When Dutch settlers came to the area we now know as New York City, they wore pants known as knickerbockers, and the city's inhabitants eventually became known as 'Knickerbockers', or 'Knicks' themselves- hence the name of the basketball team. 'Father Knickerbocker' came into common use after author Washington Irving wrote a satirical history of the city under the name Dietrich Knickerbocker. Father Knickerbocker became the representative of the city and its inhabitants in political cartoons, humor writing, and in everyday speech. Henry uses the phrase in this way.
Father Knickerbocker (NYC) met them at the ferry, giving one a right-hander on the nose and the other an upper-cut with his left (cruelly suprising them with multiple hardships- perhaps city life coupled with injury), just to let them know that the fight was on (New York is known as a city that you don't mess with- see the 2002 Spider Man and the response after Sept. 11!).