USA > Connecticut > Hartford County > The memorial history of Hartford County, Connecticut, 1633-1884, Vol. I > Part 45
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The prodigiously great subscriptions to this bank of late, whenever a new subscription to its stock has been permitted, prove the extreme desire of the public to possess it. Seeing, therefore, from the facts just adduced there appears to be on the one hand no want of borrowers, nor of lenders on the other, your petitioners have been led to hope that while their object meets with general ap- probation from the community at large it will not be denied the countenance of this Honorable General Assembly.
If the business of banking has proved so lucrative to one bank in this City, your petitioners see no reason why that bank should enjoy a monopoly of this profit. They are desirous, therefore, of being permitted to establish another bank. They wish to invest their own property therein. And they ask for a new bank rather than for an enlargement of the old, thinking it more congenial to true re- publican principles, and an equality of rights in the great body of our citizens, that a new bank be granted than that an overgrown capital and influence be accumulated in the old bank, thereby diffusing and equalizing privileges, not per- mitting them to be engrossed, thereby promoting competition which creates an increased endeavour to accommodate the public, from which the bank receives its support. Your petitioners would remark that the banking business in this city has been as good, if not better, since the war than it was in the time of peace. The dividends of the Hartford Bank prove this. Hence it appears plainly a bank in the City of Hartford has other resources besides those of foreign com- merce. It has indeed important and very great resources, not only in an exten- sive and increasing inland trade, -the effect of a central and highly advantageous situation, - but in the numerous and constantly increasing manufacturing estab- lishments in the vicinity ; establishments which in general absorb a very great capital before they render back to the proprietors any part of it in the profit ulti- mately realized. And the restoration of our foreign commerce with the return of peace must add greatly to the amount and effectiveness of these resources. Your petitioners would further remark that it is an undeniable fact, which has been proved by experience, that the multiplication of banks does not increase any faster than the regular demands of trade require the amount of bank-notes in circulation, but only subdivides it. Hence it follows that the security of the public is really increased by increasing the amount of bank capital pledged for the redemption of bank-notes in circulation. Hence also it follows that from the increase of banks of late years a vastly greater amount of bank capital is required now to authorize and support the same amount of circulating paper than was re- quired twelve or fifteen years since. And hence also must be perceived the im- portance of endeavouring as a State, and as far as may be in our power, to supply our own circulation from our own resources. Your petitioners would also further remark that the creating more bank stock in the State will bring within the reach of taxation the alienable property of individuals which now escapes being taxed,
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and thus it will compel it to contribute a portion of its profits to the community which privileges, protects, and supports it. Your petitioners beg leave to conclude by remarking, finally, that they do not ask for the privileges of a banking associ- ation, but upon the ground of mutual concession as well as of reciprocal advan- tage. If this Honorable General Assembly in their wisdom see fit to grant them an Act of incorporation for a bank in the City of Hartford, to be denominated The Bank of Connecticut, with a Capital of Fifteen Hundred Thousand Dollars, divided into shares of One Hundred Dollars each, and with the usual privileges of banking corporations, the petitioners offer the same liberal provisions of receiv- ing at all times the funds of the State and of school and ecclesiastical societies, at par, which is now granted by the Hartford Bank. And your petitioners further pray that they may be permitted to establish a branch of said bank to a limited amount in the Town of Litchfield, for the purpose of Discount only, to be under the superintendence of the Directors of the Principal Bank, and to account monthly or oftener with them, subject to any and such other regulations and restrictions as to your Honours may seem proper and expedient. And they offer, moreover, in conformity to Precedent in other States, to pay for the Incorporation herein prayed for the sum of Sixty Thousand Dollars, a premium of Four per cent, to be advanced by the stockholders as fast as the successive installments of the Capital Stock shall be paid in, and to be appropriated, if in the opinion of your Honours it shall be deemed expedient and in such proportions as by your Hon- ours may be thought proper, to the uses of the Corporations of Yale College and of the Medical Institute established in the City of New Haven, and of the Cor- poration of Trustees of the Fund of the Bishop of the Episcopal Church in this State, or to be otherwise disposed of for the use of the State, or for any purpose whatever which to your Honours may seem best. And your petitioners, as in duty bound, will ever pray.
Dated February, 1814.
WARD WOODBRIDGE. SAM'L TUDOR, JR. CHARLES SIGOURNEY, By his attorney, WALTER MITCHELL.
This application of course prompted forcible and some ingenious opposition. Contributors to the newspapers and writers in pamphlets aired the matter in various styles. One contributor in the "Courant " called attention to the general depreciation of the currency for the few past months more rapid and alarming than ever, evidenced by the ad- vance in the price of labor ; the cause of which was obviously and prin- cipally, at least in the mind of the writer, the multiplication of banking institutions and the consequent flood of bank-bills : -
"One which is continually increasing, and unless restrained will in a few years destroy the credit of banks. . .. The continual multiplication of banks and of manufacturing institutions, with the privilege of issuing bills of credit, is a subject of just alarm to the community. . . . It is an undeniable fact that the quantity of medium circulating is far greater than the trade of the country re- quires. Nor is the practice of purchasing charters by liberal donations to the State treasuries to be viewed without extreme anxiety. The corrupting influence of such a practice cannot but be obvious ; and once introduced, that influence will swell like a torrent, which no public or private virtue will be able to resist."
When this measure was presented in the Assembly there seemed to be something indeed very like a swollen torrent behind it. The bonus named, with the proposed divisions of it, and the projected branch office at Litchfield, were quite captivating among the legislators, and the act
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of incorporation was granted to the president, directors, and company of the Phoenix Bank, with authorized capital of one million dollars; a premium of five per cent, or fifty thousand dollars, to be paid into the treasury of the State ; the right of the State to subscribe for additional shares at any time, which shares should be transferable, being reserved ; as well as the right to appoint two directors when the subscription of the State should amount to the number of five hundred shares.
When in the following July the commissioners appointed by the act to receive subscriptions to the stock opened their books, not only was
PHOENIX
BANK
THE OLD PHOENIX BANK BUILDING ON MAIN STREET.
the limited amount of capital immediately pledged, but seventy thiou- sand shares ($7,000,000) were asked for. The unhappy commissioners must withhold six shares where they could grant one to the eager in- vestors ; and their apportionment, declared at Bennett's Coffee-House July 21, was brought under a jealous and acrimonious review before the public, while the legislature called them to account with close and specific interrogatories.
There was disappointment ultimately at the disposal of the fifty thousand dollars bonus. The expressed preference of the founders of the new bank was indulged only so far as to bestow a part of the sum upon the Medical Institute, while the suggestion in favor of the Bishops' Fund
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was determinedly ignored ; and this incident, with some interesting com- plications more or less intimately related thereto, stood nearly at the be- ginning of the order of events which marked a change in the governing position between the two political parties of the State, the advent and ascendency of the Tolerationists, followed so soon by the proposal and adoption of the new Constitution. However, much of the varied con- troversy contributed to a public sense of the importance of the new in- stitution ; reminding its friends that they must be substantial patrons ; impressed those gentlemen who expected to undertake the direction that they must be alert and helpful ; and altogether went far to insure for it a good start.
At Bennett's Coffee-House, July 21, when the allotment of shares was made, the first shareholders' meeting was organized, and Messrs. Normand Knox, Ward Woodbridge, Samuel Tudor, Jr., Charles Sig- ourney, Daniel Buck, Thomas K. Brace, Moses Tryon, Jr., Jonathan W. Edwards, John Burr, James H. Wells, and David Watkinson were elected directors, and Mr. Knox, who had resigned the cashiership of the Hartford Bank,1 was elected president.2 The election of Mr. George Beach as cashier promptly followed. Instalments upon the stock were received at the home office and at the Litchfield branch office, and the second bank in this county had, before the summer was over, fairly started upon a career of usefulness and success, albeit in a season of financial difficulty and danger.
If this particular region had been spared much of the distress fol- lowing upon the usual fortune of war since 1812, the depression of com- mercial credit and the interruption and suppression of our trade with the outside world had, by all accounts, been deplorable enough. At the same time the species and quality of the moneys forced into circulation here as elsewhere were variously aggravating, to say the least. Sus- pension of specie payments had occurred generally outside of New England ; Connecticut banks cautiously withdrew their specie notes and replaced them with notes authorized by the legislature, nicknamed "Facilities." These were payable in two years after the war, were re- ceivable of course for debts due to the banks of issue, and were current at a price in the market. Besides these were the fractional bank-notes and the notes for parts of a dollar issued by other corporations and by individuals for change, and a great accumulation of unassorted stuff representing the unsecured and unredeemable promises to pay of Western and Southern banks, and every lot passing from hand to hand badly seasoned with more than a sprinkling of what at the present day would be accounted an amusing species of counterfeit work ; 3 the latter, nev- ertheless, in many instances about as artistic in finish as the genuine, and passing with as little scrutiny, perhaps, as the other.
1 Succeeded there by Mr. Horace Burr.
2 The presidents of the Phoenix bank have been : Normand Knox , elected President, Sept. 1, 1814; Charles Sigourney, Jan. 19, 1821; George Beach, Sept. 8, 1837; John L. Bunce, April 5, 1860; Henry A. Redfield, April 15, 1878.
3 " A specie bank bill was almost an object of worship. An anecdote will illustrate this. In our city of Hartford there were a shrewd man and a greedy man, who had some dealings with each other about these days, when the following scene occurred : -
" Shrewd Man. Do you recollect giving me a ten-dollar bill in change yesterday, Mr. C .?
"Greedy Man. No, I don't ; why do you ask ?
" S. M. Well, I found a specie bill of ten dollars in my purse, and I thought perhaps VOL. I .- 22.
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MEMORIAL HISTORY OF HARTFORD COUNTY.
At the close of the war the condition was no better. July, 1815, gold commanded a premium of fifteen per cent, and, with the raising of the blockade importation, was resumed, and there was great demand for the precious metal to pay for the goods brought in from abroad.
The United States Bank was re-chartered in 1816, and after all the endeavor to establish the branch for Connecticut at Hartford, it was announced on the 4th of February, 1817, that the directors had finally decided to place it at Middletown, " agreeably to their former decision." This transaction had a connection, locally, with the matter of the resump- tion of specie payments, which had been agitated for several months. If the deposits of the Government were to be at once transferred to this branch or others from the State banks, the question of a date for re- sumption possessed a different interest. It was said in behalf of the latter1 that
" The banks in Boston and Rhode Island and many others have always paid specie for their bills. The Banks in this State will continue to fulfil their engage- ments, and will cheerfully unite with the Banks of New York in commencing specie operations."
Occasionally during the period of suspension had been made the an- nouncement similar to one of Sept. 30, 1814 :-
" At the Hartford Bank all demands upon it are and always have been promptly and cheerfully paid in specie."
Per contra, the same paper, June 5, 1815, says : -
" New York Banks refuse to pay their bills, and pay dividends of nine or ten per cent. From present appearances the FACILITIES issued by the Banks in this State will be paid much sooner than the bills issued by the Banks of New York or Pennsylvania."
Of course the care of the currency of our local banks at the resump- tion was not so serious a matter as it was to those of other parts of the country, and the diversion of the Government deposits at this point not likely to be of very great account. Yet the State banks had preference for one date of resumption ; the Secretary of the Treasury (Mr. Craw- ford) had another. A communication from him, dated Dec. 20, 1816, mentions that the United States Bank at Philadelphia would commence business there on the 1st of January following, and be ready to receive moneys from the State banks.
"If the determination of the latter to resume specie payments on July 1st, 1817, is persisted in, there will be no hesitation in ordering transfers (of the deposits) with as little delay as may be ; but as an inducement to change that determination it is proposed, if the State Banks will resume on the 20th of Feb- ruary next, the public moneys now with them shall not be transferred to the
I might have received it of you. You remember I was only entitled to a facility, and not to a specie bill.
"G. M. Well, I dare say you had it of me ; let me see it.
" S. M. There it is.
"G. M. Oh yes ; I recollect it perfectly. I'll take it and give you a facility. There.
" S. M. Are you sure, Mr. C., that you gave me that specie bill ?
"G. M. Certainly, certainly. I recollect it distinctly.
" S. M. Well, I'm glad you are sure, for they tell me the specie bill is counterfeit !" - S. G. GOODRICH, Recollections, vol. i. p. 494.
1 Connecticut Courant, January, 1817.
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Bank of the United States, and from then to July Ist as little shall be withdrawn as the demands upon the Treasury will admit."
The alternative, after all, was an influential one. The policy of the Secretary prevailed, and resumption was here and uniformly and nomi- nally accomplished. Further contractions in business and failures fol- lowed. Our inland trade and manufactures suffered, and for differing reasons our commerce no less. The reader may find in the files of the day a communication from a meeting of merchants, shipholders, and others, of the city and county of Hartford, at Morgan's Coffee-House, addressed to the assembled Congress, asking an account of the imposts and restrictions that since the last war had been laid on the trade to the West India Colonies by those Europeans who possessed them, by which means the shipping of this river was nearly becoming useless, that the matter might be considered whether there should not be pro- hibition of the entry of any vessels with a cargo from any port or place to which an American vessel was not permitted to enter and trade, or of the clearance of a foreign vessel with cargo from the United States to any such port.
In January, 1824, the banking business of Hartford was augmented by the removal to this city of the Connecticut Branch of the United States Bank. It was noticed in the "Courant " of the date : -
" It is finally settled by the Mother Bank to remove to this City that Branch of the Institution hitherto located at Middletown. The long-contested claims be- tween New Haven, Middletown, and Hartford, which originated with the Bank, and which have been regularly followed up to this time, leaving the public mind in a state of suspense where the Branch would ultimately be fixed, are finally set- tled and wisely settled in favor of Hartford. Notwithstanding the collision of interests, an honorable testimony of liberality has been displayed by our City Banks in tendering their vaults and spare room for the accommodation of the Branch until preparation can be made for more permanent arrangements."
Of this removal a New Haven journal (the " Register") gave an amusingly different sketch : -
" The United States Branch established at Middletown is to be removed forthwith to Hartford, by a sudden and unexpected order from the directors of the Mother Bank. We believe the inhabitants of New Haven are well pleased that so great a calamity as the Branch Bank would have been is not to be inflicted on this place. We have now as many picture-shops as can well be supported."
The branch was speedily adjusted to running order, and conducted an important business here until the charter expired by limitation, March 4, 1836. Of its local directors officiating during its operations in Hartford, one, the Hon. Julius Catlin, who was on the board for a large part of the whole period, still survives at this writing (1886).
During the legislative session of the same year, in response to the application of Charles Sigourney, George Beach, Isaac Toucey, Henry Kilbourn, Eliphalet Averill, Henry L. Ellsworth, Hezekiah Huntington, Nathaniel Terry, Eliphalet Terry, Cyprian Nichols, Reuben Langdon, Daniel Buck, John Caldwell, Denison Morgan, Robert Watkinson, and others, the Connecticut River Company was incorporated by charter " to improve the boat navigation through the valley of Connecticut
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MEMORIAL HISTORY OF HARTFORD COUNTY.
River from Hartford toward its source." At the following session amendments were made thereto, so that upon the payment of their stock and the expenditure by the said company of not less than two hundred thousand dollars for the above purpose, of which one hundred thousand dollars should be upon parts " above this state," the company might assess fifty dollars additional upon each share of one hundred dollars, and pay it over to the Connecticut River Banking Company,1 simultaneously chartered, to constitute for the latter a capital "not so exceeding five hundred thousand dollars." Further modifications of the charter or charters were made in 1828 and subsequently, which practically secured for the stock special exemption from taxation, by which it has always maintained favor with investors, as the institution has had a creditable reputation with the public ever since it began busi- ness in October, 1829.
The quality of our bank circulation, always of comparatively high standard, was brought to proof of a higher or more exacting test, by the adoption during this decade of what came to be known as the Suffolk Bank System of Redemptions. The Suffolk Bank, organized at Boston in 1818, became in 1824 the agent of the associated in- stitutions of that city for receiving and effecting the redemption of the bills of all the New England Banks, "peaceably if we may, forcibly if we must." Funds from our banks, either specie, Boston exchange, or current bills of other banks of New England, were required to be deposited there, in time and amount sufficient to cover the accu- mulation of their bills gathered by the exchanges of the Suffolk; in default of which the notes of the delinquents were to be sent home for presentation, and demand for specie payment of them was to be made and enforced. The system, applying to a large and increasing New England currency, afforded a sensible remedy for the varying and ex- pensive discount hitherto chargeable upon this currency at all points of accumulation or exchange. The advantages of stated redemptions were in fact largely mutual between the banks finally enlisted; the operations of the method upon the whole salutary and justifiable.
The plan was, however, by no means cordially accepted ; was rather quite cordially hated and antagonized by a large proportion of issuing banks, who saw in the new movement a curtailment of the profits of their circulation.
Here, as elsewhere, the terms advanced by the " Boston Alliance," as it was called, were at first regarded as quite. arbitrary, and were strenuously objected to and opposed; while at Hartford the proposed special compensatory deposit was once for all denied and persistently withheld. The threatened aggression and discipline were applied in refractory cases where most likely to be effective; the notes of some isolated bank being sent by special messenger, when gathered in con- siderable amounts, for payment in specie. Various ways of defence or retaliation were resorted to; and with all the bravery shown in the con- troversy as it proceeded, there was at least sharpness enough in what
1 The presidents of the Connecticut River Banking Company have been : Alfred Smith, elected Jan. 8, 1829 ; William H. Imlay, Jan. 1, 1838 ; Alfred Smith, Nov. 3, 1851 ; John A. Butler, Jan. 7, 1862 ; Joseph Church, Jan. 2, 1872; Geo. M. Welch, Feb. 1, 1872 ; Samuel E. Elmore, Jan. 26, 1874.
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was said or written upon either side.1 With the approach and progress of another Presidential campaign the banking interest of the country was made a convenient and exciting topic of debate. The Old Hickory Hero was determinedly set against the renewal of the National Bank Charter which was to expire in 1836; and upon his aecession to the chief magistracy in 1829 moved in direct order of assault upon the system, and, in immediate course, for the withdrawal of the Govern- ment deposits from the custody of the fated banks.
The discussions of this proposed measure, which followed through- out the first years of the new administration, were colored and fired by partisan wit and wile, but in no great degree hindered the Democratie purpose. They may have been suggestive of a necessity or an opportunity for another bank in Hartford, and probably were sug- gestive to minds of differing political choices ; for in the spring of 1833 Messrs. James T. Pratt, Job Allyn, Asa Farwell, Lemuel Humphrey, Horace Goodwin, 2d. Albert Day, A. H. Pomeroy, Solomon Porter, Nathan Johnson, Henry and Walter Keney, Julius Catlin, Roland Mather, George C. Collins, David Clark, Ellery Hills, and other as well- remembered citizens, united in a communication to the legislature, setting forth, among other things, that -
" The business of said town of Hartford and its vicinity had greatly increased in a few years past ; the commercial, manufacturing, and mechanical business in particular being now carried to an extent until recently unknown to our citizens ; that the same causes which have produced this effect are still supposed to exist, and may justly be expected to produce a further increase in the future. In con- sequence of this increase, further banking capital is deemed to be necessary. Notwithstanding the amount of such capital already located in the City of Hart- ford, the same is by no means commensurate with the necessities of the public."
Their prayer was, that a bank might be established in Hartford, to be denominated the "Farmers' and Mechanics' Bank," and in the debates of the Assembly it was rather fervidly promised that the farmers and mechanics would find, if this charter were granted, that their bank had not been misnamed. The affirmative vote prevailed ; the charter carried with a capital of five hundred thousand dollars - and no bonus this time! W. H. Holabird, Joseph Pratt, James Dodd, Benjamin B. Soule, and Chauncey F. Cleveland were appointed eom- missioners to receive subscriptions for shares ; and when the farmers and the mechanics and their neighbors had written their names, it was found that they wanted to contribute a capital of $1,600,750 to begin with. As less than one third of this amount was called for, there was the usual amount of dissatisfaction at the apportionment that followed on the second Tuesday of July ; but the choice of a board of thirteen directors was shortly announced, as well as the election by
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