History of Idaho, the gem of the mountains, Volume I, Part 40

Author: Hawley, James Henry, 1847-1929, ed
Publication date: 1920
Publisher: Chicago, The S. J. Clarke publishing company
Number of Pages: 910


USA > Idaho > History of Idaho, the gem of the mountains, Volume I > Part 40


Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).


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With regard to public indebtedness, the Constitution provided that the Legis- lature should never create debts in excess of one and one half per centum upo:i the assessed value of the taxable property of the state, except the debt of the terri- tory at the date of its admission as a state. This provision was amended in 1912 so that the state debt, "exclusive of the debt of the territory at the date of its admission as a state, and exclusive of debts or liabilities incurred subsequent to January 1, 1911, for the purpose of completing the construction and furnishing of the state capitol at Boise, and exclusive of debt or debts, liability or liabilities in- curred by the eleventh session of the Legislature of the State of Idaho," should never exceed $2,000,000, "except in case of war, to repel an invasion, or suppress an insurrection," etc.


The Constitution further provides that "The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, muni- cipality or corporation ; nor shall the state directly or indirectly become a stock- holder in any association or corporation;" and that "No money shall be drawn from the treasury, but in pursuance of appropriations made by law."


Some years ago the Legislature provided by law for the designation of certain banks as state depositaries, said banks to pay interest on the public funds deposited thercin. In his biennial report for the two years ending on September 30, 1916, the state treasurer gives the amount of interest thus received as $100,196.29. The total receipts and principal sources of revenue during that biennial period, as shown by the report of the state treasurer, were as follows :


Taxes received from the counties $2,220,325.25


State land department 1,549,165.69


Bond sales 202,575.00


State insurance commissioner 210,294.81


United States treasury department. 365,084.81


Collections-lands, bonds and loans 901,180.03


Contributions to state highway fund. 160,052.61


State fish and game warden 113,006.16


Secretary of state


183,666.85


2


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HISTORY OF IDAHO


State depositaries $ 100,196.29


Miscellaneous receipts


195,858.79


Total receipts


$6,199,406.04


BONDED DEBT


The first bonds issued by the Territory of Idaho were authorized by the Third Legislature in January, 1866, for funding the territorial indebtedness, then amount- ing to $60,529.13. These bonds bore interest at the rate of 12 per cent per annum. During the years following other funding bonds were authorized from time to time and some of the first issue were redeemed, so that when the Thir- teenth Legislature met in December, 1884, the bonded debt amounted to $69,- 248.59. That Legislature authorized two bond issues-one of $80,000 for the erection of a new capitol building at Boise, and one of $20,000 for establishing an insane asylum at Blackfoot. The last Territorial Legislature authorized bonds to the amount of $50,000 for the construction of public wagon roads, but at the time Idaho was admitted to statehood only $11,000 of these bonds had been issued. In July, 1890, the bonded debt of the territory, less cash in the treasury, was $236,170, which was assumed by the new state.


Since 1890 numerous bond issues have been authorized by the Legislature for the establishment of new institutions, the improvement of those already established during the territorial era, for building roads and bridges, etc. Ac- cording to the last published report of the state treasurer, the bonds of the state outstanding on September 30, 1916, amounted to $2,227.750. Of this debt $71,000 bears interest at the rate of 5 per cent ; $954,000 at the rate of 41/2 per cent; and the remainder at the rate of 4 per cent per annum-quite a difference between the rate of interest in 1916 and that of 12 per cent when the first territorial bonds were issued in 1866.


In the ordinary course of business, the rate of interest at which securities can be sold is an index to the certainty of the investment-the greater the risk the higher the rate of interest, and vice versa. For the first three or four years after Idaho Territory was created, it was looked upon as a sort of ex- periment, a field for speculation, with a floating population that was likely to vacate upon the discovery of new gold mines outside the territorial borders; hence an interest rate of 12 per cent upon the first territorial bonds. True, the interest rate was generally higher at that time, many of the older states paying 8 or 10 per cent on their outstanding bonds, but capitalists regarded the West as an uncertain quantity and refused to loan money at the rate paid by old, well established states. About the time the first bonds were issued by Idaho, many of the inhabitants began making improvements of a more permanent character, developing farms, building schoolhouses, etc., with the result that Idaho's credit became more and more firmly established, until today her bonds bear as low a rate of interest as those of other states and never sell below par (often at a premium) when offered to investors. The principal items for which the bonds outstanding on September 30, 1916, were issued are as follows :


Capitol building $ 880,000


Highways and bridges 469,500


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HISTORY OF IDAHO


University of Idaho


$ 177,000


Lewiston State Normal School


122.750


Albion State Normal School


56,000


North Idaho Insane Asylum.


145,000


Industrial Training School


1 38,000


Academy of Idaho


57,000


Penitentiary


75,000


Miscellaneous bonds


107,500


Total


$2,227,750


THE SECURITY


It is not to be wondered that bonds guaranteed by the State of Idaho have for twenty years last past always commanded a premium, although interest rates have been comparatively small. The holders of such bonds have every assurance that a reasonable investor could ask that such bonds will be paid at maturity. They constitute, as a matter of course, a lien upon every dollar's worth of property in the State of Idaho. Even at the rate of assessment for taxation purposes, the property valuation in 1917 was $412,265,201.00, while the bonded indebted- ness was $2,227.750.00, thus making $185.00 assets for each dollar of liability, taking the assessed value as being the real value of the property, although it is well known that the assessed valuation is not over seventy per cent of the actual value of the property of the state. In addition to the property owned by individuals of the state, which itself is security for these bonds, the state is rich in its own right, in that it is the owner of lands donated by the general government for various purposes and which if sold at a fair valuation would place at least $50,000.000 in the state treasury and aside from these lands which have been held by the state in trust for certain purposes, in its corporate capa- city the state owns lands and public buildings sufficient to liquidate every dol- lar of its bonded debt twice over. Moreover, the state is in its infancy. Its real development has just commenced. Millions of acres of arable lands in addi- tion to that already under cultivation are in the near future to be devoted to agricultural purposes. The vast resources of the state will be more fully men- tioned in another chapter. In view of all this, it is not surprising that Idaho state bonds should continue to command a handsome premium in all the great financial centers of the country.


BANKING


Modern banking methods date from the Bank of Florence, which was estab- lished about the middle of the Fourteenth Century, though the Bank of Venice had been established some two hundred years earlier as a bank of deposit, the government being responsible for the funds deposited with the bank. It went down with the Venetian Empire in 1797. The Bank of Genoa was organized soon after the Bank of Florence and for many years the Italian bankers domi- nated the financial transactions of the civilized world.


In 1609 the Bank of Amsterdam was founded and about ten years later the Bank of Hamburg opened its doors for the transaction of business. At that time there was not a single banking institution in England and the people who had a surplus of funds, deposited with the mint in the Tower of London until


390


HISTORY OF IDAHO


Charles I appropriated the deposits to the royal use. After that English mer- chants deposited their funds with the goldsmiths, who became bankers in a limited way, loaning money for short periods and paying interest on money deposited with them for a specified time. In 1690 the Bank of Sweden in- vented and first issued bank notes, which influenced William Patterson to sug- gest the Bank of England. That bank was chartered in 1694. at a time when England was at war with France and subscribers to the war loan of £1.500,000 became stockholders in the bank to the extent of their subscriptions to the loan.


UNITED STATES BANKS


The first bank in the United States was known as the Pennsylvania Bank. which was established in Philadelphia in 1780 by Robert Morris, George Clymer and a few others and it played an important part in saving the financial credit of the new American Republic. In 1781 it was reorganized as the Bank of North America and continued for ten years, when the Bank of the United States was incorporated by act of Congress with a capital stock of $10,000,000 and a charter for twenty years. This bank was made the fiscal agent of the United States, but upon the expiration of the charter in 1811. Congress failed to renew it and the business of the bank passed into the hands of Stephen Girard of Philadelphia. The War of 1812 followed immediately after the ex- piration of the bank's charter and the government was placed in financial straits for want of an accredited fiscal agent. The second bank of the United States was therefore chartered soon after the close of the war and began business in January, 1817. under a charter for twenty years and an authorized capital of $35,000,000, of which the government held twenty per cent. At the expira- tion of this charter, President Andrew Jackson vetoed the bill renewing it and in 1840 the bank went into liquidation.


In the meantime a number of banks had been chartered by state legisla- tures, with the consent of Congress. After the affairs of the Bank of the . United States were settled in the early '40s, the number of state and private banks increased all over the country, ushering in the era of the so-called "Wild Cat" banks. Speculation ran rife during the ten years following the liquida- tion of the Bank of the United States and there were in circulation over $5 in bank notes for each dollar of gold or silver held for their redemption. About 1853 the reaction set in and during the next four years there were 5,123 bank failures in the United States.


The present national banking law was enacted by Congress as a war measure and was approved by President Abraham Lincoln on June 3. 1864, though a number of amendments have since been added to the original bill. The na- tional banks, organized under this law, are the only banking institutions in the United States having authority to issue notes that can be used as currency. though in every state there are banks of discount and deposit that operate under the laws of the state.


IDAHO BANKS


The framers of the State Constitution of Idaho failed to make any provi- sions for a system of state banks, and Idaho was without any general legis- lation on the subject until 1905. The Legislature of that year, in response to a


391


HISTORY OF IDAHO


recommendation of Governor Gooding in his message, created the office of bank commissioner, the incumbent to be appointed by the governor for a term of four years and to receive an annual salary, of $2.500. The law specified the manner in which banks might be formed under the general corporation laws of the state ; provided that at least one-half of the authorized capital stock should be paid in before the bank began business; that stockholders should be indi- vidually liable for the amount of their stock ; fixed the fees to be paid by banks for examination ; and stipulated that no single loan made by any state bank should be more than one-half of the capital stock and surplus of such bank. Subsequent legislatures have enacted additional provisions, but the law of 1995 still forms the basis of Idaho's state banking system.


The law went into effect in March, 1905, and on November 12, 1906, the bank commissioner made his first report. At that time there were thirty-two national banks and ninety state and private banks and trust companies in Idaho -a total of 112 banking institutions, with a combined capital of $7.099,963 and deposits of $25.833.837.


According to the Banker's Directory for July. 1918, there were then 201 banking concerns in the State of Idaho (66 national banks and 135 operat- ing under the state laws), with a combined capital of $12.573,660 and de- posits of $81.347,025. A majority of the banks organized between 1905 and 1918 were located in the small towns of the state, their capital stock ranging from $10,000 to $25.000 each. Consequently, while the increase of the capital stock of banking concerns since 1905 has been a little more than 77 per cent. the increase in the amount of deposits was over 310. per cent up to July, 1918 and bank statements show the increase has continued since that date.


BANKING IN THE EARLY DAYS


In the early days of the Territory of Idaho, when mining was the chief business of the people of the state. banking cut but little figure and banks were al- most unknown. The payment of a bill meant to "weigh out," not to draw a check for the amount due. The fact that the first general legislation on the subject to banking was enacted in 1905 and the Constitution of Idaho was silent on the question of banks, of itself shows the slight importance that was attached to what is now the most important of all our business interests.


BANKS IN 1918


It will be of great future interest to give the list of the banks of Idaho, as shown by the Banker's Directory, for July, 1918, together with the year in which each was organized, the amount of capital stock, the deposits, the names of the presidents and cashiers, and such historical information as can be ob- tained. As a matter of convenience these banks have been arranged by towns and cities in alphabetic order.


Aberdeen-The Bank of Aberdeen was organized in 1900, with a capital stock of $20,000. Surplus, $3,500 ; deposits, $190,000 ; E. M. Brass, president ; P. A. Fugate, cashier.


Albion-In Albion, the county seat of Cassia County until recently, the bank- ing house of D. L. Evans & Company began business in 1904. The capital stock of this firm is $25.000; surplus, $9,460; deposits, $189,000; A. Louns- bury, president ; R. A. Lounsbury, cashier.


392


HISTORY OF IDAHO


American Falls-The City of American Falls has two banks. The First National was established in 1907, with a capital stock of $50,000; surplus, $II,260 ; deposits, $268,000; D. W. Davis, president; H. G. A. Winter, cashier. The Evans State Bank began business in 1908, with a capital stock of $25,000; surplus, $8.500 ; deposits, $223.000; L. L. Evans, president ; L. L. Evans, Jr., cashier.


Arco-The Bank of Commerce of Arco was organized in 1907, with a cap- ital stock of $25,000; surplus, $11,000; deposits, $300,000 ; E. M. James, presi- dent : F. W. Sorgatz, cashier.


Ashton-The banking business in Ashton is represented by two strong in- stitutions. The Security State Bank was established in 1909, with a capital stock of $25,000; surplus, $20,000; deposits, $380,000; Henry Peterson, presi- dent : W. L. Robinson, cashier. In 1912 the First National Bank of Ashton was chartered with an authorized capital of $35.000 : surplus, $15,000; deposits, $300,000 ; R. D. Merrill, president ; C. R. Isenburg, cashier.


Bancroft-The First National Bank of Bancroft, with a capital stock of $25,000, began business in 1910. Surplus, $6,000; deposits, $125,000; E. J. Merrill, president ; H. Van Slooten, cashier.


Bellevue -- In 1906 the Bellevue State Bank was incorporated with a capital stock of $30,000 ; surplus, $8.500 ; deposits, $300,000 : C. \V. Wilson, president : R. B. Merrill, cashier.


Blackfoot-The banking house of D. W. Standrod & Company began busi- ness in Blackfoot in 1898. Its capital stock in 1918 was $100,000; surplus, $45,000; deposits, $1.300,000; C. W. Berryman, president ; W. F. Berryman, cashier. The First National Bank of Blackfoot received its charter in 1904. Capital stock. $25,000; surplus, $38,000 ; deposits, $660,000 ; Alexander Younie, president ; Leon J. Chapman, cashier. The Blackfoot City Bank was incorpo- rated in 1917 with a capital stock of $50.000. Surplus, $10,000; deposits, $420,000; J. C. Millick, president ; M. M. Farmer, cashier.


Bliss-The Bliss State Bank was established in 1909, with a paid up capital of $10,000 : surplus, $2,000; deposits, $40,000; C. L. Nelson, president ; S: W. Struble, cashier.


Boise-The First National Bank of Idaho, located in Boise, claims the dis- tinction of being the oldest bank in the state. It was chartered on March II, 1867, with a paid up capital of $100,000 ; B. M. Durell, president ; C. W. Moore, cashier. This bank is now located in handsome and commodious quarters on the southwest corner of Eighth and Main streets : has a capital stock of $300,000 : surplus, $263,600 : deposits, $3.432,000; Crawford Moore, president; Robert F. McAfee, cashier.


The Boise City National Bank was chartered, in 1886; has a capital stock of $250,000 ; surplus, $232,400; deposits, $3.930,000; Frank R. Coffin, presi- dent; C. H. Coffin, cashier. This bank occupies the main floor and basement of a handsome building on the southwest corner of Main and Idaho streets, which building was erected by the bank and is equipped with every convenience known to modern banking.


In 1908 the Pacific National Bank of Boise began business with a capital stock of $300,000 ; surplus, $93,100; deposits, $1.615,000; H. B. Eastman, presi- dent ; D. A. Swan, cashier. The Boise Title and Trust Company, operating under the state laws, was organized in 1911, with a capital stock of $100,000.


٧٠: ٠٤٤١٠


STANDROD BANK, BLACKFOOT


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1


WELCO


MEST NATIONAL FINA


Service S


FIRST NATIONAL BANK, BURLEY


-


395


HISTORY OF IDAHO


and does a general banking business. Surplus, $14,600; deposits, $160,000; S. H. Hays, president ; W. J. Abbs, cashier. The Overland National Bank of Boise received its charter in 1915. The capital stock of this bank is $100,000 ; surplus, $64,690 ; deposits, $1,268,coo; R. F. Bicknell, president; J. H. Black, cashier.


Bonners Ferry-The Town of Bonners Ferry has two banks. The First State Bank was established in 1906, with a capital stock of $30,000 ; surplus, $2,460; deposits, $223.320; F. W. Anderson, president ; J. P. Cowen, cashier. The First National Bank of Bonners Ferry was chartered in 1912, with a cap- ital stock of $25,000 ; surplus, $7.500 ; deposits, $275,000 ; M. P. DeWolf, presi- dent ; F. A. Shultis, cashier.


Bovill-The First State Bank of Bovill was organized in 1909, with a capital stock of $10,000 ; surplus, $2,500 ; deposits, $110,000; J. A. Harsh, presi- dent ; W. C. Nelson, cashier.


Bruneau-In 1907 the Bruncau State Bank, Limited, opened its doors for business. It has a capital stock of $25,000 ; surplus, $25,000 ; deposits. $206,225 ; Arthur Pence, president ; M. E. Reynolds, cashier.


Buhl-There are three banks in the Town of Buhl. The Citizens State Bank was established in 1907, with a capital stock of $100,000; surplus, $25,000 ; deposits, $468,500: J. W. Hayward, president; R. W. Allred, cashier. The First National Bank of Buhl began business in 1908. It has a capital stock of $100,000; surplus, $22,000 ; deposits, $700,000; W. G. Holcomb, president ; J. W. Faris, cashier. In 1917 the Farmers National Bank of Buhl was organized, with a capital stock of $25,000 ; surplus. $2,500; deposits, $52,600; A. B. Wil- son, president ; J. C. Hamilton, cashier.


Burley -- The oldest of the three banks in Burley is the Burley State Bank, which was organized in 1906, with a capital stock of $50,000; surplus, $18,000; deposits, $650,000 ; L. R. Eccles, president; W. H. Young, cashier. The Bank of Commerce was established in 1909, with a capital stock of $50,000 ; surplus, $25.000 ; deposits, $634.230: Albert Ploeger, president ; C. M. Oberholtzer, cashier. In 1913 the First National Bank of Burley began business. It has a capital stock of $30,000 ; a surplus of $18,000 ; deposits of $450,000; C. L. Ol- son, president ; P. J. Lorang, cashier.


Caldwell-The First National Bank of Caldwell was organized in 1886 by Howard Sebree, of Caldwell, and B. F. White, of Dillon, Mont. It was made a national bank in 1892, with a capital stock of $100.000; has a surplus of $62,800 ; deposits of $1,231,000; J. E. Cosgriff, president ; W. P. Lyon, cashier. The Caldwell Commercial Bank was established in 1894. with a capital stock of $100,000 ; surplus, $31,000; deposits, $718,110; J. C. Rice, president; . H. Plowhead. cashier. In 1906 the Western National Bank of Caldwell. opened its doors for business, with a capital stock of $50,000 ; surplus, $11.290; de- posits, $495,000 ; Fred J. Palmer, president ; F. R. Miller, cashier.


Cambridge-The People's Bank of Cambridge was organized in 1905, with a capital stock of $40,000 ; surplus, $4,300 ; deposits, $230,000 ; H. M. Coon, presi- dent; A. W. Gipson, cashier.


Carey-The Carey State Bank was established in 1910, with a capital stock of $20,000 : surplus, $4.400; deposit $108,000; Ira Eldredge, president; Joseph T. Cooper, cashier.


396


HISTORY OF IDAHO


Cascade-In 1907 the Inter-Mountain State Bank of Cascade was estab- lished, with a capital stock of $10,000. It has a surplus of $4.000, and carries deposits of $110,540; L. M. Gorton, president; M. D. Kerby, cashier.


Challis-The First State Bank of Challis was established in 1917, with a capital stock of $20,000 ; surplus, $7,000 ; deposits, $175,000; S. L. Reece, presi- dent ; E. W. Hovey, cashier.


Coeur d'Alene-The City of Coeur d'Alene has three banks. The Coeur d'Alene Bank and Trust Company was organized in 1903, with a capital stock of $50,000. It reported no surplus in July, 1918, but then carried deposits of $180,000, with E. P. Browne, president and C. S. Sowder, cashier. In 1904 the First Exchange National Bank of Coeur d'Alene was established, with a capital stock of $100,000; surplus, $20,000; deposits, $700,000; A. A. Cram, president ; F. D. Warn, cashier. The American Trust Company began busi- ness in Coeur d'Alene in 1906. It has a capital stock of $50,000 ; surplus, $10,200 ; deposits, $672,440; Huntington Taylor, president ; Ira H. Shallis, cashier.


Cottonwood-The Cottonwood State Bank was organized in 1907, with a capital stock of $25,000 ; surplus, $10,000; deposits, $200,000; E. M. Ehrhardt, president ; H. C. Matthiesen, cashier.


Council-The First Bank of Council was established in 1905. It has a cap- ital stock of $25,000; a surplus of $3,400 ; deposits of $143,000; Fred Cool, president ; E. S. Clapp, cashier.


Culdesac-In 1902 the First Bank of Culdesac began business with a cap- ital stock of $10,000 ; has a surplus of $4,500 ; deposits of $181,000; F. M. Rem- ington, president ; C. B. Updegraff, cashier.


Deary-The Latah County State Bank of Deary was organized in 1908. It has a capital stock of $15,000 ; surplus, $4,000 ; deposits, $133.740 ; J. A. Harsh, president ; H. D. Warren, cashier.


Declo-The Declo State Bank was established in 1917, with a capital stock of $25,000; C. M. Oberholtzer, president ; C. J. Wilson, cashier. In July, 1918, this bank reported a surplus of $1,860 and deposits of $57,000.


Donnelly-In 1907 the Donnelly State Bank began business with a capital stock of $10,000. It has a surplus of $2,000 ; deposits of $82,000 ; A. R. Cruzen, president : P. G. Cruzen, cashier.


Downey-The Downey State Bank was opened for business in 1910. It has à capital stock of $25,000 ; surplus, $6,000 ; deposits, $114,000; G. T. Hyde, president ; F. W. Fautick, cashier.


Driggs-The First National Bank of Driggs was organized in 1906, with a capital stock of $25,000 ; surplus, $10,000; deposits, $225,000; W. W. Taylor, president ; C. B. Walker, cashier.


Dubois-The Security State Bank of Dubois was incorporated in 1915, with a capital stock of $25,000; surplus, $1,500; deposits, $150,000; S. K. Clark, president ; A. E. Young, cashier.


Eagle-In 1908 the Bank of Eagle was established with a capital stock of $10,000; surplus, $2,500 ; deposits, $150,000; William Goodall, president ; E. H. Fikkan, cashier.


Eden-The Eden State Bank was organized in 1916, with a capital stock of $15,000; surplus, $2,700; deposits, $83,000; W. J. Young, president ; E. S. Young, cashier.


397


HISTORY OF IDAHO


Elk River-In 1911 the Elk River State Bank was incorporated with a cap- ital stock of $15.000. It has a surplus of $5,000 and deposits of $100,000; A. WV. Laird, president ; G. J. Wick, cashier.


Emmett-The City of Emmett has two banks. The First National was chartered in 1902, with a capital stock of $30,000, has a surplus of $6,000 and deposits of $350,000. C. A. West is president and A. J. Betts, cashier. The Bank of Emmett began business in 1906, with a capital stock of $60,000 ; surplus, $13,000; deposits, $430,000 ; D. H. Van Deusen, president ; V. T. Craig, cashier.




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