USA > Illinois > Madison County > Centennial history of Madison County, Illinois, and its people, 1812 to 1912, Volume I > Part 63
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ALTON COURTS
The city charter of 1837 provided for the establishment of a municipal court of Alton. Section 21 of that instrument reads : "There shall be established in said city of Alton a municipal court, which shall have concurrent or equal jurisdiction with the circuit court in Madison county, in all civil matters arising therein within said county, and exclusive jur- isdiction in all criminal matters arising within the corporate bounds of said city, except such as are cognizable before justices of the peace. "Section 22. Said court shall be held by
one judge, who shall be appointed by joint bal- lot of both branches of the general assembly, and commissioned by the governor, and shall, during his continuance in office reside within the limits of said city and shall receive a sal- ary of one thousand dollars annually, payable quarterly, by the common council."
At the next session of the general assembly Hon. William Martin was appointed judge, and in January the most important case ever brought in an Alton court was argued before him at the January term, 1838. It was that of the People vs. Winthrop S. Gilman, indict- ment for riot, and of The People vs. the Riot- ers in the trials following the pro-slavery mobs of 1837. Just what became of this court seems not recorded in any archives of the city the writer has found, but it seems to have been abolished or died of inanition as in 1859, the general assembly passed an act establishing the Alton city court. The act bears date Feb. 9, 1859. It provided for the election of a judge by the people on the first Tuesday in March, and every six years thereafter. In 1874 the general assembly passed another act changing the name to city court of Alton and making the term of office four years instead of six.
Hon. H. W. Billings was the first judge elected to preside over the Alton city court and he appointed James W. Davis the first clerk. Judge Billings was succeeded in 1865 by Hon. Henry S. Baker who held the office for four terms when he was succeeded by Hon. A. H. Gambrill in 1881, who, in turn, gave place to Hon. J. E. Dunnegan, who served eight years. Hon. A. W. Hope was elected in 1893 and held office for twelve years. Judge Dunnegan was again elected in 1905, re-elected in 1909, and is now nearing the close of his fourth term on the bench.
The following lawyers are resident mem- bers of the bar of the city court of Alton, named in alphabetical order : Henry S. Baker,
439
HISTORY OF MADISON COUNTY
W. P. Boynton, John J. Brenholt, Levi Davis, J. E. Dunnegan, E. E. Campbell, R. B. Eng- lish, C. W. Leverett, J. A. Lynn, J. C. McGin-
nis, J. V. E. Marsh, E. B. Meriwether, B. J. O'Neil, J. P. Thornton, R. D. Watson, Wm. Wilson, Levi D. Yager.
1
CHAPTER LI BANKING AND FINANCE
EARLY FINANCIAL VENTURES OF ILLINOIS TERRITORY-STATE BANK AND BRANCHES -- LOSS TO THE STATE FOR A DECADE-ANOTHER STATE BANK-BUILDING UP OF ALTON-CONSTI- TUTIONAL PROHIBITION AGAINST STATE BANKING-PRESENT BANKING LAW-DEVELOPMENT OF BANKING IN COUNTY-BANKING IN ALTON BY EDWARD P. WADE.
ยท By Charles Boeschenstein
Before the war of 1812, Illinois was but sparsely populated. The pursuits of the peo- ple were agricultural. A very few merchants supplied such goods as were necessary to the settlers and which could not be manufactured at home. Money was scarcely ever seen in the country; a few notes of state banks of other states were in circulation, but in the main the medium of exchange consisted of furs and skins of animals, and other useful commodities of local production.
The financial status of the country is indi- cated by the laws passed by the territorial legislature. One of these recited that the peo- ple of this territory were indebted to the peo- ple of Indiana on divers accounts and were poor and unable to pay their debts at this time, and therefore that all executions pro- cured on account of these debts should be stayed for a period of three years in order to give the debtors an opportunity to raise money to pay; and as the citizens of Illinois seemingly were annoyed by lawsuits that were brought against them by attorneys for cred- itors in Indiana, another law was passed, mak- ing it a misdemeanor for any attorney of In- diana to appear in a court of Illinois and pro- viding that any such attorney should be fined
in the sum of $500 for each offense. The net result of this legislation was that the people of Indiana withdrew from our people all commercial accommodations, and for the next several years the Illinois settlers almost starved to death.
After the close of the war, people from the east began to filter into Illinois in increasing numbers, bringing with them some property, and a certain amount of money, which money had been principally paid by the United States government to members of the militia. This addition of wealth, it would appear, upset the sober judgment of the earlier inhabitants, fill- ing their heads with aspirations for a higher plane of living and for greater material com- forts than had hitherto been theirs, and en- gendering all kinds of schemes for the easy making of money.
Even the legislature was not exempt from this contagion, for it passed a law granting a franchise and incorporating the Little Wa- bash and International Navigation Company, which act glowingly set forth that the Little Wabash river was inevitably destined to be- come one of the greatest arteries of commerce the world had ever seen and that it was the amiable intention of the navigation com-
440
441
HISTORY OF MADISON COUNTY
pany to remove all snags and other obstruc- tions then in the river; and in consideration of these intentions the company was granted the right to collect toll from all who set any- thing afloat on the river, this toll varying from five cents for a canoe to $Io for a steamboat, which latter kind of craft was ex- pected to cruise these waters in vast numbers.
FINANCING NAVIGATION SCHEME
In order to finance this navigation scheme the legislature created banks at Shawneetown, Kaskaskia and Edwardsville. The states of Ohio and Kentucky had chartered a batch of about fifty similar banks, and Missouri added two at St. Louis. These banks turned out money as fast as the settlers carried it away. There was little needed for commerce, the navigation company failed to create any great demand by the vast developments along the Little Wabash and the settlers used the money to build houses in towns for which there was no demand, and to buy land on speculation.
Government land sold for $2 an acre, a quarter section for $80 paid down, the bal- ance to be paid in five years. In a short time a quarter-section had been purchased for nearly every $80 there was in the country, most of it with the expectation that the rapid settlement of the country would enable the purchaser to sell it for a higher price before the expiration of his credit. Towns were laid out and lots sold, but the town maker re- ceived no money ; instead he was given notes of hand. Moreover the amount of merchan- dise brought here vastly increased. Every man's credit was good, and everybody em- barked in ventures.
By the year 1820, the people had become hopelessly involved in debt, the fondly ex- pected tide of immigrants had failed to ma- terialize, real estate was unsalable and gov- ernment lands remaining unpaid for were for- feited. The residents who lived on the Little Wabash even burned down the toll houses and
drove the toll gatherers out of the country. The banks of Ohio and Kentucky broke, and the banks of Illinois followed them. Bank notes had driven out specie, and when the notes became worthless there was no money left in the country.
STATE BANK AND BRANCHES
When the territory became a state in 1818 the constitution provided for the establish- ment of a state bank and its branches. and in 1821 an act was passed creating this bank. Purely a state institution it had no capital ex- cept the credit of the state. The head bank was at Vandalia, with branches in Edwards- ville, Brownsville, Shawneetown and Pal- myra. The charter provided that it could issue paper based on the credit of the state. Of the so-called capital of $500,000 it was authorized to issue $300,000 in one, two, three, five, ten and twenty dollar notes, bearing two per cent. annual interest and payable by the state in ten years.
The act provided that these bills should be loaned to the people in sums of not exceeding $100 on personal security, and in greater sums on mortgages on land. The bills were re- ceivable in payment of state and county taxes and for salaries of public officers, and if a creditor failed to endorse on an execution his readiness to receive the bills of the bank in payment, the debtor could stay collection for three years.
The legislature so firmly believed in this scheme that in spite of the protests of Lieu- tenant Governor Pierre Menard they voted to ask that this state money be accepted by the United States in the land offices in pay- ment for public lands. The $300,000 of new money was soon loaned out, without much attention to the security. The notes fell twenty-five, then fifty, then seventy cents be- low par, and drove out all other money. Even small silver coins were so scarce that the peo- ple from necessity cut new bills into two
442
HISTORY OF MADISON COUNTY
pieces so as to make two halves of a dollar. There was no other money for several years, and in the meantime few people pretended to pay their debts. The president and directors, the act provided, should be elected bi-ennially by the legislature, and this opened the way for vicious political influences to enter into the management of the business.
Governor Coles, in 1822, urged an investi- gation of the bank and had a law passed re- quiring cashiers to furnish security and em- powering him to remove delinquent cashiers. The state was embarrassed in carrying on gov- ernment. The taxes were paid in nearly all cases in bank bills, and the legislators were compelled to provide for their own pay and the pay of other officers by giving enough of the depreciated bills to equal the amount of the salary, so that members in place of $3 re- ceived $9 per day ; and the salary of the gov- ernor and of other officials was paid in the same way.
Governor Edwards on assuming office in 1826 made peremptory demands on the banks for reports and asked especially to be fur- nished the names of members of the general assembly and officials who were "defaulting debtors." He appointed a committee to in- vestigate the branch at Edwardsville. Benja- min Seward was cashier of the bank when it was organized and he was succeeded by R. T. McKinney.
It was charged that this bank had loaned $2,000 on real estate, which loan when fore- closed realized only $491.83; that it loaned $6,625 which was secured by real estate valued at $3,140.71, and this loan was made to three prominent advocates of the convention for the founding of a pro-slavery newspaper in Edwardsville. It was further alleged that the bank officers loaned themselves amounts greatly in excess of that permitted by law.
A large amount of testimony was taken and the committee eventually reported that "Noth- ing had been proved against the president and
directors and cashier of the branch bank at Edwardsville, to-wit: William Kinney, Jos- eph A. Beaird, Thomas Carlin, Abraham Prickett, Elijah Iles and Theophilus W. Smith, which would justify the belief that they had acted in bad faith."
It is not known how much of the feeling against the officials of the bank was due to political differences. All of them were promi- nent men of the day. Carlin was afterward elected governor and Smith was a justice of the supreme court. The United States su- preme court meanwhile decided that bills of this character issued by banks were in viola- tion of the constitution.
LOSS TO THE STATE FOR A DECADE
Governor Ford estimates that in the course of ten years of the existence of the bank, the state lost $150,000 by receiving depreciated currency, $150,000 more by paying it out, and $100,000 of loans which were never paid by borrowers, and which the state had to make good. This latter amount of $100,000 was borrowed by the state to redeem the out- standing issue of the defunct bank, and as there was doubt whether this amount would cover the entire obligation, the state provided that state bonds bearing 6 per cent. might be issued to meet the remainder. The money was secured from Samuel Wiggins, of Cin- cinnati, and the "Wiggins loan" as it was called, was for many years a torment to the legislators who authorized it. The charter of this bank expired January 1, 1831.
When Governor Duncan was inaugurated, he recommended new banking legislation. For the most part, owing to previous ex- perience, the people were not favorable to banks, and the new institutions were brought into existence in defiance of the vital prin- ciples of political economy. The state was peopled mostly by newcomers whose advent could have justly been attributed to a desire for pecuniary gain or personal advantage.
443
HISTORY OF MADISON COUNTY
Cities did not exist, there was comparatively no manufacturing, little or nothing was ex- ported, and no surplus capital was available for investments. Prospects for success, there- fore, were not in any wise rosy for these new enterprises, and though they were started with stock actually subscribed, they were en- gulfed in the great wave of internal improve- ment speculation that swept over the country.
ANOTHER STATE BANK
The people who had had such a varied ex- perience in financial matters hardly expected to find themselves part of an enterprise with millions of capital. A bill was passed in 1835 chartering a state bank with a capital of $1,500,000, with power to increase to $2,500,- 000 if the legislature saw fit to do so. The principal bank was to be at Springfield, with a branch bank at Vandalia. The bank was to pay a tax of one-half of one per cent. of its capital actually paid, but was subject to no other tax. The state reserved the right to subscribe to one-fifteenth of the stock. A provision of the charter was that $5 in cash must be deposited with the subscription of each share of $100, and another clause pro- vided that no subscriber should receive more than a certain number of shares of the stock.
John Tillson, Jr., of Hillsboro; Thomas Mather, of Kaskaskia; Godfrey, Gilman & Co., of Alton; Theophilus W. Smith, of Ed- wardsville, then supreme judge, and Samuel Wiggins, of Cincinnati, made arrangements to obtain money in eastern cities to invest in the stock. Subscriptions were made in the name of others, and a struggle immediately began for control. Thomas Mather was elect- ed president, and, joined with Godfrey Gil- man & Co., secured control.
The legislature of 1836 increased the capi- tal to $2,500,000, and also revived the old Bank of Illinois at Shawneetown, which had practically been out of existence, by increas- ing its capital stock from $300,000 to $1,700,-
000, the state reserving the right to subscribe for the entire increase of the state bank, and for $1,000,000 of the increase of the Bank of Illinois, payable in each case with money raised by selling state bonds. The banks at the same time were made depositories and fiscal agents of the state.
BUILDING UP OF ALTON
A strong desire prevailed at this time to build up Alton as the metropolis of Illinois, and money was freely furnished for that pur- pose. Godfrey, Gilman & Co., of Alton, un- dertook to bring the lead trade from Galena to Alton, and were loaned $800,000 for that purpose. Stone, Manning & Co., another Alton firm, and Sloo & Co., of the same city, also secured large sums for this purpose. Godfrey, Gilman & Co. purchased lead mines and smelters at Galena and engaged exten- sively in the lead business, and the price of lead rose in a short time from $2.75 to $4.25 per hundred, but the price could not be kept up in the eastern cities, and the sales were finally made at ruinous prices.
The people of the state at this time had vast schemes of internal improvements and railroads were projected in all directions, with Alton as the terminis. A large sum was also appropriated for the Illinois & Michigan canal. To conciliate the farmers a provision had been made for a real estate fund of one million to be loaned on mortgages on land.
The banks had hardly begun to operate freely before the crisis of 1837 was upon them. Banks in the east suspended specie payments and the banks in Illinois did the same. As these latter banks were fiscal agents of the state, and of the railroad and canal projects, the legislature met in special session and legalized the suspension of specie on their part.
Politics naturally played a prominent part in the banking affairs, and though it was evi- dent that the institutions were hopelessly in-
444
HISTORY OF MADISON COUNTY
volved, they dragged out their existence until 1842, when both the State Bank and the Bank of Illinois suspended. The paper of the banks had been at a discount for several years. At first this was small, but it increased in two or three years to 20 and even 50 per cent. The bank paper was maintained nominally at par, but specie commanded a premium, and in this way good money was banished from circu- lation, so that when the banks failed the peo- ple were without money until supplied by the course of trade.
Governor Ford, when he went into office in 1842, estimated that the good money in the state, in the hands of the people, did not ex- ceed one year's interest on the public debt. He felt convinced that the state had erred in assuming the functions of a private enter- prise, and advised negotiations with the banks for "an amicable dissolution between the state and the banks." Terms of settlement were subsequently agreed upon and the ill- fated experiences of the state came to an end.
CONSTITUTION PROHIBITS STATE BANKING
The constitution of Illinois of 1848 pro- hibited the general assembly from involving the state in the banking business. The con- stitution of 1870 contained a similar provision. The general assemblies at various times granted special charters to corporations with banking powers but no general law for the establishment of banks was passed until June, 1888. By provision of the constitution it did not become effective until approved by a vote of the people at a general election, and this vote was taken in November, 1888, and the act was adopted. The banks under this act are authorized to do a general banking busi- ness, but are prohibited from issuing bills to circulate as money. They are under the sup- ervision of the state auditor to whom they make detailed reports and by whom they are adequately inspected.
PRESENT BANKING LAW
The act of congress establishing national banks was approved in February, 1863, but was superseded by the present law in June, 1864, which established a banking bureau in the treasury department, and operated by the comptroller of the currency, who exercises full control over this institution. A part of the capital of a bank, organized under the act, is required to be invested in government bonds, upon which circulating notes may be issued, which are receivable in all payments to or from the government, except for duties or imports, interest on public debt and in re- demption of national currency. In March, 1865, congress passed an act fixing a tax of IO per cent. on the notes of any person or state bank used for circulation and paid out by them, which act had the effect of taxing state bank circulation out of existence.
Disappointing as were the experiences of early banks, they served as foundation upon which the national and state bank systems as existing today were laid, and as Madison county has grown in population, gained in wealth and expanded in power, so have the banks of the county grown in strength, gained in standing and expanded in influence.
DEVELOPMENT OF BANKING IN COUNTY
In 1880 there were five banks in the county, two organized under the National bank act, and three private partnerships, viz: First National and Alton National, of Alton, West & Prickett and John A. Prickett & Sons, of Edwardsville, and F. Ryhiner & Co. of High- land. Private banks are not required to pub- lish statements and therefore official infor- mation concerning them is not obtainable, but a fair estimate of their resources is possible. The aggregate capital of the five banks was perhaps $300,000 and the deposits may have reached $2,500,000, a part of this being for- eign money deposited in the bank at High-
445
HISTORY OF MADISON COUNTY
land, which a short time afterward proved the undoing of that institution.
A comparison of figures for the last decade will show stronger than words, the tremen- dous growth made by Madison county banks. On January 1, 1901, when the twentieth cen- tury opened, there were four national and four state banks and one private bank in the county, a total of nine, and their capital and surplus together with the deposits, were as follows :
Capital Un-
Names of
and divided
Banks Surplus Profits Deposits
Alton National, Alton . . . . .$300,000 $70,472 $1,244,904.35 Citizens Na-
tional, Alton. 200,000 30,509 1,228,869.19
Alton Savings, Alton 200,000 35,741 979,906.93
Bank of Ed-
wardsville ... 190,000 14,965 854,622.68
First National,
Highland ... 150,000
20,796
823,388.95
First National, Edwardsville. 200,000 6,912
817,835.55
Alton Savings Bank,
Alton
167,000 656,484.03
First National,
Bank of Edwardsville,
Granite City. 100,000
14,409
641,759.31
Edwardsville
70,000 517,081.16
Citizens National Bank, Alton
I20,000
375,799.28
State & Trust, Highland. ... Alton Bank & Trust, Alton. 110,000
105,000
15,969
524,463.02
Highland Bank, High- land
35,000
298,411.92
State Bank, Col- linsville
130,000
15,302 475,183.36
First National Bank, Edwardsville
65,000
169,866.83
First National Bank,
Granite City
50,000
57,674.45
*Troy Exchange Bank,
Troy
10,000
100,000.00
First Trust & Sav'gs, Alton 100,000
1,340
293,156.29
Bank of Marine, Marine
28,000
2,472
227,013.85
First National, Madison .
54,000
2,723
236,349.41
Troy Exchange, Troy .. ....
40,000
4,77I
208,282.93
Granite Trust &
Sav'gs, G. C. 100,000
3.008
267,871.20
State Bank, St. Jacob
30,000
5,265
158,107.02
State Bank of Collins- ville, Collinsville ..
60,000
183,317.II
60,000 31,973
364.881.77
First National, Collinsville .. . Citizens State & Trust, Ed- wardsville .. ..
74,000
4,364
292,591.61
Totals
$777,000 $3,025,331.23
The last statements of the banks of the county, made under call of the comptroller of the currency and the auditor of state on April 18, this year, 1912, show 28 banks in the county, 8 national, 16 state and 4 private, with the following items :
*Private bank.
Capital and
Names of Banks Surplus Deposits
Alton National Bank,
Alton $200,000 $666,696.45
Granite City
Natl., G. C .. 100,000
8,023 818,534.03
13,735
562,347.86
446
HISTORY OF MADISON COUNTY
Capital and
Un-
Names of
divided
Banks
Surplus
Profits Deposits
Farmers Bank,
Bethalto
.$ 25,000
$ 131
$128,696.42
Citizens State,
Alhambra .. . .
25,500
771
77,440.09
Tri City State,
Madison
28,000
846
79,953.74
East End, High-
land
27,000
179
62,725.05
First Trust & Sav'gs, Madi-
son
25,000
5,055
80,841.15
*Adolph Hitz,
Alhambra .
39,000
...
222,000.00
*Wall & Co., Worden .
20,000
...
100,000.00
*Peoples, East
Alton
27,000
.
100,000.00
*Prange Bros.,
New Douglas
20,000
I32,000.00
Totals .. $2,507,500 $309,731 $12,003,725.76
BANKING IN EDWARDSVILLE
Edwardsville's first bank was started in 1816, its principal business being the hand- ling of funds for the United States land office. Its methods were crude and its life was short. Edwardsville, like Alton, had a branch of the Bank of Illinois, chartered in 1821. Both went through the same vicissitudes and passed out of existence in the same way, the co-op- eration of the state legislature being insuffi- cient to keep them alive. Edwardsville had no bank for many years afterwards, such money as there was in circulation being kept in strong boxes of business houses or con- cealed in private residences.
In January, 1868, the late Edward M. West and Major William R. Prickett, who is still a
resident of the city, organized a private bank- ing house under the name of West & Prick- ett. Its capital stock was $10,000. Mr. West died on October 31, 1887, and Mr. Prickett, with his son, Edward I. Prickett, continued the business under the firm name of W. R. Prickett & Co. The bank incorpated under the general banking laws of the state in Jan- uary, 1896, with the name of Bank of Ed- wardsville, and a capital stock of $25,000. William R. Prickett was president and Edwin P. Greenwood, cashier.
The Madison County State Bank was char- tered on May 3, 1897, with a capital of $25,- 000 and Judge William H. Krome, president ; W. F. L. Hadley, vice-president ; George Kalb- fleisch, cashier; and Charles Boeschenstein, secretary, A. P. Wolf being subsequently chosen assistant cashier. These gentlemen, with Henry P. Hotz and John Stolze consti- tuted the board of directors.
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