USA > Illinois > Cook County > History of Cook County, Illinois : being a general survey of Cook County history, including a condensed history of Chicago and special account of districts outside the city limits : from the earliest settlement to the present time, volume II > Part 16
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"This has been about the dullest week financially that Chicago has suffered for many years past. The active available capital of the city is just now largely employed in retiring Illinois currency. The entire business of the city is sadly depressed, more for the want of means to operate than from any other cause. Exchange is nominal at par or 1/2 per cent. discount for coin and 14 to 2 per cent. for currency, depending upon the quality of the article offered. As to loans and discounts, they are entirely out of fashion."-(Tribune, June 15, 1861.)
"We, the undersigned merchants and business men of Chicago, do not believe that the resolves of a self-appointed, so-called finance committee can make a depreciated shinplaster good. Therefore, we hereby pledge ourselves to each other and to the interests of Chicago not to aid, assist, or abet in the fraud of giving to a depre- ciated currency a value that it does not possess, and that from this date henceforth we will not receive and circulate Illinois and Wis- consin depreciated shinplaster currency at anything more than its real value."-(Signed by over eighty merchants and business men.)
"A noticeable feature is the opening of several new banking houses, some of them connected with the leading firms of other cities. The old banks that have not gone absolutely into liquida- tion are closing up old accounts as fast as possible preparatory to beginning anew. J. Y. Scammon continues business in place of the Marine bank and the Marine and Fire Insurance company. These institutions, I. H. Burch, and Hoffman & Gelpcke, have gone into liquidation. E. I. Tinkham continues his clearing house. It will take the city a long time to accumulate the banking capital that has been lost in the collapse of our Illinois currency."-(Tribune, July 30, 1861.)
On May 28, 1861, E. I. Tinkham & Co. and I. H. Burch & Company made assignments for the benefit of their depositors. About the same time Hoffman & Gelpcke liquidated and issued a
182
HISTORY OF COOK COUNTY
circular announcing that they intended to close up business and settle with depositors. Nearly all of the brokers at this time bought and sold all varieties of stump tail in circulation here.
The example of the board of trade in returning to a specie basis was soon followed by all business interests of the city. Immediately thereafter confidence was restored and business of all kinds boomed regardless of the war. Currency was in immense demand. Busi- ness men could not get half as much as they wanted, but in every transaction as before they were compelled to take into consideration the value of all currency in circulation.
In September, 1861, Julius White, United States depositary, placed upon the market here for sale the first of the United States 7-30 treasury notes. Solomon Sturges & Sons subscribed for $100,- 000 worth of the 7-30 loan. The first sales were made on the 18th. Among the first subscribers were Walter L. Newberry, $10,000; Alexander White, $1,000; James Niccoll, $500; Jason McCord, $1,000; William T. Barron, $200.
About the middle of October, 1861, Tennessee securities were quoted in New York at 43 cents on $1; Missouri, 46 cents; North Carolina, 60 cents; Virginia, 47 cents. At this date Eastern ex- change was at from par to 14 per cent. premium and gold about the same. Exchange on Detroit was also at par. Willard & Keane's quotations were considered authority at this date.
Early in the fall of 1860 Illinois banks had issued about $12,- 500,000 of currency based on Southern security. By October, 1861 the amount had been reduced to about $3,500,000.
The Merchant's association at a business meeting adopted resolu- tions against the proposed bank bill then before the people for con- sideration. Prominent at this meeting were John V. Farwell, Judge Scates, Merrill Ladd, H. A. Hurlbut, Mr. Tyrrell, J. V. Clark and C. M. Cady, all of whom addressed the assemblage. Mr. Far- well, as a whole, liked the proposed bill, but objected to the proposed post notes. The resolutions against the bill were voted for almost unanimously by the citizens present. In this county the vote on the bank law was as follows: For the law, 121; against the law, 8.744. At this date the State auditor announced that the stocks of forty- five suspended banks had been sold. He further announced that he was busy redeeming the bills of such banks at a published rate of discount. In some instances the rate was as low as 50 cents on the $1 and as high as 66 cents on the $1. The stocks of thirty-one other banks were also being sold for what they would bring. He also announced that those of seventeen other banks would soon be placed on the market.
Late in 1861 the banks of New York, Philadelphia and Boston suspended specie payments. On January 10, 1862, gold was quoted at from 2 to 21/2 per cent. premium buying and 4 per cent. selling.
"The suit of Charles Chandler of Macomb, against the Marine
183
HISTORY OF COOK COUNTY .
Bank of Chicago settled the rights of depositors in the old banking institutions. After four days' trial here he obtained a judgment of $17,375.83 on a running bank account. The judgment was ren- dered against a stump tail balance, no allowance being made for the depreciation of the stuff; and such have always been the decisions of the courts in similar cases. The law allows no abatement of re- sponsibility. When a banker receives any currency as money, the courts hold him responsible to pay money in return." -- (Tribune, November 26, 1861.)
"The monopolists cannot brook the presence of any currency intrinsically better than their own. They have almost complete com- mand of the field now, and will only yield it after an obstinate and desperate resistance. The manufacturers of 'promises to pay' have made too nice a thing out of the business to voluntarily with- draw. Look at the state of the case: The shinplaster fraternity have 200 millions of their notes in constant circulation as money. On this 200 millions which they owe the community they charge and collect $20,000,000 on their own obligations. No other class enjoy such extraordinary special favors. Other people are obliged to pay interest on what they owe, but the bankers receive interest on what they owe and literally wax rich on the interest of their debts. But this imposition is only one of a series. The second is called 'exchange and discount.' When one of the banking fraternity puts one of his 'promises to pay' into circulation, all the others commence shaving the holders of them. The note which was issued as worth 100 cents is quoted and bought at a discount. The shave varies according to circumstances, being higher at one time than another. Sometimes the notes are done at a moderate shave; on other occasions they are tithed and frequently redeemed on shares, the holder getting but half their face. This miserable state of things breeds and sustains swarms of exchange brokers, who reap fortunes from the evils attending our currency system. As the whole currency (paper) passes through the hands of brokers and banks at least a score of times per year and a shaving is planed off the holder at cvery transit, varying from one-quarter per cent. in thickness to 20 per cent., the gross amount of spoliation suffered must be double the interest first charged, or thirty to forty millions in the whole Union. There must be added to this at least ten mil- lions to cover the loss by breaking of banks and the suspension of specie payments, all making an immense sum paid as a penalty annu- ally by the people for permitting these thousands of debt factories to pollute the currency medium, and convulse the business of the country by panics, contractions, and expansions. The remedy for the cure of this appalling evil is simple and at hand. It consists in substituting the Government demand notes. redeemable in gold at par. for the issues of the thousand banks."-(Tribune, October 12. 1861.)
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HISTORY OF COOK COUNTY
"With the sinking out of sight of so many of our old and well established banking houses, our business public for a time were at a loss to know where to do their business. One house after another has opened its doors until now there seems to be scarcely any lack of banking accommodations. Among our old citizens J. Y. Scam- mon has taken the place of the Marine bank, and Solomon Sturges & Sons with an immense capital occupy the rooms of George Smith & Co. on Wells street. Among the new houses are Brotherton & Nettleton, from Cincinnati; A. C. Badger & Co., from Louisville, Ky .; C. B. Blair, who represented the Branch Bank of Indiana at Laporte; Chapin, Wheeler & Co., who represent the South Bend branch, and Burkham & Sons, who represent the Lawrenceburg branch, and there is an agency here of the Bank of Montreal, E. Willard being the representative."-(Tribune, October 4, 1861.)
"In a speech, October 12, 1861, Mr. Wentworth denounced the banking system of the State, said it was charged that the Legislature was bribed to pass the late banking law and stated that he was pre- pared to go before any grand jury and give the names of those contributing money to influence legislation."-(Tribune, October 13, 1861.)
"For the convenience of subscribers the banking house of Solo- mon Sturges & Sons offer to furnish them gold to pay the Govern- ment for ordinary currency free of extra charge. This patriotic offer on their part is really equivalent to giving the suscribers 1/2 to 34 per cent., as gold is now worth that premium in this city. So liberal and patriotic a policy on the part of Solomon Sturges & Sons will be properly appreciated by their fellow-citizens. They deserve a general vote of thanks."-(Tribune, October 16, 1861.)
In February, 1862, New York exchange was quoted at 1/4 of 1 per cent. premium and an abundant supply was obtainable. Gold at this time was 4 per cent. premium above the best paper.
The Board of Trade on February 10, 1862, passed the following resolution : "Resolved, That the president of this board be directed to telegraph the honorable, the Senators from this State at Wash- ington, that in the opinion of this board the Senate should pass immediately the House bill making treasury notes a legal tender, believing as we do that the great Northwest will sustain the credit of such issues by receiving them cheerfully for all our products." (Tribune, February 11, 1862.)
The passage of the treasury note bill in February, 1862, gave great confidence throughout the entire country and particularly at Chicago. It meant that the Government thereafter would sustain the money of the country. In March demand treasury notes were quoted at 1/4 per cent. premium above the best bank issues, but among bankers and business men thev passed ordinarily at par with the best bank issues. In April. 1862. W. F. Coolbaugh opened a banking house and about the same time J. W. Drexel & Co. did the
185
HISTORY OF COOK COUNTY
same. James Boyd and H. Doolittle were also in the banking busi- ness here at this date. About the first of June treasury notes were 1/2 per cent. premium and gold from 3 to 4 per cent. premium. "Bank rags" were the circulating medium and were in abundance, though very inconvenient. The demand for treasury notes led a little later to a wish to have them established as the par fund or circulating medium instead of the "bank rags." At this date people were warned against wild-cat bills of all descriptions which flooded this community. Canada currency at this date was 2 per cent. pre- mium. About the middle of June gold had risen to about 7 per cent. premium.
In June, 1862, the majority for the new Constitution in this city was 663 and for the banking articles of the new Constitution the majority was 1,948. By June 24 gold had advanced to 9 per cent. premium. At this date the first issue of treasury notes was quoted at 4 per cent. premium. It was stated that the rise in gold and in old treasury notes was due to the passage by the House of Congress of the bill for an issue of $150,000,000 of new demand treasury notes, of which $50,000,000 was to be in bills of denominations less than $5. It was thought that such an immense issue would depre- ciate the currency and consequently in this community the new bills were from the start regarded with some misgivings. The ad- vance in the price of gold in July greatly alarmed financiers here. On July 8 gold was quoted at 11 per cent. premium and the next day at 17 per cent. premium over currency. Old treasury notes at this time and silver were quoted all the way from 5 per cent. to 12 per cent. premium. On July 18 gold was quoted at 18 per cent. premium and on the 21st as high as 20 per cent. About this time Congress passed a bill to permit the use of postage stamps as small currency. Late in July the department was paying out daily $2,000 in postage stamps to be used as small currency. The stamps were issued in small packages in order to keep them from becoming soiled and in this condition they passed around in packages of 10 cents, 25 cents, 50 cents and $1. All other fractional currency was for- bidden at this period.
"Probably at no time in our business history has there been such a scarcity of silver. One may travel a week with a dollar note in his pocket, indulge in cigars and other domestic follies to an un- limited extent and at the close of the week find his dollar note still wadded up unbroken in his pocket. At the railroad office if the fare be a dollar note and a fraction, and you are unfortunate enough to have nothing but a five-dollar note, you must pay the note or forego your trip. The grocer bars you from sugar and the market man from your matutinal steak unless you pay him in silver. The dry goods clerk makes change with shinplasters, vulgarly supposed to represent 25 or 50 cents, but which of course can be redeemed only by the same institution by a second purchase. Now we have a
186
HISTORY OF COOK COUNTY
plan to propose. Take your demand treasury notes and buy up a quantity of 1, 3, 5 and 10-cent postage stamps and pay them out for all fractions of a dollar."-(Tribune, July 14, 1862.)
"The brokers are paying 10 per cent. premium for silver change and selling at 12. Many of our dealers are resorting to postage stamps to make change. They put them up in little packages of 10, 20 and 25 cents, and, having marked them, wrap them in bits of paper to keep them clean. This is far better than for the town to become deluged with irresponsible shinplasters."-(Tribune, July 15, 1862.)
The whole county loan of $200,000 at 7 per cent., ordered in 1862, was taken by Chicago bankers, as follows:
Sturgis & Sons
$100,000
Merchants Savings Loan and Trust company. 25,000
Chapin, Wheeler & Co 25,000
J. Y. Scammon 20,000
10,000
W. F. Coolbaugh & Co.
10,000
Drexel & Co. 10,000
A. C. Badger : Co 5,000
Total
$205,000
"To give the uninitiated some idea of the beauty of shinplasters as we 'see it' here and as a subject to laugh over in the future years, we annex a list of the contributions made by a certain Wabash avenue congregation on Thanksgiving day. The list was taken as the 'collection' came from the plates."-(Tribune, December 8, 1862.) :
1 two-dollar bill $ 2.00
11 one-dollar bills 11.00
9 fifty-cent postal currency 4.50
16 25-cent postal currency 4.00
19 10-cent postal currency
1.90
16 5-cent postal currency
80
1 patent postage stamp
10
2 10-cent postage stamps
20
3 5-cent postage stamps
15
25 3-cent postage stamps
75
12 1-cent postage stamps
12
3 silver dimes
30
5 silver half-dimes
25
2 3-cent pieces 06
09
4 old coppers
04
4 grain inspection tickets
40
1 Joliet bank ticket 25
20
35 Chicago railroad tickets
8.75
1 Chicago railroad ticket
15
2 Chicago railroad tickets with four holes
20
2 Chicago railroad tickets with three holes
-30
2 Chicago railroad tickets with two holes 30
1 S. T. X. Bitters ticket.
00
Total
.$36.81
9 new coppers
4 Walker omnibus tickets
Western Marine and Fire Insurance company.
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HISTORY OF COOK COUNTY
Among the leading bankers in July, 1862, were the following : Chapin, Wheeler & Co .; Solomon Sturgis & Sons, Merchants Loan and Trust company, Burkham & Sons, Western Marine and Fire Insurance company, A. C. Badger & Co., F. G. Adams, Joseph W. Drexel & Co., C. P. Blair, Rutter, Endicott & Whitehouse; Mark & Hertel, J. G. Conrad, J. M. Adsit, Brotherton & Nettleton, Trad- ers bank, Bank of Montreal Agency, Wiley Brothers & Co., Ruxton & Co., H. Doolittle, James Boyd, Willard & Kean.
In August, 1862, an organized band of counterfeiters put out in this city a large quantity of their paper products before they were discovered and arrested. In August, 1862, treasury notes of the denomination of $2 appeared here for the first time. Late in August, early in September and throughout October the price of gold rapidly advanced. On September 30 it was quoted here at 23 per cent. premium. By October 14 it had reached 32 per cent. premium, by October 15, 371/2 per cent. premium, but on the 18th of October the price dropped to 27 per cent. premium. Late in Oc- tober, 1862, Collector Haven received $5,000 in small United States fractional currency and so great was the demand he was forced to pay it out to different individuals in lots of $5. At this time the demand for fractional currency was enormous. Business houses, street railways and even the Chicago Times issued a sort of shin- plaster which circulated as fractional currency and in a measure relieved the distress prevailing here in money matters. The Board of Trade persistently demanded a greater quantity of postal cur- rency. There had been received here by December about $40,000 of such currency, but the board at a business meeting demanded of the government $200,000 more at the earliest possible moment. Late in 1862 the newspapers here could not or would not understand the new proposed national banking law. At a business meeting held in December the Board of Trade, the express companies, the tel- egraph companies and numerous wholesale and retail merchants agreed that after January 1, 1863, they would take no more small currency except United States postal notes, silver, copper or nickels. At this date the City railway had issued monthly tickets which were in circulation to the amount of about $40,000. Upon the announce- ment that on January 1 such tickets would be thrown out of circu- lation a small panic arose among holders of the same and they were sacrificed at a considerable loss to holders when they really should have passed at par. For the week ending January 10. 1863, Col- lector Haven paid out about $30,000 worth of postal currency, or as they were termed "little greenbacks." At this time nearly all of the old shinplasters which had circulated here so extensively the pre- vious summer had disappeared. The little greenbacks and the ac- tion above mentioned of the business men had driven them from this community. In January. 1863, gold was quoted all the way from 40 to 72 per cent premium.
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HISTORY OF COOK COUNTY
During the summer of 1862, when gold began to rise, the brokers here began to buy and sell the same like any other commodity and as it continued to rise and fluctuate in value the expectations and hopes of brokers arose and fell correspondingly.
The troubles of the Marine bank culminated early in 1863 and many lost heavily thereby. It was claimed that in 1860 heavy defal- cations had undermined the strength of that institution and later when Mr. Scammon returned from Europe its affairs were patched up temporarily, but as the financial troubles of that date contributed to their distress the bank in the end was unable to recover itself and was compelled to quit business early in 1863 with a debt of over $200,000 hanging over it.
The new National banking law passed by Congress in February, 1863, received the favorable opinion of Chicago financiers and busi- ness men. Chicago men declared that by reason of the fact that the United States Government was back of the National banking law the currency thus issued could not be otherwise than good, pro- viding the Government itself continued to exist. Citizens here re- garded the law with confidence and awaited its operations with enthusiasm and hope. Early in 1863 the freaks of the gold market were regarded with much concern here by business men. The stock and gold brokers were in their element. It gave them an opportunity to gamble on futures and to make money from those who could be enticed into the web of their misrepresentations.
In May, 1863, it was rumored that the first bank under the na- tional law was soon to be established in this city. By May 7 nearly $300.000 in treasury notes had been exchanged for 5-20 bonds at the United States depository by Mr. Haven, the collector. At this time preliminary steps to establish a United States savings bank under the national banking law with a capital of $500,000 were taken here. The stock was offered by Horn, Miller & Lewis, at- torneys, and by L. E. Alexander, cashier of the Mechanics Savings bank. On July 20, 1863, a number of business men and capitalists assembled in the rooms of the Mercantile association "to consider the establishment of a National bank with a capital of at least $1,000,000." In the spring of 1863 the First National bank, with a capital of $100,000, was duly authorized to commence business.
In August, 1863, Lyman J. Gage, cashier of the Merchants' Sav- ings Loan and Trust company, was victimized by a woman who managed to secure $3,600 by the transaction. During the summer and fall of 1863 people generally began to realize that the true monetary basis was gold. In February, 1864, the Second National bank and the Third National bank began operations. James H. Bowen was president of the Third National bank, which had a capital of $200,000; Ira Holmes was cashier. This bank was lo- cated at 156 Lake street. J. A. Ellis was president of the Second National bank and E. I. Tinkham cashier. This bank was the suc-
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HISTORY OF COOK COUNTY
cessor of the old private concern of J. A. Ellis & Co. E. Aiken was president of the First National bank and E. E. Braisted cashier. The First National bank at this date had a capitalization of $300,- 000. In May, 1861, George Smith, president, and E. W. Willard, cashier, gave notice that the Bank of America would withdraw its notes from circulation during the next three years. In February, 1864, they gave further notice that the time for withdrawal was limited and for all holding the notes to take advantage of the offer. Early in 1864, the Fourth National bank was established with a capital of $100,000. On April 5, 1864, a large meeting of bankers and business men, including members of the Board of Trade, was held for the purpose of taking steps to drive completely out of circulation the remaining wild-cat and stump tail issues yet here. It was decided to make greenbacks and national bank notes the basis of all commercial transactions .. At this time, owing to the fact that gold fluctuated so rapidly, all wished to make treasury notes the basis instead of gold. This was deemed so important that the first meeting adjourned before taking action in order to give the subject proper consideration. The Board of Trade passed a resolution on March 10 that five days later they would shut out from circulation on the board all wild-cat issues, but this resolution encountered an immediate remonstrance from business men and bankers. It would work too great a hardship on holders of such bills to summarily throw them out of circulation without giving due notice so that holders could have time in a measure to save themselves from serious loss. Accordingly the Board of Trade re- considered their action and postponed such a step until a later date.
In April, 1864, prices of all kinds, including that of gold, fluctu- ated rapidly and occasioned much excitement in this city. Wheat advanced in a few days about 15 cents per bushel. Stocks of all descriptions advanced about the same ratio. Early in 1864 there was in circulation here yet bills of the banks of New York, New England, Indiana, Iowa, New Jersey, Pennsylvania, Ohio, Michi- gan and other States. All were to be thrown out of circulation by the rule adopted to make treasury notes and national bank notes the basis of business. However, all other bank notes which were redeemable at par at the home bank were announced to be equal in value to treasury notes. May 16 was the date fixed for throwing out the bills of banks under the old system. It was at this time that working men and clerks demanded to be paid in greenbacks.
"Resolved, That on and after the first day of July, 1864, we, the bankers of Chicago, will receive and pay out as par funds, United States notes, national bank notes, and such other notes as are re- deemed in legal tender notes in the city of Chicago only. Thereafter for the present solvent New England bank notes and the notes of all other solvent banks whose notes are redeemed at par in New York shall be taken at one-fourth per cent. discount; Ohio,
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