USA > Indiana > Sullivan County > A history of Sullivan County, Indiana, closing of the first century's history of the county, and showing the growth of its people, institutions, industries and wealth, Volume I > Part 20
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This limited business was carried on mainly upon the principles of barter and exchange and credit. The merchant had more accounts then, comparatively, than now. And when settlement was made, instead of
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satisfying the account with a check or cash, the debtor very usually dis- posed of his wheat or corn, or live stock, through the merchant, and accounts were squared with very little money being used in the trans- action.
It was of course necessary that "a balance of trade" should be maintained-that the goods imported for use in the county should be balanced by goods of equal value exported from the county, or the dif- ference had to be made good by cash payment. But for a number of years the balance was kept very even. The amount of grain and peltries and lumber, etc., sent down the river to the world markets, measured very exactly the amount of goods that would be brought back in return. Capital came in slowly and was very quickly absorbed.
The result of all this was that very little money-meaning by that silver and gold and its substitutes-circulated in Sullivan county. The wealth of the country was held in the forests, in the fields and granaries, and in the stores. There was no surplus, no large amount of coin kept on hand to meet the exigencies of daily commerce; hence there was little need for a bank as a place of safe deposit. And since the few merchants, who did the business for the community, had individual credit at the large trade centers, there was little need for an institution that would furnish exchange and credit to distant cities. Money being unknown, banks had no cause to exist.
Says W. H. Smith in his "History of Indiana": "In the early set- tlement of the territory, such a thing as money was practically unknown, peltries being used as the only currency. All values were based upon what the article would bring in coon skins, muskrat skins and other furs. Such a state of affairs could only exist in a sparsely settled country, where manufactures were unknown, and where the only trading done was for the actual necessities of life. In those early days the settlers
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raised on their little farms about all they needed to sustain life, and their purchases were limited to salt, iron, dye-stuffs and a few articles of that character. For those they exchanged wheat, corn, hogs and peltries."
As population increased and the social and industrial organization became more complex, came a demand for currency that would represent values, and could be subject to the flexible uses of exchange without the more cumbersome and primitive methods hitherto in vogue. The gold and silver medium could not be obtained. A paper currency was sought instead. Originally intended, on its face value, to represent actual wealth. Practice soon produced a wide variance between the shadow and the substance, and instead of representing wealth actually existing, this paper currency soon came to represent only "a promise to pay," with no security as a basis.
Though such currency might be honestly issued to represent current values, it often happened that the security declined in value, so that when the "promise to pay" returned to its author, the latter found no resource to satisfy his note, which could be redeemed only at a large discount.
Thus the period during the war of 1812 was one of prosperity, owing to the increase of values caused by the war and the large sums disbursed by the government. At the close of hostilities, the war values suddenly declined and the enormous issue of notes representing such con- fidence and prosperity became nearly worthless paper in the hands of the holders, who had no recourse against the issuing institutions, which were in large number swept away during the panic.
State Bank.
In 1814 the territorial legislature of Indiana had chartered a banking institution at Vincennes, with a capital stock of five hundred thousand dollars, and one at Madison, with a capital of seven hundred and fifty
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thousand dollars. The bills issued on this capital were returned during the panic, but only a small part was redeemed.
In the first constitution of the state of Indiana appeared a provision that "there shall not be established or incorporated in this state any bank or banking company, or moneyed institution, for the purpose of issuing bills of credit or bills payable to order or bearer: Provided that nothing. herein contained shall be so construed as to prevent the general assembly from establishing a state bank and branches."
Here was the legal sanction for the State Bank of Indiana, one of the most notable institutions in the early history of banking. The bank at Vincennes was allowed to retain its charter, but on Janaury 1, 1817, this bank was adopted as a branch of the state bank.
The career of the first state bank is described by W. H. Smith in his "History of Indiana": "The bank thus enlarged and with such increased powers, at once entered upon an era of mismanagement that soon wrought widespread ruin. In 1821 its reckless management caused the general assembly to authorize legal proceedings to cancel its charter. Among other things charged and proved were, the contracting of debts to double the amount of the deposits ; the issuing, with a fraudulent pur- pose, of more paper than the bank had means for redeeming; the de- claring and paying of large dividends to the stockholders, while the bank was refusing to pay specie for its notes; and embezzling $250,000 de- posited by an agent of the United States in the bank for safe keeping. The notes of the bank and its branches, except those of the bank at Madison, became wholly worthless."
The failure of the first state bank occurred during a period of profound financial depression during the early '20s. For ten years or more the circulating medium in Indiana consisted largely of what were
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called "shinplasters," being the individual notes of local merchants and business men, and the bills of banks in other states.
During this period the state sought to give aid to the financial situa- tion by entering upon a great plan of internal improvements, consisting of canals and railroads, that would provide a magnificent system of transportation. In the speculative era that followed, when values were advanced with little regard for actual substance, the second state bank of Indiana was founded.
During the whole of its existence from 1834 to 1857, the credit of the State Bank of Indiana was not exceeded by any bank in the United States. Its notes went current from lakes to gulf, and its capital and credit were used to develop business and agricultural resources of the state. Its regular annual dividends for twenty years averaged ten to twelve percent, and at the expiration of its charter there was a surplus of one hundred percent to divide among the stockholders.
The State Bank was chartered in the winter of 1833-34. It was not a central bank with numerous branches, but the institution consisted of the different branches under control of a central governing body. Thirteen branches in all were organized, each branch having its own president and other officers. The semi-annual examinations by the state president was very searching, and kept the branches in a safe and healthy condition, with the result that only one case of fraud was ever found in all the thirteen banks. The capital of each branch was $160,- 000, one half of which was furnished by the state. As there were no capitalists in the state at that time, the charter provided that every stock- holder who paid $18.75 on each $50 share, should receive as a loan from the state the remaining $31.25 so as to fully pay up the stock. The loan was secured by bond and mortgage on real estate, at six percent interest. The full amount of the annual dividends was then credited on the loan,
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and in one of the branches at least the loan was thus paid off seven years before the expiration of the charter, and the borrowing stock- holder received for that period the full amount of the dividends on his shares. To pay for its half of the stock and its advances to stock- holders, the state had issued and sold in London its coupon bonds at five percent, these being secured by the state stock in the banks and liens upon borrowers' stock. The state could have retired all these bonds before maturity, but although the state credit was very low in and after 1837, these bonds commanded a handsome premium and could not be reached. The state's share in the banks, bonds and mortgages and sinking fund was so well managed that not a dollar was lost and the state made a net profit of nearly $3,000,000 by its connection with the bank revenues which became the basis for the large school fund.
The capital of the thirteen branches was a little over two millions, but the aggregate of the loans sometimes amounted to ten or fifteen millions in a year. There was one president, cashier and board of directors for the whole state, this central body having: absolute control over the branches with power to put any branch in liquidation, which was exercised but once, with only a temporary suspension. The general board was composed of splendid men and able financiers, and through their management the bank had a career such as few banks of the country surpassed. The State Bank of Illinois, chartered in the same year, disastrously failed in 1837. The Indiana Bank suspended specie payment in 1837, as did every other bank in the country except the Chemical of New York, but it always furnished its customers with New York exchange at one percent premium for its own or other bankable notes, and also never failed to supply the home demand for coin, which was then silver.
The State Bank of Indiana, being a monopoly, there was a great Vol. 1-18
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demand as its charter was expiring for a free bank act. Such banks were authorized by the new constitution. The agitation for a new bank law also resulted in a bill providing for the establishment of the "Bank of the State of Indiana," as the title was then made to read. The bill was vetoed and passed over the governor's veto, and became a law in 1855. The state could not be a stockholder in the new institution. There were to be twenty branches, each with $100,000 capital. It was a good franchise, but those who had procured it did not intend to operate a bank, and it passed under the control of the former managers of the old State Bank and other citizens, with Hugh McCulloch as president. The new bank began business in 1857, and started out under the most favorable auspices, but the panic of 1857 tested its integrity to the utmost. Only one bank in the east, and in the west the Bank of Kentucky and the Bank of Indiana alone escaped the necessity of sus- pending specie payment. The Indiana bank's notes commanded a premium, but the result of that was a drain on the bank's specie from the notes coming from other states. To have declined to redeem notes in specie on demand would have caused the forfeiture of the charter, which was too valuable to sacrifice. The branches made a gallant strug- gle, and had nearly exhausted their cash resources when on the fifth week of the panic there was a change for the better in the financial out- look, gold declined in the east, and the Indiana notes ceased to come home for redemption. The charter was safe. The effects of the panic were overcome in from two to three months, and the business of the branches was prosperous until the war broke out. Then ensued a great depression and a renewed demand for gold. Under the direction of Mr. McCulloch, the branches proposed to weather the storm, drew in their circulation as much as possible, arranged with depositors that deposits in gold should be paid in gold and in bank notes with notes. The issue
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of legal tender notes in 1862 made them a substitute for coin, and the question arose, could the bank save its charter by redeeming with legal tender notes instead of gold. A test case was hurried through the circuit court and supreme court of the state. The decision of the courts was that legal tender notes was lawful money in the terms of the bank's charter.
The Bank of the State of Indiana successfully passed through all financial storms, and when Mr. McCulloch resigned in 1863 to become comptroller of the currency it had upwards of three million dollars in gold coin in its vaults. With the passage of the National Banking Act, all notes of state and private banks were taxed ten percent, which was practically prohibitive and caused nearly all these banks to surrender their charters and either go out of existence or take out national charters.
The Civil war made enormous demands upon the national treasury, and the government within a few months after the beginning of the war was seriously embarrassed by the difficulties of providing funds from the regular sources. Permission to duly empowered organizations upon certain conditions to put into circulation bills furnished them by the government, their redemption in specie to be guaranteed and regulated by the government, was the means of making the national debt an avail- able capital for banking purposes that was proposed by Secretary Chase, and out of which grew the National Banking. Act. In order to give the national currency thus created preference over other forms of credit currency, it was proposed to tax the issues of state banks to such an extent that these institutions could not profitably issue notes. Naturally the state banks opposed the measure. But the necessity of securing "one sound, uniform circulation of equal value throughout the country upon the foundation of national credit combined with private capital," forced
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Congress to act, and a bill passed the senate February 12, 1863, and the house eight days later, and the National Currency act received the signature of the president, February 25, 1863. While the practical re- sults of the act did not realize expectations during the war, the national banking system eventually remedied the great financial bills from which the country suffered under the miscellaneous and loose methods of state banking.
In Sullivan county, during the period which has been discussed, there were no banks. In Terre Haute a branch of the State Bank had been established in 1834, and its bills and facilities were without doubt employed in the transaction of business in Sullivan county. Vincennes was also a banking center for this county.
Sullivan Banks.
The history of the oldest banking institution of Sullivan county involves the names of some of its oldest citizens and business men. The Crowders, the Hokes, the Duttons and Crawleys are family names that have at various times been associated with the oldest bank, and Jacob F. Hoke and William H. Crowder, Sr., have been identified with the Sullivan State Bank since the original institution was established as the Sullivan County Bank. Mr. Crowder was president of the bank from 1875 until 1897. In the latter year, the Farmers State Bank of Sullivan and the Sullivan County Bank having been consolidated, Mr. Hoke, who had owned a controlling interest in the State Bank since 1892, became president of the new institution. Mr. Hoke shares with Mr. Crowder the honor of being the oldest bankers of Sullivan county, and while Mr. Hoke is presi- dent of the bank, the elder Mr. Crowder is a director and W. H. Crowder, Jr., is cashier of the Sullivan State Bank.
The charter for the first national bank in this county was granted in
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January, 1872, and on the 9th of that month the bank was organized at Sullivan by the election of five directors, who chose as their executive offi- cers, Mr. H. J. Barnard president, and Medford B. Wilson cashier. In April, 1874, Mr. Wilson on leaving Sullivan sold his stock to Thomas K. Sherman, who became cashier in his stead. The three-story bank building on Washington street was built in 1873. The First National Bank of Sullivan went into voluntary liquidation January 8, 1878.
After the liquidation of the First National, the Farmers National was established and was operated under national charter until 1884, when it became the Farmers State Bank, and continued thus until merged in the Sullivan State Bank.
The Sullivan County Loan and Trust Company filed articles of incor- poration, July 28, 1903, the directors for the first year being C. L. Davis, A. E. Hazelrigg, C. J. Sherman, J. K. Smock, J. R. Riggs, C. H. Ed- wards, W. C. Jamison. The capital stock of this institution was placed at $100,000.
The People's State Bank of Sullivan was organized in the fall of 1906, the principal stockholders being George R. Dutton, formerly cashier of the Sullivan State Bank, and Joshua Beasley, of the abstract firm of Beasley and Brown. The first directors, elected in October, 1906, were John T. Hays, William Powell, Joseph T. Akin, Joshua Beasley and George R. Dutton.
The National Bank of Sullivan was organized in 1900, and has a capi- tal of $100,000. Charles L. Davis is president of this bank.
Carlisle. 1
Carlisle had no banking facilities until 1892. In that year E. W. Akin, Sr., Joseph T. and Charles T. Akin, all members of the well-known old family of that name, organized the People's Bank of Carlisle. A pri-
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vate bank, it has filled a large want in the business community and has received the hearty support of all citizens, whose confidence in the integ- rity and reliability of the owners is complete. Originally the bank had a capital of $25.000, but on the reorganization in 1902 this was raised to $35,000, and in 1907 again increased to $50,000. Edgar W. Akin, Sr., has been president since the foundation of the bank, and his son, E. W. Akin, Jr., is cashier.
During the past decade banks have been organized in other centers of the county, though previous to that time it was customary for one or more of the business men of the town to manage a small private banking business. At Shelburn is the First National Bank, organized in 1904. The Hymera State Bank was organized in 1906, R. L. Ladd being presi- dent. At Farmersburg two private banks were organized about 1902, and in 1905 one of them became the Citizens State Bank, with W. S. Baldridge president. The Dugger State Bank was organized in 1904, Joseph Moss and William R. Dugger being those chiefly interested.
Building and Loan Associations.
The first organization of a building and loan association in Sullivan county was effected at Sullivan in February, 1883. Its capital stock of $200,000 was divided into shares of $200 each. The directors for the first year were: W. H. Crowder, Joseph P. Stratton, Murray Briggs, M. B. Wilson, W. G. Young. The executive officers were Murray Briggs, presi- dent : William H. Crowder, vice president ; James Burks, secretary ; Pat. McEneny, treasurer.
Two years after the organization it was reported that the stockholders had paid $26.40 on each share, the present value of the individual shares being estimated at $34.83, and that an aggregate sum of $10,000 had been
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loaned. At the end of six years, about $80 had been paid on each share, and the value of the shares had risen to about $125 apiece.
In the latter part of January, 1889, a building, savings and loan asso- ciation was formed on a new plan, known as the Bedford plan of issuing stock in different series. Nine directors were to be elected each year, those chosen for the first being W. H. Crowder, B. F. Knotts, I. H. Kalley, C. J. Sherman, R. H. Crowder, A. B. Williams, William Willis, A. J. Stewart, Sol T. Wolfe. About two years later, in September, 1891, it was voted that borrowers in the old association could have their mortgages can- called by paying thirty dollars on each share, and that those who had stoek which had not been used as a basis for borrowing could surrender the same and receive $162 a share.
The report of the new association, three years after its organization, stated that 1,336 shares had been issued, loans had been made on 454, and the present capital was represented in first-mortgage notes of face value $45,400. Through the means afforded by the association, 49 persons had purchased homes, 42 had built new dwellings; and of the loans for these purposes, 72 had been made in Sullivan and 19 in the surrounding towns and country.
A building and loan association at Farmersburg was incorporated in February, 1893, with a capital stock of $100,000. The first directors were : W. S. Baldridge, William Lash, R. H. Van Cleve, T. W. Kennedy, W. Foote, S. W. Brown, George Heap.
CHAPTER XIX.
THE PRINCIPAL CHURCH ORGANIZATIONS.
Methodist Churches .- In 1885 Rev. M. S. Heavenridge, then pastor in charge of the Methodist church at Sullivan, prepared an historical paper which reviewed the work and growth of the Methodist church in this county from the beginning of the century. This paper, which was pub- lished in the Democrat of August 18th, is the basis for the following account.
Up to 1818 the country all along the line of the E. & T. H. Railroad, from Vincennes to Terre Haute, was almost an unbroken wilderness. Among the families then settled here were some Methodists, most of whom had been converted in the great revivals in Kentucky and Tennes- see, and who were formed into circuits which were visited at great inter- vals. Peter Cartwright, the famous itinerant evangelist, had organized the Vincennes circuit in 1808, which in 1811 extended from the Ohio river north as far as there was any white population on the Wabash. In 1821 the Vincennes circuit was divided, and the newly formed Honey Creek circuit embraced all the country on the Wabash from Terre Haute to the Knox county line. The appointments in this circuit in 1825 were-Car- lisle, Johnsons', Robbins', Walls', Weir's, Wilkins', Merom, Bonds', and Graham's, in Sullivan county, and Jackson Jr., Jackson Sr., Rays' and Barns', in Vigo county.
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At the session of the Missouri conference in 1821, Samuel Hamilton was appointed presiding elder for Indiana, and David P. Chamberlain was sent to the Honey Creek circuit, being succeeded in the fall of 1822 by Hackaliah Verdenbergh, who remained one year. In 1823 William Beauchamp was appointed presiding elder and Samuel Hull preacher in charge. At the quarterly meeting of April 17, 1824, at Jonathan Gra- ham's, a committee consisting of Joe MI. Baker, John Jean, Bailey Johns- ton, Jonathan Webb and Meshack Hunt was appointed to meet the trustees of the Carlisle meeting house for the purpose of making a purchase there if possible. In October, 1824, William Beauchamp died at Paoli, and James Armstrong succeeded him. Charles Holliday was appointed pre- siding elder in 1825, and Richard Hargraves preacher in charge. About this time the Honey Creek circuit was again merged with the Vincennes circuit. The total amounts paid by the different classes in this year was $34.3712, the salary of the presiding elder for the year was $50 and $5 house rent. Stephen R. Beggs was the next preacher in charge and S. C. Cooper assistant preacher. In 1827 John Miller and Ashael Risley were appointed to the circuit.
In 1828, on the division of the Vincennes circuit, the Carlisle circuit was formed. In 1829 William H. Smith and Boyd Phelps were named as preachers in charge, with twelve local preachers-Samuel Hull, John S. Cartwright, James Holmes, Thomas Springer, Owen Creasy, Daniel T. Pinkston, Joseph Joslin, Joshua Walls, Jesse Graham, Martin Hale, Wiley Wood, and Benjamin Bushnel. As exhorters were named, James F. Harney. Nathan Hinkle, Robert H. Springer, William Medarious, Garrett Davis, William Gill.
In 1830 Richard Hargraves and Daniel M. Murphy were preachers in charge, succeeded in the fall of 1831 by Enoch G. Wood and William Taylor. The following winter was one of great severity. Presiding Elder
1
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Lock, while returning home, found the Wabash gorged with ice, and after waiting two or three days he and a companion resolved to break a channel for the ferry boat. When near the opposite shore Lock lost his balance and fell into the water, but recovered himself and about sunset succeeded in reaching shore. After riding ten miles to the nearest house, he arrived speechless and frozen to the saddle. He was cared for by the family, but continued his journey in a few days. The exposure laid the foundation for consumption, from which disease he died July 15. 1834.
James Thompson was presiding elder and William Smith preacher in charge of the Carlisle circuit in 1832. For the following seven years there are no records, except that in 1835 Rev. A. Wood was presiding elder of the Vincennes district and in 1837 was succeeded by John Miller.
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