USA > Massachusetts > Suffolk County > Boston > Metropolitan Boston; a modern history; Volume II > Part 3
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1,000,000
North National
500,000
1,000,000
National Bank of North America.
500,000
1,000,000
People's National
100,000
300,000
National Bank of the Republic.
650,000
1,500,000
Revere National
600,000
2,000,000
Rockland National
100,000
300,000
Second National (Granite Bank)
500,000
1,600,000
Shawmut National
500,000
1,000,000
Shoe & Leather National
500,000
1,000,000
I
Union National
I792
1865, May
I
Washington National
1825
1865, Jan.
I
Webster National
1853
1865, Sept.
I
Traders' National
1831
1865, June 27
Tremont National
1814
1865, Jan.
1,000,000
1,000,000
349
A HISTORY OF BANKING IN BOSTON
Name of Bank. Original Capital. Capital as Changed.
State National
3,000,000
2,000,000
Suffolk National
500,000
1,500,000
Third National
300,000
300,000
Traders' National
500,000
600,000
Tremont National
750,000
2,000,000
Union National
I,200,000
1,000,000
Washington National
500,000
750,000
Webster National
1,500,000
1,500,000
The extra dividends paid by the various banks upon their becoming National banks, or soon thereafter, together with the dates, were as follows :
Atlas National, 10 per cent., regular and extra, April 1, 1865.
Blackstone National, 20 per cent., in stock, December, 1864.
Blue Hill National, 10 per cent. regular and extra, April, 1865.
Boston National, 20 per cent., in stock, December, 1868.
Old Boston National, 20 per cent., December, 1864, and 20 regular and extra, Octo- ber 2, 1865.
Boylston National, 25 per cent., in stock, April 1, 1865.
Broadway National, 12 per cent., in stock, December, 1864.
City National, 10 per cent., in gold (at 235), December 13, 1864.
Columbian National, 15 per cent., regular and extra, October 2, 1865.
Eagle National, 9 per cent., regular and extra, October 2, 1865.
Exchange National, 20 per cent., January 2, 1865.
Faneuil Hall National, 50 per cent., April 1, 1865.
Freeman's National, 25 per cent., regular and extra, October 2, 1865.
Globe National, 20 per cent., April 1, and 12 per cent., October 2, 1865, regular and extra.
Hamilton National, 8 per cent., regular and extra, April 1, 1864, and 60 per cent., March 1, 1865.
Hide & Leather National, 5 per cent., January 10, 1865.
Howard National, 121/2 per cent., in stock, March 1, 1865.
Market National, $20 per share of $70, in stock, and no cash, October 1, 1864; then assessed $10 per share, raising par from 70 to 100.
Massachusetts National, 10 per cent., regular and extra, April I, and 10 per cent., April 29, 1865.
Mechanics' National, 20 per cent., April, 1865.
Mount Vernon National, 10 per cent., regular and extra, April 1, 1865.
National Bank of Redemption, 20 per cent., in stock, October, 1864.
New England National, 25 per cent., February 6, 1865.
North National, 1623 per cent., in stock, November 21, 1864.
National Bank of North America, 25 per cent. in stock, no cash, April 1, 1865.
People's National, 10 per cent. extra, January 1, 1865.
National Bank of the Republic, 25 per cent. in stock, March, 1869.
Revere National, 10 per cent. regular and extra, April 1, 1865.
Rockland National, 10 per cent. extra, January, 1865.
Second National, one new share to nine old, October, 1864.
Shawmut National, 10 per cent., March 6, 1865.
Shoe & Leather National, 25 per cent., March 1, 1865.
350
METROPOLITAN BOSTON
State National, $8 per share, regular and extra, October, 1864; $62/3 in stock, May, 1865, and par raised from 60 to 100, giving two new for three old shares.
Suffolk National, 128 per cent., January 10, 1865. (Reported as highest extra divi- dend ever paid by a bank.)
Tremont National, 331/3 per cent. in stock, February 1, 1865.
Union National, 6 per cent. April 1, 1864, and 10 per cent. regular and extra, Octo- ber 2, 1865.
Webster National, 8 per cent. regular and extra, April 1, 1865.
During the period of reorganization two new banks were incorporated and commenced business, the Everett National and the Third National, which are included in the previous tables. The period also marked the final liquidation of the Grocers' Bank, which failed on November 30, 1855. The bank had a capital of $750,000 at the time of the failure. The receiv- ers paid all of the debts of the bank. The stockholders received $12 per share on June 12, 1861, and a final payment of $1.64 in March, 1865.
The first bank to receive a charter after this period was the National Security Bank, on February 1, 1868. This bank was merged in late years with the Commercial National Bank, which did not come into being until 1888, receiving its charter on October I of that year. The merged bank, known as the Commercial Security National Bank, is one of the twelve National banks in business in Boston at the present time.
The year 1869 marked one of the worst bank robberies in the history of Boston. The Boylston National Bank, originally founded as a State bank in 1845, and which was absorbed by the Atlantic National Bank in 1923, was the institution to suffer. Several men hired a room in the bank, adjoining the safe and separated only by a wooden partition. A trap door was cut through this to a twenty-inch brick wall. The men, who were supposedly engaged in a medicinal tonic business, worked steadily for weeks on the brick wall, up to Saturday, November 19. Between that day and Monday they finished their work and escaped with $320,000, largely in government bonds, leaving behind them several boxes labeled "Gray's Oriental Tonic," which were carefully packed with bricks and mortar.
Singularly enough this same bank figured in another robbery almost thirty years later. A 19-year-old messenger fled on May 19, 1897, with $30,940.35. He was arrested at Farmington, Maine, three days later, and all of the money except $130 which he had spent, was found on his person.
Dorchester was annexed to Boston on January 1, 1870, bringing into the city the Blue Hill National Bank, an institution originally started as a State Bank in 1832. The name of the bank had been changed from the Dorchester and Milton Bank on February 26, 1851, after a heavy rob- bery. The original capital was $100,000, which was increased succes- sively to $150,000 in 1854 and $300,000 in 1873. The capital was reduced
35I
A HISTORY OF BANKING IN BOSTON
to $200,000 in 1879, and in 1882 it was moved to Milton, where it is still in business.
The Great Boston Fire came on November 9, 1872, burning over sixty acres of the downtown section of the city and destroying upwards of $75,000,000 in property in less than twelve hours. There were fifty-two National banks in the city at that time, three-fourths of which were located in State Street. Only a few were in the path of the flames, of which six, the Revere, Hide & Leather, North America, Shawmut, Free- man's and Mount Vernon, were burned out.
On the morning after the fire the Clearing House opening was delayed from ten to twelve o'clock, but all of the six banks mentioned, except the Freeman's, made their settlements at that hour. The Freeman's saved its cash, but lost all books, files of collection and discounted notes, but it has been recorded, "to the credit of its customers, that the entire loan was promptly paid at maturity." Six months later, singularly enough, when Boston was visited by a second serious fire on May 30, 1873, the Free- man's National Bank was again burned out. This bank was absorbed by the Republican National Bank in 1907, which in turn went to the Shaw- mut in 1908.
As was the case throughout the country, the Boston banks were hard hit by the panic of 1873. Several new banks had been added to the grow- ing field, the Eleventh Ward National on May 20, 1872; the Central National on May 6, 1873; the First Ward National on June 1, 1873; the Manufacturers' National on July 1, 1873, and the National Bank of the Commonwealth, which had been incorporated in 1871. Two Brighton banks had been added to the city's list, the National Bank of Brighton and the National Market Bank of Brighton. With the annexation of Charlestown in 1873 came two more, the Bunker Hill National Bank and the Monument National Bank.
The financial storm hit the city on September 20, 1873. The Stock Exchange closed for a period of ten days. Banks were compelled to stop making loans because they could not obtain currency. They were able to transact business among themselves through the issue of $26,565,000 in Clearing House Certificates. The monetary crisis was worse than the previous panics of 1837 and 1857. In two weeks the Boston banks lost $8,139,000 of their deposits. It was six years before there was a full recovery from the effects of this panic, but all of the Boston banks weathered the storm.
Three new National banks were incorporated in Boston in 1875, the Fourth National on July 19, the Metropolitan National on August I, and the Merchandise on November 8. The Pacific National Bank was char- tered on November 1, 1877.
352
METROPOLITAN BOSTON
What was regarded as the first failure of a National bank in Boston came in 1878, when the Eleventh Ward National went to the wall. It was a small institution, having commenced business, as already men- tioned, only six years before. Its original capital was $300,000, which was reduced in 1877 to $200,000. An assessment of twenty-five per cent. was made on stockholders, but the institution could not continue and finally closed its doors. The total dividends which had been paid, when liquidation was completed in 1880, amounted to 36.07 per cent.
A second failure occurred in 1881, when the Pacific National Bank found itself in difficulties. It was closed on November 18 of that year, but resumed operations on March 18, 1882, after a one hundred per cent. assessment had been levied on the stockholders. The Central National Bank was in trouble at the same time, but a similar assessment of one hundred per cent. saved it from closing its doors.
The new lease of life for the Pacific National was for a very brief time, as it failed finally on May 20, 1882, only two months after it had resumed business. The bank had organized originally only five years before, with a capital of $250,000. This amount was increased to $500,000 on January I, 1880, and to $1,000,000 on October 1, 1881, but of this capital only $461,- 500 had been paid in. The voluntary assessment of one hundred per cent. was only partially collected, the total amounting to $742,800. The Comp- troller of Currency ordered an assessment of one hundred per cent. on November 27, 1882, only a portion of which could be collected. The bank's total resources were $3,912,161. Thirteen dividends were paid by the receiver before the bank was finally liquidated in 1893, the total of all dividends amounting to 65.33 per cent.
The National Bank of Brighton decided to wind up its affairs in 1882. Its capital had been increased from $200,000 to $300,000 on January 18, 1875. In 1879 the par value of the stock had been increased from $80 to $100 by trading four new shares for five old ones. An extra dividend of twenty per cent. was paid in April, 1880. The liquidation of the bank was completed within a year and the stockholders received a total of $126.50 in dividends.
The close of the year 1882 found the banks of Boston with $17,000,000 less in deposits than at the close of the preceding year. A new bank, the Lincoln National Bank, was incorporated on January 10, 1883, which was absorbed by the Central National Bank in 1898.
The Commercial National Bank was incorporated on October 1, 1888, and followed by the South End National on February 1, 1890. The Com- mercial is one of the twelve National banks doing business in Boston today, having merged with the Security National as the Commercial Security National Bank, in 1922.
L
353
A HISTORY OF BANKING IN BOSTON
A check made in April, 1889, brought the first indication of what might be expected to happen in the Boston banking field-a period of absorptions and consolidations, for it was found that the city had too many National banks. With a population of 400,000, Boston had sixty National banks, with a total capital of $53,300,000, while New York, with a population at that time of 1,500,000, had forty-five National banks, with a combined capital of $48,350,000.
The Merchandise National changed its name in 1890 to the Winthrop National Bank. Starting in 1875 with a capital of $500,000, which was increased in 1877 to $1,000,000, then reduced to $750,000 in 1878, and to $500,000 in 1879, the bank in changing its name exchanged three shares of Winthrop National stock for five shares of Merchandise National, which, in effect was a reduction in capital from $500,000 to $300,000.
The Maverick National Bank, with a capital of $400,000 and total assets of $10,218,799, failed almost without warning on the morning of November 2, 1891. The capital was wiped out and an assessment of one hundred per cent. was levied, of which about one-third was collected. Liquidation was completed in 1898, a total of 90.166 having been paid in dividends.
All of the Boston banks suffered somewhat from the panic of 1893, which was, however, less severe than those of 1837, 1857 and 1873. The prompt issuance of Clearing House Certificates aided the situation. Six banks passed dividends, but their action was taken merely as a conserva- tive measure, earnings and a portion of their surplus funds having been used to charge off bad and doubtful debts.
The Traders' National Bank was reorganized as the Hancock National on January 22, 1893, twenty per cent. of the capital being cancelled, and bringing it to $400,000. The capital had previously been reduced from $600,000 to $500,000 by a similar process. The Hancock National Bank was in turn absorbed by the Mercantile Trust Company on March 15, 1897, having reached the point where it could no longer continue in business.
Then came the red letter year in Boston's banking history-1898, which marked the beginning of the consolidation movement. Within a period of eight years, the number of National banks had dropped from sixty to twenty-eight. The Shawmut National Bank led the way in that first year, establishing a record for all time. It absorbed no less than nine other National banks, starting the movement which has since fol- lowed down to the present day.
The nine National banks absorbed by the Shawmut, which changed its name in the same year to the National Shawmut, were the Boston,
Met. Bos .- 23
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354
METROPOLITAN BOSTON
Columbian, National Eagle, Hamilton, Howard, Market, North, National Bank of North America, and the Revere, two or three of which had been in existence for more than three-quarters of a century.
These were not the only consolidations of that first year, however. The Eliot National Bank absorbed the City National, which was first incorporated in 1822, and the Tremont National, which had been in existence since 1814. The Continental National merged with the Manu- facturers National, the former being founded in 1860 and the latter in 1873, and the merged bank changed its name to the Colonial National Bank. The Everett National, which received its charter in 1865, was absorbed by the Shoe and Leather National, and Lincoln National, founded in 1883, went over to the Central National, making a total of fourteen bank consolidations for the year.
The year 1899 saw the failure of two of Boston's National banks, the Broadway, incorporated in 1853, and the Globe, which had started busi- ness originally in 1824. A receiver was appointed for the Broadway on December 16, 1899, and for the Globe just five days later, but in both cases 100 per cent was paid in dividends, final liquidation of the first named being completed on February 15, 1900, and of the second on Feb- ruary 25, 1903. The Broadway had a capital of $200,000, with total assets of $3,333,067 at the time of the failure, while the Globe had a capital of $1,000,000 and total assets of $8,437,439.
In 1900, the Blackstone National, founded in 1851, was absorbed by the Shoe and Leather National, which had been in existence since 1836, and which was itself absorbed in the following year, 1901, by the Na- tional Bank of Redemption. In 1901 also, the National Shawmut took over the Commonwealth National, founded in 1871, and the Third Na- tional, which was started in 1864. The Hide and Leather National, estab- lished in 1858, was absorbed by the State National, making the fourth consolidation in 1901.
The year 1902 saw the failure of one bank and two further consolida- tions. The bank to fail was the Central National, which had absorbed the Lincoln in 1898. The Central, which had been established in 1873, had a capital of $500,000 at the time of the failure, with total assets of $3,884,353. A receiver was appointed on November 13, 1902, and when final liquidation had been completed, on October 20, 1906, a total of 100 per cent had been paid in dividends.
The banks to figure in the consolidation of 1902 were the National Hamilton, started in 1898, which went to the Fourth National, and the Washington National, chartered in 1825, which went to the Suffolk Na- tional. The Suffolk National, in turn, which had been in existence since 1818, was absorbed by the Second National Bank in 1903, which also
355
A HISTORY OF BANKING IN BOSTON
marked the merger between the oldest bank in the State, the Massachu- setts National, and the First National.
In 1904 a precedent was established, when for the first time a Boston National Bank surrendered its charter and became a trust company, under the laws of the State. It was the Colonial National Bank, created in 1898 by the merger of the Continental and the Manufacturers, and which took the name of the Commonwealth Trust Company. According to the State records it obtained the charter of the Manufacturers' Trust Company, which had been organized originally under the name of the Manufacturers' Loan and Trust Company in Holyoke, in the western part of the State, on April 26, 1887, but which had never started in busi- ness. The location was changed to Boston and the name changed to the Commonwealth Trust Company when the Colonial National obtained the charter in 1904.
The Continental National Bank was originally a State bank, receiving its charter as a National Bank on October 1, 1864. By its merger with the Manufacturers as the Colonial National, and subsequent changing over to become the Commonwealth Trust Company, it came under State jurisdiction again. In 1923, however, it went back into the national field, when the Commonwealth Trust Company obtained a National Bank charter and then merged with the Atlantic National Bank, as the Com- monwealth-Atlantic National Bank, the name being shortened to At- lantic National about two years later.
Other consolidations in 1904, which marked the beginning of similar movements among the trust companies of the city, included the taking over of the National Bank of Redemption, founded in 1858, by the First National. The Webster National, incorporated in 1853, and the Atlas National, which started in 1833, merged in the same year, to form the Webster and Atlas National, one of the twelve National banks still exist- ing in Boston.
The year 1905 marked the failure of the American National Bank, which had been in business for but a comparatively short time, and which was a small institution. It had a capital of $200,000 and total assets of $483,516. A receiver was appointed on November 27, but the bank was not finally liquidated until November 30, 1911, the total amount paid in dividends reaching only 50 per cent.
The Mechanics National Bank surrendered its charter in 1905 and became a trust company, but as in the case of the previous bank to make such a change, it returned to the National field later. It was absorbed by the Federal Trust Company in 1909, which in 1923 was converted into a National Bank and is one of the existing twelve such banks in the city today. The original Mechanics National had first started as a State bank in 1836.
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356
METROPOLITAN BOSTON
The Monument National, established in 1854, and which became a part of the Boston system when Charlestown was annexed in 1873, was absorbed by the Bunker Hill National, also of Charlestown, in 1905, and the Mount Vernon National, which started in 1860, was taken over by the Boylston National. The National Shawmut took over the Exchange Na- tional Bank in 1906, the latter having been in existence since 1847.
The Bunker Hill National Bank in Charlestown, which was estab- lished in 1825, and which in 1905 had absorbed the Monument National, was absorbed by the City Trust Company on April 6, 1906, and was sold by that institution to the American Trust Company in 1910, and is still operated as a branch of the last named trust company.
In 1907 the Freemans National, founded in 1836, was taken over by the National Bank of the Republic, which was itself absorbed in 1908 by the National Shawmut Bank. The Faneuil Hall National Bank, estab- lished in 1851, was absorbed by the Beacon Trust Company in 1909, and in the same year, the Metropolitan National, chartered in 1875, went to the Atlantic National.
Not until 1912 were there further consolidations among the National institutions, that year marking the last of thirteen mergers by the Na- tional Shawmut, when it took over the Eliot National, which was founded in 1853, which had itself taken over the City National and the Tremont National in 1898. It also marked the first of several consolidations which were to follow by the Merchants' National Bank, in the absorp- tion of the State National, which had been established in 1811 and was one of the old Boston banks.
In 1912 also, the Fourth National, started in 1875, was merged with the Atlantic National, the name of the merged bank being changed to the Fourth-Atlantic National Bank. In the same year the National Market Bank of Brighton surrendered its charter and became a trust company, the name becoming the Market Trust Company of Brighton. It was originally started as a State bank in 1854. As a trust company it was ab- sorbed by the International Trust Company in 1922, and was back in the National field in the following year, 1923, when the International Trust Company was absorbed by the First National Bank.
Thus in the period from 1898 to 1912, the year before the passage of the Federal Reserve Act by Congress, the number of National banks in Boston had been reduced as here shown, from sixty to twenty. The banking power of these twenty banks was $271,500,000, which, worked out on a per capita basis with the city's population, was $383.83-in which respect the city of Boston was shown to be first among the financial centers of the United States.
The year 1913 marked the passing of two more National Banks, when the New England National, then just a century old, having been estab-
357
A HISTORY OF BANKING IN BOSTON
lished originally in 1813, and the South End National, organized in 1890, were taken over by the Hamilton Trust Company, which had been organ- ized for the purpose of taking over these two banks. In the following year this trust company was absorbed by the Commonwealth Trust Com- pany, which, as already shown, became a National Bank in 1923 and was merged with the Atlantic National.
The Federal Reserve Act of 1913, which is treated under a separate heading, proved to be a great boon to the National banks as well as to the trust companies which became members of the Federal Reserve Bank. It coordinated the credit and resources of the country and provided an elastic currency to automatically meet the requirements of increasing and diminishing business. It also enlarged the scope of all National banks by authorizing functions which had been previously exclusive to savings banks and trust companies, a situation which had rankled in the National field for many years. Savings departments and trust departments thus became added, and new avenues for growth were opened up.
In 1914, the National Bank of Commerce, which had been established in 1850, was absorbed by the Merchants National. This latter institu- tion, in 1915, also took over the Winthrop National, which had been founded as the Merchandise National in 1875, its name being changed in 1890. The year 1915 saw the First Ward National, established in 1873, surrender its charter to become a trust company, the name of the insti- tution being changed to the Metropolitan Trust Company.
The Merchants National continued its policy of expansion in 1916, in the last consolidation before the entry of the United States into the World War, when it took over the Old Boston National, which had started in 1803 and was the third State bank to be created. Then fol- lowed the war period, when the banks of the country joined hands with the government and strained to the utmost of their resources to bring about a successful prosecution of the conflict.
Not until 1922 were the consolidations in the National field resumed, although the previous year, 1921, had been a record year in such move- ments among the trust companies of Boston. The Atlantic National took over the Peoples National, established in 1833, when consolidations were resumed, and in 1923, the same bank absorbed the Boylston National, which had been in existence since 1845.
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