USA > Michigan > Kent County > Grand Rapids > Grand Rapids and Kent County, Michigan: History and Account of Their Progress from First. Vol. I > Part 62
Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37 | Part 38 | Part 39 | Part 40 | Part 41 | Part 42 | Part 43 | Part 44 | Part 45 | Part 46 | Part 47 | Part 48 | Part 49 | Part 50 | Part 51 | Part 52 | Part 53 | Part 54 | Part 55 | Part 56 | Part 57 | Part 58 | Part 59 | Part 60 | Part 61 | Part 62 | Part 63 | Part 64 | Part 65 | Part 66 | Part 67 | Part 68 | Part 69 | Part 70 | Part 71 | Part 72 | Part 73
Although the bank is an effect rather than the cause of industrial or commercial activity in any city or community, it is generally a good index to the state of industrial or commercial prosperity. In a review of the trade, manufacturing and transportation interests of Grand Rapids it is therefore eminently proper that its banking history should be first considered.
During the era of settlement, and even after the State was organ- ized, the people of Michigan were not friendly to banks. This was chiefly due to the unstable character of the currency then in circula- tion. Most of the paper money of that day was issued by private banking concerns, remote from Grand Rapids, and went current only so long as some man of known integrity and business standing said it was good. Nor was this prejudice-if prejudice it can be called- indigenous to the Western frontier. Many of the pioneers had been forced to leave their homes in the older States and begin life anew on the margin of civilization through the failure of some "wild-cat" bank. Hence the antipathy to banks whose solvency was liable at any mo- ment to be called into question. And it becomes necessary here to notice a series of events that had an important bearing upon the de- velopment of Kent county, as well as Michigan in general. Not- withstanding the hostility mentioned, at the beginning of 1837 there were sixteen chartered banks in the State, nine of which had been chartered by the Territorial Legislative Council and seven by the State legislature of 1836. The following is a list of these banks: Bank of Michigan, at Detroit; Bank of Monroe, at Monroe; Bank of
Hosted by
475
BANKING AND FINANCE
Pontiac, at Pontiac; River Raisin, at Monroe; Bank of Washtenaw, at Ann Arbor; Erie & Kalamazoo, at Adrian; Farmers' and Me- chanics', at Detroit ; Michigan State, at Detroit; Bank of Tecumseh, at Tecumseh; Merchants' & Mechanics' at Detroit; Bank of St. Clair, at St. Clair ; Bank of Clinton, at Clinton; Bank of Calhoun, at Marshall; Bank of McComb, at Mt. Clemens; Bank of Constantine, at Constantine; and Bank of Ypsilanti, at Ypsilanti.
It would seem as though these sixteen banks could have done the business of this then new State, but on March 15, 1837, the legislature enacted a law providing for the incorporation of moneyed institu- tions. This law provided that any number of men might associate together, subscribe $50,000 for a capital stock, and by filing articles of association with the county clerk, become incorporate. One-third of the capital must be owned in the county, ten per cent. to be paid in before election of directors, and thirty per cent. before bank notes should be issued. The law also contained this restrictive clause: "It shall not be lawful for any such banking association to issue, or have outstanding or in circulation at any time, an amount of notes or bills loaned or put in circulation as money exceeding twice and a half the amount of its stock then paid in and actually possessed; nor shall its loans and discounts at any time exceed twice and a half the amount of its capital stock so paid in and possessed."
This was bad enough, but a subsequent statute allowed them to deposit, instead of specie, a bond secured on real estate. Under the operation of this law hundreds of banks sprang into existence. Nearly every crossroads had its bank, and it is indeed a wonder that the inhabitants of any community could forego the luxury of a banking association. Every kind of property was quoted at inflated prices, and wild land, valued at three or four times its actual worth, became the security for the bank circulation of Michigan. These banks, on account of the character of their securities, were called "wild-cat banks," and the old banks were known as "chartered banks." Two banks of the wild-cat species sprang up in Grand Rapids: The Grand River Bank, with a capital of $50,000, and the People's Bank, with a capital of $100,000. The law required a certain amount of specie to be kept in the vaults of the bank, but this provision was evaded. The same specie served for exhibition for a dozen banks, at various intervals. The bonds and mortgages which were deposited were upon city lots in the woods, or on real estate at fictitious values. The notes of one wild-cat bank were held as capital by another wild-cat bank. They clandestinely put out a much larger circulation than the law allowed them. In these and a hundred other ways they evaded the law and practiced outrageous swindles upon the public.
Incidents connected with the operations of these banking schemes properly form a part of history, and none will serve as a better illus- tration than the City Bank of Brest. Brest was a magnificent city (on paper), situated at the mouth of Swan creek, about seven miles from Monroe. An excellently lithographed and beautifully colored map of the city represented it with broad avenues, lined with palatial resi- dences and handsome grounds. The extended river front of the city had continuous lines of docks, above which towered, on either hand, lofty warehouses, filled with the merchandise of the world. The larg-
Hosted by Google
476
HISTORY OF KENT COUNTY, MICHIGAN
est steamers were represented as sailing up past the city, whose docks were crowded with vessels of all descriptions, while the streets were thronged with busy life. The ruins of Ninevah or Baalbec are not more desolate now than are the ruins of Brest, and it is little less a wilderness today than it was eighty years ago. But Brest had a bank, with a capital of $100,000. It was a fair sample of a wild-cat bank, and an illustration of how those affairs were managed. The law compelled the bank commissioners to make an investigation into the affairs of the banks. Spies dogged the footsteps of the commission- ers, and it was generally found out when they were to visit a bank for inspection, whereupon the affairs of that particular bank were put into favorable shape forthwith. On Aug. 2, the commissioners examined the Bank of Brest and found that its principal resources consisted of loans on bonds, $16,000; bank stock, $10,000; specie, $12,900. It appears that of the specie, $10,500 belonged to Lewis Godard, and had been received by the bank the day before examina- tion, and was drawn out the day after examination. The $16,000 loan on bond and mortgage was a loan to the trustees of the town of Brest, to secure which the bank received an assignment of the bonds executed by Lewis Godard for the sum of $34,000, and also of mortgages of 118 city lots. in Brest. On the day after the examination the directors assigned the bond and mortgage back to the trustees of Brest, having received nothing for the same. Seven days later an impromptu in- vestigation of the affairs of the bank showed that the amount of specie on hand amounted to $138.89, while the whole amount of bills of the bank which were in circulation was $84,241.
A few days after the investigation into the affairs of the Bank of Brest, the commissioners examined the Bank of Clinton, and found specie on hand to the amount of $11,029.36. On the day succeeding the examination, $10,500 of this specie was drawn from the bank by the cashier, taken to Detroit and paid over to Lewis Godard, it being precisely the same specie that had done duty a few days before in the Bank of Brest. Thus the specie was carted about the country in ad- vance of the commissioners. Isolated banks, which could not enjoy the benefits of this rotation of specie reserve, resorted to other de- vices. Some of them, it is said, would buy a small quantity of specie, and nearly filling small kegs with pounded glass, would cover the top with specie and thus pass the examination.
Before the bursting of this financial bubble the amount of notes of these banks in circulation is estimated to have been not less than $300 for every man, woman and child in the State. While some bona fide banks were established, it was soon found that the law was taken advantage of by dishonest men to practice the grossest frauds and swindles. The law practically permitted these frauds, and the officers of the State, though striving honestly to do their duty, were powerless to prevent them. Banks were established in the most inaccesible places, which it was not likely the holders of the bills could ever find, and hence the bank would not be asked to redeem its currency.
When all the banks had been swept out of existence there were bills afloat representing millions of dollars. Many of these were in the hands of bona fide holders, who lost heavily thereby. Many of the bills had never been in use, and were then given away promiscu-
Hosted by Google
477
BANKING AND FINANCE
ously. Children used them to play with, and in the rural districts, where paper hangings were scarce, people used them to paper their rooms. The bills were engraved by Rawdon, Wright & Hatch, in the best style of their art, and were printed on a good quality of paper, so that they made the walls of a log cabin rather picturesque. When, about 1851, Louis Campau built a lookout or observatory on his house, on Fulton street hill, and was about finishing it, he said: "I am pretty rich. I shall paper this room with money. Here is the money." He brought forward a stack of bills of the defunct People's Bank, and with these the room was papered. They were still on the walls when the house was removed to make room for a more pre- tentious modern dwelling. Bills were scattered all over the State, thrown into old garrets, closets and book-cases. While the Civil war was in progress, thousands of dollars of these bills were resurrected and taken South by Federal soldiers, who found that the people of the South preferred them to Confederate money ; in fact, they were quite as valuable and superior in point of typographical appearance. Many of these bills are yet preserved and are shown as curiosities, serving also as reminders of those exciting times, which in history are re- garded as partaking both of the ludicrous and the mournful.
Looking over the field now, it is hard to understand how men of ordinary wisdom and prudence were led into this wild scheme of universal banking. But they suffered intensely for it. Kent county, which was rapidly filling up with a stirring Eastern population, re- ceived a check to her immigration and to her commercial prosperity from which she did not soon recover. But the lesson was not lost on Michigan. Upon the ruins of that utterly prostrated credit she builded so wisely that now no state enjoys greater prosperity or has a more enviable reputation for financial soundness.
The first bank to be established in Kent county was the Grand River Bank, of Grand Rapids, a chartered institution, established by John Almy and William A. Richmond. It continued in existence a few years, until forced into liquidation by the series of events already narrated.
THE PERIOD OF SANE BANKING
About 1851 William J. Welles decided to open a banking office in Grand Rapids. The bank was opened in the old stone building on the corner of Monroe and Ottawa streets, then known as the "wedge, which stood for many years as a sign of what the early builders could do with limited means and stones from Grand river. Fire finally made an end of the building, but not until Mr. Welles had established within its walls an enviable reputation for fair and just dealing and a handsome business. Mr. Welles continued in business until June, 1861, when, owing to serious losses arising from the dis- turbed condition of business affairs in connection with the breaking out of the Civil war, he was obliged to close his doors. Within a reasonable time his creditors received the amount of their claims in full, and Mr. Welles ever retained the good will and hearty sympathy of all who had business relations with him.
Daniel Ball & Company commenced to sell bills of exchange on Chicago and Eastern cities, in 1852. Their business enlarged year
Hosted by Google
1
478 HISTORY OF KENT COUNTY, MICHIGAN
by year until, in connection with Mr. Welles' establishment, the neces- sities of Grand River Valley-rapidly filling up with a vigorous and pushing population, including many new business enterprises-were fairly well provided for. In October, 1861, Daniel Ball & Company, surrounded by similar conditions with those of Mr. Welles, and hav- ing suffered severely by failures of individuals and banks of issue in Illinois and Wisconsin, found it impossible to continue business and went into liquidation.
About the year 1860, W. B. Ledyard and M. V. Aldrich opened a discount and exchange business in the office formerly occupied by W. J. Welles, the last named having built for his especial use a neat wooden office, about where the entrance to the Arcade now is.
In January, 1869, E. G. D. Holden and Marcus W. Bates, then operating in an insurance partnership, opened in connection with their business a savings department. This was afterward merged in the Grand Rapids Savings Bank.
In 1868, E. P. and S. L. Fuller, after building a brick block there, opened a private bank at or near what is now 228 Monroe avenue, and they operated it until 1876, after which Peter Graff and H. H. Dennis (as Graff & Dennis) continued it until 1879. In 1873, Randall & Dar- ragh (L. H. Randall and J. C. Darragh) began banking and operated a private bank until 1879. In the latter year both of these were merged in the Farmers' & Mechanics' Bank.
In 1860, Ledyard & Aldrich opened a private bank, and in the same year the interest of M. V. Aldrich was purchased by Henry Fralick. Mr. Aldrich resumed banking in 1871 and continued it until his death, when the Grand Rapids National succeeded to the business.
For a time between 1857 and 1860, Revilo Wells held forth as a private banker and custodian of other people's money. His capital, both in money and integrity, seems to have been limited, and his career was brief. After obtaining several thousand dollars of the people's money, he migrated westward and found a wider sphere of action somewhere on the California coast.
In 1870, David L. Lataurette, from Fentonville, in this State, instituted a branch in this city of his bank at the former place. He soon adopted unusual and unsafe methods of conducting banking by offering extraordinary rates of interest upon deposits. Prudent and cautious persons avoided his institution, but many fell into his trap, and within two years he succeeded in getting possession of not less than $75,000 in money from our citizens. Secretly he left the city, and the dividends received by the Grand Rapids creditors were only nominal.
In December, 1861, M. L. Sweet opened the office formerly occupied by Daniel Ball & Company, and he, together with Ledyard & Fralick, who had succeeded Ledyard & Aldrich, continued until March 10, 1864, to transact the general banking business of the city. The national bank law was approved by President Lincoln on Feb. 25, 1863, and on March 10, 1864, under the direction of several promi- nent business men, the First National Bank was organized, and com- menced operations with Martin L. Sweet as president and Harvey J. Hollister as cashier, with a capital paid in of $50,000. The directorate of the new financial institution, elected Sept. 22, 1863, consisted of five members-Martin L. Sweet, Lewis Porter, John Clancy, /Nelson
Hosted by Google
479
BANKING AND FINANCE
Burchard, and Charles Kendall. So successful did the new financial institution prove that before it was a year old it was found necessary to double its capital, the action being taken in December, 1864. In May, 1865, it was again found necessary to increase the capital of the bank to keep pace with its wonderful growth, and $50,000 was added, making the total capital $150,000, an increase of $100,000 in a little more than a twelve-month. The bank continued to grow steadily, and on June 29, 1868, the capital was increased to $200,000. At the annual meeting of the stockholders, held in January, 1871, it was decided to enlarge the directorate to nine. Those who were elected at this meeting were Martin L. Sweet, J. M. Barnett, W. D. Foster, T. H. Lyon, John Clancy, S. L. Withey, L. H. Randall, W. D Roberts, and Amos Rathbun The continued enormous growth of the bank's business made it advisable to again increase its capital, in 1871. A big jump was taken at this time, the capital being increased to $400,000. In January, 1881, the stockholders decided to increase the directorate to thirteen members, and when the charter of the First National was about to expire it was decided to reorganize the bank under the name of the Old National Bank of Grand Rapids. It was also decided to increase the capital to $800,000, the business war- ranting this increase. There were few changes in the personnel of the officers and directors of the First National during its twenty years of existence. The officers of the bank-Mr. Sweet as presi- dent, Mr. Barnett as vice-president, and Mr. Hollister as cashier- remained the same during its entire history, with the exception of a brief period, when it became necessary, in the transfer of some real estate, for the president, Mr. Sweet, to be superseded by Judge Withey, who served two years, when Mr. Sweet again assumed the presidency. Mr. Sweet was also the first president of the Old National Bank, and Mr. Barnett and Harvey J. Hollister, respec- tively, were vice-president and cashier. Mr. Sweet was elected pres- ident from year to year until his age and other circumstances in- duced him to give way to Mr. Barnett, who succeeded him as presi- dent. Willard Barnhart then succeeded to the vice-presidency. In 1903 the charter of the Old National was renewed until 1923. A second office of vice-president was created and Cashier Harvey J. Hollister was elected to fill the position, Clay H. Hollister being elected cashier. In January, 1904, the directorate was increased to fifteen members. In May, 1918, the capital of the Old National was $800,000, and its entire resources amounted to over $12,600,000, with Clay H. Hollister president, and George F. Mackenzie cashier.
No other national banks were established in the city until the early part of 1865. On Feb. 17 of that year the City National Bank was organized. Thomas D. Gilbert was its first and only president, and J. Frederick Baars its first and only cashier. The Board of Di- rectors was composed of the following gentlemen: William B. Led- yard, Thomas D. Gilbert, Ransom E. Wood, Moses V. Aldrich, Henry Fralick, Ransom C. Luce, George Kendall, James M. Nelson, and James Miller. The capital of the bank was $100,000. This capital was increased to $200,000, in 1867, and in 1871 to $300,000. Among other well known names of men who served on its Board of Directors were: Noyes L. Avery, John W. Peirce, Julius Houseman, Francis
Hosted by Google
480
HISTORY OF KENT COUNTY, MICHIGAN
B. Gilbert, Lemuel D. Putnam, and John C. Fitzgerald. In 1865 it was made a United States Depository. The original charter expired in 1885, its history under the name of the City National Bank having continued just twenty years. But at its organization it succeeded to the business of Ledyard & Fralick, heretofore mentioned, so that the business of the institution has been practically continuous since 1860. On Jan. 22, 1885, a new charter was secured and the name of the institution was changed to The National City Bank, and the capital stock was increased to $500,000. The officers at that time were: Thomas D. Gilbert, president; Julius Houseman, vice-president; J. Frederick Baars, cashier, and Edwin H. Hunt, assistant cashier. Mr. Gilbert died in November, 1904, and was succeeded by Constantine Morton, who was president from 1895 to 1898, and he in turn was succeeded by Ransom C. Luce, who served as president until his death, in 1902. James R. Wylie then became president and served continuously in that position until his death, which occurred, June 30, 1915. In the meantime, in October, 1910, the National City bank, which had been rechartered in 1905, and the Grand Rapids National Bank were consolidated under the name of the Grand Rapids Na- tional City Bank, with a capital of $1,000,000 and surplus paid in of $200,000. After the death of Mr. Wylie, Dudley E. Waters became president of the consolidated institution and has since been the active president of the bank. The other officers at the present time are Charles H. Bender and R. W. Irwin, vice-presidents, and Ira B. Dal- rymple, cashier. At the time of its being re-chartered, in 1905, the National City Bank organized, within its own stockholders, the City Trust and Savings Bank, which enabled it, under the State charter, to conduct a State bank. The stockholders in one are also interested as stockholders in the other, and the sale of the stock of one institution carries with it the sale of the other, so that the institutions, except in their charters, are identical.
The Grand Rapids National Bank was organized and commenced business March 9, 1880, as successor to the banking house of M. V. Aldrich. The directors were C. H. Bennett, Edwin F. Uhl, Freeman Godfrey, W. B. Ledyard, W. G. Herpolsheimer, M. J. Clark, Paul Steketee, Enos Putman, George H. Long, and its officers were C. H. Bennett, president; T. C. Sherwood, cashier ; Freeman Godfrey, vice- president ; and Edwin Hoyt, Jr., assistant cashier. The capital stock was $200,000. The business of the bank was very prosperous and, July 1, 1882, the capital was increased to $300,000, and again, on Aug. 11, 1883, to $500,000. President Bennett died in April, 1881, and Edwin F. Uhl was elected as his successor. T. C. Sherwood re- tired from the office of cashier, in April, 1883, and William Widdicomb was elected in his place, holding the office nearly six years, when he was succeeded, in January, 1889, by Nathan B. Brisbin. Edwin F. Uhl served as president until 1894, when, by reason of his appointment as assistant secretary of state in President Cleveland's second adminis- tration, he withdrew from the position and was succeeded by Enos Putman, who served until his death, Jan. 11, 1898. Shortly after- ward, Mr. Uhl, who had recently returned from a memorable career as ambassador at the court at Berlin, was again elected president of the bank, holding the position until his death, May 17, 1901. Mr.
Hosted by Google
481
BANKING AND FINANCE
Uhl wa's succeeded by Dudley E. Waters, who held the position until the consolidation of the Grand Rapids National Bank with the Na- tional City Bank, and he is now the president of the consolidated insti- tution. Nathan B. Brisbin died in July, 1889, about six months after assuming the duties of cashier, and was succeeded by Frank M. Davis, who filled that position until the consolidation of the two banks.
The Grand Rapids Savings Bank was organized, March 23, 1870, with a capital stock of $100,000, of which 50 per cent. was paid in. The following named persons were elected trustees for the ensuing year : Alfred X. Cary, William S. Gunn, Henry M. Hinsdill, Solomon O. Kingsbury, Edwin S. Pierce, Sluman S. Bailey, Eben Smith, John R. Stewart, Samuel M. Garfield, and E. G. D. Holden. The officers were A. X. Cary, president; George W. Allen, vice-president ; and Marcus W. Bates, treasurer. On April 24, 1872, the bank was re- organized with the same officers, and the capital of $100,000 was fully paid in. In September, 1878, for prudential reasons the capital stock was reduced to $50,000, but ten years later it was again increased to $150,000, and still later it was increased to its present size, $400,000. In 1874 M. W. Bates was succeeded in the cashiership by George R. Allen, who in turn was succeeded by D. B. Shedd, in 1879. F. A. Hall succeeded Mr. Shedd, July 1, 1885, and he was succeeded by the present cashier, F. S. Coleman, in 1907. Succeeding Mr. Cary as president, for various periods of time, we find on the records the familiar names of George W. Allen, Isaac Phelps, and James D. Robinson. The last named was succeeded, in 1892, by J. M. Stanley, and at the same time E. S. Pierce became vice-president. In 1893 Charles W. Garfield was elected president and W. D. Talford vice- president, and in 1895 Orson A. Ball was elected vice-president. The officers in 1918 were as follows: William Alden Smith, president ; Adolph H. Brandt, vice-president, and F. S. Coleman, cashier. In May, 1918, the bank showed deposits of $7,568,343.45, and a capital and surplus account of $750,000. The Michigan Exchange Private Bank was organized in the Spring of 1910, and was absorbed by the Grand Rapids Savings Bank, in January, 1917.
The Fourth National Bank is the successor of the Farmers' and Mechanics' Bank, which was organized under an act of the Legisla- ture of Feb. 16, 1857, and acts amendatory thereof, for discount, de- posit, and circulation, with a capital of $100,000. The organization was effected Feb. 1, 1879, with forty-three stockholders, and was to terminate Jan. 31, 1909. Under the articles of association the fol- lowing were named as directors: Leonard H. Randall, William Sears, James M. Nelson, Amasa B. Watson, Thomas M. Peck, Henry H. Dennis, and Edwin Bradford, and the following were elected of- ficers: Leonard H. Randall, president; Henry H. Dennis, vice-presi- dent, and James C. Darragh, cashier. Articles of association were filed with the register of deeds Jan. 27, 1879, and with the secretary of state the following day. On Jan. 23, 1880, the capital was increased to $200,000. On March 16, 1880, L. H. Randall resigned as presi- dent and Amasa B. Watson was elected as his successor. On May 10, 1880, H. H. Dennis resigned as vice-president, and on June 7 Thomas M. Peck was elected to succeed him. On July 26, 1880, J. C. Darragh resigned as cashier, and H. H. Dennis served as acting cashier until Nov. 18, 1880, when I. M. Weston was elected to the position. On Oct. I-31
Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.