History of Detroit and Wayne County and early Michigan: A Chronological Cyclopedia of the Past and Present, Vol. I, Part 135

Author: Farmer, Silas, 1839-1902
Publication date: 1890
Publisher: Detroit, Pub. by S. Farmer & co., for Munsell & co., New York
Number of Pages: 1094

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In February, 1825, E. P. Hastings was made president, and Charles C. Trowbridge cashier. Mr. Trowbridge continued in office till May, 1836. He resigned in 1835, but remained till the arrival of his successor, Henry K. Sanger, who came from the Utica Branch Bank of Canandaigua. In February, 1839, Mr. Trowbridge succeeded Mr. Hastings as president, and continued to serve until the bank suspended on October 28 of the same year.

In the meantime, on February 25, 1831, the charter of the bank was extended for twenty-five years, and the same year the bank built the stone building on the south side of Jefferson Avenue, near Woodward, afterwards occupied by the State Bank and Bank of St. Clair. Five years later, dur- ing the flush times of 1836, the bank built its second building, on the southwest corner of Jefferson Ave- nue and Griswold Street, now occupied by the First

National Bank. It is built of shell limestone, and the stones show many beautiful petrifactions; in olden times the building was oiled yearly, and they were very noticeable. When the Bank of Michigan failed, the building, on December 12, 1842, was sold at auction to the United States, for $32,000, and was used as a court-house and post-office.

An Act of March 7, 1834, authorized the Bank of Michigan to establish a branch at Bronson, and increased the capital stock to $350,000. The branch was to be managed by seven directors, who were to live west of the principal meridian. It went into operation, and continued until 1837. From 1825 and onward, owing to the tide of immigration from the Eastern States, commerce was invigorated ;

860

BANKS AND CURRENCY.

large sums of money were brought into the Terri- tory, and used in the purchase and clearing of lands. This bank partook of the benefits of the new era, and its capital was steadily increased until it reached half a million of dollars. Its operations were so successful that in the autumn of 1835 an investigating committee of shareholders pronounced it able to pay all its debts and return its capital stock within three months. Up to that time, except by the one cashier, it had suffered no losses. Its shares stood at forty per cent premium. Its notes circulated as far as New Orleans and were redeemed at agencies in Cincinnati, Buffalo, Geneva, and New York. The direc- tors during this period were E. P. Hastings, Peter J. Desnoyers, James Abbott, Darius Lamson, DeGarmo Jones, B. F. Larned, and Robert Stewart.

Finally the crisis of 1837 and 1838 came on, and in order to sustain the bank, the eastern shareholders added to their $300,000 already invested $400,000 more, which sum, with the $100,000 belonging to Michigan shareholders, and $175,000 of surplus profit, was supposed to be sufficient to meet all con- tingencies. All was unavailing, and a meet- ing of the directors to consider the situation was held on Monday, January 10, 1842, at II A. M. There were present C. C. Trow- bridge, P. J. Desnoyers, De G. Jones, James Abbott, and Darius Lamson, and the fol- lowing preamble and resolutions were read and adopted :

Whereas, there is reason to suppose that the alterna- tive is about to be presented to this bank of allowing its affairs to go into the hands of a receiver (a measure which in the opinion of this board would be ruinous alike to the interests of creditors and stockholders), or of as- signing the assets, or a part thereof, to Trustees who may, with the aid of the Board, collect and dispose of the same for the benefit of all concerned ; therefore, be it Resolved, that Charles C. Trowbridge, Robert Stuart, and John Owen be nominated as Trustees.

Mr. Trowbridge became the acting trustee, and the business was finally closed up, in 1844, by Shubael Conant, receiver, the as- signment having been judicially set aside on account of its mandatory provisions.

The Farmers and Mechanics' Bank.

This bank was chartered November 5, 1829, with a capital of $100,000. Its direc- ors were Levi Cook, John R. Williams, Orville Cook, Henry V. Disbrow, John Hale, Elliott Gray, Tunis S. Wendell, Daniel Thurston, and Henry San- derson. The subscriptions to its stock were com-

pleted on March 1, 1830. On June 7 the follow- ing directors were elected: J. Biddle, E. Johnson, H. V. Disbrow, M. F. Johnson, O. Cook, W. Smith,

T. S. Knapp, R. Hilliard, and H. H. Sizer. Its bills were in circulation as early as June 23. On March 7, 1834, the bank was authorized to

FAC-SIMILE OF BANK-NOTE - BANK OF MICHIGAN.

BANKS AND CURRENCY.

86 1

increase its capital several hundred thou- sand dollars and to establish a branch at Berrien, to be governed by seven directors, who were required to live in the western half of the State. Under this Act a branch was established at St. Joseph, with Thomas Fitzgerald as cashier. An agency at Niles was provided for by Act of March 8, 1843, and continued till the summer of 1852, after which time all the interests of the bank were concentrated at Detroit. The bank did not long remain under the man- agement of the original directors, but passed into the care of several gentlemen from the State of New York, who had been attracted to Michigan by the active and promising business of the Territory. From the commencement of business under its new owners until 1836 its oper- ations were large and very remunerative, and in connection with the Bank of Mich- igan it wielded a powerful influence. These were the only banks of importance from Buffalo to the Mississippi. They furnished the greater part of the currency for the business of the entire West, and served also as the almoners of the public bounty in the same Territory. The busi- ness of the two banks was enormous, and up to 1837 their profits were very large. The dividend of the Farmers and Me- chanics' Bank alone for the year 1836 was thirty per cent on a capital of $400,000. Its stock at that time was so high that one of its eastern stockholders sold his shares in the Utica & Schenectady Canal Boat Company, which one year paid him a dividend of seventy per cent, and in- vested the proceeds in the stock of this bank; unfortunately it proved to be a per- manent investment, as the last dividend of the bank was the large one of 1836. Four of the eastern stockholders invested their share of that large dividend in the purchase of real estate on Jefferson Ave- nue, from Cass to Wayne Streets. It re- mained on their hands for fifteen years, and did not by any means prove a for- tunate venture. The panic of 1837 came, and all the Detroit banks were compelled to suspend, and on October 28, 1839, the Farmers and Mechanics' Bank again sus- pended.

In July, 1845, the bank was revived. A call was made for $150,000 on the capital stock, the value of the bills began to rise, and, on July 18, they were received at

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par by the Michigan Insurance Bank. The bank was not, however, able to redeem its notes in coin, and on August 5, 1845, Chancellor Man- ning, at the instigation of friends of the bank, granted a peremptory injunction against it, on the ground that there was danger of an excessive issue of its notes. This relieved the bank from paying coin for its notes by preventing it from doing any kind of business. The injunction was dissolved in November following, and meantime its principal officers had been changed and it was again in a con- dition to resume, which it did on November 15. In those days the directors rarely met; all the paper was discounted by the cashier, with the occasional assistance of one director. The cashier had to col- lect notes and discount paper, taking real estate or bonds and mortgages, when nothing else could be obtained. He had also to sell the real estate, collect the bonds and mortgages, secure all the deposits he could, make as many friends for the bank as pos- sible, conciliate the brokers, and be ready for any and all emergencies. During the winter of 1847-48 the banks did more discounting after closing than during the whole day. At that time there were neither boats nor railroads in the winter. The flour-buyers had rooms, called the Corn Exchange, in the Sheldon Block. The mail through Canada was two and a half days in coming, and did not arrive until 6 P. M. Every steamer that came in from Europe raised the price of flour ; these advances were at once made known to the buyers, who, as agents for large New York houses, were eager to overreach each other in getting money into the country to make purchases. They would flock to the banks for discounts of from $5,000 to $20,000 at a time, giving drafts on their houses in New York, at ten, fifteen, and twenty days' sight. In this way the bank would discount from $5,000 to $50,000 in an evening. Millions of dollars were thus dis- counted, all of which was created capital, and nearly all redeemed by New York exchange. Compara- tively little coin was used.

By Act of March 24, 1849, the charter of the bank was extended for twenty years on certain conditions, which were acceded to by the stockholders on Sep- tember 29 of the same year. In July, 1865, the bank began to retire and destroy its notes prepara- tory to going out of business, and in 1869, after pay- ing all its debts and redeeming all bills presented, its affairs were closed. It commenced business in Lamson's Building, and in the fall of 1832 first oc- cupied its own building, built of Erie stone, on the south side of Jefferson Avenue, between Griswold and Shelby Streets. In 1854 this building was sold to one of its stockholders for $8,000, to reimburse him for advances, and the bank removed to the next store below. In February, 1857, the store on the

southwest corner of Jefferson and Woodward Ave- nues was fitted up for the use of the bank. From here the offices were moved to the upper story of Merrill Block, and then to the office of the Ameri- can National Bank, where its affairs were settled.

The following persons served as presidents and cashiers during the years named : Presidents: 1829- 1838, John Biddle; 1838-1845, Levi Cook; 1845, Charles Seymour; 1846-1851, Charles Howard; 1851, S. Barstow; 1852, E. C. Litchfield; 1853- 1858, Guy Foote; 1858-1863, L. M. Mason. Cash- iers: 1829 to October, 1831, H. H. Sizer; 1831, H. K. Avery; 1833-1845, John A. Wells; 1845-1851, E. C. Litchfield; 1851, P. L. Green; 1852-1857, J. C. W. Seymour; 1857-1862, C. M. Davison; 1862, W. D. Morton.

Michigan Insurance Company and National Insurance Bank.

This corporation was chartered on March 7, 1834, as the Michigan Insurance Company, but with powers which were deemed sufficient to enable it to carry on a banking business. In fact, it never transacted any insurance business, and was not organized for business of any kind until January 15, 1838. Stock having been then subscribed, the bank opened for business on January 24. Some doubts were expressed as to whether banking busi- ness could be legally carried on under its charter, and the question was submitted to Governor Wood- bridge, who gave a favorable opinion. In 1848 it was again intimated that the right of the company to transact banking business would be contested. The Board of Directors therefore applied to the Legis- lature to so amend the charter as to confer full banking privileges, and in 1849 a new charter, with full banking powers, was granted. When first organized, $25,000 were paid in, and James Abbott was elected president, and H. H. Brown cashier. In 1844 Douglass Houghton was president and H. H. Brown cashier. In 1845 Mr. Houghton died, and John Owen was elected president, and con- tinued to serve until the corporation ceased. In 1848 Mr. Brown was succeeded, as cashier, by HI. L. Lansing; on June 1, 1850, he was followed by H. K. Sanger, and he in turn, after September, 1863, by Walter Ingersoll, who continued till the bank ceased.

At the time of the first organization the company occupied an office in a little building near the old Sheldon Block, at the northeast corner of Jeffer- son Avenue and Shelby Street. It next moved to the southeast corner of Griswold Street and Jefferson Avenue, and from there, about 1855, to the bank building on the southwest corner of Jefferson Ave- nue and Griswold Street.

During the panic of 1857 it aided the Peninsular

BANKS AND CURRENCY.

863

and the Farmers and Mechanics' Banks, but could not save them from suspension. By inducing its own customers to accept drafts instead of gold, by the aid of depositors, and on account of the great personal confidence that all had in John Owen, the bank was enabled to continue business all through the panic, without suspension, and very soon depositors came in with gold in such quantities that it was shipped to and sold in New York. When the charter expired in 1860, a reorganiza- tion was effected under the General Banking Law of Michigan, and the capi- tal increased to $200,000.

On June 25, 1865, having been organ- ized as a national bank, it commenced business under the name of National In- surance Bank; four years later it was discontinued, some of the old directors taking stock in the new First National Bank.

Michigan State Bank.

This bank was incorporated on March 26, 1835, with a capital of $100,000, and power to increase the amount. The directors named in the Act were John R. Williams, John Hale, Robert McMillan, Edward C. Matthews, Ellis Doty, Bar- nabas Campau, Abram S. Schoolcraft, Cullen Brown, and John Truax. The bank organized with a capital of $500,000, and commenced business on the north side of Jefferson Avenue, between Wood- ward Avenue and Bates Street, with F. H. Stevens as president, and John Nor- ton, Jr., as cashier. One day in the week, Wednesday, was designated as discount day.

In 1837 the bank bought the building on the south side of Jefferson Avenue, which had been occupied by the Bank of Michigan.

On February 25, 1839, the bank sus- pended. George F. Porter was made the assignee.

On April 2, 1839, the Legislature authorized the organization of a bank to be called The State Bank of Michigan, with a capital of two millions of dollars, and the right to increase it to five mil- lions, one half to be owned by the State. The Act was the result of many confer- ences with the eastern shareholders of the Bank of Michigan and the Farmers and Mechanics' Bank, and it contemplated their ab-

sorption and the infusion of fresh capital. Seven branches were to be established, each to be repre-

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intended to be provided for by the eighty-seven sec- tions of the Act. The success of the State Bank of Indiana stimulated the promotion of the scheme, but the time was unfavorable. The shrinkage in values and all consequent evils kept increasing up to and beyond the year 1840, and as the Act of April, 1839, contained a provision that if the bank was not organized before February, 1840, its charter should be null and void, those interested were com- pelled to abandon the effort to obtain the necessary capital, and the plan failed. During all this time the affairs of the original Michigan State Bank were being cared for by the assignee, and on April 2, 1841, the bank took the public by surprise, and saved its charter by paying gold and silver for all bills presented .. By 1844 the bank had paid all its

in 1855, the capital stock with a surplus of thirteen per cent was divided among its shareholders.

Bank of St. Clair.

This bank was chartered on March 28, 1836, with a capital of $250,000, and was located in the village of Palmer, St. Clair County, with John Clark as president, and W. Truesdail as cashier. In 1842 Jesse Smith became president, and the Legislature authorized the bank to remove to Detroit. The first meeting of the directors here was held on July 7. The bank occupied the building on Jefferson Ave- nue, between Woodward Avenue and Bates Street, which had been used by the Michigan State Bank. A. S. Williams succeeded Jesse Smith in 1842, and in 1845 Levi Cook was president and W. Truesdail cashier, and in this year the bank failed.

378

DETROIT SAVINGS BANK BUILDING, Northeast corner of Griswold and Larned Streets.

debts, and had twenty per cent left of its original capital.

In 1845 H. P. Baldwin, Zachariah Chandler, Franklin Moore, Henry Ledyard, C. H. Buhl, F. Buhl, C. C. Trowbridge, James F. Joy, and George F. Porter, of Detroit, and John L. Schoolcraft, of Albany, New York, formed a corporation, bought up the stock, and started the bank anew. The capital was $150,000. C. C. Trowbridge was elected president, and A. H. Adams cashier. So well was the bank managed that it returned dividends of ten per cent per annum, and when its charter expired,

Detroit Savings Bank.

This institution was incorporated by the Leg- islature on March 5, 1 849, and first opened for busi- ness in May of that year, under the name of the Detroit Savings Fund Institute. The officers were: President, Elon Farnsworth; vice-presi- dent, H. N. Walker ; trus- tees, E. Farnsworth, Z. Pitcher, S. Conant, J. Palmer, H. N. Walker, D. Smart, J. A. Hicks, S. Lewis, L. Cook, G. M. Rich, B. B. Kercheval. Its first place of business was on the northeast cor- ner of Woodbridge and Griswold Streets. It PHOTO ENG. GO. N.Y. then moved to the west side of Woodward Ave -- Built in 1878. nue, next to George Kir- by's leather store, then to Griswold Street, in the Butler Block, opposite the post-office, and on January 1, 1879, it first occu- pied its present quarters on the northeast corner of Griswold and Larned Streets. It began without any capital, but in July, 1871, when its name was changed to Detroit Savings Bank, $200,000 of capi- tal was invested, and the stockholders are personally holden for $200,000 additional. At first the bank was kept open only on Mondays, Wednesdays, and Fridays, but now it is open all week-days. Deposits as low as one dollar are taken, but interest is not allowed on amounts of less than five dollars. A

BANKS AND CURRENCY.

865

noteworthy and remarkable feature of the care with which the business has been conducted, is the fact that in 1881 all of the deposit books issued by the bank, from No. I to No. 31,000, were in its possession, and carefully preserved as a record of the past. The total number of books issued by the bank up to May, 1883, was 45,287.

There was no regular cashier up to January, 1855, at which time A. H. Ad- ams was appointed ; after 1879 and up to 1882 he served as president and cashier. In 1882 E. C. Bowman became cashier. The directors in 1888 are: G. Hendrie, George Jerome, T. Ferguson, F. B. Sib- ley, James McMillan, W. K. Muir, Alex- ander Chapoton, James E. Pittman, and S. D. Miller.

Peninsular Bank.

This bank was chartered on March 28, 1849, with a capital of $100,000. The following corporators were named in the Act : Charles Howard, William Brewster, Gurdon O. Williams, Benja- min B. Kercheval, Henry P. Bridge, D. Bethune Duffield, James A. Armstrong, and Henry H. Brown.

The corporators first met on April 5, 1849. The first meeting of stockhold- ers was held on October 19, 1849. Charles Howard was elected president, and H. H, Brown cashier, and on October 22 the bank was opened in a building just west of the Farmers and Mechanics' Bank, on Jefferson Avenue. The bank did a very profitable business for several years, paying semi-annual dividends of five per cent, and on August 1, 1853, an extra dividend of twenty per cent. The directors then voted to increase the cap- ital stock $100,000. In July, 1854, they moved into the Farmers and Mechanics' Bank Building, which they bought for $12,000. On April 28, 1856, the capital COUNTERSIGNED AND REGISTERED stock was increased to $350,000, and in August an extra dividend of twenty-five per cent from surplus profits was divided among the stockholders. After this the tide set in the other direction, and losses multiplied. The panic of 1857 came, and on October I the president notified the directors of the suspension of the bank, by reason of an injunction from the attorney- general because the securities were not deemed sufficient to protect the bill-holders.

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FAC-SIMILE OF BANK-NOTE - PENINSULAR BANK.

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866

BANKS AND CURRENCY.

Moss was elected president, and S. Med- bury cashier. On December 19 the stock- holders were invited by circular to loan the bank twenty-five per cent of the value of their stock, and with the amount thus ob- tained the bank resumed on February 15, 1858. On June 8, 1859, George K. Johnson was elected president, and on June 10 H. H. Brown again became cashier, but re- mained only a short time. C. M. Davison was elected cashier on October 21, 1859, but declined to serve. On February 2, 1860, Daniel Ball was elected president, and E. Wendell cashier; and on August 9, 1860, H. P. Pulling became president. The cap- ital of the bank having been largely lost by bad debts, on March 7, 1861, the Legislature at the request of the stockholders, author- ized the reduction of the stock to $106,600. On June 15 following, Mr. Wendell resigned as cashier, and on July II M. F. Dow was made his successor.

After the passage of the National Bank- ing Law no banking business of any amount was done, and the affairs of the bank were closed up in 1870, four years before the charter expired.

The bills were redeemed in full, and the stockholders received about twenty per cent for their stock.

State Bank of Michigan.

This bank was organized on February 1, 1859, with a capital of $50,000. It was located on the southeast corner of Jefferson Avenue and Griswold Street. L. E. Clark, the first president, was succeeded, in the fall of 1860, by S. Medbury ; on May I, 1861, he resigned, and was succeeded by S. P. Brady. The first cashier was T. P. Hall. He resigned August 1, 1861, and was followed by Emory Wendell. In De- cember, 1864, the officers purchased the charter of the First National Bank, and the State Bank was then discontinued, its own- ers merging their interests in the First National Bank.

First National Bank.

This bank was originally organized al- most entirely through the efforts of Philo Parsons. The preliminary meeting for the organization was held on June 21, 1863. The first meeting of stockholders was on August 5, 1863, and articles of association, by-laws, etc., were then adopted. On September 2, the follow- ing directors were chosen : Philo Parsons, W. M.

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ing firm of Parsons & Fisher, in their old office in the south corner of the Rotunda Building on Gris- wold Street. In December the charter was pur- chased by the officers of the State Bank of Michigan. On January 1, 1865, the bank was reorganized and moved to the southeast corner of Jefferson Avenue and Griswold Street. On March 1, 1869, it was moved to the opposite side of Griswold Street, in the old Bank of Michigan building. In 1881 the capital was $500,000.

The officers have been : Presidents, Philo Par- sons, till December 27, 1864; S. P'. Brady, from December 27, 1864, to January 14, 1868; after this last date, Jacob S. Far- rand. Cashiers, Philo Parsons, till September 16, 1863; H. C. Kibbee, from September 16, 1863, till September 30, 1864; S. E. Pittman, until De- cember 29, 1864; and then Emory Wendell.

Owing to the fact that the charter was soon to expire, and in order to close up the business of the original corporation prepa- ratory to organizing anew, the bank building was offered for sale at public auction on April 24, 1882, and was bought for the stockholders of a new cor- poration at $76,000. On June 19, 1882, the bank began business under its new charter, with a cap- ital of $500,000, and the following directors : J. S. Farrand, W. B. Wesson, James Mc Millan, A. She- ley, G. V. N. Lothrop, M. I. Mills, L. E. Clark, D. M. Ferry, and E. Wendell. The last named director was elected president, and L. E. Clark cashier. The directors in 1888 are the same, except C. B. Lothrop and W. J. Chittenden in place of G. V. N. Lothrop and M. I. Mills.

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History of Detroit and Wayne County and early Michigan: A Chronological Cyclopedia of the Past and Present, Vol. I, Part 135

Author: Farmer, Silas, 1839-1902 Publication date: 1890 Publisher: Detroit, Pub. by S. Farmer & co., for Munsell & co., New York Number of Pages: 1094

Author: Farmer, Silas, 1839-1902
Publication date: 1890
Publisher: Detroit, Pub. by S. Farmer & co., for Munsell & co., New York
Number of Pages: 1094