History of Saint Louis City and County, from the earliest periods to the present day: including biographical sketches of representative men, Part 84

Author: Scharf, J. Thomas (John Thomas), 1843-1898
Publication date: 1883
Publisher: Philadelphia : L.H. Everts
Number of Pages: 1358

USA > Missouri > St Louis County > St Louis City > History of Saint Louis City and County, from the earliest periods to the present day: including biographical sketches of representative men > Part 84

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).

"That in the opinion of this meeting it will be highly inexpedient in the General Assembly to remove or lessen the banking facilities now possessed by the manufacturing and commercial community by removing the bank agencies now located amongst us, and that we deprecate any presentation in the General Assembly on the subject as tending inevitably to the great injury of every class of our citizens.

" Resolved, That a committee of five persons be appointed to respectfully memorialize the General Assembly upon the subject of these agencies."

The chair then appointed the following committee in accordance with the resolution : George Morton, Henry S. Geyer, Jolın D. Dagget, James T. Swearin- gen, and Samuel S. Reyburn.

George Morton then offered the following resolu- tions, which were severally adopted :

" Resolved, That this meeting has heard with regret that there is a disposition in the General Assembly to expel from the State agencies of foreign insurance companies; for the reason that they are evidently an accommodation and benefit to this city, affording to the owners of insurable property facilities of protection which without them could not be had, and opera- ting only for the advantage of the community.

" Resolved, Therefore, that our senators and representatives be respectfully requested to use their influence to induce the General Assembly to permit insurance agencies to continue their beneficial operations amongst us.

" Resolved, That a committee of three be appointed by the chair to select five gentlemen to repair as a delegation to the city of Jefferson, and co-operate with our senators and repre- sentatives in respectfully laying before the General Assembly the wants and wishes of the people of this city upon such sub- jects of general interest as to them shall seem proper."

The chair appointed Messrs. George Morton, Henry Von Phul, and Edward Tracy that committee.

In 1830 the banks in the United States were esti- mated to number three hundred and twenty-nine, with a capital of one hundred and ten millions of dollars. In 1837 their number, including branches, was seven hundred and eighty-eight, with two hundred and ninety million dollars capital. The consequences of their multiplication were speculation in property and com- modities, increasing priccs, strikes of working-people for increase of wages, the abandonment of agricultural pursuits, and the crowding of people into cities or large towns for the purpose of speculation, chiefly in city and village lots. Industry was no longer thought of by the multitudes of people who found themselves rich from the high prices obtained for farming lands bought for new villages or cities that were to grow up to enrich their owners. At length (1836-37) the United States began to import food from other countries, and hungry mobs attacked the flour-stores in New York, the great speculation culminating in panics in all the cities. Early in March, 1837, Herman Briggs and Co., of New Orleans, failed on account of the decline in cotton. Their New York agents failed as soon as the news reached that city. This was the beginning. At New York one failure followed another among those who lield Southern funds. In April news came that the leading Eng- lish merchants granting American credits had become dependent on the Bank of England, and were being carried on a guarantee from the city. The panic then recommenced, and continued increasing until May 8th, when the Dry-Dock Bank of New York suspended. The other banks were forced to suspend on the 9th and 10thı. The Philadelphia, Baltimore, St. Louis, and other banks followed as the news spread. Each city professed that it could have held out, but was forced to yield in the general interest. St. Louis suffered greatly from the panic that swept over the country. Many of the leading firms of the city were prostrated, and business, which a few weeks before was moving smoothly along in its accustomed channels, was checked with fearful suddenness, and becanie almost extinct.

Of course the state of the country was a promi- nent topic in political discussions. Hon. Thomas H. Benton, then the leader of the Democratic party in Missouri, was an advocate of a specic currency, and his party declared in favor of a monetary system com- posed exclusively of the precious metals. The Whig party was in favor of re-establishing a controlling power, like the United States Bank. In August, 1837, notwithstanding the denunciations of Col. Ben-

1373

BANKS, AND OTHER FINANCIAL INSTITUTIONS, AND BANKERS.

ton and his adherents, a petition to Congress " for the establishment of a National Bank" was adopted by the Chamber of Commerce of St. Louis, and was signed by nearly every leading business man in the city.

An extra session of Congress was called by Presi- dent Van Buren ; the banks expanded still more their issues of depreciated paper, and Congress did nothing but permit the issuc of United States Treasury notes bearing a small interest to meet the pressing wants of the general government. On May 10, 1838, the New York and New England banks resumed, but the Philadelphia banks delayed until the Governor forced them to resume, Aug. 13, 1838. The banks in the other States followed in duc time. In October, 1839, the paper of the United States Bank went to protest, and on the 9th the Philadelphia banks suspended payment. They were followed by all the banks South and West, and by those of Rhode Island. The New York and other New England banks did not suspend. In consequence of the suspension of the Eastern banks, the Bank of the State of Missouri, on the 12th of November, 1839, passed a resolution " that the bank will in future reccive from and pay only to individuals her own notes and specie on the notes of specie-paying banks." This decision, on becoming generally known, aroused the intense in- dignation of the mercantile community of St. Louis.

The Missouri Republican of the following day says,-

" The bank excitement continued very high during yester- day. In fact, it is the only subject matter of conversation or consideration. The merchants, it might literally be said, have forsaken their counting-rooms, and mechanics their shops. Wherever two or three meet, the action of the bank was the theme of conversation, and in every circle that we have fallen in with, whatever might be the politics of those composing it, the resolution of the directors was condemned without measure or reserve. In truth, there never has been in this community so universal and unanimous a condemnation of any measure as this. Execrations loud and deep are freely uttered in every quarter, and by men of all parties."

The notes of banks of other States formed the principal currency of the State, and by this act of the Bank of the State of Missouri all the notes of banks which had suspended specie payment lost their char- acter as representing funds for the payment even of existing contracts. The merchants were in a most distressing situation. They had their commercial honor to preserve, and to do this it was all important that their notes should not go to protest. There were not, however, sufficient specie and bankable funds in circulation to redeem their paper.1 In this crisis a meeting was held at the court-house at noon on Nov.

13, 1839, " to take into consideration the recent move- ment by the Bank of the State of Missouri in re- fusing to receive anything except specie and its own paper in payment of debts due it."

Edward Tracy was chosen president, J. C. Laveille and J. Clemens, Jr., vice-presidents, and G. G. Foster and Samuel Gaty, secretaries. It was

" Resolved, That, as the sense of this meeting, it will be no dis- credit to any individual having paper maturing this day at the Bank of Missouri to allow said paper to go to protest if a ten- der is made at bank or to the notary of currency hitherto bank- able and is refused."

The president announced the following gentlemen as a committee on resolutions : Messrs. N. Paschall, George Morton, Joseph Foster, A. Carr, J. P. Doane, J. B. Sarpy, Asa Wilgus, John Whitehill, Wayman Crow, George K. Budd, A. G. Farwell, H. Von Phul, and Felix Coonce.

A proposition was made to John Brady Smith, president of the bank, that the collection paper dis- counted by the bank up to that time should be paid in the same description of funds as that previously received by the bank, and that the business paper dis- counted by the bank up to that time should, as far as possible, be placed on the footing of accommodation paper, the curtailment and discount being paid in specie or the notes of specie-paying banks.

The president promised to confer with the board of directors, and after due deliberation by that body objection to the proposition was raised on the ground that there would be necessarily some depreciation of the funds, which loss the bank was unwilling to sus- tain. So great was the emergency at this particular juncture in financial affairs, that this objection was met on the part of the most wealthy of the citizens by an offer to legally bind themselves to indemnify the bank against any loss it might sustain by a depre- ciation of the notes of the banks " hcretoforc received."2

The directors of the bank held a consultation, but determined to adhere to their original resolution.

The merchants had fully expected that the bank would accept the noble proposition made it by the responsible gentlemen mentioned, but when the refusal of the board of directors was made known, another indignation meeting was called, which strongly con- demned the conduct of the bank, and rcsolutions were adopted recommending those doing business with it to withdraw their deposits and patronize some other

2 The gentlemen who obligated themselves to be thus respon- sible were George Collier, E. Tracy, Pierre Chouteau, John Walsh, William Glasgow, John Perry, Henry Von Phul, John Kerr, G. K. MeGunnegle, Joseph C. Laveille, and John O'Fal- lon .- Edwards' Great West, p. 368.

1 Edwards' Great West.

1374

HISTORY OF SAINT LOUIS.

institution. As a consequence many of the largest depositors withdrew their funds and deposited them in the insurance offices, and with the St. Louis Gas- Light Company, which was then doing a banking business.1

The bank, notwithstanding it was thus deprived of the support of many of its most influential patrons, still pursued the policy it had adopted, and weathered the financial storm which had threatened it.

On Jan. 15, 1841, all the banks of the country re- sumed specie payments, but they all suspended again on the 4th of February of the same year. The Phil- adelphia banks resumed in March, 1842, but complete resumption of specie payments throughout all the States was not accomplished until 1843, when prices were at the lowest point. Bankruptcy, ruin, and dis- tress had done their work. At least two thousand millions of dollars, it has been estimated, represented the shrinkage in prices or values, six hundred millions of dollars of debts being wiped out by actual bank- ruptcies.2

In 1846 the Democratic party succeeded in estab- lishing the independent treasury, the general govern- ment becoming its own banker, and receiving and paying only coined money. The measure was highly beneficial in promoting the use of coined money. In

1 The Missouri Republican about this time discourses thus upon the financial situation :

"' The Divorce,' the Bank and the People .- A third and probably last notice from the State Bank of Missouri appears in to-day's paper. The first notice was the famous resolution of the 12th, contemplating a specie-paying business altogether, and another restricting the curtailment of renewable paper to five per cent. instead of ten, as had been the case. Under the first resolution specie was demanded in all cases, as well as upon collection, as discounted business and accommodation paper. The next day brought forth another set of resolutions requiring depositors of paper for collection, whether owned in the city or out of it, to withdraw the same from bank, and giving notice that no paper will be received hereafter for collection unless specie is expressed on the face. The third and last notice is that to which we have requested attention, and which is a free confession on the part of the bank that the measure which it contemplated on the 12th would operate harshly and oppres- sively, and its repeal is compassed in another way. By the last notice, for the next sixty days discounted business paper is made to assume the character of renewable paper, the drawer paying up one-tenth of the amount with interest, and although the ar- rangement is restricted to sixty days, we venture to prophesy that its character will not be changed, and that it will there- after be renewed."

2 The first bankruptcy law in this country was passed April 4, 1800, but was repealed Dec. 19, 1803. Another bankruptcy act was passed Aug. 19, 1841, and repealed Feb. 25, 1843. This was the period of "scrip," or "shinplaster" currency. The kinds of currency in use in the West were known as "bank scrip," " canal" and " railroad scrip," " white dog," " blue dog," "blue pup," etc.

the same year and in 1847 the potato famine in Ireland sent to the United States thousands of emigrants, and in 1848 the revolution on the continent sent thou- sands more. The potato famine also gave the· United States a market for grain, and saved them from a share in the financial troubles of 1847. The repeal of the Corn Laws in 1846 and the more liberal tariff adopted by Congress in that year gave wider scope to industry. Railroads had already been extended both in the United States and Europe suffi- ciently to affect production and exchange. The tele- graph was just coming into general use, and ocean steam navigation was rapidly extending. Following close upon this conjunction of circumstances came the discovery of gold in California in 1848. At once began a great emigration of adventurous men to the Pacific slope, and also great speculation in exports thither. The whole industrial world gained by this new supply of the medium of exchange, which came just when it was needed to sustain the new develop- ment of industry and commerce. The first exchange of the metal was for food and manufactured articles, and its discovery caused a new and sharp demand for agricultural and manufactured products in St. Louis and elsewhere. New fields were opened, new fac- tories built, not in the United States only, but in all the commercial countries. The new and enlarged in- dustries brought richer returns than before, both of wages and profits, not on account of the money, but on account of the whole industrial expansion, which the new supply of real money facilitated.

After two or three years of low discount rate and cheap food, there followed in 1853 rumors of war and a bad crop in England. This caused high prices for wheat and a renewed speculation in Western lands and railroads, which resulted in 1854 in a crisis and panic in Wall Street, New York. Some California traders also found their affairs to be in a critical condition, but generally the mercantile com- munity held firm.3 Suddenly, on the 13th of January, 1855, the failure of Page & Bacon, of St. Louis, an old and highly-esteemed banking-house, with liabil- ities estimated at several millions of dollars, was an- nounced. The firm transacted the largest banking business in the West, and at this time stood towards the city and county of St. Louis in the relation of public benefactors.4

3 Professor William G. Sumner.

4 The head of the firm was Daniel D. Page, of whom a bio- graphical sketch is given in the municipal chapter. Henry D. Bacon, his partner, was born May 3, 1813, at East Gran- ville, Mass. He entered early in life into commercial pursuits at Hartford, Conn., and in 1835 removed to the city of St.

1375

BANKS, AND OTHER FINANCIAL INSTITUTIONS, AND BANKERS.

The announcement of the suspension of the bank- ing-house of Page & Bacon created a wide-spread sensation in the community, which was not diminished, but rather increased, by the fact that Messrs. Loker,

Louis, where he soon engaged as partner in one of the lead- ing dry-goods firms of the eity. He then entered the iron trade, which he pursued with good results until his marriage in 1844 withi Miss Julia Page, daughter of Daniel D. Page, when he became associated with him in the flour business. He was a very active and enterprising young man, and at his suggestion his father-in-law in 1848 consented to open a banking-house under the firm-name of Page & Bacon, leaving its management to the more experienced Bacon. The property of D. D. Page provided a strong backing to the concern, and the house prospered from the start. The known ability of Henry D. Bacon increased the confidence of the public, and as both were leading Democrats, they profited through the oppor- tunity offered by the Mexican war, under the Democratic ad- ministration of President Polk, which made St. Louis the dis- bursing eentre of large sums of money for the army. In 1850 they established a branch in California, and in 1854 their ex- changes amounted to the immense sum of eighty millions of dollars.

Everything went on well with the firm, and as Duncan, Sher- man & Co. were their New York agents, both firms made large gains. In 1849 and 1850, St. Louis took a sudden leap forward. An immense emigration from Europe, especially from Germany, forced across the ocean by the collapse of the revolution of 1848, settled either in St. Louis or in its vieinity. Most of them were people of means, and with the traditional desire of Germans to own land, they purchased real estate. The trade in building lots assumed enormous proportions, and values rose rapidly. Page & Bacon saw heavy profits in the movement, and at once started with building up the extensive property of Mr. Page, selling houses and lots with small eash payments and on long mortgages at great advantage, and using the funds of the bank in buying more land. But in 1854 this upward tendency came to a sudden stop; sales of land gradually ceased, and Page & Bacon found themselves unexpectedly in difficulty to meet all the demands upon them. Early in the fall of that year the great sugar-refinery of Belcher Brothers in St. Louis, the lar- gest establishment of its kind then in the country, suspended payment, and Page & Bacon held a large amount of their dis- credited paper. Distrust began to creep upon the commercial community of the city. Bacon saw the storm coming and hur- ried to New York. He opened negotiations with Duncan, Sherman & Co., with whom he had been doing a lucrative busi- ness for seven years. The conference came to a eonelusion on the third day at midnight in Bacon's room in the New York Hotel, and he was promised that his firm should have a credit of two hundred and fifty thousand dollars on the strength of the securities Bacon had to offer, valid mortgages on improved property in St. Louis. Henry Bacon returned home in bright spirits, but he was greatly alarmed a few days later when a telegram informed him that Dunean, Sherman & Co. could not help them, as they must first look out to protect themselves. " For God's sake," he telegraphed back, "do not desert us; if you do we are ruined, and half of St. Louis with us !" But the New York house was inexorable, and sent word that a banking- house had no right to risk its money in real estate or other speculations. Thereupon Page & Bacon closed their doors.

. The banking-house of Messrs. Duncan, Sherman & Co. failed in New York in August, 1875, and, singular to note, their fate was precisely the same as that which overtook their St. Louis

Renick & Co., another banking firm, did not open their doors. Ordinary business in the city was left unat- tended to by the citizens, and the public mind seemed absorbed at first in the public calamity of the stop- page of Page & Bacon, and afterwards in the run which commenced on the other banking-houses of the city. Indeed, Saturday, the 13th of January, 1855, was a day long to be remembered in the financial annals of St. Louis. As soon as the banking-houses were opened in the morning a run on the deposits commenced, and continued without intermission until evening. During this time the firm of Lucas & Simonds paid out upwards of two hundred and sixty thousand dollars, Louis A. Benoist & Co.1 more than

correspondents twenty years before. As in the case of Page & Bacon, Dunean, Sherman & Co., not six weeks before their failure, were told by their London correspondents that their credit would be protected and their paper honored. But on the 27th of July, 1875, they were told that they could not be aecom- modated, as a banking-house had no right to tie up its funds in cotton and railroad speculations. Like Page & Bacon, they were also forced to stop business.

Besides many public evidences of the liberality of the firm, Mr. Bacon showed his generosity personally in many ways. To his efforts in part is to be attributed the establishment of the Mercantile Library, which has proved to be of the greatest use to St. Louis. He contributed forty thousand dollars towards the erection and furnishing of the Union Presbyterian Church, and the Webster College and the Home of the Friendless were also beneficiaries of his bounty. He was among the first of the enterprising merchants of St. Louis who stepped forward prom- inently to aid in the construction of the Missouri Pacific Rail- road when that magnificent enterprise was presented to the public. His first subscription was the liberal sum of thirty- three thousand dollars, and afterwards he made advances for the prosecution of the work to the amount of from one to two hundred thousand dollars. The Belleville and St. Louis Rail- road was another evidence of the same liberality. He also assisted very materially in pushing forward to its destination the North Missouri Railroad. In advancing to the city and county of St. Louis large amounts of money to meet their bonds the firm of Page & Bacon at the time were regarded as public benefactors. In 1853, knowing the advantage a direct line through the rich bottom-land of Illinois would prove to St. Louis, they advanced the necessary sum for the completion of the greater portion of the Ohio and Mississippi Railroad. This diverted an immense sum of money from their business, and a pressure shortly after taking place in the money market, as w have stated, the firm was compelled on Jan. 13, 1855, to suspend payment.

1 Louis A. Benoist was born in St. Louis, Aug. 13, 1803. His father, François M. Benoist, was a native of Montreal, Can., and his mother was the daughter of Charles Sanguinette, an early settler. François M. Benoist was an Indian-trader, and removed to St. Louis in 1790. His son Louis A. attended early in life the school of Judge Tompkins, and at the age of fourteen went to St. Thomas' College, Kentucky, where he remained for two years. Returning to St. Louis, he commeneed reading medicine with Dr. Todson. After a trial of two years he re- linquished medieine and began the study of law in the office of Horatio Cozens. Soon after this he entered the office of Pierre

1376

· HISTORY OF SAINT LOUIS.

one hundred thousand dollars, and the Boatmen's Saving Institution one hundred and seven thousand dollars.

Though the run was apparently upon these insti- tutions alone, yet the other banking-houses by no means escaped the visitation. J. J. Anderson & Co. and E. W. Clark & Brothers, bankers, paid out on that day larger sums, in proportion to their deposits, than any other houses in the city, although no crowds were collected around their doors, as was the case with other financial institutions. The same was true of other firms to a smaller extent. It was calculated by good judges that between seven and eight hundred thousand dollars of deposits were drawn from the banking-houses on this eventful day.

To check the panic which was spreading over the community, and to restore public confidence in the monetary institutions of the city, on Monday morn- ing, January 15th, the following guarantee notice was issued, in which it will be seen that ten of the wealthiest citizens of St. Louis, believing in the en- tire ability of these banking-houses to pay every demand which might be made upon them, pledged their private property (estimated to be worth over eight million dollars) to secure the deposits :

" TO THE PUBLIC.

" The undersigned, knowing and relying on the ample ability of the following banking-houses in the city of St. Louis, and with a view of quieting the public mind in regard to the safety of deposits made with them, hereby pledge themselves, and offer as a guarantee their property, to make good all deposits with either of said banking-houses, to wit: Messrs. Lucas & Simonds, Bogy, Miltenberger & Co., Tesson and Danjen, L. A.

Provenchère, conveyancer, where he continued his studies. In 1823 he visited Europe to look after some family property, and on his return was wrecked in the Bay of Biscay, but reached St. Louis in safety, and opened a broker's office for the sale of prop- erty, loaning inoney, etc. He pursued this business for a short time, and in 1832 opened an exchange and lottery office. This, it is said, was the first banking-office established in St. Louis. In 1838 his business increased to such an extent that he estab- lished a branch in New Orleans under the firm-name of Benoist & Hackney, which was afterwards, in 1855, known as Benoist, Shaw & Co. In July, 1847, the St. Louis house of Benoist & Co. suspended payment, together with the Perpetual Savings Institution, owing to the tightness of the money market, and their " inability to convert their debts or funds into such cur- rency as their depositors could use." Messrs. Benoist & Co., however, resumed payment thirty days afterwards. Mr. Benoist's banking career was a long one, and he amassed a very large estate, estimated in value at about three millions of dollars. He was thrice married, his first wife being Miss Barton, of Kas- kaskia, III., his second Miss Hackney, of Pennsylvania, and the third Miss Sarah E. Wilson, daughter of John Wilson, of New Jersey. Mr. Benoist had twenty children, of whom thir- teen survived him. He died in Havana on the 15th of January, 1869.

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.

History of Saint Louis City and County, from the earliest periods to the present day: including biographical sketches of representative men, Part 84

Author: Scharf, J. Thomas (John Thomas), 1843-1898 Publication date: 1883 Publisher: Philadelphia : L.H. Everts Number of Pages: 1358

Author: Scharf, J. Thomas (John Thomas), 1843-1898
Publication date: 1883
Publisher: Philadelphia : L.H. Everts
Number of Pages: 1358