History of Saint Louis City and County, from the earliest periods to the present day: including biographical sketches of representative men, Part 85

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 85

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Benoist & Co., John J. Anderson & Co., Darby & Barksdale, and Boatmen's Savings Institution.

" J. O'Fallon, Ed. Walsh, Louis A. Labeaume, J. B. Brant, L. M. Kennett, D. A. January, John How, James Harrison, Andrew Christy, Charles P. Chouteau.

"ST. LOUIS, Jan. 15, 1855."

The generous manner in which these patriotic and self-sacrificing citizens stepped forward to sustain the credit of their city, with no motive save the city's good, showed plainly the broad basis on which the prosperity of St. Louis was founded and restored con- fidence completely. Indeed, no more pleasing cvent has ever happened in the commercial history of the country. These noble men volunteered their private fortunes for the purpose of protecting the character and standing of their city, both as to her commercial credit and the quiet of the community, and no one could require stronger evidence of the entire safety of his or her funds in the threatened banks. The guarantee provided, together with the prompt pay- ment by the bankers of every deposit called for on January 16th, restored confidence completely, and for the remainder 'of the weck, though money was very scarce, every one seemed comparatively cheerful and energetic. The crisis, though it seemed for a time about to result in a fearful public calamity, was in reality productive of much good, for it developed resources in St. Louis which before were latent and not suspected by many of the citizens. It showed also that the finances of the city were founded on a substantial basis, and that they were fully able to withstand a storm. But, above all, it exhibited the noble character of the wealthy citizens in a clear and brilliant light, and as the news of the crisis, and of its issue, spread over the country, St. Louis assumed a prouder and loftier position than she had ever attained in the cyes of the commercial world.

The houses which had survived the " run" pro- ceeded tó business with renewed vigor and added stability and strength, and the two firms which had suspended made immediate preparations to resume at an early day. Messrs. Page & Bacon paid all their drafts, after the 15th of January, at the Bank of America, in New York, with interest and cost of pro- test, and on February 17th announced that they would " resume the regular business" of their office on the 19th. At the time named the banking-house fully resumed business operations, but in consequence of the failure of their branch bank in San Francisco, and their drafts going to protest in New York, the partners of the parent bank in St. Louis determined to suspend operations, which they did finally on April 4th.

1377

BANKS, AND OTHER FINANCIAL INSTITUTIONS, AND BANKERS.

On the 24th of August, 1857, the failure of the Ohio Life and Trust Company, of Cincinnati, an old and highly-esteemed institution, with liabilities for seven million dollars, was announced. This ineident passed without causing any general alarm, but the banks well knew what it meant. They reduced their loans in New York City from August 22d to October 17th nearly one-half, and this produced a erisis. A large number of failures of banks and firms, especially brokers, produce dealers, and persons depending on Western collections, took place in September. Bills on the seaboard were hardly obtainable in the interior at ten and fifteen per cent. premium. On the 12th and 13th of September the banks of Philadelphia, Washington, Baltimore, and many interior towns sus- pended. Stoeks fell forty or fifty per cent., and twenty thousand persons were thrown out of work in New York City within a fortnight. On the 13th of October the New York banks (with one exception) suspended ; the New England banks followed immediately.

The erisis in St. Louis was perhaps more intense than in any other eity of the country. The news from Philadelphia and Baltimore of the suspension of the banks in those eities was announced in the newspapers on September 28th, and was not without its effect on the money market. Immediately after the banks opened for business the "run" on them for specie payments began. The consequence was that the house of Darby & Barksdale closed about ten o'clock, and very soon thereafter that of J. J. Anderson & Co. suspended payments. There were unusual de- mands upon the other banking-houses of the city, but they were promptly met. An excessive " run" also occurred upon the banking-house of James H. Lucas & Co., which was then doing the largest banking busi- ness of any house in the West. The senior member of the firm was one of the wealthiest men in the city, and as his failure would have proven a public calamity at this time, eighteen generous gentlemen of large means, and of the highest character for honesty and in- tegrity, without solicitation from any quarter, pledged their private property to secure the depositors of the banking-house against all loss. The guarantee was as follows :

" The undersigned, believing that there is nothing in the con- dition of affairs to justify a want of confidence on the part of the community in the solvency of the several banking-houses of St. Louis, do hereby, in order to allay the apprehensions of depositors and to prevent the inconveniences which might re- sult from a run on their depositories (without intending by their action to intimate a distrust of any other house), guaran- tee and assure to all persons having accounts with the banking- house of James H. Lucas & Co. the safety of their respective deposits.

"Witness the hands and seals of the undersigned this 28th of September, 1857, at St. Louis, Mo.

" James E. Yeatman, James Harrison, John How, R. J. Lock- wood, Edward J. Gay & Co., Ed. Walsh, J. O'Fallon, John H.Gay, M. Brotherton, W. Renshaw, Jr., J. S. McCune, D. A. January & Co., D. H. Armstrong, Chas. K. Dickson, Thomas T. Gantt, Wm. M. McPherson, James B. Eads, Chas. Tillman."

Another paper of the same character, guaranteeing the safety of all deposits in the banking-house of Renick & Peterson, was also issued and signed by Samuel Gaty, R. Campbell, Edward Walsh, John How, Charles K. Diekson, Thos. T. Gantt, J. J. Murdoch, O. D. Filley, G. F. Filley, J. B. Sickles, Livermore, Cooley & Co., W. Renshaw, Jr., W. H. Benton, and H. Crittenden. These gentlemen were known to be men of wealth ; at the same time they were prudent and were able to carry out their pledge, and would have done so if it had been required of them.

After what had transpired on Monday, the 28th of September, there was great anxiety to see what would be the result of the panic on Tuesday. The Repub- lican of the 30th thus details the financial proceed- ings of the day :

" It was apprchended that a run would be made on the bankers and savings institutions, notwithstanding the guaran- tees given to two of the banking-houses by some of the leading capitalists of the city and the acknowledged solvency of the whole of them. At the hour of opening an unusual number of persons was observed upon Main Street and on the cross streets leading to it. The first thing that attracted attention was a notice at the door of the banking-house of Bogy, Miltenberger & Co. that the house had temporarily suspended business, and that it would not be opened.

" The seekers after gold were early on the street in front of the banking-house of James H. Lucas & Co., where they were soon joined by a number of idlers and curiosity-mongers. Those who bad deposits in this house were not overmodest in making demands for specie, and from nine to nearly eleven o'clock the tellers were busily employed in paying checks.

"Another class of depositors was not slow in paying their respects to the gentlemen who managed the German Savings Institution, in the Merchants' Exchange block. There was quite a rush upon them, and this was kept up for an hour or two, when all demands for specie from affrighted depositors ceased. While these things were going on in Main Street, another set of depositors were paying their respects to the Boatmen's Savings Institution, at the corner of Pine and Sec- ond Streets. For a time, say an hour or two, the young gen- tlemen whose province it is to honor drafts upon this institu- tion were a good deal exercised, and the coin passed out pretty freely ; but by the time they had fairly got their hands in the demand was exhausted, and they had nothing unusual to do for the balance of the day. Passing up Main Street, a few stragglers were noticed in the banking-house of L. A. Benoist & Co., but the serenity of the gentleman who manages that concern was not disturbed, and he rarely took his hands out of his pockets.

"Still farther up the street, the State Savings had no calls for specie from importunate or suspicious depositors, and dis- counts were made and the usual business carried on as if they had no knowledge of any undue excitement in the city."

1378

HISTORY OF SAINT LOUIS.

Mercantile failures now commenced and followed each other day by day, the panic increasing with re- newed force as each suspension was announced, and as money was locked up by any one who could get and keep it, the pressure for money in the city was very great. There was an abundance of " currency," but this had ceased to be available in the payment of debts where specie funds were required, and for this reason, on October 3d, Messrs. Chouteau, Harrison & Vallé, one of the largest and most important business houses, temporarily suspended payment. This was an event that was not expected, and it added fuel to the panic. As a consequence, many of the leading houses in St. Louis were compelled to suspend business, and thousands of persons were thrown out of employ- ment. On the following day the banking-house of E. W. Clark & Brothers was compelled to tempora- rily suspend cash payments. This was followed on the 5th by the suspension of the great banking-house of James H. Lucas & Co., which had been struggling for several weeks to withstand the unexampled mone- tary pressure. The Republican in announcing this failure said,-

" It needed only the stoppage of this banking-house of James H. Lucas & Co. to wind up the financial horrors with which this city has been overwhelmed within the past three weeks. Business houses have suspended to the surprise of everyhody, banking-houses supposed to be equally sound with that of Lucas & Co. have gone down, and confusion has been increased ; but when the house of James H. Lucas & Co. was forced to suspend yesterday hy the continual run upon it, as regular as the rain which fell throughout the day, men were amazed and scarcely knew what to think. The case is an extraordinary one. For at least thirty days the house had endured a regular, cease- less draft upon it for coin. There was not a man, in all proba- bility, who did not helieve that his money was perfectly safe with them, hut the great majority of depositors, either to answer the importunities of friends or to he sure that the gold was in their clutches, resolved to check it out, and it was done. We assume that a million of dollars of current deposits were thus extracted by little and little, and yesterday, hetween one and two P.M., the doors were closed. We need not say that we regret this suspension. There is hardly a man in the community who will not do it. To nearly all it was a matter of surprise that such an event should occur at all, even in such inauspicious times. But when it is considered that the house was doing an immense business, that it had daily transactions over the coun- try, that in the sudden and extraordinary pecuniary panic through which we are now passing losses must necessarily be incurred, and with a run upon all banking-houses, indicating a general want of confidence, however ungenerous that feeling may have heen, it is not surprising that even this strong house should have heen forced to yield to the storm. The members of the firm have, it is certain, the warmest sympathies of the people of St. Louis."

On October 6th an unexampled run was made on the Boatmen's Savings Institution, which was con- tinued until night. The capacity of the bank was

not impaired by this demonstration, as the amount paid out hardly made an impression on the funds then in its vaults, and specie funds were offered it by other banks, but declined by the managers of the institu- tion. In consequence of rumors that were circulated in the city, the bank in the afternoon issued the fol- lowing " card":

" BOATMEN'S SAVINGS INSTITUTION, " Oct. 6, 1857.

" Whereas, there are rumors injurious to this institution, that a portion of its cash funds are on deposit in other institutions of this city, the hoard deem it proper to state that all the cash funds belonging to it are in its own vaults.

"By order of the board of directors.

"S. BLOOD, President."

On the same day the " Mutual Savings Institu- tion," located under the Planters' Hotel, at the corner of Fourth and Pine Streets, suspended. At the State Bank a steady run was made on it all day. The Ger- man Savings and the Franklin Savings Institutions, situated in the Exchange building, suffered a similar run, but it created no impression on their funds. Tesson & Danjen, Benoist & Co., Franciscus & Co., Renick & Peterson, and other banking-houses were not much troubled with specie demands.

Thus the panic continued until October 6th, when a second meeting was held by the leading merchants of the city at the Exchange room, for the purpose of receiving the report of Messss. Ranney, Garnier, Ho- gan, January, Crow, Wall, Gay, Oglesby, King, Funkhouser, and Tucker, a committee appointed at a previous meeting " to advise upon the currency ques- tion." The committee reported the following resolu- tion, which was adopted :

" Resolved, That the committee are unanimously of opinion that memorials should be generally signed petitioning the Leg- islature of this State, which convenes on the third Monday in the month, not to issue any State honds, except such as previous legislation makes imperative to he issued, and to pass such a revenue law as will give to the world the most perfect assurance that, under any and all circumstances, Missouri will pay her interest and protect her obligations."

On motion of Mr. Ranney, the following resolution was also unanimously adopted :

" Resolved, That the husiness men of St. Louis will continue to receive for the present the good currency (meaning Illinois hank-notes, which were thought to be better secured than any other) afloat in the country in all transactions at par."

In consequence of the action of the merchants, the following day passed off without any excitement what- ever. "There was quite a cheerful feeling, and people seemed to feel that they had reached the turning point, when financial affairs must improve and greater activity be infused into every description of busi- ness."

1379

BANKS, AND OTHER FINANCIAL INSTITUTIONS, AND BANKERS.

On October 19th the banking-house of Messrs. Tesson & Danjen suspended, which was followed on the 24th by the closing of the Bank of the State of Missouri. On the 26th the State Bank opened as usual, but did not pay specie, and with this exception business was transacted through the day. The Mer- chants' Bank suspended specie payments as soon as it opened on Monday morning, the 26th, but the Southern Bank suffered the run to be made upon it for an hour, and then the suspension of specie pay- ments was announced. The Mechanics' Bank sus- tained the run all day, but, like the others, was forced in time to succumb to the unexampled monetary pressure.

This crisis was short, sharp, and severe, but the recovery was rapid, and the reaction healthful. The losses were very great, but it was only a bad stumble in a career of great prosperity, and it simply taught sobriety and care. The number of bankruptcies in the United States and Canada was 5123, with $299,- 800,000 liabilities. Fourteen railroads suspended pay- ment on $189,800,000, and cotton manufacturers suffered severely by the fall of cotton (sixteen cents to eight and a half cents) and by the depreciation of stock.

The Northern and Eastern banks resumed in Dc- . cember, 1857, and were followed shortly afterwards by all the other banks in the country. Things went on until the civil war very much in the old way. The next panic was in November, 1860. Prosperity and abundance prevailed everywhere in all the States. Business of every kind appeared to be conducted with profit; the crops had been abundant, and the banking and currency systems rested upon a solid foundation. But the election of President Lincoln was followed by movements towards secession and by political agitation and excitement. Later in Novem- ber several States werc found to be drifting in the wake of South Carolina, which was considered the leader in a movement aiming at secession. A dark eloud arose to mar the fair prospects of a great nation engaged in profitable occupations, and there ensued a shrinkage of business, a contraction of credit, the reduction of enterprise, and some hoarding of gold. Prices were lowered, the foreign exchanges fcll, and gold began to be imported. Southern collections be- came difficult, and then ceased.

The panic set in about the middle of November at New York with sudden violence. Some of the banks were spcedily embarrasscd, and the suspension of all, or nearly all, was considered inevitable if the panic continued to the close of Thursday, the 22d of No- vember. But on Monday, the 19th, a plan for allay-

ing the panic was devised, and was submitted on that day and the next for the consideration of the bank officers, who adopted it in general meeting on Wednes- day, the 21st. It was at once carried into effect, with wonderful success. People who had drawn out specie at once returned it to the banks, and the day that was expected to bring on general bankruptcy only wit- nessed universal rejoicing. Not so, however, in St. Louis, where all the banks, with the exception of the Exchange Bank, suspended payment on November 26th. They resumed shortly after, but during the winter the Southern States seceded and the political ex- citement increased. In April, 1861, the progress of the secession movement caused great uneasiness in financial circles, but on the 24th of that month the bank officers again united as before and prevented any panic worthy of note.1

On October 14th the banks of St. Louis created quite a stir in the community by deciding not to receive or pay out the notes of the Union Bank of Missouri. The initiative was taken by the State Bank, which was followed by the others. On the following day a meeting of the bank presidents was called at the instance of the Merchants' Bank, " to determine on a line of policy to be pursued by these institutions towards each other." The State Bank, Merchants', Southern, Mechanics', and St. Louis were represented at the meeting. A resolution was adopted for a set- tlement of balances each day, the notes of each bank being received and paid out indiscriminately. This resolution was agrced to by all the banks represented except the Bank of St. Louis, which, in consequence of the seizure of some one hundred and thirty-four thousand dollars of its coin by the military authori- ties, did not feel itself warranted in abiding by the resolution.2

1 On the 20th of September, 1861, the following notice was published :

" Subscriptions Invited to the National Loan .- Pursuant to instructions from the Secretary of the Treasury, a book will be opened on the 24th day of September, 1861, at the office of the assistant treasurer in St. Louis, for subscriptions, under my superintendenee, for treasury notes, to be issued under the act of July 17, 1861. BEN. FARRAR,

" Assistant Treasurer United States, St. Louis, Mo."

2 The eoin referred to was taken possession of by an officer of the army in the branch bank at Boonville, Ill., and was transferred by him into the hands of the United States Ex- press Company, with instructions to deposit it with the sub- treasurer in St. Lous. The sub-treasurer refused to receive it, and the express officer then made a special deposit of it in the Mechanies' Bank, where it remained for some time, as none of the army officers were willing to take the responsibility of restoring it at this time to the bank. In a short time, how- ever, the speeie was returned to the owners.

1380

HISTORY OF SAINT LOUIS.

In consequence of this action on the part of the St. Louis Bank, its paper on the 16th was rejected at the several banks. This proceeding was followed on the next day by similar action on the part of several of the other banks. The State Bank received and paid out Southern and Mechanics' Bank bills, while the Merehants' refused the Mechanics', but took the Southern Bank notes, as they had agreed to do. The Mechanics' then retaliated on the Merchants' by throwing out its paper. This state of affairs con- tinued until the 19th, when the misunderstanding between the Merchants' and Mechanies' Banks was removed, and they received each other's paper as for- merly. The paper of the State, Mechanies', Mer- chants', and Southern Banks constituted at this time the only circulating medium in the eity.1

The final panie at New York preceding the suspen- sion of specie payments on Dec. 30, 1861, was very slight, the banks having suspended before the public had become aware of there being any pressing neces- sity for it. In the interior, where State banks were issuing notes on security of stoeks of the seeeding States, many banks failed, and there was much dis- tress among the people. The year 1862 consequently opened with a general suspension of specie payments by the banks in all parts of the country, and on Feb. 25, 1862, Congress authorized the issue of one hun- dred and fifty millions of " greenbaek" legal tender notes. The first issue of legal tenders was in April. As they were issued gold rose, and all specie disap- peared. On July 11th one hundred and fifty mil- lion dollars more legal tenders were voted, and the provision of the aet of February 25th for funding them in six per eent. bonds was omitted.2

1 On the 31st of July, 1861, the assistant finance commissioner of the State made an official report on the condition of the State bank-note circulation, from which it appears that the entire out- standing circulation of all the banks in the State was $8,021,000. Of this account the discredited or partially discredited banks had a circulation of $4,609,405, divided as follows: St. Louis, $472,110 ; Mechanics', $831,635; Western, $597,045; Southern, $715,070; Union, $1,067,510; Farmers', $926,035. This would leave for the circulation of the remaining banks, Exchange, Merchants', and State Banks, $3,411,595, which was the local capital upon which the business of the city and State was con- ducted. The savings institutions (leaving out the brokers) had a deposit account of over $3,000,000.

" In consequence of the discovery of extensive gold deposits at Pike's Peak, in Colorado, and the Salmon River regions, a meeting was held on May 26, 1862, at the Union Merchants' Exchange, "to take into consideration measures for establishing in St. Louis a United States Branch Mint." Mr. Partridge called the meeting to order, when Clinton B. Fisk read a pre- amble and resolution, and the following memorial to Congress, which were adopted. The memorial was circulated throughout the city and State for signatures, and was afterwards submitted to Congress :

In January, 1862, the highest price of gold was three and three-quarters premium, and when a sceond issue of legal tender notes was authorized (July 11th), it sold at a premium of twenty per cent. In January, 1863, another issue of one hundred million dollars of the notes was authorized, when gold rose to fifty per eent. premium. June 20, 1864, gold trading was forbidden. Gold rose from 199, on the 21st, to 230 on the 23d, and fell to 207 again. The aet was re- pealed July 2d. Gold reached its highest point, 285, in July, 1864, the paper dollar being worth a little more than thirty-five eents in eoined money. One week after the Confederate forees east of the Missis- sippi, on May 11, 1865, had surrendered, the pre- mium on gold was as low as twenty-eight and a half per eent.

The act of July 17, 1862, provided for the issue of stamps to be used as " change," but they were incon- venient, and the aet of March 3, 1863, provided for fifty million dollars of fractional notes.3

" To the President and Members of the Senate and House of Representatives, in Congress of the United States :

"Your memorialists would represent that since the recent dis- covery and partial development of the rich gold deposits at Pike's Peak and Colorado, and the Salmon River regions, St. Louis has become the depository of much of the crude products of these mines. Several organizations, with abundant supplies . for the further exploration and development of said mincs, are now en route for the northwest from this city and vicinity.

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History of Saint Louis City and County, from the earliest periods to the present day: including biographical sketches of representative men, Part 85

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