USA > Nebraska > Douglas County > Omaha > Omaha: the Gate city, and Douglas County, Nebraska, a record of settlement, organization, progress and achievement, Volume I > Part 26
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Purchase, Andrew M. Robinson, Edward Stumpf, Axel Sund, Bert F. Talcott and Otto Whitaker.
Company I contained a number of Douglas County men. George R. Lunn was a corporal and the following served as privates: Matthew J. Burke, John J. Callanan, William C. Dotson, Fred W. Margwadt, Warren H. Ray and Willianı Ward.
Company K came from Hastings. The only Douglas County men in the company were Troy Nicholson and Patrick J. Reardon.
Company L was made up of men from all parts of the state. It was mustered in on July 8, 1898, with Cleveland W. Brown, Charles J. Nicholson and Walter Lowe as corporals, and the names of the following Douglas County men appear on the muster roll as privates: William Black, Thomas H. Bradshaw, James E. Burns, William P. Conway, Samuel V. Fitzsimmons, Clarence M. Garton, Samuel Gibson, George W. Grove, Joseph B. Jones, Robert S. Kelly, Herman Kratzsch, Charles Kropp, Gilbert B. Laflin, Jestivin E. Lee, John McCall, Benjamin D. McCormick, John E. Mardock, Michael P. May, August Miller, Edwin Morrison, Charles A. Nystrom, Gust E. Nystrom, George H. Pendarvis, Cyrus R. Redfield, William R. Simpson, James Snyder, John W. Sperry, Carlton B. Turner and Henry Werth.
Company M bore upon its muster rolls the names of ten privates from Douglas County, viz. : George B. M. Alter, Charles S. Chenoweth, Samuel Constan, Marshall Custard, Bert Griggs, Jason L. Ratekin, Charles W. Stolze, Henry Stiter, Andrew J. Trapp and Frank Wagner.
The regiment remained in camp at Fort Omaha until July 18, 1898, five days after it was mustered in, when orders were received to move at once to Jackson- ville, Florida, and report to Maj .- Gen. Fitzhugh Lee. It arrived at Jacksonville on the 22nd and went into camp Panama Park, about six miles north of the city. In December it accompanied General Lee's Army of Occupation to Cuba, where it remained on duty until April, 1899. It was then ordered to Augusta, Georgia, where it was mustered out on May 11, 1899, and the men immediately returned to their homes in Nebraska.
THE NATIONAL GUARD
After the Spanish-American war the Nebraska National Guard underwent a complete reorganization, and since then several changes have been made. According to the last available report of the adjutant-general, the National Guard of the state is composed of two regiments, of twelve companies each, except that in the First Regiment Company F is missing.
The First Regiment is made up of the following companies: Company A, York; Company B, Stanton; Company C, Beatrice; Company D, Norfolk; Com- pany E, Blair ; Company G, Geneva ; Company H, Osceola; Company I, Auburn; Company K, Wymore; Company L, Omaha; Company M, McCook. The head- quarters of the first battalion of this regiment are at Madison; of the second battalion, at Beatrice; and of the third, at Stanton.
The companies composing the Second Regiment and their location are: Company A, Kearney; Company B, Beaver City; Company C, Nebraska City ; Company D, Hastings; Company E, Holdrege; Company F. Lincoln; Company
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G, Omaha; Company K, Schuyler; Company L, Alma; Company M, Albion. Headquarters of the first battalion are at Aurora; of the second, at Nebraska City; and of the third, at Schuyler.
From this organization of the National Guard it will be seen that Douglas County is represented in time of peace as well as in time of war, having two full companies in the regular military forces of the state. Annual camps of instruction are held, in which every company is required to participate.
FORT OMAHA
At the time Fort Omaha was established as Sherman Barracks in 1868, it was outside the corporate limits of the city of Omaha. It is located about three miles north of the main business district, on a tract of ground bounded on the north by Laurel Avenue ; on the east by Thirtieth Street ; on the south by Redman Avenue ; and on the west by Thirty-third Street. In 1869 the name was changed to Fort Omaha, and since that time the city has grown out and beyond the post. In August, 1869, Emerson and Ellen J. Seymour conveyed by warranty deed to the United States the north half of the southeast quarter of Section 33, Township 16, Range 13, as a site for the fort, and on September 4, 1869, Charles B. Wells deeded to the United States twenty acres adjoining the Seymour tract on the north. Augustus Kountze leased to the Government forty-two and a half acres additional for military purposes, later selling the land to the United States.
In the early '8os, Mr. Kountze and seventy-nine others agreed to give $100 each for the purpose of purchasing additional land for the military post, with the understanding that it would be made a permanent institution. Before any- thing was accomplished in this direction, Senator Charles F. Manderson intro- duced a bill authorizing the Secretary of War to sell Fort Omaha and purchase not less than 320 nor more than 640 acres of suitable land, within ten miles of the limits of the City of Omaha, for a permanent military post. The bill passed both houses and was approved by President Cleveland on July 13, 1888. Under the provisions of this bill, 543 acres in the northeastern part of Sarpy County were purchased and Fort Crook was established.
Fort Omaha was not abandoned, however, a small body of troops remaining quartered there until removed to the southern border of the United States on account of the unsettled conditions in Mexico.
During the Civil war the Department of the Platte was created and depart- ment headquarters were established at Omaha. For several years the com- manding general, his assistants, etc., occupied the Withnell Building at Fifteenth and Harney streets. Headquarters were next established in the Strang Building on the corner of Tenth and Farnam streets, where they remained until 1889, when they were removed to the fifth floor of the Bee Building. When the present postoffice building was completed the old postoffice was remodeled and made the permanent headquarters of the department.
CHAPTER XV
FINANCIAL HISTORY
BURDEN OF TIIE PIONEERS-CITY FINANCES-THE FIRST BALANCE SHEET-BONDED DEBT IN 1915-SCHOOL BONDS-DOUGLAS COUNTY FINANCES-DOUGLAS COUNTY BONDS-VALUE OF THE SECURITIES-BANKING INSTITUTIONS-SOUTH OMAHA BANKS-RURAL BANKS-NEW BANKS-DEFUNCT BANKS-TRUST COMPANIES- SAVINGS AND LOAN ASSOCIATIONS-CHARACTER OF OMAHA'S FINANCIAL INSTITUTIONS.
A little more than three score years ago the first settlers of Omaha crossed the Missouri River and began the work of building up a city in the wilderness. There were no weaklings among these pioneers. They were men of unquestioned courage and great energy, full of hope for the future, but unfortunately they possessed only a limited amount of ready cash, with which to defray the early expenses of the growing municipality. It is the history of almost every city and county in the Union that, during the early years of their career, the demand for public expenditures outstripped the sources of public revenue. During this period the burden of maintaining the public institutions fell heavily upon the few brave men who undertook the work of developing the natural resources of the new country. It was so in the case of the City of Omaha and the County of Douglas.
CITY FINANCES
In a former chapter is given some account of the early financial difficulties of Omaha, in the years immediately following its incorporation in 1857; the issue of a large amount of scrip to meet current expenses, because the revenue derived from taxation was not sufficient to provide for municipal expenses; and how the people at a special election on December 26, 1857, by a vote of 598 to 43, authorized the issue of bonds to the amount of $57,500-the first bonds ever authorized by the people of Omaha-to retire the scrip from circulation. For some reason the bonds were not sold, probably because the credit of the city at that time was such that dealers in bonds were wary of investing in her securities, though twenty-five years later Omaha bonds bearing only 5 per cent interest, a low rate for western cities then, commanded a premium in the market.
As an illustration of the safeguards thrown around the city treasury in those trying times, the council, in the spring of 1858, ordered the treasurer "to accept only gold and silver specie in the redemption of lots sold for the non-payment of taxes." Not long after this order was issued a man named Shennehan presented
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FIRST NATIONAL BANK, SIXTEENTH AND FARNAM, OMAHA
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a claim for a few dollars against the city, which the council ordered paid. John H. Kellom, then city treasurer, refused to pay the claim and a committee of the council called on him to inquire why the order of the council in the matter had been ignored. Mr. Kellom then called attention to the fact that he had previously been directed by the council "to reserve the first $500 received as a special fund to pay the expenses of caring for the poor and the land office trials," and as there were not $500 in the treasury, he had no money with which to pay Shennehan's claim. It is said that a member of the committee then took up the claim of Shennehan and held it until financial conditions improved.
In August, 1858, an ordinance was introduced in the council providing for the payment of certain warrants outstanding. It was referred to the committee on judiciary and at a meeting a little later Thomas Davis, chairman of that com- mittee, reported as follows: "The committee on judiciary, to whom was referred the ordinance providing for the payment of city warrants, would respectfully report that they have had the same under consideration and would recommend that the bill do not pass, for the reason that your committee are fully of the opinion that the bill is a virtual repudiation of the debt of the city, known as the scrip debt, which has been ratified by a vote of over two-thirds of the citizens."
M. W. Keith, a member of the committee, presented a minority report, in which he said: "In the first place, the city cannot proceed to make any improve- ment of streets and bridges, payment of its officers, relieve the poor, or even bury the dead, in those cases of citizens who are so unfortunate as to die poor, unless we reestablish the credit of the city by paying its legitimate indebtedness in preference to any other class of claims. The undersigned is fully of the opinion, from information derived from citizens, that nine-tenths of the citizens are in favor of the bill now under consideration, and he therefore respectfully recom- mends that the report of the chairman of this committee be laid on the table and that the bill do now pass and become a permanent ordinance of the city. The minority report was adopted and the ordinance was passed.
THE FIRST BALANCE SHEET
Early in the year 1859, in order to know the exact financial condition of the city, the council appointed an auditing committee, which reported on March 23, 1859, the following city indebtedness :
Scrip issued in 1857 $60,000.00
Warrants outstanding 12,414.14
Floating debt
275.45
Total debt
$72,689.59
The population of the city at that time was about fifteen hundred, so that the debt was nearly five dollars per capita. On the other side of the balance sheet the committee found the following assets, which partly offset the indebtedness :
One hundred and two lots $22,000.00
Bond and mortgage of Hotel Company 15,000.00
Taxes due 3.559.12
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City warrants redeemed 3,130.39
Scrip redeemed 2,868.68
Interest in courthouse (estimated ) 3,000.00
Amount received at tax sales 1,286.03
City engineer's instruments 200.00
Cash in the treasury 69.82
Balance in hands of collector. 83.03
Total assets $51,197.07
Deducting the value of the assets from the total debt left a net indebtedness of $21,492.52. The courts afterward decided that the city had no interest in the courthouse, hence the item of $3,000 should be deducted from the assets. This loss was almost offset by an error on the part of the committee regarding the scrip. The total amount of scrip issued was $60,000, all of which was reported by the committee as outstanding, yet on the credit side of the ledger they report "Scrip redeemed, $2,868.68," which would leave only $57,131.32 to be carried on the debit side.
BONDED DEBT IN 1915
The above brief analysis of the city's financial condition and struggles during the early years of municipal history has been introduced for the purpose of com- parison with the credit of Omaha at the present time. Since about 1890 the city authorities have experienced no difficulty in disposing of bonds bearing a low rate of interest at more than their par value. The last published report of the Department of Accounts and Finance gives the following as the bonded debt of the city on April 1, 1915. And as no new bonds have been issued since the publication of that report, the same condition applied on April 1, 1916. The table therefore shows the amount of bonds outstanding on the latter date, and the purpose for which they were issued :
Sewers
$ 2,033,000
Special issues
1,210,000
Paving
798,000
Intersections 900,000
Parks 600,000
Funding bonds
595,000
Fire engine houses
285,000
City Hall
125,000
Public Library
100,000
Water bonds of 1914.
7,500,000
Total
$14,146,000
For $6,646,000 of these bonds-all except the water bonds of 1914-no sink- ing fund was provided. The sinking fund for the water bonds on January I, 1915, amounted to $323,043.54. It is now considerably over half a million of dollars.
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OMAHA NATIONAL BANK
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SCHOOL BONDS
Under the law the board of education can issue bonds for school purposes independent of the city authorities. From a handbook issued by the board in March, 1916, is taken the following statement regarding the amount of school bonds outstanding at that time :
Issued in 1899, due 1919 $ 230,000
Issued in 1901, due 1921 12,000
Issued in 1908, due 1928 350,000
Issued in 1909, due 1929 I 50,000
Issued in 1911, due 1931.
750,000
Issued in 1915, due 1945
1,000,000
Total
$2,492,000
To this should be added $220,000, representing the bonds issued by the former South Omaha School District, and $83,000 issued by the former School District of Dundee, making a total bonded indebtedness of the Omaha Board of Education of $2,795,000. Although this debt is regarded as a separate obligation from the city debt proper, it nevertheless constitutes a lien upon the property of the people of the city, and added to the regular city debt of $14,146,000 makes the total bonded debt of the municipality $16,941,000.
DOUGLAS COUNTY FINANCES
.. .
While the City of Omaha was passing through some hard times during the first years of its existence, the County of Douglas was, to use a vernacular expres- sion, "having troubles of its own." The assessment of 1855, the year in which the county was organized, showed property valued for tax purposes at $311,116, which included the City of Omaha. Five years later the valuation was over three-fourths of a million, and the total revenue, including poll taxes and license fees, was $31,437-38. In 1862 the tax levy was lowered about five mills on the dollar and the total income in that year was but $24,996.26. The liabilities of the county at that time amounted to $49,343.74, or nearly two dollars of indebted- ness to each dollar of income, and this despite an increase in the valuation of the property of the county to $1,203,931. This financial condition was due chiefly to the fact that during the first seven years of the county's history large sums of money (large for that period at least) had to be expended in making public improvements. A courthouse was erected at a cost of over forty thousand dollars; roads had to be opened, streams bridged, aid given to the poor, etc., so that the outlay each year exceeded the income.
Money could be borrowed only at rates of interest that in this day would be considered the rankest kind of usury. As an illustration of the financial straits through which the people of Douglas County were passing in the early days, it is only necessary to note that in building the courthouse the county commissioners gave two notes-one for $3,000, drawing 30 per cent interest, and one for $1,000 drawing 20 per cent. In September, 1862, a special election was held to give the voters of the county an opportunity to express their views upon the question of
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levying a tax of a half mill on the dollar to provide a sinking fund for the pay- ment of these two notes. At the election only 138 votes were cast, but every one was in favor of the tax.
DOUGLAS COUNTY BONDS
From time to time the county authorities have found it necessary to submit to the people the question of issuing bonds to make needed public improvements, or for other specific purposes. The oldest county bonds outstanding in 1915 were $268,000 of refunding bonds, which were first issued in 1877 and bore 8 per cent interest. By refunding these bonds in 1902, the interest rate was reduced to 334 per cent.
Under date of July 1, 1892, improvement bonds to the amount of $150,000, bearing interest at the rate of 41/2 per cent were issued. These bonds were for the purpose of macadamizing certain roads outside the City of Omaha and South Omaha and have all been paid.
On January 1, 1903, refunding bonds to the amount of $119,000 were issued to redeem a like amount of the courthouse bonds issued on January 1, 1881. The old bonds bore interest at the rate of 6 per cent and the new issue 334 per cent.
In order to promote the Trans-Mississippi Exposition, the people of Douglas County voted $100,000 bonds, which were issued on January 1, 1898, bearing 47/2 per cent, due in twenty years.
What are known as the Douglas Addition bonds were issued on January I, 1898, the proceeds from the sale of said bonds to be used exclusively in the payment of judgments against the county on account of failure to give a clear title to lots sold in Douglas Addition, being the east fifty acres of the Douglas County Poor Farm. These bonds bear interest at the rate of 47/2 per cent and are payable in twenty years from date of issue The issue amounted to $180,000.
The bonds issued for the purpose of building the present courthouse, amount- ing to $1,000,000 and dated October 1, 1908, bear 4 per cent interest. These bonds are due at the rate of $50,000 a year, beginning on October 1, 1918, and running for ten years, the last $500,000 becoming payable on October 1, 1928. When these bonds were offered for sale, N. W. Halsey & Company, of Chicago, took $200,000, for which the county received a premium of $2,016.66, and the remaining $800,000 were taken by the State of Nebraska at par.
For the purpose of furnishing and equiping the new courthouse, a bond issue of $200,000 was made on October 1, 1911. These bonds bear 47/2 per cent interest and are due in twenty years from date of issue. The total bonded indebtedness of the county on January 1, 1916, was therefore as follows:
Refunding bonds of 1902. $ 268,000
Refunding bonds of 1903 119,000
Exposition bonds 100,000
Douglas Addition bonds 1 80,000
Courthouse bonds 1,000,000
Courthouse equipment bonds 200,000
Total $1,867,000
CITY NATIONAL BANK BUILDING, OMAHA
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In a few instances bonds have been issued by some of the school districts, but as these are payable by the district issuing them they constitute no part of the county debt proper. The City of Omaha is a school district by itself and for that reason the city school bonds were included in the statement of total indebted- ness. If the county and city bonded indebtedness be added together, the sum total for which the people of Douglas County are responsible is $18,808,000.
VALUE OF THE SECURITIES
To some the above figures may seem appalling and the question may arise in the mind of the reader: What security has the bondholder for the payment of these obligations? Every dollar of this indebtedness is a lien upon the property of the taxpayers, which in 1915 was assessed for taxation as follows :
City of Omaha
$41,710,657
City of Benson
898,275
Chicago Precinct
594,210
Clontarf Precinct
17,535
Douglas Precinct
692,618
Dundee (now part of Omaha)
360,208
East Omaha Precinct
183,921
Elkhorn Precinct
411,573
City of Florence
380,513
Jefferson Precinct
455,650
McArdle Precinct
529,021
Millard Precinct
573,065
Platte Valley Precinct
609,649
Union Precinct
397,817
Waterloo Precinct
345,021
Railroad terminals outside Omaha
173.721
Total
$48,333,454
In the table the assessment of the property in the villages of Bennington, Millard, Ralston, Valley and Waterloo is included in that of the precincts in which they are located. Even at the assessed value, the property of the county represents over two and a half dollars of assets for each dollar of debt, and when it is remembered that the property is appraised for tax purposes at only one-fifth of its actual value it will be seen that the actual value is in excess of two hundred million dollars, or nearly eleven dollars of security for each dollar of bonded indebtedness. Under these circumstances it is not surprising that the credit of Douglas County has never been questioned in recent years.
BANKING INSTITUTIONS
At the time Omaha was laid out in 1854 the old state bank system was at the zenith of its glory. The period from 1840 to 1857 is frequently referred to in the financial history of the country as "the era of wildcat banking." During that period charters were freely granted to banks of issue all over the nation, but
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particularly in the states of the new and growing West. The notes issued by these banks passed as currency, though in many instances their redemption was a doubtful question. Unscrupulous financiers found it an easy matter to get rich by organizing a bank, securing a charter from the state, issuing a large amount of notes or bills and then "closing the doors." The abuse of the system by such persons was what caused the state banks to become generally classed as wildcat banks, though many of them were established upon a firm basis and con- ducted by men whose integrity was beyond reproach. The panic of 1857 was so universal throughout the country that most of the state banks were forced to suspend. The system continued, however, until the national banking system was established in 1863.
The first concern in Omaha to transact a general banking business was the Western Exchange Fire & Marine Insurance Company, which was organized in the spring of 1855 and opened for business at the corner of Twelfth and Farnam streets, in the quarters afterward occupied by the United States National Bank. It was established under a charter granted by the Territorial Legislature, with Thomas H. Benton, Jr., a son of Senator Thomas H. Benton, of Missouri, as president; Leroy Tuttle, cashier, and A. U. Wyman, afterward treasurer of the United States, teller. In reality, the institution was a branch of the banking house of Greene, Ware & Benton, of Cedar Rapids, Iowa. From the time the Western Exchange opened its doors it was greatly aided by Government deposits. such as receipts of the land office, etc., and it did a flourishing business for about two and a half years. On September 23, 1857, President Benton made public a statement that, owing to losses incurred in the East, the bank was forced to close its doors and make an assignment of assets for the benefit of the creditors. Doctor Enos Lowe, John A. Parker, Sr., and A. U. Wyman were appointed trustees to wind up the bank's affairs. They found assets of $288,083.75, of which a large part consisted of "discounted notes and bills receivable," upon which but little was realized.
On June 7, 1856, the Bank of Nebraska was organized with B. F. Allen, president ; Samuel Moffatt, cashier. Under the management of those two men the bank issued $37,000 in notes, which were redeemed in full. It weathered the panic of 1857 and in 1858 the interests of the founders was bought by B. R. Pegram, of Council Bluffs, who became president, and D. C. DeForrest was made cashier. The bank continued for about a year under the new management, when it went out of business, paying all obligations in full.
Concerning the Western Exchange and the Bank of Nebraska, James M. Woolworth, in his "History of Omaha," published in 1857 while both banks were in existence, says: "The charters of these institutions are of the most liberal kind. No public securities are required, no control over them is exercised by the Government, they might issue their bills to any amount, without one dollar of gold with which to redeem them. It would be hard for the public to protect them- selves against fraud, should the officers please to close the institution, but the public hold a strong protection against such a course in the character and worth of the gentlemen who own the banks. Not only is their moral character above suspicion of such a gross act of public injury, but their business interests and relations are too dear and extended thus to be sacrificed. Indeed so careful have these gentlemen been to protect themselves individually, and the public from the
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