USA > New York > Nassau County > Long Island; a history of two great counties, Nassau and Suffolk, Volume II > Part 34
USA > New York > Suffolk County > Long Island; a history of two great counties, Nassau and Suffolk, Volume II > Part 34
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The Dutch towns on Long Island had been permitted, from time to time, to have town courts and to elect magistrates, following the example of the towns inhabited by the English. The towns in what is now Kings county formed one judicial district, those in Queens another, and Suffolk a third, but as the majority of the towns in the present county of Suffolk refused to submit to the Dutch, a district court was never organized in that district.
When the English took over the government of Long Island, they brought with them the conception of Natural Law as opposed to the absolute power of the sovereign to prescribe law. This they had fought for prior to Magna Carta and the Reformation and were to fight for again prior to and after the Declaration of Independence which enunci- ated the principle. Francis Lewis of Flushing was one of the signers of the Declaration. Mr. Justice Robert H. Jackson has enunciated the principle again at Nuernberg. It was no mere accident that the first professorship of law in America, established at Kings (now Columbia) College in the City of New York, should have been denomi- nated a chair of "Natural Law."
The jury system was established. They brought with them also the English Common Law which grew up from popular customs, deci- sions of the judges, and verdicts of juries to whom, in the beginning, novel questions were submitted-questions to which no answer was found in the written law or in precedent.
The east end towns were not at first subject to the control of any colony, nor had they any political connection with each other before the conquest of New Netherland by the English which took place when the Netherlands and England were not at war. Being too remote from Europe to derive any protection from that quarter, and having no political alliances here, the whole power of government was retained by and vested in the primary assemblies of the people; an instance of a pure democracy which, apparently, answered all the ends of the government. The people (who in the town of Southold must be church members) elected their magistrates and all other civil officers (who must have the same qualification) and established town courts which decided causes with or without the intervention of a jury, according to the discretion of the court itself, subject to the ultimate decision of the town meeting (then called the general court) if either party appealed.
The town of Southold at that time included Riverhead. The first President Dwight of Yale College, in his journal of travels through Long Island in 1804 states: "No lawyer, if I am not misinformed, has hitherto been able to get a living in the county of Suffolk." Punish- ment of criminals must be "according to the minde of God as revealed in his word."
In 1665 a convention at Hempstead established the first judicial districts under English rule, dividing the Island into ridings (a cor- ruption of the Yorkshire word "trithing", since there were three). The towns in Suffolk county constituted the East Riding; Kings county and Newtown were in the West Riding; and the remainder of Long Island belonged to the North Riding of Yorkshire. The Duke's
Suffolk County Courthouse at Riverhead
The smaller building at left houses the County Treasurer and the County Auditor. Beyond the courthouse is the office building of the County Clerk.
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Laws, adopted at this convention, provided for local courts with no appeal in minor causes; and for treble damages against anyone suing for greater damages or debts than actually due. Final appeal was to the court of assize, composed of the Governor and council.
The judgments and decrees of the court of assize were such as the governor dictated; his assistants not being colleagues but merely advisers who held their authority under him and were dependent on him. The governor was both judge and legislator. He interpreted his own acts and not only pronounced what the law was but what it should be. There were many protests and rebellions against these conditions.
The first colonial legislature met in the city of New York in 1683; abolished the three ridings and substituted the counties of Kings, Queens and Suffolk as the judicial districts, established a court in every town to be held on the first Wednesday of every month; a court of sessions in each county to be held annually, that for Kings to be held at Gravesend, for Queens at Jamaica and for Suffolk at Southold and Southampton alternately; a court of general jurisdic- tion called a court of oyer and terminer and general gaol delivery to be held in each county once a year. The governor and council constituted, ex officio, the court of chancery, the supreme court of judicature of the province from which appeals lay to the king. One year later the court of assize was abolished. Eight years later justices of the peace were substituted for the town courts. A jury could be had on the demand and at the cost of either litigant. Lay judges were considered qualified to decide even capital cases but when the ' title to land was in question they had no jurisdiction. The governor and council were eliminated from the supreme court of judicature.
The power of taking proof of wills and issuing letters testa- mentary and of administration was vested in the governor who in some localities appointed a delegate to take proof and transmit it to him. Not until 1778 did the legislature order the appointment by the governor and council of a surrogate in every county.
There seems to be no record of witch burning or ducking (the ordeal of cold water), or of lynching on Long Island, but there are records, not so ancient, of torture to force confession.
In the eighteenth century leading practitioners formed a "Law Society" and provided for the study of law in their offices. Pro- spective clerks must have two years of college education, must bind themselves for five years and pay a fee of £500. It was provided that "The sciences necessary for a lawyer are 1. The English, Latin and French Tongues. 2. Writing, Arithmetic, Geometry, Surveying, Mer- chant's Accounts or Bookkeeping. 3. Geography, Cronology, History. 4. Logic and Rhetoric. 5. Divinity. 6. Law of Nature and Nations. 7. Law of England."
The constitution of 1777 made no changes in the courts or judicial districts except to institute a court for the trial of impeachments and the correction of errors, consisting of the president of the senate, the senators, chancellor and judges of the supreme court. Neither the judges nor the chancellor could vote, but were permitted to explain their decisions. The right of trial by jury was preserved.
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The constitution of 1821 provided for the appointment of all judicial officers, except justices of the peace, by the governor with the consent of the senate; the governor to appoint justices of the peace if the supervisors and the judges of the respective county courts could not agree on any appointment. Under the authority of this constitution the legislature divided the state into eight judicial dis- tricts, Long Island being in the second district.
The eight judicial districts were continued until the constitutional amendment of 1905 which authorized the legislature to erect out of the second judicial district another district. The legislature acted and left Long Island and Staten Island to compose the second dis- trict. The constitutional convention of 1938 sought to give the legis- lature power to erect still another district but the proposition was rejected by the voters. Unsuccessful efforts to amend the constitution to permit the erection of Nassau and Suffolk counties into a tenth judicial district had been made in 1931 and 1935. Several efforts had been made by the legislature to erect the district regardless of the constitution but these were vetoed by the governors. Another effort was made in 1944 and the bill was signed by Governor Dewey but the Court of Appeals held the act to be a violation of the constitution, since the power given the legislature to "alter" the districts did not imply the power to "erect". The purpose was finally accomplished by an amendment to the Constitution adopted at the general election of 1947, giving the legislature power to erect a 10th district composed of Nassau, Suffolk and Queens counties, and by act of the legislature with the approval of the governor in 1948.
The power to appoint judges, except to fill vacancies, was taken from the governor by the constitution of 1846. The Court of Appeals succeeded the supreme court of judicature which had been composed of a chief judge and two puisne judges appointed by the governor; the present Supreme Court was created with general jurisdiction in law and equity; the judges of the Court of Appeals to be elected by the electors of the state and the justices of the Supreme Court by the electors of the several judicial districts; elective county judges and surrogates were made constitutional officers; justices of the peace to be elected by the electors of the several towns. The Nassau County charter, adopted by referendum in 1936, abolished justices of the peace and provided for the District Court of the County of Nassau.
The legislature was empowered to establish tribunals of concilia- tion but this power seems not to have been exercised.
The work of the constitutional convention of 1869 was rejected by the voters, except the judiciary article which directed the legis- lature to provide for a referendum on the appointment of judges and justices by the governor. On the referendum the voters rejected over- whelmingly the proposal to return to the governor the power to appoint the judiciary.
In 1882 an amendment directed the legislature to provide for general terms of the Supreme Court for appellate work and these continued until the end of 1895 when they were succeeded by the four appellate divisions. Circuit courts, courts of oyer and terminer, and
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courts of sessions, on Long Island, were abolished by the constitution of 1894 and the appellate division was authorized to provide for an appellate term for the hearing of appeals from minor courts.
In the convention of 1915 another attempt was made to have the judges and justices appointed by the governor but the proposal was not adopted by the convention and the constitution submitted by that convention was rejected by the voters. Further attempts to bring about an appointive judiciary have been defeated either in the legis- lature or by the voters, but hope springs eternal in the executive breast.
L. I .- II-22
CHAPTER XXXVI
Banking
SUBURBAN AND RURAL BANKING
N EW YORK State's first bank was founded in New York City in 1784 as the Bank of New York by Alexander Hamilton and other leading Federalists. It has operated continuously since then. The year was an eventful one. There was much rehabilitating and rebuilding to be done. The Revolution, which had ended the year before, had left the disunited states in a bad way financially as well as otherwise. An important part of New York City's business section had been destroyed by fire during the war. Long Island, which had been occupied by the enemy from the autumn of 1776 to the end of the conflict almost seven years later, was an area of desolation. Back came thousands of refugees who had abandoned their island homes and property after the Battle of Long Island and fled to Connecticut rather than submit to enemy rule.
The optimism of the people in 1784 was demonstrated not only by the establishment of the State's first bank. That same year the State Board of Regents was created and, at East Hampton, Clinton Academy, the first such institution in the State was founded, followed shortly by Erasmus Academy in Brooklyn.
The Bank of New York remained without local competition until 1799 when Anti-Federalist Aaron Burr, Alexander Hamilton's chief rival in political as well as business and social life, with several associates organized the Manhattan Company. Created ostensibly to supply the city of New York with water service, its charter included banking powers and thus was born today's great Bank of the Manhattan Company.
Generations before the establishment of New York's first bank, there was in almost every sizeable community in the province some citizen who provided his neighbors with banking service, such as lending funds on interest, sometimes receiving deposits for safe keep- ing and borrowing when necessary from outside sources in order to increase his lending power. The profession was older than Christianity and like the money lenders who were driven from the Temple in Biblical times, these private bankers were not always above reproach.
Perhaps the nearest thing to a bank on Long Island during the colonial era was the town of Hempstead itself, then in the County of Queens. To quote from Bernice Schultz's Colonial Hempstead:
"Early in the Eighteenth Century, it became common to end the year with a surplus which was put in charge of the trus- tees. As the surplus grew it was loaned out to individuals who gave their bonds for it and paid interest to the town, the exact opposite of present day municipal financing. Numerous regu-
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lations were passed to control the loaning and management of this fund. In 1720 it was voted that no money held by the trustees should be used in any way without the consent of the major part of the freeholders, and every year the trustees were ordered to give a list of the bonds to the town clerk. These reports show year by year an ever increasing surplus. In 1742 the town had £168 'in Bank,' and 1766, £300, the responsibil- ity of loaning, calling in, and collecting interest on this fund becoming a considerable burden. It was only a few years, how- ever, before the Revolution had wiped out any such care."
All during this period and, in fact, for many years previous thereto and for some years thereafter, the principal medium of exchange throughout the colonies was English money. As early as 1695, in which year the Bank of England was founded to provide ready cash for the Crown, parliament had endeavored by various stringent meas- ures to halt the flow of English specie to America. English ships often paid their crews in Spanish and other foreign coins in order to conserve English money for the motherland. American ships frequently received foreign specie for their cargoes and paid their crews in the same way, thus bringing a steady flow of doubloons, florins and even Asiatic pieces to the Western World. This practice continued until after the Revolution, even though certain of the colonies, notably Massachusetts, began minting their own money some years before the war for independence.
Under such a conglomerate state of affairs, it was only natural that bartering, which had its beginning in the earliest days for want of a minted medium, remained in general practice well into the nine- teenth century. Even the private bankers of colonial days sometimes received payment of loans "in kind," which might mean fish, flesh, fowl or farm produce, a policy conducive to the same sharp practices employed in horse trading. "At the outbreak of the Revolution the very word bank was regarded with suspicion and distrust," declares William H. Dillistin in his Historical Directory of the Banks of the State of New York, 1946.
For some years after the Revolution New York City had a monopoly on the banks in this State. Not until 1827 was the Brooklyn Savings Bank established across the East River. In 1836 The Atlantic Bank in the City of Brooklyn was founded, but for many years there- after the greater part of Long Island continued to depend upon private bankers.
Up to 1838 a bank charter was obtainable only by special act of the Legislature, which procedure was thwart with politics and entailed a great amount of pressure being brought upon political leaders whose word was essential to favorable action. In 1838 the State enacted its first general banking law but not until 1846 were charters issued to commercial banks other than through the Legislature. In the case of savings banks a similar step was taken in 1875 and in 1887 trust companies were included.
That the far-flung easterly end of Suffolk County became the pioneer in rural banking on Long Island is somewhat surprising. When
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Nassau County was set up from part of Queens County in 1898, the new county had very few banks although its earliest settlement, Hemp- stead, went back to 1643-44. Not until 1887 did that flourishing com- munity obtain its first financial institution, the Hempstead Bank. The Oyster Bay Trust Company and the Bank of Rockville Centre Trust Company were founded three years later and in 1892 came what is now
Home of the First National Bank and Trust Company, Freeport
the Freeport Bank and the same year the present Glen Cove Trust Company. The Nassau County Trust Company of Mineola was chartered in 1899, about the time the new county of Nassau established Mineola as its county seat.
Years before any of the foregoing banks were founded in what was to become Nassau, now the richest suburban county in the State if not in the nation, a group of local businessmen founded the Southold Savings Bank in the village and town of that name at the east end of the island. This was in 1858 when fortunes made from whaling by residents of that and neighboring towns were still intact. Two years
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later the Sag Harbor Savings Bank was chartered at what until a few years before had been one of the leading whaling ports of the entire Atlantic seaboard.
The first commercial bank on Long Island outside of Brooklyn received its charter in 1864. This was the First National Bank of Greenport, which village twenty years before had been made the eastern terminal of the Long Island Railroad's first line extending the length of the island. The organizer of this bank was Grosvenor S. Adams. Until 1830 Greenport had been known as Sterling and until a decade before that its future site had been the farm of Captain David Webb which in 1820 was auctioned off by Augustus Griffin (later author of Griffin's Journal) for $2,300 to David T. Terry, Silas Webb and Joshua Tuthill who developed the area. In 1884 a second bank was established at Greenport to be known as the People's National Bank. The Patchogue Bank was founded the same year. By then the Riverhead Savings Bank, the fourth oldest bank in Suffolk County, had been operating for twelve years, having received its charter in 1872.
The South Side Bank was established at Bay Shore in 1887, the Bank of Huntington in 1888 and the following year, the Bank of Amityville, the Bank of Port Jefferson and the Peconic Bank, the latter becoming the fourth such institution in Southold Town, making that town the leading banking area on the island east of Brooklyn.
The year 1890 saw the birth of the Suffolk County National Bank at Riverhead and the Oystermen's Bank and Trust Company of Sayville while the following year was established the Northport Trust Company, in 1893 the Babylon National Bank, in 1896 the Union Savings Bank at Patchogue and in 1897 the First National Bank of Port Jefferson.
Thus at the turn of the century Suffolk County had some thirteen commercial banks, none of which was located in the towns of Southamp- ton, East Hampton, Shelter Island or Smithtown, and four savings banks. In 1901 came the First National Bank of Northport, in 1902 the Center Moriches Bank, in 1903 the present Citizens National Bank and Trust Company of Patchogue and the First National Bank of Huntington. In 1904, was established the Seaside Bank of West- hampton Beach, in 1905 the Mattituck National Bank and the East Hampton National Bank, in 1907 the Bank of Suffolk County at Stony Brook, the First National Bank of Amityville, the First National Bank of Islip and the First National Bank of Lindenhurst.
In 1908 was chartered the Bank of Southold, in 1909 the First National Bank of East Islip and in 1910 the Bridgehampton National Bank, the Suffolk County Trust Company at Riverhead and the Bank of Smithtown at Smithtown Branch. The following year brought the First National Bank of Bay Shore and in 1912 came the First National Bank of Southampton. Other banks were subsequently founded in Suffolk County as follows:
Bank of Babylon 1913, Osborne Trust Company at East Hampton 1917, Tinker National Bank at East Setauket in 1919, Huntington Station Bank in 1920, Bellport National Bank and Central Islip National Bank 1923, First National Bank of Cutchogue 1924, People's National Bank of Patchogue, and Long Island State Bank at River-
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head 1925, Hampton Bays National Bank 1926, National Bank of Lake Ronkonkoma 1927, Eastport National Bank 1928, and the Linden- hurst Bank 1929.
The history of banking in Nassau County since World War I is to a great extent the history of the Nassau County Clearing House Association and, before that, of the Nassau County Bankers Associa- tion. Fortunately their history was compiled by Mr. William H. Kniffin, president of the Bank of Rockville Centre Trust Company, and published by the former Association in 1947. With Mr. Kniffin's permission, we are using below a portion of his interesting pamphlet, which was mimeographed under the title of "Fifteen Years of Con- structive Banking."
THE NASSAU COUNTY BANKERS ASSOCIATION
The story of the Nassau County Bankers Association cannot adequately be told because the minutes have been irretrievably lost. Only memory is left as a guide. The Association was conceived by Dr. Frank T. DeLano, then president of the Bank of Rockville Centre. It was organized during 1923 or early 1924. It was not intended to operate as did the Clearing House, but to be more in the nature of a fraternal organization. It had no "police powers." The banks worked together because of the Association but it had no jurisdictional powers. It had no code of rules. It was a medium through which bankers could function as a group, but the decisions were entirely group action. One of its major problems was the handling of the reward offered for the apprehension of the murderers of Mr. Ernest L. Whitman, a bond salesman, who was shot while in the lobby of the First National Bank of Bellmore during a holdup. The County of Nassau offered substantial reward supplemented by that of the Bankers Association. In due course the bandits were apprehended and punished and the reward, after long negotiation, was apportioned among several claimants.
The Association held two dinner meetings each year, the first being in the Hempstead Golf Club, May 27, 1924, at which the Rev. Richard Haggerty was speaker. There were not more than two hundred present. The officers changed almost yearly. It was, however, the Nassau County bankers who assembled on that memorable night, January 6, 1932, that led to the Clearing House. It was they who conducted the meeting. It was also through the Bankers Association that the Nassau County Chapter American Institute of Banking was formed in 1925, and the Bankers Association, followed by the Clearing House, has supported the Institute throughout its entire history.
A meeting of the Board of Governors of the American Institute of Banking was held at the First National Bank and Trust Company of Freeport, September 22, 1925, preceded by several conferences of the committee to draft the plan of organization. The first general meeting of which I have recollection was in the Mineola High School at which William Feick, now Vice President of the Irving Trust Company, spoke. The Chapter has had a remarkable career of success, and is now one of the outstanding "country chapters" in this country.
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As soon as the Clearing House was organized in 1932 it was realized that the two organizations would parallel each other quite closely. For several years the Bankers Association conducted the semi-annual dinners, while the Clearing House functioned continuously. The work of the Clearing House was soon recognized as being the more important, with the result that the Bankers Association was merged into the Clearing House and the former ceased to exist. The merger took place officially as of May 5, 1938, the process having been under way since 1935. There was no little sentiment connected with the Bankers Association, Dr. DeLano having been its first president, fol- lowed by Dr. J. Clark Schmuck of Lawrence. It was this sentiment that kept it alive long after the Clearing House took over the active supervision of the banks.
IN A SMOKE FILLED ROOM
In a smoke filled room at the Garden City Hotel sometime around midnight, January 7, 1932, the Nassau County Clearing House was born. There were two hundred or more bankers representing some sixty banks there assembled who had been in session intermittently since ten o'clock in the morning. That was, in my judgment, the most momentous gathering of bankers ever held in Nassau County. The events leading up to that meeting are of such human interest and so important in the formation of the Nassau County Clearing House, and the writer had such an intimate part in those preliminary steps, that this story must be told in the first person or it will lack something essential to its understanding.
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