USA > New York > Oneida County > Utica > Memorial history of Utica, N.Y. : from its settlement to the present time > Part 54
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The early years of the existence of the bank brought it great pros- perity. Not more than twelve and one- half per cent. of the stock was called in before a semi-annual dividend was declared, and down to 1825 only 25 per cent. of the subscriptions had been asked for, while the semi- annual dividends of four and one half per cent. were regular for the first sixteen years. In 1832 the capital stock was certified as $600,000, the same as at the present time. On the Ist of September, 1865, the Bank of Utica was organized under the national system and became the First National Bank of Utica as at present. The present officers of this bank are as follows : President, P. V. Rogers ; 1 vice- president, Edward Cur- ran ; cashier, John A. Goodale ; teller, H. R. Williams.
Montgomery Hunt was the son of Ward Hunt, of Westchester County, New York. He graduated from Columbia College in 1792, and was then placed as a clerk in the Bank of America. He came to Utica in 1809, in the employ of the Manhattan Bank, as the cashier of its branch, and was afterward transferred to the Utica Bank. He became known throughout the State as one of the ablest and most skillful financiers. During all of the fluctuations of trade and the shocks and reverses to which every country is exposed, he displayed judgment and sagacity that are rarely surpassed. During the war period of 1812 and a few years threafter, when so many of the banks succumbed, he maintained the credit of his and pushed its notes into circulation as far distant as
1 See biography in another department of this work.
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MEMORIAL HISTORY OF UTICA.
New Orleans. The deposits of the Bank of Utica rarely exceeded $200,000, while the circulation was three times as large. Mr. Hunt was conspicuous as a Mason, and in 1816 was one of the presidential elec- tors. After his resignation in the bank he lived about two years in New York, but died in St. Cruz, whither he had gone to improve his health, February 24, 1837.
Thomas Colling, so long in the service of the Bank of Utica, was of English birth and came to America while still a minor and engaged in teaching. In 1810-1I he taught a night school in Utica, at the same time being a writer in the office of the county clerk. He had a good mathematical education and was an expert accountant ; besides he was a man of steady industry and punctual habits, which rendered his serv- ices invaluable to the bank. He was retained in its employ until his death, February 25, 1859, at the age of seventy. He was the first clerk of Utica after it became a city.
William B. Welles had a long and honorable connection with the Bank of Utica, and was one of the pioneers of the place. He joined Asahel Seward as clerk about 1811, and remained with him three years. He then served Jesse Doolittle in the same capacity for about a year. In 1814 he was made teller of the Bank of Utica, at which time he was regarded as the best judge of paper money in the village, a qualification which at that time was of great importance. In 1824 he succeeded Orson Sey- mour as cashier of the branch of the bank at Canandaigua, and in 1835 was recalled to take the place of Montgomery Hunt, as cashier of the parent institution, and as before noted filled that station with honor for about thirty years, and until 1863. The later years of his life were spent in Brooklyn.
Alexander B. Johnson was intimately connected with the financial history of Utica for many years, and was also associated with the man- agement of the Bank of Utica. He was born in Gosport, England, May 27, 1786, and came to New York with the family in April, 1801. His father became a merchant in Utica, and his son began keeping his books soon after his arrival in this country. With the foundation of education obtained in London, and later earnest and sustained endeavors, he acquired a large stock of information, and became a vigorous and original thinker, and a terse and forcible writer. In the year 1810, soon
573
ALEXANDER B. JOHNSON.
after he had attained his majority, he established a large glass factory near the village of Geneva, N. Y. In 1812 he wrote and published a book entitled "An Inquiry into the Nature of Value and of Capital, and into the Operation of Government Loans, Banking Institutions, and Private Credit, with an Appendix containing an Inquiry into the Laws which Regulate the Rate of Interest and the Price of Stocks." This work brought him into notice as a thoughtful speculator on the subject of finance. It was not long before his energies were enlisted in a scheme for a bank of his own, and these resulted in the creation of an institu- tion now almost forgotten. About the year 1798 Aaron Burr had secured banking privileges for the Manhattan Company of New York, under the plea of furnishing " pure and wholesome water," and for his management in getting such a charter through the legislature he was greatly applauded. His adroitness was not without influence on Mr. Johnson. Ambitious of securing a charter for another bank in Utica he yet feared opposition from the law-makers at Albany, as well as hostil- ity from the banks already in existence. Deluded by the successful ex- ploit of Mr. Burr, he resorted to similar means to compass his purpose. He drew a charter for the Utica Insurance Company, which was so cun- ningly worded that, while it seemed to convey only permission to in- sure property, it in reality granted the privilege of banking also. This charter he skillfully maneuvered through the legislature during the winter of 1815-16. . On coming home he called together Messrs. Kip, Bloodgood and others, who all agreed that the charter by its terms con- ferred the right of banking, and in this opinion concurred also Thomas Addis Emmet and Richard Harison of New York. A company was soon formed and the $500,000 of capital was taken up. The directors were James S. Kip, president ; Francis A. Bloodgood, Nathan Williams (who soon, however, gave place to Nicholas Devereux), Bryan and Alexander B. Johnson, Charles C. Broadhead, Killian Winne, Hugh Cunningham, and Richard R. Lansing. Mr. Johnson was made secre- tary and treasurer as well as cashier, and A. D. Smith served as teller. Operations were begun in July about where is now the Second National Bank, though the company afterward bought of the Johnsons a part of the property on the corner of Division and Whitesboro streets, where their store had previously been, and erected thereon a suitable building.
574
MEMORIAL HISTORY OF UTICA.
They made banking their principal business, and soon had in circulation $190,000 of their notes of one dollar and upwards, with about $3,500 of small fractional change. The loans ran up to nearly $300,000. They met with much opposition from the Utica and Ontario banks, which endeavored in every possible way to embarrass them. These banks collected with avidity the notes of the Insurance Company and returned them speedily. Mr. Johnson conducted the war with vigor and skill, sending out agents with the notes of the company, who exchanged them for other bank notes. He insured also to the extent of $1,000,000 and fortunately met with no losses by fire. Martin Van Buren had in the mean time become attorney-general of the State. He applied to the chancellor for an injunction against the company. The legislature of 1818 amended the restraining law, as it was termed, which prevented individuals from banking, and made it apply to corporations also, affix- ing severe penalties for its infraction. On this account the company de- termined to suspend business on the 3d of August, 1818, the day before the act was to take effect. Both deposits and notes were paid in full, and the outstanding policies of insurance were transferred to a New York insurance company. The court gave judgment against the Utica com- pany, when a majority of the stockholders, through their proxies obtained by Mr. Johnson, dissolved the company on the 6th of July, 1819, and he, by his unaided efforts wound up its affairs with trifling loss to the stockholders. Though Mr. Johnson was commended by many for his acuteness in securing the charter for the above described institu- tion, the matter was a source of regret to him in later years.
In June, 1819, he was made a director of the Ontario Branch Bank, and in September following was elevated to the presidency. That bank emanated from Canandaigua, where its parent had been established about a year after the organization of the Bank of Utica, and it began business here in December, 1815. During a number of years the capi- tal was divided equally between the parent bank and its branch, but subsequent to 1843, $300,000 were located in the branch, and the re- maining $200,000 in the parent institution. The existence of the cor- poration was limited to June, 1843, but in 1829 it was extended by legislative act to January 1, 1856. A general supervisory and directing power remained of course with the board at Canandaigua, who ap-
575
ONTARIO BANK.
pointed the principal officers of the branch, advised as to the selection of its directors, as well as with respect to the administration of its affairs, and to this board weekly returns were made of its condition and its do- ings. The first directors at Utica were as follows : Benjamin Walker, Jeremiah Van Rensselaer, Arthur Breese, Joseph Kirkland, William G. Tracy, Charles C. Broadhead, James Platt, Kellogg Hurlburt, Jesse W. Doolittle, Abraham Varick, Moses Bagg, Jason Parker, and James Lynch. Colonel Walker was the first president, and was succeeded after his decease by Arthur Breese.
Mr. Breese resigned in his favor and Mr. Johnson succeeded him, though under the title and guise of president he became de facto cashier also. With him rested all the management of the bank, the care in selecting directors, attending to the sufficiency of notes and the security of those already in the bank, all the responsibility in the eyes of the public and the Canandaigua board for its general safety and prosperity, all the care of preserving harmony between the bank and its dealers, and among the members of its own board of directors. And he was daily present at the bank from its opening till its close. Its affairs when he assumed control were greatly depressed ; its notes were not taken at all in Utica, and were sold in New York at twelve and a half per cent. discount. In fact the bank was closed from the middle of July to the fore part of November. Such, however, was the public confidence in his integrity and financial ability that the notes very soon rose to par and obtained an extensive circulation. From that day forward the On- tario Branch Bank was one of the most prosperous banks in this or any other State. It was conducted on sound principles, and experienced almost no loses.
In 1852, by reason of severe domestic affliction and consequent in- capacity for business, Mr. Johnson was obliged to take a voyage to Europe. During his absence he could not of course exercise a per- sonal supervision of the affairs of the bank, nor did he afterward assume as direct a management of its concerns as he had previously done. Upon the expiration of its charter in December, 1855, its connection was severed with the parent bank, and its capital and interests were merged in a new one formed under the general banking law, with the name of the Ontario Bank. Mr. Johnson took part in organizing it,
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MEMORIAL HISTORY OF UTICA.
and when, as he supposed, it was placed on a sure foundation, he ceased in part from his labors and left the details to others. Within eighteen months after its organization the bank was insolvent. The occurrence in all of its painful aspects, the ruin produced, the brief period of its ac- complishment, constitute a case almost without parallel in banking, and which is exceeded by nothing but the elaborateness of the means em- ployed to conceal the progress of the ruin from the president who was constantly in the bank, and from the scrutiny of directors of experience and caution who met weekly as a board. Mr. Johnson devoted himself to the utmost to save those who had placed confidence in him from loss, and the bill holders were all paid off and a trifle restored to the stock- holders.
Mr. Johnson died September 9, 1867, at the age of eighty-one. Prominent and distinguished as he was as a banker, Mr. Johnson re- garded his reputation and success in that character as of secondary im- portance to himself. He adopted that profession in order, as he himself has said, that he " might have time and opportunity to write." "The labors of the counting room and the study were constantly intermingled, and often the sheet of a treatise in hand and a current balance sheet might be seen on his table together; but the business of the day was never for a moment sacrificed to its relaxations, and the balance sheet al- ways had the preference." He wrote treatises upon the subject of bank- ing and finance which received high commendation from those who were best qualified to judge of their merits ; for few men in our country understood better than he the principles which should govern all finan - cial affairs, or were more practical in applying them. Yet though he devoted so much time and study to such subjects, " the great and promi- nent study of his life was language with reference to its meaning in something other than words."
With the exception of the general unsettled financial condition of the country during and succeeding the war of 1812-14, the first period of severe monetary stringency occurred in 1835-37. The causes of this panic had their beginning in the very financial foundation of the govern - ment as developed by the policy of General Jackson and in antagonism to that policy by the United States Bank and its connections. While the tide was rising, banks multiplied in various parts of the country and their
577
SPECULATIVE EXCITEMENT.
managers, who had thus become able to control large resources in depre- ciated currency, engaged heavily in real estate and other speculations, indulged extravagantly in the purchase of luxuries, and thus aided in turning the heads of their more conservative neighbors. Prices of lands and all other kinds of goods were greatly inflated, money was plenty, eas- ily got and as readily spent. Usurious rates of interest prevailed, money commanding from three to five per cent. a month, with an unusual de- mand at even those rates. This apparent anomaly is explained by the fact that many persons were led into borrowing money at enormous rates of interest, in the hope that by its use they could realize the same large profits that were being made by their neighbors ; thus almost the entire community was drawn into the whirlpool and an era of general speculation followed such as the country has never since experienced. Upon the subject of actual gains by the mere transfer of land from hand to hand, and always at enhanced prices, men otherwise apparently sane seemed to have gone mad. Tracts of land which, even at this late day, are not looked upon as very desirable residence or business property, were laid out and mapped and sold over and over at constantly advanc- ing prices, until the crash came, with ruin in its wake. This was the case in Utica as well as in most other cities of the country ; and it is doubt- less true that tracts of land here changed hands between the years 1836 and 1839 at higher prices than they would bring today. For months after the excitement had subsided letters were frequently received from persons at a distance making inquiries about the value of city lots they had bought here when the fever was at its height. They learned in reply that these lots were located quite outside of the inhabited portions of the city and were of value simply for farming purposes. The record of mortgages in the office of the county clerk reveals a long list of mort- gages given by one man as securities for the purchase of " lots " which in fact lie within the confines of New Hartford or beyond the boundaries of Utica on the east. The fever of speculation invaded all classes of the community. Some persons saw the approach of coming disaster and es- caped in time ; but large numbers became bereft of ordinary judgment and clung to the impossible theory that money could be actually created by such operations, until they were finally overwhelmed. The general crash was finally precipitated by President Jackson's " specie circular,"
73
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MEMORIAL HISTORY OF UTICA.
which required all payments for public lands that had been eagerly located and absorbed in the west, to be made in specie, and the with- drawal of deposits from the United States Bank. In Utica the general demand for a greater volume of circulating medium, and particularly for more extensive banking facilities, began several years before the period of active speculation, and manifested itself in one direction by repeated efforts for the establishment of the Oneida Bank. This was, however. in 1836, as related further on. In September, 1838, the Bank of Central New York was established with a capital of $100,000. This, as well as the Ontario Bank, failed in the panic of 1857.
When the day of general disaster approached, a meeting was called in Utica at which a resolution was adopted that a public meeting should be called at once to consider the question of the suspension of specie payments by the local banks. This call was made, and the second meeting held on the 16th of May, 1837, and the call was signed by Theodore S. Gold, Horace Butler, Bradford Seymour, George Tracy, G W. Hubbard, and I. Tiffany. A resolution was adopted at the meeting expressive of confidence in the banks and in the belief that their notes would be paid. The suspension followed as it had almost univer- sally elsewhere. There was much ruin and distress, and many, especi- ally among the younger business men, were financially stranded. Flour sold at one period here at $10.50 per barrel (higher by about a dollar a barrel than the New York quotation), and for a few days there was not a barrel of that necessary in the Utica market.
A resolution was adopted on the 19th of May in the common council that a plate be struck promising to pay one dollar in specie to the holder of the scrip one day after the banks should resume specie payments, or in Safety Fund bills whenever five dollars' worth of the notes should be presented to the treasurer. A protracted discussion followed, and the matter was finally referred to the committee on public improvements ; but we do not learn that anything was accomplished in that direction. The force of the storm finally passed, and early in 1838 the banks began the resumption, this action having been preceded a few months earlier by similar action by the New York banks. A local paper said on the 8th of May : "The banks of the city have for some time paid specie on all demands, and they issue their own notes without reserve." In 1838
579
SPECULATIVE PERIOD.
the general banking law was passed, which exerted a powerful influence in restoring public confidence.
From the financial wreck just described Utica did not recover as rapidly as many other places. But the reaction throughout the country brought an era of general prosperity in which this city shared. Mer- cantile operations became active, building progressed, and some new manufactures were projected. A short period of stringency occurred in 1847, the evil results were confined largely to the channels of mercantile business. Prices of all kinds of goods were greatly advanced, flour selling here at one time for $13 a barrel, and there were a few failures. This was followed by ten years of encouraging prosperity when the great panic of 1857 overwhelmed the country. Utica had by this time grown to a prosperous and thriving city, and her citizens 'shared in the feeling of independence and over- confidence in the future which was universal. The surrounding country had reached a position of tolerable independence ; the farming community had in most cases wholly or in part paid for their lands; plank-roads had been built and extended from the city directly to the doors of the farms, and over them were easily drawn the products which were turned into money in the city. But as has often been the case, the tide of prosperity brought its own destruction ; business of all kinds became excessively overdone ; railroads and other great undertakings were recklessly projected in all parts of the country ; the banks in many of the States inflated the cur- rency beyond necessity or prudence, and a great crash followed. It was precipitated in the fall of 1857 by the suspension of specie pay- ments in the city of New York, which was followed by similar action on the part of the local banks. Money had never before been so scarce, and no paper was so good as to secure a discount. It is said that in Utica a business man pinned a five dollar bank bill to his own note for the same amount, and offered it for discount at one of the banks and was refused. The great and immutable laws of finance were not so well understood then as now, particularly by the general public, and ignorance usually leads to suffering. One of the directors of a local bank asked a clerk if the bank did not have a great amount on hand in their own notes. He was answered in the affirmative. He replied that it was just as he thought, and he would see that they had less of them. He accordingly
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MEMORIAL HISTORY OF UTICA.
made his own note for $10,000, and offered it for discount and was re- fused. He was deeply incensed and could not understand it. In this crisis the Ontario Bank and the Bank of Central New York failed. The hard times following this event continued through 1858-59, when the country began to recover from its effects, only to be plunged into the horrors of a great civil war.
The incorporation of the Oneida National Bank was effected on the 13th of May, 1836, but it did not begin business until late in November in that year. Strenuous efforts had been made for two or three years to secure better banking facilities in Utica which were not successful until the date mentioned. The first board of directors were Charles A. Mann, Horatio Seymour, John H. Ostrom, John D. Leland, Van Vech- ten Livingston, A. G. Dauby, Ezra S. Barnum, Henry Wager, Jesse W. Doolittle, Israel Stoddard, Charlemagne Tower, Hiram Shays, and Jonathan R. Warner. Augustine G. Dauby was its first president and Kellogg Hurlburt the first cashier. The stock of the new bank was in great demand and its distribution caused much excited feeling and even litigation, so great was the disappointment of those who could not secure shares in its stock. About a million of dollars was subscribed while the capital was but $400,000. A sad mishap befell the bank ere its start. On Sunday night, November 20, 1836, the night just preceding the proposed opening of the bank for business, it was robbed of $108,000 in cash besides $8,500 in drafts. This money had just been paid in for stock. A watchman was provided for the bank and he seems to have performed his duty faithfully until an early hour in the morn- ing, when he supposed there was no further danger and went home. It was subsequently learned that the thieves had been on the watch for a considerable period waiting for the money to be paid in and placed in the vaults, and were in the end enabled to carry out the crime with less trouble and risk than they perhaps anticipated. This robbery created great excitement. Persistent efforts were made to trace the robbers and these were in a measure finally successful. By means of marked bills one of the thieves was at last located in the western part of the State and another near Hamilton, Canada. Both had purchased farms and had apparently settled down to enjoy the proceeds of their crime. They were arrested and property to the value of nearly $50,000 was
581
ONEIDA BANK.
recovered. Only one of the robbers was convicted. The loss was a severe one, but the bank began business through a re-distribution of the stock and soon became a strong institution. On the Ist of July, 1865, the bank went into the national system, taking the name of the Oneida National Bank.
Mr. Dauby held the office of president only about three months when he was succeeded in December, 1836, by Alfred Munson, who contin- ued in the office until his death, May 6, 1854. In June of that year Charles A. Mann was elected to the office, which he filled until his death January 20, 1860, and was succeeded by James Sayre, whose election occurred in June, 1860. He died April 24, 1877, and on the 6th of July of that year A. J. Williams was elected president and continued in the office until his death in August, 1886. In November of that year the present incumbent, R. S. Williams, was elected.
Succeeding Kellogg Hurlburt as cashier, who held that office only a short time, came B. B. Lansing, who continued until 1854, when he was succeeded by James Watson Williams; he resigned in October of the same year and was succeeded by George Langford, who held the office until January 13, 1863. On that date R. S. Williams 1 was placed in the office and administered its duties until his elevation to the presi- dency. The present officers of the bank are as follows: R. S. Williams, president ; E. Chamberlain, vice-president ; George L. Bradford, cash- ier; H. K. Van Size, teller; George D. Dimon, discount clerk; William Wright, book-keeper. The capital of this bank has always remained at the original amount, $400,000. Its present handsome building was erected in 1886-87 on the site always occupied by the bank.
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