USA > New York > Bronx County > The Bronx and its people; a history, 1609-1927, Volume II > Part 20
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National Bank of New York-Mr. Gallatin accepted the presidency of a bank in New York, the subscription to the stock of which, amounting to seven hundred and fifty thousand dollars, was completed by John Jacob Astor under stipulation that Mr. Gallatin should supervise its management. This was the National Bank of New York. The idea of this arrangement was to secure to New York the benefit of Mr. Gal- latin's great experience and intimate connection with financiers abroad. New York was rapidly becoming the financial centre of the commercial system of the United States, and the financial system of the republic was at the time about to undergo a radical change. Roger B. Taney, Sec- retary of the Treasury, reported to Congress that he had directed the
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removal of the deposits of the government from the Bank of the United States and placed them in banks designated by himself. In his annual report, Taney named as one of the reasons for his removal that the bank had used its money for electioneering purposes, and that he "had al- ways regarded the result of the last election of President of the United States as the declaration of a majority of the people that the charter ought not to be renewed." That election had reelected Jackson to the presidency. Taney said further that "a corporation of that description was not necessary either for the fiscal operations of the government or the general convenience of the people." Mr. Gallatin, on the other hand, had always been a steadfast friend of the Bank of the United States. He had in a masterly paper in the "American Quarterly Re- view" shown that from the year 1791 the operations of the treasury had, without interruption, been carried on through the Bank of the United States without loss, except in the years 1811 to 1814, when the misman- agement of the State banks had brought on the financial disaster of the latter year, and compelled the re-charter of the semi-governmental institution. There was no such thing, however, as resistance to Jack- son's views. Levi Woodbury, Taney's successor in the Treasury De- partment, reported "an unprecedented spectacle presented to the world of a government virtually without any debts and without any direct taxation." But the conservative instrument by which this condition had been attained was then stripped of its influence. In addition, the surplus revenues of the United States, about thirty-seven millions of dollars, had been distributed among the several States.
On the expiration of its charter in 1836, the renewal of which Presi- dent Jackson had imperatively refused, the Bank of the United States accepted a charter from the State of Pennsylvania. It was still the one great financial institution of the country, but its management was no longer the same. It had the power for evil, and no longer the influence for good, in general affairs. In the same manner as in 1811, after the withdrawal of the control of the Bank of the United States, the State banks ran a wild career of speculation. In four years three hundred new banks sprang up, with an additional capital of one hundred and forty-five millions of dollars-doubtless, as twenty years before, the banking capital of the country. The Bank of the United States, of Penn- sylvania, under the direction of Nicholas Biddle, was swept along in the resistless tide. As one scheme after another of industrial or land speculation was floated, this institution found itself compelled to drive to dangerous financial expedients. Abandoning its legitimate business of discount and deposit, it sent an agent to New Orleans to buy up the cotton crop of Louisiana, Mississippi, and Alabama as a basis for foreign exchange. The Barings, alarmed for the supply of the English cotton manufacturers, sent to New Orleans John A. Stevens of New York.
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BANKS AND BANKING
With the superior facilities of their great credit, Mr. Stevens had no dif- ficulty in securing the choice of the market, and moreover righting the exchange by the purchase of the best Northern and Western notes; the difference in exchange between New York and New Orleans ranging as high as twenty per cent-a condition of things impossible in the days of the old Bank of the United States with its established branches.
General Banking Circulation-The volume of the general banking circulation of the country was further swelled by the deposits of the revenues of the United States. Secretary Woodbury became alarmed for their safety. He reported the paper currency of the country to have increased since the removal of the deposits from the Bank of the United States from eighty millions to one hundred and twenty millions of dol- lars, or forty millions in eighteen months; and the bank capital in the same period to have increased from two hundred to three hundred millions of dollars. The flush times were at the flood. Importations augmented. Suddenly a check came. The balance of trade turned against the United States to a sum of one hundred and fifty millions, and coin was shipped abroad to liquidate the account. But as the en- tire amount of specie in the country did not exceed the sum of seventy- three millions, the reaction was sharp. The contraction which set in was still further heightened by the withdrawal by Mr. Woodbury of the government deposits from the selected depositaries, or "pet banks," as they were termed. Had there been any government debt to attract a foreign investment, the situation might have been tempered. It has to be remembered that at this period the United States was not a specie producing country. It accumulated only as the result of a sound finan- cial policy. It could not be retained when demanded by Europe, ex- cept by a general suspension. The result was unavoidable.
United States Sub-Treasury-In May, 1837, the New York banks suspended. Mr. Gallatin's bank went down with the rest. It is idle to suppose that any single bank can maintain itself against a general sus- pension. It may liquidate, become a bank of deposit, paying out in the currency it receives, but it cannot maintain itself on a specie basis when gold is at a premium, or hold its relations with its sister institutions except on a basis of common accord. A general suspension of all the banks of the United States followed. It was under these circumstances and at this period that Mr. Woodbury devised the United States sub- treasury, which he recommended to Congress as a plan of "Keeping the public money under new legislative provisions without using the banks at all as fiscal agents." This has been described as a "new de- parture in treasury management and a further evolution in American finance." Its advantages have been incalculable. In fact it was the only alternative to a national bank under government control, after the plan
Bronx-89
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of the great European government institutions. Mr. Gallatin, unable to prevent the suspension, immediately set to work to bring about a partial liquidation and an early resumption. He had the hearty co- operation of the able men who then controlled the banks of the city. On August 15, 1837, the officers of the New York banks, in general meeting, appointed a committee to call a convention of the principal banks to agree upon a time for a resumption of specie payments. This committee, on August 18, addressed a circular to the principal banks in the United States, inviting the expression of their wishes as to the time and place for a convention, suggesting New York as the place, and Oc- tober, 1837, as the time. The law of the State of New York dissolving any bank as a legal corporation in case of its suspension for one year, it was imperative that resumption in New York would have to take place before March 1, 1838. In the circular the New York banks com- mitted themselves to no definite plan nor to any specified day, but ex- pressed the opinion that the fall in the rate of exchange indicated an early return of specie to par, when resumption could be effected without danger. In fact, the collapse of the vast paper fabric had been so sudden that it carried with it in its fall the entire scheme of land speculations, which was the particular craze of this exciting period.
Conventions and Resumption-The banks of Philadelphia, no doubt influenced by the tottering Bank of the United States, of Pennsylvania, whose transactions affected the entire State, on August 29th decided, in general meeting, that it was inexpedient to appoint delegates to the New York convention. Understanding this condition, the New York committee invited a meeting of delegates on November 27, 1837, in New York. Delegates from banks of seventeen States and the District of Columbia appeared. On the 30th a resolution was brought in recom- mending a general resumption on July 1, 1838, with privilege to any banks that felt it to be necessary to resume earlier. This was to cover the New York condition. The Pennsylvania banks replied, condemning the idea of immediate resumption as impracticable and, in the absence of delegates from Louisiana, Mississippi, Alabama, and Tennessee, as unwise. It has been said that the entire southwestern system of banking and currency had descended to the Bank of the United States, of Penn- sylvania, from the old bank. The convention met again on December 2, when an adjournment was carried to April 11, 1838, when delegates from the banks not represented were invited to attend. As in all cases where such conventions are controlled by numbers, the weaker institutions for a time protracted the debate, dreading the consequence of a resumption, which is as severe upon the weak as suspension is upon the strong. It was evident that Mr. Biddle had the power of postpone- ment. The Boston banks had joined forces with those under Biddle's influence. Meanwhile exchange on London, the true par of which was
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1091/2, had fallen from 121 to 111, a rate about 21/2 per cent below specie par, New York bank paper being at a discount of 5 per cent. The export of specie had ceased.
As those in authority and in a position to know gave the opinion that the banks in Pennsylvania were in a condition to resume, Mr. Gallatin's committee made a general report on December 15th. On February 28th, a further report from the same source showed that the liabilities of the New York banks had been reduced more than twelve and one-half millions, or fifty per cent and that, with the support of the community and the State authorities, they could resume on May 10, 1838. A general meeting of citizens joyfully ratified this decision. On April 11th, the general convention again met in New York, the Philadelphia banks once more declining to attend. A letter from Secretary Woodbury promised the support of the United States Treasury. A committee of one from each State recommended the first Monday in October as the earliest day, but the general body could not be brought to a date so early, and finally fixed upon January 1, 1839. The New York banks would have accepted July 1, 1838, as a day for general resumption, and would have postponed it until then if that had been the date set; but this being refused they resumed alone on May 10, 1838. The banks of the country were com- pelled, by the force of public opinion, to resume on July 1st. The terrible contraction was fatal to the Bank of the United States, of Pennsylvania, which after desperate struggles to redeem itself from the meshes, closed its doors in October, 1839, carrying with it the entire banking system of the southern and southwestern States. With it ended the last hope of the friends of a United States bank as a fiscal agent of the government. With the failure of this hope came the desire for a pow- erful institution in New York to serve as a check on the banks-an in- stitution with a large capital, controlled by men removed somewhat from the temptation of active business, which should hold a large re- serve, confine itself to short discounts, and consider absolute safety rather than profit as the purpose of the bank. Samuel B. Ruggles by his active exertions at Albany, secured the passage of a free banking law in 1838, under which the Bank of Commerce went into operation in that year. The presidency of this bank was tendered to Mr. Gallatin, but he declined. He had already resolved to withdraw from active business, and in fact resigned the presidency of the National Bank of New York in June, 1839. Samuel Ward was chosen president of the Bank of Commerce. This gentleman died in the first year of office. and John A. Stevens was chosen in his place. Mr. Stevens conducted the bank with eminent success after the close of the Civil War, holding in that critical period of our national finances intimate relations with Salmon P. Chase, the worthy successor of Hamilton and Gallatin in the department of the Treasury of the United States.
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Centre of Nation's Commerce-To describe the course of develop- ment of New York and its various territorial divisions is in large part to write the economic history of the nation, so closely has the develop- ment of the city paralleled the evolution of the entire country. New York has become the centre of all tides of the nation's commercial ex- istence. Business and commerce seem to be drawn towards the metrop- olis by invisible forces. For more than a century New York has served as the financial capital of the United States and the tragic years of the World War appeared to lift the veil on her destiny as perhaps the most important city in the world, whilst it also demonstrated her usefulness as what some have described as the international cash drawer.
Banking records in what is now Bronx County date back to 1860, at which time a bank was formed in the Morrisania section, flourished for a short time and then dissolved. There is no record of the or- ganizers of this bank, nor is much known of its activities.
The first State bank organized in The Bronx was the Twenty-Third Ward Bank, established April 17, 1888, by a group of prominent business men of this section. The leaders in this organization were: John Haffen, owner of the Haffen Brewery, located at 152nd Street and Melrose Avenue; Charles W. Bogart, a banking man of long experience, and James L. Wells. The bank was organized with a capital of $100,000 and its first location was at the corner of 146th Street and Third Avenue, where Courtlandt Avenue joins Third Avenue.
Within a few years the bank was removed to 133rd Street and South- ern Boulevard, then a busy corner in view of the heavy traffic from the old New Haven Railroad station. At that time Bogart was elected president and Haffen vice-president. By 1895 deposits of this bank had grown to $1,250,000 and business was increasing. In 1900 it was found necessary to move to larger quarters, and accordingly a new building was erected to house the bank at the northwest corner of 135th Street and Third Avenue. Two other branches were opened between 1900 and 1907, one at Boston Road and 164th Street and the other at Third Avenue, near 148th Street.
In 1924 the capital of the institution was increased to $750,000 in an- ticipation of the conversion into a trust company, and on January 1, 1925, the Twenty-Third Ward Bank was converted into The Bronx County Trust Company, becoming thereby The Bronx's first trust company. In six months the deposits of this company increased nearly $2,000,000. This bank now has four large offices in Bronx County, and recent figures show deposits at more than $16,000,000.
John M. Haffen, son of John Haffen and nephew of Matthias Haffen, both of the old Haffen Brewery firm and both founders of the old 23rd Ward Bank, is now chairman of the Board of Directors, and one of the largest stockholders in The Bronx County Trust Company,
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Frederick Berry is president, Charles P. Bogart, son of Charles W. Bogart, is vice-president. Other officers are Henry J. Van Cook, Edward R. Cohn, vice-presidents; Charles E. Merrifield, secretary ; George W. Smith, trust officer; Charles H. Meyer, John R. Reddington, Jacob A. Zeller and William Grosch, assistant secretaries. The Board of Direc- tors includes a number of Bronxites prominent in business, financial and professional circles. The Bronx County Trust Company is equip- ped with the most up-to-date safe depositories known to the banking industry.
First Savings Bank-The influx of home-builders into The Bronx two decades back gave rise to the need for a savings bank. Accordingly, on April 27, 1890, Thomas Mackellar, Ernest McNeill, J. Ogden Kern and John M. Haffen organized The Bronx's first savings bank, The Dollar Savings, at No. 2771 Third Avenue. In three years the new bank had 1,396 depositors and $115,105 on deposit, and its quick growth forced larger quarters at No. 2875 Third Avenue, near 149th Street. For the next ten years this bank grew in proportion to the population of The Bronx, and in 1915 it became apparent that the quarters were again outgrown. It moved again in 1919 to the site now occupied on the corner of 147th Street and Willis and Third avenues.
Depositors in 1919 numbered over 53,000 and deposits had increased to $19,000,000, while today more than 80,000 depositors have over $67,000,000 on deposit. The bank has a surplus of more than $7,000,000.
In 1926 the building now occupied by The Dollar Savings Bank was enlarged, and safe deposit vaults were installed in the basement for the benefit of its depositors. The presidents of the bank have been John M. Haffen, George E. Edwards and Brian G. Hughes. Howell T. Manson, the present incumbent of the president's chair, was elected February 7, 1925. The trustees of the bank are Charles P. Faber, Bernard French, William M. Kern, Howell T. Manson, Fred A. Wurz- bach, James L. Wells, Joseph B. Hare, Robert Gerbracht, Jr., Fred Berry, James Hopkins, Eugene J. Busher, H. T. W. Hunting, Bernard H. Weisker, Arthur H. Hall, and Lloyd I. Phyfe. The Dollar Savings Bank is the largest savings bank in The Bronx.
North Side Savings Bank-Another of the "old-timers" in The Bronx bank group is the North Side Savings Bank, which was organized January 30, 1905, and commenced operating at its present location, No. 3196 Third Avenue, near 163rd Street. At the end of the first five years it had on deposit $392,000, with 1,911 live accounts. This modest amount has increased to more than $17,275,000, representing 27,194 accounts. The school fund of this bank has 37,642 accounts, repre- senting the deposits of Bronx school children.
The original officers of the bank were John J. Barry, president, George
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J. Grossman and Anthony Stumpf, vice-presidents; John Bambey, treasurer, and Arthur A. Ekirch, secretary. John G. Borgstede is the president of the bank now, and Arthur A. Ekirch is still secretary. Fred H. Wefer and Dr. John Riegelman are vice-presidents, and John M. Haffen is treasurer.
Bronx National Bank-In 1907 The Bronx National Bank was formed, being the first national bank in The Bronx. It started on the southeast corner of Bergen Avenue and 149th Street, and until 1925 was the only National bank operating in The Bronx. This institution has occupied its present quarters at No. 369 East 149th Street, near Third Avenue, since 1911. In 1923 the deposits of the Bronx National were $2,800,000, in 1925 $5,597,000, and in December of last year $8,500,000. The bank underwent a complete reorganization in 1923. The present board of directors is composed of fourteen representative Bronxites. At the start, the bank had a capitalization of $200,000 and surplus of $200,000. At present this bank has a capital of $300,000, surplus of $300,000 and $100,000 in undivided profits.
Bronx Savings Bank-Another Bronx bank in the 20-year class is the Bronx Savings, at the corner of Tremont and Park avenues, which was established April 2, 1906, in a store at No. 719 East Tremont Avenue, where the Crotona Theater now stands. This institution is headed by T. T. Fischer, who is president and William Stevens, comp- troller.
The American Exchange Irving Trust Company has been associated with The Bronx since 1900, when the present Bronx Office of the com- pany was opened at Third Avenue and 148th Street. The following year, its Harlem Office was opened at 125th Street and Seventh Avenue, and in 1924, additional offices were opened at Hunt's Point, 163rd Street and Southern Boulevard, and in Fordham, at East Fordham Road and Marion Avenue. Each office is a complete banking unit. John S. Sammis, vice-president, supervises the offices at "The Hub" and Hunt's Point. The Fordham and Harlem offices are under the direction of C. C. Howard, vice-president.
Corn Exchange Bank-In April, 1902, the Corn Exchange Bank opened a branch office on the corner of 125th Street and Lenox Avenue. The first Bronx branch was opened May 1, 1905, in a store in 149th Street, near Third Avenue, opposite the present quarters at No. 375 East 149th Street. T. J. Eberhard is manager of this branch. Other uptown offices maintained are at 166th Street and Broadway, No. 2050 Jerome Avenue, 207th Street and Post Avenue, No. 385 East Fordham Road, No. 72 East Kingsbridge Road, No. 3191 Broadway, No. 1309 Clinton Avenue, No. 85 East 125th Street, 181st Street and St.
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Nicholas Avenue, No. 1 East 170th Street, No. 543 Cathedral Parkway, Tremont and Arthur avenues, 231st Street and Broadway, No. 2900 Broadway, near 113th Street, and 143rd Street and Amsterdam Avenue.
Commonwealth Bank Branch-On June 15, 1904, George F. A. Olt was appointed manager of the newly-established Commonwealth Bank branch at 155th Street and Third Avenue. The bank still occupies the same premises, and is managed by George F. Keckeissen, assistant vice-president.
Cosmopolitan Formed in 1906-The first offices of the Cosmopolitan Bank, No. 803 Prospect Avenue, were opened in June, 1906. In 1923 a branch was established at No. 1294 Southern Boulevard, and on February 28, 1925, another branch opened at No. 273 East Fordham Road. Frank A. Gallagher is president, Dennis J. Sullivan is cashier, and Conrad Kel- lenberg, assistant cashier. Harry Barber and Harry Ries are also as- sistant cashiers.
Harlem Savings Bank-The oldest savings bank in the Harlem sec- tion is the Harlem Savings Bank now at No. 124 East 125th Street. It first started in 1863 at the corner of 124th Street and Third Avenue. William E. Trotter is president; Granville F. Dailey, John J. Bell and Warren A. Leonard, all old Harlemites, are vice-presidents. Robert C. Hart, is secretary.
The Empire City Savings Bank was founded in 1889 at No. 233 West 125th Street. Later it moved to No. 217 West 125th Street, and then in 1921 to its present quarters at No. 231 West 125th Street. Arthur S. Van Winkle is president of the bank, and H. C. Murphy is secretary and treasurer. Curtis J. Beard and John H. Loos are vice-presidents as well as Joseph Walker. George E. Brown is comptroller and Robert G. Horton is assistant-secretary.
Bank of Washington Heights-On October 21, 1901, John Whalen, former corporation counsel of the city with a few Heights business men established the Bank of Washington Heights at 155th Street and Amsterdam Avenue. This is the oldest bank in the Heights section and the main offices are still at the 155th Street address. A branch at 181st Street near St. Nicholas Avenue was opened in 1922, and another at 171st Street and Broadway in June, 1926. Another office will be opened about February 1, at the corner of Sherman Avenue and Dyckman Street. John D. Beals is president, filling the vacancy left by the death of the founder and former president a few weeks ago. James V. O'Shaughnessy, former State Bank examiner, is first vice- president.
The Bronx Borough Bank was organized in 1902 at No. 701 Tremont
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Avenue. Some time later it moved to the corner of Tremont and Park avenues and in 1924 it moved into its present building at No. 464 East Tremont Avenue. A branch at No. 3744 White Plains Avenue was opened in 1907. Harry T. Hall and Charles P. Hallock are vice- presidents of the bank, and Alfred Koch is cashier. Dr. A. D. Becker is president.
Title Guarantee & Trust Company-When the Title Guarantee & Trust Company decided to establish a Bronx branch, it sent Charles M. Gambee uptown to look over the ground and make arrangements for the new office. Accordingly in 1910 Gambee selected the Hub as the most likely place for this kind of office and soon after the Title Guarantee & Trust Company commenced operations at No. 370 East 149th Street. Some years later another branch was opened at No. 271 West 125th Street. C. K. Whittmor is the present manager of this branch, and Gambee is still supervising things at the 149th Street address. In 1926 a banking unit was added to The Bronx branch, and during the twelve months it has been operating the deposits have exceeded $1,000,000.
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