USA > Ohio > Hamilton County > Cincinnati > Cincinnati, the Queen City, 1788-1912, Volume II > Part 24
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The following year the Lafayette Bank's charter expired and it became a private bank under the name of Lafayette Banking Company. Thus by 1854 the only chartered banks were the Commercial, Ohio Life Insurance and Trust Com- pany, Citizens', and the Mechanics' & Traders' Bank, while the number of private banks, large and small, was twenty-one.
Financial conditions during the year 1855 were rather unsettled, two bank failures and a few suspensions occurring in the fall of the year, when W. W. Cones & Co. failed, and the Mechanics' & Traders' Bank closed its doors. W.
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CINCINNATI-THE QUEEN CITY
W. Cones & Co. had deposits of about $150,000, and the Mechanics' & Traders' Bank, which had been a branch of the State Bank of Ohio, had quite a large line of deposits. Gold rose from 34 to I per cent premium during the year, and gilt edge investments fell to a low figure, Little Miami railroad 6 per cent bonds, due 1883, selling at 83 in November.
In spite of these unsettled conditions, the number of private banks continued to increase, five more being added during the year, namely: Fallis, Brown & Co., Kinney, Espy & Co., J. R. Morton & Co., Walnut Street Bank, owned by McNicoll & Bussing, and Smitlı & Gilbert.
The Trust Company Bank, as the Ohio Life Insurance and Trust Company was generally called, had about $1,700,000 deposits at this time, and occupied the position of the largest bank. The other chartered institutions, as well as a few of the private banks, had their notes in general circulation, while the Trust Company bank did not, being prohibited by their charter, but their checks or tickets were frequently used as cash about the city.
The next year was a continuation of the increase of private banks and bankers. The Bank of Commerce, of A. G. Woodruff & Co., W. R. Paddock & Co., E. G. Burkam & Co., Jos. F. Meline & Co., C. E. Nourse & Co., The Bank of Savings, of Alex. Van Hamm, and the Exchange Bank of J. A. Tingley & Co., being the ones added during the year. The aggregate banking business of the private banks was by this time very large, some of them having large deposits, while some of them were really only exchange brokers. As we have mentioned before, new charters for banks were difficult to obtain from the state at this period, with the natural result that the number of private banks increased. By this period of Cincinnati's history, deposits became more of a feature of banking and note issue of less importance; accordingly, although many of the private banks at this time did not issue circulating notes, they had a profitable volume of deposits.
At this time, the year 1856, there were twenty-five active private banks in the city, not counting some of the smallest exchange brokers, while there were but three chartered banks, the Ohio Life Insurance and Trust Company, the City Bank, and the Commercial Bank. S. Robert was now president of the City Bank, J. P. Reznor having resigned, still being a director, however, with C. T. Sher- man, Timothy Baker and George Baker, as the other members of the board. James Hall was president of the Commercial Bank, Chas. B. Foote cashier, and Rufus King, Jacob Strader, James Hall, R. Buchanan, and Larz Anderson, directors. The Ohio Life Insurance and Trust Company had Charles Stetson as president ; Wm. Green, secretary ; S. P. Bishop, assistant cashier ; the cashier, Edwin Ludlow, being in the New York office. The Cincinnati trustees were : A. M. Taylor, J. C. Wright, N. Wright, G. Crawford, S. B. Keys, Charles Stet- son, G. T. Stedman, C. J. Stedman, C. G. Engart, S. C. Parkhurst, S. J. Broad- well, S. Fosdick, S. Luckey, and C. Dietrich. The year 1857 was destined to be an important one financially over the whole country, the widespread unsettled conditions reaching a crisis in the fall of the year, and forcing a far more care- . ful study of banking conditions, because of the evident fact that some great change in banking regulations was needed.
The year started out in a prosperous way in Cincinnati with the exception that the City Bank sustained some losses, and was not considered as sound as it
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CINCINNATI-THE QUEEN CITY
had been-general sentiment being against it, and it was forced to close early in the year. Liquidation of its assets was slow, and in the panic soon to follow, its resources naturally shrank.
The capital employed by the largest private banks at the time as shown by their returns to the city tax assessor, was as follows: Groesbeck & Co., $473,- 693 ; Kinney, Espy & Co., $232,431. Citizens' Bank of Smead, Collard & Hughes, $150,000. Twenty-six banks made returns this year including all the private banks of the city, except the two new ones established that year, namely: B. Bagley and C. F. Adae & Co. Mr. Adae had been connected with the City Bank, but after its closing, new capital started the firm of C. F. Adae & Co .. who called their bank the German Savings Institution.
Thus by the middle of the year, just as financial matters began to assume a troubled aspect, there were twenty-eight private banks and bankers, and two incorporated banks, the Commercial Bank and the Ohio Life Insurance and Trust Company.
On the afternoon of August 24, 1857, news came from New York that the New York office of the Ohio Life Insurance and Trust Company had closed its doors, and it soon became known that the Cincinnati office would not open the following day. The next morning's paper held the announcement, signed by S. P. Bishop, assistant cashier, that the Ohio Life Insurance and Trust Company, having very unexpectedly heard of the closing of the New York office, would close its doors and suspend payments, until they could be more fully advised as to the conditions in New York; that all collection paper would be found at the office of Groesbeck & Co., and all due paper at their own trust office.
This suspension was utterly unlooked for, as the stock of the trust company had sold at 98 only two days before the suspension. Because of the suddenness of the financial trouble, Cincinnati was all the more disturbed, as the morning's Commercial put it: "Cincinnati is destined to receive a blow as severe to her business prospects as it was unexpected."
Third street was the center of interest on this morning-details of police were stationed at the Trust Company building and along the street, the fear of mob violence being felt, bank. riots of 1842, although fifteen years before that time, being still remembered vividly. As a newspaper put it: "Third street during banking hours, was full of men, kindling with feeling."
A number of depositors gave notice to Smead, Collard & Hughes that they would want their deposits in thirty days, under the terms of the law. The Citizens' Bank, however, was the only bank which had any serious run. Mr. Wesley Smead, the active manager of the bank, addressed the crowd, making a long speech assuring the depositors that matters were sound and explaining banking methods and the impossibility of any bank paying all its depositors at once. Matters became quieter towards the close of the day, and developments were awaited.
During the next few days it was announced that the New York office of the trust company bank had sustained losses due to the shrinkage in value of stock exchange securities held as collateral. Several attachment suits were entered against the institution, and the final settlement of the affairs of the company was greatly protracted because of the legal complications.
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CINCINNATI-THE QUEEN CITY
During the week the exchange brokers did a lively business, many people who held various bank notes, coming in and buying gold, at a premium from 2 per cent up. William Hooper and W. W. Scarborough were selected as a com- mittee to go to New York and obtain definite knowledge about the trust com- pany's affairs, as no statement was obtainable, and some depositors were offering their claims at varying discounts.
On September 2d the Central Bank of Hatch & Langdon suspended, being affected by the failure of Beebee & Co. in New York, their eastern correspondent. Matters were becoming more and more unsettled over the whole country, and failures a matter of daily occurrence throughout the country.
By September, claims against the trust company were selling at fifty cents on the dollar and the stock had fallen to 1012, or 88 points in twenty days.
On September 13th the Citizens' Bank suspended, confidence being felt along the street, however, that all the depositors would be fully cared for in time.
By the end of the month the trust company's affairs were generally realized to be a matter of long settlement and the assets were assigned to Charles Stetson, John C. Wright, Samuel Fosdick, Samuel J. Broadwell, Abraham M. Taylor, George Crawford and Clement Dietrich.
Suspensions throughout the country increased as the month of October be- gan. On the 5th, Dunlevy, Drake & Co. closed their doors, and it now became a matter of discussion as to how long it would be before a general suspension of specie payments would be necessary.
On October 14th, the New York banks suspended specie payments, and the whole country immediately followed this example.
Cincinnati now entered a period of financial distress which lasted a long time. During the winter months large contributions were collected to care for the poor, the hard times bringing actual starvation into some parts of the city, until organized charity helped care for the situation. General depression of business and suspension prevailed for many months, necessarily being the topic most discussed-many criticisms of the general banking and monetary conditions were offered, and the period from 1857 to 1862 was the period during which the new national bank laws were planned and the need for some radical change more and more felt. In this movement Salmon P. Chase was one of the fore- most men who were making a deep study of the matter.
As the effects of the panic wore off, Cincinnati regained its normal activity. The Citizens' Bank resumed, changing the firm to Evans, Swift & Hughes, and to Evans & Co., soon after, Jason Evans, Briggs Swift, H. W. Hughes, and W. I. Drake, being the members of the firm. Homans and Company started as private bankers, becoming at once one of the larger private banks. W. A. Collard opened an office of his own; the Bank of the Ohio Valley, and Bepler & Co., were the other new banks. W. W. Scarborough was president of the Bank of the Ohio Valley, W. A. Goodman cashier, the office at 65 West Third street. The bank operated under a state charter, issuing notes secured by state stocks, deposited with the state banking authorities.
In 1860 Mr. Brotherton started the firm of Brotherton & Co., Gilmore's Bank being now owned by the firm of Gilmore, Dunlap & Co. The returns of the
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CINCINNATI-THE QUEEN CITY
Cincinnati bankers to the tax assessors, as reported to the county auditor for the year 1860, is given below :
Taxable Returns of Incorporated Companies. The following is the complete returns of banks, insurance companies, railroads and all other incorporated com- panies who are by law required to list for taxation to the county auditor for 1860:
RETURNS OF BANKERS AND BROKERS FOR 1860.
G. H. Bussing & Co., Walnut Street Bank $ 31,052
Kinney, Espy & Co., bankers 256,651
J. B. Ramsey, banker. 14,089
S. S. Rowe & Co., bankers 7,382
J. R. Morton & Co., bankers. 23,732
E. G. Burkam & Co., bankers 50,000
Homans & Co., bankers. 25,490
A. G. Burt & Co., bankers.
31,933
Nettleton, Lowry & Co., bankers
60,066
Lafayette Banking Co., bankers.
118,880
C. E. Nourse & Co., bankers
24,490
Evans & Co., bankers. 300,000
Brotherton & Co., bankers.
33,152
C. F. Adae & Co., bankers 56,604
Fallis & Co., bankers
43,629
Groesbeck & Co., bankers 599,108
S. S. Davis, banker. 10,000
Bank of the Ohio Valley, Cincinnati. 193,242
Smith & Gilbert, bankers 25,514
A. I .. Mowrey & Co., bankers. 71,213
Gilmore, Dunlap & Co., bankers. 125,182
Commercial Bank of Cincinnati.
87,80I
R. Ellis & Co., bankers.
16,000
James F. Meline & Co., bankers.
12,500
Bepler & Co., bankers
3,000
W. A. Collard, banker
12,237
T. S. Goodman & Co., bankers 7,077
J. F. Larkin, banker 15,000
Total, 1860
$2,257,024
Total, 1859 1,822,988
Increase of 1860 $ 434,036
Cincinnati was still feeling the effects of the late panic up to the opening of the Civil war, and then hard times in general continued. The notes of the vari- ous state stock banks still circulated generally, although by law they had to be collected when banked. Bank notes were variously called "Wild Cat," "Red Dog," "Stump Tail," "Shinplasters," etc., and monetary conditions were a great
JOHN SHILLITO
JOSEPH C. BUTLER
S. S. L'HOMMEDIEU
HENRY PEACHEY
WILLIAM A. GOODMAN
S. H. BURTON
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CINCINNATI-THE QUEEN CITY
matter of debate at Washington. In 1862 the total capital of incorporated banks in Ohio was $5,696,000 and the amount of their circulation outstanding was $9,217,000. By December this circulation had increased to ten millions of dol- lars, partially based upon Ohio state stocks or other securities.
As the bank note circulation increased, specie in circulation decreased and small change was very scarce. General coinage of small copper cents, or "hard times tokens," was undertaken, and they passed generally as small change.
Pike's opera house, and the Burnet house issued small notes from five cents to fifty cents. The government issued a large amount of fractional currency and postage currency, even postage stamps were used as small change, and some merchants put stamps under a mica covering on a round metal disc with their card on the reverse side, thus preserving the stamp and making it fit for general circulation. The Cincinnati houses putting this necessity money into circulation, were John Shillito & Co., Ellis, McAlpin & Co., Pearce, Tolle & Holton, L. C. Hopkins & Co. and G. G. Evans & Co. issuing stamps of denominations from one cent to twenty-four cents.
By 1861 Groesbeck & Co. had changed the firm name to Culbertson, Kilgour & Co. The Queen City Banking and Exchange office had opened on Third street but did not continue in business very long.
In 1862 the Lafayette Banking Company reorganized under the Free Banking Law of Ohio, with Joseph C. Butler, president; W. G. W. Gano, cashier; and Henry Peachey, assistant cashier. Culbertson, Kilgour & Co. also incorporated as the Franklin Bank of Cincinnati with Benjamin F. Brannan as president, and John Kilgour, vice president. At this period James Espy left the firm of Kinney, Espy & Co., which became E. Kinney & Co. and in partnership with Philip Heidelbach, started the banking house of Espy, Heidelbach & Co. The largest of the Cincinnati banks now, just prior to the starting of the national banks, were the Commercial Bank, Franklin Bank, Lafayette Bank, Evans & Co., Fallis, Young & Co., Bank of the Ohio Valley and E. Kinney & Co.
On February 20. 1863, the National Bank Act was passed, approved by the president on the 25th, and the establishing of national banks began at once. This Act was later slightly changed by the Act of June 3, 1864.
The First National Bank received its charter ahead of the other banks or- ganizing in Cincinnati, being the twenty-fourth charter granted under the new Act. The capital of $1,000,000, was all subscribed for by May IIth. John W. Ellis was the president; Lewis Worthington, vice president ; James A. Frazer, L. B. Harrison, Gardner Phipps, A. S. Winslow, William Glenn, Robert Mitchell and Michael Werk, being the other original directors-and J. D. Thompson, cashier.
The bank opened for business early in August, near the northeast corner of Third, just east of Walnut street. The Second National Bank at the northeast corner of Main and Court street, received the next national charter, with George Keck as president, and S. S. Rowe, cashier, and with a capital stock of $200,000.
The Third National Bank opened offices at the northeast corner of Third and Walnut; capital, $500,000; electing A. L. Mowry as president and Frank Goodman as cashier. The Fourth National Bank, at 31 West Third street ; capital, $500,000, had B. T. Stone as president.
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CINCINNATI -- THE QUEEN CITY
Hewson, White & Co., bankers and exchange brokers, opened an office at 73 West Third street about this time, the firm consisting of John H. Hewson, M. Morris White and Frank White.
From the immediate forming of national banks in Cincinnati and from their success, it was evident that the new banking legislation met with approval here. Salmon P. Chase, secretary of the treasury, having been a Cincinnatian for so many years, was held in high esteem, and it being in great measure due to his effort that the change in banking affairs had come about, the new plan was naturally adopted by Cincinnati with more enthusiasm than in other cities of similar size.
In October of the year 1863, when Mr. Chase spoke in Cincinnati about the new banking and monetary changes and the good that he hoped would follow the new Act, the enthusiasm of the listeners was great. He spoke at Mozart hall, dwelling on the hoped for uniform bank currency to eventually replace the various state bank issues in circulation. During the speech, he said :
"I have been doing something in my humble way to promote the welfare and secure the permanence of the reconstituted Republic. It seemed to me that if labor was henceforth to have fair wages, it was highly desirable to have a medium of payment, a substantial, permanent, and uniform medium, so that labor should not be cheated of its reward. So I set myself to work to devise a uniform currency for the whole country."
The organization of new national banks continued during the year 1864, being accompanied by several changes in the officials of some of the banks.
The Ohio National Bank was organized with a capital stock of $500,000; C. G. Rodgers, president; and G. W. Forbes, cashier ; and the office at 75-77 West Third street. During the year Seth Evans became president of the Second National, and W. H. Davis, vice president; Griffith P. Griffith became assistant cashier of the First National Bank, and Theodore Stanwood, cashier, succeeding J. D. Thompson; W. A. Goodman was made vice president of the Bank of the Ohio Valley, and H. B. Bissell, cashier.
Early in the year 1865, the firm of Fallis, Young & Co., nationalized as the Merchants' National Bank, with Daniel J. Fallis, president and J. T. Allen, cashier. Mr. Allen was succeeded by H. C. Yergason as cashier in 1866.
Later the Central National Bank was organized, capitalized at $500,000, the banking offices opening in the Burnet house, J. D. Thompson becoming the president; W. T. Perkins, cashier. The officers of the Third National Bank changed to Thomas B. Page, president ; and G. P. Griffith, cashier ; G. W. Forbes succeeding Mr. Griffith as assistant cashier of the First National and W. B. Wood becoming cashier of the Ohio National Bank, succeeded in 1867 by W. W. Brown.
After July 1, 1866 all state bank notes became subject to a tax of ten per cent per annum and the natural result was that state bank notes left general circulation at once, national bank notes taking their place as the new national banks obtained the government bonds to use as security for the new issues.
Thus by 1866 Cincinnati had seven national banks, a very large number of private banks and bankers as well as the banks with state charters; the Frank-
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CINCINNATI-THE QUEEN CITY
lin, Commercial, Lafayette, and Bank of the Ohio Valley, the state banks being now banks of discount and deposit only, and not issuing notes for circulation.
The need of a clearing house to facilitate the collections between banks was now greatly felt, the first step towards its establishment being taken when a special meeting of some of the bankers was held at the Lafayette Bank on March 20, 1866. James W. Ellis, S. S. Rowe, Thos. B. Page, C. G. Rodgers, D. J. Fallis and Jos. E. Butler were those at the meeting, Joseph C. Butler acting as chairman and S. S. Rowe as secretary. By the end of the month the articles of association were drawn up and on April 14th the Cincinnati Clearing House was established with the following banks as charter members: First, Second, and Third National Banks, Bank of the Ohio Valley, Fourth National, Central Na- tional, Merchants' National, Commercial Bank, Ohio National, Franklin Bank, Lafayette Bank, C. F. Adae & Co., called the German Savings Institution, Ho- mans & Co., and Gilmore, Dunlap & Co. Later in the month Geo. P. Basset was elected manager. The Clearing House Association was destined to be a great help to the financial conditions of the city during times of panic as well as a great assistance in routine collections between banks.
The other banks which joined the Clearing House during the year were Jos. F. Larkin & Co., Espy, Heidelbach & Co., Hewson, White & Co., and Evans & Co.
The first safe deposit boxes were being built during 1866, when the Safe De- posit Company of Cincinnati incorporated and soon had a large vault installed in the Lafayette banking room. The company rented boxes from $20 to $50 per year, and the new vault was considered a great addition to "the street." Joseph C. Butler was the president and Samuel P. Bishop secretary.
At this period money was in good demand and general activity and pros- perity on the increase. Discount rates varied from 9 to 12 per cent, gold was selling at about 135 and silver at 128. United States 6 per cent bonds sold at about 108 to 109.
During the year 1867 the banking houses of Joseph A. Hemann & Co. opened at 72 West Third street, and Andrews Bissell & Co. at 82 West Third, both be- coming members of the clearing house at once. Alex. H. Andrews and H. B. Bissell were the members of the latter firm, Mr. Bissell having resigned as cashier of the Bank of the Ohio Valley. The Cincinnati Savings Society began business at about the same time on West Third street, being the only savings society at the time.
The first national bank merger took place during the year when in August, 1867 the Merchants' National Bank absorbed the Ohio National. This consolida- tion made the capital stock of the Merchants' National $1,000,000, with D. J. Fallis, president ; John Young, vice president ; H. C. Yergason, cashier ; and W. W. Brown, assistant cashier.
During the year 1868 there were a few changes in the banks: C. B. Foote be- came president of the Commercial National Bank, which now had a national charter and a capital of $500,000; the officers of the Central National Bank changed to Wm. Hooper, president; L. G. E. Stone, vice president; and M. H. Coates, cashier. Theodore Cook became president of the Fourth with R. W. Richey, cashier.
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CINCINNATI-THE QUEEN CITY
N. G. Nettleton & Co. opened a banking office at 78 West Third street at this time, becoming members of the clearing house.
The Miami Valley Savings Society also was the new savings bank at 13 West Third street, with Henry E. Spencer president.
Seasongood, Netter & Company soon opened their office on Third street, as members of the clearing house, the firm consisting of Jacob Seasongood, Jacob Netter, Adolph J. Seasongood and Albert Netter.
The clearing house now by the year 1869 had a membership of twenty-two banks, six of which were national banks. The two incorporated savings socie- ties, the Cincinnati Savings Society and the Miami Valley Savings Society were not members, and several private banks did not belong, among whom were A. G. Burt & Co., S. S. Davis & Co., Walnut Street Bank, C. F. Adae & Co., Bepler & Co., Burkam & Co., and E. W. Tuttle & Co.
During the year the firm of Joseph F. Larkin & Co. changed to Larkin, Wright & Co., and Gilmore, Dunlap & Co. changed to the old firm name of James Gilmore & Co.
In July, 1869, the First National increased its capital to $1,200,000.
In November, 1869, the Lafayette Bank gave up its charter and became a firm again, under the name of Lafayette Bank, with Joseph C. Butler, Henry Peachey, Reuben R. Springer and Charles P. Cassilly as partners .- One liqui- dation marked the year, when Homans & Co. closed their doors, gradually pay- ing off their depositors.
In January, 1870, Mr. Ellis resigned as president of the First National, go- ing to New York as a member of the firm of Winslow, Lanier & Co., L. B. Harrison becoming the president.
Early in April of this year the Central National was absorbed by the First, the officers of the First being unchanged, but the new board of directors in- cluded L. B. Harrison, A. S. Winslow, Robert Mitchell, A. M. Bishop, Joseph Rawson, George W. McAlpin, H. F. West, James A. Frazer, Wm. Hooper.
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