Standard history of Pittsburg, Pennsylvania, Part 37

Author: Wilson, Erasmus, 1842-1922; Goodspeed, Weston Arthur, 1852-1926. cn
Publication date: 1898
Publisher: Chicago : H.R. Cornell & Co.
Number of Pages: 1192

USA > Pennsylvania > Allegheny County > Pittsburgh > Standard history of Pittsburg, Pennsylvania > Part 37

Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).

(s) Gazette, November 24, 1818.

(u) Issue of December 25, 1818.

(x) Gazette, February 5, 1819.

(t) Issue of December II, 1818.

(v) Mercury, April 9, 1819.

HISTORY OF PITTSBURG.

amount to more than $80,000; this can be of no service here. We would pro- pose then, as we cannot be worsted by it, and as we must have a paper circula- tion or none, that means be taken to substitute our own for Ohio trash. If so respectable an institution, for instance, as the Bank of Pittsburg would issue $300,000 and not pay specie, surely we would be better off than with the contemptible trifle she has in circulation with all her character for punctuality and ability. We do not see in what respect we should not be bettered. It would give the bank an opportunity of extending its discounts in a currency we have confidence in. It would give more life to our manufactures and rouse our dormant spirit of enterprise. If specie payments are to be the order of the day, discounts may be curtailed. Our paper will not remain in circulation and we must implore the aid of Ohio to supply us with a medium for market and for our merchandise. If they are discontinued we can have a medium of our own and we can extend the hand of patronage to the real supporters of Pittsburg. We consider the question simply this: Is it better to have no notes in circulation with the useless reputation of paying specie; or to have a respected medium without this reputation?" (y).

The feverish and exaggerated character of this editorial of a column and a half is an indication of the pressure under which this community was then laboring. The general suspension which had taken place about February 1, 1819, and had been contemplated for some time previously, forced all the banks of Pittsburg to a curtailment of discounts, to a probable withdrawal of a con- siderable portion of their circulation, and to a partial suspension, at least, of specie payments. At a town meeting held Saturday, February 13, 1819, to consider the question of petitioning for a removal of the Branch from this city, the largest number met that had ever assembled here up to that time (z). David Logan was called to the chair and John Gilland appointed secretary. An animated discussion ensued, in which many of the leading citizens par- ticipated. Three days later at an adjourned meeting, the following preamble and resolutions were passed:

"Whereas, The Bank of the United States has been conducted in a manner disgraceful to the directors of that institution and highly injurious to the community; and

"Whereas, The Branch Bank of the United States, located in this city, has produced effects extremely detrimental to the interests of the Western District of Pennsylvania; therefore be it

"Resolved, That our representative in the Congress of the United States be instructed to urge the necessity of a new law repealing the charter of the Bank of the United States, and be it further

"Resolved, That the members of the Legislature from the district composed of Allegheny and Butler counties be requested to procure an act of the Legisla- ture to be passed, taxing the Bank of the United States and such of its branches as now are, or hereafter may be, established in this Commonwealth such an amount as the wisdom of the Legislature may deem proper" (a).

It has been declared at this meeting, as well as both before and after it was held, that the Branch was of little advantage to the community, and that it oppressed the State banks; but the committee of Congress appointed to inquire into the management of the bank reported that neither it nor its branches op- pressed the State banks, "either by wanton demand of specie, or by the rejection of their notes, and that much of their distress resulted from their having emitted too large a volume of paper" (b). The State banks and the branches of the Bank

(y) Gazette, February 5, 1810.

(a) Pittsburg Gazette, January 16, 1819.

(z) Gazette, February, 1819.

(b) American State Papers, Vol. III.

33I

HISTORY OF PITTSBURG.

of the United States were from the first more or less hostile to each other. It was charged by the former that the latter acted oppressively and capriciously toward them, subjecting them to inconvenience and depriving them of advantage; and by the latter that the former desired to reap all the advantages of their situation without incurring any responsibility under the charter of the latter (c). This fact will, in a measure, account for the bitter cditorials in the Gazette, written by Morgan Neville, cashier of the sorely-pressed Farmers' and Mechanics' Bank, against the Branch here, for curtailing its loans and demanding specie.

"We should be much gratified to know whether the whole county of Alle- gheny, in which there is certainly not $150,000 of available specie, whose mer- chants have to remit annually $300,000 to purchase goods for the home con- sumption and whose exports since the destruction of manufactures are nothing, can possibly establish anything for a circulating medium to support the present state of trade and living? By way of collateral information also we should like to know how the bank debt of $1,000,000 is to be paid" (d).

Pittsburg during this crisis suffered more than most communities. Large quantities of depreciated fractional currency were in circulation; the infant manufactures had been crushed by the immense importation of cheap British goods; the large discounts made by the bank were met with correspondingly large curtailments of loans and the settlement of balances, and the great demand for money forced to the bottom the value of real estate and other securities.

"About three months ago the price of bank money at the brokers' offices in this town, if you wanted to buy Ohio paper and the like, was three per cent. On the stoppage of the banks the brokers bought at ten and sold at twelve and a half cents. About two weeks ago the current money took a new fall here while it continued stationary in Philadelphia; the brokers gave fifteen per cent. and took eighteen. We are threat- ened with a heavier exchange, some think twenty-five per cent. If the city of Pittsburg, therefore, remits to the Eastern country to the amount of $200,000 a year, and only one-half of it passes through the broker's hands, he will earn of the city about $14,000 if there is any truth in figures" (e). . "Among the evils which tend to embarrass us, I look upon the system of brokerage, with which we are so liberally indulged in Pittsburg, as one. When we are compelled to pay from seventeen to twenty per cent. on notes taken currently in business to obtain bank money, it indicates 'something rotten in Denmark.' Will anyone say that these notes cannot be collected in the usual course of trade from the different banks at a less loss than half this sum? I will admit that the high price of Pittsburg and United States money among us is owing in a great degree to its scarcity. But what causes the scarcity? Because the money is bought and withdrawn from circulation by brokers who transmit it backward and forward to the different banks and brokers eastward and west- ward at an enormous profit. I have it from undoubted authority that since

. the establishment of our two brokers here (f) they have transmitted to the eastward $192,000. If a country merchant arrives with Eastern money his first step is to the brokers to sell it. If these 'professional gentlemen' were not among us the value of these notes would be fixed by our merchants, who would allow for them a moderate premium and in many instances would receive them at par. If an Ohio or Kentucky merchant comes to town with Eastern or Pittsburg money, the proceeds of his tobacco or cotton, he sells to

(e) American State Papers, Vol. IV, page 262.

(d) Gazette, June 25, 1819. (e) Gazette, February 16, 1819.

(f) These brokers were John Towne and the two Gilmores-James and Gordon. They had established exchange offices here in 1818.

332

HISTORY OF PITTSBURG.

the brokers. If they could not do this the money would fall in the hands of . the merchant or storekeeper at a moderate or fair rate. They (the brokers) accumulate large profits from our necessities, for there is no appeal from their tribunal; and if the banks are moneyed monopolists, brokers are still more so. Add to this that the profits they derive from their business, perhaps $15,000 a year, go to the Eastern cities, these establishments being but branches of those there" (g).

"The reduction of discounts in Pittsburg has been greater than the new loans made at the Branch; so no new capital can fairly be said to have been brought among us by this emanation of the national bank. During the halcyon days of the late war a great issue of paper money had taken place and immediately after the peace an enormous mercantile debt had been con- tracted. Pay-day has arrived; the products of our soil are insufficient for the purpose; our manufactures have left the field to the triumphant British and naught remains to balance our account with but the notes of the Western banks" (h). "But a short time since the whole American world were calling out 'Shame upon them (the banks) for not calling in their notes and making them more precious by rendering them scarcer;' they have no sooner commenced a system of curtailment, in obedience to public opinion, than they are attacked open-mouthed for their wanton cruelty in attempting in these hard times to add to the distress of the community by demanding their just debts" (i).

Gradually the community grew out of the hard times. By 1822 the banks were lending freely and the severe stringency was past. Late in 1819 the banks of Pittsburg, exclusive of the Branch, had on hand in gold $12,451.81, and in silver $18,236.88 (j). In July, 1820, the notes of the Bank of Pittsburg and of the City Bank of Pittsburg (k) were at par in this city, while those of the Farmers' and Mechanics' Bank, the Pittsburg and Greenburg Turnpike Com- pany and the bills of the city of Pittsburg, were at four per cent. discount. The panic of 1817-21 really left traces of its withering effects until the revival in 1826. The act authorizing joint stock banks was passed in 1826, but no bank was established under it until 1834.

On November 9, 1819, William Wilkins having been elected to the State Legislature, tendered his resignation to the directors of the Bank of Pittsburg. By the act of 1824, the bank was rechartered with the same capital. By the act of January 17, 1834, it was again rechartered for fifteen years, and it was made lawful for the institution to extend its capital by the creation and sale of new stock to any amount not exceeding, with its former capital, the sum of $1,200,000, with the proviso that five per cent. of such new issuance should be paid into the State treasury to be placed to the credit of the common school fund. The bank was permitted to establish an office of discount and deposit in Beaver County and was prohibited from issuing or reissuing notes of less denomination than $5 and from receiving any such notes of other banks. In January, 1834; W. H. Denny, president, issued the following announcement:

"Notice is hereby given that a public sale of new stock will take place on Monday, the 24th inst., at the house of George Beale in the city of Pittsburg- sale to commence at Io o'clock a. m.

"P. M'KENNA, Auctioneer."

Late in 1834 the bank called for the purchasers of new stock to pay install- ments thereon as follows: $10 on January 10, March 10 and May 10, 1835. It continued to call for such installments from time to time as they became due. Early in January, 1835, the bank had outstanding of its own notes $136,950.

(g) Gazette, February 18, 1819.

(i) Gazette, June II, 1819.

(h) Gazette, April 21, 1819.

(j) American State Papers, Vol. IV, page 916.

(k) This institution was conducted for a short time.

333

HISTORY OF PITTSBURG.

Previous to 1833 the bank's paid-in capital amounted to only about $250,000 (1). By act of April 3, 1837, the bank was authorized to expend the sum of $60,000 for the purchase of a lot and the erection thereon of a banking house. In 1835 a branch was established at Beaver, but proved unprofitable, paying less than four and one-half per cent. dividend per annum on the stock employed there, and was, for that reason, removed in the spring of 1839 (m). The amount of specie sent to its Beaver Branch by the Bank of Pittsburg was between $6,000 and $7,000 and the amount of its notes nearly $190,000 (n). The Branch was capitalized at $200,000. The stockholders of the bank insisted upon receiving the same dividend as was received by the stockholders of the mother bank. The business of the Branch did not warrant the payment of more than a four per cent. dividend. The mother bank refused to pay more than this dividend, and, accordingly, the Legislature was petitioned by the stockholders of the Branch to compel the mother bank to pay them the same dividend paid to others. The Legislature appointed a committee to investigate the affairs of the Branch, who reported against such payment. The citizens of Beaver had owned between $60,000 and $100,000 of the stock, and had claimed that the mother bank had restricted the operations of the Branch, but this claim was disproved by the investigations of the committee. It was shown that specie had increased greatly in the Branch, owing to the excellent standing of the parent bank. Among other things the committee said:

"The character of the bank at Pittsburg was sounder than that of any bank in the West during the suspension of specie payments. Its notes were taken by many when other paper was refused; consequently, persons indebted to the bank at Beaver probably often paid their debts to the bank in specie, finding the notes of the bank more convenient for the ordinary business transactions and much less cumbersome. The stock of the Bank of Pittsburg, after this extension (the rechartering of 1834) was obtained and at the same time that this institution went into operation, commanded a premium of twelve per cent. and was always in demand. Indeed, stock of the Bank of Pittsburg at this time (June, 1839) is more desirable than the stock of any other banking institution in the West. There is not, therefore, a shadow of want of good faith on the part of the bank; but if there be any evidence of the want of good faith it is on the part of the citizens of Beaver toward the bank" (n).

The latter statement referred to the fact that the citizens of Beaver, after securing the Branch of the Bank of Pittsburg had also secured a Branch of the Pennsylvania Bank of the United States with a capital of $500,000, thus cutting the possible dividends of the former Branch down to the lowest limit in that comparatively small community. The distress complained of from the with- drawal of the Pittsburg Branch could not, the committee stated, be attributed to that cause. The citizens of Beaver claimed that rechartering and increasing the capital of the bank were made conditional upon the establishment of the Branch, and that the withdrawal of the latter in 1839 forfeited the charter of the parent bank. As a matter of fact, as shown by the report of the committee, those who had framed the bill had purposely left it discretionary with the parent bank to close the Branch whenever it became unprofitable, and therefore did not establish it in perpetuity.

The Farmers' and Mechanics' Bank, incorporated under the act of March 21, 1814, formally began operations by opening books for the subscription of stock at the house of William Morrow on May 10, 1814, under the manage- ment of the commissioners appointed by the Legislature. The following notice was signed by the commissioners appointed under the act of incorporation, as

(1) "Allegheny County's Hundred Years."-Thurston.

(m) Gazette, January 26, 1839. (n) Report of Legislative Committee, 1839.

334

HISTORY OF PITTSBURG.

follows: Jacob Negley, John Neal, George Evans, John Ferris, Thomas Hazle- ton, George Steward, George Robinson, Matthew B. Lowrie, William Campbell and Robert Layman (o).

"The stock of the Farmers' and Mechanics' Bank of Pittsburg is now selling rapidly. There remain but few shares to be sold to enable it to go into operation. We presume it unnecessary to state the advantages which may result to the farming and mechanical interests from the operations of this bank. They are evident. The books will still continue open daily at the house of Major Steward, Turks' Head, in Wood Street, and on Wednesdays and Saturdays at McMartin's tavern near the market-house, Market Street."

The Farmers' and Mechanics' Bank had an unfortunate and melancholy career. From the time of its establishment in 1814 to April 6, 1818, it enjoyed a fair degree of prosperity and gained the confidence of the community. It declared dividends regularly on its paid-in stock, and issued its own paper to the amount of nearly $50,000, and had in its vaults ready to be issued nearly $100,000 more. On the night of April 6, 1818, two men, Joseph L. Pluymart and Herman Emmons, who had managed to get duplicate keys to the bank and its vaults, entered and robbed the institution of a large sum of money in specie, notes and other valuables, and escaped down the river in a boat. About forty-four miles from Pittsburg they landed and concealed all the money, except about $1,200, in a rocky ravine, and continued on down the river. The officers of the bank knew nothing of the robbery until the usual hours for opening the doors on the morning of the 7th, when the cashier found the vault open and the money gone. An alarm was immediately given, messengers were dispatched in several direc- tions, handbills and circular letters announcing the crime were hurriedly struck off and other means taken to discover the robbers. William Leckey, one of the directors, accompanied by three or four others, entered a skiff and started down the river in anticipation of catching the criminals, who were thought to have gone in that direction. Up to this time the real robbers had not been suspected. Investigations, however, led to the discovery that Pluymart and Emmons had been in the city for some time and had gone down the river in a boat very early on the morning of the 7th. Other circumstances pointed to their guilt, where- upon a second boat was dispatched down the river to overtake them. In the meantime the first boat had overhauled the two men near Wheeling, and, after examining them and finding nothing suspicious, had released them, and they had continued on down the river. The robbers, when about to be overtaken, had slipped overboard the $1,200 of stolen money in their possession, which act saved them from suspicion and arrest for the time being. Anticipating that the boats would not catch the two men, the directors sent J. Trembly on horseback to Limestone to endeavor to intercept them there. The second boat, in which were Mr. Montgomery and others, by going night and day, caught them about thirty miles up the river from Cincinnati, whereupon they were arrested and soon lodged in jail in that city. A few days later they broke jail and Pluymart escaped, while Emmons was recaptured, after breaking his arm, and brought to Pittsburg. After much persuasion he confessed, and, in a boat at night, was taken down the river by the bank officers and several other citizens, and dis- closed the place where the money was concealed. But Pluymart, who had escaped, had been there and had taken away the most of the coin and consider- able of the bills, together with a solid gold medal, weighing twenty-nine guineas, which belonged to Morgan Neville and had been granted to his grandfather, General Daniel Morgan, by Congress, for gallantry at the battle of "The Cow- pens." This was never recovered. Emmons, probably as a condition of his con- fession and disclosure, was permitted to escape the clutch of the law. Among

(o) Mercury, July, 1814.

John. (. Kirkpatrick)

337

HISTORY OF PITTSBURG.

those who were active in catching the robbers were Messrs. Peebles, Geary, Steward, St. John, Piatt and Hopkins. At this time John Scull was president of the bank and Morgan Neville cashier, and both were joint owners of the Gazette, A little later the paper said editorially :

"The robbery of this institution and the consequent shock communicated to public credit had for the last sixty days caused a serious depression of com- mercial spirit. Indeed, the consequences of a rapid curtailment of discounts which this loss must have produced, had it not most fortunately been retrieved, were most fearfully anticipated by every virtuous citizen. However, the cloud has hovered over us without bursting. We hope that that portion of credit which was affected by this circumstance will sustain but a temporary embarrass- ment. As the character of the bank has been somewhat injured abroad, it is to be expected that a considerable quantity of its notes will be presented for pay- ment as soon as it is generally known that its operations have recommenced. On this account a modified curtailment of discounts will probably be adopted by the board in order to enable it to nieet every demand with punctuality. But from our knowledge of the directors and from the known liberality of their pro- ceedings as a board, we feel perfectly safe in asserting that their conduct at that critical moment will be marked by all the delicacy and indulgence that the imperiousness of the circumstances will admit of" (p).

The sum of money actually taken by the robbers has always been a matter of dispute. It was claimed by the bank officials at the time that the sum embraced about $100,000 in notes (mainly their own) and a few thousand dollars in gold and silver. It seems that Pluymart was a professional robber, had planned this crime and had managed to escape and get away with all the coin he could carry without exciting suspicion. Some time after this he was captured at Ogdens- burg, New York, but succeeded in escaping, though he was retaken. On his person was found $5,000 in gold and bills. All this, less expenses, was turned over to the bank here by the authorities at Ogdensburg. It would seem, then, that all the money stolen, with the exception of a few thousand dollars, was recovered. Some have stated that the amount stolen was greatly exaggerated. In the trial of Pluymart, ten years later, for this robbery, the evidence disclosed the fact that the amount of bills taken was between $60,000 and $70,000, and the amount of specie about $9,000. A reward of $3,000 for the recovery of the money and $1,000 for the robbers, if brought to trial, had been offered. Pluy- mart, at the trial in 1828, was convicted and sentenced to three years in the penitentiary, and to pay a fine of $1,000, but later again managed to escape. He was soon afterward pardoned by Governor Shulze while evading the officers. This act of the Governor's created much unfavorable comment at the time, because Pluymart was shown to be a professional robber and always had suc- ceeded in breaking jail. He was a slippery rogue, but a man of talents and fine presence.

On the 19th of March, 1819, the board of directors of the Farmers' and · Mechanics' Bank announced that, owing to the unfortunate robbery of April 6, 1818, the bank had received such a shock that they found it necessary to curtail its issues and gradually retire every note in circulation. They said:

"Its credit being entirely destroyed abroad, either from the presumption of an actual bankruptcy in consequence of the robbery, or from a suspicion, ungenerously encouraged by a portion of our citizens, that there was some unfairness in the conduct of its management, its notes flowed in so rapidly as soon to render useless the most prudent efforts to sustain its character for punc- tuality. Hopes, however, were entertained, after a candid statement to the public of the amount of notes in circulation and of the sum due by discounts,

(p) Gazette, June, 1818.

338

HISTORY OF PITTSBURG.

that its credit might still be so far supported as to prevent pressing demands for specie until, by a moderate call upon the borrowers, the whole amount in circu- lation might have been gradually drawn in. These hopes, it seems, have been wrongly founded. Although the notes do pass currently out of doors, they are constantly presented for payment and specie is inexorably demanded, as if no misfortune had happened to the bank. At the time of the robbery the amount of notes in circulation was $48,963; the sum loaned, $154,520. Owing to the pressure of the times and to an unwillingness on the part of the board to embarrass the mechanical part of our population, to whom a considerable portion of the loans are made, the curtailment has not been as great as circumstances would have justified. The sum now in circulation is $18,000, and the bills dis- counted amount to $121,786. It will take but a short time to call in this amount of notes, and the public may rely with confidence on the call being regular and undeviating" (q).

Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.

Standard history of Pittsburg, Pennsylvania, Part 37

Author: Wilson, Erasmus, 1842-1922; Goodspeed, Weston Arthur, 1852-1926. cn Publication date: 1898 Publisher: Chicago : H.R. Cornell & Co. Number of Pages: 1192

Author: Wilson, Erasmus, 1842-1922; Goodspeed, Weston Arthur, 1852-1926. cn
Publication date: 1898
Publisher: Chicago : H.R. Cornell & Co.
Number of Pages: 1192