USA > Pennsylvania > Allegheny County > Pittsburgh > Standard history of Pittsburg, Pennsylvania > Part 54
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).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37 | Part 38 | Part 39 | Part 40 | Part 41 | Part 42 | Part 43 | Part 44 | Part 45 | Part 46 | Part 47 | Part 48 | Part 49 | Part 50 | Part 51 | Part 52 | Part 53 | Part 54 | Part 55 | Part 56 | Part 57 | Part 58 | Part 59 | Part 60 | Part 61 | Part 62 | Part 63 | Part 64 | Part 65 | Part 66 | Part 67 | Part 68 | Part 69 | Part 70 | Part 71 | Part 72 | Part 73 | Part 74 | Part 75 | Part 76 | Part 77 | Part 78 | Part 79 | Part 80 | Part 81 | Part 82 | Part 83 | Part 84 | Part 85 | Part 86 | Part 87 | Part 88 | Part 89 | Part 90 | Part 91 | Part 92 | Part 93 | Part 94 | Part 95 | Part 96 | Part 97 | Part 98 | Part 99 | Part 100 | Part 101 | Part 102 | Part 103 | Part 104 | Part 105 | Part 106 | Part 107 | Part 108 | Part 109 | Part 110 | Part 111 | Part 112 | Part 113 | Part 114 | Part 115 | Part 116 | Part 117 | Part 118 | Part 119 | Part 120 | Part 121 | Part 122 | Part 123 | Part 124 | Part 125 | Part 126 | Part 127 | Part 128 | Part 129 | Part 130 | Part 131 | Part 132 | Part 133 | Part 134
The Allegheny Bank, which had been in operation under State laws since 1857, was merged into a National bank by a vote of the stockholders on December 24, 1864, pursuant to the State law of August 22, 1864. In 1857 the name had been simply Allegheny Bank, but in 1858 was changed to the Allegheny Bank of Pittsburg. The capital of $500,000 under State law was continued under National law. The officers elected in 1864 were William Bagaley president and J. W. Cook cashier (e).
The Tradesmen's National Bank, though organized in December, 1864, did not open its doors for business until January 18, 1865. The capital stock was fixed at $400,000, and there it has remained to this day (1897), though now the surplus exceeds $500,000. The first president, Alexander Bradley, has served continuously until the present time. The first cashier was George T. Van Doren, and the first directors Alexander Bradley, William H. Faber, William F. McKee, Joseph M. Knapp, David E. Park, James Frazier, Samuel M. Kier, William Vankirk and William H. Forsyth. "The new bank has been singularly fortunate in the selection of its principal officers. The president, Alexander Bradley, Esq., is well known as one of our most careful, prudent and industrious business men, and the cashier. George T. Van Doren, Esq., has established a reputation by his conduct in a similar capacity in the Citizens' Bank second to none other in our city. We predict for the new bank a successful and profitable career" (f). The Farmers' Deposit Bank was merged into a National institution in
(b) State law of August 22, 1864. (c) Post, December 26. 1864.
(d) Gazette, July 17, 1865. (e) Post, December, 1864.
(f) Commercial, January 9, 1865, referring to the Tradesmen's National Bank.
Mf abbott
HISTORY OF PITTSBURG. 477
January, 1865, having some time previously made application for the change. It began with a capital of $300,000. The first president was James Marshall and the first cashier R. A. George. "The Farmers' Deposit National Bank is an old acquaintance in a new suit of clothes. They will open their books as a National bank on the first day of February proximo. We do not suppose that their customers will notice very much difference in their transactions with this bank under their new name. They will find, we have no doubt, the same clever and competent officers prompt and active in the discharge of their duties" (g).
The German National Bank was authorized on January 26, 1865, by Hugh McCulloch, to commence operations under the National Bank Act. It had previously, on December 29, 1864, voted to become a National bank. As the German Trust and Savings Bank it had, before this event, operated with a capital of $50,000; but upon becoming a National bank it increased the amount to $250,000. The first president was Augustus Hoeveler, first cashier G. A. Endly, and first directors Augustus Hoeveler, Springer Harbaugh, Adam Weise, Ernest H. Myers, John F. H. Havetotte, Anthony Meyer, Adolph Groetzinger, Joseph Dilworth and Joseph Keeling. "The German National Bank of Pittsburg is known as one of the solid institutions, and enjoys an enviable popularity, not only among the German population, but is recognized by everybody as a sound concern. It is one of the most prominent National banks now in the city" (h).
The Merchants' and Manufacturers' Bank was merged into a National institution late in 1864, but did not begin business as such until 1865, with a capital of $800,000, and with William Rea as president and John Scott, Jr., cashier. "The increase of capital stock. of the Merchants' and Manufacturers' Bank to $1,000,000 from $600,000 was restricted to $800,000, after the full amount had been subscribed in July, 1865, owing to the fact that the apportion- ment to the State had already been filled" (i).
The Union National Bank opened its doors for business on February I, 1865, with a capital of $250,000. This bank had been organized in 1857 by A. G. Cubbage, John Glass, Thomas Neely and James Crawford. Others joined them and the name Diamond Savings Institution was adopted. In the fall of 1857 the name was changed to the Union Banking Company, and so continued until merged into a National bank. John R. McCune was the first president under the National law and R. S. Smith was the first cashier. In February, 1865, the Second National Bank of Allegheny, with a capital of $150,000, opened its doors for business.
On March 6, 1865, the People's National Bank, with a capital of $1,000,000, began business at the corner of Wood and First streets, with Samuel Rea presi- dent, F. M. Gordon cashier, and Samuel Rea, B. F. Jones, Barclay Preston, Byron H. Painter and George W. Hailman directors. The Exchange Bank, which had been incorporated in 1836, was chartercd under National law April 8, 1865, as the Exchange National Bank, with a capital of $1,000,000. James B. Murray was elected first president under the National law, and Henry M. Murray first cashier. It has occupied its present location since 1839. The First National Bank of Birmingham began business March 31, 1865, with B. A. Wolfe presi- dent, John P. Beech cashier, and George Dunevan, James Fawcett, Peter Habe- man, Joseph Watson, William S. McKee and John Redman directors. Its authority from the Comptroller of the Currency was dated March 22, 1865.
On January 2, 1865, the deposits in the First National Bank amounted to $2,148,850.24. No other bank in the city surpassed this showing. "A great many of the banks of Pittsburg and vicinity are becoming National banks" (j). In January, 1865, the following notice was issued:
(g) Commercial, January 11, 1865.
(i) Gazette, July 18, 1865.
(h) Gazette, February II, 1865.
(j) Post, January, 1865.
25
478
HISTORY OF PITTSBURG.
"In order to further the design of the National bank law, to provide a uniform currency and to relieve this community from the loss incident to the circulation of depreciated banknotes, the following banks have agreed that on and after February 1, 1865, they will pay out only such money as will be received at par on deposit and in payment of all debts due them. They will purchase from their customers all distant State banknotes which they may receive in the regular course of business at the net cost of sending them home for redemption, but will not receive such funds on deposit as currency. To give full effect to this arrangement the acquiescence and cooperation of the business community is respectfully solicited. (Signed) John D. Scully, cashier First National Bank; R. A. George, cashier Farmers' Deposit Banking Company; G. A. Endly, cashier German Trust and Savings Bank; John B. Livingston, cashier Third National Bank; J. R. McCune, president Union Banking Company; Francis Sellers, presi- dent Citizens' National Bank; C. H. Riggs, assistant cashier Second National Bank; J. W. Cook, cashier Allegheny Bank" (k).
The Fourth National Bank, having in view the same object, took a differ- ent course to attain it. All the National banks at this time were struggling for popularity and supremacy. As a stroke of policy this bank undertook to oblit- erate the distinction between currency and par funds, and gain at the same time the good will of depositors and business men, and accordingly issued the follow- ing: "Notice .-- Wishing to further the design of the National bank law to provide a uniform system of currency, the Fourth National Bank of Pittsburg will, on and after February 1, 1865, receive from her regular depositors, custom- ers and dealers, currency at par. By this course the public will obtain par money free of all charge in exchange for their currency. By order of the board. S. D. Herron, Cashier." The Post ridiculed the idea of drawing a distinction between the paper issues of the various banks which had suspended specie payments, when all such paper had greatly depreciated and was constantly subject to rapid fluctuations (1). Yet, despite this, there was a great difference, real or imaginary, in the value of the numerous varieties of paper money. Banks usually required their customers to keep currency accounts apart from par paper or specie accounts. "The question has not yet been presented to the Bankers' and Brokers' Board, but we learn that the private bankers and several of our large banks think it too early to make the proposed movement. As the National banks grow in number and circulation, the evil of a mixed currency will be cured without extraneous effort" (m). "I observe that nearly all the leading banks have agreed that on and after the first day of February they will not pay out currency-will pay all checks only in par funds, such as notes of our city banks, National bank and legal-tender notes. This is a good move and will drive away a lot of miserable currency. . I have the best means of knowing that nine-tenths of the business community are heartily in favor of this move, and they also hope that the brokers will also join in the good work .- Dry Goods" (n). "There is a general desire among our business men to see the rule carried into effect for excluding currency after February Ist from business transactions, and to receive and pay out only par money. As par money now includes the issues of all the National banks of the country, as well as greenbacks and the notes of our city banks, the term has a much wider range than it used to have when it embraced only city and Eastern bank notes. The banks which have signed the notice to this effect have agreed to receive 'currency' at one- fourth per cent. discount and send it home for redemption" (o).
It was believed here by financiers, and so announced in the newspapers early
(k) Post, February, 1865.
(m) Gazette, January 13, 1865.
(o) Gazette, January 18, 1865.
(1) Post, February 2, 1865.
(n) Correspondence in Post, January 14, 1865.
-
479
HISTORY OF PITTSBURG.
in March, 1865, that the policy of the new Secretary of the Treasury, Hugh McCulloch, would be to bring the country back to a specie basis as soon as possible-to lessen the gap between gold and currency. All thought this could be accomplished in a comparatively short space of time. In fact everybody expected that, as soon as peace would be restored, all banks would be required, within a reasonable time, to resume specie payments. Some argued that peace would lower the price of gold; others that the amount of currency fixed the price of gold, and still others that the excess of active paper money was the cause of depreciation. The currency question throughout the year 1865 continued to absorb the earnest attention of financiers. Would greenbacks be retired? would National bank notes be withdrawn? when could and would specie payments be resumed? were some of the questions anxiously asked, and which time alone could answer. "An early return to specie payments, the bugbear to present operations in stocks, would, in our judgment, be unwise. An immediate one (in 1866, as proposed by some) would be madness. The country is not ready, neither is the Government" (p). "The wonder of the great majority of the people is that there is, as yet, no signs of an immediate return to specie payments. We are but beginning to realize the fact that that process is not the easy one which was predicted it would be at the closing of the war" (p).
The suspension had passed to the domain of the unexpected. It had not been caused by unwise trading, or banking, or commercial methods. No per- sons blamed the banks for continuing the suspension, save those who were so wedded to old traditions that they could not, or would not, face the unprecedented conditions of a nation in the throes of a Titanic internicine war. The action of the banks in continuing the suspension and in purchasing in immense amounts the war securities of the Government was as directly in the line of patriotic duty as was the enlistment of soldiers to face the enemy on the field of battle. The banks as well as the soldiers had thus enlisted to crush the rebellion and save the Union. And so it came to be thought here that, should the Government survive, no bank thus pouring out its treasure would be permitted to suffer. All banks here took this view and all pursued this course except the Bank of Pittsburg. The latter, always independent and self-reliant, adopted different methods, with no less loyalty than the others. But the suspension had become a national circumstance, owing to the necessity of issuing bonds and Treasury notes, and finally of the establishment of National banks. The other banks here poured out their cash for Government securities and prospered greatly under the new conditions. As had been expected, their course brought them no disaster at the close of the war. They were cared for until the Government itself enabled them to resume without jar or loss in 1879.
By the middle of February, 1865, sixteen National banks were either in operation in Pittsburg or were on the point of embarking under the new system, and two were in operation in Allegheny. They were as follows: In Pittsburg, First, Second, Third and Fourth, Citizens', Exchange, Iron City, Allegheny, Bank of Commerce, Union, People's, German, Tradesmen's, Merchants and Manufac- turers', Mechanics', and Farmers' Deposit; and in Allegheny, First and Second. The stock of all these banks fluctuated immensely. By July 22, 1865, the aggre- gate capital of the National Banks amounted to about $7,600,000. At this time Pittsburg had more National banks than any other city except New York, which had fifty-three, Boston, which had forty-four, and Philadelphia, which had twenty-nine. All the old State banks had disappeared except the Bank of Pittsburg. Stock of the Fourth National, in January, 1865, was quoted at $180, and of the First National $175. By October, 1866, stock of the Fourth National
(p) Gazette, September and November, 1865.
480
HISTORY OF PITTSBURG.
stood at par. In the autumn of 1865 bank stock, though variable, was quoted about as follows:
Institution.
Par.
Sales.
First National Bank
$100
$150.00
Second National Bank.
100
126.00
Third National Bank.
IO0
124.50
Fourth National Bank.
IO0
II3.00
Citizens' National Bank
50
61.00
Exchange National Bank
50
65.75
Iron City National Bank.
50
79.50
Allegheny National Bank.
50
57.75
Pittsburg National Bank of Commerce.
IO0
IIO.50
Union National Bank.
Not quoted.
People's National Bank.
IO0
II2.00
German National Bank.
IO0
162.00
Tradesmen's National Bank
IO0
II2.00
Merchants' and Manufacturers' National Bank.
50
61.00
Mechanics' National Bank.
50
72.25
Farmers' Deposit National Bank.
IO0
150.00
Bank of Pittsburg.
50
68.00
First National of Allegheny
100
124.50
Second National of Allegheny
100
. ...
First National of Birmingham
IO0
.. .
"No banks, probably, in the country are conducted with more ability or integrity than our Pittsburg banks, and, we are sure, those in other States are in no better trim financially" (q).
It was in 1866 that hostility to the National banking system took color, form and force here. The Post, late in the year and during 1867, was emphatic in its denunciation of Mr. Chase's "pet banks," and just as strongly in favor of making greenbacks the only National currency. "We are proud of the fact that the Post, from the inauguration of this method of banking (the National), has always stood foremost in denunciation of the system" (r). It is likewise true that many financiers and business men held the same view, another fore- shadowing of the Greenback party.
On May 14, 1866, by the failure of Work, McCouch & Co. of Philadelphia, of which they were a branch, Kramer & Rahm of this city, private bankers, were forced to close their doors. "This house is one of the oldest, and has always been considered one of the most reliable banking institutions in the city, and the suspension created considerable excitement in financial circles" (s). The Philadelphia papers stated that the failure was due to stock gambling (Heston- ville Railway stock) and involved upward of $1,000,000, and that the extent of the disaster was in doubt "beyond its intimate connection with a highly respectable firm in Pittsburg, which can scarcely stand up under this disaster." Kramer & Rahm, with characteristic promptness, turned over their private and personal effects to secure their creditors. "Four years ago the number of banking institu- tions in the city was barely twenty, while now forty will scarcely, if at all, exceed their number" (t). During the year 1866 there were established six new banks of deposit: Pittsburg Savings Bank, Pittsburg Bank for Savings, People's Sav- ings Bank, Keystone Savings Bank, National Trust Company and Franklin Savings Bank of Allegheny. In February, 1867, one of the bookkeepers of the
(q) Gazette, January 8. 1866.
(s) Gazette, May 16, 1866.
(r) Post, February, 1867.
(t) Post, October 18, 1866.
HISTORY OF PITTSBURG.
48I
Dollar Savings Bank embezzled a large sum, presumed by George Albree, the president, to be about $35,000 (u). This loss was partly recovered, and the remainder was charged to contingent expenses, which at that date amounted to $146,000. Rumors of embezzlement in another bank were circulated, but were concealed before they reached the province of established fact.
On April 1, 1867, the total bank deposits amounted to $10,434,733.25. The Fourth National Bank was wholly without deposits. The First National led with $1,435,597.99. The Exchange led with loans and discounts $1,898,430.85, and the First National stood second with $1,295,815.77. The Exchange held the largest amount of United States securities-$1,090,000. All had outstanding a circulation of National currency, except, of course, the Bank of Pittsburg. The banks and their capital stock were as follows :
First National.
$ 500,000
Second National
300,000
Third National.
500,000
Fourth National. 300,000
Pittsburg National Bank of Commerce.
500,000
Iron City National
400,000
Citizens' National.
800,000
Mechanics' National.
500,000
Allegheny National.
500,000
Tradesmen's National
400,000
Farmers' Deposit National
300,000
German National.
250,000
Union National.
250,000
People's National
1,000,000
Exchange National.
1,700,000
Merchants' and Manufacturers' National
800,000
Bank of Pittsburg.
1,153,500
First National, Allegheny
350,000
Second National, Allegheny
I 50,000
Total capital
$10,653,500
The project of establishing a clearing-house in Pittsburg had been contem- plated many years prior to 1864. One had been started in New York in 1853, Boston in 1855, Philadelphia in 1858, Cleveland in 1858 and Baltimore 1858, but no action had been taken here looking to effective and permanent results. The change in financial systems during the rebellion precluded the establishment of such an institution during that period. The rise of the National banking system, the great increase in the number of banking institutions here and the doubling of capital stock made it apparent in 1865, or earlier, that a clearing-house would vastly facilitate banking operations and place a powerful safeguard over local financial houses.
"A clearing-house is suggested here similar to the New York and Philadel- phia plans. It would obviate the necessity of so much currency as is now re- quired, besides a saving of time and liability to losses" (v). "We un- derstand that it is in contemplation to establish a clearing-house upon the mode of the Eastern cities or Cleveland, after the Ist proximo, when the chartered banks cease handling country money or currency. It is estimated that about one-fourth of the amount of the cash now required for the daily transaction of the banks would suffice, if the exchanges were made through a clearing-house" (w).
(u) Post, February 7, 1867.
(v) Commercial, December 22, 1864.
(w) Commercial, January 26, 1865.
482
HISTORY OF PITTSBURG.
It appears, then, that the bankers of Pittsburg and Allegheny, sometime dur- ing the winter of 1864-5 (no doubt informally) had made arrangements to estab- lish a clearing-house on or about February 1, 1865. Doubtless it is true that pre- liminary proceedings were begun about that time; but it is equally true that no formal organization or effective operations were accomplished until a later date, owing probably to the excitement attending the closing scenes of the war and to violent changes in the price of gold and in all valuations.
In May, 1865, by mutual agreement of a number of the banks, a meeting was called for the 26th of that month to establish a permanent clearing-house. On that occasion there were present John D. Scully, cashier of the First National; Henry M. Murray, cashier of the Exchange National; J. B. Livingston, cashier of the Third National; G. A. Endly, cashier of the German National; John R. McCune, president of the Union National, and G. T. Van Doren, cashier of the Tradesmen's National. The meeting was called to order by Mr. Scully, and upon motion Mr. Endly was chosen chairman and Mr. Van Doren sec- retary. The chairman stated the object of the meeting and the necessity of a clearing-house in this part of the State; whereupon, after some discussion, a committee consisting of Messrs. Scully, Murray and J. P. Cramer, cashier of the First National Bank of Allegheny (who had just come in), was appointed to draft a constitution and by-laws, secure a suitable room where operations could be conducted, and invite the banks of the two cities to join the association.
On the 5th of June the second meeting was held to hear the report of the committee, elect the necessary officers, adopt a constitution and by-laws, and set the wheels of the association in operation. There were present John Harper, of the Bank of Pittsburg; John Scott, Jr., of the Merchants' and Manufacturers' National; R. W. Mackey, of the Allegheny National; C. H. Riggs, of the Second National; T. H. Nevin, of the First National of Allegheny; R. A. George, of the Farmers' Deposit National; John R. McCune, of the Union National; G. A. Endly, of the German National; John D. Scully, of the First National; Samuel Rea, of the People's National; D. Donnelly, of the Fourth National; W. E. Schmertz, of the Third National; John A. Wolfe, of the Birmingham National; H. M. Murray, of the Exchange National, and J. E. Brady, of the Citizens' National. Of this meeting of June 5th, John Harper was elected chairman and J. E. Brady secretary. The constitution reported by the committee was adopted, and was thereupon signed by the representatives of the following banks: Bank of Pittsburg, N. Holmes & Sons, and the succeeding National banks: Union, German, First, Second, Third, Exchange, Allegheny, Tradesmen's, Mechanics, Merchants' and Manufacturers', Iron City, Farmers' Deposit, People's, Citizens', First of Allegheny and Pittsburg Bank of Commerce-in all eighteen. This membership of eighteen in the association remained unchanged until July 7, 1884, when the Diamond National was admitted, thus increasing the member- ship to nineteen, the present (January, 1898) number.
"A clearing-house similar to those established in Eastern cities by various banks will, we understand, be put in full operation in this city in about three months. A room over the Bank of Pittsburg on Fourth Street has been leased, a manager appointed and the room is now undergoing the necessary repairs, preparatory to its occupation for the purpose" (x). "The clearings of the Pittsburg clearing-house, situated over the Bank of Pittsburg, yesterday were larger than on any previous day since the organization of the association, amounting to nearly $700,000. The association at present includes seventeen National banks, five banking institutions, two banking firms and one State bank. Of the National banks in this city, the Tradesmen's and the Fourth
(x) Gazette, July 15: 1865.
HISTORY OF PITTSBURG. 483
National ones are the only ones who do not redeem their checks through its means. On February Ist the Clearing-house will have been in operation one year, and with such marked success that no one of its members evinces the slightest dissatisfaction or desire to leave the association" (y). "Look- ing back a few years ago, when we possessed no such institution, when each bank had to collect checks on its neighbor by messengers, it seems astonishing how they got along without the Clearing-house for so long a time. The transfer of large balances through the Clearing-house serves very much to lighten the other- wise heavy load" (z).
If any record of the business done by the Pittsburg Clearing-house Asso- ciation (which was the name adopted) during the rest of the year 1865 was kept, such is not now obtainable. The business done, if any, was irregular, and it is probable that no record was kept. On February 5, 1866, when the first recorded proceedings began, the exchanges for the day amounted to $153,567.95 and the balances to $40,330.55. The total exchanges for the year 1866 amounted to $83,731,442.17, and the total balances to $20,850,179.68. The total exchanges for the year 1896 amounted to $745,428,891.25 and the total balances to $138,915,- 053.48. The total business to December 31, 1896, amounted to $14,714,743,- 712.42, and to December 31, 1897, to $15,711,512,472.64. The present (January, 1898) daily business amounts to from $2,700,000 to $3,400,000.
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.