USA > Washington > Standard history of the city of Washington from a study of the original sources > Part 47
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
545
History of the City of Washington
until the money was withdrawn. This was the first savings bank in Washington.
During the war of 1812-15, with Great Britain, the finances of the country fell into confusion; the Government was obliged to borrow money at a ruinous rate of interest, giving $100 for $88, and taking the proceeds in the notes of banks which could not pay specie-the notes being worth from sixty to ninety cents on the dollar. Under such disastrous circumstances, the evils inflicted on the country by Vice-President Clinton's vote against the renewal of the charter of the old National Bank, already referred to, were plainly visible, and the necessity of such an institution was felt. At the session of Congress of 1813-14, Hon. Felix Grundy, of Tennessee, introduced a measure into the House of Representatives looking to the establishment of a national bank. Action upon the question was not taken at that session "for want of time."
The bill, as presented in the House of Representatives, November 14, 1814, named only Boston, New York, Philadelphia, Baltimore, Richmond, Charleston, and Pittsburgh, as places where subscriptions to the capital stock were to be received, thus confining the opportunities to subscribe almost exclusively to the Atlantic cities. This was far from satisfactory to many Western members of Congress, and Lexington, Kentucky, Nash- ville, Tennessee; Washington, District of Columbia; Raleigh, North Carolina; Savannah, Georgia, and New Brunswick, New Jersey, were also added, and Pittsburgh striken out.
For Washington, District of Columbia, Robert Brent, Wal- ter Smith, and Thomas Swann were made the commissioners to receive subscriptions. Mr. Lewis made a motion contem- plating the location of the principal bank in Washington, but this was opposed by Mr. Fish, of New York, as the Ways and Means Committee had selected Philadelphia for that distinction. On January 2, 1815, the bill, on final action in the House of Representatives, was apparently carried by 81 affirmative to 80 negative votes. But the Speaker, Hon. Langdon Cheves, from South Carolina, called attention to the rule of the House which permitted the Speaker to vote in two cases, of which
546
History of the City of Washington
this was one, and, declaring his conviction that the bill was a dangerous measure, cast his vote against it, and thus made the vote in the House a tie, and then decided that the bill was lost. On January 8, in an amended form, the bill passed the House by a vote of 120 to 38; and passed the Senate by a good major- ity. But on January 30, President Madison returned it, with- out his approval, to the Senate.
On April 5, 1816, the bill passed the House of Representa- tives and the Senate, and on the 10th of the same month was signed by the President. Of those who voted for the bill more than two-thirds were "Republicans" or "Democrats," as they were indifferently called, in contradistinction to the "Federal- ists" who numbered about three-fourths of those who voted against the bill. But all of those who thus voted were not opposed to a national bank, but voted against the bill in the hope of throwing it again into the committee, and thus having an opportunity to eliminate the features which were objectionable to them.
Under this act the president of the bank appointed as com- missioners to superintend the taking of subscriptions in Wash- ington, General John Mason of Georgetown, Thomas Swann of Alexandria, and General John P. Van Ness of Washington. Subscription books were opened on Monday, July 1, 1816, and closed on the 23rd of the same mo nth. The amount subscribed here up to that time was $1,293,000, an amount far exceeding what had been anticipated.
On January 27, 1817, the following gentlemen were ap- pointed directors of the Branch Bank of the United States in Washington : Richard Cutts, Thomas Munroe, B. Thruston, R. C. Weightman, G. Bomford, G. Graham, and William Brent, of Washington; Thomas Tudor Tucker, J. Deane, and Thomas Swann, of Alexandria, and W. Smith, W. S. Chandler, and R. Parrott, of Georgetown. Richard Smith was chosen cashier, and the office began business on Saturday, February 8, 1817. General John P. Van Ness was elected president of this branch. This branch bank continued in successful operation until the main bank was slaughtered.
547
History of the City of Washington
During the Presidential campaign of 1828, at the close of which Andrew Jackson was elected to the Presidency, his ele- vation was not urged on the ground of the overthrow of the United States Bank; but soon after his inauguration, he became involved in a controversy with the management of that insti- tution.
In his annual message to Congress he took occasion to observe that the time would soon arrive when the question of granting a re-charter to the Bank of the United States would come before that body, and that "both the constitutionality and expediency of such an institution had been well questioned." The portion of the message containing this assertion was re- ferred by the House to its Committee on Ways and Means, of which the Hon. George McDuffie, of South Carolina, was chair- man. The entire committee, including its chairman, who were supporters of General Jackson, gave grave consideration to the whole subject, and made a lengthy report, strongly in favor both of the constitutionality and expediency of a national bank.
But President Jackson continued to press the matter upon the attention of Congress. In 1832, a bill passed both Houses of Congress, re-chartering the United States Bank. President Jackson vetocd this bill, but explicitly stated that, if he had been applied to, he would have furnished a plan of a charter which would have been constitutional. An attempt to pass the bill over the veto failed.
In 1819 there was considerable excitement in reference to the suspension of specie payments. But one merchant and banker of Georgetown, named Romulus Riggs, publicly an- nounced that the banks of the District were paying specie for their notes, and also stated that he held himself responsible for the announcement.
A peculiar feature of the monetary history of the District in 1820 was the practice of cutting paper dollars in such a way as to make change. In the latter part of May of this year, the banks adopted a resolution which was calculated to banish from circulation "such an inconvenient and unsightly sort of cur- rency, and to bring silver into use in its place. Those who have
548
History of the City of Washington
cut notes on hand would do well to exchange them for silver before tomorrow evening." This advice was published May 31, so that it appears that June 1 was the last day on which these cut notes were received at the banks.
In 1834, only three of the banks in the District of Columbia suspended specie payments; the others were kept from doing so, by the presidents and directors of each, with the exception of the Bank of the Metropolis-each pledging his individual property as security for the debts of their respective banks. The Bank of the Metropolis had other means of accomplishing the same results.
In 1835, when it was thought the completion of the Chesa- peake and Ohio Canal was near at hand, and the commerce of the cities of the District was about to be greatly increased it was plain that the means of carrying on such commerce was at the same time to be restricted. The National Bank, it was conceded, must fall, and of course its branch in Washington, which had furnished from $1,000,000 to $1,500,000 of the cir- culating medium, must necessarily close its doors. Besides this, the charters of the several banks in the District would expire in March, 1836, and it was at least problematical what disposi- tion Congress would manifest toward them. It was supposed that even if these charters should be renewed they could not supply capital sufficeint for the necessities of trade, as they were small institutions, and the competition among them had caused a limited circulation of their notes. In order to meet these difficulties, it was thought necessary to establish a new bank to be called the Bank of the District of Columbia.
In December, 1835, Congress took up the question of the re-charter of the banks of the District of Columbia, but not before it was necessary for them to do so, as the charters of all of them expired March 3, 1836. The bill re-chartering these banks was passed by Congress in June, 1836, their several charters being extended to July 3, 1838. In August, 1836, the Branch Bank of the United States, in Washington, Richard Smith, cashier, advertised its property for sale.
549
History of the City of Washington
On May 13, 1836, a notice was published in the press by the Bank of Washington, and by the Bank of the Metropolis in almost identical language, to the effect that notwithstanding information had reached Washington of the suspension of specie payments by the banks in New York, as well as by some of those in Philadelphia and Baltimore, they had determined to con- tinue to pay specie.
The determination to suspend specie payments had been arrived at in New York on May 11, and was the result of the peculiar and great stringency of the times.
One of the most instructive features of the times was with reference to the Government itself suspending specie payments. In Philadelphia, on May 12, some of that city's merchants called at the custom house to make payment of bonds, in order to avoid suit for non-payment, and offered notes on the Govern- ment deposit bank in payment of the bonds, which were refused, the Government requiring payment in gold or silver. On the same day, the custom house in Philadelphia, having certain liabilities to meet, refused to pay specie. On May 13, a mer- chant in I hiladelphia, having to pay a certain sum to the Gov- ernment, tendered payment to the Government deposit bank in its own notcs, and they were refused, the merchant being told that the Government would receive nothing but gold or silver.
Throughout the country a national bank was the great desideratum. This was the constant and continuous refrain : "Give us a national bank." But that had been destroyed. The result was ide-spread distress. Bank notes in one part of the country wer at a great discount, or entirely worthless, and the people in the various cities were busy in fabricating paper representatives of every part of a dollar. In Washington, all kinds of paper were in circulation, the extreme limit being reached in the issue of notes by a certain barber, who, upon the presentation of his notes for redemption, said: "I don't want anything to do with them; go and buy something with them !"
May 16, 1837, the Bank of the Metropolis of Washington issued printed notices announcing its suspension of specie pay-
>
550
History of the City of Washington
ments, and then the Bank of Washington, which had sustained for three days a heavy run upon it for specie, finding itself standing alone in the city, resolved to close its vaults. It was, however, then prepared to redeem its circulating notes to the last dollar; but it was thought that such a course would only tend to embarrass the mercantile classes, without relieving the public. This bank, therefore, also suspended on the 16th, and was thought to be the last bank to suspend in the Union.
A law passed the House March 1, 1837, designed to counter- act the evil effects of the specie circular, by providing that, under certain conditions, and in accordance with certain regu- lations, no duties, taxes, or sums of money payable for lands should be collected or received otherwise than in the legal cur- rency of the United States, or in notes of banks which were payable and paid on demand in said legal currency of the United States, failed through its retention by the President until after Congress had adjourned.
The banks of Washington which had suspended specie pay- ments were requested by resolution of a public meeting, May 20, 1837, to resume, so far as the $5 notes were concerned. To these resolutions each bank replied separately. The substance of each reply was, that while the bank was anxious to comply with the request, it could not be done with safety or with benefit to the public by any one bank or by the banks of any one city. The Chesapeake and Ohio Canal Company, unable to obtain corporation notes of $1 and $2, determined to issue notes of its own in sums of $2, $1 and fifty cents, in order to carry on its business. These notes, while serving the purposes of the company, found their way among the people generally, and "enabled them to transact their little everyday business."
An Act was passed by Congress May 25, 1838, which was in part as follows :
"Be it enacted, That the charters of the Farmers and Mechanics' Bank of Georgetown, the Bank of the Metropo- lis, the Patriotic Bank of Washington, the Bank of Wash- ington, and the Farmers' Bank of Alexandria, and the Bank of Potomac, in the town of Alexandria, be, and the same are hereby, extended to the 4th of July, 1840, pro-
551
History of the City of Washington
vided that said banks, each for itself, shall conform to the following conditions :
"1. To cease receiving and paying out all paper cur- rency of a less denomination than $5, on or before the promulgation of this act.
"2. To redeem all their notes of the denomination of $5, in gold or silver, from and after the first day of August of the present year.
"3. To resume specie payments in full on or before the first day of January, 1839, or sooner if the principal banks of Baltimore and Richmond shall sooner resume payments in full."
These conditions were justly considered very harsh by the banks.
Specie payments were generally resumed early in 1839, but were soon again suspended, because there had been a con- tinual drain upon the banks for specie to ship to Europe to meet a demand on the Bank of England for export in payment for grain because of bad English harvests. The banks, there- fore, thought it best to suspend, and thus to keep the gold and silver at home. On the 11th of October, the banks of the Dis- trict of Columbia, at a meeting of the representatives of several of them, passed the following resolutions :
"Whereas, Information is received that the banks of Philadelphia and Baltimore have suspended specie pay- ments for the present, and it being the opinion of the several banks in the city of Washington here represented that the safety of the banks and the interests of the com- munity will not be promoted by an attempt to sustain specie payments while the suspension of Northern banks shall continue; and
"Whereas, The banks here have abundant means to meet all. their liabilities, yet as a considerable part of these means have become unavailable for the present, as specie funds, by the suspension of the banks of Philadelphia and Baltimore; be it therefore
"Resolved, That it be, and is hereby, recommended to the several banks here represented, to suspend specie pay- ments for the present, with the pledge of said banks to resume as soon as the banks of Philadelphia and Baltimore shall do so."
552
History of the City of Washington
The Patriotic Bank was not represented at this meeting and did not suspend, as it had some time before reduced its circulation.
On July 1, 1840, the question came up in Congress as to whether the charters of the banks of the District should be continued.
Mr. Halleman introduced a bill to continue the charters of the banks in the District of Columbia for certain purposes : "That the provisions, restrictions, and enactments of the Act of Congress of May 25, 1838, entitled "An Act to Extend the Charter of the Union Bank of Georgetown, in the District of Columbia, be, and the same are hereby, extended to the Farmers and Mechanics' Bank, of Georgetown; the Bank of the Metropo- lis; the Bank of Washington; the Patriotic Bank, of Washing- ton; the Bank of Potomac, and the Farmers' Bank, of Alex- andria. Provided, that whenever in the original act the 4th of July, 1838, occurs, it shall be construed to mean the 4th of July, 1840, and whenever the 4th of July, 1842, occurs, it shall be construed to mean the 4th of July, 1844."
On Friday, July 3, 1840, Mr. Underwood moved to amend the bill by adding :
"That if the said banks, or any or either of them, shall, within ninety days from and after the passage of this act, resume specie payments, then the said banks, or such of them as shall so resume, shall be entitled to all the rights and privileges conferred by their present charters until the 4th of July, 1842, unless Congress shall at any time otherwise direct; but if such banks so resuming shall at any time after such resumption again suspend specie pay- ments, or refuse to pay any of their notes or other obliga- tions in specie, then such suspension or refusal shall operate as a forfeiture of their respective charters, except for the purpose of winding up their affairs, under the provisions and restrictions contained in this act; and provided further, in all cases where the said banks, or either of them, there- after refuse payment of any of their notes or obligations, there shall be a summary remedy therefor before any justice or judge having jurisdiction of the case by giving five days' notice, wherein there shall be no supersedeas, stay, execution, or injunction, or certiorari allowed, nor
553
History of the City of Washington
any appeal, except upon an affidavit of merits by the presi- dent, cashier, or directors."
This amendment was sustained and the bill as thus amended was passed and sent to the Senate. In this body it was reported without Mr. Underwood's amendment; was returned to the House, and there passed by a vote of 124 to 19; again sent to the Senate, and then to the President, for his signature.
When Congress adjourned, July 21, 1840, after having failed to take action looking to a continuance of the corporate existence of the banks, bank privileges were suspended in the District, on July 4. After that day no bank could reissue its notes, make any discounts or loans or incur or receive any new obligation. The result was that bank notes of any kind could scarcely be found in quantities sufficient to transact the daily business of the community. Not long after the result of the election of William Henry Harrison to the Presidency, and of John Tyler to the Vice-Presidency became known, a memo- rial to Congress was circulated for the signatures of merchants, tradesmen, mechanics, and other citizens of Washington, set- ting forth, that "the condition of your memorialists resulting from the present state of the incorporate banks in the city of Washington is such as, in their opinion, calls for some effectual and speedy remedy to be applied by your honorable body."
In the meantime, two of the banks of the District, the Bank of the Metropolis, and the Farmers and Mechanics' Bank of Georgetown, resolved to pay all their notes and other obliga- tions in specie, this action being taken on July 6, 1840.
In order to effect a reform in the currency as soon as possi- ble, President Harrison called Congress together in extra ses- sion, and at this extra session Congress passed a bill providing for a "Fiscal Bank," which was only another name for a national bank, to be located in the City of Washington. Presi- dent Harrison died before the opportunity came for him to assist this necessary work for his signature, and the Vice- President, John Tyler, became the President. President Tyler, when the bill establishing the Fiscal Bank was presented to him for his signature, returned it to Congress with his objec-
554
History of the City of Washington
tions, two in number-first, that he was conscientiously opposed to a national bank, because in his view such an institution was clearly unconstitutional, and he had taken an oath to support and defend that sacred instrument. After the veto of the Fiscal Bank bill, Congress attempted to frame one which, as they understood it, was in accordance with the President's views as to what a national bank should be, giving to it the name of a "Fiscal Corporation," to be located within the District of Columbia, with a capital of $21,000,000. The bill providing for this Fiscal Corporation was likewise vetoed by the President, because he was unable to see the difference between a "Fiscal Bank" and a "Fiscal Corporation." If one was unconstitu- tional, so was the other.
The bankable paper of the District at that time consisted of the notes of the banks of the District, certificates of deposit of those banks, and notes of the banks of Baltimore and of banks in cities north of Maryland. By far the greatest part of the bank circulation, however, was of the Virginia banks, which, for some reason that was not then clear, could not then be made bankable, except at a loss of $3 per hundred to the possessor. Besides this, there was a flood of the notes of the Baltimore and Ohio Railroad Company, of denominations less than $5, which, up to near the latter part of 1841, circulated at par, and then becoming depreciated in Baltimore, they also, of course, settled in Washington to about ten per cent below par. So great was the loss and confusion that was occasioned, that the merchants of Baltimore agreed not to receive them in payment for anything except at their actual value.
In January, 1842, the rates of discount in Washington were as follows: Baltimore and Ohio Railroad notes, 20 to 25 per cent. discount; Virginia notes, from 4 to 5 per cent. dis- count, specie was from 3 to 31/2 per cent. above Baltimore bank notes, while the notes of the banks of the District were equal to specie, and the certificates of deposit of the Patriotic Bank were equal to Baltimore bank notes.
The District banks were honestly conducted. They paid specie often when other banks did not, and always when other
555
History of the City of Washington
banks did. They were at that time paying specie, and were quite as able to meet their engagements as any banks in the States. But the triumph of the enemies of the District banks was not permanent. In March, 1844, a bill to extend their charters was reported to the House of Representatives, which became a law June 17, 1844. This law, however, did not specific- ally extend the charters of any of the banks in the District of Columbia. It only provided that each of them might be party to a suit at law, by which debts due by or to any of them might be collected.
Mr. William W. Corcoran commenced the brokerage busi- ness in the City of Washington, in 1837, in a small store, ten by sixteen feet in size, on Pennsylvania Avenue, near Fifteenth Street. His business here was eminently successful, and in 1839 he moved to the old Bank of the Metropolis building, on the corner of Fifteenth and F Streets. In 1840, he received into partnership George W. Riggs, son of Elisha Riggs, of New York, broker, the firm name being Corcoran & Riggs. In 1845, Corcoran & Riggs purchased the old United States Bank build- ing, at the corner of Fifteenth Street and New York Avenue, together with all its property and effects uncollected. The busi- ness of this firm having been successful, Mr. Corcoran settled with all his old creditors of 1823.
About this time, the house of Corcoran & Riggs took on its own account nearly all the loans made by the Government of the United States. July 1, 1848, Mr. George W. Riggs retired from the firm, and Elisha Riggs, also a son of Elisha Riggs, of New York, by another wife, was taken in as a junior partner. He remained in the firm until 1854. On the first of April of this year, Mr. Corcoran withdrew from the firm, and the busi- ness was continued by Mr. George W. Riggs, under the firm name of Riggs & Company, until his death, August 24, 1881.
After the death of Mr. George W. Riggs, which occurred on August 24, 1881, the business of the bank was conducted under the same name by E. Francis Riggs, Thomas Hyde, Charles Carroll Glover and James M. Johnston. E. Francis Riggs withdrew from this bank as director and manager in
556
History of the City of Washington
1904 and became identified with the interests of the Metropoli- tan Bank. His interests were taken over by John R. McLean.
The Riggs Bank for many years occupied the old brick building at the northwest corner of Pennsylvania Avenue and Fifteenth Street, but purchased the land adjoining on the west, and erected thereon the new building which it now occupies, in 1899.
The Riggs National Bank has a capital stock of $1,000,000 and its individual deposits amount approximately to $7,000,000.
The First National Bank of Washington was organized in September, 1863 under the National Bank law of Congress, and opened its doors for business on the 22d of that month, at the corner of Fifteenth and G Streets. H. D. Cooke was president, and William S. Huntington, cashier. During the panic of 1873, it failed, and was placed in the hands of E. L. Stanton, son of the Secretary of War, Edwin M. Stanton, who wound up its affairs.
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.