USA > Wisconsin > Milwaukee County > Milwaukee > History of Milwaukee from its first settlement to the year 1895 > Part 51
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* So, in the Wisconsin of June 22, 1861; the printing of the card on this page is intended to be literat.
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HISTORY OF MILWAUKEE.
the head and drove him to more efficient means of quelling the tumult. But the mob was not slow of its undisturbed opportunity. To reach the contents of the bank was their aim, the doors and windows their point of aggression, paving stones and boulders dug from the pavement, their principal weapons. Soon the window glass, not only of the bank but of the offices above and below, was all in fine pieces upon the sidewalk, and not long after the door yielded to the persist- ent and riotous demand. As the mob rushed in the besieged clerks scattered as best they could, and one of these, Charles H. Larkin, Jr., had both difficulty and danger in effecting his escape. The attack upon the vaults was ineffectual, but every- thing else suffered. The windows were cut out, the counters were thrown down, the desks and other office furniture were demolished and the fragments tossed into the street; all books and papers not in the vaults, including some overlooked collections, took a similar journey. Promissory notes acquired a new and unanticipated currency as they floated about in the breeze. During the process of demolition within his building Mr. Mitchell attempted to address his unwelcome visitors, but no attention whatever was paid to his effort except as the sound of his voice may have imparted added vigor to the busy rabble.
The destruction in the Mitchell Bank having become complete, the whetted appetites of the wreckers sought fresh food. A visit was now paid to the State Bank at the northeast corner of East Water and Michigan streets, where similar havoc was quickly wrought. All the windows were first broken and, admission to the interior being gained, the furniture and other contents were thrown into the street and piled up for burning. The presi- dent, John G. Imbusch, narrowly escaped a swiftly thrown rock; a clerk, Thomas S. Hayden, less fortunate, was considerably injured. The bank- ing force finding resistance 'futile escaped by the roof to adjoining buildings. George A. Stark- weather, a lawyer with offices over the State Bank, descended to the crowd and essayed to pacify them, but was set upon and badly beaten for his pains. To the heap of combustibles ready for the torch were added also the contents of the insurance office of McGregor & Allis * and of the banking and brokerage office of James B. Martin, both under the State Bank, which
offices-such was the undiscriminating fury of the vandals-were thoroughly looted. Mr. Martin, after vainly endeavoring to protect his business, and being considerably hustled about in the effort, abandoned his property to the impending ruin and escaped by means of a boat upon the river. The brokerage office of F. C. Bellinger and the local agency of the Mutual Life Insurance Com- pany of New York, situated in the same building, suffered less severely. Some stones were thrown into the windows of the Bank of Milwaukee, im- mediately to the east of the State Bank.
The destruction thus far had been wrought quickly and without interruption. Contemporary accounts characterize the rioters as conducting their proceedings in an extremely noiseless man- ner, except when some unusually well-aimed mis- sile received a complimentary yell. The crowds of citizens that had gathered, as they watched the dreadful scene from the outskirts of the mob or upon adjoining roofs, seemed awed into silence, and in their terror and indignation wondered what the end would be and when the reign of law and order would begin.
At this period the police force nominally con- sisted of twenty-three men-too few to cope with the numerous and reckless rioters. The mayor thereupon called out the Montgomery Guard. This was a militia company under instructions to start for Madison, and mustered but thirty-seven men when ready to leave their armory for the scene of destruction. Unfortunately they were ordered out with blank cartridges, and still more unfortunately, the rioters knew it. With scant numbers and harmless weapons the Guard ad- vanced pluckily, but were met with a shower of rocks and clubs. They made some scattering of the crowd, however, and halted at East Water and Michigan streets. But the mob, having but little fear of soldiers without ammunition, soon went on with their active business, and the Guard received other orders .*
Soon after the disturbance had begun Governor Randall at Madison had been notified of the situa- tion by telegraph. A prompt message came back
* John P. McGregor and Edward P. Allis.
* A portion of them, at Mr. Mitchell's earnest request, guarded his residence on Ninth street, and the remainder ren- dered valuable assistance later, in the arrest of rioters and in escorting them to jail. It is only scant justice to say that the Montgomery Guard was a portion of the Iron Brigade during the war, and was in no fewer than thirty pitched battles.
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THE ERA OF STATE BANKS IN WISCONSIN.
directing the mob to be put down at all hazards, calling out the local militia for that purpose and promising speedy re-enforcements from without the city. The Milwaukee Zonaves, commanded by Elisha C. Hibbard, in anticipation of such an order had been waiting impatiently at their armory fully uniformed and armed and burning to wipe out the disgrace that was threatening the city.
They arrived none too soon. The rioters had been attempting to set on fire the State Bank building, using for that purpose brands from the pile of combustibles which they had started to burn in the street. Fire Engine Company No. 1, commanded by Peter Van Vechten, had been called ont, had stationed itself on Michigan street by the river and with a line of hose had quenched the incipient flame. The mob, doubly enraged at this interference with their errand of destruction, had the firemen, only fifteen in number, in a des- perate position. The river was behind them and a thousand mad men in front. A fireman named Sidebotham had been struck with a rock and knocked from the brake. Arthur Dadd, a pipe- man, had been wounded in the leg, yet the crew kept faithfully at work, quenching every blaze as soon as discovered and extinguishing the fire in the street.
As the rioters were about to silence the firemen by cutting their hose the yell of the approaching Zouaves was heard. These soldiers, equipped with bayonets and ammunition, and having, moreover, the air of meaning business had a ter- rorizing effect upon the foe. Formed in close array they marched straight through Michigan street with bayonets fixed, driving the crowd before them, accomplishing in brief time what should have been done two hours or more before. There was no need for bullets, and no shots were fired that day, but streams of water from the fire-engine gave effective assistance to bayonet thrusts in break- ing the strength of the mob. The rioters sullenly dispersed, betaking themselves to the remoter dis- tricts of the city, and by two o'clock in the after- . noon order had been comparatively restored.
Governor Randall redeemed his promise of sending outside troops. During that Monday afternoon, Col. Halbert E. Paine arrived from Racine with two companies from the Fourth Regi- ment there encamped ; in the evening two compa- nies came in from Madison, and during the night
there were other arrivals, so that there was a return of security to the citizens. During Monday night one thousand soldiers and civilians were on guard against a threatened reappearance of the rioters, and it was a fortnight or more before all fears were allayed. During Monday afternoon and evening about fifty persons were arrested for com- plicity in the riot, but they were discharged on the morrow for lack of prosecution. The injured banks repaired their damages as soon as possible and re-opened, their loss having been between four and five thousand dollars. The indirect loss to all Milwaukee was far greater, for business was paralyzed at least a week, and for a month or more was well nigh dormant.
The cause of the trouble did not immediately disappear. The Mitchell Bank, rehabilitated, re- opened July 1, 1861, but as a number of persons came demanding good money for such uncurrent bills as they had, Mr. Mitchell closed his doors again and the other banks followed suit. On July 2, Mr. Mitchell published a card withdrawing his guaranty and withdrawing from any existing arrangement which involved responsibility on his part, for the currency of unsound concerns.
But it soon became evident from the uneasy and turbulent condition of certain ranks in the city, that the Milwaukee banks must compromise with the laboring classes or must at least prevent further cause of trouble. A meeting of bankers and business men was held which decided that the bills' of the ten tainted banks, which had been paid out before the riot should be made good. This was done at two temporary redemption bureaux established, one in the Sixth and the other in the Ninth ward.
Of the ten discredited banks, six by substituting different and better securities, soon regained their standing, and their bills, as well as those of the other guaranteed banks, were in every instance paid at par. The other four discredited banks were closed and their circulation redeemed in full. And all this was done before September 1, 1861.
Meanwhile a concerted effort was made by bankers and business men, in which the state of- ficers were greatly interested, to substitute other securities for the circulation of notes, in place of the bonds of states, especially of Southern states, whose obligations were too fluctuating and uncer- tain to furnish any dependence. This substitution
272
HISTORY OF MILWAUKEE.
was accomplished in the following manner: Chap- ter 13 of the laws of the extra session of 1861 had made provision for a war loan, not to exceed one million of dollars, for organizing and bringing into active service the volunteer militia. The bonds representing this loan were to bear interest semi-annually at six per cent. These bonds had been issued and the governor and state treasurer had been in New York endeavoring ineffectually to float them. An arrangement was now made between the state officers and the bankers by which the latter agreed to sell their Southern and other insecure bonds for what they would bring in the New York market, and to substitute in their place the war loan of Wisconsin. To assist in ac- complishing so desirable an exchange and to aid the bankers in their guarantee of the seventy banks, the merchants of Milwaukee contributed one hundred thousand dollars. This subscription was a great boon to some of the country banks, which would have been badly crippled in making the exchange of securities; for the statute re- quired that sixty per cent. of the Wisconsin war bonds should be paid for in coin, and the bonds on hand whose sale should have secured this coin brought but a beggarly figure on the Stock Ex- change in New York. This subscription was also beneficial in bringing to, and keeping at par the value of the securities of all of the seventy guar-
anteed banks-of all, at least, except of the four wound up.
But the first of December, 1861, was approach- ing when specie redemption would be required of all the banks. Some, it was plain, which were not of the guaranteed class, would not be able to meet the demand. Arrangement was made with these that their circulation should be retired and that their bills should not be paid out, but be sent to a bankers' committee in Milwaukee. This commit- tee issued in lieu thereof seven per cent. certificates of deposit, and held the uncurrent bills until the securities of the banks issuing them could be sold by the state treasurer. Hence, through the good management of the bankers' committee, the co- operation of the solvent banks and the patriotism of the people, the first of December, 1861, found the state prepared for the crisis. Every bank in Wisconsin had its notes secured and was ready to redeem them. There was at first a disposition to convert bills into coin, but it being abundantly evident that the banks would pay, the people were content and ceased demanding it. This desirable state of solvency continued undisturbed until a new character appeared upon the scene and wrought another change-until, that is to say, a power mightier than the state interfered to disar- range its financial operations. This subject per- tains to the next section.
CHAPTER XL.
THE EPOCH OF NATIONAL BANKS. BY WILLIAM W. WIGHT AND JOHN JOHNSTON.
N ATIONAL legislation now for the first time began to play a part in banking affairs in the state. A brief review of monetary legislation anterior to the National Banking Law seems necessary in elucidation. Up to July 17, 1861, there had been no national currency except coin. Upon that date provision was made by Congress for the emission of treasury notes, pay- able on demand .in coin, to the amount of fifty million dollars. To this bulk ten million dollars were added by act of February 12, 1862. Between these two dates, on December 31, 1861, the state banks suspended specie payments. Because of this suspension and because of the enormous war drain upon the government treasury, an act of Congress was passed on February 25, 1862, authorizing the issue, for circulation, of United States notes to the amount of one hundred and fifty million dollars, payable to bearer, but not expressed to be payable on demand. Later acts increased the amount of these notes to four hundred and fifty million dollars. These notes, during the war period, were convertible into, or receivable at par for five per cent. bonds, payable principal and interest in coin, and being direct issues of the government for war purposes were exempt from taxation.
On February 25, 1863, the National Banking Law was enacted. But the same strenuous oppo- sition which existed in the United States Senate and House of Representatives against its enact- ment, and which caused its passage by very narrow majorities only, was manifested in Wisconsin as throughout the country against making trial of its provisions. The first bank in Wisconsin, the sixty-fourth in the whole country to organize under this law, was the Farmers' & Millers' Bank of Milwaukee. This occurred September 19, 1863, and the rehabilitated institution became and is the First National Bank of Milwaukee, one of the most influential and stable banks in the nation, with a present capital of one million dollars. But for eighteen months or thereabouts not another bank in the city made the change. The same reluctance
characterized the entire North. How congres- sional coaxing and coercion removed this reluct- . ance, requires brief mention.
In the above-noticed National Banking Law Congress, for the first time during many years, im- posed a tax upon currency. Upon the circulation of all banking associations authorized by the law a tax of two per cent. annually was imposed. On March 3, 1863, a tax of one per cent. annually was im- posed on the circulation of state banks in certain proportions of their capital, and of two per cent. on the excess. The tax on national banks was then reduced to conform thereto. On June 3, 1864, the law of February 25, 1863, was revised and repassed by a somewhat larger majority. On June 30, 1864, the laws of Congress began to dis- criminate against the circulation of state banks, the country being then well supplied with national currency. An act of that date imposed a certain tax on their deposits, capital and circulation. This tax was fixed at one twenty-fourth of one per cent. each month upon the average deposits and upon the capital of each state bank, and at one- twelfth of one per cent. each month upon the aver- age amount of circulation. Likewise an additional tax of one-sixth of one per cent. each month was imposed upon the average circulation of each beyond the amount of ninety per cent. of its capital.
This being not sufficiently drastic a new law was passed March 3, 1865, which was re-enacted with wider application July 13, 1866. This law increased the facilities for the re-organization of state banks as national associations, and imposed a tax of ten per centum upon the notes of any person or state bank used for circulation. As it was this law which was efficacious in driving state bills out of circula- tion and had its local application and effect in Mil- waukee, it is here quoted as re-enacted July 13,1866:
Every national banking association, state bank, or state banking association shall pay a tax of ten per centum of the amount of notes of any person, slate bank, or state banking association used for circulation, and paid out by them after the first day of August, 1866, and auch tax shall be assessed and paid in such manner as shall be prescribed by the Com- missioner of Internal Revenue.
273
274
HISTORY OF MILWAUKEE.
The effect of this statute, whose constitutionality the Supreme Court of the United States was called upon to affirm,* was to compel banks desiring to be, or to continue, banks of circulation to become national institutions. Incidentally also it rendered innocuous that anomaly of judicial in- terpretationt by which banks chartered by the state, and of which the state was a stockholder, could emit bills of credit, although the state itself was forbidden to so do by the explicit provisions of the National Constitution.
One difficulty peculiar to Wisconsin in bringing its banks to reorganization under national law, had been the fact that they were loaded with bonds of the state, issued in war times to assist in raising troops and quelling rebellion. These bonds, as hereinbefore related, the banks had taken to use in securing their circulation in lieu of the depreciated bonds of Southern and other states. These Wisconsin bonds, although un- doubtedly the perfect securities of a solvent com- monwealth, were themselves at a discount in the monetary centers, and could not be disposed of save at a great depreciation. A market must be found for these if transfer from state to national banks was to be accomplished without loss.
Hereupon the state intervened, and by its legislature passed three acts, which, however questionable they might seem to some in the abstract, were efficacious and salutary in their consequences. Chapter 217 of the laws of 1864, authorized and directed the commissioners of school and university lands to invest, in prefer- ence to all other loans and investments, the princi- pal of the school, university, swamp land and drainage funds then in the state treasury or which might be paid in, in the bonds or certificates of indebtedness of the state. The state agreed to pay interest at seven per cent. on funds so in- vested. The act was followed by still more com- prehensive measures. Outstanding mortgages of the school fund were called in and ordered in- vested in Wisconsin bonds ; the state treasurer was directed (chapter 282, laws of 1865) to accept on deposit the bills of state banks and to issue there- for certificates of deposit bearing seven per cent. interest, and likewise to receive such bills for indebtedness to the state, including taxes; all foreign insurance companies seeking to do business
in Wisconsin were compelled (chapter 320, laws of 1865) to deposit with the state treasurer bonds of Wisconsin graduated according to the gross amount of premiums received by such companies in Wisconsin in 1864. If, however, such com- panies could not purchase such bonds at prices not exceeding the par value thereof, United States bonds might be deposited in their room. By such and similar legislation the credit of the state was firmly established, the volume of bank notes gradually and easily diminished, the war bonds of the state unloaded from the banks and safely in- vested elsewhere, and the banks facilitated when they elected to change their organization from state to national auspices.
In the spring of 1865 three state banks in Milwaukee changed their organization and became national associations. These were the State Bank of Wisconsin, which became the Milwaukee National Bank; the Bank of Mil- waukee, which became the National Exchange Bank, and the Merchants' Bank, which became the Merchants' National Bank. All these institu- tions obtained special legislation authorizing the change. (See laws of 1865, chapters 76, 149 and 434, approved February 27, March 16 and April 10, 1865.) During the same session a gen- eral law was passed (chapter 489, laws of 1865) authorizing the conversion of state banks into National Banking Associations. In July, 1864, the number of state banks in Wisconsin was sixty-six, with three million one hundred and forty-seven thousand dollars of capital, two mil- lion four hundred and sixty-one thousand seven hundred and twenty-eight dollars of circulation, and five million four hundred and eighty-three thousand two hundred and five dollars of deposits; in July, 1865, the number of such banks had de- creased to twenty-six, with one million and eighty- seven thousand dollars of capital, one hundred and ninety-two thousand three hundred and twenty- three dollars of circulation, and two million two hundred and eighty-four thousand two hundred and ten dollars of deposits. National banks had sprung up or had grown out of state banks in almost every important city or town in the state.
After the national system had become thor- oughly acclimated and affiliated with state banks, matters in the monetary world in Milwaukee pro- ceeded quietly and with little need for comment for several years. The Milwaukee County Bank,
* Veazie Bank v. Fenno, 8 Wallace, 533.
t See Briscoe v. Bank of Kentucky, 11 Peters, 257.
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THE EPOCH OF NATIONAL BANKS.
however, had an unfortunate career. About 1866 James L. Spink, who had been its cashier since its organization, was succeeded by Louis Scheffer. The latter, rendered temporarily insane by unfortunate speculations with the funds of the corporation, committed suicide March 9, 1868. The president, John Armstrong,after still further looting its funds, left for parts unknown. The bank closed in 1869.
It is only fair to contrast conduct so execrable with the public spirit of other state concerns in the city. notably of the Wisconsin Marine & Fire Insurance Company Bank. It was due to the funds of this institution, and the foresight and prudence of its president, that several petty scat- tered railroads in the state were fused into one great line, with many ramifications, known as the Chicago, Milwaukee & St. Paul Railroad. Mr. Mitchell's personal influence prevented Milwaukee from being a way-station of this great system, and as long as he lived its headquarters remained here to the great pecuniary advantage of the city. Another instance: While the Milwaukee County Bank was bringing discredit upon the state sys- tem, Mitchell's Bank was rendering a signal ser- vice to the city in the matter of pure water. The utmost statutory limit of indebtedness of Milwau- kee for strictly municipal purposes (five hundred thousand dollars) had been reached, and the long- desired and long-delayed water system had be- come a positive necessity. On the offer of Mitch- ell's Bank to pay the expenses of construction, trusting to the future issue of bonds for re-im- bursement, the present satisfactory system was in- augurated and successfully pushed. An act of the legislature of 1871 made provision for the bonds.
The panic of 1873 had no appreciable effect upon either the state or national banks in Milwaukee. The causes of this wide-spread monetary depres- sion do not concern this chapter. It is sufficient to state that all the banking institutions in Mil- waukee successfully withstood the financial storm. In the midst of the general distrust and business collapse a new state bank, the Manufacturers', was established in Milwaukee. It ran a success- ful and prosperous career for more than ten years, but finally failed in June, 1884. To the extreme credit of Albert Conro, its last president, it should be stated that he assumed every dollar of the bank's indebtedness as a personal obligation and paid the same, principal and interest, as it became due, from his private resources,
The lack of banking facilities on the West side frequently occupied the attention of John Plank- inton, who was intensely interested in the devel- opment of that portion of the city. Two state in- stitutions were started in that section, the Com- mercial Bank in 1885, and the Plankinton Bank somewhat later. Their history will be noticed in a later portion of this chapter.
In the year 1858 an act (chapter 83) passed the state legislature authorizing the incorporation of savings institutions. It is curious to observe that the law especially required that the phrase savings institution, not savings bank, should constitute a portion of the name of any association incorpor- ated thereunder. Although this law received the attention of the legislature once subsequently, in 1860, it does not seem to have ever been used in Milwaukee. Certainly it was never submitted to the people, and was, therefore, invalid. Special acts for the organization of individual companies began to pass the legislature at the close of the war. In 1865 the Germania Savings Bank was incorporated (chapter 303) to do business in Mil- waukee, but the enabling act was never submitted to the people, and the bank never came into exist- ence. In 1866 the old Second Ward Bank changed its name by inserting the word savings, and still flourishes as a bank of general business and with enviable reputation. About two years later the South-side Savings Bank grew out of the former Fifth Ward Bank. During the same year, 1868, the legislature was besieged to bring into existence a number of savings banks. Two of these thus incorporated were the State Savings Bank of Milwaukee and the Milwaukee Savings Bank of Milwaukee (private and local laws of 1868, chapters 289, 468). Both of these measures contained clauses submitting the acts to the peo- ple and they both were disapproved, although both had a majority in Milwaukee county. It was not until 1876 that a general law for the
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