USA > Wisconsin > Milwaukee County > Memoirs of Milwaukee County : from the earliest historical times down to the present, including a genealogical and biographical record of representative families in Milwaukee County, Volume I > Part 60
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"The recent act of the legislature of the territory in reference 36
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to this instituion will not in any way affect its rights or interrupt its business. This notice is deemd proper for the information and protection of holders of its paper, which will be redeemed by its correspondents in New York, Buffalo, Detroit, Chicago, Galena, and St. Louis as heretofore."
The legislative hostility continued, however, and bills were drawn to declare the certificates of deposit of no legal value and to impose a fine of five dollars for every one taken in or paid out, but the bills were never introduced. Legal proceedings were com- menced. but were withdrawn upon the understanding that the com- pany would reorganize under the banking law of 1852, which was one of the first acts passed by the legislature after the people had voted on the question of banks and had expressed themselves by a large majority in favor of their incorporation.
The first constitution was rejected by the people at the elec- tion on April 6, 1847, because it contained a clause prohibiting banks of issue. The second constitution, which was ratified by the people on March 13, 1848, contained the provision that "The legislature may submit to the voters at any general election, the question of 'bank,' or 'no bank,' and if at any such election a num- ber of votes equal to a majority of all the votes cast at such elec- tion on that subject shall be in favor of banks, then the legislature shall have power to grant bank charters, or to pass a general bank- ing law, with such restrictions and under such regulations as they may deem expedient and proper for the security of the bill holders. Provided, that no such grant or law shall have any force or effect until the same shall have been submitted to a vote of the electors of the state, at some general election, and been approved by a ma- jority of the votes cast on that subject at such election."
The legislature of 1851 submitted the question to the people at general election of Nov. 4, 1851, when the electors decided by a vote of 31,289 to 9,126 to permit the incorporation of banks. Con- sequently the legislature of 1852 passed a general banking law, and it was under this law that the Wisconsin Marine and Fire Insur- ance Company was reorganized and opened as a bank on Jan. 5, 1853.
In 1880, while still operating under the state law, the officers of the bank procured the enactment of a law by the legislature au- thorizing the stockholders of any state bank to file a written dec- laration with the treasurer of state, agreeing to hold themselves individually liable for all legitimate demands against the bank, and in case a stockholder sold his stock he was to remain responsible
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for all debts and liabilities incurred during the six months follow- ing such sale.
Many prominent lawyers held this law to be unconstitutional, but the Wisconsin Marine and Fire Insurance Company Bank went ahead and filed the declaration of its stockholders, and when the bank suspended in 1893 they put up securities, etc., to secure the doubtful loans held by the bank. The result was that every lia- bility of the bank was paid in full, a new capital of $500,000 was subscribed, and the institution reopened on Jan. 15, 1894, as the Marine National Bank, under which name it still continues.
In the decade following the enactment of the general banking law of 1852 a number of state banks were opened in Milwaukee. The State Bank of Wisconsin began business on May 1, 1853, with a capital of $150,000, Eliphalet Cramer being president and Moses S. Scott cashier. On May 2, 1853, the Farmers' and Millers' Bank opened with Newcomb Cleveland as president and Charles D. Nash as cashier, the capital being $50,000. The Exchange Bank of Wil- liam J. Bell & Co. opened on Nov. 2, 1853, with a capital of $50,- 000. It ceased to do business on July 14, 1855, though all its lia- bilities were paid in full. The Bank of Commerce, George W. Peckham, president, and Joseph S. Colt, cashier, with a capital of $100,000, opened on April 19, 1854. It closed its doors after an existence of about two years, without loss to any one. The Ger- mania Bank of George Papendiek & Co. began its career on Aug. I, 1854, with a capital of $25,000, but failed the following January. The People's Bank, Haertel, Greenleaf & Co., opened on Nov. I. 1854, with a capital of $25,000, and closed on Jan. 4, 1858, no one incurring any loss by the closure. The Bank of Milwaukee opened its doors on Jan. 1, 1855, with a capital of $50,000, Charles D. Nash, formerly of the Farmers' and Millers' Bank, being president, and Peveril S. Peake cashier. The Marine Bank, Jacob A. Hoover, president, John H. Skidmore, cashier, opened on Feb. 1, 1856, with a capital of $50,000, and continued in operation until some time in 1860, when it closed after paying all its liabilities in full. The Second Ward Bank (now the Second Ward Savings Bank) opened on Feb. 1, 1856, with Augustus C. Wilmanns as president, William H. Jacobs as cashier, and a capital of $25,000. The Globe Bank, which was never fully organized, began business on June 1, 1857, with Asahel Fitch as president and William R. Freeman as cashier. It wound up its affairs after a few months and went out of exist- ence in January, 1858. On July 1, 1857, the Juneau Bank was opened with James B. Cross as president, Samuel B. Scott as
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cashier, and a capital of $250,000. It was reorganized as a national bank in 1866 and continued as such until it went into voluntary liquidation in 1875. The Union Bank opened for business on April 23, 1858, with a capital of $50.000, but it was closed the following year. During its brief existence John W. Medbury was president and Wilbur F. Herbert cashier. The Merchants' Bank, Edwin H. Goodrich president and Samuel B. Scott cashier, with a capital of $25,000, opened on Aug. 1, 1862, and some three years later was reorganized as the Merchants' National Bank. The Milwaukee County Bank opened on Aug. 1, 1862, with John Armstrong as president, James L. Spink as cashier, and a capital of $50,000. It wound up its affairs and closed in 1869.
The ease with which banks could be established under the free banking law led a number of unscrupulous schemers to found so- called banks for the sole purpose of issuing notes for criculation, without any intention of ever redeeming them. These institutions were frequently located at some obscure place, where holders of the notes would not be likely to present them for redemption, and the location of some banks were changed from time to time with a view to dodging their creditors. Such banks were denominated "wildcat" banks.
After a few years the weakness of the law in this respect was made apparent and in 1858 the legislature passed an amendment, which was ratified by the people at the election in November of that year. By the amendment the comptroller was prohibited from issuing notes for circulation to any bank except such as were en- gaged in a regular discount, exchange and deposit business "in some particular city or village in a township containing not less than 200 votes."
The law of 1852 required that bonds to the amount of one- fourth of the bills issued should be given by the directors as addi- tional security for the circulation, but the amendment further re- quired that such directors and bondsmen should be residents of Wisconsin. This amendment had a wholesome effect upon the financial conditions, and in the contraction which followed the panic of 1857 the losses were comparatively slight. It is worthy of note that none of the Milwaukee banks ever came within the category of wildcat institutions.
A number of Wisconsin banks held the bonds of Southern states as securities to guarantee their circulation, and when these states seceded carly in 1861, the securities became practically worthless. The Milwaukee banks were not large holders of these
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Southern bonds, but they felt the effect of the depreciation through the fact that they held the notes of many banks that were large holders of such securities. Some of the wildcat banks took advan- tage of the situation to unequivocally repudiate their notes.
Early in the spring of 1861 the legislature was called in special session to provide some means of warding off the threatened dis- aster. But the banking law could not be amended except by vote of the people at a general election, and the next general election would not be held until the following November. The legislature, however, enacted that all banks and banking associations should honor their notes either at Madison or Milwaukee; that no public stocks should be deposited with the treasurer as security for cir- culation except the bonds of the State of Wisconsin and of the United States : that the comptroller should suspend. until Dec. I. 1861, all legal proceedings against banks failing to redeem their circulation ; prohibited until the same date all notaries from pro- testing bank bills or notes, and gave all banks that might be sued on their paper until that time to file their answers.
The effect of these provisions was virtually to suspend specie redemption until December. The act was approved on April 17, 1861, at which time there were in the state IIO banks that were considered solvent. On the 25th, only a week after the passage of the act, the bankers met in convention at the Newhall House in Milwaukee, and about twenty-five of the 110 banks were then under a cloud. The following circular was issued on April 26: "The undersigned banks and bankers of the State of Wisconsin, believing the following named banks to be sound and well se- cured, either by state stocks or individual responsibility, or both, do hereby agree to continue to receive and pay out their issues un- til the first day of December next, when the amended banking law will go into effect."
This was signed by fifty-five banks of the state, all the Mil- waukee banks except the Farmers' and Millers' entering into the agreement. This action had a soothing effect, especially as it was supplemented by another agreement, in which the president of the Farmers' and Millers' Bank joined, "not to assort any of the cur- rency of this state received by us from this date until after the Ist day of December next." But the reaction was not long in com- ing. Large receivers of bank notes, such as the railroad companies, managed to shift all the doubtful notes that came into their pos- session to their Milwaukee deposits, and for a time it looked as though the Milwaukee banks that had agreed to protect the cir-
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culation of the weaker institutions would long before December I hold all the worthless and uncertain notes of the state banks.
The climax was reached on June 22, 1861. Authentic reports came to the Milwaukee banks on the 21st that railroad companies and certain country banks were refusing guaranteed paper, with the result that representatives of several of the city banks got to- gether and prepared a circular notifying their customers "that on and after this date, and till further notice, they can only receive the notes of the above list of banks on special deposit." The cir- cular was signed by representatives of the Wisconsin Fire and Ma- rine Insurance Company, the State Bank of Wisconsin, the Bank of Milwaukee, the Farmers' and Millers' Bank, the Juneau Bank, and the private banking houses of Price, Farmer & Co. and Mar- shall & Ilsley. This circular made its appearance on Saturday, June 22, and workingmen who received their wages on that day discovered that they had been paid the greater part of their weekly stipends in notes of the discredited banks. All day Sunday the workingmen discussed the situation.
About nine o'clock on Monday morning some 200 laborers as- sembled at the corner of Ninth and Winnebago streets, from which point, with a flag and a band of music, they marched against the banks that had issued the circular of Saturday. No real riotous demonstration was made until they reached the bank of the Wis- consin Fire and Marine Insurance Company on the corner of Mich- igan and East Water streets. The doors were vigorously assailed, while the mayor and the sheriff endeavored to pacify the mob by addressing them from the steps of the bank building. The doors refused to yield and the rioters turned their attention to the win- dows, which in a short time were shattered by such missles as came handy. The sheriff, Charles H. Larkin, was struck upon the head by a boulder and seriously injured.
Finally the doors gave way and the mob rushed into the build- ing, the clerks making their escape as best they could. Unable to gain admission to the vaults containing the funds of the bank, the infuriated throng contented itself with the destruction of the fur- niture, books, papers, and such other effects as they could find, and in a little while the bank was a complete wreck.
The State Bank on the opposite corner was next visited, where the scene was repeated, the furniture being carried into the street and piled up for burning, and other offices in the building being also looted for material to add to the proposed bonfire. Persons who attempted to interpose as peacemakers were set upon and se-
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verely beaten. Stones were thrown through the windows of the Bank of Milwaukee, just east of the State Bank, but further than this no damage was done to that institution.
A militia company known as the Montgomery Guard was called out by the mayor, but it numbered only thirty-seven men, and they were provided with nothing but blank cartridges. This fact was known to the mob, who refused to disperse and even assaulted the militia with clubs and stones. As soon as the disturbance started Governor Randall was notified by telegraph, and he sent back a message ordering the authorities to exhaust every means to quell the riot, promising assistance from outside the city. The Milwau- kee Zouaves were then called out and arrived just in time to pre- vent the State Bank building from being set on fire. The Zouaves were armed with ball cartridges, but they managed to disperse the rabble with the bayonet alone, assisted by the fire department which drenched the rioters with streams of water. That afternoon Col. Halbert E. Paine arrived from Racine with two companies of the Fourth infantry, and that evening two more companies of troops came from Madison.
Soldiers and citizens remained on guard all that night expect- ing a renewal of the outbreak, though none occurred, and it was fully two weeks before the city was restored to its normal condi- tion. The wrecked banks repaired the damages and reopened, though some of them were forced to close their doors on account of the immense amount of notes presented for which good money was demanded. This was especially true of the Marine and Fire Insurance Company, which opened its doors on July I, and was compelled to close the next day.
As a last resort to restore sound financial conditions a meeting of bankers and business men was held, at which it was decided that the bills of the discredited banks, mentioned in the circular of June 22, that had been paid out immediately preceding the riot should be redeemed, and for that purpose two offices of redemption were established. About this time the state legislature authorized its first war loan of $1,000,000. Many of the Wisconsin banks dis- posed of their Southern state bonds for whatever they would bring and invested the proceeds in Wisconsin war loan bonds, the Mil- waukee banks contributing about $100,000 to assist in effecting the exchange.
This generous subscription was beneficial in two ways: First, in aiding some of the smaller banks in making the exchange of se- curities, the law requiring sixty per cent. of the war loan to be
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paid in coin and the state bonds held by them sold at a price insuf- ficient to enable them to do this but for this subscription ; second, it advanced and kept at par all the securities held by the seventy guaranteed banks of the state, except the four whose affairs were liquidated.
By the time this was accomplished the first of December had arrived-the time when specie redemption would be required of all the banks. A few banks were not able to do so and their circula- tion was retired, the bills being sent to a committee of bankers in Milwaukee, which committee issued certificates of deposit bearing seven per cent. interest, and held the depreciated bank notes until the state treasurer could sell the securities of the banks.
Every bank in the state thus had its notes secured, a result brought about largely by the bankers of Milwaukee. Confidence was restored, and no further financial disturbance occurred until after the passage of the law by Congress authorizing the establish- ment of national banks and imposing a tax upon the circulation of the state banks.
The national bank law was approved by the president on Feb. 25, 1863, and on September 19 of the same year the Farmers' and Millers' Bank of Milwaukee was reorganized as the First National with Edward H. Brodhead as president and Hoel H. Camp as cashier. The original capital of the First National Bank was $200,- 000. On Jan. 25, 1894, it absorbed the Merchants' Exchange Bank, the history of which is as follows : On April 4, 1870, the Home Sav- ings Bank opened for business and on Oct. 29, 1870, it was united with the firm of Moritz von Baumbach & Co. to form the German Exchange Bank. The Bank of Commerce, organized on June 23, 1870, was consolidated with the German Exchange Bank on Aug. 13, 1879, to form the Merchants' Exchange Bank, which was merged into the First National as above stated. In May, 1908, the capital of the First National was $2,000,000, and its entire resources amounted to over $17,600,000, with Fred Vogel, Jr., president, and Henry Kloes cashier.
No other national banks were established in the city until the spring of 1865. This was due in a great measure to the fact that the state banks were carrying large amounts of the Wisconsin war loan bonds, which in the financial centers of the country were at a heavy discount, although there was no question as to their legality or to the solvency and good faith of the state in authorizing their issue.
If the state banks were to be changed to national banks these
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bonds must be brought up to par or the change would entail loss upon the bankers who might make it. Consequently the legisla- ture of 1864 passed three laws intended to enhance the market price of the bonds. The first directed the commissioners of school and university lands to invest the funds under their control in the state bonds in preference to all other securities and investments, the state agreeing to pay seven per cent. interest upon all funds so invested. The second act provided for calling in all loans of the school fund and the investment of the money in state bonds. State banks could deposit their bills with the state treasurer, who was directed to issue therefor certificates of deposit bearing seven per cent. interest. He was further instructed to receive the state bank bills for all indebtedness due the state, including taxes. The third act required all foreign insurance companies doing business in the state to deposit with the state treasurer bonds of the state in pro- portion to the full amount of premiums received on policies issued within the state in 1864, or, if such bonds could not be purchased at prices not exceeding the par value, the insurance companies might deposit United States bonds instead. By these acts the credit of the state was firmly established and the state bank circulation grad- ually retired.
On March 2, 1865, the State Bank of Wisconsin became the Milwaukee National Bank, the capital at that time being fixed at $250,000. Eliphalet Cramer continued as president of the institu- tion and Theophilus L. Baker was made cashier. This was shortly afterward followed by the Bank of Milwaukee, which was changed to the National Exchange Bank with Charles D. Nash as president and William G. Fitch as cashier, the capital stock being at that time increased from $50,000 to $200.000.
The next Milwaukee bank to become a national association was the Merchants', which was changed to the Merchants' National in the spring of 1865, Edward H. Goodrich remaining as president and Samuel B. Scott as cashier. The capital stock was increased from $25,000 to $100,000 and the bank continued in operation until June 14, 1870, when it went into voluntary liquidation. In May, 1908, the capital of the Milwaukee National Bank was $450,000, with George W. Strohmeyer president and William F. Filter cash- ier. The National Exchange Bank at that time reported a capital stock of $500,000, with J. W. P. Lombard president and William M. Post cashier. In 1866 the Juneau Bank, with a capital of $250,000, was reorganized as the National City Bank with a capital of $100,- 000. Anthony Green was elected president and James A. Pirie
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cashier and the bank continued in successful operation until in February, 1875, when it went into voluntary liquidation. The Central National Bank opened on Dec. 1, 1892, with a capital of $300,000, George G. Houghton being president and Herman F. Wolf cashier. The bank was the outgrowth of the private banking business of Houghton Bros. & Co., which began business in 1868 as Houghton, McCord & Co. Mr. McCord withdrew from the firm in 1877, when the name of Houghton Bros. & Co. was adopted. On Aug. 16, 1892, R. P. Houghton died and the surviving brother became the principal organizer and first president of the Central National.
The Wisconsin National Bank of Milwaukee began business on Dec. 5, 1892, with a capital of $1,000,000, Frederick Pabst presi- dent and Frederick Kasten cashier. In 1898 the Central National was merged into this bank and their interests consolidated. Her- man F. Wolf of the Central came into the Wisconsin National as assistant cashier and rose to the position of cashier, which he oc- cupied in May, 1908, at which time Louis J. Petit was president and the capital stock of the bank was $2,000,000. The Germania National Bank was organized in 1903, with a capital of $300,000. In May, 1908, George Brumder was president, Alfred G. Shultz, cashier, and the total resources of the bank amounted to over $8,200,000.
In addition to the six national banks above mentioned, Mil- waukce has nine state and private banks and five trust companies which do a banking business, except the issuance of notes for cir- culation as currency. The oldest of these is the Marshall & Ilsley Bank, the main office of which is located at 388-390 Broadway, with a South Side branch at 374 National avenue. In the spring of 1847 Samuel Marshall began a brokerage business with William J. Bell as a silent partner. In September, 1849, a partnership was formed by Mr. Marshall and Charles F. Ilsley, who had been con- nected with the Wisconsin Marine and Fire Insurance Company, and they opened a general banking office in the old United States block at what is now 342 East Water street. It was subsequently incorporated under the state law and has passed unscathed through every panic and financial depression from that day to this and is universally regarded as one of the substantial financial concerns of the Cream City. In May, 1908, James K. Ilsley was president and John H. Puelicher cashier. The capital stock of the bank at that time was $500,000 and its total resources were over $8,000,000.
The Second Ward Savings Bank was organized as the Second
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Ward Bank in 1855, and was changed to the present name on Feb. I, 1866, at which time Valentine Blatz was elected president and William H. Jacobs cashier. Since then the capital stock has been increased from $25,000 to $200,000, and in May, 1908, its resources were reported as being a little over $10,000,000, the officers then being August Uihlein, president, and Charles C. Schmidt, cashier.
The German-American Bank, incorporated under the state law, was opened for business on Nov. 1, 1892, with Emil Durr as president and Charles F. P. Pullen as cashier, and a capital of $100,000. This has since been increased to $250,000. Mr. Pullen was still cashier in May, 1908, at which time the president was J. B. Whitnall and the resources of the bank amounted to a little over $2,000,000.
On July 2, 1894, the West Side Bank began its career with a capital of $100,000, Adam Gettelmann as president and George Koch as cashier. These officers were still at the head of the in- stitution in May, 1908, the resources of the bank then being over $1,500,000.
The American Bank Reporter for May, 1908, mentions among the banks of the city the Milwaukee Savings Bank, but gives no information regarding its resources or affairs further than that it was organized in 1904, and that J. L. Tormey was president and J. H. Koenig cashier at the time the edition of the Reported re- ferred to was issued.
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