McLean County, Illinois - Chapter 19: Banks, 1924

Banks and banking- institutions as we know them now did not exist in the earlier years of McLean County. In fact, for many years after the white settlers began to take up land in this section of Illinois, they could buy the land from the government at $1.25 per acre, but they were unable to secure funds with which to buy the necessary implements and stock for the proper conduct of their farms. The first recorded loans of money made in this county were those in the year 1829, when Dr. Peebles seemed to be the principal man engaged in any kind of money loaning business. In the period just preceding 1836, there was a large influx of population into this county, and money became more plentiful, due to speculative buying and selling of lands and town lots. Then came the panic of 1837, and money went flat again, for everybody was hard up. Governor Ford, in his message of 1843, told the Legislature that he did not believe there was over $400,000 of money in circulation in the whole state of Illinois.

For the ten-year period prior to the Civil War there were three banks in Bloomington, operating under the state banking law, but none in any other town of the county. When the Civil War came on, banks holding bonds of the southern states found them very greatly depreciated and some banks caught with many southern bonds had to go out of business. One such bank was the Lafayette Bank of Bloomington. Gridley's bank, started in 1853, found its notes subject to great discounts. The predecessor of the First National Bank had declined to use southern bonds as the basis of its issues, hence it got over the crisis and reorganized in 1862 as the First National Bank. It then began to operate under the national banking laws instead of the state. Peoria, Springfield, Chicago and Indianapolis banks in those days supplied most of the money needed by farmers for buying cattle and other farm operations. The interest charges were very high, being 2 per cent per month as the minimum.

Another era of hard times in 1873 resulted in the failure of the Home Bank of Bloomington, run by McClun, Holder & Co. The First National Bank, which had been organized on a 'permanent basis in 1865, remained as solid as a rock and pursued a careful and judicious policy.

The number of banks grew rapidly in the 20 years from 1875 until 1895, and at the close of the period there was one or more banks in nearly every important town in the county. Many of these were private banks, but when a law was passed about 1911 that all private banks must organize under state or federal direction, then some of the smaller banks went out of business. At one time in Bloomington, about 1905, there were seven banks in operation. Then consolidations took place, and the number of banks in Bloomington now (1923) is five. The Corn Belt Bank, the McLean County Bank and the American State Bank were the younger of the institutions, but they have outlived some of the older banks. The Third National was first absorbed by the First National. Then the State National and the State Trust and Savings were combined with the First National Bank and the building of the latter was remodeled to accommodate the larger institution. The American State bought the Metropole Hotel Building in 1923 and made it into a first-class banking house. The Corn Belt remodeled its entire interior. The People's Bank erected in 1902 a seven-story bank building, the only seven-story structure in the downtown district.

In towns outside of Bloomington many of the banks own their own homes, and occupy up-to-date quarters. The following is a list of the banks in McLean County, with the year of their organization and their present officers:

First Trust and Savings Bank, Bloomington; president, Wilber M. Carter; vice-presidents, H. K. Hoblit and W. J. Carter; cashier, Leonne Robinson.

Liberty State Bank, Bloomington; founded 1920; president, John W. Rodgers; vice-presidents, E. E. Fincham and Phil Wood; cashier, P. A. Johnson.

The total deposits of the banks in McLean County will reach the large figure of over $21,000,000. When we consider that a few years ago practically all the money that was loaned in this vicinity came from banking institutions in the east, the fact of the great sums on deposit now belonging to our own people, which is used in turn for the promotion of business and farming enterprises within the county, it can be seen that the population of the county is now on a self-sustaining basis such as might have been not dreamed of in the former times. In the old days, the banks of the city and county depended upon voluntary deposits for the funds with which to operate, outside of their own capital. In the last two decades, however, a decided change of policy has come over the banks, and they now advertise in the columns of the newspapers much the same as other commercial enterprises. There is one difference, however: the banks urge and teach thrift, the virtue of saving, in order that each customer increase his balance and therefore his own independence. In this way, the increase of bank deposits tends to increase the general welfare and stability of the whole community.