Vermilion County, Illinois - Chapter 27, 1911

First Banks And Banking Interests

Although Danville was less than ten years old in 1836, its prospective importance was such as to warrant the establishing of a branch of the State Bank of Illinois at this place. The United States Land Office was here and, while it was yet a town little more than in promise, it bid fair to become a place of importance. Mr. Mordecia Mobley was sent here to take charge of the new venture and rented a small building on the corner south of the public square and east of Vermilion street, where he built a stone vault outside the building in which he put his safe. Mr. Mobley was a competent and safe business man and conducted a safe and very good business. He did the entire business himself, being president, cashier, teller and clerk. He made a gratuitous distribution of bank-books among the depositors. This branch did not issue any bills but paid the money out of the parent bank. Every thing went prosperously, until the crash of 1837, which disorganized all business and put an end to the profits of banking here as well as elsewhere. It was a common occurrence at that time to have banks fail, and it is no wonder that the branch of the State Bank of Illinois at Danville was one of the number.

Banks failed, bankers disappeared and assets were missing, but it is recorded to the credit of Mr. Mobley that in his disappearance, none was defrauded. It is perhaps the only instance on record that a banker ran away and no one was the loser. The explanation of this is that when business became dull he spent much of his time in hunting, and being a lover of good horses he had a good team which he used in going away from home frequently. Because of this he could disappear one morning with his family and entire assets of his bank without causing suspicion. He knew that if it was known that a removal of the bank was contemplated, measures would be taken to prevent it, and much annoyance would ensue. Knowing as well that no one was defrauded by his going, he slipped away secretly.

The next bank was started by an eastern man by the name of Cullum. This was in 1852, and the bank was one of those known as a stock security bank - that is a certain portion of the capital was invested in state stocks, usually in the stocks of Missouri, North Carolina, Tennessee and other southern states. The state of Illinois was bankrupt and had not even paid the interest of its debt for fifteen years, so her bonds were not considered bankable, and other bonds were sought. Eastern state stock could not be bought, hence a new bank must buy stocks of some southern state. When the rebellion broke out such states could not of course pay their bonds, nor even the interest on them, and consequently these banks established on this system which had not already failed, succumbed. Mr. Guy Merril was appointed cashier of this Cullum bank, and it was located in the old frame building. It had a capital of $50,000. Later it was removed to a building opposite the McCormack House. This bank was run successfully for three years and then sold to Daniel Clapp who had neither the required capital nor the experience to carry it on and in 1856 he failed. As soon as he failed; brokers all over the country stood ready to buy his bills at from fifty to seventy cents on the dollar. Messrs. Tincher and English, who had for some time been carrying on a large and growing business, were Clapp's assignees, and after closing up his business opened a private bank. These men were of much experience in this vicinity, had sufficient capital for the then state of trade, were safe and judicious and enjoyed the full confidence of the people of the entire county. This private bank, established in 1856, was the beginning of the well known First National Bank of Danville. The first test of their ability to weather financial storms came in the year following the establishing of the bank. This bank sent the first application received at Washington for a charter under the national bank act of 1864, and in 1872 increased the capital to $150,000. They went through the panic of 1873 without difficulty.

The real estate firm of Short and Wright commenced banking in connection with its business in about 1865. In 1867, Mr. Abraham Sandusky and Andrew Grundy became partners of John C. Short, and continued the business under the name of the Exchange Bank of J. C. Short & Co. This firm was interested in the development of the coal interests, and in building railroads which at that time were much needed and promised to be remunerative. Because of a variety of reasons this bank failed and the Danville Banking and Trust Co. was organized on its ruins. This business enterprise, however, was of short duration. The Vermilion County Bank -established by W. P. and J. G. Cannon is now the well known and trusted Second National Bank. It was established in 1873 with a capital of $10,000.