Cass County, Indiana - Banks and Finance, 1913

In 1786 the Congress of the Confederation chose as the monetary unit of the United States the dollar of 375.64 grains of pure silver. This unit had its origin in the Spanish piastre or milled dollar, which was the principal coin in circulation prior to that time. By an act of April 2, 1792, the first monetary system in the United States was established. The basis of this system was the gold dollar or unit containing 24.75 grains of pure gold, and the silver dollar containing 371.25 grains of pure silver. A mint was established at Philadelphia and the first coinage in the United States began of gold and* silver at this ratio of 1 to 15. In 1834-1837 and 1853 various acts were passed readjusting the ratio between the two metals to conform to the commercial value of these metals as the cheaper money always drives the dearer out of circulation. In 1873 the single gold standard of value was adopted as it was found that it was next to impossible to have two standards or measurements and keep them on an equality without continually changing the ratio to conform to the commercial value of the metals. Since that date gold has been the unit of value and silver employed for conveniences in minor transactions and as subsidiary coins.

In the beginning of Indiana and Cass county history, there was no currency in circulation. Barter and trade was universal, peltries being used as the only currency. All values were based on what the article would bring in coon skins, muskrat and mink skins or other furs. Such a state of affairs could only exist in a sparsely settled country, where manufacturers were unknown and the only trading done was for the actual necessities of life. In these early days the settlers raised on their little clearings about all they needed to sustain life, together with what the forests afforded in the shape of game, wild nuts and fruits, and their purchases were limited to salt, hardware and a few articles that could not be made or procured from field, forest or river and for these few articles they exchanged wheat, corn, hogs or peltries. There were certain days on which the farmers would meet at some convenient central or public place for the purpose of barter and trade or ** swapping'' as they usually termed the transaction. At public meetings of every kind, be it religious or other character, the pioneers would stand around after the meeting closed and engage in trade or exchange of goods or chattels for future delivery. There was, however, a little government scrip and British or Spanish silver coin that was brought -in by the settlers from the east. For small change Spanish dollars were cut into quarters, eights and sixteenths. These were called **bits,''

The first banks in Indiana were chartered by the territorial legislature in 1814, the Bank of Vincennes and the Farmers and Merchants Bank at Madison. When Indiana assumed statehood in 1816 the constitution recognized these two banks and confirmed their charters. The Vincennes bank was recognized as the State bank in 1817 and making the Madison bank a branch. Branches were also established at Yevay, Brookville and Corydon. The reckless management of the Vincennes bank caused the general assembly in 1821 to authorize legal proceedings to revoke its charter which was done and its note holders lost heavily, but the Madison branch paid out in full. Prom this time until 1834 there was great financial depression in the entire state and prices were low. To make matters worse, there were epidemics of disease that carried off many of the pioneers from 1821-23.

To aid and encourage the settlers the government reduced the price of public lands from $2.00 to $1.25 per acre. Gradually prosperity returned, as public enterprises were projected and pushed to completion, such as canals, roadis, etc. In 1834 the legislature chartered the ''State Bank of Indiana" with authority to establish branches. This bank was a complete monopoly. Its charter was to run twenty-five years and during its existence no other bank could operate in the state It was, however, managed on sound financial principles, but the panic of 1837, caused largely by President Jackson's interference with the United States bank compelled the Indiana State Bank to suspend specie payment. In 1842 the legislature ordered the bank to resume specie payment and from that date it ever stood ready to meet all demands for the redemption of its notes.

Prom 1832 to 1839 the state was aiding the building of roads and canals and became involved, and in the latter year the legislature authorized the issue of state scrip to the amount of $1,500,000 to bear six per cent interest. This scrip was for a time depreciated and speculators took advantage of this fact to manipulate the market. It was, however, ultimately redeemed. The issue of scrip by the state led to still further inflation of the currency. Millers, merchants, companies and contractors on public roads all went into the business of issuing scrip or paper money, made payable in goods or merchandise and much of it was floated on the public, that issued by the Plank jSoad Company, being based on the receipts for toll. This scrip was issued in bills as low as twenty-five cents, the highest being three dollars. It was printed on blue paper and was derisively styled **Blue Pup" to distinguish it from **Red Dog" of the state, as the latter was printed on red paper. About this time Michigan chartered banks with little regard for financial soundness and Michigan paper money flooded northern Indiana and aided in the depreciation of all currency and adding to the difficulties in making financial transactions. Much of this currency became worthless, business was prostrated and values destroyed. The State Bank, however, was well managed and its paper floated at par, but some grew envious of its monopoly and in the revision of the new constitution, the clause in the original instrument of 1816 giving the state bank exclusive authority to issue money was stricken out and gave the legislature the authority to establish free banking laws which were passed by that body in 1853, and in 1855 a charter was given to the State Bank of Indiana although vetoed by (Jovemor Wright, they were passed over his veto. The charter of the <dd bank did not expire until 1859 but negotiations were entered into* by which the new company bought out the old, the change being made in 1857 on conditions that Hugh McCuUough be made its president, which was done. Mr. McCullough guided this bank into a safe and honorable career. It weathered the financial storms of 1859 in great credit and continued its operations until it was superseded by; the National banking syjstem in 1865.

The free banking law opened the door for another season of financial disaster. Banks of issue sprang up everywhere. These banks made no pretention to be banks of deposit, their only business was to issue and float notes. A few men would get together, purchase a few thousand dollars* worth of the depreciated bonds of some far away municipality, deposit the same with the auditor of state and receive authority to enter upon the manufacture of paper money. They would often issue bills several times greater than the securities deposited, float them and they would become worthless. Many of these banks started on no more capital than was necessary to secure the engraving and printing of the notes and the oflSce fixtures, and the latter often consisted of simply a small safe, a table and a few chairs. Hugh Mc- Cullough thus speaks of these banks: ''Their life was pleasant and short ; their demise ruinous and shameful. As soon as their notes began to be presented for payment, they died without a struggle." Mr. McCullough became the first controller of the currency under the act establishing the National banking system in 1865, and later, secretary of the treasury.

During the fifties Indiana was flooded with these notes and Cass county was not exempt from the financial havoc caused by such methods of banking. The writer well remembers these evanescent bank bills. Today, they were at par, but if you carried one to your rural ' home you had no assurance that you could pass it on your return to the city, and we have several beautiful specimens of these bills that became worthless on our hands and are only valuable as an historical curio of by-gone days. These uncertain bills were termed ''Wild Cat, * ' but we never taiew why the term was applied for the money was a very: tame affair, although the men who originated and floated it might have some of the characteristics of a wild cat. We close thij» part of the subject by a quotation that illustrates the humorous side, a parody on the "Banks of the Wabash,'* taken from W. T. Wilson's article on banking, read before the Historical Society February 26, 1909.

"The only baSk I ever saw along the 'Wabash' was a farmer banking up his house one day. And the snow banks, that bank up in the winter. And the sand banks that are banking up in May. But there's 'faro banks' galore along the Wabash and other banks in which you put your trust. There's another kind of bank you put your money in; there's a loud report and then that bank has bust."

But thanks to President Lincoln and his advisers for the changed condition of our monetary system; our currency is reliable and can be exchanged anywhere in the wide, wide world at its face value and no man has lost one dollar since 1865 by worthless United States currency or that of our national banks. Under present laws, state banks may issue their notes but the tax is so exorbitant that it is prohibitive and onlyt national banks, under the direction of the controller of the currency, have been issuing bank notes since the inauguration of the national banking system in 1865, but we have state and private banks of discount and deposit and savings banks so well guarded by legal restrictions, making the stockholders personally responsible with frequent examinations, and in case of savings banks, requiring the stockholders to have been residents of the county for five years and possess a certain amount of unincumbered real estate ; with all these safeguards,

There was a publication known as the Bank Note Detector, which attempted to keep the public advised as to the value of bills of variousi banks, but it was not possible to publish the Detector as often or as quickly as bank notes were printed and keep step with the *'Red Dogs" and **Blue Pups" that were overrunning the pioneer forests of Cass county and Indiana.

In 1893 the legislature enacted a law establishing trust companies. These companies do not do a general banking business but receive deposits, make investments, act as administrators of estates and execute bonds. In addition to these banking institutions the state authorized the organization of building and loan associations, especially to aid and encourage the laboring class of people to secure homes by means of monthly payments. Many of these associations were organized in Logansport from 1875 to 1900 and when carefully managed were a success and a great help to many a poor man who thus secured a home, who could not otherwise have purchased. Since the country has been developed with vast accumulations of capital, interest rates reduced, and many financial agencies are ready to sell homes on the installment plan, these associations have been retired.

W. S. Wright, in his ^^Pastime Sketches" (page 58), says: *'The first Logansport bank was a private bank, situat^ on the north side of Alarket street, sixty feet below Fourth street. This was in 1837 or '38. James Warren was president and the business was conducted in a small room. There was a table in it and president, cashier and customers sat around it."

There was a brokerage oflSce and private banking business carried on in the rear of George Coecil's dry goods st«re, at the southeast corner of Fourth and Market streets, in 1848-9, by J. Green, J. M. Warren and George Miles. They had a large fireproof vault in the room, the only one at the time in Logansport. Later J. M. Warren & Co. were bankers and dealers in exchange on Market street, between Fourth and the Canal, according to the city directory of 1859.

This bank was organized in the early fifties and conducted its affairs in a building now known as 416 Market street. Philip Pollard was its president; D. M. Dunn, cashier, and George Miles, teller and bookkeeper. The bank was operated only a few years. Soon after the death of its president, Philip Pollard, on March 7, 1856, its affairs were honorably settled without loss to its depositors, but with considerable loss to the Pollard estate.

Probably the first banking institution in Cass county issuing notes was the ** Logansport Insurance Company," which was organized in the oflSce of J. W. Wright on the first Monday in January, 1850, where, in accordance with the fifteenth section of the charter they proceeded to elect five directors of said company as follows: John Green, J. W. Dunn, J. W. Wright, Wm. L. Brown and David M. Dunn. The directors elected the following oflScers: John W. Wright, president; David M. Dunn, secretary; Wm. L. Brown, treasurer. An oflSce was secured in a room adjoining the Wabash and Erie Canal Land oflSce. The following year $50,000 in checks and scrip was issued and loaned to the

Which was organized about the same time by practically the same parties but had no aixthority to issue notes and the insurance company was organized for that purpose, to issue notes, which the above Valley bank could assume and loan. Later Cyrus Taber was made president and Philip Pollard, Thos. H. Wilson, Wm. Chase, Geo. B. Walker, George Cecil, Stephen C. Taber, G. N. Pitch and probably others became identified with these banking institutions.

On April 28, 1857, the directors of the Logansport Insurance Company met in the house of S. C. Taber and destroyed, by burning, its notes received back from the Wabash Valley Bank and the company seems to have ceased to exist as w^ell as the Wabash Valley Bank, which was apparently operating in connection with the Logansport Insurance Company. Messrs. Brown, Wright and other managers of this company were severely censured by the stockholders and holders of the scrip, upon which they could not realize, but were losers and an indignation meeting was held but nothing came of it as the company's manager seemingly kept within the law. The Wabash Valley Bank had quarters in a smaU room on Third street, north of Market.

This was a private bank owned and operated at 221 Sixth street by J. W. Wright and J. ]\L Warren. They began business about 1858, but like many private banks was not successful and it wound up its aflfairs in the early sixties. It was not a bank of issue and its patrons suffered no loss.

This was another private banking institution that proved an unfortunate venture for both its projectors and patrons. It was organized about 1871-2, and occupied a room on the east side of Third street, south of Market. Wm. H. Standley was president and Wm. H. Whitesides, cashier; Terrance McGovern was bookkeeper. It only ran for four or five years when it became involved in litigation and after some years its affairs were finally settled by the courts with loss to all parties except the oflSciating attorneys.

This institution was organized in 1856 and occupied a room opposite the courthouse at 206 Fourth street. Among the stockholders were James Cheney, J. T. Musselman, W. W. Haney, T. H. Wilson, Geo. Cecil. J. T. MussTelraan was its first president and Wm. Ingram, cashier. Later, James Cheney was elected president and became its manager.

The career of this bank was honorable and it was liquidated with credit. When the national banking system became operative in 1865 its business was taken over by the Logansport National Bank, organized in that year, and many of its stockholders became interested in the new bank.

holder until the day of his death. In addition to these oflScers other well known citizens have been identified with this bank, to- wit: John

In 1883, the Logansport National Bank was reorganized with practically the same stockholders, but changed the name to the First National Bank and has since been doing a prosperous and honorable business at its present location, 314 Fourth street. The officers are:

This is the oldest bank in continuous business in Cass county, dating its existence from 1856, when the Logansport branch of the State Bank was organized, which is its immediate predecessor. The Logansport National Bank began business in the office where the State Bank was located at 206 Fourth street, but soon removed to 314 Fourth street, where the business has since continued. Its obligations to its stockholders and depositors have. always been strictly met and it has gained a reputation for conservative and careful management throughout the state. It is the largest in capital of Cass county's banks and the volume of its business is greatest and is annually increasing.

This organization was perfected about 1872, Allen Richardson being the moving spirit in the undertaking and became its first president and John C. Ingram, its cashier. They at first occupied the room at 318 Fourth street, but later moved to the southwest comer of Fourth and Broadway, and Wm. H. Johnson succeeded Mr. Richardson as president. In 1881 the company was reorganized and changed from a private corporation to a national bank under the title of

With a capital stock of $100,000. The officers were : Wm. H. Johnson, president; A. L. Pogue, vice-president; J. C. Ingram, cashier. Directors : A. L. Pogue, Wm. H. Johnson, S. W. Ullery, Wm. H. Snider, and

Under the changed conditions the bank had a prosperous career, until the death of its president, Wm. H. Johnson, about 1892-3, when his son, John F. Johnson, became president. The bank continued business until 1897, when its affairs became involved in unfortunate speculations by its president and was placed in liquidation by the government. The capital stock was wiped out by the losses of the bank. The depositors of the bank, by subscribing a new capital stock out of their deposit accounts and taking over the substantial assets of the bank reorganized the bank under the name of the

1897. The capital stock was fixed at $200,000. The first oflScers were: John Gray, president; I. N. Crawford, vice-president; F. R. Fowler, cashier. Later, A. P. Jenks replaced Mr. Fowler as cashier. The bank has been conducted very successfully and has ever been able and prompt to meet all its obligations.

The bank owns the building in which it conducts its business at the southwest corner of Fourth and Broadway, and it is one of the finest in the state. The deposits amount to $800,000.

This bank organized under the laws of the state of Indiana, was capitalized for $50,000, distributed among forty stockholders. It opened its doors for business September 18, 1893, in the Jordan building, southeast comer of Fourth and Market streets.

September 18, 1897, the capital stock was increajaed to $100,000. The deposits now amount to $930,000, and the surplus and undivided profits to $123,000. The bank has been doing a prosperous business from the day of its first opening. The oflScers at this time are: Victor B. Sj^iter, president; Geo. W. Seybold, vice-president; B. F. Sharts,

This institution is tlie successor to A. T. Bowen & Co.'s bank which was organized as a private bank and opened May, 1902. A. T. Bowen, of Delphi, Indiana, was the principal stockholder, but there were nearly forty others holding a few shares. Geo. A. Baub acted as cashier.

In March, 1908, the Farmers and Merchants Bank was organized to replace or take over the Bowen bank, with a capital stock of $100,000, distributed among one himdred and sixty stockholders, all residents of Cass county. The following persons oflScer the bank: M. W. CoUett, president; S. A. Vaughn, vice-president; Geo. A. Eaub, cashier.

This bank has one of the best locations in the city at the northeast comer of Fourth and Broadway, and is on the road to increased prosperity, its deposits now amounting to $650,000.

This company was organized under the statutes of Indiana, June 2, 1902, and secured a room in the Elliott block, southwest corner of Pearl and Broadway. The bank started with a paid up capital of $100,000, and its deposits have increased to $633,000. The oflScers are : James D. McNitt, president; M. A. Jordan, vice-president; F. H. Wipperman, secretary and treasurer. The directors are : Elmore Uhl, Geo. W. Funk, Max Fisher, A. P. Jenks, Geo. W. Seybold, F. B. Wilkinson, J. M. Douglass and John C. Nelson. There is a savings department connected with the bank and not like national banks, the Trust Company, make longer loans and on mortgage security and these features make this bank quite popular.

This private banking company was opened by A. T. Bowen, formerly of Delphi, Indiana; but now residing in New York, December 13, 1912, in a frame building at 411 Market street, and is capitalized at $10,000. They do a loan and brokerage business. H. E. Hankee is the cashier.

Logansport's six banking institutions have a combined paid up capital stock of $760,000. Their deposits amount to $4,500,000. Add to these figures the postal savings deposits and private brokerage concerns, also the deposits in the banks at Royal Center, Walton, Galveston, Twelve Mile and Lucerne, and some idea can be formed of the accumulated wealth and the volume of business in Cass county. All this is done with no fear of loss. You can deposit your money in the bank or carry a bank note to your country home with almost absolute certainty that your deposit slip or your bank note will be honored next month or next year, as may suit your pleasure. You can carry money or check in your pocket to any comer of (^aaa county, yea to any part of the world, and purchase whatever you desire and pay for it on the spot. Contrast these conditions with those in Logansport in 1838, which Mr. E. S. Rice describes in his paper read before the Cass County Historicid Society in 1907: '*We had no bank and it was difficult to secure exchange. There was very little currency in circulation and this was sent out by eastern banks to get as far away as possible. Our small silver was largely foreign coin. Copper cents were not in use at all. Nothing was sold for less than a fip, which was six and one-quarter cents, and a bit twelve and one-half cents. Trade with the farmers was largely through the medium of farm produce or coon skins, or other furs. Every merchant was obliged to take a monthly bank note detector and a coin chart, and keep them hanging very handy for reference. In addition to this there were two kinds of canal scrip, * White Dog* and 'Blue Pup,' redeemable in canal lauds."

To further show the financial conditions in early times we copy an advertisement from the Logansport Canal Telegraph, dated February 26, 1842, to-wit: