Franklin County, Indiana - Chapter 13: Banks and Banking, 1915

Chapter 13: Banks and Banking

There were banks in Indiana Territory which had been recognized by the territorial Legislature and which were continued by the .state after it was admitted to the Union. The two banks in existence in i8l6 were at Vincennes and Madison and the first session of the Legislature ( Januarv i, 1817) made extensive changes in the charter of the Vincennes bank and provided for the division of the state into fourteen districts, with a bank for each district.

All the branch banks were to be considered dependent on the Vincennes bank and each branch was to have eleven directors chosen by the stockholders and three selected by the state. The Madison bank became one of the fourteen branches and ,of the others which were provided for. onlv three ever organized under the legislative act. These were at Brookvillc, Corydon and Vevay.

The Brookville branch, the second to be organized, started out with a capital stock of thirty-five thousand dollars, furnished by William H. Eads, Robert John and John Jacolis. This organization was effected in the summer of 1817 and a substantial bank l)uilding was at once erected in which to carry on the business. L'n fortunately, no complete records were kept of this bank and it is not known how much business it transacted or how long it was in existence. What was known as the aristocratic party of Brookville evidently controlled the policy of the bank and this may account in part for the opposition which the bank had to meet. The panic of 1810 struck this bank, as it did all other hanks of the \\"est. and started it on its downward path. In a report to the state Legislature during the session of 1821-22. the Brookville Bank is reported as having been tendered twelve thousand two hundred sixteen dollars. This was done December 22, 1821. and the supposition is that the bank accepted it from the state treasurer, D. C. Lane. As has been stated, the history of the Brookville Bank established in 1S17 is verv obscure, but it is known that it closed its career during the early part of the twenties. The building which it occupied is still standing in the town and is now used as a dwelling house.

From the closiiijj of the first hank in I5rook\ille, in the early twenties, to the estahhshment of the first hank after the adoption of the Constitution of 1851, is a period characterized l)y "wild cat" banks. During the builfling of the White Water canal throtu;h the county and during the most prosperous part of the canal ])eriorl, there were a number of such banks in the county, but little is known of their history. There was very little specie in circulation and nidst of the business done by these banks consisted of buying and selling notes and commercial paper which they felt they could handle to a good profit. They issued paper currency, known as "shinplasters." for sums ranging from six and one-fourth cents to a dollar. Canal scrip was largely used in Franklin county for nearly twenty years and the manv references to "blue dog," "blue pup" and "white dog" indicate the wide use of this peculiar canine scrip. Banking continued in a more or less haphazard fashion until 1853, when statutory provisions based upon the new Constitution provided a solid basis for conservative banking.

The Brookxille Bank, 1853-63

The new Constitution adopted in 1851 made a radical change in the banking business in Indiana, and Brookville was not slow to take advantage of the provisions governing the establishing of banks. Early in 1853 a number of the wealthy citizens of Brookville began to agitate the question of establishing a bank. By the middle of March their capital stock of Sroo,- 000 had all been subscribed, the stock being taken by the following citizens of the county : Richard Tyner, X. W. Haile, George Holland. X. D. Gallion, John W. Hitt, James H. Speer, William ^I. ^fcCarty. Abncr McCarty, Enoch McCarty and Benjamin H. Burton.

The articles of incorporation which were filed designated it as a bank of deposit as well as discount. While they began with the capital stock of $100,000, their articles of incorporation allowed them to increase it to $500,000 should the business of the town and county demand it.

Brookville National Bank, 1 865-79

The career of the Brookville Bank covered twelve years and was succeeded on Octol>er 9. 1865. by the Brookville X'ational Bank, which was organized with a capital stock of Sioo.ooo. in accordance with the narional banking act. Its first ofticers w ere a? follows : John H. Farquhar. president; John G. Adair, vice-president: John W. Hitt. cashier. On March 5,

Franklix Coun'Ty, Indiana

1879, Dr. John J^ rioodw in and Cliarles F. Goodwin became the .-,ole owners of the hank. The directors of the Ijank at the time of its voluntary liquidation were as follow: William W. Butler, John G. Adair, John Herron, William Dare, Jacob H. Masters, J(jhn K. Goodwin and Charles F. Gofxlwin. The officers of the bank were as follow: John d. /\.dair, president: W. W. Butler, vice-president: John R. Goodwin, cashier; Charles F. Goodwin, assistant cashier. These ofiicers and directors were elected January 17, 1879, and at the same time a resolution was adopted to reduce the capital stock to $50,000. However, by the first of March financial conditions were such that it was impossible for it to make satisfactory dividends on $100,000 capital stock and it was decided to go into voluntary licpiidation. The fnuihlin Democrat of March 6. i!^79. says that "It is understood that the closingup of the Brookville National Bank will open the way for a private bankin;^ company among our solid men." .\. notice in the same ])a])er the following week says that the bank is closing up its affairs and that the banking business will be continued in the same room "by John R. Goodwin & Son, under the name of The Brookville Bank." The new bank assumed all the obligations of its predecessor and o])enc(l for business sometime Itetween March 13 and 20, since on the latter date the Franklin Democrat says, "Doctor Goodwin is as well known as any man in the county; he is perfectly responsible and will conduct the business of the bank honestly. Charles F. Goodwin is popular as a bank officer and will give satisfaction in the line of his duties."

The Brookville Bank, 1879-I905

As has been stated the Brookville National Bank could not survive the hard times of the latter seventies and in 1879 went into voluntary liquidation. The former owners. Dr. John R. Goodwin and his son, Charles F., closed up the business of the defunct .National Bank in March and organized what was called the Brookville Bank, taking the name wdiich had been applied to the banking institution here that had existed during the decade following 1853. Doctor Goodwin and his son had been connected with the bank for some years previous to its dissolution in 1879, but the death of the Doctor the following year brought about a change in the management of the bank. Upon the death of Doctor Goodwin, Isaac Carter and Dora Wagoner were employed in the bank. Mr. Carter later became one of the leading lawvers of Shelbyvillc. while ^Ir. Wagoner became a successful druggist of Terre Haute. In 1881 John C. .Shirk, who had just graduated from Indiana University, became identified with the bank and on January i, 1884, became a partner in the bank.

For the next twelve years Charles F. Goodwin and John C. Shirk were the owners of the !)anl< and conducted its business in such a way as to make it a financial institution of undouhted integrity. L'pon the death of Mr. Goodwin, January 12. i8»/), .Mr. Shirk and his sister, Mrs. Charles F. Goodwin, formed a partnership and this continued until June 20, 1905, when the bank was chartered as The National Brook\ille Bank.

The National Ckookville Bank, I905-I915

The National Erookville Bank, as has been previously stated, is a successor of the Brookville Bank and be',Mn its career Saturday. July i, 1905, under a charter granted June 20, 1905. The first officers were as follow: John C. Shirk, president: John P. Goodwin, vice-president; George E. Dennett, cashier. These officers, with the addition of M. S. Goodwin and W. D. Moore, constitute the board of directors. During the ten years of the bank's existence there has been no change in the officers or board of directors.

The bank began business with a capital stock of $50,000 and continued with this amount of working capital until March 25. 191 5. At that time the bank was granted permission by the comptroller of the currencv to increase the capital stock to Si 00,000. During the spring of 19 15 the bank decided to apply for permission to do a general trust and loan business in connection with their regular banking. The last Legislature of Indiana passed an act ^vhich empowers nati(jnal banks to add the so-called trust companies' business to their present activities. Since the passage of this act the federal reserve board has received a large number of recjuests from national banks in Indiana that they be permitted to act as trustee, administrator, registrar of stocks and bonds, and. in general, to do such business as has heretofore been done only by trust companies. It was to be expected that the trust companies would register a vigorous objection to this encroachment on their business, but the federal board replies to their protest by saying that the trust companies have no right to complain, since widiin the past few years they have been doing what amounts to a regular banking business.

The National Brookville Bank applied for and has been granted permission to do a general trtist Imsiness in connection with their regular banking and are now looking forward to an increased business as result of the change. This bank is housed in its own stone and pressed-brick building which was erected in 1890-91 at a cost of $21,500. The stability of the bank is shown by the fact that its deposits now amount to more than $;30,- 000, with a surplus and undivided profits of $73,000.

Franklin Colnty National Bank

The Franklin County National Rank was organized in 1900 with the following officers: Joseph A. Fries, president; Louis Federman, vice-president; Richard S. Taylor, cashier: Frank Geis, Jr., assistant ca=hier. The original capital stock of $25,000 has been doubled in order to take care of the constantly increasing Inisiness of the hank. With rleposits of $510,000 and a surplus and undivided profits of $35,000, the bank- stands today as a good example of safe and conservative business methods.

The Franklin County National Bank has taken advantage of the act of the late Legislature which permits national banks to engage in loan and trust business. In order to add this phase of banking to its business it was necessary to obtain permission from the federal reserve board. This has been granted and the bank is now in a position to engage in a general loan and trust business. In general terms this means that the bank can now loan money on mortgage security, a privilege which has heretofore been denied to national banks.

In 191 2 the bank moved into its own beautiful three-story-building which was erected at a cost of $35,000. The Knights of Pythias built and now occupy the third story. The present officers of the bank are as follow : W. H. Senour, president ; Louis Federman, vice-president ; Richard S. Taylor, cashier; Frank Geis, Jr., assistant cashier. The officials, with the addition of John W. Brockman, constitute the board of directors.

The People's Trust Company was incorporated under the laws of Indiana, January 22, 191 5, with the capital stock of $50,000. There was such a demand for the stock on ^larch 25, 191 5, that it was soon oversubscribed and it was increased to $75,000. Within a short time this whole amount of stock was subscribed, there being one hundred seventy-four stockholders.

The officers of the bank are as follow: Caspar Ritzi. president: James B. Kidney, vice-president; George E. Mullin, secretary-cashier. The directors are Caspar Ritzi, James B. Kidney, Herman Walther, M. P. Hubbard, Frank A. Wright, Frank J. Geis, Charles A. Stinger. J. M. Hamilton and Harry M. Stoops. The bank opened for business May i, 1915, in the room formerly occupied by the Franklin County National Bank.

The Farmers And Merchants Bank

The Fanners aiu! .Merchants Fiank of Oldenhur;^ was orj^^anizerl as a private bank March 9, 1909, with a capital sttjck of $12,000. The first officers have been in active charge of the bank since its orc^anization. namely: B. J. Kessing, jjresident : F. P.. M(jornian, \ice-j)resiflent : .\. J. Ilackman, cashier. The directors include the officers and A. A. Hackman, F. J. Raver and C. L. Johnson. The bank rents the room in which it carrie.s on its business. Its last rejjort shows a surjjlus and undivided profits of S3.076.50, on its capital of $12,000.

The Laurel Bank

The Laurel Bank is the oldest bank in continuous oix-ration in Franklin county. It was organized as a private bank by W. L. Day, J. J. Reiboldt and W. O. Bowman on July i. 1893, with a capital stock of $5,000. Two years later Bowman disposed of his interests to the other two members of the company, who, in turn, continued the business in ])artnership until 1904. In that year Reiboldt acquired the sole interest in the bank and has continued as owner of the bank since that date. On July i, 1905, Mr. Reiboldt secured a state charter for his bank and during the ten years which have elapsed since it was made a state bank it has increased in usefulness in the community which it seeks to serve. As the bank has prospered it has been found necessary to double the original capital and, according- to the last statement, has a surplus and undividetl ])rofits of SG.ooo on a capital stock of $10,000.

Farmers Bank Of Metamora

The Farmers Bank of Metamora was chartered July 10. 191 o. as a private bank with the following officers: W. X. Gordon, president; J. E. Jackson, vice-president: H. R. Lennard. cashier. The bank has a capital of $10,000 and deposits of $80,000. The surplus and undivided profits of the bank for the past year were $3,000. The bank does general banking and under the efficient management of its directors it has won the confidence of the community in which it plays such a pn^minent part.