BANKS AND BANKING
(Re: History of DeKalb County, Indiana; B. F. Bowen & Company, Inc., Indianapolis, 1915, pages 302 to 308
Submitted by: Arlene Goodwin, firstname.lastname@example.org
Although DeKalb county has not been entirely free from banking troubles during her seventy-five years or more of life, no lasting weakness had been imposed upon the county by the poor banking, such as will be found in some territories. What misfortunes there were may be traced to the fact that the old-time banking system allowed anyone, irrespective of nationality or occupation, to start a bank, in consideration that he won the confidence of the people and could persuade them to trust him with their funds. No strict qualifications were necessary, such as exist today, and no examinations of the applicant for banking privileges were necessary. Under such a state of affairs, it is not singular that trouble arose, and it did arise, in some sources. This was aptly called the free-for-all banking system. The issue of paper currency for circulation as money was free and open, Any banker had the privilege of issuing such currency, which would be as valuable as his bank was well known. Bills of practically all banks would be current somewhere, at some price, but largely they were taken only at a discount, the discount depending, as mentioned before, upon the general reputation of the bank. Thus, many undeserving institutions would issue a quantity of currency, which would float at a fluctuation valuation, and then die in the hands of the holders, to the loss of everybody except the original issuers, who obtained face value when they issued the same. Again, strong institutions would issue currency in their own locality, which would be accepted readily by the people at face value, but in adjacent communities would be subjected to a slight discount, this discount increasing the farther away from home currency traveled. This inconvenience of this is obvious.
Counterfeiters were also plentiful in the early day. It was an easy matter to counterfeit, apparently, and a much harder matter to distinguished between good and bad money. A man one thousand miles from home would stand small chance of being able to pass a bill upon his home bank, no matter how stanch and reliable they knew the institution to be. The paper money was redeemable only over the counter of the issuing bank.
The first steps taken to remedy this palpable evil was the establishment of the "state banks," in the early thirties. This was a material improvement over the "wild cat" system formerly in vogue. Of course, the system of state control and supervision was in a crude and primitive state, but it had the merit of securing reputable people as the responsible heads of these banks and branches.
FRIST BANK IN DEKALB COUNTY
In the matter of banking, the town of Waterloo became the pioneer in DeKalb county.
In May, 1873, W. C. Langan, of Lima, Ohio, became formally associated with O. T. Clark, J. I. Best, and C. A. O. McClellan, of Waterloo, for the purpose of doing a general banking business in that place, under the name of the DeKalb County Bank. On July 24th, their safe, weighing fourteen thousand pounds, arrived from the manufactory of Diebold, Kiengle & Company, of Canton, Ohio. And was placed in the office, located in the south side of what was known as the Clark building, north of the Lake Shore railroad crossing. The capital of this early bank was placed at fifty thousand dollars. Mr. Langan became the cashier and business manager of the bank, and the enterprise gave much satisfaction to the general public.
BEGINNINGS IN AUBURN
Page 303 & 304
In the beginning of the year 1874 there was no bank in Auburn, but the time had arrived when such an institution was a necessity. There were citizens who were willing and had enough capital to engage in banking, but they had no experience and, distrusting their own ability, they invited the coming of someone to take the initiative.
On March 2nd, two men names Riley and Mots, from Wabash, visited Auburn, to look over the ground preparatory to establishing a bank. The need was evident for a medium to facilitate business transactions and by secured deposits to find employment for otherwise idle currency. These men met several citizens at the Swineford House, to whom they expressed themselves well pleased with the location and their proposals met unqualified encouragement.
All seemed favorable and the front part of the Cool building was engaged for an office. It was intended to commence business within a month, with a capital of fifty thousand dollars, of which sum the people of Auburn were to have supplied two-fifths. Nothing was done and, save several futile assurances, the subject lapsed until near the close of the year, when George Hazzard, a stranger from Newcastle, this state, made his appearance, and renewing the subject of a bank, won the confidence of the people. He proposed to open a bank in Auburn with a capital of fifty thousand dollars, to which sum he asked the citizens to subscribe fifteen thousand dollars. This offer was taken, and arrangements made for a speedy organization. There was a question in the minds of the people as to whether a state or a national bank would be the best. The national bank was supposed to be the most profitable to the stockholders, but the general trend was in favor of the state institution. However, the decision was in favor of a national bank, and on December 19, 1874, the First National of Auburn, Indiana, was organized, by electing a board of directors, consisting of Nicholas Ensley, William McIntyre and Orrin C. Clark, of Auburn, and George and James Hazzard,
A small frame building on Seventh street, just west of the later Farmersí Bank building, was occupied, a strong safe was procured and put in place, and James V. Hazzard, the youngest of the brothers, was made cashier. Deposits were at once received; United States bonds were purchased and deposited in the nation treasury. Sheets of crisp, new national bank notes in denominations of fives, were received from Washington, and being signed, their issue commenced, and business opened auspiciously, the date April, 1, 1875.
This bank was afterward involved in many difficulties, and was threatened with insolvency. Faulty investments and misuse of moneys caused no end of trouble for the institution.
In 1878 it was discovered that George Hazzard, heaviest stockholder, had hypothecated his stock with other banks; drawn heavily from the bank on worthless notes, accepted by his brother, the cashier; sold the bonds of that bank and replaced them with ones drawing a lower rate of interest, and, to cap the climax, replaced the worthless notes with others of leading citizens. Seventeen out of twenty-one thousand dollars was recovered.
PRESENT DAY BANKS
In Auburn there are three banks: The Auburn State Bank, the City National Bank, and the Savings, Loan and Trust Company.
AUBURN STATE BANK
The Auburn State bank was organized in the year of 1904, with a first capital of $50,000. The present capital of the bank is $75, 000. The surplus is $12,000, and the amount of money on deposit is $450,000. In the report of the condition of the bank, published on October 21, 1913, the following resources are shown: Loans and discounts, $372,653.50; overdrafts, $610.10; other bonds and securities, $526,26; banking house, $20.000; furniture and fixtures, $3,384.90; due from banks and trust companies, $54,398.12; cash on hand, $20,760; cash items, $20; making a total of $472,352.88. Liabilities, besides capital stock and surplus already mentioned, were: Undivided profits, 663.37; exchange, discounts and interest, $2,053.97; demand deposits, $169,464.24; demand certificates, $213.671,30; making a total of liabilities, same as resources.
The present officers of the Auburn State bank are: President J. Schloss; vice-president, I. D. Straus; cashier, C. B. Weaver.
CITY NATIONAL BANK
The City National Bank of Auburn was organized in 1902. F. M. Hines is president; Charles M. Brown, vice-president; Willis Rhoads, cashier; F. W. Knott, assistant cashier. The capital stock in $50,000; the surplus, $20,000, and the deposits total $325,000.
SAVINGS, LOAN AND TRUST COMPANY
The Savings, Loan and Trust Company of Auburn was organized in the year 1903. The present capital if $50,000; the surplus is $10,000; and the amount of deposits in $260,000. P. D. West is president; W. M. Swaysgood, vice-president; W. C. Henderson, cashier.
GARRETT STATE BANK
Pages 305 & 306
The Garrett State Bank is located at Garrett, Keyser township, DeKalb county, Indiana. This bank was originally named the Garrett Bank Company. The first bank was organized on January 3, 1893, with a capital of $25,000. In 1907 the capital stock was increased $35,000 and a surplus of $15,000 was created. The late H. N. Coffinberry and the Kniselys of Butler, this county, started the bank and Coffinberry was the first president. Thomas Mitchell was the first cashier. He was succeeded in a couple of years by Charles W. Camp, and the latter has been actively connected with the institution ever since.
The new charter of the bank, wherein the name was changed to the Garrett State bank, was issued on November 25, 1912. This reorganization was necessary on account of a provision of the constitution of the state of Indiana that the charters of banking corporations shall expire in twenty years from the date they are issued.
The present capital is $50,000; the surplus, $8,750; and there is on deposit in the bank, $265,000. The present officers are as follows: President, H. W. Mountz; vice-president, J. Singler; cashier; H. M. Brown; assistant cashier, H. W. Wert.
GARRETT SAVINGS, LOAN AND TRUST COMPANY
This bank is located at Garrett, this county, and was organized in November of the year 1908. Monte L. Green and J. N. Ritter were then responsible for the establishment of the institution, and their first capital consisted of $25,000. The charter is dated November 8, 1908. The present capital totals $40,000; the surplus, $3,000; and the amount of deposits, $60,000. Monte L. Green is president; J. N. Ritter is first vice-president; J. A. Clevenger is second vice-president; and Laura A Shutt is secretary. The resources and liabilities each, according to the sworn statement issued October 31, 1913, equals $101,842.58. The bank is a four per cent bank, and is a depository for the United States postal savings, Garrett schools, city of Garrett, town of Altona, Altona schools, Keyser township, and DeKalb county treasurer. The bank writes insurance of all kinds, rents and sells property, makes loans on collateral and mortgage, issues money drafts on New York and Chicago, sells high grade bonds, acts as executor, administrator, guardian, etc., and rents safety deposit boxes in steel burglar proof vaults.
FIRST NATIONAL BANK
Page 306 & 307
This bank is located in Butler, DeKalb county, Indiana. The bank was organized in the year 1908. The present capital stock of the bank is $25,000, and the amount of deposits is $75,000. The record of the bank shows that the deposits have been more than doubled in the past two years. A beautiful bank building is at present under course of construction. The bank is now without a president, and no changes will be made until the annual meeting. E. A. Farnham is cashier and manager, and E.A. Farnham, Jr., is assistant cashier.
KNISELY BROTHRES & COMPANY STATE BANK
This banking institution is located at Butler. It was organized in the year 1882. The date of the present charter is April 1, 1907. The present corporation succeeded Knisely Brothers & Company private bank in the year of the charter date. The present capital is $60,000; the surplus, $16,000; and the amount of deposits, $263.000. T. J. Knisely is president; W. A. Mason is vice-president; O. T. Knisely is cashier, and C. R. Decker is assistant cashier. The bank erected an excellent bank building in 1903, costing when completed, $20,000. This includes a private heating plant.
The bank known as the Citizens bank is located in Waterloo, DeKalb county. This bank was organized in the early seventies, with a first capital stock of $25,000. This early date or organization marks the bank as one of the oldest, if not the oldest, in the county. The present capital amounts to $10,000. H. K. Leas is president and cashier, and Grace Wilcox is assistant cashier. The bank is not chartered. The present bank building was erected in the year 1876, at a cost of $4,500; $190,339.174 is the amount each of resources and liabilities.
THOMAS EXCHANGE BANK
This bank is located in the town of Corunna, DeKalb county, and was organized in the year 1897 by Milo J. Thomas, with a first capital of $5,00. The present capital is $10,000; the surplus is $11,000; and the amount of deposits is $63.000. Milo J. Thomas is president of the institution and cashier; M. C. Guthrie and Bertha M. Thomas are assistant cashiers. A handsome bank building was erected in 1909, which cost, complete, $1,200. The sworn statement issued October 21, 1913, places the liabilities and resources each as $94,149.39. This was divided as follows: Resources, loans, $70,480.90; cash in other banks, $18,338.63; cash on hand, $2,329.86; furniture and fixtures, $1,800; building, $1,200. Liabilities, capital, $10,000; imdivided profits, $11,089.15; deposits, $73,060.24.
ST. JOE VALLEY BANK
The St. Joe Valley bank is located at St. Joe, DeKalb county, and was organized in 1888, by J. D. Leighty, E. Case and W. C. Patterson. The institution was incorporated in the year 1913. It is a state bank. The first capital entered was for the amount of $6,000, but today the capital stock totals $25,000. There are $70,000 on deposit at this bank. The date of the charter is August 1, 1913. The present bank succeeded the St. Joe Valley private bank on the date of the above mentioned charter. E. Case is the president and W. C. Patterson, vice-president and cashier.
THE COMMERICAL BANK
The Commercial bank at Ashley was reorganized in 1910 with a capital of $25.000, the same as at present. E. F. Mortorff is president; E. F. Smith, vice-president; A. W. Gonser, cashier; G. W. Clark, assistant cashier.