Howard County IN Archives History - Books .....Early Financial History 1909 ************************************************ Copyright. All rights reserved. http://www.usgwarchives.net/copyright.htm http://www.usgwarchives.net/in/infiles.htm ************************************************ File contributed for use in USGenWeb Archives by: Joy Fisher sdgenweb@yahoo.com April 3, 2006, 5:42 pm Book Title: History Of Howard County Indiana EARLY FINANCIAL HISTORY. BY MILTON GARRIGUS. Like all other states of equal age, Indiana has tinkered with many kinds of currency and learned by bitter experience. An interesting and intelligent review seems to require starting with colonial times and tracing theories, trade, banking laws and panics in nation and state to 1861. Great Britain required its American Colonies to trade exclusively with the mother country and to import manufactured articles in English ships, levied duties and required them to be paid in specie, forbade them to start banks, coin money, manufacture clothing, hats, iron or paper; to sell lands to any but British subjects, and to export only in English vessels. But the enterprising inhabitants built vessels and carried on a circuitous trade with the West Indies, thus obtaining Spanish gold and silver for use, and bartering exports for necessary supplies. This was the chief dependence of the colonies for turning their industries to account. England, in 1764, to raise revenue, laid a heavy tax on this West India trade. This led to a clandestine trade and, with other impositions, finally to the Revolutionary war. It was a very unequal struggle. Thirteen colonies with no ships or navy. A coast more than a thousand miles long to defend; not a fort or fortification; not a bank; no money or treasury; no army or military supplies, and without credit, pitted against the wealth and prestige of England, the greatest naval power of the world. And we were also handicapped by a wilderness in the rear of our scattered settlements filled with murderous savages, ever ready to burn and massacre the settlers. We had no strong central government, only a loose confederation of independent governments. Congress was nearly powerless, a sort of advisory board rather than a legislature. The states were jealous of Congress and of each other. The most necessary and excellent measures could not be enforced. In war money is indispensable. Congress issued paper money, treasury notes, continental currency, as it had no constitutional power to raise money by taxation, and had no commerce. During the first year of the war six million dollars of paper were put in circulation; in 1776, nineteen million dollars more; in 1777, thirteen million dollars more; in 1778, sixty-three million, five hundred thousand dollars; in 1779, one hundred and forty million dollars; making a total of two hundred and forty-one million dollars. To this volume was added the notes issued by the states. An inevitable increase in prices followed, with a depreciation of the value of paper money. In 1779 a dollar in paper currency was worth only twelve cents in specie, and a year later only three cents. All specie disappeared from circulation. Congress had pledged the faith of the nation to redeem this Hood of paper. It repudiated its pledge and passed a resolution to redeem all bills of credit at one-fortieth of their face value. The first parties were Whigs, who favored our independence, and the Tories, or Loyalists, who stood for British rule. In 1781 Robert Morris was by Congress made Superintendent of Finance and placed at the head of the Continental treasury. He was an opponent of paper money. He established the Bank of North America at Philadelphia with a capital of four hundred thousand dollars, which was of great service to Congress. The army was on the verge of starvation and nearly naked for lack of shoes and clothes. Nearly eight million dollars were borrowed in specie in Europe. Of this $6,352,000 was from France; $1,304,000 in Holland; $174,000 in Spain, and nearly $12,000,000 at home. Nearly $6,000,000 were collected by states, and nearly $3,000,000 miscellaneously. Altogether the war cost about $100,000,000. CONVENTION OF DELEGATES. The Confederation, without general authority and with the conflicting interests and theories of independent states, was seen to be a failure. So a convention of delegates was called to revise the Articles of Confederation. It assembled at Philadelphia, with Washington as its President. It was found to be utterly impracticable to amend them, and the delegates formed a constitution, to be in force when ratified by nine states. At once two political parties were formed. Those who favored ratification were called Federalists, those opposed, Anti-Federalists. The leaders of the Federalists were Washington, Hamilton, Madison, Franklin, Harry Lee, Randolph, John Marshall and Jay. The Anti-Federalists were led by Patrick Henry, Richard Henry Lee, Samuel Adams, Jefferson, Elbridge Gerry, George Clinton, James Monroe and George Mason. Dissensions and irreconcilable theories of government existed between these parties. Hamilton advocated a strong government, a national bank, a protective tariff—in short, a nation with one supreme head. Jefferson contended for state's rights, or state sovereignty, a tariff for revenue only, and local sovereignty, including monetary affairs. Hamilton was made Secretary of the Treasury in President Washington's Cabinet. Hamilton at once proposed that the government should assume the war debts of the states, and proceed to fund the same, and to establish the national credit. He advocated a national bank of the United States. Congress adopted his views, including a protective tariff. Daniel Webster said of Hamilton: "He smote the rock of the national resources and abundant streams of revenue burst forth. The fabled birth of Minerva from the brain of Jupiter was hardly more sudden than the financial system of the United States as it burst from the conception of Alexander Hamilton." He declared we should legislate for American interests, and so raised funds for the treasury by customs duties on imports. The national bank was established by Congress in 1791 with a capital of ten million dollars, the charter to run twenty years, and the government to own one-fifth of the stock. The conflict between the two schools, or parties, made a theoretical and practical war, which exists with some modifications to the present time. The Separatists, or State's Rights party, brought the Union to the verge of destruction by civil war. The national school which Washington and Hamilton founded has triumphed and the national principle is now supreme. A NATIONAL MINT. A national mint was established in 1792 at Philadelphia for the creation of a uniform metallic currency, which had not theretofore existed, and the lack of which had caused great inconvenience. The metallic currency in common use in the United States consisted of a variety of English, French and Spanish coins—shillings, crowns, dollars, moidores, joes, half joes, pistareens, picayunes and small Spanish coins of six and one-fourth, twelve and one-half, eighteen and three-fourths and twenty-five cents, respectively, which came handy for odd change. The paper currency consisted of thirteen kinds of notes, issued by as many different states. The system of coinage by the mint was the first monetary system of the United States. It was decimal, with the dollar as the unit. Both gold and silver were legal tender. The standard was double. The gold dollar contained 24.75 grains of pure gold, stamped in pieces of ten dollars, five dollars and two and one-half dollars, denominated, respectively, eagles, half-eagles and quarter-eagles. The silver dollar contained 371.25 grains of pure silver. The ratio was 15 to 1, that is, the weight of the silver coins was fifteen times that of the corresponding gold coins of the same denominations that being the then market price, the mint price was made to correspond with it. Since that time the ratio has changed often, as the market price of the two metals shifted until the last few years. When the charter of the national bank expired, in 1811, the Virginia school of politicians prevented its renewal. The bank had been a great success, but they contended that it was unconstitutional. The want of such an institution was severely felt during the War of 1812. The excellent currency which it had supplied to the country was withdrawn and its place taken by a currency issued by state banks, which quickly sprang into existence in large numbers. From 1811 to 1816 state banks increased from eighty-eight to two hundred and forty. The flood of paper which they issued could not be redeemed in specie. There was no penalty for refusal to redeem, nor any real check to prevent the issue of bills far beyond the legal limit, and most of the banks were compelled to suspend specie payments. In April, 1816, the United States Bank was rechartered with a capital of thirty-live millions, instead of ten millions, and the government was to hold seven millions of the stock and to appoint one-fifth of the twenty-five directors thereof. The government funds were to be deposited in this bank, as they were before. The Federalists opposed rechartering the bank, while the "Anti's," then called the Republicans, heartily supported it—the two political parties having thus completely changed sides on this proposition. The bank was chartered for twenty years. The public moneys deposited in its vaults averaged six or seven millions, its circulation twelve millions and its discounts more than forty millions a year. Its annual profits were more than three millions annually. The parent bank was at Philadelphia. It had twenty-five branches and more than five hundred employes, and they disbursed the entire revenues of the nation. Its stock often sold at forty per cent, premium. In every county of the Union and in every country on the globe were its stockholders. One-fifth of the stock was owned by foreigners, and one-fourth was held by women, orphans and by trustees of charity funds. So high and unquestioned was its credit, its bank notes were good as gold in even* part of the country. A man could travel and pass these notes in London, Paris and in every place in the world without discount, and could sell them at a premium at the remotest commercial points. The state banks were forced to resume specie payments in February, 1817. The state of Maryland attempted to tax the circulation of the national bank, but the Supreme Court of the United States, in the case of McCullough vs. Maryland, in an opinion written by Chief Justice Marshall, denied the authority of a state to pass such tax laws, and upheld the constitutionality of the bank and its charter, and thus limited the authority of the states and exalted the power of the general government, greatly to the disgust of the State's Rights Republicans, who had rechartered the bank, and to the satisfaction of the Federalists, who had originally chartered a United States bank. EARLY BANKS IN INDIANA. Indiana had no distinctive currency of its own. But in 1814 the territorial legislature chartered two banking institutions, one at Vincennes, which was to have a capital stock of five hundred thousand dollars, and one at Madison, with a capital of seven hundred and fifty thousand dollars. Their bills were soon put in circulation and added to the flood of currency that had been coming into the territory from the general government. When the war with Great Britain ended, the large disbursements by the government ceased, and financial distress followed. During the war specie payments had been suspended by the banks, which had issued far more paper currency than they could redeem. The general government had disbursed in this territory a large amount, most of it in bills of Ohio banks. The constitutional convention in Indiana met and inserted a provision in the organic law for a state bank with branches, including the banks heretofore established at Vincennes and Madison, and making the bank of Vincennes the State Bank on January 1, 1817, which was by act of the state legislature, with an additional capital of one million dollars, with enlarged powers. Of the ten thousand shares of new stock, three thousand seven hundred and fifty were reserved for the state. Branches were established at Vevay, Brookville and Corydon. The bank was badly managed and for its reckless proceedings the legislature, in 1821, by suit, canceled its charter, for the reasons that it contracted debts double the amount of its deposits and issued, with a fraudulent purpose, more paper than it had the means of redeeming, and that it declared and paid large dividends to the stockholders while it was refusing to pay specie for its notes. This crash came while the state was still suffering from the great depression following the end of the war with Great Britain. Every kind of business was prostrated. It was estimated that during the years 1821, '22 and '23 at least one-fourth of the population died or removed from the state. Prior to that time the price of government land had been two dollars per acre, and Congress, thinking to stay the tide of disaster, reduced the price to one dollar and a quarter per acre, which only added to the ruin, for it reduced, in the same proportion, all the land in the state held by individuals. In 1832 the state began its system of internal improvement. It borrowed several million dollars in the East, employed large numbers of men, started another artificial era of prosperity, and speculation ran rife again. Michigan had a very liberal banking law, and her banks issued bills in large numbers, while most of those banks had nothing to redeem the notes they issued. HOW LABORERS WERE PAID. The contractors on the canals and other public works in this state secured this cheap Michigan money and used it nearly altogether in paying their laborers. Thousands of dollars of this currency were paid out weekly by the contractors, and soon nothing else was afloat in Indiana. The merchants were compelled to take it, but did so at a heavy discount, the laborers who earned it always getting the worst of the bargain. The merchants had to have it to pay their debts. Then merchants, millers and others issued bills, or "shin-plasters," only redeemable in merchandise at the store or mill of the issuer. These were of no value only in the neighborhood. Most of the millers and merchants became bankrupt, leaving thousands of dollars of their currency unredeemed. In 1834 the legislature chartered the State Bank of Indiana to run twenty-five years. It was modeled somewhat after the United States National Bank. It was a complete monopoly, for during its existence no other bank could operate in the state. It was to have a capital of one million six hundred thousand dollars in shares of fifty dollars each, and the state agreed to take one-half of the entire capital stock. The state was to borrow the sum of one million three hundred thousand dollars. Of that amount eight hundred thousand dollars were to be used to pay the state's share of the capital stock, and the remaining five hundred thousand dollars were to be loaned out at six per cent, interest to individual subscribers to the stock, to assist them in paying for the same. The bank was required to hold the dividends on this stock and pay the same to the state in discharge of the interest accruing, and to reimburse the state for the loan. The bank was not at any time to suspend specie payment. The branches were to be mutually responsible for the redemption of all bills issued, but each branch was to have its own profits. No notes of a less denomination than five dollars were to be issued. The state was to elect the president and one-half of the directors, the stockholders to elect the remaining directors. The only tax that could be levied on the bank or its stock was provided for in its charter. This tax amounted to twenty-five cents annually on each one hundred dollars of the stock, and was to be deducted from the dividends and retained in the bank. If the bank failed to make money no tax was paid! The panic of 1837 struck the country soon after the bank got into operation, and it was compelled to suspend specie payments, but its credit remained good and its bills were taken everywhere at their face value. The panic was a bad one, and business in all parts of the country was wrecked. One who swung the cradle in wheat harvest received thirty-seven and one-half cents a day, or a bushel of wheat, at his option. In 1842 the legislature ordered the bank to resume specie payment, and from that date it was ready to meet all demands for the redemption of its notes. A NATIONAL ROAD. In President Monroe's administration Congress passed a bill appropriating.the means necessary for the construction of a National Road across the Alleghanies from Cumberland to Wheeling, and the state of New York took the lead in internal improvements by constructing a splendid canal from Buffalo to Albany, a distance of three hundred and sixty-three miles, at a cost of seven and a half million dollars, taking eight years to complete it. There was a great financial crisis in 1819, which disturbed and distressed the country. In his first annual message President Jackson took strong grounds against rechartering the Bank of the United States. He thought it inexpedient and unconstitutional, and recommended that the old charter should be allowed to expire by its own limitation in 1836. The partisan elements of the country, which for some years had been whirling about in a chaotic condition, was resolved into two great factions of Whig and Democratic. The old Federalist party, under whose auspices the government was organized, had lost control of national affairs when John Adams retired from the Presidency, but it lingered along for some years. On the other side, the line of political descent had begun with the anti-Federalists, who, after opposing the national constitution and the administrative policy of Washington and Adams, became, under the lead of Jefferson, the "Republican" party, but soon exchanged that name for Democrats. The arbitrary measures of President Jackson alarmed the country and consolidated all opposition elements into a compact phalanx, known as Whigs, under the leadership of Clay and Webster. SURPLUS FUND DISTRIBUTED. The national debt having been paid, in October, 1833, President Jackson ordered the surplus accumulated fund of the United States Bank, amounting to about ten million dollars, to be distributed among thirty-five pet state banks, to be so distributed in four quarterly installments, reserving about five millions for government use; and it was so distributed between the states, i. e., the first three installments. The fourth was never distributed, as the government ran short of funds and had to issue and sell bonds to raise money to pay the expenses of the government. The new state depositories were instructed by the secretary of the treasurv to loan the money freely, and having: millions to dispose of, which was easily borrowed, speculation spread with a furore; and with a hope of getting deposits of government funds, many banks were established in the various states. In 1830 there were only three hundred and thirty state banks in the country. By 1837 they had increased to six hundred and thirty-four, and the capital had expanded from sixty-one million dollars in 1830 to nearly two hundred and ninety-one million dollars in 1837. These were all banks of issue of paper currency which, in 1837, amounted to one hundred and forty-nine million dollars. Behind this vast amount of paper money there was, in 1837, only thirty-eight million dollars of specie. The banks had loaned in proportion to their issue of paper. In 1830 their loans were two hundred million dollars, and in 1837 five hundred and twenty-five million dollars. The deposits of funds had been made among the states in proportion to their representation in Congress by President Jackson. The general idea seemed to be that the way to get rich and prosperous was for the country to establish banks, issue currency and loan money. The inflation of the currency, prices and debt-making went hand in hand. Everybody bought government land as the most promising investment, and paid for the land with bank notes. Again and again these bank notes went from the land office to the deposit banks as government funds, and were loaned out again to the speculators to buy more land. It was a perpetual circle. In 1832 the receipts from the sale of lands were two million six hundred and twenty-three thousand dollars; in 1834 they were four million eight hundred and fifty-seven thousand dollars; in 1835, fourteen million seven hundred and fifty-seven thousand dollars; and in 1836, twenty-four million eight hundred and seventy-seven thousand dollars. Importation of foreign merchandise increased in the same enormous proportions. It was a universal carnival. In this way, on January 1, 1837, the surplus for distribution to the states was thirty-seven million four hundred and sixty-eight thousand eight hundred and fifty-nine dollars. Nominally it was in the banks, but really it was in the hands of borrowers. The government took this surplus from the deposit banks to distribute it to the several states. The banks had to collect it, and a general collapse followed. Fortunes disappeared over night. The whole South was bankrupt. Tens of thousands of workmen lost their employment. Everybody was in debt. GREAT DEMAND FOR SPECIE. The President sought to stop the exchange of public lands into "inconvertible paper." He ordered that nothing but specie should be received for public lands. This order created an extraordinary demand for specie, drew it from the great centers of commerce, where it was needed to uphold the credit of the banks, and this specie circular was the last straw on the back of the banks and commerce, and under it they went down. Indiana and all the other states suffered. The bills of the State Bank were the only good paper money. The state had borrowed large sums of money in the East to carry on its schemes of internal improvement. Specie was scarce and the state full of depreciated currency. Neither the people nor the state could get money. As a measure of temporary relief the legislature, in 1839, authorized the issue of state scrip to the amount of a million and a half dollars, to bear six per cent, interest and to be receivable for taxes. This "scrip" was issued in bills of five and fifty dollars, had a dog's head engraved thereon and was printed on red paper, and was known as "Red Dog" currency. At first this scrip was well received, but as it had no redeemer in prospect it soon was worth only forty or fifty cents on the dollar. The issue of scrip by the state led to further inflation of the currency. Merchants, millers, contractors on public works and plank road companies all went into the business of making paper money. The scrip was issued in bills as low as twenty-five cents, the highest being for three dollars. It was mostly printed on blue paper and was styled "Blue Pup" to distinguish it from the "Red Dog" of the state. Business men went down in the crash, and as most of the merchants were large purchasers of farm products, and owed large sums to farmers, their failures pulled down the farmers and the court calendars were mainly taken up with mortgage foreclosures. The most active men were the sheriffs, endeavoring to find buyers for property under foreclosures. The United States constructed the National Road from Baltimore to Wheeling and a similar turnpike from Washington to Wheeling, via Cumberland; thence through Zanesville, Ohio, and Indianapolis to St. Louis. It had been agreed by the federal government that two per cent, of the proceeds of sales of land should be applied to the making of roads in Ohio, Indiana, Illinois, Missouri, Alabama and Mississippi. The Michigan road was surveyed in 1828 from New Albany to Michigan City. One mile wide along the same, of the public lands, was set aside by the government to pay the cost of making this road, and the sale was held in October, 1831. The construction was begun, under the authority of the state, in 1830, and it was cut out two hundred feet wide. Ten alternate sections of land were granted by the general government along its route for the construction of the Wabash and Erie Canal, March 20, 1827, and its construction was begun in 1832. The sale of land was held at Logansport in October, 1830. The terms of sale were one-fourth cash, the balance on seventeen years' time, with six per cent, interest. The long time granted prevented the canal commissioners from realizing much with which to then go on with the work. The Indiana legislature passed a bill February 9, 1832, pledging the faith and credit of the state to raise funds to complete the canal. A further grant of public lands was made by the government, seven miles in width, off of the west side of the Miami Reserve, to aid in the completion of the canal. This grant was made to the state. The state issued scrip, or wildcat money, on white paper, called "White Dog," from the figure and color of the paper. The state agreed to receive such paper in payment for said land, which was sold to individuals to be paid for in installments, with interest. This land was rapidly settled up. The contractors on the canal used this "White Dog" currency to pay the laborers and it was treated as legal tender all around. INDIANA NEAR BANKRUPTCY. In 1847 the state of Indiana was practically bankrupt. She had burdened herself with a large debt for the purpose of carrying out a great scheme of internal improvements, and for several years had defaulted the interest upon her bonds. By this course her credit had been destroyed and the prosperity of the state seriously checked. Most of the bonds were held in Europe and the holders were clamorous for the payment of the interest, and the state was out of funds. The legislature passed an act for the settlement of the bonds on a new basis. J. F. D. Lanier, a noted banker, was selected to proceed to Europe and lay the proposition before the bondholders. His mission was successful and the load of debt was lifted. In 1837, when the government called for the transfer of a large per cent, of the government funds, then held by the banks, to Washington. Mr. Lanier was the selected agent of the State Bank to take eighty thousand dollars in gold to Washington. He went by steamer to Wheeling, and from there across the mountains alone in a stage-coach chartered for the purpose. Under the authority of the constitution of 1852 the legislature, in 1853, passed a free bank law, and, in 1855, a charter was given to the Bank of the State of Indiana. Governor Wright vetoed both of these bills, but they were passed over his veto. The panic of 1857 occurred throughout the country. Within a very few years after this new bank law passed many banks were started in Indiana, one of which, "The Indian Reserve Bank," was located in Kokomo, at the southeast corner of the public square. David Foster was president and Karles Ashley was cashier. It was supposed to have been robbed one night, and it ceased to exist. Banks sprung up everywhere, and the state was fairly deluged with a flood of practically worthless currency issued under this general banking law. Many of them had no banking house or actual place of business. They made no pretense to being banks of deposit, their only mission being to issue and float bills. A few men would get together, purchase a few thousand dollars' worth of the depreciated bonds of some far-away municipality, deposit them with the auditor of state and receive authority to manufacture paper money. They would issue bills to an amount two or three times greater than the value of the securities deposited, put them in circulation, and these bank officers and directors would disappear, leaving the holder of the notes to mourn their disappearance. The discount of the notes changed almost daily, so that the bill worth eighty cents today might bring only sixty cents tomorrow. This money was called "Wildcat." This flood of money caused reckless speculation. Every merchant or business man had to keep for ready reference a periodical known as a "Detector and Bank Note Reporter," in which the rates of discount on the bills on the various banks were daily given. Many thousands of dollars were lost by the people who had accepted these "shin-plasters" as money. Merchants, millers and other traders issued them. The banks failed one after another, and as their notes and other worthless currency had driven all the good currency out of the state the result was very disastrous. Business was checked at once, all building stopped, new enterprises were smothered and old ones crippled. Nobody would take the "free bank" money, and as there was no other in circulation in the state, nobody could pay debts. Thus it was until the Civil war broke out and the government had to issue "greenbacks" and small paper currency for change. The people of the United States are, or should be, so happy and thankful that the country has finally escaped from the ocean of troubled finance and stands today on the solid ground—the "gold standard"—and all our currency as good as gold the world over. We are a Nation, not a Confederacy of sovereign states. The school of experience has been a costly one, and all our people should profit by it. BANKS. As stated in Mr. Garrigus' article, the Indian Reserve Bank was the first bank organized in Howard county. The exact date of its organization and the date of its closing are not known, but appear to have been in the years just previous to the breaking out of the Civil war. Rumor says that one night while one of the bank officials was asleep in the bank building, some one stole in and took fifteen thousand dollars' bank funds; that Howard county had funds on deposit there and lost. From this bank failure until the organization of the private bank of T. Jay & Company there was no bank in the county. NO BANKING FACILITIES. The bank of Thomas Jay & Company was organized early in the year 1861, and was the direct outgrowth of the coming to Kokomo of Thomas Jay, Rufus Dolman and Ithamer Russell, business men who associated themselves together as a firm for carrying on several lines of business. The town was without banking facilities and to meet this urgent need they began a private bank and continued it for several years, until after the organization of the First National Bank of Kokomo. These men contributed very largely toward the industrial development of Kokomo for many years. Thomas jay was perhaps the leading man of the firm, and was not only active in promoting the several business lines in which the firm was engaged but actively assisted in public affairs, contributing liberally of money and assisting in various ways to help Howard county do her full share in the war* of the Rebellion, and later as a member of the common council of the city of Kokomo worked for her interests. Ithamer Russell was pre-eminently the banking man of the firm; a quiet, unostentatious man, always at his post, kindly and accommodating. Rufus Dolman, not so pronounced a hustler as Mr. Jay, nor so familiar a figure in the banking houses of Kokomo, was a man in whose word and judgment the citizens of Kokomo and Howard county had great confidence. Rufe Dolman commanded the respect of the community to a marked degree. The several qualities of these men have been transmitted to their sons in marked degree. The First National Bank of Kokomo was organized in 1865. This was the first bank organized in Kokomo under the government banking laws, with which a later generation has become so familiar as to consider the system a necessity and to regard it a matter of wonder how the people had a banking system without it The charter was for twenty years, and at the expiration of the charter the stockholders, not wishing to continue the business, it went into voluntary liquidation and closed out a successful business career. This bank was located much, if not all of its time, in the southwest corner room of now the St. Francis Hotel. Mr. Russell, with his long, flowing beard, was a familiar figure at the cashier's desk. The Howard National Bank was organized in 1879 with a capital stock of one hundred thousand dollars. The most active and influential men in organizing this bank were Richard Nixon, Samuel Davis, Nathan Pickett and A. F. Armstrong. Nathan Pickett, except for a few months, in which Richard Nixon served as president, has been president since its organization. Richard Nixon, who took an active interest in its organization, except for the few months referred to above, held no other official position than that of one of its directors. Mr. Nixon was one of the county's earliest and most influential pioneers and was prominently connected with the county's commercial life, first engaging in business at New London and later in Kokomo. He also took an active interest in the churches and schools of the city and was in every way a worthy citizen. William P. Vaile was the earliest cashier. He resigned and went West and was succeeded by John A. Jay, who served in that position many years. After Mr. Jay's promotion to the vice-presidency Ernest George was chosen as cashier. The bank was located for many years in the Armstrong block, on the south side of the square. It was removed to a home of its own when the building at the northeast corner of the square was completed. The first charter expired in 1899 and was renewed, the capital stock remaining the same. In the first years of its history much of the capital stock was held abroad. This stock has since been bought by local parties and the stock is now held at home. In 1907 the surplus having increased to one hundred and fifty thousand dollars, one hundred thousand dollars of it was used in increasing the capital stock to two hundred thousand dollars. This bank is also a United States depository. CITIZENS' NATIONAL BANK. The Citizens' National Bank of Kokomo was organized October 8, 1889, with a capital stock of one hundred thousand dollars, and in December, 1907, was increased to two hundred thousand dollars. This bank is a United States depository. The organizers were Jacob R. Bruner, Richard Ruddell, George W. Landon, J. C. Blacklidge, and others. The stock is owned entirely by Kokomo parties. Handsome dividends have been paid regularly. In eighteen years the surplus had grown to one hundred and fifty thousand dollars, and on the 1st of June, 1908, after increasing the capital stock one hundred thousand dollars, there remained fifty-four thousand dollars surplus. Their bank building is at the southwest corner of Main and Mulberry streets. Richard Ruddell has been president of this bank since its organization. Mr. Ruddell had been a citizen of Kokomo and an active business man several years before becoming president of this bank. Formerly he had been a member of the Ruddell Brothers' Dry Goods Store Company at the northeast corner of the public square. The officers now are: Richard Ruddell, president; George W. Landon, vice-president; Frank McCarty, cashier; R. F. Scherer, assistant cashier. The Kokomo National Bank was organized July 15, 1902, with a capital stock of one hundred thousand dollars, divided in the beginning among about five hundred stockholders widely scattered over the city and county. This bank was promoted by George E. Bruner and John W. Barnes. George E. Bruner was the first president; John W. Barnes, cashier; and Lex J. Kirkpatrick. vice-president. January 1, 1904, E. E. Springer succeeded Bruner as president. The year before Barnes had retired as cashier and E. E. Sanders chosen as his successor. W. A. Marsh was elected cashier and became Sanders' successor March 14, 1905. The stock has been considerably consolidated but is still largely held by residents of the county. One block only is held outside of the county and but three stockholders live outside of the county. The bank is in a prosperous condition, is excellently located and is finely equipped. E. E. Springer and W. A. Marsh are president and cashier respectively. W. A. Marsh is a recent acquisition to the citizenship of the county, coming from Bluff ton in 1905. E. E. Springer has been a resident of the county since childhood. He moved to Kokomo in 1884 and engaged in the real estate business and was very successful. He has been recognized as one of the most upright and solid business men of Kokomo for years. OTHER BANKS. In 1873 the private bank of Walker, Welsh & Company was organized with a capital of thirty thousand dollars. A. B. Walker was a well-known and highly respected citizen of the county. Mr. I. N. Welsh was a business man of good reputation of Eaton, Ohio. They did a good deposit and loaning business. They were not permitted by law to issue notes. During the panic of 1873 and following years, the bank's funds became tied up in real estate in such a manner that they could not be realized upon to meet the demands of depositors and the bank made an assignment, naming J. F. Elliott as assignee in the year 1878, who settled its affairs and closed out its business. The Kokomo Trust Company was organized December 3, 1902, with a capital stock of thirty-five thousand dollars, and on April 1, 1906, was increased to fifty thousand dollars. It has a surplus fund of thirty-eight thousand four hundred and forty-two dollars after paying dividends. The departments of this company are the savings bank department, where money is received on deposit in three different ways: on certificates of deposit, on savings account and on checking account, on which interest is paid, but no commercial or active business account will be taken; second, the loan department, where money is lent on first mortgage security or good collateral, and where bonds, mortgages, and so forth, are bought and sold; third, the insurance department, where fire, accident, plate glass, employers' liability, surety bond, and so forth, are written carefully and in the best companies; fourth, the real estate department, where they buy and sell real estate on commission and where their officers may be consulted freely as to values; fifth, the trust department, which manages all kinds of business of a trust nature, such as administrator or executor of estates, guardian, trustee, receiver, commissioner, agent, and so forth, the services of which will be found much more desirable and the cost of service much more reasonable than that of an individual in this capacity; sixth, the renting department, where the company will take entire care of the renting of property, paying taxes, making repairs, and so forth, for nominal charges. The company is located on the west side of the square, opposite the courthouse. James D. Johnson is president; W. E. Blacklidge, vice-president; Fred. L. Trees, secretary-treasurer. The directors are William C. Purdum, C. A. Dolman, William H. Turner and Ed. S. Moore. The First National Bank of Russiaville was opened as a private bank in 1898 by John H. Cox, R. C. Kincaid, T. L. Harris, Sheridan, Indiana, and John H. Collett, Indianapolis, with capital of seventeen thousand dollars. It was organized as a national bank in 1900, with capital of twenty-five thousand dollars, and had lately fourteen thousand dollars surplus and undivided profits, with one hundred and two thousand dollars deposits. It owns and built its own banking house in 1900. The stock is now practically held by Russiaville citizens. R. C. Kincaid is president and H. M. Brubaker is cashier. STRONG FINANCIAL INSTITUTIONS. Kokomo and Howard county are certainly fortunate in having in their midst such carefully managed and safe financial institutions, where their citizens can deposit money and be sure that it is safe and can be had again for the asking; places where they can go when in need of money and upon giving reasonable security can be accommodated. These banks all receive deposits subject to check or certificates of deposit and issue letters of credit on foreign banks and do a general banking business, such as making loans and discounting gilt-edged paper, etc. They have passed through the periods of panic without loss to anyone. While the stress of the money famine of October, 1907, was on, the banks and trust company organized a clearing house association and issued certificates guaranteed by all. The association was protected by the deposit of gilt-edged securities from the several members of the association. The certificates, while not currency in the fullest sense, were local currency; that is, the local business concerns accepted them in payment of bills and factories used them in payment of wages and redeemed them as soon as their money was released from the large banks in Indianapolis, Chicago and New York. During this period, while many depositors were nervous to the extreme lest they should lose their earnings, the Kokomo Trust Company called three disinterested citizens of Howard county to carefully audit their books and report to the depositors the actual financial condition of the company. They did so and found, and so reported, that the surplus was as large and all the securities were gilt-edged and that the affairs of the' company were such that nothing short of a calamitous shrinkage of values would endanger the deposits of anyone. A like examination of any one of the banks would doubtless have shown a like state of affairs. It is but simple justice to say that the financial houses of Kokomo and Howard county are first class. Additional Comments: From: HISTORY OF HOWARD COUNTY INDIANA BY JACKSON MORROW, B. A. ILLUSTRATED VOL. I B. F. BOWEN & COMPANY INDIANAPOLIS, INDIANA (circa 1909) File at: http://files.usgwarchives.net/in/howard/history/1909/historyo/earlyfin11ms.txt This file has been created by a form at http://www.poppet.org/infiles/ File size: 42.1 Kb