1870	1932
Hams lb Butter (Best) Eggs, doz Chickens, lb Potatoes, bu. Granulated sugar, lb Java coffee, lb	18 cents 28-30 cents 26-28 cents 14-15 cents 45-50 cents 15 2/4 cents 35-36 cents	25 cents 24-27 cents 35 cents 21 cents 50-60 cents 5 cents 27-33 cents

Modifications made for current abnormal conditions, causing exceptionally low prices, must also consider the disparities in wages for the two contrasted periods. Common labor in 1870 brought one dollar a day, and only brought a dollar and one-half as late as the 'nineties, whereas it brings six dollars a day in some industrial plants today. From this high point the disordered curve drops downward to three dollars, which may be accepted as the low point, even with just allowance for the fact that unemployed men and women will work for what they can get. If one will accept three dollars as the present depth of the wage curve, and compare it with the 1870 high point of one dollar, he will find that industrial effort of today produces at least twice as much food as it did in 1870. Chickens have regrettably failed to modernize their production methods in their meat and egg department but hams, butter, sugar, coffee, tea, milk, fruits and other foods are better prepared, better preserved, more widely diversified, cleaner and better packed than ever before. And even chickens are better prepared and stored, and the quality of eggs has been immensely improved. He would be a careless observer who would say that foods and manufactured products have deteriorated since the "good old days" after a moment's comparison of old and new office buildings, automo- 830 - THIS CLEVELAND OF OURS biles, furnaces, refrigerators, stoves, lights, shoes, pens, farm implements and bath tubs. Mass methods in production and distribution have brought the changes referred to. The "Technocrats" are pointing to the unemployment dangers that such methods are causing, but it is not in the province of this article to explore that field. Historians of earlier days could dramatize their stories with the personalities of famous merchants and tales of well-known stores and places, but the chronicler of today and, more particularly, the writer of tomorrow, must summarize in numbers, because the volume of Cleveland's trade is too great to be expressed other than in statistics. For the present purpose the figures of 1929 are chosen because those of 1932, on account of business conditions, would not be an index of normal volumes. Even 1930 shows a shrinkage from the previous year; but as 1927, 1928 and the first months of 1929 were extraordinarily high points of trade volume, and 1931 and 1932 phenomenally low points, the 1929 showing should be a reasonably exact medium. The United States Census of Distribution for that year does not reflect all the business done in Cuyahoga County, but only that done in cities of 10,000 or over, which includes Cleveland and seven other cities : Lakewood, East Cleveland, Garfield Heights, Parma, Euclid, Cleveland Heights and Shaker Heights, representing an estimated population of 1,121,572. This is inclusive enough. The eight cities reported 14,148 stores with a retail busi-ness of $586,442,085. The information offered differentiates as carefully as possible between retail and wholesale operations and seeks to distinguish between the independent and the various chain or multiple stores. In Cleveland alone there were 12,609 retail stores with a total annual business of $534,240,787, a yearly payroll of $68,657,292 and the full time employment of 46,347 men and women. The reported number of employees does not include those working part time, although the payroll of part time employees is included in salaries and wages. Mer- THE CITY'S WEALTH AND POWER - 831 chandise in stock for sale at the end of 1929 showed a cost value of $61,725,705. The total of 12,609 stores included 9,582 single-store independents, 582 units of two-store multiples and 190 units of three-store multiples. There were also 983 units of local chains, 368 units of sectional chains and 803 units of national chains. Sales of these three types of chain organizations aggregated $186,873,911, or thirty-five per cent of the total retail business, while sales of the single-store independents amounted to $277,942,939, or fifty-two per cent. Leased departments reported by department stores and included in the figures submitted by them are not counted as separate establishments. Those reported independently by their proprietors are shown as separate establishments. There were twenty-four units of leased-department chains in Cleveland. The food group takes the lead in this report, with the general merchandise group second and the automotive group third in order of sales. Food stores in Cleveland totaled 5,380 and reported sales of $119,147,316, or twenty-two per cent of the total retail business. Of this number 2,225 were grocery stores with sales of $63,225,690 and 1,015 meat markets with sales of $26,144,010. Fresh meat departments were operated in 876 of the grocery stores and several of the meat markets had developed a side line of groceries. Of the grocery stores, 1,395 were single-store independents reporting $17,694,459 in sales; 312 were local multi-units reporting sales of $16,- 858,121, and 517 were units of sectional or national chains with sales of $28,135,442. Many bakeries manufacturing their own products were included in the Census of Manufactures, and do not appear in this report but 264 stores selling bakery goods were reported. The food group in Cleveland made twenty-two per cent of the total retail business, while in East Cleveland it advanced to twenty-eight per cent, and in Parma to sixty-one per cent of the total. 832 - THIS CLEVELAND OF OURS The general merchandise group in Cleveland, which includes department stores, dry-goods stores, general stores and variety, "five and ten" and "a quarter to a dollar" stores, reported sales of $111,354,363 in 462 stores, employed the full time services of 11,705 men and women, and paid $15,076,953 a year in salaries and wages. The seventeen department stores reported sales of $90,818,942, while 351 dry-goods stores, thirty-three general stores and sixty-one variety, "five and ten" and "a quarter to a dollar" stores reported sales of $20,535,421. Of the variety and general stores reported, fifty-one were single-store independents with sales of $840,876, seven were local multi-units and reported sales of $297,229, and thirty-six were units of sectional and national chains and did a business of $12,726,318. Of the department stores, eight were single-store independents with sales of $28,300,322 and eight were units of multi-unit organizations with sales of $62,082,788. The additional facts were given : "The general merchandise group in Cleveland totals 21 per cent of the total retail business, while in Garfield Heights it decreases to 4 per cent, and in Parma and Shaker Heights the reports show no general merchandise group. "The automotive group in Cleveland, with 1,509 establishments, does a business of $86,262,520, or 16 per cent of the total retail business. Sales in 120 motor vehicle establishments amount to $46,779,122 and sales in 287 accessory, tire, and battery stores, to $8,135,079. A total of 768 filling stations is reported with aggregate sales of $24,096,615 in gas, oil, tires, and other accessories. This merchandise is also sold in 279 garages whose total business of $4,587,134 includes receipts from repairs and storage as well as from sales. Of the filling stations reported, 192 are single-station independents with sales of $5,306,099, and 236 are local multi-units with sales of $9,346,350, while 340 are units of sectional and national chains with sales of $9,444,166. "The automotive group in Cleveland totals 16 per cent of the total retail business, while in East Cleveland it advances THE CITY'S WEALTH AND POWER - 833 to 41 per cent, and in Garfield Heights decreases to 12 per cent of the total retail business. "The apparel group of 1,145 stores in Cleveland reports a business of $54,016,245, employs 4,407 full-time people, and pays $7,240,952 in salaries and wages annually. This group consists of 261 men's stores, 152 women's specialty shops, 61 clothing stores, 97 millinery shops, 335 shoe stores, 24 fur shops, 27 hosiery shops, and 188 other apparel and accessory shops. Of the women's specialty shops reported, 93 are single-store independents with sales of $6,981,192 ; 38 are local multi-units with sales of $1,732,905, and 21 are units of sectional and national chains with sales of $8,405,101. Of the shoe stores reported, 169 are single-store independents with sales of $2,958,639 ; 111 are local multi-units with sales of $3,940,868, and 55 are units of sectional and national chains doing a business of $4,307,278. "The apparel group in Cleveland totals 10 per cent of the total retail business, in Cleveland Heights and Lakewood the apparel group decreases to 3 per cent, and in Shaker Heights no apparel stores are reported in the 1929 reports. "The furniture and household group in Cleveland totals 323 stores, employs 2,997 full-time people, and does a busi-ness of $33,608,878. Furniture stores sell $23,880,523 of this total in 181 stores, while 58 household appliance stores account for $4,066,592 of the balance. "The 1,073 restaurants and other eating places in Cleveland employ 5,959 full-time people and do a business of $27,084,127. This volume of business is exclusive of meals served in dining rooms operated by hotels and boarding houses and of lunches served in drug stores. The total pay roll of the restaurants and eating places is $5,795,851. "The lumber and building group in Cleveland with 636 stores and yards, reports 1,973 full-time employees and a total retail business of $25,492,964. This group includes lumberyards, together with hardware, electrical, heating and plumbing and paint and glass stores. Planing mills and similar establishments which manufacture building ma- 834 - THIS CLEVELAND OF OURS terials are included in the Census of Manufacturers and do not appear in this report. "Other large business classifications shown in detail in this report are drug stores, coal, wood, and ice establishments, jewelry stores, office, school, and store supplies and equipment stores, and radio and music stores. "This report is a comprehensive picture of the retail business in Cleveland, and is part of the first basic nationwide Census of Distribution compiled by the Bureau of the Census." The volume of business done by the 961 wholesalers proper located in the city of Cleveland amounted, in the period considered, to $424,429,383. These wholesalers employed 14,238 men and women, paid them $27,779,136 and carried a stock at the end of the year whose cost value was $35,693,038. In addition to wholesalers proper, there were manufacturers' sales branches and bulk tank stations in the petroleum industry operating somewhat like wholesalers. There were large numbers of what may be termed "functional middlemen," such as brokers and selling agents. The total volume of business transacted by all wholesale establishments in Greater Cleveland amounted to $974,474,391. This volume was reported by 1,774 concerns. "The wholesale trade reported does not include sales by Cleveland manufacturers that were made direct from their plant locations, nor does it include wholesale sales made by retailers. On the other hand, the total volume of wholesale business includes whatever retail business was done by any of the 1,774 wholesale establishments. "The 1,774 establishments employed 21,746 men and women and paid them $45,546,307 in salaries and wages. It is impossible, however, to compute the average salaries, and wages per employee, since it is not known for what length of time the 21,746 persons were employed during the year 1929. However, the figures cover establishments that came into ex-istence during the year, as well as a number of establishments THE CITY'S WEALTH AND POWER - 835 that ceased operations prior to December 31, 1929. The stocks on hand at the end of 1929 showed an approximate cost value of $48,817,826. "The metals and minerals group (except iron and steel scrap and other waste materials) accounted for the largest volume of business at wholesale, amounting to 27.38 per cent of the total for all groups. This was followed in order by the food and tobacco products group, the hardware, electrical, plumbing, and sporting goods group, the machinery equipment and supplies (except electrical) group, and the automotive group. The total for all five groups represents 77.55 per cent, or more than three-fourths of the entire volume. "When analyzed by kind of business, the arrangement in order of their importance from the standpoint of volume, is as follows : Metals and metal work, groceries, coal and coke, electrical goods, manufacturing, mining and drilling machinery, equipment, and supplies, fruits and vegetables (fresh), automobiles and other motor vehicles, lumber and building materials (other than metal) , hardware, and chemicals and paints. "It is interesting to note that the largest sales per establishment were reported by chain store warehouses, with an average of $3,744,379. Mail-order wholesalers ranked sec-ond, with average sales per establishment of $1,356,344. Brokers ranked third with $1,206,478 per establishment, and manufacturers' sales branches, selling agents, bulk tank stations, and commission merchants followed in the order named. "For every $100 of net sales $4.70 was paid in salaries and wages when all types of wholesale distributors are considered together. For wholesalers proper, however, the percentage of net sales paid in salaries and wages was 6.5, ranging from 2.1 per cent for commission merchants to as high as 14.1 per cent for wagon distributors. Straight wholesale merchants, or what may be termed "full-service wholesalers," spent 6.7 per cent of the net sales in salaries and wages. "The 961 wholesalers proper accounted for 43.53 per cent of the total volume of business, 65.47 per cent of all employees 836 - THIS CLEVELAND OF OURS engaged in wholesale trade, and carried 73.11 per cent of the total inventories of all types of wholesale distributors." Manuel Halle saw all those great totals mount up, almost from zero. They are the product of a period of time measured by one man's life. CHAMBER OF COMMERCE The Chamber of Commerce of Cleveland, organized as the Board of Trade, July Seventh, 1848, typifies and expresses the city's business and employing personnel—its bourgeoisie —in the bulk of its membership. It was formed by merchants. The records of the first organization were destroyed by fire, but the purposes were similar to those set forth in the new charter of April, 1866: "To promote integrity and good faith, just and equitable principles of business ; discover and correct abuses; establish and maintain uniformity in commercial usages ; acquire, preserve and disseminate valuable business statistics and information ; prevent or adjust controversies and misunderstandings which may arise between persons engaged in trade ; and generally to foster, protect and advance the commercial, mercantile and manufacturing interests of the city." This was just the sort of structure, and expressed in the language, that may be expected of the American business man when he surrounds himself with the transient but idealistic atmosphere of "associations" and "conventions." The Board met daily in the Atwater Block and there were twenty members. The signers of the charter indicate, to anyone familiar with his Cleveland, the social stratum to which the members belonged : Philo Chamberlain, R. T. Lyon, J. T. Sage, A. Hughes, C. W. Coe, H. S. Davis, J. E. White, J. H. Clark, S. W. Porter, H. B. Woodward, A. V. Cannon, E. D. Childs, W. F. Otis, M. B. Clark, W. Murray, S. F. Lester, A. Quinn, George W. Gardner, E. C. Hardy and George Sinclair. The Chamber's report of November, 1894, says that the THE CITY'S WEALTH AND POWER - 837 rules were "suited particularly to an organization where dealing in grain, provisions, etc., was carried on; they were not appropriate for a deliberative body, representing equally every trade interest and embracing within its membership a large number of professional men." The report of 1892 says : "A committee on promotion of industry began the collection of what is known as the business men's fund, and the organi-zation of a movement within the Board of Trade made up of subscribers to this fund." A new committee was formed to conduct the industrial work composed of Wilson M. Day, chairman ; L. E. Holden, vice chairman ; George T. McIntosh, secretary; H. R. Groff, treasurer; A. J. Wright, Michael Backus, Myron T. Herrick, T. C. Burnett, L. W. Bingham, L. McBride, D. A. Dangler, George Deming, J. B. Perkins, S. M. Strong and W. J. Morgan. Ryerson Ritchie was named "Superintendent of Industry." In 1893 the name was changed to The Chamber of Commerce. New rooms were opened in the Arcade. All the elements were assembled for the making of a standardized luncheon club, with cheer-up songs, speeches, flag-waving and back-slapping. Instead, out of those elements came not only a voice, but an arm and even a fist. The Chamber smashed the molds of its pattern. Note these successive accomplishments : New armory on Bank Street; new Federal Building; bet-terment of freight conditions; United States Hydrographic Office; fund for relief of depression sufferers; harbor im-provements ; new building code to alleviate tenement evils; new sanitary code; playgrounds; medical inspection of school children ; pure food laws; smoke elimination; city beautifica-tion, the Group Plan ; co-ordination of charities. The complete list of the Chamber's deeds, filling many pages, would repeat over and over the motif so plain in the above brief summary, namely, that the major activity of this body has become the championship of the poor man's cause, and not the advancement of the fortunes of the business man. This characterization of the Cleveland Chamber of Commerce is not heard on the streets or in the halls of the city. Cham- 838 - THIS CLEVELAND OF OURS ber officials do not themselves seem aware of the direction its purposes have taken. Only a general survey of its reports reveals the unmistakable truth. All pro-community action centers, first or last, in the Chamber. In the World war, the Mayor's War Council, which "ran" the war as far as Cleveland's participation was concerned, was as much a Chamber of Commerce committee as if it had been selected by that group. Community Fund meetings were always held in the Chamber of Commerce Building, next to the Society for Savings Bank on the Square, until the Chamber moved into the Terminal Building in 1928. Citizens unconsciously think of the Chamber of Commerce when they think of fund-raising. The great plants of the Geometric Stamping Company and the Chase Brass Com-pany, among many others, were brought to the Cleveland district by the Chamber, through its Industrial Commission and its head, Earle Martin, now editor of the News. It fought for Home Rule for cities in 1913, not hesitating to enter the mine-sown fields of politics when the civic good was involved. Its voice is not partisan, politically, but dares to speak in local, state or national affairs on occasion. Honest men with a sense of humor are inclined to refer to their city as a vehicle for money-making, first and fore-most, and they laugh at themselves as a reflection of that spirit. But now and then comes a Red Cross drive, a crippled children's aid, an "Orphans' Day" or a Community Fund campaign. The onlooker, removed from the heat of the action, looks down and sees that the real Spirit of the City is something which is lovely and deep, but mention of which would make the citizen shame-faced and uncomfortable. He would rather laugh and try to be cynical about such things—including his Chamber of Commerce.—W. C. M. CHAPTER VII BANKS AND BANKERS A consultant who has been too long in the banking business to be reverent about the matter says: "The first bank was started in Cleveland when the first fellow asked a friend to lend him a dollar until next Tuesday. Now, if the capitalist said yes, a bank was established, but not a banker. On the other hand, if he said no, a banker was established, but no bank. The first trust company came when someone asked a friend to hold his coat while he fought. You'll have to go a long way back for the records, because these operations begin early in the history of any community." As a matter of fact this authority, sound though he may be in his theories as to the prime functions of banks and trust companies, must see his cynicism contradicted by the records of banks and bankers of Ohio and Cleveland. Much warmer tones appear in the picture than are popularly seen. A fair but careful examination of the history of banks here will dissipate the vision of side-burns, flat-topped derbies and glassy eyes and substitute one of smooth-shaven faces (with a pardonable predominance of beards and mustaches in the earlier periods) , uncovered heads and keen but, yes, sympathetic eyes. The uncovered heads should be especially remarked because, as shall appear, they portray a very recent phase of the banking business, a phase which has produced the greatest progress. The story of the first half-century of Ohio and Cleveland banking is told elsewhere in this work, but part of it should be reviewed here as a background by means of which a - 839 - 840 - THIS CLEVELAND OF OURS clearer understanding may be obtained of those causes which wrought the great changes of the following century. The very first bank started in Ohio contradicts all the traditions. This was the Miami Exporting Company, which opened its doors at Chillicothe in April of 1803, only five months after Ohio had been admitted into the Union, "its main purpose being to facilitate trade, then suffering under a great depression," and its secondary purpose being to receive deposits and lend money for profit. It anticipated, in one respect, the need recognized by the Federal Reserve Act of 111 years later, since it sought to stabilize commodity prices and make the commodities themselves serve as a medium of exchange. Such service was much needed in those days when currency, issued by state banks without Federal control, fluctuated in value from state to state and even from village to village. The bank was capitalized for $500,000, a vast sum then, but only one-twentieth of this capital was represented by cash. Shares were $100 each, payable the first year $5 in cash and $45 in produce and manufactured articles acceptable to the directors, while the remaining $50 was payable the second year, entirely in produce. This bank lasted for forty years. It issued bills and redeemed them in notes of other banks. It was not until 1816, when a banking law was passed incorporating twelve new banks in Ohio, that the first bank was opened in Cleveland. This was the Commercial Bank of Lake Erie, and the law which authorized it started a battle between state and banks which lasted nearly half a century. The banks were required to donate to the state one share of stock out of every twenty-five issued. In 1825 the law was amended to a tax of four per cent on dividends. In 1831 the tax was increased to five per cent. Legislators seemed never to settle down on an enduring bank policy and the banks considered the attitude of the state to be hostile. The net result was loss of popular confidence, faulty methods and insecurity, with short lives for the banks and far from merry ones for the bankers. Worse conditions came in the decade before the Civil THE CITY'S WEALTH AND POWER - 841 war after "free banking" was permitted. Bank plates were stolen and notes counterfeited to the extent of a million dol-lars in one year. In 1852 a new state constitution wiped out free banking and precipitated a war that actually resulted in violence. Bank taxes were trebled, by a forced construction of the law, and sheriffs were authorized to break into the vaults and collect taxes by force. This "crow-bar legislation" drove capital out of the state and flooded Ohio with notes of questionable value from the "free" banks of neighboring states. This was the period of "wild cat," "red dog" and "coon box" currency, when bank notes were worth whatever you could get for them. Brokers travelled from state to state and from town to town, carrying bags full of paper money, taking advantage of the various rates of exchange and making a profit everywhere. In 1855 Cleveland had six banks, representing $650,000 of capital. A magazine commented that for fifty years Ohio had pursued the most vacillating policy toward banks of any state, and that its legislation had been "crude, misguided and wilful." Banking funds available were inadequate to convert crops into money and there was no cooperation among the four types of banks : the banks as first founded, the branches of the state banks, independent banks and "free" banks. At the outbreak of the Civil war, a federal examination declared that ten banks in Ohio were "broken ;" twenty-three "closed" and thirty-one "worthless." This brief resume of the situation before the Civil war will reflect credit, in due course, upon Cleveland bankers. Their infancy was nourished upon this sort of sour gruel, and their dispositions in maturity might fairly have been expected to show evidences accordingly. But better fare worked wonders. On February 25, 1863, there was established the National Banking Act, which substituted currency of the general government for that which had been issued by state banks. With some amendments this act is the foundation of the present national banking system. As originally drawn, the act authorized five men or more to start a national bank on de- 842 - THIS CLEVELAND OF OURS posit of bonds in the United States Treasury in an amount not less than $50,000, for which they were to receive ninety per cent in United States bank notes. Here was the birth of a new era, and it was not without travail. The banks of the country held over one-fifth of the funded debt of the United States, which means that they had lent to the government, for war purposes, more than their entire aggregate capital. The banks of Ohio bore their proportionate share of this burden, evidencing that their faith in the Federal government had not been weakened by their experiences with their own state. In the flurry of re-adjustment, the Bank of the State of Ohio, with 41 branches, closed its doors, its circulation of $8,000,000 in 1862 reduced to $692,000 in 1866, much of the shrinkage due to lost notes. Cleveland banks went through this stage notably well. The first bank in Cleveland to take advantage of the new National Bank Act was the First National, the first in Ohio, as its title implies, and seventh in the country. It was in-corporated in 1863 for $200,000, with William Hewitt, Philo Scovil, George Worthington, A. K. Spencer and Edward Bingham as officers. It took over the business of the private banking house of S. W. Chittenden and Company. Its presi-dents have been Worthington, Hewitt and Scovil, mentioned above, General James Barnett and John Sherwin. It was the nucleus about which has been gathered one of the greatest financial powers in the country today. But first place, as reckoned in years, properly belongs to the National City Bank; for this institution dates back to May 17, 1845, when a company known as the Firemen's Insurance Company was chartered with banking powers for $200,000, reduced to $150,000 in 1856. Reuben Sheldon was president and T. C. Severance cashier. When its charter expired on February 11, 1865, it opened the next day as the National City Bank. Under George Mygatt, Lemuel Wick, W. P. Southworth, John F. Whitelaw, T. W. Burnham and the late H. V. Schulters, this institution has successfully car-ried on down to the present day. Another of the old banks which lived through the read- THE CITY'S WEALTH AND POWER - 843 justment period of the sixties and left its impress on the situation of today was the Merchants' Bank. Its charter was granted in 1845 and, when this expired in 1865, the name was changed to the Merchants National, the old officers being retained. The same course was followed as the charter again expired in 1884, when the title of Mercantile National was taken. The latter charter expired in 1905. Presidents of this bank have been P. M. Weddell, S. J. Andrews, T. M. Kelly and Truman P. Handy. At least one more of these aged banks, whose origin has been told in a previous chapter, must be traced now in greater detail because of the unusual circumstances surrounding its birth and growth. This is the Society for Savings. The idea of a mutual savings society was not original with S. H. Mather and Charles J. Woolson, but these two heard of a similar operation in New England and decided to apply it in Cleveland. They procured the passage of an act by the state on March 22, 1849, authorizing a "benevolent institution, without capital, managed by trustees without salary, in the interest of depositors only, to whom profits are paid or to whose benefit they are accumulated." The Society was organized June 18, 1849, with John W. Allen, president; Reuben Hitchcock, Dudley Baldwin and F. W. Bingham, vice presidents ; S. H. Mather, secretary; J. F. Taintor, treasurer. Mather had a room twenty feet square in the rear of the Merchants Bank, at Superior and old Water streets, which room was occupied at the same time by the Society, an insurance company and Mather himself. The rent was $400 a year, of which the Society agreed to pay $75. From the first report of the treasurer it appears that the expenses for the first six months were $3, for a sign, and for the first year the total expenses were $46. The bank was open only for two hours on Wednesday and Saturday of each week, because Treasurer Taintor was teller of the Merchants Bank and had to attend to his salaried job. Dan P. Eells was employed as bookkeeper and was paid by Taintor out of the latter's personal funds. There was no provision for salaries until July 1, 1850, when the trustees adopted the following resolution : 844 - THIS CLEVELAND OF OURS "That the secretary and treasurer be authorized to receive for their services from this time all surplus earnings, after paying dividends and expenses, not to exceed $100." The sum actually paid was $50. This was gradually increased until it amounted to $170 for the secretary in 1852, and $130 for the treasurer. The first deposit was $10, by Mrs. D. E. Bond. The Society continued to occupy its small quarters for eight years, although in two and one-half years its deposits reached $80,000, with 484 depositors. Hope ran high and William A. Otis, president, believed "the time would come when the deposits would amount to $300,000." Eight years later the deposits totaled $490,376.23, and in another decade they were $3,524,908.41. For eight years of the early period, Mather came to the office at four o'clock every day, when the Merchants Bank closed, and put all the assets, including cash on hand, into a tin box eighteen inches long, which he deposited in the bank vault. When the Weddell House was completed in 1857, the Society moved into rooms provided for it there and bought a burglar-proof vault, enclosed in brick. Presidents John W. Allen, F. W. Bingham, W. A. Otis, Sherlock J. Andrews, Samuel Williamson, S. H. Mather, Albert L. Withington, Myron T. Herrick and John H. Dexter have led the Society to its present position. A new phase of banking came into existence on February 21, 1867, when the state authorized building and loan associations to lend money on homes, amending the law May 9, 1868, so that these associations could receive deposits and pay interest on them. The Cleveland Land and Building Loan Association took advantage of the new law March 1, 1867, and became the first of the building loan companies which have played so prominent a part in the city's growth. The Citizens Savings and Loan Association began business August 1, 1868, with J. H. Wade as president, succeeded by H. B. Payne, W. S. Jones, Frederick W. Pelton and Joseph R. Nutt. This bank was another very important link in the chain which was welded together later to form the present financial structure. THE CITY'S WEALTH AND POWER - 845 Trust companies came into the Cleveland market in February, 1883, when the Savings and Trust Company opened at 44 Euclid Avenue with a capital of $750,000, half paid in and the other half paid from earnings, no further assessment on stock being necessary. C. G. King was the first president. But the laws of the state were not favorable to the organization of trust companies here. Cleveland was classified as a city of the second grade, and it was necessary that this barrier be removed in order that essentials of trust operation could be made available to the city. The Guardian Trust Company carried the fight almost single-handed, to a triumphant conclusion. This was in 1894, the year in which the bank was organized. All the expenses of the undertaking were borne by the Guardian, and to it must be given credit for the pioneering courage which made modern trust company operation possible. J. F. Whitelaw was the first president and bore the brunt of the struggle. He was succeeded in 1898 by H. P. McIntosh. J. Arthur House is now president. If one were to attempt to portray the history of Cleveland banking in graphic form, he might well make a drawing of a boy's peg-top. The point of the peg, at the bottom would represent the zero days before 1816, when the first bank opened. The body of the top builds out slowly in the stormy days of the following. half-century, and even as late as 1883 we find only eight banks, not including four private ones. But from there on the growth, numerically, is rapid. In 1895 there were 11 national banks and 29 savings and trust companies, a total of 40, and the advent of the twentieth century shows 65. Now the top, which has been ever widening, begins to narrow, slowly at first, then accelerating until its circumference curves tend to horizontal lines as they rush together at the top. In 1911 there were 40 banks; in 1912, 35; in 1917, 32; in 1932, only 12. That picture, however, must be supplemented, because it represents only the number of independent organizations. Growth in resources and in buildings in which the banking business is conducted could be shown by drawing a cone, with its base at the top, where there would be 117 banking build-ings and these enormous totals : 846 - THIS CLEVELAND OF OURS Capital, $53,362,900; surplus, $56,417,000; deposits, $781,653,000; resources, $980,957,900. The figures are of September, 1932. Of greater significance is the fact that, of these 117 bank buildings, two banks control 78 and another controls 18, so that three banks own 96 buildings while the nine others own but 21. About nine-elevenths of the resources of all the Cleveland banks is in the hands of five separate institutions. This summary does not include building and loan, finance and mortgage companies or the Federal Reserve Bank. What does this mean? By whom or by what cause does this trend come? When did it start? Does it bode good or ill for the banking business or the community which is served? These questions are answered by the historical facts. Certainly 1910 may be fixed as the date when the "modern age" of Cleveland banking. began. But the first indica-tions of a new era were to be seen away back in 1858, when the Cleveland Clearing House Association was formed, although the significance of that formation was probably not seen at the time. On the old Leonard Case homestead, which stood just north of the present Federal Building, was an out-building which had been preempted by the boys of the neighborhood and used as a "club," called "The Ark." Fathers of the members got into the habit of dropping around after busi-ness hours, and nine of them, who were bankers, found the time and place convenient for clearing their checks. While this was the sole function of the association, ostensibly, the meetings had other and much farther-reaching effects. They developed harmony through acquaintanceship and discussion of mutual problems and led, in 1911, to the movement for centralization of control. Also they led to the major opera-tion of removing the banker's flat-topped hat. The cashier of the earlier days had represented, to the laity, the dignity and majesty of the bank. The president shone in too fierce a light to be seen at all. Business came to the bank, and it came in humility, content to wait in the outer darkness of dingy waiting rooms upon the convenience of the THE CITY'S WEALTH AND POWER - 847 cashier. One day, in the early nineties, a man called at the Central National and was greeted by an underling who asked his name. The caller's card showed that he was vice president of one of the nation's largest railroads. "Oh !" said the underling. "Colonel Sullivan himself will see YOU." Colonel J. J. Sullivan, president of the bank, came forth from his sanctum not for that time alone, but for all time, and set the scenery in his place as it is in all banks today. For you can walk into any of them now and march right up to the president, seated in an open room, hat off, hand out, abundantly surrounded by vice presidents, all visible, affable, approachable. The Western Reserve Trust Company took another daring step a little later and smashed the old taboo against bank advertising. The ethics of the lawyer and the doctor had prevailed hitherto, and it took a great deal of courage to defy such long established usage. Some feared that the public would hail a bank advertisement for deposits as a confession that it was in straits, but the Western Reserve went ahead and marked another milestone. E. G. Tillotson, secretary of the Cleveland Trust, joined the radicals when he published a statement of his bank's condition that the man on the street could actually understand. It was quite a while before banks girded up their courage to the point of sending out salesmen to ring doorbells and solicit deposits ; but they did it, and this practice is not the least of the factors which account for our present condition of centralization. The Clearing House Association anticipated the luncheon clubs where men call each other by their first names, develop community of purpose and at the same time learn that there is a lot of able competition in the world which must be met by aggression. The Clearing House did much more. Francis Coates, Jr., who had been a special examiner for the United States government, was brought here to establish a department of examination under the Clearing House. It was felt that the periodical examinations by State and Fed-eral authorities were not sufficient. The task was too great to be undertaken with the facilities at hand. 848 - THIS CLEVELAND OF OURS The primary object of Clearing House examinations is to secure community safety by demonstrating and insuring the safety and solvency of each bank in the Clearing House community. The failure of one weak bank would seriously involve a whole group of strong banks. The state authorities supervise state banks and trust companies and national authorities supervise national banks, but there is no central authority to safeguard all. The Clearing House examiner fills this gap by maintaining a community control whereby the condition of each bank is known to every other bank in the community and whereby each bank is, perforce, required to conform to such standards of procedure, of management and of solvency as are set by the Clearing House Association, to insure continued community safety. It has been repeatedly shown that troubles in banks—losses, failures, defalcations, etc., are attributable largely to the fact that the directors are not fully conversant with the banks' affairs. The chief strength of Clearing House examinations lies in the fact that the examiner, unlike either the Federal or State examiners, reports his findings directly to the individual directors. Such a report, to be adequate in value, often requires months of painstaking effort and is of a magnitude quite beyond the scope of governmental agents, whose sole function is to determine the solvency of banks un-der their jurisdiction. Their limitations also left, unan-swered, another problem. When John Doe asked Bank "A" for a loan of $10,000, Bank "A" was curious to know whether Doe had borrowed anything. from Bank "B," or Bank "C," and how much and how he was meeting his obligations. So Coates organized a "Bureau of Bank Credits" somewhat similar to a retail merchants' credit association ; and the idea, as well as its application, original in Cleveland, has been adopted throughout the country. Two years after the plan was set to working here, one borrower had loans from 29 Cleveland banks, all outstanding at the same time. Through the work of the Bureau the fact was disclosed, and the Bureau was helpful in untangling the threads of this dangerous condition, so that   THE CITY'S WEALTH AND POWER - 849 finally the estate of the borrower was liquidated at one million dollars, 100 cents on the dollar. No bank member of the Clearing House Association has failed, not even in the troublous days following 1929. Only one member has ever been haled before it for judgment, and that was back in the early days of 1912. One of the smaller banks was found to be impaired, but not hopelessly so. The officers and directors were in daily session and all working with might and main to straighten things out. It was the duty of the Association examiner to report the condition to the State superintendent, who would as promptly have closed the bank's doors, had not the Association members guaranteed to meet all the demands of depositors in full. This saved the bank, enabled it to re-establish itself, with the result that, in a few months, it was fully restored. It is conservative to state that Cleveland banks are safe-guarded beyond any others in the United States, because of their close affiliation through the Clearing House and the Department of Examination. It is not only close supervision that accounts for this, but numerous rules and regulations developed through the accumulated experiences of all the members. One instance will illustrate. A bank president wishes to inspect certain securities held in the vault. He writes out an order. Three officers, from three different de-partments, are needed to open the vault, for there are three combinations and each official knows but one. Each com-bination is turned by one officer in the absence of the other two. Each sees the written order and knows to whom the securities are going and for what purpose, and each sees to it that they are returned before the close of the day. Defalcation from the vaults is practically impossible. We are mainly concerned, though, with the causes which led to the centralization policy. It is not a mere coincidence that the trend in this direction began in 1910 or 1911, when the department of examination was launched. Association members were afforded a detailed view of the entire local banking picture, regarded it as a whole and formed broad, general conclusions. Consolidations were effected not, as