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Forced Into Liquidation —In May, 1821, the Miami Exporting Company made a public statement in the hope of satisfying the people and, notwithstanding the excellent board of directors—all men of good ability and strictly honorable—one morning a crowd gathered on upper Main Street and marched down the street toward the Miami Bank, intending to get what they could from the bank. The proposed "run on the bank" terminated rather in a mob A dray with a huge coffin, inscribed "Miami Bank No More," headed the procession down the street, the crowd increasing at every street crossing en route. When it reached Fourth Street, Mayor Isaac G. Burnet stood in front of his office, at the corner, and succeeded in dispersing the mob without violence. Thus the bank was saved from actual demolition, but it was soon forced into liquidation.
The period of liquidation, with no banks open, lasted a long time. The suspended debt of the Cincinnati office of the United States Bank amounted to $2,528,000 in 1822, when George W. Jones was made the first agent of the bank. Collections of debts proceeded—the United States Bank was forced to take over an immense amount of real estate, as it was usually the only bidder when it had been foreclosed, no one having any credit. From the autumn of 1821 until 1825 there were no banks in Cincinnati and general depression obtained everywhere.
In 1825 matters looked better and Peter Benson was sent out from Philadelphia to establish another branch of the United States Bank, of which he became cashier, and J. Reynolds, president. This institution had a capital of $1,329,000. The agency of the first branch was moved to the second floor of the bank building, and Cincinnati again had a banking institution in operation. Immigration increased rapidly, the population reaching 16,000 in 1826, a gain of 4,000 in two years.
The directors of the United States Bank in 1828 were : Bellamy Storer, William Phillips, James Gest, James Reynolds, M. M. Cassily, Henry Emerson, William Greene, William Neff, J. W. Mason, Luman Watson, John H. Groesbeck, C. W. Gazzam and Benjamin Urner.
As the city grew it felt the need of better banking facilities, so prominent citizens obtained a charter from the Legislature in the fall of 1829 for the Commercial Bank. Stock was sold and the institution was opened to the public in April, 1821, at No. 45 Main Street, with an authorized capital of $500,000. The first officers were : Robert Buchanan, president; Augustus Moore, cashier ; Robert I. Dunlap, teller ; Rowland Ellis, bookkeeper.
There had been much talk of starting a savings institution ever since 1819, but nothing was effected until March, 1831, when the Cincinnati Savings Institution was organized and incorporated at the following legislative session. The office was opened at Goodman's Exchange Office on West Third Street, where deposits were received on Mondays from
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ten to one o'clock. The president was George W. Jones and H. H. Goodman secretary. There was a board of directors, including twenty-four excellent business factors of Cincinnati.
Thus at the commencement of 1832 Cincinnati had a branch of the Bank of the United States, the State Bank and a savings institution, as well as two exchange offices—those of G. R. Gilmore & Company and Goodman's Exchange Office.
In February, 1833, the Franklin Bank was chartered with a capital of $1,000,000. John H. Groesbeck was president and Augustus Moore cashier. During the same year the old Miami Exporting Company, which had closed up in 1821, opened a new office at Main and Court streets, having an authorized capital of $600,000. J. C. Wright was president and J. C. Lamb cashier.
In February, 1834, two new banks were incorporated—the Lafayette Bank of Cincinnati and the Ohio Life Insurance and Trust Company.
The United States Bank's charter expired and a new one was not obtained. Accordingly, the offices were closed and Timothy Kirby acted as agent for the bank, combining the new agency office with the old one, which had still been managing the real estate holdings of the first branch. A few years later the affairs of this institution were entirely wound up.
Banks in 1836 —The following banks were in existence in 1836, according to a directory published that year : Ohio Life Insurance and Trust Company, Fourth and Main streets ; Commercial Bank, Main Street, between Third and Fourth streets ; Franklin Bank ($i,000,000), Main, between Third 'and Fourth streets ; Lafayette Bank, $1,000,000 capital ; Miami Exporting Company, Court and Main streets, $600,000 capital ; Cincinnati Savings Institution, No. 5 West Third Street ; Exchange Bank and Savings Institution, a private institution.
The great panic of 1837 was felt all over the country, including here in Cincinnati vicinity. But for all that, in 1838, two new banks were started in Cincinnati, the Mechanics' and Traders' Bank, Main and East Third streets, and Delafield & Burnet's Bank, both private institutions.
Banks Were Mobbed —January Jo, 1842, the Miami Exporting Company assigned. The next morning a crowd collected about the doors of the closed bank. News reached the crowd that the Bank of Cincinnati had not opened it doors that morning. By eleven o'clock the crowd grew to be an angry mob, which broke into the bank, destroyed all movable property, scattered notes and books about the floor, and carried away a large sum of circulating notes. Shots were fired and several men were wounded. The mob proceeded down the street to John Bates' Exchange Bank, where they sacked the place, scattering notes and papers all about the rooms and threw some into the street. They also broke into Noah Lougee's Exchange Office next door, but failed to enter the safe. Next
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the crowd, though it was smaller, entered the street in front of the Mechanics' and Traders' Bank, but that institution paid all demands in specie, and the mob then dispersed. The Miami Exporting Company had paper stolen valued at $25,850, but it was later recovered, but the bank soon went into liquidation, their paper being worth fifty-eight cents on a dollar. Mr. Bates redeemed his notes, but retired from banking.
In 1844 The Citizens' Bank opened at 25 East Fourth Street. This was the private bank of which W. Smead was main owner. In 1848 there were six chartered banks, the agency office of the United States Bank, and the private banks and bankers had increased to ten in number. When Charles Cist published his work, entitled "Cincinnati in 1851," he listed six incorporated banks and sixteen private banks and bankers. He mentioned the private banking interest as follows : "From the limited amount of banking capital heretofore allotted to Cincinnati by the Ohio Legislature, the business of private banking has become an interesting feature in the growing commercial operations of our city."
Incorporated Banks in 1851—Ten years before the breaking out of the Civil War these incorporated banks in Cincinnati were engaged in business : Ohio Life Insurance and Trust Company, $2,000,000 capital ; Commercial Bank, capital $1,000,000 ; Franklin Branch Bank, $1,000,000 capital ; Lafayette Bank, capital $1,000,000 ; Mechanics' and Traders' Branch Bank, capital $500,000; City Bank—North Side ; B. F. Sanford & Company, or Ohio Savings Institution, paid eight and ten per cent. on deposits ; S. O. Almy's Bank ; The Central Bank of Messrs. Langdon and Hatch ; Gilmore & Brotherton ; Western Bank of Scott and McKenzie ; Burnet Shoup & Company ; The Phoenix Bank, established in 1848; The Merchants' Bank of Cincinnati, using English money ; The People's Bank of P. B. Manchester ; the Union Bank of Brown and Ramsay, A. J. Wheeler, A. G. Burt, Wright Clark & Company.
In 1855 the Trust Company Bank (Ohio Life Insurance & Trust Company) had about $1,700,000 deposited with them, and occupied the position of the largest bank in Cincinnati, but were prohibited from issuing circulating notes, but their checks went everywhere.
In the year 1856 Cincinnati had twenty-five active private banks, not counting some of the smallest exchange brokers, while there were but three chartered banks, The Ohio Life Insurance and Trust Company, the City Bank, and the Commercial Bank.
Panic of 1857 —On the afternoon of August 24, 1857, news came from New York that the New York office of the Ohio Life Insurance and Trust Company had closed its doors, and it soon became known that the Cincinnati office would not be open the following day. The next morning the newspapers contained the announcement, signed by Mr. Bishop, the assistant cashier, that the Ohio Life Insurance and Trust Company, hav-
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ing very unexpectedly heard of the closing of the New York office, would close its doors until it had time to hear more from New York ; that all collection paper would be found in the office of Groesbeck & Company, and all due paper at their own office. This suspension was utterly unlooked for, as the stock of the trust company had sold at ninety-eight cents only two days before the suspension. By reason of this suddenness Cincinnati was all the more disturbed, as the "Morning Commercial" put it : "Cincinnati is destined to receive a blow as severe to her business prospects as it was unexpected."
The author' of the banking chapter in the last history of the Queen City, a banker himself, John J. Rowe, wrote on this panic period as follows :
Third Street was the center of interest on this morning. Details of police were stationed at the Trust Company's building and along the street, for fear of mob violence being felt. Bank riots of 1842, although fifteen years before that time, were still vividly recalled. As one man worded it, "Third street during banking hours was full of men, kindling with feeling."
A number of depositors gave notice to Smead, Collard & Hughes that they would want their deposits in thirty days, under the terms of the law. The Citizens Bank, however, was the only bank which had any serious run. Wesley Smead, active manager of the bank, addressed the crowd, making a long speech assuring the depositors that matters were sound and explaining banking methods and the impossibility of any bank paying all its depositors at once. Matters became quieter towards the close of the day.
During the next few days it was announced that the New York office of the trust company had sustained losses due to the shrinkage in value of stock exchange securities held as collateral. Several attachment suits were entered against the institution, and the final settlement of the affairs of the company was greatly protected because of the legal complications.
During the week the exchange brokers did a lively business, many people who held various bank notes, coming in and buying gold, at a premium from two per cent. up.
September 2d the Central Bank of Hatch & Langdon suspended.
By September 1st, claims against the trust company were selling at fifty cents on a dollar, and the stock had fallen to 10 1/2, or 88 points in twenty days. The Citizens Bank suspended September 13th. By the end of the month the trust company's affairs were generally realized to be a matter of long settlement, and the assets were assigned to Charles Stetson, John C. Wright, Samuel Fosdick, Samuel J. Broadwell, Abraham M. Taylor, George Crawford, and Clement Dietrich.
October 14th, the New York banks suspended specie payments, and the whole country immediately followed the example.
Cincinnati now entered a period of financial distress which lasted a long time. During the winter months large contributions were collected to care for the poor, the hard times bringing actual starvation into some parts of the city, until organized charity helped care for the situation. General depression of business and suspension prevailed for many months, necessarily it being the topic most discussed. Many criticisms of the general banking and monetary conditions were offered, and the period from 1857 to 1862 was the period which the new national banking laws were planned and the need for some radical change more and more felt. In this movement Salmon P. Chase was one of the foremost men who were making a deep study of the matter and finally aided in solving it for all time.
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As bank note circulation increased in the early years of the Civil War, specie decreased, and small change was very scarce. General coinage of small copper cents, or "hard times" tokens were undertaken, and they passed generally as small change. Pike's opera house, and the Burnet house issued small notes from five cents to fifty cents. The government issued a large amount of fractional currency and postage currency. Even postage stamps were used as small change, while some merchants put stamps under a mica covering, on a round metal disc with their card on the reverse side, thus preserving the stamp and making it fit for general circulation. The Cincinnati houses putting this necessity money into circulation were: John Shillito & Co., Ellis, McAlpin & Co., Pierce, Tolle & Holton, L. C. Hopkins & Co., and G. G. Evans & Co., issuing stamps of denominations from one cent to twenty-four cents.
National Banking Act —On February 20, 1863, the National Bank Act was passed, approved on the 25th, and the establishing of National banks began at once. This act was slightly changed in June, 1864.
The first National Bank received its charter ahead of the other banks organized in Cincinnati, being the twenty-fourth charter granted under the new law. The capital of $1,000,000 was all subscribed by May II, 1863. For further history of this institution, see elsewhere in this work. The Second National Bank, located at Main and Court streets, was next in order among the National banks of this city. The Third National Bank opened offices at the corner of Third and Walnut streets, with a capital of $500,000, electing A. L. Mowry as president and Frank Goodman cashier. The Fourth National Bank of Cincinnati, at No. 31 West Third Street, with a capital of $500,000, had for its president B. T. Stone. The organization of more National banks went steadily forward here as all over the country. The Ohio National Bank was organized with a capital of $500,000 ; C. G. Rodgers, president ; G. W. Forbes, cashier. Early in 1865 the firm of Fallis, Young & Company nationalized as the Merchants' National Bank, with Daniel J. Fallis president and J. T. Allen cashier. Later, the Central National Bank was formed and had a capital of $500,- 000. Its president was J. D. Thompson and its cashier W. T. Perkins. By July, 1866, Cincinnati had seven National banks, a large number of private banks and banks with State charters.
The first National bank merger here took place during August, 1867, when the Merchants' National Bank absorbed the Ohio National. This made the consolidated capital stock of the Merchants' National $1,000,000, with D. J. Fallis president, John Young vice-president, H. C. Yergason cashier.
The panic of 1873, occasioned by the financial failure of Jay Cooke & Company, bankers of New York City, who were connected with the interests of the Northern Pacific Railroad Company, of course, had its immediate effect on the banking concerns of Cincinnati, in common with all other cities. Hence it was that on September 25 the Cincinnati Clearing House followed the example of the New York Clearing House and passed resolutions to relieve the situation. These resolutions stated that
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the banks would not pay out currency except for small checks and where there was actual need of currency for pay rolls, and provided for the issuance of clearing house certificates, to be secured in settlement of balances between members, such certificates to be secured by a deposit of securities in the Safe Deposit Company, to be accepted at seventy-five per cent. of their current value. The men selected to carry out these resolutions were : William Hooper, W. W. Scarborough, R. R. Springer, Jason Evans and Oliver Perin. Within six weeks' time after their selection, $515,400 in clearing house certificates had been redeemed. Thus Cincinnati banks proved that they were able to care for the deposits of the people even during times of financial stress.
The year 1880 opened with six National banks—the First, Second, Third, Fourth, Merchants', and National Lafayette and Bank of Commerce ; five State banks—the Commercial, Franklin, German Banking Company, Western German, and Bank of Cincinnati ; one savings bank—the Cincinnati Savings Society ; and eight private banks—H. W. Hughes & Co., S. S. Davis & Co., A. G. Burt & Co., J. F. Larkin & Co., Espy Heidelbach & Co., Seasongood Sons & Co., S. Kuhn & Sons, and the Real Estate Savings Bank ; twenty banks and bankers all together, in addition to the Safety Deposit Co., of which sixteen were members of the clearing house.
In November, 1880, was organized the Citizens' National Bank, with a capital of $1,000,000, with B. S. Cunningham as president and George W. Forbes as cashier. One year later the German National Bank was formed, with a capital of $500,000. The same year the Union National Bank was formed, with a capital of $500,000, with H. W. Hughes as its president and 0. H. Tudor cashier. In 1882 were established the Exchange National, the Cincinnati National, the Queen City National. During that year the Third National Bank doubled its stock, having $1,600,000--the most of any bank in Ohio at that date. A. G. Burt & Co. discontinued business during 1882, they having been in the banking business since 1853.
The Panic of 1893 —Panics had not bothered the finances of Cincinnati since the Jay Cooke & Co. failure of 1873, until 1903, when a flurry in financial matters spread throughout the entire country, the same being caused largely by too great an expansion of business—many lines of trade were greatly over-stocked, and credit inflated. Over-production is the word best representing the true cause of this slight panic, which crippled many industries for sometime. The Cincinnati Clearing House passed the subjoined resolution, which should here appear as a matter of banking history, to be referred to by future generations, possibly :
"It is hereby agreed by the members of the Clearing House Association of Cincinnati, Ohio, that in view of the present demand on the reserves of the banks, and for the protection of our industry and commer-
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cial interests, the Clearing House Association, through its committee, is authorized to issue, not to exceed one million dollars, represented by loan certificates, which shall be received in settlement of the daily balances between the members thereof, and the same will be furnished to the members on the delivery of approved securities, at seventy-five per cent. of their market value. Said certificates shall not be negotiable and shall be used only for the purpose of settlement between member and the clearing house. Securities so delivered shall be valued by a committee of three, consisting of the following members : L. B. Harrison, William A. Goodman, James Espy, who shall serve in connection with the president of the association (M. M. White being the president at the time) and same shall be received at seventy-five (75) per cent. of the value so fixed. Each member shall receive a receipt for securities deposited. Said committee shall have charge of the securities, of different kind, deposited by said members, and shall place the same in a safe deposit company for safe keeping. Said committee shall be called together upon the application of any member of the clearing house who may desire to obtain said certificates, notice being given to the president or manager of the association, or in the absence of either of them, to any member of the committee, and the said certificates shall bear interest at the rate of eight per cent. (8 per cent.) per annum, which interest shall be paid by the member to whom the same are issued, and for the time so used. The committee has authority to employ clerical force, if necessary, to carry out the objects proposed. The expense incurred by the said committee shall be assessed and paid by the members receiving the certificates proportionately. The following committee, consisting of the president of the First National Bank, the president of the National Lafayette, and the president of the Fourth National, shall determine the time when such certificates shall be issued."
This resolution was made in view of impending danger, but the panicy period soon passed away and there was no necessity of using a single certificate, in which respect Cincinnati showed itself better able to handle its business than several other of our clearing house cities which had passed similar resolutions.
By the beginning of 1900, Cincinnati had thirteen National banks, one savings society, one private bank, two trust companies and five State banks, of which sixteen were members of the clearing house. From 1900 to 1910 there was a great increase in the number of banks in Cincinnati. The increase in population and wealth with the popularity of savings institutions all tended to demand more banks, which are now distributed over the city.
From 1903 to 1905 many banks moved to other quarters, or were merged one with another. Third Street, had always been the "Wall Street" of Cincinnati, but at this period many moved to Fourth Street.
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The First National Bank Building at Fourth and Walnut streets, a splendid nineteen-story structure, was completed in June, 1904; the Ingalls Building was erected, with the Merchants' National Bank occupying the second floor ; the Citizens' National built at the corner of Fourth and Main ; the German National at Fourth and Vine ; the Third National on Fourth, between Vine and Race, and the Fourth National on Fourth, between Vine and Walnut. Thus it was that the early banks, which had been centered on lower Main Street, later moved to Third Street, as business pushed back from the river district, to remain many years, but finally to follow the march of business up to and beyond Fourth Street.
In August, 1904, the Ohio Valley National Bank was absorbed by the First National, making the combined capital $3,700,000, with W. S. Rowe president and T. J. Davis cashier. The following January, 1905, the First National merged with the National Lafayette, increasing the capital to $5,000,000. Another merger was that of the Equitable National, which was absorbed by the Merchants' National, whose capital was then increased to $1,200,000.
From 1905 to 1907 ten new banks were chartered by the State and opened at different sections of Cincinnati, as follows : The Queen City Savings Bank and Trust Company; Walnut Hills Savings and Banking Co.; the Stockyards Bank and Trust Company ; West End Bank ; East End Bank Company ; Hyde Park Savings Bank ; Liberty Banking and Savings Company ; Metropolitan Bank and Trust Company ; Pearl Street Market Bank.
The Panic of 1907 —The financial world has upheavals quite frequently; the reader's attention has already been called to a number of panicy periods, beginning in the thirties and ending in 1893. The next time of depression felt throughout the entire country was that of 1907, really the fifth period of financial troubles, so far as Cincinnati was concerned. The suddeness with which the lack of enough currency became felt necessitated prompt action upon all parts of the land. The Cincinnati Clearing House appointed a committee of W. S. Rowe, president of the First National Bank, chairman; G. P. Griffith, vice-president of the Citizens' National Bank ; W. W. Brown, vice-president of the Merchants' National Bank ; George Guckenberger, president of the Atlas National Bank ; Charles A. Hinsch, president of the Fifth National Bank ; Casper H. Rowe, vice-president of the Market National Bank, to act together and handle the crisis. In the matter of caring for currency enough to do ordinary daily business with Cincinnati was depended upon for this section of the country.
Late in October, 1907, the condition was serious—retail trade, pay rolls, labor, the country sections, etc., created a great demand for currency, in small denominations especially. Accordingly, the Clearing
Cin.-17
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House Committee realized that the situation must be met by their action. Hence cashier's checks, known as "script," were issued .by each of the fourteen clearing house banks, in denominations of two, five, ten and twenty dollars, payable through the clearing house, well secured by securities pledged for their redemption. The committee received from each bank various securities, either bonds or customers' notes, which they delivered to each bank not in excess of seventy-five per cent. of the value of the securities, in script to the various banks, which were then signed by the banks and put into circulation ; the first one appeared November 4.
So keenly was the state of affairs felt that the merchants cooperated with the banks in aiding circulation of the script, advertising that they would receive script for purchases, and in some instances advertised a special discount for script or cash. Thus, if there had been any doubts of the acceptance of the script for practical use in pay rolls for paying labor, the aid of the citizens and the press dispelled it, and cashier's checks went as freely as "real money." It was from such experiences in money affairs which finally brought about the present system of Federal Reserve Banks, twelve or more now in existence throughout the country.
In 1908 The Third National Bank consolidated with the Fifth National Bank, creating what is now known as the Fifth-Third National Bank, with a specified capital in 1908 of $2,500,000.
In 1909 there were organized five more banks in Cincinnati—the Mohawk German Banking and Savings Company ; the Commerce and Deposit Bank ; the Evanston Bank ; the Courthouse Savings Bank, and the German-American Commercial and Savings Bank. In December, 1909, the First National and the Merchants' National banks consolidated, the First National increasing its capital to $6,000,000.
In January, 1910, the private bank of S. Kuhn & Sons was absorbed by the Fifth-Third National Bank, its deposits transferred and Louis Kuhn becoming a vice-president. This marked the disappearance of private banks in Cincinnati, where previous times they were named only by the one word—Legion.
In 1911 the combined capital of the National banks was $13,900,000, and that of the State banks and trust companies $5,743,910. The total deposits in September, 1911, in both National and State banks, amounted to $134,000,000.
Cincinnati is Leader in Ohio —The September banking reports from Washington, D. C., 1925, shows total resources of Ohio National banks had increased $35,732,000 in the one-year period between June 30, 1924, and June, 1925. Toledo was the only one of the Federal Reserve cities in the State where National bank resources diminished during the year. In that city the drop was from $29,000,000 to $13,000,000, a decrease of over $15,000,000.
Cincinnati's National bank resources, which are the largest in Ohio,
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increased from $145,442,000 to $159,173,000, or $13,731,000. Those of Cleveland increased from $107,186,000 to $115,651,000, while those of Columbus increased from $87,102,000 to $92,355,000.
Cincinnati also leads the State in the amount of its Postal Savings deposits, with a total of $475,000,076. Columbus was second with a total of $412,792, and Cleveland came in third, with $318,542. Though the fifth city in population in the United States, Cleveland ranks thirty-fifth in the size of its postal deposits, having $5,000 less than Sioux City, Iowa, whose population is less than 100,000.
Postal deposits in other Ohio cities were : Toledo, $245,650; Dayton, $127,119; Akron, $115,438. Each showed less than the year before.
The present (1925) banking statistics for Cincinnati include the figures presented by various sworn to statements, issued by the banking institutions in 1924-25, and from other reliable sources, and are summed up as follows :
First National Bank—This institution is the twenty-fourth National Bank established in the United States. The date of its charter was in 1863. It received its charter ahead of the other banks organized in Cincinnati. The National Banking Act was passed February 20, 1863, and signed as approved by President Lincoln on the 25th. The First National of Cincinnati started on a capital of $1,000,000, all subscribed by May II, 1863. John W. Ellis was the first president ; Lewis Worthington vice-president ; James A. Frazer, L. B. Harrison, Gardner Phipps, A. S. Winslow, William Glenn, Robert Mitchell and Michael Werk being the original directors, and J. D. Thompson cashier. The bank was opened for business early in August, near the northeast corner of Third, just east of Walnut Street. The law exacted, after July, 1866, a tax of ten per cent. on all State bank notes, hence these institutions speedily went out of business. In 1866 Cincinnati had seven National banks, a very large number of private banks and bankers, as well as the banks with State charters ; the Franklin, Commercial, Lafayette, and Bank of the Ohio Valley, the State banks being now banks of discount and deposits only. They were not permitted to issue bank notes like National institutions.
The present First National Bank Building is a modern seventeen-story structure, located at the southeast corner of Fourth and Walnut streets. The various departments found in this financial institution include commercial banking, savings department, trust department, United States bonds, foreign department, steamship department, safe deposit department, with securities and investment departments.
At the close of business, September 28, 1925, the condition of this bank was as follows :
RESOURCES.