Chapter 45

Chapter 45
pages 256 - 262

BANKING FACILITIES.

     Previous to 1851 we had no banking facilities in Peoria of any kind, and all our interests suffered much for want of them. In those days, the Democrats repudiated all kinds of banks in their public speeches, and proclaimed to the world the Jackson doctrine, that those who dealt in borrowed capital ought to fail. Yet, after being elected to the legislature, they generally managed to keep the South, where Democracy was triumphant, supplied with banks, while the North was nearly or quite destitute. There was not one, in those days, in this part of the state, nor could we any more succeed in getting one than we could in getting the capital removed to Peoria. These matters of finance ought not to be mixed up with party politics; but politicians will resort to anything to carry an election, and in such matters they exhibit much shrewdness. The Whisks were bold advocates of a national bank, but not of state or individual banks; yet these they would tolerate, or even help to establish, rather than have none. The Democrats generally managed it so that abundance of bank charters were passed, by more Whig votes than Democratic votes; that is, they would get all the Whigs to vote for the measure they could, and then spare to the measure only enough Democrats to carry it, and let those be from counties whose interest was in favor of the bank, or whose constituents were not in the habit of scrutinizing the conduct of their representatives, or such as it was not the interest of the party leaders to have returned to the legislature. They were then ready at the next election canvass to denounce the Whigs as purse-proud aristocrats and bank-bought politicians; and many good Democrats to this day believe their party has always been opposed to all banks.
     There were two principal banks in Illinois — one located at Shawneetown, and the other at Springfield; one was called The State Bank of Illinois, and the other Bank of the State of Illinois. Each was allowed by the legislature to establish sundry branches, but none in Peoria. I have no doubt that these banks did much good in their day, in the neighborhoods in which they were located, but their bad management and final downfall obscured all the good they had done.
     In 1850, we were almost destitute of a circulating medium. Not only had all our Illinois banks gone down, but the western banks generally had done so. A little specie was in circulation, and some New-England and New-York bank-notes. We had not even a broker in Peoria. In Chicago there were no banks of issue, but several brokers, prominent among whom was George Smith, a Scotchman, and a smart business man, and reputed rich. He, perhaps aided by others, inundated the north half of Illinois, and parts of other adjoining states, with paper after the similitude of bank-notes, which purported to be issued by an institution at Milwaukee, called the Marine and Fire Insurance Company. This paper was said to be illegal and without a basis, but the people were so anxious to have some kind of circulating medium that they were not inclined to scrutinize it much.
     In 1851, Mr. Nathaniel B. Curtiss came from Chicago to Peoria, and opened an office, at the upper corner of Main and Water streets, which he called the Banking-House of N. B. Curtiss & Co. He dealt for some time in said Milwaukee paper, which, it was understood, he got of George Smith. Be that as it may, that which circulated to a small extent before now came into general circulation. No body supposed the money was good, or that Curtiss was responsible for it; but the people wanted a circulating medium, and they were willing to take whatever was offered.
     Curtiss drove a large business, and made money; and, probably having to pay something for the Milwaukee money, he got up and circulated other kinds, particularly notes on the Cherokee Bank, which purported to have been issued in Georgia. There may have been a bank in Georgia of that name, and these notes may have been issued there, for any thing I know to the contrary; but the fact that the people believed them to be spurious, and the other bankers probably knew them to be, and still people and banks received them freely as good money, is a strong argument in favor of some body's doctrine on the subject of credit. I suppose Curtiss paid a little, but very little more than nothing at all, for this money; and yet, from what I saw of his operations, I give it as my opinion he made twenty-five per cent on it, and yet he broke. He became too reckless. He trusted every body; among others, he let Kellogg & Co., who were building the Peoria and Oquawka Railroad, have more than $100,000 (I have heard it said nearly three times this amount). Finally, in 1857, he got scared, and closed his doors. In this measure he was probably unwise, for the people were not inclined to inquire into his circumstances. This made a great tumult in the community, and where Christianity had not taken too deep root, some 'tall swearing' was done.
     Mr. Curtiss, however, after arranging his affairs a little, and buying some of his paper at a discount, tried it again; but it 'would not work'. The charm was broken. 'He had to go under'.
     Mr. Curtiss's success soon raised up competitors.
     It being perceived that Curtiss was making money fast, Messrs. William R. Phelps and Benjamin L. T. Bourland, of Peoria, and Gideon H. Rupert and James Haines, of Pekin, in 1852 opened an office on the opposite corner, which they called the Central Bank. In 1853, they sold out this establishment to Governor Joel A. Matteson and his son-in-law, R. E. Goodell, who run the establishment about three years, when it failed.
     Mr. Joshua P. Hotchkiss, in the fall of 1852, opened an office of the same kind, which he called the Bank of J. P. Hotchkiss & Co., and carried it on with apparent success until his death, which happened in 1856. Mr. Hotchkiss was in feeble health for some time before his death, and intrusted the business to Lewis Howell, his cashier, and was so well pleased with his management that he provided in his will that Mr. Howell should, after his death, carry on the business in the same name, at a salary, for the benefit of his heirs. This Mr. Howell did for about four years; but it becoming inconvenient, or perhaps impossible, to carry out the requirements of the will, he and others bought out the institution, and for about four years carried on the business in the name of L. Howell & Co. In 1864, it was organized into a national bank, under the law of Congress, and called The Second National Bank of Peoria. Under that law, and that name, it is operating now.
     Previous to 1864, there had been a bank at the upper corner of Main and Washington streets, in the building Mr. Curtiss had built, and in which his bank was kept at the time of its failure. Marshall P. Stone, William F. Bryan, and others, had been concerned in this establishment (I do not remember them all). In 1864, that was turned into The First National Bank, and from that time to this it has been conducted as such. Mr. Washington Cockle is president, and Mr. W. E. Stone is cashier.
     In 1865 was established the Mechanics' National Bank of Peoria. Mr. H. N. Wheeler is president, and J. Boyd Smith is cashier.
     There are two private banking-houses here. The style of one of these is S. Pulsifer & Co. The business is mostly conducted by Mr. Erastus D. Hardin, who is understood to be a partner in the institution. The other is the Banking-House of Davis & Hogue. This firm is composed of Thomas L. Davis, an old citizen of Peoria, but now residing at Henry, and James B. Hogue, who has recently come to this city.
     In addition to all these, we have a Savings Bank for those who have small sums, with which other banks wish not to be troubled, and even this is said to be doing well. Mr. Philip Zell seems pretty much to have the control of it.
     All these institutions are doing well, and have a good reputation with the people, and supply the community with a reasonable amount of banking facilities, and deposits are considered safe in all of them. But let times change; let some great commercial crash come upon the country, and they would probably all or most of them 'go by the board'.
     What then? Because of the apprehension that in some pecuniary panic they may break, shall we withdraw our confidence and break them now, and bring on that crisis? Or shall we not rather foster them, and avail ourselves of their benefits as long as we can, but keep as good a lookout as we can, so as to be as well guarded as possible against a panic? The latter would certainly be the wiser course.
     The foundation of all prosperity is labor. Whatever will induce men to work will contribute to the wealth of a neighborhood. Should a bank be established without a dollar of gold or silver, and the people have such confidence in the directors that they would take its paper as freely as they would specie, they might use the money to build factories — in fact, to build a manufacturing city. Then, after a city had been built, and some had grown rich, and all had been supported off it for ten years, suppose it should break. What then? Would the fortunes that had been made off it vanish? Would the city that had been built by it take wings and fly away? Would the people who had been fed by it ten years have to disgorge? Should the bank go down, all who had depended upon it for the sinews of business would be put to some inconvenience, and any who happened to have any of the money on hand would be liable to lose it; but all these losses would be nothing compared to the gain during the ten years, and even these losses would be less than at first they would seem to be. The ten years that had passed would have infused so much energy into the people that the stagnation in business would not last long; for they would soon make another bank, or resort for funds to one already in existence. As for the loss by the bank-notes on hand there would be but little on that score, for people would generally pay their notes in the bank with its paper, and those who owed the bank, but had no paper, would buy it, perhaps at a discount, from those who had it. Even in the case of N. B. Curtiss, notwithstanding all the curses he got for breaking, I am of the opinion that, besides making a fortune for himself, he benefited this community a good deal more than he injured it. It is very questionable whether the Peoria and Oquawka Railroad would ever have been built without Curtiss's 'wildcat' money. It certainly would not have been built as soon as it was.

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