Chicago eagle. [volume] (Chicago, Ill.) 1889-19??, 1899-10-14

began to issue notes which were Sc
cured by nothing more tangible than
the confidene of the people who. ac
cepted them. After a few years of sue
cess the bank retired from business.
while the depositors received little or
no money. Chief among other so-called
wildcat" institutions during this prim-
itive period of banking in the history
of Chicago was smiths Bank"
In 1850 the people of the city were So
aroused against the issue of irrelcem-
able currency that a public melting was
held and committee appointed to
draft memorial to the Legislature to
secure relief. This memorial rccitcd
that banks properly formed and con.
Quoted would be of immense benefit to
all the interests of the state. and that
by Withholding bank charters the cir
culation of paper currency is not check
cd. but. on the contrary. floods the en-
tire Union with paper which is worth
less" The State was pettioned TO pass
"a general banking law providing ample
safeguards for the holder of paper. In
response to the memorial general
banking act was passed in February.
1851. under which legal banks of issue
We're incorporated to displacc the
wildcat" banks. The result was a
wedding out of the spurious institu.
tions. while others obtained legal char
tiers and continued in business by main
tanning an honest policy.
The first bank organized in the city
under the operation of this law was
the Marine Bank. reconstructed from
the Chicago Marine and Fire Insurance
Company. of which Jonathan Young
Scammon was President. This bank
had q prccarious existence. closed its
doors several times and in 1875 went
into the hands of u receiver. The year
following the enactment of this law a
number of banks started out with fly
ing Colors. but nearly all were forced
into liquidation or experienced trou-
blous times. One of the institutions
which commanded more than usual at
tcntion was the so-called Bank of Chi
cago." which was run by Seth Paine
and Ira Il. Eddy. To shut out a mum.
her of weak banks an amendment was
passed TO the banking act providing
for q deposit of $4,000 legal tenders
with the auditor as guaranty of COM
rliance with the banking regulations Of
the state.
The Merchants Loan and Trust Com.
pany. which was organized in Febru.
AIRY. 1857. was the product of the ef.
forts of "a number of citizens who join.
ed In n disintercsted movement to So.
cure relief from the State Legislature
from wildcat" institutions. a char.
ter was procured by special effort for
the Merchants Loan and Trust Com.
pany and It became one of the financial
bulwarks of the city.
In 1S51-S the financial panic caused
havoc In the local banks. The issues
Of the banks of Illinois and Wisconsin
could not he redeemed In coin and non,
of the banks could furnish exchange In
coin. so that exchange rose to fabulous
figures. When the storm was over i
was evident that most Of the banks ol
she city had survived. and their safet!
was ascribed to the precautions takei
by the State Legislature.
There was no further disturbance Ia
cally until the war cloud broke. I'LL
nOls banks had % total circulation q
$I232O.60i. for which there were de
posted United States and State securl
ties of the par value of S14.OOO,WW. o
which S9527.5OO was In bonds o
- ts,.r In no. MI A
depreciation the banking laws of th'
State failed utterly In their purpose
and n new act was passed In 1861. 4
afford better security. But none wa
obtained until the national banking ac
was passed In March. 1863. This legls
latlon was SO favorably received ID.
the Board of Trade that II resolved 4
base all transactions on legal tende
treasury notes. During IS6i-5 the Firs
National. Second National. Third M
tional. Fourth National, Fifth National
Mechanics National, Northwestern M
tional and Manufacturers Nationa
banks We're established.
In 1869 there were fourteen nationa
banks in this city, with an aggregat
capital stock Of S5,900,0OO. n surplus
S2.3WUOO, circulation of S4,G}O. I3O an
deposits amounting to Sl5,342,2s2. Tn
private banks In existence at the tim
had n capital of S3,OO0,00O. From tha
time forward the banking interests g
the city advanced with steady an
firm stride The condition Of the III
tlonal and large private banks imm'
diately after the fire Is summed up
the following figures: Total capit'
stock, sl0, 900; total surplus and III
divided earnings, S3,5ll ,123.G5; tot;
circulation, S5,I27,475; individual d
posits, S29, 9,4s3, ,jS5.I2. After the gre'
fire the bankers convened In body IN
decided they would pay Is per cent.
their depositors, and soon after 7
sumed operations without limitation
The banks soon recovered from u
shock caused by the fire, and until Il
panic Of 'T3 there was general pro
perity.
During 1873 and 1877 there was
struggle on the part OF large numb
of the banks 10 maintain their eNi'
encc. \ number Succumbcd, while OF
crs remained unscathed. This ie
placed the institutions which survive
upon more substantial footing.
In 1893 there came the fearful pan
that resulted In Il run on the bank
which h stlll vivid in the minds Of tho
who witnessed the mad frenzy Of d
...yt,,ry tphn faar.l thor. would