Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-03-15
HISTORY OF BANKING
PAPER READ LAST MEET By MR..
CHARLES E. HOWE.
Earliest Attempt to Organize an In
stitution in Washington-eBank of
the United States.

A notable gathering of Washington's best
known citizens attended the seventy second
regular meeting OF the Columbia Historical
Society in the banquet hall of the Shore
ham Hotel last night, and were entertained
by a sketch of the early history of banking
In Washington, given by Mr. Charles E.
Howe, assistant secretary of the American
Security and Trust Company. At the con-
clusion of the address there was discus
sion of the question, which brought out ad-
ditional facts of interest.
In the course of his address Mr. Howe
said:
Contemporary with the chartering of the
Bank of Alexandria and the Bank of CO.
lumbia, Congress granted charter to the
Bank of the United States by special act
approved by President Washington, Febru.
airy %, 1871. The capital of this bank was
$40, 100000, one-fifth of which was sub
scribed and paid for by the government.
Its charter expired in March 4, 1911. and
was not renewed.
by reason of the restrictions in regard
to the establishing of any new banks, Con-
gress was unable to incorporate any bank
ing institutions whatever. for the District
of Columbia until ISL.
Effort at Organization.
L
bank in Washington prior to the establish
ment of the branch bank Of the United
States was by the Washington Associa-
ton and United States Insurance Company
in the summer of 1901, few months prior
to the opening of the branch bank of the
United States. In the Intelligencer of Au-
gust 81 1901 l found a letter addressed
To the Public and signed by VIM. Thorn
ton, president of said insurance company,
wherein ne explains the object of the COM
pany, it's plan for investment OF Its assets,
which were to consist. among other things,
of a capital of $2O00.000, and lastly that
another object OF the association was to
establish bank, as soon as Inc bulidlng
was ready in this city, which 1t was con-
ceived would facilitate its progress, and
consequently add to the convenience of the
officers of the government, the congress
and the public.
In obedience to resolution of the
United States Senate of April 90 1908, the
Honorable Secretary of the Treasury, Mr..
Gallatin, furnished under date of March =
1909, a report of the affairs or the BANK OF
the United States and prayed for a re-
newal of this charter which expired March
a 1911. This report appears to be the only
complete and authoritative statement or
the organization, growth, volume OF Dusl-
ness and general condition OF It's aHa;rs
that was ever published Very little de-
tailed information aside from that con-
tanned in this report is available and hence
II is that the banks history aside from Mr.
Gallatin'S summary is IraSMentdry.
Managed by Directors.
~rbe stockholders appointed regularly
twenty five directors of the bank wmch was
located in Philadelphia, Pa. and those d.
rectors had entire management OF the ois-
counts and other transactions IN that Guy
and the general superintendenee ana ap
pointment of the directors and CASHIERS OF
the offices of discount and deposit estap.
lished in other places. There were elent
such branches, viz, at Boston, New 1orh
baltimore Norfolk, Charleston savannah
Washington and new OIieals s. of The
two were established at the request OF tne
Secretary of the Treasury. TINS accounts
for the fact that no branch was estapiisheo
here until after the seat of government was
established and the treasury was III heeu VI
such a depository. 49, I'd =. .-,.,
.'The profits arose from interest received
from loans made to both the government
and individuals. The discount, ra.e ap
The hanks averaging DIVIDENDS from 1871 10
1911 were about SIS per cent; -..otas ot
..irhs total discounted bills and notes ot
tho branch bank of the Unlea olaess q
Washington. December %, 1910. accoiuine
~ a report furnished Congress by MT. Ga,o
latin under date of January y, ISL, W.
sn2, 1913 OF this amount VI nv, baI-
sented bills and notes IN sun. .ne NO 9
once due by other banks In accouh. waa
az eeo and the bank notes of, other
hanks on hand were $31 ,142. 90
"In a statement of the cash In the united
States treasury on January Z, ISL DIS re-
turned by the treasurer to the Secretary OF
the Treasury, showing the several banks IN
which the same was deposited, found ina
the amount on deposit with the blaIcIl
Bank of the United States at washington
was S65T16; the amount on deposit with
the Bank of Columbia of Georgetown was
s115. OS6. and the amount on deposit with
the Bank of Alexandria was $Sj,9l1.
First Public Official Act.
THE first public official act of the Branch
Bank of the United States at Washington,
looking toward the closing of this ONCE,
was a notice published in the Intelligencer
of January % 1911. This notice was to the
effect that in accordance with the resolu-
ton of the parent bank, under date OF
January %, 1911. an immediate cuftail-
ment amounting to 40 per cent must be
made on all accommodation paper due or
overdue.
For all paper maturing within week
from date of this notice, renewal for
eighteen days only was allowed within
which to pay the necessary curtail.
Another notice states that all persons
holding the notes of this Office are hereby
notified to bring in the same for payment
before January 1. 1913, as after that period
the notes of the late bank of the United
States and its branches will be paid only
at the office of the trustees. in the city of
Philadelphia and those persons h'ving
balances TO their credit are desired 10 draw
for the same before the above period, after
which they will be pad by the trustees in
Philadelphia only.
The above notice was dated Wash ngton.
July 3, 1872, and signed by James David
son, cashier.
Still another notice contained the follow
ing:
1.-The holders of shares in the capital
stock of the late Bank of the United
States, who have not received the late d.v:-
dend of 40 per cent, ARE requested to pre-
sent their certificates forthwith at the
banking house in Philadelphia for the
liquidation of said dividends, which rem lin
at the individual risk of the said stockho.d-
ers, respectively. 1t was also requested
that the drafts of the cashier, issued for
payment of dividends, be presented with
out delay at the respective offices where
the same are payable.
Assets Converted Into Cash.
For the foregoing one can see that 40
per cent of the assets were very quickly
converted into cash, and, further, that it is
more than probable that, the cashier drew
on the branch banks located in. the city or
vicinity where the various stock holders re-
sided. That this latter method was very