Bank of Baltimore

Last updated

The Bank of Baltimore was a bank based in Baltimore, Maryland, that was chartered in 1795 and failed during the Panic of 1857. It was the seventh American bank to begin business in the United States and the second bank in Maryland. [1]

Contents

History

Charter

The Bank of Baltimore was chartered on Christmas Eve, December 24, 1795, with $1,200,000 capital in the city of Baltimore, Maryland. The bank was the seventh American bank to begin business in the United States and the second bank in Baltimore, and in Maryland. [1] The Charter provided that subscriptions would be opened the first Monday of the following June 1796 for 1,240 shares under the superintendence of the leading business men and civic leaders of Baltimore, including:

  • David Stewart
  • William Winchester
  • Thorowgood Smith (future mayor)
  • William Wilson
  • Archibald Stewart
  • George Salmon
  • James West
  • Thomas Usher, Jr.
  • Henry Payson (Unitarian Church founder)
  • Thomas Hollingsworth
  • Nicholas Rogers (of "Druid Hill")
  • Elias Ellicott
  • Joseph Swann
  • Andrew Buchanan
  • Solomon Etting
  • Charles Ghequiere
  • Hugh McGurdy
  • Christopher Johnston

Subscriptions for stock were also received from other parts of the state. On October 14, 1796, the bank's share-holding members elected directors:

  • David Stewart
  • William Wilson
  • William Winchester
  • George Salmon
  • James West
  • William Lorman
  • Elias Ellicott
  • John Stump
  • John Stricker (future militia general in War of 1812)
  • Charles Gehquiere
  • Christopher Johnston
  • Solomon Etting
  • Lewis Pascault
  • Charles Ridgely
  • Thorowgood Smith (future mayor)

Smith, Hollingsworth, Winchester and Etting were authorized to receive proposals for offices or a house or securing a lot on which to erect a bank building.

1790s

During the years 1790 to 1800 the Bank of Maryland, first financial institution in the newly emergent Town and City of Baltimore (town incorporated as a city, 1796–1797) and the state of Maryland and was in need of increased capital to meet demand. The Bank unsuccessfully attempted to double its capital in 1795. As a substitute, the B. of M. proposed to the General Assembly of Maryland, (the Maryland State Legislature) to grant a charter to establish another bank which might later consolidate with the Bank of Maryland, upon consent of both parties. this clause was later stricken and so this "Bank of Baltimore" was chartered as an entirely separate institution, receiving its charter in 1795. However, the Bank of Maryland might later become a holder of the Bank of Baltimore stock. [2]

The charter of this bank was for 20 years and the state reserved the right to subscribe for 6000 shares at $300 each, and appoint two of seventeen directors annually. The first president of the bank was George Salman, elected in 1796 and served until 1807. Additional presidents during the B. of B.'s first century were as follows: William Wilson, 1807 and succeeded in 1824 by Brig. Gen. John Stricker (of 1814's Battles of North Point and Baltimore fame in the War of 1812) until his death June 23, 1825, and William Lorman was elected in his place. Mr. Lorman was succeeded by Joseph H. McCulloh in 1841 who was followed in December 1853 by C.C. Jamison, the former chief cashier, who died a decade later Sept. 9, 1863. On Oct. 1, 1863, Gen. Henry A. Thompson was elected as the seventh president, serving until his death on March 12, 1880. He in turn was followed by Christian Devries.

Cashiers

The bank had only four chief cashiers during its existence:

Location

The bank was in one location for its place of business from its organization to its first century, but the building of that time was not completed until 1856–1857.

Reorganization

The institution was reorganized as the "National Bank of Baltimore" in July 1865. During its first century, it had not missed any payments of dividends or made any reduction in the amount of its capital. However, in November 1864, along with several other city banks, it suffered from a gang of forgers and in December later that year a temporary loss of $23,000 from a falsification by one of its clerks, however later made good. On September 17, 1878, $27,850 in bonds and $35,000 in cash were stolen from the vaults in broad daylight.

The capital stock of the bank in 1880 was $1,210,700 and its surplus fund was $365,000. [3]

The capital of the bank was fixed by the General Assembly of Maryland, the state legislature at $1,200,000, though the petitioners wanted the limit placed at $3,000,000, with provision for increasing it ultimately to $9,000,000, as growth demanded. [2]

In 1795, the two banks ("Maryland" and "Baltimore") had an aggregate capital of $1,500,000 which was actively employed in the city of Baltimore whose export in trade was valued at more than $9,000,000 and which was rapidly growing in the area of manufacturing. Maryland's total exports for 1799 were $16,300,000. [2]

In 1802, the third President of the United States, Thomas Jefferson from 1801 until 1809, wrote to his Secretary of the Treasury, Albert Gallatin, expressing concerns that the Government was granting too many demands to the First Bank of the United States political lobby. This concerned President Jefferson because this would grant the United States Bank the ability to "shallow up the other" smaller banks such at the Bank of Baltimore whose stock was owned by U.S. citizens and create a monopoly over the entire beginning American banking industry that would be controlled by foreign powers since the majority of stock of the United States Bank was held by citizens and subjects of other countries. Jefferson was concerned that this situation would cause problems for the United States in the event of future conflict with a foreign power and as such he supported the Bank of Baltimore's application for a deposit of government funds. [4]

Both the Bank of Maryland contributed to the infamous "Baltimore bank riot" in August 1835, after the bank encountered financial problems the year before in 1834. Along with a series of other civil strife in the crowded and dirty city which spread to several other city financial and public institutions with extensive downtown fights, burnings and civil unrest, along with mobs of disgruntled citizens torching of several prominent citizens' and civic leaders' townhouses such as Reverdy Johnson, William Glenn, and mansions, predating the worse and far deeper and longer of the first major national financial recession of the so-called "Panic of 1837" two years later which marred the reputation and the end of the Andrew Jackson presidential administration and his unregulated free-wheeling financial policies.

Bank failure

The Bank of Baltimore failed during the financial recession known as the "Panic of 1857". [5]

Other banks

An additional financial institution of a similar name entitled the "Savings Bank of Baltimore" was chartered in 1818 with a general meeting held on "New Year's Day", January 1, 1818, at Gadsly's Hotel (or Gadsby's?) with the Right Rev. James Kemp presiding, the Bishop of the Episcopal Diocese of Maryland with Isaac Burneston as secretary. After examining the plans and situations of several similar other thrift institutions in other cities, it was resolved that it was expedient to establish a Savings or Provident Bank in Baltimore. David Winchester, Henry Brice and Charles G. Appleton were accordingly appointed a committee to draft a constitution which was later reported on and adopted at the following meeting on January 15, when the same committee and the addition of Abner Neal and Isaac McPherson were authorized to call upon the citizens of Baltimore with appropriate publicity to become members of the association. An election was then held on February 2, 1818, at the Gadsby's Hotel (near the wharves) and the following were elected as directors for the following twelve months:

On March 16, 1818, the bank opened for the reception of deposits at No. 100 Market Street (now Baltimore Street). The first report of January 15, 1819 reported that: Deposits $15,957.00 (138 depositors) Withdrawals $3,308.44 (41 depositors) Leaving to the credit of depositors: $12,648.62 Interest that has accrued: $342.37 Disbursements: Interest paid depositors: $89.82 Amount paid for stationery: $74.92 Salary paid for secretary (1 year): $150.00 Sub-total, disbursements: $314.74, Interest in U.S. Bonds, at 6%: $6,000 Amount placed in local bank with interest at 6%: $6,676.25 TOTAL disbursements: $12,990.99.

The Bank was further chartered by the State on January 30, 1819. In March 1819, the list and occupations of depositors were as follows:

Which totaled 157 depositors.

In 1834, the Bank was situated in the basement level of the landmark Merchants' Exchange (designed by famous architect Benjamin Henry Latrobe, built 1815–1820), with the entrance at South Gay Street, between Water and East Lombard Streets. In 1846, the dwelling of Col. Thomas Tenant at the northwest corner of South Gay and Second Streets was purchased for $10,000 and the S.B. of B. moved there in September.

At one time the Bank was only open one day out of the week and its business conducted by the directors in person who were divided into committees and performed a large portion of the clerical labor.

Comparing the financial statistics in 1880 below with those of the first year of 1818–1819, above: Amount of funds, Dec. 31, 1879: $13,667,002.01 Received from depositors in 1880: $2,647,222.03 Interest on loans, dividends on stocks, etc. in 1880: $796,695.43 Less premiums paid on stocks purchased: ($176,771.50) Total funds: $16,934,148.87. Amount paid depositors during 1880, including principal and interest: $2,185,965.64 Amount paid to expenses: $30,894.50 Amount paid to taxes: $20,730.88 Total Expenses: $2,237,591.02 TOTAL amount of funds on hand, Dec. 31, 1880: $14,696,557.85.

Eventually the Savings Bank of Baltimore grew with both the small and large savings of many of the city's citizens, rich and poor, great and minor. In 1907 after the Great Baltimore Fire of February 1904, which devastated the downtown business district, the Bank built a "Temple of Thrift", a beautiful landmark Greco-Roman pillared marble headquarters building at the geographic center of the city at the southeast corner of South Charles Street and East Baltimore Street. In the 1980s, the S.B.B. expanded its offices into a narrow office building to its east and re-cladding the front façade to resemble the older Classical style of its 1907 headquarters.

Later years

Later by the 1990s, the bank relocated its headquarters two blocks further east to a new skyscraper at the northwest corner of East Baltimore Street and North Calvert Street, on the former site of Rembrandt Peale's "Baltimore Museum and Gallery of Fine Arts" of the 1830s, later operated by P.T. Barnum. They moved subsequently to the 1884 Baltimore and Ohio Railroad Central Headquarters building, which was destroyed in the Great Fire of 1904 and replaced by the Emerson Hotel. The bank went through several quick mergers and bank name changes and is now owned by Wells Fargo Bank.

Finally, to simplify its name after 170 years of history, tradition and reputation, the bank dropped the word "Savings" from its title, becoming briefly known as the "Bank of Baltimore Building".

This later "Bank of Baltimore" is one of the several predecessor banks that were eventually consolidated two decades later into an out-of-town financial institution SunTrust with headquarters in another prime city, making Baltimore a "branch town".

Related Research Articles

<span class="mw-page-title-main">Benjamin Banneker</span> Free African-American scientist, surveyor, almanac author and farmer

Benjamin Banneker was an African-American naturalist, mathematician, astronomer and almanac author. A landowner, he also worked as a surveyor and farmer.

<span class="mw-page-title-main">Federal Deposit Insurance Corporation</span> US government agency providing deposit insurance

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".

The Philadelphia Savings Fund Society (PSFS), originally called the Philadelphia Saving Fund Society, was a savings bank headquartered in Philadelphia, Pennsylvania, United States. PSFS was founded in December 1816, the first savings bank to organize and do business in the United States. The bank would develop as one of the largest savings banks in the United States and became a Philadelphia institution. Generations of Philadelphians first opened accounts as children and became lifelong depositors.

<span class="mw-page-title-main">Savings and loan association</span> Type of financial institution

A savings and loan association (S&L), or thrift institution, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" and "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include building societies and trustee savings banks. They are often mutually held, meaning that the depositors and borrowers are members with voting rights, and have the ability to direct the financial and managerial goals of the organization like the members of a credit union or the policyholders of a mutual insurance company. While it is possible for an S&L to be a joint-stock company, and even publicly traded, in such instances it is no longer truly a mutual association, and depositors and borrowers no longer have membership rights and managerial control. By law, thrifts can have no more than 20 percent of their lending in commercial loans—their focus on mortgage and consumer loans makes them particularly vulnerable to housing downturns such as the deep one the U.S. experienced in 2007.

<span class="mw-page-title-main">Savings and loan crisis</span> US financial crisis from 1986 to 1995

The savings and loan crisis of the 1980s and 1990s was the failure of 32% of savings and loan associations (S&Ls) in the United States from 1986 to 1995. An S&L or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members.

<span class="mw-page-title-main">Time deposit</span> Bank account with a fixed maturity date

A time deposit or term deposit is a deposit in a financial institution with a specific maturity date or a period to maturity, commonly referred to as its "term". Time deposits differ from at call deposits, such as savings or checking accounts, which can be withdrawn at any time, without any notice or penalty. Deposits that require notice of withdrawal to be given are effectively time deposits, though they do not have a fixed maturity date.

<span class="mw-page-title-main">Mutual savings bank</span> Type of financial institution

A mutual savings bank is a financial institution chartered by a central or regional government, without capital stock, owned by its members who subscribe to a common fund. From this fund, claims, loans, etc., are paid. Profits after deductions are shared among the members. The institution is intended to provide a safe place for individual members to save and to invest those savings in mortgages, loans, stocks, bonds and other securities and to share in any profits or losses that result.

<span class="mw-page-title-main">Financial Institutions Reform, Recovery, and Enforcement Act of 1989</span>

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), is a United States federal law enacted in the wake of the savings and loan crisis of the 1980s.

<span class="mw-page-title-main">Dollar Bank</span> Regional savings bank

Dollar Bank is a full-service regional savings bank serving both individuals and business customers, operating more than 90 offices throughout Pennsylvania, Ohio, Maryland, and Virginia. The bank's corporate headquarters is located in downtown Pittsburgh alongside its Pennsylvania regional headquarters. The Ohio headquarters is located in downtown Cleveland, and Virginia headquarters is located in Hampton Roads.

The Panic of 1796–1797 was a series of downturns in credit markets in both Great Britain and the newly established United States in 1796 that led to broader commercial downturns. In the United States, problems first emerged when a land speculation bubble burst in 1796. The crisis deepened when the Bank of England suspended specie payments on February 25, 1797 under the Bank Restriction Act of 1797. The Bank's directors feared insolvency when English account holders, who were nervous about a possible French invasion, began withdrawing their deposits in sterling rather than bank notes. In combination with the unfolding collapse of the U.S. real estate market's speculative bubble, the Bank of England's action had deflationary repercussions in the financial and commercial markets of the coastal United States and the Caribbean at the start of the 19th century.

<span class="mw-page-title-main">Freedman's Savings Bank</span> Private savings bank chartered by the U.S. Congress

The Freedman's Saving and Trust Company, known as the Freedman's Savings Bank, was a private savings bank chartered by the U.S. Congress on March 3, 1865, to collect deposits from the newly emancipated communities. The bank opened 37 branches across 17 states and Washington DC within 7 years and collected funds from over 67,000 depositors. At the height of its success, the Freedman's Savings Bank held assets worth more than $3.7 million in 1872 dollars, which translates to approximately $80 million in 2021.

<span class="mw-page-title-main">Benj. Franklin Savings and Loan</span>

Benj. Franklin Savings and Loan was a thrift based in Portland, in the U.S. state of Oregon. Founded in 1925, the company was seized by the United States Government in 1990. In 1996 the United States Supreme Court found that this and similar seizures were based on an unconstitutional provision of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). Shareholders of the thrift sued the federal government for damages caused by the seizure, with the shareholders winning several rounds in the courts. In 2013, $9.5 million was allocated for disbursement to shareholders.

The Baltimore bank riot of 1835 took place in Baltimore, the major port city of Maryland. It was a violent reaction to the failure of the Bank of Maryland in 1834. Thousands of citizens had lost millions of dollars in savings. The riot, which lasted from 6 to 9 August, attacked the homes and property of a number of former directors of the bank, who had been accused of financial misconduct and fraud, as well as the federal district courthouse located on Battle Monument Square. The Baltimore bank riot was one of the most violent and destructive events of civic unrest in any American city prior to the Civil War.

The New York State Banking Department was created by the New York Legislature on April 15, 1851, with a chief officer to be known as the Superintendent. The New York State Banking Department was the oldest bank regulatory agency in the United States.

<span class="mw-page-title-main">Provident Institution for Savings in the Town of Boston</span>

The Provident Institution for Savings (est.1816) in Boston, Massachusetts, was the first chartered savings bank in the United States. James Savage and others founded the bank on the belief that "savings banks would enable the less fortunate classes of society to better themselves in a manner which would avoid the dangers of moral corruption traditionally associated with outright charitable institutions."

Crestar Bank was a bank headquartered in Richmond, Virginia with branches in Virginia and Maryland. It was the leading subsidiary of Crestar Financial Corporation. In 1998, it was acquired by SunTrust Banks. At that time, it was the largest independent bank in Virginia.

The National Bank of Delaware was the first bank chartered in the U.S. state of Delaware. Based in Wilmington, the bank operated independently from 1795 to 1929, when it was merged into the Security Trust Company, also of Wilmington.

<span class="mw-page-title-main">Dedham Institution for Savings</span> American bank

Dedham Savings is one of the oldest American banks still in operation and one of the oldest banks in the state of Massachusetts still doing business under its original charter.

The Mechanics' and Farmers' Bank of Albany was a state and national bank that became a subsidiary of the Bank of New York in 1969.

St Martin’s Place Bank was founded in London in 1816 and for much of the nineteenth century was the leading savings bank in the country. However, it went into decline in the latter part of the century and, in 1896, declined to accept the recommendations of the independent Inspection Committee. The Bank closed its doors and transferred the depositors’ funds to the Post Office.

References

  1. 1 2 Mayer, "Baltimore: Past and Present: With Biographical Sketches of Its Representative Men", Richardson & Bennett, 1871, page 126.
  2. 1 2 3 Alfred, Cookman Bryan, History of State Banking in Maryland , Johns Hopkins Press, 1899, page 16.
  3. Col. J. Thomas Scharf, The Chronicles of Baltimore , Oxford University, 1874, page 260.
  4. Thomas Jefferson, "The Writings of Thomas Jefferson", G.P. Putnam's Sons, 1897, page 172.
  5. David Morier Evans, "History of the Commercial Crises 1857-58 and the Stock Exchange Panic of 1859", Ayer Publishing, 1969, page 186.