History of Linn County Iowa Part 91

"After a lapse of forty-four years, one's memory is not reliable and you must therefore make liberal allowance for errors in date as well as other things. In writing I regret the want of old papers and other data, but have done the best I could under the circ.u.mstances.

"Truly yours,

"SEYMOUR D. CARPENTER."

The first const.i.tution of Iowa made the following reference to banks:

"The General a.s.sembly shall provide for the organization of all other corporations, except those with Banking privileges, the creation of which is prohibited."

For this reason early banking was conducted as a purely private enterprise, or as a branch of some bank incorporated in another state.

Prior to the adoption of the second const.i.tution in 1857, it became evident that the state was very much in need of a more stable banking system, so provision was made for incorporated banks, when approved by vote of the people and for "The State Bank of Iowa," which was incorporated July 29, 1858, with power to establish branches and issue circulating notes. Elihu Baker, a Cedar Rapids banker, was the first secretary of the State Bank, and in time fifteen branches were established at different points in the state.

Although none was located here, our business interests received substantial benefit from the improved financial conditions that resulted from a safe system and a sound currency.

With the coming of the railroad in 1859, Cedar Rapids entered the field of commerce and forever put an end, not only to frontier banking, but to one of the most wonderfully heroic, and, in some respects, beautiful scenes of its human history--the pioneer life.

[Ill.u.s.tration: R. D. STEPHENS]

[Ill.u.s.tration: ADDISON DANIELS]

[Ill.u.s.tration: J. B. YOUNG]

[Ill.u.s.tration: I. M. PRESTON]

Country banking as conducted today, is less crude, more scientific, and safer than in the time of which we write, but a fundamental condition that has always made it a public necessity remains the same, namely, a local community engaged in the activities of development, production, and commerce.

It goes without saying that the banking needs of Cedar Rapids as a railroad town were greater than ever before and several applications were made for permission to establish a branch of the State Bank, none of which, however, was successful.

This worthy inst.i.tution itself proved to be short-lived, for the need that brought it into existence was broader than Iowa and soon crystallized into the National Bank Act, which was adopted by the Federal Congress in 1863, and which provided for a National Bank currency and effectually put an end to all other bank note issues, and the State Bank of Iowa, having fulfilled its mission, redeemed its notes and all other liabilities, and ceased to exist.

Although the national system met with much opposition on the part of the larger state banks of New York and elsewhere, and had to overcome prejudice in the minds of many people throughout the country, its positive improvement on the old order of things was quickly apparent to Cedar Rapids bankers, resulting in the establishment of two National banks in 1864, and the race for charters ill.u.s.trates a degree of alertness and compet.i.tion in those days that would do credit to the chief of present day hustlers, and verified the old proverb, "the first shall be last," for the First National Bank, with a capital of $50,000.00, received charter No. 500 on August 23d, while the City National Bank, with a capital of $100,000.00, received charter No. 483 on July 19th of that year and was the first to open its doors for business. During the following year, the First National Bank increased its capital to $100,000.00. Published reports, about the end of the year 1865, show total deposits in both banks of nearly $150,000.00, and the full limit of outstanding bank notes $90,000.00 each, thus promptly and amply providing banking facilities for the rapid development that followed the close of the Civil war.

City banking within the memory of our older bankers was practically confined to the east and to a very few of the larger cities of the country, and its development in Cedar Rapids and other cities of her cla.s.s ill.u.s.trates the evolution of banking methods and evidences the remarkable financial growth of Iowa and the west. In response to the growing needs of jobbing and manufacturing lines, which were then in their infancy, the Merchants National Bank was organized in 1881 by R.

D. Stephens. He was an exceptionally able banker, and his untimely death in 1883 deprived the community of a strong force.

With the organization of the Cedar Rapids National Bank, which succeeded the private banking business of G. F. Van Vechten in 1887, there was inaugurated a systematic effort to encourage and build up a business with country banks within this territory. Such deposits were carried in moderate amounts before this, but were handled more as a matter of necessary collections on account of the shipments of live stock and grain to this center than as a permanent and profitable branch of banking. It became evident at this time that the rapid development of the state and of wholesale and manufacturing businesses at this point was bringing Cedar Rapids into closer business relations with many other towns, that currency and credit could be handled here with equal safety and with greater profit and convenience than in the distant east, and with population and wage earners increasing, the savings banks a.s.sumed their most important place, and thus it came about that city banking, like country banking, was the outgrowth of our mutual business requirements and advantages. Its natural development led to the organization of the Cedar Rapids Clearing House a.s.sociation in 1902, the designation by government authority of Cedar Rapids as a reserve city for deposits of other national banks in 1903, and to the existence of ten active banks today, holding total deposits of over sixteen million dollars, and completes a record of banking safety that has paid its depositors in full throughout its history.

List of Cedar Rapids banks in the order in which they began business:

No. Name Opened Liquidated

1 Greene & Weare 1852 1858

2 Ward, Bryan & Co. 1853 1856

3 Carpenter, Lehman & Co. 1856 1857

4 Dodge, Carr & Co. 1856 1857

5 Elihu Baker & Co. 1857 1860

6 Greene, Merritt & Co. 1858 1862

7 Carpenter, Stibbs & Co. 1859 1869

8 S. C. Bever & Son 1862 1864

9 City National Bank July 19, 1864 1898

10 First National Bank August 23, 1864 1886

11 Union Savings Bank February, 1870 1879

12 G. F. Van Vechten Private Bank February 1, 1877 1887

13 Merchants National Bank March, 1881

14 Cedar Rapids Savings Bank May 15, 1883

15 O. N. Hull's Real Estate Bank August 12, 1884 1890

16 Cedar Rapids National Bank February 28, 1887

17 Security Savings Bank April 26, 1889

18 Bohemian-American State Bank June 13, 1892 1894

{Iowa Savings Bank May 1, 1893} 19 { changed name to } 1898 {Bohemian-American Savings Bank September 1, 1894}

20 Citizens National Bank March, 1898 1908

21 American Trust and Savings Bank April 5, 1898

22 Cedar Rapids Loan and Trust Co. February 1, 1900 1904

23 Peoples Savings Bank May, 1903

24 Fidelity Trust and Savings Bank June 1, 1904 1907

25 Commercial Savings Bank December 14, 1905

26 Iowa State Savings Bank July 1, 1906

27 Commercial National Bank July 7, 1908

28 First Trust & Savings Bank August 4, 1910