CHAPTER XIII
WORTH COUNTY BANKS

COUNTY STATE BANK - FIRST NATIONAL BANK - KENSETT BANK - FARMERS & MERCHANTS BANK, MANLY FARMERS SAVINGS BANK, MANLY FARMERS EXCHANGE BANK AND FARMERS & MERCHANTS BANK, GRAFTON CITIZENS SAVINGS BANK, HANLONTOWN & FERTILE BANK, FARMERS SAVINGS BANK, JOICE - SECURITY BANK, MELTONVILLE - FARMERS SAVINGS BANK, HANLONTOWN.

ORIGIN OF MODERN BANKING

Modern banking systems date back to the Bank of Venice, which was founded in 1587, though private individuals in Venice had been receiving deposits of money for nearly two centuries before the establishment of the bank by authority of the Venetian Government. In 1619 the Bank of Amsterdam, which was modeled to a great extent after the Bank of Venice, was opened for business. After a short time it introduced the innovation of accepting bullion for deposit and issuing receipts therefor, the receipts circulating as so much currency. This was the origin of the financial theory that a paper currency must be redeemable in specie or bullion. When the Bank of England was founded in 1694 it adopted the custom of the Bank of Amsterdam, and a little later the system was extended in the authority granted to the bank to issue notes. Toward the close of the Revolutionary war the continental paper currency issued by the American colonies became so depreciated in value that some finan­cial legislation was necessary. Consequently, on the last day of the year 1781 the Continental Congress passed an act granting a charter to the Bank of North America, which was given the right to issue notes under a plan similar to that of the Bank of England. The states of New York and Massachusetts granted charters to state banks in 1784, but with the adoption of the Federal Constitution, both the state banks and the Bank of North America surrendered their charters and, on February 25, 1794, Congress incorporated the Bank of the United States. In July, 1832, President Andrew Jackson vetoed the bill renewing the bank's charter, and a little later the public funds in the bank were withdrawn by execu­tive order. The bank continued in business, however, until the expiration of the time for which it was chartered, when it wound up its affairs and passed out of existence. With the closing up of the Bank of the United States, the several states began the policy of issuing charters to state banks, under authority conferred by acts of Congress. The next decade witnessed a rapid development of the country's natural resources, with the consequent demand for a larger volume of currency, and in the early J4os was inaugurated the era of what is known in American history, as -"wild-cat banks." Under this system individuals could establish a bank and "issue notes against their assets." They were not subject to government supervision or inspection and unscrupulous persons took advantage of the system by issuing notes far in excess of their assets. It is estimated that at one time there were more than six hundred of these irresponsible banks scattered through­out the country. The panic of 1857 drove many of the wild-cat banks out of existence, but the business continued until after the beginning of the Civil war in 1861. So many people had suffered loss through worthless bank notes that a prejudice was created in their minds against any banking system. But the requirements of modern civilization demanded a currency of some character as a quick and convenient medium of effecting exchanges. Added to this demand were the conditions growing out of the Civil, war, which made an extension of the national credit imperative. In February, 1863, Congress passed the first act for the establishment of national banks, with authority to issue notes based upon Government bonds as security for their redemption. The act .proved to be defective in a number of important particulars, and on June 3, 1864, Presi­dent Lincoln approved another national banking act, which, with subsequent amendments, constitutes the authority under which nearly eight thousand national banks were operating in the United States in 1915. The national banks are the only ones in this country that have power to issue notes, all other banks being merely institutions of discount and deposit.

IOWA BANKING LAWS

The prejudice against wild-cat banks already referred to was so great in Iowa at the time the state was admitted to the Union in 1846 that the first state con­stitution contained a provision that no bank should ever be established by state . authority. The present constitution, which became effective in 1857, 'ls more liberal in this respect than its predecessor, though it contains stringent provisions regarding the creation and regulation of banking institutions. Section 5, article 8, provides that: "No act of the General Assembly, authorizing or creating corporations with banking powers, shall take effect, or in any manner be in force, until the same shall have been submitted, separately, to the people, at a general or special election, as provided by law, to be held not less than three months after the passage of the act, and shall have a majority of all the electors voting for or against it at such elections." Sections 6, 7 and 8 of the same article prescribe the manner in which state banks may be established and what features may be incorporated in a general banking law. Section 9 reads as follows: "Every stockholder in a banking corporation or institution shall be individually responsible and liable for its creditors, over and above the amount of stock by him or her held, to an amount equal to his or her respective shares so held, for all its liabilities accruing while he or she remains such stockholder." Each state has its own laws for the creation, regulation and control of banks methods of any bank whenever ordered by the auditor to make such examination. The result of this system is that there have been very few disastrous failures of state banks in Iowa.

WORTH COUNTY BANKS

The first bank to be established in Worth County was that of a banking firm known as the Easton, Pike & Company. In 1869 J. Henry Easton, of the First National Bank of Decorah, Iowa, with R. C. Pike and William Hunter, formed an organization under the above firm title. This firm was succeeded by B. H. Beckett in 1870. In February, 1874, Mr. Beckett was bought out by R. C. Pike and M. V. Bentley and the two carried on a general banking business as Pike & Bentley. The death of Mr. Bentley shortly afterward closed the partnership and Theodore R. Crandell took his place in the firm. This arrangement continued for about three years and then the firm style was changed to T. R. Crandell & Company. Finally, in the spring of 1881, Mr. Crandell became the sole proprietor. In 1888 he sold the bank to William F. Andrews of New Providence, Hardin County, Iowa. The institution was then conducted under the name of William F. Andrews & Company, with W. F. Andrews as president; W. V. Andrews, vice president; and Henry T. Toye, cashier. On November i, 1891, the bank was organized as the Worth County State Bank, with the following officers: B. H. Beckett, president; William F. Andrews, vice president; Henry T. Toye, cashier. A few years later Mr. Beckett moved to Chicago and then A. J. Dwelle became the president, which position he held until his death December 6, 1902. Lemuel Dwelle succeeded his brother as president of the bank, but after two years' service turned over the presidency to Henry T. Toye, the incumbent at this writing. Until 1891 the bank was of private character, but upon the reorganization as a state bank in that year, the capital stock was placed at $60,000. In 1906 this was increased to $75,000, and again, in 1917, to $125,000. At the beginning of the year 1917 the officers of the institution were: H. T. Toye, president; E. H. Dwelle, vice president; T. S. Hanson, cashier; and C. H. Dwelle, assistant cashier. In November of the same year a change in officials was made and now the organization is operated by the following: H. T. Toye, president; T. S. Hanson, vice president; A. O. Rye, cashier; and C. H. Dwelle, assistant cashier. Mr. Rye was formerly cashier of the Citizens Savings Bank of Hanlontown. The First National Bank of Northwood was started as the Bank of North-wood in 1886 by R. P. Johnson and O. V. Eckert. Four years later, in 1890, G. N. Haugen and Dow Simmonds purchased the bank and reorganized it as the Northwood Banking Company, under which name it was successfully managed for a period of sixteen years. In the fall of 1906 the bank was again reorganized as the First National Bank. The first officers were: G. N. Haugen, president; O. V. Eckert, vice president; N. E. Haugen, cashier; J. O. E. Johnson and T. O. Groe, assistant cashiers. The officers are the same at present, with the exception of the office of cashier, which is filled by Iver Iverson. The capital stock of the institution is $50,000; surplus and undivided profits, $14,000; and deposits about three hundred thousand dollars. In connection with this bank there is the Northwood Savings Bank, organized in 1906, and officered by T. O. Lund, president; J. O. E. Johnson, vice president; and Iver Iverson, cashier. The Kensett Bank was established in 1888 by G. N. Haugen and Knut Cleophas, and has conducted its business continually since that time. The officers of this institution are: G. N. Haugen, president; C. Cleophas, vice president; Ed Cleophas, cashier; and C. C. Cleophas, assistant cashier. The capital stock is $25,000. The Farmers & Merchants Savings Bank of Manly was started in the year 1890. The officers in 1917 are: C. H. McNider, of Mason City, president; F. Wise, vice president; and W. M. Leise, cashier. The bank has a capital stock of $15,000; surplus and undivided profits amounting to $10,000; and average deposits of $200,000. The Farmers Savings Bank of Manly was organized in 1910 and is now officered by H. H. Schulte, president; H. A. Daricliff, vice presi­dent ; J. F. Shulte, cashier; and A. E. Weieneth, assistant cashier. In 1905 the Farmers Exchange Bank was organized at Grafton. W. J. Chris­tians is the manager of this institution, which has a capital stock of $25,000. In 1915 the Farmers and Merchants Bank of Grafton made its appearance, car­rying a capital of $12,000. C. H. Miller is the president of the latter bank; O. H. Koch is the vice president, also H. A. Walk; and J. H. Brogmus is the cashier. One of the most prosperous of the smaller banks of the county is the Citizens Savings Bank of Hanlontown, which was organized in 1900. C. H. McNider is the president and Frank Lang the vice president; at the beginning of the year 1917 A. O. Rye was the cashier and C. S. Rye assistant cashier. The Rye brothers were first associated with the bank in 1905, but in November, 1917, A. O. Rye accepted the position of cashier of the Worth County State Bank of Northwood and his position in the Hanlontown bank was assumed by his brother, Clarence S. The bank has a capital stock of $25,000 and deposits approximately two hun­dred and seventy-five thousand dollars. The Fertile Bank began business as early as 1891 and has been maintained as one of the more prosperous of the smaller institutions ever since. The bank has a $4,000 capital stock and carries deposits averaging $115,000. I. R. Kirk is the president; J. R. Jones, vice president; and J. F. Rhodes, cashier. The Farmers Savings Bank of Joice opened its doors for the first time in the year 1900. C. H. McNider is the president; W. E. Brice, vice, president; K. S. Paulson, cashier; and L. B. Paulson, assistant cashier. The capital stock is $20,000; surplus $3,000; and deposits about two hundred thousand dollars. The Security Bank of Meltonville started in 1907 and is now officered by H. T. Toye, president; J. H. Huber, vice president; and H. A. Larson, cashier. Over fifty thousand dollars in deposits is carried by this bank. The most recent bank in Worth County is the Farmers Savings Bank of Han­lontown, which was organized in October, 1917, with a capital stock of $20,000. The officers are: A. M. Schanke, president; John Hendrickson, vice president; and C. H. Thompson, cashier.

Transcibed by Gordon Felland, July 20, 2018.