BANKING IN NEBRASKA
TERRITORIAL WILD-CAT BANKING
The early banking history of Nebraska dining territorial days is badly marred with considerable "wild-cat"
records. Some brief conception of the operations of these wild-cat banks may possibly be gained by a brief examination,
and a few excerpts from a paper prepared by A. G. Warner for the Nebraska State Historical Society, and published
in Vol. II (1887) of its Proceedings and Compilations. Mr. Warner defined the operation of wild-cat banking something
"Just at the beginning of the present century, in the Empire state, that congenial home of all forms of political
rascality, Aaron Burr had tried his prentice hand at stealing a bank charter through the New York legislature under
the guise of a bill to incorporate 'A company to supply the city of New York with water.' Following the lead of
Massachusetts and New York, various states tried first special and then general acts of incorporation for banks
having a right to issue currency, but like the traveler choosing between two roads in an Illinois swamp, whichever
way they went they were sure to wish they had gone the other."
The experience of older states in creating banks brought about by illicit lobbying, meeting the examiner's visit
with specially borrowed specie, with many times the amount of worthless notes in the hands of a gullible public
as it began to have assets, and even at times the "busting" of a bank named for some place that never
existed in the state seemed never to teach the new ones anything. It was only another form of the spirit that in
recent years has permitted such unbridled traffic in oil stocks, worthless securities and stocks of "well
watered" promoting schemes, despite securities and blue sky laws as well devised as legal minds have been
able to figure them out. Even Nebraska was no exception. Its first company to be incorporated was the "Western
Fire and Marine Insurance and Exchange Company," on March 16, 1855, with powers to issue currency, and do
various financial business that the modern banking laws would hardly permit to the best regulated bank, and so
much so, that it surreptitiously got itself into existence as the "Western Exchange Bank of Omaha." Its
cashier was Levy R. Tuttle, who afterwards, under Lincoln, was treasurer of the United States and the paying teller
was A. M. Wyman, who at a subsequent period held the same high honor. A. D. Jones, a representative from Douglas
County, claimed in his day to have consistently voted against the flock of banking bills in the first Legislature.
This fight came up in the second Legislature, and J. Sterling Morton fought against the chartering of banks on
any system except that of surplus capital. Five banks were chartered in this session: The Platte Valley Bank (at
Nebraska City), the first bank established there; Stephen F. Nuckolls was president and Joshua Garside, cashier.
It was one of the six territorial banks that survived the panic of 1857 and one of the few that was really owned
locally. The Fontanelle Bank at Florence, its owners being Greene, Weare & Benton. It went under in the panic
of 1857. The Bank of Florence, which also went under at that time. The Bank of Nebraska, at Omaha, Samuel Moffatt,
cashier, the second of the three Douglas County banks to go under in the panic of 1857. The Nemaha Valley Bank
at Brownville, The charters had all been drawn in similar form, were "lobbied through" in similar manner,
and each company was made up of a few persons. The stock was either $50,000 or $100,000, to be increased at will
to $500,000 and divided in shares of $100 each. When $25,000 of this stock had been subscribed the company could
go to work.
Mr. Warner summarizes this stock as being "assignable and transferable according to such regulations as the
directors might think proper. The bank had the power to issue notes, bills, and other certificates of indebtedness,
to deal in exchange and do a general banking business. The stockholders were individually liable for the redemption
of the currency issued, but there was no provision for a fixed specie reserve, nor other guard against individual
rascality or incompetency."
Anyone desiring to examine the text of these charters may find them in Acts of Second Legislative Session, pp.
224, 230, 177, 202 and 208. No annual report was ever made in accordance with such provision as there was for that
After the ruin of 1857 struck Nebraska, a correspondent of the St. Louis Republican thus placed the ownership of
the new Territory's first six banks, and two of their predecessors:
Nemaha Valley Bank, Galesburg, Ill.
Platte Valley Bank, Nebraska City, Neb.
Fontanelle Bank of Florence, Elgin, Ill.
Western Fire & Marine Ins. Bank, Galva, Ill.
Bank of Nebraska, at Omaha and Council Bluffs, Ia.
Bank of Florence, Davenport, Ia.
Bank of Desoto, Wisconsin.
Bank of Tekamah, Bloomington and Gossport, Ind.
This list was reprinted in the Brownville Advertiser of July 8, 1858.
The third session was swamped with such bills, but only two banks reached the final goal of incorporation, the
bank of Desoto and Bank of Tekamah, mentioned above.
The panic of 1857 practically ended the passage of special acts of incorporation for banks, except there was an
attempt to "wire" through the 1858 session a measure to establish a "State Bank of Nebraska"
to do business with the state and have branches in other parts of the commonwealth. Even though the measure passed
the council, Dr. G. L. Miller stemmed the tide by exposing an attempt to bribe him, by leaving a note on his desk
that if he would support the measure he would receive $250 in cash and the privilege of making a loan of $5,000
without interest when the institution should be started.
A great many of the earlier more substantial banks which started as the communities began to build up were private
institutions and later became state and national banks. We will only endeavor in the following brief review to
list some of the earlier towns and mention the first banks that started in those towns, to give an idea of the
evolution of the present Nebraska banking system.
Nebraska City. James Sweet National Bank, established September 19, 1859, as a private bank, by Cheever, Sweet
& Co., and assumed the title first given on June 30, 1881, after four or five changes in the membership of
the firm. James Sweet was president and head of it.
Otoe County National Bank, chartered May, 1865, Talbot Ashton, president, J. Metcalf, cashier.
Nebraska City National Bank, 1871, O. J. McCann, president, John W. Steinhart, acting cashier.
Omaha. A cursory examination of the banks that came and went during a quarter century, after the panic of 1857,
in Omaha, will serve as a good barometer of the progress of the banking business in Nebraska.
Private banks were started during the period from 1857 to 1860 by Samuel E. Rogers, Smith & Parmalee, and Gridley
& Co. None of these were longlived, however.
In 1858 William Young Brown started a bank of issue on the corner of Farnam and Eleventh streets, of which J. D.
Briggs was cashier. This bank went into liquidation after a year or so, leaving its paper afloat.
J. A. Ware & Co. started a bank at the corner of Thirteenth and Farnam streets in 1865 and continued in business
for five or six years. The firm was composed of J. A. Ware, Nebraska City; J. W. Angus, Omaha.; and P. S. Wilson,
Cheyenne. In April, 1868, the "Central National Bank" was organized with John McCormick, president; J.
E. Boyd, vice president; and J. M. Watson, cashier. It was located on the south side of Farnam Street, between
Thirteenth and Fourteenth streets. In January, 1871, this bank wound up its affairs and closed its doors. These
institutions have been dealt with a little out of chronological order for the reason that they were short lived.
To revert back to early days, the first banking house established in Omaha (and the oldest with one exception in
the Territory) was that of Barrows, Millard & Co., which started early in 1856. The house was composed of Willard
Barrows, J. H. Millard, Ezra Millard and S. S. Caldwell. Business prospered with the firm.
In 1864 the title became Millard, Caldwell & Co., and May 1, 1868, the firm name became Caldwell, Hamilton
& Co., C. W. Hamilton at this time purchasing the entire interest of Mr. Millard. In October, 1883, this firm's
bank opened up as the United States National Bank.
The house of Kountze Bros. was established in 1857 by Augustus, L. W. and Herman Kountze. A large business was
done by this firm down to the year 1865 when it merged into the First National Bank.
The First National Bank was organized August 26, 1863; commenced business April 1, 1864, and was consolidated with
the preceding firm July 1, 1865. The first officers were Edward Creighton, president, and Herman Kountze, cashier.
The first board of directors were Augustus Kountze, Herman Kountze, Edward Creighton, W. H. S. Hughes and Louis
J. Ruth. The capital stock at the organization of the bank was $50,000. This amount has been increased from time
to time, as follows: January 19, 1865, to $65,000; October 13, 1865, to $100,000; June 19, 1869, to $200,000. May
6, 1864, Augustus Kountze was elected as vice president of the bank, there having been no such officer elected
prior to that time, He remained in this position until February 14, 1865, when Alvin Saunders was elected vice
president and Kountze became cashier. January 12, 1869, Herman Kountze was elected vice president, and H. W. Yates,
assistant cashier. July 8, 1874, Mr, Yates was elected cashier, and Augustus Kountze, second vice president. Herman
Kountze was elected president, January 12, 1875, and Augustus Kountze, vice president, at the same time. F, H.
Davis became assistant cashier, January 9, 1877. The present board of directors are Herman Kountze, Augustus Kountze,
John A. Creighton, A. J. Poppleton and F. H. Davis. On March 1, 1882, Mr. Yates retired from the bank and F. H.
Davis succeeded him as cashier.
For the first twenty days in October, 1866, the average business transactions per day amounted to $14,432.18, including
the cash on hand. The average daily transactions for a corresponding period in October, 1881, were $811,108.11,
including also the cash on hand, Exclusive of cash on hand, in October, 1866, the average daily transactions were
$5,905.76, and in October, 1881, $529,569.20. The first board of directors were Ezra Millard, S, S. Caldwell, Joseph
N. Field, J. D. Brown, R. A. Brown, Thomas Martin and A. J. Simpson. The present board of directors are Ezra Millard,
J. H. Millard, J. J. Brown, A. J. Simpson and William Wallace. The bank has at present a surplus capital of $100,000.
In 1877 the bank retired one half of its $180,000 circulation, leaving $90,000 outstanding.
The State Bank of Nebraska was organized and commenced business June 1, 1870. The board of directors were Alvin
Saunders, Enos Lowe, Samuel E. Rogers, A. D. Jones, Jonas Gise, John R. Porter, J. Weightman, C. H, Downs and J.
A. Horbach. The capital stock is $100,000, one half of which was paid in and the remainder paid from the profits,
This was the first state bank organized in Nebraska, as well as the first instituted under the amended banking
law of the state, which permitted them to receive deposits in excess of two thirds of the capital stock. Alvin
Saunders was its first president, J. R. Porter, vice president, and B. B, Wood, cashier. June 5, 1876, Mr. Saunders
retired from the presidency of the bank, and Frank Murphy was elected to succeed him. In 1871, Enos Lowe was elected
vice president of the bank; he was succeeded by Samuel E. Rogers, June 5, 1876. July 15, 1874, Luther Drake became
The Nebraska National Bank was opened in April, 1882, with a paid up capital of $25,000, and the following directors:
S, R. Johnson, A. E, Touzalin, W. V. Morse, John S. Collins, James M, Woolworth, Lewis S, Reed and Henry W. Yates,
The United States National Bank, through succession to Barrows, Millard & Co., and Millard, Caldwell &
Co., the oldest bank in the State of Nebraska, after almost forty years as a national bank has become one of the
two largest Omaha banks. Charles W. Hamilton, S. S, Caldwell, Milton T. Barlow and V. B. Caldwell have been the
men to whom the credit for the success of this institution mainly reflects. The record of Ex-Senator Joseph H.
Millard of over half a century service with the Omaha National Bank has been one of the landmarks of American banking.
The First National Bank has continued to be one of the larger institutions of Omaha, with F. H. Davis in more recent
years serving as president.
In 1882 the old firm of J, A. Ware & Company was reorganized and came out as the Merchants National. The service
of H. W. Yates as cashier and president of the Nebraska National Bank is another landmark record in Nebraska banking
annals. Newer banks in Omaha, were the City National, which operated for a decade or more prior to its purchase
by the younger State Bank of Omaha, organized in 1912; the Corn Exchange National Bank, 1909, and the Central State,
and Commercial State, organized in 1916. South Omaha has the very strong South Omaha Savings Bank, 1888; Packers
National Bank, 1890; Live Stock National Bank, 1907; Stock Yards National Bank, organized under its present name
in 1911 and succeeding to the old Union Stock Yards National, The service of H. C. Bostwick, as president of this
bank is another of the credit marks of the Nebraska banking profession. The Security State in 1914 is the junior
bank down there. Omaha has had a long list of defunct banks, in between the two extremes pictured in this review,
of the struggling pioneer banks and the solidly established financial bulwarks of today.
Lincoln. The pioneer establishment was that of James Sweet & Brock, dating from 1868. It was built in the southwest
corner of the Sweet block, the first block built on the plat of Lincoln. In 1,871 it was reorganized into the State
Bank of Nebraska. Nelson C. Brock, of this firm, died in Lincoln in March, 1921.
The First National Bank of Lincoln received its charter, to do business on February 24, 1871. It was the successor
of a private bank founded by Judge Amasa Cobb and J. F. Sudduth, president and cashier. In 1874, John Fitzgerald
became president and John R. Clark, cashier. In 1889 a consolidation was - effected with the American Exchange
National Bank, when S. H. Burnham became president. It later took in the Columbia National. Now with the First
Savings Bank and First Trust Company, this concern is one of the strongest of Nebraska. Lincoln has had many banks
come and go since the old First National started in. Banks which are no longer on the active list are: State National,
1872; Lincoln National, 1882, consolidated in 1892 into First National; Marsh Brothers & Mosher banking house
was a leading factor in the defalcation of Joseph Bartley, state treasurer, and the president of this institution
landed in the Federal Penitentiary as a cure for his style of banking; Lancaster County Bank, 1877; Union Savings
Bank, 1886; Nebraska Savings, 1886; German National, 1886; Industrial Savings, 1891. On the other hand, another
group of banks have started in Lincoln that are splendid institutions, The City National began in 1899; National
Bank of Commerce, in 1902; Central National in 1907; Nebraska State Bank, 1911; Continental State, formerly German-American,
1909; Lincoln State, 1913, and American State, 1917.
Beatrice. Smith Brothers Bank commenced business in September, 1872, in a small way. Their successor, the First
National Bank, was chartered and commenced business in April, 1877. Hon. A. S. Paddock was director in this bank,
The Gage County Bank, organized in 1881, was an outgrowth of the private banking business of William Lamb, opened
August 1, 1879.
Blair. The private banking business of A. Castetter was opened in 1869. Francis M. Castetter, a son, was manager
after 1890, and after his father's death, also president. F. H. Claridge has been president of this bank in recent
years, and continued in charge until the sensational failure of this institution in February, 1921, in probably
the most stupendous bank failure in many years of Nebraska banking history.
Brownville. The first bank at Brownville has already been spoken of. S. H. Riddle was president and Alexander Hallam
cashier. This bank, connected with the Nemaha Valley issue, went down in the storm of 1857, B. F. Lushbaugh and
John L. Carson established a private banking house, as Lushbaugh & Carson, January 14, 1857, and this withstood
the storms of territorial finance until August 28, 1871, it was succeeded by the newly organized First National
Bank of Brownville, of which John L. Carson was the first president. The State Bank of Brownville was organized
under state law, October 1, 1870,
Columbus. In July, 1871, Leander Gerrard and Julius A. Reed opened a bank on the north side of town. In May, 1874,
Abner Turner and Geo. W. Hulst opened another on the south side. The two banks organized under the name of Columbus
State Bank July 28, 1875. The next bank in Columbus was a private bank of Anderson & Reen in 1880.
Crete. The State Bank of Nebraska was organized in Crete in 1872, with Colonel Doane, John Fitzgerald and John
R. Clark as incorporators. This was the first bank organized in Saline County, and its first competitor in Crete
was in 1879, when the banking company composed of John L. Tidball and Walter Scott started in, and this institution
became the Citizens Bank in 1881. The Saline County Bank was organized at Wilber in March, 1878; the Blue Valley
Bank there in 1881.
Fairbury. Thomas Harbine's Bank started in 1874 and was the first and in fact the only bank in Jefferson County
for some time.
Fremont. E. H. Rogers & Co. established a private bank in July, 1867. In April, 1872, the First National Bank
was formed with Theron Nye as president, and E. H. Rogers as cashier. Hopkins & Millard's bank, originally
Wilson & Hopkins, starting in 1871, eventually became the Fremont National. George W. E. Dorsey's bank began
in December, 1879, and Richard &,Keene's private bank (L. D. Richards and L. M. Keene) opened in 1882.
Grand Island. The pioneer financial institution of Hall County was the old State Central Bank organized in 1871
by Henry A. Koenig, later state treasurer, The Citizens National started in 1887 and the Security National in 1889.
These three banks all went under during the trying times of the '90s But the Grand Island National, an outgrowth
of the Grand Island Banking Company, organized in 1879, and the First National, organized as such in 1882, from
the private bank of C. F, Bentley, started in 1880, have remained and grown during the forty years elapsing.
Kearney. The oldest bank in Kearney was that of L, R. More, established in 1873. The Buffalo County Bank was organized
in 1879 to take the place of its predecessor, the Kearney Bank, which failed that year.
Madison. Barnes-Tyrrell, bankers, opened in 1871. F. W. Barnes of this firm was a pioneer of Madison, as he laid
out the town in 1870.
Norfolk. J. and C. P. Mathewson opened a bank in 1872 in a small frame building. In 1878 C. P. Mathewson became
sole proprietor of that business, and this institution later became the Norfolk National Bank. The next banks to
start were the Norfolk Bank, opened by Burrows & Egbert, January 18, 1882, and the Norfolk City Bank, opened
February 15, 1882, by I. P, Donaldson & Co.
Pawnee City, The State Bank of Nebraska was established July 26, 1872, It was reorganized later as the Farmers
State Bank, and still later as the First National Bank. But as the immediate successor of the Farmers State Bank
in 1881, the private banking house of Joy, Eckman & David came in.
Plattsmouth. The first bank in Plattsmouth was that of Tootle & Hanna, opened in 1859; John R. Clark became
a partner in 1866, and the firm remained Tootle, Hanna & Clark until 1872, when the First National Bank was
organized, with John R. Fitzgerald as president, C. H. Parmalee vice president, John R. Clark cashier, E. G. Dovey
and R. G. Cushing and others as directors. This list presents names very prominent in banking and commercial circles
in Nebraska. Schuyler. F. E. Frye & Co., the first bankers here, could not survive the storm of 1873. In March,
1874, Sumner, Smith & Co. established a bank. In 1881 it became the Farmers Bank.
Tecumseh. The first banks in Tecumseh were the private house of Russell, Holmes & Co. (W. H. Russell and C.
A. Holmes), established in 1371 and about twenty years later becoming the Tecumseh National Bank, and the Farmers
Bank, started in 1880.
West Point. Bruner's Bank was organized in 1871, by Bruner, Neligh & Kipp In 1872 it became Bruner & Kipp,
and in 1874 became Uriah Bruner's Bank. The next bank was the Elkhorn Valley Bank established in 1875.
York. William McWhister founded a bank in 1875 which became the Commercial State Bank after Sayre & Atkins
had operated it a short time. The First National of York was incorporated July 1, 1882.
BUILDING AND LOAN ASSOCIATIONS
One of the peculiarly characteristic achievements of Nebraska's financial history is the part played in her
upbuilding by the many building and loan associations organized in the state under the peculiarly encouraging and
favorable laws adopted for the purpose of aiding in home building, Hon. Charles F. Bentley of Grand Island, Neb.,
served in 1907 as president of the National Association of Building and Loan Companies, and with other Nebraska
financiers early saw the need of protecting the small borrower and investor from the greed and unsafe methods of
many so called national concerns that had sprung up around the country.
Secretary Hart of the state department of trade and commerce is distributing the annual report of the building
and loan associations of the state. The pamphlet contains a statement of the condition of each of the seventy four
associations in the state, together with a summary of the combined report. Mr. Hart speaks in high terms of their
The first building and loan associations in the state were fostered under a law passed in the early history of
the state, and for the last twenty eight years they have remained rather constant in number. There are now seventy
four, whereas in 1892 there were seventy one. The largest number was eighty six, in 1894, and the lowest was in
1902, when it was forty eight.
The growth in total assets, however, has been tremendous, nearly twenty six times as much as in 1892, when they
were three millions. During the last year the increase was twelve millions. Two were granted certificates during
the year, the Home at Fairbury and the Globe at Columbus The number of shares has risen from 45,000 in 1892 to
1,917,000 at the present time.
Associations are now located in the following towns and cities: Albion, Alliance, Auburn, Aurora, Beatrice (3),
Blair, Bloomfield, Cambridge, Central City, Clay Center, Columbus (3), Crete, David City, Fairbury (2), Falls City,
Fremont (2), Grand Island, Hartington, Hastings, Havelock, Holdrege, Hooper, Humboldt, Kearney, Laurel, Lincoln
(9), Madison, McCook, Nebraska City, Nelson, Newman Grove (2), Norfolk (2), North Loup, North Platte, Omaha (9),
Ord, Platt& mouth (2), Seward, Sidney, Superior, Tecumseh, Trenton, University Place, Valentine, Wahoo, Wilber,
Wood River, Wymore, York.
The nine Lincoln associations have assets totaling around twelve million dollars, while the nine in Omaha have
assets of about fifty millions. Those with more than a million assets in the state are the State of Beatrice, with
$3,023,000; the Nebraska State of Fremont, with nearly three millions; the Equitable of Grand Island, with $1,230,000;
the Nebraska Central of Lincoln, with $5,512,000; the Union of Lincoln, with $1,422,000; the Norfolk, with $1,239,000;
the Mutual of North Platte, with $1,329,000; the Bankers of Omaha, with $1,032,000; the Commercial of Omaha, $1,302,000;
the Conservative of Omaha, with $17,259,000; the Nebraska of Omaha, with $1,749,000; the Occidental of Omaha, with
$9,013,000; the Omaha, with $16,943,000. Outside of Lincoln and Omaha the total assets are fifteen millions.
Secretary Hart says: "This report shows that practically the same prosperity shown in the 1919 report has
continued throughout the year just closed and the increases in receipts and expenditures have again shown a 25
per cent gain and the total assets and liabilities have increased 18 per cent or $12,171,277.84.
"Loans are negotiated only on real estate security or assignment of installment certificates of stock and
then only for a conservative margin of the appraised value. This report shows that the loans on real estate averages
48 per cent of the appraised value of the security compared with 53 per cent in 1919. With the return of normal
building conditions and the urgent housing conditions now existing, the future activities of these associations
will no doubt show greater activity than heretofore. Nebraska is justified in her feeling of pride in being the
home of some of the largest and most efficiently managed associations in existence anywhere."
Receipts for the year included twenty five millions of dues paid; ten millions of stock paid up; mortgage payments
of sixteen millions; a million and a half of stock loan payments and over four millions interest payments. The
total receipts were $71,711,388,36. Over thirty one million was invested in mortgage loans; withdrawals totaled
twenty five millions; salaries and commissions, $645,000; Liberty Bonds, $911,000,