A letter discussing the formation of First Charter National Banks from the Comptroller of Currency.
RussHJB
Posts: 20 ✭✭✭
Recently, we were fortunate enough to discover a true lost piece of American banking history in our shop. The following letter is addressed to George Washington Smith, a Chicago lawyer and politician from the Comptroller of currency John Jay Knox. Apparently at one point Mr. Smith and two partners were attempting to open a National Bank in 1872, what makes this letter even more interesting is one of the partners was none other Than Potter Palmer of the Palmer House Hotel fame. It appears the bank never materialized however this brief letter gives us wonderful insight into the formation of First Charter period National Banks. The transcript reads:
September, 27 1872
Sir,
I have received your letter of the 21st last, in reference to the organization of a national bank by yourself, Potter Palmer and H.C. Clements, with a capital of $300,000. The additional fifty four millions of circulation provided for by the act of July 12, 1870, has been already promised although no amount apportioned to the state of Illinois although the amount apportioned to the state of Illinois is not entirely exhausted. It is possible that some of the banks that had been authorized may hereafter conclude not to organize in which event a small amount of circulation will still remain at my disposal. If this shall be the case, I shall be gal to entertain your proposition if renewed sometime during the month of December.
Very Respectfully,
John J Knox
Comptroller
Comments
Very interesting historical letter. For me, this sort of thing really gives life to NBNs, and are always a welcome find. Congrats and thanks for sharing! What fun...
The National Bank System was very extensive and survived for the better part of a century. It was very well documented with correspondence, much surviving, and there are many interesting stories of 19th and early 20th century banking and commerce to be told.
Thanks for posting this wonderful Knox letter. It sounds like they were on the waiting list because a limited amount of capitalization was promised for Illinois banks. If enough of these promised banks failed to raise their capitalization, Knox would offer Clements and Palmer the opportunity to start a national bank.
Interestingly, Potter Palmer of Chicago issued civil war scrip, and built the Palmer House Hotel in 1870. It burnt in 1871, so he built it back.
