The Omaha Sunday Bee
FIFTIETH
ANNIVERSARY
FIFTIETH
ANNIVERSARY
)
A
VOL. 51 NO. 1
Foundation
Banks on a Firm Basis
V First Banking BusineM Here That of Western Exchange
I Fire and Marine Insurance Company in 1855
Joseph H. Millard, One of Pioneers,
, ; ' " Still Active in Business.
V V nun nxywxy
Safe ibankina has been a charac-
'teristic of Omaha. The foundationi
of Ihr sound method which so gen
erally have marked, the financial in
stitutions here were laid in two pri
vate banking firms of pioneer days,
the house of Kountze Brothers and
that of Barrows. Millard & Co. The
men who established these institu
tions may have moved away, or died,
but their tradition has been carried
on by the youngsters whom they
trained, by their sons and by many
others who came into contact with
them.
The solid principles of business
which they established have proved
more enduring than any man or set
of men. having been bred into the
verr character of the banking insti
tutions. The frame shacks in which
the frontier banks opened up for
business have gone; by the process
of -combination, division and change,
the old names have disappeared, but
the smrit lives on.
According to the historians, the
first banking business in Omaha
was that of the Western Exchange
Fire and Marine Insurance company
back in 185S. The panic of 1857
wiped it out of existence. The Bank
of Nebraska opened in 1856, at the
southeast corner of Farnam and
Twelfth streets. Barrows, Millard
& Co., established a land agency
in the same year, and gradually
worked into the insurance and bank
ing business. Kountze Brothers
founded their banking business in
1857.
Early-Day Bankers.
One of the early-day bankers, who
is still active in business life, is
Joseph H. Millard. Talcs are still
told1 of how he brought a cargo of
thousands of dollars of gold dust and
nuggets irom the head ot navigation
down the Missouri river to Omaha.
and of his adventures in the mining
camp at Virginia City, Mont Mr.
Millard came to Nebraska in 1856T
and established the land agency of
Barrows, Millard & Co. His brother,
Ezra Millard, who had been in busi
ness in Sioux City, came here two
years later. The two were soon
joined by S. S. Caldwell, and es
tablished a bank at Twelfth and
Farnam streets, across the street
from Kountze Brothers bank. In
1864 he crossed the plains and spent
two years in the banking business in
the Montana gold fields. In 1S67
he sold out his interest there and be
came cashier of the Omaha National
bank, of which he later was presi
dent, and where he, now occupies the
position of chairman of the board.
Another who has been in intimate
association with the early day
financiers is Milton T. Barlow, now
vice president of the United States
National bank. As a boy looking
for a job he came to Omaha from
Greencastle, Ind., in 1864. - Fate
drew him into the banking house
of Barrows, Millard & Co. He re
mained there through all the changes
that saw the firm altered into that
of Millard, Caldwell & Co.. of
which he was a member.
But One "Wild Cat"
I remember only one 'wild cat'
back in those days," says Mr. Bar
low. "It was called the Bank of
Chicago, and issued its own paper
money in large quantities. It was
my duty at the close of business each
day to go across the hall (it was in
tha tame buildinr as the firm I was
vfck) md tt aold foe its, euntjLcy.
i. t- .1 ... l . i m .m . mi mr mm
jL sow anniversary etottioh
of Omaha
It always was able to pay me, but
eventually closed down.
"Grasshoppers ate the crops and
panics broke many men, but the old
banks kept running. There may not
have been enough in the banks
sometimes to make a good meal for
the grasshoppers, but we had a lot
of men who would never close
down and who never knew when
they were licked."
The Kountze brothers, who be
came widely known throughout the
west, and later engaged in the
banking business in New York City,
were the sons of an immigrant from
Saxony who settled at Osnaburg,
Ohio. There were five daughters,
and five sons who received good
business training in their father's
store. ,
First National's Origin.
Back in 1854 one of these young
men, Augustus Kountze, came west
and set up in the real estate business
in Muscatine, la. In the summer of
1855, according to Alfred Sorenson's
History of Omaha, he visited Omaha
in connection with business, and be
coming convinced that this was to be
a great city, made a number of in
vestments in real estate. He took
up his home here in the following
vear and remained until 1872. His
brother, Herman Kountze, joined
him, and lat- Luther, Charles B.
and William Kountze followed. Wil
liam Kountze died in Dakota City in
185K.
The brothers found their propertyj
unsalable after the financial panic of
1857, but did not despair. Nearly all
the banks in Nebraska had failed at
that time, and they saw an opening
for a new bank in Omaha. The firm
of Kountze Brothers did a banking
business until 1863, when it was con
verted into the First National bank,
with a capital of $50,000.
Luther Kountze was the first one
to move farther west, and opened a
bank in Denver with Augustus and
Herman Kountze as senior partners.
He was joined by Charles B.
Kountze and in 1866 organized the
Colorado National Bank of Denver.
In the following year Luther
Kountze went to New York, where
he established the banking house of
Kountze Brothers.
Unprofitable Speculations.
The growth of this venture re
quired the attention of Augustus,
who went east in 1872, leaving his
Omaha interests in the hands of
Herman Kountze.
Their speculations in property in
the river towns of Nebraska are said
not to have proved profitable except
in the case of Omaha. The coming
of the railroad diminished the impor
tance ot many thriving towns along
the Missouri, while it assured the
prosperity of Omaha, which was
chosen as the terminal of the LTnion
Pacific. .
Augustus and Herman Kountze
were identified with the progress of
Omaha. They invested in the Oma
ha and Northwestern, railroad, and
in other lines, Augustus also having
been an incorporator and a director
of the Union Pacific. He served
as treasurer of the territory of Ne
braska. Herman Kountze was a
large holder of residence property,
doing much to develop the city, and
was heavily interested in the stock
yards. The Kountze Memorial Lu
theran church was named in honor
of the father of these, five earlyday
ftV'fie.H 0151 -
" - -.141- U i-ss-.X J SSS a z
I It always was able to pay me, but f & 1 . VI V i - 'rtr -, 1 t&J
9 l III I I I . i l l I tf t J 11 INI II
Bank in Omaha 50 Years Ago Much Like That
In Nebraska Town of
Robberies in Pioneer Times
Less Than at Present,
Says F. H. Davis
Loans Were Less
Liquid.
Only four banks existed in Oma
ha, where now there are 20, when
F. H. Davis entered the profession,
in 1872. But, then, wealth was only
in the making, and these four met
all the requirements of that day
when ready cash was rather limited
and the city had only 16,000 inhabi
tants. Mr. Davis, who now is pres
ident of the First National bank, en
tered the employ of that institution
49 years ago. It was an outgrowth
of the frontier banking firm of
Kountze Brothers, and was the first
bank in Nebraska to be organized
under the national banking laws.
Primitive Methods.
"The volume of business was then
very small," said Mr. Davis, in re
calling the old days. "There was
ro clearing house, and the tellers
would sort out the checks at 1
o'clock and then go over to the other
banks and settle up, sometimes
bringing back cash.
"Robberies? No, they were less
frequent than today, as newspaper
readers who' notice bank holdups in
Chicago and other cities now aver
age close to one a week may well
believe. Things were more free and
easy, but we were quite up to the
minute in banVing facilities, and even
had time locks on our vaults.
"I remember Herman Kountze
sometimes took his place at the
counter, a thing bank presidents do
not try now. He had only one teller
and a bookkeeper in the 60s. A man
came in to buy a draft for $150 and
Mr. Kountze waited on him. He
remembered to charge the 35 cents
exchange fee, all right, but forgot
to get the man's $150.
"At an earlier day considerable
gold dust came to Omaha from the
Black Hills and Montana, but after
I entered the busines, there was
very little, although some came up
from Colorado. Mr. Kountze would
always handle this because he was
experienced at it, and we kept i
pair of scales to weight it..
Cashing $1,000 Bill
"Banking in Omaha never saw
the opportunities or took the advan
tages that were found farther west.
A story that used to be told about
Montana banking in those davs
deals with a man who came to town
with nothing- but revolver nr a
j $1,000 bilL.Hj drjftetWc.np.djyyingJ
OMAHA, SUNDAY MORNING, JUNE 19, 1921.
in rain to cash his note and un
able to spend it because no one had
the change. Ultimately he ended up
in the village bank, where the bill
would be cashed at $50 discount.
Later another man would come in
with plenty of gold, but wanting to
turn it into paper to go on a trip
to the east The $1,000 bill would
then be turned over to him at an
other handsome discount That was
wild west financing, but no tales
such as that can be told of Omaha."
Banking in Omaha 50 years ago,
Mr. Davis says, was much like
banking today in any Nebraska town
of 16,000 population. Loans were
less -liquid than is now customary,
however, and extensions the usual
rule. The total deposits of the First
National bank in 1876, as revealed
by a yellowed advertising statement
were $1,267,066. Quite a respectable
figure for many banks even now, but
small indeed compared with the de
posits shown in the last statement
of more than $15,000,000.
... A Frame Shack.
Kountze Brothers opened their
first banking house in a frame shack
on Farnam street Its capital grad
ually increased from $50,000 to
$500,000, and the building into
which it had moved at the southeast
corner of Farnam , and Thirteenth
streets became too small. It was re
placed with the six-story building
which now houses the Omaha
branch of the federal reserve bank.
This was completed in 1888, at a
cost of about $300,000. This struc
ture was the admiration of the whole
state, and, to quote a historian of
those days, "The arched granite en
Investment Is Important
Work of Insurance Men
By H. O. WILHELM.
In the enormous growth of the
life insurance business in 50 years
the companies have not overlooked
the more important things that make
an institution great. Life insurance
companies give their clients (policy
holders) greater service than clients
receive in most other lines of busi
ness. Among the branches of the busi
ness most important to Omaha and
the surrounding territory is the in
vestment department. The com
panies collect millions of dollars in
small sums from their policy-holders,
and then invest it in city and farm
loans. Omaha is exceptionally well
jocated, as the farm loans of Ne
16,000 Population Today
trance on Farnam street and the
vestibule are upon a scale of mag
nificence that strikes the eye with
admiration." A broad flight of
marble stairs led to the banking
room, and the floor of the lobby
was of white Italian marble. The
building is still to be seen, stripped
of much of the lavish architectural
devices of the old days, MrVdly to
be recognized as the sensation it un
doubtedly was.
There were not as many promo
tion schemes 50 years ago as now,
Mr. Davis recalls, although there
was a fever of town lot speculation.
The expectation on which this
boom was based was that Omaha
would be a city of 500,000 popula
tion in 25 years.
Shops and Stock Yards.
The Union -'Pacific railroad had
built its shops here, and the city
had become an important distrib
uting center. Flour mills were an
early development, and as the min
ing country to the west sent its gold
and silver ores down to be refined
here, food and other supplies were
sent in return. The packing indus
try had not then taken on its pres
ent importance. Meat was supplied
from slaughter houses on the out
skirts of the city run by the pro
prietors of the butcher shops. Most
of Nebraska's cattle were shipped
to the Chicago stock yards, and the
ranges were stocked by driving
herds of cattle from Texas and the
Indian territory overland.
But by 1878 larger packing houses
were in operation and Omaha meat
had begun to be shipped abroad. The
volume of commerce in Omaha in
braska and Iowa are considered the
finest in the land. In fact, the per
capita of farm wealth in Nebraska
and Iowa is the greatest in the
United States. Since the insurance
companies began making farm loans
in Nebraska, only a few years ago.
the value of the land in many cases
has more than trebled. Many of the
companies are now' making loans in
the better sections of western Ne
braska, and as a result the investors
are beginning to look upon. the whole
state of Nebraska with equal favor.
4 Loan Millions.
Much of the money paid out in
claims is invested in farm mortgages.
In fact, the companies are all en-
1 X
Not So Many Promotion
Schemes Then, But There
Was a Fever of Town
Lot Specula
' - tion.
1878 is set in an old account at $30,
000,000, which may be compared
with the bank clearings which ran
over $3,000,000,000 last year. Whole
sale business at that time was said
to be increasing at the rate of 30 to
40 per cent a year.
Among the products manufactured
here in the late 70's were white lead,
nails, carriages, wagons, brooms,
cigars, beer, whisky, soap, farm
implements, and the boast was made
of the largest smelting and refining
works on the continent, several
foundries and a safe and vault fac
tory. At West Point there was a
paper mill and furniture factory,
using power from the Elkhorn.
Grasshonoer Davs.
In Johnson's History of Nebras
ka, which was published in 1880,
immediately preceding an account of
the depredations of the grasshop
pers, the opportunities offered by
Omaha and the state were thus set
forth.
"No state offers a more inviting
field for the location of the manu
facturer or man of capital than this,
and there is none where he would
be received with heartier welcome,
or where the investment of his
means would yield larger returns.
The resources of the country are
inexhaustible, the manufacturing ad
vantages unsurpassed, water power
abundant and well distributed, and
to men of capital and skill the field
for manufacturing enterprises, of
the kind to suit the wants of the
country, is unlimited. A more ad
vantageous location for woolen
mills, .paper and flouring mills, tan
neries and factories of various kinds,
is not presented in any other west
ern country. The state is settling
up at an unprecedented rate'; hun
dreds of immigrants are arriving
each day, and every season thou
sands of new farms are opened out
In no agricultural country is the
demand for machinery so great as
this, and no establishment for the
manufacture of all the different
farming implements would be bet
ter patronized and pay handsomer
profits on the money invested."
The construction of the last sen
tence seems to leave something to
be desired, but certainly the his
torian of those davs was not
prejudiced against ithts state
muckrakers were not then in faro,
18 Banks in State in 71
Have Increased to 1 ,009
Only Four Banks in Omaha When The Bee Was Found
ed 50 Years Ago Today There Are 20 First
Exclusive Sayings Institution Was
Omaha Savings Bank.
There were only four banks in
Omaha 50 years ago when The Bee
was founded. A fifth, known as
the Central National, was then in
process of liquidation. In the whole
state there were only 18 banks. That
was in 1871, but today Omaha has
20 banks, and the total for the whole
state is 1.009. ,
Private banks were in the major
ity then. Nebraska City had three
of these; Lincoln, two, and Omaha
only one, that of Caldwell,. Ham
ilton & Co., although it had had
others before this, among them J. A.
Ware & Co. and Kountze Bros. At
Blair was the banking house of Cas-
tetter & Co., which closed down only
a few months ago, and there was one
each in Beatrice, Brownville, Platts
mouth and Fremont
Two National Banks.
There was a state bank at Brown
ville, capitalized at $100,000, for
then the river towns were all thriv
ing. D. Remick was president of
this institution, and G. P. Eaton,
cashier The only other state bank
then was in Omaha, the State Bank
of Nebraska, of which Alvin Saun
ders was president and Benjamin
B. Wood, cashier. It had been
formed the previous year, with a
capital of $100,000.
The two national banks in Umana
were the First National, founded in
1863, and the Omaha National,
founded in 1866. the former with a
capital of $200,000 and the latter of
$100,000. Edward Creighton was
president of the First, and Augustus
Kountze, cashier, tzra Millard was
president of the Omaha National,
and J. H. Millard was cashier.
At Nebraska City was the Utoe
County National bank, capital $100,-
000, Tolbert Ashton, president, ana
Julian Metcalfe, cashier lhe first
National bank of Lincoln, of which
Amasa Cobb, who afterward became
judge of the state supreme court,
was president, and J. F Suddarth,
cashier, had capital of $50,000, and
completed the list
Remarkable Gain.
The population of Nebraska in
1871 was 122,000, a remarkable gain
from the 28,000 people who lived in
the state in 1860, 10 years before. It
was a period of development. In
1865 there had been only 122 miles of
railroad in Nebraska; by 1871 there
were 588, costing with its equipment,
$39,300,000; and by the following
year the mileage had been prac
tically doubled, to 1,051 miles.
As business grew, the number of
failures increased also; there were 11
commercial bankruptcies in the state
in 1871, and'17 in the next year, with
liabilities of $201,000. Then came the
great panic of 1873, which had such
distressing effect throughout the na
tion. However, the older established
communities felt this more than did
the struggling towns on the frontier.
The country was new and depended
little on the market centers of the
east for its livelihood. The great
grasshopper raids between 1873 and
1876 are said to have had a much
more distressing influence.
Thirty Banks in 1874.
By 1874 there were 30 banks In
the state, of which nine were na
tional banks. In 1872. Samuel G.
Owen and Nelson C Brock formed
the State National bank at Lincoln;
the Nebraska City National was
formed by Dwight J. McCann and J.
P. Metcalf; the First National at
Plattsmouth, by John Fitzgerald and
uohn R, Clark, and the First Nitional
TEN CENTS
at Brownville, by John L. Carson
and Andrew R. Davison.
At the same time the private bank
of E. M. Morsman was established
in Omaha, and others in West Point,
Tecumseh and Columbus. The State
Central bank at Grand Island was
formed at this time by Fred A.
Wiefe and Dorr Heffleman.
In the boom days of the '80's the
banking business grew rapidly. The
Merchants National bank was organ
ized out of the State Bank of Ne
braska in 1882, and six years later,
moved into the building it now oe
cupies at Farnam and Thirteenth!
streets. Frank Murphy was presw
dent, and Luther Drake, who died
only this year, was assistant cashier.
The Nebraska National bank was
established by H. W. Yates in 1882,
putting up the novel iron-faced build
ing which still stands on the north'
west corner of Farnam and Twelfth
streets, and from which it took, the
nickname, "the iron bank." WJ
First Savings Bank. 'fr
The Commercial National came fn
1884, but has now disappeared, as,
has the Bank of Commerce. Mw j
Cague Brothers opened a privatt J
bank in 1883, the same date that
marked the organization of the 4,
United States National bank, out of, j
ji i iuuiviiig lulu v& WI1U
well, Hamilton & Co. Later tho
Union and the Commercial were
combined with the United States Na-4
tional.
The first exclusively savings bank
was the Omaha Savings bank, form
ed with J. E. Boyd as president; W,
A. Paxton, vice president; C F.
Manderson,- managing director, and
J. E. Wilbur, cashier, in 1882.
By 1888 there were seven national
banks, seven private banks, four
savings banks and several loan and
trust companies in Omaha. They, m
enjoyed a steady growth and for a:
quarter of a century Omaha was j
without a single bank failure. Near- . j
ly all were conducted by men who j
grew up with the city, who made
their money here and who held the,
confidence of their fellow citizens, i
Omaha 18th In Bank Clearing
Though 34th in Population
Omaha is 18th in volume of bank
clearings, although 34th in popula
tion. The aggregate deposits in the
20 banks here at the time of the '
last statement April 28, were $96,418, :
095. Ten years ago deposits amount-
ed to less than $60,000,000. Loans 1
now amount to more than $85,000.
000, as against $35,000,000 in 1911. '
An abstract of the condition of
the commercial and savings banks of -the
state of Nebraska, at the close '
of business February 16, 1921, as
made by the Department of Trade
anil Commerce, showed 1.009 banks:
with 569,787 depositors and an aver-
age reserve ot 19 per cent. The to
tal deposits in all the banks of the
state was 9241.808,202.71.
Of the 31 cities in the Tenth re
serve district reporting their clear
ings Omaha ranks next to Kansas
City, outranking Denver, Oklahoma
City, St. Joseph. Wichita. Tulsa. Lin
coln aid all the others.
Since the beginning of the process
of deflation loans have been liqui
dated in large volume, keeping pact
with deposits. Bankers have beea
devoting their resources and ener
gies to protecting home interests5
and have put littl of thir urnluj
into jnvesrmentSi i J i
r
- ,- a ,-