A Brief History of the Grange National Banks in Pennsylvania
By Adam Stroup
A Brief History of Grange National Banks
The Grange is officially named The National Grange of the Order of Patrons of Husbandry. It is a social organization in the United States that encourages families to band together to promote the economic and political well-being of the community and agriculture. The Grange was founded after the Civil War in 1867 and is the oldest American agricultural advocacy group with a national scope. The Grange actively lobbied state legislatures and Congress for political goals, such as the Granger Laws to lower rates charged by railroads, and rural free mail delivery by the Post Office.
William F. Hill, Pennsylvania Grange master and bank president, and John G. McHenry, Pennsylvania Congressman from Benton, Columbia County were the principal backers of a movement promoting the establishment of a Grange National Bank in every county in the state of Pennsylvania. At the 1905 convention of the National Grange at Atlantic City, New Jersey, this idea was the most discussed subject by members. A press dispatch from Atlantic City carefully prepared by W.F. Hill, laid out the idea.
Members of the Pomona Grange of Tioga County as stockholders and directors put the idea into practice by the organization of the Grange National Bank of Tioga County in the borough of Tioga. It was the first Grange National bank. When about 15 grange national banks were established, a central Grange National Bank of Pennsylvania, located in Philadelphia, was envisioned to feed and be fed by the Grange banks in as many counties. Within two years, it was planned to have a grange national bank in each of the 45 [sic] counties.
Farmers would have use of money to finance their operations and their own improvements such as rural telephones, making individual farmers more prosperous. The banks would be independent of one another, but each would have several directors on the board who were also directors of the other Grange banks. The amount of capital in each depended upon the financial resources of the county. Capital outside of the Grange would also be accepted. Mr. McHenry was so certain of success he offered to guarantee to the stockholders of the Grange National Bank of Tioga that he would buy the stock of any holder who wished to sell two years after its founding at a substantial increase upon the original investment.
Mr. Willard F. Bunnell, vice president and trust officer of the Anthracite Trust Company, at the annual dinner of the Group 3 Pennsylvania Bankers' Association meeting in Scranton gave this view of the relation of a bank to a farmer. "I believe the banker has failed to comprehend this relationship," Mr. Bunnell said. "We all know the reception the farmer gets when he comes to the bank to borrow, offering his neighbor's name and farm as security. The banker doesn't like that kind of security and gives the farmer the cold shoulder, sending him to dig the money elsewhere and maybe to pay high premiums. I want to say that no security in the world excels that of the honest, frugal farmer, and the bank that takes up that kind of business and pushes it will reap the harvest."
Tioga County, Pennsylvania gets the first Grange National Bank
C.D. Kingsley, master of the local Grange, participated in the festivities incident to the opening of the Grange National Bank in Tioga on Tuesday, April 3, 1906. The State Grange Master W.F. Hill of Chambersburg also attended and reported the first day's deposits amounted to over $75,000. Farmers attended from miles around and it was made a gala occasion with a cornet band, a free banquet and speech making. Master Hill delivered an address on the advantages of farm banks to rural communities.
Much attention was upon the first Grange bank, The Grange National Bank of Tioga, as far as the viability of the business proposition. Officers were Dr. Solomon P. Hakes, president and Tioga physician, and Edward B. Dorsett, cashier and later a State Grange Master for five years. John G. McHenry of Benton and W.F. Hill of Chambersburg were elected vice presidents of this first bank of its kind. Grangers who heretofore kept their insurance policies, deeds and receipts in insecure drawers or boxes at home now could rent safe deposit boxes in the new grange bank. The par share price of the bank stock was low, and the number of shares to be held by one person was limited. The desire of the officers and directors of the new bank was to have bank stock in every Granger's family.
Grange National Bankers' Association of America
The first annual convention of the Grange National Banks of Pennsylvania met at Williamsport on Saturday, Oct. 12, 1907. Master of the State Grange, W.F. Hill, Esq., of Chambersburg who was connected with a number of the fourteen Grange banks attended the convention. Mr. Hill was President of the Grange Trust Company of Huntingdon. As a result of the Williamsport meeting the Grange National Bankers' Association of America was formed with the purpose being to extend the enterprise in other states. Grange banks as well as those to be established in the other states would be under the scrutiny of not only the national bank examiners, but also of a special examiner appointed by the Grange authorities. The Grange National Bankers' Association of America had these first officers elected: President, John G. McHenry, President of the Columbia County National Bank, Benton; vice presidents, John S. Schwab, President of the Grange National Bank of Cambria County; and D.C. Young, President of the Grange National Bank of McKean at Smethport; secretary, E.B. Dorsett, President of the Grange; Secretary, E.O. Hartshorn, cashier, Grange National Bank of Mansfield, assistant cashier of the Grange National Bank of Clearfield County; Treasurer, E.E. Van Dyne, president of the Grange National Bank of Bradford County at Troy. T.J. Scholl was elected special bank examiner.
The National Grange bank convention held at Troy, Pennsylvania in June 1908 had 150 delegates from Pennsylvania and New York. The grange banks were reported without exception to be doing a safe, profitable business.
In September 1907, the following banks in the Grange chain had been organized and opened for business, or were preparing to open for business: The Grange National Bank of Tioga (8092), located at Tioga, Tioga County; Grange National Bank of Patton (8233), located at Patton, Cambria County; The Grange National Bank of McKean County at Smethport (8591); The Farmers and Traders National Bank of Clearfield (8464), Clearfield County; The Grange National Bank of Chester County at Downingtown (8646); The Grange National Bank of Potter County at Ulysses (8739); The Grange Trust Co., Huntingdon, Huntingdon County; The Grange National Bank of Wyoming County at Laceyville (8845); The Grange National Bank of Susquehanna County at New Milford (8960); The Grange National Bank of Clarion County at Sligo (8946); The Grange National Bank of Bradford County at Troy (8849); The Grange National Bank of Mansfield (8831), located at Mansfield, Tioga County; The Grange National Bank of Lycoming at Hughesville (8924). Brother McHenry, superintendent of the Grange National Banks of Pennsylvania can be credited for much of this work as well as in advising others on organizing and uniting within this chain. The capital stock ranged from $25,000, the smallest, up to the Grange Trust Company at Huntingdon with capital of $125,000. This was the only Trust Company and the president was State Grange Master W.F. Hill.
A legacy of Hon. John Geiser McHenry
McHenry was president of the Columbia County National Bank of Benton, vice president of The Grange National Bank of Tioga, and a director of The Grange National Bank of Potter County at Ulysses, The Grange National Bank of Bradford County at Troy, and The Grange Trust Company, Huntingdon. He was an organizer of grange national banks throughout Pennsylvania and served as the state superintendent of the Grange National banks of Pennsylvania. He was a 3-term Congressman for Pennsylvania and served from March 4, 1907 until his death December 27, 1912. In 1908 McHenry introduced a bill to establish a bureau of mines and mining as a result of a 25% increase in coal mine accidents between 1907 and 1908, not including the four big disasters in Pennsylvania in December 1908 in which nearly 700 lives were lost. The estate of the former Congressman showed liabilities of $406,609.17 while the assets were only $20,156.47. The J. Henry Cochran estate of Williamsport was the heaviest loser among the creditors to the amount of $119,687. Sixty banks suffered by the insolvency of the McHenry estate with the Grange banks which he helped to establish especially affected, some to the extent of $20,000. The congressman lost heavily through bad investments as shown by worthless stocks held.
The vision of farmers organizing banks under the sponsorship of the State Grange, laid out in Atlantic City at the 1905 convention of the National Grange, received the energies and organizational skill of McHenry.
While the movement was started by the grange, and the banks are controlled by the grangers, the stockholders were not limited to farmers, but local businessmen in the towns where the banks were established, laboring men, miners, and all classes were invited to take stock. However, members of the subordinate granges were given preference in the allotment of stock. The stock is so divided that every granger can have a share, but no one family can buy more than 10 shares, and the allotment is made so that fractional parts of shares may be bought, thus enabling the farmer boy or man of small means to purchase a half or quarter of a share. The idea was to encourage as many individuals as possible to become personally interested in the enterprise, for in union of interest there is strength. The Allentown Leader, Allentown, Pennsylvania, Wed., Sep. 5, 1906.
While more is to be written on his contributions as the bank histories of the Grange National Banks are developed, it's of interest to collectors today as bank notes with Grange National Bank in their titles are aggressively sought. The small town names contribute to this interest, no doubt, as does the small circulations of these banks. It's notable that no other states have Grange National banks; Georgia and Illinois do have towns named La Grange and Texas has a Granger County. The Grange National Banks were consistent in preparing their titles, every one using "The Grange National Bank" whereas statistically you would expect one or two to have forgotten the article "The" or placed National in front of Grange! Only two did not use "of X County" in their titles, those being The Grange National Bank of Patton, the second to open and The Grange National Bank of Mansfield, the second Grange bank in Tioga County.
The Farmers and Traders National Bank of Clearfield organized October 29, 1906 was listed as a bank sponsored by the Grange as was the Farmers National Bank of Exchange. Along with state chartered banks, it's expected that more will be found that were assisted by the Grange and McHenry.
The large, central Grange National Bank proposed for Philadelphia was never realized. The number of 15 Grange National banks laid out in the 1905 proposal essentially was reached if the national banks adopting a Farmers title are included. At the time, centralized banking in the U.S. was about to come under the Federal Reserve System. Perhaps if McHenry had lived another decade the Philadelphia Grange National Bank could have been organized.
The chain of Grange National Banks in Pennsylvania
In 1912, there were 12 grange national banks in Pennsylvania with a total capital of $585,000, surplus and undivided profits of $150,000, resources of nearly $4,000,000 and deposits of about $3,000,000. All of the twelve had been established between 1906 and 1908. It was pointed out that in banking, unlike an insurance policy holder where the Grange could limit issuance of policies only to Grangers, a common security is issued which may be bought by any one, the only control being the price. Hence the grange bank, though a part of the co-operative movement in the beginning of its life would not necessarily be a permanent grange institution. The plus was that the grange had been the impetus behind establishing banks in sections where they gave services to the farmers and as original owners of its stock, farmers profited from its success even though general investors may come along and buy the stock at higher prices.
The following is a list of the 12 banks that used Grange National Bank in their titles--all were from Pennsylvania:
The Grange National Bank of Tioga (8092), located at Tioga, Tioga County;
The Grange National Bank of Patton (8233), located at Patton, Cambria County;
The Grange National Bank of McKean County at Smethport (8591);
The Grange National Bank of Chester County at Downingtown (8646);
The Grange National Bank of Potter County at Ulysses (8739);
The Grange National Bank of Mansfield (8831), located at Mansfield, Tioga County;
The Grange National Bank of Wyoming County at Laceyville (8845);
The Grange National Bank of Clarion County at Sligo (8946). On February 21, 1913, the title was changed to Sligo National Bank.
The Grange National Bank of Bradford County at Troy (8849).
The Grange National Bank of Lycoming at Hughesville (8924).
The Grange National Bank of Susquehanna County at New Milford (8960).
The Grange National Bank of Spartansburg (9110). Spartansburg is in Crawford County, Pennsylvania.
Besides the 12 national banks with Grange in their titles, there are several National banks that chose to use Farmers in their title and had strong grange connections. There is also at least one state banking institution, The Grange Trust Company. This list would be incomplete without listing the bank founded by John G. McHenry although it lacks both grange and farmer in its title. This list will be updated as new finds are discovered.
The Columbia County National Bank, Benton (6328). Founder and President was Hon. John G. McHenry.
The Farmers National Bank of Exchange, (8410). One of a number established under the direction of the State Grange with Farmers National Bank in the title.
The Farmers and Traders National Bank of Clearfield (8464), Clearfield County. W.F. Hill was the organizer and along with Hon. John G. McHenry was a director.
The Farmers National Bank of Leechburg in Armstrong County, (9290). William F. Hill, state grange master, organized this bank and was elected president. The second vice president was J.A. Schwab, banker, granger, and father of Charles M. Schwab, steel magnate.
The Grange Trust Company, Huntingdon, Huntingdon County. William F. Hill was president. The Grange Trust Co. merges with the First National Bank of Huntingdon, Charter 31, in 1966, forming the First-Grange National Bank.
Sources
- The York Daily, York, PA, Mon., Oct. 14, 1907.