First National Bank, Gary, IN (Charter 8426)
First National Bank, Gary, IN (Chartered 1906 - Receivership 1932)
Town History
Gary is a city in Lake County, Indiana, United States, and borders Porter County to the east. Historically, Gary was dominated by major industrial activity. The city is located along the southern shore of Lake Michigan about 25 miles east of downtown Chicago, Illinois. Gary is adjacent to the Indiana Dunes National Park, and within the Chicago metropolitan area.
Gary was founded in 1906 and named after lawyer Elbert Henry Gary, the founding chairman of the United States Steel Corporation. The city is known for its large steel mills and as the birthplace of the Jackson family. Gary was the site of civil unrest in the steel strike of 1919. On October 4, 1919, a riot broke out on Broadway, the main north–south street through downtown Gary, between steel workers and strike breakers brought in from outside. Three days later, Indiana Governor James P. Goodrich declared martial law. Shortly thereafter, over 4,000 federal troops under the command of Major General Leonard Wood arrived to restore order.
The jobs offered by the steel industry provided Gary with very rapid growth and a diverse population within the first 26 years of its founding. After white flight in the 1970s, the city of Gary held the nation's highest percentage of African Americans for several decades.
Per the 2020 census, the population was 69,093. Once a prosperous steel town, it has suffered drastic population loss due to overseas competition and restructuring of the industry, falling by 61 percent from its peak of 178,320 in 1960. In 1910 the population was 16,802 and by 1930 had grown to 100,666.
Gary had two National Banks chartered during the Bank Note Era, and both of those banks issued National Bank Notes.
Bank History
- Organized October 9, 1906
- Chartered November 5, 1906
- Opened for business April 18, 1907
- Receivership January 27, 1932
In October 1906, Elkhart bankers and Col. Thomas Snell of Bloomington, Illinois were granted a charter to organize the First National Bank of Gary, Indiana. In November the bank organized with John W. Fieldhouse, president; Walter S. Hazelton, vice president; and T.T. Snell, cashier.
In November 1917, the First National Bank of Gary was the largest in the steel city and Lake County and in resources was ahead of its nearest competitor by nearly a half a million dollars. Its latest statement issued September 11 showed Loans of $855,562.58, Bonds and Investments of $1,955,228.93, Building and fixtures $45,000, and Cash $710,435 with Total resources of $3,566,301.02. Liabilities included Capital $200,000, Surplus and Profits $57,962.25, Circulation $200,000, Deposits of $3,108,319.27 for total liabilities of $3,566,301.02.
On November 23, 1917, F. Richard Schaaf, Jr., Hammond's young Napoleon of finance, president of the Citizens' National Bank of Hammond, vice president of the Bank of Hammond and a stockholder in several other banks in Lake County, bought the controlling interest in the First National Bank of Gary and was elected president at a special meeting. The First National of Gary, practically a four million dollar institution, was one of the big banks of the northern part of the state. Mr. Schaaf succeeded Thos. T. Snell, whose stock he bought giving him controlling interests in the bank. E.C. Simpson continued to actively direct the affairs of the institution and Mr. Schaaf continued presiding over the destinies of the Citizens' National of Hammond.
The meteoric rise of F.R. Schaaf, Jr. in Lake County's financial world was phenomenal. A few years before, he was working in the offices of the Standard Oil Company at Whiting for $15 a week. By sheer pluck, consuming energy and the shrewdest acumen, he rose rapidly. He entered politics and was very successful. President Taft made him postmaster of Hammond. Suddenly he invaded the banking field. He built up the East Chicago Bank, becoming its president and then got into the Citizens’ National of Hammond. He sold his East Chicago interests at a splendid profit. Other banks in which he became interested were the Highland Bank and the First National of Whiting. Although not active in the Lake County political field, Mr. Schaaf was one of Gov. Goodrich's advisers and after the latter was elected was made a major on the governor's staff. Schaaf lived in a modest home in Robertsdale and had only one hobby--golf. Reportedly, the First National Bank of Gary, now the largest in the city, came into being as the result of Thomas T. Snell accidentally overhearing a conversation in 1916 in a Chicago hotel to the effect that the steel trust was about to found a new city in Gary. Having won laurels in the banking field at Elkhart, and possessed of plenty of money, Mr. Snell decided to found a bank in the new community. He at once wired to Washington, got priority on the name "First National Bank" and was sustained in the matter. In doing this it is said that Mr. Snell 'put one over' on the shrewdest financiers in steel circles. The steel magnates, who later founded the Gary State Bank, had intended that it should have been the First National Bank, but Mr. Snell beat them to it. The bank was organized on November 5, 1906, and it had its first home on Broadway, near the Brellahan shoe store location in 1917. Mr. Snell was elected its first cashier, and other interested persons were W.S. Hazleton, E.C. Simpson, and J.W. Fieldhouse, an Elkhart banker who became the president. Mr. Simpson was identified with Snell and Fieldhouse at Elkhart and from 1910 to 1914 he was city treasurer of Gary. A short time after the Gary bank was founded, he came to Gary to become cashier, Mr. Snell taking over the presidency. The capital at first was $25,000. In 1907 it was increased to $50,000, in 1908 to $100,000, in 1912 to $150,000 and in 1913 to $200,000. Among the first directors of the bank was William A. Wirt, the Gary educator, who had since organized and was elected president of the new National Bank of America of Gary. In 1908 the bank moved into its new home on Broadway between 5th and 6th Avenue into one of the finest banking houses in Indiana. As a subsidiary, the bank founded the First Trust and Savings Company which it later discontinued. Later, Snell and Simpson became heavily interested in the South Side Trust and Savings Bank. Messrs. Snell and Simpson organized the Snell-Simpson Company, located in the First National Bank Building, which dealt in bonds and tax assessment liens. Mr. Snell was also a partner for a time in the Chicago and Gary bonding house of Snell, Dinkle and Holmes.
Mr. Snell only lived part time in Gary. He was reputed as a millionaire and during the past years, made his home at his estate on the Hudson River near West Point. Property owned by Mr. Snell in Gary included the Brennan block southwest corner, 6th Avenue and Broadway which he purchased in 1913 for $75,000 and was worth $200,000 by 1917.
Upon assuming the presidency, F.R. Schaaf said “The First National Bank is Gary owned. It will be a distinctive Gary bank and with its assets of nearly $4,000,000 it will be a real Gary institution.” He further stated, “I will be here daily and as soon as possible I will move my family from Hammond to Gary. There will be no change in my banking interests elsewhere in the county.”
Directors of the First National Bank were F.R. Schaaf, H.J. Carr, M.M. Winter, W.A. Hill, and E.C. Simpson. Mr. Hill was a Hammond man. Directors of the bank didn’t know of Mr. Schaaf’s purchase until the day before they were summoned to elect him president.
In January 1930, at the annual election of officers of the First National Bank and the bankers Trust Co., both leading institutions of finance in Gary, F. Richard Schaaf was named president of both institutions. All former officials of the two institutions were honored with their reelection. Of the First National Bank staff, Mr. Schaaf was president; Harvey Watson, vice-president; E.C. Simpson, cashier; and Robert M. Davis, T. Merle Kitchen, Tom Burke and Elmer Johnson, assistant cashiers. Directors elected for the ensuing year were: Mr. Schaaf, president; Mr. Simpson, vice president; Emil G. Seip, president of the Calumet National Bank of South Chicago; Walter Schmidt, president of the Roseland State bank of Roseland, Illinois; Walter P. Schrage, president of the Bank of Whiting, Indiana; Hazel K. Groves, president of the American State Bank of East Chicago; Anton H. Tapper, president of the State Bank of Hammond; Dr. T. D. Scales, president of the First National Bank of Booneville, Indiana, and Jacob Steeb, president of the Peoples State Bank of Crown Point. Other officers named by the directors were Harvey Watson, vice president and trust officer, Miss Emma Claus, secretary and treasurer, and Miss Audrey Winter, assistant secretary and treasurer.
On January 17, 1930, another financial organization affiliated with the bank and trust company elected its first officers and directors at the formal beginning of its operations. The institution, incorporated late in 1929 as the First National Corporation, would function as an investment corporation. It was capitalized at $1,000,000 and announcement was made at the stockholders' meeting that all capital had been paid in. The company, one of the largest dealing in investments in the Indiana financial field, established its connection in the stock trading centers of New York and Chicago. Officers and directors elected were: Mr. Schaaf, president; Mr. Simpson, vice president; Mr. Watson, Miss Claus, P.F. Goodrich of Indianapolis, W.F. Weyerbachar of Boonevile, Indiana, Mr. Schrage, Mr. Groves, Mr. Tapper and Mr. Steeb.
In February 1931, on the other side of the Atlantic, attention was drawn to the fact that women were very little heard of in banking. Women had no doubts as to the reason — they feel that it was only prejudice that kept them back. Mr. F. Hyde, general manager of the Midland Bank in England, giving evidence before the Royal Commission on the Civil Service remarked that “this [England] is a country with very old prejudices” and explained that with women as bank managers during the war there was a good deal of reluctance among customers to discuss business with them. Miss Mildred Ransom principal of a school which trains women for commercial posts said that there were two prejudices against women in banking: men did not like to see a woman holding a post which meant money and responsibility and they did not like discussing their business with women. In America at least one woman had achieved success in the world of banking. In Gary Indiana a woman was the secretary-treasurer of the Bankers’ Trust Company of Gary, assistant to the president of the First National Bank of Gary, and director-secretary and treasurer of the Northern Indiana Bankers’ Finance Co. The woman the Evening Despatch was referring to was of course Miss Emma Claus of Gary, Indiana.
On March 18, 1931, Thomas Burke, former assistant cashier in the First National Bank of Gary, was sentenced to serve two years in Leavenworth Federal prison on a plea of guilty entered two weeks ago to taking $5,500 from the bank vaults to play on horse races. Sentence was passed by Federal Judge Thomas W. Slick in United States District Court in Hammond. Burke admitted when arraigned for his plea of guilty that he took the money, wagering as high as $100 per day on horse races. His first thefts, he said, were made to cover up shortages he had created in the funds of the Elks' lodge of which he was treasurer. Prominent Gary Elks and friends of the defendant testified on his behalf when called by Attorney Ernest Force. Burke was taken to Leavenworth immediately.
On January 5, 1932, the First National Bank with capital of $250,000, surplus of a like amount and $253,000 undivided profits closed its doors, marking the second failure in the city. This left only the Gary State Bank, secure with U.S. Steel Corp. backing, to provide the entire banking services to the community. David H. Jennings of Indianapolis was appointed receiver and expected to assume charge of the bank's affairs as soon as the examiners concluded their duties. In August, the Reconstruction Finance Corp. extended a loans to eight banks in Indiana. The institutions were able to borrow money because the had adequate security. Bank without proper security cannot get loans. The largest sum of $235,000 was advanced to the First National Bank of Gary. The loan made it possible for depositors to receive an early dividend. On October 3, after 9 months, Mr. Jennings distributed a 20% dividend to depositors. A third payment of 9% was made November 17, 1933, bringing the distributions to 41 1/2 percent.
On February 13, 1935, David H. Jennings, retiring receiver of two closed national banks in Gary, said that his plans for the future were "rather indefinite." He declared he had no new job in mind after he relinquished the receiverships to Rudolph Ackerman, receiver of the Hammond National Bank and Trust Company. Mr. Jennings was paying a $165,000 dividend to depositors of the First National Bank of Gary. The current payment approximated an additional 10%. Mr. Ackerman who is to become receiver of the two Gary national banks recently was appointed receiver of the Hammond National Bank and Trust Company. He said he will conduct the three receiverships independently of each other, but will consolidate the staffs wherever possible to save money. He proposed to maintain his headquarters in Hammond for time being. Consolidation of the three receiverships under Mr. Ackerman's control was effected as an economy measure to reduce receivership costs.
Official Bank Title(s)
1: The First National Bank of Gary, IN
Bank Note Types Issued
A total of $1,762,100 in National Bank Notes was issued by this bank between 1906 and 1932. This consisted of a total of 93,900 notes (63,936 large size and 29,964 small size notes).
This bank issued the following Types and Denominations of bank notes:
Series/Type Sheet/Denoms Serial#s Sheet Comments 1902 Red Seal 3x10-20 1 - 840 1902 Red Seal 50-100 1 - 424 1902 Date Back 3x10-20 1 - 5300 1902 Date Back 50-100 1 - 300 1902 Date Back 3x50-100 1 - 1986 1902 Plain Back 3x10-20 5301 - 12796 1929 Type 1 6x10 1 - 3730 1929 Type 1 6x20 1 - 870 1929 Type 1 6x50 1 - 298 1929 Type 1 6x100 1 - 96
Bank Presidents and Cashiers
Bank Presidents and Cashiers during the National Bank Note Era (1906 - 1932):
Presidents:
- John W. Fieldhouse, 1907-1907
- Thomas Thornton Snell, 1908-1917 NOTE: A featured biography is available
- Ferdinand Richard Schaaf, 1918-1931
Cashiers:
- Thomas Thornton Snell, 1907-1907 NOTE: A featured biography is available
- Ernest C. Simpson, 1908-1914
- Chester E. Wirt, 1915-1915
- Ernest C. Simpson, 1916-1931
Other Bank Note Signers
- There are currently no known Vice President or Assistant Cashier bank note signers for this bank.
Wiki Links
- Indiana Bank Note History
- General information on Gary (Wikipedia)
- General information on Lake County (Wikipedia)
- General information on Indiana (Wikipedia)
Sources
- Gary, IN, Wikipedia
- Don C. Kelly, National Bank Notes, A Guide with Prices. 6th Edition (Oxford, OH: The Paper Money Institute, 2008).
- Dean Oakes and John Hickman, Standard Catalog of National Bank Notes. 2nd Edition (Iola, WI: Krause Publications, 1990).
- Banks & Bankers Historical Database (1782-1935), https://spmc.org/bank-note-history-project
- The Waterloo Press, Waterloo, IN, Thu., Oct. 11, 1906.
- The Indianapolis News, Indianapolis IN, Wed., Nov. 14, 1906.
- The Times Munster, IN, Sat., Nov. 24, 1917.
- The Times, Munster, IN, Sat., Jan. 18, 1930.
- Evening Despatch, Birmingham, West Midlands, England, Wed., Feb. 25, 1931.
- The Times, Munster, IN, Thu., Mar. 19, 1931.
- Mid-West Progressive, Muscatine, IA, Thu., Jan. 14, 1932.
- The Indianapolis Star, Indianapolis, IN, Tue., Aug. 23, 1932.
- Chicago Tribune, Chicago, IL, Tue., Oct. 4, 1932.
- The Times Munster, IN, Wed., Feb. 13, 1935.
- ↑ The Bankers' Magazine, Vol. 79, July 1909-Dec. 1909, p. 745.