James Dwight Lankford (Atoka, OK)
James Dwight Lankford (October 2, 1861 – November 7, 1923)
Biography
- Name: James Dwight Lankford
- Birth: October 2, 1861 Pontotoc, Mississippi
- Death: November 7, 1923 San Diego, California
- Was Oklahoma Bank Commissioner from 1911 to 1919.
James Dwight Lankford (1861-1923), a businessman, civic leader, and banker active in Atoka, Oklahoma, is best remembered in the state’s banking history for having served as State Bank Commissioner from 1911 to 1919, during a particularly fraught period of the state’s experiment in the guaranty of bank deposits.
Early Life and Business Interests in Atoka
J. D. Lankford was born in Pontotoc County, Mississippi, in 1861, the youngest son in a family of eight children. In 1880, at age 19, he moved along with most of his family to Milam County, Texas, where he went to school for a time and clerked at a mercantile establishment in the town of Cameron. In 1882 he relocated to Lehigh, Indian Territory and then to nearby Atoka the next year. There, he and his brother, Dr. James Silas Lankford, opened an apothecary, “Lankford Brothers, Druggists”, whose business grew rapidly. In February 1890 they dissolved their partnership, with J. D. buying out his older brother and continuing the business on his own. J.D. Lankford then operated his drugstore for the next decade, regularly promoting patent medicines with cheerful newspaper advertisements such as “If people would take the advice of J. D. Lankford, the druggist, they would never start on a journey without a bottle of Chamberlain’s Colic, Cholera, and Diarrhoea Remedy. It can always be depended upon and is pleasant to take.” In 1896 he even joined the Indian Territory Pharmaceutical Association and served as a vice president for two years.
As he diversified his business ventures, however, Lankford shifted out of the drugs line. By 1902 he sold a half interest in it to Leon V. Officer, and they continued for a while as partners before Lankford exited the trade entirely. With another partner. S. B. Patch, Lankford got into the lumber, coal and ice businesses. By 1902 he was sole owner of the Lankford Lumber Co., employing another brother, C. A. Lankford, to manage the lumber yard.
In addition to these concerns, Lankford was an active civic booster in his community as a member of the Commercial Club. He also participated in investment schemes aimed at promoting building construction and other physical improvements in Atoka. These included the Atoka Building and Investment Co. (1901), of which Lankford was president; the Atoka Improvement Company (1902), which embarked on a building plan in anticipation of Atoka becoming the site of the Choctaw Land Office; and the Atoka Development Company of Oklahoma City (1909).
Political Interests
While a settlement had been there since the 1850s, Atoka was only incorporated in 1901, thanks to a petition drive undertaken by Lankford and others. Lankford then became Atoka’s first Mayor, elected to three terms in 1903, 1904, and 1907. In addition, he served on the City Council and the school board. In state politics Lankford was a committed Democrat, having become a member of the Central Committee of the Democratic Party of Indian Territory in 1892 and active through 1914. He was also Treasurer of the State Democratic Committee. He also participated in one of the Single Statehood Clubs that advocated for both Oklahoma and Indian Territories to be admitted to the Union as a single state.
Banking Activities
Years before he actually operated a bank, in 1891 Lankford engaged in banking as an agent of the National Bank of Denison, Texas, which operated a “Nickel Savings Stamp System.” Agents like Lankford sold 5-cent savings stamps to the bank’s customers, who accumulated them into one-dollar increments which were then remitted to the bank by mail as deposits. As banking proper extended into Indian Territory, Lankford became an active capitalist. In 1900 he was elected a director of the newly-organized Choctaw National Bank (charter 5246) in Caddo. With the founding of the Atoka National Bank (charter 5791) the following year he joined as Vice President, before buying out J. T. Jeanes’s interest to become its President in 1902. In 1905 its capital expanded to $50,000. In February 1909, Lankford and an associate bought out the remaining investors to take full control of the Atoka National Bank. Shortly thereafter they put the bank into voluntary liquidation, reorganizing it under a state charter as the Oklahoma State Bank in order to take advantage of Oklahoma’s new deposit guaranty law. In doing so, Lankford and his associates were following in the steps of the Caddo bank, which did the same thing in April 1908 to reemerge as the Bryan County State Bank.
These conversions to state charters were part of a broader reaction to the advent of state deposit guaranty in Oklahoma. Faced with a ruling by the United States Attorney General that national banks could not legally participate in any insurance scheme that made one bank liable for the debts of another, Oklahoma national bankers judged that the new law put them at a competitive disadvantage to their state-chartered brethren. The result, between 1908 and 1910, was a steady stream of national banks giving up their charters in order to qualify for deposit guaranty. These conversions were warmly welcomed by the new Democratic state government, which viewed them as a vote of confidence in the new law.
By the time that he converted the First National to a state charter, Lankford had also expanded his financial portfolio with a number of other bank holdings. In addition to the Oklahoma State Bank, he was President of two smaller institutions, the Farmers & Merchants Bank of Stringtown (founded 1905) and the Farmers State Bank of Lewis (1908; later renamed Tushka). Lankford also belonged to a group of Durant investors, including the national bankers Barlow Roberts and E. F. Rines, who purchased the Madill State Bank in 1910 from W. S. Derrick. Like Lankford’s Oklahoma State Bank, the Madill institution had originally been founded under a national charter before becoming a state bank.
Beyond banking, Lankford acquired sundry insurance interests as a director of the Southwestern Surety Insurance Company (1909) and the Jefferson Life Insurance Company (1910).
Service as State Bank Commissioner (1911-1919)
An attractive candidate to run the deposit guaranty program by dint of his party activism and the prominent example of his own national bank’s conversion to a state charter, Lankford was chosen by Governor Lee Cruce in 1911 to replace E. B. Cockrell as State Bank Commissioner at a critical moment. The original guaranty law, passed just three years earlier, had rapidly proven to have serious flaws. Lax vetting of state banks had brought hundreds of weak institutions under the umbrella of the Guaranty Fund. Minimal regulation created a moral hazard that encouraged risky oil and real estate lending by certain large Oklahoma City banks, leading to the collapse of the Columbia Bank & Trust Co. (Sept. 1909), the Planters & Mechanics Bank (April 1911) and Night and Day Bank (June 1911).
These failures not only blew a huge hole in the Guaranty Fund’s balance, but exposed other weaknesses of the law. The law generously required depositors to be paid off immediately upon a bank’s failure, with sales of the failed banks’ assets later replenishing the Fund. Yet no provision was made in the event the Fund itself went dry. Financed by member banks’ pro rata contributions, the Guaranty Fund was not backstopped by public monies (indeed the state insisted that banks not advertise their deposits as being guaranteed by the State of Oklahoma). Finally, Oklahoma’s deposit guaranty was undermined by the possibility that state banks might leave the system by rechartering as national banks. Just as Lankford’s own bank had earlier changed from national to state status to take advantage of the new law, so could the trend run in the other direction. By 1911, state institutions seeking to escape the mounting levies imposed by the law began re-chartering as national banks. Given that it was precisely the largest and strongest state banks that had the greatest incentive to do this, the Guaranty Fund risked tipping into a death spiral.
Commissioner Lankford’s firm and decisive leadership prevented this from happening. Most urgent was finding emergency resources for the Fund, which he did by canvassing bankers in Kansas City and elsewhere to purchase interest-bearing warrants issued on the Fund and backed the assets of failed banks, pending their sale. Lacking explicit authority to do this, Lankford staked this borrowing on his own reputation. Next, Lankford battled against those state banks seeking to convert to national charters by vowing to withdraw state deposits from those institutions. He also threatened, unsuccessfully, to require all banks converting their charters to seek written consent from depositors before doing so, or otherwise to pay them off in full. Additionally, he successfully sued those departing banks for payments to the Fund that he claimed they owed.
On the regulatory side, Lankford took other steps to stabilize the fund. Again in advance of any explicit legislative authorization, his office began exercising discretion in the dispensing of bank charters, rather than automatically handing them out to any parties that possessed the minimum capital necessary. Insufficient oversight from the beginning had left Oklahoma with too many weak banks with impaired assets. Beefing up his team of bank examiners, Lankford began proactively closing down such banks rather than waiting for them to fail, typically by merging weaker banks with their stronger neighboring institutions and using monies from the Guaranty Fund to top off any shortfalls.
Legislative revisions to the bank guaranty law, passed in 1913, codified many of these steps. Invariably, however, recovery was a stressful process. An emergency levy imposed in 1911 upon banks in the guaranty plan triggered a surge of conversions (and reconversions) to national charters; the number of banks reporting between June 1910 and 1911 alone fell by 53, and the overall tally of banks stabilized at about 550 only by 1915, which represented a 20% decline in their numbers from the 1911 peak. Thereafter, this lower number, reached through a combination charter conversions and closings of weaker banks, seemed to put the plan on a more sustainable basis.
During his tenure, Lankford was widely regarded as an effective Commissioner both by bankers and the political establishment. He was reappointed, without seeking it, to a second term in 1915 by the next Governor, Robert L. Williams. Lankford proved to be a forceful defender of both the deposit guaranty law and of the interests of state bankers as a group, particularly in their relations with national banks. At the same time, he was an advocate for conservative banking practices and for the passage of a state “blue sky” law after the Kansas model. He called for caps on the interest rates state banks could pay on deposits (to prevent the banks from competing excessively for funds); at the same time, he argued against an anti-usury law that he thought would put his state’s bankers at a competitive disadvantage to national institutions. More than anything else, though, Lankford could take credit for stabilizing the Guaranty Fund’s finances. Inheriting a deficit of some $1 million upon taking office, Lankford left it in the black when he departed.
Lankford did not achieve everything he wanted. He sought, unsuccessfully, to secure direct state financial support for the Guaranty Fund, which always remained dependent upon bankers’ contributions. Even though he had resigned from his banking posts upon entering public service, some events still struck close to home. It must have been embarrassing to see the Madill State bank that he had bought into in 1910 reconverted to a national charter by 1912. Oklahoma’s loose banking practices that Lankford had sought to change produced other, tragic consequences. At about the time Lankford was taking up his duties as Commissioner, his Cashier at both the Tushka and Stringtown banks, L. R. Teubner, simply disappeared while on a trip to Muskogee, leaving the Tushka bank’s safe inaccessible as he was the only who knew its combination. By late March 1911, Teubner’s lifeless body was discovered on a train near Jacksonville, Florida, his throat slit by his own hand. The safe, which was supposed to contain $25,000, had to be shipped to its manufacturer back East to be opened. Once cracked, it was found to hold just ten cents—the missing balance apparently lost in Teubner’s covert speculations in the cotton market.
Later Years and Death
At the end of his second term in 1918 Lankford declined re-appointment despite support for it by the Oklahoma Bankers Association. The incoming Governor at that time, J.B.A. Robertson, chose the ill-starred F. G. Dennis as Lankford’s replacement. Given his responsibility for rescuing Oklahoma’s deposit guaranty plan, Lankford’s reputation within a grateful financial community was impeccable and his career prospects bright. With his departure, he also stepped down from the presidency of the National Association of Supervisors of State Banks.
In April 1919 Lankford became head of the Southwestern Reserve Bank of Oklahoma City. Failing health, however, forced him to resign from that post in August. In July 1920 Lankford retired and relocated to the more salubrious climes of San Diego, where he died three years later, the same year that Oklahoma repealed its deposit guaranty law, which the agricultural depression of 1920-21 had finally rendered unworkable. The Oklahoma State Bank of Atoka, Lankford’s original institution, failed in 1926.
Bank Officer Summary
During his banking career, J. D. Lankford was involved with the following bank(s):
- Atoka National Bank, Atoka, OK (Charter 5791): President 1902-1908
Sources
- Williams, Robert L. "James Dwight Lankford" Chronicles of Oklahoma (April 1925): 86-89.
- The Atoka (OK) News, April 6, 1905.
- Caddo (OK) Herald, January 12, 1900; December 24, 1901.
- Indian Citizen (Atoka, OK), Feb. 22, 1890; June 13, 1891; June 6, 1901; November 21, 1901; January 16, 1902; May 15, 1902; November 4, 1909; April 10, 1910
- The Investor (Oklahoma City, OK), May 1912; June 1912; December 1913; September 1916; November 1918; January 1919; February 1919; April 1919; August 1919.
- McAlester (OK) Daily News, November 13, 1902.
- "The Oklahoma Bank Guaranty Law a Proved Success" Harlow's Weekly (August 8, 1917): 9-12.
- Oklahoma Banker, August 1911; December 1911; January 1918; March 1, 1919; July 1954.
- Wapanucka (OK) Press, November 26, 1901; January 2, 1902.
- Findagrave.com: https://www.findagrave.com/memorial/181678211/james-dwight-lankford
- Banks & Bankers Historical Database (1782-1935), https://spmc.org/bank-note-history-project
- Closed, Merged, Renamed and Relocated Banks of Oklahoma: https://oklahoma.gov/content/dam/ok/en/banking/documents/history/Closed%20Merged%20Banks.pdf