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Published online by Cambridge University Press: 11 June 2012
Although short-lived, the Commercial Bank of Lake Erie played an active role in the economic life of its locale. Its history contrasts the hopes and the realities of commercial banking on the American frontier.
1 The other bank was the Bank of Cleveland, on which see note 18, infra. The principal sources for this article are the Commercial Bank of Lake Erie Letterbooks, Western Reserve Historical Society (hereafter cited CBLE Letters); and the George Bancroft Papers, Regional History Collection, Cornell University Library (hereafter cited Bancroft Papers-Cornell). For background on Cleveland's commercial history, see Rose, William G., Cleveland: The Making of a City (Cleveland, 1950).Google Scholar See also Bennett, William A., “Banking in Cleveland,” Annals of the Early Settlers' Association of Cuyahoga County, V (1904), 212Google Scholar; and the recollections of Truman P. Handy, the Commercial Bank's cashier from 1832 to its demise, in Banquet Given in Honor of Truman P. Handy, May 15, 1882 (Cleveland, 1883), copy generously lent the author by Mrs. Truman P. Handy of New York (hereafter cited as Handy Banquet).
2 Scheiber, H. N., “The Ohio Canal Movement, 1820–1825,” Ohio Historical Quarterly, LXIX (July 1960), 254Google Scholar; Rose, Cleveland, passim; Bogart, E. L., Internal Improvements and State Debt in Ohio (New York, 1924), 78 ff.Google Scholar
3 Odle's, Thomas D. serially published articles on “The American Grain Trade of the Great Lakes, 1825–1873,” Inland Seas, VII (1951)Google Scholar, passim, contain much valuable data on investment at Cleveland and ties with the Erie Canal forwarders. Property values of Cuyahoga County taken from Ohio Auditor of State, Annual Reports, 1832, 1840.
4 On the Dwights, see Dwight, Benjamin W., The History of the Descendente of John Dwight of Dedham, Massachusetts (New York, 1874), 865 ff.Google Scholar; on Henry Dwight, see Conover, George and Aldrich, L. C., History of Ontario County, New York (Syracuse, 1893), 278–79Google Scholar; on their role in Massachusetts railroad promotion, Kirkland, Edward C., Men, Cities and Transportation (2 vols., Cambridge, Mass., 1948), I, 125–27Google Scholar, II, 458, 462; on investment at Chicopee, Shlakman, Vera, Economic History of a Factory Town (Northampton, Mass., 1935)Google Scholar; and on the Bank of Michigan, Dain, Floyd R., Every House a Frontier: Detroit's Economic Progress, 1815–1825 (Detroit, 1956), 107–113.Google Scholar
5 S. Starkweather to V. Maxcy, Nov. 14, 1830, in 22nd Cong., 1st Sess., House Executive Doc. No. 53 (1832), 2–4; on capital paid in, see Leonard Case to Simon Perkins, Nov. 30, 1831, Simon Perkins Papers, Western Reserve Historical Society; on the bank's early history and capitalization, Huntington, C. C., “A History of Banking and Currency in Ohio before the Civil War,” Ohio Archaeological and Historical Society Publications, XXIV (1915), 362Google Scholar; and on proceedings leading to insolvency. Hammond, Bray, Banks and Politics in America from the Revolution to the Civil War (Princeton, 1957), 272.Google Scholar
6 Rose, Cleveland, 77–80; for notice of a directors' meeting, see Cleveland Herald, Dec. 4, 1823. Terms of the charter are discussed in Huntington, “Banking and Currency,” 273–74.
7 Scheiber, H. N., “A Jacksonian Radical as Banker and Lobbyist: New Light on George Bancroft,” New England Quarterly, XXXVII (Sept. 1964), 363–65.CrossRefGoogle Scholar
8 Ibid., 365, quoting Truman P. Handy.
9 Deposition of Leonard Case, in State of Ohio, Bank Commissioners, Special Report … July 25, 1842 (Columbus, 1842), 67 (cited hereafter 1842 Bank Report); Case to Perkins, Nov. 30, 1831, Perkins Papers.
10 Handy Banquet, 11.
11 See Scheiber, H. N., “Entrepreneurship and Western Development: The Case of Micajah T. Williams,” Business History Review, XXXVII (Winter 1963), 357–58Google Scholar, for a similar instance of use of influential local directors when capital was provided mainly by outsiders.
12 Henry Dwight quoted in Sarah Bancroft to George Bancroft, Dec. 26, 1831, Bancroft Papers-Cornell. On Case's early connection with the Western Reserve Bank, see the anonymous article, “General Simon Perkins,” Magazine of Western History, III (1885–86), 98.
13 Scheiber, “Jacksonian Radical,” 365–67.
14 Case to Perkins, Nov. 30, 1831, Perkins Papers. See also Bancroft to Case, Nov. 24, 1831, and reply, Dec. 30, 1831, George Bancroft Papers, Massachusetts Historical Society.
15 George Bliss to Bancroft, Nov. 8, 1831, ibid.; also, Leonard Case to Alfred Kelley, April 23, 1832, Misceli. MSS. No. 282, Western Reserve Historical Society.
16 Case to Kelley, April 23, 1832, ibid.; T. P. Handy to John Ward & Company, April 2, 1832, CBLE Letters.
17 Handy to George Bliss, August 13, 1832, CBLE Letters.
18 Henry Dwight to Bancroft, October 25, 1833, Bancroft Papers-Cornell; see also William Dwight to Bancroft, July 20, 1833, ibid. The Dwights also controlled the Bank of Cleveland, chartered with $300,000 authorized capital in 1834. Its records apparently have not survived; it wound up and divided its assets, with considerable loss to the stockholders, in 1842. (1842 Bank Report, 100.)
19 Handy to Bliss, December 14, 1832, CBLE Letters.
20 William Dwight to Bancroft, July 20, 1832, Bancroft Papers-Cornell; balance sheet of Jan. 1, 1835, CBLE Letters; Handy to B. W. Hewson, Dec. 27, 1832, ibid.
21 Handy to John H. James, Aug. 15, 1832, to D. C. Judson, Aug. 23, 1832, to J. Wood-bridge, Jan. 1, 1833, Feb. 5, 1833, CBLE Letters.
22 Handy to Woodbridge, Jan. 1, 1833, Leonard Case to Hewson, Dec. 27, 1832, CBLE Letters; W. Dwight to Bancroft, Jan. 23, 1833, Bancroft Papers-Cornell.
23 Handy to Ward, June 26, 1835, CBLE Letters.
24 Ibid. On the aggressive tactics of the Sandusky Bank, see O. D., and Smith, W. E., A Buckeye Titan (Cincinnati, 1953), 258–59.Google Scholar
25 Handy to J. R. Lee, May 3, 1836, CBLE Letters. On the impact of state borrowing upon Ohio banking, see 1842 Bank Report, 67–69; Scheiber, “Entrepreneurship and Western Development,” 354.
26 Handy to H. Scranton, April 29, 1836, to J. R. Lee, May 3, 1836, to J. Dela Beld, May 6, 1836, CBLE Letters.
27 Handy to Taney, Oct. 21, 1833, CBLE Letters. Even as early as November 1831, when the bank's revival was being negotiated, Bancroft's brother-in-law declared that the family might use its influence “in procuring publiek deposites at Cleaveland.” (George Bliss to Bancroft, Nov. 4, 1831, Bancroft Papers, Mass. Hist. Society.)
28 E. P. Hastings to Lewis Cass, Oct. 28, 1833, and Cass' endorsement thereon, in “Letters from Banks,” Records of the Secretary of the Treasury, National Archives.
29 See Scheiber, H. N., “George Bancroft and the Bank of Michigan,” Michigan History, XLIV (March 1960), 82–83.Google Scholar
30 The two stockholders were Alfred Kelley, canal commissioner, and Simon Perkins, member of the canal fund board. One of the canal fund board members, Samuel MacCracken, asserted that he had doubted the “trustworthiness” of the Commercial Bank and had agreed to naming it as a depository only because of recommendations by Kelley and Perkins. (Letter to S. Perkins, Dec. 10, 1833, Ohio Board of Canal Fund Commissioners Papers, State Archives, Columbus.) On the terms of the deposit arrangement, cf. correspondence of Nov.–Dec. 1833, ibid.; and Handy to Maccracken, April 15, 1834, CBLE Letters.
31 Handy to Joseph Whitehall, Oct. 8, 1839, Correspondence of the State Treasurer, State Archives, Columbus; see also Handy to Maccracken, April 15, 1834, CBLE Letters; and Maccracken to Henry Brown, Nov. 14, 1833, Board of Canal Fund Commrs. Papers, instructing deposit of county funds. The reference to promiscuous notes is in Handy to Fund Commission, Oct. 18, 1837, CBLE Letters.
32 On the 1836 Deposit Act and its effects, cf. Scheiber, H. N., “The Pet Banks in Jacksonian Politics and Finance,” Journal of Economic History, XXIII (June, 1963), 202 ff.Google Scholar
33 Charles Butler to Levi Woodbury, July 30, 1836, Handy to Woodbury, July 20, 1836, and reply Aug. 3, Oct. 3, 1836, Treasury Correspondence, National Archives. The Dwights' subscription payments are discussed in Handy to Woodbury, Nov. 1, Nov. 14, Nov. 17, 1836, ibid.; see also Case to Auditor of State, Jan. 5, 1838, and to W. Dwight, March 8, 1838, CBLE Letters.
34 Handy to Woodbury, Feb. 3, 1837, CBLE Letters.
35 Handy to Woodbury, Oct. 11, 1836, March 2, 1837, CBLE Letters; Scheiber, “Pet Banks,” 207.
36 Handy to Woodbury, Oct. 19, 1836, CBLE Letters.
37 Handy to Kelley, Jan. 24, 1838, CBLE Letters. Moreover, Handy implored the state treasurer to draw upon the federal deposits transferred to Ohio on “as late a day as your conscience and the discharge of your duty will permit.” (Letter to Whitehill, April 7, 1837, ibid.)
38 See Handy to Woodbury, Dec. 4, 1837, to J. Campbell, Sept. 25, 1837, CBLE Letters.
39 Handy to Woodbury, Oct. 25, 1837, Dec. 4, 1837, CBLE Letters.
40 Handy to J. M. Espy, July 20, 1837, CBLE Letters.
41 Case to W. Dwight, March 8, 1838, CBLE Letters. The dividends are computed from ibid., 1832–1838, checked against State of Ohio, Executive Documents, 1838–1839, No. 54.
42 Case to W. Dwight, March 8, 1838, CBLE Letters.
43 The Dwights had executed a personal bond guaranteeing the Bank of Michigan debt to the government; later in 1838 or in early 1839, they advanced $182,000 in cash to the Detroit Bank. (Scheiber, “Bancroft and Bank of Michigan,” 85 ff.; Bancroft to J. Haven, April 14, 1842, Bancroft Papers-Cornell.)
44 Handy to E. Dwight, June 1, 1838, J. Rockwell to John Ward, June 1, 1838, CBLE Letters.
45 Handy to W. Lewis, April 16, 1838, to W. Vermilye, April 17, 1838, CBLE Letters. On the western price revival of 1838, cf. Berry, Thomas S., Western Prices before 1861 (Cambridge, Mass., 1943), 452.Google Scholar On the 1839 bond purchase, see Fund Commissioners to J. Brough, April 23, 1838, Board of Canal Fund Commrs. Papers.
46 1842 Batik Report, 69, 74.
47 Handy to Bancroft, July 14, 1841, Bancroft Papers-Cornell; Scheiber, “Bancroft and Bank of Michigan,” 87; Prentiss Dow to M. T. Williams, July 9, 1841, Micajah T. Williams Papers, Ohio State Library, Columbus.
48 Handy to Bancroft, Dec. 24, 1841, Bancroft Papers, Mass. Hist. Society; 1842 Bank Report, 75.
49 Cleveland Herald, March 3, 1842, listing the bank's liabilities as $167,218 and nominal assets of $773,588; Handy Banquet, 10–12, 22–24; 1842 Bank Report, 69; correspondence of Bancroft with Handy and with John Davis, 1846–49, Bancroft Papers-Cornell.
50 1842 Bank Report, 6, 10–16, 22.
51 Ibid., 67–75.
52 Address of R. C. Parsons, Handy Banquet, 45–51. Bancroft himself said of the Michigan and Ohio banks owned by the Dwights: “the secret of their troubles lies in having loaned their funds to speculators, [but] their self love will tell them it was all the fault of the wicked loco-focos.” (Bancroft to William Dwight, Nov. 10, 1840, Bancroft Papers-Cornell.)
53 Case commented that real estate in Cleveland and its vicinity had risen as much as 300 per cent in value during the 1830's, then “receded one third, one half, and two thirds in many locations” leaving many of the bank's debtors without means. (1842 Bank Report, 68.) Evidence of the later increase, often spectacular, in value of mortgages and liens turned over to the bank's stockholders is in the Bancroft Papers-Cornell, correspondence of 1846–1849, between Bancroft and Handy and Bancroft and John Davis. Handy asserted in 1882 that the property distributed to stockholders included “some of the most valuable in the city and now worth many millions.” (Handy Banquet, 12.)
54 Redlich, , “American Financial Institutions: Bank Administration, 1780–1914,” Journal of Economic History, XII (December 1952), 441Google Scholar; also, ibid., 438–42.
55 E. Dwight to Bancroft, Aug. 17, 1840, Bancroft Papers-Cornell. The total book value of Dwight-Bliss-Bancroft investments in 1840 was approximately $700,000 at Cleveland; $500,000 at Detroit; and an estimated $100,000 at Massillon, Ohio. In addition, perhaps $100,000 of stock was owned in the Bank of River Raisin at Monroe, Michigan. Compare $390,000 investment in the Dwight textile mills listed by Lance Davis, E. in “Stock Ownership in the Early New England Textile Industry,” Business History Review, XXXII (Summer, 1958), 219Google Scholar, Table 2. The book value of the family's western bank investments is computed from “List of the property of Sarah Bancroft” (MS in Bancroft Papers-Cornell); 1842 Bank Report, 100; and State of Michigan, House of Representatives, Reports of the Special Committee to Investigate the Condition of the Bank of Michigan … March 5, 1841 (Report No. 57 [1841]).
56 Kalida (Ohio) Venture, Nov. 18, 1853. For similar attacks on Dwight banks, see Cleveland Herald, June 16, 1841, May 10, 1842; 1842 Bank Report, 10–11. “When the time of trial came, after the suspension of 1837, [the Dwights] endeavored to protect their escutcheon free from the taint of failure by advancing large sums, (to the Bank of Michigan $300,000); and yet these gentlemen were stigmatized by the antibank people as robbers.” (C. C. Trowbridge, in Handy Banquet, 42.) The Dwights' pledge of personal funds ($280, 000) as collateral for the Bank of Michigan's debt to the federal government is treated in Scheiber, “George Bancroft and Bank of Michigan,” 85. In turn, however, they took mortgages and other security from the bank, it should be noted.
57 Handy Banquet, passim; aspects of Handy's career are treated in detail in Kennedy, James Harrison, A History of the City of Cleveland (Cleveland, 1896).Google Scholar See also the article on Handy in Joblin, Maurice, Cleveland, Past and Present: Its Representative Men (Cleveland, 1869).Google Scholar
