On November 20, 1818, just one day before adjourning, the Alabama Territorial Legislature passed an act establishing Mobile‘s first bank, the Bank of Mobile. Until its closing in 1884, the bank remained one of the most solvent in the country and time and again survived national panics and banking crises. It was called “the little monster” and “the monster of many heads” because it weathered national panics, local disasters, and runs.
Bank of Mobile The 1818 charter specified that the bank needed to raise $8,750 in gold and silver in order to open its doors. Unfortunately, during the summer of 1819, the bank was robbed of $3,100, which delayed its grand opening. The money was never recovered, and the thief was not brought to justice until 1826, when George Bohannan was caught and sentenced to 39 lashes and three hours in the town pillory for the first bank robbery in the state of Alabama. The robbery did not deter the bank’s founders, all prominent businessmen in Mobile as the city transitioned from its colonial years into Alabama statehood. Lewis (or Louis) Judson, the first president of the bank, had also been the first “president” of newly incorporated Mobile in 1814. In addition to Judson, a merchant, there were 11 other directors on the first board: Alvin Robeshow (chief justice of Mobile County in 1816); Addin Lewis (merchant and postmaster); David W. Crawford (merchant); John King Jr (trader); Thomas L. Hallett (merchant and shipping agent); Henry Gunnison (shipping agent); Oliver Helman (merchant); Henry Stickney (merchant); Terry McCusker (merchant and real estate agent); Benjamin H. Hall (business owner); and John Whitehead (merchant). On April 23, 1819, this first board of directors elected Archibald W. Gordon as the Bank of Mobile’s first cashier.
The bank first operated out of a frame building on Conception Street, most likely near Dauphin Street. This initial building was probably rented, because the only references to this first location are found in directions to other locations, such as an advertisement for a millinery store on “Conception Street nearly opposite the Bank.” In 1824, the bank moved into its own building on Royal Street, between Government Street and Church Street. The bank’s founders were mostly from the Northeast, and so this first building was in the Federal style, as was popular in the Northeast at the time. The Greek Revival style prevalent in present-day Mobile buildings would not take hold until the boom years of the 1840s. In 1842, the bank moved a third time, to the corner of Royal Street and Conti Street, to a location previously inhabited by the Planters and Merchants Bank, which failed that year after only four years in operation. The bank would remain at this location until 1875, when it moved to its final location at the northeast corner of Royal Street and St. Francis Street.
Even though the Bank of Mobile was one of the most financially sound in the nation, by itself, it could not handle the large and ever-growing commerce of the Port City. During its history, many other banks opened in the city only to fail within a few years. In 1848, the Bank of Mobile was the city’s only bank, with $1,500,000 capital. This amount was considered too little and inadequate to meet the demands of Mobile businesses, which had exports worth $10,000,000 that year. In 1860, with only two banks, Mobile’s banking capital was $2,100,000 with exports worth $38,600,000. Conversely, for the same year, New Orleans had more than eleven times ($24,551,666) Mobile’s banking capital, but less than three times its annual export ($107,800,000). To meet the demand, some Mobilians used private bankers or banks in other cities.
In its early years, the Bank of Mobile remained solvent thanks to cautious management. William R. Hallett (1836- 1860) was one of the most prudent presidents. On April 22, 1848, the bank’s sterling reputation would be proved by a run, or largescale and rapid withdrawal of cash by customers. Bank director Eliezer L. Andrews and his brother Zeligman (or Zalegman) Andrews of New Orleans had a mutual business shipping cotton. Their business suffered huge losses, and the brothers died by suicide by drowning on the same day, each in his respective city. When this became known, in combination with rumors that the bank had lost money in northern states, Mobilians panicked and sought to withdraw their savings. The bank brought in extra personnel and stayed open late to meet every demand. The bank’s competent management of the run only further demonstrated its solvency.
Panic of 1837 Political Cartoon In general, the Bank of Mobile survived crashes that ruined other banks. During the crash of 1837, it was one of only four surviving banks in the country. In the Panic of 1857 and subsequent economic depression, it was one of only ten. It later lost money on advances to the state of Alabama during the Civil War, however, and was left in fragile condition. The Panic of 1873 further distressed the institution, because Charles Walsh, president at the time, had used bank funds in his private firm, Walsh, Smith & Co., which went bankrupt after the 1873 crash.
With the bank in trouble, the board of directors asked William H. Pratt, a former bank director then living in Louisiana, to return to Mobile to take over as president. Pratt’s presidency appears to have been a slow return to the solvency of earlier years, but he oversaw an investigation that uncovered evidence of financial troubles. Pratt hired a special bookkeeper to investigate irregularities in the books he had been alerted to in 1881. The bookkeeper examined the books from 1876 to 1880 and found a long list of errors, on different days and with multiple depositors, that totaled several thousand dollars. The investigation continued into late 1883. Richard F. Manly, a cashier since 1875, and both teller and cashier from 1877 to 1881, was under suspicion for many months, but he remained cashier and was later named director.
Pratt’s term ended abruptly on March 3, 1883, when the 72-year-old died at the Birmingham train station as he attempted to cross under the coupling of a train car and became entangled. Because of his sudden death, the board needed both a new president and director to serve out the remainder of his term. Lumberman Albert C. Danner was elected president, even though some of the directors opposed his appointment because of the nearly $80,000 debt that his lumber companies owed the bank. In addition, the board elected Manly to serve out the remainder of Pratt’s term as director. But at a stockholder meeting before the general election in January 1884, Manly was removed from his position as director. That April, Gaylord B. Clark, an attorney from the firm of Clark & Clark, determined that even if Manly had not personally embezzled money, he was still legally liable for the amount missing. Manly would have seen daily receipts and payables and should have noticed so many errors over the years. On May 14, 1884, the board agreed with Clark’s decision that although Manly was at fault for the missing money he should not be held responsible, and he remained in his position as cashier.
The final board of directors elected for 1884 included C. DuBose (merchant and druggist); Daniel P. Bestor (lawyer); Winston Jones (cotton factor); Marcus Lyons (merchant); Albert M. Quigley (manufacturer, business owner); William Barnewell (commission merchant); Lorenzo M. Wilson (merchant and husband of author Augusta Jane Evans Wilson); David R. Dunlap (merchant); and Danner, who remained president. After Danner’s re-election, however, the directors alleged that he borrowed more money from the bank, as well as discounted notes, without their approval. Some of the directors wanted Manly to refuse all transactions with Danner without prior approval from the board. But, the rest of them felt that placing the cashier above the president was a terrible idea. They compromised and appointed two directors, Bestor and Dunlap, to oversee the personal accounts of the president.
The Bank Closes
In late June 1884, the board of directors devised a plan to recover the bank’s money from Danner. They believed his business to be on the verge of failure and wanted to get what they could before Danner was unable to pay back his debts. Instead of cash, the bank took over a mill, kilns, and other property to cover Danner’s debt of more than $100,000, although this property turned out to be worth considerably less. It was also planned for Danner to announce his resignation and a new president to take his place. And, at the beginning of August, the bank would remove all support from Danner’s companies. The plan was to be kept secret from the public for fear of panic, but before the directors could enact their plan, it became known. Mobilians panicked when they heard that the bank president had signed over his own property to the bank and resigned, and on Monday, July 8, 1884, at 10:00 a.m., the run started. By noon, the bank closed its doors.
The board called an emergency session. Although the bank had more than enough assets to cover all depositors, they could not meet the demand for immediate cash. Winston Jones, a director and partner in the cotton factor firm of Jones & DePras and a collector for the bank, was appointed to liquidate assets and pay off all debts and depositors, a role then known as “assigning” or an “assignment.” The directors chose Jones because he understood the condition of the bank and its assets, he was the best collector among them, he was honest, and he was financially responsible. Thirty minutes later, the bank received an offer of a $150,000 loan to keep the bank open, but it was too late and the Bank of Mobile closed after 66 years.
Clark thought the bank solvent even though the bank’s assets were mostly in property, which was difficult to convert to cash. Clark also believed that the bank should have handled the situation differently and that stockholders would lose money through the assignment. The directors found themselves needing to explain why the bank had failed, and most blamed Danner and his debts. In a statement to explain their version of events, they acknowledged that the bank’s losses began well before Danner became president but focused on the losses incurred during his presidency. Their rationale for this was that most of the directors were new to the board.
The failure of the bank was likely due to a convergence of numerous bad decisions. After William R. Hallett’s death in 1860, the bank became less reliable, and the directors loaned money to its presidents without proper collateral. The personal debts in the tens of thousands of dollars of former presidents Charles Walsh, James Crawford, and William H. Pratt all hurt the bank. The lost money from loans to the state of Alabama during the Civil War, the Crash of 1873, and a cashier who was either an embezzler or incompetent, placed the frail bank into the hands of a bickering board and a weak president.
An examination of the bank showed its assets to be equal to the liabilities and therefore all its depositors and stockholders would be paid, but Clark felt that the bank was too impulsive in its action. As it was, Winston Jones was still working as the assignee until at least 1895, still selling bank properties to pay liabilities. The site of the last location of the bank is now the Hancock Whitney Bank.
- Amos, Harriet E. Cotton City: Urban Development in Antebellum Mobile. Tuscaloosa: University of Alabama Press, 1985.
- Delaney, Caldwell. Craighead’s Mobile. Mobile: Haunted Bookshop, 1968.
- Gould, Elizabeth Barrett. From Port to Port: An Architectural History of Mobile, Alabama, 1711-1918. Tuscaloosa: University of Alabama Press, 1988.