Bank of Spearfish (Spearfish, SD)

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ARE SOLID AS A ROCK Spearfish Banking Houses Are In No Way Affected by Recent Flurry in Banking Circles Story of the Only Time When a Spearfish Banking House Was in Any Danger Patrons of the two banking houses in Spearfish need have no worry about the financial stability of these solid institutions. During the past month the American National Bank carried a display advertisement in the Mail which was self-explanatory. In brief it read as follows: The bank owes its numerous depositors $489,008.64 Our national bank notes in circulation 6,250.00 These notes are secured by government bonds with the treasury of the United States. Total $495,258.64 The bank has for the purpose of meeting the above obligations: Cash and exchange $87,898.07 This consists of actual cash in our vaults and money due from the Federal Reserve Bank and city correspondents. Loans to individuals and corporations 416,571.32 These loans are secured mostly by collateral and mortgages of greater value than the loans. United States Bonds, (considered the same as cash) 7,250.00 Warrants and other securities 24,710.51 Banking house as carried on our books 10,000.00 Total assets $546,429.90 Total liabilities 495,258.64 Leaving a surplus of $51,171.26 This surplus operates as a guarantee fund to protect depositors against loss, and, added to this, the shareholders are additionally liable for twice the amount of the capital stock. This alone gives depositors protection in the sum of $50,000 and thereby increasing the guarantee to over $100,000. With no borrowed money, it is readily seen that you have an exceptionally strong financial institution in which to deposit your funds. The Bank of Spearfish, now in its forty-second year of safe and successful business, makes an equally creditable financial showing. When it is remembered that several of the stockholders and officers are men of immense financial rating in Bradstreet's—such men as H. G. Weare, L. A. Brown, and others—the safety and security of the institution is assured beyond question. This recent suspension of a Deadwood banking house recalls the time when the Bank of Spearfish was for a few moments in possible danger. That was away back in 1887. J. F. Summers was cashier of the bank at that time, and patrons of the bank had unbounded confidence in his ability and integrity. The bank had been established by Stebbins, Fox & Company as a branch of their Merchants' National Bank of Deadwood, which went onto the rocks in February, 1887. A review of the file copies of the Spearfish Register of those days reveals several news stories in this connection. The Register of Feb. 19, 1887, says: "Wednesday evening word came that the Merchants' National Bank, Deadwood, had closed its doors, but it was after banking hours, and those who learned the circumstances kept quiet. As soon as the bank opened Thursday morning a number of depositors appeared and demanded their funds, and not till the third or fourth had got what he was after did Mr. Summers, the cashier, suspect that anything was in the wind, not having been apprised of the trouble in Deadwood, the telephone line being down. When advised of the situation he invited L. W. Valentine and other business men to examine the books and satisfy themselves that the bank was all right, which was done, and on the assurance of Mr. Summers that he was not compelled to and would not embarrass the bank here in attempting to assist the Merchants, Mr. Valentine immediately placed $1,400 additional in the bank. Messrs. Keets, Winterling, Lown, and other heavy depositors, including most all the leading merchants, backed their confidence not only by leaving their deposits in the bank, but offering more, even if they had to telegraph for it. Thus an unfortunate run was averted, and the fact demonstrated that, unless depositors will otherwise, there need be and will be no interruption in the even business course of the institution." In the same issue of the Register is the following account of the closing of the Deadwood institution: "The Merchants' National Bank of Deadwood was compelled to close its doors Wednesday afternoon. For a time excitement ran pretty high, all sorts of rumors prevailing, but by the following morning business resumed the even tenor of its course in Deadwood. The Central City bank, a branch of the Merchants, or owned by the same directors, was early compelled to close its doors. Even the Lead City bank, in no way connected with the institution in trouble, was for a time threatened, miners who had deposits in it quitting work and flocking to the institution in troops. Homestake bullion was placed at the disposal of the bank, and abundant currency secured to sustain the strain, pay all demands and have plenty left in sight, and as the true inwardness of the situation became better understood the deposits began to flow back again. The cause of the trouble is thus given by the Times: 'In a nutshell, for personal reasons, business has drifted to other institutions continuously for the past six months, and very rapidly since the first of the year, while a very large discount business, altogether out of proportion and not in the line of available assets, has been maintained. The immediate cause, however, was the knowledge that paper of the institution had been returned from the east protested, which led depositors to withdraw. The taking out of the Iron Hill surplus and other heavy sums hastened the temporary collapse.'" The issue of the Register of the following week contains this additional story: "The fever of excitement immediately following the closing of the Merchants' National Bank of Deadwood, and its connections in Central and Sturgis, had pretty well died out by Saturday evening. A telegram from Mr. Stebbins, stating that he was ready to deposit sufficient money in New York to relieve present distress of the Merchants, provided patrons and friends in the Hills would cooperate, had a marked effect in reassuring the timid in and about Deadwood. The Bank of Spearfish, notwithstanding the open threats of prominent Deadwood men that it should and would be closed, rode the storm in fine shape, thanks to the good sense and courage of depositors. In this connection the following from Tuesday's Times is interesting: 'The Spearfish bank has $25,000 on the road from St. Paul. We regret sincerely that an impression should have gone abroad that the last mentioned bank was else than absolutely solvent. Such it is, and if those who thoughtlessly assisted in circulating first reports will as faithfully endeavor to disabuse the public mind, they will perform an act of simple justice. The bank has a capital of $30,000; demand and time deposits aggregating $40,000, and a list of loans and discounts aggregating $40,000. A slight run was experienced immediately after the Merchants closed, but it was short-lived, except to return every dollar drawn out and many in addition. Currency deposits alone yesterday amounted to $6,000. The bank is a fixture, to be forced to the wall only when every man, woman and child in the Spearfish district is a hopeless bankrupt.'" To which the Register made the following reply: "All of which is very true, as is also the fact, perhaps not known to the editor of the Times, that the same men who, to gratify a petty feeling of spite or revenge against one man, freely risked the best interests, the welfare of the country to that end and were alone responsible for the 'impression' that our bank had closed, having hired an emissary to spread the news from Deadwood to Sundance. Happily, he arrived too late to do any harm, and the good sound sense of Sundance merchants prevented any disastrous results of his visit to Sundance. Few depositors of the latter bank insisted on withdrawing their deposits after Cashier Pettigrew showed them the folly and uselessness of such proceeding, which, by even temporarily closing the bank, would tend to injure the credit of the town and every merchant in it." * * * Such in brief is the story of the only time in the history of Spearfish that one of its banking houses was ever threatened with suspension. J. F. Summers, founder of the Bank of Spearfish and its cashier and subsequently its president for more than a third of a century, personally directing its business course up to within a few years, was a man in whom the people of this community had such implicit faith and confidence that he warded off a blow which would have been serious to Spearfish. For twenty years or more he has devoted his personal attention to his ranch and live stock interests, which he finds quite as agreeable as that of personally caring for the financial interests of one of the strong banking houses in this city.