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  • Writer's pictureHistoric Columbus

Columbus Bank & Trust: A Trust to Keep (Part 1)

SOURCE: A Trust to Keep: The One Hundred Year History of Columbus Bank and Trust Company, Sara Crawford and Janis Eberhardt, editors. 1988.

 

In 1888, the United States of America celebrated its 112th birthday. The country, a novice in world commerce and international negotiations, thrust its restless and inevitable growth westward. Undisciplined in social and commercial character, the great land possessed endless, unexplored regions and provided a perfect setting for innovative ventures. Governor John B. Gordon presided over the affairs of the state of Georgia and Grover Cleveland occupied the White House, followed by Benjamin H. Harrison. The population of Columbus, at the time, was around 15,000 people. Our town produced textiles, iron and castings, paint, gas, sugar, tin, copper, flour, brick, furniture, tile, bagging, barrels, and other goods. More than one hundred "drummers" rode the rails and steamboats, selling their wares up and down the river. Farmers brought between 70,000 and 80,000 bales of cotton annually. Mayor Cliff B. Grimes proved an energetic and popular local leader. The Columbus Evening Ledger noted that a home builder could purchase a lot in Rose Hill on the streetcar line for $450. $1,000 bought a six-room home with a two-room cottage located on the same lot near the Rose Hill Market. The two-room cottage could provide the purchaser with a rental income of $150 per annum.



With the enterprising social and economic activity stirring in West Georgia in the late 1800s, businessmen with foresight recognized that Columbus needed another bank to accommodate the fast-moving economy. Such a financial venture stirred latently and eventually formalized in the probing, disciplined mind of George Gunby Jordan. In the 1870s and early 1880's, Mr. Jordan acquired his interest in banking by running the Eagle and Phenix Savings Bank to serve the employees of the local Eagle & Phenix Mill. The Eagle and Phenix Savings Bank seemed ordered by providence when a young woman employee working in the mill got her dress caught in one of the machines. William H. Young, founder of the Eagle and Phenix, explained the necessity for organizing the in-house bank: "We have organized a savings department. It originated from a mishap that occurred. One of the hands had her dress caught in the machinery, and the superintendent of the room took his knife and cut through $60 in greenbacks. He asked why she kept her money there and she said she had no place else to keep it, that if she kept it in her trunk somebody might take it, so she always carried it about her. I then told her that if she would feel satisfied to put her money in the factory, I would see that it was kept safe for her and pay her interest on it." Fortuitously, G. Gunby Jordan (pictured below), as Secretary and Treasurer of the Eagle & Phenix, became the official designated to run the savings bank that served the textile workers.



Jordan would also fight for the safety of the Eagle and Phenix Bank in the depression of the 1870s. Local historian Dr. John S. Lupold, with Barbara A. Kimmelman and J. B. Karfunkle, wrote "Even before the national panic, the failure of a local bank squeezed local currency, and the Eagle and Phenix became the area's chief banking institution. To help relieve the situation, the Eagle and Phenix offered to issue $300,000 in certificates, scrip, or 'shinplasters', backed in part by the company's savings department. Their workers were paid in that medium; forty merchants and businessmen in the city agreed to accept it; and Eagle and Phenix currency was exchanged for all cotton brought to Columbus that fall. In October of 1873, a New York trading house advertised in a Columbus newspaper for $100,000 of Eagle and Phenix money to be exchanged for dry goods. Since the company issued currency, it could be taxed by the federal government as a banking institution under a law designed to force state banks to become national banks. The tax, calculated not merely on the currency in circulation but on its entire capital stock, amounted to $28,000 by 1878. The U. S. Congress, after the appropriate lobbying by Gunby Jordan and others, passed a bill relieving the company of the tax." Eventually, the Eagle and Phenix Savings Bank reached the $1,000,000 level under the able guidance of Gunby Jordan. A million dollars, no small sum now, in the 1800s meant monumental wealth in Columbus, Georgia.



When Jordan left the mill in 1885, he turned his energies toward developing railroads which Columbus desperately needed to improve the inadequate freight and passenger service in existence. During this period, railroad and business expansion presented an irresistible financial picture. Gunby’s experience with the Eagle & Phenix Savings Bank and the Georgia-Midland Railroad were not wasted. As a result, he had little trouble persuading seventeen influential Columbus businessmen to jointly invest $100 a share in 1,000 shares of stock to establish a bank capitalized at $100,000. Fortune smiled on September 18, 1888, when eleven of the seventeen original stockholders met in a small building at 1119 Broad Street, City Lot No. 54, owned by Mrs. Mary B. Mainerd, to organize the Third National Bank. At a meeting of the Third National Bank Board of Directors on November 4th, 1888, President G. Gunby Jordan reported that the Bank-owned Certificate 3937, was signed on October 31, 1888, and received on November 3, 1888, from the Comptroller of the Currency of the United States, authorizing the bank to begin business. With Certificate 3937 in hand and $100,000 in pledged subscriptions, the directors were ready to open the Third National Bank for business. Since the officers had rented a banking home from Mrs. Mainerd on Broad Street, no debt existed because of capital outlay.



To broaden banking services, on December 24, 1888, a similar group of businessmen met to apply for a charter to the Georgia State Legislature incorporating Columbus Savings Bank with a capital stock of 1,000 shares with a par value of $50 each. Mr. Jordan was also the leading spirit in the formation of this bank which met in the Eagle & Phenix Mill, although it was separate from the in-house mill bank. The Savings Bank had to satisfy two conditions to obtain the necessary certification – a local need must exist for the bank and the financial soundness of the undertaking must be evident. Columbus Savings Bank satisfied the two-state requirements and was chartered as a state bank on December 29, 1888. Several of the same officers served both Third National and Columbus Savings, and Gunby Jordan presided as president of both institutions. After operating for one year and eight months at 1119 Broad Street, the Third National Bank required a proper home. The corner of 12th Street and Broad Street became available. The location had housed banks since 1856 and belonged to Mrs. Adele Foley and Mrs. Emelie G. Springer. The bank agreed to pay the $1,300 a year rent, acquired the use of the property, and moved in. The Columbus Savings Bank had been meeting in the Eagle & Phenix Mill and needed to be near its Third National counterpart. So, when the Third National moved into larger quarters and obtained a lease for ten years, Columbus Savings Bank eagerly followed; and here they operated side by side, separately, yet together. Historically, early banking in the United States went through cycles of "ups and downs." The young country tried to model its financial profile on the European plan of a few banks doing substantial business, but the picture would not fit the frame. Outside the populous East, the U. S. was a farming country, and as the crops prospered or withered so did the economy. A hint of financial trouble could leak into the community, snowball, and cause a run on the local bank. The trouble might be a bad crop or just a rumor. Whatever the reason, the Panic of 1893, caused by the fear that free silver legislation would deplete the gold reserve, made for trouble of gigantic proportions.



Numerous bank failures were widespread in 1893. President Jordan stated that the Third National Bank lived up to every promise made to its depositors and experienced few losses during this period of depression. Mr. Jordan congratulated the stockholders on the net profit of $18,233.76 accrued during this time. The profit justified the payment of dividends and increased the surplus account and undivided profits. He commented further on the stable character of the customers of the bank and credited the bank's health to the "unremitting and successful attention given to your affairs by the Board of Directors, the officers, and the employees." Mr. Jordan commended the policy of the board's strengthening the Third National Bank by building up its surplus fund from profits each year, showing that long-range stability was preferred to temporary success through granting bigger dividends. Such care paid off in an age of indiscriminate credit and free-wheeling bank practices. Meanwhile, the Columbus Savings Bank also passed through the panic safely. President Jordan proclaimed that no savings bank should have closed its doors because the institutions contained a clause in their charters requiring notice of ninety days before a withdrawal of deposits during "periods of excitement," although the local savings bank had not found it necessary to apply the 90-day rule. Despite the stability of the institution, deposits, which had reached a high-water mark of $356,999.20 on June 30, 1893, shrank to $214,810.78 by November 2, 1893. The withdrawals amounted to $142,188.42 which was forty percent of the entire deposits. The forty percent depletion caused concern, but not alarm, as the savings bank recovered its lost ground rapidly and nearly doubled its deposits by 1907.



During the period between 1888 and 1913, the two Columbus banks grew tap roots for the future. In 1900, Governor Allen O. Candler named the Third National Bank as a State Depository. The Board of Directors voted to accept the honor which meant that Third National would receive public money amounting to $200,000. In the same year John Wesley Murphey, one of the founding fathers, died; and in a moving speech to the Board of Directors, President Jordan, ever cognizant of support and loyalty, proclaimed the debt the bank owed Mr. Murphey and pledged the institution to an obligation of public service and integrity in the memory of a man to whom "we have a trust to keep." Also, in 1900, the office of vice president became necessary, and William Clark Bradley (pictured below) filled the position. An original stockholder, Mr. Bradley proved ambitious, energetic, and immensely capable. The question occurring was not whether Mr. Bradley was big enough for the job but whether the job was big enough for Mr. Bradley. Gunby Jordan, the older of the two men, appreciated the great energy and enjoyment the younger Mr. Bradley brought to his endeavors. The two gentlemen proved exceedingly compatible and formed a family friendship.



The Third National Bank presented a conservative posture which reflected the attitude of the community. The bank began carefully projecting an image of cautious prosperity by upgrading its buildings and joining the Bank Clearing House of Columbus, organized on October 31, 1907. The Clearing House was composed of Merchants & Mechanics Bank, Third National Bank, Columbus Savings Bank, National Bank of Columbus, Home Savings Bank, Fourth National Bank, The Phenix Bank of Columbus, Georgia, and Phenix-Girard Bank of Phenix City, Alabama. Heading the officers again was G. Gunby Jordan as President, with W. P. Slade - Vice President, E. P. Owsley - Treasurer, and A. W. Hale - Secretary. The Clearing House provided a businesslike basis for interaction among the city banks. The Columbus Savings Bank had acquired trust powers granted by the Georgia General Assembly and had already begun to exercise those powers in the 1890s. Recognizing the danger of large deposits in the hands of one customer, at this time the board voted to limit the amount of money held by one depositor to $3,000. This action was taken by the bank to prevent any one customer from controlling large sums of money, the withdrawal of which could cause considerable inconvenience.



Mr. Jordan, at this time, recommended changing the name of Columbus Savings Bank to Columbus Savings Bank and Trust Company, emphasizing the total services offered by the bank. But the name change to Columbus Savings Bank and Trust did not materialize until later when stockholders authorized the action in 1920. Columbus Savings Bank's future looked bright. In 1905, her assets passed the $1,000,000 mark. By 1918, Columbus Savings was the largest savings bank in Columbus. While Columbus Savings Bank was growing, Third National was extending its scope by subscribing to 330 shares of the Federal Reserve Bank of Atlanta, Georgia, District #6 on April 15, 1914. Gradually and securely, the "Bank with a Surplus" was building a base for the future. By 1919, deposits had reached an amazing $3,753,850.20. At the end of World War I, Columbus had over 30,000 citizens. The city would become known as the "Home of the Infantry" – a decision lobbied for by Columbusites and made by the War Department, but a decision that would change the destiny of the community and expose its Southern ways to cultures from all over the world.


On November 30, 1923, Columbus Savings Bank & Trust Co. voted to lease the storefront space at the northeast corner of 10th Street and Broad from Mr. Rankin for its first branch bank.


At this time, G. Gunby Jordan felt both banks were healthy and with unlimited futures. He knew they had been built with certain constants guiding the path. To the banking business, Gunby Jordan brought his conservative inclinations. He knew what it was to lose, and he knew what it meant to win, and he meant to win. He bade farewell to both banks in 1921. Having served thirty-two full years and in his thirty-third year as head of both institutions, G. Gunby Jordan could look with parental pride on his two brainchildren. He knew that the banks were responsible to the community and filled an "insatiable demand" in the public sector for financial accommodation. A firm base formed by sound thinking and strong leadership provided a safe launching pad. Mr. Jordan, no longer a young man, knew the banks were in capable hands. He recommended, without hesitation, that both banks secure the superlative leadership of his friend and co-founder, William Clark Bradley. Neither man, Jordan nor Bradley, confined his talents exclusively to banking; but the tremendous business interests of each needed sound financing, and what better place to find support than at home banks. Mr. Bradley, the younger man, took the helm, confidently exercising his talents in the area he loved – business. As for Mr. Jordan – though in his seventies – he had another business to promote – the growing Jordan Company, but that's another story.

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