The first bank in the Territory of Illinois was established at Shawneetown, of Gallatin County, Illinois the act authorizing its establishment having been approved December 28, 1816. It was named the Bank of Illinois; its capital was not to exceed $300,000, one-third of which was to remain open to be subscribed by the Legislature of the Territory or of the State, when the State should be formed. Its charter was to continue until January 1, 1837, and its title was the “President, Directors and Company of the Bank of Illinois.” The directors were to be twelve in number, to be elected on the first Monday in January annually. The rate of interest received by the bank was not to exceed 6 per cent, and if the bank should refuse to redeem any of its bills in specie or to pay any of its depositors on demand, then such holder was authorized to receive the amount due with interest at the rate of 12 per cent per annum from the time the demand was made. The bill was signed by Willis Hargrave, speaker contempore of the House of Representatives and by Pierre Menard, president of the Legislative Council, and was approved by Ninian Edwards, governor, on the date mentioned above.
In 1823 or 1824 this bank suspended operations, and on the 12th of February, 1835, an act was passed to extend the charter for twenty years from January 1, 1837, the name of the institution to be the State Bank of Illinois at Shawneetown. This bill was approved by Joseph Duncan, governor. The first officers of the bank were John Marshall, president, and John Siddall, cashier.
The State Bank of Illinois
From a point of time somewhat earlier than this, to one considerably later, the State Bank of Illinois at Shawneetown was a principal figure in the history of the town. Upon the recommendation of Gov. Joseph Duncan, elected in 1834, the Legislature passed an act chartering a new State bank with a capital of $1,500,000, with the privilege of increasing the capital $1,000,000 more. Six branches were authorized, one of these at Shawneetown, was to be a revival in a certain sense of the old Territorial Bank at this place, which was the first bank in the Territory that had been in a state of suspension over twelve years. The capital of this bank was fixed at $300,000. By an act of March 4, 1837, the capital stock of this bank was authorized to be increased $1,400,000; $1,000,000 being reserved for the State, and $400,000 for private subscription. The bank was to have nine directors, and was authorized to establish three branches, one at Jacksonville, one at Alton and one at Lawrenceville, each to have such an amount of capital as the mother bank could safely supply. Upon an attempt to dispose of the State bonds it was found they could not be negotiated at par, hence the banks took the bonds at par, amounting to $2,665,000. The bank at Shawneetown sold its share, $900,000. Soon after this came the financial revulsion of 1837, and although the banks were solvent, they could not stand the drain of specie caused by the presentation of their notes, and hence were compelled to suspend. The charters of the banks provided that if suspension of specie payments was continued for more than sixty days together the charters would thereby be forfeited and the banks should go into liquidation. Hence, in order to avoid the common ruin in which the State and its splendid scheme of internal improvements would be involved by a destruction of the banks, the canal commissioners urged the governor to convene the Legislature to legalize an indefinite suspension of specie payments. The Legislature met in special session July 10, 1837, and acted upon the governor’s suggestion. The suspension was again made legal in 1839, but without attempting to follow in detail the trials and troubles of the banks, it may be said that it was found impossible even with the most assiduous pains and care to keep them on their feet. In February, 1842, the entire institution, with a circulation of $3,000,000 and upward, fell.
This bank had loaned to the State in the first place $80,000, to complete the new State house at Springfield, and early in the autumn of 1839, upon the earnest solicitation of Gov. Carlin, and upon his solemn promise to deposit as a pledge of security, $500,000, in internal improvement securities, it had loaned to the commissioners of public works $200,000, in order to prevent a cessation of their improvements, otherwise unavoidable. The deposit of the $500,000 security, however, was never made, neither was the $200,000 loan to the fund commissioners ever repaid, and as a consequence, although the directors had resolved to resume specie payments on the 15th of June, 1842, the bank finally collapsed during the same month with a circulation of somewhat over $1,300,000. The banks were compelled to go into liquidation in 1843.
The real estate enumerated in the above statement as worth $83,336.74, consisted of a lot on the north corner Main and Main Cross Streets, in Shawneetown, and the bank building is still standing and later occupied by the First National Bank. This building was erected in 1839-40. It is a massive stone structure, four stories high, with five massive corrugated, Doric columns in the front, built at a cost of $80,000.
The directors of this bank for the year 1835 were as follows, appointed by the stockholders: E. H. Gatewood, Alexander Kirkpatrick, W. A. Docker, W. A. G. Posey, Timothy Guard, Daniel Wood, M. M. Rawlings, P. Redman, Henry Eddy, James C. Sloo and O. C. Valandingham. Appointed on behalf of the State: Porter Clay, David J. Baker, H. H. West, J. K. Dubois, William Linn, William Sim, James Dunlap, E. B. Webb and Peter Butler.
The bank building was afterward sold to Joel A. Matteson, for $15,000, who, in 1853, started a bank under the free banking act, which was named the State Bank of Illinois, and had a capital stock of $500,000. E. E. Goodell, son-in-law of ex-Gov. Matteson, was president of the bank, and A. B. Safford, cashier for four years, when upon going to Cairo, Ill., he was succeeded by L.B. Leach. This bank was conducted by Mr.Leach until the breaking out of the war of the Rebellion, when it was closed, because of Gov. Matteson’s fears that southern Illinois would be overrun by the rebel hordes. From the same fears he sold the building to Thomas S. Ridgway, for the ridiculously small sum of $0,500, who bought it for a residence and has since occupied it as such, but in 1865 himself and partner, John McKee Peeples, decided to establish The First National Bank of Shawneetown, and since then the building has been used for the business of this bank as well as for a residence. The capital stock of the bank was in the first place $200,000, with five stockholders as required by law, William D. Phile, George A. Ridgway and A. K. Lowe, each holding $2,000, while Mr. Ridgway and Mr. Peeples held the balance in equal shares. In 1878 the capital of the bank was reduced to $50,000, because of the unjust policy of the assessors, who insisted on assessing the capita] stock of the bank at its par value, while real estate was at the same time being assessed at from about 25 to 33 per cent of its cash value. Mr. Peeples remained president of this bank until his death in 1879, when Mr. Ridgway, who had been cashier from the organization of the bank, became president, and William D. Phile, who had been assistant cashier from the establishment of the bank, became cashier; and these two remain the officers of the institution. The surplus fund is now $25,000, and the deposits range from $180,000 to $200,000.
The Gallatin National Bank was established in February, 1871, with a capital of $250,000, and with the following directors and officers: Orval Pool, president; Henderson B. Powell, cashier; Dr. William M. Warford, John D. Richeson and Peter Smith, directors. In June, 1871, Orval Pool died, and M. M. Pool, his son, was elected successor. At the same time Mr. Powell resigned as cashier and F. C. Crawford succeeded him. In 1872 Hon. R. W. Townshend was chosen vice-president of the bank, and upon the resignation of Mr. Crawford, became cashier. In 1874 the bank went into voluntary liquidation, because the county, although it had at one time agreed to reduce the assessed value of its capital stock 25 per cent below its nominal value, yet receded from that position and insisted upon taxing the bank upon the face value of its stock. Upon closing out the affairs of the national bank, a private bank was organized under the firm name of M. M. Pool & Co. (the Co. being William B. Henshaw, of Union County, Ky.)
In 1937, a great flood forced an evacuation of the town. Much of Shawneetown was destroyed, and the federal government decided to relocate what was left. Through the Works Progress Administration, the town was moved to higher ground three miles west. The new site became Shawneetown, while the old village became Old Shawneetown. The flood left it’s physical mark on the bank, as the high water mark can still be seen on its infamous Dorian columns.
The bank housed numerous financial institutions from 1854 to the 1930s, but finally closed its doors in 1942 and was deeded to the state. Some restoration was completed in the 1970s, but budgetary problems prevented further work. This building is still in existence, on Main Street in Old Shawneetown. Landmark Illinois, a state historical preservation organization, listed Shawneetown Bank as one of the 10 most endangered sites of 2009.
- The Goodspeed Publishing Company. History of Gallatin, Saline, Hamilton, Franklin and Williamson counties, Illinois, from the earliest time to the present: together with sundry and interesting biographical sketches, notes, reminiscences, etc. Chicago: John Morris Company, Printers, 1887.
- The Southern Illinoisan. Old Shawneetown Bank: Standing testament to history. Published 9 Oct. 2014.
- Russell Lee – Farm Security Administration – Office of War Information Photograph Collection, Library of Congress, Reproduction Number: LC-USF34-010659-D, LC-USF34-010660-D, and LC-USF341-T-010678-B.
- Lusk, D. W. Directory, charter and ordinances of the city of Shawneetown, 1872: with a brief reference to the resources of Gallatin County, p. 10. Shawneetown: D. W. Lusk, Mercury Office, for Glass and Co., 1872.