Websters Collegiate Dictionary- Banking: an establishment for the custody, loan, exchange or issue of money, for the extension of credit and for facilitating the transmission of funds by drafts or bills of exchange.
In England banking began as a private business. In the United States it became a semi-private business authorized and sanctioned by the government via statures and law. Banks issued their own bank notes/script. These became depreciated and worthless when a bank failed.
Following the 1812 War, the U.S. finally gained control over the Northwest Territory. With the opening of the Erie Canal I 1825, settlers from the eastern states surged into Michigan. The majority were anxious to improve their way of life. A high percentage of the states new settlers came from New York. Noting that states economic growth as a model Michigan leaders borrowed New York lawns dealing with banking, among others. Much of Michigans first Constitution was based on the New York Constitution.
Michigans strategy of economic development followed the national policy of settling people on the land to be accompanied with the establishment of units of government as soon as possible. To accelerate this development lines of transportation were designated and local banks were to be launched.
These banks provided immediate income, usually in the form of credit or bank-issued notes, to the farmer for produce and crops sold. Farmers received credit for purchase of land, seed, equipment, etc. Banks also extended credit to village merchants to launch a local enterprise, to businessmen (millers, sawyers, blacksmiths, etc.) and to professional persons (doctors, lawyers, etc.) to establish themselves in the pioneer farm community.
By 1832, pioneers were acquiring land in Livingston County. Brighton Township was still part of Green Oak Township. Just over the county line, in Oakland County, where the Huron River was crossed by the Grand River Trail, a sawmill and house were built by Joel Redway. Alfred A. Dwight, one of many entrepreneurs, platted the town of Kensington in 1836. By then there was already a post office the name of which was changed from Lyon to Kensington that same year. (In operation until 1902.)
Dwight, along with Sherman D. Dix, who had taken up 82 acres in Section 17 of Green Oak Township in 1832, were members of the Board of Directors of the Bank of Kensington; organized December 12, 1837. Completely within the states corporation laws of the time, the bank was one of the many “Wild Cat” banks. (So named because their nearest neighbors often were wild cats.)
The “Free Banking: law, passed by the Michigan legislature January, 1837, was an attempt to speed the states economic development which was based on agriculture. To encourage local manufacturing businesses and improve transportation, which could be financed by local bank credit, general incorporation statures regulating commercial ventures were enacted, including banking corporations.
Banking was “free” in that the bank charter requirement of 2/3 vote of the Legislature was largely ignored; only 30% of its stock was necessary in “Good and sufficient security” to protect its bank notes; and county clerks and treasurers (who had a vested interest in the development of their county) were influential in the approval process.
“Free” banks, for short term investment projects, were successful in normal times. However, hard times caused bank investors and customers to request specie and the banks would be forced to sell land (the principal collateral) and other capital, at t loss. This often resulted in bank failures.
By June, 1837, the “Panic of 1837” was underway and the Legislature ruled that a bank did not have to pay in specie. Thanks to the “Wild Cats” banking laws of the state at the time, banks were started on a shoestring throughout the populated areas of Michigan. Since it would be another 11 months (May, 1838) before the general banking law governing the issuance of bank notes would go into effect, “Wild Cat” banks proliferated in the interlude of the 46 in the state the Bank of Kensington was as wild as any of them. (the bank note pictured below is from a private, local collection.
To promote the evolution of the new state of Michigan from one of forest trails to one with a progressive climate for development, the advancement of the banking business held a high priority. Minimum capitalization seems to have been the norm in the organization of a local bank. Creative and varied means were employed to determine the origin of the currency generated. These included state bonds and mortgages on land, unimproved real estate and bank shares, besides precious metals.
An 1838 statewide analysis showed that 75% of the loans issued went to those most closely connected to the bank, the bank directors and stockholders; these were the ones who were most anxious for a community to develop and thereby had the most to gain.
By November, 1837, it was evident to the Legislature that in order to bring some semblance of order to the banking business in this newcomer to the Union some changes were necessary. Banking commissioners where appointed to inspect and audit specie reserve. Stories of skulduggery abound. On at least one occasion a layer of coins over the top of a box of nails and broken glass passed inspection by the county clerk. The transfer of specie from a bank examined one day, through the forest or down the river, to the next bank on the examiners list. The story goes that one examiner marked a chest of gold and other securities and counted the same specie at three different banks in as many obscure and inaccessible sites. Occasionally an examiner came back to a bank unannounced to learn the box of specie could not be found, only to discover it at another bank several days later. The intimate knowledge of the local bank personnel with the forest trails made it possible to precede the examiners who were unfamiliar with the area.
These commissioners, exposing the often fraudulent procedure of Free banks” recommended the repeal of the free banking laws. It was also decided that banks organized after January 1, 1838, could not suspend specie payment as had been done regularly in the past. So it was that under these conditions the Bank of Kensington was created. By organizing December 12, 1837, the Board of Directors got in just under the wire.
The signatures of Henry Fisk, President, and Fred Hutchinson, Cashier, are on the few remaining “Bank of Kensington” notes. Only a few collectors of currency have any in their possession. On the Board of Directors one finds the names of Alfred A. Dwight, Sherman Dix, B.P. Hutchinson, Chauncy Crouse, N.F. Butterfield, A.M. Brown and C. F. Cooke. Stockholders include Joel Redway, Joesph Wood and Kinsley Bingham, (1854 Republican Governor of Michigan, first in the nation.)
After being certified by the Farmers and Mechanics Bank of Detroit, the Kensington Bank Directors began to issue notes. “They obtained a good supply of bank note blanks that were soon properly signed and put in circulation. Let it be recorded that the Bank of Kensington issued as nice bills to look upon as any bank ever issued.”
When Kensington Bank note sales had not proceeded as well as expected, Sherman Dix and Alfred Dwight (unknown to the remaining stockholders) left for Milwaukee and disposed of several thousand bank notes, keeping the proceeds.
At that time the Michigan Legislature passed laws requiring banking corporations to show real estate security. The Kensington Bank was ordered to close since only two of the original holders owned land: N.F. Butterfield and Chauncy Crouse. The remaining holders had conveniently recorded their land titles to their wives names. (Not all went to Milwaukee to hold on to their assets.) Kinsely Bingham was appointed receiver of Kensington Bank. He found that liabilities were many times the value of the assets. The bank notes were worthless.
Dix and Dwight were later arrested in Milwaukee and returned to Kensington. This writer has found no record of legal proceedings against any of those connected to the bank. Not all researchers malign Dix and Dwight for their actions. Some historians believe they were making a last ditch attempt to salvage the bank if possible with new assets from other areas.
Prior to the closing of the bank construction had begun for a small brick building with white columns supporting the portico at the front, for the use of this banking company. This building was used by the Weslyan Methodist Church until 1920. For some time farm tools were put up in the building and a local postmaster used it as a storage shed for a while. In September, 1931, the remaining walls were leveled. In August, 1946, the ground breaking ceremony was held for the Kensington Metro Park. Travelers on I-96 unknowingly pass the site each day in 1992.
These two businessmen, Sherman Dix and Alfred Dwight (members of the Board of Directors of Kensington Bank), seem to be true examples of the enterprising speculator who, by their daring, are on the scene when new lands and/or opportunities open. Sometimes described as being ahead of their time, visionaries, they skirt and sometimes overstep the bounds of honesty and caution. As noted, the bank scheme, of which Dix and Dwight were historically the originators, finally brought disaster.
Dix repaired to Texas and engaged in cattle speculations according to one source. However he is listed on the assessment roll as a resident taxpayer in Brighton Township in 1843. (He platted a village, Livingston, in the Woodruff Mill area- Pleasant Valley north of Grand River. The Plat was taken to ” . . . New York and easily disposed of the lots to parties in search of Western investments.”) Dwight is reported to have become a successful lumberman in the Wyandotte area. He is listed as a commissioner of the Detroit & Shiawassee Railroad Project by an act of the State of Michigan, March 22, 1837. (This project was never begun.) Both men might be described as typical entrepreneurs of the times.
To better regulate and salvage the new states banking system a state bank was to have been created. But because of the fear of government control of their credit practices, owners of local banks resisted. Michigan citizens, holding worthless bank notes, felt the devastating effects of too much credit with too few legal restraints. (The nations taxpayers recent experience with unscrupulous banking administrators is not a new phenomenon.) Following litigation, the Michigan Supreme Courts ruling allowed the directors of banks to avoid punishment. Very few banks survived the “Free Banking period. By 1844, the Legislature permanently suspended the practice.
At the Michigan 1850 Constitution Convention the need for banks was recognized along with the need for restrictions which would ensure a sound currency and stockholder protection. Private bankers, with limited capital and no authorization to offer local currency, were restricted in providing local bank credit; altho the need was there. That decade is received to have been one of Legislative vacillation and lack of confidence by the citizens of Michigan.
Michigan was not alone with its problems relating to the transfer of value for something of equal value. It wasnt until the time of the Civil War, when the Confederacy circulated its own currency, that a national currency was issued. It was left to the National Banking Act of 1863 for Michigan to attempt to achieve “. . . a balance of reliable currency for its farmers and enough local bank credit for its businessmen.”
The compiler of the 1880 History of Livingston County, Franklin Ellis, observed: ” the Village of Howell luckily escaped the misfortune which was visited upon many other Michigan towns about 40 years ago: the establishment of a wild cat bank within its borders.” Upon passage of the National Banking Act of 1863, the Exchange Bank of Alexander McPherson was opened June, 1865, for the purchase and sale of government bonds, sale of exchange on New York and all Eastern and Western cities and the transaction of a general banking business, for which its capital was and is ample.” McPherson, in 1868, purchased the business, fixtures and real estate of the Exchange Bank. October, 1868, saw the bank of John Weimeister and Neil OHearn opened for general banking business in Howell. These were the first banks in the county.
In Brighton Village, the (Dr.) B.H. Lawson Bank was organized in April, 1871. A little over two years (June, 1873) later it was reorganized as the B.H. Lawson & Companys Bank. Ellis writes, ” It has most of the patronage of the village and surrounding country.” Early pictures locate the bank at the northeast corner of W. Main and N. West Streets. Lawson was active in the village serving as assessor in 1873 and president in 1875. Prior to that he was active in the Livingston County Agricultural Society, serving as treasurer in 1861. He was also a charter member of Howell Knights Templar. In 1856 he was a school inspector in Genoa Township and in 1858 held that same position in Howell Township.
Gustave J. Baetcke, born in 1842 on the Baetcke homestead in Genoa Township, owned and worked a farm in Genoa until moving to the village. He bought Lawsons banking business in February, 1891.
The high esteem in which Gutave J. Baetcke was held, is well documented in various references. One of these, the “Portrait and Biographical Album of Ingham and Livingston Counties”, November 1891, states the bank ” . . . is now conducted as a private institution and under the present management merits the confidence that it enjoys. It is operated under the firm name of G.J. Baetcke & Co., and although in its infancy, under the present regime it has already acquired a high standing, not only in the immediate locality, but throughout the surrounding country and especially among the agricultural class with whom our subject has been associated for years.”
Beatcke was a Civil War veteran serving with the 22nd Michigan Infantry from January 1, 1864 through September 20, 1865. He marched with Sherman into Atlanta. He was Supervisor of Genoa Township for five terms and served in the capacity of Treasurer for two terms. At the time of the 1907 Brighton Homecoming celebration, he was Village President. An ad in the Argus of that day includes an advertisement stating he was also an insurance agent for several companies.
Gus married Amelia Gartner (d. 1904) in 1874 and in 1905 he married Mrs. F. L. Smith (nee Jennie Placeway). When Baetcke died suddenly March 5, 1913, his obituary states, “At the time of his death he was commander of the D.C. Russell Post GAR of this place . . . He was a prominent Republican… All business places were closed from 1-4 p.m. and the (local) business men attended in a body.” During the hours of the funeral.
As stated earlier Beatckes bank was a private institution. Because of lack of information the writer must assume the bank went into receivership following his death. (It is hoped a reader will have more data and will give the Society a more complete record of these proceedings following Beatckes death.)
Established April 7, 1910, as a commercial and savings bank, the Brighton State Bank had 22 shareholders, all of whom lived in the county. The President was M. P. VanWinkle, Vice President was Wm. T. Fry and the Cashier was L. R. Manning (at $1000. annual salary). Other shareholders were F.M. Bergin, B.I. Case, Clio S. Case, K.V. Clark, James Collett, Mary A. Collett, A.M. Davis, Arthur Garland, T.G. Henessey, F.F. Hubbell, A.A. Montague, J.A. Nelson, H.A. Nichols, C.E. Placeway, G.L. Pitkin, C.C. Schafer, John Schoenhals, A.L. Smith, and H.M. Tunis. It is thought some descendent may still hold shares.
Originally located in a building at 334 W. Main (since then occupied by Stricks Department Store, the Country Cupboard and the Golden Gallery), in 1911 the bank directors selected a building site at 306 W. Main. At the time a footbridge carried pedestrian traffic across Ore Creek, which was then replaced by a concrete sidewalk. Because of the low, wet land by the creek, a coffer dam was built and the terrain built up. May 11, 1911, C.C. Schafer received the contract to build the bank for $5,100.00. This was a two story brick structure. Construction to include floor and counters, to be completed by September, 1911.
Early on a sense of dependable continuity developed in the perceptions of the patrons of Brighton State Bank. Besides the fact that all shareholders and members of the Board of Directors were local people (many descendents of early settlers), it was also noted that successive generations continued their representation on the board. Van Winkle, Hyne and Case are a few of the names which should be noted. One also was aware that the faces behind the counters were the same each time one went into the bank. This writers memory includes Roy Newcomb, Alice Newcomb, Emma Westin and Carmen Wilson.
Mrs. Wilson stated at an interview in 1975, that when she first went to work at the bank, “We had two windows, shelves and a stool. The facilities were outside, but it was air conditioned inside, after a fashion . . . we had a large fan that blew the papers around.” She also told of an attempted bank robbery in the early 1920s. “He broke in from the back into what we laughingly referred to as the directors room. Actually it was the cloakroom, the room for examining safe deposit boxes, the lunch room and the conference room.”
However, the would-be robber had not considered the small town integrity of Brighton at that time. The towns telephone switchboard, “Central”, was located on the second floor of the building. The night operator heard the break in. From the myriad of wires, lights and sockets she activated the burglar alarm. The ringing of bells awakened Mr. Heckathorn, the superintendent of Greenville Gravel Company (later American Aggregate), who lived across the street. He jumped out of bed, pulled on his pants, got into his car and gave chase down Grand River. But the robber had too much head start and he made his getaway down Rickett Rd. An acetylene torch was found at the scene of the break in but the thief was never heard from again. In the January/February, 1992, issue of Michigan History Magazine we learn: ” On February 14, 1933 Michigan Governor William A. Comstock closed every bank in the state for eight days. (But banks were not allowed to open until February 23.) The country was suffering the devastating effects of the Great Depression and Michigans banks were at the brink of failure. After attempts to obtain loans from the federal government and private donors had failed, Comstock closed the banks, which set off a tidal wave of bank closings in other states. Ultimately, only 207 of Michigans 436 state banks and trust companies reopened.” To top it off, two days after his March 4, 1933 inauguration President Roosevelt declared a national banking holiday for a week.
Brigthon State Bank was one of the successful banks. It reopened under the conservatorship of its cashier, Mr. Roy Newcomb. (Not only were businesses and individuals critically affected by this catastrophe, but also governmental bodies and schools. Vacation time for Brighton students started April 21, 1933. There were no funds with which to pay school bills.) Assets were liquidates and a new bank formed with new stock the following January.
It was six years before the area had sufficiently recovered from the effects of the Depression to enable bank officers to decide it was time to authorize the opening of the Industrial Loan Department; June 1, 1939.
Following WW II the American industry turned again to peacetime production. Local economy was stimulated and business increased with the areas growth. In 1951 it was determined that a 20′ x 50, one story addition would be made to the building. Total remodeling included changes which completely obliterated all vestiges of the old, familiar 1911 architectural details.
In 1960 the Brighton State banks first annex, housing the Installment Loan Center, was opened across the street at 317 W. Main. The 1951 addition to the original building was already proving to be inadequate for housing the banks business.
August, 1963, saw the first branch of the expanding bank opened in nearby Hamburg in a mobile office on M-36 in a shopping center. Also that year, prior to construction of a new banking facility, the original building was sold to the city of Brighton for use as a city hall and police department for $20,000. After 53 years the main office was to be moved from its original site next to the mill pond. Construction of a new main office in 1964, at 300 W. North Street, continued the expansion program and ushered in other major changes. Located on the hill above the filled parking lot, the building has been described as a ” contemporary brick and glass interpretation; with a flare of French Regency, capped with gold anodized aluminum. Two drive in windows were a significant innovation of the times.
Other expansion changes included the opening of more branches: 1967, Highland; 1969, Island Lake (an A-frame); 1972, Brighton Mall; 1979, Pinckney (closed December, 1987); 1988 Clarkston and 1989, Ann Arbor.
In 1985 increased activity necessitated a significant enlargement of the main office. That year changes of a business nature included joining Pacesetter Financial Corporation, a merger with Old Kent Financial Corporation and a name change to Old Kent Bank of Brighton. That years remodeling of the physical structure included the first ActionBank 24 Machine installed at the main office and their subsequent appearance at all branches.
One other bank located in the Brighton Area early in the 20th century was the First National. It was housed in the building most recently known as the Canopy Restaurant. This structure, on the southeast corner of W. Grand River and St. Pauls St., was built in 1927 by Thomas S. Leith, a mayor of Brighton during the 1950s. It was originally constructed to serve as the Lincoln Hotel and included space for the bank.
This two story building had rooms to rent on the upper floor, a restaurant on the south side with the bank on the north side of the first floor. The bank closed in 1932 before the state and national bank closings referred to previously in this series. This writer assumes the bank went into receivership, from which it never recovered. When the Canopy closed, the building has been vacant for several years and was in a rapidly deteriorating condition. Preview Properties recent remodeling and renovation retained most of the original exterior design characteristics of the building. (For which they are to be commended.)
The potential of the development of the Brighton area into a vibrant and commercially progressive place in which one would enjoy living made it a desirable community in which a bank could prosper. The construction of nearby interstates were a major factor. Beginning in the 1960s branches of other state and national banks began locating in the area.
D & N Bank, formerly First Federal, has been at its site, 9880 E. Grand River since 1960. The site is on a former orchard.
A branch of First National first appeared in 1972 in a mobile office on E. Grand River. Since June 1975, they have been at 9911 E. Grand River in a permanent structure. A two story frame house was originally at that location.
At 205 W. Grand River, Ann Arbor Federal Savings appeared in 1974. This branch is now titled Great Lakes Bankcorp. During the last half of the 19th century Fred Stuhrberg had a home and blacksmith shop on that corner.
First of America appeared as a branch of McPherson Bank in 1977 at 8130 W. Grand River. A second branch was opened in 1991 at 10014 E. Grand River. During the 30s and 40s a Standard Service Station was located on the corner there prior to the construction of the strip mall, Brighton Gate Commons, where the bank is located.
At one time, 1981, Michigan National Bank operated from three offices in the area. Coming first in 1979 to a site on Hilton Road then for several years in the former Mellus Hospital, 218 E. Grand River (presently occupied by Leah Gold Confectioners.) A branch was also located for several years at 10816 E. Grand River. Their only branch is now at a new building at 8661 W. Grand River, where theyve been located since 1989.
Society Bank, 9948 E. Grand River (formerly Ann Arbor Trust and then Trustcorp.) opened for business in May, 1979. It is located where the two story frame house of Victor Clore was standing.
1981 saw the construction and opening of the Standard Federal office at 8516 W. Grand River. Prior to the construction of this building and the several restaurants on either side, the land was tilled for many years as a farm.
January, 1991, Comerica installed a branch office at 5678 Whitmore Lake Rd. A home which became a landscape business (English Nursery) and then was Buckys Pharmacy, was there prior to the construction of the strip mall, Boardwalk, where the bank is located.
The most recent opening of a branch bank is that of N.B.D. Bank, 9858 E. Grand River which held their grand opening February 10, 1993. This site also was part of the same fruit orchard where D & N Bank is located.
If the number of banking facilities in a community give any indication of its prosperity level it is this writers opinion the Brighton area is in pretty good shape.
Prepared by Marieanna Bair with many thanks to the congenial personnel of all these establishments for their cooperation and help in the preparation of this series. Information was also acquired from Alice Newcomb, Tom Leith, 1880 History of Livingston County, Michigan History Magazine and Michigan Pioneer Collections.