EARLY DAY BANKING—PIONEER FINANCIERS—THE OLDEST BANK—PRIVATE, STATE, AND NATIONAL BANKS—ATCHISON COUNTY BANKERS AND THE DEVELOPMENT OF BANKING INSTITUTIONS.
Banking was a precarious business during the Territorial days in Kansas. There were no banks, as we know them, until January 29, 1857, when the Territorial legislature passed an act providing that every company or association of persons formed for banking purposes within the Territory, and without an act of legislature authorizing the same, should be deemed unlawful. Upon the passage of this act, the first bank authorized to do business under it was The Kansas Valley Bank, of Leavenworth, with an authorized capital stock of $800,000.00, with five branches, at Atchison, LeCompton, Doniphan, Ft. Scott and Shawnee. The authorized capital stock of each one of the branches was $300,000.00, and under the terms of the act, each branch was independent of the Leavenworth institution. The great Government Overland Transportation Company of Majors Smoot-Russell & Company was the big financial power behind this organization. The Leavenworth bank was never formed, and the Atchison branch was the first to start out under this act of the legislature, being authorized to begin business February 19, 1857, with securities amounting to $100,000. Dr. John H. Stringfellow, Joseph Plean and Samuel Dickson were authorized to open subscription books. The board of directors included Samuel C. Pomeroy, who was president: W. H. Russell, L. R. Smoot, W. B. Waddell, Franklin G. Adams, Samuel Dickson and W. E. Gaylord. Shortly after the bank began business there were rumors emanating from the rival towns of Sumner and Doniphan that the Atchison institution was about to suspend, and for the purpose of allaying any suspicion on the part of the public, created by these rumors, the directors published a statement of its condition, showing that the assets were $36,638.00, with liabilities of $20,118.00. In July or August, 1857, L. S. Boling, of LeCompton, was appointed to examine and report on the financial condition of the Atchison branch of the Kansas Valley Bank, and this is the first record in Kansas of a proceeding of this kind.
Samuel C. Pomeroy resigned as president of the bank in 1858, and was succeeded by William H. Russell, of the contracting firm of Majors-Smoot-Russell & Company. G. H. Fairchild was made vice-president, and R. L. Pease, cashier.
In 1861, this bank, then called the Kansas Valley Bank, had its name changed by act of the legislature, to the Bank of the State of Kansas, and it was conducted under that name until 1866, when the stockholders wound up its affairs.
The legitimate successor of the Bank of the State of Kansas was Hetherington’s Exchange Bank, which was founded in 1859 by William Hetherington.
The Exchange National Bank, of Atchison, Kan., is the oldest banking institution in the city of Atchison, having been established in 1859, while Kansas was a Territory. The bank was then named the Hetherington Exchange Bank. That bank became the successor of the Bank of the State of Kansas, which was organized in 1857. The founder of the Hetherington Exchange Bank was William Hetherington, and, except for one year during the Civil war, it has been in successful operation since it was established. It passed through the period of its existence during Territorial days, and the depressing financial conditions as a result of the war, and business reversals incident to the reconstruction period, and its management was at all times conducted upon the theory of its motto adopted by William Hetherington in an early day that “Safety First” in all of its business transactions was the secret of success.
The bank’s first business home was in the Otis & Glick building, opposite the Byram Hotel. In 1869 it was moved to the Hetherington building, at the northwest corner of Fourth and Commercial streets. Later on, and in 1885, the bank was moved to the southwest corner of Sixth and Commercial streets, into the building erected by its president, William Hetherington, where it has since been located.
In 1876, William Hetherington admitted into the firm, as a partner, Webster W. Hetherington, his eldest son, and in 1881, Clifford S. Hetherington, his youngest son, became associated with him. In the year 1882 the Hetherington Exchange Bank was incorporated under the laws of Congress, as a National bank, under the name of The Exchange National Bank of Atchison, with a paid-up capital of $100,000, and surplus of $20,000, and at once took high rank as one of the strongest and most conservative banks in northeastern Kansas, and has ever since maintained that reputation.
The Exchange National Bank was organized with William Hetherington as president, August Byram, vice-president, Webster W. Hetherington, cashier, and C. S. Hetherington, assistant cashier. In 1890, upon the death of its president, William Hetherington, Webster W. Hetherington was elected president, B. P. Waggener, vice-president, and C. S. Hetherington, cashier. In 1892, upon the death of its then president, Webster W. Hetherington, B. P. Waggener was elected president, A. J. Harwi, vice-president, W. P. Waggener, vice-president, C. S. Hetherington, cashier, C. W. Ferguson, assistant cashier, and Webster Wirt Hetherington, teller. In October, 1906, C. S. Hetherington, the cashier, died, and C. W. Ferguson was elected cashier, and Webster Wirt Hetherington, assistant cashier, and Edgar Mattocks, teller. In April 1907, the capital stock of the bank was increased to $200,000.00 with a surplus of $50,000, and ex-Governor W. J. Bailey was elected vice-president and managing officer of the bank, which position he has since held. Upon the death of A. J. Harwi, his son, Frank E. Harwi, was elected director, and succeeded his father, A. J. Harwi, as vice-president, which position he now holds.
In 1892 the bank adopted a by-law, which prohibited any officer or director of the bank from borrowing any money from it, or becoming an endorser or surety on any obligation or note to the bank, since which time no officer or director of the bank has been permitted to borrow any of its funds on deposit. The wisdom of this by-law adopted in 1892 has repeatedly been approved by the comptroller of the currency. The management of the Exchange National Bank has adopted and adhered to this policy, because it believes that a bank officer or director should not be permitted, under any circumstances or in any emergency, to use any of its deposits in any of his own personal speculations or ventures.