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The Bank of Stephen Girard, 1812–1831

Published online by Cambridge University Press:  11 May 2010

Donald R. Adams Jr.
Donald R. Adams Jr.
Affiliation:
Southern Illinois University
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Extract

The literature of economic history abounds with studies of nineteenth century banking. Unfortunately, most of these studies have drawbacks which make them of limited use to the modern student of economic history. The most serious drawback is their almost unanimously institutional character, punctuated here and there with biographical sketches of past bank presidents and directors. Those studies which do offer solid quantitative evidence on banking practice and performance are often based on aggregate statistics compiled by state or national banking commissions and thus preclude the study of individual institutions or small groups of institutions which may have played a key role in the development of early banking practices. This article represents a detailed investigation of the largest non-chartered bank of the early nineteenth century, the Bank of Stephen Girard.

Type
Articles
Information
The Journal of Economic History , Volume 32 , Issue 4 , December 1972 , pp. 841 - 868
Copyright
Copyright © The Economic History Association 1972

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References

1 One of the best attempts to analyze the operations of a single bank is N.S.B. Gras, The Massachusetts First National Bank of Boston, 1784–1934 (Cambridge: Harvard University Press, 1937)Google Scholar.

2 See Brown, Kenneth, “Stephen Girard's Bank,” The Pennsylvania Magazine of History and Biography LXVI, 1 (January, 1942), pp. 29–35Google Scholar and “Stephen Girard, Financier Methods and Operations” (unpublished Ph.D. dissertation, Temple University, 1941)Google Scholar. Also Simpson, Stephen, Biography of Stephen Girard (Philadelphia: Bonsal, 1832)Google Scholar; Wildes, Harry Emerson, Lonely Midas (New York: Farrar and Rinehart, 1943)Google Scholar; McMaster, John Bach, The Life and Times of Stephen Girard (Philadelphia: J. B. Lippincott Company, 1918)Google Scholar; Redlich, Fritz, The Molding of American Banking Men and Ideas (New York: Johnson Reprint Corporation, 1968)Google Scholar.

3 Redlich, The Molding …, p. 62.

4 Ibid., p. 9.

5 Stephen Girard Collection, Series II, Reel No. 393.

6 Ibid., Series III, Reel No. 147.

7 A study of the data on deposits in other banks in Appendix I indicates that this decline, despite a high degree of variability in the data, represents a trend rather than a reflection of the variability for these terminal dates.

8 Simpson, Biography …, pp. 148–149.

9 For comparative data see Fenstermaker, J. Van, A Statistical Summary of the Commercial Banks Incorporated in the United States prior to 1819 (Kent, Ohio: Kent State University Bureau of Economic and Business Research, 1965), p. 19Google Scholar, and The Development of American Commercial Banking, 1782–1837 (Kent, Ohio: Kent State University Bureau of Economic and Business Research, 1965), p. 224Google Scholar.

10 Smith, W. B. and Cole, A. H., Fluctuations in American Business, 1790–1860 (Cambridge: Harvard University Press, 1935), p. 29Google Scholar.

11 Girard acted as an agent in the sale of these bonds and most likely simply credited bond sales to this Treasury account.

12 It is interesting to speculate that after 1816 some large depositors left the Girard Bank in favor of the newly established and more prestigious Bank of the United States.

13 Since the Girard Bank served as an agent in the sale of the public shares of the Second Bank of the United States, these large initial deposits may reflect that role.

14 Redlich, The Molding …, p. 52.

15 Van Fenstermaker in the Development of American Commercial Banking, p. 43, found that “interbank deposits increased more rapidly than any other liability of the average bank.” The Girard Bank data indicate no such trend.

16 Cameron, Rondo, et al. , Banking in the Early Stages of Industrialization (New York: Oxford University Press, 1967), p. 7Google Scholar.

17 It can be noted that notes in the $500-$l,000 category show little change while the proportion of notes under $500 appears to gain at the expense of those over $1,000.

18 For long-term interest rates, see Homer, Sidney, A History of Interest Rates (New Brunswick: Rutgers University Press, 1963), pp. 286–87Google Scholar and 295–99.

19 Davis, Lance, “The New England Textile Mills and the Capital Markets: A Study of Industrial Borrowing, 1840–1860,” JOURNAL OF ECONOMIC HISTORY, XX (March, 1960), p. 12Google Scholar.

20 Redlich, The Molding …, p. 11.

21 While these concepts of profitability are not perfectly comparable, the unincorporated nature of the Girard Bank makes a direct comparison of dividends impossible.

22 Anna J. Schwartz, “Gross Dividends and Interest Payments by Corporations at Selected Dates in the Nineteenth Century,” National Bureau of Economic Research, Trends in the American Economy in the Nineteenth Century, Studies in Income and Wealth, V. 24 (Princeton: Princeton University Press, 1960), pp. 431–32, 442 and 436Google Scholar.