Utah History Encyclopedia (2024)

In most frontier American communities, including those in Utah, bankingfunctions were performed primarily by merchants and express companies. In Utahearly merchants including Livingston, Kinkead and Bell; Holladay and Warner;John and Enoch Reese; Andrew and Levi Stewart; J. M. Horner; J. M. Hockaday;and others engaged in various types of banking activity. As was the case withother pioneer merchants, they often sold goods on credit and were paid laterwith customers' goods and services. By keeping open accounts for extendedperiods of time, they made it possible for the short supply of cash to bespread more widely. Merchants also accepted promissory notes drawn betweentheir customers and transferred the transaction amounts to the accounts of thepeople affected, thus serving as a kind of community clearinghouse. Finally,merchants, express companies, and firms engaged in the importing and exportingof goods bought and sold drafts on eastern institutions and handled exchanges.

In Utah, an even greater role was played by the Church of Jesus Christ ofLatter-day Saints. The banking activities of the church included theintroduction of coin and currency to supplement other circulating media. Thechurch also provided short-term consumer and long-term agricultural andindustrial credit through church agencies and the church treasury; and ithandled drafts, remittances, and other "foreign" credit instruments throughsuch church institutions as the Perpetual Emigrating Fund Company.

The most important early banking activity of the church, however, was thatconnected with the tithing houses located in every LDS settlement. Until 1869,the tithing houses were the only general stores in most Utah communities. Eachkept an elaborate bookkeeping system, with debits and credits for eachcustomer; the accounts were "settled," but not necessarily balanced, at the endof each year. Thus, individuals and village shops and industries could "save"by accumulating credits and "borrow" by withdrawing commodities in excess oftheir accumulated credits. The tithing offices, particularly the GeneralTithing Office in Salt Lake City, issued a kind of currency called "tithingscrip," which facilitated accurate bookkeeping and generally circulatedthroughout the territory. Tithing resources were used in supporting laborersengaged in making roads, constructing dams, building schoolhouses, and erectingtelegraph lines.

What the tithing houses did on a village basis, the central treasury of thechurch, called the Office of the Trustee-in-Trust, did on a territorial basis.With tithing receipts, other donations, borrowed capital, and profits fromchurch enterprises as its revenue, that office financed public works ofinterest to the entire church. Woolen factories, major canal systems,railroads, the importing of houses, and, of course, various kinds of buildingsfor worship were among the enterprises and institutions financed by thisoffice. By lending capital and credit, and by borrowing and relending surplusfunds to other members of the community, the office of the trustee-in-trust wasthus a kind of church-wide investment bank. Its financial arm, the PerpetualEmigrating Fund Company, maintained deposits in leading banks in the East andin Europe, and performed banking functions for Utah citizens and businesses.

While the Mormon Church and private mercantile firms sufficed as bankersduring the first seventeen years after settlement, specialized institutionswere required beginning in 1864. Utah itself might have gone withoutspecialized banks until the coming of the railroad in 1869 had not the needs ofdependent territories required such institutions. Beginning with the Pike'sPeak, Colorado, discoveries of 1859, increasing attention was given to mineralprospecting in the Mountain states. Rich veins of ore - particularly gold andsilver - were found in the next four years in Nevada, Idaho, Montana, andUtah, and there were also further discoveries in Colorado. The stampede ofminers which followed each of these discoveries established the need for banksto purchase and store gold dust, transmit it to eastern financial centers,handle miners' savings, discount drafts, and extend credit to freighters,merchants, and miners. Because of its central location and establishedinfrastructure, Salt Lake City became the center of the growing "inlandempire," which included Utah, eastern Nevada, Idaho, and Montana.

The richest finds having been made or proved in 1862-63, the year 1864 seemsto have been a boom year in the mining regions north and west of Utah. It wasthis boom which was the immediate and compelling reason for the establishmentof formally organized private banking houses in Salt Lake City in 1864. Foursuch banking houses were attracted to the city in that year: Clark and Company;Holladay and Halsey; Powers, Newman and Company; and Scott, Kerr and Company.All of these concerns, which had Midwestern connections, were freighters andmerchants as well as bankers. They purchased the gold dust from miners and soldit in New York City where it brought fabulous prices during the Civil War; theysold drafts on eastern and midwestern banks, made exchanges, purchased landwarrants and government vouchers; and they provided a circulating medium forlocal use much superior to the wasteful and inconvenient "trade dust." Theyalso provided mining and other enterprises with working capital, and served as"middlemen" in the purchase of machinery and supplies in the East. On each ofthese transactions, of course, they earned a commission, fee, or other profit;and they appear to have enjoyed relatively good incomes.

Local enterprises which engaged in banking as a supplement to their otherextensive interests were William Jennings and Walker Brothers, prominentmerchants, and the Corporation of Great Salt Lake City, which in 1864 printed$10,000 worth of municipal notes, redeemable in greenbacks, to supplement thecirculating monies of the growing frontier metropolis. In succeeding years theyprinted additional amounts.

With the success of these early firms and agencies, the passage of theNational Banking Act in 1863, and the continued growth of mining and othereconomic activities in Utah and surrounding states and territories, adifferentiation began to take place between national banks, incorporatedterritorial banks, and unincorporated private banks.

National banks, chartered by the Comptroller of the Currency in Washington,D.C., had a paid-up capital of at least $100,000 in cities the size of SaltLake City, and were required to deposit with the Comptroller government bondsequal to one-third of their capital, in return for which they would receivenational bank notes equal to 90 percent of the value of the deposited bonds.These notes would then be placed in circulation by the banks, largely throughthe lending process. To insure the redeemability of national bank notes, eachnational bank was required to maintain a 15 percent reserve in "lawful money"(gold, silver, and greenbacks) against its outstanding note circulation anddeposits. As a further precaution, stockholder-owners were subject to doubleliability in case of the failure of the bank. National banks also wereprohibited from making loans on real estate or on the security of the bank'sown stock. The prohibition against real estate loans, of course, meant thatnational banks could render little assistance to the development ofa*griculture.

Utah's first national bank, chartered on 3 March 1866, was the Miners'National Bank of Salt Lake City, with a capital of $150,000. The founders weretwo men attracted to Salt Lake City as the result of the mining boom of theearly 1860s - William Kiskadden, an Ohioan who had freighted gold andsupplies in Colorado after the Pike's Peak discoveries in 1859 (he was an uncleof Maude Adams [Kiskadden], the actress), and John F. Nounan, a Kansasfreighter who had previously maintained a small private bank in Salt Lake City.In 1867 John W. Kerr consolidated his own private bank with the bank and becameits cashier. The total resources of this bank grew from $165,000 in July 1866to more than $400,000 in January 1869. In 1869 the assets of the bank weretaken over by the First National Bank of Utah.

The First National Bank of Utah developed from a partnership of Warren Husseyand Charles Dahler. Hussey was a gold broker and land agent in Colorado in theearly 1860s, while Dahler was the Denver agent of Ben Holladay's Overland StageLine. When Holladay sold out to Wells Fargo in 1866, Hussey and Dahlerassociated together in banking enterprises throughout the West, including SaltLake City. Hussey, who managed the Salt Lake and Montana businesses, quicklydeveloped his bank into one of Utah's most important financial houses, withbranches in Corinne and Ogden. Certain that the completion of thetranscontinental railroad would provide ample justification for expansion,Hussey and Dahler received a certificate for organization as the First NationalBank of Utah on 17 August 1869. In December of the same year the firm boughtthe Miners' National Bank of Utah. Designated as the official United Statesdepository and financial agent in Utah, the First National seemed to beimmensely profitable. When mining and other activity began to slump as theresult of the Panic of 1873, however, the bank was unable to meet the heavywithdrawals which occurred and was forced to suspend payments in September1873. When the receiver was finally discharged in 1878, less than 25 percent ofthe claims against the bank had been paid.

The third national bank in Utah Territory - the Salt Lake City National Bankof Utah - was also founded by an "outsider," B. M. DuRell, who hadestablished the First National Bank of Idaho in Boise in 1867. Concluding thatSalt Lake City was a strategic distribution and financial center, DuRell leftthe Boise bank in 1871 to establish the bank in Utah, with a paid-up capital of$100,000. The bank was destined to last less than four years; on 21 February1876 it went into voluntary liquidation, and eventually paid its obligation infull.

The final national bank, and the first "Mormon bank" to be founded in Utah,was the Deseret National Bank. This bank was an outgrowth of a bankingpartnership established in 1868 under the name of Hooper, Eldredge and Company.William Hooper was a prominent Salt Lake City merchant and Utah's territorialdelegate to Congress; Horace S. Eldredge was also a prominent merchant and highofficial of the LDS Church. Their mercantile firm having been absorbed in 1868into the church-promoted wholesale and retail house, Zion's Co-operativeMercantile Institution (ZCMI), Hooper and Eldredge entered the field of bankingwith their bookkeeper, Lewis S. Hills. Their bank was originally called "Zion'sCo-operative Banking Institution," and the sign bore a representation of the"All-Seeing Eye of Jehovah," signifying approval by the Mormon Church of theirventure and enjoining all faithful Saints to patronize their establishment.

Starting with a paid-up capital of $40,000, the firm increased its capital in1871 to $100,000 and incorporated as the Bank of Deseret, with Brigham Young aspresident. This was the first "state" bank in Utah. The bank further expandedand in 1872, with $200,000 in capital, obtained a charter as the DeseretNational Bank. For many years this was the only Mormon commercial bank in Utah,and it cooperated in meeting the economic needs and social goals of the LDSChurch. In association with other Mormon officials, Hooper and Eldredge alsofounded the First National Bank of Ogden in 1881 and the First National Bank ofProvo in 1883.

For nine years after the failure of the Salt Lake City National Bank of Utahin 1876, the Deseret National Bank was the only national bank in Salt LakeCity. It continued as the leading national bank in Utah until well into thetwentieth century. The Deseret National Bank remained a separate institutionuntil 5 April 5 1932 when, as the result of the exigencies of the GreatDepression, it was consolidated with the Security National Bank of Salt LakeCity, a bank controlled by Marriner Eccles and the First Security Corporation.Total resources of the firm rose from about $600,000 in 1872 to more than$1,000,000 in 1880. During the same period deposits rose from $250,000 to$570,000.

An offshoot of the Deseret National Bank was Zion's Savings Bank & TrustCompany. Incorporated under Utah territorial laws in July 1873, Zion's SavingsBank & Trust Company was established by the Mormon Church to take over thesavings department of the Deseret National Bank. The original officers anddirectors consisted of leading authorities of the Mormon Church and Mormonbusinessmen. Brigham Young was the first president, and the presidents of theinstitution throughout its life were the presidents of the LDS Church. Thecapital stock was originally listed at $200,000, of which one-fourth was paidup.

The bank was intended to stimulate thrift, facilitate immigration to Utah, andmobilize savings for investment projects, particularly those in which the LDSChurch itself was interested. Indeed, Zion's Savings claimed to be "the firstwestern bank to make available long time loans." During the first twenty-fiveyears of its history, it made loans to Utah canal companies, railroads, realestate developments, salt companies, sugar companies, power companies, andindeed, to the LDS Church itself, on such security as stocks, bonds, andmortgages. With the occasional assistance of the Mormon Church, it successfullyweathered the crises of 1873, 1891, 1893, and 1932. Its resources grew fromslightly more than $50,000 in 1873 to more than $50 million in the 1950s.

Private banks of importance established in early Utah were Wells, Fargo andCompany; Walker Brothers Banking Company; and McCornick and Company. All threewere founded by non-Mormon interests, but became a permanent and important partof the expanding Utah economy. Wells, Fargo and Company had been organized in1852 by Henry Wells and William G. Fargo, both of New York, for the purpose ofcarrying express between San Francisco and New York. It acquired stage coachlines, freighted merchandise and supplies (particularly gold), carried themail, and became by 1860 the greatest and most powerful express company in theWest. When Wells Fargo bought out Ben Holladay's Overland Stage Line, OverlandMail, and other interests in 1866, it acquired Holladay and Halsey's Salt Lakebank. One of the firm's key banking agencies, the Salt Lake branch lifted itsdeposits from an average of less than $30,000 in 1867 to more than $200,000 inthe mid-seventies. By 1890 the bank's assets exceeded $1 million.

Walker Brothers Bank was founded by four brothers who migrated to Salt LakeCity from England with their mother and sisters, arriving in 1852. Theyestablished a mercantile partnership in 1859 in order to take advantage of theprofitable opportunities offered by the presence of the U.S. Army at CampFloyd, Utah. Walker Brothers became the largest wholesale-retail establishmentin the territory in the 1860s. Banking continued to be incidental to theirmercantile business until 1885, when the firm obtained a national charter andbecame the Union National Bank of Salt Lake City. With the death of Samuel S.Walker, the brothers surrendered the national charter in 1893 and formed apartnership - Walker Brothers Bankers. After Joseph R. Walker's death, thefirm reincorporated in 1903 as Walker Brothers Bankers, with a capital of$200,000. This bank, under the leadership of Matthew Walker, purchased the SaltLake City branch of Wells Fargo in 1905. The bank also absorbed W.S. McCornickand Company in 1921. The capital of the bank, which had been renamed WalkerBank and Trust in 1931, stood at $1.5 million in 1949. The resources of thebank approached $125 million when the firm merged with Trans-AmericaCorporation in 1956. Walker Bank became part of First Interstate Bank of Utahin 1981.

McCornick and Company was founded by W. S. McCornick, who left his nativeCanada in 1858 to seek his fortune in the West. He moved to Salt Lake City in1871, associated with A. W. White, who had established a small private bank inSalt Lake City, and bought out White's interest in 1875 to found what becamethe largest private bank in Utah. By 1900, deposits in McCornick and Companyexceeded $5 million. The firm was finally incorporated as McCornick & Co.in 1910, one of the leading stockholders being Daniel C. Jackling, "father ofUtah copper." McCornick became president of a number of other banks, includingthe First National banks of Logan and Nephi. His Salt Lake bank was sold toWalker Brothers after his death in 1921.

A few other banks operated in Utah Territory for brief periods. The firm ofWilson and Morton established a bank at Echo in August 1868 to serveconstruction camps of the transcontinental railroad. They transferred toCorinne the following year, and sold out to Hussey and Dahler in 1870. O.D.Cass, a midwestern doctor who had gone to Colorado to deal in gold as well ashealth, moved to Corinne in 1872 and opened the Bank of Corinne. It operatedwith a small capital until 1875, when it suspended operations under suspiciouscirc*mstances. J.W. Guthrie, a Corinne freighter, also operated a private bankin Corinne from 1875 to 1910. Guthrie established a branch in Ogden in 1877,but sold his interest the following year to the firm of Harkness & Company,which was absorbed into the Commercial National Bank of Ogden in 1883. J.E.Dooly, an agent of Wells Fargo, also established a bank in Ogden in 1875, whichmerged into Guthrie, Dooly & Co. in 1880. The latter firm in turn wasabsorbed into the Utah National Bank of Ogden in 1883.

A total of thirty-four separate banking institutions was established in UtahTerritory during the years 1864 to 1880. Most of the banks were private banks,integral to the broader operations of their owners in the fields ofmerchandising and freighting. Beginning in 1881 there was a rapid rise in thenumber and importance of banks. In the next two decades after 1880, a total offifty banks were established, of which thirteen were national banks. Incontrast with the period before 1880, most of the banks organized after 1880were scattered throughout the state, reflecting the economic growth oflocalities outside Salt Lake City. Thirty-three banks, including eight nationalbanks, were founded outside of Salt Lake City between 1880 and 1900. The yearsafter 1880 thus mark Utah's financial coming-of-age, just as the years before1880 ushered in the beginnings of a monetary economy. In a real sense, theexpansion transformed Utah's economy from a frontier cooperative society intothe more highly articulated, specialized, and interdependentagricultural-industrial society of the twentieth century.

Four banks founded or organized after 1900 have loomed large in Utah'sfinancial history: First Security Corporation, Zions First National Bank,Continental National Bank and Trust, and Tracy-Collins Bank and Trust.

One of the largest stockholders of the First National Bank of Ogden, and itspresident from 1894 to 1912, was David Eccles. Upon his death in 1912, hisoldest son by his second wife, Marriner Stoddard Eccles, played a leading rolein the bank, and became its president in 1920. As the result of a partnershipagreement between the Eccles and the Browning interests, seventeen banks inUtah, Idaho, and Wyoming were acquired in the 1920s. On 15 June 1928 Marriner,his brother George, and Jonathan Browning, along with a few other persons,formed the First Security Corporation, generally regarded as the firstmulti-bank holding company in the United States. Paid-up capital stock at thetime of organization was approximately $3 million. Although its affiliatedbanks had their difficulties during the depressed 1930s, First Securitycontinued to acquire banks and to grow. By 1972 First Security had totalresources of $1.25 billion, and served 500,000 deposit accounts through 107banking offices as well as facilities on five military posts. In 1990 FirstSecurity was the largest banking system in the Intermountain West, with 186branches, and $5.3 billion total assets.

Zion's Savings Bank & Trust Company celebrated its first half-century in1923, by which time its resources had grown from $55,876 to $12 million. Zion'swas merged in 1957 with the First National Bank of Salt Lake City and UtahSavings and Trust Company to form Zions First National Bank. (The long-familiarapostrophe in Zion's was dropped.) The greatly enlarged institution, of whichOrval W. Adams was first president, had a total of $110 million in deposits.First National Bank was formed as an LDS Church bank, and its charter datedback to 1890; Utah Savings and Trust was incorporated in 1889, and the LDSChurch had acquired major holdings in it in 1915. Thus, the LDS Church held amajority interest in the new Zions First National. In 1960, when its resourceswere $154 million, the church sold its majority stock to a group of businessmenheaded by Leland B. Flint of Salt Lake City. By 1972 Zions First National Bankhad become the second largest banking institution in Utah, with total assets of$396 million. In 1990 the bank had seventy-five branches in Utah and twelve inArizona and Nevada. Total assets were $2.9 billion.

In 1903 James E. Cosgriff, a wool grower who had acquired control of severalsmall banks in Wyoming in the 1890s, purchased the Commercial National Bank ofSalt Lake City, which had been founded in 1889. Cosgriff rechartered the bankin 1909 as the Continental National Bank and Trust Company of Salt Lake City.In 1922 it merged with the National Bank of the Republic, a Salt Lake Cityinstitution founded in 1890. The enlarged Continental Bank then had deposits inexcess of $12 million; by 1947 total deposits exceeded $34 million.

In 1884 Russell L. Tracy, a young Ohioan who had gone to Wyoming for hishealth, established a mortgage loan business in Cheyenne. In 1892 hetransferred his business and residence to Salt Lake City, and in 1902 heincorporated his general loan, brokerage, and commission business. By 1906Russell L. Tracy Co. was making more loans on real estate than any singlecompetitor; by 1908 a combination of the three top rivals could not match thebusiness of this largest mortgage creditor in Utah. In 1908 the firm name waschanged to Tracy Loan and Trust Co. In 1889 Tracy had employed teenager JamesW. Collins as a helper. Collins continued to work with the company while movingup the ladder of responsibilities and authority; his name was added to thecompany in 1944 as it became Tracy-Collins Trust Company. Full-line commercialbanking began in 1956, with the name change to Tracy-Collins Bank and TrustCompany following in 1960. The assets were in excess of $10 million in 1956; by1964, total assets had grown to $37 million. In 1987 Tracy-Collins merged withContinental Bank; two years later, the two became part of West One Bank, withheadquarters in Salt Lake City.