Panics, and the clearing house

1873 – 1918

1873 and 1893: The national panics reached Fort Wayne as pressure, not as a local failure record. The Merchants National Bank discontinued in 1874, in the panic of 1873's long shadow, but no source found for this history ties its closing to the panic, and the connection is not asserted here. For 1893 the record that survives is a banker's, not a bank's: when the Fort Wayne Furniture Company failed in the panic, Colonel Samuel M. Foster — organiser of the German-American banks — had endorsed some $50,000 of its paper, and Griswold's biographical volume records that he paid it in full. The booster history of 1913 went further and claimed the city "has never had a financial panic"; that is printed here as what it is, a booster claim in a promotional book.

1907: The panic of 1907 is documented at the state's level and hinted at locally. On 28 October 1907 Indiana's Auditor of State, John C. Billheimer, wrote to all Indiana banks and trust companies endorsing the Indianapolis rule — cash payments limited, the balance settled by certified checks and drafts — the mechanism by which Indiana banks rationed cash that fall. Whether Fort Wayne's own clearing house issued its own scrip is suggested but not proven by the record in hand: the outline of a speech James B. McDougal, president of the Federal Reserve Bank of Chicago, gave at a First National Bank banquet in Fort Wayne on 9 February 1929 carries the line "Panic — 1907 — Clearing House script authorized October 29, 1907," but the line sits inside a general outline of Federal Reserve history, and its Fort Wayne application is not stated.

The clearing house: That Fort Wayne had one is documented a decade later: the 1918 city directory lists the Fort Wayne Clearing House Association at 723 Court, Paul F. Kuhne manager — the banks' own machinery for settling each other's checks and, in a crisis, acting together. By the 1913 booster count the system it served numbered eleven banking institutions — four national banks, four trust companies and three private banks, beside a building and loan association — and ranked, the book claimed, second in Indiana in bank clearings.

Sources:

1. A. Piatt Andrew, "Substitutes for Cash in the Panic of 1907" — Auditor Billheimer's 28 October 1907 letter to Indiana banks and trust companies.
2. James B. McDougal, outline of remarks at the First National Bank banquet, Fort Wayne, 9 February 1929 (Federal Reserve Bank of Chicago; FRASER) — the 1907 clearing-house script line, context ambiguous.
3. R. L. Polk & Co., Fort Wayne City Directory, 1918, "Banks and Bankers" — the Clearing House Association listing.
4. Bert J. Griswold, The Pictorial History of Fort Wayne, Vol. II (1917) — the Foster endorsement in the panic of 1893.
5. Fort Wayne: A Presentation of Her Resources (1913) — the eleven-institution count and the "never had a financial panic" claim.