Ernest M. Morris — the banker who rescued the bank

the Associates founded 1917 · died May 1951

The founding, from a hundred dollars: Notre Dame's own account of Ernest M. Morris begins at the smallest figure in this record after the Studebakers' $68: an orphan without funds, Morris received a $100 loan in 1905 from the university's president, Father John W. Cavanaugh, took his law degree in 1906, and built the city's banking fortune on consumer credit. The Morris Plan Company of South Bend, an industrial-loan company on the Morris Plan system, was incorporated in 1915, and in 1917 he founded the company that became the Associates Investment Corporation, a pioneer of automobile consumer finance — the loans that put the car companies' customers into cars, made from the city that built the cars.

The rescue: When the First National Bank of South Bend closed in the June 1931 crisis, the combination that succeeded it was recapitalized by two men: on the bank's own published account, Morris and Vincent Bendix each supplied $500,000 of new capital in 1931–32. The presidency of the successor — the First Bank and Trust Company, renamed 1st Source Bank in 1981 — passed to Morris, and the Morris line ran the city's lead bank from the rescue forward. The two rescuers' fortunes divided as the Depression divided everything: Bendix's ended in bankruptcy, while Morris's, in the Wealth section's phrase, is the one South Bend fortune the Depression enlarged rather than broke. Morris bought the bankrupt Clement Studebaker Jr.'s Tippecanoe Place in 1941 for $20,000 — the house that had cost $250,000 to build — and gave it to the South Bend schools. His gift built the Morris Inn at Notre Dame; the gift's year is carried as 1947 in one university-linked account and about 1950 in another, and both stand. He died in May 1951. The bank he rescued passed within his family — to his daughter and then her son-in-law, the last entry of this section.

Sources:

1. Great Fortunes — "Ernest M. Morris: The Banker's Fortune, Built on a Borrowed $100" (Part Three) — the $100 loan of 1905 from Father Cavanaugh and the 1906 law degree (Notre Dame's account); the 1917 founding of the Associates; the $500,000 each from Morris and Bendix in the 1931–32 combination, on 1st Source Corporation's 2013 annual report; the 1941 Tippecanoe purchase at $20,000 and the gift to the schools; the Morris Inn gift year in conflict (1947 vs about 1950); the death in May 1951.
2. Banks — "The system at its peak" (the Morris Plan Company of South Bend, incorporated 1915) and the First Bank and Trust Company entry (the 1931–32 succession and the Morris presidency, on the bank's own account).