E.S.C. quarterly

              The E. S. C. Quarterly
/OLUME 7, NO. 1 WINTER, 1949
ftanks of North Carolina flow Have Assets in Excess of
Zwo Million Dollars; History, growth and Achievements
Erected in 1818 in Raleigh to house the State Bank of North Carolina (See inside cover)
PUBLISHED BY
Employment Security Commission of North Carolina
RALEIGH, N, C.
PAGE 2 "HF": E. S. C. .QUARTERLY WINTER, 1949
The E. S. C. Quarterly
(Formerly The U.C.C. Quarterly)
Volume 7, Number 1 Winter, 1949
Issued four times a year at Raleigh, N. C, by the
EMPLOYMENT SECURITY COMMISSION OF
NORTH CAROLINA
Commissioners: Mrs. W. T. Bost, Raleigh; S. B. Midyette, Jack-son;
C. A. Fink, Spencer; R. Dave Hall, Belmont; Marion W.
Heiss, Greensboro; Dr. Harry D. Wolf, Chapel Hill.
State Advisory Council: Capus M. Waynick, Raleigh, Chair-man;
Willard Dowell, Raleigh; H. L. Kiser, Charlotte; Dr.
Thurman D. Kitchin, Wake Forest; Robert F. Phillips, Ashe-ville;
Mrs. Dillard Reynolds, Winston-Salem; Mrs. Emil
Rosenthal, Goldsboro; W. Cedric Stallings, Charlotte.
HENRY E. KENDALL Chairman
R. FULLER MARTIN ' Director
Unemployment Compensation Division
ERNEST C. McCRACKEN Director
North Carolina State Employment Service Division
M. R. DUNNAGAN Editor
Informational Service Representative
Cover illustrations represent typical North Carolina
industries under the unemployment compensation
program or related activities.
Cover for Winter, 19^9—This building was erected in 1818 to
house the State Bank of North Carolina and to serve as the
home for its president. It is the oldest standing brick build-ing
in Raleigh. It has double-gallery porticoes on the east
and west elevations, each of which has eight massive modified
Doric columns in two tiers of four. The building is in the
approximate center of the block adjoining Capitol Square to
the northeast, surrounded by Wilmington, New Bern, Blount
and Edenton Streets. The Charter of the State Bank expired
on January 1, 1838, but the building was used by private
banking institutions until 1871. In 1873 the property was
purchased by the Wardens and Trustees of Christ Episcopal
Church and has since been used as the church rectory.—In-formation
supplied by William S. Powell; see opposite page.
Sent free upon request to responsible individuals, agencies,
organizations and libraries. Address: E. S. C. Informational
Service, P. 0. Box 589, Raleigh, N. C.
CONTENTS
Silas F. Campbell Dies 2
Beginning of Banking in North Carolina, 1804-1860 :.. 3
By William S. Powell
North Carolina Shares in Nation's Banking Progress 6
By Robert M. Hanes
N. C. Bankers Association Active Since Formed in 1897 8
By John F. McNair, Jr.
State Bank Supervision Since 1887 in North Carolina 11
By Gurney P. Hood
State's Smallest Bank Building ... .12
Notable Progress Made in State in Trust Business 13
S. B. Midyette, Jackson, New Commissioner; Succeeds Cowan 15
Charlotte Branch, Federal Reserve Bank of Richmond 16
Incidents in 15-Year Banking Span in North Carolina 18
By John G. Allen
Charlotte Mint Coined More Than $5,000,000 in Gold ... ...19
N. C. Bankers Earn National Honors in Agricultural Work....20
Banking is $2,000,000,000 Business in North Carolina ... ...21
Wachovia Bank & Trust Co.—American Trust Co.
—
First Citizens Bank & Trust Co.—Branch Banking &
Trust Co.—Security National Bank—The Commercial
National Bank—The Northwestern Bank—The Union
National Bank—Cabarrus Bank & Trust Co.—Guaranty
Bank & Trust Co.—The Fidelity Bank.
By M. R. Dunnagan
All Banks—Commercial, Industrial and National, in State .33
Industrial Banking History and Activities in State _._37
By Gurney P. Hood
Hugh M. Raper Heads Statistical Bureau.— 37
Mechanics and Farmers, Durham, Largest Negro Bank
in Nation ____ ___ 38
( Bank in Washington topped it a few thousand dollars
in Dec. 31, 1948, statement)
Silas F. Campbell
SILAS F.CAMPBELL DIES
Silas F. Campbell, director
of the Bureau of Research
and Statistics of the Em-ployment
Security Commis-sion
of North Carolina, died
at Rex Hospital, Raleigh, at
6 P. M. on January 11, fol-lowing
a heart attack about
40 hours earlier. He was 64
years old and more than 30
years of his eventful life
had been spent in service for
the State of North Carolina.
Many of Mr. Campbell's
articles, dealing largely with
facts and figures regarding
labor, employment, wages
and other statistics about
North Carolina had been
published in issues of "The
E.S.C. Quarterly", as well as in other magazines and
newspapers in this State and elsewhere. He had
also entered the field of fiction and had written num-bers
of short stories and travel articles, dealing in
part with boating, which had been published in na-tionally
circulated magazines. In addition, he had
written numbers of poems that were judged as ex-cellent.
In music, Mr. Campbell was also proficient.
The violin was his favorite instrument, but he taught
his seven sons and one daughter to play various in-struments.
Since December 1, 1933, Mr. Campbell had been
with the Employment Security Commission, its pre-decessor
and related agencies. He became statistical
supervisor and later assistant State director of the
former National Reemployment Service, headed in
succession by Capus M. Waynick, Col. A. L. Fletcher,
ex officio, and May Thompson Evans. In 1935 he was
taken over by the North Carolina State Employment
Service when it succeeded the earlier agency. When
the Employment Service was made a division of the
Unemployment Compensation Commission in 1936,
he continued his work in statistics and research.
Since July 1, 1942, Mr. Campbell headed the Bureau
of Research and Statistics under titles of supervisor
and director.
Prior to his work with this agency, Mr. Campbell
had served for 15 years, 1910-25, with the State In-surance
Department, in charge of the Building and
Loan Section most of the time, as chief deputy insur
ance commissioner. Mr. Campbell's first job was as
secretary and sales manager for a fertilizer firm in
Durham for two years, 1900-02, and for the next four
years he was assistant treasurer and manager of a
cotton mill in Greensboro, where he spent four more
years, until 1910, in independent auditing. After his
Insurance Department work, he spent a few years in
Raleigh in general auditing and for three years he
was auditor and N. C. manager of a steamship freight
line in New Bern. From 1930 to 1933 he was in May-port,
Florida, doing independent auditing and coun-selling
for several business firms.
Mr. Campbell attained high proficiency in many
varied fields, but in statistics he was in a class to him-self
in this State, particularly in his ability to trans-late
facts and figures into intensely informative and
interesting dissertations.
Winter, 1949 THE E. S. C. QUARTERLY Page 3
Beginning of Banking in North Carolina, 1804-1860
By William S. Powell, Researcher, N. C. Department of Archives and History
Discounting, receiving deposits and lending credit
in the form of ''created" deposits or bank notes are
among the basic functions of the modern bank. In
this sense there were no banks in colonial America.
There were instead loan offices or land banks which
made loans on real estate security with limited
issues of legal tender notes. 1 The first bank in the
United States was the Bank of North America or-ganized
by Robert Morris and chartered by the
Continental Congress on December 21, 1781. The
Bank of Massachusetts was second, having been
chartered on February 7, 1784. On June 9, 1784,
a third bank, the Bank of New York, began opera-tion.
By 1800 twenty-six state banks had been or-ganized
; in 1811 this number had grown to eighty-eight.
State banks were privately owned but char-tered
by the state, generally for a period of twenty
years, but in a few cases "perpetual charter banks"
were set up.
In 1789, when North Carolina joined the Federal
Union, one of -the most demoralizing influences in
the state was the inflated currency. Various issues
of paper money were in circulation and the problem
of retiring them was a pressing one. In the case of
state currency, as contrasted to the Continental cur-rency,
the honor and credit of North Carolina de-manded
redemption.
One method adopted to redeem the state's certifi-cates
was to sell land and accept them in payment.
Another was to accept them in payment of a prop-erty
tax levied specifically for that purpose. Finally
the use of dividends from bank stock and the coop-eration
of banking institutions was resorted to as
a means of retiring the currency.
CAPE FEAR, NEW BERN BANKS
North Carolina was the last of the original states
of the Union to enter the field of banking, a fact
frequently lamented by Joseph Gales, editor and
wd Four
*ccawia&&
"New Proc" Bill, issued in 1748 and exchanged for the old bills,
"old proc", was declared by law to have the value of four pence
proclamation money. Originals of these three bills in N. C.
Hall of History.
JP«;5 KORm CAROLINA CURRENCK £o*
£*t . <t-en por
f<X No
Y **s/-K~%I« I S Bill iotH tMto receive
% I rE
fc, JL Vakif- thereof tit Gold? w Sl '
&fi£&'4
ST4TE if NORTH CAROLINA.^
TEN Spiimjt milk-d DO I CJRS, or thej-
J** Vakic sit lioki« or S>Uvcs
*abk> to an Act of A;«vn;Mj_ pa{fed at Htiijfaretigfi
rsXthe eighth Day of Aupufi, 1778
*4
Xj5 J? Pmfifrim theRum* " >
%XXyXX>00O
Bill issued in 1778 to help pay expenses of Revolution, against
Spanish milled dollars. At that time taxation in the State had
been practically suspended. The note was almost worthless.
publisher of the Raleigh Register and champion of
improvement and progress for the state. 2 The Bank
of Cape Fear and the Bank of New Bern were char-tered
in 1804. "The increase in population and com-merce
of the districts of Wilmington and Fayette-ville,"
states the charter of the Bank of the Cape
Fear, "render it expedient that a bank should be
established for their convenience in the town of
Wilmington," with a branch at Fayetteville. The
charter of the Bank of New Bern records that "an
act to incorporate the Newbern Marine Insurance
Company, and to establish a bank in the said town"
was passed for the purpose of preventing losses at
sea and effectively to aid commerce.'5
"The immediate effects of the banks on finance
and commerce were good," writes William K. Boyd.4
"Their notes, engraved on silk paper, were exchanged
for the ragged state currency. The dividends were
promising. So in 1807 the Treasurer was ordered
to subscribe the number of shares reserved for the
state. Soon, however, the banks began to return
into circulation the state currency which they had
received, offering it in payment of debts instead of
specie or their own notes.
"Thus specie was hoarded and depreciation of the
bank notes set in, for they were redeemed only in
' For an account of financial affairs in North Carolina during
the colonial period see "The Fiscal System and Administration"
in Charles Lee Raper, North Carolina, A Study in English Co-lonial
Government (New York, 1904), pp. 125-147.
- Raleigh Register. January 4, 1804; December 5, 1805.
:1 Beecher Flanagan. "History of State Banking in North Caro-lina
to 1866." Unpublished doctoral dissertation, George Pea-body
College for Teachers, 1934, p. 28. A copy of this disserta-tion
is in the North Carolina State Library.
' "Currency and Banking in North Carolina, 1790-1836," in
Historical Papers Published by the Trinity College Historical
Society, Series X (1914), pp. 52-86.
PAGE 4 THE E. S. C. QUARTERLY Winter, 1949
the depreciated currency. Two remedies were ap-plied.
The first was to levy a tax of one per cent
on bank stock held by individuals and to limit ex-cessive
note issues by ordering the forfeiture of the
charters of the banks if notes in excess of the amount
authorized were issued. This was a conservative
measure, enacted in 1809. The next year a radical,
almost revolutionary, measure was taken.
STATE BANK CHARTERED
"That was the charter of a new bank, to be known
as the State Bank of North Carolina, which, it was
hoped, would absorb the existing banks and equalize
the relation between currency and specie. The char-ter
provided for a central bank in Raleigh5 with
branches at Edenton, New Bern, Wilmington, Fay-etteville,
Tarboro, and Salisbury, with a capitaliza-tion
not exceeding $1,600,000, of which $250,000
were reserved for the state to be paid for in gold
and silver or stock of the United States. In sub-scriptions
preference was to be given to the Banks
of New Bern and Cape Fear, and no new bank was
to be chartered until the charter of the State Bank
should expire in 1830.
"As the charters of the existing banks expired in
1820 it was intended that their capital would thus
be invested in the new institution. Three-fourths
of the capital stock was to be paid in specie, one-fourth
in paper. The indebtedness by bond, bill,
note, contract or otherwise was not to exceed $4,800,-
000 above the amount on deposit, and all such liabil-ities,
also debts due the bank, were to be redeemed
in gold and silver upon judgment in the courts. After
the bank went into operation the state currency
should not be received as legal tender in payment of
debts to the bank, but the state's dividends should
be used to redeem the paper currency when pre-sented
to the bank. Thust the redemption of the
outstanding paper money was provided for along
with new banking facilities."
Within a few years the bank's charter was amend-ed
by extending its duration until 1835 and by
m* Dbath to CO U N TEH F fiIT. -tftfv
J5gf Firry dollars. J^
p.± 8tat« of North-Ca*ol»ka, "%. ,
p I
np H I S Bill iuntles the Besuer to receive tiftyjl ) J
<< b? i Sfan'/k milled Dollars, or the Value thereof.?" I 2
Total Capital Stock, Deposits and Note Circulation
of the Banks of North Carolina
^g | m Gold oi fciiver, agreeable u an Act of Aflen.bly* •> %
jg~ paired »t NEWBEKm t he 10 th !><*/ of Mzy,±~ii*J
Ijlo,
9s
!
| Fundowentum ffiiMp
" & cere Percnnius. •»
| ">» "M—y» "x» "\a ">s "\» "\»
!*9U(je«9w^u>-«-
1835--1860
Number Capital Note
Date Banks Stock Deposits Circulation
1835 3 $1,769,232 $ 475,435 $2,032,043
1836 3 2,393,440 569,559 3,189,068
1837 3 2,525,000 497,540 2,124,133
1838 3 2,525,000 520,247 3,114,140
1839 3 3,225,000 474,151 2,275,569
1840 3 3,225,000 425,147 2,092,877
1841 3 3,225,000 434,623 1,984,299
1842 3 3,225,000 379,284 1,496,021
1843 3 3,225,000 402,398 1,931,352
1846 3 3,225,000 601,713 3,088,060
1848 4 3,407,300 439,883 2,955,121
1850 5 3,789,250 881,402 4,249,883
1852 7 4,341,101 975,516 5,278,555
1854 10 5,141,775 1,961,049 6,576,549
1857 11 6,049,400 1,276,088 5,425,277
1860 14 7,949,965
p. 247.
1,704,572 5,735,186
Flanagan, op. cit.,
exempting the stock and dividends from taxation
provided the bank would take up and exchange the
paper currency of the state for bank notes. As a
part of the arrangement for extending the charter
the governor issued a proclamation that the paper
money no longer was legal tender except to the bank
and that the bank should return the currency which
it accepted as dividends on the state's stock.
Having thus provided for the redemption of the
state currency the financial transactions of the State
of North Carolina in 1816 began to be reckoned in
the currency of the United States instead of in
state currency.
N. C. NOTES IN MANY STATES
Inflation and depression, however, did not dis-appear
with the redemption of the state currency.
!
Instead of paper money the bank notes were the
cause of confusion and commercial depression. The
j
total authorized bank capital in 1804 was $450,000
with the right to issue $1,350,000 in notes. Six!
years later the capital was increased to $2,050,000
and the possible note issues upped to $6,150,000.
The banks' operations, however, were not so extrav-j
agant as to cause them to suffer unduly under thej
strain of the War of 1812.
Archibald D. Murphey in 1817 reported to the
Senate that "when the banks to the west and south
of New England suspended specie payment, the notes
issued by the State Bank of North Carolina became
in a general degree a continental currency. In
Georgia they were at par, received and issued by
the banks of that state. In South Carolina they
were always at par, except occasionally in the city
of Charleston, where they were subject to a small
depreciation. Everywhere else they bore a premium,
often a considerable one."
Bill issued in 1780, in which year State issued more than $3,-
000,000 in paper money, but before year ended it was all worth-less.
Taxes levied that year were paid in country produce.
5 After about 1818 the State Bank of North Carolina occupied
the building in Raleigh now used as a rectory for Christ
Church, New Bern Avenue and Wilmington Street.
Winter, 1949 THE E. S. C. QUARTERLY PAGE 5
''MONOPOLY" AND "ARISTOCRACY"
The expansion of the currency brought a desire
for speculation. The charters of the banks of New
Bern and Cape Fear were to expire in 1820 leaving
only the State Bank of North Carolina. The cry of
"monopoly" and "aristocracy of money" was raised.
The directors of the two original banks thereupon
petitioned the legislature for extension of their char-ter.
Not only was their request granted, but they
were authorized to increase their capital stock.
From the time of this extension in 1814 until the
scheduled expiration of the charters the banks faced
a stormy period. A depression in 1819 resulted in
a rapid return of the bank notes to the banks and a
drain on specie. Brokers bought bank notes and
demanded coin, but met only a refusal at the banks.
They were given instead drafts on northern banks.
When ordered by the courts to resume specie pay-ment
the banks resorted to various courses. One
refused to accommodate customers unless they made
payments in specie; in another case stock in the
Second Bank of the United States was purchased as
a means of securing funds equivalent to specie. The
president of the State Bank in 1822 bought cotton
with the bank's funds, selling for specie at a profit.
By these schemes and others the banks managed to
protect their notes without having to call in their
loans.
Capital and Note Circulation of the Banks of North
Carolina 1830, 1856, 1861.
Note
1830: Capital Circulation
Bank of Cape Fear $ 796,000 $ 235,460
Bank of New Bern 797,400 392,479
State Bank of N. C 1,598,776 695,976
1856:
Bank of Cape Fear $1,591,900 $1,688,885
Merchants Bank of New Bern 225,000 171,634
Bank of State of N. C .... 1,500,000 1,033,633
Bank of Fayetteville 380,000 668,000
Farmers Bank of N. C 393,026 453,225
Bank of Washington 375,000 380,000
Bank of Charlotte 300,000 302,329
Commercial Bank of Wilmington 350,000 157,970
Bank of Yanceyville. 200,000 352,000
Bank of Clarendon 400,000 400,020
Bank of Wilmington 502,300 434,169
Bank of Wadesboro 324,850 617,900
1861:
Bank of North Carolina $2,500,000 $1,665,780
Bank of Cape Fear 1,591,900 1,948,906
Bank of Commerce, New Bern 400,000 465,595
Bank of Washington ._ 325,000 513,949
Bank of Fayetteville 380,000 397,959
Bank of Clarendon 400,000 423,780
Merchants Bank, New Bern ..... 225,000 108,778
Bank of Wilmington..... 758,500 851,758
Bank of Charlotte 300,000 449,963
Bank of Wadesboro 325,000 575,000
Bank of Yanceyville... 200,000 374,763
Farmers Bank, Greensboro . 297,000 223,883
Bank of Lexington 300,000 410,000
Miners & Planters Bank, Murphy 77,420 134,955
Bank of Roxboro 84,106 27,110
Thomasville Bank 300,000 14,215
[Henry C. Brown?], "Banking in North Carolina—Past—Pres-ent."
Henry C. Brown Collection, N. C. Department of Archives
and History.
CONDITION OF BANKS IN 1835
In 1832 the United States House of Representa-tives
passed a resolution directing the Secretary of
the Treasury to lay before it at each session a state-ment
showing the condition of the different state
banks and banking companies. In 1835 Governor
David L. Swain received a letter from Levi Wood-bury,
Secretary of the Treasury, asking for such a
report for North Carolina.
In reply to this request Governor Swain on Jan-uary
21, 1835, wrote: "There are at present in this
State four Banks, viz. 'The State Bank of North
Carolina' 'The Bank of Newbern' 'The Bank of the
State of North Carolina' and 'The Bank of Cape
Fear.' The two first named institutions have done
no new business since the 31st of Dec. last [and] are
rapidly winding up their affairs ; and their charters
will expire on the first day of January 1838.
"The capital of the Bank of the State actually
subscribed is $1,074,000; of which $900,000 is held
by individuals and $174,000 by the State. The State
has the privilege of increasing her stock to six hun-dred
thousand dollars, at any time previous to the
1st of Jan. 1837. at which period if not previously
exercised, it will expire. The Principal Bank is
located in this city [Raleigh]. Branches have been
established at Newbern, and Tarborough and agen-cies
at Charlotte, Milton, Leaksville and Morganton.
"The Bank of Cape Fear is located at Wilmington.
"By an act passed at the last Session the Mer-chants
Bank of Newbern with a capitol of $300,000
was established, but it is uncertain whether the requi-site
amount of Stock $100,000 to put it in operation
will be subscribed."7
STATE BANK'S NAME CHANGED
In 1835, as indicated in Governor Swain's letter,
only two banks were operating in North Carolina.
In 1832 the charter of the Bank of Cape Fear had
been extended until January 1, 1855, with a capital
of 8,000 shares and its debt limit fixed at $1,600,000
above the amount on deposit. At the same session
of the legislature during which the charter of the
Bank of Cape Fear was extended the charter of the
State Bank of North Carolina came up for discus-sion.
It was scheduled to expire in 1835. Numerous
plans for a new bank were discussed and considered,
but no action taken.
At the next session the charter was remodeled and
a new name authorized—The Bank of the State of
North Carolina. Its charter was to remain in force
to 1860 and its capital was fixed at $1,500,000 to be
paid in gold or silver or their equivalents, of which
the state was to subscribe two-fifths. Four of the
new bank's ten directors were to be appointed by
(Continued on page 36)
K The Bank of the United States at Fayetteville was not opened
until 1825 and it closed after ten years.
7 David L. Swain Letter Book, 1832-1835, p. 319. N, C. Depart-ment
of Archives and History.
PAGE 6 THE E. S. C. QUARTERLY Winter, 1949
North Carolina Shares in Nation's Banking Progress
By Robert M. Hanes, President, Wachovia Bank and Trust Co., and Former President
American Bankers Association
Substantial growth in North Carolina's banking
resources reflects the marked progress that has been
made in the State's economic development in the
past decade.
By the end of 1947, banking in our State had be-come
a two billion dollar business. North Carolina's
banking structure is composed of 152 state com-mercial
banks, 45 national banks and 29 industrial
banks, which together operate 169 branches. These
institutions had total resources of $2,007,105,755.73
on December 31, 1947, compared with $451 million
at the end of 1937, just ten years ago.
On the national level, banking has shown notable
progress. There are nearly 15,000 commercial banks
in the United States, and at the end of last year they
had total resources exceeding $176 billion, total
capital and surplus of more than $9 billion, and
deposits totaling over $163 billion.
GROWTH EXCEEDS NATIONAL GAIN
Banking resources in North Carolina, however,
have shown greater growth proportionately than
has occurred countrywide. Between 1930 and the
end of 1947, bank resources of the State increased
from $220 million to over $2 billion, or almost ten-fold.
In the same period, bank resources in the
nation increased from about $85 billion to approx-imately
$177 billion, or slightly more than double.
At the end of 1947, we ranked 19th among the
states nationally in banking resources and were
second in the Southeast, being exceeded only by
Tennessee (by a slight margin) . In the entire South,
North Carolina ranked third, being exceeded only
by Tennessee and Texas. This standing is particu-larly
significant in view of the fact that we do not
have large cities in our State such as Richmond,
Atlanta, New Orleans or Louisville, which are im-portant
financial centers.
Banking figures serve as a gauge for measuring
the forward strides which North Carolina has made
in expanding its agricultural activities and its com-mercial
and industrial life. Total personal income
in North Carolina last year reached the record high
level of $3 billion, nearly three times larger than in
1940. Agricultural income in 1947 was the highest
on record, and North Carolina industries last year
manufactured products valued at more than three
billion dollars, double the value of manufactured
products in 1940. As Louis Bromfield expressed it
recently, "Of all the southern states, and for that
matter all the forty-eight, no state has shown more
progress within the past generation than North
Carolina."
Since the banking holiday of March, 1933, banks
of the State have compiled an enviable record of
soundness and stability. In this period, spanning
nearly 16 years, there have been only two bank fail-ures
in the State, both involving small institutions.
North Carolina's record is one of the best in this
respect nationwide for this period. Nearly all banks
in the State have their deposits insured by the Fed-eral
Deposit Insurance Corporation, and 13,420
banks in the nation are so protected.
STRONG CAPITAL STRUCTURE
To keep this record of soundness intact, bank
management in the State has added to reserves and
capital funds as the deposit level has moved upward.
The capital funds of Carolina banks were increased
by nearly $8 million in 1947. Nearly $9 million was
added in 1946, and over $6V-> million in 1945, a total
of $23 ]/o million in the past three years. Banks in
our State have used over 75% of their total net
earnings during these years to strengthen their
capital structure. This is highly .important both to
the banker and the public because with loans in-creasing
and the holdings of U. S. Government bonds
declining, the volume of risk assets is growing. Good
banking practice demands that bank funds be as
fully protected as possible by adequate reserves and
capital funds.
Throughout the nation, the capital position of
banks has been greatly strengthened. The insured
banks of the nation added just under half a billion
dollars to their capital funds in 1947, and each of
the two previous years additions totaled over $600
million. The fact that banks generally have put
back a major portion of their earnings into surplus
and reserves, thus increasing the cushion of protec-tion
against the uncertainties of future business con-ditions
is a high tribute to the integrity and efficiency
of management in the banking industry.
On the whole, bank earnings have been satisfac-tory,
and during recent years have shown some in-crease.
They have not, however, grown in propor-tion
to the increase in deposits or resources because
of low-level interest rates on loans and investments,
coupled with higher operating costs. A recent sur-vey
showed that banks as a group had experienced
a smaller percentage gain in earnings over the pre-war
period than most other types of business. How-ever,
earnings have been steady and should continue
satisfactory in the years ahead.
North Carolina banking has kept pace with the
extensive gains made in all segments of the State's
economic life. Everywhere—in agriculture, in trade,
in industry—we see the signs of progress.
BETTER BALANCED AGRICULTURE
Our farmers last year received over $770 million
in cash income from farm marketings. North Caro-
Winter, 1949 THE E. S. C. QUARTERLY PAGE 7
THE BANK OF ASHEVILLE
The beautiful building of The Bank of Asheville, completed
in 1946, is Georgian style, faced with Williamston brick and
trimmed in limestone. Attractive wall colors in the William-ston
tradition are used throughout the building, with walnut
woodwork and furniture. The interior has no decorations, its
simplicity producing the proper atmosphere. The building
fronts 50 feet on Patton Avenue, in the heart of the business
district, facing Pritchard Park. It is two stories high, with
basement, at the front, running 100 feet through the block to
Commerce Street, where the basement, due to the hilly nature
of the site, is on the street level. The bank occupies the first
two floors, renting out offices on the top floor. Philip Wooll-cott
is president.
lina again stood third in the nation in cash farm
income from crops. Although one-crop farming is
still much too prevalent in the State and our farmers
depend too heavily on the State's principal crops of
tobacco and cotton to provide their livelihood, we
do have a better balanced agriculture than we have
ever before achieved. For example, North Carolina
farmers received over $135 million in cash income
from the sale of livestock and livestock products last
year, four times more than was received from this
source in 1940. We must, however, continue our
efforts to develop greater diversification in farm
activities.
Since ours is an agricultural State, we have bene-fited
somewhat from the postwar imbalance of agri-cultural
prices in relation to the cost of various other
goods and commodities. Prices for farm products
during and since the war have increased much more
rapidly than other prices. North Carolina's total
cash farm income has increased over three times
since 1940, and much of this increase can be attrib-uted
to a steep rise in the price of agricultural
products. The increase in price of non-agricultural
commodities has not been as sharp. This relative
situation has favored our section and has made it
possible for our farmers to make substantial financial
headway.
HOLD INDUSTRIAL LEADERSHIP
Because of the growth experienced since the war,
North Carolina is assured of maintaining its position
of industrial leadership in the South. Figures re-cently
released by the State Department of Conserva-tion
and Development show that in the three years
since V-J Day the State has acquired 1,112 new
industrial plants, and 550 industries have carried
out expansion programs. It has been estimated that
these new and expanded plants will employ 94,000
additional workers with payrolls estimated to reach
approximately $150 million annually. These new
or expanded plants represent an investment of over
$238 million. All indications point to continued
steady, though perhaps not as rapid, industrial de-velopment
in the years ahead.
The pattern of our trade with the rest of the
nation changed at least temporarily under the war
economy. Manufacturing industries in North Caro-lina
produce non-durable goods principally. Almost
full-scale production has been maintained in these
plants during the past seven years. Prior to the war,
much of the purchasing power of the State annually
went into durable goods, which until recent months
have been largely unavailable. Consequently, since
1940 we have not exported large portions of our
income to the sections of the country where durable,
and more expensive, manufactured goods are pro-duced.
FAVORABLE TRADE BALANCE
These factors in the past decade have accelerated
the inward flow of funds and decreased the outward
movement of money in the State. In other words,
our net dollar balance of trade has been favorable
—
much more so than in the years preceding the war.
Accordingly, there has been a greater accumulation
of savings in the region than in any previous period.
Savings deposits in North Carolina banks totaled
$319 million last year, and since war financing was
started in 1941, close to a billion dollars' worth of
U. S. Savings Bonds have been sold in the State.
The war brought many changes in the economic
structure of the State and nation. The tempo of
trade, manufacturing and business quickened. The
money supply rapidly expanded as vast wartime
expenditures necessitated more and more govern-mental
borrowing. Banking was faced with the
responsibility to render broader service to meet the
increased needs of business and the public. The
banking system was found to be ready, willing and
able to serve in a larger capacity. The bankers of
the nation for their part worked untiringly during
the war to render the services needed from them,
and in doing so proved convincingly the usefulness
of the American banking system. In the years since
the war, banks have continued to improve and en-large
their operations.
Correspondent banking relationships have been
made stronger and more effective. Large and small
banks in the State have worked together in close
PAGE 8 THE E. S. C. QUARTERLY Winter, 1949
harmony, with mutual benefit to themselves and to
their customers. By calling in their city correspond-ents
to take part in loans in excess of their credit
limits, smaller banks have been able to meet credit
needs which, because of their size or unusual nature,
might otherwise have been declined. City banks
have made the services of their larger and more
specialized staffs available to smaller banks and have
assisted in improving operating procedures in cor-respondent
banks.
BANKS IMPROVING SERVICES
Carolina bankers have participated wholeheart-edly
in the activities and programs of state and
national banking associations, which work to develop
higher standards of banking management and serv-ice.
Every bank in this State belongs to the North
Carolina Bankers Association and to the American
Bankers Association, and Tar Heel bankers hold
key posts in national banking organizations.
One important field of association work has been
helping to improve agriculture in our region. Over
and over again bankers are stressing the importance
of diversified farm and soil conservation, sound farm
planning and sound farm financing, and banks are
making credit available to farmers to improve farm
operations. North Carolina banks last year loaned
over $60 million to farmers, and nation-wide nearly
$5 billion of credit was extended farmers by banks.
Another example of effective cooperation action
by banks in the spirit of public service is the volun-tary
anti-inflation program of the American Bankers
Association. Banks in every section of the country,
realizing their responsibility to help check the infla-tionary
trend, pledged themselves at a series of
nation-wide meetings last year to make only sound
productive loans that would increase the supply of
needed goods. They agreed to discourage specula-tive
buying and unessential loans that would con-tribute
to inflationary demand. They resolved to
continue to encourage systematic saving in bank
accounts and regular purchase of U. S. Savings
Bonds. For the way this program has been carried
through, banking has been praised by President
Truman and Secretary of the Treasury Snyder, as
well as top Federal Reserve officials.
Banking has been alert to develop new services
where needed. For example, installment loan de-partments
have been established by a majority of
banks in recent years. It has been estimated that
some 12,000 of the nearly 15,000 commercial banks
in the country now offer consumer credit in some
form. The Wachovia established a Time Payment
Department in 1945. Last year more than 25,000
people were served through this department, and
other banks in the State have likewise found heavy
demand for this useful type of credit.
By the end of the war, banking faced a problem
which was troubling many another business or in-dustry,
not to mention thousands of individuals. It
had a severe housing problem. North Carolina banks
were no exception. In many cases bank quarters
were obsolete or inadequate for handling properly
the volume of business being conducted. Throughout
the nation, a broad bank modernization and building
program has been under way in the past three years.
In addition, it has frequently been practical and
desirable to open neighborhood branch offices to
serve suburban areas which have developed in recent
years.
Banking in North Carolina now occupies, along
with the State's industry and agriculture, a position
of leadership in the South and the nation. As the
State continues to progress economically and to de-velop
its many resources and capacities, banking will
have the opportunity and challenge to do an even
better and larger job of serving and helping individ-uals,
business and industry.
There will be problems to be faced and solved by
our State and its people in the years ahead. But if,
in good times and lean, we have confidence in North
Carolina's future, then, with hard work and sound
planning, we can go far and continue to maintain
our outstanding record of progress.
N. C. Bankers Association Active Since Formed in 1897
By John F. McNair, Jr., President, North Carolina Bankers Association.
The organization of the North Carolina Bankers
Association was a very simple but an interesting
affair. After exchanging ideas with a few friends,
Thomas H. Battle, to become the first president of
the Association, wrote to every banker in the State
suggesting a meeting at Morehead City to organize
a State Association. Approximately twenty-five
bankers met on July 24, 1897, at The Atlantic Hotel.
In those days The Atlantic Hotel was the social sum-mer
capitol of the State. Many a man owes a debt
of gratitude to this center and an opportunity to
select his wife, since it was the source of meeting
the attractive daughters of this and other Southern
states. The meeting was held in the great hall of
the old Teachers Assembly, which was doing a fine
work. This building, incidentally, was converted
into a summer home by Frank W. Barnes of Wilson.
It is interesting to record here that at that period
there was so much agitation in the State in regard
to Trusts and Associations, that before calling the
meeting, President Battle conferred with Marion
Butler, a collegemate who was then head of the Pop-ulist
Party, and secured his approval of the project.
At the first business session the small group pro-ceeded
to elect officers and form by-laws. Two spe-cial
committees were appointed as follows: Com-
WINTER, 1949 THE E. S. C. QUARTERLY PAGE 9
FIRST NATIONAL BANK OF CATAWBA COUNTY
The First National Bank of Catawba County has a show-place
in its building in Hickory- The building is of white
Georgia marble, 50 by 125 feet. The lobby, 22 by 80 feet, is of
brown figured marble, extending around the banking room to
a height of 3 % feet. The floor is terrazo tile and the ceiling-is
arched. A large assembly room on the mezzanine is used as
a meeting place by civic organizations. This bank was organ-ized
in 1891. K. C. Menzies was its first cashier, later became
president, a position he still holds, after 57 years of service.
Mr. Menzies was a member of the State Banking Commission
for several years. J. L. Cilly, John G. H. Geitner, J. R. Gaither
(Newton), A. L. Shuford (Conover) are vice-presidents, and
Earl F. Shuford is trust officer. The First National Bank of
Hickory was consolidated with banks at Newton and Conover
to form the First National Bank of Catawba County. It has
assets of more than $25,000,000. Its deposits exceed $23,000,-
000. Capital stock is $700,000, with surplus, profits and re-serves
in excess of $1,050,000.
mittee on Permanent Organization, J. W. Norwood,
Wilmington ; J. F. Bruton, Wilson ; W. A. Hunt, Hen-derson;
W. E. Borden, Goldsboro; J. M. Miller, Char-lotte;
Leo D. Heartt, Durham; and T. W. Dewey
of New Bern. The Committee on Constitution and
By-Laws included Thomas H. Battle, Rocky Mount;
E. F. Lamb, Elizabeth City; J. G. Mehegan, Tar-boro;
George Folk, Edenton; W. L. Parsons, Rock-ingham;
and W. T. Olds, Elizabeth City.
FIRST ASSOCIATION OFFICERS
At the afternoon session, called to order at 3 o'clock
on July 24, 1897, the Committee on Permanent Or-ganization
then made its report, recommending the
following officers for the Association during the
ensuing year : For president, Thomas H. Battle, pres-ident
of the Bank of Rocky Mount; for first vice-president,
A. G. Brenizer, cashier of the Commercial
National Bank of Charlotte; for second vice-presi-dent,
A. W. Norwood, president of the Atlantic Na-tional
Bank of Wilmington ; for third vice-president,
W. A. Blair, vice-president of the Peoples National
Bank of Winston ; for secretary and treasurer, T. W.
Dewey, cashier of Farmers and Merchants Bank of
New Bern. All were duly elected.
From this early beginning the Association has
continually grown in its services to the banking
fraternity of this State. From July, 1897, to July,
1922, the Association employed a part-time secre-tary,
but the full-time position of Secretary of the
North Carolina Bankers Association was established
July 1, 1922, with the election of Allen T. Bowler.
Along with the advent of opening permanent head-quarters
in Raleigh, the Executive Committee and
the membership authorized the beginning of its
monthly publication to be known as The Tarheel
Banker. The establishment of a central office with
a full-time secretary and with a regular monthly
official publication gave a greater stimulus to Asso-ciation
interest and activities.
For the past several years every bank in North
Carolina has been a member of the State Association,
as well as a member of the American Bankers Asso-ciation.
Present enrollment lists 404 banks and
orancnes and bO associate memberships registered
with tne North Carolina Bankers Association.
GENERAL ORGANIZATION
The general officers of the Association are its
president, first vice-president, second vice-president,
tnird vice-president, treasurer, executive secretary,
and general counsel. These officers coordinate the
activities of North Carolina bankers with an Execu-tive
Committee comprising a body of thirteen per-sons,
one representative from each of the ten groups,
the immediate past president, the chairman of the
industrial Banking Section, and the chairman of the
Trust Section. The officers and Executive Commit-teemen
are responsible for the general activities of
the State Association through tne work of ten reg-ular
committees as follows : Bank Management and
Research, Federal Legislation, Agricultural, Finance,
Group Activities, Insurance and Protective, Legisla-tive,
Membership and Policies, Publications, Public
relations and Fuolic Education. Actually the affairs
of the North Carolina Bankers Association are di-rected
by 125 North Carolina bankers.
MANY ASSOCIATION ACTIVITIES
Meetings—Including the annual convention, thir-ty-
five major meetings are to be held this year under
tne auspices of the N. C. B. A.
Agricultural Program—The North Carolina Bank-ers
Association is sponsoring for the fourth year a
state-wide Public Speaking Contest on Soil Con-servation
with white high school pupils throughout
the State participating. The contest last year had
more than 4,000 participants from 303 schools and
awards exceeded $6,000.00. It will not be surprising
to see the 1949 contest eclipse the 5,000 participating
mark with awards fast approaching the $10,000.00
mark. The purpose of the Agricultural Committee
is to do everything within its power to cooperate
with all agencies in improving the agricultural situa-tion
of our State. Next spring four special Banker-
Farmer meetings will be held as regional study pro-grams
for bankers and farmers in cooperation with
The Federal Reserve Bank of the Fifth District.
Efforts are now being made to establish at an early
date a regular Banker-Farmer School at North Caro-lina
State College.
The Carolinas Bankers Conference—This bankers'
school has been sponsored by the North Carolina
Bankers Association for thirteen consecutive years
PAGE 1 THE E. S. C. QUARTERLY Winter, 1949
at the University of North Carolina and has provided
phases of banking education to thousands of bank
employees throughout the immediate area, particu-larly
in North and South Carolina. In addition to
general banking education, a specialized technical
school in trust education, as well as credit adminis-tration
and organization for junior officers will be
offered during its school session, 1949.
ISSUES MONTHLY MAGAZINE
Publication—N. C. B. A. members receive many
classified bulletins under the headings of General,
Legal, Legislative, Protective, Public Relations,
Washington, Insurance, and Conference. The Asso-ciation
also publishes annually "Trends in Banking
in North Carolina" which is recognized by bankers
throughout the United States as an outstanding
project of the Bank Management and Research Com-mittee.
The Tarheel Banker is published by the
North Carolina Bankers Association for the purpose
of furnishing a medium for the dissemination of
information and for the discussion of matters of in-terest
to its members. Educational articles on new
trends in operations and services, as well as news
about banks and bankers, are its predominant fea-tures.
Insurance—Even though the Association Insur-ance
Program has been in effect only a few months,
already 130 banks are furnishing Life and Hospital-ization
Insurance to all officers and employees at
bank expense.
Miscellaneous—Other services of the Association
include legal counsel for member banks, legislative
activity in the interest of banking and its customers,
and also sponsorship of a Thumbprint Plan whereby
its merchant customers may be protected, if they
wish to be protected from fraudulent check writers.
Future planning indicates the establishment of a
Pension Program for all personnel in North Carolina
banks, expanded educational programs, and a broad-er
general program of services for its membership.
News and views of tomorrow will find all North
Carolina banks and bankers serving their customers
and communities in full protective and serviceable
activity.
OFFICERS, EXECUTIVE COMMITTEE,
GROUP CHAIRMEN OF N. C. BANKERS
Officers, members of the Executive Committee, group
chairmen and section chairmen of the North Carolina Bank-ers
Association for the current year are as follows:
Officers: John F. McNair, Jr., executive vice-president,
The State Bank, Laurinburg, president; J. Herbert Waldrop,
vice-president and cashier, Guaranty Bank & Trust Co.,
Greenville, first vice-president; Garland Johnson, executive
vice-president, the Bank of Elkin, Elkin, second vice-presi-dent;
Wiley W. Mears, vice-president and cashier, The Plant-ers
National Bank & Trust Co., Rocky Mount, third vice-president;
Ernest S. Booth, executive vice-president, The
Fidelity Bank, Durham, treasurer; Fred W. Greene, Raleigh,
executive secretary; I. M. Bailey, Raleigh, general counsel.
Executive Committee: J. E. Edwards, Belhaven; S. B.
Kittrell, Pinetops; Jack L. Satchwell, Fremont; J. C. Gard-ner,
Henderson; W. L. Glancy, Mount Airy; John P. Sted-man,
Lumberton; J. C. Leigh, Hamlet; H. P. Brandis, Salis-bury;
George Blanton, Jr., Shelby; B. B. Massagee, Hender-sonville;
E. B. Pittman, Wilson; George D. Vick, Raleigh;
Warren S. Johnson, Wilmington.
Group Chairmen: Group 1, John A. Kramer, Edenton;
Group 2, S. B. Kittrell, Pinetops; Group 3, M. F. Allen, Jr.,
Kenansville; Group 4, O. Gordon Perry, Durham; Group 5,
James W. Poole, Greensboro; Group 6, C. Paul Stewart,
Fayetteville; Group 7, Robert Lewis, Raeford; Group 8,
A. L. Shuford, Conover; Group 9, W. W. Hoy, Rutherford-ton;
Group 10, Perry C. Tomlin, Asheville.
Section Chairmen: Industrial Section, E. B. Pittman, Wil-son;
Trust Division, George D. Vick, Raleigh.
WORKING COMMITTEES OF THE N. C.
BANKERS ASSOCIATION FOR 1948-49
Working committees named to handle the various activi-ties
of the North Carolina Bankers Association for the year
1948-49 are as follows:
Agriculture: John P. Stedman, Lumberton, chairman;
Paul Edmonds, Gatesville; G. Thomas Fawcett, Mount Airy;
Roy Griffin, Woodland; Harry Gurganus, Washington; Gor-don
Hunter, Roxboro; T. H. LeCroy, Rocky Mount; Carl
McCraw, Charlotte; Robert Prince, Fuquay Springs; Clyde
L. Stutts, Laurel Hill; Jonathan Woody, Waynesville.
Bank Management and Research: G. Harold Myrick, Lin-colnton,
chairman; Wallace W. Brawley, Rocky Mount; W.
J. Broadwell, Durham; John Covington, Rockingham; Yates
Faison, Charlotte; J. C. Garner, Henderson; Fletcher Greg-ory,
Jr., Halifax; Robin Hood, Hickory; W. D. Whitaker,
Andrews; Meade Willis, Jr., Winston-Salem.
Federal Legislation: Edwin Pate, Laurinburg, chairman;
Fred W. Greene, ex-officio, Raleigh; J. G. Thornton, Wil-mington;
W. H. Woolard, Greenville; Philip Woollcott, Ashe-ville.
Finance: J. Herbert Waldrop, Greenville, chairman;
Ernest Booth, Durham; Garland Johnson, Elkin; Warren
Johnson, Wilmington; Wiley Mears, Rocky Mount.
Group Activities: Wiley Mears, Rocky Mount, chairman;
M. F. Allen, Kenansville; W. W. Hoy, Rutherfordton; S. B.
Kittrell, Pinetops; John A. Kramer, Edenton; Robert Lewis,
Raeford; O. Gordon Perry, Durham; James W. Poole,
Greensboro; A. L. Shuford, Jr., Conover; Paul Stewart,
Fayetteville; Perry C. Tomlin, Asheville.
Insurance and Protection: Charles D. Parker, Asheville,
chairman; W. J. Ausbon, Tarboro; J. N. Coburn, Whiteville;
R. H. Johnson, Conway; John G. Knox, Statesville; John
Mitchell, Warrenton; Olin Sikes, Monroe; C. V. Sutton,
Greensboro; Robert H. Tate, Wilmington.
Legislative: Garland Johnson, Elkin, chairman; W. B.
Hodges, Hendersonville; Leroy Martin, Raleigh; R. L. Pope,
Thomasville; B. H. Plint, Winston-Salem; Allen H. Sims,
Gastonia; John P. Stedman, Lumberton; Archie McLean,
Charlotte; A. G. Small, Elizabeth City; Frank Spruill, Rocky
Mount; W. E. Thompson, Chapel Hill; I. M. Bailey, ex-officio,
Raleigh.
Membership and Policies: B. R. Roberts, Durham, chair-man;
Claude Armfield, Jr., Lenoir; H. W. Cabe, Franklin;
Helen Jackson, Winston-Salem; H. E. Lee, Roanoke Rapids;
M. A. Matthews, Columbia; R. A. McPheeters, Greensboro;
W. H. Neal, Winston-Salem; Marshall Spears, Rocky Mount;
Zeb Strawn, Charlotte; Edythe Wyche, Sanford.
Publications: William Singletary, Winston-Salem, chair-man;
Charles Barrett, Laurinburg; Martha Guy, Newland;
J. L. Hofler, Windsor; Helen Holbrook, Winston-Salem; L.
D. Kirkland, Jr., Durham; I. E. Pittman, Morehead City;
Bruce Riley, Wilson; J. P. Robinson, Charlotte; Bowen Ross,
Lumberton; Miller Sigmon, Hickory.
Public Relations and Public Education: Richard Forres-ter,
Raleigh, chairman; H. F. Bell, Wilson; Mary Lee Biz-zell,
Kinston; Guy Dudley, Winston-Salem; W. D. Halfacre,
North Wilkesboro; M. W. Harriss, Jr., Sanford; W. F. Phil-lips,
Charlotte; C. Bion Sears, Whiteville; Mildred Snipes,
Asheville.
Winter, 1949 THE E. S. C. QUARTERLY PAGE 1 1
State Bank Supervision Since 1887 in North Carolina
By Gurney P. Hood, N. C. Commissioner of Banks.
The duty of the State to supervise banks was not
recognized by the General Assembly until 1887, at
which session banks operating in North Carolina
were required to make reports to the State Treasurer
at least twice each year, and some limited authority
was given to make special examinations to determine
a bank's solvency.
The first consolidated statement of the banks of
the State was made by the State Treasurer in 1887,
and the total resources were slightly more than
$3,000,000.00. Nine years later the resources had
increased to about $19,000,000.00.
The banking laws were amended at the sessions
of 1889, 1891 and 1893, giving the State Treasurer
more authority in the supervision of banks.
At the session of 1899 the Corporation Commission
was created, and the supervision of banks was placed
under its jurisdiction.
In 1903 the Legislature gave the Corporation Com-mission
authority to make rules to govern banks,
provided such rules were not inconsistent with the
banking law, and in 1907 supervision was slightly
extended, and definite fees were provided to cover
the cost of examination. Very few additional powers
were given with reference to supervision from 1907
to 1921.
BANKING DEPARTMENT CREATED
The General Assembly of 1921 enacted the first
real statutes with reference to supervision and exam-ination
of banks, including discretionary powers to
refuse bank charters, providing for the organization
of a Banking Department within the Corporation
Commission, and the naming of a Chief State Bank
Examiner. Very few changes were made in this
law until 1927, at which time it was very much im-proved.
The General Assembly of 1927 also passed the
Liquidation Act, placing the liquidation of all closed
banks under the Corporation Commission. This
method of liquidating closed banks has been proved
to be very satisfactory.
The Seawell Bill passed by the 1931 General As-sembly
and ratified on April 2, 1931, created the
position of Commissioner of Banks, and gave him
the duties, power and authority to supervise and
liquidate all State Banks which had been exercised
by the Corporation Commission since 1899. This bill
also provided for an Advisory Commission to consist
of the State Treasurer, Attorney General, two prac-tical
bankers and one business man.
The authority to license banks to do a trust busi-ness
was transferred from the Insurance Commis-sioner
to the Commissioner of Banks at the 1931
session, and provision was made for a closer super-vision
of trust business in the future.
EARLY BANK EXAMINERS
It has been impossible to find any record of Bank
Examiners who served under the State Treasurer
STATE BANKING COMMISSION—This picture shows the
State Banking Commission in session in January, 1949, when
65 citizens, lawyers, senators and representatives and others,
were present in the hearing room. Brandon Hodges, new State
Treasurer, ex officio member and chairman, was attending his
first meeting. Members, left to right, facing the camera, are:
Harry McMullan, Attorney General, ex officio member; E. B.
Massagee, vice-president and cashier, State Trust Co , Hendei"
sonville; H. D. Bateman, president, Branch Banking' and Trust
Co., Wilson; Chairman Hodges; R. P. Holding, president, First-
Citizens Bank and Trust Co., Smithfield; R. C. Lewellyn, presi-dent,
Surry County Loan and Trust Co., Dobson and Mount
Airy, and president, Bank of Elkin, Elkin. At extreme right
is Gurney P. Hood, Commissioner of Banks. B. Bascom Black-welder,
president, Quaker Meadows Mills, Hickory, non-banking
member and secretary, was absent, but a picture of
him adorns the wall behind the other members, first on
left, wirh Raiding and Eewellyn.
PAGE 12 THE E. S. C. QUARTERLY Winter, 1949
from 1887 to 1899. However, R. C. Strong, formerly
president of the National Bank of Kinston, told me
that the first Bank Examiner appointed in North
Carolina was W. H. Kitchin, father of Governor W.
W. Kitchin, and that Claude Kitchin succeeded his
father and served as Bank Examiner before he was
elected to Congress. We find, however, that A. E.
Rankin, W. F. Lucas and W. B. Shaw were bank
examiners retained from the State Treasurer's office
by the Corporation Commission when it was given
supervision of banks, and Frank Hatchett and J. W.
Noell served from January, 1901, until June, 1903.
The above examiners were assigned definite sections
of the State in which to examine banks.
In 1903 authority was given the Corporation Com-mission
to create a department for bank examination,
and the following State Bank Examiners served in
this position during the next eighteen years
:
J. 0. Ellington—June 1903 to April 1905
John W. Aycock—April 1905 to Sept. 1905
F. J. Haywood, Jr.—Sept. 1905 to January 1909
J. K. Doughton—January 1909 to Sept. 1911
C. V. Brown—Sept. 1911 to May 1912
S. A. Hubbard—May 1912 to February 1919
John G. Nichols—February 1919 to October 1919
Clarence Latham—October 1919 to March 1921
In 1921 the position of Chief State Bank Exam-iner
was created and the following have served in
that position:
Clarence Latham—March 1921 to July 1926
John Mitchell—July 1926 to April 2, 1931
WOOD AND HOOD COMMISSIONERS
Word H. Wood, Charlotte banker, was appointed
Acting Commissioner of Banks on April 2, 1931,
and served until May 27, 1931, at which time Gurney
P. Hood, Goldsboro, was appointed Commissioner of
Banks to fill the unexpired term to April 1, 1935. On
April 1, 1935, he was reappointed by Governor J. C.
B. Ehringhaus for a four year term, on April 1, 1939,
was reappointed for a four year term by Governor
Clyde R. Hoey, and again on April 1, 1943, was re-appointed
for a term of four years.
The first members of the Advisory Commission to
the Commissioner of Banks were: Nathan O'Berry,
chairman ; Dennis G. Brummitt, secretary ; John F.
Bruton, Wilson; W. H. Wood, Charlotte, and A. H.
Bahnson, Winston-Salem.
The last three named were appointed by Governor
Gardner for terms of two years. Later Governor
Gardner appointed former Governor A. W. McLean,
Lumberton, to succeed Col. John F. Bruton, resigned.
Governor Ehringhaus reappointed A. H. Bahnson
and appointed K. C. Menzies, Hickory, and Charles
E. Taylor, Wilmington, in place of A. W. McLean and
W. H. Wood.
A new Advisory Commission was appointed by
Gov. Clyde R. Hoey, composed of H. D. Bateman,
Wilson; R. E. Kerr, Charlotte, and Gord.on Gray,
Winston-Salem. Governor Hoey later appointed B.
Bascom Blackwelder, Hickory, to succeed Gordon
Gray, resigned.
PROVIDES BANKING COMMISSION
The 1939 session of the General Assembly created
the State Banking Commission which superseded the
Advisory Commission to the Commissioner of Banks,
becoming effective April 1, 1939. This Commission
consists of the State Treasurer and the Attorney
General as ex officio members, the State Treasurer
to serve as Chairman of the Commission, and five
members appointed by the Governor, four of whom
are practical bankers and one a business man who
is not an executive officer of any bank, the appointive
members serving for a period of four years.
The first members of the State Banking Commis-sion
were : Chas. M. Johnson, chairman, and Harry
McMullan, ex officio members, Raleigh ; B. Bascomb
Blackwelder, secretary, Hickory; H. D. Bateman,
Wilson; R. E. Kerr, Charlotte; R. P. Holding, Smith-field
; R. C. Lewellyn, Dobson.
The last five named were appointed by Governor
Hoey, for terms of four years. Governor Broughton
later appointed Boyd B. Massagee, Hendersonville,
to succeed R. E. Kerr, resigned.
Governor Broughton reappointed all of these mem-bers
for terms of four years on April 1, 1943, and
they are serving now.
Governor R. Gregg Cherry reappointed Gurney P.
Hood, as Commissioner of Banks, and the following
members of the State Banking Commission, for terms
expiring April 1, 1951: H. D. Bateman, Wilson; B.
Bascom Blackwelder, Hickory ; R. P. Holding, Smith-field;
R. C. Lewellyn, Dobson; Boyd B. Massagee,
Hendersonville.
Ex officio members were : Chas. M. Johnson, chair-man,
State Treasurer, and Harry McMullan, Attor-ney
General. Brandon P. Hodges succeeded Chas.
M. Johnson as chairman in January 1949.
STATE'S SMALLEST BANK BUILDING
What is believed to be the smallest bank building in North
Carolina is the West Side Branch, 615-17 Hillsboro Street,
Raleigh, of the First-Citizens Bank and Trust Co., Smithfield.
The building is one-story, about 20 by 25 feet, and, needless
to say, is temporary quarters, occupied while a modern
bank building is being constructed beside it.
The new building will be 50 by 100 feet on a lot 100 feet
wide and extending through the block, Hillsboro to West
Morgan Street, about 300 feet. It will have two stories and
basement. The building will be fire-resistant, of grey brick,
steel and glass, with aluminum door and window frames.
Plenty of vault space, for cash and records, is being pro-vided.
The lobby will be 50 by 60 feet. The bank will rent
out offices on the top floor. It should open this summer.
The new building will have drive-in windows for banking
from the cars of customers, as well as extensive parking
space in the rear. Entrance will be from both Hillsboro and
Morgan Streets. In fact, the temporary small building will
be, demolished and in its space will be a driveway from
HiJ'Lsboro Street.
Winter, 1949 THE E. S. C. QUARTERLY PAGE 1 3
Notable Progress Made in State in Trust Business
Note: This article contains some of the highlights from
an address by Gilbert T. Stephenson, director, Trust Research
Department, The Graduate School of Banking, American
Bankers Association, delivered to the Trust Section, North
Carolina Bankers Association at Sedgefield Inn, October 2,
1048. His many friends in North Carolina will recall that
Mr. Stephenson was formerly closely identified with trust
business in this State and that he has followed its develop-ment
and progress through the years. He has made extensive
studies of trust business in this and other countries.
GEORGE D. VICK, Chairman, Trust
Section, N. C. Bankers Association
In very many ways North Carolina has made not-able
progress in recent years in the development of
its trust business.
TRUST LEGISLATION
This has been especially so in the field of trust
legislation. Consider the number of items of trust
legislation, favored by the Trust Division of the
American Bankers Association, which North Caro-lina
already has adopted : The prudent-man rule
for trust investment (by judicial decision in 1928,
if not earlier) ; common trust fund enabling act
(1939) ; uniform fiduciaries act (1943) ; nominee-registration
act (1939) ; uniform principal and in-come
act (1943); uniform trusts act (1939), and
court accounting act (1931).
One important item of trust legislation remaining
to be enacted is an act modernizing the canons of
descent and rules of distribution of intestate prop-erty.
In 1935, by joint resolution of the General
Assembly, a commission was appointed to make a
study of the laws of the State relating to the descent
and distribution of property of intestates, wills and
probate, the administration of estates and trusts,
and other allied matters. The commission made a
report by December 1936, in time for consideration
at the 1937 session and again in 1939 in time for con-sideration
at the 1939 session, but at both sessions it
was sidetracked.
It was hoped that the recommendations would be
considered and that action would be taken at the
1941 session. Governor Broughton, who himself
had been a trust officer for a brief period and who
had been legal adviser to a trust institution since
1922, was in favor of and hopeful that action would
be taken at the 1943 session ; but in 1943 legislation
incident to the war and war conditions kept the re-port
of the commission from being considered. This,
then, is one remaining item of unfinished business
in the field of trust legislation which possibly might
be brought up for consideration at the 1949 session
of the General Assembly.
TRUST COMPENSATION
North Carolina has been making substantial prog-ress
in the field of trust compensation. The prevail-ing
practice of its trust institutions is not to divide
their compensation with individual co-executors and
to charge the same whether serving solely or jointly.
In connection with a study made by the Trust Re-search
Department of The Graduate School of Bank-ing
on Compensation of Co-Executors and Co-Trus-tees,
to the question, Is the total compensation in-creased
by naming co-executors?, eight of the larger
trust institutions of the State answered No ; only
one, Yes. To the question, Is a single allowance
shared by co-executors?, all nine answered No.
North Carolina is making progress toward putting
trustees' compensation on a pay-as-you-go basis by
charging an annual commission on principal, in
addition to the usual annual commission on income.
When the trust institutions of North Carolina arrive
at the point, as sooner or later they will, where
people pay cash—that is, by the year—for their trust
service, as they do for so many other services, then
and only then will trust business be on a soundly
profitable basis year after year.
TRUST ASSETS
In tune with the spirit of progress of the State in
all respects, it is not surprising that within the past
30 years the trust assets of the trust institutions of
North Carolina have increased from not over $10
million in 1918 to over $210 million in 1948 (carrying
value; market value unknown)—that is, the volume
of trust business in 1948 was 21 times what it was
in 1918. There are presently 48 banks in North
Carolina, both State and National, licensed to render
trust services.
TRUST INFORMATION
Such marked progress in these three fields—trust
legislation, trust compensation, and trust assets
—
must give the trustmen of the State courage and
inspiration to take still another forward step in the
development of their trust business. It would be
such a step if the trustmen of North Carolina,
through their Trust Section, turned their attention
to the clarification and standardization of trust in-formation.
This would be for the benefit alike of
trust institutions and of the people of the State who
would become their customers if they but knew (1)
what trust services were available to them and (2)
what those services would mean to them, to their
families, to their businesses, and to their public in-stitutions—
such as schools, churches, and hospitals.
NEED FOR CLARIFICATION
First, there is need for clarification of trust in-formation.
The body of information which people
now desire about trust business is comparatively
small. The much larger body of information which
they need they will not seek or accept until they know
more about the general subject.
1. Trust needs. When people ask such elementary
questions as these—Why should I make a will? Why
PAGE 1 4 THE E. S. C. QUARTERLY WINTER, 1949
WILMINGTON SAVINGS AND TRUST CO.
Attractive interior of the Wilmington Savings and Trust
Co., a bank with a background. Chartered in 1887 and organ-ized
and opened early in 1888, the Bank of Clarendon, its prede-cessor,
had as its principal founder Henry Walters, later A.C.L.
president, along with J. M. Atkins, William Calder, W. H.
Chadbourn, A. J. deRosset, Clayton Giles, W. J. Gore, Gabriel
Holmes, Pembroke Jones, R. J. Jones, William Latimer, E. S.
Martin, G. H. Smith and J. C. Stevenson. Col. J. W. Atkinson
was first president and W. P. Toomer cashier. Capital was
$25,000. It has been located at 110 North Front Street since
1906, the present building having been erected in 1910, following
a fire. J. W. Norwood, commercial banker, headed the bank
for several years, as did Charles E. Taylor, until 1941. J. G.
Thornton, former vice-president and cashier, has been presi-dent
since 1941. The capital structure now includes $1,585,000,
with deposits of $15,621,000. Through stock dividends, the
capital has increased from $25,000 to $300,000 and dividends
of $1,426,623.68 have been paid stockholders. An original $100
investment in 1888, is now valued at $6,355.00 and has netted
$5,706.49 in dividends.
should I name a bank or trust company? Why should
I create a trust?—they do so, not because they mean
to be querulous or disagreeable, but because they
really do not realize that they have any need for the
services of a trust institution as distinct from those
of an individual. They do not know, usually, because
they never have been told in a way that impressed
them, either their need for trust service or the ad-vantages
of corporate trust service. The prime need
for the development of our trust business is not in-forming
people of their need for the services of one
trust institution rather than that of another but of
their need for the services of any trust institution.
2. Trust services. People should be informed as
to what trust services are available to them and to
the members of their family as individuals, to their
businesses, and to the institutions in which they are
interested and which they are supporting. Trust
institutions are rendering a grand total of over 80
different trust services. About comparatively few of
these do people know. How can one expect people to
purchase trust services they do not know exist?
One service, for example, is being rendered by
many different names. It is managing agency serv-ice.
According to a poll that was taken in the class
of Trust majors in The Graduate School of Banking,
this service goes by 31 different names in the insti-tutions
represented in that class. How confusing
it must be to people to hear the same service called
by so many different names.
POLICIES AND COMPENSATION
3. Trust policies. Every trust institution must
have a set of trust policies—that is, settled and
definite courses of procedure for the conduct of its
trust business. But comparatively few trust insti-tutions
yet have reduced their general trust policies
to writing or made a statement of them available to
people. For example, it is the general policy of
every trust institution in North Carolina to employ
the lawyer who drew the will or the family lawyer
for any legal work needed in settling the estate.
But few, if any, trust institutions of the State have
said just that either to the general public or to law-yers
themselves.
4. Trust compensation. It is true that no trust
institution can tell any one what it will cost to settle
his estate or to administer his trust under will, for
the allowance is within the discretion of the court.
But any trust institution can tell anyone the sub-stance
of the statute governing the executor's com-pensation
and what the court actually has allowed
executors in estates of a given size and character.
The same is true of guardianships and of all court
accounts, for in all these accounts the fiduciary's
compensation is an allowance made by the court.
But, when it comes to compensation for living
trusts, managing agencies, and for all other contract
accounts, any and every trust institution can be
definite. That is to say, its board of directors can
adopt schedules of compensation for usual services,
make provision for additional compensation for
specified unusual services, and leave the way open
for adjustments upward or downward as time goes
on.
5. Trust powers. The quality of a fiduciary's
service depends largely upon its powers. Only actual
experience over a long period of time and under
various circumstances can reveal the powers that a
fiduciary must have if it is to be under the best
quality of service. All the leading specialists in
estate planning—Rene Wormser and Mayo Shattuck,
for just two examples—stress the importance of
executors and trustees having broad discretionary
powers. The trust institution, drawing upon its
long experience in handling estates and trusts, knows
what those powers should be and, if these powers are
called to their attention at the time, the draftsmen
of wills and trust agreements are glad to incorporate
them in their instruments. Otherwise, they are like-ly
to omit them and to leave the trust institution
handicapped by lack of adequate powers.
These five points—needs, services, policies, com-pensation,
and powers—illustrate the need for fur-ther
clarification of trust information. But, as illus-
Winter, 1949 THE E. S. C. QUARTERLY PAGE 15
trated by the names for managing agencies, there is
need not only for clarification but also for standard-ization.
STANDARDIZATION OF SERVICES
No matter what trust institution disseminated it,
a great deal of trust information would be the same.
Consider, one after another, each of the five points
just discussed. Trust institutions present the same
reasons why they should be patronized—that is,
people's needs for their services. No trust institu-tion
has or could have a monopoly of any trust serv-ice.
All trust institutions are rendering or are
authorized to render similar trust services. The gen-eral
trust policies of all trust institutions of a given
state may be and should be substantially the same.
They even might be the same for all the trust insti-tutions
of the country but for the difference in state
laws and procedures. On account of the restrictions
imposed by the anti-trust acts, in contract accounts
trust compensation cannot be a matter of agreement
by trust institutions because agreements might vio-late
these acts. But in court accounts the controlling
statute as to executors' compensation is the same for
all trust institutions and actual allowances made by
courts are public information. The same trust pow-ers
in similar cases are needed by all trust institu-tions.
In Florida, under its Trust Administration
Act of 1941, these powers have been incorporated in
a statute, and every fiduciary possesses them unless
the instrument otherwise provides.
Grant that further clarification and standardiza-tion
of trust information is desirable. Who is to
take the initiative—the individual institution or the
Trust Section of the North Carolina Bankers Asso-ciation?
It should be the Trust Section. On this
assumption, the following outline of procedure for
the Section is suggested as another forward step for
North Carolina trust business
:
RECOMMENDATIONS FOR ACTION
1. Authorize the Chairman either to appoint a
special committee on Trust Information or to assign
additional functions to some existing committee;
2. Assign to the committee the duty of preparing
(a) a statement of the basic needs for the services
of trust institutions, (b) a statement listing and
describing briefly in non-technical language the
services of trust institutions, (c) a statement of
general trust policies, (d) a statement of trust pow-ers,
and (e) a statement suggesting, not the sched-ules,
but the form of statement the board of directors
of any trust institution might make regarding trust
compensation
;
3. After approval by the Section, make these five
statements, either in printed form or otherwise,
available to each of the trust institutions of the
State
;
4. Recommend to each trust institution that it re-quest
its board of directors, using these statements
as a guide, to adopt its own statements regarding
needs, services, policies, compensation, and powers
and that it add to these statements information about
the trust institution itself—such as its historical
background as a trust institution and its directors,
officers, and trust committee
;
5. Recommend to each trust institution whose
board adopts such statements that it prepare and
publish a pamphlet (in further aid of standardiza-tion,
call it the official pamphlet of its trust depart-ment)
containing all this information and make the
pamphlet available to members of the institution's
own directorate and employed staff, to lawyers, to
life insurance men, to accountants, and to those
prospective customers who, in the judgment of the
trust institution, are ready for the authoritative in-formation
contained in the pamphlet
;
INFORMATION FOR PUBLIC
6. Recommend to each trust institution that it
draw and keep a sharp distinction between this pam-phlet
and all current advertising material; that it
regard the pamphlet as of a class with the bank's
published statement of condition.
The step suggested is not new or untried. The
Trust Division of the Illinois Bankers Association
and Group II of the Pennsylvania Bankers Associa-tion
have prepared and made available to their mem-ber
institutions typical models.
Grant that ultimate responsibility for the dissemi-nation
of trust information to the general public and
among selected groups of people rests upon indi-vidual
trust institutions. None the less, a large
share of responsibility for clarifying and standard-izing
trust information rests upon the Trust Section.
Is it not a primary responsibility of the Section to
take the initiative in making trust words and phrases
mean the same thing to all people ; to help all people
to understand what they mean ; and to promote har-mony,
consistency, and sufficiency in the messages
of trust institutions to the people of North Carolina?
S. B. MIDYETTE, JACKSON, NEW
COMM5SSBONER; SUCCEEDS COWAN
Samuel Buxton Midyette, prominent Jackson at-torney,
was appointed by Governor Cherry as a new
member of the Employment Security Commission,
to succeed Judge C. E. Cowan, Morganton, whose
health did not permit him to attend to the duties of
the position. He was administered the oath of office
by Associate Justice W. A. Devin in the Justice
Building at 9 :30 on December 16, in the presence of
other members of the Commission and friends. Later
Mr. Midyette attended the regular meeting of the
Commission.
Mr. Midyette is a law partner of Archie Gay in
the firm of Gay and Midyette at Jackson. He stud-ied
law at the UNC Law School and was granted
license to practice August 22, 1927, and has appeared
in many important cases in the intervening years.
Mr. Midyette was a son of the late Judge Garland
E. Midyette.
PAGE 16 THE E. S. C. QUARTERLY WINTER, 1949
Charlotte Branch, Federal Reserve Bank of Richmond
(Contributed)
In March 1927 the Federal Reserve Board (now
the Board of Governors of the Federal Reserve Sys-tem)
authorized the establishment of a branch of
the Federal Reserve Bank of Richmond at Charlotte,
North Carolina. This announcement marked the
culmination of three years of untiring effort on the
part of a host of prominent North and South Caro-lina
bankers to have a branch Federal Reserve bank
established in the Carolinas. While several cities
were competing for the location, their individual
interests were submerged in the joint effort to obtain
approval of a branch for this section. In the end
Charlotte was selected as the site by reason of its
geographical location, mail facilities and importance
as a financial center.
W. H. Wood, then President of the American
Trust Co., Charlotte, and now honorary chairman of
the board, was chairman of the committee of bankers
from the two states and is recognized as one of those
most responsible for obtaining the establishment of
a branch in the Carolinas. The influence of Robert
Lassiter, Charlotte, who at that time was a member
of the Board of Directors of the Federal Reserve Bank
of Richmond and later became Chairman and Fed-eral
Reserve Agent, was equally important.
FIRST OFFICERS AND DIRECTORS
Following approval by the Federal Reserve Board,
suitable quarters had to be found, the staff selected
and many organizational details completed before
the branch could be established. After several
months of planning, the Charlotte Branch opened
for business on December 1, 1927 with offices on the
twentieth floor of the First National Bank Building
(now the Liberty Life Building) and with vaults
and storage space in the basement of the same build-ing.
There were 54 employees, 28 of whom were
transferred from the Richmond bank. Hugh Leach,
now President of the Federal Reserve Bank of Rich-mond,
was the first officer in charge of the Charlotte
Branch and had the title of Managing Director. W.
T. Clements was the first Cashier, later becoming
Managing Director.
The members of the original Board of Directors
were: W. H. Wood of Charlotte; W. J. Roddey of
Rock Hill, S. C; John L. Morehead of Charlotte;
Charles A. Cannon of Concord, N. C. ; Robert Gage
of Chester, S. C. ; John A. Law of Spartanburg, S. C.
;
and Hugh Leach. Other former directors are : C. L.
Cobb of Rock Hill, S. C. ; F. F. Beattie of Greenville,
S. C. ; George S. Harris of Lancaster, S. C. ; Christie
Benet of Columbia, S. C. ; R. E. Henry of Greenville,
S. C. ; George M. Wright of Great Falls, S. C. ; B. M.
Edwards of Columbia, S. C. ; T. E. Hemby of Char-lotte;
J. G. Cowan of Asheville, N. C; D. W. Wat-kins,
of Clemson, S. C. ; Charles L. Creech of Win-
Beautiful new building of the Charlotte Branch, Federal Re-serve
Bank of Richmond—see description in
accompanying article.
ston-Salem, N. C. ; D. P. Tillett of Charlotte; Angus
E. Bird of Columbia, S. C. ; and W. T. Clements.
DIRECTORS OF VARIED INTERESTS
The composition of the Board of Directors is in-teresting
and unique. There are seven members,
four of whom are actively engaged in banking and
are appointed by the Board of Directors of the Fed-eral
Reserve Bank of Richmond, while three are
representative of commerce, industry and agricul-ture
and are appointed by the Board of Governors
of the Federal Reserve System. Members of the
Board must be persons whose business and financial
interests are primarily within and are representative
of the territory served by the branch. A member,
after serving two full terms of three years each, is
not eligible for reappointment, thus assuring an
orderly rotation of branch directorships and a broad
representation of business interests, at the same time
retaining a high level of continuity. A glance over
the list of present and former directors will serve
to impress one with the extraordinary talent that
has been represented on the Charlotte Branch Board.
The territory originally assigned to the branch
by the Board of Directors of the Federal Reserve
Bank of Richmond embraced 55 counties in the west-ern
half of the two states, 34 in North Carolina and
21 in South Carolina. The counties on the eastern
Winter, 1949 THE E. S. C. QUARTERLY PAGE 1 7
border of the territory were Alleghany, Wilkes, Ire-dell,
Rowan, Stanly and Union in North Carolina,
and Lancaster, Fairfield, Richland, Lexington and
Aiken in South Carolina. Generally speaking, the
territory thus assigned was limited to those points
which could be served more quickly from Charlotte
than from Richmond.
TERRITORY ENLARGED
On July 1, 1940, 16 additional counties in North
Carolina were transferred from the Head Office to
the Charlotte Branch, extending the branch terri-tory
farther eastward to include the border counties
of Rockingham, Alamance, Chatham, Lee, Moore
and Richmond. Thus, the entire industrial Pied-mont
area of the two states is located within the
Charlotte Branch territory.
Among its important functions and services, the
Charlotte Branch maintains the reserve accounts of
its member banks, receives for collection checks on
all par remitting banks and effects the clearance
thereof, supplies member banks with the currency
and coin required and receives surplus currency and
coin from them, makes loans to member banks, col-lects
notes, drafts and other non-cash items, trans-fers
funds by wire and provides safekeeping facil-ities.
In addition, many fiscal agency functions are
performed for the United States Government, in-cluding
the issuance, exchange and redemption of
U. S. Treasury securities of all kinds. During the
war period fiscal agency work was the largest single
operation performed but this activity has declined
considerably since the war ended. At the peak of
activity on June 30, 1944, the total number of em-ployees
in the branch was 291, of which 146 were
engaged in fiscal agency work.
BIG INCREASE IN ACTIVITIES
A comparison of certain important volume opera-tions
of the branch during 1928, the first full year
of operation, and 1948 is given below:
1928 1948
Number of checks handled 6,589,000 24,906,000
Amount of checks handled $1 ,691,921,000 $11,603,754,000
Money receipts $48,600,823 297,512,137
Money disbursements $42,621,685 $276,304,960
Average daily amount of
members' reserve deposits $7,852,980 $144,448,221
Number of officers and
employees at end of year 56 179
These comparative figures testify to the remark-able
growth in the volume of transactions handled
by this branch, paralleling the growth in importance
of Charlotte and the two Carolinas economically.
The comparison further reflects the important influ-ence
of the Federal Reserve Bank in the gains made
in Charlotte and the rest of the territory in the last
two decades. For example, in 1927 the total com-mercial
banking resources in Charlotte were $56,-
000,000 ; whereas at the end of 1948 they were
$268,000,000, exclusive of a branch of an out-of-town
member bank having aggregate resources of
$283,000,000.
Significantly, Charlotte is one of the smallest cities
in which a Federal Reserve bank or branch is located
and this office was the last branch to be established.
In volume of principal operations and size of staff,
however, the Charlotte Branch is well above the mid-point
among the 24 branches, a further indication
of the business activity within and the economic
importance of this territory.
MODERN NEW BUILDING
On January 20, 1942, the Charlotte Branch occu-pied
its new building which consists of three stories
and a basement and is situated at the corner of
Tryon and Second streets, within two blocks of the
center of the financial district. In architectural de-sign
the building comes from an ancient period of
the severe type, depending upon mass and propor-tion
for its effect rather than upon columns, pilasters
or architectural detail. The exterior is of Indiana
limestone, above a base of North Carolina granite,
and is unrelieved except for the accents given by the
entrances and the simply fluted frieze and parapet.
The building is set back from the street lines to give
space for the foundation planting for the low step&
flanked by great urns at the main doorway. The pub-lic
lobby is designed in a simplified modern treat-ment
of classic architecture, with walls of limestone,
floor of Tennessee marble and grilles, guard tower,
doors and trim of polished bronze. Fluorescent light-ing
has been used in this lobby and in all other prin-cipal
portions of the first floor. The cooling system
was completed in the spring of 1948 and the building
is now air conditioned throughout.
Members of the Board of Directors for 1949 are:
N. S. Calhoun, Greensboro; Allen H. Sims, Gastonia;
R. Flake Shaw, Greensboro; W. A. L. Sibley, Union,
S. C; George S. Crouch, Charlotte; R. E. Ebert,
Greenville, S. C, and Thomas J. Robertson, Colum-bia,
S. C. The official staff consists of R. L. Cherry,
vice president of the Federal Reserve Bank of Rich-mond
and officer in charge of the branch, S. A. Ligon,
cashier, and R. L. Honeycutt and E. C. Mondy, as-sistant
cashiers.
Since it was created, as of April 1, 1939, the State
Banking Commission has considered 118 applications
affecting additional banking facilities in the State.
Of these, it has approved 109 and disapproved 9
applications.
At its meeting January 19, 1949, the State Bank-ing
Commission approved the applications of the
American Trust Co. and the Wachovia Bank and
Trust Co. to open one additional branch each in
Charlotte ; authorized the Bank of Davidson to open
and operate a branch at Mount Pleasant ; authorized
the Bank of Charlotte to convert from an industrial
to a commercial bank ; authorized the opening of a
new bank in Lexington, the Lexington State Bank.
An application to open a new industrial bank in
Elizabeth City, the Bank of Elizabeth City, was dis-approved.
PAGE 18 THE E. S. G. QUARTERLY Winter, 1949
Incidents in 15-Year Banking Span in North Carolina
By John G. Allen, State Bank Examiner, State Banking Commission
North Carolina's progress in a banking way has
attracted national attention, as is attested by the
selection of outstanding North Carolinians to head
some of the most prominent banking organizations
in our nation during the past few years.
Robert M. Hanes, as president of the American
Bankers Association.
Gurney P. Hood as president of the National As-sociation
of State Bank Supervisors.
W. H. Neal, as president of the Financial Adver-tisers
Association of America.
William P. Folger, as Chief National Bank Exam-iner.
John Nichols (deceased) as the first chief of the
Examining Division of the Federal Deposit Insur-ance
Corporation.
Beginning with "low tide" in banking resources,
reported as $188,215,443.47 on the "call report" of
June 30, 1933, our resources steadily climbed, year
by year, until the "call report" on June 30, 1948,
when they totaled $1,341,922,154.41.
One North Carolina banking institution on June
30, 1948, had more resources than all of the banks
under Commissioner Hood's supervision 15 years
prior to that time—on June 30, 1933.
The intervening period between the depression
years and the present time has witnessed some seri-ous,
some amusing, and some absolutely ludicrous
actions and situations in connection with our banks.
Too, this good State of ours has scored some notable
"firsts".
CLOSED AND REOPENED—LATE
When President Roosevelt in March, 1933, ordered
all of our banks closed—generally referred to as the
"banking holiday", only one bank in the entire United
States remained open. It was a North Carolina
bank, located at Engelhard. That bank did not defy
the President's order—they were over two days late
in receiving it, as Engelhard at that time had no
paved roads entering the town, no telephone or tele-graph
lines, and no electricity. This same bank was
about two days late in re-opening, and for the reasons
stated.
The Federal Deposit Insurance Corporation began
to function on January 1, 1934. The smallest insti-tution
ever to apply for admission to the protection
of that organization was a North Carolina bank,
located at Stokesdale. That bank at the time of its
application for membership in the Federal Deposit
Insurance Corporation had deposits of less than
$5,000. It took extra earnest pleadings on the part
of Commissioner Hood to bring the Federal Deposit
Directors around to belief in his repeated statements
that the Commercial Bank of Stokesdale was as
necessary to the welfare of the Stokesdale commun-ity
as was the Chase National Bank to New York
City, or the First National Bank, to Boston. The
bank was finally admitted, and since then has seen
its deposits grow to over $750,000.
Oftentimes, particularly during the past few years
while banks have been almost bursting their seams
with hordes of deposits, there has been a hue and
cry from some non-thinking bankers and short-sighted
individuals, over what they call a multiplicity
of examining agencies—an apparent duplication of
State and National efforts along that line. However,
if State supervision is ever abolished, banks will then
lose a most potent force highly in their favor—
a
State agency, thoroughly familiar and completely
sympathetic with their desires and aims.
FIRST IN BANKING CONFERENCES
One banking institution in our State at the depth
of the depression, notified the Commissioner of Banks
one Saturday afternoon that the bank would be un-able
to open for business on the following Monday
morning, and requested the Commissioner to send a
liquidating agent to take charge. This agent was
appointed and instructed to go to the bank on Mon-day
morning and take charge in accordance with
our laws. But the head of the bank, after thinking
about his institution over the Sabbath decided he
would make one last and desperate fight to keep his
nose above water. His resolve paid off big. His
bank is operating today, is making money, is serving
the community in a fine way, and no doubt this fight-ing
resolve has added glorious years to the life span
of its president.
North Carolina in 1937 was the first State in the
Union to establish banking conferences—that is,
Summer Schools where bankers could meet and be
instructed by national authorities on better banking
along all lines. This move has spread over the en-tire
nation. Last year 18 such conferences were
held, with some States joining with others in pro-moting
a joint conference—as South Carolina did
with North Carolina.
LARGEST NEGRO BANK IN WORLD*
In this connection it might be pointed out that
North Carolina has the largest Negro bank in the
world—the Mechanics and Farmers Bank, with
headquarters in Durham and a branch in Raleigh.
When the newspapers reported that a bankers con-ference
was to be held at Chapel Hill, representatives
of that bank came immediately to the Commissioner
of Banks and inquired as to their connection with
such a school. The Commissioner conferred with the
University authorities, and the North Carolina Bank-ers
Association—those two agencies and the State'
Banking Commission sponsor the conferences. From
no quarter whatever was there any objection to
"students" from the Mechanics and Farmers Bank
Reports Dec. 31, 1948, show a Washington Negro bank
topped this bank by a few thousand dollars.
Winter, 1949 THE E. S. C. QUARTERLY PAGE 19
attending the banking- schools at our University. For
every year—twelve consecutive years now—their
representatives have attended such classes. Incident-ally,
the President of the Mechanics and Farmers
Bank, C. C. Spaulding, was recently unanimously
elected a Vice President of the American Bible
Society.
One more incident in connection with the Mechan-ics
and Farmers Bank. One morning about 3 o'clock
during the banking holiday (March, 1933)—the
Banking Department remained open 24 hours per
day during that period—three representatives from
the bank came to the Department and presented the
Commissioner a letter from one of the wealthiest
men in our State. This letter stated that if it be-came
necessary to rehabilitate the capital structure
of the bank, the communication presented would be
honored for $100,000. The Commissioner read the
letter, then turned to the three representatives and
said
:
"Go back to Durham and rest easy. However, if
you are not true to the trust imposed by this letter,
you can rest assured that the ship transporting you
three as runaways to Liberia will have me on board
as a stowaway."
They have not become runaways, nor has Commis-sioner
Hood been a stowaway. Instead, the bank
has steadily increased in knowledge of management,
and in total resources.
TWO UNUSUAL PRESIDENTS
North Carolina has two most unique bank presi-dents—
J. T. Bowman, President of the Union Trust
Company, Shelby, who is over 94 years of age, and
is the oldest bank president in the United States,
and R. L. McWhirter, President of the State Bank
of Wingate. The latter has no legs, yet is quite
active in connection with the bank as well as his own
private business. A short while ago, in endeavoring
to aid a neighbor with a stalled truck, he lost both
legs by having another truck crash into the stalled
machine on which he was working. Mr. McWhirter
has an automobile specially built with electrical but-ton
controls on the steering column. A short while
ago he picked up a hitchhiker who noticed his lack
of legs and inquired how he managed to handle the
car. Without the semblance of a smile Mr. McWhir-ter
explained that through the development of elec-tronics
and radar during the last world war his car
was controlled by his voice : that he could say "Whoa"
and the car would obey him. The hitchhiker asked
for a demonstration. Mr. McWhirter promptly call-ed
out "whoa" and without being noticed pressed
the stop button, and the car slowed down and stopped.
"Well, daggone my buttons," the hitchhiker exclaim-ed,
"if I hadn't seen that with my own eyes I would-n't
believe it."
VERIFIES ASSETS AND LIABILITIES
North Carolina through its State Banking Com-mission
was the first and only supervisory authority
to attempt direct verification of banking assets and
liabilities. That is, to confirm with each depositor
and borrower by mail, a detailed statement of their
totals. This work has attracted national attention,
and is right now the subject of a nationwide research
program by the National Association of Bank Audi-tors
and Comptrollers.
Too, North Carolina was the first and only State
to completely analyze the salary list of all banks
under the supervision of the Commissioner. The
results of this survey, to the shame of banking, show
that it would be far better from a salary standpoint
for bank employees to find employment in our cotton
mills, or other industrial establishments.
There continues one marked deficiency in many
of our banking institutions today—it can mean a
deal of anguish and embarrassment—that is, the lack
of proper succession of management. Bankers must
wake up to this distinct menace.
Charlotte Mint Coined More Than $5,000,000 in Gold
The United States Branch Mint in Charlotte, open-ed
in 1837, coined more than $5,000,000 in gold be-fore
coinage of money ended with the War Between
the States. After the war, operations were resumed,
but only as an assay office, and were discontinued in
1913, when the building was closed. The building
was ordered demolished in 1932 by the Federal Gov-ernment,
but was rebuilt and now serves as the Mint
Museum of Art.
The mint in Charlotte was established by Act of
Congress March 3, 1835, at a time when the South-ern
Appalachian Region was the only gold mining-territory
in the United States. In and around Char-lotte
many gold mines were in operation. Levi Wood-bury,
Secretary of the Treasury, appointed Samuel
McComb to select a site for the building in Charlotte.
McComb purchased a full square on West Trade
Street, containing almost four acres, from William
Carson and F. L. Smith for $1,500.
William Strickland, Philadelphia, was the archi-tect
and Perry and Ligon, Raleigh, were the con-tractors.
The building was completed and machin-ery
installed for opening in December, 1837. Col.
John Hill Wheeler, author of Wheeler's History of
North Carolina, and son-in-law of Thomas Sully, the
noted painter, was the first superintendent and Dr.
John H. Gibbon was the first assayer.
On July 27, 1844, a fire almost completely destroy-ed
the building and machinery, but it was recon-structed
on the same architectural plan and reopened
for business two years later. During the War Be-tween
the States operations were suspended and the
building was used as district headquarters for the
Confederate Army. After the war the building was
PAGE 20 THE E. S. C. QUARTERLY Winter, 1949
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.
: ' ;'
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The Mint Museum of Art, Charlotte, reconstructed on another
site from the United States Branch Mint in Charlotte, long
called the "Old Mint Building", which coined more than $5,000,-
000 in gold.
reopened, but for assaying gold only. No further
minting was done. Discovery of gold in California
in 1849 had greatly reduced the importance of the
Charlotte Mint. In 1913 the Federal Government
decided to discontinue the branch and the building
was closed.
Meanwhile, in 1901, Thomas A. Edison, famed
inventor, came to Charlotte to make a study of gold
in the South and worked for two years in the Mint
Building, making experiments in the process of sep-arating
gold from ore by means of electricity. He
became discouraged because he found that gold did
not exist in sufficient quantities in the area to war-rant
the kind of operations in which he was inter-ested.
During World War I and in the years that fol-lowed
the "Old Mint Building" was used as head-quarters
for the American Red Cross and as head-quarters
for the employment office in Charlotte.
Later it was the meeting place for the Charlotte
Woman's Club. Other civic and governmental activ-ities
were carried on in the building.
Meanwhile, lots had been sold off the western side
of the square for residence and business purpose,
and the Charlotte postoffice had been erected on the
eastern side. When ground on which the "Old Mint
Building" stood was needed for expansion and en-largement
of the postoffice, the government ordered
its demolition.
Then Charlotte citizens got busy in an effort to
save the building. The Mint Museum Society was
formed February 14, 1933, by a small group. Four
days later the Art Department of the Charlotte
Woman's Club had an enthusiastic meeting. Plans
of the building had been drawn before the demoli-tion
started. A few days later a beautiful lot, with
a 20-acre park as a background, located in the East-over
section of Charlotte, was donated to the Mint
Art Society. A group of 64 citizens contributed
$1,500 to purchase the material in the old building.
Through the Public Works Program of the Federal
Government the work of rebuilding the "Old Mint
Building" on the new site was started in December,
1933, and completed October 22, 1936, with notable
inaugural ceremonies. A fund was raised to insure
permanence of the building as the home for the Mint
Museum of Art. Donations of numbers of fine works
of art have been made by donors all over the country.
By no means the least of the accomplishments of
the organization is the preservation of the Mint
Building, itself a work of art. Important also is the
large spread eagle over the door, the emblem used
for the building when it was in operation as a mint.
The accompanying picture is of the building as it
was reconstructed, true to the original, in its new
setting.—M. R. D.
N. C. BANKERS EARN NATIONAL
HONORS IN AGRICULTURAL WORK
(News Item—1948)
Detroit, Mich., Sept. 27—The North Carolina
Bankers Association today was presented the 1,000-
point rating award of the ABA agricultural commis-sion
at the first general session here of the 74th an-nual
convention of the American Bankers Associa-tion.
The award was presented to the North Carolina
association in recognition of the high quality of
regular bank services provided for the farmers of
North Carolina, as well as for special activities con-ducted
by the association's member banks in the
agricultural field during the past year. This is the
fourth consecutive year the North Carolina bankers
have received this award.
Especially cited in the award was the North Caro-lina
Association's promotion of soil conservation.
During the year, the association sponsored public
speaking contests on soil conservation and presented
prizes to winners in each school, county, district and
for the State as a whole. Other activities included
cooperation with 4-H clubs and other farm and youth
organizations, and sponsoring of livestock shows
throughout the State. In many sections, banks pur-chased
baby beef cattle and pigs to encourage 4-H
Club members.
Members of the North Carolina Bankers Associa-tion's
agriculture committee are: John P. Stedman
of Lumberton ; Paul Edmonds, Gatesville ; C. Thomas
Fawcett, Mt. Airy; Roy Griffin, Woodland; Harry
Gurganus, Washington; Gordon Hunter, Roxboro;
T. H. LeCroy, Rocky Mount; Carl McCraw, Char-lotte;
Robert Prince, Fuquay Springs; Clyde L.
Stutts, Laurel Hill ; Jonathan Woody, Waynesville.
Winter, 1949 THE E. S. C. QUARTERLY PAGE 2 1
Banking is $2,000,000,000 Business in North Carolina
By M. R. Dunnagan, Informational Service Representative, ESC
North Carolina banks had total assets of $2,007,-
105,755.73, at the close of business December 31,
1947, an increase of almost $43,000,000 over total
assets one year before.
These assets were included in the assets of 306
State commercial banks and branches, 29 industrial
banks and 60 national banks and branches. During
the year 1948, commercial banks and branches in-creased
by 14 units and national banks and branches
increased by three units. Action of the State Bank-ing
Commission in its January meeting, made slight
changes in these figures.
Breakdown of the assets as of December 31, 1947,
shows that State commercial banks and branches
have assets of $1,432,744,773.53; State industrial
banks showed assets of $51,433,982.20 and national
banks and branches showed assets of $522,927,000.
It is interesting to note that aggregate resources of
all North Carolina State commercial banks, exclusive
of industrial banks, increased from $356,580,153.53
at the end of 1938 to $1,432,744,773.53 at the end of
1947, an increase of 302 per cent, in the ten year
period. In the same period the assets of industrial
banks increased from $18,739,355.32 to $51,433,-
982.20, an increase of 175 per cent. In addition,
trust assets in North Carolina State banks increased
from $78,838,489.67 at the end of 1938 to $207,524,-
220.56 at the end of 1947, an increase of 163 per cent.
While preferred stock in North Carolina State
commercial banks decreased from $986,500 at the
end of 1946 to $721,300 at the end of 1947, common
stock in such banks in the same period increased
from $16,541,850 to $17,117,050, while surplus was
increased from $33,157,275 to $36,865,212.14.
During the year 1947, total deposits in State com-mercial
banks increased from $1,323,962,545.57 to
$1,349,440,034.33, a net increase of $25,477,488.76;
in the same year total deposits of industrial banks
increased from $34,413,988.50 to $43,246,660.00, a
net increase of $8,832,671.50.
North Carolina had 159 banks or banking systems
in 1947 that were subject to the Employment Secur-ity
Law; that is, those that had eight or more em-ployees.
The average number employed in these
banks for the year 1947 was 4,142, and total wages
paid them during that year amounted to $10,591,-
652.00, an average weekly wage of $41.18, including
all employees from janitor to president. Figures for
1948, not yet available, should show some increase in
banks reporting on their employment.
Details of the operations of a dozen of the State's
largest banks, are given in items which follow. A
complete list of all of the banks operated within the
State will also be found in this issue. Other odd and
interesting details about banks and banking in the
State are also recorded.
WACHOVIA BANK AND TRUST CO.
Winston-Salem, N. C.
The Wachovia Bank and Trust Co., Winston-Salem,
with branches in Raleigh, Asheville, Charlotte, High
Point and Salisbury, is North Carolina's largest
banking institution and one of the largest in the
entire Southeast.
Legally the Wachovia Bank and Trust Co. had its
beginning in June 1879 when the Wachovia National
Bank opened for business in the small town of Win-ston,
many years before that town and Salem were
consolidated. Actually Wachovia goes back to 1866
when the First National Bank of Salem was estab-lished
as one of the first banks in the South, follow-ing
the enactment of the national banking law. How-ever,
prior to the War Between the States, Salem
branch of the old Cape Fear Bank, with headquarters
in Wilmington, was established in 1848 with Israel
G. Lash as president and C. L. Rights as cashier. All
banks of the State were closed at the outbreak of
the war.
Mr. Lash organized the First National Bank of
Salem immediately following the war. In 1879 the
directors of the First National Bank of Salem, head-ed
by William A. Lemly, decided to move the bank
from Salem to Winston. Since Winston already had
the First National Bank of Winston it became neces-sary
to change the name. The charter of the First
National Bank of Salem was surrendered, a new
charter for the Wachovia National Bank of Winston
was secured, the bank was moved a few blocks up
Main Street and opened for business.
First officers of the new bank were W. F. Bowman,
president ; Mr. Lemly, cashier, and James A. Gray,
assistant cashier; the directors were Mr. Bowman,
Mr. Lemly, Mr. Gray, J. C. Buxton, Eugene E. Gray,
W. A. Lash, W. D. Sullivan and J. W. Hunter. This
bank started business with a capital of $100,000,
WACHOVIA IS FROM WACHAU,
NAME OF LAND OF MORAVIANS
The name "Wachovia" in the Wachovia Bank & Trust
Co., Winston-Salem, is distinctive and had an interesting
origin.
The word is pronounced Waw-ko'-via, accent on the 'o'.
It had its origin in the Austrian word Wachau, which de-scribes
the terrain, hills, streams and other topographical
features of the large tract of land selected for a settlement,
surrounding and including the present site of Winston-
Salem, in 1753 by members of the early Moravian Church.
The name was also the name of an estate in Southern
Austria, formerly belonging to the family of Count Zinzen-dorf,
who aided the Moravians in securing the site in the
Upper Piedmont area of North Carolina. The original word
was hard for any except the older settlers to pronounce, so
the English version of Wachovia soon came into common
usage.
Facetiously, it has been described as a contraction and
variation of "Watch-over-you".
PAGE 22 THE E. S. C. QUARTERLY Winter, 1949
increased in about two months to $150,000. In 1888
the bank's quarters were moved half a block and
occupied a three story building at the corner of Main
and Third Streets, the site now occupied by the main
office of the Wachovia Bank and Trust Co.
In 1893 Colonel F. H. Fries and associates organ-ized
the Wachovia Loan and Trust Co. and opened
for business in a small building on Main Street,
formerly used as a Chinese laundry. Associated
with Colonel Fries in its establishment was Henry
F. Shaffner. Other associates as directors were
James A. Gray, J. E. Gilmer, C. H. Fogle, J. C. Bux-ton,
J. H. Millis, T. L. Vaughn and R. J. Reynolds.
This financial institution was not only a bank, it
was also a trust company, a relatively new type of
service in the South at that time. A special charter
granted by the General Assembly, authorized the
company to act as ''Executor, Trustee, Guardian,
Fiscal or Transfer Agents and in any and every
fiduciary capacity for individuals, firms and corpora-tions".
The Wachovia Loan and Trust Co. in 1902, started
an expansion program, opening branches in Ashe-ville,
High Point and Salisbury and operated an office
in Spencer until it was sold in 1914. By 1910 de-posits
of the Wachovia Loan and Trust Co. had pass-ed
the $4,000,000 mark and deposits of the Wachovia
National Bank had grown to $865,000.
Directors of these two banks, some of them direc-tors
of both banks, began plans for a consolidation.
Details were worked out and the consolidation com-pleted
in time for the institution to begin business
January 1, 1911, under the charter of the trust
company. It was then that the name was changed
to the present Wachovia Bank and Trust Co. A new
building was erected at Main and Third Streets in
March, 1911, this building was remodeled and great-ly
enlarged in 1918. The Trade Street office in Win-ston-
Salem was opened in 1919.
Realizing the need for a bank to serve the Eastern
North Carolina area, the directors in 1922, opened
a bank in Raleigh. The next year this bank took
over the Merchants National Bank of Raleigh and
in May, 1927, purchased the Tucker Building, Fay-
WACHOVIA OFFICIAL'S HOME
SAFER THAN IRON SAFE, 1893
It is hard to realize that the Wachovia Bank & Trust Co.,
with all of its millions of assets now, could have been in
financial straits in its early days, and that the small sum of
$5,000 would be sufficient to meet all demands of its de-positors.
Back in August 18 93, just 60 days after its predecessor,
the Wachovia Loan & Trust Co., had opened for business,
the peak of the so-called "Cleveland panic" hit the Winston-
Salem area. Heavy demands were made on all banks and
it was difficult to obtain money, especially gold.
Through a New York connection, the Wachovia Loan &
Trust Co. secured a shipment of $5,0 00 in gold. This was
enough to supply all demands and check the "run".
The late Henry F. Shaffner, a director and officer of the
bank from its beginning and chairman of the Wachovia
board of directors when he died in 19 41, related that he
took this gold home at night and placed it under his bed,
feeling it was safer there than in the iron safe at the bank.
Home office building of Wachovia Bank and Trust Co., Winston-
Salem, largest bank in North Carolina.
etteville and Martin Streets, as a permanent home.
This building was remodeled and occupied in 1928.
Plans for a merger with the Charlotte National
Bank were worked out and on June 19, 1939, con-solidation
was completed. The former Charlotte
National Bank Building was remodeled and rear-ranged,
giving Wachovia splendid quarters in the
financial center of the Carolinas.
Wachovia now operates twelve offices in six of
the State's larger cities, placing it in position to give
splendid financial service to the more important in-dustrial
and agricultural activities of the State. It
is the largest bank between Washington and Atlanta
and its trust business is larger in volume than that
of any other institution in the southeast.
Assets of the Wachovia Bank and Trust Co. now
exceed $283,000,000. Among its resources are
$82,000,000 in cash and due from banks, approx-imately
$85,000,000 in Federal, State, county and
municipal bonds and notes, and loans of approx-imately
$112,000,000. Wachovia has a capital stock
of $5,000,000 with approximately $12,000,000 in
surplus, undivided profits and reserves for contin-gencies.
Deposits have reached the enormous figure
of about $262,000,000. Wachovia Bank has 1,787
shareholders, 91% of whom are located in 69 North
Winter, 1949 THE E. S. C. QUARTERLY PAGE 23
Carolina counties. Several of the shareholders live
in Virginia and South Carolina. No single stock-holder
owns more than 3% of the stock. The bulk
of the stockholders live in or near the communities
in which Wachovia banks operate. Numbers of
stockholders and the amounts of stock owned, par
value, by communities, follow : Winston-Salem area,
428 stockholders, $1,785,000; Charlotte area, 302
stockholders, $829,000 ; Raleigh area, 265 stockhold-ers,
$475,000 ; High Point area, 152 stockholders,
$462,000 ; Asheville area, 131 stockholders, $345,000
and Salisbury area, 117 stockholders, $300,000.
Colonel Fries was elected president of the Wacho-via
Bank at the time of the consolidation in 1911. He
continued to direct the affairs of the bank until his
death in 1931. James A. Gray was elected vice-president
and continued to serve until his death in
1918. H. F. Shaffner, an official of the bank for
many years, was elected chairman of the Board of
Directors in 1931, serving until his death in 1941.
Robert M. Hanes was elected president of Wacho-via
following the death of Colonel Fries. Previous
to his elevation to president, he had operated the
Crystal Ice and Coal Co. for a few years following
his graduation from the University of North Caro-lina.
During the 18 years of his leadership, his re-markable
executive abilities have been demonstrated
many times. His reputation had broadened to such
an extent that in 1939 he was elected and served as
president of the American Bankers Association. A
combination of his administrative ability and the
times have brought the greatest period of expansion
and enlargement of Wachovia.
A list of the directors of Wachovia reads like a
roster of "Who's Who" in industrial, financial, busi-ness
and professional circles in Winston-Salem and
other cities in which Wachovia operates. It includes
A. H. Bahnson, Thurmond Chatham, Bowman Gray,
James A. Gray, J. G. Hanes, P. H. Hanes, R. M.
Hanes, T. Holt Haywood, C. T. Leinbach, Joe S. Rice,
Richard G. Stockton, B. S. Womble, all of Winston-
Salem; R. T. Amos, High Point; J. Melville Brough-ton,
Raleigh; Stuart W. Cramer, Jr., Cramerton;
Harry L. Dalton, Philadelphia; E. Hervey Evans,
Laurinburg; James S. Ficklen, Greenville; Edwin L.
Jones, Charlotte; Millard F. Jones, Rocky Mount;
Stahle Linn, Salisbury; J. E. Millis, High Point; R.
Grady Rankin, Gastonia ; W. Y. Preyer, Greensboro
;
and directors emeritus: W. H. Belk, Charlotte;
Thomas Barber and E. W. O'Hanlon, Winston-Salem,
and Reuben B. Robertson, Sr., Canton.
General officers in the home bank are: President
Hanes ; R. G. Stockton, senior vice-president and sen-ior
trust officer ; Thomas Barber, William H. Neal,
Paul N. Montague and Walter L. Webb, senior vice-presidents
; Frank J. Wolfe, vice-president ; Clarkson
S. Starbuck, treasurer ; Robert F. Goodwin, comp-troller,
and Edward T. Shipley, auditor.
Principal officers and members of the board of the
Wachovia Banks in other cities are as follows
:
UNIT OFFICERS AND DIRECTORS
Asheville Office: J. Gerald Cowan, senior vice-president;
John W. Spicer and C. G. Pickard, vice-presidents; Board
Members: J. Gerald Cowan, chairman; Tench C. Coxe, Jr.,
J. D. Earle, R. Lee Ellis, Harvey M. Heywood, F. E. Lykes,
Robert F. Phillips, C. G. Pickard, Verne Rhoades, Reuben B.
Robertson, Sr., John W. Spicer and D. C. Waddell, Jr.
Charlotte Office: John F. Watlington, senior vice-presi-dent;
Courtney R. Mauzy and Archie W. McLean, vice-presidents;
Board Members: John F. Watlington, chair-man;
W. H. Belk, James A. Bell, J. H. Bridges, J. E. Broy-hill,
John G. Bryce, Harry L. Dalton, W. Doak Flintom, R. O.
Huffman, Edwin L. Jones, Henry A. Lineberger, B. F.
Mathews, Courtney R. Mauzy, W. B. McClintock, Archie W.
McLean, W. Bryan Moore, Charles F. Myers, Jr., E. A. Ter-rell
and Charles A. Williams, Jr.
Salisbury Office: J. L. Fisher, W. F. Snider and Paul
Wright, Jr., vice-presidents; Board Members: J. L. Fisher,
chairman; John R. Crawford, Jr., J. F. Hurley, C. W. Isen-hour,
Stahle Linn, John W. Lippels, J. P. Mattox, A. G.
Peeler, C. F. Raney, Miles J. Smith, W. F. Snider, Charles
H. Wentz, and Paul Wright, Jr.
Raleigh Office: George P. Geoghegan, Jr., senior vice-president;
LeRoy B. Martin, H. J. Plonk, R. Lee Covington,
L. M. Agnew and Henry W. Harris, vice-presidents; Board
Members: William T. Joyner, chairman; John C. Brantley,
James H. Clark, Marshall Y. Cooper, A. E. Finley, George
P. Geoghegan, Jr., Irving F. Hall, Leo H. Harvey, H. Clar-ence
Howell, Karl G. Hudson, N. H. McLeod, LeRoy B.
Martin, Emil Rosenthal, Raymond B. Streb and Alfred
Williams.
High Point Office: Brant R. Snavely, J. P. Bolt, Arthur M.
Utley and S. C. Kirkman, vice-presidents; Board Members:
J. E. Millis, chairman; J. Roscoe Adams, R. T. Amos, N. M.
Ayers, J. P. Bolt, J. Sanders Dallas, H. F. Hunsucker, W. C.
Idol, I. P. Ingle, C. T. Ingram, O. A. Kirkman, S. C. Kirk-man,
J. W. Lindsay, H. A. Millis, W. T. Powell, Owen Reese,
Brant R. Snavely and Arthur M. Utley.
Winston-Salem Office: Banking Department: Clarence T.
Leinbach and Archie K. Davis, senior vice-presidents; Wil-fred
P. Rainey, Claude C. Armfleld, Coleman C. Walker and
J. B. Wahmann, vice-presidents; Trust Department: Car-lysle
A. Bethel, Ray Johnson, Charles F. Matton, Charles
E. Norfleet and Charles E. Wood, Jr., vice-presidents and
trust officers; Irving S. Bull, secretary and trust officer;
Trade Street Office: Leon Lentz, vice-president; Board Mem-bers:
Irving E. Carlyle, chairman; Albert L. Butler, Jr.,
William J. Conrad, Charles L. Creech, Jr., A. K. Davis,
Egbert L. Davis, Jr., G. Wilson Douglas, Gordon Gray, P.
Huber Hanes, Jr., Clifton E. Pleasants, Thomas B. Rice,
Emil N. Shaffner, C. W. Starbuck, Charles B. Wade, Jr.,
John H. Williams, Jr., and Frank F. Willingham.
AMERICAN TRUST CO.
Charlotte, N. C.
The American Trust Co., with entrances on Tryon
and Fourth Streets, Charlotte, is the second largest
bank in North Carolina, one of the largest individual
or unit banks in the entire country in a city of com-parable
size and does a bigger business with cor-respondent
banks than any banking institution in
the southeast.
Starting as the Southern States Trust Co., this
bank opened for business on July 15, 1901, and the
name was changed in 1908. When it started busi-ness
it was in quarters at 216 South Tryon Street,
three doors from its present quarters, in a banking
room 15 feet wide and 60 feet deep. Charlotte, at
that time, had a population of 18,000 and the only
semblance of paved streets was a rough macadam
street in front of the bank.
Capital stock of this new banking venture was
only $29,600 and the deposits on the first day amount-
PAGE 24 THE E. S. C. QUARTERLY WINTER, 1949
American Trust Co., Charlotte, State's second largest bank and
largest correspondent (business for other banks)
bank in the Southeast.
WORD WOOD STARTED BANKING
AS RUNNER, WITHOUT SALARY
One of North Carolina's most prominent and most suc-cessful
bankers started his banking career as a bank runner,
working for several months without pay—just to learn the
business.
Word H. Wood, one of the founders of the American Trust
Co., Charlotte, and now honorary chairman of its board of
directors, after 46 years as an active banker, got his first
bank job as a runner, without salary, with the Wachovia
Loan & Trust Co., soon after that bank, later to become the
Wachovia Bank & Trust Co., was first organized in Winston
(Salem was a separate corporation then) in 1893.
Wood, then 20 years old, wanted to get in on the ground
floor with the new bank and wanted to work with Col. F. H.
Fries, president. After working for nothing for a few
months, he was put on the payroll at $25 a month. Later,
after seven or eight years with this bank, he was earning
$75 a month, a good salary in those days. Born in Elkin
April 28, 18 73, young Wood moved with his family to Win-ston
a few years later. He attended school there and had
one year, 1891-2, at the State University. He served as a
resort hotel clerk one season.
When George Stephens organized the American Trust Co.
in Charlotte in 1901, he went to Winston and persuaded
young Wood (they had been boyhood friends for a few
years while Stephens' family lived in Winston and Stephens
was just 20 days older than Wood) to join him in organizing
and operating the new bank. Starting as secretary and
treasurer, Mr. Wood climbed the rungs of the ladder to
active vice-president, to president when Mr. Stephens moved
to Asheville in 1919. He served as president until 1943,
when he was made honorary chairman of the board.
Mr. Wood still has a desk at the American Trust Co. and
may be found at it most of the working day when he is in
Charlotte. However, he has developed a reputation as a
"rambler" and may be found at summer or winter resorts,
in New York, or elsewhere frequently. He is in splendid
health as he approaches his 7 6th anniversary and 4 6 years
in banking.
The honor of being the first N. C. Commissioner of Banks
goes to Mr. Wood. He served for two or three months in
the Spring of 1931, when the post was first created, until
Gurney P. Hood finished his work as a representative in
the General Assembly and was appointed. Also, Mr. Wood
served as district highway commissioner in the Charlotte
area when the State's huge road program was inaugurated
in 1921.
Mr. Wood was the chief promoter and chairman of the
committee of bankers in North and South Carolina which
secured the location of the Charlotte branch of the Federal
Reserve Bank of Richmond for Charlotte in 1927.
ed to only $1,739.77. Total assets were only $31,-
467.80.
The predecessor of the American Trust Co. was
organized by George Stephens, who a few years be-fore
had established a real estate business in Char-lotte.
Mr. Stephens interested several prominent
Charlotte citizens in the new venture. One of his
first acts was to persuade his boyhood friend, Word
H. Wood, then with the Wachovia Loan & Trust Co.
in Winston-Salem, to join him as secretary and treas-urer
to handle the affairs of the bank.
When the company was first organized, F. C. Ab-bott
was elected president and Mr. Stephens, vice-president.
Within less than a year Mr. Abbott re-signed,
Mr. Stephens was elected president and T. S.
Franklin was named vice-president. Mr. Wood con-tinued
to handle the affairs of the bank as secretary
and treasurer (see accompanying sketches of Ste-phens
and Wood).
Torrence E. Hemby, present president of the
American Trust Co., joined the staff as collection
clerk, on June 6, 1906, five years after it had opened,
when this institution had only five employees. Mr.
Hemby, a native of Union County, had moved to
Charlotte in 1904 with his family and had attended
the then famous Baird School For Boys. His bank-ing
ability was evident from the beginning and in
1917, he was made assistant secretary and treasurer.
In 1919, he was promoted to active vice-president.
He became executive vice-president in 1931 and in
1943, he was elected president to succeed Mr. Wood,
who then became chairman of the board. Mr. Wood
had been elected president to succeed Mr. Stephens
in 1918 and had continued as president until 1943.
Meanwhile, this small institution had outgrown its
original quarters and had erected the first unit of its
present home at 204 South Tryon Street in 1910.
The quarters were enlarged again in 1928 and in
1941 the Fourth Street entrance was established,
making the banking quarters in the form of an "L",
with a 62 1/> feet front on Tryon Street and an 82
feet front on Fourth Street, with additional mezza-nine
and second floor space.
Although considered a one unit bank, the Ameri-can
Trust Co. has established branches at 732 East
Trade Street and at the corner of Morehead and
College Streets in the City of Charlotte and plans to
build another branch at the corner of North Tryon
and Ninth Streets this year.
From this small institution the American Trust
Co. has become the second largest bank in North
Carolina. With assets of more than $160,000,000,
it has grown to be the largest bank in the South-eastern
States in the amount of business handled
for other banks and it has trust and insurance de-partments
which handle a huge amount of business
each year. Its deposits of $150,000,000 are consid-erably
more than twice the deposits in all of the
banks in North and South Carolina, approximately
$60,000,000, when it started business in 1901.
In its report of December 31, 1948, the bank assets,
exclusive of its Insurance and Trust Departments,
Winter, 1949 THE E. S. C. QUARTERLY PAGE 25
amounted to $160,000,000 and deposits have reached
$150,000,000. The American Trust Co. is now cap-italized
at $1,200,000, owned by 395 stockholders. It
has accumulated a surplus of $5,000,000, undivided
profits of $2,000,000 and reserves of $1,000,000, thus
giving a total of $9,200,000 as protection to its de-positors.
Among its resources are $63,000,000 in cash and
in banks, $54,000,000 in Federal, State and municipal
bonds and $42,000,000 in loans.
Present directors of the American Trust Co., with
Mr. Wood as chairman, include W. H. Belk, Jr., C. B.
Campbell, M. L. Cannon, Frank Dowd, J. B. Efird,
T. E. Hemby, R. H. Johnston, R. E. Kerr, H. F. Kin-cey,
Walter Lambeth, J. Caldwell McDonald, Morgan
A. Reynolds, Frank O. Sherrill, George C. Snyder,
Paul C. Whitlock, and Earle Whitton, all of Char-lotte
; J. H. Lineberger, Belmont, and James H. Cok-er,
Hartsville, S. C.
Officers, in addition to Chairman Wood and Presi-dent
Hemby, include, in the Banking Department:
R. E. Ker