Measures of Necessity: Bankers Respond to the Civil War
No event in American history matches the drama of the Civil War: 617,000 died in the line of duty, 4 million African Americans secured their freedom, and the nation upheld its commitment to democracy. It is hardly surprising then, that its impact upon the financial system is often overlooked. Unable to pay for the war, Congress established a centralized currency that gave the Union a decisive advantage over the Confederacy and served as the underpinnings for the creation of the Federal Reserve a half-century later.
Amidst the chaos of war and the uncertainty of this nascent financial system, bankers tried to sustain commerce and preserve their communities. The PNC Legacy Project invites you to explore the heroic efforts of bankers who saved a central Maryland city, innovatively protected their customers’ investments, and chartered new institutions to help their cities rebuild.
The successful candidacy of Republican Abraham Lincoln led seven southern states to secede before he took office.
Tensions within the divided city erupted when rioters attacked the Massachusetts 6th on its way to Washington.
Meeting at the National Farmers and Planters Bank, the directors elected its first slate of of Tensions within the divided city erupted when rioters attacked the Massachusetts 6th on its way to Washington.
The Confederate Army forcefully defended Union troops advancing towards Richmond. The 460 Union dead shocked Northerners and signalled the beginning of a long and bloody war.
Congress authorized the circulation of $150 million in U.S. Treasury notes, known as greenbacks. Considered a radical measure, it was the first step toward creating a national currency.
Gunpowder explosion at a munitions supply depot and manufactory outside Pittsburgh, similar to the one pictured here, killed 78 people in the largest civilian disaster during the war.
The Union army halted the Maryland campaign led by General Robert E. Lee during the single bloodiest day in U.S. history, with more than 22,000 dead, wounded, or missing.
The three-day battle on the Rappahannock River effectively quashed the Union Army's drive towards Richmond.
The scarcity of provisions and hyperinflated currency led hundreds of women, wielding clubs and guns, to plunder warehouses and stores.
The Union successfully defended Pennsylvania during the only major battle north of the Mason-Dixon line. The death count included more than 3,100 Union and 4,700 Confederate soldiers.
Congress created a national bank system that authorized individual banks to issue notes. This note issued by the First National Bank of Washington indicates that the bank invested in U.S. bonds to secure this privilege.
Workingmen, resentful that wealthy men could hire substitutes for $300 each to avoid the draft, staged a riot that ultimately targeted the black population and left 120 dead.
Throughout the nation, African Americans and abolitionist allies celebrated the emancipation of all slaves held within the Confederacy.
During a military campaign aimed at weakening the defenses of Washington, Confederate forces plundered Maryland farms and businesses and demanded ransom from the citizens of Hagerstown and Frederick.
Battle of Mobile Bay | August 5, 1864 A Union fleet of eighteen vessels rendered the seemingly invincible ironclad ships guarding the Mobile Bay into motionless hulks and secured this highly strategic site.
After vanquishing Confederate forces in Atlanta, General William T. Sherman led his troops to Savannah who ransacked farms, industrial sites and transportation networks along the way.
Triumphant loyalists, mostly African Americans, greeted Lincoln as he walked through Richmond, two days after Confederate forces evacuated their capital.
Acting as part of a larger conspiracy to revive the Confederate cause, John Wilkes Booth shot President Abraham Lincoln during a performance of Our American Cousin at Ford's Theatre.
Disaffection with the Lincoln administration ran high in the commercial entrepôt Baltimore through the war. Most of its financiers and investors sympathized with the Southern planters and merchants, whose trade had undergird the city’s prosperity. Despite their sympathies, they maintained the city’s competitive advantage by investing in manufacturing concerns and government bonds that supported the Union.
Several of the financial leaders of the city established the Safe Deposit Company in 1864 to provide a safe place to store valuables, especially bonds and securities. Within three years, the company expanded upon this mission and received authorization to administer trusts that managed the wealth of individuals.
View of Baltimore Harbor from Federal Hill | c. 1862–1865
Protected by Union troops stationed on its south side, the port of Baltimore remained a center of commercial enterprise during the war.t.
Advertisement for Safe Deposit Company c. 1870
Designed for the safe keeping of valuables, the Safe Deposit Company emphasized the security of its new headquarters to attract customers.
Directors' Meeting at Safe Deposit Company | July 5, 1867
Meeting at the National Farmers and Planters Bank, the directors elected its first slate of officers, including railroad magnate and philanthropist Enoch Pratt as its first president, secretary, and treasurer.
Best known for his investments in iron manufacturing and railroads, Enoch Pratt was also a leading banker in Baltimore, which included a 36-year stint as president of the National Farmers and Planters Bank. As the leader of the Safe Deposit Company, his reputation lent credibility to the endeavor.
As the federal capital separated only by a river from the Confederacy, Washington was in a precarious position during the Civil War. So was its pre-eminent banker George Washington Riggs, who like many financiers was privately sympathetic to the Southern cause. As the chief proprietor of Riggs & Co. (previously known as Corcoran & Riggs), a successful bankinghouse that cultivated profitable relationships with Congressmen, Presidents and other officials, Riggs managed to retain his clientele largely because of the respect earned over years of trustworthy service to the city.
Broker to the Future Confederate President | September 24, 1850
Corcoran & Riggs enabled Senator Jefferson Davis to maintain agricultural and commercial interests in his home state of Mississippi. With this note, Senator Davis turned to Corcoran & Riggs to exchange a promissory note issued by a merchant in New Orleans.
West Front Of The Capitol Dome | June 1861
Lincoln insisted upon the completion of the Capitol dome as a symbol of the durability of republican government. The unfinished dome and the dilapidated state of the Mall still convey the image of a capital in crisis.
Lincoln check to Mr. Johns (a sick man) | August 28, 1861
Little is known about the identity of Mr. Johns (a sick man), although it is quite possible that Lincoln met him during one of his regular walks outside the Executive Mansion
Travel Pass to Mount Vernon | February 26, 1862
As Treasurer of the Mount Vernon Ladies' Association, George Washington Riggs played a critical role in preserving the first president's estate. This pass required Riggs – known to his family as a Confederate sympathizer -- to provide an oath of loyalty to the Union government.
Carte de Visite of George Washington Riggs | c. 1865
During the Civil War, Northerners and Southerners alike sent cartes de visite - small photos mounted on paper cards - back home to loved ones.
Confederate troops moved through Frederick and the surrounding farms during campaigns that culminated in the Battles of Antietam and Gettysburg. Ordered by General Robert E. Lee in late June 1864 to attack Washington by first penetrating the Shenandoah Valley, General Jubal Early and his troops occupied Frederick one last time.
On July 9, 1864, General Early delivered an ultimatum to the citizens of Frederick that no Union general would have asked in the South: he threatened to plunder the city if he did not receive $200,000. Within hours, the banks of Frederick furnished that ransom and saved the property held within the city. The federal measures that provided a stable medium of exchange – at least in contrast to the hyperinflated Confederate currency – certainly benefited the city of Frederick.
Painting of Barbara Fritchie | c. 1922
Ardent Unionist Barbara Fritchie became the symbol of the city of Frederick, where the frequent encounters with Confederate troops galvanized its citizenry against them. This painting portrays Fritchie waving her tattered U.S. flag to greet troops led by Confederate Stonewall Jackson during the Antietam campaign of September 1862.
Ransom Note | July 9, 1864
This order conveyed to the citizens of Frederick the demand by Lt. General Jubal Early for $200,000 "in current money" or in rations. Within one day, the Mayor and Board of Aldermen provided that money, thanks to the local banks of Frederick.
Protest Letter | July 9, 1864
The Mayor and citizens of Frederick asked General Early to reconsider his onerous demands, as the ransom amount equaled ten percent of the taxable property in the city.
Resolution Of The Mayor And Board Of Alderman | July 9, 1864
Faced with the threat of the destruction of the city, its elected representatives requested that the banks provide the $200,000 demanded by the Confederate forces. The banks lent more than twenty percent of their assets to cover the ransom.
Table Showing Distribution Of Ransom Payment | July 9, 1864
Each of the city's banks contributed a share towards the payment of the ransom in proportion to their total capital reserve. PNC predecessors Fredericktown Savings and Farmers & Mechanics paid $92,000 of the entire ransom
Receipt for Payment of $200,000 | July 9, 1864
Receipt was issued by Quartermaster J.R. Brathwaite to prove the city met Confederate demands.
The Civil War tested the mettle of the Confederate stronghold of Fredericksburg, which changed hands seven times. While its citizens’ plucky defense of that city against Union incursions in December 1862 is particularly well-known, the extraordinary, if ultimately futile, measures taken by its bankers are not. After most employees of the pre-eminent Farmers Bank enlisted in the Confederate Army, the cashier moved its assets and records to Danville, an especially prudent decision as its banking house served as the Union headquarters during its occupation of the city. The bankers could not overcome the chaotic state of Confederate finances and the destruction of the city’s businesses so that Farmers Bank surrendered its charter at the end of the war.
Only months after the Confederate surrender, investors embraced the emerging national financial order and received a charter for the National Bank of Fredericksburg. This bank helped rebuild the city from the ashes of the Civil War.
View Of Fredericksburg From East Side Of Rappahannock River | May 1863
The city of Fredericksburg had successfully defended itself from Union forces during a three-day battle waged less than six months before Timothy H. O'Sullivan, one of Matthew Brady's assistants, took this photo.
Confederate Naval Paymaster's Check / November 8, 1862
This check written by William Ware to Assistant Paymaster R.L. Mackall was written on a form printed by the U.S. government. He tampered with it to indicate that the check would be drawn from the Confederate Treasury.
From Confederate Naval Agent To Paymaster General Thomas C. Ware | September 6, 1864
Farmers Bank cashier Thomas C. Ware had served as a paymaster for the federal army, but transferred his service to the Confederate Navy. This letter is one of many documenting his service as its Paymaster General.
Confederate Bond For $5,000 | May 23, 1863
One of the several bonds purchased by the Farmers Bank to back the Confederate cause, it was worthless by its maturity date in 1868
Charter For The National Bank Of Fredericksburg | October 11, 1865
The citizens of Fredericksburg quickly affirmed their loyalties to the federal financial system. This charter issued by the Office of the Comptroller of the Currency required the National Bank of Fredericksburg to purchase U.S. government bonds.
Assets of Farmers Bank | 1867
By the end of the Civil War, Farmers Bank had no liquid capital. The assets assumed by the National Bank of Fredericksburg included irrecoverable notes and worthless Confederate stocks and bonds.
As word approached Gettysburg of the Confederate advance toward Pennsylvania in late May 1863, the directors of the Bank of Gettysburg transferred its assets to the Bank of Philadelphia. During the days of the bloody battle between July 1 and 3, the bank closed. A few weeks later, the Adams Sentinel noted that the bank “suffered no pecuniary loss beyond the inconvenience occasioned by the hasty removal of its valuables.” Its stockholders welcomed the national bank system and received a national charter in December 1864 for the Gettysburg National Bank.
$5 note issued by the Bank of Gettysburg | 1861
Like other state-chartered banks, the Bank of Gettysburg issued notes used as medium of exchange. Since banks often issued these notes without sufficient capital reserves, they did not have the same level of security as those issued later by national banks.
Gateway of Cemetery | July 1863
This structure overlooked Cemetery Ridge and the gravesites destroyed by intense fighting. Four months after the battle, Lincoln delivered his Gettysburg Address on a platform not far from this structure at the re-dedication of the site as the National Cemetery at Gettysburg.
National Bank of Gettysburg Charter | December 1, 1864
Slightly more than one year after the Bank of Gettysburg closed its doors to protect itself, its directors applied for and received a national bank charter.
Certificate of Deposit Issued by The Gettysburg National Bank | April 3, 1884
The engraving of the Soldiers' National Monument suggests that GNB directors promoted the memorialization of the battle ground at Gettysburg.
The Civil War transformed Pittsburgh from a small but prosperous manufacturing center to a nascent industrial city. Although its populace never felt safe from the possibility of invasion, its proximity to the fighting proved a commercial advantage. The city served as a Union depot, its manufacturers supplied the coal, oil and iron that undergird the war effort, and its railroad and shipping enterprises boomed. In the midst of this growth, the Pittsburgh Trust Company re-organized to establish the First National Bank of Pittsburgh, one of the first in the nation. James Laughlin, a principal partner with Jones & Laughlin Steel Company, was the leading force behind the venture.
Bird's-eye view of Pittsburgh from Mount Washington | c. 1871
This somewhat apocryphal lithograph portrays the emergence of Pittsburgh as a center of commerce with steamboats and railroads converging at the Point.
Advertisement announcing national bank charter | September 11, 1863
One of the first in the nation to re-charter under the provisions of the National Bank Act, the First National Bank of Pittsburgh announced its intentions to seek relationships with banks throughout the country.
Antique Doll | c. 1855
An excavation at Three PNC Plaza uncovered artifacts that document the extensive use of fine imported goods by the city's elite before the Civil War. This porcelain doll, made in Germany by Kestner & Co., is currently on display at the Fairmont Hotel in Pittsburgh, part of Three PNC Plaza.