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Page 179
BANKING
CHAPTER XXXVII
IT has not been many years since banking was rather a
simple matter. Any person who could gain the confidence of his
neighbors could open a private bank. The word "bank" seemed to be
attractive and not many people thought of investigating the
responsibility of the institution, relying upon their knowledge of
the individual who opened the bank. These bankers were not annoyed
by government agents snooping into their affairs by examining their
bank, and many depositors suffered heavy losses through this
overconfidence.
A large number of the early banks of Clearfield County
were private affairs. During and after the Civil War period the
Federal government authorized the establishment of National banks.
The National bank was compelled to buy government bonds in the
amount of at least 25% of the capital stock and against, which the
.bank was authorized to issue national bank currency to the amount
of 90% of the bonds so held. Thus a bank with $100,000.00 capital
could buy government bonds, which during and after the close of the
Civil War were sold at an interest rate of 6% and 7% and the bank
could issue $90,000.00 in currency on which the Government would
permit it to charge 6% interest on loans. Thus the bank was making
as much as 13% on its capital without risk or effort. Interest rates
were not carefully scrutinized and if the bank could get a higher
rate of interest, it made that much more.
The first bank in Clearfield County west of
Curwensville was opened in the residence of F. K. Arnold at
Luthersburg in 1871. The stockholders were F. K. Arnold, of
Luthersburg, Samuel Arnold and John Patton, of Curwensville, and
they did a banking business under the firm name of F. K. Arnold &
Co.
This bank continued in business about three years when
it was dissolved and F. K. Arnold sold his residence in Luthersburg
and moved to Reynoldsville.
The first bank in DuBois was a private affair and was
opened September 21, 1880 under the name of "DuBois Deposit Bank,"
by W. C. Bovard, J. H. Chambers of Apollo, Armstrong County, S. M .
Jackson, of the A. V. Railroad, Dr. William McBriar and Dr.
McCartney, with W. C. Bovard as cashier.
No one knows what the capital stock of this bank was at
the time of its opening. However, it is stated that on the day of
the opening of this bank a borrower applied to Mr. Bovard for a loan
of $5000.00, with ample endorsers. Mr. Bovard refused the loan. The
applicant then went to Clearfield, secured the money and came back
and deposited his $5000.00 in this bank.
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