By our standards, life was not very easy for the Americans of the new nation. Compared with people in Europe at that time, however; Americans were, on average, comfortably well-off. Because of the rich resources of the nation and the need for workers, most people could earn their own living with hard work and ingenuity. Americans in different locations had very different lifestyles. Nevertheless, they became skilled in adapting to the challenges of their varied environments.
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Bank War, in U.S. history, the struggle between President Andrew Jackson and Nicholas Biddle, president of the Bank of the United States, over the continued existence of the only national banking institution in the nation during the second quarter of the 19th century. The first Bank of the United States, chartered in 1791 over the objections of Thomas Jefferson, ceased in 1811 when Jeffersonian Republicans refused to pass a new federal charter. In 1816 the second Bank of the United States was created, with a 20-year federal charter.
In 1829 and again in 1830 Jackson made clear his constitutional objections and personal antagonism toward the bank. He believed it concentrated too much economic power in the hands of a small monied elite beyond the public’s control. For support, Biddle turned to the National Republicans—especially Henry Clay and Daniel Webster—turning the issue into a political battle. On their advice, Biddle applied for a new charter even though the old charter did not expire until 1836.
The recharter bill easily passed both houses of Congress in 1832. Saying “The bank is trying to kill me, but I will kill it,” Jackson issued a potent veto message. The fate of the bank then became the central issue of the presidential election of 1832 between Jackson and Clay. Jackson concluded from his victory in that election that he had a mandate not only to refuse the bank a new charter but to destroy as soon as possible what he called a “hydra of corruption.” (Many of his political enemies had loans from the bank or were on its payroll.)
Jackson ordered that no more government funds be deposited in the bank. Existing deposits were consumed paying off expenses, while new revenues were placed in 89 state “pet banks.” Biddle responded by calling in loans and thus precipitating a credit shortage and business downturn. Clay in 1834 pushed a resolution through the Senate censuring Jackson for removing the deposits.
Jackson held firm. Biddle was eventually forced to relax the bank’s credit policies, and in 1837 the Senate expunged the censure resolution from its record. When the bank’s federal charter finally expired, Biddle secured a state charter from Pennsylvania to keep the bank operating. But in 1841 it went out of business, the result of faulty investment decisions and national economic distress.
This article was most recently revised and updated by Amy Tikkanen, Corrections Manager.
A history of always looking forward
Henry Wells and William G. Fargo began their careers in the middle of a technological revolution. Trains, canals, and stagecoaches created more interconnected communities and economies. Demand grew for secure ways to send payments, and reliable places to access money, especially while traveling.
Wells and Fargo used their hands-on experience making deliveries of money and valuables by steamboat and stagecoach to develop a network of offices from California to New York and around the world. The network provided consistency and support for customers in a rapidly evolving economy. Using Wells Fargo, customers wary of doing business with distant partners knew they could depend on the local Wells Fargo agent to act on their behalf.
A lot has changed since 1852. New communities and industries have emerged and grown. Technology has made communication and bank transactions faster than ever before.
Across time, and in every generation, Wells Fargo has continued helping customers go further by providing innovative financial services to help them get ahead. Through prosperity, depression, and war, customers have turned to Wells Fargo for the solutions they needed to survive and thrive.
We’re committed to continuing the Wells Fargo legacy of always looking forward by finding solutions and removing barriers to help our customers.
1995–2000: Clicking with online investing
The Internet era begins. Schwab.com launches online trading during a historic bull market, and the combination fuels tremendous growth in client assets. During this period, Schwab continues to diversify by launching a bundled 401(k) plan and expanding internationally. The firm also reshapes its core brokerage business as it begins to offer financial advice.
1995: Schwab activates its first website at Schwab.com®. The company acquires U.K.-based discount broker ShareLink and 401(k) plan recordkeeper The Hampton Company, founded by Walter W. Bettinger II.
1996: Web trading goes live. Customers can trade listed and OTC stocks, or check balances and the status of orders. The SchwabPlan ® is introduced, offering companies and their employees access to more than 1,300 mutual funds in a new, bundled 401(k) product. Schwab AdvisorSource ® referral service is introduced nationally.
1997: The Charles Schwab Corporation is added to the S&P 500 Index. The website registers its one millionth online account. Schwab's Hong Kong office reopens after being closed since the 1987 market crash. Mutual Fund Report Card is introduced with a single-page review of more than 7,700 mutual funds. In December, David Pottruck is named co-CEO of the corporation.
1998: Two Canadian brokerages are acquired to create Charles Schwab Canada. Online accounts reach 2 million. TeleBroker adds voice technology.
1999: Schwab launches after-hours trading for Nasdaq and select listed stocks, with orders accepted online or by phone from 4:30 p.m. to 7:00 p.m. ET, Monday through Friday. Schwab launches eConfirms, a new email subscription service that delivers trade confirmations directly to customers, eliminating paper delivery. Schwab becomes the first online brokerage to offer multiple stock order entry for all online trading accounts. The firm also introduces two new web-based tools, including Schwab's advanced mutual fund screener, which allows customers to screen all funds rated by Morningstar, Inc. The Schwab Fund for Charitable Giving, 2 an independent public philanthropic fund, is launched.
2000: Schwab and U.S. Trust merge. The company also acquires CyBerCorp Inc. to better serve active online traders. Schwab introduces pre-market trading for most Nasdaq and listed securities, with orders accepted from 7:45 a.m. to 9:15 a.m. ET, Monday through Friday. PocketBroker™ wireless investing service is introduced. Schwab Mutual Fund OneSource tops $100 billion in assets.
End of the First Bank - History
In 1859, William S. Ladd teamed up with San Franciscan Charles E. Tilton to form the Ladd & Tilton Bank. Ladd operated their business in a building at First and Stark and it was the first bank to be established north of Sacramento and west of Salt Lake City. The bank received its first deposit of $50 on June 1, 1859. Ladd & Tilton Bank also acted as agent for the Bank of British Columbia until they opened their own branch in Portland in 1867 by a special act of the Court. The Bank of British Columbia later became the Bank of Canadian Commerce in 1912. Later, it was known as the Canadian Imperial Bank of Commerce with four branches in Portland until they were closed in the mid-1980’s.
The original partnership between Mr. Ladd and Mr. Tilton was dissolved in 1880 when Tilton retired. Tilton agreed to lend his name to the new partnership between Ladd and his oldest son William M. Ladd. The institution flourished under the name “Ladd & Tilton Bankers”.
The elder Ladd passed away on January 6, 1893 and the banking business which he founded continued under the management of his oldest son. On May 8, 1908, the bank was chartered as a state institution and the name changed to “Ladd & Tilton Bank”. Having outgrown their original building, they moved to the Spalding Building at Third & Washington on January 1, 1911.
When the United States National Bank purchased the Ladd & Tilton Bank on July 11, 1925, that deal joined the oldest bank in the Northwest with Oregon’s largest bank. When the two banks joined, the United States National Bank became the largest bank west of Minneapolis and north of San Francisco.
The 13th bank to open in Portland was the United States National Bank which was incorporated on November 10, 1890. The bank opened for business on February 9, 1891 in the Kamm Building on First Street. Two years later, the panic of 1893 hit many banks and operations were suspended, but the United States National Bank managed to remain open. In 1902, U.S. National merged with the Ainsworth National Bank.
This view of the United States National Bank building shows the building as it looked after completion in 1917 when it was built under the direction of A.E. Doyle, one of the West Coast’s leading architects. To the left is Stark Street and Sixth Avenue is on the right. The building to the rear and to the right was the original Wells Fargo Bank.
When the steel and terra cotta building, which was designed in a Second Century Roman style, opened for business on July 30, 1917, it was the first edifice in Portland constructed with a steel frame. The free standing columns on the building’s exterior are of Corinthian design with modified capitals, which stand 54 feet high.
Marble used in the lobby came from various parts of the world. The white marble in the floor and the columns was imported from Italy. The red marble in the floor came from Hungary and the black marble on the check counters came from Belgium. Today you can see a crack in the floor where the two buildings were joined together.
All the light fixtures were originally made in 1917 by Fred Baker especially for U.S. National Bank. He rewired the fixtures in 1975 at the age of 90 so the the fixtures could accommodate larger bulbs for better lighting. He also constructed the lanterns in the hallways to the U-Bank and elevator when the fixtures were rewired.
The bronze doors to the lobby were designed by Arvard Fairbanks, a former professor of sculpture at the University of Oregon. He was inspired by the world famous fifteenth century “Gates of Paradise” doors to the Baptistry in Florence, Italy. The bank’s doors on the Broadway side illustrate progress in transportation with scenes of the Lewis & Clark Expedition: oxen pulling wagons westward, Indians frightened by the Iron Horse, Captain Robert Gray’s ship: “Columbia”, fur traders and a waterfront scene.
On the Sixth Avenue side, the doors depict international good will: science’s progress through Direction, Labor, Domestic Welfare, Understanding and Expression, Enterprise and Life.
Downstairs, the vault door to the Safe Deposit area is constructed of manganese tool steel and it weighs 13 tons (26,000 pounds). Steel for the first 6,600 safe deposit boxes was originally intended for French 75MM cannons, but World War I ended before they were made and the steel was purchased by U.S. National Bank. The vault now holds approximately 11,000 safe deposit boxes.
By 1920, the leaders of the bank decided it was time to expand and they purchased the quarter block on the southwest corner of the block from the Elks Lodge. Construction began early in 1924. The same artisans and craftsmen who built the original building were commissioned to duplicate the ornate interior.
Later view of building after completion of the second half in 1925. To the right is Stark Street and to the left is Broadway.The facade remains virtually unchanged today.
When the expanded building opened in February 1925, it took up the full width of the block along Stark Street. This later view shows the bank as it looked in 1925 when an expansion project duplicated the existing building and doubled it in size, making it one of the largest and most up-to-date banks in the nation. To the right and to the rear, you can see the corner of the original Bank of California Building, along Stark. Architect A.E. Doyle, who also designed the Meier & Frank Building, the Lipman Wolfe Building, the Central Library and Reed College, was the architect on the U.S. Bank Building.
In this interior view, you can see the bank upon completion in 1925 with a lobby ceiling that is 30 feet high. Casts for the ceramic bas-relief on the ceiling were handcarved. Each square was then hand painted under Doyle’s careful supervision and the ceiling has never been repainted.
U.S. National led the way nationally in branch banking in 1933, with the opening of a branch in The Dalles, Oregon. In 1956, U.S. National was the first bank west of the Mississippi to have a drive-up teller window. Later that year, U.S. National was the first bank in the world to post customer’s checks electronically at the Sheridan Branch on November 1, 1956. In 1970, U.S. National offered 24-hour banking with the installation of the first automated teller machines in Oregon.
At it’s peak, U.S. National had over 200 branches in Oregon. Long gone are the days when you would see hundreds of customers waiting in the long lines at the Main Branch to cash their paychecks on a Friday afternoon before a holiday weekend. In the mid-1990's, U.S. Bank was bought out by First Bank of Minneapolis which later merged with First Star, and the U.S. Bank name was retained for all of their locations.
This blotter, which was mailed to customers in their monthly statement, is very supportive of the war efforts against Germany in World War I.
Wells Fargo and Company played a very important role in the development of Portland and the West. Beginning in 1852, Henry Wells and William Fargo contracted with local stagecoach companies to carry passengers, mail and gold throughout the West.
They opened an office in Portland the same year, which was the hub of Wells Fargo’s banking and express business in the Northwest. The coaches also traveled from St. Louis to San Francisco via El Paso and Los Angeles.
In its heyday, Wells Fargo boasted a line of 1500 horses and 150 Concord Coaches. In 1867, Wells Fargo owned more than 3100 miles of overland stage lines. In the 1890’s, Wells Fargo operated 105 offices in the state of Oregon.
The Abbot-Downing Company of Concord, New Hampshire built this Concord Coach for Wells Fargo in 1853 and it is a veteran of the Overland Trail. This stagecoach is on display at the Wells Fargo Museum in the San Francisco Building on Treasure Island at the site of the Golden Gate International Exposition. Other coaches can be found in Los Angeles, Sacramento and San Diego.
Today, Wells Fargo Bank has 10 Historic 19th Century Concord Coaches that have become the symbol of the company. There are a similar number of authentic replica coaches that are used for parades and other civic events. Millions of people see the Wells Fargo Coaches every year. A replica of the original Coaches is on display in Portland at the Wells Fargo Museum.
Well’s Fargo purchased control of the Commercial National Bank, which opened on January 24, 1896, during the panic of 1893. It was closed for several months, but reopened and remained the Commercial National Bank until 1898 when it was renamed, becoming known as the Portland Branch of Wells Fargo and Company Bank.
On June 5, 1905, the United States National Bank purchased the banking assets and assumed the deposit liabilities of the Portland Branch of Wells Fargo and Company Bank.
The Wells Fargo Express Building, at SW Sixth and Oak Streets, which opened in 1907, was owned and used by U.S. National Bank for many years. If you get a chance to view the Wells Fargo building today, you will still see the large letters spelling WELLS FARGO near the top. The building is being renovated and leased for small startup businesses.
The First National Bank of Portland was born during the 1865 Fourth of July Celebration in Portland when five prominent business men gathered at attorney Armory Holbrook’s office to draw up “Articles of Association” for the First National Bank on the Pacific Coast. They petitioned the Comptroller of Currency in the nations’s capital to name the bank “First National Bank of Oregon”, but the Comptroller returned the charter papers with the name “First National Bank of Portland”. The partners accepted the name and it remained for many years. The bank opened its doors for the first time on May 7, 1866, before a national standard of exchange had been established.
When the panic of 1873 struck, First National Bank helped local merchants and farmers survive the panic and even paid a 12 percent dividend to stockholders. First National Bank solidly withstood other panics as well as the severe test of the Great Depression and never closed its doors on its loyal customers.
Built in 1916, the First National Bank Building resembles a Greek Temple. It was designed by W.A. Coolidge an alumnus of Harvard.
Interior of First National Bank of Portland
In 1979, First National merged with several other banks to become the multi-state First Interstate Bank of Oregon. They had a larger penetration of the customer base in Oregon than in any other Northwest state and Portland became the Regional Headquarters for First Interstate with nearly 200 branches in Oregon.
Wells Fargo Bank returned to Oregon in 1996 when they bought First Interstate. Wells Fargo also merged with Norwest and soon thereafter Wells Fargo became a leader in Mortgage Lending.
The Northwestern Bank Building at 6th & Morrison was built in 1913 and opened in 1914 with distinctive granite-based Corinthian columns designed by A.E. Doyle that make up the facade. It now serves as a Wells Fargo Branch.
Local founding fathers Henry Pittock and Frederick Leadbetter organized the Northwestern National Bank Company in 1912. The bank first opened its doors on January 2, 1913. Several years later, it was the third largest banking institution in Portland. Pittock was the president of the bank until his death in 1919.
Tragedy struck in late March in 1927. Rumors that the bank was unstable began circulating on Saturday March 26. The bank’s customers began receiving anonymous calls warning them that the bank was about to fail and to withdraw their funds immediately. On Monday, March 28, lines began forming before the bank opened. Crowds of depositor’s fought to get into the bank after it opened. Closing time was extended from 3 pm to 6 pm and over two million dollars in deposits was withdrawn. When the bank closed at 6:00, things appeared so hopeless that the bank decided to go into liquidation.
The next day, the bank’s directors worked out a plan under the direction of the local bank clearinghouse and a national bank examiner whereby the Pittock estate and other stockholders would provide a guaranty fund to assure that all depositors would be paid. Depositors were not given cash, but they were given a check to be drawn on or deposited to their choice of either the United States National Bank or the First National Bank of Portland. Northwestern National bank’s customers numbered in the tens of thousands and the pay out took many weeks.
The Spalding Building at Third and Washington opened on January 1, 1911 and it housed the Ladd & Tilton Bank for a short time. Later it became the Portland Trust and Savings Bank, which later became The Oregon Bank.
The Portland Trust and Savings Bank was organized as the Portland Trust Company of Oregon on April 22, 1887 and Henry Pittock was vice president. In 1910, Pittock acquired control of the bank. When he organized the Northwestern National Bank in 1912, Pittock wanted to separate the commercial banking business from the the Portland Trust Bank’s trust business.
The Commercial Bank of Lake Oswego merged with the Portland Trust and Savings Bank in the 1960’s and they became The Oregon Bank. In the 1970’s they merged with Security Bank of Oregon and had about 35 branches scattered around the State. Rapid growth near the latter s increased their branch count to nearly 50 branches.
Security Pacific Bank bought The Oregon Bank in 1987, and Bank of America bought Security Pacific in 1992. The old main branch (in the Spalding Building) was closed and sold when Security Pacific bought Oregon Bank, several years after Orbanco built a new headquarters building.
The Lumbermans National Bank was organized April 6, 1906 as Bankers and Lumbermans Bank. In April 1908, the name was changed to the Lumbermans National Bank. A year later, the bank moved to the Lumbermans Building at the northwest corner of Fifth and Stark streets. In 1913, Lumbermans Bank bought the West Side Branch of the Geo. W. Bates & Co. Bank which was located in the Henry Building at Fourth and Oaks streets. United States National merged with the Lumbermans National Bank when it was acquired on September 15, 1917.
Lumbermans Building which housed the Lumbermans National Bank at Fifth & Stark
End of the First Bank - History
The History of Jewish Banking
The History of Jewish Banking Jewish bankers have been prominent throughout our history. It is fascinating to study their origin and development, because they played an important role in Jewish history as a whole. There is no doubt that they constituted a highly disproportionate segment of the banking world.
In my opinion, there must have been something basic in Judaism that formed the basis for this excellence. I would say that the Torah, before any other code or law, set down strict rules for commercial honesty and public-mindedness, so that a Jewish banker was always more trusted than other bankers. The biblical laws commanding honest and reliable weights and measurements, regulating interest-taking, and governing the handling of pawns, all set the basis for honest money lending. In the Talmud, laws controlling honest commerce and money lending abound. It is therefore not surprising that the basic Hebrew word for moneylender, "shulchani" ("money changer") -- found in the Mishnah -- ultimately took the meaning "banker."
Similarly, the predominance of Jews in the medical profession -- 45 percent of all Nobel Prize winners in medicine have been Jews! -- can, in my opinion, be traced to the unprecedented care for human health expressed in the Torah and in subsequent Jewish laws. No other nation ever cared so much for the physical well-being of each and every one of its members. Such attitudes and inclinations are carried over for hundreds of generations -- either through education and personal example of elders, or by way of genes.
In the Tenach we find several transactions involving payment of money, such as Abraham's purchase of the Machpelah and Jeremiah's purchase of land in his native city. But there must also have been doing a thriving money lending business, since as soon as the Jews were exiled to Babylonia we surprisingly encounter at least two full-fledged Jewish banks operating there -- the banking houses of Murashu and Egibi. Many cuneiform tablets evidencing their money lending transactions and bearing Jewish names have been preserved. The "banking" skill of these Jews must have been preceded by generations of experience and tradition.
No wonder then that Jews were sought out by their rulers in the early days of exile in Europe. The Roman armies marching north in Europe, along the Rhine river, encouraged Jewish money lenders and traders to accompany them. They were the founders of the earliest Ashkenzic communities, such as Mainz, Speyer, Worms, and Trier.
Before them, Jews in partnership with the Phoenicians had founded trading settlements along the Western Mediterranean. The outlook of Jewish businessmen and moneylenders, from the beginning, was international. The Diaspora itself offered the advantage of families having members in all corners of the world -- Jews who could always trust each other. The worldwide trust remained the hallmark of Jewish bankers throughout the ages.
Jewish Banking in Germany
While Jews carried on money transactions in most countries of the Diaspora, their long-range success was most remarkable in Germany. In the documents found in the Cairo Geniza, covering the 11th to 13th centuries, we find adequate testimony of Jews carrying on commerce from one end of the then known world to the other -- from Spain to India. But these communities -- after flourishing for some centuries, died out. German Jewry, however, existed for over 1,000 years.
In the Middle Ages, Jews were often restricted by law to money lending and tax collecting. Even a great man such as Rabbeinu Tam was a "banker" in the medieval sense -- even operating his "bank" during Chol Hamoed.
German Jews came to their full bloom in the years shortly after the 30-year war, when the Germany of the monolithic "Holy Roman Empire" fell into three small duchies and municipalities, each with financial worries and needs for financing. The local dukes and princes would reach into the ghettos of Germany to select skilled Jews with proven ability to manipulate money. Some of these rulers had insatiable appetites for money -- to be used on their lavish courts, their military campaigns and repayment of old debts. This need created the position of the Court Jew, occupied by an exceptionally fine class of Jews who excelled in finance but also in their concern for their suffering and oppressed brethren. Some of the finest Court Jews were Oppenheim, Wertheirmer of Vienna and Behrend Lehmann of Halberstadt in the 17th century. Without them, German Judaism would have died out.
They also laid the foundation for the great banking families of the 18th century. As an example, Behrend Lehmann who had achieved the position of virtual Minister of Finance to the King of Saxonia, established far-flung branches of his business with sons and nephews manning offices in various European cities. Lehmann's example was copied by the Rothschilds a few decades after his death. By distributing five sons -- to Vienna, Paris, London, Naples and Frankfurt -- the founder of the dynasty, Moshe Amsehl Rothschild, established one of the most powerful financial empires the Jews ever possessed. But the Rothschilds were not alone in achieving banking greatness.
Here is a partial list of Jewish bankers and the dates when they were founded: 1750 N.M. Bamberger, Berlin 1764 Gebrueder Veit, Berlin 1795 Joseph Mendelshn Berlin 1798 M.M. Warburg, Hamburg 1803 S. Bleichroder, Berlin 1811 Leopold Seligman, Cologne 1815 A.S. Goldshmidt, Coblenz.
As Germany was unified into an empire in 1871, the need for large scale loans grew. Kaiser Wilhelm and Count Bismarck founded their administration almost entirely on the financial help rendered by their Jewish banker, Bleichroeder.
In 1856, when the Russian Czar needed a large loan, Jewish bankers helped him out without regard to the oppression which their Jewish brethren suffered under him. Only one Jewish banker, Jacob I. Schiff -- whose descendents founded the American private bank Kuh, Loeb & Co. -- refused to lend his money to a Russian czar!
Jewish Bankers in England
English Jews, before their expulsion in 1290, had been outstanding bankers, who helped their sovereigns. Such Jews as Aaron of Lincoln and Aaron of York have gone into history as exemplary bankers. But all this did not help such after some terrible pogroms, all English Jews were expelled. It was only 400 years later, under Oliver Cromwell, that Jews were re-admitted to England, after the famous Dutch-Portuguese philosopher Menasse ben Israel had lobbied in London. Since the early arrivals were of Portuguese ancestry, with outstanding commercial and banking traditions, it did not take long before important Jewish banking firms were established in London, after moving there from Amsterdam, such as the de Costa, de Medinas, Lopez and Salvador families. Many became stock brokers. Later famous stockbrokers were the Montefiores, David Ricardo and Benjamin Gompertz from Amsterdam. When Ashkenazic Jews emigrated to England, some of them laid the foundations to well-known British banks. David Solomons, whose ancestors had come to England in 1689 became London's first Jewish mayor and was a founder of the Westminster Bank, today one of England's leading banks. Another early Jewish banking house was that of Mocatta and Goldsmid founded in 1782 and still flourishing today as bullion brokers.
The banking house of Samuel Montegue and Co. was established in 1863 and is still and important factor in London's city. Other banks, which are not clearly identified as of Jewish origin, are the Hambro Bank, of Danish-Jewish origins, and the Wagg banking firms, today known as J. Henry Schroder, Wagg and Co. goes back to the famous Samuel family which produced Herbert Samuel, the first High Commissioner in the British Mandate of Palestine after World War I.
Dominating the field of English Jewish bankers, are the Rothschilds. When Nathan M. Rothschild came form Frankfurt to England, he started a dynasty which until this day is outstanding in financial and Jewish life. His brother-in-law Sir Moses Montefiore, although the legendary benefactors of Jews everywhere and founder of modern Israel, never failed to attend board meetings of his companies, especially the Alliance Insurance company which he and his brothers-in-law had founded in 1824 and which still today is a powerful insurance company.
Jewish bankers played a prominent role in the United States, France, Belgium, Holland, Vienna, Italy, Scandinavia, Russia, Egypt, Turkey, South Africa and, finally, today in Israel. Many of them were interlocked through marriage and common family origins. They gave their Jewish communities much prestige and support.
The Holocaust gave sadly a fatal blow to Jewish banks in the lands under Hitler. Individual bankers were heroic in their fight to help their fellow Jews, especially the case of Max Warburgn of Hamburg comes to mind. Most of the Jewish banks ravaged by Hitler have been rebuilt and are again flourishing. We must remember the Jewish banks of the past and relations of the past with reverence and respect. When Jewish communities were powerless, without political or military forces to defend them, many a staunch Jewish banker stood up for them and saved entire communities. If we take a look at the thousands of years of Jewish banking business, we realize with pride that their success can be laid at the feet of Mt. Sinai where their ancestors stood and learnt the laws of honesty and reliability in business.
A number of townspeople are remembered for their actions that day: J.S. Allen, the merchant who first sounded the alarm A.R. Manning, who used a single-shot rifle to shoot a horse, wound Cole Younger, and kill Bill Stiles and Henry Wheeler, who killed Clell Miller and wounded Bob Younger with an old single-shot army carbine he found in the lobby of the Dampier Hotel. Acting cashier Joseph Lee Heywood was shot and killed because he refused to open the bank vault and betray the trust of the bank trustees.
Each year on the weekend after Labor Day, the town comes together to celebrate the defeat of the James-Younger Gang. It is the courage of these ordinary citizens and many others that are honored during the celebration.
What Did the Jewish Merchant Banks of Italy Do?
The Jewish merchant banks performed various functions including deposits, currency exchange, financing (credit), underwriting (insurance), and even speculation. At first, their main clients were the Italian merchants, mostly grain merchants, and farmers. Eventually, their services extended to other trades and to European royalty and nobility in general as “court Jews.” “Court Jews” were the first international bankers in many respects. Mayer Amschel Rothschild, the father of international banking, was probably the most recognizable example.
The merchant banks had many roles including:
- to farmers at the beginning of the growing season, which allowed a farmer to develop and manufacture (through seeding, growing, weeding, and harvesting) their annual crop. providing custody of valuable items and currency exchange (another thing the Jews could do and Christians couldn’t).
- Trading currency, as there were many different types of money in Italy and grain merchants needed a place to trade them in.
- Issuing insurance against future crop failures.
- Using bank notes, holding money against a “bill” (billette, a note, a letter of formal exchange, later a bill of exchange and later still a cheque).
- Speculating with money held on deposit although this risked “bankruptcy.” Lending out money on hand under the assumption that people wouldn’t make a run on the banks or fail to repay loans in bulk. This was also known as fractional reserve banking. There are also other banking practices with risk involved like speculating on future yields of crops.
The First Futures: The process of selling futures also comes from these merchant banks (in this case future yields from crops). The bankers of Italy could lend to farmers against crops in the field, in this way they could secure the grain sale rights against the eventual harvest. They then began to advance payment against the future delivery of grain shipped to distant ports. In both cases, they made their profit from the present discount against the future price. This two-handed trade was time-consuming and soon there arose a class of merchants who were trading grain debt instead of grain. This practice is all well-and-good until crop failures and the Tulip bubble. If the presumed future never comes to pass, the debt that has been speculated on is worthless, and the depositor’s money has been lost. See 2008 financial crisis and speculating on futures.
Timeline: 180 years of banking technology
Almost all advances in retail banking within the past century or two owe their existence to a leap forward in technology. Think about the ATM, which amazed the world when it appeared in a London suburb in the 1960s. Or mobile point-of-sale devices, which allow micro-vendors to turn hobbies into going concerns. ■ “Technology is everything,” says George Bassous, CEO and CTO for Affirmative Technologies, a payments technology provider based in Palm Harbor, Fla. He identifies real-time payments as the latest technological innovation poised to shake up retail banking—and the whole commercial sector. And yet a paradigm shift of this magnitude relies on a chain of smaller advances, ranging from improved core processing to tokenization and ever-more-reliable network security. ■ Staying abreast of the latest technologies is a “huge challenge,” because, “for most bankers, technology isn’t their primary job,” says Mike Brent, vice president, marketing at FiNet, a payment processing solutions provider in Boardman, Ohio. ■ The timeline on the next few pages captures some of the upheavals bankers have already encountered—and hints at even more seismic changes to come. “Within the last five years, we’ve seen an influx of new technology such as we’ve never seen before,” says Brent. “And the advances are going to continue to come quickly.”
1836 ▼ Pneumatic capsule transportation
With the invention of a pneumatic capsule system for transporting objects through tubes in 1836, Scottish engineer and inventor William Murdoch spawned a new technology in search of an application. Pneumatic capsules were first used for transmitting telegrams, but when the automobile age dawned, American banks embraced the invention so customers could withdraw money and make deposits without leaving their cars. Arguably, drive-up teller windows were the beginning of a shift in branch design that accelerated after the arrival of cash automation technologies, says Anthony Burnett, customer experience director for Level5, a custom design-build and construction company for banks and credit unions. Gone are the days when all of the customer-facing people in a bank branch “interact with the customer across three feet of mahogany,” he says.
1950 ▼ The credit card
In 1950, Diners Club introduced the first universal credit card, a portable payment solution that could be used at numerous member establishments. FiNet’s Brent points out that it was not until payments became integrated for merchants at the back end, allowing the tracking of everything from inventory to total sales, that popular venues like McDonalds and Starbucks began accepting plastic for small purchases. In 2005, Richard Jaros and Monique Steadman of Capital One Financial Corp. filed a patent for instant issuance technology today, banks with this technology can print cards for customers immediately.
1967 ▲ The ATM
UK megabank Barclays installed the first ATM in a London suburb on June 27, 1967. Two years later, Chemical Bank unveiled the first ATM in the US at a branch in Rockville Centre, N.Y. “On Sept. 2,” proclaimed a Chemical Bank ad, “our bank will open at 9:00 and never close again.” Stuart Cook, CTO of Buzz Points, an Austin, Texas-based incentivized engagement and revenue platform for community financial institutions, calls the ATM the start of “the quiet revolution of customer experience.” According to Cook, “the humble ATM…was really the synthesis of several emerging innovations,” including computer displays, magnetic stripe cards, algorithms that link an encrypted PIN with a customer’s accounts and networks that interlink a bank account to ATMs across the world. “These network standards were the foundations of the rails that enable the payments ecosystem we know today,” he says. Over time, ATMs have continued to advance. Think of ITMs (interactive teller machines), which launched in 2013 and made it possible for customers to talk with a remote teller via video monitor.
1973 ▼ FTP (file transfer protocol)
Introduced by computer scientist J.C.R. Licklider in 1973, the US Defense Department’s Advanced Research Projects Agency Network (ARPANET) is often credited with providing a vision of how computers could be networked together. Bassous notes that in the early days of the ACH network, “Customers would drive over with a floppy disk or a tape with the ACH information.” The internet, of course, has rendered that an archaic approach. Bassous says the rise of cloud computing and APIs (application programming interfaces), both results of ARPANET’s work, means real-time payment (RTP) processing is now within community bankers’ grasp.
1976 ▼ Jack Henry’s “green screen” core processor
Founded in 1976, Jack Henry is retiring its iconic green screen terminals on Dec. 31, 2019, to be replaced by a modern user interface called SilverLake Xperience. “Banking is moving into the 21st century with graphical user interfaces,” says Stacey Zengel, president of Jack Henry Banking. Training new employees is easier on the newer, more intuitive interfaces, which “help the banks gain efficiencies,” he says. Zengel explains that because new bank branches are typically smaller and staffed by fewer people, “they need a single sign-on or no sign-on interface that employees can quickly get into and serve the customer’s complex needs.”
1980 ▲ Electronic cash counters
Such counters were first introduced in Great Britain in 1980 and made bank tellers’ jobs easier. Today, some banks maintain self-serve coin counters in their lobbies so customers can see just how much money that shoebox on their dresser contains. In 1997, cash recyclers appeared on the scene. Level5’s Burnett is convinced that the new approach to branch design was spurred by these secure vaults or safes that accept cash, authenticate its value, and store and dispense it. Once large vaults became unnecessary, banks no longer needed massive physical footprints. “Cash recycling technology made it possible for banks to not have to deliver service to customers across a teller line,” says Burnett. He notes that bankers are using the freedom afforded by cash automation to spend less time counting money and more time building relationships with customers.
1989 ▲ Tablet computers
Released by GRiD Systems in 1989 and manufactured by Samsung, GRiDPad was considered the first commercially successful tablet computer. Zengel points out that tablets have transformed retail banking by allowing bank employees to move within and even beyond the branch. “Instead of waiting in a line for the teller to become available, the teller might come to the door, greet a customer, sit on the couch with them and serve their needs from a mobile tablet as opposed to a tethered device,” he says. In the good old days, bankers took notes from customers on cocktail napkins, but now they can take the bank to customers, whether that’s on a sofa in a branch or at the customer’s business.
1998 ▼ PayPal
Established as Confinity in 1998, PayPal earned praise as a user-friendly money transfer service. On the heels of PayPal came other person-to-person (p2p) payment innovations like Venmo, Popmoney and Zelle. Greg Bloh, CEO of TransCard in Chattanooga, Tenn., describes the arrival of PayPal as a watershed event. He contends that PayPal and then Venmo succeeded because they “took advantage of an account system that wasn’t working for the consumer.” He has found that products soar “when they really focus on the user experience and facilitate that experience in an easier fashion from end to end.” The advent of RTP will bring further improvements in the speed and ease of p2p transfers.
2004 ▼ Digital check clearing
With the Check Clearing for the 21st Century (Check 21) Act of 2004, a check recipient could make a digital copy of a check and then process that check electronically. Jack Henry’s Zengel points out that check imaging “eliminated a lot of paper and put a lot of couriers out of business. He says digital checks were the beginning of a chain of innovations that made payments timelier. “We’re becoming more of a real-time society,” he says. “We’ve been expanding our retail capabilities so there are more payment options, and they’re faster and easier. And we’ll continue to press that, because that’s what’s expected in the world today.”
2007 ▲ The iPhone
Steve Jobs unveiled the iPhone at the Macworld convention on Jan. 9, 2007, and the first iPhone was released to the public five-and-a-half months later. Apple Inc. would eventually move into mobile payments: On Sept. 9, 2014, Apple Pay was launched, allowing payments to be accepted at the point of sale from stored and encrypted payment card information on mobile devices.
2009 ▲ Bitcoin
The convergence of digital currency bitcoin, the explosion of social media and the global financial crisis of 2007-2009 spurred people to question norms, according to Travis D. Dulaney, CEO of Push Payments in Fort Lauderdale, Fla. “[These events] made people think outside the box,” he says. “They realized the status quo isn’t going to work anymore.”
2010 ▼ Mobile point-of-sale devices
Brent says that in 2010, when his company began offering its first mobile point-of-sale devices, FiNet finally had “a bright and shiny example of what’s out there in terms of integrated payments.” These devices, which can be plugged into mobile phones or iPads, allowed very small companies, from fruit growers at farmers’ markets to craftspeople at trade shows, to begin accepting noncash payments. What’s more, mobile point-of-sale devices were integrated with cloud-based systems and could help merchants in innumerable ways—from tracking inventory to gathering business intelligence. “That’s where our industry has really changed,” says Brent. “Payments are not necessarily a stand-alone piece anymore. They’re a component of a much bigger piece of the entire operations for retail and business-to-business.”
2011 ▼ Facial recognition technology
The Panamanian government first installed face recognition systems in 2011 to reduce illicit activity in Tocumen International Airport. Stephen Joseph, business development manager, banking and finance, for market leader in network video Axis Communications, Inc., notes that video analytics are becoming a focus for banks seeking to enhance security. Video analytics are in use at retail branches to measure foot traffic and to recognize license plates at drive-through teller stations, he says. He also notes that some financial institutions are using 360-degree-view cameras and facial detection solutions “for advance detection of potential threats.”
2015 ▲ The 2015 EMV chip shift
FiNet’s Brent says EMV chips make cards far more secure because the information transmitted is encrypted and tokenized. Additional security is critical as payments become more integrated, he notes.
Web-based compliance dashboards
Early this fall, Affirmative Technologies went live with its first banking customer for ACH Insight, a dashboard that lets bankers use graphs and other features to manage and monitor risk, perform compliance reporting and identify anomalies and suspicious patterns. “Now there are beautiful dashboards with compliance reporting, all in one place, that a banker can use for risk management and compliance,” says Bassous. He calls these dashboards “a game-changer” because they promote transparency bankers can even give regulators or auditors access to these systems so they can pull the information for themselves. In this arena, affordability is key. As banking dashboards now cost hundreds of dollars rather than hundreds of thousands, they are becoming affordable for banks of all sizes.
User-friendly onboarding apps
The dilemma for many community banks keen to expand is the tremendous expense of building physical branches, says Dave Mitchell, president of NYMBUS, a core banking modernization company based in Miami Beach, Fla. “What you need,” he says, is “a slick, sexy sizzle with an onboarding app.” Mitchell points out that community banks enjoy “the local affinity and trust” to sign on new clients over the internet, but what they historically lacked was an app that could onboard quickly (in three minutes, not 30) and a core powerful enough to handle multiple banking products from a single dashboard. “Onboarding is sophisticated now,” Mitchell notes. “Because of KYC [Know Your Customer], you have to run an algorithm to know who that new customer is. You should have an onboarding product that’s the exact same experience as if you walked into a bank.”
Real-time movement of money
Recommendations this year by the Fed’s Faster Payments Task Force provided a launchpad for real-time payments in the US (see page 78), something residents of other countries have been enjoying for a while now. American financial technology companies are eager to get started. “My mission is to help digitize the banking world and the payments world to move toward the instantaneous movement of funds. What will that do? It eliminates the monetary risk in the process right now,” says Push Payment’s Dulaney. One Push Payment service, he notes, “allows merchants to be paid immediately after they batch out on a credit card receipt at the end of the day. What we’re doing is digitizing ACH, but the next wave will be about the real-time movement of both money and data.”
1990: In 1990 male managers earned an average salary of $48,137 while women managers earned an average salary of $27,707 men in teaching earned an average of $38,663 while women in teaching earned an average of $24,767 men in sales earned an average of $27,825 while women in sales earned an average of $13,405
1991: The Federal Government declares December 6th as the National day of Commemoration to End Violence Against Women.
1993: Canadian RefugeeGuidelines are modified to cover women who are persecuted because of their gender.
1995: Women made up almost half the labour force.
1995: Gender-based analysis of legislation and policies was adopted by the federal government.
1995: The Fédération des femmes du Québec organized the Women’s March Against Poverty this was followed by the Women’s March of Canada in 1996 and the World Women’s March in 2000.
1995: Sunera Thobani was the first woman of colour to become President of the National Action Committee on the Status of Women (NAC).
1995: Bill C-72 prohibits the invocation of intoxication as a defence for violent crimes including sexual assault.
1996: The Canadian Human Rights Act is modified to include sexual orientation.
1997: Québec launches 5$ per day childcare.
1997: The Federal Government launches a third initiative to end family violence.
1998: Official recognition of mid-wifery in Québec.
1999: The Federal Court of Appeal validates the pay equity rights of 200,000 public sector workers and their union – the PSAC.
2000: 52% of victims of violent crimes are women.
2000: Women’s World March Against Violence and Poverty.
2004: Women make up slightly more than 50% of Canada’s population but only 21% of the House of Commons.
2005: Canada is the fourth Country to legalize same-sex marriage.
2007:For the first time, the Québec cabinet is comprised of an equal number of men and women.
2008: The Canadian Prime Minister extends a formal apology to Aboriginal students of Residential Schools.
2009: Sharon McIver wins her battle to force changes to the Indian Act so that grandchildren of Aboriginal women who marry non-Aboriginal may be granted Indian Status.
2009: For the first time, there are more women in the labour market than men.