Early Banks-Causes Which
Stimulated the Growth of Banking
Interests-Financial Condition of Portland
Banks-Ladd & Tilton-First National Bank-Bank
of British Columbia-Oregon and Washington
Mortgage Bank-Portland Savings Bank-London
and San Francisco Bank-Merchants' National
Bank-Oregon National Bank-Portland National
Bank-Ainsworth National Bank-Commercial
National Bank-Northwest Loan and Trust
Company-Portland Trust Company-Northwest
Fire and Marine Insurance Company-Pacific
Fire Insurance Company.
The first banking house of
Portland was established in 1859 by William
S. Ladd and C. E. Tilton, under the firm
name of Ladd & Tilton. It was a private
enterprise and was undertaken to facilitate
the commercial business of the city. For
several years thereafter it was the only
banking institution in the city and fully
met all the demands made upon it. In 1866
the First National Bank and the Bank of
British Columbia entered the field. In 1868
these three banks had a working capital,
including deposits, of $1,500,000, ample for
the mercantile business then conducted,
since the entire exports of Oregon at that
time did not exceed $1,250,000. Money
lending on mortgages, by corporations, was
then unknown, and there was little mortgage
money in the hands of individuals. So much
was this the case that interest readily
commanded twelve per cent with a brokerage
of five per cent. and often a much higher
rate was obtained.
In 1869, 1870, 1871 and 1872, the
construction of that portion of the Northern
Pacific railroad which connected the
Columbia River with Puget Sound, and the
extension of the Oregon & California
railroad through the Willamette Valley for
200 miles, considerably increased the
imports into Oregon, which were principally
rails, rolling stock, tin and salt in
British ships. These vessels for the first
time carried wheat and flour to Europe.
Foreign capital was thus attracted to
Oregon, and in 1873 the Oregon and
Washington Trust Company was formed in
Scotland, with a capital of $250,000,
exclusively for mortgage loans on farms. In
1875 its capital was increased to $500,000,
and in 1878 it had invested over $1,000,000
in the State.
Little progress was made in commercial
banking, however, from 1874 to 1877 on
account of the stoppage of railroad
construction and the small immigration of
this period. The three banks referred to
held practically control of the commercial
banking of the entire State from 1868 to
1878. So carefully had the moneys of these
institutions been invested that the
commercial panic, which, in 1875, caused the
suspension of the Bank of California, and
many similar banking institutions, did not
affect Portland at all.
The Oregon and Washington Savings Bank was
the fourth bank organized in Portland. It
came into existence in 1876. It was followed
in 1878 by the Bank of British North
America, and in the next two years the
Portland Savings Bank, the Metropolitan
Savings Bank, and the Willamette Savings
Bank entered the field.
From 1879 to 1883 the construction and
extension of the Villard system of
railroads, which included the Oregon Railway
and Navigation Company, Northern Pacific,
Oregon and California, and Oregonian
Railway, under one management, caused a vast
increase of population. The commerce of the
State took rapid strides and the money spent
in the community, from the building of 1,890
miles of railway rapidly enhanced the value
of the banking institutions of Portland.
Fortunately the gold coin basis on which the
banks first did business in Oregon, from
1860, was continued and prevented that
depreciation in value of securities which
was so common in the western states after
the war.
When the foreign export trade of Portland
advanced from $1,250,000 in 1868, to
$12,936,493 in 1884, and the import trade
to, $28,203,746, considerable local capital
of the city sought for further extensions by
the subsequent organization of the Portland
National, Ainsworth National, Commercial
National and latterly the Oregon National
and the Merchants National Banks, with a
united paid up capital of $750,000. These
five National institutions, with the First
National, Ladd & Tilton, Bank of British
Columbia, London and San Francisco banks
practically do the entire commercial banking
business of the State, some of them having
many subsidiary institutions all over Oregon
and Washington which are tributary and
feeders to the Portland banks.
It is safe to say that Portland, at the
present time, has as strong banking
institutions as any city in the United
States of equal population. All are doing a
safe business and are conducted on a
conservative basis, and the people of
Portland take pride in their management and
reputation. As there are no State laws
requiring the publication of the deposits or
capital of State banks and private bankers
or those of foreign banks doing business in
Oregon, their present condition and
aggregate strength cannot be accurately
ascertained. The following is a summary of
the condition of the six national banks of
Portland taken from the last report of the
United States Comptroller of the currency
for the year ending in December, 1888: Total
paid up capital, $1,250,000; surplus fund,
$187,500; undivided profits, $573,359.64 ;
individual deposits (excluding government
deposits), $3,627,497.79; loans and
discounts, $3,717,789.12; invested in United
States bonds, $825, 000; total liabilities,
$7,209, - 734.65; while the lawful money
reserve was more than double the amount
required by law. These figures reveal the
remarkable healthful condition of the
national banks of Portland. Indeed, there
has never been a failure or suspension of
any national bank in Oregon.
The following table will show the available
banking capital of the city for the year
ending December, 1889, compiled from
reliable sources:
| Oregon Banks | Capital | Surplus and Undivided Profit |
| First National | $ 500,000 | $ 700,000.00 |
| Ladd & Tilton | 250,000 | 450,000.00 |
| Commercial National | 250,000 | 136, 740.23 |
| Oregon National | 200,000 | 30,000.00 |
| Portland Savings | 125,000 | 120,000.00 |
| Ainsworth National | 100,000 | 26,954.96 |
| Portland National | 100,000 | 18,207.13 |
| Merchants National | 100,000 | 15,000.00 |
| Oregon Capital | $1, 625,000 | $1,496,902.32 |
| Total Oregon Capital | 1, 625, 000.00 | $3,121,902.32 |
| British Banks | ||
| Bank of British Columbia | $2,425,000 | $ 557,750.00 |
| London and San Francisco | 2,100,000 | 315,000.00 |
| $4, 525, 000 | $ 872, 750.00 | |
| Total British Capital | $5,397,750.00 | |
| Total Oregon Capital | 3,121, 902.32 | |
| Grand Total | $8,519,652.32 |
The average standing
deposits in the ten banks named above is
equal to $10,000,000, which, with the
legitimate banking capital and the capital
of the various loan companies of the city
would make the present available banking
resources of Portland fully $20,000,000, a
statement based on a conservative rather
than over estimate.
A Clearing House was opened in Portland,
July 15, 1889, and from that date we are
enabled to give the reports for the first
twenty-four weeks of its existence.
| Clearings | Balances | |
| July, two weeks | $2,966,641.26 | $ 657,167.63 |
| August, five weeks | 7, 273, 339.84 | 563, 332.65 |
| September, four weeks | 6,110,056.71 | 1,051,479.87 |
| October, four weeks | 7, 895, 075.99 | 1,347,030.33 |
| November, five weeks | 9, 651, 097.99 | 1, 972, 803.49 |
| December, up to 28th, four weeks | 7, 733, 979.16 | 1, 517, 534.88 |
| $41,630,190.95 | $8,109,348.85 |
Banking statistics such as
the above are conceded to furnish the best
possible gauge for determining the real
condition of a city's commercial standing,
and Portland's exhibit in this regard places
her, according to population, as a trade
center, unsurpassed in the United States.
In mortgage banking the success of the
Oregon and Washington Trust Company from
1873 to 1880, when it was consolidated with
the Dundee Mortgage Company at a premium of
seventy per cent. profit, caused foreign
mortgage companies to seek investment on the
North Pacific Coast. In 1880 the Pacific
Loan Company of Liverpool, and the Dundee
Mortgage and Trust Investment Company, of
Scotland, entered the field. Subsequently
the American Freehold and Land Mortgage
Company, of London, and the New England
Mortgage Company, of Connecticut, followed
by the American Mortgage Company, of
Scotland, in 1881 and the Oregon Mortgage
Company, in 1883, all of which opened
offices at Portland. These companies had a
combined capital of over $3,500, - 000
invested in the State of Oregon and
Washington Territory, which was the means of
developing, to a great extent, the lands of
Eastern Oregon and Eastern Washington,
supplying the new settlers, who arrived from
1879 to 1883, through the building of the
Villard system of railroads, with. money to
improve the vast tracts of land which was
then opened up for settlement. Their
aggregate strength, however, alarmed the
granger portion of the State Legislature and
in December, 1882, a special mortgage tax
law was passed, declaring that all mortgages
should be taxed at their face or par value.
The effect of this law has been, in the
main, harmful. The companies previously
named immediately called in all matured
loans and have greatly reduced their
investments since the law went into effect.
That the development of the resources of the
country has been retarded by this
legislative attempt to decrease the -profits
to the mortgagor, is an acknowledged fact.
Foreign capital, in a great measure, has
sought other fields, while the mortgage
demand being much greater than the supply,
has caused a higher rate of interest to be
maintained than would have been the case if
competition for mortgage securities had
prevailed.
In the following pages we have aimed to
present more in detail the history of each
banking institution in Portland.
No change occurred in the firm of Ladd &
Tilton, private bankers, from the time they
commenced business, in April, 1859, until
1880, when Mr. Tilton withdrew. They
commenced business at 73 Front street, and
so successfully were they that, in 1861, the
capital was increased from $50,000 to
$100,000. A few years later the earnings of
the bank turned into the business brought
its capital up to $1,000,000. When the
partnership was dissolved, that is, in 1880,
bills receivable amounted to upwards of
$2,500,000. As an evidence of the sound and
safe business conducted by this concern, it
may be stated, that when the bank made its
statement, in 1888, there was less than $1,
300 of this balance still outstanding.
Business was conducted on Front street until
1869, when the present bank building, corner
of First and Stark street was completed. The
career of W. S. Ladd, who has been at the
head of this financial house from the start,
is so thoroughly given in other portions of
this volume as to make further mention in
this connection unnecessary. His close
business calculation and powers of
financiering have made possible the
accumulation of the largest private fortune
in the Pacific Northwest. He still
personally superintends and manages his
extensive interests with all the shrewd,
far-seeing business sagacity which marked
his younger years. Since the retirement of
Mr. Tilton, Mr. Ladd's eldest son, William
M., has been a partner in the bank. He
inherits many of his father's traits, a
strong will, perseverance and sterling
integrity. He was prepared for college at
Andover, Massachusetts, and graduated from
Amherst College in 1878.
The First National Bank, as its name
implies, was the first bank organized on the
Pacific Coast under the national banking
law, and remained for several years the only
one. It was organized early in 1866 and
opened its doors for business in May of the
same year with a paid up capital of
$100,000. L. M. Starr was president and
James Steel, cashier. The opening was
announced by advertisement in the
Oregonian of May 9, stating that the
bank was the designated depositary and
financial agent of the government, and that
exchange would be drawn on San Francisco and
New York at favorable terms. For some time
the bank occupied the upper floor of the
building, No. 73 Front Street.
In August, 1869, the greater part of the
stock of the concern passed into the hands
of Hon. Henry W. Corbett and Hon. Henry
Failing, who have since so successfully
controlled its destinies and extended its
business. Its capital has been increased
from $100,000 to $500,000, while its foreign
business has been extended until now it has
correspondents in ever important city in the
world and has become the principal banking
house of the city. Since 1869 Henry Failing
has been president of the bank and Henry W.
Corbett, vice president. The other officers
are: G. E. Withington, cashier and H. J.
Corbett, assistant cashier. The present
building occupied by the bank on the corner
of First and Washington streets was erected
in 1883 at a cost of $80,000, and is the
finest bank building in the city.