We all know that Christmas – that special season of the year when Christians celebrate the birth of Jesus Christ – involves joy, fellowship, good will, exchanging of gifts, and overindulging on food. But few people realize that a number of significant banking events occurred at this time. A few of the Christmas-time banking happenings through the years are discussed below.
The first bank in Alabama was founded in December 1816 in Huntsville, then a part of the Mississippi Territory just before establishment of the Alabama Territory in March 1817. The Planters and Mechanics Bank came into being with capital of $500,000, a significant sum at that time ($12.6 million today).
The driving forces behind the bank were Leroy Pope, the “father” of Huntsville, and several other distinguished leaders. Two of the founders, Clement Clay and John Walker, later became U.S. Senators. And Clay served as the first chief justice of the Alabama Supreme Court as well as governor of the state.
On the national scene, President Woodrow Wilson signed the Federal Reserve Act on December 23, 1913. The Federal Reserve System, the nation’s central bank, was a much-needed addition to the banking system. It came about after several devastating panics that ripped apart the financial fabric of the country, the most recent occurring in 1907.
An unusual event occurred in Alabama during Christmas 1928, something that would be unthinkable as well as illegal today. Alabama bankers, The Montgomery Advertiser reported, presented a gift to banking superintendent C.E. Thomas. The Advertiser indicated that Thomas “expressed his gratitude and pride in the honor conferred upon him by the donors of the gift.” The gift was a new Cadillac sedan.
The Great Depression brought with it 157 bank failures in Alabama. An inordinate number shut down during Christmas 1930. Nine of the 38 banks that failed during the year were closed then. Two – Bank of Kennedy and Bank of New Brocton –failed on Christmas Eve, and Bessemer Trust and Savings Bank closed its doors on December 23. Three years later, regulators shut down Bank of Prichard the day after Christmas and First National Bank of Bessemer on December 28.
On a lighter note, we wish you a Merry Christmas! And may the spirit of the season reside in us throughout the year.
Wayne Curtis, former superintendent of Alabama banks, is a retired Troy University business school dean. He has written two books on Alabama banking history. Email him at firstname.lastname@example.org.