BANKS
HUDSON,
COLUMBIA COUNTY, NEW YORK
By Captain Franklin Ellis125
1878
THE BANK OF COLUMBIA
The Bank of Columbia was, as has already been mentioned, the first bank of Hudson, and the third was chartered in the State. The preamble and agreement place before the capitalists of Hudson, for their subscriptions to the stock, was a follows:
"Whereas, it appears from the experience of all Commercial Communities, that well-regulated Banks are highly useful to Society, by promoting Industry, increasing the Medium of Trade, preventing the exportation of Specie, furnishing for it a safe deposit, and advancing the interest of the Community by introducing punctuality in the performance of Contracts; We, the Subscribers, desirous of promoting such an Institution, do engage to take the number of Shares set against our names respectively in a Bank to be established in the city of Hudson."
The act incorporating the bank was passed March 6, 1793. The "whole amount of stock, estate, and property" to be held by the institution was limited, not to exceed $160,000, and was divided into "four hundred shares, at four hundred Spanish milled dollars per share." Its affairs were to be managed by thirteen directors, of whom eight must be residents of Hudson; and its charter was limited to expire in May, 1811.
The first board of directors was composed of Thomas Jenkins, Seth Jenkins, Duncan Ingraham, Stephen Paddock, John Thurston, Justus H. Van Hoesen, David Lawrence, Cotton Gelston, William H. Ludlow, William Cantine, Walter V. Wemple, Peter Van Ness, and John Livingston. Thomas Jenkins, president; James Nixon, cashier.
The bank was duly organized, and commenced business in a house in Main street near Front.* About ten years afterwards, it was removed to the second story of the building standing on the southeast corner of Second and Warren streets. Its third and last location was in a brick building which had been erected for its accommodation, on the southerly side of Warren street, where the fine structure of the Hudson River Bank now stands. That old building has been but recently demolished, and its appearance is still fresh in the minds of many people in Hudson.
The bank was very prosperous during the earlier years of its existence, but afterwards became less so. The management of its affairs was bitterly criticised (sic). Among the allegations made was that, after the death of Mr. Jenkins, sound business principles were dropped, and that the bank was used as a political engine. Whether the charge was true or false it grew out of the fact the Elisha Williams (who was its president after Mr. Jenkins), Jacob R. Van Rensselaer, and others who were most influential in its management, were leaders in the Federalist party; and an occurrence which had some connection with its concerns was used with cruel effect by the Anti-Federalists against one of their chief opponents, Judge Wm. W. Van Ness. The circumstances were as follows: In the issue of the New York American, dated Jan. 16, 1820, it was charged that about the time (the winter of 1812) when application was made to the Legislature for the charter of the Bank of America, the applicants had bargained for the support fo three prominent public men of Columbia, viz., Elisha Williams, Jacob Rutsen Van Rensselaer, and Wm. W. Van Ness, and had promised that the bank, when chartered, should loan to the Bank of Columbia the sum of $150,000 for fifteen years, at six per cent interest, one-half of which interest was to be retained by the three gentlemen named, for their own private use, in consideration of their services in securing the charter; that after the charter was obtained the directors refused to live up to their bargain, but consented to pay instead, and did actually pay to Mr. Williams, the sum o f$20,000 for himself and associates; and that he (Mr. Williams), after receiving it, refused to divide any part of it unless a fourth person was admitted to an equal share.
Upon the appearance of this publication a committee of the Assembly was appointed to inquire into the facts, with a view to the impeachment of Judge Van New, whose position upon the Supreme bench rendered him peculiarly vulnerable to their attacks.
In the course of the investigation the committee examined Mr. Williams, who testified that before the Bank of America was chartered he had made an agreement with its agents to the effect that, if the charter was obtained, the Bank of Columbia should keep its accounts with the Bank of America; that the latter should allow the former to overdraw its account to the amount of $150,000, paying interest at the rate of three per cent only; that this arrangement should continue for fifteen years. He said that this contract was made with him individually, and for his own individual benefit; that he had acted solely for himself, and had a right to make such terms with the Bank of Columbia as he and the directors might mutually agree on; and that Judge Van Ness had known nothing of the contract until after the bank received its charter in 1813 but that he (Van Ness) had voted for the charter simply as a Federalist measure, as it was understood that the stock was to be taken by Federalists, and that its influence was to be used to counteract the Anti-Federalist influence wielded by the Manhattan Banking Company.
It also came out during the examination that before the Bank of America went into operation, the president, Mr. Wolcott, proposed to Mr. Williams that the previous agreement should be set aside and a new one substituted, to this effect, that the Bank of Columbia should be allowed to overdraw its account to the extent of $150,000 for fifteen years at six per cent, Mr. Williams and two other responsible parties to become surety for the amount, and that he (Mr. Williams) should receive from the Bank of American $20,000 cash in lieu of the advantage which would have accrued to him by the terms of the former agreement. Mr. Williams consented to the change, and Mr. Van Rensselaer and Judge Van Ness became sureties with him, each receiving $5000 out of the $20,000 paid by by the Bank of America; Mr. Van Ness, however, receiving it unwillingly, and only when Mr. Williams insisted on his doing so.
Thus the investigation resulted in the complete vindication of Judge Van Ness, but his sensitive nature received a wound which is said to have hastened his death.
The bank continued is existence for thirty-six years, and failed in 1829, not only inflicting severe losses on individuals, but creating panic and financial depression throughout the county.
*Afterwards the residence and tailor-shop of Prosper Hosmer. It has been stated that this was built especially for the use of the bank, but we are assured by high authority that this was not so; and it seems improbable that it was, as, in that case, the bank would hardly have moved as it did into temporary quarters on a second floor.
