FlNANCES AND THE CATTLE TRADE -- THE BANKING HOUSES THAT DO THE CATTLE BUSINESS OF THE WEST -- THE FIRST NATIONAL OF KANSAS CITY -- THE MASTIN BANK -- THE GREAT PANIC OF 1873 -- SUSPENSION AND RESUMPTION -- HOWARD M. HOLDEN -- THE FIRST NATIONAL AND SAVINGS BANKS, WICHITA -- NOAH EBY & CO., OF COFFEYVILLE -- D. W. POWERS & CO., ELLSWORTH.
It has been truly said that money is the sinews of war. It is equally as true that it is the sinews of the live-stock trade. The motive power which drives as well as oils the mighty, yet intricate, system upon which the live-stock commerce, both in the living and the product condition is done. Immense sums of money are paid annually for live-stock for consumption and other purposes. But few of the civilized world's inhabitants do not daily consume more or less meat, either fresh or cured, and of the few who do not so daily use it, poverty, more than a dislike, or lack of desire for it, prevents them from using it also. Often in single live-stock transactions as much as fifty to one hundred thousand dollars changes hands, and transactions reaching from one to twenty thousand dollars are of almost hourly occurrence in every live-stock mart of note within the country. It is common in transacting live-stock business, to borrow large sums of money, usually upon short time, say thirty to ninety days. Not one operator, whether he be drover, feeder, or shipper, in a thousand, ever has money sufficient of his own to conduct all his business operations without borrowing capital. If he had so much of his own, he would not need to operate at all, for he could and would live at his ease. The reader may rest assured that it is the hope of gain, and not the love of the business, or the labor connected with it, that impels the operator to take the risks, endure the hardships and perform the labors which he does. Drovers, shippers, and feeders of cattle are almost unavoidably heavy borrowers of money. The banking institutions are the most common source from which they obtain loans.
In every live-stock mart or section of stock country, be it great or small, there is, and of a necessity there must be, one or more financial institutions which are able to supply the requisite accommodations and make a speciality of accommodating the stock trade.
As every other great center, or geographical division of the live stock trade, has its leading financial institutions, so has the live stock trade of the west and southwest. It is useless to tell a western reader that that institution was for many years the First National Bank of Kansas City alone, for every stock-man knows it; the officers of this Bank at an early day saw, as with a prophetic eye, the future greatness, importance, and the lucrative nature of the live stock trade and its value as a commerce to such banking houses as secured it; seeing this so plainly they put forth early and effective efforts to secure it to their Institution and to Kansas City. At first they had little or no competition, for few other banking houses cared to take such as they deemed extreme extra-hazardous discount risks, as they regarded loans to the uncouth sunburned drovers who claimed to have herds grazing on the prairie, somewhere out on the uncertain frontier of civilization. At first but few drovers wanted money, save for expenses or to pay off extra help on arrival at Abilene, for they had purchased their cattle on time, payable when the cattle were marketed and returns were realized; this limited amount needed could in most cases be obtained in Abilene or Junction City. But as the volume of trade grew, the necessity for money grew also. Because the time for payment for their herds in whole, or in part, became shortened, it often being at the time of arrival at Abilene, whether sale of the stock was made or not. This of course increased the demand for loans, which soon outgrew the supply at Abilene and other western points, and in such cases it was the custom of the Illinoisians to direct the drovers to the First National Bank of Kansas City, for funds or for eastern exchange to take back to Texas. Indeed, it was common to advise, and often urge, returning drovers to take New York exchange instead of currency, back to Texas, thus avoid the danger of robbery or permanent loss whilst en route home. Often those who declined to act upon the advice, rued it when too late, in several instances they were robbed and sometimes murdered for their money, whilst going through the Indian Territory to Texas. The drovers were not slow in learning what financial institutions were disposed to afford them needed accommodations. It is true that in a certain sense, banking with cattle men is extra-hazardous, from the fact that their herds are distant, often in different States and counties from the one in which the bank is located, and being a class of assets that has the power of self-transportation, could be hurried off in a short time to regions in which force and the pistol is the only recognized law; this being the fact, the bank that affords them discounts must do it as much upon the drovers honesty and honor, as upon his financial responsibility; and this of course requires in the banker a keen, shrewd judgment of human nature, one who has faith in humanity, one who does not imagine every applicant for accommodation to be a thief or swindler, one who is willing to let go his ducats without exacting a pound of flesh as surety from next the heart of the borrower, a banker who understands the financial necessities of live stock men and the nature of their business, one who regards the major part of business men as being honest, and not as ever seeking to swindle somebody. Such are some of the requisite traits for banking in the western cattle trade; such a one has ever been at the head of the affairs of the First National Bank of Kansas City.
It is related that at an early day in the opening and development of the cattle trade, when the personal of the driving fraternity was but little known in Kansas City, a certain now well known Major who had just arrived at Abilene with a large herd of cattle, and needing a loan, after having made unsuccessful applications at other banking houses of Kansas City, went into the First National, and, unheralded and without formal introduction, went abruptly into the President's room and bluntly announced in a full audible voice: "My name is Major_______ , I have a herd of two thousand head of cattle at Abilene, Kansas, I want ten thousand dollars for ninety days; can I get it here?" He was asked by the President if he knew any one in the city, or if there was any one who knew him or that would probably endorse his note; to which the blunt drover frankly replied "No." After talking a few moments, in which the banker put various questions to the drover, and scanned his countenance closely as if he were looking into his inmost soul and noting whether its impulses were honest or otherwise, the drover was dismissed with direction to call again the next morning. Promptly at the hour designated the drover went to the banking office; he had nothing but his stock, nevertheless he was told to sign a plain note of hand, upon which he received ten thousand current dollars less the interest. It is needless to add that the note was paid promptly at maturity, just as western drovers are in the habit of doing.
A hundred similar instances might be related where money has been freely loaned to the drover without other than personal security. Yet as a rule to which the exceptions are rare indeed, the notes have been paid on or before maturity. The First National of Kansas City was established and opened for business in 1865, with a capital of $100,000, and has gradually increased in capital and strength, until it now ranks second to none west of St. Louis. In 1868 it began to cultivate the acquaintance of, and extend accommodation to western and southern cattle men. Those at the head of that institution early saw the importance, magnitude and profit of the cattle commerce, then just beginning to develope, and with rare business tact, reached forth a helping hand to aid, secure, and build up the great commerce, and richly have they been rewarded for their foresight and efforts. By the year 1870, their business with the drovers had so materially increased, that they opened an office at Abilene under the able management of W. H. Winants, a capable and popular young business man, who has long been honorably connected with the institution, and by this means secured the lion's share of business. Indeed but a small fraction of the banking business of the western cattle trade was done in other financial institutions. So much has this been the case that it is justly regarded as a part and parcel historically of the western live-stock trade, hence the space devoted to it. It never seemed too limited in its ability to accommodate drovers and dealers, and never unwilling to aid liberally any upright man who was making honest efforts to conduct his business. It has been influential in a marked degree, in securing and aiding the various packing establishments found at Kansas City. Among stock men it has many patrons -- from the Rocky Mountains on the west to the gulf on the south, who regard it as their best friend and most ready helper.
As may rightly be supposed, when the great panic of 1873 burst upon the country, this institution, like every other one that was doing an extended business, felt its fury severely. For sixty days during that unprecedented stringency, it kept open and paid more than one million of its obligations. At the beginning of the panic, of its assets, were live-stock men's notes to the amount of over one half million dollars. In nearly every instance they were met and paid at maturity, although to do so caused the sacrifice of thousands of cattle upon ruinously low markets. Indeed it may be said that that institution has found, upon the severest of tests, that banking with live-stock men, has been eminently satisfactory and safe instead of extra-hazardous, as it appeared to be in the beginning.
During the prevalence of the panic, which depressed the live-stock interests of the west more disastrously than any other branch of commerce, the various marts were the centers at which the greatest distress imaginable was daily manifested. Indeed it may truthfully be said, that for many weeks, to be upon a live-stock market was, to one in sympathy with the operators, like witnessing a daily calamity. So depressed was the business, and so severe were the losses sustained, that whole days would be passed without one being able to hear a lively or jovial remark or a smile upon the universally sad and gloomy countenances of the dealers. This was emphatically the case upon the Kansas City market during those memorable weeks of financial darkness and ruin. But when it was known that the First National Bank was ordered into liquidation by its stock-holders and officers who had in the previous sixty days struggled so persistently that in sheer exhaustion they adopted the course as a means of shelter and relief from distress and over-taxation -- when the fact became known among stock men at the yards, a gloom little less in its density than Egyptian darkness, settled upon every one, and a sadness such as one experiences on hearing of the loss of a friend, was depicted upon every countenance. Men spoke in inaudible accents, and sorrow was manifested upon all sides. Many could scarce talk of the event so deeply were their sensibilities touched. It was conceded by all to be the greatest and crowning disaster of the many that had occurred. That day was the gloomiest ever experienced in Kansas City.
After a few brief days during which business men recovered from the paralyzing shock, a petition went up numerously signed to the directors of the bank asking them to re-open, and pledging aid and support in any reasonable amount or manner. When, after the elapse of a few weeks, it was announced that the bank would re-open with its capital increased to $500,000 a feeling of joy and relief was manifested on all sides. Now that resumption with double capital is fully accomplished, the live stock dealers look forward to the future with buoyant hopes and sure confidence that both they and the bank will be mutual co-workers to the accomplishment of a great and good destiny.
The gentleman who has been at the head of this institution nearly from its beginning is so widely and well known among western stock-men, and has been so closely identified with the developements of the live stock commerce of the west, that its history would be incomplete without a brief sketch of him. Howard M. Holden is a native of Massachusetts, in which State he was reared and educated, the latter including a thorough practical business training, to which is due in no small degree his subsequent success in business. Soon after attaining the years of manhood, not meeting opportunities to suit him in his native State, he turned his face toward the west, whither goes so many capable young men to better their fortune and aid in developing those great new States. Iowa was the State to which he directed his steps, and at Des Moines opened a bank which he conducted successfully for more than three years. Meeting an opportunity he sold out and removed to Washington in the same State, and opened a bank which was a branch of the State Bank of Iowa. This he conducted for six years with marked success, but when by national legislation its circulation, in common with that of all other private banks, was taxed out of existence, he sold out and came to Kansas City and bought nearly the entire stock of the First National Bank, which had a few months before been organized but had not got fairly underway, and of course had made little or no progress or impression on the business community. So soon as he became identified with the institution, he industriously looked about to increase its sphere of usefulness, by building up a business. The opening of the cattle trade, with other new enterprises then developing, afforded superior opportunities, which he was by no means slow to improve. The lapse of time was brief before his institution took rank among the first in the city, and began to make its power felt throughout an immense area of country, greatly to the accommodation and benefit of the business men thereof, as well as to Kansas City.
As the city has grown, and its commerce expanded, his acquaintance and influence has extended co-equal, and that invariably to the benefit of the city of his adoption. He is personally, in every sense, an enterprising, liberal, appreciative business man, one who has naturally an endowment adapted to the business in which he is engaged, and fully understands. He appreciates the wants, necessities and nature of live-stock operations, and of live-stock men. His affable manner and ease of approach, render him popular with the live-stock dealers. His willingness to aid them alike, with his easy, smooth manner of declining their requests when not convenient or desirable, are alike unoffending if not pleasing. He is a man who possesses rare faculties which contribute to his popularity and success -- one who has hosts of friends and but very few enemies.
Complaints are rare, indeed, of unfair, oppressive, or arbitrary dealing; or of haughty or harsh treatment at the hands of Mr. Holden. Standing as he does at the head of the strongest financial institution in the Missouri Valley, his power is immense to do great good unto many men, as well as to his adopted city, and it is not doubted that he will be equal to his opportunities and so wield the power that his name will descend to future generations as one among Kansas City's greatest benefactors.
For the more perfect accommodation, and the greater convenience of Kansas City's constantly increasing live stock trade, the First National established an office at the stock yards and placed Mr. Winants in charge. This office has been of great benefit and an appreciated convenience to live stock dealers.
The success and profitable results accruing to the First National in its long experience in banking with live stock men, has fixed the determination to continue to seek and accommodate that branch of commerce in the future as in the past. Its greatly increased capital, of half a million dollars, will proportionately augment its ability to accommodate a larger proportion than heretofore of the constantly increasing demand for financial accommodation The institution rightly claims the credit of being, in a financial sense, the founder and promoter of Kansas City's live stock commerce. None will dispute the claim, and none are so historically connected with the western stock trade, hence this extended sketch.
But it is not the only banking house that has in later years successfully sought to extend its line of business to stock-men. The Directors of the Mastin Bank, during the early part of the year 1873, turned their attention toward the stock trade. They have been successful to a degree so highly satisfactory, that at the close of the first year, they determined to continue. This institution also established a branch office at the Kansas Stock Yards, under the management of M. R. Platt, which has extended facilities and accommodations to a large number of stock-men, and its patrons are increasing daily. In the association constituting the Mastin Bank are some of Kansas City's oldest, most wealthy, and prudent business men, and its entry into the vast field of live stock commerce is warmly welcomed by stock-men. There is ample room and use for its large capital in the chosen field, without intruding upon the pre-occupied ground of other financial institutions. The First National and Mastin Banks will in the future be able to extend ample financial accommodation to the patrons of Kansas City's growing live stock mart, and may be regarded as the central financial institutions -- the heart of the immense stock trade centering there.
Whilst upon each line of road centering at Kansas City from the west and south, at such points where Southern cattle are driven for sale and shipment, other and minor financial institutions are established, which afford accommodations and facilities, although generally in a comparatively small way, I yet aggregating immense sums. In all cases a round interest is charged the drover and dealer, who are as a rule scrupulous about paying up their bank obligations. A breach of faith upon the part of one would to a great degree effect the credit of all, so that other than an honest honorable course is as a matter of self-protection frowned down by all stock-men, and the one who would attempt to defraud his banker would be made to feel uncomfortable beyond endurance.
Messrs. Noah Eby & Co., private bankers at Coffeyville, Kansas, give close attention and liberal financial accommodation to the live-stock trade centering at that important point. They have never experienced serious trouble in loaning a large amount of capital at good rates, or the least difficulty in securing prompt payment. By a shrewd arrangement they manage to be posted on what herds of cattle leave Texas for their point, and the financial standing of the owners.
The Messrs. Eby's were large and successful live-stock operators in northern and central Ohio, but on going to Kansas decided to enter the banking business as in it there was little competition and a broad and inviting field. They are well pleased with the chosen vocation, as well as the point selected. They have contributed largely to Coffeyville's recent success as a cattle mart; and after a full test are satisfied that banking with western drovers is both safe and very profitable. At Wichita, Kansas, the First National of that place, was the first bank which extended accommodations to stock men. It entered the field and by liberal accommodations and shrewd management, was able to do an enormous and lucrative business with stock men, greatly aiding the point to build up and retain a large cattle trade. But it did not have the field to itself but one year. The second season the Savings Bank under able and obliging management was opened, and from the first had many warm friends and patrons among the stock men. To the liberal policy pursued by Wichita's bankers, as much as to any other one source, is that point indebted for its wonderful success as a cattle market and shipping depot.
Among the solid and successful cattle men of Kansas, none are better known than D. W. Powers, whose residence is at Leavenworth, but whose principal place of business is Ellsworth, where he stands at the head of the banking house which does the financial business of the Kansas Pacific's cat- tale trade. In this banking house are associated his nephews who attend to the office duties whilst the principal and senior member devotes much of the time to his live-stock interests and operations. Mr. Powers is in every sense a self-made man. Not liking the restraints of his Kentucky home, at the early age of sixteen he departed for the State of Virginia and began life upon his own account. But in after years he re- moved to Missouri where he engaged in farming and stock-dealing.
In those days there was a great demand for suitable cat- tale for oxen, to be used in freighting over the plains, and into this ox trade he gradually grew until he became one of the principal purchasing agents of extensive freighters in the days of "prairie schooners." He was not long in getting initiated into the profits of the freighting business, and determined to start an outfit as large as his means would admit on his own account; accordingly, after raking together all his means, and investing it in wagons, teams, and necessary outfitting, he found that three teams of four or five pairs of oxen each was the result, and represented his available wordily assets. But not daunted by its limited appearance, rather pleased that it was as much, he took in his own hands one of the ox whips, and, to use the parlance of early days "whacked bulls" many trips to Denver and Salt Lake. In this business he gradually acquired a start in this world's goods; got something ahead for which he owed nothing. But this lucrative, although hard business, did not last very long; soon the construction, or rather the completion of the Pacific Railways superseded freighting by ox teams, and "prairie schooners" became institutions of the past; institutions about which cling many reminiscences of events interesting and thrilling. But the departure of the days of overland freighting did not leave Mr. Powers without means, or a knowledge of good paying business opportunities. In wintering his freighting teams, which in time grew to be large herds of oxen, he learned the advantages and facilities of Central Kansas as a live stock country. As early as '66 he bought many Texan cattle and wintered and fatted them to his great profit. Having practical experience at so early a date he improved his opportunity by purchasing four superior locations for live stock ranches, one of which is upon Bluff creek, at its junction with the Smoky Hill river, twelve miles southeast of Fort Hacker. This ranch is one of four owned by D. W. Powers & Co., upon which they annually winter about three thousand head of cattle, and sufficient cow-ponies to handle the stock. Over two thousand acres of good tillable land is included in this ranch, of which more than one-fourth is substantially fenced with posts and boards. A large part of the enclosed lands are under cultivation, Hungarian, millet, oats, and corn, being the chief products. Although the uplands furnish unlimited grazing partly of buffalo grass, yet they deem It prudent, if not necessary, to provide a good supply of hay and other food; with such facilities and good preparations their wintering operations are uniformly a success, and heavy losses by storms comparatively unknown. Several hundred acres are annually sown to Hungarian grass and the hay thus produced is of the very best for cattle feeding, it is easily raised and harvested, the land yielding abundantly. When properly cut and cured it forms the best and cheapest feed that can be secured by cultivation. It will keep Texan cattle thriving and in good heart during the worst winters known in Kansas.
The ranches are each under the supervision of a foreman, under whose direction are enough herdsmen and other laborers to conduct business and take proper care of such stock as the proprietors may purchase. Mr. Powers' business as may be inferred, is large and varied and requires a good business man to successfully manage it, this he has shown himself to be. He has engaged in almost every branch of business pertaining to live stock, as well as every manner of handling it, having corn-fed, grazed, ranged, shipped, and packed cattle, besides for one or two years fed the "Lo family" on the Upper Missouri river country; in nearly all these departments he has been successful, and now ranks among Kansas' most responsible men. He is an unostentatious, matter of fact, every day style man, whose solid judgment and long varied experience, enables him to plan and execute business operations with unerring skill and certainty; quiet kind, and mild in disposition, he has many friends and an Irreproachable credit. Few men have labored more diligently and perseveringly for success, and few have been more amply rewarded for their labors than he.