History with ‘Hud’: Recalling when Wilmington received its first bank in 1804
WILMINGTON, NC (WWAY) — There are countless options for banking today around Wilmington. But more than two centuries ago, your choices weren’t quite as endless.
In 1791 U.S. Treasury Secretary Alexander Hamilton persuaded Congress to charter the first Bank of the United States. Headquartered in Philadelphia, the bank had eight branches in major cities but none in North Carolina.
Discussion of the need for a bank in the state was first considered seriously in 1802. On a motion by Dr. Jones of Johnston County, a committee was established to look into the issue in 1803.
The result was the Bank of Cape Fear as the first private state bank chartered in North Carolina. It opened in December of 1804 along North Front Street, at the site of the Masonic Building today. North Carolina was the last of the original 13 states to build a private bank, with it standing as one of the largest banks in the entire state until the Civil War.
The North Carolina General Assembly authorized an initial capital of $250,000 with notes and debts to not exceed $750,000. In addition to the headquarters in the Port City, the bank also had a branch in Fayetteville open around the same time followed by New Bern.
A Raleigh branch opened on April 8, 1807, with other branches popping up around the state in the following years as the state’s economy grew in the 1820s through 1850s, including in Charlotte by 1835 along with Asheville, Fayetteville and Greensboro by 1859.
The Federal Government did not issue paper notes until the Civil War. So many of the early state banks provided their own banknote currency, which often was depreciated outside the state by other financial institutions. The banknotes widely ranged in denominations, including notes for $1, $3, $4, $5, $7 and more.
By 1861, the Bank of Cape Fear’s capital reached $2.5 million. The bank remained open throughout the Civil War, and the Wilmington branch prospered from the blockade-running trade. But when the state needed to raise funds to support the military, one step was to authorize the treasurer to borrow $1 million from the banks at 6 percent interest; the loan amount increased almost immediately to $3 million and later to more than $8 million.
Despite the financial strain, surrender in 1865 did not stop the cost of the war. The banks had survived, but their doom was sealed when the U.S. Congress levied a 10 percent tax on all notes issued by state banks. Every bank in the state ceased operation, including the Bank of Cape Fear.
Banks seemingly dot every block across the region today. But they all trace their roots back to a time when only one location in the Port City could meet local financial needs.
Meteorologist Matthew Huddleston (‘Hud’) has always had two major loves – weather and history. While you can watch him talk about weather each morning on WWAY, he looks forward to bringing you a little piece of history each Thursday on WWAY’s website.
To read other History with ‘Hud’ segments, click HERE.
