Keen business eyes were focused on a process by which
western Rhode Island could profit by the rapid growth of Providence.
Leverage through banking was a process by certain leading families
with names such as Place, Frye, and Holden. Mount Vernon, a small
area near Foster in Moosup Valley, held a store which was also a
bank. In general banks held private funds which were lent, and for
safety, probably no more than 5% of a wealthy man's income might be
placed there. Mount Vernon bank was a radical exceptioni
Pardon Holdenii in the 1830's had a $1,540 investment which was ¾ of his estate.
Pardon Holdenii in the 1830's had a $1,540 investment which was ¾ of his estate.
We have a nice description of this
bank's early days in an historical recollection by Rachael Knight
Budlong, about 1880.
The Mount
Vernon Bank was situated in Foster near the Coventry line on the
Plainfield Pike or stage road about two miles east of Rice City. The
founders of the bank were Col. Nathaniel Stone, Pardon Holden, Elisha
Fish and Peleg Place. The bank was chartered about 1824 and
commenced operations in the fall of 1825, with Peleg Place as Cashier
and Nathaniel Stone as President. The bank was kept for a few months
in the west front chamber of the two storied house, which was owned
and occupied by Pardon Holden. It was afterwards removed to a stone
building which had been built by Dr. Thomas Carpenter and used for a
while as a store after which it was sold to Pardon Holden. This
building, together with a shed, stood a short distance west of his
house, and was leased by him to the bank for as long a time as it
should be used for banking purposes after which it should revert to
Holden or his heirs.
Mount
Vernon village, called after the bank, was a thriving village at that
time. There were then two stages on the road, each driver carried a
long tin horn which he blew before coming to a dwelling house. The
stage house or tavern was kept by Elisha Fish, and was later sold to
Moses Potter.
Mr.
Holden was an enterprising man. He owned a large country store, which
at that time meant to buy and sell everything. He had a plough shop
for the manufacture of cast iron ploughs.
…
Peleg Place was the
first cashier and a stockholder. He filled that office for eleven
years when, becoming infirm from age, Charles M. Stone was chosen to
take his place, which he held for eight years, when in the spring of
1844, he removed to Providence to take charge of an agency connected
with the bank, a large amount of the business being done in the city.
Raymond G. Place was the next and last cashier.
The daughter of Pardon
Holden remembers distinctly riding home from Providence with her
father, the latter bringing large sums of money in his breast pocket,
often times not arriving until dark, something never done at the
present time. He went to and fro two or three times a week without
molestation although completely unarmed. Mr. Holden was a large and
exceedingly powerful man fully able to cope with any opposition he
was likely to meet in those days. He served the bank in this and
every way in which he could further its interests until his health
failed. Afterwards the packages of money were sent by the driver of
the mail stage or any person considered perfectly reliable and not a
dollar was ever lost in transportation. Fifty-five years ago {c.
1825} there were very few houses this side of the bridge.
It is difficult to put the pieces
together, but it appears that the men who ran the bank took assets
from providence and applied them to business schemes in the Foster
area, and in turn took raw materials, processed them, and returned
those at a premium profit to Providence. By 1850, the branch in
providence was extremely successful and the bank managed significant
assets for the time. We know this by a coincidence, an inside-job
robbery that made headlines. At the time the bank had about $60,000
in capital stock, and $41,000 in circulationiii.
There was also a trade announcement:
Foster.—
The Mount Vernon Bank, at Foster, Rhode Island, was entered between
Saturday, the 4th of September {1852}, and the following Monday
morning, and robbed of $ 10,300 in bills of the bank. About $ 7,000
were of the denomination of $ 50, and numbered mostly from No. 400 to
500, $ 2,000 of which had never been put in circulation. The
remainder were in bills of $ 10, $ 20, and $ 100. The bank has issued
the following advertisement: —
Caution.—
The Mount Vernon Bank, of Foster, hereby cautions the public against
receiving bills of the bank of the denomination of $20, $50, and
$100, issued prior to this date. All parties holding bills of those
denominations, which have been put in circulation by the bank, are
informed that said bills will be redeemed on presentation at their
counter.
By order
of the Directors,
R. G.
Place, Cashier
 |
| A rare 1852 deposit specimen |
 |
| The signatures of Raymond Place and Henry Whitman are seen on this 15 May 1856 note. It is likely one held once by the Rhode Island Historical Society. Other species show that by 1 January 1857, a new president signed. |
More trouble ensued in 1852iv
when:
Mount Vernon Bank V. Charles M. Stone.
Where a bill makes charges of fraud, which are not established at
the hearing, the bill will be dismissed, notwithstanding it states
other grounds upon which relief might have been granted, if not
blended with the allegations of fraud.
In Equity. The Mount Vernon Bank was a Bank
located in Foster, and the defendant was from the 8th of June 1844 to
the 29th of May, 1850, their agent for the purpose of transacting the
business of the Bank in the city of Providence, where the plaintiffs
provided him with an office and books to be kept in the office, in
which to record the business of his agency, and they paid him as such
agent a salary of five hundred dollars per annum. The bill
alleged first, that the defendant had not fully accounted and had
refused to deliver and exhibit the books of the Bank to the
plaintiffs, and, in the second place, charged that the defendant
fraudulently concealed the said books, fraudulently used the money of
the Bank, and by fraudulent representations obtained a release or
discharge of a portion of said account, and a surrender of the bond
given for the faithful discharge of his duties as agent. The bill
prayed for a decree for an account, a delivery of the books of the
Bank, a surrender of the release obtained from the plaintiffs and a
return of the bond. … After a careful examination of the evidence
in relation to the charges of fraud, we feel bound to say that the
plaintiffs in our judgment have failed to prove them.
The bank, essentially, was in deep
trouble, and on an attack from within. A faction, by force or by
subtlety, was attempting to commandeer the bank's assets.
MOUNT
VERNON BANK.—87 Westminster Street {Providence, R.I}.
Incorporated,
1823. Capital, $92,778. Henry Whitman, President; Raymond G.
Place, Cashier. Henry Whitman, Ira Brown, Raymond G. Place,
Robert Knight, Wm. Hill, Giles M. Nichols, Thomas S. Battey, Whipple
Phillips, Amos Fuller, John Henry Ormsbee, Thomas M. Remington,
William H. Collins, Sterry Fry, Directors. — Annual meeting, first
Monday in September. Dividends payable, first Mondays in September
and March. Discount, Mondays and Thursdays.
The Mount Vernon Bank was declaredvii publicly “broken”, that is bankrupt or defunct, by 26 September 1857. It seems that the new president could not turn the bank around.
iThe
economic & social transformation of rural Rhode Island,
1780-1850, p. 104 ff.
iiPardon
Holden and Daniel Wood were plowshare makers as early as 1823 in
Foster. See The Providence Gazette, 20 March 1823, page 1, ad.
iiip.
762 of The Bankers Magazine, Volume 2, 1949, for the year 1848.
ivMarch
Term, 1852, Supreme Court of Rhode Island, 1854 Volume 2. By Thomas
Durfee, Providence.
vp.
86, Rhode Island Register, In same issue, p., 166, W.V.B.
Phillips is listed as a store keeper in Foster for the year 1856,
published by George Adams (Volume II).
viSpelling
during her life varied from Rhoby to Robie.
vii
26 September 1857 Hartford Weekly Times, page 2, colum 7.
listed the Mount Vernon Bank as one of several banks suspended.
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