fell, as they too frequently did. Ordinarily, banks acted as if the farmer did not exist. The local store advanced him money for food, cloth, seed, tools, and whatever else he required. The farmer reasoned that if his future were left to a bank, he would never put in, much less harvest, a crop. Despite one of the three worst economic crises in United States history, the Panic of 1873 \(actually, a six-year de1870s. Banks took off accordingly. Population rose 94.5 percent in ten years, farming made a comeback, manufacturing continued its growth, and a new industry, mining, began to show some promise. The state population was about 90 percent rural, but the people were there, and more were on the way. The huge petroleum discoveries lay little more than a decade ahead. An urbanized, industrial society loomed. Banking statistics paced the growth. While Texas had only 13 national banks in 1880, the number jumped to 189 over the ensuing ten years. In that one decade, capital totals climbed from $1.5 million to $24.75 million, while combined deposits went from $2 million to more than $30 million. A Texas Bankers’ Association was organized in 1885. In 1900, Spindletop blew in, a new national banking act became law, and the nation found itself in prosperous times \(the so-called upward trend. It arrived. Texas voters took note, and in 1905 struck the thirty-year-old ban against state banks from the state constitution. When the voters removed the prohibitions, they didn’t stint. A bank was permitted to incorporate with a capital base as small as $10,000. The state now guaranteed a bank’s demand deposits, a development in which The Dallas Morning News, of all papers, played a leading role. \(William Jennings Bryan spoke in favor of state guarantees before a special months Texas. had 29 state banksall legal; ten years later it had 835, with combined time and demand deposits of almost $80 million. Meanwhile, the number of national banks rose to 535, with combined capital and surplus of $81 million and demand and time deposits of $185 million. Banks were now big business. The Federal Reserve had located in Dallas, The Texas banker, once classed with the gambler and prostitute, is now the town aristocrat, the model and envy of us all. giving the money-minded there a great thrust forward; oil was discovered across the state; more than four million people lived in Texas and earned and spent money here; and World War I was just around the corner, bringing with it great gobs of federal contract money. Texas was poised for money-making and money-spending, and a banker mentality was no longer a sin, except to a few disgruntled farmers and workers outside the mainstream. The new acceptance of banking was evident in the stirrings of state government. A department of agriculture, insurance. and banking had existed for years, uniting these unlike concerns. Now, separate departments of agriculture and finance were established. A state that had discouraged banks for nearly eighty years now gave them its official seal of approval. When guaranteed deposits proved a burden, the Legislature obligingly abolished the guaranty fund in 1927. Although at official levels the state has become increasingly fond of bankers in this century, their climb to grace has not always been easy. When the Great Depression hit and one-third of the nation’s banks closed before Franklin Roosevelt shut all all of them on March 6, 1933, much of the latent distrust came to the surface again. For instance: the town of Temple, an economically wellintegrated community, entered the Depression with four banks, but soon lost three of them. It’s difficult to feel sorry for a fallen banker if he sinks with all of your money. Congressman Wright Patman made a career of railing at the Federal Reserve System and for a while ‘threatened to make “banketeer” as pejorative a word as “racketeer.” But when good times returned, Texans laid aside their antipathy toward bankers, who proceeded to remove the cages from around their tellers’ stations, change their architecture from forted-up vaults to flowers and openness and art and soft music, and replace their chilly hearts with warm smiles and queries of “What can I do for you today?” The Texas banker, once classed with such pariahs as gamblers and prostitutes, is now the town aristocrat, the model and envy of us all. He runs 1,300 state and national banks and oversees more than $50 billion in money resources in Texas alone, not to mention all the people and things he controls or influences by virtue of his central position. Some lesson must exist here. If you feel you’re irretrievably at the bottom of the heap, take heart from the history of banking in Texas. The banker has gone from official illegitimate to acknowledged king of the throne room. And it only took him 125 years. That’s Texas progress! Joe Frantz recently resigned as director of the Texas State Historical Association after eleven years on the job -. He is a professor of history at the University of Texas in Austin. 1.111111111111.111111111111111 Illustrations by Eje Wray
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