At the time of Trigg County’s establishment in 1820, the United States was in the midst of the depression that followed the Panic of 1819, a financial collapse caused by a crisis in banking. Europe’s return to peace after Napoleon’s final defeat at Waterloo in 1815 spurred an economic boom. The Industrial Revolution gained momentum, rapidly transforming England into the manufacturing powerhouse of the world. Industrialization led to ever increasing demands for imported raw materials, especially cotton, and food for the growing numbers of urban industrial workers. To get the necessary raw materials and food, Britain looked to her former North American colonies, now the United States. Trade and commerce expanded rapidly. In America, the trans-Appalachian west was being settled with amazing speed.

The First Bank of the United States adopted a policy of easy credit and loaned enormous sums to land speculators. The Bank of Kentucky, founded in 1806, followed the national bank’s lead, making loans and issuing paper currency far in excess of its ability to redeem those banknotes in gold. The speculative bubble burst in 1819. Land values plunged and speculators were unable to repay loans. The Bank of Kentucky called in its loans and stopped redeeming its banknotes in gold. Paper currency that it had issued became worthless. The General Assembly revoked the bank’s charter in 1822.

The episode left many people with a deep distrust of banks and leery of the paper currency that they issued. Cash money in the form or gold and silver coins from the U.S. Mint was scarce. From the 1820s until after the Civil War, the agrarian economy operated on a multi-tiered system of credit extended by merchants known as factorage. Other than a failed effort in January 1860, when “A bill to authorize the Southern Bank of Kentucky to remove her branch from Hickman to Cadiz, in Trigg County” was introduced in the General Assembly, there was no known attempt to open a bank in Trigg County until after the Civil War.

W. J. Bacon & Co.

On Jan. 25, 1867, the Clarksville Chronicle printed the notice: “Personal — From a card of W. J. Bacon & Co., of Cadiz, Ky., we observe they have opened a general Banker’s and Broker’s establishment in that thriving little town. — Hugh. H. Poston, our former townsman and highly esteemed friend, is the cashier. — From an acquaintance of many years, we, in common with this entire community, can heartily recommend him as both a correct and thoroughly qualified business man and a most estimable gentleman.”

A letterhead of the bank preserved in Western Kentucky University Library’s special collections states that “W. J. Bacon & Co., Bankers” dealt in “Gold, Stocks, Bonds, and Exchange, on all the Principal Cities, bought and sold.” The 1871 Merchants and Bankers Almanac indicates that W. J. Bacon’s correspondent bank was Fourth National Bank in New York City. (“A correspondent bank is a financial institution that provides services on behalf of another financial institution. It can facilitate wire transfers, conduct business transactions, accept deposits and gather documents on behalf of another financial institution. Correspondent banks are most likely to be used by domestic banks to service transactions that either originate or are completed in foreign countries, acting as a domestic bank’s agent abroad.” —Investopedia.)

William James Bacon (1832-1891), president of the bank, was the grandson of wealthy tobacco planter and horse breeder Edmund Bacon (1785-1866). Edmund Bacon was overseer at Thomas Jefferson’s Monticello plantation before coming to Trigg County in 1818. William J. Bacon, both of whose parents died while he was still a child, grew up on his grandfather’s 1,000 acre farm located between Montgomery and Gracey.

In 1863, W.J. Bacon, in partnership with his brother-in-law William D. Clardy, Edward C. Roach, George W. Blakemore, Joshua W. Gray, and Clarksville tobacco speculator Daniel Gold, formed Bacon, Clardy & Co., Tobacco Commission Merchants. Bacon, Clardy & Co. was affiliated with Gold, Roach & Co., a tobacco exporting firm with connections to British importer-dealers. Bacon went to New York and managed the company’s affairs there, while his partners bought and packed the tobacco.

The WKU letter indicates that Benjamin A. Whitlock, who was partner with J.S. McNichols in the leaf tobacco trading concern Whitlock, McNichols & Co. in Linton immediately after the Civil War, was affiliated with the bank. Benjamin Agee “Ben” Whitlock (1843-1909) was born in Christian County and resided in Hopkinsville until the Civil War, when in the words of William Henry Perrin “he engaged successfully in tobacco speculation in Trigg, Caldwell and Crittenden Counties, and later in banking business in Cadiz, Ky.”

The W. J. Bacon & Co. bank was short-lived. The Bankers Magazine and Statistical Register for 1873-74 reveals that it failed in the spring of 1873. Although it cannot be said with certainty, it seems probable that the local bank’s closing was caused by events in Europe and New York connected to its handling of international trade transactions involving the export of tobacco. At the time of its failure, Europe was in the midst of severe financial problems associated with the Panic of 1873, which began in Vienna, Austria, on May 8, 1873. Fourth National Bank in New York was severely affected by those overseas events. It survived, but many smaller banks for whom it handled foreign exchange transactions did not.

The W. J. Bacon & Co. bank’s closing struck Trigg County a severe blow. Sheriff Robert Wade Major had deposited the previous year’s tax receipts — about $3,000 — in the bank, intending to transmit the money to the state treasury via cashier’s check. When the bank failed, the money was lost. Sheriff Major and those who had signed his surety bond became personally responsible for repaying the tax money. All of the bank’s ordinary depositors lost their money.

The First Bank of CadizThe Bank of Cadiz can trace its antecedents to Feb. 27, 1867, when the Kentucky General Assembly passed “Chapter 1482 — An ACT to incorporate the Bank of Cadiz.” The incorporators of this bank were Thomas H. Grinter, Robert Douglas Baker Sr., Fenton Sims, Robert Wilford and Joseph F. Dyer. The bank was authorized to take deposits and loan money but, “said corporation shall not charge more than six per cent per annum on any loan made.”

On March 6, 1869, the General Assembly passed “An ACT to amend an act, entitled ‘An act to incorporate the Bank of Cadiz.’ ” The charter amendment allowed the bank to “buy and sell gold and silver, bills of exchange, promissory notes, uncurrent money, stock bonds, stocks of all kinds, mortgages, and all other evidences of debt, and take personal notes and inland bills of exchange ... foreign bills of exchange ...” The act prohibited what today would be called “insider trading” by bank officials and stockholders. What happened to this first Bank of Cadiz is unknown, but it likely fell victim to the Great Depression that followed the Panic of 1873.

Second Bank of Cadiz

There was no bank in Cadiz when, on June 1, 1886, the Hopkinsville South Kentuckian reported, “The Cadiz Telephone is urging some of the moneyed men to start a bank in Cadiz. No class of men feel the need of banking institutions more than country editors.” On Feb. 6, 1888, the General Assembly passed “An act to establish the Bank of Cadiz, at Cadiz.” The second Bank of Cadiz opened in 1888 with John W. Chappell as its president and Felix G. Terry as cashier.

This Bank of Cadiz operated for 11 years, until June 1899, when “Owing to the inability to secure the consent of its stockholders to a reduction of capital, the Bank of Cadiz began paying off its deposits on June 9 with a view to retiring from business.” On June 9, 1899, the Hopkinsville Kentuckian reported, “A Cadiz bank to Quit — The Bank of Cadiz will quit business after the 30th of June says the Record, having failed in an attempt to reduce the capital stock from $50,000 to $20,000.” Legally the second Bank of Cadiz ceased to exist on that date.

Editor’s Note: This is the first article in a series on Trigg County banks.

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