In the history of local banks, there is a remarkable number of them that arrived with great fanfare and vanished within a short period. Others, which had been around for decades, shocked the community when they failed.
The Bank of Mobile
Although the name of this bank has been resurrected over the years, the original institution dated back to 1818. It was housed in a two-story brick building “of the best materials” and located on the former grounds of Fort Conde. When the United States experienced a financial panic in 1837, it was one of only four banks to survive in the nation.
The Bank of Mobile ultimately moved into an impressive Greek revival structure on the northwest corner of Royal and St. Francis streets, which had been home to another bank. The setting screamed stability.
On July 8, 1884, it suffered what has been termed the largest run on a bank in the city’s history. According to newspaper accounts that appeared throughout the state, “rumors of insolvency” led to a run that began at 10 a.m. and ended at noon when cash payments were suspended and the doors locked.
A printed response from Winston Jones, a director of the bank, stated “owing to money pressure and other adventitious circumstances, [the bank is] compelled to close its doors.”
Suddenly, other banks became suspect that day, and a crowd headed to the Peoples Savings Bank which operated out of a two-story brick building on the southeast corner of St. Francis and St. Joseph streets.
As the lobby filled with frantic customers, a trio pushed between them with a wheelbarrow filled with bags of gold coins. Bank director John Lawrence Lavretta got to a teller window and began calmly handing them, one by one, over the counter as the crowd watched. As the last sack was received by the teller, Mr. Lavretta loudly announced, “If you need any more, just send word.”
That was the end of the run and that bank remained in business into the 1890s.
Meanwhile, rumors of a reopening of the Bank of Mobile continued throughout the summer of 1884. Surely the oldest bank in the state would be resurrected. It was not.
New Banks, New Failures
The 20th century began with a building boom for both old and new banks but only a few would survive. In 1904, architect George B. Rogers remodeled a row of buildings on the northeast corner of St. Michael and Royal streets for a new bank using an old name: The Bank of Mobile.
According to a lengthy news account, the limestone-clad bank building had an “interior of the richest and most durable materials,” including imported marble, mahogany and bronze. Despite all that grandeur, it would last barely a dozen years before being absorbed into the Peoples Bank in 1917. The City Bank, which had been formed in 1899, grew rapidly. In 1903, under the new name of City Bank and Trust, they built an impressive seven-story building on Royal Street. The bank soon expanded to triple its Royal Street frontage and extend back to St. Joseph Street under a third name, National City Bank.
Much as with other failed banks, rumors began to circulate about its finances and a series of runs in November of 1915 led to the doors being closed. On the following day, it reopened as part of the First National Bank.
The Roaring Twenties
In June 1927, the 47-year-old Peoples Bank had a run on its deposits and “the bank closed its doors at 11 o’clock,” according to the news account. A notice was placed on the door, stating, “By a vote of the board of directors, the affairs of this institution will be turned over to the state superintendent of banks to liquidate as provided by law.”
The bank was another to be absorbed by the First National Bank. The building, which had been previously occupied by the ill-fated Peoples Savings Bank, was purchased by First National for the sum of $200,000 and demolished for an addition completed in 1929.
So, by that fateful year, Mobile had seen its share of bank runs, seemingly all caused by rumors leading to depositors rushing the lobby for their funds and the ultimate collapse of banks – both old and new. The portion of the deposits returned to customers in the liquidation process varied widely.
With the October 1929 stock market collapse, the country would be thrown into the Great Depression and the banking industry would go into a national upheaval. In the many years since, Mobile has had a much healthier and calmer banking history.