Any photos not otherwise credited are from the personal collection of Frank Passic, Albion Historian.
Morning Star, December 24, 2006, pg. 2
A very Merry Christmas to all of the readers of this column. I thank you for your support, and your donations of Albion pictures, yearbooks, and directories, etc. which help me with research and illustrations used in preparing my weekly articles. We can all be proud of our town and the rich history it has. A reminder: These articles are re-published on the www.Albionmich.com website. Please share that information and my book “Growing Up in Albion” with your visiting relatives from across the country who are returning to Albion to visit this holiday season.
Here’s a chilly Christmas story that turned the “ho-ho” into “oh-oh.” It wasn’t a very Merry Christmas in Albion in 1931. That year, the Albion State Bank suddenly closed its doors for good on December 22, 1931--three days before Christmas! This bank was located at 304 S. Superior St. and was the successor to Albion’s first bank, Hannahs’ Exchange and Banking Office which opened in 1856. It became the James W. Sheldon Bank in 1858, and the Albion State Bank in 1895. President of the bank in 1931 was David A. Garfield; Bruce Green and Warren S. Kessler served as vice-presidents. The board of directors consisted of George Bullen, Norman H. Wiener, Daniel McAuliffe, and Carl M. Craeger.
The Great Depression was taking its toll on local finances as jobs were lost, and deposits were at an all-time low. The Albion State Bank had also loaned thousands of dollars into the ill-fated Albion Coal Mine project north of town. The Bank was closed because of dwindling deposits and lack of sufficient capital.
Savings accounts were frozen: a move which greatly angered Albion residents as you couldn’t withdraw any money you had in the bank. Although depositors eventually received around 80% of their funds back--the gradual payments were stretched out over a decade. The last payment was made on December 19, 1942.
A personal account of the failure is recorded in the 1936 book “Michigan’s Irish Hills” by Lita (Hindman) Luebbers on pgs. 192-93 where she writes: “The next morning Miss Bean [Note: this was Annie G. Dean, home economics instructor at Albion College] was all in a flutter as she sat at the breakfast table with Miss Potter [College nurse]. Lila [Lita Luebbers] putting her tray on the table, casually asked, “What’s happened?” Miss Bean was excited--more so than Lila had ever seen her. “Haven’t you heard?” At Lila’s negative response, she continued. “The National Bank [Albion State Bank] has closed!” Lila was unmoved. “I was afraid of that. Did you lose much, Miss Bean?” “Not much, but it was such a shock. I thought the bank was secure. It’s such a terrible time to close a bank; just before Christmas!”
The text continues, “Banks were cold material concerns and were not respectors of seasons or depositors when their assets became frozen. A dispairing gloom, greater than if an eminent citizen in the community had died, settled over the city, the Christmas shoppers, and the campus, formerly gay with vacation plans. Students wired frantically for transportation money to get home which was not as easy to get as that lost in the bank had been. Faculty members, panicky, rushed to the College office and anxiously asked if they could have an advancement on next month’s salary.”
Several older Albion families have stories (does yours?) about their grandparents losing their savings in the Albion State Bank, and subsequently not trusting banks again. Their funds were subsequently desposited in the First Bank of the Mattress in future years. Many Albion Public School children who had participated in the weekly “School Savings Plan” offered by the Bank also lost their funds. The school system itself had several thousands of dollars in deposits impounded, and 10-15% in budget and wage reductions were instituted in the following weeks.
From our this week we present a 33 mm. diameter brass token issued by the Albion State Bank, which entices people to deposit $5.00 in a savings account and keep it there for a year, in order to receive 50¢. The compound interest rate was touted as 3%. Hey--that’s more than simple savings accounts get today, and that was during the Great Depression! We can be thankful today for FDIC insurance--something that wasn’t available in 1931.
33 mm. diameter brass token issued by the Albion State Bank, Obverse view
All text copyright, 2021 © all rights reserved Frank Passic