Six weeks after I was born in Bell County, Texas, I was present at a trade between my parents and the late J. Z. Miller, Jr., in the Belton National Bank, and I knew Mr. Miller intimately for a period of nearly fifty years.
J. Z. Miller, Jr., has been one of the outstanding financiers of our time. From a start as office boy, janitor and handyman in the Miller Brothers private bank at Belton, in 1880, he rose to become the Governor of the Federal Reserve Bank of Kansas City, and a power in financial circles throughout the entire country.
The following is a brief narrative taken from a lengthy document prepared by him in 1929. This narrative reveals some interesting facts pertinent to nineteenth century merchandising and banking in Texas.
Merchandising and Banking With Shot Bags
In December, 1865, W. A. Miller left Montpelier, in Bastrop County, and went to Belton, in Bell County, then a village of about 200 people.
Upon his arrival at Belton, Miller formed a partnership with Don A. Chamberlin to do a general mercantile business at Belton and in its trade territory. For a while the operations of Miller and Chamberlin were quiet and uneventful. The country was unsettled and disturbed and had not recovered from the effects of the Civil War. Bell County was sparsely settled and had a population of less than 4,000. Salado, on the Salado River, nine miles south of Belton, was the only other community in the county large enough to be classed as a village. Its population was about 100. Most of the country's rural population settled along the streams where wood and water could be had. Small farms in the "bottoms" and valleys were cleared and fenced "stake and rider" fashion, with rails split on the ground.
Farming was conducted on a small scale. Nearly all farmers had a few horses and cattle, some had larger herds.
It was the age of free grass. Everybody's live stock grazed over the open country, a large part of which was Public Domain and Mexican Land Grants. County boundaries were indefinite and almost unknown.
On September 1, 1868 J. Z. Miller, who had been a Lieutenant Colonel in the 17th Texas Infantry during the war, joined the firm at Belton. Prior to the secession of Texas, J. Z. had been associated with his brother, W. A. Miller, in farming and the handling of merchandise for the sparsely settled neighborhood of Montpelier, which they had named for their home town in Kentucky.
The Articles of Agreement creating the firm of Miller, Chamberlin & Company did not contemplate banking, but the firm did advertise to do business of that nature. Its banking department, however, existed in name only. It was simply an advertising expediency and was mainly to attract attention to the firm's mercantile activities, add dignity to and give the firm a little more prestige—especially with incoming settlers.
The firm had no separate banking organization, with separate books and special employees. All transactions of a banking nature were recorded in the mercantile books, along with items involving boots, calico, coffee and other merchandise.
Deposits were not solicited; few were offered and fewer still accepted. The firm's customers, especially those living in the country districts, were furnished "shot bags" in which the customers put their gold and silver, the only money in circulation at the time. Each bag, tagged with the owner's name, was received and laid away in the firm's safe. The bags were handed out when the owners called for them, to draw from or add to the contents of their bags. After such changes were made by the customers, without aid or observation of any members or employee of the firm, the customer would hand the bags back to be laid away again in the safe. It is remarkable that during the whole existence of the firm and the hundreds of changes in such "bag deposits" there never arose a single controversy regarding the contents of any bag.
The firm handled for its customers such checks as were brought into the country by seasonal buyers of horses and cattle. Occasionally some of the "newcomers" from other states would have what little capital they possessed in shape of drafts. The firm was glad to handle these items as they supplied exchange which was used in making payment for merchandise purchased in Galveston, New Orleans and the East.
The store building, a long and narrow two story structure, was situated on the north side of the public square. The 13 x 25 foot space occupied by the office and vault was along the west wall. On the opposite wall was an old-fashioned fireplace providing the only heat in the entire building. A little farther to the rear was the stairway to the second floor. At the rear of both floors space was reserved for receiving incoming merchandise and the storage and shipment of buffalo and cow hides, wool, pecans, wheat, tallow and other produce purchased from the settlers. The clerks slept in a room at the front of the second floor. A light well, enclosed by banisters under a skylight roof, served the office. An inside well provided the only source of water supply.
The conduct of the firm's business was extremely crude. There was little or no system in selling the merchandise, in making charges against customers who had charge accounts, and accounting for the cash received from cash sales. While the goods were marked with a cost price and a sale price, every clerk used his own discretion in making reductions in the sale price, and frequently accepted a lower amount offered by the customer.
Each salesman had an individual cash drawer located near the front of the store. The salesman, however, was not required to put the cash into the drawer simultaneously with the sale if he was some distance from the cash drawer. He simply carried the funds in his pocket until he happened to be near his cash drawer. A busy salesman would at times have a half day's sales in his pockets. No tickets nor any kind of check was made of sales.
No merchandise account was kept and hence at no time did the books reflect the amount of merchandise, bought, sold or on hand. Only at irregular periods were inventories made and the value of merchandise on hand known. Even after such inventories were made no entries were made in the books of the concern for future reference. The firm did not keep a liability record of its indebtedness for merchandise. The merchandise was of the nature at that time in demand by farmers and small stockraisers of moderate means, and by ranchers having larger herds located as far west as Brown County, northwest as Eastland County, and southwest as Burnet and Llano counties. The merchandise was not classified nor kept in order. Goods of the same class and kind would frequently be found in different parts of the store. Each salesman had "the run" of the store. He would sell or try to sell the customer hair restorer, "made while you wait" of olive and bergamoy oils, liver pills and Ayers cherry pectoral; brogan shoes, slickers and chewing tobacco; rifles, chair parts, logwood, sheep dip, saddle bags, etc., right through his list with little or no system of assembling, wrapping or charging the items to the customer's account, recording the amount of goods sold, or accounting for the cash receiving for them. Unfortunately, for the success of the business, very few of the clerks had much education or "schooling," as it was called. Practically all were without previous training or experience in business or merchandising.
In spite of the crude frontier methods of merchandising, the firm of Miller, Chamberlin & Company was looked upon as a very large concern in comparison with the half-dozen small, more or less specialized, stocks of goods carried in one-story buildings by others pretending to do a mercantile business in the little town. In those days, the number of saloons, gambling halls, and tenpin alleys in Belton was more than double the number of legitimate business concerns.
The firm established branches in Davilla, in Milam County, at Moffattown and at Hamilton, a new county seat, in what was then the northwest frontier and frequently subject to Indian raids. These branch ventures proved to be unprofitable and were discontinued.
Bell County and Belton
The population of Bell County increased, but "times were hard" and farmers and stock raisers did not prosper during the panic of 1873. Cattle and horses were not in demand and prices were very low. The enormous ranches of South Texas were better organized to sell and deliver large herds of cattle and horses to northern buyers than were the small cattlemen of Bell County. Cotton was expensive to raise and market. For a period it was taxed 3 cents per pound by the United States Government and the price at which it had to be sold was not profitable to the farmers.
Fully two-thirds of the goods sold by the firm were sold on credit. The customers were scattered over the vast territory composing Bell, Coryell, Falls, Milam, Williamson, Burnet, McLennan, Bosque, Lampasas, Hamilton and Brown counties. The firm sustained a few severe losses and many smaller ones by being unable to collect from customers. In a few cases land was acquired, although its possession added but little value to the firm's assets, as raw land produced no revenue and was hard to sell at any price.
At the time of its formation, the firm contemplated the partnership to continue only to July 1, 1870, but did, in fact, continue until April 14, 1874. Just prior to that date, Harvey J. Chaimberlin, a brother of Don A. Chaimberlin, moved to Belton and induced his brother Don to join him in a new commercial business. This brought about the dissolution of Miller, Chaimberlin & Company. So at the time the firm dissolved, difficulty was experienced in liquidating its indebtedness. It was two years after the dissolution before all debts were paid.
Belton in the mid-eighteen seventies had grown to be a town of about 1200; the County had a population of nearly 14,000. The citizenship, on the average, was much improved. Small communities had sprung up in every part of the County. Some attention was being given to roads and bridges. A splendid iron bridge now spanned the Leon River at Hill Crossing on the Austin-Belton-Waco military road. It was built by the Belton Bridge Company of which W. A. Miller was a dominant factor. Silas Baggett, H. C. Denny, J. Q. Allen, Elisha Embree and "Miller, Chaimberlin & Company," were among the stockholders.
Prior to the construction of this bridge, Dred Hill operated a ferry at this crossing when the water was high.
Within 200 yards of the east bank of the Leon River, opposite the old Hill Crossing, stands the large elm tree under which the three Commissioners, appointed in 1854 by the County Organization Committee to locate the county seat, held their first and only meeting. Three locations were considered: one on the Dred Hill farm where the Committee was meeting; one near the confluence of the Leon, Salado and Lampasas Rivers, now known as Three Forks; and the third on Nolan Creek about 1 ½ miles west of the confluence of Nolan Creek and the Leon River. The third suggestion was selected. Its central position and easy access to wood and water appealed to the Commissioners. Mrs. Matilda F. Connell, owner of the Matilda F. Connell League (an original Mexican grant), donated 100 acres for the townsite, which was called Nolanville, the county seat of Bell County. During the year 1856, the Commissioners Court changed the name of the town from Nolanville to Belton.
A New Partnership
On April 14, 1874, W. A. and J. Z. Miller formed a partnership under the name of Miller Brothers to carry on a general mercantile business, and also a banking business. The announcement to do a banking business was not a solicitation of deposits, nor were deposits at this time expected as there was little or no idle money in the county and interest rates ranged from 2% to 5% a month. The announcement and offer to do a banking business was simply a notification that the firm contemplated and was prepared to handle the checks and drafts received by citizens of the county from time to time for horses, cattle, farm products and those brought in by new settlers, just as their predecessors had done. Occasionally, however, there were some small deposits made by customers. The records of these transactions were kept in the mercantile books.
The banking end was carried on in that manner until about January 1, 1875, when a new partnership was formed by William A. Miller, J. Z. Miller and John Q. Allen under the firm name of Miller Brothers & Company, to do a banking business, with Mr. Allen in charge as manager. The capital of this new firm was $10,000, all contributed by Mr. Allen, and upon which he was to get interest at the rate of 10% payable annually, and one-half of the net profits in lieu of salary for his personal services as manager. Neither of the other partners, William A. Miller nor J. Z. Miller, contributed any capital. After charging the expense account with the annual interest on the capital furnished by Mr. Allen the net profits were to be divided ½ to Miller Brothers (Merchants). No charge was made for rent of office and vault space. Mr. Allen made no charge for his personal services. Both firms occupied the same office and vault, situated about the middle of the storeroom occupied by Miller Brothers for mercantile purposes. Each concern was an entity and had its own set of books. There was little banking business done at that time as we now think of such institutions. The total deposits at the end of 1876 did not exceed $5,000. The revenue came in part from small loans from $25 to $250 to townspeople and settlers, but mostly from the purchase of vendors' lien notes from land owners whose lands had suddenly greatly increased in value and had become marketable.
Most of the land in Bell County consisted of large Mexican grants and had been held for years by the first removed from the original grantees from the Mexican Government, or by their heirs. Land in the northeast quadrant of Bell County—had but little value as there was no economical way to fence it. Land between Troy and Eddy was sold for one dollar per acre by the firm, in 1875.
On December 23, 1875, the death of W. A. Miller occurred. He had been the active manager of all commercial activities of all the firms of which he had been a member.
After the death of W. A. Miller the affairs of Miller Brothers, Merchants, and their interest in the firm of Miller Brothers & Company, Bankers, were in the hands of J. Z. Miller, the surviving partner. The death of W. A. Miller did not bring about the dissolution of the firms in which he was partner. His estate was represented by his brother, J. Z. Miller, Executor, and his widow, Amanda P. Miller, Executrix, of his last will. The operation from 1874 to the latter part of 1879 was uneventful until the disastrous fire of 1879.
The north side of the Public Square of Belton, except one building, was destroyed at 2 A. M. Thursday morning, September 27, 1879. The important mercantile firms of Belton occupied the buildings destroyed. The building occupied by Miller Brothers, Merchants, and Miller Brothers & Company, Bankers, was among those burned. The firm lost merchandise worth $15,000 to $20,000. There was no insurance. The merchandise carried out of the building represented $5,000 to $7,500. This merchandise was moved from the streets to the store of Ray & Elliott, dealers in gents' furnishing goods, who occupied the second story of the Allen Building, the only building which did not burn.
The fire occurred at the most inopportune time. The fall stock had just been received. The last invoice for the new boots and shoes arrived the afternoon before the fire. The accounts receivable were at the maximum, as cotton was starting to market and collections from farmers had just begun. The first bale of cotton on the market at Belton in 1879 was September 18th, the very day Colonel J. Z. Miller returned from the eastern markets. Joezach Miller, the 16 year old son of W. A. Miller had accompanied his uncle to New York and Boston on that trip. It required exactly 100 hours to reach New York City from Belton. The trip to Waco, the nearest railroad point, required an entire day's buggy ride. There were no Pullmans running in Texas. They were available from St. Louis but were little patronized, certainly not by country merchants from small Texas towns, hence it is easy to imagine Colonel Miller and his nephew sitting up nights during the trip to and from New York.
The fire burned around the vault all day Thursday. Timbers, merchandise and bins of wheat fed the flames. A downpour of rain Thursday night extinguished the fire, but caused great anxiety for fear that the sudden change of temperature would crack the vault and ruin the books and records, as well as the private papers of many customers left for safe keeping.
Early Sunday morning an improvised plankway was laid from the front of the building to the vault. The combination worked on first effort and the door opened without much difficulty. The contents of the vault were found to be intact, only slightly smoked, and the great anxiety felt during the past three days was allayed.
Sunday afternoon, about three o'clock, J. Z. Miller and J. Q. Allen had a meeting, somewhat by accident, in front of the residence of W. J. Long on East Street where the Belton Hotel is now located. Joezach Miller was present at this meeting and although only 16, took a small part in the discussion which ensued.
J. Q. Allen announced that he wished to discontinue the banking business, dissolve the firm and wind up its affairs. The banking business, he argued, had not been profitable during the five years the firm of Miller Brothers & Company had been in business, and in his opinion there was no good reason to suppose banking would ever pay in Bell County.
Colonel Miller showed great surprise at the attitude assumed by Mr. Allen. He called Mr. Allen's attention to the progress the bank had make during each of the last three years, increasing deposits and larger turnover; explained that the town and county were increasing in population and wealth; that the farmers had made considerable headway in paying for their lands, mostly purchased from non-resident owners; and present owners were improving their farms and ranches; that wire was available and coming into more general use for fencing; that the products of the farms and ranches were increasing at a rapid rate—all which promised increased deposits; that each of these factors would benefit banking and in time make that business more profitable than the mercantile or any other commercial venture, especially as the firm then had and would probably continue to have the only bank in the county.
Mr. Allen was obdurate! His state of mind and his determination to discontinue the business could not be changed. As Colonel Miller had the problem of guiding the destiny of the mercantile firm so as to avoid financial embarrassment, he was compelled to accede to Mr. Allen's wishes. Next morning, Monday, another meeting was held, Colonel Miller, Mr. Allen and Joezach Miller being present. It was decided to begin liquidation by paying off the depositors as rapidly as they could be reached.
Isaac H. Layton, the bank's clerk, bookkeeper and general man (he would be called a cashier now) was ill, and for that reason Joezach Miller was selected to assist Mr. Allen with details of the bank. They were not voluminous.
The deposits were approximately $15,000; about one third belonged to townspeople; the balance to people in the county and the trade territory tributary to Belton.
Monday afternoon a list of all local depositors was prepared. Beginning early Tuesday morning (October 2, 1879), Mr. Allen and Joezach Miller, with a supply of gold and silver, the only circulating medium at that time, packed in what was known as a "blue bucket," made numerous trips on that day and the next, calling from door to door on local depositors, paying the amounts due them and taking their receipts. Many of the depositors remonstrated with Mr. Allen on his decision to discontinue the bank, but to no avail. Thus ended the bank of "Miller Brothers & Company." Bell County was then without a bank and the citizens were without banking facilities of any kind.
The cash on hand, collections of some receivables, and the sale of some assets, enabled Mr. Allen to pay the depositors in full as they called for their balances. This required three or four months.
The capital, $10,000, used in the business, contributed by Mr. Allen, with several years' accrued interest thereon at the rate of 10%, remained a liability of the firm. The remaining assets of the firm were "frozen" as would be said today. They consisted of slow notes, stocks in Waco Bridge Company, Belton Bridge Company, Lampasas Bridge Company, Frontier Telegraph Company, and several parcels of land, and a few land notes. All were slow of conversion into money.
As the assets were realized upon, the proceeds were turned over to Mr. Allen as a credit on the indebtedness held by him against the firm, but so slowly were the receivables collected and the securities converted into cash (the stocks of the bridge companies turned out to be more than 50% losses), it was not until December 9, 1897, that a full settlement was made, and a net loss of about $7,500 determined. One half of this amount was paid to Mr. Allen by Miller Brothers according to the terms of the partnership. And so, the firm of Miller Brothers & Company passes into history.
Little effort was made by Miller Brothers, Merchants, to show and sell the salvaged merchandise. The small space available in the rear of the room occupied by Ray & Elliott was barely enough to store the goods, much less exhibit them. The great concern of Colonel Miller was to collect the debts due the firm and pay the indebtedness due the eastern wholesale houses from whom the burned merchandise was purchased. Several days after the fire, the firm arranged to borrow $3,000 from P. Fitzwilliams, a cotton factor, at Galveston, to meet pressing demands.
The '79 cotton was low in price and the crop poor. Farmers did the best they could but were unable to meet their obligations for supplies furnished them during the year. The firm had great difficulty in meeting its own obligations when due. Creditors were lenient, mainly because they realized the great misfortune the firm had sustained from the fire, and granted extension of a substantial amount of the firm's paper.
All through the fall and winter of '79-'80, every effort was made to convert the firm's assets into money. It required more than a year after the fire to take up the outstanding notes given for merchandise.
Within sixty or seventy days after the fire, say about December 5th, the building in the middle of the block on the north side of the Public Square in Belton, occupied by the firm at the time of the fire, had been hastily rebuilt and the salvaged merchandise moved into it and exposed for sale. The stock was so broken the disposition was extremely slow.
About January 1, 1880, Miller Brothers closed out their merchandise, amounting to about $5,000, to Ray & Elliott, who moved their own stock of gents' furnishings to the store building then occupied by Miller Brothers. For many years thereafter Ray & Elliott conducted their general mercantile business in that building.
This transaction with Ray & Elliott completely terminated all commercial activities of the then firm of Miller Brothers which had its beginning in Belton at the close of the Civil War.
J. Z. Miller continued the liquidation of the affairs of Miller Brothers, Merchants, taking when possible mortgages on future crops and on land to better secure notes carried over for customers. In a few cases the firm became the owner of lands taken for debts due it. Notwithstanding the earnest efforts put forth, the losses were large. These with the unfortunate fire loss well nigh wiped out the equities of the firm.
Miller Brothers Bankers
After discontinuing the banking business October 1, 1879, and after the sale to Ray & Elliot of the mercantile business January 1, 1880, there was a complete hiatus in the commercial activities of the Millers in Belton and elsewhere. On February 17, 1880, a new partnership was formed by J. Z. Miller and Amanda P. Miller, in her own right, under the firm name of Miller Brothers, to begin and carry on a banking business in Belton.
The formation of this new firm and the establishment of a new banking business was mainly the suggestion of Joezach Miller. At first, Colonel J. Z. Miller did not approve the idea, being so deeply concerned with the liquidation of the two firms which had but recently retired. Colonel MIller discounted the future of the banking business in Belton.
Constant urging by Joezach Miller, during the several weeks following the sale of the mercantile business and quite likely his suggestion that if he, Colonel J. Z. Miller, did not wish to re-embark in business, particularly banking, a partnership would be formed by Amanda P. Miller (to be represented by her son Joezach) and Aurelius Pruit, a capable accountant and business man who had previously married her niece. Joezach insisted that it was quite necessary for his mother to develop plans immediately as she had four children dependent upon her.
So, on February 17, 1880, Miller Brothers, Bankers, opened for business. The public was notified by small handbills printed on newsprint paper, 5 ½ x 7 inches. These hand bills were carried from door to door in the business section and from house to house in the residential section of Belton by Joezach Miller.
The bank occupied an office situated about the center of Ray & Elliott's dry goods store, with no other formality than a simple set of books, consisting of cash book and ledger. The counter checks, cheque books, letter heads, and note forms were all printed locally.
Aurelius Pruit was cashier and bookkeeper. Joezach Miller was collection clerk, office boy, janitor and handy man, for all sorts of little jobs and errands until September 1 of that year, when he left to spend a year at school in St. Louis. Colonel J. Z. Miller, as manager, directed the operation, but did not handle details.
The bank started without a dollar of capital, as all the funds realized from the assets of the retired firm of Miller Brothers, Merchants, was being applied to the liquidation of that firm's indebtedness.
Belton then had a population of about 2,500; Bell County, 20,518. There were only two banks in the county, L. Burr & Company and Miller Brothers. Deposits were small. Probably not exceeding $30,000 for both the Belton banks at the close of the year, 1880. Interest rates were high, ranging from 15% for the better class of customers to 18% or 20% for others. All loans were small, rarely over $500, except to merchants, and not exceeding $2,000 to any one of them. Exchange rates were high. From 1% to 1 ½% discount was made on exchange purchased and 1% charged on that sold. A charge of 1% was made on all collections.
The discontinuance of the L. Burr & Company bank, January 1, 1881, was a great help to Miller Brothers. Theirs was again the only bank in Bell County until January 1, 1882, when H C. Denny & Company opened a bank in the building adjoining that of Miller Brothers.
The business of the county increased. In 1881 the Gulf, Colorado & Santa Fe Railroad penetrated the county during the spring and summer, establishing the towns of Rogers, Heidenheimer and Temple. This opened a large area to agriculture. Those interested in the railroad purchased large ranches which were subdivided and sold to farmers. There was quite an influx of population, especially after the M. K. & T. railroad penetrated the county in the fall of the same year, and crossed the Santa Fe at Temple, which became a boom railroad town almost over night. The terminus of the Santa Fe remained at Belton for about 18 months, when it projected its road west from Belton to Ballinger and north from Temple to Fort Worth.
On September 1, 1881, Joezach Miller returned from school in St. Louis and became the bookkeeper at the bank. Aurelius Pruit remained the cashier.
During the spring of 1882, Downs Brothers opened a private bank at Temple. On September 1, 1882, B. N. Boren and R. H. Stewart of Galveston organized and opened the First National Bank at Belton. So, during the year 1882, Miller Brothers not only lost the distinction of having the only bank in Bell County but were confronted with the severe competition of three strong banks; H. C. Denny & Company and the First National Bank at Belton, and Downs Brothers at Temple.
Pruit resigned as cashier January 1, 1883, whereupon Joezach Miller became cashier and Thomas J. Herron, bookkeeper.
While the volume of business in the county greatly increased in 1883 and 1884, the increase was divided between the three competitive banks, especially after Downs Brothers nationalized in the fall of 1884.
Miller Brothers realized they were losing deposits to their competitors. About that time some notable failures of private banks over the state created a distrust of private banks, and people became generally impressed with the idea that only the national banks were safe.
The bank of Miller Brothers during the first five years had been reasonably successful as far as gross profits were concerned. It had maintained those dependent upon it despite considerable losses due to poor credits.
After much discussion between Colonel J. Z. Miller and Joezach Miller, who was now the recognized representative of his mother (Amanda P. Miller), it was decided, on December 4, 1884, to organize The Belton National Bank, with the minimum capital for National Banks at the time, $50,000.
The Comptroller of Currency granted a permit for the organization of The Belton National Bank, with J. Z. Miller, President: A. J. Harris, Vice-President; and J. Z. Miller, Jr., Cashier. The board of directors consisted of all officers and B. A. Ludlow and S. M. Ray.
The Belton National Bank opened for business on March 1, 1885. Though quite small in volume, the business of the bank was successful from the beginning. Interest rates had declined. On loans to merchants and the more important farmers and ranchers 10% was charged; on small loans, 12%, 15%, or 18%, according to the nature of the security or standing of the borrowers.
Late Christmas Eve, 1885, after the bank had closed for the day, while J. Z. Miller, Sr., and J. Z. Miller, Jr., President and Cashier, were sitting beside the old cannon stove in the center of the office, talking over the day's business, Captain A. J. Harris, Vice-President of The Belton National Bank, and, as strange as it may seem, attorney for the First National Bank, entered the office. He took from his pocket a memorandum written in pencil on the back of a used envelope and handed it to J. Z. Miller, Sr., who read it in silence and passed it to J. Z. Miller Jr. J. Z. Miller, Jr. looked it over and without a word being said made a notation at the bottom of the memorandum and handed it back to J. Z. Miller, Sr.
Early next morning, Christmas, the deed and actual possession was delivered and The Belton National Bank moved into its new location on the northeast corner of the square where it has since remained.
The business of The Belton National Bank increased slowly from year to year. Results of operation were satisfactory as the bank was conservative and followed good methods. The expense account was watched and credits were extended with so much care that losses were practically eliminated.
All went well until the panic in the summer of 1893. In July J. Z. Miller, Jr. made a trip to New York to borrow funds to carry the bank through that ordeal. It was next to impossible to get an interview with the officers of corresponding banks.
After a week in New York, spending every business hour of each day in correspondent banks' waiting rooms, hoping for an opportunity to see one of the officers, early one morning a messenger came from a little room where the bank's officers had been closeted for many days, and informed J. Z. Miller, Jr., that the cashier would see him for five minutes. The story was quickly told, the request was to borrow $30,000. Without a moment's hesitation, the cashier granted the loan; $10,000 at once, the balance, if and when absolutely needed. Fortunately only part of the remaining commitment was required. Mental anxiety was relieved. Cotton was soon on the market. Spinners and factors shipped gold from England to local banks in the farming section to pay for cotton purchased.
The panic was over but practically no deposits were made that fall. People kept their money at home. During 1894, the year following, deposits of The Belton National Bank were reduced to $75,000. They had averaged about $200,000 for several years.
Belton had but two banks from 1886 to 1900, the Belton National and H. C. Denny & Company.
On January 10, 1900, B. A. Ludlow and associates organized the Citizens National Bank of Belton with a capital of $50,000. The Citizens National gave up its National Charter July 1, 1990, and became the Citizens Bank, a private institution. It failed January 12, 1902.
On October 2, 1905, the Farmers State Bank of Belton began business with a capital of $25,000. That bank operated not quite a year. It transferred its business to the Belton National.
On February 8, 1907, the Peoples National Bank of Belton began business and that bank is still operating (1929).
The 1907 panic was handled skillfully. Since it was strictly a currency panic, the Belton National Bank followed the recommendations of the New York Clearing House and limited the amount of cash paid to each depositor. For convenience of customers, the Belton banks issued script to take the place of United States currency. Customers accepted the script without serious objections, since it was received by all merchants, banks, and individuals as real money. This condition lasted ten weeks, until unlimited withdrawals were resumed, January 15, 1908.
On June 30, 1910, W. W. James, then assistant cashier of the Belton National Bank, purchased from J. Z. Miller, Sr., J. Z. Miller, Jr., and Amanda P. Miller their interests in the bank. This rang the curtain down on forty-five years of banking services the Miller family had rendered the citizens of Bell County and its trade territory.
On July 27, 1910, J. Z. Miller, Jr. moved to Kansas City, where this former country banker there rose to the position of Governor of the Federal Reserve Bank.
James T. Padgitt, West Texas Historical Association Year Book, October, 1956
J. Z. Miller, Jr., has been one of the outstanding financiers of our time. From a start as office boy, janitor and handyman in the Miller Brothers private bank at Belton, in 1880, he rose to become the Governor of the Federal Reserve Bank of Kansas City, and a power in financial circles throughout the entire country.
The following is a brief narrative taken from a lengthy document prepared by him in 1929. This narrative reveals some interesting facts pertinent to nineteenth century merchandising and banking in Texas.
Merchandising and Banking With Shot Bags
In December, 1865, W. A. Miller left Montpelier, in Bastrop County, and went to Belton, in Bell County, then a village of about 200 people.
Upon his arrival at Belton, Miller formed a partnership with Don A. Chamberlin to do a general mercantile business at Belton and in its trade territory. For a while the operations of Miller and Chamberlin were quiet and uneventful. The country was unsettled and disturbed and had not recovered from the effects of the Civil War. Bell County was sparsely settled and had a population of less than 4,000. Salado, on the Salado River, nine miles south of Belton, was the only other community in the county large enough to be classed as a village. Its population was about 100. Most of the country's rural population settled along the streams where wood and water could be had. Small farms in the "bottoms" and valleys were cleared and fenced "stake and rider" fashion, with rails split on the ground.
Farming was conducted on a small scale. Nearly all farmers had a few horses and cattle, some had larger herds.
It was the age of free grass. Everybody's live stock grazed over the open country, a large part of which was Public Domain and Mexican Land Grants. County boundaries were indefinite and almost unknown.
On September 1, 1868 J. Z. Miller, who had been a Lieutenant Colonel in the 17th Texas Infantry during the war, joined the firm at Belton. Prior to the secession of Texas, J. Z. had been associated with his brother, W. A. Miller, in farming and the handling of merchandise for the sparsely settled neighborhood of Montpelier, which they had named for their home town in Kentucky.
The Articles of Agreement creating the firm of Miller, Chamberlin & Company did not contemplate banking, but the firm did advertise to do business of that nature. Its banking department, however, existed in name only. It was simply an advertising expediency and was mainly to attract attention to the firm's mercantile activities, add dignity to and give the firm a little more prestige—especially with incoming settlers.
The firm had no separate banking organization, with separate books and special employees. All transactions of a banking nature were recorded in the mercantile books, along with items involving boots, calico, coffee and other merchandise.
Deposits were not solicited; few were offered and fewer still accepted. The firm's customers, especially those living in the country districts, were furnished "shot bags" in which the customers put their gold and silver, the only money in circulation at the time. Each bag, tagged with the owner's name, was received and laid away in the firm's safe. The bags were handed out when the owners called for them, to draw from or add to the contents of their bags. After such changes were made by the customers, without aid or observation of any members or employee of the firm, the customer would hand the bags back to be laid away again in the safe. It is remarkable that during the whole existence of the firm and the hundreds of changes in such "bag deposits" there never arose a single controversy regarding the contents of any bag.
The firm handled for its customers such checks as were brought into the country by seasonal buyers of horses and cattle. Occasionally some of the "newcomers" from other states would have what little capital they possessed in shape of drafts. The firm was glad to handle these items as they supplied exchange which was used in making payment for merchandise purchased in Galveston, New Orleans and the East.
The store building, a long and narrow two story structure, was situated on the north side of the public square. The 13 x 25 foot space occupied by the office and vault was along the west wall. On the opposite wall was an old-fashioned fireplace providing the only heat in the entire building. A little farther to the rear was the stairway to the second floor. At the rear of both floors space was reserved for receiving incoming merchandise and the storage and shipment of buffalo and cow hides, wool, pecans, wheat, tallow and other produce purchased from the settlers. The clerks slept in a room at the front of the second floor. A light well, enclosed by banisters under a skylight roof, served the office. An inside well provided the only source of water supply.
The conduct of the firm's business was extremely crude. There was little or no system in selling the merchandise, in making charges against customers who had charge accounts, and accounting for the cash received from cash sales. While the goods were marked with a cost price and a sale price, every clerk used his own discretion in making reductions in the sale price, and frequently accepted a lower amount offered by the customer.
Each salesman had an individual cash drawer located near the front of the store. The salesman, however, was not required to put the cash into the drawer simultaneously with the sale if he was some distance from the cash drawer. He simply carried the funds in his pocket until he happened to be near his cash drawer. A busy salesman would at times have a half day's sales in his pockets. No tickets nor any kind of check was made of sales.
No merchandise account was kept and hence at no time did the books reflect the amount of merchandise, bought, sold or on hand. Only at irregular periods were inventories made and the value of merchandise on hand known. Even after such inventories were made no entries were made in the books of the concern for future reference. The firm did not keep a liability record of its indebtedness for merchandise. The merchandise was of the nature at that time in demand by farmers and small stockraisers of moderate means, and by ranchers having larger herds located as far west as Brown County, northwest as Eastland County, and southwest as Burnet and Llano counties. The merchandise was not classified nor kept in order. Goods of the same class and kind would frequently be found in different parts of the store. Each salesman had "the run" of the store. He would sell or try to sell the customer hair restorer, "made while you wait" of olive and bergamoy oils, liver pills and Ayers cherry pectoral; brogan shoes, slickers and chewing tobacco; rifles, chair parts, logwood, sheep dip, saddle bags, etc., right through his list with little or no system of assembling, wrapping or charging the items to the customer's account, recording the amount of goods sold, or accounting for the cash receiving for them. Unfortunately, for the success of the business, very few of the clerks had much education or "schooling," as it was called. Practically all were without previous training or experience in business or merchandising.
In spite of the crude frontier methods of merchandising, the firm of Miller, Chamberlin & Company was looked upon as a very large concern in comparison with the half-dozen small, more or less specialized, stocks of goods carried in one-story buildings by others pretending to do a mercantile business in the little town. In those days, the number of saloons, gambling halls, and tenpin alleys in Belton was more than double the number of legitimate business concerns.
The firm established branches in Davilla, in Milam County, at Moffattown and at Hamilton, a new county seat, in what was then the northwest frontier and frequently subject to Indian raids. These branch ventures proved to be unprofitable and were discontinued.
Bell County and Belton
The population of Bell County increased, but "times were hard" and farmers and stock raisers did not prosper during the panic of 1873. Cattle and horses were not in demand and prices were very low. The enormous ranches of South Texas were better organized to sell and deliver large herds of cattle and horses to northern buyers than were the small cattlemen of Bell County. Cotton was expensive to raise and market. For a period it was taxed 3 cents per pound by the United States Government and the price at which it had to be sold was not profitable to the farmers.
Fully two-thirds of the goods sold by the firm were sold on credit. The customers were scattered over the vast territory composing Bell, Coryell, Falls, Milam, Williamson, Burnet, McLennan, Bosque, Lampasas, Hamilton and Brown counties. The firm sustained a few severe losses and many smaller ones by being unable to collect from customers. In a few cases land was acquired, although its possession added but little value to the firm's assets, as raw land produced no revenue and was hard to sell at any price.
At the time of its formation, the firm contemplated the partnership to continue only to July 1, 1870, but did, in fact, continue until April 14, 1874. Just prior to that date, Harvey J. Chaimberlin, a brother of Don A. Chaimberlin, moved to Belton and induced his brother Don to join him in a new commercial business. This brought about the dissolution of Miller, Chaimberlin & Company. So at the time the firm dissolved, difficulty was experienced in liquidating its indebtedness. It was two years after the dissolution before all debts were paid.
Belton in the mid-eighteen seventies had grown to be a town of about 1200; the County had a population of nearly 14,000. The citizenship, on the average, was much improved. Small communities had sprung up in every part of the County. Some attention was being given to roads and bridges. A splendid iron bridge now spanned the Leon River at Hill Crossing on the Austin-Belton-Waco military road. It was built by the Belton Bridge Company of which W. A. Miller was a dominant factor. Silas Baggett, H. C. Denny, J. Q. Allen, Elisha Embree and "Miller, Chaimberlin & Company," were among the stockholders.
Prior to the construction of this bridge, Dred Hill operated a ferry at this crossing when the water was high.
Within 200 yards of the east bank of the Leon River, opposite the old Hill Crossing, stands the large elm tree under which the three Commissioners, appointed in 1854 by the County Organization Committee to locate the county seat, held their first and only meeting. Three locations were considered: one on the Dred Hill farm where the Committee was meeting; one near the confluence of the Leon, Salado and Lampasas Rivers, now known as Three Forks; and the third on Nolan Creek about 1 ½ miles west of the confluence of Nolan Creek and the Leon River. The third suggestion was selected. Its central position and easy access to wood and water appealed to the Commissioners. Mrs. Matilda F. Connell, owner of the Matilda F. Connell League (an original Mexican grant), donated 100 acres for the townsite, which was called Nolanville, the county seat of Bell County. During the year 1856, the Commissioners Court changed the name of the town from Nolanville to Belton.
A New Partnership
On April 14, 1874, W. A. and J. Z. Miller formed a partnership under the name of Miller Brothers to carry on a general mercantile business, and also a banking business. The announcement to do a banking business was not a solicitation of deposits, nor were deposits at this time expected as there was little or no idle money in the county and interest rates ranged from 2% to 5% a month. The announcement and offer to do a banking business was simply a notification that the firm contemplated and was prepared to handle the checks and drafts received by citizens of the county from time to time for horses, cattle, farm products and those brought in by new settlers, just as their predecessors had done. Occasionally, however, there were some small deposits made by customers. The records of these transactions were kept in the mercantile books.
The banking end was carried on in that manner until about January 1, 1875, when a new partnership was formed by William A. Miller, J. Z. Miller and John Q. Allen under the firm name of Miller Brothers & Company, to do a banking business, with Mr. Allen in charge as manager. The capital of this new firm was $10,000, all contributed by Mr. Allen, and upon which he was to get interest at the rate of 10% payable annually, and one-half of the net profits in lieu of salary for his personal services as manager. Neither of the other partners, William A. Miller nor J. Z. Miller, contributed any capital. After charging the expense account with the annual interest on the capital furnished by Mr. Allen the net profits were to be divided ½ to Miller Brothers (Merchants). No charge was made for rent of office and vault space. Mr. Allen made no charge for his personal services. Both firms occupied the same office and vault, situated about the middle of the storeroom occupied by Miller Brothers for mercantile purposes. Each concern was an entity and had its own set of books. There was little banking business done at that time as we now think of such institutions. The total deposits at the end of 1876 did not exceed $5,000. The revenue came in part from small loans from $25 to $250 to townspeople and settlers, but mostly from the purchase of vendors' lien notes from land owners whose lands had suddenly greatly increased in value and had become marketable.
Most of the land in Bell County consisted of large Mexican grants and had been held for years by the first removed from the original grantees from the Mexican Government, or by their heirs. Land in the northeast quadrant of Bell County—had but little value as there was no economical way to fence it. Land between Troy and Eddy was sold for one dollar per acre by the firm, in 1875.
On December 23, 1875, the death of W. A. Miller occurred. He had been the active manager of all commercial activities of all the firms of which he had been a member.
After the death of W. A. Miller the affairs of Miller Brothers, Merchants, and their interest in the firm of Miller Brothers & Company, Bankers, were in the hands of J. Z. Miller, the surviving partner. The death of W. A. Miller did not bring about the dissolution of the firms in which he was partner. His estate was represented by his brother, J. Z. Miller, Executor, and his widow, Amanda P. Miller, Executrix, of his last will. The operation from 1874 to the latter part of 1879 was uneventful until the disastrous fire of 1879.
The north side of the Public Square of Belton, except one building, was destroyed at 2 A. M. Thursday morning, September 27, 1879. The important mercantile firms of Belton occupied the buildings destroyed. The building occupied by Miller Brothers, Merchants, and Miller Brothers & Company, Bankers, was among those burned. The firm lost merchandise worth $15,000 to $20,000. There was no insurance. The merchandise carried out of the building represented $5,000 to $7,500. This merchandise was moved from the streets to the store of Ray & Elliott, dealers in gents' furnishing goods, who occupied the second story of the Allen Building, the only building which did not burn.
The fire occurred at the most inopportune time. The fall stock had just been received. The last invoice for the new boots and shoes arrived the afternoon before the fire. The accounts receivable were at the maximum, as cotton was starting to market and collections from farmers had just begun. The first bale of cotton on the market at Belton in 1879 was September 18th, the very day Colonel J. Z. Miller returned from the eastern markets. Joezach Miller, the 16 year old son of W. A. Miller had accompanied his uncle to New York and Boston on that trip. It required exactly 100 hours to reach New York City from Belton. The trip to Waco, the nearest railroad point, required an entire day's buggy ride. There were no Pullmans running in Texas. They were available from St. Louis but were little patronized, certainly not by country merchants from small Texas towns, hence it is easy to imagine Colonel Miller and his nephew sitting up nights during the trip to and from New York.
The fire burned around the vault all day Thursday. Timbers, merchandise and bins of wheat fed the flames. A downpour of rain Thursday night extinguished the fire, but caused great anxiety for fear that the sudden change of temperature would crack the vault and ruin the books and records, as well as the private papers of many customers left for safe keeping.
Early Sunday morning an improvised plankway was laid from the front of the building to the vault. The combination worked on first effort and the door opened without much difficulty. The contents of the vault were found to be intact, only slightly smoked, and the great anxiety felt during the past three days was allayed.
Sunday afternoon, about three o'clock, J. Z. Miller and J. Q. Allen had a meeting, somewhat by accident, in front of the residence of W. J. Long on East Street where the Belton Hotel is now located. Joezach Miller was present at this meeting and although only 16, took a small part in the discussion which ensued.
J. Q. Allen announced that he wished to discontinue the banking business, dissolve the firm and wind up its affairs. The banking business, he argued, had not been profitable during the five years the firm of Miller Brothers & Company had been in business, and in his opinion there was no good reason to suppose banking would ever pay in Bell County.
Colonel Miller showed great surprise at the attitude assumed by Mr. Allen. He called Mr. Allen's attention to the progress the bank had make during each of the last three years, increasing deposits and larger turnover; explained that the town and county were increasing in population and wealth; that the farmers had made considerable headway in paying for their lands, mostly purchased from non-resident owners; and present owners were improving their farms and ranches; that wire was available and coming into more general use for fencing; that the products of the farms and ranches were increasing at a rapid rate—all which promised increased deposits; that each of these factors would benefit banking and in time make that business more profitable than the mercantile or any other commercial venture, especially as the firm then had and would probably continue to have the only bank in the county.
Mr. Allen was obdurate! His state of mind and his determination to discontinue the business could not be changed. As Colonel Miller had the problem of guiding the destiny of the mercantile firm so as to avoid financial embarrassment, he was compelled to accede to Mr. Allen's wishes. Next morning, Monday, another meeting was held, Colonel Miller, Mr. Allen and Joezach Miller being present. It was decided to begin liquidation by paying off the depositors as rapidly as they could be reached.
Isaac H. Layton, the bank's clerk, bookkeeper and general man (he would be called a cashier now) was ill, and for that reason Joezach Miller was selected to assist Mr. Allen with details of the bank. They were not voluminous.
The deposits were approximately $15,000; about one third belonged to townspeople; the balance to people in the county and the trade territory tributary to Belton.
Monday afternoon a list of all local depositors was prepared. Beginning early Tuesday morning (October 2, 1879), Mr. Allen and Joezach Miller, with a supply of gold and silver, the only circulating medium at that time, packed in what was known as a "blue bucket," made numerous trips on that day and the next, calling from door to door on local depositors, paying the amounts due them and taking their receipts. Many of the depositors remonstrated with Mr. Allen on his decision to discontinue the bank, but to no avail. Thus ended the bank of "Miller Brothers & Company." Bell County was then without a bank and the citizens were without banking facilities of any kind.
The cash on hand, collections of some receivables, and the sale of some assets, enabled Mr. Allen to pay the depositors in full as they called for their balances. This required three or four months.
The capital, $10,000, used in the business, contributed by Mr. Allen, with several years' accrued interest thereon at the rate of 10%, remained a liability of the firm. The remaining assets of the firm were "frozen" as would be said today. They consisted of slow notes, stocks in Waco Bridge Company, Belton Bridge Company, Lampasas Bridge Company, Frontier Telegraph Company, and several parcels of land, and a few land notes. All were slow of conversion into money.
As the assets were realized upon, the proceeds were turned over to Mr. Allen as a credit on the indebtedness held by him against the firm, but so slowly were the receivables collected and the securities converted into cash (the stocks of the bridge companies turned out to be more than 50% losses), it was not until December 9, 1897, that a full settlement was made, and a net loss of about $7,500 determined. One half of this amount was paid to Mr. Allen by Miller Brothers according to the terms of the partnership. And so, the firm of Miller Brothers & Company passes into history.
Little effort was made by Miller Brothers, Merchants, to show and sell the salvaged merchandise. The small space available in the rear of the room occupied by Ray & Elliott was barely enough to store the goods, much less exhibit them. The great concern of Colonel Miller was to collect the debts due the firm and pay the indebtedness due the eastern wholesale houses from whom the burned merchandise was purchased. Several days after the fire, the firm arranged to borrow $3,000 from P. Fitzwilliams, a cotton factor, at Galveston, to meet pressing demands.
The '79 cotton was low in price and the crop poor. Farmers did the best they could but were unable to meet their obligations for supplies furnished them during the year. The firm had great difficulty in meeting its own obligations when due. Creditors were lenient, mainly because they realized the great misfortune the firm had sustained from the fire, and granted extension of a substantial amount of the firm's paper.
All through the fall and winter of '79-'80, every effort was made to convert the firm's assets into money. It required more than a year after the fire to take up the outstanding notes given for merchandise.
Within sixty or seventy days after the fire, say about December 5th, the building in the middle of the block on the north side of the Public Square in Belton, occupied by the firm at the time of the fire, had been hastily rebuilt and the salvaged merchandise moved into it and exposed for sale. The stock was so broken the disposition was extremely slow.
About January 1, 1880, Miller Brothers closed out their merchandise, amounting to about $5,000, to Ray & Elliott, who moved their own stock of gents' furnishings to the store building then occupied by Miller Brothers. For many years thereafter Ray & Elliott conducted their general mercantile business in that building.
This transaction with Ray & Elliott completely terminated all commercial activities of the then firm of Miller Brothers which had its beginning in Belton at the close of the Civil War.
J. Z. Miller continued the liquidation of the affairs of Miller Brothers, Merchants, taking when possible mortgages on future crops and on land to better secure notes carried over for customers. In a few cases the firm became the owner of lands taken for debts due it. Notwithstanding the earnest efforts put forth, the losses were large. These with the unfortunate fire loss well nigh wiped out the equities of the firm.
Miller Brothers Bankers
After discontinuing the banking business October 1, 1879, and after the sale to Ray & Elliot of the mercantile business January 1, 1880, there was a complete hiatus in the commercial activities of the Millers in Belton and elsewhere. On February 17, 1880, a new partnership was formed by J. Z. Miller and Amanda P. Miller, in her own right, under the firm name of Miller Brothers, to begin and carry on a banking business in Belton.
The formation of this new firm and the establishment of a new banking business was mainly the suggestion of Joezach Miller. At first, Colonel J. Z. Miller did not approve the idea, being so deeply concerned with the liquidation of the two firms which had but recently retired. Colonel MIller discounted the future of the banking business in Belton.
Constant urging by Joezach Miller, during the several weeks following the sale of the mercantile business and quite likely his suggestion that if he, Colonel J. Z. Miller, did not wish to re-embark in business, particularly banking, a partnership would be formed by Amanda P. Miller (to be represented by her son Joezach) and Aurelius Pruit, a capable accountant and business man who had previously married her niece. Joezach insisted that it was quite necessary for his mother to develop plans immediately as she had four children dependent upon her.
So, on February 17, 1880, Miller Brothers, Bankers, opened for business. The public was notified by small handbills printed on newsprint paper, 5 ½ x 7 inches. These hand bills were carried from door to door in the business section and from house to house in the residential section of Belton by Joezach Miller.
The bank occupied an office situated about the center of Ray & Elliott's dry goods store, with no other formality than a simple set of books, consisting of cash book and ledger. The counter checks, cheque books, letter heads, and note forms were all printed locally.
Aurelius Pruit was cashier and bookkeeper. Joezach Miller was collection clerk, office boy, janitor and handy man, for all sorts of little jobs and errands until September 1 of that year, when he left to spend a year at school in St. Louis. Colonel J. Z. Miller, as manager, directed the operation, but did not handle details.
The bank started without a dollar of capital, as all the funds realized from the assets of the retired firm of Miller Brothers, Merchants, was being applied to the liquidation of that firm's indebtedness.
Belton then had a population of about 2,500; Bell County, 20,518. There were only two banks in the county, L. Burr & Company and Miller Brothers. Deposits were small. Probably not exceeding $30,000 for both the Belton banks at the close of the year, 1880. Interest rates were high, ranging from 15% for the better class of customers to 18% or 20% for others. All loans were small, rarely over $500, except to merchants, and not exceeding $2,000 to any one of them. Exchange rates were high. From 1% to 1 ½% discount was made on exchange purchased and 1% charged on that sold. A charge of 1% was made on all collections.
The discontinuance of the L. Burr & Company bank, January 1, 1881, was a great help to Miller Brothers. Theirs was again the only bank in Bell County until January 1, 1882, when H C. Denny & Company opened a bank in the building adjoining that of Miller Brothers.
The business of the county increased. In 1881 the Gulf, Colorado & Santa Fe Railroad penetrated the county during the spring and summer, establishing the towns of Rogers, Heidenheimer and Temple. This opened a large area to agriculture. Those interested in the railroad purchased large ranches which were subdivided and sold to farmers. There was quite an influx of population, especially after the M. K. & T. railroad penetrated the county in the fall of the same year, and crossed the Santa Fe at Temple, which became a boom railroad town almost over night. The terminus of the Santa Fe remained at Belton for about 18 months, when it projected its road west from Belton to Ballinger and north from Temple to Fort Worth.
On September 1, 1881, Joezach Miller returned from school in St. Louis and became the bookkeeper at the bank. Aurelius Pruit remained the cashier.
During the spring of 1882, Downs Brothers opened a private bank at Temple. On September 1, 1882, B. N. Boren and R. H. Stewart of Galveston organized and opened the First National Bank at Belton. So, during the year 1882, Miller Brothers not only lost the distinction of having the only bank in Bell County but were confronted with the severe competition of three strong banks; H. C. Denny & Company and the First National Bank at Belton, and Downs Brothers at Temple.
Pruit resigned as cashier January 1, 1883, whereupon Joezach Miller became cashier and Thomas J. Herron, bookkeeper.
While the volume of business in the county greatly increased in 1883 and 1884, the increase was divided between the three competitive banks, especially after Downs Brothers nationalized in the fall of 1884.
Miller Brothers realized they were losing deposits to their competitors. About that time some notable failures of private banks over the state created a distrust of private banks, and people became generally impressed with the idea that only the national banks were safe.
The bank of Miller Brothers during the first five years had been reasonably successful as far as gross profits were concerned. It had maintained those dependent upon it despite considerable losses due to poor credits.
After much discussion between Colonel J. Z. Miller and Joezach Miller, who was now the recognized representative of his mother (Amanda P. Miller), it was decided, on December 4, 1884, to organize The Belton National Bank, with the minimum capital for National Banks at the time, $50,000.
The Comptroller of Currency granted a permit for the organization of The Belton National Bank, with J. Z. Miller, President: A. J. Harris, Vice-President; and J. Z. Miller, Jr., Cashier. The board of directors consisted of all officers and B. A. Ludlow and S. M. Ray.
The Belton National Bank opened for business on March 1, 1885. Though quite small in volume, the business of the bank was successful from the beginning. Interest rates had declined. On loans to merchants and the more important farmers and ranchers 10% was charged; on small loans, 12%, 15%, or 18%, according to the nature of the security or standing of the borrowers.
Late Christmas Eve, 1885, after the bank had closed for the day, while J. Z. Miller, Sr., and J. Z. Miller, Jr., President and Cashier, were sitting beside the old cannon stove in the center of the office, talking over the day's business, Captain A. J. Harris, Vice-President of The Belton National Bank, and, as strange as it may seem, attorney for the First National Bank, entered the office. He took from his pocket a memorandum written in pencil on the back of a used envelope and handed it to J. Z. Miller, Sr., who read it in silence and passed it to J. Z. Miller Jr. J. Z. Miller, Jr. looked it over and without a word being said made a notation at the bottom of the memorandum and handed it back to J. Z. Miller, Sr.
Will sell our building, furniture and fixtures, and 100 shares of American Cotton Oil Trust for $10,200. Conveyance and delivery tonight. Will liquidate our deposits through you (meaning Belton National Bank) and retain our bills receivable.The paper was then returned to Captain Harris with a draft on New York for $2,500 as earnest money to bind the transaction. Captain Harris departed, returning in about 20 minutes with a receipt for the part payment written on the back of the original memorandum and signed by the President of the First National.
December 24, 1885.
(Signed) First National Bank of Belton,
By, B. N. Boren, President
Accepted, Belton National Bank of Belton, by J. Z. Miller, Jr., Cashier.
Early next morning, Christmas, the deed and actual possession was delivered and The Belton National Bank moved into its new location on the northeast corner of the square where it has since remained.
The business of The Belton National Bank increased slowly from year to year. Results of operation were satisfactory as the bank was conservative and followed good methods. The expense account was watched and credits were extended with so much care that losses were practically eliminated.
All went well until the panic in the summer of 1893. In July J. Z. Miller, Jr. made a trip to New York to borrow funds to carry the bank through that ordeal. It was next to impossible to get an interview with the officers of corresponding banks.
After a week in New York, spending every business hour of each day in correspondent banks' waiting rooms, hoping for an opportunity to see one of the officers, early one morning a messenger came from a little room where the bank's officers had been closeted for many days, and informed J. Z. Miller, Jr., that the cashier would see him for five minutes. The story was quickly told, the request was to borrow $30,000. Without a moment's hesitation, the cashier granted the loan; $10,000 at once, the balance, if and when absolutely needed. Fortunately only part of the remaining commitment was required. Mental anxiety was relieved. Cotton was soon on the market. Spinners and factors shipped gold from England to local banks in the farming section to pay for cotton purchased.
The panic was over but practically no deposits were made that fall. People kept their money at home. During 1894, the year following, deposits of The Belton National Bank were reduced to $75,000. They had averaged about $200,000 for several years.
Belton had but two banks from 1886 to 1900, the Belton National and H. C. Denny & Company.
On January 10, 1900, B. A. Ludlow and associates organized the Citizens National Bank of Belton with a capital of $50,000. The Citizens National gave up its National Charter July 1, 1990, and became the Citizens Bank, a private institution. It failed January 12, 1902.
On October 2, 1905, the Farmers State Bank of Belton began business with a capital of $25,000. That bank operated not quite a year. It transferred its business to the Belton National.
On February 8, 1907, the Peoples National Bank of Belton began business and that bank is still operating (1929).
The 1907 panic was handled skillfully. Since it was strictly a currency panic, the Belton National Bank followed the recommendations of the New York Clearing House and limited the amount of cash paid to each depositor. For convenience of customers, the Belton banks issued script to take the place of United States currency. Customers accepted the script without serious objections, since it was received by all merchants, banks, and individuals as real money. This condition lasted ten weeks, until unlimited withdrawals were resumed, January 15, 1908.
On June 30, 1910, W. W. James, then assistant cashier of the Belton National Bank, purchased from J. Z. Miller, Sr., J. Z. Miller, Jr., and Amanda P. Miller their interests in the bank. This rang the curtain down on forty-five years of banking services the Miller family had rendered the citizens of Bell County and its trade territory.
On July 27, 1910, J. Z. Miller, Jr. moved to Kansas City, where this former country banker there rose to the position of Governor of the Federal Reserve Bank.
James T. Padgitt, West Texas Historical Association Year Book, October, 1956
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