Lockport Union-Sun & Journal Online

December 9, 2013

NIAGARA DISCOVERIES: Lowertown hosted first Lockport banks

By Ann Marie Linnabery
Lockport Union-Sun & Journal

Lockport Union-Sun & Journal —

Banking in the United States in the early years of the Republic was much different than it is today. At that time, banks were very specific in nature. Charters were granted by either the state or federal government. Many banks were exclusively savings banks that held deposits that could incur interest. Others were commercial banks that loaned money or allowed patrons to have “money on account,” which was similar to today’s checking account. This money could be drawn by check or draft. 
Patrons who borrowed money were issued promissory notes from the bank. These notes could be recalled at any time on demand. Banks also issued their own currency which might or might not be accepted by other banks, businesses, the government or individuals. Banks also came in and went out of business on a regular basis. Corruption and “irregularities” plagued most banking establishments and their charters were revoked.
In these early years many people did not trust banks. Bank notes (paper money) were suspect and most people preferred to make transactions with specie (gold or silver). Consumers also did not want to use the bank as a “middleman” when negotiating a mortgage or when establishing credit with a business. People wanted to deal directly with the land owner, land company, merchant or individual when borrowing money or paying a debt.
By the 1820s banks were becoming more numerous and “up and coming” places like Lockport were eager to have their own establishment. At that time, there were no banks in Niagara County and the nearest one was in Buffalo.
It was the directors of the Albany Land Company, led by Washington Hunt and Joel McCollum of Lockport and Samuel DeVeaux of Niagara Falls, who first approached the New York State Legislature with the request to charter a bank in Lockport. The charter for the “Lockport Bank” was passed by the Legislature on April 22, 1829, with $100,000 in capital stock. 
Fifty-seven of Niagara County’s leading citizens, and others from out of the area, signed on as stockholders. One of those was Aaron Burr, the former U.S. vice president who fatally shot Alexander Hamilton in a duel. Thirteen of the men were named as directors and three as commissioners. Shares in the bank could be bought for as little as $1. A handsome, two-story, red brick building was erected on Market Street near Chapel Street. 
For eight years the bank thrived at the center of the community. This was at a time when Lowertown was much more commercial and had many more prominent residents than Uppertown. In fact, Lowertown was the place to live and do business in Lockport in the 1830s and many fine homes were built along Market Street, many of which are still standing. The major hotel was the Lockport House, an imposing Greek revival style edifice at the intersection of Market and Exchange streets. 
It was believed that Lowertown would always be the center of Lockport’s economic and social life. Unfortunately, a series of circumstances occurred that in turn caused the decline of Lowertown and the rise of Uppertown.
One of the setbacks Lowertown experienced involved the Lockport Bank. After eight years of assisting farmers, merchants and individuals, the bank came under attack from the state Legislature and its charter was revoked for “illegal and highly improper practices.” The bank directors disputed these claims but the charter was revoked anyway. 
The directors immediately petitioned the state Legislature to charter a new bank, the Lockport Bank and Trust Co., to be operated out of the same building. It is interesting to note that this charter was granted until 2101, more than 260 years in the future. 
This second Lockport Bank only lasted until 1852, when Lowertown began to lose its prominence to Uppertown. In 1834, Uppertown businessmen began to petition the New York State Legislature for a bank above the locks. It took four years before the “powers that were” granted a charter for the “Canal Bank” in Uppertown. It was located at 77 Main St. So from 1838 to 1852 Lockport had a bank to represent each of its two sections.
After 1852, Lowertown would not have another bank. The building that housed the bank in Lowertown reverted to a residence and later a school for a brief time. It is still standing on Market Street.

Ann Marie Linnabery is the assistant director of the History Center of Niagara.