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.