The Battles Bank: When Honesty Was Collateral and Chickens Paid the Interest

On the day the pri­vately owned R. S. Battles Bank in Girard, Erie County, closed, it had been in operation for eighty-seven years. For nearly a century its owners had steadfastly offered services to their depositors despite panics, recessions, depressions, robberies, even a presidential proclamation. Oddly enough, the doors of the vine covered brick building were ultimately closed in 1946 by growth and prosperity.

During the eighteenth and early nineteenth centuries federal banks were regarded as an encroachment on state rights. State banks, which began organizing in greater numbers in the early 1800s, had few restrictions imposed upon them. Banking institu­tions paid in specie or issued their own notes which were easily counterfeited. Bank failures were a common prob­lem. The general population had greater confidence in an individual to conduct its finan­cial affairs than in the govern­ment and often respected merchants were the conduit for money transactions.

In Girard, a small rural community in northwestern Pennsylvania, two young men from prosperous families were frequently approached by their acquaintances to hold their money for safekeeping. Realiz­ing the possibility of using these resources to finance other projects, Rush S. Battles and Henry M. Webster opened the Battles and Webster Bank in 1859.

Rush S. Battles, born in 1833, was the sixth and young­est child of Asa and Elizabeth (Brown) Battles. His propen­sity for management was ap­parent early, and upon his father’s death in 1848, the two hundred and forty acre family farm was left to him. Rush was interested more in business than in farming, and after completing his primary school­ing in Girard and Ohio, he read law with Samuel E. Woodruff of Girard. In 1853, he entered the National Law School of Poughkeepsie, New York, and graduated the fol­lowing year. Admitted to the bar in Erie County in Decem­ber, 1855, he joined the law office of Woodruff, who had been elected Erie County dis­trict attorney in 1853. Their association was short lived, and Rush turned more of this energies to managing the Battles farmstead.

Born in 1837, Henry M. Webster, one of four children of James and Mary (Lef­fingwell) Webster, Jr., was gifted with great business acumen. He and his brother, Charles F., and their sister, Charlotte E., were to have lifelong affiliations with Rush.

Girard was a prosperous little community surrounded by flourishing farms. Incorpo­rated in 1846, two years after the completion of the Erie Extension Cana] which coursed its way through the Battles farm and on through the borough toward Erie, bringing business and cheap fuel for local factories from Pittsburgh.

When the Battles and Web­ster Bank was established in the Keystone Block on the borough’s main street, it was the only formally organized financial institution in Girard. During the same year, Rush built a large house on his farm, which abutted the borough line, for himself, his mother and two unmarried sisters. Perhaps the house was meant to signal his new station in life as banker, although he listed his primary occupation as farmer in the 1860 county census. Rush, who had been courting Henry’s sister Char­lotte for several years, married her on March 28, 1861. By the end of the year he erected another residence on a corner of the farm for himself and his bride.

With the beginning of the Civil War the need for banking restrictions and a uniform national currency became urgent. In 1863, Congress passed the National Banking Act which provided federally­-chartered banks in small com­munities. The First National Bank was organized and char­tered in Girard in 1863 by several businessmen, includ­ing Rush, Henry, and Henry’s father, who served as vice president. Rush acted as cash­ier with duties similar to those of today’s bank manager. Hen­ry’s younger brother Charles began his long career in bank­ing in a minor role that year. The Battles and Webster Bank continued thriving.

The two banks worked harmoniously in the commu­nity. In 1871, when the president of the First National Bank died, James Webster, Jr., as­sumed the position and Henry Webster became vice presi­dent. Rush remained as cash­ier and Charles F. Webster became assistant cashier. At that time William C. Kibler of Girard, a seventeen year old errand boy, began his long association with the Battles and Webster Bank.

Following the flurry of business activity created by the Civil War, the economy of Erie County began to decline in September 1871, when a canal aqueduct collapsed south of Girard, halting the lucrative freight and passenger trade. It meant serious economic loss to many small communities lin­ing the canal, some of which never recovered. Two railroad lines offered similar service through Girard Township, using the tracks owned by the Lake Shore Rail Road.

The strength of Girard’s two banks was again tested during the Panic of 1873 that began with the failure of the New York brokerage firm of Jay Cooke and Company on Sep­tember 28. Nearly forty other banks and brokerage houses closed the same day and two days later the Stock Exchange closed for ten days. The effects were not felt immediately in Erie County. On October 2, the editor of the weekly Girard Cosmopolite commented, “There has been a great finan­cial panic in Philadelphia, New York and Washington … there was very little of it elsewhere.”

The economic condition which had been building since the Civil War resulted in a depression that lasted five years. By the end of 1873, Erie banks were rushed by panic­-stricken depositors, and the idea of issuing fractional cur­rency was considered in a desperate attempt to relieve the scarcity of coinage. As the situation worsened, Erie offi­cials announced the city would open a soup house for the benefit of the peripatetic poor. Many Erie factories ceased operation temporarily and earnings of the Lake Shore Rail Road plummeted. At one point all the banks in Erie County suspended payment in currency – except “the two banks located in Girard which paid all demands in currency on presentation.”

The situation was never as serious in Girard. Later in 1873 the Cosmopolite editor wrote, “The ‘hard times’ are not so terribly hard in this vicinity,” noting that marriage engage­ments were the exception. They had been suspended, although “courting goes on as usual.”

Nor did the depression hinder Rush Battles and Henry Webster from expanding their endeavors. A wrench factory had opened in Girard in 1874 and appeared to have a prom­ising future; however, it fal­tered and the following year Rush and several other Girard businessmen bought it at sheriff’s sale. The limited part­nership included William C. Culbertson, who served as president, C. F. Rockwell, Charles F. Webster and Rush, as secretary-treasurer.

Rush utilized the resources of his farm so successfully that he was often retained to stable wintering circus horses in his huge barn. He developed a feed concoction of cornmeal and oatmeal which guaranteed good health. “This ration soon converts the travel-worn horses into sleek, high mettled charges,” the Erie Observer reported on February 7, 1873.

Henry Webster, a bachelor, dabbled in the booming oil industry and grew quite suc­cessful. He retired from the Battles and Webster Bank in 1876 and Rush continued alone, changing the name to the R. S. Battles Bank. Henry died the next year, while at­tending a meeting of the oil exchange in Oil City.

Like his partner, Rush also was drawn to the oil region. In 1884 he purchased the failing Climax Manufacturing Com­pany of Corry. The company had begun operation in 1868 making mowers and reapers, but was hurt by the panic and depression of the 1870s. It changed hands and the new owners reorganized to manu­facture engines and other machinery. The business re­mained marginal until Rush purchased it, and “extended its scope, at length being de­voted chiefly to building geared locomotives for use in the lumber camps.” During Rush’s long association with the Climax Manufacturing Company, several opportuni­ties occurred to move it to Girard, but his decision each time was to leave it in Corry.

The charter for Girard’s First National Bank expired in 1882, which necessitated its closing, even though it was still prosperous. Its entire indebtedness was satisfied within thirty days, leaving the R. 5. Battles Bank as the bor­ough’s only bank. Charles M. Webster returned as cashier and William C. Kibler contin­ued his association.

In 1890, Rush S. Battles continued to prosper. He opened a bank in Corry with his wrench factory partner, W. C. Culbertson. In nearby Un­ion City, he owned shares in the Electric Light Company. He and several businessmen negotiated to bring the Pitts­burgh, Shenango and Lake Erie Rail Road to Girard. It followed the route of the old canal and a depot was built off the main street. On Memorial Day in 1891, the first excursion cars rolled through, accompa­nied by “the roar of cannon, toots and whistles, cheer after cheer from the immense crowd.”

The Battles touch reached far beyond Girard’s financial and industrial circles. There were many cultural groups in Girard and reading was espe­cially popular. The community owned books, but lacked a building in which to house them. A former resident, Ro­bertson Wilcox, had died in 1891 and left five thousand dollars to establish a free li­brary in the town of his wid­ow’s choice. She chose Girard and a committee was orga­nized to select a site for this new structure.

Charles F. Webster, a com­mittee member, chose a lot on the north side of the main street, opposite the Keystone Block. The lot was large enough for a double structure and it was proposed that a joint building be constructed for the library and a new bank for Rush. The proposal was accepted and Charles pur­chased the land. By 1893, when work began on the li­brary, the bank building was already under construction. The library was set back on the lot twenty-four feet which was never to be built upon “but shall be kept open and dear for the benefit of said Bank Building lot,” stated the deed for the bank lot, which Rush purchased from Charles on July 21, 1896.

As construction continued on the building, news of the bankruptcy of the Philadelphia and Reading Railroad and bank failures around the coun­try made front page headlines. Erie businessmen reported losses during the year, while foreclosure and bankruptcy notices punctuated the news­papers. In Girard – seemingly unscathed – the exciting news was of the World’s Fair in Chi­cago. By its closing days in October, at least seventy-five residents had attended the Columbian Exposition and spent an estimated five thou­sand dollars to do so. Newspa­pers advertisements included “Hard Tunes” sales in the Girard stores, but at the end of the year, the holiday trade was judged to be better than the previous years. “The hard times that folks talk so much about we believe to be more imagination than anything else,” wrote the local newspa­per editor on December 28.

Rush Battles appeared untouched by the panic and recession. In addition to his banking and manufacturing endeavors, he was selling Concord grapes grown on his farm for up to six cents more per bushel than the growers from the eastern part of the county. “The demand for R. S. Battles grapes has been greater than the supply,” reported the newspaper, mentioning that the fruit of some growers had suffered frost damage. The next week Rush publicly re­sponded: “If anyone had grapes injured, it was because they neglected to attend to their business.”

His other enterprises were also flourishing. The Climax Works was running fourteen hours a day and the wrench factory in Girard, although closed temporarily at the end of the year, presented each of its seventy-five employees with one extra dollar as a Christmas present. Although more than one hundred and fifty banks suspended opera­tion by the year’s end, Rush’s enterprises thrived; in fact, when the new library opened to great ceremony in 1895, his bank building was already in use.

Rush spared no expense, on the structure or on the vault room in which two large safes were placed. Constructed of steel, stone and brick, the building was completely fire­proof with foundation walls measuring nineteen inches thick. The walls of the vault room, built near the right rear corner of the first floor, were even thicker. The only entry into the vault room was through two heavy steel doors, with a time-lock set to release once every twenty-four hours. Rush ordered an elabo­rate alarm system installed that not only connected with the electric light plant but also alerted Girard’s fire depart­ment. Except for two marble fireplaces, the furnishings were unembellished. The second floor consisted of one large finished room used mainly for storage.

Because of the many safety precautions, the bank proved to be impervious to robbers. On the night of March 8, 1911, neighbors were awakened by an explosion. “In an instant the street lights flashed on and the fire bell began ringing, as they were wired to do,” breath­lessly reported the Cosmopolite in its front page story. Word spread that the bank had been dynamited and a crowd quickly gathered. The would­-be robbers had pried out the bars on the rear windows and, once inside, had set dynamite to blow open the vault doors. The large front and side win­dows had been shattered in the explosion, and although the outer door to the vault room had a large hole in it, the inner door was only dented and the contents of the R. S. Battles Bank remained un­touched.

Ever the entrepreneur, Rush sold his interests in the Corry bank, but continued to invest in new ventures, such as the Lake Erie Foundry Com­pany, organized in 1901 with two of his long-time bank personnel serving as officers. Rush’s judgement was exem­plary, as T. S. Clymonts, a fruit and produce merchant from Cleveland, observed in June, 1897. He wrote Rush, asking to sell his grapes through him rather than the Union and added he had “the promise of a number of people who will ship at Girard, but they seem to hinge their decision on what Mr. Battles is going to do.”

Rush’s two great assets were his financial wizardry and his wife Charlotte, highly interested in the community’s religious, cultural and educa­tional well-being as he was in its commerce. The Battles had three children, but only one, C. Elizabeth, lived to adult­hood. Elizabeth was a well­-educated woman who lead a life of refined leisure. She had been married for a brief, un­happy year in the 1880s, then returned to her father’s home. The three traveled widely, enjoying the luxury Rush’s prosperity afforded, but al­ways returned to the serenity of rural Girard.

Until his death in 1904, Rush Battles walked to the bank every day. Following his wishes, Charlotte and Eliza­beth kept the farm and super­vised the banking, manufacturing and other branches of his business. As Elizabeth began to take an active role in her father’s af­fairs, it was she who made the traditional trips to the bank.

During the year that Rush died, another bank, the Na­tional Bank of Girard, orga­nized in the community. In late 1907, the panic initiated by the failure of the Knicker­bocker Trust Company, fol­lowed by a downturn in the stock market, resulted in a severe recession. The National Bank of Girard worked to assure the community that it was strong, partially by shift­ing its advertisements from the inside pages of the Cosmopolite to the front page. The Battles Bank remained confident and silent.

Weeks passed, during which numerous lay-offs and bank closings were reported around the country. The rail­road line through Girard paid its employees with eighty percent scrip in December, decreasing to fifty percent in January 1908. In the northeast­ern end of the county the privately owned bank of En­sign and Son’s in North East­ – organized the year before the Battles Bank – was closed by the financial flurry. Elizabeth, her mother and her Uncle Charles, now head cashier, remained calm and led the bank through yet another economic crisis. Upon Char­lotte’s death in 1920, Elizabeth became the sole owner and president of the R. S. Battles Bank.

During the lean years of the twentieth century, Charles and William C. Kibler continued to loan money in the bank’s name. Sometimes the only collateral needed was the hon­esty they saw in the appli­cant’s face. Area residents still recall occasions when there was no money to satisfy a loan, but the intent to pay, plus a few chickens or produce as interest, was sufficient for the Battles Bank. Bank records never showed receipt of anything but cash, suggesting that some loans may have come directly from these two bankers.

The stock market crash in October 1929 revealed that the basic business of the country was unsound, and every as­pect of life was affected as the economy began a relentless downward spiral. Rural Girard could no longer be insulated from the nation’s economic condition. Bank after bank across the nation floundered, shattering any confidence that might have been left in them. Depositors made heavy cash and gold withdrawals. By the beginning of 1933, the banking crisis surged out of control. To further complicate matters, the government was about to change hands as the term of Pres. Herbert Hoover, a Republican, came to an end.

Hoover and newly elected Pres. Franklin Delano Roosevelt, could not work out a mutual agreement to curb the crisis. Hoover wanted Roosevelt to agree to a pro­gram developed by the Repub­lican Administration which included keeping the gold standard. Roosevelt, a Demo­crat, refused to make any announcement, hoping to curb the flow of gold out of the country.

Just two weeks before Roosevelt took office, the banks in Michigan were so strained the governor pro­claimed an eight day banking holiday. The New York Times and newspapers in London and Paris called for a statement from Roosevelt. Six more states, including Pennsylvania, imposed limitations on bank­ing. On Thursday and Friday, March 2-3, there were heavy runs on all the banks. Millions of dollars in gold were with­drawn each day and hoarded by frightened depositors. By Friday evening, twenty-seven states had authorized restric­tions on bank withdrawals. Roosevelt directed his staff to contact all the other governors to enact moratoriums on their banks and during the night all the governors agreed, al­though many banks opened for their usual half-day on Saturday. That morning the New York Stock Exchange was shut down; it was also Roosevelt’s inauguration day.

Said Roosevelt in his inau­gural address, “This is a day of national consecration … the only thing we have to fear is fear itself.” Using authoriza­tion available through the amended Trading with the Enemy Act of October 6, 1917, he prepared a proclamation. Late on Sunday, March 5, he proclaimed “a bank holiday for all banks and a cessation of all banking transactions” to re­main in effect until March 10. Roosevelt anticipated that Congress could pass an Emer­gency Banking Act by that time, but was obliged to ex­tend the moratorium through March 12. Once enacted, it lead to the Banking Act of 1933, which created the Fed­eral Deposit Insurance Corpo­ration (FDIC).

Elizabeth Battles, vacation­ing during the grim crisis, learned of the proclamation and immediately wired in­structions to Charles to keep her bank open. Early Monday morning, March 6, Charles appeared at his station, ready for work as usual. By his side were William C. Kibler, head teller, and his assistant, and eldest son, William F.

Clamoring at the door were several area residents, shout­ing their complaints. At the usual hour, the doors of the bank opened and the deposi­tors rushed the teller’s win­dow, demanding their money, which was turned over to them immediately. Eyewit­nesses recalled that Charles asked each, “Now, what are you going to do with it?” Nearly all the depositors turned back and redeposited their cash.

Of the 1,147 banks in Penn­sylvania at that time, all but the Battles Bank of Girard closed. Walter Brenneman, who was placed in charge of the closed bank division of the Pennsylvania Bankers Associa­tion that year, was “unaware of any other bank that remained open in the state.” Even the National Bank of Girard, which began operation in 1904, complied with the dos­ing order. It reopened tempo­rarily for limited business until a plan to reorganize and merge with the National Bank of North Girard (now Lake City) was developed. When the two banks merged in 1934 the new bank was called the Girard National Bank.

There were approximately sixty private banks and bank­ing firms operating in the state in 1933, according to the Phila­delphia Public Ledger. All were required to file an application for permission to resume nor­mal business by 5 P.M. on March 6. But the Battles Bank had remained open, and by doing so, was making news. Under the heading “Girard Bank Says ‘Pooh’ to State and U.S. Closing Edict,” the Erie Daily Times carried the local story on March 9. “The R. S. Battles Bank .. .is in a class by itself during these hectic days of money famine.” Charles was quoted as stating, “Ours is a private bank … and neither the state or national government have any authority over it – … There was no reason to close,” although he made it dear that the bank was only open to its own clientele.

With a Girard, Pennsylva­nia, dateline, the New York Times reported on March 11, that “There has been no bank­ing holiday as far as the Battles Bank in Girard is concerned. Business has been transacted as usual, officials explained. The institute is neither a state nor a federal bank, it is pri­vate, operated on the same basis as a private or indepen­dent store.”

The story still circulates that when government officials learned the Battles Bank had not closed, they issued orders for it to comply immediately. Perhaps those orders came directly from the president, for either Charles or Elizabeth is said to have dispatched a telegram to Roosevelt stating, “We’re minding our business, you do the same.” The bank had no choice about its thirty thousand dollars in gold de­posits, which had been stored with the bank since the Civil War. Charles transferred the gold to federal officials at the First National Bank of Erie.

Charles is remembered as an immaculately dressed man. He wore stand-up collars, a large knot in his ties and a magnificent diamond stick pin. He had a full, neatly trimmed beard. Although he owned two Pierce-Arrows, he was unable to drive and al­ways employed a chauffeur. Traveling back and forth daily to make cash deposits into an Erie vault comprised most of his working day during his later years. At the Battles Bank, William C. Kibler held forth. William C., who was seventy-nine in 1933, was almost nine years younger than Charles. William F. Kibler was forty-nine.

It was progress that finally closed the Battles Bank. The need to provide more services, personnel and larger facilities, plus the ages of the staff and owner, prompted the merger with the Girard National Bank. After a delay earlier in the year, on July 25, 1946, the two banks merged, thus end­ing eighty-seven years of unin­terrupted service for the R. S. Battles Bank. The new institu­tion was named the Girard Battles National Bank and through other mergers evolved as Pennbank. The Battles building was sold to a World War II veteran, who operated a jewelry store for several years. Charles died two years prior to the merger, just a few months short of ninety-nine years of age. William C. Kibler, ninety­-three years old at the time of the merger, chose that mo­ment to retire from banking. His son, William F., had been working at the Battles Bank for forty-six years when it closed.

Elizabeth had no children and left her considerable estate in trust with her friend and companion of many years, Georgianna Read, who in turn named the Erie County Histor­ical Society as beneficiary. In 1987, the Society purchased and restored the Battles Bank building to be used as part of the proposed Battles Museums of Rural Life project. Plans are for the farm and several build­ings to be used as a living history experience depicting rural life in the lake region as it was from the mid-nineteenth century to the present.

For Further Reading

Bates, S.P., et al. History of Erie County. Chicago: Warner, Beers, 1884.

Freidel, Frank. Franklin D. Roosevelt: Launching the New Deal. Boston: Little, Brown & Company, 1973.

Mayer, Martin. The Bankers. New York: Weybright & Talley, 1974.

Miller, John. A Twentieth Cen­tury History of Erie County, Pennsylvania. Chicago: The Lewis Publishing Co., 1909.

Morison, Samuel Eliot. The Oxford History of the Ameri­can People. New York: Oxford University Press, 1965.

Reed, John Elmer. The History of Erie County Pennsylvania. Topeka: Historical Publishing Company, 1925.

Schlesinger, Arthur M., Jr. The Coming of the New Deal. Bos­ton: Houghton Mifflin Co., 1958.

____. The Almanac of Ameri­can History. New York: G. P. Putnam’s Sons, 1983.

Tindall, George Brown. America, a Narrative History. New York: W. W. Norton & Com­pany, 1984.

Sabina Shields Freeman, a resi­dent of Fairview, Erie County, has co-authored three books dealing with the county’s history. A member of local historical and cultural organizations and com­mittees, she actively researches regional history, the results of which have been published in Girard’s Cosmopolite Herald. She is a regular contributor to Pennsylvania Heritage.