The idea began in Tilford. The city had just lost its bid for the county seat, but they were determined to still cement their importance in the newly formed Meade County. In June of 1889, just a month after officially losing their fight for the county seat, Freeman Knowles would change the name of his newspaper from Tilford Times to Meade County Times. It was a way to make the paper not just a local paper, but a paper for the whole county.
The next year, the city would make another potential move to solidify their place in the county. In February of 1890, a new private banking institution was announced for Tilford. The claim was that the bank, which would be headed by the Honorable John R. Wilson, would have a capital of $15,000 (the equivalent of half a million dollars today) and unlimited financial backing. The name of the institution was to be the Meade County Bank.
There was little reason to doubt that the bank would materialize. Wilson was a prominent lawyer from Deadwood, who was also a director of the National Bank of that city, and active in a number of other investments within the Black Hills. Yet, the bank would never materialize.
Later that same year, Knowles would move his newspaper from Tilford to Deadwood, signaling the death of the Meade County Times. For Tilford, it meant a decline in the city’s importance. But for the Meade County Bank, it just meant a pause.
Sturgis Banking
As the Black Hills were being settled, banking institutions were quick to set up shop as well. With fortunes being made, as well as lost, banks became quite important, not just for keeping one’s wealth, but also as a signifier of a city’s prosperity.
In the earliest years of the city of Sturgis, it was served by banks like the First National Bank of the Black Hills, that were general banking institutions that served the entire Black Hills Territory. As Sturgis grew though, so did its banking needs.
Early in 1883, two new banks would establish themselves in Sturgis. The first was the Lawrence County Bank, followed by Stebbins, Fox and Co. The two would make their homes on Main Street, on kitty-corner lots on First Street, where the 1886 Bank Building and Sturgis Photo and Gifts currently stand.
These two banks would serve the community until 1887, when they merged to form the First National Bank of Sturgis. The newly formed bank would establish itself in the former Lawrence County Bank building. While the original Lawrence County Bank building, a wooden structure, had been built around 1883, the bank had just invested in a new brick building on that site in 1886.
The First National Bank of Sturgis would serve the community for a decade until they decided to retire. According to their stockholders, “the running of a ‘National’ bank doesn’t pay.” Their retirement gave way to our bank of current interest, the Meade County Bank, which was formed in 1897.
When the First National Bank of Sturgis closed its doors, it did so by giving the option to their depositors of either carrying away their money if they wanted, or simply transferring it over to the newly formed Meade County Bank. For many, it was a no-brainer, as the Meade County Bank was at the same location where they had been banking for decades. The familiar brick bank on the corner of First and Main would now be known as the Meade County Bank.
Meade County Bank
The Meade County Bank opened with great fanfare and support. Local businessmen quickly added to its cash resources, and shortly after opening, it was being touted as one of the best and safest banks in the state. Within a year, the bank would have over $143,000, or about five and a quarter million dollars today.
For nearly a decade and a half, the bank appeared too big to fail. In the banks earliest years, the biggest public controversy that arose was over payment of predator (coyote, wolf, and cougar) bounties that was owed to Meade County Bank (while the court would rule that the bank was legitimately owed the money for those bounties, it would later turn out that the bank may have participated in fraud, or at least was used to perpetuate fraud, but that’s another story).
Part of the trust in the bank came because of its cashier, Henry E. Perkins. Perkins was a prominent member of the town, and in 1900, was elected mayor of Sturgis. He would serve in the South Dakota Senate, and later had a county named after him. Perkins’ prominence and trust only added to the security people found with the Meade County Bank.
The bank was also prospering. By 1903, it was the 5th largest bank in the Black Hills, with more than $311,000, or nearly 11 million dollars today, in deposits. As the bank grew, so did its importance in the larger community of the Black Hills.
By 1907, the bank was being recognized nationally, as it was the only bank in South Dakota to show that its surplus and undivided profits were in excess of their capital. That same year, as banks in the east were gripped with panic due to a stock market crash, the greatest crash in the United States banking system up to that time, Perkins, who would be promoted to Vice President of the Meade County Bank, would be able to laugh off the crisis, saying the banks in the west were full of money.
It was true that Meade County Bank was flush with cash. Two years later, in 1909, the bank would boast that they now had over a million dollars in deposits. They would be the 10th bank in the state to hit that milestone.
Not Quite Right
With Meade County Bank seemingly on top of the world, it was a shock when on December 26, 1911, the bank never opened its doors for business. Initial reports were a bit optimistic, assuring the public that the bank had enough money on hand to meet its obligations. Quickly, reality set in. It was a financial disaster.
While the closing of the bank would be a surprise to many in the community, the writing had been on the wall for those who could actually read the warnings. The fact that the bank had remained open for so long surprised a number of bankers, as a crisis was expected.
The Meade County Bank for some time had been making very large loans, and with the troops leaving Fort Meade in 1911, bank failure appeared to be imminent. But the severity of the failure was more than most had imagined.
While it was expected that the bank had deposits amounting to around $750,000, it would later turn out that the bank had hundreds of thousands less. The only reason why the bank hadn’t closed earlier was because Perkins had actively deceived the Public Bank Examiner by concealing the true conditions of the bank. And while Perkins would try to defend himself by saying that he hadn’t been in charge of the bank, even though he was the Vice President and acting President of the bank, that it was in fact the cashier, Elmer Ladd who was at fault, it was shown clearly that Perkins had been seeking to borrow $50,000 on notes of the Meade County Bank which were backed by supposed assets the bank had.
Even more damning, it was shown that Perkins had signed false reports, and over inflated the amount, by double, what was owed to the Meade County Bank by other banks.
Perkins would initially be found guilty in relation to the failing of the Meade County Bank. It was shown that even though he knew the bank was insolvent, he continued to have it take in more deposits. He would eventually appeal his case, and it would finally be dropped and forgotten due to the expense of the continual appeals. In the end, Perkins would be fined $500.
The fine would be nothing compared to what the bank’s closure would do to many throughout the community. The closing would have ripple effects that lasted for decades. Lives, like that of Ladd and Stahl, as covered in a previous article, would be lost. Others would lose their homes, their farms, their very lively hoods. And it is with that that our next article will examine.