Erik Eckilson, (left) responding to audience question and Ray Bacon, co-director of Woonsocket's Museum of Work & Culture)

 

Erik Eckilson:A History of Banking in the Woonsocket Area

On Sunday, 1/24/04 at 1:30 guest speaker Eric Eckilson, whose love of history has produced a fascinating Woonsocket website, presented tremendous insight into a lesser studied aspect of the economic growth within the Blackstone Valley - banking! Offering a well-organized power point slide show, historian Erik Eckilson covered two hundred years of banking in the Woonsocket area from its early origins in 1791 to the criminal disappearance of Joe Mollicone Jr with $8 million of Heritage Loan & Investment's funds in 1991.

Woonsocket represented a thriving center of commerce as it evolved over 200 years. The rapid decline in the 1990s has not been fully recovered, yet a renaissance is slowly beginning to blossom.  Mr. Eckilson skillfully reviewed the emerging banking industry from John Brown's early bank, Providence Bank in 1791, with some of the funds loaned by brother Moses Brown to start up Samuel Slater's enterprise.  This was followed by the 1805 startup of the Smithfield Union Bank, the Cumberland Hill Bank in 1823 and the 1828 Woonsocket Falls Bank. These banks took deposits, made loans, often to the controlling  bank Board who were often mill owners seeking loans. Yet, Eckilson stated, that the stability of the banking industry was strong, even without the deposit insurance put into law in 1933.  The bank also managed money for transactions with issuance and banknotes. Each banknote from bank to bank printed their own currency.

By the mid 1850s, there were six commercial banks in Woonsocket.  Around then, disposable income started to grow, so  five savings banks, some as a separate component of the commercial bank, were started up in Woonsocket. Commerce and banknote transactions broadened from New York to Boston to Hartford and beyond, so this made the numerous currencies accepted, but getting more difficult to manage. At the peak nationally, there were over 7000 types of currency which eventually led to the 1863 National Banking Act of 1863, established by President Abe Lincoln. This led to a uniform currency that would be issued by the government along with federal bonds which financed the Civil War. Trust companies absorbed some of the commercial banks after the 1863 Act.

Eckilson presented slides of the large bank buildings along Woonsocket's Main Street which was once thriving and quite urban. Some of the bank buildings remain, while others are gone. A slide showed the magnificent interior of the former bank that now houses the Registry of Motor vehicles in a more subdued interior. Eckilson also highlighted the rapid vulnerability of assets, profits and liabilities that began to plague the banking industry in the 1930s depression when 10,000 small banks closed. Even with the Federal reserve Act put in place in 1933, the banking industry was relatively stable in Woonsocket until Governor Bruce Sundland closed 45 banks in 1991 as bank executive Joseph Mollicone Jr. stole $8 million and a cashier pushed the R.I. Share and deposit Indemnity Corp into unexpected bankruptcy.

Eventually 34 of those banks would re-open but banking has not yet seen the grandeur and stature in Woonsocket that it once had, especially as de-centralized branches and technology change the frontier of banking service for many consumers. But it is important to recognize, as Eckilson points out, that banking and its services, including loans to make things happen, was a compelling force in the thriving growth of Woonsocket  from the late 1790s to the canal period in the early 1820-40s and on to the railroad period until the mills began to slow and industry was lost.

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