THE BEGINNING OF BANKING IN ARIZONA

THE BEGINNING OF

This year marks the Diamond Jubilee of bank-ing in Arizona. On August 11, 1877, just 75 years ago, the first bank in Arizona Ter-ritory opened for business. Fourteen years had passed since the organization of the Territory at Navajo Springs in 1863, and the subsequent establishment of Prescott as the Capital, before the Territory had a bank. The Bank of Arizona, then organized at Prescott, has been in continuous operation since that opening date and stands as a landmark on Arizona's road of progress.

In 1877, Prescott was the metropolis of Arizona Territory, and in that year became, for the second time, Capital of the Territory. Hinton's "Hand Book to Arizona" (1878) states that Prescott had a resident population of about 4,000, and "a sash, blind and moulding factory, a planing mill, several sawmills, brickyards and lime kilns, two public halls, two newspapers, two hotels, several boarding houses, 25 stores, two drug stores, 20 saloons, three breweries, and over 20 lawyers. There are a few log dwellings-reminiscenses of early days; but the large majority of buildings are of frame, some business places being of brick, with a few resi-dences, also. Really, and without flattery of any kind, Prescott is a very attractive town.

BANKING IN ARIZONA

Isolated from San Francisco and other Coast points by days of arduous travel via boat and stage, Prescott had become a cultural and commercial center. The life in the community reflected a sense of being at the center of a new world and not on the periphery of an old one. Prescott had "the finest school building of this or any sister territory," a Library Association, and three Protestant churches. Fort Whipple, adjacent to Prescott, was important both as a military headquarters and for its social bearing. Life was filled with enthusiasm and the future was all that counted. The Arizona Miner reflected the spirit in an editorial of September, 1875: "They come! They come! They come from every nation, they come from every way... Yavapai is filling up with a hardy and industrious people . . . to form communities and to become happy."

By 1877 the Indian troubles had subsided. Military payrolls and the government's demand for supplies were creating trade. The livestock industry was already well established, cattle having been imported from as far away asOregon and Texas. It was the day of the open range and large scale operation. Roads were being constructed. Regular wagon train and stage coach schedules were maintained. Stage coach robberies were not an unusual occurrence, but loss on the average was small and the inconvenience was lessened by the adventure afforded. Mining flourished in the area with hundreds of mines and mills operating in the neighboring Bradshaws, and to the south and west. Reports of mineral values were astounding. Assays from 10 mines in one district averaged over $1,000 per ton! Fortunes were made and lost, and outside capital was rushing to this frontier. Life was on the march toward greater expectations.

The immediate need of an expanding frontier caused the Arizona Miner to clarion editorially in June 1871: "We Want a Bank-or a broker's office, for the reason that, at times, it is next to impossible to get currency notes for Government checks, and gold and silver bullion. Then, too, a bank could do a safe and profitable business by loaning small sums upon good security."

It is a matter for conjecture whether Sol Lewis had read the Arizona Miner and so was influenced to come from San Francisco in 1877 to organize Arizona's first bank. In any event, venture capital was attracted by the possibilities inherent in "loaning small sums, upon good security." That the going rate of interest was from 2% to 3% per month may have provided a certain incentive.

Soon after Sol Lewis arrived, Arizona had a bank. Though the principal capital was from California, some local investors shared Lewis' vision as to the financial future of the area. The location selected for the bank building was opposite the northeast corner of the Plaza. Hinton specifies "a new bank building has recently been completed, 72 feet by 29 feet 5 inches." This site has been the home of the Bank of Arizona these 75 years. Only once has it operated at another location, and that temporarily in 1899-1900 during-ing the construction of the second and present bank build-ing, which coincided with the occurrence of Prescott's his-toric fire.

At the time of the completion of the first building and the installation of the vault, the Arizona Miner reported: "The vault and safe of The Bank of Arizona are worth a visit to that institution to examine, even though you have no idea of robbing it or borrowing money from it. . . The vault itself which is fireproof would be hard to crack if there were no safe inside. . . ."

However, it is apparent that the bank's personnel did not always share the editor's opinion as to the impregnabili-ty of the installation for it was rather common practice to hide bags of gold coin or bullion in the waste paper baskets rather than to risk them to the vault.

Sol Lewis was named president of the Bank of Arizona - the first president of the first bank in the Territory. M. W. Kales, who had come from San Francisco with Lewis, became the cashier. These two men gave able direction to the bank for five formative years, during which time they opened an Agency of the bank in Phoenix in 1881.

The following event is closely related to the legislative vacillation concerning the location of the Territorial Capital. In 1864, Prescott became the first Capital City; by act of the Legislature, the Capital was removed to Tucson in 1867; by the same means, the Capital was returned to Prescott in 1877, the year in which Lewis organized the Bank of Arizona. However, in 1889 the Capital was again moved, this time permanently, to Phoenix. With this change in Prescott's political fortunes, Lewis and Kales lost their enthusiasm for the future of Prescott. They and their California associates disposed of their interest in the Bank of Arizona in 1882 to three Prescott residents, Hugo Richards, Edmund W. Wells and W. E. Hazeltine. At the same time, Lewis and Kales purchased from the bank its Phoenix agency, and developed it into what later became the First National Bank of Arizona. This change of ownership affected the entire history of the bank: no longer merely a commercial enterprise profiting absentee owners, it now belonged to Prescott.

The personalities of the new management are not without significance. Hugo Richards, who became president of the bank, was a gentleman from St. Louis who could well qualify as a Westerner. He had come to Denver in 1860 as special agent of the Ben Holliday Stage and Express Company. After a sojourn in Montana, he was connected with the Wells Fargo Express company in California. Prior to settling permanently in Prescott in 1872, Richards was engaged in the trading business as the "sutler" at the military posts at Camp Verde, Fort Whipple and Camp Apache. He invested in both mining and livestock, seemingly possessed of that peculiar flair for business that spelled success for his every venture.

Edmund W. Wells, the new vice president, was even more of the Old West. Coming with his father and John P. Osborn in the famous Wells and Osborn Party, he arrived in Prescott in 1864 after driving his father's team across the plains. He was later paymaster at Fort Whipple, served in a clerical position in the District Court in Prescott and was admitted to the bar in 1875. In later years he was appointed Judge of the U. S. District Court. Judge Wells gained further recognition with the publication of "Argonaut Tales," a colorful first-hand portrayal of early days in Arizona Territory.

W. E. Hazeltine was a later arrival, coming to the territory in 1875 at the instance of his cousin, Moses Hazeltine Sherman, who had come from New Hampshire in 1871. Hazeltine took the place of Kales in the new triumvirate, and was largely responsible for the management of the bank, since both Richards and Wells had numerous outside interests which consumed much of their time.

In 1890, Moses B. Hazeltine came from Ohio to join his older brother in the bank. A family anecdote serves to illustrate the matter-of-fact way in which both brothers regarded the conduct of business. After days on the train without benefit of "sleeping car," M. B. Hazeltine arrived in Prescott in the forenoon of January 30. Following lunch at his brother's house, he reported at the bank for work at 1 p.m. and never stopped working until the day of his death, September 7, 1949. It can be said fairly that his rectitude of character was mirrored by the institution which he served so ably for sixty years.

As a result of overwork, W. E. Hazeltine was forced to resign from the management of the bank's affairs in 1894 and was succeeded by his younger brother, who also acquired his interest in the ownership of the bank. With the death of Richards in 1911, Wells succeeded to the presidency and M. B. Hazeltine became vice president, a position which he held until 1928, at which time Judge Wells resigned from the bank and Hazeltine became president. Simultaneously, Hazeltine acquired the Wells interest in the bank and A. H. Favour acquired the Richards interest and became vice president of the institution.

A. H. Favour, an able attorney, had come to Arizona from New York in 1917 and soon became counsel for the bank. He served as State Senator from Yavapai County for four sessions and was an influential member of the Arizona Commission on the Colorado River. Like Judge Wells, Senator Favour was an author as well as a barrister and produced an authoritative work, "Old Bill Williams, Mountain Man." He continued his active relationship with the bank until his untimely death in 1939.

Charles S. White, the present executive vice president, came to the bank as cashier in 1928 from the vice presidency of the First National Bank of Albuquerque. White's long experience in livestock banking has made him an