Contrary to what one might expect, early settlers of Northern Illinois, beginning in the 1830s, were not all poor. Some left eastern states for expected greater opportunity in Illinois and arrived with sufficient means to purchase land. They brought food, clothing, furniture, wagons, and livestock with them. They built their homes, cleared the land, planted crops. At that time, barter was the only means of exchange, so they had no need for banks. But as they made profits on their crops and businesses sprang up around them, towns grew and so did the need for banking services.
At first all that was needed was a place to keep valuable papers, money or jewelry. There was nowhere to store valuables, police magistrate was a part time job, and in Lemont, Smokey Row with its disrespectable saloons and brothels was getting established!
Tedens Hardware Store at 106 Stephen Street in Lemont had a vault that rented boxes for that purpose. The vault was said to be so strong that three attempts to break into it failed. The most recent was in 1930. Despite what looks like a great deal of destruction in the photo above, the robbers were unable to get to the contents of the safe. Tedens vault is still in the back of the main floor of the old building today.
Other banking needs gradually developed: the need to store payroll money or to exchange currency; businesses wanted capital for further development; the occasional loan was needed, when crops failed or for funds to buy land or develop businesses.
It was not unusual for banks in those days to operate inside other businesses that housed large vaults, such as general merchandise stores or companies with large payrolls. One could enter an archway and select from a grocery, barbershop, restaurant, or—yes—a bank.
One of the reasons bank services were very different in the early years was because there was no standard currency until 1900 when the gold standard went into effect. Prior to that federal, state, and private banks all issued currency in the form of bank notes, the value of which varied from bank to bank. It was common for employers, such as quarry owners, to pay their workers with scrip, perhaps good only at the quarry owner’s company store. It was very confusing to say the least.
Adding to the uncertainty and poor reputation, early banks were prone to failure due to poor management or misuse of funds. An example of such a failure was the Lemont State Bank, started in 1891 with capital put up through the interests of notable Lemont business owners. Skeptical of the entire banking industry, the town was initially hesitant to trust this new bank. However, one person the town did trust was the bank’s president, Tom Huston, so people put their savings into the bank.
Tom Huston was the town’s Civil War hero, who, after surviving a number of battles, was wounded and sent to a Confederate prison. As the young man watched the horrors around him and the deaths of many prisoners, he asked God, “Why them and not me?” He became convinced he was meant to survive for a purpose and it became the guiding principle of his life.
After the war, he settled in Lemont and became well respected. He was elected to the village board, and then was made police magistrate, known for his honesty, courage, compassion and understanding. His task was not easy, as he held this position during some of Lemont’s most challenging years, dealing with such matters as large numbers of immigrants, labor disputes, early Smokey Row, and the Quarry Massacre of 1885. But he worked hard to develop his beloved Lemont: he helped build a subdivision, solicited manufacturers to locate in Lemont, helped start Pure Aluminum, organized the Lemont Electric Light and Power Company, and helped to form the Lemont State Bank.
At first the bank was a successful venture and helped the town. That is, until the owners started to speculate in the purchase of wheat, using bank capital to finance the investments. The bank failed, and some people lost all they had.
Huston was devastated, and burdened with guilt. The people would not have put their money into the bank, and lost it, if they had not believed in him. On February 12, 1897, he went to a hotel in Chicago and registered under a false name. On February 14, hotel management broke into his room and found him dead. On the mantle nearby was a flask of whiskey from which a single drink was gone, and an empty 3 ounce bottle of carbonic acid. The weight of the bank failure and his part in it was too much for his great character.