A History of the Bank of Caledonia and Caledonia National Bank
By Patty Conly, President of the Danville Historical Society
Imagine what life must have been like for the early pioneers following their arrival to this area, a virgin wilderness that we now call “Danville” in the beautiful northeastern corner of the state. There were hard times with many important decisions to be made under difficult conditions while settlers began to organize the structure of the town at the very first town meeting warned in 1788. Over the next ten year period, a post office was established, churches were organized and by 1799 there were twelve schools located in the various districts of the town proper. Danville was on a fast track to becoming one of the most important towns in northern Vermont in the early decades of the new century, but it needed a bank. It did not come into existence for another 26 years.
To be or not to be was the question of the day following some controversy between Danville and Peacham over which town should be designated the shire town of Caledonia County. E. Tobias Balivet, local lawyer and historian writes, “…by 1790 Danville had become by far the largest town in the county with 25% of the total of the county population.” Chief Justice William Chamberlin suggested to his neighbors that they support a compromise by establishing a county grammar school in Peacham and let Danville have the courthouse. He felt that Danville was the more logical site because of its geographic location in the center of the county, making it a more convenient location for lawyers to travel to the county court. After review by the legislative committee, Danville’s bid was accepted and on November 8, 1796, Danville was officially designated the shire town.
Again quoting Balivet, “The Village of Danville Green did not exist until a four-acre parcel of land was donated [1797] for a courthouse and Green, and Aaron Hartshorn and Thomas Dow [the donors], began selling off building lots around it. Before that, the closest thing to a populated village in the center of town was Danville Center, around Dole Hill. And the major north-south road, possibly used by the stagecoach between Boston and Montreal, was the road that you can still pick out mostly on a map today, starting at Greenbanks Hollow, running through the Center, and on to Wheelock. When the site was picked for the Green, people began selling their house lots around the Center and buying in the area of the Green.
“The jail was built immediately, near the head of Brainerd Street, but there was delay for some reason in building the courthouse. They started building on the Green a few feet northwest of where the bandstand is now. But they abandoned that site, got an extension in time from the Legislature, and ended up building approximately in the area between the current town hall and Danville Restaurant.” The new courthouse, a two story elegant wooden structure was completed in 1801. Good roads were established in every direction from all points of the Green leading from the courthouse. This would serve to greatly improve the mail delivery to the village as well as the operation of the first post office.
Commercial and industrial growth rapidly increased with the establishment of several mills, and by the late 1790s many artisans began to open shops on Danville Green. By 1820, there were at least seven stores in town. William Goodwin opened a hatting shop just east of the new courthouse, and Deming and Strong had a store on the site which later became the Eagle Hotel. Buckminster and Kelsey opened their new store on the Green where several years later, Miss Francis Hand opened a dress-making shop on the second floor. In one of the largest stores in town, one could buy everything from umbrellas, walking shoes, violins to Italian writing paper.
Sargent and Willard opened their woodworking business on the Green near the courthouse where they made clock cases, secretaries, sideboards, desks, and Windsor chairs. Captain Peter Blanchard built a tavern about 1787, probably the first in town. This would also come to be known as the home of William Palmer, a man of legal and political distinction with a long-standing career in public service. He was elected Governor of the state in 1831. Balivet writes, “ Governor Palmer’s home…was the house at the bend in the road to Greenbank’s Hollow…now owned by Peter and Cam O’Brien.”
In Susannah Clifford’s book, Village in the Hills, a prominent New England statesman travelling through Danville in May, 1819, recalls the warm and welcoming hospitality of a local tavern owner and the excellent food and accommodations. He described the scene in the village as “young men brushing the streets with long tailored surcoats on their backs and small crowned hats on their heads.” The first circus arrived in Danville in September 1823. It was a “Grand Caravan of Living Animals” exhibited at Wait’s Inn on Danville Green. Admission was twenty five cents for which one could view up to 34 different animals!
Danville soon became home to several well-respected lawyers and judges, many of whom were also local merchants and business owners. By 1820, six lawyers and one judge had offices on the Green. Marmaduke Wait, proprietor of Wait’s Inn on the Green rented rooms to at least two lawyers for their law offices. Bliss N. Davis, who built one of Danville’s finest Greek Revival style houses in 1845 was the most prominent and well-known lawyer in town and had a long and distinguished career as a state senator, state’s attorney and judge. Today, this is the home of Senator Jane Kitchel and her husband, Guil.
Danville’s distinction was again demonstrated in 1804 being chosen as host town for the upcoming legislative session. Israel Putnam Dana moved to Danville in early 1800 and built the house on the east side of Hill Street which later became the home of Col. Addison Preston and is now owned by James and Sara Stinson. Dana soon established himself as one of the most distinguished citizens in town. In 1805, he opened a store on or near the Green known as the Haviland Store and purchased and renovated the “old red tavern stand” to accommodate the legislator’s horses. Many of the townspeople opened their homes as boarding houses to accommodate the 200 legislators who would soon descend on Danville. The legislative session was held at the courthouse while Abel Morrill’s tavern hosted the Governor and his council.
A Connecticut newspaper publisher, Ebenezer Eaton, arrived in Danville in 1807, printing press in tow with a plan to start a regional newspaper. He met with some of the towns leading citizens to ask for suggestions of names for the paper. The name North Star was proposed by local merchant and store owner, Aaron Porter, and the vote was unanimous. The first issue was published on January 15, 1807, on a single sheet of paper.
The tremendous growth and recognition of Danville as one of the most important market towns and political centers in northern Vermont happened in a relatively short period of time following the arrival of the first settlers. Danville was soon becoming known and referred to as a “city on a hill” and would enjoy the prestige and profit of being the county seat for more than sixty years.
A Connecticut-born lawyer, William Palmer, previously mentioned, practiced law in St. Johnsbury for several years and moved to Danville after he was elected Judge of Probate in Caledonia County in 1811. He was one of the wealthiest gentleman farmers in town and had a flock of more than 70 sheep. He went on to be elected Chief Justice of the Supreme Court of Vermont and subsequently elected as a Senator in the United States Congress for the next six years. He then served as the representative in the legislature for Danville for the following year. Realizing the need for the county seat and its growing community to have a strong financial institution, Palmer introduced a bill in the legislature to incorporate a bank in Danville. The bill was originally rejected in 1824 but successfully passed in the 1825 legislative session. The Bank of Caledonia, as it was named, was incorporated in 1825 and received its charter as a state bank, only the third to be chartered in the State of Vermont. Israel Dana, at the time a member of the Governor’s council, also played an important role in securing the charter of the Bank of Caledonia. This was yet another mark of commercial distinction for the town.
A notice soliciting subscriptions for capital stock in the newly chartered Bank of Caledonia was issued on January 7, 1826, and the advertisement ran in the January 24, 1826, issue of the North Star. The following were listed as the first commissioners of the Bank of Caledonia: John W. Chandler, Israel P. Dana, Augustine Clark, Luther Clark, Samuel Sias, and Ephraim Paddock. The sale of stock was opened on January 31, 1826 at the Inn of Marmaduke Wait on Danville Green and continued for ten days; $50,000 was raised by the sale of stock for the bank’s starting capital and the bank officially opened for business on March 13 of that year. It is believed that the first board of directors at this time consisted of William Palmer, Samuel Sias, Franklin Deming, William Baxter, and Dr. Josiah Shedd. The cashier, who acts as chief executive officer, was Zebina Newell. The board of directors elected William Palmer as president of the bank; however, he resigned after only six months and was succeeded by Augustine Clark, a local merchant and tavern owner. Clark owned a house at the top of Hill Street, known for many years to be the home of Dr. Martin Paulsen and his wife Louisa, now owned by Dwight and Sharon Lakey.
Phil Rogers, a former director of the Caledonia National Bank has done extensive research on the early history of the bank, and has shared a great deal of the following information. The Bank of Caledonia is believed to have started doing business in a brick building built by John Kelsey in about 1820. This building was long known as the John Currier Store. The building was later owned by the American Legion and is now home to the Open Door on the first floor, while the second floor is occupied by the office of the North Star Monthly. The bank did business at this location until its own building was completed on the Green, beside the old Wetherby Hotel, which was in the approximate location of the Pope Memorial Library today. At this time, Samuel Mattocks, a practicing lawyer in Danville, was appointed cashier of the bank in 1833. He remained in this position until 1835 when he was appointed clerk of the county court. In 1848, he resigned this position and returned as cashier of the bank until 1857. Gustavus A. Burbank served the bank in the position of cashier from 1857 – 1863. In 1855, a fire destroyed the Bank of Caledonia building as well as the nearby Wetherby Hotel. The bank rebuilt on the Green the same year beside the Methodist Episcopal Church.
At the time of its incorporation, the Bank of Caledonia issued its own paper currency and continued to do so until this practice was taxed by the Federal government in 1863. It was thought that the objective was to discontinue the issuance of paper money by thousands of different banks throughout the country in order that the government should have more control by bringing all banks under the same system. In 1865, the directors of the bank voted to give up their state charter and become a member of the National Bank system.
The application was approved and on October 7, 1865, the bank received their new charter under the name Caledonia National Bank. During this period, the bank had experienced significant growth with an increased capital of $100,000. Orra Crosby was elected president of the newly named Caledonia National Bank at this time and James Mattocks, son of Samuel Mattocks, had been serving in the position of cashier since 1863. At that time, The National Banking Act allowed banks that had been granted a national charter to issue their own paper currency if this money was secured by United States government bonds held at the bank. The Caledonia National Bank issued a variety of these notes and they circulated widely until the bonds which secured the notes were called in by the Roosevelt administration in May, 1935.
Bliss N. Davis was elected president of the Caledonia National Bank in 1873 and held that position until 1879. During this period he was instrumental in bringing the railroad to Danville. Ground was broken in 1870 and construction began the following year. At about the same time, the town decided to build a railroad depot to the south of the village. The building was constructed by builders William Dole and David Morse. On September 29, 1871, the first train cars arrived at the Danville depot greeted by a large cheering crowd. Just one month after the arrival of the first steam engine to the station, the first telegraph message was successfully relayed from Danville. Telephone wires were strung from St. Johnsbury to Danville in August of 1884, and the first telephone in town was located in the Elm House Hotel.
Fire again ravaged the newest Caledonia National Bank building and the Methodist Episcopal Church next door in 1886. This is likely the reason that many of the early records of the Bank of Caledonia and the early Caledonia National Bank are no longer in existence. The Methodist Church rebuilt that same year and the new location of the Caledonia National Bank would be a large house on the Green referred to in more recent years as the “Hamilton House.” The bank originally occupied a back corner room of the house but soon outgrew the space and expanded to two rooms. Continued growth led to the renovation of the entire first floor for the use of the bank. The original vault is still intact in the house today.
The Caledonia National Bank would experience an extreme stroke of good luck in 1889 when on the afternoon of May 9, a fire broke out in the Baxter barn on Hill Street near the Congregational Church. The fire spread rapidly as high winds fanned the flames and within an hour most of the business portion of the village was a mere pile of smoldering ashes, including the Eagle Hotel, the old courthouse and the office of the North Star. The grand Elm House Hotel and Caledonia National Bank were the only two buildings left standing in the business district after the great fire. “The pictures show it stopped south of the Congregational church on Hill Street, traveled up Route 2 as far as the Danville Restaurant, and doesn’t appear to have touched the south side of Route 2,” notes Balivet.
A short time after the Great Fire of 1889, the bank would acquire a new neighbor to the north. Mrs. Charles Pope of Chicago donated funds to construct a library in memory of her late husband, a Danville native who moved to Chicago and became a successful businessman. This beautiful building of superb nineteenth century neo-classical style was designed by Brooklyn architect Marshall J. Morrill. It was completed in 1890 and named the “Pope Memorial Library.”
After the death of his father in 1893, Charles H. Mattocks was called on to assume the responsibilities of cashier of the bank, continuing the work of his father, James B. Mattocks. He was born in Danville in 1871 and graduated from St. Johnsbury Academy in 1890. At 22 years of age, he was likely the youngest bank cashier in the state, and it was a testament to his ability to be chosen to fill this important position. He served as cashier until 1900.
Many noteworthy and prominent businessmen in addition to those previously mentioned served in the position of president of the Caledonia National Bank in the early years, some of whom include: Samuel Sias, George W. Chandler, Ira Brainard, L .H. Delano, Samuel Ingalls, James W. Simpson, John Farrington, Henry S. Tolman and Peter Wesson, who served from 1905 – 1920.
As business continued to grow, the Caledonia National Bank would eventually outgrow their current space and in 1924, the directors began to pursue a new location on the Green and a favorable design for the new structure.
This is the first in a series of articles that will focus on early life in the village of Danville, business on the Green and the history of the Bank of Caledonia and Caledonia National Bank.
This article first appeared in the North Star Monthly April, 2014
