George Smith (financier)
Encyclopedia
George Smith was an important banking figure in the mid-19th century in Chicago.
Born in Aberdeen, Scotland, Smith visited Illinois and Wisconsin in 1835 and felt there was money to be made. He returned home and gathered subscribers and back in Chicago used those funds to found the Scottish Illinois Land Investment Company. He stepped into the vacuum left in the wake of the Panic of 1837
during which most banks in Chicago
failed used his company as an unchartered bank. Through that company he was able to bring in notes from solvent banks in other parts of the country helping to revive Chicago's economy.
By 1839, he had founded an insurance company based in Wisconsin whose notes he circulated in his new unchartered bank, George Smith and Company. These bills acted almost like currency which came to be called "George Smith's money" which by 1842 was actually redeemable in gold and silver. Two years later Smith's was the only bank left in Illinois and by 1854 75% of Chicago's currency was backed by Smith.
His efforts were interpreted differently across the country, for example a bank founded by Lemuel Grant in Atlanta, Georgia
in 1852 was forced to close down when Smith circulated their notes widely throughout the midwest. It was made insolvent by 1856.
Smith accumulated a fortune in Chicago but by 1857 he was living in London
where he died in late 1899.
Born in Aberdeen, Scotland, Smith visited Illinois and Wisconsin in 1835 and felt there was money to be made. He returned home and gathered subscribers and back in Chicago used those funds to found the Scottish Illinois Land Investment Company. He stepped into the vacuum left in the wake of the Panic of 1837
Panic of 1837
The Panic of 1837 was a financial crisis or market correction in the United States built on a speculative fever. The end of the Second Bank of the United States had produced a period of runaway inflation, but on May 10, 1837 in New York City, every bank began to accept payment only in specie ,...
during which most banks in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
failed used his company as an unchartered bank. Through that company he was able to bring in notes from solvent banks in other parts of the country helping to revive Chicago's economy.
By 1839, he had founded an insurance company based in Wisconsin whose notes he circulated in his new unchartered bank, George Smith and Company. These bills acted almost like currency which came to be called "George Smith's money" which by 1842 was actually redeemable in gold and silver. Two years later Smith's was the only bank left in Illinois and by 1854 75% of Chicago's currency was backed by Smith.
His efforts were interpreted differently across the country, for example a bank founded by Lemuel Grant in Atlanta, Georgia
Atlanta, Georgia
Atlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
in 1852 was forced to close down when Smith circulated their notes widely throughout the midwest. It was made insolvent by 1856.
Smith accumulated a fortune in Chicago but by 1857 he was living in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
where he died in late 1899.