Health Crisis

In Wisconsin’s pre-statehood days, banks of any kind were few and far between. The few that had been chartered by territorial legislators were almost universally undercapitalized affairs run by non-bankers whose corporate lives were usually quite short. The Wisconsin territory’s banking needs were filled by a hodgepodge of currency of varying quality issued by banks in neighboring states and beyond.

Scottish Banker 

One notable exception was a Milwaukee-based company, The Wisconsin Marine & Fire Insurance Company. Scottish banker George Smith formed it in 1839. It branched out into offering banking services since those were not readily available. It also soon began issuing certificates of deposit that circulated in day-to-day commerce. The company eventually morphed into the Wisconsin Marine and Fire Insurance Company Bank in 1853 and went on to become the Marine National Bank of Milwaukee in 1900.

Businesslike Concern

Successful operations that are virtual monopolies tend to attract competition. In this case, Joel W. Hemenway entered the scene. Hemenway was first mentioned in an announcement in the September 18, 1843, edition of the Milwaukie Commercial Herald. He was opening the Milwaukie Academy, a “Select School for the education of young ladies and Gentlemen” offering a wide range of subjects. It appears that he continued operating the school until perhaps September 1844, as an ad in the September 28 edition of the American Freeman lists his occupation as attorney and counsellor at law, as well as solicitor in chancery. 

The July 25, 1846, issue of the Milwaukee Daily Sentinel for the first time lists the partnership of “Hemenway & Ripley, Attorneys at Law and General Land Agents,” with an office at the corner of Water and Wisconsin Streets “over F.J. Blair’s store.” An October 1847 notice indicated that a third partner, Charles K. Wells, had been added. This partnership was dissolved on March 20, 1849, with Hemenway continuing the business. 

By the spring of 1849, Hemenway had begun to provide a market for city bonds and orders and loan money. This apparently led him to take the plunge and get into the banking business. The August 28, 1849, issue of the Waukesha Republican carried the following column filler: 

“NEW BANK IN MILWAUKEE—We have just seen a one dollar bill of “Hemenway’s Bank of Deposite and Exchange” issued by J.W. Hemenway of this city. It is a neatly engraved bill, with vignettes tastefully executed, signatures & c., all in business like style—Wisconsin. This “business like” concern will do no harm if the people have nothing to do with it.”

This was not exactly a ringing endorsement of the new venture, but it ultimately proved to be pretty accurate.

Shinplaster Mill

Newspapers almost immediately indicated that the bank was a wildcat bank or shinplaster mill. One such report, published in the September 25, 1849, issue of the Waukesha Republican, stated: 

“Hemenway’s Wild Cats—Several of these critters have found their way into the country and we cannot but wonder at the carelessness of our people in handling them. The “kittens” are represented to be worth $1 and are the productions of one J.W. Hemenway, a Milwaukee lawyer, who finding his professional business rather dull, has turned his attention to banking, and on the strength of a few dollars capital has undertaken to furnish our people with a ‘sound’ currency. This banker thinks the fools are not all dead, and if he succeeds in getting off his plasters, we hope he will make a fortune in the ‘winding up.'”

Bank Failure

It was not long before these dire predictions came true. The bank exploded on Tuesday, February 12, 1850. A report of the bank’s trustees issued the day after the bank suspended operations indicated that its assets totaled $10,867.99, including $38.49 in silver coins. Its liabilities totaled $13,956, comprising $11,383 in “bills in circulation, as near as we can determine” and $2,573 due depositors. Their report concluded with the hopeful thought that 

“From the reputation which Mr. Hemenway enjoys as an honorable business man, we are of the opinion that upon his recovering from his present sickness (on account of which this crisis has arisen in his affairs) he will be able to redeem his circulation, if some little indulgence is granted him. Meantime we would recommend bill holders to make no unreasonable sacrifices.”

While some pundits wondered if the illness excuse was a tall tale created to rationalize the bank’s closing, it turned out to be quite legitimate. Hemenway died in August at the age of 30. It is unclear what impact his death had on the compensation that note holders and depositors actually received, if anything, in the wake of the bank’s failure.

A version of this article appears in the April 2025 issue of The Numismatist (money.org)