Tumultuous Times

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The story of Otis, Arnold & Co. (OA&C) is complicated, with numerous twists and turns over the span of five short years. The firm’s history includes complex commercial relationships and events in four states, bank failures, a massive riot, and even the murder of one of the main characters. 

Our story starts innocently enough with a small notice in the Tri-Weekly Nashville Union newspaper on January 25, 1838. The county clerk of Davidson County, Tennessee, announced:

“Otis, Arnold & Co. did on the 27th day of November last, take license from me, to issue change bills or change tickets according to law, and paid therefor [sic] the sum of $1,000, Given under my hand at office, this 23rd day of January, 1838.

SMITH CRIDDLE.”

License Required

During the Panic of 1837, it was not uncommon for businesses to issue scrip as a means of making change in day-to-day transactions. This is the first time I have come across evidence that merchants and others, at least in Tennessee, were legally required to obtain a license to issue these notes. Undoubtedly, some companies chose not to follow the rules and issued notes without the nicety of a license. 

So we know that the company was in business at least as early as 1837. This, of course, begs the question: What type of business was OA&C? The answer is provided in an announcement in the November 22, 1839, edition of the Republican Banner, a Nashville newspaper:

“G.R. Price & Jno. S. Logan, having formed a copartnership, under the name and firm of Price & Logan, respectfully inform their friends and the public generally that they have purchased of Otis, Arnold & Co. their stock of Boots, Shoes, Caps, & c.   

So we now know that the company was in the clothing business until it sold its inventory to Price & Logan. We also know from an 1842 news item, which I will discuss later, that the company transitioned into running an extensive milling and distillery business.”

Bank Redemption

Businesses issuing scrip had two options for how it could be redeemed. The most straightforward approach was to redeem it directly. However, many companies opted to leave the redemption of their issues to banks, which handled the details. Initially, it appears that OA&C issued notes that were redeemable at the Planters Bank of Tennessee in Nashville. The Planters Bank would treat the company’s scrip as denominated checks, charged against the firm’s deposited funds. Scrip could be redeemed in multiples of $5 in either Alabama or Tennessee bank notes. Notes payable at the Planters Bank are known dated within a month or so of the date that OA&C acquired its license from the county.

So far, this experience is unremarkable, but things started to take a turn. By mid 1838, OA&C became involved with a Cincinnati brokerage firm of Lougee & Moore, which was associated with two banks: the Exchange Bank of Cincinnati and the Savings Bank of Louisville. It appears that these two banks became the alleged points of payment for OA&C as early as May 19, 1838, when the following notice appeared in the Republican Banner: 

“We are requested to say, that the checks of Messrs. Otis, Arnold & Co., Nashville, on the Savings Bank of Louisville, and on the Exchange Bank of Cincinnati, are redeemed in this city [Louisville, Kentucky] by G.J. Moore, corner of Wall and Water streets—Lou[isville] Journal.”  

One of the principals in Lougee & Moore, G. J. Moore also served as cashier of the Savings Bank of Louisville, and its street address is listed in the notice. Between mid 1838 and late 1841, OA&C appears to have been issuing notes payable at the two banks controlled by Lougee & Moore. 

Cincinnati Bank Riot

This relationship between Otis, Arnold & Co. and the Louisville and Cincinnati banks continued, more or less without incident, until January 11, 1842, when the collapse of two other banks, the Miami Exporting Company and the Bank of Cincinnati, was the catalyst for a massive bank riot in Cincinnati. The rioters were intent on punishing the banks that they perceived as having taken advantage of note holders. They looted a number of financial institutions, including the Exchange Bank of Cincinnati. 

When word reached Louisville of this turn of events, a similar riot took place at the Savings Bank of Louisville. The January 26, 1842, issue of the Painesville Telegraph in Ohio related the following: 

“MOB IN LOUISVILLE  

Immediately on the receipt of the news in Louisville, that the Banks of Cincinnati had been mobbed, a considerable number of persons collected in front of the banking house of Messrs Lougee & Moore. Mr. Moore, anticipating their design, did not open the doors of the institution at the usual hour, but removed every article of much value out of the building, and concealed himself also. During this time the number of persons assembled around the door increased. They soon commenced operations by breaking in the windows and doors, and throwing into the street every article that could be found in the house, including books, papers, chairs, tables, & c., amidst shouts of the mob.”

The Final Blow

All of this attention and bad publicity soon led to the issues of all three parties—the Exchange Bank of Cincinnati, the Savings Bank of Louisville, and OA&C—being listed as worthless. The final blow occurred when the extensive milling and distilling operations of OA&C on White Creek near Nashville were destroyed by fire on January 15, 1842. Predictably, OA&C failed two days later, as it lacked the means to redeem its scrip in the face of the collapse of its correspondent banks and the destruction of its other uninsured business assets.

One last remaining irony of this whole episode is that Moore’s business partner Noah Lougee, who had apparently left Cincinnati for a fresh start in Philadelphia, was stabbed to death in his office by a thief on the morning of July 27, 1842. It appears that this murder had nothing to do with the financial losses occasioned by the firm’s failure six months earlier.

Misattributed Notes

Numismatically, notes issued by Otis, Arnold & Co. at any of the three banks it utilized are very scarce. For years, the company name has been misattributed as Otis, Arnolo & Company or as issues of one of the three banks. It is necessary to look closely at the signature on these notes because the “d” in “Arnold” can be easily mistaken for an “o.” Also know that the prominent size of the bank titles does not mean that they issued the notes, but that they only served as the redemption agents for OA&C.

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