PNC Legacy Logo

Civil War Exhibit

The Stories of PNC Predecessors
Measures of Necessity: Bankers Respond to the Civil War

No event in American history matches the drama of the Civil War: 617,000 died in the line of duty, 4 million African Americans secured their freedom, and the nation upheld its commitment to democracy. It is hardly surprising then, that its impact upon the financial system is often overlooked. Unable to pay for the war, Congress established a centralized currency that gave the Union a decisive advantage over the Confederacy and served as the underpinnings for the creation of the Federal Reserve a half-century later.

Amidst the chaos of war and the uncertainty of this nascent financial system, bankers tried to sustain commerce and preserve their communities. The PNC Legacy Project invites you to explore the heroic efforts of bankers who saved a central Maryland city, innovatively protected their customers’ investments, and chartered new institutions to help their cities rebuild.

About the Legacy Project

Civil War Timeline

Disaffection with the Lincoln administration ran high in the commercial entrepôt Baltimore through the war. Most of its financiers and investors sympathized with the Southern planters and merchants, whose trade had undergird the city’s prosperity. Despite their sympathies, they maintained the city’s competitive advantage by investing in manufacturing concerns and government bonds that supported the Union.

Several of the financial leaders of the city established the Safe Deposit Company in 1864 to provide a safe place to store valuables, especially bonds and securities. Within three years, the company expanded upon this mission and received authorization to administer trusts that managed the wealth of individuals.

As the federal capital separated only by a river from the Confederacy, Washington was in a precarious position during the Civil War. So was its pre-eminent banker George Washington Riggs, who like many financiers was privately sympathetic to the Southern cause. As the chief proprietor of Riggs & Co. (previously known as Corcoran & Riggs), a successful bankinghouse that cultivated profitable relationships with Congressmen, Presidents and other officials, Riggs managed to retain his clientele largely because of the respect earned over years of trustworthy service to the city. 

Confederate troops moved through Frederick and the surrounding farms during campaigns that culminated in the Battles of Antietam and Gettysburg. Ordered by General Robert E. Lee in late June 1864 to attack Washington by first penetrating the Shenandoah Valley, General Jubal Early and his troops occupied Frederick one last time.

On July 9, 1864, General Early delivered an ultimatum to the citizens of Frederick that no Union general would have asked in the South: he threatened to plunder the city if he did not receive $200,000. Within hours, the banks of Frederick furnished that ransom and saved the property held within the city. The federal measures that provided a stable medium of exchange – at least in contrast to the hyperinflated Confederate currency – certainly benefited the city of Frederick.

The Civil War tested the mettle of the Confederate stronghold of Fredericksburg, which changed hands seven times. While its citizens’ plucky defense of that city against Union incursions in December 1862 is particularly well-known, the extraordinary, if ultimately futile, measures taken by its bankers are not. After most employees of the pre-eminent Farmers Bank enlisted in the Confederate Army, the cashier moved its assets and records to Danville, an especially prudent decision as its banking house served as the Union headquarters during its occupation of the city. The bankers could not overcome the chaotic state of Confederate finances and the destruction of the city’s businesses so that Farmers Bank surrendered its charter at the end of the war.

Only months after the Confederate surrender, investors embraced the emerging national financial order and received a charter for the National Bank of Fredericksburg. This bank helped rebuild the city from the ashes of the Civil War.

As word approached Gettysburg of the Confederate advance toward Pennsylvania in late May 1863, the directors of the Bank of Gettysburg transferred its assets to the Bank of Philadelphia. During the days of the bloody battle between July 1 and 3, the bank closed. A few weeks later, the Adams Sentinel noted that the bank “suffered no pecuniary loss beyond the inconvenience occasioned by the hasty removal of its valuables.” Its stockholders welcomed the national bank system and received a national charter in December 1864 for the Gettysburg National Bank.

The Civil War transformed Pittsburgh from a small but prosperous manufacturing center to a nascent industrial city. Although its populace never felt safe from the possibility of invasion, its proximity to the fighting proved a commercial advantage. The city served as a Union depot, its manufacturers supplied the coal, oil and iron that undergird the war effort, and its railroad and shipping enterprises boomed. In the midst of this growth, the Pittsburgh Trust Company re-organized to establish the First National Bank of Pittsburgh, one of the first in the nation. James Laughlin, a principal partner with Jones & Laughlin Steel Company, was the leading force behind the venture.