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Community Corner

Discover Downtown's Corner Bank

Farmers and Merchants Bank was once there, and many people remember Douglasville Printing Company being in the building.

You can’t help but notice the building if you get caught by the red light at the intersection of Campbellton and Broad Streets in downtown Douglasville. The tile work showcasing the business name, the little architectural flourishes that make the building so unique and the exquisite round and fan windows all boasting imported German glass takes you back to another time.

I’m speaking of the beautiful Farmers and Merchants Bank building, of course. The location happens to be the original home to the second bank organized in Douglasville. 

As the South moved from Reconstruction into the New South era there was a sudden spike in the number of applications for new national banking charters by business men who had taken over as the new leading class. These men understood the New South philosophy calling for changes in the southern economy in the areas of industrialization and in the textile industry in particular.

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Douglasville Banking Company, our first bank, opened in 1891. The space that bears their name now serves as the for the City of Douglasville. 

The second bank, Farmers and Merchants Bank was opened in 1907 with assets of $25,000. The Farmers and Merchants Bank was established after a visit from W.S. Witham, the founder of the Witham Banking System. Witham Banks were state banks, organized under Georgia laws with individual officers and directors and each had their own individual capital.

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The Witham Banking System focused on small rural areas with populations of 1,000 or less. Witham would meet with local citizens and persuade them they needed a bank. In Douglasville’s case he would push the fact that competition was good for the market. My research indicates Witham was a masterful speaker and his position on the State Sunday School Board for the Methodist Church probably didn’t hurt either.

By the time the Farmers and Merchants Bank was organized in Douglasville Witham had approximately 80 banks in Georgia and Florida involved in his chain. Each member bank would appoint Witham as fiscal agent, and he would receive a fee from each location.

His company operated with two mottoes that seemed to satisfy his customer base. The first was "Safety First!" which was meant to calm the nerves of any depositor. In fact, Witham was the first banker to institute the practice of guaranteeing deposits before the FDIC, however in the end it did little to help. His second motto was "Success!"  and Witham certainly promoted that. He took all of the executives with his system on retreats to the mountains or some resort as a morale booster. Sometimes as many as 200-500 people went on these trips. Once he reserved an entire train for a trip to New York for one of the "Success!" jaunts.

He also spoke at any convention or for any group he could wrangle an invite for. His very large mansion along Peachtree Street in Atlanta helped his “success” image, as well.  

A 1916 article advises W. Claude Abercrombie served as president of the Farmers and Merchants Bank. His brother Joseph S. Abercrombie was identified as a stockholder. Both men were former mayors of Douglasville as well. Rader Stewart, who I mention  was also involved with the bank.

I became very interested in the history of the Farmers and Merchants Bank when I noticed a small blurb in Fannie Mae Davis’ history of Douglasville and Douglas County that read, “When hard times hit Douglas County in 1926 and 1927, the bank [Farmers and Merchants Bank] failed also and it was taken over by the old Georgia State Bank (not affiliated by a more recent Georgia State Bank).”

Hard times hit the county? Hard times hit before the actual Depression?  

So, I thumbed through Davis' book looking for more information regarding the hard times and the bank failure. I was surprised to discover her book covers events during World War I and then basically jumps into the Depression. The 1920s are eluded to but not mentioned in great depth. In her section detailing various banks in the county she only gave the Farmers and Merchant Bank a scant paragraph.

That sent me into heavy research mode to discover what happened to the Witham Banking System, and I found quite a bit.

At some point Witham basically retired from running the chain of banks and his assistant, W.D. Manley, took over. Manley had no previous banking experience and had only served as a cashier when he was first hired. Loyalty to Witham is what seemed to qualify him for the job unfortunately.  

Though he worked with Witham, Manley did not adhere to the same conservative course. The chain prospered and grew under his management, but it was a house of cards waiting to fall due to Manley’s creative financing. It was very simple. Manley would borrow from bank A to buy controlling shares of bank B. Once he owned controlling shares of bank B,it was simple to get a loan from bank B to pay off bank A. The shares of bank B could then be used to
purchase control in bank C.  

While Witham had his Peachtree Street mansion Manley lived in grand style on Paces Ferry Road in an Italian style mansion complete with a butler, chauffeur, limousine and shopping trips to Europe for his family.

As it became more and more apparent Manley was using the member banks as his own personal cash drawer state and federal regulators tried to calm depositors by stating the banks were just small country banks operating as independent units, but before the collapse in July, 1926 the Georgia State Bank was one of the state’s largest banks, with its branching network of 20 offices throughout the state.  

The bank failures shattered the economy in Georgia and Florida.

Many depositors lost their life savings. By the end of 1926,150 banks in Florida and Georgia were closed and more than $30 million was missing.

The bank failure had to devastate the folks of Douglasville even if the bank was taken over by Georgia State Bank. Fannie Mae Davis advises Farmers and Merchants’ stockholders were only paid 0.5 percent of their investment.

THIS is part of the hard times Fannie Mae Davis alludes to in her book.

Manley was tried and was eventually convicted of “fraudulent insolvency.”  He served seven years. If you would like more information regarding the Witham Banking System you can find my article over at Georgia on My Mind I published last week.

I plan to continue to research this particular chapter of Douglasville history to discover the rest of the story, and I will share it here as soon as I can.

The bank building eventually became the home of Powell’s Groceries and most people my age remember Douglasville Printing Company being in that spot for most of their lives. 

For the last few years the spot has been a little sad and vacant. I love the corner location and all the windows. It would be a perfect spot for a little bistro or tea room.  

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