On July 3, 1913, the Lexington City National Bank acquired the assets of the First National Bank and continued operations under the name of First & City National Bank of Lexington. Over the Fourth of July holiday, the records, papers and equipment of the old First National Bank were moved to the City National Building and, on the next day, the new bank commenced business.
The consolidated bank was the largest in the City of Lexington (a position maintained by its successors to this day). The new bank's officers were Leonard G. Cox, Chairman; J. Will Stoll, President; Joseph W. Porter, Cashier; and Garland H. Barr, Jerry W. McMeekin and Frank C. Bell, Assistant Cashiers.
National Bank Note, Date Back, Series of 1902
In August 1913, J. Will Stoll and J. Edward Bassett, of Fayette National, attended an Emergency Crop Loan meeting in Washington. This meeting was called to discuss the problem of moving the fall crops to market with the tight money supply remaining from the Panic of 1907. During the period, most banks kept reserves with banks in New York City, which limited the funds available for the fall market due to the concentration of currency in the East. In Kentucky, a large amount of currency was needed in the fall to market the hemp and tobacco crops. National banks were authorized to triple agricultural loans and the Treasury Department agreed to deposit fifty million dollars in regional banks to stimulate the money supply.
In October 1913, the directors declared a two and a half- percent dividend, the first since consolidation and, thereafter, regular dividends were declared quarterly.
National Bank Note, Plain Back, Series of 1902
Federal Reserve System:
In late 1913, the Federal Reserve System was created by Congress to stabilize interest rates, provide a stable, elastic money supply and prevent wide scale bank failures. The Federal Reserve Act of 1913 was the most important change in banking since the National Bank Act of 1864. The Federal Reserve System created twelve Federal Reserve Banks located throughout the United States. These institutions were authorized to accept the bank's reserve deposits preventing excess funds from accumulating in New York City.
All national banks were required to join and subscribe six percent of their capital and surplus to a regional Federal Reserve Bank. State banks were also eligible for membership. Each Federal Reserve Bank was authorized to issue Federal Reserve Notes. National Banks could request these notes by delivering acceptable collateral in an amount equal to the currency desired. Security could include promissory notes, bills of exchange or acceptances, with a maturity not to exceed ninety days. This method allowed banks to met demands for currency when business activities increased (expand loans, etc.) and contract when business slowed. This provided an elastic money supply. This new currency remains in common usage today.
On August 28, 1914 Joseph W. Porter, of the First & City, J. Edward Bassett, of Fayette National, and Younger Alexander, of Phoenix & Third, attended the National Currency Association meeting in Louisville. At this meeting, they made application for four million dollars in the new Federal Reserve banknotes authorized by the Federal Reserve Act. The currency was due to be received in late 1914.
In early November 1914, First & City shipped thirty three thousand dollars in gold coins and notes to the Federal Reserve Bank of Cleveland, as its first installment of the Federal Reserve subscription (one-sixth of the total subscription of six percent of capital and surplus). According to the Act, the second installment of one-twelfth was due in eighteen months, the third installment of one-twelfth in twenty-four months and the remainder in thirty months.
In 1917 Joseph Madden, the "Wizard of Hamburg Place," purchased the Elmendorf Farm on Paris Pike for one million dollars from the James Ben Ali Haggin estate (being administered by the Security Trust Company). Mr. Madden paid for the purchase with a check drawn on the First & City National Bank. This was the first million dollar check to clear a Lexington bank.
National Bank Note, Plain Back, Series of 1902
World War One:
After the outbreak of the First World War in Europe during 1914, First & City resources expanded with the rest of the American economy. With the entry of the United States into the war in 1917, the Treasury Department was faced with raising billions of dollars to finance the war. In June 1917, the government began issuing Liberty Bonds to finance wartime expenditures.
J. Will Stoll, of the First & City, was appointed the Chairman of the Fayette County Liberty Bond and Loan Committee. The committee also included Richard T. Anderson of the Security Trust Company. Billboards and newspaper advertisements were used to promote bonds sales, while at local theaters "Minutemen" gave four-minute speeches encouraging bond sales. A torch light rally was also held on Cheapside, outside of the First & City, to also promote bond sales. During the four wartime bond drives, the Lexington committee raised over five million dollars, exceeding their goal every time. Following the Armistice an additional million dollars was raised in Victory Bonds sales.
In 1921, a six-mile section of the Winchester Pike was rebuilt using concrete, the first highway built of concrete in Kentucky. In 1924 Stoll Field, University of Kentucky's football stadium, was built entirely of concrete on Euclid Avenue. The new stadium was named after the Stoll family, large stockholders of the First & City National Bank. The roadway and stadium were built by Louis des Cognets Company, Mr. des Cognets was an influential director of the First & City National Bank.
Banking Room (Lobby) of the First & City National Bank, circa 1920s.
Banking Room (Lobby) of the First & City National Bank, circa 1920s,
During 1922, the Lexington Board of Commerce ordered a study of the local economy. The report concluded that Lexington's economy was strong, but concentrated in thoroughbred horses, tobacco and higher education. In reviewing the city's banks, the report indicated “banking institutions are not accustomed to industrial financing and local investors are much sounder judges of good horses that of good manufacturing projects.” The report noted that Lexington lacked major manufacturing concerns and suggested attracting a Ford assembly plant to the city. This plant was later located in Louisville.
Lexington's city limits expanded during the 1920s with the additions of the Ashland, Liberty Heights and Hollywood subdivisions. These subdivisions were connected to downtown by the local trolley line.
In January 1929 J. Will Stoll died and his nephew, John G. Stoll, was selected President. In March 1929 the First & City National Bank merged with the Phoenix National Bank and Trust Company to form the First National Bank and Trust Company.
National Bank Note, Date Back, Series of 1902
