Commercial Financial Corp history

The First Bank died in 1811, when its charter wasn't renewed.

With the War of 1812, federal debt began to mount again.

By 1816, the political climate was once again inclined toward the idea of a central bank; by a narrow margin, Congress agreed to charter the Second Bank of the United States.

But after a congressional inquiry into the Second Bank’s problems, Langdon Cheves was brought in as president in 1819 and saved it from collapse.

Cheves was succeeded by Nicholas Biddle in 1822, and the Second Bank is generally considered to have operated effectively under their leadership.

But when Andrew Jackson, a central bank foe, was elected president in 1828, he vowed to kill it.

Between 1836 and the onset of the Civil War—a period known as the Free Banking Era—states allowed virtual free entry into banking with minimal regulation.

Consequently, during the period from 1837 to the Civil War, commonly known as the free banking era, states passed “free bank laws,” which allowed banks to operate under a much less onerous charter.

Wilson had founded The Economist in 1843.

Bagehot happened to be in Paris at the end of 1851 when Louis Napoleon’s coup d’etat took place.

In response to a rising volume of check transactions, the New York Clearinghouse Association was established in 1853 to provide a way for the city’s banks to exchange checks and settle accounts.

The following year Wilson was asked to go to India to reorganize the finances of the Indian government, and he died in Calcutta in 1860, leaving Bagehot, then the manager of the Bristol branch of Stuckey’s bank, in charge of The Economist.

In 1863, they established what is now known as the “national banking system.”

In 1867 Bagehot published The English Constitution, an attempt to look behind the facade of the British system of government—crown, Lords, and Commons—to see how it really operated and where true power lay.

In 1873 he published Lombard Street, which, though really a tract arguing for a larger central reserve in the hands of the Bank of England, in fact contains the germ of the modern theory of central banking and exchange control.

Central Bank began its legacy on January 9, 1902, when Lon Stephens helped create Central Missouri Trust Company.

He was succeeded by his son, Howard, who began working at the bank as a high school student in 1905.

After the Capitol building burned in 1911, he fought with city leaders to ensure that Jefferson City would remain the state capitol.

Throughout most of 1912, Glass and Willis labored over a central bank proposal, and by December 1912 they presented Wilson with what would become, with some modifications, the Federal Reserve Act.

After Congress passed and President Wilson signed the Federal Reserve Act in 1913, Congress established 12 District Banks to reflect the distribution of population and banking in the country. [For more on the Federal Reserve’s history, visit FederalReserveEducation.org.]

But, by November 16, 1914, the 12 cities chosen as sites for regional Reserve Banks were open for business, just as hostilities in Europe erupted into World War I.

In 1916, Cook moved the Central Missouri Trust Company into a seven-story Carthage stone building on the corner of Madison and High Street where it remains today.

New York Fed President Benjamin Strong began conducting open market operations in the 1920s.

Strong’s aggressive action to stem a recession in 1923 through a large purchase of government securities gave clear evidence of the power of open market operations to influence the availability of credit in the banking system.

The policy led to the beginning of recession in August 1929 and the crash in October.

Sam Baker Cook continued to promote the company and his adopted hometown until his death in 1931.

In reaction to the Great Depression, Congress passed the Banking Act of 1933, better known as the Glass-Steagall Act, calling for the separation of commercial and investment banking and requiring use of government securities as collateral for Federal Reserve notes.

An early example of selective credit-control authority vested in a central bank and one that, on balance, has worked tolerably well is the authority conferred on the United States Federal Reserve Board in 1934 to establish margin requirements on stock-market credit. (See money.)

The Federal Reserve System formally committed to maintaining a low interest rate peg on government bonds in 1942 after the United States entered World War II. It did so at the request of the Treasury to allow the federal government to engage in cheaper debt financing of the war.

Conflict between the Treasury and the Fed came to the fore when the Treasury directed the central bank to maintain the peg after the start of the Korean War in 1950.

The Fed regained its independence from the Treasury in 1951, whereupon it began following a deliberate countercyclical policy under the directorship of William McChesney Martin.

Like his father before him, Howard Cook passed along the leadership of the bank to his son, Sam B. Cook in 1961.

Over the years, Central Bank continued to grow into a corporation, Central Bancompany, in 1970.

By August 1979, when Paul Volcker was sworn in as Fed chairman, drastic action was needed to break inflation’s stranglehold on the United States economy.

The Monetary Control Act of 1980 required the Fed to price its financial services competitively against private sector providers and to establish reserve requirements for all eligible financial institutions.

Two months after Alan Greenspan took office as the Fed chairman, the stock market crashed on October 19, 1987.

The effectiveness of the Federal Reserve as a central bank was put to the test on September 11, 2001 as the terrorist attacks on New York, Washington and Pennsylvania disrupted United States financial markets.

In 2003, the Federal Reserve changed its discount window operations so as to have rates at the window set above the prevailing Fed Funds rate and provide rationing of loans to banks through interest rates.

The Fed followed these rules in September 2007, although it is unclear whether the funds were provided at a penalty rate.

After a lifetime of business success and amazing generosity in the form of philanthropy, Sam Cook passed away in July of 2016.