Wagonloads of Smith wagons

By Jared Olar
Library assistant

Students of the bygone days of Pekin will readily recognize the name of the T. & H. Smith Wagon Company of Pekin as one of the most prominent and successful businesses in Pekin’s history. Those who would like to learn more about this company, which operated a large factory at the corner of Third and Margaret streets along the railroad track as well as a bank at 331 Court St., may consult a number of historical sources in the Pekin Public Library’s Local History Room.

One of those sources, James A. Velde’s historical essay, “A Sensational Criminal Trial in Central Illinois,” was the subject of a previous Local History Room column published in the Aug. 30, 2014 Pekin Daily Times. Velde’s essay tells the story of the scandal that led to the collapse of the Teis Smith Bank on April 2, 1906.

For a general overview of the Smith Wagon Company’s history, though, interested researchers can consult “Catalog No. 10 of the Smith Wagon Company of Pekin, Ill.,” a document from the beginning of the 20th century that was spared the ravages of time by being preserved in the Pekin Public Library’s 1902 cornerstone time capsule.

Shown is the cover of a catalog of the T. H. Smith Wagon Company of Pekin that had been preserved in the Pekin Public Library's 1902 cornerstone time capsule.

Shown is the cover of a catalog of the T. H. Smith Wagon Company of Pekin that had been preserved in the Pekin Public Library’s 1902 cornerstone time capsule.

This image shows one of the many kinds of wagon manufactured by the Smith Wagon Company of Pekin, Ill. The image comes from the copy of the company's Catalog No. 10 that was preserved in the Pekin Public Library's 1902 cornerstone time capsule.

This image shows one of the many kinds of wagon manufactured by the Smith Wagon Company of Pekin, Ill. The image comes from the copy of the company’s Catalog No. 10 that was preserved in the Pekin Public Library’s 1902 cornerstone time capsule.

Most of the pages of the Smith Wagon catalog, of course, are taken up with drawings, specifications, and prices of the company’s wagons and trucks. These details provide a window onto a lost and all-but-forgotten past, when farm work and transportation required literal horsepower. Also, on page 5 of the Smith Wagon Co. catalog is a page-length essay on the history of the company and its various offshoots in Pekin.

The company began as a blacksmith and woodworking shop that was established by a family of German immigrants who came to Pekin in 1849. The founders were the brothers Teis, Henry, and Fred Smith, and their brother-in-law Luppe Luppen, who started their business the same location where they later would build their wagon-making plant. Later, their youngest brother D. C. Smith and their cousin Habbe Velde joined as partners.

“Soon their own hands were unequal to the task of supplying their growing trade, which at first demanded extra help, then more room and finally separate factories, stores and warehouses,” the catalog essay says. “Starting with the manufacture of farm wagons, buggies, carriages, plows and agricultural implements, the business gradually took on also banking, dealing in grain and general merchandising. As the business grew it was found advisable to separate the different departments and the banking house of Teis Smith & Co. was established with D. C. Smith as its present manager, the grain business became known as the Smith-Hippen Co., and the implement part was taken up by Pekin Plow Co., with Luppe Luppen as its president and D. C. Smith as vice president and manager at the present time. The manufacture of plows was commenced in 1870 in a separate factory and with separate office force, the manufacture of buggies and carriages was gradually discontinued and the merchandising given over to other hands. The parent company, T. & H. Smith & Co., with Habbe Velde as its president, retains the same name and location it has had since the beginning and is now engaged exclusively in the manufacture of farm and spring wagons.”

A fire destroyed the company’s plant in 1899 and a new factory was built in its place in 1900. That setback contributed to the collapse of the Teis Smith Bank and liquidation of the wagon works a few years later.

These photographs of the Smith Wagon Company's founders and a short history of the company were printed in the company's Catalog No. 10.

These photographs of the Smith Wagon Company’s founders and a short history of the company were printed in the company’s Catalog No. 10.

This lithograph from the 1873 Atlas Map of Tazewell County depicts the home of D. C. Smith, youngest of the Smith brothers and first manager of the Teis Smith Bank.

This lithograph from the 1873 Atlas Map of Tazewell County depicts the home of D. C. Smith, youngest of the Smith brothers and first manager of the Teis Smith Bank.

#d-c-smith, #fred-smith, #habbe-velde, #henry-smith, #luppe-luppen, #smith-wagon-company, #teis-smith, #teis-smith-bank

Scandal: The Failure of the Teis Smith Bank

Here’s a chance to read again one of our old Local History Room columns, first published in August 2014 before the launch of this blog . . .

Scandal: The Failure of the Teis Smith Bank

By Jared Olar
Library assistant

In its account of the organization of Pekin’s first banking institutions, the 1974 Pekin Sesquicentennial volume, pages 33-34, provides the following paragraph about a bank that popularly was known among the residents of Pekin as “the Smith Bank”:

“At about the same time that the first National Bank was organized [i.e., about the end of the Civil War], the Teis Smith banking firm was founded. The bank was located in the same block as the Smith wagon works, but it was conducted as a distinct and separate business. An interesting note in conjunction with the story of this operation is that upon the death in 1890 of Fred Smith, the senior partner who had taken over after his brother Teis died in 1870, Habbe Velde of the T. & H. Smith Company, Henry Block and John Schipper of the Schipper and Block dry goods establishment, and E. F. Unland of the Smith Hippen grain company (all of which are substantial businesses of old-time Pekin) stepped in as full partners to assure that the credit of the bank would not suffer greatly from his death.”

The 1949 Pekin Centenary, page 25, offers just a single sentence on the founding of this bank:

“That year [i.e., 1866] the Smith bank was established at 331 Court street, the First National bank at 304 Court street, . . . .”

“Pekin: A Pictorial History” (1998, 2004) has even less to say about the bank – just a single reference on page 92 to the fact that Teis Smith “also had interests in banking and railroads.”

Teis Smith, his brothers and other relatives were the founders of several prominent businesses in Pekin in the mid- to late 1800s, including a bank located at 331 Court St. This lithograph of Teis Smith was printed in the 1873 Atlas Map of Tazewell County.

Teis Smith, his brothers and other relatives were the founders of several prominent businesses in Pekin in the mid- to late 1800s, including a bank located at 331 Court St. This lithograph of Teis Smith was printed in the 1873 Atlas Map of Tazewell County.

Relying only on these brief notices in the standard works on Pekin’s history, one would never even be able to imagine the catastrophic circumstances surrounding the closing of the Smith Bank.

After operating for 40 years, the bank suddenly closed its doors on April 2, 1906, and the firm was then liquidated. When shareholders and depositors learned the reasons why the bank had closed, however, they went to the state’s attorney, who filed charges of embezzlement against the bank partners.

The story of that embezzlement trial – characterized in the Peoria Star’s contemporary reports as “the most sensational and deplorable affair that has ever come under the notice of Tazewell County residents” – is told in James A. Velde’s historical essay, “A Sensational Criminal Trial in Central Illinois,” a copy of which is in the Pekin Public Library’s Local History Room collection.

This is how Velde explains the failure of the Smith Bank:

“After partner Frederick Smith, a younger brother of Teis, died in a railroad wreck in 1890, the wagon and plow companies were separately incorporated in Illinois to avoid the complications in settling a deceased partner’s interest. But the bank was not incorporated, perhaps because of a feared government interference in an incorporated bank. The bank partners were thus left with their personal unlimited liability for all the bank’s debts . . . Near the mid-1890s the three enterprises were adversely affected by nation-wide difficult economic conditions, including bank panics and years of business depression. There came a time when the payrolls and other expenses of the wagon and plow companies were financed by borrowings from the Smith Bank, whose managers and partners were officers and stockholders of the two corporations. When the loans became delinquent in large amounts, the corporations issued shares of capital stock in payment of the loans. This practice, since the stock had no market, depleted the bank’s liquid assets and led to its closing on April 2, 1906.”

On May 24, 1906, four of the six bank partners were indicted in Tazewell County Circuit Court for embezzlement, under an 1879 Illinois law that made it illegal for a banker to accept deposits when his banking company is insolvent. The four indicted partners were Dietrich Conrad Smith, youngest brother of Teis Smith, who was the bank’s president and vice president of Pekin Plow Company; Conrad Luppen, bank cashier; Ernest F. Unland, president of Smith, Hippen & Company; and Henry C. Block, president of Schipper & Block department store.

The case was prosecutors by State’s Attorney Charles Schaefer, owner of the land that came to be known as Schaeferville and later a Tazewell County judge, and Judge Jesse Black, who later successfully defended the Tazewell County Sheriff’s deputies accused of torturing jail inmate Martin Virant to death in 1932.

The criminal prosecution stretched through the rest of 1906. Unfortunately, the issues of the Pekin Daily Times from that year are lost, but the indictment and trial proceedings were reported extensively in the Peoria Star (one of the predecessors of today’s Peoria Journal Star). The Star’s reports were usually sensationalistic and incendiary, often transgressing into libelous attacks on the personal character and even physical appearance of the defendants. During the course of the trial, as Velde shows, evidence was presented showing that the bankers had fraudulently been using depositors’ money to keep their troubled wagon and plow businesses afloat.

The jury returned a verdict of guilty against all four defendants on Dec. 15, 1906. However, defense attorneys almost immediately appealed the verdict and asked for a new trial, arguing that the conviction was not in accordance with a 1903 amendment to the 1879 statute under which the bankers had been indicted. In the end, both the trial’s judge, Leslie D. Puterbaugh, and State’s Attorney Schaefer agreed that the indictment had been a mistake, because the 1903 amendment had made it virtually impossible to obtain a conviction in a case such as the failure of the Smith Bank. The conviction was then set aside. Schaefer moved to have the indictment dismissed on April 15, 1907, and Judge Puterbaugh granted the motion.

With no attempt to disguise the dismayed at the overturning of the guilty verdict, the Peoria Star wrapped up its coverage of the affair with the comment, “Although the cases were stricken from the records, the memory of the wrecking of the Teis Smith and Company Bank by those behind it will linger for years to come.”

#charles-schaefer, #conrad-luppen, #e-f-unland, #fred-smith, #habbe-velde, #jesse-black, #leslie-puterbaugh, #pekin-history, #preblog-columns, #schaeferville, #schipper-and-block, #smith-wagon-company, #teis-smith, #teis-smith-bank