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The banking operations of Lionel and Barron Jacobs in Tucson, Arizona, 1867-1913 Item Type text; Thesis-Reproduction (electronic) Authors Santiago, Dawn Teresa Publisher The University of Arizona. Rights Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author. Download date 05/10/2021 18:13:48 Link to Item http://hdl.handle.net/10150/276927 INFORMATION TO USERS The most advanced technology has been used to photo graph and reproduce this manuscript from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. 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Higher quality 6" x 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. University Microfilms International A Bell & Howell Information Company 300 North Zeeb Road, Ann Arbor, Ml 48106-1346 USA 313/761-4700 800/521-0600 Order Number 1S35850 The banking operations of Lionel and Barron Jacobs in Tucson, Arizona, 1867-1913 Santiago, Dawn Teresa, M.A. The University of Arizona, 1988 Copyright ©1988 by Santiago, Dawn Teresa. All rights reserved. 300 N. Zeeb Rd. Ann Arbor, MI 48106 THE BRNKING OPERATIONS OF LIOSiEL AND BARRON JACOBS IN TUCSON, ARIZONA, 1867-1913 by Dawn Teresa Santiago Copyright © Dawn Teresa Santiago 1988 A Thesis Submitted to the Faculty of the DEPARTMENT OF HISTORY In Partial Fulfillment of the Requirements For the Degree of MASTER OF ARTS In the Graduate College THE UNIVERSITY OF ARIZONA 19 8 8 STATEMENT BY AUTHOR This thesis has been submitted in partial fulfillment of requirements for an advanced degree at The University of Arizona and is deposited in the University Library to be made available to borrowers under rules of the Library. Brief quotations from this thesis are allowable without special permission, provided that accurate acknowledgment of source is made. Requests for permission for extended quotation from or reproduction of this manuscript in whole or in part may be granted by the copyright holder. SIGNED: Qenim APPROVAL BY THESIS DIRECTOR This thesis has been approved on the date shown below: Harwood P. Hinton Date Professor of History 3 PREFACE When beginning my graduate studies, I discovered the extensive manuscript collections of Lionel and Barron Jacobs who had been pioneer merchants and bankers in Tucson, Arizona, from 1867 to 1913. As I had a background in accounting and economic history, I became curious as to the role the brothers had played in the financial affairs and growth of southern Arizona. In doing background reading, I discovered that few studies had been done on the history of banking in Arizona, and that most of these had focused on the period after 1900. Of the few studies of the pre-1900 years, none had discussed the impact of capital and credit scarcity on the economic scene, or the ways that pioneer bankers gathered monies to fuel territorial development. This thesis discusses the operations and evolvement of the Jacobs money exchange business and banks, and stresses how their skills and perceptions earned than the reputation of being preeminent financiers and businessmen in Arizona Territory. I would like to thank several people who made the completion of this thesis possible. For his patience, skill, and determination to see this work finished, I would like to thank my advisor Dr. Harwood P. Hinton. For serving on my committee, special consideration goes to Dr. Leonard Dinnerstein and Dr. Michael F. Weber. I give special thanks to my parents, my husband Mark, and my son Edward for their patience and support in seeing this dream come true. 4 TABLE OF CONTENTS ABSTRACT 5 1. THE JACOBS BROTHERS REACH TUCSON 6 2. THE PIMA COUNTY BANK, 1879-1882 54 3. THE FIRST NATIOSIAL BANK AND THE BANK OF TUCSON 105 4. THE JACOBS BROTHERS RETIRE 146 REFERENCES 196 5 ABSTRACT Ihis thesis focuses on the financial careers of Lionel and Barron Jacobs in Tucson, Arizona, from 1867 to 1913. As early merchants, the Jacobs brothers discovered that cash and credit were both scarce in the region, and in 1870 opened a money exchange and lending business. During the decade they expanded their services as the economy of the region changed. Then in 1879, the Jacobs brothers opened the Pima County Bank to serve the increased economic activity caused by the Tombstone silver discoveries. Mastering the details of banking, they developed management skills and insights and expanded their horizons. They organized and operated the First National Bank of Tucson (1882- 1885), the Bank of Tucson (1885-1887), the Consolidated Bank of Tucson (1887-1990), and the Arizona National Bank (1890-1913). At retirement the Jacobs brothers were among the preeminent financiers of Arizona. A study of Lionel and Barron Jacobs's banking experience not only provides a valuable perspective on the economic growth of southern Arizona during the late nineteenth century, but also mirrors the problems that bankers faced on remote frontiers. 6 CHAPTER I THE JACOBS BROTHERS REACH TUCSON In the fall of 1867, Lionel and Barron arrived in Tucson, Arizona Territory from California in search of business opportunities. The territorial capital recently had been moved to Tucson from Prescott and there was great potential for trade and commerce. The Jacobs brothers established a mercantile store and in time developed a flourishing money exchange operation. In 1879 they opened the Pima County Bank and expanded into various other economic enterprises in southern Arizona. Throughout their long tenure in southern Arizona, the Jacobs brothers made a lasting contribution to the growth of the region as businessmen, bankers, and public-spirited citzens."'" The brothers were two of twelve children of Mark Israel and Hannah (Solomon) Jacobs. Lionel had been born in England in 1840. Barron was born in 1846 in Baltimore, Maryland, where the family had moved two years earlier. During the gold rush the Jacobs family traveled to California, and in 1851 settled in San Diego. For the next six years, Mark Jacobs operated a general merchandise store and a newspaper and periodical depot. In 1857 the family moved to San Bernardino, where a married daughter resided. There, Mark Jacobs 7 and his wife managed a store and hotel. After finishing their 2 education, Lionel and Barron joined the family business. Lionel and Barron in the fall of 1867 opened M. I. Jacobs & Company, a retail mercantile store in Tucson. Tucson at this time was an isolated settlement of scattered adobe buildings described by visitors as filthy, forlorn, dreary,and desolate. The town boasted 2,000 inhabitants, but connections with the outside world was tenuous. Marauding Indians and Mexican outlaws made travel on Arizona's roads hazardous, and regular stage and mail service did not exist. Local businessmen freighted goods from Santa Fe, New Mexico; from El Paso, Texas, and Mesilla, New Mexico; or from California. To import a stock of goods, merchants required a substantial long-term investment. Despite the formidable obstacles, there were seven Tucson merchants who consistently made a profit: Edward Nye Fish, John Gaffield Capron, Leopoldo Carrillo, Solomon Warner, partners Dr. Charles Lord and Wheeler Washington Williams, Charles Hayden, and Estevan Ochoa. By 1867, business prospects appeared promising. Tucson was growing in size and importance as a center of trade and transportation, and merchants found ready markets in the mines, ranches, military, and Indian agencies in southern Arizona.^ Amid these circumstances, Lionel and Barron Jacobs, on their father's advice, brought a wagonload of merchandise, mostly canned goods, to Tucson from California. Mark Jacobs believed that the relocation of the territorial capital and military headquarters from Prescott to Tucson that year would stimulate the local economy, creating new markets. Hie elder Jacobs remained in California to purchase and ship goods to his sons in Tucson. Upon their arrival, the brothers rented a small adobe building in the central business district from Leopoldo Carrillo. They quickly sold their first stock of goods for a dollar a can.^ The brothers learned that businessmen consistently wrestled with the problem of scarce currency and credit. As in most frontier areas, Tucsonans dealt primarily in U.S. federal notes, known as "greenbacks, and gold and silver coins, both of which constantly were in short supply. Banks on the East and West coasts were reluctant to ship money to Arizona because of the danger of robbery enroutG. Arizona's unfavorable balance of trade—more money flowed out of the territory than flowed in—created a continuous drain on available cash.