Commercial Paper Market
R. K. SWIFT: CHICAGO'S FIRST "FINANCIER"
A review of the business section of an 1849 issue of the Chicago
Tribune, the first year of publication, reveals only limited advertising
of "financial services." The same situation existed
in the 1850, 1851, and eary 1852 issues. But by the December,
1852 issue, a large display advertisement of the firm of "R.
K. Swift's," with offices at 45 Clark Street, appeared, promoting
the firm's extensive "foreign and domestic exchange office"
network in Europe and Canada. The list includes a range of banks
and foreign exchange dealers which Swift represents in Chicago,
and which in turn represent Swift in New York, Boston, Philadelphia,
New Orleans, Buffalo, Aurora (New York), Baltimore, Washington
(DC)., Detroit, Hartford, Cincinnati, St. Louis, Providence, San
Francisco, Sacramento, Quebec, Montreal, and Toronto, along with
some thirteen European cities. The Boston representative listed
is Blake Brothers, a well known trade paper broker in that city
and throughout New England.
This is an impressive network of connections emanating from Chicago,
which was just emerging from its reputation as a frontier town.
The advertisement lists Swift's main services to include "circular
drafts" for traveler's use, gold and silver coins, letters
of credit on a major English bank, and offers "highest current
rates paid on domestic and foreign bills of exchange" as
well as "land warrants for sale."
1852 Advertisement (far
right lower corner of page)
Within a few years, the trade style of the business was changed
to "R. K. Swift & Co, Bankers" which firm particularly
offered "exchange of credits." Then, in early 1856,
apparently a companion business (not a successor) was created
under the name "R. K. Swift, Johnston & Co." offering
to "buy and sale on commission, Railroad Bonds and Shares,
Gas and Bank Shares, and First Class Notes and Acceptances, (making)
advances thereon in anticipation of sale." "Trust and
legacy" services were also listed. In the modern parlance,
the firm was becoming a full service domestic securities brokerage
and financial services firm along with its foreign exchange and
letter of credit services. It appears that these two "businesses"
were operated out of separate offices, the banking business being
conducted in main floor offices, and the other business -- one
involving higher rate securities with higher risks -- being pursued
on an upper floor.
In 1857, the firm again changed its name (and/or began to have
just one name) -- "R. K. Swift, Brother, and Johnston"
-- and its advertisements suggested that it was now organized
in various departments offering specialized services - banking,
savings, exchange, remittances (by telegraph), commission and
foreign. In the "commission" department the services
described include executing orders to "buy and sell . . .
negotiable commercial paper." Also the firm mentions that
was "investing money for Capitalists."
1857 Advertisement (far
upper right corner of page)
During the fall of 1857, the money markets tightened, as in fact
chronicled by R. K. Swift's own analysis printed in the Tribune
in August. In the firm's late September commentary, a national
panic is reported to be underway, with a number of bank failures
and including a local Chicago house. At the end of the commentary,
the firm reports that it is experiencing a run by depositors who
were confusing R. K Swift with a bankrupt produce dealer named
"W. P. Swift & Co." By the end of the day, Swift
decides to close its doors. The next day, the Tribune comments
on these developments.
RSK commentary, August,
RSK commentary, September,
RSK announces suspension
All the drama of the next few days is further captured in Tribune
reports and editorials. It appears that the downfall of R. K.
Swift, at least in part, was due to the age old temptation of
bankers to lend and invest long while borrowing short -- in this
case, real estate investing was in some part R. K. Swift's Achilles
Lots for sale
(left hand column, near bottom of page)
After the sudden demise of the R. K. Swift banking business,
not much was reported in the newspapers about this quite interesting
and gregarious character who was probably Chicago's earliest "financier."
R. K. prided himself in being the head (Brigadier General) of
the 2nd Brigade, Sixth Division, of the Illinois Militia, often
receiving public notice in that role, and was temporarily the
commanding general in Cairo, Illinois early in the Civil War,
although there is no evidence that subsequently he served in an
active war zone.
Even with his business downfall, General Swift joined other founders
(including Henry Greenebaum) in
the formation of the Chicago Industrial Association, a society
of Chicago businessmen fostering manufacturing development in
the city and region, with a particular emphasis on recruiting
immigrants to the city. The CIA was something of a predecessor
of today's Chicago Association of Commerce and Industry.
Finally, R. K. Swift attempted a come back in the lending and
mortgage dealing business, and in offering advice and education
in these areas, working with various colleagues, and serving as
a "fiscal agent," but from what can be learned, he sadly
did not achieve any particular success or prominence in any of
these late in life endeavors.
With his death in 1883, a long obituary described R. K. Swift's
early business career, his Chicago banking achievements, his later
business efforts, and his sad death in Missouri, at age 70.
Four years later, in 1887, the Chicago Tribune printed an interesting
retrospective about General Swift, his special role in the early
development of Chicago as a financial center, his generous spirit,
and his eclectic personality.
Posted: March 25, 2008