In Part I, I laid out the timeline for the brief existence of the Merchants State Bank. In this post, I’ll present detailed facts and figures but also the narratives. I get that not everyone does accounting (or has any interest in it) so I’ll try to keep it as simple as possible.

Keep in mind the editorials were mostly about politics so the relevant newspapers were The Globe-Republican, The Dodge City Democrat, and The Dodge City Times. George Cox was a Democrat who had also been supported by the Times. He was also Ford County Treasurer at the time the bank failed.

The bank had been in trouble for a while but it was a bounced check drawn on the City of Dodge City’s account which was the proximate cause of the failure. Either that or…you know…the lack of *any* money in the vault.

The second tile of this piece in The Globe-Republican includes the words “criminal carelessness.” You may be wondering why this all falls at George Cox’s feet. He made the mistake of securing Langton’s loan for the hardware store. So when Langton failed, Cox was on the hook for the note. He began making the monthly payments from his personal funds but that was unsustainable.

I don’t want to belabor the point too much but Cox was not just the Ford County Treasurer. Other organizations also trusted him with their money. And you will note the address for James Langton is listed as “unknown.” The Union Town Company represented the merger between the towns of Ryansville and Ford. You will also note “City Treasurer” and “Treas. Dist. No. 16.” A metric buttload of public funds was on deposit at Merchants State Bank.

George M Hoover was appointed assignee and it was reported even then that Hoover intended to reorganize the bank once everything was settled.

Of the $31,726.56 owed, $24,261.46 belonged to taxpayers in Dodge City and Ford County. That’s freaking huge…potentially catastrophic. The problem was the bank was loaning money against those deposits and those loans were essentially unsecured.

While Langton had left town and washed his hands of the mess, Cox stayed and tried to make things right. Since he was Langton’s security, all of his property was fair game.

Somehow, Cox was still County Treasurer as all this was taking place. The shenanigans precipitated an audit of Ford County finances from its inception through April 23, 1891.

If you ever wonder why people preach about segregation of duties, allow me to present Exhibit A:

So everyone was asking about the bond. In light of the circumstances, I think Cox probably wanted it to stay lost. This editorial is pretty hard-core.

And then these “facts” in the same issue:

I should probably note here that W. C. Shinn was the assistant editor and manager of The Globe-Republican at this time. You may recall, Shinn was Secretary of the bank when it was first organized.

The Globe-Republican published Cox’s response on the same page:

And here’s how the Democrat framed the issue:

As assignee, Hoover set about collecting from the all of the loan guarantors via sheriff’s sales and those legal notices ran for a couple years after the bank closed. Why didn’t they just sell the building? I really don’t know why that wasn’t an option as the failure became imminent. The building was finally put up for sale along with all other bank-owned property in December of 1893.

And here’s how that went:

It’s really unfortunate that depositors only received about 15 percent of their money back (rather than the 10 percent initially reported) but I guess it’s better than nothing.

Initially, I thought George Cox was simply a good guy who had difficulty saying no to people. I thought he was straight up conned by James Langton, who was a reckless speculator. But if you go all the way back to the bond, you can see he had to have known. There’s no way he couldn’t have known. Maybe he thought they could pull it off and no one would know the difference. Later, it was alleged that Cox’s deputy treasurer, Otto Mueller, was the diabolical brains behind the operation. Regardless, this mess was entirely preventable with simple internal controls.

Next time, I’ll look at the building itself as well as the occupants up until demolition during the Urban Renewal Project.

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This time, I’m going to switch things up a bit and profile a business rather than a building. I alluded to the drama surrounding the Merchants State Bank here and here. The failure of this bank ruined several men financially and nearly bankrupted Ford County. It’s a long story involving a lot of names you will recognize so I’m breaking it up into a few parts.

First of all, let me just say this ad right here says all you need to know about James Langton:

The brief history of Ryansville, Kansas was quite dramatic and Langton was in the thick of it. But that’s another story for another day.

Merchants State Bank was organized on February 18, 1886 by some very prominent men in Dodge City…and also James Langton. I should note that the State of Kansas shows the official date of the bank’s formation was March 8, 1886.

$50,000 was a massive amount of capital in 1886 – the equivalent of more than $1.5 million in 2023. But that didn’t mean they had actually *raised* $50K! I can assure you they had not.

Dr. T. L. McCarty commissioned an architect by the name of Weston to design the new bank building and plans were ready in April of 1886. It was to be a two-story brick structure measuring 25 x 50 feet adjoining the Post Office.

The bank officially opened in its temporary quarters on April 15, 1886 and took in a whopping $10,000 in deposits the very first day.

On May 20, 1886, many of the same players organized the Monarch Mortgage and Bond Company of Dodge City. This entity set up shop right next door to the bank with J. P. Brown in charge.

The bank moved into its permanent location at the southwest corner of Second Avenue and Chestnut Street in August of 1886. The 1887 Sanborn Fire Insurance Map shows the bank with frontage at what was then 714 Second Avenue.

Langton *definitely* needed to pay more attention to the hardware business, considering it was mortgaged to the hilt. More on that fine mess later.

Langton was also Treasurer of Dodge City’s public schools at this time. By June of 1887, Charles Martin had replaced Langton as Cashier but Langton was still on the Board of Directors.

I don’t know exactly when it became known around town that Merchants State Bank was offering risky loans to officers of the bank and their friends. Langton alone was into the bank for $8,000! That’s more than $251,000 in 2023 dollars.

In July of 1887, the bank paid Dr. McCarty $20,000 for the lot which included the post office and bank buildings. I find it interesting that neither the Journal nor the Globe nor the Times pointed out that McCarty was still on the bank’s Board of Directors. Not that there was anything wrong with that, but it was certainly relevant. The purchase was also an enormous mistake.

By mid-November, Langton’s name stopped appearing in the Merchants State Bank newspaper ads. Here’s where the bank’s finances reportedly stood as of January 26, 1888.

I don’t want to make Langton out to be a super villain but he was also Treasurer of the Bloom town company. From what I can tell, he owed money on various properties to people all over Ford County, including Carrie Rath. The lawsuits started pouring in but he had opened a hardware store in Monte Vista, Colorado and it appears he left several people in the lurch. Unfortunately, the bank was forced to foreclose on the Langton Hardware Store in August of 1888 and that caused a serious financial ripple effect in Dodge.

George Cox shipped the remaining merchandise to Oklahoma where he also shipped his drug store. Cox had been elected Ford County Treasurer in November of 1887 but didn’t take office until October of 1888. I don’t fully understand all of the particulars but R. M. Wright’s term didn’t expire until October and I guess Cox was Treasurer-elect all those months because of the election cycle. Seems weird, but whatever.

George Cox announced his candidacy for reelection in August of 1889 and was heartily endorsed by The Dodge City Times. He won again.

Cashier Charles Martin moved to Washington at the beginning of 1890 and was replaced by J. W. Guynn of Ingalls.

Merchants State Bank was included in this lawsuit against Langton Hardware in July of 1890.

By October of 1890, there were concerns about Cox’s handling of some tax bills but nothing was officially recorded. And then this happened. Weird, huh!

Cashier Guynn left for Pueblo in January of 1891 and was replaced by E. E. Smith. I’m thinking Smith may have had regrets.

Merchants State Bank closed its doors nine days after its fifth anniversary on February 27, 1891 and the Democrat specifically referenced Cox’s failure.

Next time, I’ll dig into how exactly this all transpired and will present a series of dueling narratives via newspaper editorials. Mud was being slung in every direction. I’ll also explain what that last sentence about school districts and townships losing meant in real terms.

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