Society Corporation is one of Ohio's largest bank holding companies. Society National Bank, an affiliate of Society Corporation, is a stock bank which was organized in 1956 to provide commercial banking services as a wholly-owned subsidiary of the Society for Savings, founded in 1849.
The Society for Savings in the City of Cleveland, Ohio, was born from the need for a banking institution that would accept the savings deposits of individuals. At the time of the panic of 1837, commercial banks were allowed to issue notes for general circulation which, when presented for specie payment, often proved to be worthless. By 1842, the banking climate was such that the Ohio legislature was refusing to extend the charter of existing banks. This situation changed with the passage of the Independent Banking Act of 1845, sponsored by then state senator Alfred Kelley, which reformed banking practices. By 1849, Cleveland had five commercial banks but the existing legislation did not provide for savings deposits. Two native New Englanders, Samuel H. Mather and Charles J. Woolsen, recollecting the success of mutual savings banks in their native New Hampshire, petitioned for a special act by the Ohio legislature incorporating the Society for Savings on March 22, 1849. The Society was chartered as "... a benevolent institution, managed by trustees without salary, in the interest of depositors only, to whom profits are paid, or for whose benefit they are accumulated and reserved."
The Society for Savings first opened for business, August 2, 1849, at #4 Bank Street (West 6th) in an office 20 feet square in the rear of the old Merchants Bank, a branch of the State Bank of Ohio. In 1857, the Society moved to larger quarters in rooms at the Weddell House on the corner of Bank and Frankfort streets. Society's third home was at No. 91 on the Park, occupying the northeast corner of Public Square, the first thoroughly fireproofed structure in Cleveland. Under the presidency of Samuel H. Mather, land was purchased and construction begun in 1888 on a new building at 127 Public Square, one of Cleveland's most notable physical structures. This served as the main office of Society for Savings until its dissolution in 1959, and thereafter as the main office of Society National Bank and the headquarters of Society Corporation until 1985.
At the turn of the twentieth century, under the presidency of Myron T. Herrick, Society's deposits exceeded $32 million from approximately 55,000 patrons. In March of 1910, Society survived a three day bank run by 2000 depositors frightened by an unfounded rumor. To prove the bank's solvency, President Herrick ordered $6 million in gold coin and currency be placed in view on tables behind the tellers. Society had previously survived a series of bank runs in 1854, 1857, 1869, and during the panic of 1873.
When the U.S. entered the First World War, Society was instrumental in a series of Liberty Loan drives. Society helped establish the Cleveland War Fund "Victory Chest" and in 1918, Society established a home economics bureau to help depositors buy war bonds with savings made possible from more efficient handling of their household budgets. During World War II, Society again aided the war effort by providing space and manpower for war bond sales. Throughout the twentieth century, Society continued to establish itself as one of Cleveland's most formidable financial institutions and an innovator in the field of banking and financial services. In 1922, Society started a safe deposit department and, in 1925, inaugurated a school savings program for children. By 1928, Society became the first Cleveland bank to attain $100 million in assets without the aid of consolidation. In general, the effects of the Depression on Society were minimal, and bank records actually show increases in deposits during the last years of the Depression. After Roosevelt's enforced bank holiday of 1933, Society was among the first of Cleveland banks to resume business without restrictions of any kind on withdrawals. It was during the Depression that Society pioneered in the issuance of term and capital loans to small and medium sized businesses, as a means of capturing new earnings sources. These loans were based upon the corporation's earning power and its repayment potential. In 1939, Society entered the personal loan field and received permission to accept demand deposits subject to certain limitations.
In the post-war period, Society expanded its public relations efforts in order to acquire increased depositors. Society added $27 million in new deposits in 1952-1956 when a series of exclusive recordings by Liberace were offered at no charge to customers depositing $25 or more to new or existing savings accounts. In search of further depositors, Society followed the movement of Cleveland's population to the suburbs after World War II. In 1953, Society opened its first branch office in South Euclid when it acquired the South Euclid Savings and Loan Company. At this time, Society raised its interest rate on savings accounts from 1 1/2 per cent to 2 per cent, and a year later it acquired a commercial bank, The Bank of Ohio, which immediately added seven neighborhood and suburban branches to the Society.
The major Cleveland commercial banks contested Society's inroads into these new markets. Claiming unfair competition, these banks petitioned the Ohio legislature for measures forcing Society to divest itself, by 1956, of all demand and all corporate deposits. Although these restrictions were enacted, a compromise was provided for whereby mutual savings societies were empowered to organize and acquire stock banks as subsidiaries to provide those banking services forbidden to savings societies. This led to the formation of Society National Bank in 1956.
For nearly three years, Society for Savings and Society National Bank operated side by side at nine office locations. Society National Bank continued to offer the commercial services formerly offered by Society for Savings, and it also grew in new directions with the formation of an International Department, Trust Department, Investment Department, Stock Transfer operation, and further capabilities in banking and loan services. During this period, new branches of both banks opened in Parma Heights, Fairview Park, and in Euclid. The inefficiencies and necessary duplications of record keeping required by this dual operation were quickly recognized. In the 1950s, in addition to the traditional deposit restrictions on savings societies, Society was also faced with traditional restrictions on mortgage investing. Given these restrictions on mutual savings societies competing in a banking environment in the 1950s where commercial banks could offer "department store" banking services, Society decided to become a strictly commercial stock bank. Under the leadership of president Mervin B. France, who had joined Society as an assistant vice-president in 1934, Society for Savings and Society National Bank were unified on December 31, 1958. France had recommended this action to Society trustees in September, inspired by the recognition that the banking climate in 1958 regarding mutual savings societies was totally different than what it was when Society was founded in 1849. France stressed that survival of Society now depended upon providing more bank credit for Cleveland's business and industry.
With the merger of Society for Savings into Society National Bank, the new bank became the sixth largest in Ohio, with total resources approaching $400 million. The plan of unification was undertaken without precedent. The plan included: 1.) the creation of a new holding company, Society Corporation, to be owned by the depositors of Society for Savings; 2.) the transfer of all assets and liabilities of the Society for Savings to Society National Bank, including $30 million in reserves, which became the capital funds of Society National Bank; 3.) the transfer of ownership of Society National Bank to Society Corporation; 4.) the dissolution of Society for Savings.
The unification of Society for Savings and Society National Bank resulted in one of the largest single stock transfer operations in the history of business. More than 650,000 shares were exchanged: Society Corporation received 119,800 shares of Society National Bank in exchange for the assets and liabilities of the Society for Savings, and Society for Savings depositors received 575,162 shares of Society Corporation in exchange for the shares of Society National Bank. The plan of unification was the first time a way had been developed to distribute the surplus and reserves of a mutual savings bank in converting to a commercial bank. Society filed papers in the Cuyahoga County Court of Common Pleas on January 2, 1959, for judicial supervision of the merger. The plan for distributing the $40 million surplus to nearly 300,000 depositors and in what proportion was unprecedented, and largely the reason that the case was not settled until 1962 - one of the longest civil actions in Cuyahoga County Common Pleas Court records. When the merger was approved, Society for Savings depositors received one Voting Trust Certificate, representing one share of Society Corporation stock, for every $500 on deposit as of December 31, 1958. Script certificates for fractional shares were issued for deposits of less than $500. School children received $15 in cash for every $100 on deposit. Deposits made after December 1, 1957 by Society officers, trustees, or directors were not applicable toward shares in the surplus. The merger was placed under a Voting Trust until 1968, managed by 17 trustees, designed to provide and assure continuity of management. The distribution of Voting Trust Certificates representing the equity of the Society for Savings was conducted on September 15, 1962 - the largest first class mailing in Cleveland's history. At the termination of the Voting Trust Agreement in 1968, Society Corporation common stock was issued in exchange for Voting Trust Certificates.
Society Corporation became Ohio's first registered bank holding company in 1965, under the Bank Holding Co. Act of 1956, when it acquired controlling interest in a second bank, the Fremont Savings Bank of Fremont, Ohio. Society had acquired 12 other banks in Ohio by the end of the 1970s and numerous other acquisitions in the 1980s such that on December 31, 1988, it had affiliates in four regions of Ohio and had become the fourth largest bank holding company in the state, with more than nine billion dollars in assets. Society's most formidable acquisition was that of the Centran Corporation in 1985, itself a regional multi-bank holding company whose largest affiliate was Central National Bank of Cleveland.
The Society for Savings, Society National Bank, and Society Corporation Records, 1836-1987 and undated, consist of acts of incorporation, charters and bylaws, histories, passbooks and miscellaneous files regarding the history of Society, personal papers of past presidents of Society, files pertaining to the construction and renovation of Society bank headquarters, Liberty Loan subscriptions, files regarding legislative activity in 1955 resulting in the formation of Society National Bank, and files pertaining to the merger of Society for Savings into Society National Bank and the creation of Society Corporation. The collection also contains minutes of early trustees' and annual meetings beginning in 1849. In addition, the collection contains annual financial reports and quarterly statements, various financial ledger books, administrative and secretarial files, bank newsletters, and a wide variety of news and publicity releases, as well as a number of scrapbooks. Attention is called to the files of the various branch acquisitions of Society for Savings and Society National Bank, as well as the affiliate acquisitions of Society Corporation, most notably that of Centran Corporation. The collection also contains numerous reports and studies toward attracting new depositors to the bank, and a considerable number of files dealing with public relations and advertising.
This collection provides detailed information concerning the history, activities, and administration of one of the first banks in Cleveland, Ohio, which has survived for over 150 years as one of the city's most important financial institutions. It is important for an understanding of banking and finance in Cleveland and the ways in which banking has evolved from the mid-19th century to the present day. The collection is useful for understanding an aspect of the economic fabric of Cleveland during this time period. Because of its Liberty Loan subscription files, the collection contains important demographic information about Cleveland during World War I. The collection is also very useful for an understanding of the evolution and activities of the modern bank holding company as the contemporary organizational structure of commercial financial institutions. In addition, the collection is important for an analysis of modern market research and promotional activities, as well as creative uses of business advertising and public relations.
The collection is arranged in two series.
All photographs, audio recordings and film footage have been removed to the audio visual collection. Still photographs have been removed to PG 419 Society Corporation Photographs.
The researcher should also consult PG 419 Society Corporation Photographs and MS 4689 Society Corporation Records, Series II.
Processed by Robert Ray in 1989.
None.
[Container ___, Folder ___ ] MS 4319 Society Corporation Records, Western Reserve Historical Society, Cleveland, Ohio
Society Corporation, 1988.
The following terms have been used to index the description of this collection in the library's online public access catalog.