The Vassar Bank

When Henry Noble MacCracken became president of Vassar College in 1915, one of his goals was to increase interaction between the college and its surrounding village, Arlington.  In 1865, Vassar had necessarily been planned to be very self-sufficient, drawing lightly on the local resources and people. As Vassar, Arlington and the times had changed, MacCracken realized, this apartness had not. The Vassar Bank, conceived in the early 1920s, offered both an extension of the college into the community and a solution to a college problem that was both a nuisance and an important missed opportunity.  Before the bank opened, the college would typically cash $8,000 in student checks each week, the vast majority of which were weekly stipends from home. This old-fashioned system of allowances was bothersome, and it also passed up an opportunity to teach girls how to properly handle their own money; a task many of them had been willing to take up for many years.  An editorial in The Vassar Miscellany in 1877 observed that “ignorance of money is the root of much evil,” and it asked, “are you not surprised that men say that girls have no idea of the value of money? We do not wonder at their statement, for it is true; but we do wonder that men do not try to give their daughters this knowledge.” Creation of a local bank, independent of the college though still connected with it, seemed the appropriate response.  Further, by opening the bank, the school no longer needed to function as a bank for either students or faculty. The new bank would also effectively meet many of Vassar’s financial needs. Founded by Vassar faculty and administrators in collaboration with a number of important Arlington businessmen, the Vassar Bank became a resource for both the village and the college.

Joining MacCracken in planning the bank were economics professors Mabel Newcomer and Herbert E. Mills, an Arlington banker, Peter Troy, and other local business owners.  An innovation for the time was the role that women played in the founding and operation of the bank.  Among its founding directors were Professor Newcomer and Margaret E. Mack, the sister of Poughkeepsie’s most prominent lawyer, and Olive Lapham ’17, who was named its chief operating officer. President MacCracken, Professors Newcomer and Mills, Miss Lapham and Mr. Troy were among the bank’s directors, as were Judge C. W. Arnold and Miss Mack’s brother, John.  Newcomer also used the bank in her classes. Each year students in the elementary economics course spent a class hour in the bank briefly learning of its functions and uses, and students in the banking class spent considerable time in the bank. Professor Newcomer left the board in 1929, but Miss Mack, whose parents had worked for the college and who, with her brother, was raised on the campus, stayed as both a director and officer of the bank until its eventual merger with the First National Bank of Poughkeepsie in 1947.  Professor Mills, the bank’s first president, was succeeded at his retirement in 1931 by President MacCracken.

As more about the project became known, interest in it grew on campus.  In April 1924 President MacCracken laid out some of his expectations in The Miscellany News. “The bank truly will fill a ‘long-felt want,’” he predicted. About students’ allowance checks, he said, “The college has been criticized for encouraging this old-fashioned allowance method, and for failing to provide an educational opportunity to the students, who will soon have to take care of their own money. The time of one man is occupied just standing and cashing checks, and the other work of the office is interrupted.” “The college payroll,” he continued, “which amounts during the year to approximately three quarters of a million dollars will, so far as possible, be carried at the Vassar Bank. Up to now there have been no banking facilities nearer than Poughkeepsie.” He predicted that within two years, the bank’s deposits would reach $300,000. The bank was established with $25,000 in capital, and while no public offering of stock was made, its stock was oversubscribed by Arlington residents by 20 percent. By January 1925, deposits in the bank totaled nearly $120,000.

The new bank opened in September 1924 in the former dining room of the Wagner Inn on what the corner of Raymond and Collegeview  Avenue.  Opened—as the Vassar Inn—in 1902 by Anne E. Lapham ’96 and Mary Swain Wagner, who had attended Vassar before receiving her bachelor’s degree from the University of Minnesota, the Wagner Inn had long been a staple of Vassar life—for many years, one of the rare places off campus where students, with permission, could socialize and, with special permission, dine with male guests.

The bank opened in 1924 in part of the former Wagner Inn.

The bank opened in 1924 in part of the former Wagner Inn.

Owing both to the opening of the Alumnae House in 1924 and to Miss Wagner’s desire to devote increased time to writing, the Wagner Inn closed in 1923.  The building was briefly an apartment house before eventually becoming home to both the Vassar Bank and Maison Brooks, a dress shop.

From the very beginning, the bank provoked students to ask new questions and to acquire some new concepts. A letter to The Miscellany News in October 1924 from seven members of the Class of 1927, “Not Yet Utopia,” cited several of the bank’s shortcomings, from the students’ point of view. Expecting “Utopia,” they found that “no place in or around college will cash our cheques but the Vassar Bank.”  They had “difficulty in cashing cheques made out to other banks” and, most importantly, the bank’s hours were inconvenient. “Nearly everyone has a full morning, and as the bank is run for college girls, we would suggest that it have hours that are more convenient.” In a self-described “lengthy and perhaps tiresome” response, appearing under the title “The Inside of a Bank” and running to some 2,500 words, Professor Mills addressed the students’ misunderstandings “both about Vassar Bank and banking in general.” Pointing out the bank had “no official connection with Vassar College whatsoever,” “the college does not own a share of stock in it and has nothing to do with its management” and “it is not correct to say that ‘the bank is run for college girls,’” he explained the bank “was started by a number of people, a few connected with the college and other having not the least interest in it, as a business venture. They have invested their money…in the hope that eventually it will so develop that a reasonable return upon their investment may be secured.” After a detailed account of many aspects of banking and of the operation of a bank, he explained his letter “was written not only to explain why a bank cannot keep open late but also as a contribution to the process of education as to knowledge of banking methods which the State Department of Banking and college authorities hope might result from a bank near Vassar.”

Items in the “Campus Chat” section of The Miscellany News reflected more playful student interaction with the bank in the early years, such as the monologue in March 1925: “My dear, I think the checks that the Vassar Bank puts out are the nicest things! They gave me just loads of them, and I’m having more fun writing on them.

Vassar students at the Vassar Bank in the early 1940s

Vassar students at the Vassar Bank in the early 1940s

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I haven’t any money at all in the bank, but I’m paying off all my bills anyway as I hate to have them lying around….” A few years later, in 1929, a student responded to an amiable, gently patronizing notice from the bank about its summer rules and services: “My dears…. When I think that I’ll have to be leaving you so soon it makes me positively miserable. It must be frightfully lonesome for you to have to sit around behind those iron bars all summer long…. You are a perfect peach to offer me those American Express Traveller’s Checks, but I don’t think I’ll need them, as I’m going to be a counselor on a girl’s camp, but it was darling of you to think about it…. Whatever made you think I’d throw my pass book and check book away? Do you think I could forget as easily as all that?”

Although small, the bank was profitable from the beginning. A great deal of its business was with Vassar, its students and its faculty.  Faculty members were strongly encouraged to use the bank for personal accounts and also for its other financial services.  The bank also, as hoped, became the main bank for Arlington residents and businesses.  Although like all businesses, the bank suffered during the Great Depression but not as much as might be imagined.  The majority of its investments were in low-stakes bonds, which helped it to remain profitable during the 1930s.  Further, in contrast to national trends, the bank continued to make money from the few mortgages it held.  One of the first banks to reopen after the Roosevelt administration’s bank holiday, the Vassar Bank rebounded quickly.  By 1937, the bank’s capitalization had risen to $75,000 and deposits totaled nearly $850,000. While the directors and officers changed constantly during the first twenty years of the bank, President MacCracken remained an influential leader of the bank until his retirement in 1946.

In 1947, the Vassar Bank merged with the First National Bank of Poughkeepsie.  By then the bank had outgrown its home in the old Wagner Inn, and in 1948 it moved to the northeast corner of the same intersection.  In 1960, the bank became the Vassar Branch of the Marine Midland Corporation of Southeastern New York.


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Sources

“Arlington,” Subject File 1.11, Special Collections, Vassar College Library.

“V.C. Poughkeepsie, Relations with,” Subject Files 21.54 and 21.55, Special Collections, Vassar College Library.

Wagner, Mary Swain. The Inner Life of an Inn: Being a True Story of an Inn near Vassar College. Poughkeepsie: A.V. Haight Co., September 1919.

The Miscellany News


NB, 2014