Bank Crisis of 1912
Four years after the great flood, natural crisis was followed by man-made crisis. In 1912 the Albion National Bank failed, ruining many prominent local families. Criticism was immediately placed on the bank cashier Henry Dearing and his son Palmer. Together they created over $325,000 of fraudulent notes, causing the largest bank crisis in America at the time.
Prior to the bank crisis Henry Dearing played a prominent role in Albion’s social and economic affairs, serving on the School Board and on the City Council. As a business leader, Dearing served on the boards of significant local firms and was friend and confidant of several local industrialists.
Focusing on Dearing’s misappropriation fails to recognize a larger point, that the Dearing’s were not operating only in their own self-interest, but in the desire to see the further growth of industry in a small town renowned in economic heritage from the days of Jesse Crowell, through the formation of the Gale Manufacturing Company. This economic growth brought a cultural flourishing through the local Methodist Church and the formation of institutions for learning including the Albion Commercial College, and the Wesleyan Seminary that later became Albion College.
Despite these good intentions, the Great Flood and Bank Crisis illustrate flaws of the gospel of progress, growth, and development. While economic development seems like a desirable goal for the people of Albion, this development is dependent on the broader economic and social structure of the nation and world, an order inherently unstable and subject to quick and rapid transformation and change. The law of unintended consequences states that when economic development is pursued even for the best of reasons, that unintended consequences may cause great harm for the people being helped. Such was the case with Dearing.
Dearing sought to stimulate growth and development in Albion against overwhelming odds. Blame should then not be placed on Dearing exclusively, but on the broader economic and social order that he operated within.
Sadly, the Albion National Bank Crisis was only a small omen or precursor for the transformation that the nation and world would experience in the decades ahead, during a global economic downturn (The Great Depression) and the greatest hostility between nations and people that the world has ever seen (World War II).