Banking Then And Now

Drew Thomas  0:04  
Fast fact, in 1826, there were 331 distinct domestic versions of the dollar circulating in the United States, alongside countless varieties of foreign coin. To eradicate private currency, Congress placed a heavy tax on banknotes issued by state-chartered private banks, effectively killing off 1000s of local currencies by 1867. I'm Drew Thomas, and this is Bank Chats. All right, so, so I have an interesting question for you.

Jeff Matevish  1:07  
Okay, shoot.

Drew Thomas  1:08  
And, and I don't think that you're going to understand why I'm asking this question, and our listeners and viewers definitely won't if they watch the thumbnail or, or listen to the, to the title or watch the thumbnail. But who's your favorite magician?

Jeff Matevish  1:19  
My favorite magician?

Drew Thomas  1:21  
Yeah, favorite magician. Do you have a favorite magician? Let me ask you, because I don't know how common it is to have a favorite magician. Yeah.

Jeff Matevish  1:30  
Oh yeah, I was big into magic when I was younger. Um, probably David Blaine.

Drew Thomas  1:33  
David Blaine.

Jeff Matevish  1:34  
Yeah. Yeah. Okay. How about you?

Drew Thomas  1:35  
Is he a magician or is he a performance artist?

Jeff Matevish  1:37  
Oh, he's a little bit of both.

Drew Thomas  1:39  
Because I, I, I have to wonder sometimes. Like he's, I think he's definitely a legitimate magician, but a lot of his stuff is kind of like...

Jeff Matevish  1:45  
It's endurance and stuff. Yeah, yeah. Like I don't know, like what's actually real and what's not. Yeah, yeah.

Drew Thomas  1:51  
I, I don't know. There has to be a way that he's getting food and oxygen whenever he puts himself into a block of ice in Central Park in New York for like three days, right? If he's not, that's really, really impressive endurance, right?

Jeff Matevish  2:05  
Hold his breath for nine minutes or whatever it was. Yeah.

Drew Thomas  2:08  
Is that what he did? Is that yeah?

Jeff Matevish  2:10  
He was underwater, and he did. Yeah, he held his breath for some ridiculous amount, like 9-10 minutes or something like that. Yeah. Wow.

Drew Thomas  2:17  
Yeah. No, I, I mean, I like David Blaine, I, I, I've, I, I'm, I've been more the traditional magician, I guess maybe like the whole Penn and Teller, like you know style or whatever. Yeah, yeah. But, but legitimately, Criss Angel.

Jeff Matevish  2:17  
Oh, are you a Mind Freak?

Drew Thomas  2:33  
My daughter was a Mind Freak. Oh yeah, 100% had the yeah, you know which is crazy because a lot of, a lot of young girls don't, don't really get into magic. It's usually young boys that get into magic, and then girls' kind of like get wowed at it later on in life. I think maybe a little bit traditionally again. But now I don't know if she much so much liked the magic or she liked Criss Angel.

Jeff Matevish  2:54  
Wow, I'm sure she liked Chris Angel. Yeah, you know. Yeah, yeah. I went to Magic Little Magic Camp when I was young too. I mean, I was really into it. Yeah, yeah.

Drew Thomas  3:02  
What did you learn? Did you do card tricks, or did you do like it was sleight of hand?

Jeff Matevish  3:07  
I was like eight, so it was like basic, we learned like a couple coin tricks, a couple tricks with ropes, rubber bands, and...

Drew Thomas  3:17  
Ooh, rubber bands?

Jeff Matevish  3:18  
Rubber bands.

Drew Thomas  3:19  
Ooh, wait, wait, we have rubber bands. There's here. Have a rubber, have a rubber band. Okay. There you go. All right. Show me a trick.

Jeff Matevish  3:25  
All right. The trick I learned.

Drew Thomas  3:27  
Okay. Here we go.

Jeff Matevish  3:28  
Was getting a rubber band to go through your thumb. Whoa.

Drew Thomas  3:33  
Oh, nice. Yeah. Very nice. We'll see, we'll see how well that shows up. But you might have to spotlight that on camera. Okay. Yeah. I didn't give you a very thick rubber band, but yeah, that's, that's pretty cool. So okay, so, so yeah, okay. Here's why I'm asking, because before we get too far down this, this random road, I wanted to talk, or we, we discussed talking a little bit about the fact that the episode we did earlier this month was sort of in honor of our 250th anniversary as a country. We had somebody that asked the question, "How much, how many, how much change could you save in about 250 days? Right, and so we did an episode on that, and it got me thinking that you know something about 250 years of, of our country wouldn't be a terrible way to look at the podcast episode, right?

Jeff Matevish  3:29  
Yeah.

Drew Thomas  3:29  
But I'm the only one that really likes history to the degree that, that, and we know this talking about it. So, I thought, well, let's look at it from the perspective of what was it like to use money if you were using it, say, in 1826 versus 2026. Okay, right.

Jeff Matevish  4:06  
200 years. Yeah, yeah.

Drew Thomas  4:08  
It's 200 years. I mean, it's not 250 but I don't think it's really fair to say how we're using money in 1776 because the, the country didn't really exist.

Jeff Matevish  4:49  
Got off the boat and said all right, how are you going to use money?

Drew Thomas  4:51  
Yeah, yeah, really. You were using whatever money you had and stuff. But so I thought, okay, let's go back 200 years and do a comparison and see what is different about how the average person used money in 1826 versus today, and, and what's, what's the same and what's different, right? And, and I really think that the whole magic thing is, I think there's a lot of people that would think that how we manage our funds today, if you, if you pulled somebody from 1826 and showed them how we manage our money today, I think they would think it was magical.

Jeff Matevish  5:26  
Oh, definitely, yeah, yeah.

Drew Thomas  5:27  
Yeah. You know, the idea of being able to move money through your, through your, through your, through your phone, right? That I can that I have a phone that a communication piece that I can. Yeah, yeah. I always say that this is not a phone. This is a computer. It just happens to have a phone app in function, functioning, yeah. But so yeah, I thought, I thought that might be an interesting way to sort of celebrate 250 years of the, of the country and, and kind of look back. So, so yeah, so I I don't know. Like I guess we can start with just your general banking relationship, right? Like, I mean, so...

Jeff Matevish  5:51  
Did banks, I mean, did, did people actually bank quite often, or was this like a luxury?

Drew Thomas  6:10  
I don't know. I don't know if I'd call it a luxury per se, but no, I would say that most people back then did not have a routine banking relationship.

Jeff Matevish  6:20  
Okay.

Drew Thomas  6:22  
They mostly kept their money where we tell people to never keep their money.

Jeff Matevish  6:27  
Under their mattress. Yeah.

Drew Thomas  6:29  
Yeah. Under the mattress in the walls, between pages of books, and you know, in coffee cans and things like that. Okay. You know, if they had money at all. A lot of times, you know, they were managing their stuff through the barter system or something along those lines. But money, coins, primarily, things like that, definitely just kept around the house. You know, not, not so much in a bank, and for various reasons that I'm sure we'll get into.

Jeff Matevish  6:57  
Yeah, yeah. Fun, fun fact. Back in, in ancient Rome, did you know that people kept their money in the basement of temples?

Drew Thomas  7:07  
Really? Yeah, that's kind of cool. Why?

Jeff Matevish  7:09  
The figured, because they figured that the priests would, would protect all their money. Yeah.

Drew Thomas  7:14  
I, I suppose that's there's good logic to that.

Jeff Matevish  7:16  
Armed guards and priests and just you know workers in temples. Yeah.

Drew Thomas  7:22  
Huh? That's, I mean, that's cool. I mean, we touched, I know at least at one point in one of the episodes about how you know in the ancient world that was this, this concept of how to move money from over long distances safely was to have a, a merchant in one city and a merchant in another that had an agreement, and you would deliver your money to the merchant where you were, and they would give you basically an IOU, and then you would travel to that other city to the, to the, to the comparable merchant and turn in the IOU, and they'd give you the money. Okay, you know, with the idea being that you weren't traveling over these long distances and just being robbed every time you turned around. Okay, you know. So, there was that. But...

Jeff Matevish  8:05  
Were there long distance between, between banks? I mean, were there, there a lot of banks back in 1826?

Drew Thomas  8:11  
No. Okay. No. I mean, really, that I I according to the research that I have, there was about, there were about 300 banks in the United States, around 1826. Okay, and I don't mean 300 banks with like 25 branches a piece. That means 300 banks total. Okay, yeah.

Jeff Matevish  9:00  
So, now westward expansion was still happening. So, I mean that was in a smaller area too, but.

Drew Thomas  8:35  
True. Yeah, yeah. The, the great wild western Ohio territory. You know that, that, that you had, but yeah, I mean, so you know, traveling to reach a bank was, was definitely, I mean, think about it now. Like, if you want to go to, I don't know, Altoona from, from where from it's like a 45-mile drive, right? You can go there for dinner and back in, in a couple of hours, you know. Whereas a 45-mile journey back then, especially if you were walking, oh yeah, or taking a horse or a wagon or something. I mean, that was a several day turnaround. You didn't just...

Jeff Matevish  9:12  
Your horse could have died and you got dysentery and you know.

Drew Thomas  9:17  
The Oregon Trail. Yeah, yeah.

Jeff Matevish  9:18  
But yeah, you think of it like airplanes. I mean, you, you can get anywhere around the world in, in one day now. It's pretty much. Yeah, yeah, crazy.

Drew Thomas  9:26  
Yeah, I still find that, I mean, I don't travel as much as some people do, but I still find it fascinating when I do travel and I, I wake up in Nevada and I can go to bed in Pennsylvania. Yeah, I, I just think that that's, that's just amazing.

Jeff Matevish  9:42  
Yeah, and it it's like it's common. Like businessmen do it daily. I mean, like, yeah, like you, like you. I don't travel very often, so it's a big deal when I go on vacation and I have to get on a plane. You know. Yeah. But for, for you know your average businessman that that's traveling, you know, half of the, half of the year, it's like, what did you do today? Ah, you know, got on a plane to, to California, and then I jumped on a plane to you know Washington State, and I came back for dinner. You know, yeah.

Drew Thomas  10:06  
Yeah, and, and, and the funny thing is, is we we're so spoiled in our world today that if there's a delay of 45 minutes at the airport, we're annoyed. Yeah, you know, like oh my gosh, I had to spend an extra 45 minutes.

Jeff Matevish  10:19  
I'm going to miss my other plane. Yeah.

Drew Thomas  10:22  
Yeah, really.

Jeff Matevish  10:25  
Okay, so, so besides proximity, was there any other reasons why you wouldn't bank if you, if you had the ability to bank. If you had a bank down the street, were there any other reasons why you wouldn't?

Drew Thomas  10:26  
Yeah, I would, I would, well, so banking was not then what it is today, for sure. In terms of, so we started out as a country with the First National Bank of the United States, that failed. Then we had the Second National Bank of the United States, and that failed. But the third one stayed up. No, that's Monty Python. So, the idea that you had these, these small banks, some of these banks were literally only just the bank of the town you were in, right? And it might have been the local, the local rich guy that had the bank, right? And he, because he could afford to, and I say he because let's face it, we're talking 1826 here, right? So, he could afford to loan money, and usually, so banks, banks would loan money. They would, they would keep deposits, but it was largely for rich people or people that were using it for business purposes, right? So, so they would have this money, and they would, they would do these, but they could leave town tomorrow with your money, and what are you going to do? I mean...

Jeff Matevish  11:44  
Nothing. Yeah.

Drew Thomas  11:45  
Yeah. I mean, it's 1826, there's no license plate readers, and there's no cameras on every corner. These people could just up and leave and take all your money, and there was really not much you could do about it.

Jeff Matevish  11:55  
And I thought people were more trusting back then.

Drew Thomas  11:59  
Trusting, yeah, not necessarily honest. Okay, yeah. And then you also had the idea that you know, as, as you pointed out, westward expansion and, and so some of these towns would pop up, and they would be super prosperous for a short time. But then, as people moved further west, the towns would fall into disrepair, and there'd be fewer people there, and so the banks would fail, and so people didn't always trust banks. Like the, the bank failures were common enough that you just didn't really feel very comfortable putting all your money over there in the hopes that, and there was no, I mean there was no FDIC system like there is today.

Jeff Matevish  12:39  
Sure, yeah.

Drew Thomas  12:40  
Um, so you know, when people talk about the, the Great Depression in the 1930s and the bank and the, the, the, the that was the real change in the United States was going away from the idea of having a government sponsored federal bank that was owned by the government to the Fed. Yeah, you know that we have now, which sort of is a federal way to help manage the financial system.

Jeff Matevish  13:07  
It's a referee. Yeah, yeah, yeah.

Drew Thomas  13:09  
And the FDIC and some of the things that are put into place. I mean, that didn't all come from one set of bank failures in the 1920s. Like everybody didn't just go like, oh, the banks failed once, we're going to put all these reforms into place, right? Right. Right. This was a series of, of bank failures dating back over 100 years that finally caused the, the federal government to step in and say, okay, we need a better way of doing banking in this country. Yeah. Right.

Jeff Matevish  13:39  
So, you had mentioned depositing money is what one thing that a bank does. What, what else back then was there the same as, as banking today? Like what else did they do?

Drew Thomas  13:50  
Yeah, I mean they well just like today they would keep deposits on, on I don't want to say on file because they literally had money. I mean that was the thing. Like today you know again comparing...

Jeff Matevish  14:01  
Money is digital right now. Yeah, yeah.

Drew Thomas  14:03  
Right. I mean, you, you had this, this notion of, you know, there's a reason why old cartoons and things like that show people breaking into a bank and like walking out with sacks of money, right? Because they did.

Jeff Matevish  14:16  
Right, right.

Drew Thomas  14:17  
As opposed to now, where most banks, I mean, yes, banks do keep cash on hand, but they don't have physical cash dollar for dollar on hand on any you know given Tuesday for every single person. Like the, the money is digital; it's there, but it's not, it's not, it's not tangible like it used to be. I guess in, in, in a way, if you want to look at it that way, like we, we kind of look at things sometimes like it's almost like a, like a credit system. Like you have money in your account, and then you, you pay the fast-food joint, and money magically transmits out of your account and into theirs, and, and you don't handle cash. Right? Right. Where back then you were handling coin and cash and stuff so the banks would, would keep that stuff locked in a vault for you if you were, if you had enough of it to store away that you didn't have to use it immediately so banks were mostly for the rich.

Jeff Matevish  15:13  
Okay.

Drew Thomas  15:14  
You had to have extra money that you could lock up and then not need tomorrow because you couldn't go to the ATM, you couldn't just go and just pop by the bank, like we said, you know, and, and withdraw funds because maybe you didn't live nearby or, or maybe whatever. So, yeah, somebody had to be there, you know, physically in the bank building to give you your money if it was locked up. You couldn't get it on you know 2o'clock on a Saturday necessarily, you know, or something like that. They made loans. You know, again, mostly to merchants and wealthy financiers. You know, railroad men, things like that. But they would make loans. So, if you were, if you were opening the local general store, maybe you would go to the, to the local bank and say, okay, well, I need, I need money to buy all of the initial stuff that I want to sell, and then I'll pay you back from part of the proceeds of what I sell at the general store. You know my, my goods and services farmers.

Jeff Matevish  16:06  
And they said, let me see your credit score and your debt-to-income ratio. And yeah.

Drew Thomas  16:10  
Yeah, we can, we can get to that, but no, there was definitely no credit scores back then. Well, there were, but not, not in the way that we say that they are. You know, and then you know, and like I said, they did, they did issue banknotes and stuff too. So, a lot of times, even into the 1900s and I mean, not, not even like not like 100 years, like less than 100 years ago. Yeah, you could still find banknotes that were, you know printed on the banknote, like you know this was, this notice is from the local bank of Johnstown or whatever. That'd be cool, you know. Yeah. So, that, that was a thing back then too, you know, for sure.

Jeff Matevish  16:49  
That'd be cool. And you had one bank account, like you, it's not like today where you had you have two checking accounts, you have a holiday club, you have a savings account, you opened a CD, you had a bank account.

Drew Thomas  16:59  
Right, right, right, right, and you know, and I don't know. Like I, I just I think we take a lot of that stuff for granted that we have, we have specialized places for our money. You know, the this money is in an account for my you know Christmas shopping, and this money is in my account for my vacation.

Jeff Matevish  17:19  
Right, right, and I can transfer money from one account to the other in the blink of an eye, or I can take money from my account and give it to you.

Drew Thomas  17:25  
Yeah, you know through Zelle or something like that. Again, not even physical money if we didn't want to use it.

Jeff Matevish  17:30  
And, and back, back then, I mean, it moving money from state to state took weeks and it was very risky, which is why like the, the Wells Fargo even came about because that they came about back whenever the, the California Gold Rush was happening. Oh yeah, yeah. So, you know these, these people, the pioneers, went out west to, to go, you know, strike it rich, you know, in the in the gold mines and the gold, you know, gold fields and or whatever, you know, and they'd take their, their gold or their money and they'd have to send it back, back home east or whatever, and they needed a faster way to do it. So, Wells Fargo capitalized on that and said, we'll do it fast, and you know, and that's how that happened.

Drew Thomas  18:07  
Fast and safe, theoretically, right?

Jeff Matevish  18:09  
Theoretically, yeah, yeah, yeah.

Drew Thomas  18:11  
But yeah, I mean, I mean, for goodness' sake, I mean, even to this day, Wells Fargo still uses the, the, the horse and carriage as their logo, yeah, in their logo marketing motif. Also where the concept of, of riding shotgun came from.

Jeff Matevish  18:27  
True. Yes. Yeah. You had a, it was a very dangerous profession. Yeah. Yeah. You had to have a shotgun. You know.

Drew Thomas  18:33  
If I mean, if everybody, you know, now, now you just run to the car and scream a shotgun, you know, and you're riding in the front seat. But really, what shotgun meant was you were riding next to the carriage guy that was holding the reins, and because, because he was holding the reins, he couldn't defend the carriage, so he had somebody sitting next to him with a shotgun in case somebody tried to rob the carriage. Yeah, right. So, yeah, I mean, there's, there's you know all kinds of well, so okay, so obviously if I'm a, if I'm a, a gold miner or I'm a 49er, a 49er, yeah, as it was, you know, and I get I'm, I'm probably getting paid in the gold that I find in the, in them that are hills.

Jeff Matevish  19:14  
Gold or coins, yeah, yeah.

Drew Thomas  19:16  
But how am I getting paid if I'm not a 49er? Like if I'm a, if I'm somebody who works for the local hotel or something like that. How am I getting paid?

Jeff Matevish  19:24  
Yeah, you're getting paid in gold or coins or the, the local bank issued banknotes, okay, or, or credit or barter, barter. Yeah, I mean there was there was something called the truck system where I mean that loosely translates to barter, but you know you could get company coins, and you'd have to spend them at the company store. So, yeah, they were getting you, you know, getting you either way. Oh yeah, yeah. I mean, you worked you worked your butt off, and then you got paid in a, in a coin that you could only use at that store. That on goods that the, the company, spent a little on and charged a lot for, and yeah, I mean, yeah, yeah.

Drew Thomas  20:03  
I mean, they were again, we're going, we're going more recent than the 1826 in this example, but it started then for sure. But you know, the, the song 16 tons, you know, is about that. It's this you know concept of you know you load 16 tons and what do you get? Another day older and deeper in debt, you know, and you know these people felt like they couldn't, not only could they not move on from their employer because of the fact that they were indebted because they weren't, they weren't getting paid in money; they were getting paid in scrip, right, right, right. And so you're right; they, they were, they were indebted to their employer and they, they couldn't even like they couldn't die like that was like you know even in that song like the lyric is you know Saint Peter don't call me because I can't go, I owe my soul to the company store, yeah. So, that's you know a, an issue that, that, that exists all the way up into like the, the early to mid-1900s in some cases, you know. So, yeah, that's, that's that's crazy stuff.

Jeff Matevish  21:08  
Yeah.

Drew Thomas  21:10  
So, what, so assuming that I'm not, assuming that I'm not, assuming that I'm getting paid on the up and up, or, or, or even if I'm not, how what happens on payday? Where do I like show up at the offices, or what? What happens?

Jeff Matevish  21:24  
You're getting handed, you know, physical money or whatever, and you're either putting it in your bank if you chose to, you know, bank, or you took it home and you shoved it under your mattress, like we keep telling you not to do, or you spent it at the company store, or, or not the company store, but at your local, local general store, or you know, paid off merchants because that that's how a lot of this worked was, was on credit. I mean, you went to a store and said, hey, I needed a loaf of bread, and I didn't have enough money today. Okay, we'll put it on your tab, and you'd square up with your, your merchant, you know, periodically. But yeah.

Drew Thomas  22:00  
Yeah, I and you know it's so you, so you didn't get it, you didn't get direct deposit.

Jeff Matevish  22:05  
You did not get direct deposit yeah no, no, no money, no check, no direct deposit.

Drew Thomas  22:09  
Yeah no direct deposit and, and like you yeah probably not a check either because again if I, even if I'm a wealthy merchant I'm probably not paying my workers in checks because where are they going to, what are they going to do with them?

Jeff Matevish  22:20  
So, the government wasn't taking out income tax at the time. That didn't, that didn't come about for quite some time.

Drew Thomas  22:25  
Yeah, no, the, the concept of income tax didn't really come around until 18, I'm sorry, not 18, 1916, no, 1913, 1913 16th amendment. Yes, yeah, is, is whenever the, the concept of income tax became a thing in the United States.

Jeff Matevish  22:44  
Right, right, right. And sales tax was even later than that. Yeah.

Drew Thomas  22:48  
Yeah. Sales tax, obviously, you know, as most of us know, is local or state, state driven. But the federal government really didn't, they got their money through, through tariffs. Oh, it's one of those words these days, you know. But they got their money through tariffs and, and, and basically taxing the imports and exports of the goods that came in and out of the country. Sure, yeah. Rather than taking the money directly from the people, although in a way they still were, because just like tariffs of today, most likely that merchant or the whoever was bringing it in was passing that, that tax on to whoever was buying it. So, you know, I mean, the whole Boston Tea Party for the Revolutionary War in the you know in the early mid 1700s was you know this concept of you know taxation without representation and throwing the tea in the harbor to protest the fact that they were being taxed on tea. Which, if you actually look at the history of it, they really weren't being taxed that much. They were actually paying less. Believe it or not, the, the American colonists were paying less for tea than the British population was in England. Really, even with the tax, it was the, it was just the fact the, the fact that they were being taxed was enough to just that was you know it was enough to, to cause them to just blow their stack. Oh, I didn't know that. I mean, yeah, yeah, it was crazy. But yeah, the, the, the there I, I won't go into, I won't go into the, the gory details of this or the deep details of this, but like, but like our area, um, we're, we're, we're in the Western Pennsylvania area. You, you might as well say near closer, our closest big city is Pittsburgh.

Jeff Matevish  24:33  
Yeah, back in 1826, we were out west. Yeah.

Drew Thomas  24:35  
Yeah, we were out west for sure. Yeah, we definitely were because so if you've ever heard of the whiskey rebellion? The whiskey rebellion was brought up because it was one of the first times that the United States government tried to tax a commodity. They tag, they put a tax on whiskey. Okay, and you know if you were paying a tax on whiskey in New York City or Philadelphia, you just whatever it didn't really, affect you that much, but out west in the Ohio Territory, West Virginia, Western PA, a lot of these people were using whiskey as money. So, like they didn't have money.

Jeff Matevish  25:13  
Their barter system. Yeah.

Drew Thomas  25:14  
Yeah, they didn't have like coins and cash and money, so they used whiskey as their method of payment. Okay. And so you put a tax on whiskey, and now these people are able to purchase less with purchase less with their whiskey than they could before, and um and you're tax, you're, you're taxing their only form of the payment at that point, so you're, you're kind of double dipping.

Jeff Matevish  25:39  
Yeah that's your income and sales tax.

Drew Thomas  25:41  
Yeah, yeah, you know, and so there was a violent uprising. They, there was a whole bunch of people that, that marched on Pittsburgh with pitchforks and guns and, and everything, and showed up in Pittsburgh as part of this whiskey rebellion to rebel against the federal government. And George Washington sent over 3,000 continental troops to put down this rebellion in Pittsburgh. Wow! In 1794.

Jeff Matevish  26:10  
Wow!

Drew Thomas  26:11  
All over the idea of taxing whiskey.

Jeff Matevish  26:14  
Wow!

Drew Thomas  26:15  
Yeah. That's nuts. So, yeah. So, definitely a little bit different. I mean, there's, there's thankfully not a lot of violent uprisings over the way we handle our money these days. We have a lot of Facebook posts about it. Yeah, you know, people are still angry, but they're just angry with their thumbs rather than angry with pitchforks and, and, and, and muskets and stuff. Yeah, yeah, which is a good thing, I suppose. Okay, so, so, yeah. Supposedly, sorry. Yes, I digress. I know. I'm sorry.

Jeff Matevish  26:45  
No, no, no. But so you, you probably didn't pay for your house with whiskey back in the day. How did mortgages work back then? Were they different than, than, than they are today?

Drew Thomas  26:56  
I mean, yeah, definitely. I mean, there were people that had to borrow money. Now, if you're out in the middle of the, the frontier territory, chances are, you're building your own house. You're grabbing a plot of land, and you're just building a house, and you're just claiming that land as your own. And you know.

Jeff Matevish  27:14  
But they didn't have 30-year fixed mortgages back then.

Drew Thomas  27:17  
No. Okay. No. Matter of fact, I mean, the concept of a 30-year mortgage back then would have been laughable. I mean, some of these people didn't live long enough. Yeah, yeah. That's true. That's true. So no, no 30-year mortgages, no credit scores, no you know, no, no fixed rates or anything like that. Basically, you know, the idea was that you paid as much as you possibly could, large down payments. You paid as much as you could for that house if you were buying one in a town or a city or something, and you were...

Jeff Matevish  27:19  
Still a good practice today.

Drew Thomas  27:45  
Yeah, still a good practice today to put as much down as you can. Absolutely, but the repayment periods were way, way, way, way, way shorter. Okay, I mean, you're talking like probably five years, you know, for most of these things. And, and really, this, this kind of goes back to what you were saying about credit scores. Like a lot of this stuff, whether you were a merchant that was buying, yeah, buying a merchant borrowing money, a farmer borrowing money, or if you were borrowing money for something like buying a house or something like that, you were doing it based on your reputation in the town.

Jeff Matevish  28:22  
Okay.

Drew Thomas  28:22  
So, you know the bankers.

Jeff Matevish  28:25  
Hey, Drew's a good guy. You should probably lend him some money if he wants it.

Drew Thomas  28:29  
I, I mean, kind of, yeah. Okay. It really came down to that. It came down to who you knew. Okay, whether or not your, your name was good. If you had a, I mean that, that you know, there's a lot of people even today that's you know my good name. Well, it's that comes from somewhere, you know. Yeah, yeah. And that idea being that if the people that I knew and the people that were in my town knew me and I had a positive reputation for being an upstanding citizen, then there was a better chance I was going to be able to borrow money if I had to.

Jeff Matevish  28:59  
Well, and like you said, the banks were mostly used by you know the rich and wealthy to begin with. So, you already had a reputation, you know, your, your name was well known. So, oh yeah, probably was easy to, to get a loan back then.

Drew Thomas  29:13  
Yeah, I mean a lot of times it was sort of handshake deals. Yeah, you know it was you know me coming to you and saying, hey, listen, you know I'm either I'm running a little short, I guess you could say, or you could, you could come back and say, well, listen, I want to expand my business, or I want to, I you know, my, my maybe it's, maybe it was even something as simple as like, listen, you know, I've, I've got a seventh kid on the way, yeah, you know, and I need some more space in my house, and I got to put an addition on it. I'm running a little shy. If I had a good reputation in the town, there was a better chance I was going to get it back. But, but again, my the expectation was most likely that I was going to pay you back that money in a short amount of time in a very short amount of time. Yeah, I mean, five years probably would have been a lot. Okay, you know, we're now. Now you know you, you have a five-year lease on a car and nobody blinks an eye, right? You know what I mean. You know, right, right, right, right. Um, so um, so yeah, so you know, um, there, there was that. Now, now the other question becomes, you know, retirement. Um, you know, I have my house, I have my business, but eventually I'm going to get old, theoretically.

Jeff Matevish  30:22  
Yeah.

Drew Thomas  30:22  
Now I might get old at 40 and die at this point in, in history, but believe it or not, a lot of people lived to a much older age than people think.

Jeff Matevish  30:31  
Really? You, you always, you always hear like you know 50s and or 40s and, and people are, are, are dying and, and kids are dying because they get sick, you know, at a very young age and all that. So, that's longer than that?

Drew Thomas  30:45  
Oh yeah, I mean Ben Franklin was in his 70s.

Jeff Matevish  30:47  
Oh, I guess you know.

Drew Thomas  30:48  
I mean, the, the, the issue becomes when you look at those time periods, we're usually looking at an average age, like an like an average age for, for a man or woman's lifespan, and those averages were really, really affected by infant mortality, childhood deaths, young people getting cholera, things like that. But, but that didn't mean that people didn't have the ability to live a long life. It's just that meant on average, you probably didn't live as long.

Jeff Matevish  31:22  
Yeah, there was a skew. Yeah, yeah, it skewed it a little bit.

Drew Thomas  31:24  
You know, but there was definitely the the, the concept of you know retirement if you had the money to do so.

Jeff Matevish  31:32  
But there was no pension plans. There was no 401k's. No, there was, I mean, whatever you saved was what you retired with. Your, your land was your, your you know insurance policy and you know giving to your kids you know passing it down so they had something, but you, you pretty much you worked, you worked until you couldn't work anymore. I mean, you didn't work till you were 62 like you do today, or you know yeah.

Drew Thomas  31:59  
Yeah there was, there wasn't as, there wasn't as defined a finish line, I guess, if you want to look at it that way.

Jeff Matevish  32:04  
You didn't work for towards something. You knew you were going to be working until you couldn't. Yeah, yeah.

Drew Thomas  32:09  
Yeah. And, and, and a lot of times it was just I don't know, I guess it was a different mentality. I mean, the concept of the nine to five work a day, you know, Monday through Friday that we exist with in our world today is a much, much newer concept than what most people think of it as. Henry Ford is largely to you, you could say blame or you could say give credit to, but Henry Ford is, is a big reason why our work days and weeks look the way they do, and it was largely because you know back in the 1700s 1800s like you worked because that was what you did. You were either a politician, or you were a blacksmith, or you were a whatever tailor.

Jeff Matevish  32:56  
Yeah.

Drew Thomas  32:56  
Silversmith. If you were, if you were you know doing well for yourself, you know, or whatever, living in Boston or something like that. But you know, the you, you worked you, you worked when you worked, and you were open if you had a shop, and, and you went to bed when you went to bed. I mean, it wasn't like this very, we are super structured, and that structure comes from the idea of Henry Ford wanting to have a structured workday for his assembly line. He needed to have workers on the assembly line when he was putting the cars together. And so there was this notion that you started at a certain time, you did a repetitive task, and you left at a certain time. And it was this idea of homogenizing and structuring the work to lower the cost.

Jeff Matevish  33:42  
Okay.

Drew Thomas  33:43  
But that's a 1910s concept. Yeah, it's not a, it's not an 1820s concept, and it's...

Jeff Matevish  33:51  
Totally, well, I guess not totally off topic. I guess sort of related, but you're a history buff, so you may, you know may know the answer. I was always told that at least around here, on Fridays, like our local schools, they get out early. Okay, I was always told that, that was because on Fridays they wanted the school districts wanted their, the kids to be able to go home and work the fields with their, their families a little bit more.

Drew Thomas  34:17  
I think there's some validity to that. Okay, I think there's some validity to that.

Jeff Matevish  34:22  
Not really related, but yeah, sparked my.

Drew Thomas  34:25  
No, I mean, I think there's, I think there's definitely some, some validity to the idea that, I mean, you know, again, we're from Western Pennsylvania. I mean, when I was in high school, we still got the day after Thanksgiving weekend off because it was the beginning of, of deer season. Yeah, right, right. You know, and it was this idea that even the high school students wouldn't be in school, so why bother having class? You're going to be out hunting with dad, you know. Right, right. So, and I apologize. I mean, women hunt too, but I'm just statistically speaking, back then that was, that was the, the notion. Yeah, yeah.

Jeff Matevish  35:00  
Um, sorry to get off topic.

Drew Thomas  35:02  
No, no, no. So, so, but that, but the idea. So, getting back to the whole retirement idea was this idea that you know, if you were a politician, if you were Ben Franklin, if you were Thomas Jefferson, you had a plantation and you had a you know all this, you probably had enough money that you, you, I don't even know if you really thought of it as retirement. You just scaled back your work. Yeah, you know you might still be writing. You might still be publishing books. You might still be doing things that, that you did. You just might be not be doing them at the pace you did when you were younger. But it wasn't so much this concept of okay, now I have stopped working and I'm just going to go do this instead and make my Barca lounger my daily chore.

Jeff Matevish  35:44  
Yeah, there was probably more a little bit of passion when you chose your occupation back then too. Like now, it's like, hey, I got to work so that I pay these bills, and my kids can eat, and they can go to school, and they can do blah blah blah blah blah. Yeah, right. Back then, you know, you, you did what you liked and you got paid, but you didn't need as much back then. Yeah. So, like there was no retirement. You just, you continued doing what you liked doing, just like you said, just maybe not at the, the same level. Yeah. Yeah.

Drew Thomas  36:12  
And a lot of times, even if it wasn't what you liked doing, like if you, if you became a farmer because it was just what you had to do when you were of that age and you moved on to that territory or something, your retirement became passing along that land to your, to your children, right? So, as your children got older and they took over the majority of the labor on the farm, right, you had more opportunity to, I don't want to say relax, but you didn't have to do as much of the manual labor, and you sort of pass that on, and your retirement became your land, and then you pass that on to your, to your heirs. And if, you know, if your son or daughter or whatever didn't want to do that thing anymore, then they would they could sell the business, I guess, and do something else. But yeah, but that, that, that notion you're right of, of saving up money specifically for the purpose of I'm not going to work anymore past this certain age didn't exist didn't really exist yeah, yeah. So, I think that you know this is a, this is really kind of an interesting way of looking at how we use because again like today it's, it's amazing to me, I think how much is the same and how much is different in terms of how money is used.

Jeff Matevish  37:28  
The basics are all the same. Yeah.

Drew Thomas  37:29  
Yeah. I mean, when you talk about basics, you're talking what?

Jeff Matevish  37:32  
Like I can deposit money. I can get a loan at a bank. What else?

Drew Thomas  37:40  
You can save.

Jeff Matevish  37:41  
You can save. Yeah.

Drew Thomas  37:42  
You know, but at the same time, you know, you, you have access, we, we have access to our bank in a way that, that people back then had no earthly concept for.

Jeff Matevish  37:54  
Speed is, is the big difference. Yeah. Yeah. Yeah.

Drew Thomas  37:56  
And you know, and going back to what you said, even about traveling, you know, the concept that you know the local bank note would be the same in a different town or a different city if it was issued by the, the bank of you know Podunk Nebraska and that's that, that, that note would be the same in, in Iowa or California. A lot of these people didn't live their lives like we do. They, they, they might have lived their entire life in a 50 mile radius, you know, of, of where they were born. Yeah, you know, so it's that was a little different too.

Jeff Matevish  38:34  
Like our tagline, their bank was their bank for life.

Drew Thomas  38:37  
It was their bank for life, if they had one at all. Yes, you know. So, I would say that you know, unlike back then, it is absolutely preferable to keep your money as much as possible in a bank. Banks are FDIC insured. The, the, the, the, the bank is a safe place to, to, to keep your money.

Jeff Matevish  39:04  
Yeah, they're not, they're not going under like they did pre, pre-depression. Yeah.

Drew Thomas  39:08  
Right. I mean that, that, that is rare that a bank fails. I, I mean obviously a couple years ago there was a very publicized bank that failed. It does happen. Yeah, but even then, the people that had their money in that bank were not the ones it. Yeah, they didn't lose it. Right, right. They so and bank failures are, are not, not nearly as common as they once were. And when they do happen, they're not as destructive to the people that are using that, that bank as they once were. Right, right. So, there's that. There's also this, this idea of you know the safety of, of your money in general. You know, like we say, like oh, don't, don't be robbed and don't be, but what happens if you have a fire? What happens if you have a flood? You know, and all of your money is under your mattress. I mean, it doesn't have to be fraud necessarily. It doesn't have to be a violent robbery for you to be taken for all your money to be lost. Right. You know, if you're, if you're still of this mindset that your money is safest under your mattress, and something happens to your home, there's it's your word against nobody's that you had that money.

Jeff Matevish  40:18  
Right, right.

Drew Thomas  40:20  
So, definitely, you know, keeping your money in a bank today is, is way more preferable. Yeah, and the, the, the sheer level of access that you have to your money through, you know, branch locations, if you, if you prefer to do it in person, telephone banking, yeah, online banking through a computer, mobile banking through your phone. I mean, to your point...

Jeff Matevish  40:21  
I have, I have more access keeping my money in a bank now than I do if I kept it underneath my mattress. At least if I had to if, well if I kept it on my mattress I'd have to run home every time I need money. Now I can just whip out my phone or go you know walk 20 feet to an ATM and say okay give me some money.

Drew Thomas  40:54  
That's true. You know you're, that's, that's a really good point that I, I didn't think about, but you're absolutely right about that. So, even from a convenience standpoint, having your money in a bank is, is better, you know, compared to keeping it yourself and keeping, keeping everything in cash. And, and that means something coming from you because you are a cash guy.

Jeff Matevish  41:13  
I am a cash guy. Yeah, yeah. I have become a lot more digital since working here. Absolutely. Yeah. Yeah. I have, I have turned over to that side, and I'm liking it.

Drew Thomas  41:23  
Yeah, and you know, and you know, regardless of whether you think that the old world way of living, where we were more fluid with our jobs and worked until we sort of trailed off, and, and, and all that kind of stuff, the bottom line is we don't live in that world anymore. Yeah. So, having a good financial planner for yourself, saving as much as you possibly can, not only just for retirement, but for just rainy days and unexpected things. I mean, unfortunately, you know, in our, in our world today, you know, you know, jobs get lost. People move. Sometimes you have unexpected expenses that you just, you just can't necessarily foresee every single time. You know, you go home tomorrow and your water heater is blown up, and you got water all over your basement. You need money to replace it, and you weren't expecting it. Yeah. Right. Yeah. So, having a savings, having some money set aside is definitely important. But having a financial planner, a wealth planner, and I think people get put off sometimes by that concept of wealth planning. You know, there are people like you and I that, that, and I don't mean to speak for you, you know, but, but there are people like you and I that, that while I am, I am certainly not poor, I, I am not uber rich either. I am not Elon Musk, right? So, the concept for me of wealth planning is kind of like it's, it's a term that you kind of, kind of scoff at. Like when I think wealth, I think of like the guy on the Monopoly box that's got like the monocle and the, the top hat and stuff. That that's not me. Yeah, but planning for your future in retirement is still something that everybody should try to do. Right, right. You know, as much as you possibly can, and the earlier you can start doing that, the better.

Jeff Matevish  43:11  
Oh yes, yeah, yeah. Remember, time, time is, is your friend. Yeah.

Drew Thomas  43:14  
Yeah, for sure. Yeah, I think this was cool.

Jeff Matevish  43:18  
Yeah, that was a fun one.

Drew Thomas  43:19  
Yeah, even though I, even though I made you endure history again, it's all right.

Jeff Matevish  43:25  
That's all right.

Drew Thomas  43:26  
You're going to look back on this one day.

Jeff Matevish  43:29  
It's going to be history.

Drew Thomas  43:30  
And it's going to be history. All right, I'm out.

Jeff Matevish  43:34  
All right, thanks, Drew.

Jeff Matevish  43:42  
This podcast focuses on having valuable conversations on various topics related to banking and financial health. The podcast is grounded in having open conversations with professionals and experts, with the goal of helping to take some of the mystery out of financial and related topics. As learning about financial products and services can help you make more informed financial decisions. Please keep in mind that the information contained within this podcast and any resources available for download from our website or other resources relating to Bank Chats is not intended and should not be understood or interpreted to be financial advice. The hosts, guests, and production staff of Bank Chats expressly recommend that you seek advice from a trusted financial professional before making financial decisions. The hosts of Bank Chats are not attorneys, accountants, or financial advisors, and the program is simply intended as one source of information. The podcast is not a substitute for a financial professional who is aware of the facts and circumstances of your individual situation.

Drew Thomas  44:42  
It's truly amazing when you think about how much has changed over the last 200 years when it comes to the average American and their relationship with their bank. In 1826, the average American barely used a bank. Most people dealt in cash, coins, or the barter system. If they had a bank account at all, it was likely at a small local bank they could physically visit, and there was little government oversight or protection if that bank failed. Borrowing money was often difficult, payments traveled slowly, and moving funds across the country could be expensive and risky. By contrast, today banking is woven into daily life. Most Americans receive their paychecks electronically, pay their bills online, and can move money instantly from a phone, accessing their accounts 24 hours a day. Deposits are federally insured. Banks operate under extensive regulation, and customers can manage their finances from literally anywhere in the world that has an internet connection. AmeriServ Presents Bank Chats is produced and distributed by AmeriServ Financial, Incorporated and hosted by Drew Thomas and Jeff Matevish. Our executive producer is Jeff Matevish. Music by SchneckMind. You can find the podcast on all of your favorite podcast platforms, or you can watch the vodcast on YouTube. For now, I'm Drew Thomas, so long.