From the Archives
Campus Bank Protects JBU During Depression
Friday, October 10, 2008
Some might look at the current size of Siloam Springs and think that the town has always endured a rather slow growth rate. Yet, following the arrival of the railroad in 1893, Siloam experienced a fifty-year growth spurt, during which Siloam became a center of agriculture and a popular health resort (due to the supposed medicinal proper-ties of the town’s springs). Unfortunately, the town’s boom period had an early end in the 1930s with the onslaught of the Great Depression. At the start of 1930, historic downtown offered the services of three banks, but all three failed during the next year’s financial crash.
According to Siloam historian Maggie Smith, “The effects of thefailure of the banks of Siloam Springs would be difficult to overestimate.” Local banks were unable to return more than a few cents of each dollar to clients, real estate values plunged, and merchants suffered huge setbacks. According to Smith’s research, no other town in Northwest Arkansas suffered comparable losses. The only financial institution that continued to serve Siloam during the crash was JBU’s College Bank.
During the spring of 1932, citizens of Siloam would come to the current Hyde Engineering Building, home of the JBU Bank, for their pressing financial needs. Since the JBU Bank had been organized under a state cooperative banking law, the campus bank was unaffected by the state and federal banking controls which had doomed other institutions. Within a year of the crash, financial stability began to return to the region, marked by the opening of theBrattState Bank in the summer of 1932. However, campus institutions like the bank and the school store continued to serve community needs whenever possible.