He also relates “in those days of poor banking facilities, it was a common custom for various firms to borrow from each other. Many times our competitors asked us if we had anything over. Our answer was ‘yes, how much do you need?’ ‘Say $5,000.’ On giving our check, we received a post dated check for like amount.”
“In the latter part of 1869,” he writes, “I was going to the city on a Missouri Pacific train, with General A. G. Edwards, who was them Sub-Treasurer of the United States in St. Louis. I told him I had some idea of embarking in the real estate, banking or brokerage business. ‘Let us talk it over together,’ he said. ‘We both are well and favorably known.’ This resulted in the formation of the firm of Edwards & Matthews on January 31, 1870.
“At that time I was worth about $100,000. But we needed little money and could easily borrow it.
“Our business prospered and expanded slowly. In 1874 General Edwards retired from the firm. In the meantime, needing a clerk, at General Edwards’ suggestion, we engaged Edwards Whitaker, then a clerk in the Sub-Treasury, and before the retirement of General Edwards we had taken Mr. Whitaker as a partner, giving him one fifth of the profits of the business and, after the retirement of General Edwards, one-half. In 1874, on the retirement of General Edwards, the firm name was changed to Matthews & Whitaker.”
The firm did considerable business in state, city and county bonds. It formed connections with a number of syndicates to finance the construction of water and gas works in cities and towns of the middle west as well as financing states. In this connection Mr. Matthews relates an interesting incident that shows how the firm, from it very start was founded on service. “In 18_3 Governor Miller of Arkansas, applied to the firm for a loan to the state of $300,000, to mature on one year, in anticipation of taxes due in six months; the loan to be secured by a duly authorized note of the state, endorsed by a number of the state’s wealthiest men.
“The firm agreed to float the loan and after unsuccessful attempts to do so in New York, it was floated in St. Louis through the assistance of The Boatman’s Bank. This business being successful, the firm accepted the proposition of being fiscal agents for the State of Arkansas and continued in that capacity until the state had no further need for financial assistance.
Abundant Credit Not Always an Advantage
“Edwards and Matthews had abundant credit at the banks. While in many ways this is an excellent feature in business, yet human nature is such that it may be a very dangerous one,” Mr. Matthews writes. “Our credit being so well established in the community also acted to our disadvantage in many instances. Our bills were always paid promptly and we were rated as ‘multimillionaires,’ when a large portion of our business was conducted on credit. I will relate one instance. The city of St. Louis advertised to sell $750,000 bonds in connection with Blake Bros. & Co. of New York, we determined to bid for them, although we had only about $15,000 in The Boatman’s Bank.
“I told the president, Mr. Rufus J. Lackland, we intended to make a bid and would want the bank to certify our check for $75,000, as the City required ten percent of the amount in a certified check to accompany each bid. If we were the successful bidders, we would deposit the bonds with his bank, accompanied by our draft for the $750,000 and any premium we might have to pay, the bank to credit or remit the amount to the city.