George Smith and Alexander Mitchell

Guest Post by Nicholas Lee 

For the History 450 Twitter reenactment, I will be portraying George Smith, @ChiMoneyGeorge, and Alexander Mitchell, @AMitchCurling, two Scottish financiers who played a significant role in the development of the Wisconsin territorial and later state economy. 

George Smith

The first of these men, George Smith, travelled from Aberdeen to the American Midwest in 1835. Recognizing the need for ready capital in the wake of Andrew Jackson’s war on banking, Smith returned home and used his credentials as a successful land speculator to recruit Scottish investors and form the Wisconsin Marine and Fire Insurance Company (WM&F) in 1839. Although banking was technically illegal in the Wisconsin Territory at this time, Smith’s charter enabled the new company to receive and loan money and granted them additional bank-like privileges.

 

George Smith remained home after gathering his investors, sending the young Alexander Mitchell to operate as the company’s secretary and man on the ground. Mitchell was a farmer’s boy who had little formal education beyond the parish school yet travelled to Aberdeen in his teens to study law. There he sufficiently distinguished himself that Smith and his fellow investors felt comfortable sending the 22-year-old Mitchell to be their primary agent in their new venture. 

Alexander Mitchell

Known for his beautiful penmanship, Mitchell was known to be brief in words, which some attributed to a desire to cover his Scottish country brogue. He quickly established a reputation for honesty and efficiency. Despite being an insurance-man in name, Mitchell’s primary responsibility was to circulate the WM&F’s certificates of deposits. Legally barred from circulating currency, the WM&F got around this by issuing certificates of deposit redeemable for specific dollar increments. Thanks to George Smith’s fundraising, the WM&F had a large reserve of coin, or specie, which was necessary for land transactions and considered more reliable than the paper money issued by various territorial and private banks. As Mitchell demonstrated the WM&F’s consistent ability to issue specie in exchange for the company’s certificates of deposit, “George Smith’s money,” which looked and handled much like actual banknotes, became the de facto currency of the Wisconsin territory. This was so much the case, that in 1846 when the territorial government became suspicious that Smith’s and Mitchell’s activities amounted to illegal banking, they were so dependent on the WM&F economically that the company was allowed to recharter as a bank, several years before banking was officially made legal in Wisconsin. While Smith was content to remain in London and collect his millions, Alexander Mitchell invested the wealth earned in his “insurance operation” into a variety of business concerns, becoming the foremost railway operator and the richest man in Wisconsin by the 1860 census. He was also the progenitor of Milwaukee’s Mitchell family, father to the U.S. senator John, and grandfather to Billy, the controversial Army general and oft-considered father of the United States Air Force.