This is how loans and mortgages worked in Greenville's early history

“A penny saved is a penny earned,” wrote Benjamin Franklin in "Poor Richard’s Almanac." Most Americans have agreed, especially if those pennies are spent buying a home, thus (according to the sages) building good citizenship and patriotism.

But few people in the young republic could afford 40% to 50% down payments or pay 8% interest on mortgages. Enter the non-profit building and loan association to help people save and then use those savings to buy property.

The first American association opened in Philadelphia in 1831. Charleston founded a building and loan in 1851, Columbia in 1852, and Hamburg (North Augusta) in 1859.

But it wasn’t until the 1870s, when almost no one in Greenville had cash, and many, bankrupt, had lost their land and homes, that local “capitalists” began the city’s first (very much for profit) building association.

Although specifics are few, May 1874 newspapers report that the Greenville Building & Loan Association had been organized. “Its object,” wrote the Anderson Intelligencer, was “the accumulation of a fund by the contributions of its members . . . that shall enable them to buy a homestead or improve property.”

“Good and substantial men” were officers, including president W.C. Cleveland. Three years later, T.Q. Donaldson (equally “substantial”) started the Mechanics Building and Loan Association. Neither was chartered by the state.

Both lasted until 1881, when a nasty lawsuit involving both associations evidently ended their activities.

The next Greenville attempt to assist residents who wanted to own homes came in 1901, when the Workingman’s Savings & Loan Co. was chartered with $20,000 in stock. Officers were Baptist minister J.O. Allen, postman Elias Holloway, and A.B. Davis, whom The Greenville News referred to as “the leading and influential members of the colored race in this section,” men who had “the highest confidence and esteem of whites.”

It was the first thrift organization in South Carolina with an all-black board and all-black customers. It advertised “liberal interest” on deposits and 8 percent mortgage loans, but the company primarily bought and sold lots and houses in black neighborhoods around the Southern Railroad Depot and along Leach Street.

It only lasted until about 1906, the same year that T.Q. Donaldson began (and this time chartered) the Mechanics Perpetual Building and Loan Association. Four years later, W.C. Cleveland began another Greenville Building and Loan Association. In 1919, the Woodside brothers began Home Building and Loan on the mezzanine of Woodside National Bank Building, and in 1920 the American Building and Loan Association was established at the American Bank in the West End.

These associations used the “serial” system. A series required weekly deposits at a set rate, ranging from 25 cents to $50, for a set period, generally about six years. (The usual amount was about a dollar to two.)

Savers beginning a series at its start could expect to earn between 6% and 8% interest on their money. Building & loans aggressively advertised the beginning of each of the year’s two or three series.

The Depression changed everything, including names. Mismanagement, land overvaluation, stock losses and occasional embezzlements led to mergers and failures throughout the nation. In 1931, Mechanics, then headed by William Goldsmith, took over the Greenville Building and Loan Association. The Woodsides’ B & L failed in 1933.

Then the federal government set up the Federal Home Loan Bank and began supervising and insuring savings up to $5,000. (There had previously been extremely limited state supervision.) Mechanics was renamed First Federal Savings and Loan (“sponsored and supervised by the U.S. Government”).

In 1936, when it became illegal to use the words “American,” “national,” or “United States” in mortgage company names, American B & L became Fidelity Federal Savings & Loan. 

Fidelity remained in the West End until 1939, when it moved across the river to a modest headquarters on West McBee Avenue, about a block away from First Federal. (All those “F’s” got confusing; they frequently got each other’s mail.)

Leaders of both S & Ls started early and stayed until death or retirement. Marion Hewell of Fidelity Federal, for example, joined American B&L when he moved to Greenville in 1925; he retired as chairman of the board in 1984. Bill Merritt began as a part-time loan officer when he was a Furman student in 1946; he retired as chairman in 1993.

First Federal’s longtime (from at least 1919 until his death in 1949) president was Z.A. Smith; he was followed by Walter White, who worked there for nearly 38 years, retiring in 1973. Luther Bolick began as a 16-year-old office boy in the 1940s and retired as chairman of the board in 2000.

After World War II, both organizations grew spectacularly because of pent-up demand, wartime savings, G. I. home loans to returning veterans, and the selling off of textile mill villages.

Assets doubled in the years immediately following the war. Space needs increased. More competition, in the form of Carolina Savings & Loan, also on McBee Avenue, began in 1954.

In 1950, Fidelity moved into a handsome new $88,000 building designed by Greenville architect Willie Ward at the southwest corner of West Court and Main streets. (It's now the home of the Greenville Symphony.) But it was too small to handle the growth, and within 10 years Fidelity moved up the street to the corner of McBee and Main to the imposing First National Bank Building. And they had opened five branches.

First Federal moved in 1954 to a W.E. Freeman-designed building on Buncombe Street that included “an auto-teller window and off-street parking for 35 automobiles.”

Between August 1945 and December 1968, Fidelity went from three employees and $3.3 million in assets to 50 employees and $79 million in assets. First Federal was just slightly behind, with $72 million, and Carolina had grown from about $250,000 to $19 million.

So they built some more. In 1972, Fidelity moved to a five-story building at East Washington and Spring streets. In the same year, First Federal erected a $5 million, nine-story building, decorated with its new “First Federal” logo, at College and Buncombe streets opposite Heritage Green.

They flourished. In 1981, when First Federal added “of South Carolina” to its name, it was the largest thrift in the state. Its assets were $415 million, and it had eight branches.

Then it got big. By 1990, when its assets reached $2.3 billion and it had 62 branches, its directors changed its name to First Savings Bank.

At about the same time, the officers and directors of Fidelity decided to return to its original name; over the next two years it became American Federal Bank, with nine offices in Greenville County. Savings and Loan Associations, by then deregulated, had become banks.

They were so successful that they disappeared.

Questions? Comments? Write Judy.Bainbridge@furman.edu.