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“Dorothy lived in the midst of the great Kansas prairies ... Their house was small, for the lumber to build it had to be carried by wagon many miles. There were four walls, a floor and a roof, which made one room.”
As The Wonderful Wizard of Oz goes, a tornado carried away Dorothy and her little house. But most Kansas farmers were more worried about a different kind of storm when the book was published in in 1900. Laboring under a heavy burden of debt contracted to buy land and equipment, they were especially vulnerable to financial unrest. And when the Panic of 1893 began, many of them felt its effects.
Thrifts and homeowners in early Kansas were challenged by both wind and financial storms. (NOAA: Photo & Central Libraries; OAR/ERL/National Severe Storms Laboratory)
It seemed like the worst of times to launch a bank. But in the midst of the panic, the founders of the Savings Association of Topeka kept faith with Kansas. According to a history of the association, the 15 founders were “bankers, insurance agents, attorneys, railroad employees, the president of a dry goods store, the Topeka City School Superintendent, and a physician.” They opened an office above the Rock Island Railroad ticket office at “6th and Kansas”—and ended the first year with a modest $8,171 in assets.
The city’s agriculture and transportation-fueled economy rebounded, and so did the population and the need for more houses. By 1928, the renamed Capitol Building and Loan Association had $12 million in assets, mostly home loans. During the Great Depression, the bank lost half its assets, but stayed afloat, unlike many failed financial institutions across the state. In 1938 the thrift adopted a federal charter, with deposits insured by the Federal Savings and Loan Insurance Corporation.
Topeka around 1920. The bank, then called Capitol Building and Loan Association, stood on the corner of Sixth and Kansas streets. After World War I, it grew rapidly, as troops returned home and borrowed liberally to buy homes. Capitol’s assets soared from $3 million to $12 million over 10 years. (Capitol Federal Savings Bank)
As manufacturing and services boomed after World War II, the bank opened more offices and its assets reached $100 million by 1958. Nonetheless, it stuck to its roots. More than 90 percent of Capitol’s loans went to single-family homebuyers, rather than the commercial real estate investments that sank many savings and loans in the 1980s.
In 2010 an act of Congress moved Capitol Federal and other federal thrifts to the supervision of the Comptroller of the Currency.
