By John Mills
Staff Writer
Web-posted June 21, 1996 at 4 p.m.

It began as a company to build a railroad, but at the end of the tracks, it was a bank.

The Georgia Railroad and Banking Co. was one of the oldest and most prominent companies in the state, one that loaned Augusta leadership and invested it with much respect.

The company's history is studded with names now prominent in the region: Phinizy, Blanchard, Thomson, Camak and Claussen, for example.

Georgia Railroad Co. was born Dec. 21, 1833. Two years later, after an act of the Legislature gave it banking powers, the company changed its name to the Georgia Railroad and Banking Co.

At first, the company's banking activities were intended to aid in building the railroad.

Its charter allowed it to use ``unemployed capital'' and earnings for banking purposes.

``It started out as a railroad with the charter opportunity to add banking facilities,'' said D. Hugh Connolly, a former legal counsel, director and executive vice president of the bank's eventual parent company, First Railroad and Banking Co. of Georgia.

``It built the railroad between Augusta and Atlanta, then entered into a lease (in 1881) that leased the properties to other railroads, which in recent years acquired the properties. It (the company) no longer had the railroad.''

In 1836, the company purchased land ``on the northwest corner of Broad and McIntosh (Seventh) streets for the banking house, . . . '' said Joseph B. Cumming, a former director who chronicled the company's history. NationsBank's downtown office occupies the spot today.

The first headquarters of the company was at Athens, but moved to Augusta in 1840.

The first train moved out of Augusta on company tracks in 1837, Mr. Cumming wrote. By 1842, the railroad extended to Madison, and by 1845 to Marthasville - now called Atlanta. With later acquisitions, the system spread as far as Alabama.

Georgia Railroad Bank was formed as subsidiary of the company about 1890 to avoid taxation.

In October 1954, the company itself became the subsidiary of First Railroad and Banking Co. through a capital reorganization. In 1986, First Union acquired the company and assumed its downtown high-rise on Broad Street.

Throughout its history, the bank played prominent roles in the city's and state's histories.

``It provided a tremendous amount of leadership to the community and provided leadership in state and regional banking circles,'' Mr. Connally said. ``And because it was headquartered in Augusta, its presence here added significantly to economic and employment aspects of downtown.''

In Augusta, the company contributed to the building of the Augusta Canal. By stretching the railroad to Atlanta, it helped set that city on course to become the eventual capital of the state and the trading nexus of the Southeast.

During the Civil War, its railroads carried Confederate soldiers to battle. From the Confederate Powderworks at Augusta, company railroads carried nearly all the gunpowder made for the Confederacy.

``Many times without adequate food or clothing, the Confederate soldier was seldom in need of the essential gunpowder the railroads brought to him from Augusta,'' Mr. Cumming wrote.

Augustan Russell A. Blanchard joined the bank as a bookkeeper in 1929 on the eve of the Great Depression. He became president in 1968.

``I started between my freshman and sophomore years at Junior College of Augusta,'' he said. ``I have one thing to brag about over the years: I was the only president who started as bookkeeper and rose to be president. I was there 44 years.''

He remembers the bank's prominence.

``The bank was a community bank. We tried to serve the community and furnish the capital for all good purposes,'' he said. ``We were `the friendly hometown bank.' That was our slogan.''