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Warren County Local History by Dallas Bogan

The First Banks Of Ohio And The City Of Lebanon

Dallas Bogan on 23 July 2004
Dallas Bogan, Warren County, Ohio and Beyond (Bowie Maryland: Heritage Press, 1979) page 351
Return to Index to see a list of other articles by Dallas Bogan

Most of us have historically invested our money in our local banks for safety purposes and have come to expect a dividend on our savings. In this article the writer will attempt to outline the early history of the first bank in Lebanon and also, Ohio.
Ohio, in the beginning of its existence, experienced the largest growth of any of the newly formed regions in the Northwest Territory. The Miami Valley, because of its rich agricultural resources, was the most populous and developed of all the lands in the new country.
Cincinnati was the largest city in the West. It is appropriate to think that the Queen City would house the first and most important bank in the State. Such was the case.
The Miami Exporting Company was incorporated April 15, 1803, it being organized at the first session of the Ohio Legislature. Its duties were organized to facilitate the "exploration of the produce of the Miami Country by boats to New Orleans; and banking it purposed at all originally, was a secondary consideration." Fifteen men were named to act as first agents, only three living in Cincinnati. The remaining twelve resided in other parts of the Miami Valley. Three lived in Warren County, their names being: Jacob D. Lowe of Deerfield, David Faulkner of Waynesville, and Jacob Reeder of Franklin.
The Miami Exporting Company was the first great corporation formed in the State. The capital stock of the newly formed organization consisted of shares of $100 each, but only $5 was required to be paid on a share in cash at the time of subscribing, $45 by the first of the next March in produce and manufactures, and $50 by the first of March of the succeeding year, also in produce and manufactures.
The business of exporting produce proved to be a failure, however, the early banking policies proved to be a success. It was reported in 1815 that its capital stock was $450,000, its stockholders numbering 190, and its dividends fluctuating between 10 and 15 percent. Possibly this bank (the word bank did not appear in the name of the corporation) issued more paper money to the settlers of the Miami Valley than any other bank in the early history of the State.
Some of the early banks and their dates of corporation and organization in Ohio were: Marietta and Chillicothe in 1808; at Stuebenville in 1809; at Warren and Zanesville in 1812; at Cincinnati (the Farmers and Mechanics Bank) in 1813, and at Dayton in 1814. Some of the names of these establishments were unacceptable because in some cases they not mention the place of business, nor did not display banking as the business of the corporation. (The bank at Warren was the Western Reserve Bank; the one at Zanesville, the Muskingum Bank; and at Dayton, the Dayton Manufacturing Company.)
The success of the Miami Exporting Company at Cincinnati may have triggered a swindling scheme. The Scioto Exporting Company may have taken its name synonymous with the company at Cincinnati, which resulted in a counterfeiting ring at Delaware in 1812. Before too much fake currency was circulated, the ring was broken up.
Several banking concerns were being run in Ohio without charters. Some other companies dealt in banking, which had purposes other than banking.
Lebanon's first bank was organized early in the year 1814. Of all the counties in the Miami Valley at this time, Warren was third in population, being exceeded only by Hamilton and Butler. Naming of this corporation was foremost on the organizers agenda. A simple name such as: "The Lebanon Bank" or the "Bank of Lebanon," seemed not to be "high-sounding" enough, thus constituting a long and lumbering name, "The Lebanon Miami Banking Company." The original articles of the association is quoted as such:
"We, whose names are hereunto subscribed, for the purpose of encouraging trade, to promote a spirit of improvement in agriculture, manufactures, arts and sciences, to aid the efforts of honest industry, and to suppress the unlawful and pernicious practice of usury, do mutually covenant and agree with others to establish a banking company for the objects before mentioned, at Lebanon; Warren county, Ohio, to be called and known by the name of the Lebanon Miami Banking Company, which shall continue for the term of twenty years from the commencement of its operations."
The directors board was elected in April 1814, and consisted of: Dr. Joseph Canby, Joshua Collett, Daniel F. Reeder, William Ferguson, William Lowry, William Lytle, Alexander Crawford, Thomas R. Ross and George Harnesberger. The first president was Daniel F. Reeder and the first cashier, Phineas Ross. Some of the best-known and most respected citizens of Lebanon are represented in this list. An issuance of notes soon began circulating from the bank that included denominations of $1, $3, $5 and $10. Tickets were issued for sums less than a dollar for circulation. This operation proved most useful. Silver coins were scarce, and in making change, "cut money" was used. By this method a silver dollar was cut into quarters, and a quarter into 12 1/2 cent pieces. Shinplasters (a piece of money depreciated by inflation or, formerly, one having a face value of less than a dollar) were also issued by merchants for small sums.
The bank at Lebanon was introduced without a charter, but on August 24, 1816, it became a chartered establishment. The management seemed to be on track in so far as good dividends were declared to its stockholders. On January 1, 1819, it reported its capital stock, paid up as $86,491; notes in circulation, $31,831; and resources as $12,000 more than its liabilities. A financial crisis struck the banking industry in 1818-19, which led the directors of the Lebanon Miami Banking Company on February 2, 1819, to resolve: "that it is expedient for this institution to close its business as soon as practicable, that it is not expedient that this resolution be now made public." The business of the bank was closed about 1822.
The bank was reopened in 1841 under the same name. Its president was John S. Iglehart with James H. Earl as its cashier. It again issued notes for circulation, but its business lasted only a short while.

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