CHAPTER XIV -- BANKS AND BANKING

The Shelby County Record of September 24, 1874, expressed the local need of a bank in these words, which seem strange indeed today, in the light of the great number of banks now established in this great productive and wealthy county: “One of the urgent needs of Shelby county is a bank where our farmers can make deposits, loans and transact other necessary business. Besides being a great accommodation, it would retain the heavy interests in our midst, and not, as now, go to erect magnificent buildings in other towns without the county.”

In the early days, of course, money was scarce and men frequently made exchanges of property instead of selling for money. One man having a colt, for instance, would trade or “swap” his colt for calves or pigs or grain. Sometimes a pioneer, needing corn, would procure what he needed by an agreement to repay in kind in the fall, and in like manner small grain was also procured. To a much greater extent than now, the products of the farm were relied upon with which to secure groceries and other provisions. The day of the creamery and of the poultry houses had not arrived and the stores took in great quantities of live poultry, in addition to butter and eggs. This system of exchange or barter made it frequently difficult for a man having something to trade to learn of another man who desired that thing and who, in turn, had something which he could or would trade for it. Of course, there were men who had some money to loan, and here again it frequently required much inquiry for a man to learn where money could be borrowed. In the early days, too, the man having money to loan frequently took an unconscionable advantage of the borrower, who often had to pay two per cent a month for the loan of money, and it is said that unfortunate borrowers were obliged in many cases to pay even more than that.

This condition of affairs, as the country settled, needed a remedy whereby men could establish a local credit in the community and could borrow funds with which to make improvements and to equip their farms with machinery and live stock and where they might safely deposit their surplus funds, subject to the convenient method of paying their debts by check. This author is of the opinion that the function of the bank in a community is frequently underestimated in its importance, and that the far-sighted, conservative banker is often denied the appreciation to which his services entitle him. Banks, by extending deserved credit to honest, capable men, have enabled them at critical times to save their property, as well as to market it to the best advantage, and on the other hand they have prevented many a man of good intention, but of unsound judgment, from embarking upon a venture that could but land in the port of failure.

The first bank of Shelby county was established in 1876 by the brothers, C. J. Wyland and D. M. Wyland. For many years before that time they had been the most prominent real estate firm in Shelby county, through which probably more than half the farmers of the county had bought their real estate, paying for most of their lands ten dollars an acre or less. They first put in a fire-proof safe and a so-called burglar-proof cash box, which, however, was only a small iron box set in the woodwork inside the safe. Money, when received at first, was put in an envelope marked in the owner’s name, but no account of it was kept on any books. When a person came to get any money his envelope would be handed to him and he would help himself. Thus this primitive banking business went on until 1876, when the proprietors notified their special depositors and others that they would thereafter receive deposits subject to check, buy and sell exchange, and do a general banking business. Thus was the Harlan Bank established. This bank failed in 1896, but its receiver ultimately paid the depositors an eighty per cent dividend. This was the only bank failure the county has ever had, and that was not due to criminal handling of funds by its proprietors. The next banks to be established were the Shelby County Bank, now known as the Shelby County State Bank, and the Bank of Shelby, which is now owned by M. E. Clapp, a son of E. C. Clapp, pioneer merchant and banker of Shelby and one of the most prominent pioneer citizens of Shelby township. It is likely that the Shelby County Bank was established first, with the Bank of Shelby very shortly following, both in 1880.

A bank in Harlan called The People's Bank, sometimes known as Kridler's Bank, was established in Harlan about the same time as the Shelby County Bank. The persons interested in the bank appear to have been Daniel Kingery, John Kridler and W. H. Kridler, who was cashier and who had formerly been connected with the Bank of Dallas Center, Iowa. In 1883 the Shelby County Bank bought the People's Bank.