MOUNT VERNON -- The wagon pulled out of the square and onto South Main Street. At the reins was a tall man, wrapped in a long riding cloak. He climbed down from his wagon, clenched his jaw, and approached a tiny wooden building constructed in a mock-Doric and Corinthian style and painted bright red.
The building bore the sign “Owl Creek Bank.” The man stalked through the front door, which had been reinforced by numerous four-penny nails hammered in to prevent thieves or disgruntled customers from cutting a hole into the grand, 14-square foot lobby.
“How may I help you, sir?” the cashier asked his customer.
The man laid out some “owls” on the counter, which is to say some of the paper money printed by the bank for use as currency.
This had been a highly controversial move on the bank's part, considering that their application for charter in 1816 had been denied by the state government in Columbus.
Since money was scarce on the frontier, the organizers of the bank went ahead anyway, boldly certain that they could fund a bank by subscription and sheer nerve.
By 1818, the wildcat bank was being denounced all over the state, and its paper money was regarded as worthless. Customers were furious.
The cloaked man put several Owl Creek Bank bills on the counter and asked to exchange them for hard currency, namely, gold and silver. The cashier looked grim.
“I'm sorry, sir, but I won't be able to do that transaction for you,” the clerk said.
“And why not?”
“I'm afraid the bank has neither silver nor gold.”
“Ah,” the man said. “Then I'd like to exchange these bills for Eastern money, bills printed by the U.S. Treasury.”
The cashier pursed his lips.
“I'm sorry, sir, but we do not currently have any Eastern money in our possession.”
The tall man narrowed his eyes.
“Well, then,” he said, “Can you give me tolerably well executed counterfeit notes on solvent banks? I would prefer them to this trash.” He gestured contemptuously at the “owls” on the counter.
The cashier was not amused. He suggested that the 'insulting puppy' vacate the premises immediately.
The cloaked man pretended to be surprised.
“Hold on, I must have made some mistake,” he said. “Am I right in supposing myself in the offices of the Owl Creek Bank?”
“Yes, sir,” the cashier said, gritting his teeth and fuming.
“There, then, damn you,” the man shouted, whipping open his cloak, “I've shot your bank president.”
Under the cloak was a huge dead owl the man had been concealing. He slapped it down on the counter with a thump, then turned and stalked out of the office.
Who the man was is unknown, though the story was well-reported at the time throughout the state. And it could have been any enemy of wildcat banks, though it is just as likely that it was a local person who invested in the bank, only to find his purchase of stock becoming worthless as confidence in the bank evaporated.
After all, a big reason banks are stable today is because the government created the FDIC to guarantee people that their money will be paid back, even if a bank collapses.
No such mechanism was in operation in the early 1800s, especially for an independent bank that didn't even have official permission to go into business. So, after a remarkably brief run, the Owl Creek Bank went out of business, leaving investors to argue in the courts for the next 30 years.
Banning's history quotes an argument overheard in Columbus at that time which demonstrates how lowly unchartered banks were regarded in that period. The men were insulting each other in the harshest terms possible, when one called the other, “a damned, unchartered son of a bitch!”
Anyone who would like to see an actual “owl” can find one in the collection of the Knox County Historical Society, which has a $5 owl, one of eight currencies that the bank printed: 6.25 cents, 12.5 cents, 25 cents, 50 cents, $1, $3, $5, and $10.
The odd low denominations come from the fact that in the early U.S. — when hard currency was scarce — foreign currency was regularly used to fill in the gaps.
A Spanish silver dollar was made in eight sections — the legendary “pieces of eight” of pirate jargon — to that the dollar could be cut up to make change. Each eighth was worth 12.5 U.S. cents. Half that amount, 6.25 cents, also happened to be the U.S. cash equivalent of an English 3-pence coin, also widely used.
So the denominations were standard issue. The problem was, without government authority to back up the bank, its method of funding by selling stock amounted to little more than a pyramid scheme, because the bank never became solvent enough to do its own investing.
Thus, Mount Vernon's first bank bit the dust quickly, and chaos followed. It got so rough at one point that bank managers and their enemies were denouncing each other in state media.
The bank even tried at one point to make customers take an oath not to use state laws to go after them. Wealthy tavernkeeper Samuel Williams lit into bank president (and Knox County justice of the peace) James Smith with this smackdown in an open letter to the Ohio Register.
“You have prostituted the official duties and obbligations of a Justice of the Peace to subserve its interest by administering unconstitutional oaths.”
Smith replied by attacking Williams' own integrity: “If your purse is so full and heavy, pay up your bank engagements.”
“The course of true love never did run smooth,” Banning comments.
It would be years before a properly-organized, legal bank was formed in Mount Vernon. And never again would independent currency by issued in Knox County.