The Sterling State Bank Blog

Sterling State Bank was founded in 1958, but the banking history in our Lyle, MN branch goes back much further!

Officially the Sterling State Bank branch in Lyle, MN was first established as a Bank on February 7, 1901. At the time Charles G. Dawes (United States Comptroller of the Currency, a Department of the U.S. Treasury) signed the certificate authorizing the First National Bank of Lyle to “commence the business of Banking.”

Charles Dawes – American Banker

Organized under banking charter #5706 with $25,000 in capital ($25,000 in 1901 is the equivalent purchasing power of $740,329.41 today^*1), the First National Bank of Lyle opened in the exact location that our Sterling State Bank Lyle office occupies today.

There were several unique features about banking in 1901 that seem unusual today. For example, the Federal Reserve Bank was not founded until December 23, 1913, and the Federal Depository Insurance Corporation (FDIC) wouldn’t come into existence until June 16, 1933.

In 1901 banks were granted charters from the United States federal government via the Office of the Comptroller of the Currency and were allowed to issue their own currency or National Bank Notes. These notes were backed by United States Bonds and each issuing bank was required to maintain a redemption fund equal to 5% of the outstanding note balance. National Bank Notes (or hometown notes as they are sometimes called) ceased to exist during the Great Depression when all currency in the United States converted to the Federal Reserve Notes we are familiar with today.

The First National Bank of Lyle issued its own unique currency after it was founded. According to online sources that buy and sell old bank notes, the First National Bank of Lyle printed its own money and issued 7 different types and denominations of national currency. The total value of national notes printed was $148,000 which is considered a very small output.

Sterling State Bank can’t verify the accuracy of this particular web site, but this is one of several online sites that include an interesting discussion of the types, quantity, and denominations of notes issued by the First National Bank of Lyle.

According to Sterling State Bank Vice President Cheryl Retterath in Lyle, there are local residents in the community who collect old bank issued notes, and we have photocopies of a couple different notes issued by the First National Bank of Lyle.

The Comptroller of the Currency who signed the certificate authorizing the creation of the First National Bank of Lyle – Charles Gates Dawes was appointed to that position by President William McKinley in 1897. Mr. Dawes would go on to serve a general in World War I, share the Nobel Peace Prize in 1925, and become the 30th Vice President of the United States (he served for one term with President Calvin Coolidge).

His original signature creating the First National Bank of Lyle still hangs on the wall in Sterling State Bank’s Lyle office.

An Image of an old National Bank Note similar to those issued by The First National Bank of Lyle.

1: Numbers are based on the CPI Inflation Calculator