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Clay County Bank


The Clay County Bank was organized on this date in 1871 in Vermillion. The bank was only the second bank in Dakota Territory, the first being the short-lived bank of Yankton, which was opened two years earlier in 1869.

V. C. Prentice opened the Clay County Bank, and served as its first and only president. He hired Henry Newton to serve as cashier and opened for business in downtown Vermillion. At the time, Vermillion was only a small frontier outpost along the Missouri River near the mouth of the Vermillion River in southeastern Dakota Territory.

With a population of only a few hundred, much of the bank’s business was drawn from nearby Indian agents, post-traders, and homesteaders, with the largest profits coming from the pay accounts of military officers. To receive cash from the pioneer bank, officers in the frontier service were more than willing to pay liberal fees and interest rates. The bank itself received its cash money by way of the Concord coach, which visited the frontier towns almost daily to pick-up and exchange mail with the local post office. The coach was paid a fee from the bank to deliver paper and coin currency from the east. Later, after the railroad reached Dakota Territory in 1873, trains would be used. The trains were faster, more efficient, and more secure than the coaches, which were frequently targeted by bandits.

Unfortunately, early private banks in the territories faced numerous challenges. Unlike banks today, these early enterprises were only able to offer personal guarantees on their customers’ deposits, and the bank owners themselves shouldered the entire risk of the venture. After seven years of business, the Clay County Bank was forced to close. Prentice paid all of his customers’ claims on demand before closing the doors and relocating to Pierre. A short time later, Lewis Swezey, of Newell, Iowa, purchased the bank building, reorganized it, and reopened the bank as the Vermillion National Bank, serving as its president and chief stockholder. Swezey successfully ran the bank until his death in 1912.

Dakota Datebook written by Jayme L. Job

Kingsbury, George W. 1915 History of Dakota Territory, Vol. II. S. J. Clarke
Publishing Company: Chicago.
Lounsberry, Clement A. 1919 Early History of North Dakota: Essential Outlines of
American History: pp. 547. Liberty Press: Washington, D.C.,_South_Dakota