Dexter, Andrew
Andrew Dexter Soundex Code D236
Andrew Dexter, is best known as being the person responsible for the first Bank failure in the United States the Farmers' Exchange Bank of Gloucester, Rhode Island in 1809. That's a little bit unfair as there were numerous other failures over the next few years due to inconsistent regulation, confusion about banking principles, and a recession brought about by the Embargo Act of 1807. Dexter finished first in the race, but he was not the only runner.
On the other hand, Dexter was not just one more over-trusting lender. He systematically founded or took control of small banks in the most remote parts of the United States, then issued large amounts of bank notes to finance his projects. With the poor travel conditions of that time, he could print notes in Gloucester, Rhode Island, a town with no road in rural Rhode Island, transport them to his bank in Detroit, Michigan, a frontier outpost at the time, and count on months or years before they would make themselves back to be presented for payment. In effect, he wrote himself an unsecured, interest-free loan. It was even better than that, as many notes continued to circulate or were lost. In those innocent days, merchants far from the issuing banks, especially in the South, trusted Dexter's banks because they issued so much paper. It was familiar, so it must be good.
