First National Bank of Joseph
The First National Bank of Joseph, established in 1905, served as a vital source for its small but growing population, closing in 1923 in the wake of the economic downturn of 1920-21.
Despite Joseph’s isolated northeastern location in Oregon, retaining a small population of 250 people, it accrued wealth through its farming and ranching industries. In response to this economic growth, a consortium of entrepreneurs established the First National Bank of Joseph in 1905 with $25,000 of capital, offering competition to the First Bank of Joseph, previously the town’s only financial institution. In 1908, profitability proved healthy as assets increased to over $52,000, causing First National’s directors to construct a new building for their operations.
Designed by J.A. Flesch & Sons of Chicago and built by local contractor Frank Marr, Dr. Jerome William Barnard, a local physician, partnered with First National by funding a single building for their businesses, sharing a common interior wall, and saving on construction costs. Around the opening of the new bank building, Joseph experienced a population boom of 206% from 1908-10, after the Oregon-Washington Railroad & Navigation Company connected the town through a branch line linking it to Enterprise, Oregon, located in the state’s northeastern sector, connecting Joseph to a larger economy.
First National’s inaugural president, farmer Ludwig Knapper, one of Wallowa County’s wealthiest entrepreneurs, utilized the bank, along with associates Aaron M. Wade, Charles Leslie Hartshorn, and Joseph Pearne Averill, to pool their wealth and expand Joseph’s economic resources into its growing timber market, the town’s largest commodity. From 1909 to 1919, this syndicate’s investments also included land acquisitions for cattle and sheep raising, a light and power company, a warehouse corporation, as storage for farm products, a woolgrower’s cooperative for sheep raising, and an irrigation organization, which supported farming around the Little Sheep Creek in Wallowa County.
Through these and other enterprises, chiefly through supplying capital or loans to new businesses, First National’s assets considerably increased, reaching $370,000 in 1919, capitalizing on the burgeoning wartime economy. Its influence attracted attention from Frederick Wesley Falconer, one of Wallowa County’s largest sheep farmers and operator of the Enterprise State Bank in Enterprise, Oregon who purchased a controlling interest in First National and became its new president. After Falconer became interested in other financial ventures, he handed the presidency to director Daniel Welbaum Warnock, a notable rancher and blacksmith, in 1921.
Despite the bank’s profitability, the economic downturn of 1920-1 facilitated First National's decline. While it retained a healthy surplus, its creditors consisted primarily of farmers and ranchers, who because of rising inflation and declining wartime demands, became unable to pay interest on their loans, freezing repayments and eliminating most of First National’s income. While the national economy quickly rebounded in 1922, Joseph’s conditions stagnated. First National’s directors ceased operation in June 1923 in the interest of their clients, redistributing any remaining deposits.
In 1925, the bank building became the Joseph Post Office, serving in this capacity until 1960, and housed commercial businesses into the 1980s. By this period, the facility fell into disrepair and underwent restoration to its original appearance and accommodated an art gallery. Currently, it accommodates Heidi’s Towne Shop, a local boutique and clothing store.
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