In the beginning of 1918, when Lithuania’s independence was reinstated, Lithuanian Americans made every effort (financial, political and cultural) to contribute to maintaining the independence and the stability of the social situation. In order to do this, a trading company of Lithuanian Americans was established in 1919. Its starting capital was $100,000.
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In 1921, this economic organisation was converted to the International Bank of Lithuania. Its purpose was to provide financial aid to Lithuania’s industry and trade development. The bank’s founders were Jonas Ramonas, Jonas Šimkus and Jonas Cunys. Ramonas, who was in charge of the bank for six years, was also the Chair and founder of the Trading Company of Lithuanian Americans, therefore, this interwar period bank was the result of his hard work. In 1927, he was accused of murder and had to leave his post. He was replaced by Kazys Pakštas, who was one of the most famous geographers in Lithuania and was known for his scandalous ideas (e.g., he suggested that Lithuania should colonise Madagascar and so on). In 1924, a new Board was elected and Antanas Smetona was one of its members.
The bank’s first years were quite successful and its branches were also established in other cities and towns (Anykščiai, Biržai, Skuodas and Šiauliai). Having bought 1 million litas worth of shares, the bank significantly contributed to the establishment of the Bank of Lithuania in 1922.
In the beginning of the 1920s, the International Bank of Lithuania was known for its outstanding advertisements in Lithuania, its emphasised "Americanism" and the pompous phrases being used. Such marketing was rather successful.
The economic crisis that affected many countries worldwide had also impacted Lithuania’s banks in the end of 1920s, the number of depositors decreased significantly. The International Bank of Lithuania, however, remained unaffected at the time, residents’ trust continued to increase and there were some German capital deposits made. Thanks to the bank, the interwar period also saw the development of one of the most popular light industry branches in Lithuania, the textile industry. The International Bank of Lithuania had purchased shares of this industry’s main companies – Rūbas and Drobė.
The bank’s time in operation wasn’t always fine. Just a few years after it was founded, it experienced financial difficulties because it purchased shares of companies that had little potential and was giving out risky loans. What saved it was that it sold the shares of the Bank of Lithuania that it had purchased. In 1934, the bank experienced financial instability for the second time due to distressed loans that amounted to roughly one fifth of total loans and most of its investments didn’t return enough profit. During this time, the bank was forced to cut its costs by 30% as well as reduce its budget and employees’ salaries. During tougher times, the bank survived mostly due to loans and deposits that the Bank of Lithuania provided. Supposedly, the government also contributed to it.
The International Bank of Lithuania which, by the way, removed Lithuania from its name in 1926, existed until 1940. During its last years, it didn’t have many deposits that would provide income and it mostly survived off of interbank loans. The nice idea of the Lithuanian Americans’ community to financially support Lithuania came to its end when the bank was hit by a crisis. On the other hand, the bank’s investments strengthened Lithuania’s light industry because textile was one of Lithuania’s exporting industries.
