Recently I heard one of your readers was concerned about the existence of my hometown of Lake Lillian, Minnesota. It’s there, all right, all 300-plus people (350-plus if you count the cats and dogs). Lake Lillian is on Highway 7 about 12 miles north of Bird Island, in case you can’t find it on the map.

One more thing. There are no yaks in town. Harold Olson does have a llama but its purpose is to keep his donkey company, not to make deliveries. Whoever told you there were yaks in Lake Lillian was obviously misinformed. –John Sagness, Bloomingdale, Illinois

John has kindly enclosed an informative booklet published by an affiliate of First State Bank of Lake Lillian, no doubt the same outfit that sent our original correspondent the 25-cent check that occasioned my brilliant disquisition on corporate cash management and boondock banking (February 24). Lake Lillian, we learn, is the “Gateway to the Little Crow Lake Region from the South.” Despite this, “Finding Lake Lillian has always frustrated many folks. That must have started when recent Rand McNally road maps didn’t show Lake Lillian even existed. And yet a small hamlet named Thorpe, Minnesota, did make the map. Thorpe, located a few miles east of Lake Lillian, consists of a few houses and a grain elevator, which is owned by the family of one of the bank’s employees who lives there now. Unfortunately he constantly rubs the map incident in our face.”

The history of Lake Lillian is filled with Keilloresque poignance. For example, “government land records show that claims had been made by a Peter Furdeen and a Peter France on the shore of Lake Lillian as early as the fall of 1858. They must not have stayed any length of time as none of the early settlers ever heard of them.” Hightailed it out to California, no doubt.

There are many tales of ventures that started out strong, then just sort of petered out. For instance: “HOTELS–Mr. and Mrs. Rudolph Vath built a hotel in 1923 called the Lake Lillian Hotel, but in 1944 sold it to Mr. and Mrs. Aug. Junkermier, who used it as a residence. In 1963 the K.M. Funeral Home purchased the lot and building which was torn down so they could construct an addition to the mortuary.”

Finally we learn about First State Bank. First State, it seems, “is one of a handful of banks with expertise in processing high-volume, low-dollar rebate checks–the checks that companies send to consumers in return for buying a product being promoted or introduced. First State was the clearing bank for 55 million rebate checks [in 1985] alone. The little bank has won the loyalty of 120 corporate clients [including] General Electric, GM, Pillsbury, R.J. Reynolds, AT&T, and Procter & Gamble”–and evidently Illinois Bell as well.

How’d the bank get into this line of work? The booklet’s answer is refreshingly candid. “About a decade ago, a fulfillment house–a company that makes sure people who send in rebate applications meet all the requirements–was looking for a bank to use as an endpoint for returned checks. The person in charge of the project happened to be a relative of First State Bank’s president.”

Why rebate checks? “For one thing, it’s cheaper to mail out the checks than to transport, count, monitor, and mail cash. Also, by issuing bearer draft checks, which do not require endorsement, a company qualifies for bulk-mailing postage rates. . . . Most important of all . . . when checks are mailed, there’s always some ‘slippage.’ Some people who send for rebate checks will not cash them before the expiration date. Because these checks are payable ‘to the bearer,’ any uncollected money is returned to the company that issued the checks. This avoids the ‘escheat’ laws–state laws that require companies to pay taxes on uncollected funds.”

One more thing. Bank president Duane Lindgren “denies that corporations issuing rebate checks choose banks situated in out-of-the-way places to maximize float. ‘One reason we’re chosen is that we’re centrally located. We also try to provide a comprehensive service at a competitive price. That’s the name of the game.'” Whatever you say, Duane. Regards to all the folks in Lake Lillian.

Art accompanying story in printed newspaper (not available in this archive): illustration/Slug Signorino.