James Lake is a 4 1/2 acre lake that drains an 85 acre area west of the village. Water enters James Lake through 3 private lakes. The lake was a gift to the village from the Don and Mary Ringler family and is named in honor of James Ringler. Five lakes are located in the village of Bailey Lakes. The waters of James Lake drain into Mud Lake to the north. Mud Lake also receives water from Spring Lake, located south of the village. The outflow of Mud Lake feeds into the headwaters of the Vermilion River and eventually into Lake Erie. The Village of Bailey Lakes is located about a mile north of the continental divide. Water north of the ridge flows to Lake Erie, and water south of the divide flows to the Ohio River. This area is believed to have been a meeting point for Indians. Tribes from Lake Erie and points north traveled the Vermilion River, and tribes from the south used the Black Fork River and Orange Creek. A dugout canoe was unearthed on the shoreline of Mud Lake about 1980 during dredging. The Ringler family donated the canoe to the Cleveland Museum of Natural History, where it has been preserved and is on display. It has been carbon-dated to be more than 3600 years old. Many other Indian relics have been found in the area.