Waubun State Bank - Waubun, MN

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: October 5, 1926
Location: Waubun, Minnesota (47.181, -95.939)

Metadata

Model: gpt-5-mini
Short Digest: 23899fb3

Response Measures

None

Description

Article (The Tomahawk, 1926-10-07) reports the Waubun State Bank's board voluntarily suspended operations because reserves were depleted after large deposit shrinkage and adverse crop conditions. No run is described; suspension appears permanent (bank 'closes' and 'failed to open its doors').

Events (1)

1. October 5, 1926 Suspension

Cause: Local Shock
Cause Details: Adverse crop/weather conditions led to farmers being unable to market grain and pay crop mortgages; deposits shrank sharply over the prior year causing depleted reserves.
Newspaper Excerpt: The Waubun State Bank, in Mahnomen County, failed to open its doors on Tuesday morning, due to the action of the board of directors, who voluntarily suspended when they found the reserves depleted to a point of danger
Source: newspapers

Newspaper Articles (1)

1. October 7, 1926 The Tomahawk White Earth, MN

Article from The Tomahawk, October 7, 1926

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Article Text

WAUBUN STATE BANK CLOSES Institution Was Unable to Weather Shrinkage in Deposits and Adverse Crop Conditions. The Waubun State Bank, in Mahnomen County, failed to open its doors on Tuesday morning, due to the action of the board of directors, who voluntarily suspended when they found the reserves depleted to a point of danger, with no hope of immediate relief. The bank was capitalized at $15,000, with H. A. Krostue, president; and P. J. Peterson, cashier. In an interview with H. A. Krostue, the following statement was given the Record editor: "The closing is due to the fact that our deposits have shrunk during the past eight months from $190,378.66 in September of 1925, to $98,078.02 at the present time. Of this but $9,000 was local commercial deposits, and the combined local deposits was only $15.000. "We had $65,000 of crop mortgages but the adverse weather conditions has made it impossible for our farmers to get their grain to market and pay off these obligations. "We were only carrying $15, 000 of real estate collateral, and this did not embarass us; but no bank can long continue when the cash is being steadily withdrawn and nothing coming in to reylace it. "Agriculture conditions have been such that the money withdrawn has been spent for necessary living expenses, and practically none of it was returned to the bank as a reserve. "We had very little public money and not a dollar of paper carried for officers or directors." The statement made by Mr. Krostue is but a repetition of con ditions which have embarrassed many banking institutions during the past two years. The people as a whole are not saving any part of their earnings, but are gradually eating into their reserves, where these were available, and where there has been no reserves they have been increasing their indebtedness to maintain a standard of living and expenditures which was established during the hectic period following the closing of the world war. This newspaper has stated many times-and we again repeat-that it is a great thing to keep "the country on wheels" as we have been doing, but the cost is a tremendous one and when the bill is finally paid-as it must be, We shall have learned a lesson in finance which will not soon be forgotten.-Detroit Record.