10947. Farmers State Bank (Havelock, ND)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
November 17, 1920
Location
Havelock, North Dakota (46.475, -102.744)

Metadata

Model
gpt-5-mini
Short Digest
f2e7912b0aff4141

Response Measures

None

Description

Articles report Farmers State Bank of Havelock closed/suspended in Nov 1920 because reserves fell below requirements due to successive crop failures and farmers withholding wheat. A receiver (A. L. Young) was appointed Nov. 17, 1920; later litigation over receivers and guaranty fund indicates the bank remained closed and in receivership. No explicit run described in the sources.

Events (2)
1. November 17, 1920 Receivership
Newspaper Excerpt
A. L. Young ... was named receiver of the Farmers State bank of Havelock on Nov. 17, 1920.
Source
newspapers
2. November 17, 1920 Suspension
Cause
Local Shock
Cause Details
Successive crop failures in the locality and farmers holding wheat, causing depleted reserves and inability to meet legal reserve requirements.
Newspaper Excerpt
The banks are the Security State Bank of New England and the Farmers State Bank of Havelock ... reserves fell below legal requirements.
Source
newspapers

Newspaper Articles (12)
1. November 19, 1920 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, November 19, 1920

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3 BANKS CLOSE; HOLDING WHEAT HELD A CAUSE All May Be Reopened SoonCrop Failures Chief Cause of Situation Crop failures and the fact that farmers are holding their wheat are reasons assigned by O. E. Lofthus, state bank examiner, for the closing of three banks in the state, whose reserves fell below legal requirements. The banks are the Security State Bank of New England and the Farmers State Bank of Havelock, both in Hettinger county, and the Tolley State Bank of Renville county. None of them are and it is possible that they will reopen, or pay out virtually in full. "Lean years and successive crop failures in these particular localities is the main reason for the condition," said Mr. Lofthus. "Crops have been spotted 'in the state. The farmers failed to get crops to permit liquidation of their accounts. "The fact that farmers have not sold their wheat naturally prevents liquidation which was expected. Holding of wheat is one of the direct causes for the condition of the New England bank and was indirectly a factor in the other cases, because if crops are not sold in localities where there were crops, those banks do not have surplus money to send into the lo calities where there were crop failures." A good crop next year would entirely change conditions, the examiner stated. All the bank deposits are guaranteed by state law. The president of the New England and Havelock banks is C. W. Merrick, formerly of Bismarck. Fargo, Nov. 19.-The Equity Cooperative Packing company, with headquarters here, is at present following a policy of curtailed activities said J. M. Casey, its president, today. in denying rumors that the company is in serious financial difficulty. Farmers holding wheat for higher prices throughout the state and continued crop failures in the western part of North Dakota are, he says. responsible for the temporary curtailment. Mr. Casey stated that all debts of the company are more than balanced by its property and accounts due. "The Equity plant here representing $1,250,000 is clear of all indebtedness," he added. "Equipment in plants at Duluth and the Twin Cities is also clear of debt."

2. November 24, 1920 Every Evening, Wilmington Daily Commercial Wilmington, DE
Article from Every Evening, Wilmington Daily Commercial, November 24, 1920

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NORTH DAKOTA BANKS CLOSE. Depreciated Collateral and Wheat Situmtion Given AH Reasons. Fargo, N. D. Nov. 24. - Nine banks have been closed in North Dakota during the last ten days as R esult of the "whent strike," three of the group of banks affected being closed yesterday. Depreciated collateral values, coupled with the refusal of the farmers to sell their grain or stock at existing prices, are the elements that have combined to force the suspension of business on the part of the banks. The three that closed their doore today are the First State Bank of Kill Deer, the Security State Bank of Columbus and the Farmers' State Bank of Bolfield. Prior to today the following banks had been closed: Bantry Bank at Bantry, Beach State at Bech, Security State Bank at New England, Farmers' State Bank at Havelock, the Tolley State Bank at Tolley and the First State Bank at Greene.

3. November 25, 1920 The Ward County Independent Minot, ND
Article from The Ward County Independent, November 25, 1920

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the state bank examiner to appoint a receiver. The reason for this institution closing was its inability to meet the unexpected demand for withdrawal of public funds deposited with the bank. Greene is in Renville county. Other banks which have been closed are the Security State Bank of New England; the Farmers State Bank of Havelock, and the Tolley State Bank of Renville county.

4. December 5, 1921 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, December 5, 1921

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GUARANTY FUND TAKES HAND IN STARK CO. SUITS C. L. Merrick Starts Actions For Removal of Receivers of Three Banks CHARGES MISMANAGEMENT Alleges Proper Attention is Not Given to Closed Banks by the Receivers The Sate Guaranty Fund Commis sion has decided to intervene in a suit started in Stark county to oust receivers of three banks, and alleging mismanagement of the affairs of the three closed banks. The suit also attaches blame to the State Banking Board, and the state examiner, referring particularly to activities of the state boards. The banking board which named the receivers for the bank was composed of Governor Frazier, Attorney General Lemke, and Secretary of State Hall, chiefly on recommendation of o. E. Lofthus, former examiner, the board being controlled by the league administration. It now is composed of Governor Nestos, Attorney General Johnson and Secretary of State Hall with Gilbert Semington. state examiner. The Guaranty Fund Commission has employed C. L. Young, attorney, to represent it in cases, which will come up in district court in Dickinson, December 20. It is expected hat the guaranty fund commission will resist the application of C. L. Merrick for removal of re|ceivers but will recommend that one receiver be appointed for three banks involved, tha the name of an experi enced banker will be suggested andthat this plan will be urged as a means of keeping supervision of closed banks in control of state boards rather than court and at same time cutting down expenses of receiverships and conserving assets. Commission announced it had obtained postponement of hearing so that it could intervene. Three Banks Involved. Banks involved are Security State Bank of New England and Farmers State Bank of Huvelock, of which A. L. Young is receiver and Slope, County State Bank of Amidon C. L. Merrick, of Minneapolis, filed the suits as stockholder. He asked the court to name George Laney as received in place of Young and that J. L. Boucher be named for the Slope county bank. A L. Young, former deputy state treasurer, was named receiver of the Security State bank of New England on Nov. 17, 1920, and receiver of the Farmers State bank of Havelock, same date, the complaint filed in the Stark county court says. In suit for removal of Young as receiver of New England bank, C. L. Merrick, plaintiff, says that the assets of the bank consist mainly of loans to farmers amounting to about $350,000 "and that on account of successive crop failures the debtors on such loans were unable to pay the same but that If said loans are properly managed and taken care of they will be paid of in full." He states that $110,000 loans were pledged to the Northwestern National bank of Minneapolis assecurity for money borrowed. Complain of Management. He further says "that the defendant A. L. Young, ever since his appointment as such receiver has not been able to give the affairs of said bank proper care and good and proper business like management on account of the directions given to him by the state banking board through the office of the state examiner and that for such reason the assets of said bank have not been properly taken care of and preserved. He says that the Northwestern National bank "has threatened to and is about to foreclose its pledges on these securities as hereinbefore set forth unless the affairs of said bank are placed in the hands of a competent man and proper management assured and that such foreclosure would result in great and irrevarable loss and injury to the creditors and stockholders of said bank and that if collections on said loans will be forced at this time it will work great hardship on the numerous farmers in the vicinity of New England." Ask Bryant's Removal. Allegation is made in complaint that "there is no supervision or control of or over the duties of said receiver 'A. L. Young. either by the state banking board of the state examiner." With regard to the Slope county bank. after setting forth similar allegations, complaint says "that the defendant. R. O. Bryan, is not a fit and competent person to be receiver of said bank and have charge of its assets and affairs: that he has not since his appointment and does not now give to the affairs of said bank due and proper care and attention and he had of grossly mismanaged the affairs said bank and does squander the assets thereof.' PRODUCE "LOOK WHO'S HERE for Dickinson. Dec. 5-Rearsals musical Who's the

5. December 5, 1921 Grand Forks Herald Grand Forks, ND
Article from Grand Forks Herald, December 5, 1921

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Stockholders Demand Removal Of Receivers Appointed By Lofthus Dickinson. N. D., Dec. 5.-C. L. Merrick of Minneapolis, representing the majority of the stockholders and creditors of the Security State Bank of New England, the S'ope County State Bank at Amidon and the Farmers' State Bank at Havelock, N. D., all of which were closed during the last year, has begun action demanding the removal of receivers appointed by O. E. Lofthus, and asking that the closed institutions be placed under court supervision with new receivers appointed. Judge .Thomas H. Pugh will conduct a hearing here December 20. The Bank of North Dakota is intervening on the ground that stockholders and other creditors have no right to intervene in the matter and should abide by the decision of the state banking board. The state guaranty of fund commission, consisting a leaguers, would intervene from standpoint of protection to the depositors and creditors.

6. December 5, 1921 Grand Forks Herald Grand Forks, ND
Article from Grand Forks Herald, December 5, 1921

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Guaranty Fund Commisison To Intervene In Action For Removal Of The Bank Receivers (Continued from page 1.) name of an experienced banker will be suggested and that this plan will be urged as a means of keeping the supervision of the closed banks under control of the state bag"t rather than the court and at the same time cutting down the expenses or the receivership and conserving the assets. The commission announced that it had obtained a postponement of the hearing so that it could intervene. The banks involved are: The Security State bank of New England, and Farmers State bank of Havelock, of which A. L. Young is receiver. and the Slope County State bank of Amidon. L. Merrick. of Minneapolis, filed the suits as a stockholder. He asked the 'court to name George Laney as receiver in place of Young and that J. L. Boucher be named receiver for the Slope County bank, alleging the assets of the banks are now being dissipated. Leaguer in Charge. A. L. Young, the former deputy state treasurer, was named receiver of the Security State bank of New England on Nov. 17. 1920. and receiver of the Farmers State bank of Havelock on the same date, the complaint filed in Stark county court says. Young was also appointed by A. A. Liedenbach, chairman of the Nonpartisan league state committee to look after the league interests in Hettinger county in the recall campaign. In the suit for the removal of Young as receiver of the New England bank. C. L. Merrick, the plaintiff, says that the assets of the bank consist mainly of loans to farmers amounting to about $350,000, 'and that on account of the successive crop failures the debtors on such loans were unable to pay the same but that if said loans are properly aged and taken care of they will be paid in full." He states that $110,000 of loans were pledged to the Northwestern National bank of Minneapolis as security for money borrowed. He further says "that the defendant A. L. Young ever since his appointment as such receiver has not been able to give the affairs of said bank proper care, and good and proper businesslike management on account of the directions given to him by the state banking board through the office of the state examiner. and that for such reason the assets of said bank have not been properly taken care of and received." He says that the Northwestern National bank "has threatened to and is about to foreclose its pledges on these securities as hereinbefore set forth unless the affairs of said bank are placed in the hands of a competent man and proper management assured and that such foreclosure would result in great and irreparable loss and injury to the creditors and stockhold ers of said bank and that if collections on said loans will be forced at this time it will work great hardship on the numberous farmers in the vicinity of New England." No Supervision. Allegation is made in the complaint that "there is no supervision or control of, or over. the duties of said receiver, A. L. Young, either by the state banking board or the state examiner. With regard to the Slope County

7. December 5, 1921 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, December 5, 1921

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ASKS COURT TO NAME RECEIVERS C. L. Merrick, of Minneapolis, Brings Suit in Case in Stark Co. Dickinson, N. D., Dec. 5-C. L. Merrick of Minneapolis, represent ing the majority of the stockholders and creditors of the Security State bank at New England, the Slope County State bank at Amidon and the harmers State bank at Havelock, all of which have been closed by the state banking department during the past year, this week through his at torney, Ctto Thress, brought action asking that the affairs of the banks be placed under court supervision and demanding the removal of receivers now in charge of the closed institutions and new appointees placed in their stead. A hearing in the matter will be held in the court chambers in Dickinson on December 20, before Judge Thomas H. Pugh. The Guaranty Fund Commission will be represented at the hearing by the attorney general's department. while the Bank of North Dakota will be represented by L. A. Simpson. The Bank of North Dakota as one of the minor creditors of the closed banks claims that the stockholders and other creditors have no right to intervene in the matter and should abide by the decision of the state banking board, it was said. This point the stockholder creditors question. The Guaranty Fund commission is intervening from a standpoint of protection to the depositors and creditors. This, the majority creditors claim, would be acceptable to them. They further state that all they ask is a strict business management accounting of the affairs of the bank by those in charge.

8. December 10, 1921 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, December 10, 1921

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DENY RIGHT OF COURT TO NAME BANK RECEIVER Answer of State Boards Hold That Under Law Courts Are Without Power CASE IN DICKINSON The policy of the Guaranty Fund Commission toward administration of closed banks in the state is outlined in an answer filed in the Stark cirC. L. Young, for the marck, cuit court attorney by commission. of Bisis in the name the Fund Guaranty The answer Commission, North of State Da Board and state in cases in kota Banking as intervenors the of which G. L. Merrick, of Minneapolis, asked the court to remove receivers of three banks appointed by the banking board and to appoint receivers. It is contended, Mr. Young said, that the courts have no power to interfere with the administration of insolvent the banks in under_ circumstances held that exist- the ing these cases. It is supervision is under the Guaranty Fund Commission and the State Bank ing Board. Proposal on Receivers. The proposal of the state boards for the consolidation of receiverships also is discussed in the answer. It states that the boards as constituted with changes made in the election have "determined to group insolvent banks, where a grouping thereof shall be possible and place in charge of several of such banks conveniently located a single receiver qualified by practical experience as a banker and business ability to manage the affairs of said banks in a proper and businesslike manner." It is further stated that under the proposed grouping, made public a few days ago in which the number of receivers would be reduced half or more, to group the three banks involved under one receiver. The three banks are the Security State of New England. Slope County Bank of Amidon, and Farmers State Bank of Have lock. Purpose in Future. The answer of the intervenors sets out that at the time the banks became insolvent the state examiner then in office was appointed a receiver for each and his appointment in each case was approved by the state banking board. The Guaranty Fund Com mission has levied assessments since the failures began last year and will in due course pay the depositors. The commission under the law is the principal creditor of each bank. It sets out that the change of administration has caused a change in the personnel of the guaranty fund board and banking board and that a new state examiner is in office. It declares that under the direction and supervision of the Guaranty Fund Commission and Banking Board as now constituted the affairs of the banks will be handled so as to protect all creditors and stockholders and all parties interested. The case is scheduled to be heard in Dickinson Dec. 20. The Guaranty Fund Commission will also, it is announced, ask Judge Lembke to vacate an order appointing a receiver for the Slope County bank. The commission was informed that upon representations by Leslie Simpson. as attorney for creditors, Judge Lembke did name a new receiver for this bank.

9. December 12, 1921 Grand Forks Herald Grand Forks, ND
Article from Grand Forks Herald, December 12, 1921

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RECEIVERSHIP PLAN UPHELD BY ATTORNEY Fund Commission and Banking Board Control Insolvent Banks, Says Counsel, Bismarck. N. D., Dec. 10.-The policy of the Guaranty Fund Commission toward administration of closed banks in the state is outlined in an answer filed in the Stark circuit court by C.L. Young. of Bismarck. attorney for the commission. The answer is in the name of the Guaranty Fund Commission. State Banking Board and State of North Dakota as intervencrs in the case in which C. L. Merrick of Minneapolis, asked the court to remove receivers of three banks appointed by the banking board and to appoint receivers. It is contended. Mr. Young said, that the courts have no power to in terfere with the administration of insolvent banks under the circumstances existing in these cases. It is held that the supervision is under the Guaranty Fund Commission and the State Banking Board. The proposal of the state boards for the consolidation of receiverships also is d'scussed in the answer. It states that the boards as constituted with changes made in the election have 'determined to group insolvent banks, where a grouping thereof shall be possible and place in charge of séveral of such banks conveniently 10. cated a single receiver qualified by practical experience as a banker and business ability to manage the affa rs of said banks in a proper and business-like manner.' It is further stated that under the proposed grouping. made public a few days ago in which the number of receivers would be reduced half or more, to group the three banks in volved under one receiver. The three banks are the Security State of New England. Slope County Bank oi Ami don and Farmers State Bank of Have. lock. The answer of the intervenors sets out that at the time the banks became inslovent the state examiner then in office appointed a receiver for each and his appointment in each case was approved by the state bank. ing board. The Guaranty Fund Com. mission has levied assessments since the failures began last year and will in due course pay the depositors. The commission under the law is the principal creditor of cach bank. It sets out that the change of administra tion has caused a change in the per. sonnel of the guaranty fund board and banking board and that a new state examiner is in office. It declares that under the direction and supervision of the Guaranty Fund Commission and Banking Board as now constituted the affairs of the all creditors and stockholders and all parties interested. The case is scheduled to be heard in Dickinson December 20. The Guaranty Fund Commission will also is announced. ask Judge Lembke to vacate an order appointing a receiver for the Slope county banks. The commisson was informed that upon representations by Leslie Simpson, as attorney for creditors, Judge Lembke did name a new receiver for this bank.

10. December 21, 1921 The Bemidji Daily Pioneer Bemidji, MN
Article from The Bemidji Daily Pioneer, December 21, 1921

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POWER OVER INSOLVENT BANKS BEING TESTED (By United Press) Dickinson, N. D., Dec. 21.-Powers of the guaranty fund commission, state banking board and courts as regards insolvent banks are expected to be clearly defined as the result of a case here today before Judge Lemke in Stark county circuit court. C.L. Merrick of Minneapolis asked the court to remove receivers appointed by the guaranty fund commission for the Security State bank of New England, Slope county, Bank of Amidon, and Farmers State bank of Havelock and appoint other receivers. The state, the banking board and guaranty fund commission hold through their attorney, C. L. Young, of Bismarck, that this not within the power of the court and that the board and commission have complete control of insolvent banks. The commission will also ask Judge Lemke to remove a receiver which he appointed on request of attorney for creditors for Slope county bank. The answer field by the commission whose personnel was changed through the recall election, reveals the intention of the commission to group several of the closed banks under one receiver, thus reducing by about onehalf the number of receivers in state banks in North Dakota.

11. December 23, 1921 The Mankato Free Press Mankato, MN
Article from The Mankato Free Press, December 23, 1921

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HEARING BANK CASE Important Question Expected In Trial at Dickenson, N. D. Dickenson, N. D., December 21.Powers of the guaranty fund commission, state banking board and courts as regards insolvent banks are expected to be clearly defined as the result of a case here today before Judge Lembke in Start county circuit court C.-L. Merrick of Minneapolis asked the court to remove receivers appointed by the Guaranty fund commission for the Security State Bank of New England, Slope county Bank of Amidon, and farmers State Bank of Havelock and appoint other receivers. The state, the banking board and guaranty fund commission hold through their attorney, C. L. Young, of Bismarck, that this is not within the power of the court and that the board and commission have complete control of insolvent banks. The commission will also ask Judge Lembke to remove a receiver which he appointed on request of attorney for creditors for Slope County bank. The answer filed by the commission whose personnel was changed through the recall election, reveals the intention of the commission to group several of the closed banks under one receiver thus reducing by about one half number of receivers in state banks in North Dakota.

12. June 7, 1923 The Bismarck Tribune Bismarck, Mandan, ND
Article from The Bismarck Tribune, June 7, 1923

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ASK GUARANTY FUND PAY OFF DEPOSITORS Suit Begun to Force Payment To Depositors in First Closed Bank TO TEST THE LAW Will Determine if Depositors Must Be Paid in Order of Bank Closings Dickinson, N. D., June T.-Suit to determine whether or not the Guaranty Fund Commission must reimburse depositors of closed banks ill the order of the banks' closing, and when, has been instituted in the Sixth district court by A. J. Wirtz in behalf of himself and other depositors of the closed Security State Bank of New England. Similar suit has been instituted by Peter Lux in behalf of himself and other depositors of the Farmers State Bank of Havelock. The Guaranty Fund Commission, it is understood, has taken the position that with numerous banks closed the commission is not obligated to pay the depositors of the first closed bank first. but that an equal liability is created. Wirtz states that when the Security State Bank of New England closed Nov. 17, 1920 he had on deposit $8,059.00, that the total of unsecured deposits is about $200,000 and that the Guaranty Fund Commission has about $400,000 in its fund at present. The Security State Bank of England, since a Tolley bank has reopened, and the Farmers State Bank of Havelock were the first banks to be declared inolvent of the closings which began about three years ago, the petition says. It holds the depositors are entitled to receive their deposits in full out of the commission funds. The court is asked to: 1. Order the Guaranty Fund Com. mission to pay the receiver of the Security State Bank of New England sufficient money to pay the claims in full. 2. That in event there is not sufficient money to pay all unsecured deposits to issue certificates of indebtedness against the Guaranty fund in payment in full. 3. Decide that unsecured depositors of the Security State Bank of New England are prior and superior to the unsecured deposits of all other banks becoming insolvent subsequent to the insolvency of the Security State. The petition in the suit instituted by Peter Lux is identical. Attorneys for plaintiffs are Crawford and Burnett of Dickinson and Chas. J. Simon and H. J. Miller, New England.