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1 ROMANCE OF FINANCE THAT FADED INTO GHASTLY TRAGEDY entral Bank and Trust Company Had Dictated Policies In City and County for Decade-Controlled Financial, Business and Real Estate Finally Met Reverse After Reverse.
Asheville Dec. collapse of he Central Bank and Trust Company if which Wallace B. Davis was pres ent, depicts a romance of finance hat faded into a ghastly tragedy. Its powerful influence spread to all sections of western North Carolina and with its closing last month, lozen banks closed their doors in symIts ramificat ons reached into all arts of the south and middlewest: is manipulations in finance caused ven the money-wise New York bankrs to give For a decade, it dictated the poliies and dominated the pol tieal leadrs of Asheville and Buncombe counWith only a few exceptions, it sereed what men should be elected to ffice. It dominated civic and comthe hurches were not overlooked. In Control For Years. For years, the finanial, business and real estate fields Asheville and Buncombe county It decided what public improvements should be made, what streets should paved, what new avenues of travel should be established. It fixed prices on real estate by its decisions to buy and sell. It determined the success or fa lure of businesses by its support or derision. In its collapse, the wealth and inluence of its friends tottered: its Ponzi-methods of finance bobbed into the pitiless spotlight of public ty; its political supporters were pushed to of disaster Innocent de the brink lost their life savings, the positors ruling class of the and county were hard put to defend their power. Never has financial institution in western North Carolina dominated so completely Never has one spread its influence into so many different fields, among so many Ifferent peoples. With the collapse of the called real estate boom in Asheville and western North Carolina, the strength of the Central, Bank and Trust company was severely tested. But it required years of depression and poor business to dip into its powerful reserves.
Reverse After Reverse. Reverse after gnawed away at its foundation. For weeks, saw many of its depositors withdraw then support; only the intervention of the city and county prevented an earher break When the governmental agencies had reached their lim fact, overstepped their legal restrictionsthe end was inevitable. Desperate means were employed to keep cash on hand to meet the heavy withdrawals that grew in number and gravity as the days passed. Deposits were accepted from the city and county after bank ng hours. Every availliquid asset was sacrificed to able the dwindling amount of That important item, designated as and due from other shrunk more than $2,200,000 in only few The more liquid paper rushed to Cincinnat New York was Baltimore for loans. Collateral and of two and three to one was put up. Financiers Saw End Near. Financial recognized the end near November 14; they had was expected it for weeks, but it became inevitable that day it was only a quest on of days, probably hours. The bank opened for business Sat urday, November 15, with less than $100,000 in cash. Somehow. it managed to struggle through the day. The week-end brought respite. but heavy withdrawals Monday and Tuesday made serious inroads. Wednesday, November 19. was one of desperation; any one of 50 or more depositors could have taken all the approximately $7,000 in silver.
The officers and directors tried des perately all Wednesday night to rais money. Friends were sent to ti interecde in behalf of the Central bank. Their efforts proved futile; no liquid assets were on hand to gua antee such loans. Telephone calls banks, investment hanking houses an friends in other cities failed to brin any response.
It was with a heavy heart that th board of rectors voted early Thurs day morning, November 20, not to open the doors. There wasn't at crowd in front of the bank, but there were hundreds of people scattere around Pack awaiting to pounce upon the institution for the runds. If the bank had opened the morning, its funds would have been depleted within an hour. A run 01 the bank was assured.
With the bank's suspens'o off cials began the task of unraveling th real story. In all sections of th south. there bobbed up transaction with the Asheville institution. Caldwell and company, the Nash ville investment banking house which collapsed several weeks previously was accused by the bank of convert ing Asheville city notes to its on use. information had been divulg ed, and the city had been credited W th the entire proceeds of the $305 000 note: although $55,000 was n nut on the books until the final day the bank was in business. The Guaranty Bank and Trust com pany, of Alexandria, La., filed a peti tion in federal court at Nashvil Saturday, December 6. asking fr possession of $150,000 in certificates of deposit upon the Central bank wh ch had been deposited by th closed Bank of Tennessee as a gual antee of deposits. The Bank of Ter nessee was a subsidiary of Caldwe and Tennessee papers, including th Chattanooga Times, had repeated! accused Gov. Henry H. Horton, Nashville publisher and former United States senator. and Rogers Ca well, head of the defunct Caldwell ar company. of nolitical alliance The also said that Caldwell and Lea had conferred with W. B. Davis, preside of the closed Central Bank and Trus company here. concerning the forms tion of southern investment bankin heuse. The Central bank was frequent mentioned as allied with the Caldwell Lea interests. financially and polit allv, and its failure was generally at tributed by Tennessee дрегв to close connection with the Caldwel Lea-Horton combine. Among the deposit securities hel by the tv of Asheville as a gua antee of its deposits in the Centre bank were notes. totaling more than $40 000. either indorsed by Col Ler or protected by collateral in newspa Ders and corporations owned by him The city might have to ask for a re order to force During the last fortnight. informr tion has trickled into the city about the county be ng used by Caldwell inter former Chairman Newton M. Ander son accuses the Central bank of mis apprepriating $875,000 which had been deposited in the bank to pay of notes due between November 12 an 15.
Asheville business firms and ind viduals have received notices from the Fifth Third Union Trust compan of and other Balt more and New York, advisin them their notes had been purchas payment in full on maturity date WE demanded. As each day cames. more informs the real story has yet been told.
Mechanized Agriculture. Salisbury Post The agriculture donartment of the chamber of commerce of the United States points out that one of the big factors in the scrambling of the farm situation is the steadily increasing mechanization of agriculture. Mere and more such crops as ton. wheat and corn are being proThis calls for more room. Mass prothe corn, cotton and wheat belts. in consequence are slowly moving away from their old habitats to new ones. Thus cotton is perseptibly moving to the west from the deep south. Wheat is heading for the wide open *nces Even corn is shifting its base Where this all will lend to is quite clear. In the end, probably will make agriculture as whole much stronger. But the period of joubt, just ask any tarmer
News of Harmony, Route One. Harmony, R-1 Dec. 16. Anothen Christmas will soon be here The older you pet the more rapidly they nass. They are going to have Christ mas exercises at most all the churches neighborhood. The following families have it: Messrs Reed Laws. Will bea, Cecil Kinder and R. M. Dan- indisposed th side pleurisy Mr. Johnson has moved to the H F Heath place. A Mr Lucas, from South Carolina is going to move where John Cobb lives. Mrs L. W Gaither and daughters Borothy and Jewel. visited Mrs. Caither's father and mother. Mr and Mrs. J. L. Heath Mrs. J. L. Heath is indisposed
The United States senate may be losing some of its colorful figures but the word from Nominee Huey of will Pittsburgh Post.
