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The Carolina Bank was not insolvent and depositors will not lose dollar. But the Carolina Bank has a been a losing venture from its inception in Oct. 1921. In only one out did it make a profit and year of this profit it set aside a surplus its of $5,100 which still appeared in statement of June 30, 1929. Stock holders had never received a dividend. At the close of business as of June 1929 the bank had loans out30, standing to the amount of $801.- to 678.80 with deposits amounting $725,864.31. A depression followed the failure of the section's big money Irish potatoes. Borrowers Decrop, could not repay their loans. ff posits shrunk. Deposits fell é $121,390.64 between June 30th and August 10th. More than a month ago the officers of the institution agreed among themselves that the bank would never pay dividends and that steps should be taken to merge with some other bank. Negotiations were opened with the Savings Bank & Trust Co. of this city. The President of the Savings Bank & Trust Co. is P. H. Williams. Mr. Williams is a shrewd but cautiour citizen. J. W. Foreman, W. P. Duff and R. E. Chesson were suggested as a committee from the Savings Bank to open negotiations with a committee from the Carolina Bank. But a week passed and nothing was done. Mr. Williams then suggested that, inasmuch as one of the branches of the Carolina Bank was in Hertford, here-should be: Hertford man on his bank's committe. T. S. White of Hertford was named. Still, no move toward a merger was made and the officers of the Carolina Bank then approached the First & Citizens National. By this time the directors of the two banks were aware that Carolina Bank was seeking to discontinue business. Many of the directors didn't know what it was all about. An impression got out that the Carolina Bank was insolvent. Wild reports of the bank's insolvency seem to have originated Hertford and one citizen of Hertto inside in that ford he telephoned had information Elizabeth that City a crash of the Carolina Banking & Trust Co. was imminent. If this report had become general there would have been a run on the bank, dewith disastrous results to its positors. It was then that the Bank Examiner was called in and the bank closed pending the negotiations with the First & Citizens National. But for the premature rumors of the bank's failure, the Carolina Bank would in all probability have been quietly taken over by the First & Citizens National and its depositors would never have been dis- inconvenienced. As it was. a astrous run on the bank and a panic were narrowly averted. Much Unfair Talk The Carolina Banking & Trust was the pet project of Dr. A. Elizabeth City wholeand Pendleton, sale druggist chairman Utilities of Com- the Elizabeth City Public mission. Dr. Pendelton organized the bank and personally sold most of the original capital stock of $250.000. He purchased actually 56 shares of the stock, 11 shares for himself, 15 for his wife and 15 each for two minor daughters. Dr. Pendleton has been president of the bank since it was organized in 1921. There has been much criticism of Dr. Pendleton and many ugly stories It have been told to discredit him. is said that he anticipated the failure of the bank and had unloaded his stock and removed his account to another bank. Neither of these reports were true. The books show that he made a substantial deposit in the Carolina Bank on Saturday, Aug. 10th after the State Bank Examiner had been called. He and his family still hold the original 56 shares of stock purchased by him. Dr. Pendleton has served for eight years as president of the bank without pay. Stockholders Optimistic A number of the stockholders of the bank, interviewed by this newspaper this week, entertain no fears of losing much by the closure. I heir stock had never paid a dividend and had sold recently as low as $55 (Continued on page
