12385. Farmers & Merchants State Bank (Lakota, ND)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
April 12, 1931
Location
Lakota, North Dakota (48.043, -98.336)

Metadata

Model
gpt-5-mini
Short Digest
8db65560

Response Measures

None

Description

Articles describe the bank as closed and in the custody of the state bank receiver; prosecutions of officers for false entries and testimony about worthless paper, dummy notes, and diversion of funds indicate bank-specific insolvency/irregularities rather than a depositor run. No evidence of a depositors' run is mentioned. Therefore this is classified as a suspension leading to permanent closure/receivership.

Events (3)

1. April 12, 1931 Receivership
Newspaper Excerpt
state bank receiver's office testified regarding the bank's ... continued until testimony would continue throughout the ... (hearing of officers). The closed Farmers and Merchants State bank of Lakota, on charges ... officers of the closed Farmers and Merchants State bank of Lakota, on charges of making false entries ...
Source
newspapers
2. April 12, 1931 Suspension
Cause
Bank Specific Adverse Info
Cause Details
State alleged bank held worthless paper, carried dummy notes as assets and officials diverted funds to run bank-owned farms; led to closure and state receiver involvement.
Newspaper Excerpt
Worthless Paper Held By Bank, State Claims ... testified regarding the bank's ... state bank receiver's office
Source
newspapers
3. January 6, 1932 Other
Newspaper Excerpt
Three Fargo women are on the jury which will try R. C. Chisholm, C. W. Lewis and James D. Gronna, officers of the closed Farmers and Merchants State bank of Lakota, on charges of making false entries ... The state will show several thousand dollars worth of dummy notes ... $5,800 worth of notes which the bank owed itself were included in the loans and discounts reported by the bank officials to the state banking department.
Source
newspapers

Newspaper Articles (3)

Article from The Forum, April 12, 1931

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Article Text

Worthless Paper Held By Bank, State Claims Lakota, N. D., April Witnesses on the stand today in the hearing of James D. Gronna, Carl W. Lewis and Ralph Chisholm gave testimony the state cated Farmers and chants State bank carried able paper. The three men are former officers of the charges of improper handling of the bank's W. Hagler, was tioned by counsel for regard dealings with the bank, Ed representative state bank receiver's office, testified regarding the bank's and The continued until testimony would continue throughout the


Article from The Bismarck Tribune, January 6, 1932

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Article Text

# SELECT JURY TO # TRY LAKOTA MEN Three Women on Cass Panel in Case of Chisholm, Lewis and Gronna Fargo, N. D., Jan. 6.-(AP)-Three Fargo women are on the jury which will try R. C. Chisholm, C. W. Lewis and James D. Gronna, officers of the closed Farmers and Merchants State bank of Lakota, on charges of making false entries in a report submitted the state banking department. The jury was completed Tuesday after a full day had been devoted to examination of prospective jurors. Both sides used the entire 10 preemptory challenges allowed by law bringing the total number drawn for jury duty on the case to 32. Members of the jury are E. G. Linke, Leonard: Joe Eischelberger, Arthur; N. E. Skunes, Grandin; Dewey Grieve, Buffalo; S. P. Harmon, Amenia; Arthur Zaeske, Leonard; Mrs. Frank Peterson, Mrs. Albert Gerloch, Mrs. Clara D. Knight, W. J. Sheehan, John Seime and Earl Urick, all of Fargo. Taking of testimony will begin today. Judge Fred Jansonius of Bismarck is presiding. George Bangs, Grand Forks, is assisting E. C. Boostrom, Nelson county state's attorney, in the prosecution. Clyde Duffy, Devils Lake, and William Langer, Bismarck, represent Chisholm and Gronna. Francis Murphy, Fargo, represents Lewis. In his opening statement to the jury, Bangs declared the state will show several thousand dollars worth of "dummy" notes and $5,800 worth of notes which the bank owed itself were included in the loans and discounts reported by the bank officials to the state banking department. He said, the state will show, that, on many occasions, officials drew from the bank funds with which to run farms owned by the bank and placed "dummy" notes for the amount in the bank in the place of the cash which was withdrawn. The state also will show, Bangs said, a false statement was made in regard to $5,800 worth of real estate listed as an asset in the report to the state department.


Article from The Daily Plainsman, January 7, 1932

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Article Text

Claim Irregularities In Accounts Of Bank FARGO, N. D., Jan. 7.-(P)-Testimony intended to show that money was taken from the Farmers and Merchants State Bank at Lakota to run the bank's farms and that "dummy" notes were crried on the records as assets instead of liabilities was introduced in district court here yesterday in the trial of R. C. Chisholm, C. W. Lewis and James D. Gronna, officials of the closed bank. C. F. Ferrix, assistant cashier in 1928. was on the witness stand most of the day.