12419. First National Bank (Bayonne, NJ)

View Charter #8454 on SPMC

Bank Information

Episode Type
Run → Suspension → Reopening
Bank Type
national
Bank ID
8454
Charter Number
8454
Start Date
December 8, 1913
Location
Bayonne, New Jersey (40.669, -74.114)

Metadata

Model
gpt-5-mini
Short Digest
88052bb52c5a37a4

Response Measures

Capital injected, Full suspension, Books examined

Receivership Details

Depositor recovery rate
76.3%
Date receivership started
1913-12-08
Date receivership terminated
1922-09-30
OCC cause of failure
Losses
Share of assets assessed as good
56.5%
Share of assets assessed as doubtful
23.7%
Share of assets assessed as worthless
19.8%

Description

Articles describe deposit withdrawals/rumor-driven drain leading directors to place the bank in hands of national bank examiners and suspend payments on 1913-12-08. A receiver was appointed and later (Feb 1914) the Union Trust Co. agreed to take over and reopen the bank as a branch. Underlying asset problems (questionable loans/note-kiting) are described, but the immediate trigger for withdrawals was rumors after the examiner's visit.

Events (6)
1. December 5, 1906 Chartered
Source
historical_nic
2. December 8, 1913 Receivership
Source
historical_nic
3. December 8, 1913 Run
Cause
Rumor Or Misinformation
Cause Details
Rumors of difficulties following the national bank examiner's visit produced a steady drain/withdrawals (quiet, steady drain), with large accounts withdrawing first.
Measures
Directors closed bank temporarily and placed affairs in hands of national bank examiners; examiner placed bank in temporary receivership.
Newspaper Excerpt
Reports had been current that the bank had met with difficulty ... It was not until Saturday that they appeared in numbers to demand their deposits. All day Saturday a crowd of depositors crowded at the bank to learn whether they could get their money.
Source
newspapers
4. December 8, 1913 Suspension
Cause
Government Action
Cause Details
Directors, facing depleted cash reserve and imminent run, turned affairs over to national bank examiners; examiner/Acting Comptroller appointed a temporary receiver and suspended payments.
Newspaper Excerpt
The First National Bank of Bayonne has been placed in the hands of Federal examiners and did not open its doors today.
Source
newspapers
5. December 9, 1913 Receivership
Newspaper Excerpt
National Bank Examiner C. H. Chatman has been designated temporary receiver for the First National Bank of Bayonne, N. J., by Acting Controller of the Currency Kane. The bank was closed by its directors.
Source
newspapers
6. February 6, 1914 Reopening
Newspaper Excerpt
The offer of the Union Trust Company of Jersey City to take over the failed First National Bank of Bayonne has been accepted ... It will be reopened as a branch of the Union Trust and the depositors will be guaranteed full payment of their savings.
Source
newspapers

Newspaper Articles (20)
1. December 8, 1913 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, December 8, 1913

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Article Text

BAYONNE BANK IN EXAMINERS' HANDS Depletion of Cash Reserve the Cause-President Says De-, positors Are Safe. [Special to the Newark Star.] BAYONNE, Dec. 8.-The First National Bank of Bayonne has been placed in the hands of Federal examiners and did not open its doors today. George H. Carragan, the president, says that there was a depletion of the cash reserve which left the bank with insufficient funds to meet requirements, and the bank has had difficulty in immediately realizing ready cash on the securities. In view of this, said Mr. Carragan, "it has been decided to place the bank, temporarily, in the custody of the national bank examiners in order that our depositors may be fully protected." Reports had been current that the bank had met with difficulty in getting cash. The directors held recent meetings lasting far into the night. Knowledge of these reached the depositors. The bank has among its officers, however, several leading citizens of Bayonne engaged in business in New York city, and the support given the institution by them and by local business interests made the depositors loath, it is declared, to withdraw their money. It was not until Saturday that they appeared in numbers to demand their deposits. All day Saturday a crowd of depositors crowded at the bank to learn whether they could get their money. The directors held a meeting at the bank yesterday. A fear of a more serious run today is said to have prompted them to decide to call in the Federal examiners. They proposed to the government officials, it was declared, that they would get together and put up $700,000 and volunteer it as a cash reserve to tide over the stringency if the examiners would allow the bank to remain open. The examiners would not agree to this, it was said. The institution was opened in April, 1903, as the Bayonne Bank. In December, 1906, it became the First National of Bayonne. It has a capital of $200,000 and a surplus of $100,000. Three hundred persons gathered in a curious group about the doors of the bank today to gaze at the little slip of paper posted upon the door ( announcing that for the best inter1 ests of the bank its board of direct] ors had decided to turn its affairs over to the national examiners. 1

2. December 8, 1913 The Evening World New York, NY
Article from The Evening World, December 8, 1913

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N. J., with deposits, according to Its last statement of $1,507,000, suspended payment to-day. During the past week probably $1,000,000 in deposits was withdrawn owing to rumors that the institution was in difficulties. There was no run-just a quiet. steady drain. The reserve of the bank-placed in the last statement at $100,000-18 impaired. There has been considerable trouble about this reserve for some time. and United States Bank Examiner Charles S. Chapman, who is In charge of the bank temporarily, has been Insisting that the affairs of the institution be placed upon a firmer basis. Mr. Chapman is said to have discovered that $80,000 had been taken from the reserve funds many months ago and to have had great difficulty in getting the matter straightened out. The bank examiner visited the First National early last week. Immediately rumors became current in Bayonne that there would be trouble in the First National. .- APE

3. December 8, 1913 The Evening World New York, NY
Article from The Evening World, December 8, 1913

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MANY LARGE ACCOUNTS ARE WITHDRAWN. Many of the largest accounts were active and the depositors of these accounts were the first to hear of impending difficulties at the bank. Quietly but thoroughly they drew out their money. Saturday found the institution in a bad way. Mr. Chapman notified the officers that unless they came forward with substantial aid he would close the doors and take possession. A meeting of the directors was called yesterday and lasted until midnight. All the directors could guarantee was $70,000. Mr. Chapman said that this amount would be useless against a run. which was sure to develop this morning. The directors then voted to suspend payment and turn the bank over to Mr. Chapman. The doors of the bank were not closed to-day. All the clerks and tellers were in their places, but no banking business was transacted. The attaches were kept busy explaining to customers that the bank was temporarily embarrassed but would probably reopen before Christmas. But it may take two or three months to straighten out the affairs of the institution. The general impression in Bayonne is that the bank will pay depositors in full and there is no feeling of panic. About 300 depositors of the First National visited the bank during the morning.

4. December 8, 1913 The Fairmont West Virginian Fairmont, WV
Article from The Fairmont West Virginian, December 8, 1913

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Article Text

N.J. BANK CLOSES ITS DOORS TO AVOID RUN. BAYONNE, New Jersey, Dec. 8.— Three hundred persons gathered in a curious group about the door of the First National bank at Bayonne this morning to gaze at the little slip of paper posted upon the door announcing that for the best interest of the bank; its board of directors had decided at midnight last night to turn its affairs over to National bank examiners. Inability to raise cash on its assets caused the institution to be closed as a precaution egainst a run today. It has a capital of $200,000 and a surplus of $100,000.

5. December 9, 1913 Evening Star Washington, DC
Article from Evening Star, December 9, 1913

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Article Text

C. H. Chatman Temporary Receiver. National Bank Examiner C. H. Chatman has been designated temporary receiver for the First National Bank of Bayonne, N. J., by Acting Controller of the Currency Kane. The bank was closed oy its directors.

6. December 9, 1913 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, December 9, 1913

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BAYONNE BANK TO REOPEN IN A WEEK Pres. Carragan Says That Depositors Will Not Lose a Dollar. [Special to the Newark Star.] BAYONNE, Dec. 9.-Announcements of the most reassuring nature in regard to the financial condition of the First National Bank of this city, which closed its doors yesterday, were made by President George Carragan, of the bank, last night. Mr. Cariagan insisted that depositors would not lose a dollar of their deposits and that the bank would reopen in a week or ten days. Mr. Carragan stated that the bank needed $350,000 to restore it to its feet and that one member of the Board of Directors had promised to deposit $269,000 worth of collateral, while another promised to extend the remainder. The closing of the bank, it was asserted, was a measure of precaution against the heavy runs which would only have made matters worse. Although throngs of depositors gathered about the doors of the bank yesterday, there was not only no disorder, but some even offered to prove their faith in the bank by making further depos'ts. This, however, was refused by Charles C. Chapman, a nat onal bank examiner, who is temporary receiver. The closing of the bank, it was found yesterday. was caused by a shortage in the cash reserve. The bank had fallen about $30,000 short of the 15 per cent. reserve requ red by the federal law. It appeared that Mr. Chapman had been working on the books of the bank for the past two weeks. The reason generally given for the financial embarrassment of the bank is that the bank examiner had disapproved of many of the bonds which had been given as security for loans. The bank is the creditor of many of the mercantile houses of this place. as well as other cities. and Mr. Chapman is said to regard the assets notes as of little or no value. The examiner also objected to the liberal policy maintained in the past in extending loans. Mr. Chapman found that the deposits of the bank amounted to $1,449.676.61. There were 1,600 depositors. of whom many were savings depositors. The bank had loaned out about $700,000, of which only about $115,000 were demand loans. The average daily e outpayments were from $50,000 to $80,000. The questionable paper amounted to $389,000, and the examiner has demanded that the directors replace d most of this amount with ready cash. The latter insists that the loans are 1 good, but that it may take some S time to collect. The reorganization of the bank, It was said, would necessitate the election of a new staff of officers, it being the contention of Mr. Chapman that the present officials were lax in their methods of granting loans. "Mr. Chapman questioned the stability of some of our loans extended to out-of-town concerns," said Mr Carragan. "Some of these are well known in the business world. He refused. however. to grant the request of the directors to be allowed to put up cash of their own and take over the criticised loans. I have no doubt that the bank will reopen within a week or ten days." The officials of the bank, besides Mr. Carragan. are William H. Vreeland and John C. Rver. vice-presidents, and Louis B. Bragden. cashier.

7. December 9, 1913 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, December 9, 1913

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Three hundred persons gathered in a curious group about the doors of the First National Bank of Bayonne, N. J., Monday morning, to gaze at the little slip of paper posted upon the door announcing that for the best interests of the bank its board of directors had decided, at midnight, Sunday night, to turn its affairs over to national bank examiners. Inability to raise cash on its posets caused the institution to be closed as a precaution against a run Monday. It has a capital of $200,000 and a surplus of $100,000.

8. December 9, 1913 The Evening World New York, NY
Article from The Evening World, December 9, 1913

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LIBRARY FUND TIED UP IN BAYONNE BANK Closing of the First National Causing Trouble in Other Quarters. The first of the community complicaMons arising from the suspension of the First National Bank of Bayonne, N. J., came to light to-day when the trustees of the public library ennounced that all their funds, amounting to $20,000, are

9. December 9, 1913 The Washington Herald Washington, DC
Article from The Washington Herald, December 9, 1913

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BANK CLOSES ITS DOORS. First National of Bayonne, N. J., Is Short on Cash. "The First National Bank of Bayonne, N. J., did not open its doors for business yesterday morning because it cannot meet demands made upon it on account of a shortage of cash." said Acting Comptroller of the Currency Kane yesterday. "Beyond that I have received no information concerning the closing of the bank. I have appointed Charles H. Chapman, the national bank examiner who has been looking into the bank's affairs, as temporary receiver." The last statement of the condition of the bank showed its resources and liabilities to have been $1,843,082.98. In the liabilities were listed capital and surplus, $150,000; undivided profits, $71,518.42; circulation, $97,000; due to State banks, $5,494.14; unpaid dividends, $5: individual deposits, $1,514,965.42; deposits of United States disbursing officers, $2,100; reserved for taxes, $1,200. Its assets are: Loans and discounts, $1,362,176.23; bonds to secure circulation, $100,000; bonds and securities, $168,176.37; banking house, $17,000; due from national and other banks, $117,255.41; notes of other national banks, $8,330; cash on hand, $63,044.97; redemption fund, $5,000; due from United States Treasurer, $2,100. The total assets are identical with the total liabilities.

10. December 10, 1913 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, December 10, 1913

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NEW DISCLOSURES PUT BANK'S CRASH UPON PROMOTERS "Note Kiter's" Operations Re= sponsible for Bayonne National's Condition. [Special to the Newark Star.] BAYONNE, Dec. 10.-Further investigation in connection with the closing of the doors of the First National Bank, of this place, has resulted in discoveries which place the responsibility for the collapse of the bank upon the shoulders of "note kiters" and promoters of New York. It is also declared by the investigators that in spite of the provision of the Federal banking law forbidding a bank to make a loan of more than 10 per cent, of its capital, several of the directors of the bank had barrowed from it amounts averaging more than $30,000 over the limited figure. One of the New York promoters, who, it was found, was once indicted for larceny in the first and second degree, and for forgery in the first and second degree, had guaranteed notes discounted at the bank amounting to between $30,000 and $40,000, the directors declare. It was also rumored that Julius G. Hocke, a director, had secured a large loan from the bank, but when questioned Mr. Hocke denied that he had ever borrowed more than $3,000. These "note kiters" borrowed from the bank either on individual notes or notes "secured" by stock which has no market value, and thus, in the opinion of the Federal authorities, not only wiped out the surplus and undivided profits of $113,000 but have depreciated the assets of the bank so that at least $250,000 is needed to put it on a sound basis. From one source it is learned that the bank has $389,000 of questionable paper. While the directors insist that all except $22,000 of this paper is good they admit that Charles H. Chapman, Federal bank examiner and temporary receiver, has marked almost that much off as worthless and has insisted that the directors replace such notes with cash. The Federal authorities have been on the trail of the so-called "note kiters" for several weeks. The comptroller of the currency has caused a thorough investigation to be made and bank examiners have a list of them. They are searching the assets of all national banks for those men's notes.

11. December 11, 1913 The Citizen-Republican Scotland, Parkston, SD
Article from The Citizen-Republican, December 11, 1913

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NEW JERSEY BANK IN HANDS OF EXAMINERS Bayonne, N. J.., Dec. 9.-The First National bank of Bayonne today turned over its affairs to national bank examiners. Inability to raise cash on its assets caused the institution to be closed as a precaution against a run. It has a capital of $200,000 and a surplus of $100,000.

12. December 16, 1913 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, December 16, 1913

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BANK'S RECEIVER SNUBS DEPOSITORS Refuses to Talk With Committee When They Ask for Information. BAYONNE, Dec. 16.-The committee of depositors of the First National Bank of Bayonne got a severe setback yesterday when they sought an interview with Charles M. Chapman, the receiver, with a view to getting some information about the condition of the institution on which to base a plan of action. Mr. Chapman refused to meet the committee and blocked all attempts of Judge Frederick D. Chamberlaim, the committee's representative, to discuss the matter. The depositors' committee decided last night to take up the situation with the bank officials and try to secure their co-operation in a scheme for the institution's rehabiliation.

13. February 6, 1914 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, February 6, 1914

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FAILED NATIONAL BANK ASSIGNED Creditors of Bayonne Institution Assured by Union Trust of Full Returns. BAYONNE, Feb. 6-The offer of the Union Trust Company of Jersey City to take over the failed First National Bank of Bayonne has been accepted by a unanimous vote of the directors of the last-named institution. It will be reopened as a branch of the Union Trust and the depositors will be guaranteed full payment of their savings, receiving about twentyeight cents on the dollar at the outset. Just when the doors of the bank will open is problematical, but it is not likely to be much over two weeks. The directors last night requested the federal banking department to grant a ten days' extension of time to the First National to get its affairs in shape. This extension will undoubtedly be given in view of the fact that it has been definitely decided that the Union Trust is to assume the liabilities of the Bayonne bank. Those depositors who withdraw the proportion of their money (approximately twenty-eight cents on the dollar, to be paid them at the start) will be given certificates of deposit on the Union Trust Company for the remainder. This additional amount will bear interest and may be withdrawn after intervals of time named by the liquidating bank. The directors and other stockholders, or rather such of them as can be made to make good the deficiency, will lose a sum approximating $170,000. in addition to their $100,000 of stock, if the worst comes to the worst, and it is found that none of the $400,000 worth of questionable loans can be collected.

14. May 12, 1914 The Sun New York, NY
Article from The Sun, May 12, 1914

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DEPOSITORS FEAR PROSECUTION. Bayonne Bank Creditors to Employ Counsel. A. meeting of depositors of the First National Bank of Bayonne, now in the hands of a receiver, will be held next Friday night, when it is expected a proposition will be discussed for the employment of counsel to prosecute those alleged to be responsible for the failure of the bank. The depositors anxious to have the meeting, it is said. were leaders in opposition to a plan for taking over the bank by the Union Trust Company of New Jersey. Samuel Ludlow. Jr., president of the Union Trust Company, explained that this plan failed because unantmous consent was not obtained. The opponents of this plan, it is said, represent holders of $60.000 of the bank's $1,500,000 deposits. Receiver Frank B. Shutts said yesterday that the first instalment to the depositors, amounting to 35 per cent., will be paid on June 15. It was said last night that if the Government is satisfied there was wrongdoing on the part of anybody in connection with the collapse of the bank, prosecutions will follow.

15. May 16, 1914 New-York Tribune New York, NY
Article from New-York Tribune, May 16, 1914

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STOCKHOLDERS MUST PAY Assessment Ordered in Interests of Bayonne Depositors. Frank B. Shutts, receiver for the First National Bank of Bayonne, was instructed yesterday by the Controller of the Currency to collect an assessment of $100,000 from the stockholders. Each one will be required to pay $100 for every share held when the bank closed. Payments are due June 13 and two days later the receiver is directed to declare the first dividend, approximately 35 per cent. The Controller's order comes after an effort to rehabilitate the bank had been made by the Union Trust Company of Jersey City and the directors had tried in vain to interest a syndicate of New York bankers to pay off the claims and make good the bad loans.

16. June 27, 1914 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, June 27, 1914

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DEPOSITORS ASK PROBE OF BANK Want Gov't to Investigate Actions of Officer he m Defunct Bayonne Institution. [Special to the Evening Star.] BAYONNE, June 27.-A demand for action on the part of the Department of Justice was made last night by the depositors of the. defunct First National Bank, of this place, at a meeting last night. The depositors ask that a rigid investigation be made of the actions of the board of directors. Several unsuccessful attempts to reopen the bank since it failed on December 8, have been made. The depositors have received 35 per cent. of their money, but the delay on the part of the directors has made them indignant and they communicated with Receiver C. L. Williams, last night, to investigate the methods of the officers of the bank. Receiver Williams said tonight that he intends to go to Washington tomorrow and lay the entire matter before the Department of Justice and ask for instructions as to how to proceed further in the matter. He also said that he will levy an assessment of $100 per share for every share of the bank stock held by the stockholders.

17. July 9, 1914 New-York Tribune New York, NY
Article from New-York Tribune, July 9, 1914

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WALLACE WHITE. Bayonne, N. J., July 8. Wallace White, for two years cashier of the First National Bank of Bayonne, now in a receiver's hands, died at his home to-day. He had been ill only a week. His friends attribute his illness to worry, the failure of the bank and the loss of his position. Mr. White was forty-four years old, and leaves a wife and two children.

18. November 7, 1914 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, November 7, 1914

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# President of the Defunct # Bayonne Bank Penniless BAYONNE, Nov. 7.-That George Carrigan, who was president of the now defunct First National Bank of this city, who until about two years ago drew $10,000 a year salary and commissions from wholesale liquor houses, is penniless, was the conclusion arrived at in a hearing before John W. Queen, of Jersey City as referee in bankruptcy. The hearing was a supplementary proceeding instituted by Receiver Christopher L. Williams of the bank in an effort to find what property Carrigan had on which a levy might be made to satisfy a judgment of $28,000 obtained against him.

19. November 23, 1914 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, November 23, 1914

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Ten Per Cent. More in Cash for Bayonne Bank Depositors BAYONNE. Nov 23.-Depositors in the First National Bank of Bayonne. now in the hands of a receiver, will receive a dividend of 10 per cent. Payments began today and are expected to approximate $150.000. The depositors have received 35 per cent. of their deposits already from the receiver, Christopher L. Williams.

20. November 17, 1915 Newark Evening Star and Newark Advertiser Newark, NJ
Article from Newark Evening Star and Newark Advertiser, November 17, 1915

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# JUDGE DENIES # VERDICT FOR # FORMER BANKER George Carragan, of Bayonne, Must Take Chances With the Jury. A motion to direct a verdict for the defendant in the trial of George Carragan, former president of the First National Bank of Bayonne, who is charged with abstracting and misapplying $40,000 of the bank's bonds, was denied by Judge John Rellstab in the Newark branch of the United States District Court today. The motion was made by Henry A. Wise, counsel for Carragan after the government had closed its case. Counsel for the defendant contended that Carragan had acted in a perfectly legitimate manner in the deal involving the transfer of the bonds. He asserted that the president had been authorized by the bank directors to borrow money and to give the bonds as securities. He argued there was no ground for criminal action against Carragan. Judge Rellstab said he felt that the case of the government against Carragan had not been conclusive, but stated that he believed that the matter should be more fully explained. Carragan is accused of removing $40,000 worth of railroad bonds without the knowledge or consent of the institution. The bonds were put up as security for a foreign draft made by Carlisle & Co., bankers, of New York, through the firm of Knight, Nachod and Kuhne, also of New York. Carragan indorsed the note of the Carlisle firm, which had been a regular customer of the bank. The bonds were subsequently sold to satisfy the creditors of the note. Oscar Gabelman, a clerk in the foreign draft department of Knight, Nachod & Kuhne, was the first witness called today by Assistant District attorney Joseph Bodine, who is handling the case for the government. He testified as to the execution of the foreign draft. Harold Kitchin, head of the accounting department of the brokerage firm, told of the delivery by Carragan of the $40,000 worth of bonds to his company. He said that the bonds were sold on July 29, 1914, for $31,359, and that $11,000 was deposited to the credit of the bank. This latter amount has been placed in the hands of the receivers of the bank, he stated.