12481. Savings Deposit Bank (Minot, ND)

Bank Information

Episode Type
Suspension → Reopening
Bank Type
state
Start Date
October 20, 1913
Location
Minot, North Dakota (48.233, -101.296)

Metadata

Model
gpt-5-mini
Short Digest
534ba3ea

Response Measures

None

Description

State bank closed by the state examiner on Oct 20, 1913 due to poor asset quality (excessive farm loans, worthless mortgages). A temporary receiver was named and the bank was reorganized/taken over by local capitalists and reopened Oct 29, 1913 with sufficient cash to pay depositors. Articles explicitly state there was no run.

Events (4)
1. October 20, 1913 Suspension
Cause
Government Action
Cause Details
Closed by state bank examiner/banking board after examination found many worthless or excessive farm loans and unsafe securities (insufficient market value of assets).
Newspaper Excerpt
The Savings Deposit Bank ... was closed by the deputy state bank examiner Schoregge at 9 o'clock Monday morning after Mr. Schoregge ... had gone over the records of the institution.
Source
newspapers
2. October 23, 1913 Receivership
Newspaper Excerpt
B. J. Schoregge has been named as temporary receiver ... B. J. Schoregge named - second national bank may take over holdings and pay depositors in full. The Savings Deposit Bank ... was closed by the deputy state bank examiner Schoregge ... The sign, 'Closed, in the hands of bank examiner,' appeared ... B. J. Schoregge named as temporary receiver, ... .
Source
newspapers
3. October 29, 1913 Reopening
Newspaper Excerpt
NO RUN ON BANK Recently Closed Bank Opened Under New Management. Minot, N. D., Oct. 29.-Instead of experiencing a run on the bank, the Savings Deposit bank ... actually gained in deposits the first day. The bank opened with enough cash to pay every depositor in full.
Source
newspapers
4. October 31, 1913 Other
Newspaper Excerpt
The Savings Deposit bank of Minot, which was recently closed at the order of Bank Examiner Sivertson, has resumed business again with 100 per cent reserves. The bank has been taken over by some of the leading capitalists ... and is again doing business on a safe and sound basis.
Source
newspapers

Newspaper Articles (10)
1. October 23, 1913 The Ward County Independent Minot, ND
Article from The Ward County Independent, October 23, 1913

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Article Text

TEMPORARY RECEIVER FOR SAVINGS BANK B. J. SCHOREGGE NAMED-SECOND NATIONAL BANK MAY TAKE OVER HOLDINGS AND PAY DEPOSITORS IN FULL. The Savings Deposit Bank of which Grant S. Youmans is president, was closed by the deputy state bank examiner Schoregge at 9 o'clock Monday morning after Mr. Schoregge, assisted by Mr. Johannsen, also a deputy bank examiner, had gone over the records of the institution. The sign, "Closed, in the hands of bank examiner," appeared from the side door of the institution that evening. The bank was carrying $66,000 worth of loans, mostly second mortgage loans, at face value and this was not considered safe by the examiners. Many of those loans were on farm lands, the bank having disposed of the first mortgage loans in the east. Out of the $66,000 worth of loans, the examiners consider that $15,000 worth of them can be considered as gilt edge, while considerable more can be worked out of them in time. Of the $50,000 deposits, $6,000 belonged to Mr. Youmans and the Savings Loan and Trust Co., which is a distinctly separate institution from the bank. The bank had $12,000 cash while the building on Main street and the bank fixtures will bring at least $15,000 more. The bank was really not in bad shape except for the excessive farm loans as it carried the legal reserve. The records are said to have been in the best of shape and everything perfectly regular. The bank made a specialty of savings accounts of various sizes and naturally many of the children as well as adults have various sized sums tied up. The probability is that the depositors will be paid dollar for dollar within a few days. The Second National Bank today is working on a plan to take over the bank's securities and if agreeable to the state banking board will pay all the depositors in full. A telegram has been sent to the board at Bismarck today and by Friday something definite ought to be known. In the event that the Second National takes hold of the proposition, the business of the bank may be continued and it is possible that the institution may be re-organized. In any event, Mr. Youmans stands to lose a considerable sum, altho his holdings in the Savings Loan & Trust Co. are said to be large. The bank but recently occupied its splendid new quarters, the improvements being made at a cost of more than $5000 to the bank. B. J. Schoregge has been named as temporary receiver, but if the present plans go thru, it will be unnecessary to appoint a permanent receiver. Mr. Youmans stated to a representative of the Independent that it would not be necessary for the depositors to lose a dollar, altho the affairs were in such shape that he would have to abandon his banking business in Minot.

2. October 24, 1913 The Evening Times Grand Forks, ND
Article from The Evening Times, October 24, 1913

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Article Text

SCHOREGGE NAMED BANK RECEIVER Takes Charge Temporarily of Closed Minot Savings Deposit Institution. Minot, N. D., Oct. 24.-No new action has been taken regarding the closing of the Savings Deposit bank, beyond the appointment of a temporary receiver in the person of B. J. Schoregge, deputy state bank examiner. Mr. Schoregge will hold his position until some action has been taken by the state banking board. on the report submitted by Bank Examiner Severtson. Mr. Youmans and the officials of the bank still claim that the depositors will not lose a cent through the closing of the bank and state that it will only be a matter of a short period before the accounts will all be paid in full. The average depositor, however, of this bank, is showing little fear of the eventual result of this trouble, all of them having great confidence in the integrity of the bank and in the person of Mr. Moumans, the manager and largest stockholder. The bank examiners are still in the city continuing their investigation of the books and the banking business done by this institution.

3. October 29, 1913 The Evening Times Grand Forks, ND
Article from The Evening Times, October 29, 1913

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Article Text

NO RUN ON BANK Recently Closed Bank Opened Under New Management. Minot, N. D., Oct. 29.-Instead of experiencing a run on the bank, the Savings Deposit bank, which opened under the management of President Jas. Johnson, Vice President Joseph Roach and Cashier Rasmussen, actually gained in deposits the first day. There was no excitement whatever at the opening of the bank. When Cashier Rasmussen reached the bank a few minutes before 9 o'clock, not one of the depositors, whose deposits aggregated $50,000, had appeared to get their money. Several new accounts were opened up, and after the bank was closed it was found that the bank had more funds than when it opened in the morning. The bank opened with enough cash to pay every depositor in full. Gold was piled up on the counters of the bank, but few asked for their money.

4. October 30, 1913 The Hope Pioneer Hope, ND
Article from The Hope Pioneer, October 30, 1913

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Article Text

Minot Bank Will Pay Out Minot. - Receiver - Schorgge of the Savings Deposit bank of Minot must realize only about $44,000 on $66,000 worth of securities to pay depositors of the closed bank in full, according to the preliminary investigation of the bank. Of the $44,000 that must be raised for depositors, there is about $12,000 in cash, while the building and fixtures are valued at about $15,000, which brings the amount available to $27,000, leaving only $17,000 to be raised.

5. October 31, 1913 Devils Lake Weekly World Devils Lake, ND
Article from Devils Lake Weekly World, October 31, 1913

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Article Text

MINOT BANK RESUMES AGAIN The Savings Deposit bank of Minot, which was recently closed at the order of Bank Examiner Sivertson, has resumed business again with 100 per cent reserves. The bank has been taken over by some of the leading capitalists of the Magic City and is again doing business on a safe and sound basis. It is said that they have enough reserve alone to pay every cent of their deposits should a run be made on the bank.

6. December 12, 1913 The Evening Times Grand Forks, ND
Article from The Evening Times, December 12, 1913

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Article Text

DECENDS ACTION BY THE EXAMINER "North Dakota Banker," Association Publication, Upholds Severtson. The North Dakota Banker, the official publication of the North Dakota Banking association, defends the action that was taken recently by Examiner Severtson in connection with the Saving Deposit bank of Minot, in the following statement: "Some unfavorable comment has crept into a few of the state daily papers on the action of the Banking Board and of the State Examiners' department, in closing the Savings Bank at Minot, and it is due Mr. Severtson to correct this erroneous impression which has gone out. "The North Dakota Banker has taken the trouble to investigate the matter thoroughly and the facts will not warrant any adverse criticism as to the action of either Mr. Severtson, or of the Banking Board, and subsequent events clearly prove the wisdom of closing the bank until its affairscould be put in shape that would protect all parties interested from loss. "Thebank was carrying on transactions that were open to criticism and thus jeopardizing the funds of the people who had intrusted their money to its care, many of whom were laborers, and people of modest means. By the prompt and vigorous action of the State Examiner and of the Banking Board the affairs of the bank have been placed upon an absolutely sound basis, and all depositors are protected. Had the affairs of the bank been allowed to drift along, a run might have been started at any time, and the loss to depositors been serious. By closing the bank temporarily this was averted, and notice given to all other institutions that their affairs must be kept in a sound, healthy condition in order to prevent similar action on the part of the Banking Board officials. "The bank, at Minot, was reopened with enough cash in its vaults to pay every depositor in full, and a reorganization of the bank has been made which makes it probably the strongest state bank in North Dakota. "The North Dakota Banker congratulates Public Examiner Severtson upon the wisdom of the course taken in handling this unpleasant affair."

7. December 13, 1913 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, December 13, 1913

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DEFENDS ACTION BY EXAMINER NORTH DAKOTA BANKER, ASSOCIATION PUBLICATION, UPHOLDS SEVERTSON IN CONNECTION WITH HIS ACTION IN THE MINOT CASE, The North Dakota Banker, the official publication of the North Dakota Banking association. defends the action that was taken recently by Examiner Severtson in connection with the Savings Deposit bank of Minot, in the following statement: "Some unfavorable comment has crept into a few of the state daily papers on the action of the banking board and of the state examiner's department, in closing the Savings bank at Minot, and it is due Mr. Severtson to correct this erroneous impression which has gone out. "The North Dakota Banker has taken the trouble to investigate the matter thoroughly and the facts will not warrant any adverse criticism as to the action of either Mr. Severtson or of the banking board, and subsequent events clearly prove the wisdom of closing the bank until its affairs could be put in shape that would protect all parties interested, from loss. "The bank was carrying on transactions that were open to criticism and thus jeopardizing the funds of the people who had intrusted their money to its care, many of whom were laborers, and people of modest means. By the prompt and vigorous. action of the state examiner and of the banking board the affairs of the bank have been placed upon an absolutely sound basis, and all depositors are protected. Had the affairs of the bank been allowed to drift along, a run might have been started at any time, and the loss to depositors been serious. By closing the bank temporarily this was averted, and notice given to all other institutions that their affairs must be kept in a sound, healthy condition in order to prevent similar action on the part of the banking board officials. "The bank, at Minot, was re-opened with enough cash in its vaults to pay every depositor in full, and a re-organization of the bank has been made which makes it probably the strongest state bank in North Dakota. "The North Dakota Banker congratulates Public Examiner Severtson upon the wisdom of the course taken in handling this unpleasant affair."

8. March 4, 1915 The Ward County Independent Minot, ND
Article from The Ward County Independent, March 4, 1915

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COMMITTEE CLEARS BANK EXAMINER Bismarck, March 3.-"After a careful examination of the evidence, records, reports and correspondence, we find that the state examiner's department was not in conspiracy or collusion with any person in the closing of the Savings Deposit Bank of Minot, North Dakota, on October 20th, 1913," is the opening statement made by the special joint committee which was appointed to investigate the charges of conspiracy and collusion made against the state bank examiner's department by Grant S. Youmans in his book, "Legalized Bank Robbery." The committee report goes on to say, that "in July, 1912, an examination of the Savings Deposit Bank of Minot, North Dakota, was made by Mr. Bleeker under examiner Knudson's administration. Upon this report Mr. Knudson in his letter of criticism ordered that paper in the bank aggregating $44,233.00 be removed from the assets of the bank, the same to be removed by November 1st, 1913. Pursuant to such order, on October 30th, 1912, the paper ordered out by Mr. Knudson was removed from the assets of the bank by Mr. Youmans through the following transaction: "On October 30th, 1912, mortgages, practically all of which were of the same character as the so-called Lewellyn mortgages, practically all of which mortgages represented the purchase price of the lands which were deeded back immediately upon the execution of the mortgages; these mortgages were all assigned on October 30th, 1912, by the trust company to the Savings Deposit Bank of Minot, North Dakota, and the following statement will show the total of such transactiom: Trust Company the Gainer. October 30, 1912. Checking account of Savings Loan & Trust Company credited in the bank $52,650.00 (This credit consisted of 28 notes and mortgages made by Youmans of date October 26th, 28th and 29th, 1912.) October 30, 1912. The Savings Loan & Trust Company account in the bank was charged with the following items: Savings Loan & Trust Com$ 5,250.00 pany note 5,250.00 G. S. Youmans note

9. March 4, 1915 The Ward County Independent Minot, ND
Article from The Ward County Independent, March 4, 1915

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can the above statement readily be seen that the trust company, through this transaction, made a net gain in cash of $8,417.00, that being the difference between $52,650.00, the total of bad paper assigned to the bank on October 30th, 1912, and $44,233.00, the total of the bad paper removed. Assuming that the $52,650.00 worth of paper which was on October 30th, 1912, assigned to the bank from the trust company was worthless paper, as the evidence clearly shows, the method of complying with Mr. Knudson's order, after the transaction was closed put the bank in worse shape after complying with the order than it was before by increasing the aggregate amount of bad paper in the bank zy $8,417.00. Furthermore, the order was expressly violated subsequently in a few particulars. On November 13th, 1912, the Savings Loan & Trust Co. note for $5,250.00 again was put into the bank and some of the fraudulent and worthless paper was taken out and replaced by the trust company note. Ordered to Close Bank. The report then goes on to tell of numerous other transactions made during the year 1913, contrary to instructions given by Bank Examiner Knudson and also tells of a meeting of the state banking board, at which meeting the bank examiner was instructed to take charge of the Minot bank if its condition had not been improved. This part of the report reads as follows: "Prior to the time of Mr. Severtson's examination of the Savings Deposit Bank of Minot, North Dakota, to-wit, on October 16th, 1913, the Banking Board held a meeting, and a copy of the minutes of said meeting is herein set forth: "A special meeting of the State Banking Board was held in the executive office this 16th day of October, A. D. 1913. The members present were: Governor L. B. Hanna, Secretary of State Thomas Hall, and Attorney General Andrew Miller. The report of the examination of J. B. Schoregge, made August 13th, of the Savings Deposit Bank, Minot, and the report of the examination made by Mr. Schoregge and Arthur Johannson of the Savings Loan & Trust Company, Minot, September 11th, was presented to the Board for its consideration. "The Board instructed the state examiner to make a special examina-

10. March 12, 1915 Sioux County Pioneer Fort Yates, ND
Article from Sioux County Pioneer, March 12, 1915

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Legislature AND ITS WORK D 00000000000000000000000000 Bismarck.-The fourteenth assembly of the North Dakota legislature closed up its business and ad journed before midnight on the 5th. It is believed to have been the cleanest and one of the very best sessions which has ever been held in the state. While, like all sessions, It passed some peculiar measures, yet it passed some very good ones Prominent Events. Prominent among the events of the session may be mentioned: the investigation of the board of control; the tax commission and the Grant Youman's charges against State Examiner Severtson and the banking board; the extensive search into the affairs or the educational institutions and the state offices; the establishment of a board of regents; the provision for the meeting of the budget commission 60 days before the meeting of the legislature; the creation of the immigration commission; the killing of the suffrage amendment the estanlishment of rural credits ;the reduction of the rates of interest, and others which might be included Are Laws Inoperative? There is some scary talk about the capital city regarding the possibility of most any law passed at this session being made inoperative through the initiative and referendum amendment which is now in the state constitution. It is claimeg that any act with the exception of the budget bill is liable to suspension within 90 days upon a petition of 10 per cent of the voters of the state. It is claimed that a petition bearing the names of between 8,000 and 9,000 voters can invalidate any law containing the emergency clause and they all do. It is not thought, however that this will be tried Bank Examiner Cleared. The Haraldson committee appointed for the purpose of investigating the charges made by Grant Youmans, the Minot banker against State Examiner Severtson and the banking board has completed its work and made its report. This was one of the most prominent investigations which occurred during the session, and resulted in a vindica tion of Mr. Severtson and the entire banking board. Youmans' troubles began in July, 1912, when an examination was deemed necessary and begun under the administration of Bank Exam: iner Knudson. This examination was made by Deputy Bank Examiner Bleeker. Upon completion of the examination Examiner Knudson in his letter of criticism ordered that paper in the bank aggregating $44,233 be removed from the bank by November 1, 1913. According to the report it is claimed that the paper which was supplied to replace that removed was no better than the original. In October, 1913, the banking board held a meeting at which time, to quote from the minutes: "The Board instructed the state examiner to make a special examination of the Savings Deposit Bank (of Minot) and if the condition of the bank showed no improvement of the report already submitted he was further instructed to take charge of the bank pending the appointment of a receiver. The Report. Quoting from the Committee's report. "In pursuance of this meeting Mr. Severtson made an examination of the bank on October 20, 1913, and found in the bank a large number of worthless notes and mortgages and a number of undesirable loans.' In closing its report the committee says: (We think that the actual cash market value of the assets of the Savings Bank on October 20, 1913 were insufficient to pay the liabiltties And from the foregoing facts, our conclusions are that the examiner, S. G Severtson, while acting under authority from the state bank ing board made a demand and order on the Savings Deposit Bank with which there was a failure to comply, and that under all the circumstances, taking into consideration the reports of prior examinations of said bank, the methods used by Mr. Youmans in the management of the bank and the Trust Company, and the condition of the assets in October. 1913, that the examiner, S U Severtson, had a perfect right to take the steps which he did in protecting the depositors of the bank, and that he acted within the authority of the law in closing the bank on October 20, 1913, and we will further say that Mr. Severtson is entitled to credit rather than censure for his acts in the matter. Matter Is Settled. This settles the matter so far as the state is concerned, but it is not known whether Mr. Severtson will institute action on his personal account or not. Joker in Budget Bill. A joker has been found in the budget bill which allows but one tax commissioner's pay for three men. There is some question as to how the commission will draw Its pay, but it is believed that the state will have to pay the salaries of $3,000 each to the three commissioners whether the budget provides for