Farmers State Bank - Belden, NE

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: March 15, 1926
Location: Belden, Nebraska (42.413, -97.207)

Metadata

Model: gpt-5-mini
Short Digest: 939b3236

Response Measures

None

Description

The bank was taken over and operated by the state guaranty fund commission from March 15, 1926 to March 10, 1928 and did not resume normal operations; district court actions and large losses to depositors indicate permanent closure/receivership. Some depositors withdrew funds while the commission operated the bank, but the primary event is the state takeover and ultimate failure. Dates taken from article text.

Events (3)

1. March 15, 1926 Suspension

Cause: Government Action
Cause Details: Bank was taken in charge and operated by the state guaranty fund commission beginning March 15, 1926 due to unsafe condition and insolvency noted by examiners.
Newspaper Excerpt: operation of the Farmers State bank of Belden, Neb., by the guaranty fund commission from March 15, 1926 to March 10, 1928
Source: newspapers

2. March 10, 1928 Other

Newspaper Excerpt: operated by the guaranty fund commission from March 15, 1926 to March 10, 1928 (end of commission operation noted in article). },
Source: newspapers

3. July 6, 1928 Receivership

Newspaper Excerpt: The district court of Cedar county on July 6, 1928, allowed $172,436.14 as valid claims of depositors payable from the depositors' guaranty fund. and The operation ... resulted in a net loss of $49,955.71 indicating disposition/claims process after failure.
Source: newspapers

Newspaper Articles (1)

1. August 3, 1929 The McCook Daily Gazette McCook, NE

Article from The McCook Daily Gazette, August 3, 1929

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Article Text

CHARGE FAVORITISM IN BANK'S HANDLING Shallenberger Says Guaranty Fund Operation of Belden Institution Improper Lincoln, Aug. 3.-(U.P.)--The operation of the Farmers State bank of Belden, Neb., by the guaranty fund commission from March 15, 1926 to March 10, 1928, resulted in a net loss of $49,955.71, according to an announcement today by A. C. Shallenberger, in charge of the state bank investigation. The balance of the deposits to be paid depositors is $147,014.07, which was come from the assets that are valued at only 6.7 per cent of the amount due to the depositors. Consequently, the report of Shallenberger's auditor said, the loss to the depositors will be $136,761.91, or 93.3 per cent. "The depositors were not placed on a uniform basis with reference to withdrawals of deposits during the period of operation as a going bank by the Guaranty Fund commission, and that as a result, some depositors withdrew more in proportion than others," the report charged. The records show that there were 44 depositors with deposits aggregating $239,213.96 and that 230 of these or 51 per cent, withdrew their deposits in full, amounting to $24,318.29, which is slightly more than 10 per cent of the total deposits. The district court of Cedar county on July 6, 1928, allowed $172,436.14 as valid claims of depositors payable from the depositors' guaranty fund. Some of this was ordered withheld pending further investigation of the claims. "It is evident that the depositors who were allowed to withdraw all or a large part of their deposits were favored over the other depositors,' the report stated. "But it seems reasonable to assume that this inequality as permitted by the guaranty fund commission and its special agents because of the belief, quite prevalent until a few months ago, that all depositors would eventually be paid in full from the guaranty fund. This belief, while it seemed sound, has been found to be erroneous, and the result is that an injustice has been done the large number of depositors of this bank who have received less than 29 per cent (the average per cent of withdrawals) of their deposits." One of the reasons stated for the failure of the bank was given by the report as "lax supervision by the bureau of banking. "The examiners reports on this bank for' nearly three years prior to the date it was taken in charge by the department of trade and commerce repeatedly called attention to bad, doubtful, slow and excessive leans, excessive overdrafts, past due notes, low reserve and failure of of. ficers to folow instructions and remedy the unfavorabe and dangerous condition of the bank. In spite of these reports, the bank was allowed to operate in an insolvent condition.