13132. State Bank (Holdrege, NE)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
October 8, 1931
Location
Holdrege, Nebraska (40.440, -99.370)

Metadata

Model
gpt-5-mini
Short Digest
f633043f

Response Measures

None

Description

The State Bank of Holdrege voluntarily ceased active banking and went into liquidation beginning Oct 8, 1931. Officers invited depositors to come and get their money and stated the bank would pay depositors in full. There is no evidence of a panic run; withdrawals were small and orderly. Classified as a suspension (cessation of active business) leading to permanent closure/liquidation (voluntary).

Events (1)
1. October 8, 1931 Suspension
Cause
Voluntary Liquidation
Cause Details
Directors decided to quit active banking because the bank was small, unprofitable, and unnecessary given two other Holdrege banks; they liquidated assets and elected to pay depositors in full and cease business.
Newspaper Excerpt
Beginning October 8... it will not receive further deposits and that beginning at the same hour it will pay in full in cash all of its depositors.
Source
newspapers

Newspaper Articles (8)
1. October 8, 1931 Holdrege Daily Citizen Holdrege, NE
Article from Holdrege Daily Citizen, October 8, 1931

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LETTERS GIVING REASON FOR AND URGING CUSTOMERS TO DRAW MONEY Bank Will Remain Open Until Each Customer Has Received Every Penny Deposited There The State Bank is quitting liquidating, paying each depositor every cent due. The bank quit receiving deposits this Thursday morning, and announced that sufficient available to pay every cent deposited in that institution. nine this morning, the depositors began in an orderly to enter bank, and receive in full of way payment deposited accounts. The bank will be kept open from day, until each depositor paid in full. Money available to pay every penny, and the officers urging the customers to get their money as soon as convenient. The decision to quit business, brought about by opportunity the fine bank building and by the following three reasons, given letter sent each depositor We do not believe there necessity for three banks Holdrege, Nebraska, and believe there are adequate banking facilities available here without the aid of this bank. This bank small and for that reason not particularly profitWe have at all times endeavored to this bank clean, fair, and commendable fashion and never expect from The responsibility doing greater than the profits involved, and for that reason have simply determined quit. We did not wish to do this, until had collected and course, secured way another sufficient money to pay the depositors in full and once. This are prepared In the letter sent to the several depositors, State Bank officers, say further: have greatly appreciated the business that you have given the We shall, of course, greatly appreciate your continued patronage the other businesses in which engaged and will become engag- admit that are "proud of ability ,in the midst troubletimes, all in full. pay you should like to point out to you, that our ability to pay all of our depositors, the midst of depression, should conclusive evidence you that there many sound financial institutions the present time, and that considerable amount of the unrest of the present moment without foundation.' The State bank organized and began business December 23, 1925 capitalized $30,000. That operated proven by the fact that the bank depositors never before heard of in bankthing circles.

2. October 8, 1931 The Holdrege Progress Holdrege, NE
Article from The Holdrege Progress, October 8, 1931

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Bank To Close Active Business Depositors Are Notified to Accounts ginning This Morning Funds To Ample Every Decision To Retire Under Consideration decision retire from active participation Holdrege banking circles brings forth ment, this morning, from the ficers and directors the State Bank that will immediately uidate its to its deposiand close its business. The matter has been under consideraby the directors this bank they finding that sufficient banking facilities. aside from their own, available the people Phelps county, the fact that an business necessarily result the institution continues to function. depositors have been notified that further deposits will cepted beginning October that mediately pay full cash settlement its obligations. following letter has been sent each patron the bank and signed by Claude Presiand Frank Falk, Cashier: Our Depositors Friends: The which folhereafter. believe to be the kind that has been For months have been quitting banking business for the following reasons: do not believe there three banks in Holdand believe there adequate banking facilities available here without the aid this bank. This bank small and for that reason not particularly profitable. We have at all times endeathis bank clean. and commendable fashion depart from The doing than profits involved, for that reason simply determined We did not wish to of until had collected and secured one sufficient money to pay the depositors full and are prepared to beg to you that bank has ceased to active banking business, that beginThursday morning. October not receive further posits and that beginning hour will in full depositors. All the money necessary to pay all depositors available once and that as soon convenient. come to the bank and the amount your deposit. Because the hazards of bank robberies and have not imported sufficient currency this total payment. but prefer make drafts upon Continental Bank, Lincoln, will currency prefers, gives hours We have greatly appreciated the business that you given the shall, of course, appreciate the other business which engaged and will We admit that are proud ability. the midst of troublesome times, pay you in should like point out to that our ability to pay all depositors, midst should be to you that there many sound finaninstitutions at the time, and that amount unrest present moment for the many things you have done Very truly yours, State Bank, Holdrege

3. October 9, 1931 The Omaha Evening Bee-News Omaha, NE
Article from The Omaha Evening Bee-News, October 9, 1931

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Philadelphia. St. Louis 0 BANK OFFERS TO PAY OFF DEPOSITS Holdrege Institution Quits Business, Orders Customers to Get Money Officers of the State Bank of Holdrege are trying to get depositors to draw all their money out of the bank immediately. They weren't very successful Thursday. Out of deposits, only had been drawn out. And the bankers refused to accept additional deposits. For the State bank of Holdrege is going out of business. Its positors were so notified in letter sent out by Claude B. Miller, president; L. Franzen, vice president, Frank Falk, cashier. The letter notifying depositors they would be paid in full and to "come and get it" follows: "The which follows hereafter, we believe to be one of the few of Its kind that has ever been made. "For some months we have been considering quitting the banking business for the following reasons: NO NEED FOR BANKS "1. We do not believe there is any necessity for three banks in Holdrege and we believe there are adequate banking facilities available here without the aid of this bank. "2. This bank is small and for that reason not particularly profitable. "8. We have at all times endeavored to run this bank in clean, fair and fashion and never expect to depart from it. The of so doing is greater than the profits involved. and for that reason have determined to quit. We did not wish to do of course, until we had collected and secured in one way or another sufficient money to pay the depositors in full and at once. This we are prepared to do. "We therefore beg to inform you that this bank has ceased to do an active banking business, that beginning Thursday, Oct. it will not receive further deposits and that beginning at the same hour It will pay in full in cash all of its depositors. All of the money necessary to pay all the de- (Turn to Page 2, Column 7)

4. October 9, 1931 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, October 9, 1931

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Holdrege Bank Invites Depositors to Call for Money; Quits Business Special Dispatch The World Herald. Holdrege, Neb., Oct. 8.-Notifying every depositor to come and get all his money, the State bank of Holdrege closed its doors today. Officers said the bank's action was caused by lack of profit, and to assure every depositor full payment. By nightfall only 18 thousand dollars of the bank's deposits of 134 had been withdrawn, less than had been expected, according to Frank Falk, cashier. The city's other two banks reported redeposits with them of practically all this sum. While a Chicago bank closed recently under similar conditions, no such action by Nebraska bank could be recalled here. The bank's letter said in part: have at all times endeavored to run this bank in a clean and fair fashion, and never expect to depart from it. The responsibility of so doing is greater than the profits on the investment, and for that reason we have simply determined to quit. We did not wish to do this, of course, until we had collected and secured in one way or another enough money to pay depositors in full and at once. This we are prepared to do. Money Available. "We therefore inform you that we will cease to do active business. Beginning October 8, no further deposits will be accepted, and beginning at the same time we will pay in full all depositors. All the money necessary is available. We request that you will. as soon as convenient, come and get it." The other banks here are the First National, with $1,300,000 in deposits, and Phelps County bank, with 500 thousand dollars deposits.

5. October 9, 1931 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, October 9, 1931

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Holdrege Bank Invites Depositors to Call for Money; Quits Business Dispatch every depositor come fying and his the State get bank of Holdrege closed its doors today Officers said the bank's action was caused by lack profand to assure every depositor full payment. nightfall only 18 thousand dollars the bank's deposits 134 thousand had been withdrawn. than had pected. according Frank Falk, cashier. The city's other two banks with them practically all this While Chicago bank closed recently under conditions such action by Nebraska bank could be here. Letter First Intimation. Comments approving bank's here. and editor the Citizen. penned editorial in praise of the bank officers No word of the intended closhad until letout to depositors notifying to come for their money that the bank heads had considering closfor some in the belief Holdrege does not need three banks, size the bank had precluded desired The letter said in part: have at all times en- deavored to this bank in clean and fair fashion, and never expect depart from The responsibility doing greater than the profits on the investment and for that reason have simply determined quit. did wish to this course, until had collected and secured in one way another enough money pay depositors full and once. This are prepared to do. Money Available. "We therefore inform you that will cease to do active business. Beginning October further deposits be accepted, beginning the same time will pay full all depositors. All the money available. We request that you will as as convenient, come and Officers the bank are Claude B. Miller Franzen, and Mr. Falk cashier 35 thousand and divided profits reported at five dollars Mr. Falk tonight that depositors had asked them except that withdrawal by ordinary permitted. The other banks First with bank. 500 thousand dollars deposits.

6. October 10, 1931 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, October 10, 1931

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A SUCCESSFUL "FAILURE." The State Bank of Holdrege has gone out of It has liquidated its business without failing. assets to pay off depositors in full and them to come and sent them notices inviting has The directors explain their action thus: not believe there necessity for and believe three there adequate banking facilities here withthe aid this bank out and for that reason not bank profitable all times endeavored to bank clean, and fashion never expect depart The responsibility than the and for this reason we have profits simply determined This an unusual proceeding, at least in Nebraska. displays realization of community responsibility which the cornerstone of sound and reliable misfortune of the state bankbanking the ing system in Nebraska to have too many small bankers without that realization or who did not too late. It had too wake to until banks which were not necessary to their comwhich particularly many profitable And had many who tried instead of getting out to hang on and profits while getting good. undertook to beat the game Too many bankers by turning unsound methods, sometimes criminal methods, offering on deposits to beat making unsound loans the maximum interest because attraction of high interest Agricultural deflation has weeded them but bitter and the state's prestige through loss its guaranty The officers of this Holdrege bank appear to profits secondhave kept the of large ary. well the reputation they have established their community that their depositors no hurry get their money, leaving longer with although there no point the bank speaks for the serenity and good sense the community that these depositheir accounts to one tors simply of other larger banks. Holdrege congratulated on numbering among group conscientious conservative bankers Messrs Falk. to be congratulated further maintenance confidence in its than transferring that confidence to banks rather the wholly unsafe and unreliable depository of an old This might be termed successful banking failure. failure without loss based fact that there not sufficient solely volume business warrant the employment the time capital devoted to It constitutes an item of cheerful news. Garden pronounces as A1 Smith did. but then voice is sweeter.

7. October 15, 1931 The Holdrege Progress Holdrege, NE
Article from The Holdrege Progress, October 15, 1931

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mistaken for billigerency. matter of fact his was most kindly and often when he had realized his manner had been mistaken he was voluble in his apology. Few men in Phelps county history done more than has Charley Skoog. about one of your banks liquidating reading these days when so easy to blame depression when one don't want to pay his debts. hope that you will urge your people those bankers who kept the faith dinner and reception in recognition and in order that othere may follow their footsteps. Don't let prove in this any case, that the public would thought just as much of them they had paid small per cent liabilities and only looked to their own welfare. You may use this letter and my you see fit to advance my 67 and out of business but am still active when comes giving the devil or any one else his due. Hade. have never been in Holdrege and do not know anyone there to write to except yourself. Business was slow on the second day of the voluntary payment of posits at the State Bank. Only depositors had appeared the withdrawal window up to that morning and there is no great indication of the depositors making haste about their money. On Wednight the close of businesday the bank had in its depositors money The liquidation began Thursday morning the regular bank opening hour of o'clock, and at closing time only fifteen thousand dollars deposits had been Less than four thousand dollars has been drawn 60 far on the second day. The bank will remain open an indefinite time The Lineoln State Journal comenable all depositors to secure their five ments situation: money. Probably four The State Bank of Holdrege closmonths When becomes necesits doors itself the other day, sary close up the affairs the ter notifying every depositor that maining deposits will be mailed to the of they would open to him to call the in shape and get his money. Experience has draft on Lincoln bank. This aetthat three banks were has been under Stock- not needed in that city, and that at for something over year. rate was profit in the holders decided that conditions of No. This will degether with present business inadeprive citizens and few lawquate to warrant busiof an opportunity to earn fees ness. Adopted policy of calling in closing the affairs of the bank, all loans and made no true of all and loans the past year. At the points the to the development close of business on last Wednesday costly system than that night loans had been reduced to in State JourLittle any loss sult stock holders capital nal. stock more than ample to take care The following is from the Omaha of this bank. Bank owns little real their building having been few days ago savings bank sold din suburb of Chicago sent word to its depositors come Since the announcement of the and get their money. The bank was intention of the State Bank direcgoing into liquidation, and its first to retire from the banking field step pay who enHoldrege has great trusted it with the keeping of their amount very favorable publicity. cash. Hardly mail that does not bring Extending this principle to the words and daily general the Holdpapers calling attention to the rege State bank has requested each successful liquidation. The story its to come and get sent over the wires the Associattheir money. The bank is going Press gaining attention in voluntary ready to parts the country and many pay 100 cents on the dollar to each newspapers outside state are depositor. writing for more detailed stateAmost unusual situation. and one ment of the affair The Progress that should bring some sort of republishing several editorials and ward the men who managed comments that have been taken state bank that its assets were not from state papers and also letter only legally liquid, but actually received by Mayor Lowry. sufficient to meet the greatest mand that might be put upon them In its last Saturday issue the That kind of bank novelty in Omaha said Nebraska. Not that the sound. conSUCCESSFUL servatively managed banks are rare, The State Bank of Holdrege has for they not But when state gone out without failing. bank finds possible wind up has liquidated its assets sufficibusiness without composition with ently off depositors in full pay creditors asking them to wait for and has sent them notices inviting part of their money, it them come and get it. The ditice. rectors explain their action thus: In both these instances the reason do believe there given was not enough business any necessity for three banks in insure profit. At Holdrege the Holdrege, Nebraska, and beretiring frankly says withlieve there are adequate bankfrom field that not ing facilities here without the large enough support three banks. of this bank. Its directors willing to give way "This bank small and for and let banks that reason not particularly carry on, serving the field reservoirs credit. spirit that is rare have at all times endeavored to run bank These men were unwilling to risk clean, fair and people's money ventures fashion and expect to dethat might prove profitable. but part The responsitainly held elements of risk Many bility of doing is greater than banks have not been conducted the profits and for this alnog sound lines. Holdrege has reason we have simply detergiven Nebraska shining incident mined quit.' banking efficiency. This unusual proceeding. One of the refreshing features of least Nebraska.

8. October 15, 1931 The Plymouth News Plymouth, NE
Article from The Plymouth News, October 15, 1931

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A Successful The State Bank of Holdrege has gone out of business without failing. It has liquidated its assets sufficiently to pay off depositors in full and has sent them notices inviting them to: come and get it. The directors. explain their action thus: "We do not believe there is any necessity for three banks in Holdrege, Neb., and we believe there are adequate banking facilities here without the aid of this bank. "This bank is small and for that reason not particularly profitable. "We have at all times endeavored to run this bank in a clean, fair and commendable fashion and never expected to depart from it. The responsibility of so doing is greater than the /profits involved, and for this reason we have simply determined to-quit." This is an unusul proceeding, at least in Nebraska, It displays a, realization of community responsibility which is the cornerstone of sound and reliable banking. It was the misfortune of the state banking system in Nebraska to have too many small bankers without the realization or who did not wake up until it was too late. It had too many banks which were not necessary to their communities, many which were not particularly profitable. And it had too many bankers who tried to hang on and force profits instead of getting out while the getting was good. Too many bankers undertook to beat the game by turning to unsound methods, sometimes criminal methods, offering premiums on deposits to beat the maximum interest law, making unsound loans because of the attraction of high inDerest. Agricultural deflation has weeded them out, but at a bitter cost to depositors and to the state's prestige through the loss of its guarantee law. The officers of the Holdrege bank appear to have kept the lure of large profits always secondary. It speaks well for the reputation they have established in their community that their depositors have exhibited no hurry to get their money, although there is no point in leaving it longer with the bank. It speaks equally well for the serenity and good sense of the community that these depositors are simply transferring their RCcounts. to one of the other and larger banks. Holdrege is to be congratulated on numbering among its citizens a group of so careful, conscientious and conservative bankers as Messrs. Miller, Franzen and Falk. It is to be congratulated further on the maintenance of confidence in its banks rather than transferring that confidence to the wholly unsafe and unreliable depository of an old sock. This is what might be termed a successful bank failure. It is a failure without a loss and based soly on the fact that there was not a sufficient volume of business to warrant the employment of the time and capital devoted to it. It constitutes an Item of cheerful news.