First National Bank (Freeport, IL)

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FRED EBERHARDT, Administrator. HUNTER & HUNTER, Attorneys. 2-10-17-24

TREASURY DEPARTMENT Office of the Comptroller of the Currency, Washington, D. C. January 4, 1934.

Notice is hereby given to all persons who may have claims against "The First National Bank of Freeport," Illinois, that the same must be presented to Arthur E. Crum, Receiver, with the legal proof thereof within three months from this date or they may be disallowed.

J. F. T. O'CONNOR, Comptroller of the Currency. 1-4-78

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NOW FOR THE LIQUIDATION Today marks the commencement of the assessment on the stock of the old First National bank of Freeport, which in process of liquidation. This assessment been levied in contravention of an derstanding between the national bank authorities and the Freeport men who organized the new First National bank. The new bank would never have been organized except for the assurance given its stockholders that the old bank would liquidated in an orderly and inexpensive way, and with the co-operation of the new bank. the temptation to place political receiver in charge of the old bank was too great to resist, and SO one was brought here. The general public may not feel much interest in the breach of this understanding. The public however, interested the payment of the remaining of posits still in the hands of the receiver. therefore, matter of common concern to know whether the assets of the old bank are being liquidated in an orderly and inexpensive way, and to what extent the cess of collection has already gone. Some months ago depositor in the old First National bank called this office and said: have just called the receiver of the old First National bank, to ask whether there is any prospect of paying out any the remaining of the deposits soon. He said it was very unlikely that there would be any further payments. The the ceiver to verify that statement. He said he had not made in that positive form. He said people sometimes asked questions and you had to them something. We then asked to furnish statement showthe assets and liabilities of the old bank and indicating to what extent had already taken place. We also asked him number of other questions. He fused to answer all of these questions, saythat he was not authorized to give information to anyone. concerning any the bank's However, we know that such information in fact, given out by bank receivers elsewhere. On principle, ought to available intervals, for both and stockholders have an interest in knowing what progress is being made. Among the questions asked was one concerning the costs of liquidation. We denied any information, but is not hard estimate these costs. The salaries the liquidating force, exclusive of attorneys, guessed approximately The work attorneys on basis. likely that the total routine of the liquidation may to year. that be added the interest which accumulating on the unpaid absurd charge, to what can be paid interest may not be paid in principal. That charge something like per year. the total the liquidation hardly less than year. on for five will years, at the least. When the the stock announced, receiver was reported as that had no illusions about to collect all of said he realized that much of could not reached. That appeared, at the time, to make. The situation at present that the depositors know absolutely about liquidation. Yet they and the general 10 know precisely the receiver doing, how rapidly he is liquidating the assets the old First National bank, how much all costing. They should know whether RFC an loan to asked for and, not, why not. good many shake their heads and do against such Perhaps But, even though seem think bona fide should be made get the facts.

$7.00

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Illinois Supreme Court Issues List Of Bank Decisions

Holds Stockholders Liable—Reverses Gillespie Verdict

SPRINGFIELD, Ill., Dec. 19, (AP)—The Illinois Supreme Court was on record today as upholding the constitutionality of the state banking act provisions for assessment of stockholders.

By a four to three decision, the court held that when a master in chancery is assigning assessments to stockholders of a closed bank, it is not a pre-requisite that all claims be proved by the creditors to determine how much individual stockholders owe.

The decision was handed down in a case appealed from the Kankakee county circuit court by stockholders of the American Trust and Savings Bank. It was written by Justice Paul Farthing and concurred in by Justices Clyde E. Stone, Norman L. Jones and Francis S. Wilson.

The stockholders were defendants in a lower court suit brought by creditors who asked assessments against 173 stockholders. The lower court ordered the assessments made, overruling contentions that creditors claims should be proved first.

This proof can be made otherwise, the court said. The books of the bank and its papers should show what it owes each creditor and when the obligation accrued to him. The decision affirmed the lower court decree.

The court held unconstitutional, however, the state law granting a preferred claim to a creditor whose draft is returned to him unpaid from a closed bank. Arthur E. Crum, receiver of the First National Bank of Freeport, brought the suit in Stephenson county circuit court against William L. O'Connell, receiver for the Union Bank and Trust Company.

Another bank opinion by the court reversed and remanded the decision of the Rock Island county court which denied the East Moline State Hospital a preferred claim against the Peoples Savings Bank and Trust Co., of Moline. Preference was sought on the allegation that the funds belonged to the state.

In other cases, the court:

Set aside the St. Clair county circuit court sentence of Herbert Buxton to 14 years imprisonment on murder charges. Buxton was alleged to have participated in the slaying of Emil Kirsch in an East St. Louis drug store June 6, 1932. The court held his guilt was not established definitely.

Affirmed the Vermillion county circuit court in sentencing Marion Green to six months at Vandalia penal farm and to pay a $250 fine for possessing a "policy" game device.

Reversed the Macoupin county court which held that certain lands held by the closed Gillespie National Bank should go to stockholders. The decision directed a new decree in favor of Ray M. Cook, bank receiver.

Affirmed the St. Clair county circuit court conviction of George Francis on burglary charges.

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CREDIT RULE IS APPROVED

State Supreme Court Okays One Closed Bank Law, Voids Another.

SPRINGFIELD, ILL.—(UP)—By a four to three decision, the state supreme court Thursday held that it is not a pre-requisite that all claims be proved by the creditors of a closed bank in order to determine the amounts owing by the individual stockholders.

In a decision written by Justice Paul Farthing, and concurred in by Justices Clyde E. Stone, Norman L. Jones and Francis S. Wilson, the court upheld the constitutionality of the state banking act provisions pertaining to assessment of stockholders.

Check Rule Voided.

The opinion was in a case appealed from the circuit court of Kankakee county by stockholders of the American Trust and Savings bank. They were defendants in a lower court suit brought by creditors who asked an assessment against 173 stockholders. The lower court ordered the assessment overruling the contention of the defendants that before such an assessment could be made the master in chancery require creditor claims be proved.

The decision affirmed the lower court decree.

The court, however, held unconstitutional the state law providing that on bank checks issued but not collected before the bank on which they were drawn is closed that the receivers shall return the checks to the presenting bank.

Reverses Lower Court.

The case was appealed from the circuit court of Stephenson county which held unconstitutional the law providing a preferred claim for a creditor whose draft is returned to him unpaid. The suit was brought by Arthur E. Crum, receiver of the First National bank of Freeport, against William L. O'Connell, receiver for the Union Bank and Trust company's receiver.

Another bank opinion by the court reversed and remanded the decision of the Rock Island county court which denied the East Moline State hospital a preferred claim against the Peoples Saving Bank and Trust company of Moline. The preference was sought on the allegation that the funds belonged to the state.

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SUPREME COURT HOLDS BANK ACT OF STATE VALID

Provides For Assessment Of Stock Holders; Conviction In St. Clair Circuit Court Upheld.

SPRINGFIELD, ILL., Dec. 19—(AP)—The Illinois Supreme Court was on record today as upholding the constitutionality of the state banking act provisions for assessment of stockholders.

By a four to three decision, the court held that when a master in chancery is assigning assessments to stockholders of a closed bank, it is not a pre-requisite that all claims be proved by the creditors to determine how much individual stockholders owe.

The decision was handed down in a case appealed from the Kankakee county circuit court by stockholders of the American Trust and Savings Bank. It was written by Justice Paul Farthing and concurred in by Justices Clyde E. Stone, Norman L. Jones and Francis S. Wilson.

The stockholders were defendants in a lower court suit brought by creditors who asked assessments against 173 stockholders. The lower court ordered the assessments made, overruling contentions that creditor claims should be proved first.

"This proof can be made otherwise," the court said. "The books of the bank and its papers should show what it owes each creditor and when the obligation accrued to him." The decision affirmed the lower court decree.

The court held unconstitutional, however, the state law granting a preferred claim to a creditor whose draft is returned to him unpaid from a closed bank. Arthur E. Crum, receiver of the First National Bank of Freeport, brought the suit in Stephenson county circuit court against William L. O'Connell, receiver for the Union Bank and Trust Company.

Another bank opinion by the court reversed and remanded the decision of the Rock Island county court which denied the East Moline State Hospital a preferred claim against the People's Savings Bank & Trust Company of Moline. Preference was sought on the allegation that the funds belonged to the state.

The court ruled on more than a score Cook county cases. It ordered the release of Arthur Emblen, convicted of assault with intent to murder Eli J. Daiches, of Chicago, advertising company official. The court reversed the case on the ground Emblen was not brought to trial within the statutory period.

In other cases, the court:

Reversed and remanded the Alexander county circuit court sentencing of Theodore Webster to one year to life for armed robbery.

Affirmed the Vermilion county