13921. Mechanics Trust Company (Bayonne, NJ)

Bank Information

Episode Type
Suspension → Closure
Bank Type
trust company
Start Date
January 1, 1934
Location
Bayonne, New Jersey (40.669, -74.114)

Metadata

Model
gpt-5-mini
Short Digest
14b5fb13

Response Measures

None

Description

The bank was operating on a restricted basis from Jan 1, 1934 (regulatory restriction) and was closed in June (1936) and taken over by the state following an investigation that found unsafe, excessive loans to insiders. No run is described in the articles.

Events (3)
1. January 1, 1934 Suspension
Cause
Government Action
Cause Details
Bank placed on restricted operations by authorities (operating on a restricted basis beginning Jan 1, 1934).
Newspaper Excerpt
The bank has been operating on a restricted basis since January 1, 1934.
Source
newspapers
2. June 1, 1936* Receivership
Newspaper Excerpt
the Mechanics Trust Company of Bayonne, N. J., which was closed last June and taken over by the state. According to the report of Commissioner Withers, the closing of the Bayonne bank was caused by the fact that bank officials had violated these principles with impunity. Commissioner Carl K. Withers of the New Jersey State Banking Department into the loans made by the Mechanics Trust Company of Bayonne, N. J., which was closed last June and taken over by the state.
Source
newspapers
3. * Other
Newspaper Excerpt
Man Drops Dead in Attack With Ax on Restricted Bank ... William Feehan, 55, walked into the Mechanics Trust Co. today ... The bank has been operating on a restricted basis since January 1. 1934.
Source
newspapers

Newspaper Articles (2)
1. March 22, 1936 Evening Star Washington, DC
Article from Evening Star, March 22, 1936

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Article Text

Man Drops Dead in Attack With Ax on Restricted Bank me 10 minutes more to do what I By the Associated Press. want to do." The ax swung again. BAYONNE, N. J., March 21. - WilSome one in the street shouted, liam Feehan, 55, walked into the Me"Hold-up" and three policemen came chanics Trust Co. today, a longon the run. They entered the bank handled ax in his hand. with guns drawn. but Feehan, on the The few depositors in the bank were verge of exhaustion from his efforts, startled as Feehan attacked two doors, surrendered the ax to the patrolman smashing the wood and glass to pieces. and then collapsed. He was rushed Then, swinging wildly, he hacked at to the hospital, where he was prothe cages of the tellers, breaking nounced dead of heart failure. more glass and pounding at the marble The bank has been operating on a and metal work. restricted basis since January 1. 1934. The uproar brought the janitor from Police said Feehan had about $200 the cellar. Pausing momentarily, Feeon deposit. han appealed to him. "Please give

2. November 12, 1936 Montana Labor News Butte, MT
Article from Montana Labor News, November 12, 1936

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Article Text

Bankers and the People The recklessness, running into financial turpitude and illegality, frequently manifested by business men operating as bankers, is disclosed in the investigation made by Commissioner Carl K. Withers of the New Jersey State Banking Department into the loans made by the Mechanics Trust Company of Bayonne, N. J., which was closed last June and taken over by the state. One of the fundamental principles of sound banking is that adequate security shall be required for loans. This is necessary because the bankers are handling money belonging to the depositors, who are morally entitled to have loans made only under conditions which guarantee their payment. Another fundamental principle of sound banking is that directors and officers of banks shall not abuse their positions of trust by making inordinate and insecure loans of the depositors' money to themselves and their friends. According to the report of Commissioner Withers, the closing of the Bayonne bank was caused by the fact that bank officials had violated these principles with impunity. He pointed out that on marketable collateral amounting to only $445,000 bank officials had made loans totaling $2,719,429 and that loans amounting to $1,430,181 on marketable collateral of only $131,400 were made to 11 bank directors, their affiliated companies, relatives and close friends. It was practices like these revealed by Commissioner Withers that threw many banks into bankruptcy during the break-down of our banking system which culminated in the forepart of 1933 and robbed depositors of millions of dollars. It is a calamity for public confidence in bankers that these practices continue even in a much modified degree.