Merchants Trust Company

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: trust company
Start Date: December 23, 1931
Location: Red Bank, New Jersey (40.349, -74.066)

Metadata

Model: gpt-5-mini
Short Digest: 80c8a4b5

Response Measures

Capital injected, Full suspension, Books examined

Other: State Department of Banking and Insurance took possession; depositors later subscribed for capital to reorganize and reopen.

Description

Newspaper accounts report a run (heavy withdrawals) on Dec. 23, 1931; the bank was taken over by the State Banking Department (suspension/closing) that day. Depositors organized and subscribed capital during 1932, and articles in Dec 1932–Mar 1933 describe plans and imminent resumption of business; reopening was arranged and announced in March 1933. Cause of the run is reported as general unrest/withdrawals following failures of other local banks (not a discrete misinformation event). OCR errors in articles were corrected where obvious (e.g., dates and phrasing).

Events (3)

1. December 23, 1931 Run

Cause: Local Banks
Cause Details: Heavy withdrawals and general unrest in Monmouth County following closures/failures of nearby banks (e.g., Seacoast Trust Company), prompting depositors to withdraw funds.
Measures: Bank was taken over by the State Department of Banking and Insurance (closure at request of president) to protect depositors.
Newspaper Excerpt: Red Bank, N. J., Dec. 23 The Merchants Trust Company here closed its doors today half an hour after the bank was opened for business ... due to unusual withdrawals.
Source: newspapers

2. December 23, 1931 Suspension

Cause: Government Action
Cause Details: State Banking Department took over the institution after heavy withdrawals; suspension/closing was effected by state authority to conserve assets and protect depositors.
Newspaper Excerpt: The Merchants Trust Company here closed its doors today ... and was taken over by the State Department of Banking and Insurance, at the request of K. H. McQueen, its president.
Source: newspapers

3. March 18, 1933 Reopening

Newspaper Excerpt: BANK, March 18.-A dramatic climax ... the local banking institution will probably open its doors within 10 days ... Out of 1,350 depositors of the bank, only 56 have failed to sign the reopening plan ... sufficient to authorize reopening . . . .
Source: newspapers

Newspaper Articles (6)

1. December 24, 1931 Brooklyn Eagle Brooklyn, NY

Article from Brooklyn Eagle, December 24, 1931

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Article Text

Lower Trend In Curb Stocks; Trade Quiet CURB EXCHANGE Opening Fairly Steady but Easier Tendency De. velops in Later Prices Prices on the Curb Exchange moved downward again today in small market. A majority of the issues opened at approximately yesterday's closing prices. but eased off gradually Aluminum Company of America, which has been constant loser this week. held up around 541/2 while American Light &Traction lost over point from the opening price at 21 Louisiana P. & L. preferred opened at 70. losing points from the previous sale. Humble Oil & Refining Company was steady around 45%. Ford Motor lost fraction as did numerous other issues including Associated Gass & Electric "A," Cities Service, Electric Bond & Share, Gulf Oil, Hudson Bay, International Petroleum, Midwest Utilities, Niagara Hudson, Pennroad and United Founders. American Cyanamid gained fraction over the previous close as did American Superpower and Tampa Electric. United States International Securities first preferred registered profit of points from the opening at Of the Standard Oil issues, "Nebraska" was the outstanding one showing gain of nearly a point from the last price of yesterday Selected Industries allotment certificates yielded points, opening at 28. two-point loss was recorded in Spiegel, May. Stern preferred, while United Light & Power preferred dropped to around 40, showIng loss of about a point from yesterday. The bonds on the Curb Exchange were irregular and dull. PENNA. BANK CLOSED Philadelphia, Dec. 23 (AP) The Citizens Bank and Trust Company of East Lansdowne, near here, was today taken over by the State Banking Department. A statement by the officers of the bank said that the closing the institution was due to unusual withdrawals. Red Bank. N. J., Dec. 23 The Merchants Trust Company here closed its doors today half an hour after the bank was opened for business, and was taken over by the State Department of Banking and Insurance, at the request of K. H. McQueen, its president. EXCHANGE HOLIDAY The boards of governors of the New York Stock Exchange and the New York Curb Exchange have granted the petitions of members for a holiday on Dec. 26. Berets Inc. distribextra em- Bank and Trust Sinkey Welles, reuther and Heaton the Samuel business Partners Stuart Hedden and last will the floor

2. January 1, 1932 The Keyport Weekly Keyport, NJ

Article from The Keyport Weekly, January 1, 1932

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STATE WOULD COMPEL PLANT (Continued from first page) Irom which a revenue could be derived and that the return would barely pay the interest on the cost of making the extension. He said that would be necessary to celve at least 10 per cent return on the principal invested. We are quite willing. said Mayor Wyckoff, "to water at a profit and if you can show us a guarantee that will warrant making the extension the proposition will be considered. It was suggested that the Matawan Township Committee submit to the Borough Council a statement of what would Councilman Smith chairman of the Water Committee, in reporting on the feasibility of rebuilding and extending water mains on a portion of Fulton and Eighth Streets sug. gested that the Council as whole look over the situation and It was decided that this would be done Councilman Van Pelt reported progress on the matter of introducing ordinances providing for merchantile licenses and prohibiting the distribution of circulars The introduction of such ordinances had been requested by the Keyport Chamber of Commerce Mayor Wye. koff suggested that the Council have a conference with the Cham ber of Commerce on the matter and that the merchants of Keyport be invited to attend a meeting of the Council and express their individual opinions of the needs of such ordinances The matter of a compromise of tax liens on the George Crawford property was presented by Borough Attorney Howard W. Roberts The property was bid in at tax sale by Attorney Ezra W. Karkus for the benefit of the heirs to the estate Allen Poling represented the heirs at the meeting Monday night. The matter was referred to a committee consisting of Councilmen Camp. Smith and Van Pelt The financial statement of Collector Charles R. Davison showed that there was a balance of $8,896.71 in the general fund. $437.03 in the water account and $834.14 in the capital and trust account Bills to the aggregate sum of $7.977 45 were approved for payment. By resolution, an emergency appropriation of $284.20 was made for the care of the poor A water anticipation note for $1,300 was authorized. This note, given for three months. is payable at the Peoples National Bank An unexpended balance of the street appropriation of $843.62 the sum of $446.02 was transferred to the police appropriation and $397.60 to the sewer appropriation. accounts All excitement has entirely subsided. Many deposits were made to express confidence in the institution and a cial confidence was manifest in large private deposit made the first the Hon, Henry E. Ackerson, president of The Peoples National Bank when interviewed said, "We are deeply appreciative of the splendid confidence manifested at this time by the people of the community in the integrity and stability of the Borough's financial institutions The Matawan Bank is the eighth Lanking institution to close Monmouth County in less than week. The Seacoast Trust Company of Asbury Park was the first to close on Tuesday afternoon last week. The following day the Merchants Trust Company of Red Bank the New Jersey Trust Company and the Citizens National Bank both of Long Branch, were closed The fifth bank to suspend business was the Asbury Park and Ocean Grove Bank of Asbury Park and the following notice signed by George Compton a bank examiner was posted on the The of Banking and Insurance has taken of the business and property of the Asbury Park and Ocean Grove Bank The bank is state institution and is the largest in Monmouth County in the matter of resources which total more than $12,000,000 The combined resources of the other four banks according to the financial statements filed with the State Department of Banking and and Insurance on September 29 last amounted to $11,361,326 Bank depositors continuing their heavy withdrawals from Monmouth County banks forced two more of the institutions in the Asbury Park district to close immediately after the Asbury Park and Ocean Grove bank suspened business These were the First National Bank of Bradley Beach and the Ocean Grove National Bank The officers and directors of these banks said the institutions were sound. that the closings were necessary to conserve assets and that the banks would be reorganized at once and pay all demands in full They attributed the heavy withdrawals to the failure of the Seacoast Trust Company and the withdrawals from other banks that resulted. The general unrest was probably largely responsible for the closing of all the banks. along with the inability to realize on loans due to the depression and that business was suspended in the interest of depositors

3. January 1, 1932 Matawan Journal Matawan, NJ

Article from Matawan Journal, January 1, 1932

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RUMORS CAUSE OF BANK'S SUSPENSION (Continued from page one) phone calls from friends and strangers from all over the county expressing their confidence in his bank these times of stress and be was no small satisfaction to be able to look back upon the safe and conservative policy always followed with view of safeguarding the interests of the depositors happenings "The bank. established over 102 years ago, has for that long period been under the management of three generations of the same family and for over hundred years has had the same correspondto The First National Bank of New York; unquestionably the strongest bank in the world During the last 25 or 30 years its policy has been largely guided by James L. former president of The First National Bank of Red Bank, pronounced by the late George G. Baker. president of the First National Bank of New York. as the ablest financier in New Jersey, also by John Terhune, president of the Long Branch Trust unquestionably the strongest and most successful banking institution in the county and by its present president. The closing of The Matawan Bank caused small flurry at The Farmers and Merchants National Bank Saturday and Monday. largely by women, many of whom drew from their savings account and called for their safety deposit boxes This timidity did not take hold of the business men, of whom it was said the bank, every merchant from Bailey's store to the station made their customary Monday morning deposits There were not half the number demands that were expected, and for which large preparation had been made were registered. Instead of the anticipated many new accounts were opened by people throughout the county some of whom lived at considerable distance. Tuesday's payments were made in gold but there were few takers Keyport was not without some actions. but as in Matawan, these were not by the business men where was reported at both banks usual business deposits were made of very substantial nature. showing that the purchases must have had been largely made with the Keyport merchants No Keyport business man withdrew his account in either of their bankinstitutions Palmer Armstrong. president of the Keyport Banking Company. said the excitement in his bank was mainly among depositors who did not understand conditions and among some others who drew their savings accounts All excitement has entirely subsided. Many deposits were made to express confidence in the institution and sp # cial confidence was manifest in large private deposit made the first of the Hon Henry E. Ackerson. president of The Peoples National Bank. when interviewed We are deeply appreciative of the splendid confidence manifested at this time by the people of the community the integrity and stability of the Borough's financial institutions The Matawan Bank is the eighth banking institution to close Monmouth County in less than week. The Seacoast Trust Company of Asbury Park was the first close on Tuesday afternoon last week The following day the Merchants Trust Company of Red Bank, the New Jersey Trust Company and the Citizens National Bank both of Long were The fifth bank to suspend business was the Asbury Park and Ocean Grove Bank of Asbury Park and the following notice signed by George bank was posted on the bank Commissioner of Banking and Insurance has taken of the business and property of the Asbury Park and Ocean Grove Bank The bank is state institution and the largest in Monmouth County the matter of which total more than $12,000,000 The combined resources of the other four banks according to the financial statements filed with the Department of Banking and and Insurance September amounted to Bank depositors continuing their heavy withdrawals from Monmouth banks forced more institutions in the Asbury Park district to close immediately after the Asbury Park and Ocean Grove suspened These the First National Bank of Beach and the Ocean Grove Bank The officers and directors of these said the institutions were that the were necesassets and that and all demands full attributed with. the failure of the Trust Company and the from other banks that The general unrest was probably largely responsible for the closing banks with the

4. December 14, 1932 The Daily Register Red Bank, NJ

Article from The Daily Register, December 14, 1932

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Closed Bank May Be Reopened Soon Meeting of the Depositors of the Merchants Trust Company to be Held at the Town Hall Tuesday Night to Consider Reopening Plan. DINNER TICKETS ALL SOLD. Could Have Many Quinn Testimonial. Chairman Frank Cole of the committee county Democrats whose dinner John Quinn, given Monterey Asbury day entire pacity the hotel's room that many applications for tickets cannot only chance anyone getting ticket the dinner," Mr. Cole, obtain one from member the spare easily have disposed of hundred Guests honor who will join the county their testimonial to Quinn clude Mayor Frank Hague and Demoleader Middlesex. music by Tom Hackett's Red orchestra is to follow the din- meeting Trust Bank next effect the sented other parties, many amount study members hopes. that will result bank opened within The details this have plan revealed the proposal the has the state banking the the the plan meet with favor the time not distant when the bank again Some the best most respectof Red Bank and vicinare committee. meeting next Tuesday only three distant from the the closing of the in last year. day, December two days before that the bank taken the state banking department. on the bank minent because banks closed other parts the state. announced that that the Trust order protect of the bank depositors. at that time that the bank was really not This contention to have borne by which pared the plan to be Tuesday night. memcommittee have issued and comment any about other are familiar the condition the bank cite various factors. One them the bank building not mortgaged. free clear this respect the same the vault and all the of other fixtures and furnishings. Register has been informed from reliable receipts from the bank been the the bank under the ment other favorable that last winter numbanks which have since all of them operating be where, cant be here? party talking Register yesterday. Every effort made have full of depositors at next meeting.

5. December 21, 1932 The Daily Register Red Bank, NJ

Article from The Daily Register, December 21, 1932

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Good Start Made For Bank Opening Enthusiastic Meeting of Depositors of Merchants Trust Subscribe for 846 Opening Likely Before Spring. LEGION CHRISTMAS PROGRAM. Mrs. Hunting Broadcast day Night Station Christmas program will WJBI Friday Tony Hunting Legion Hunting for the through the courtesy Dream Peddler, regular station at that time. children's Christmas party the Legion the auxiliary the post this evening the post rooms Broad Santa gifts, decorated Christmas and the other usual features evidence. More than 600 depositors Trust Bank attended the town night and submitted They agreements, to 846 shares bank. dissenting against the Frank Warren Smock, Mayor English since early held The been 23d, 1931, when run on the bank last night's far exceeded the expectahad about depositors more than half them turned out entirely unexpected by the members The unaniminity of opinion favor opening large amount subscribed stock the proposed new bank likewise encouraging the committee. The opinion freely. expressed that bank would reopened within two months at the latest. Kenneth Queen, the president the closed meeting. He expressed gratification stating that in view the fact that the council room where the meeting of the assemblage, another meeting might for those unable to the Mr. not The to the council room was people and there another big on the ground floor. Fully many were The the regret that the not been building. They they had had any would the meeting in armory. the depositors arrived reof an agreement, by planned and reorganize reopen the bank. Under this plan the bank have capital of $100,000 undivided profits $50,000. planned to raise the capital $100,000 allowing depositors their deposits buy shares $15 each. The surplus and undivided profits to be raised by sales of stock $15 each. The that depositors their money certain over period of months. On the date opening the deposits Thereafter, six months, may made alternating amounts of fifteen ten per cent. Larger more withdrawals may made in the judgment of the board this practicable. feature of the agreement that each deposit is to be reduced regards above withdrawal Against deposit reduction to per cent of the assets of the bank. explained at the mortgages, loans and other which lieved be sound which liquidated at the present time would produce only portion their real value under normal circumstances. In other these assets paper." It was stated that attemptto collect assets now would probably cause bankruptcies injure the financial structure the community. deposits $25 be paid on the date of reopening. The agreement in full is as follows: the undersigned, hereinafter the Trust Company Red Bank, Merhereby agree to the bank, upon the terms assets of old hereby authorized, as hereinafter company to be formed shall the Trust Company Banking New capital not undivided profits be raised under Stock sold the $15.00 new share, of raising will be permitted deposit for same at the deposit agrees that his said assets said the Banking Deof the State over and these assets the shall be paid to the depositor the above made their from the set the the end months. the the of thirty months. (Continued on next page, column

6. March 18, 1933 The Daily Record Long Branch, NJ

Article from The Daily Record, March 18, 1933

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EXPECTED Only 56 Out Of 1,350 De- positors Have Failed To Sign For Resumption DEPOSITORS TO MEET THURSDAY AT Red Bank Institution Free Of Any Debts; Cash On Hand (By Staff Correspondent) BANK, March 18.-A dramatic climax of 15 months of servative of the Merchants Trust Company came late morning when revealed that the local banking institution will probability open its doors for within 10 days. With not single bank in this community at present functioning normal manner, the directors the Merchants sprang into the breach and have called special meeting depositors next Thursday night o'clock in St. James auditorium on Broad Street. The meeting for the purpose presenting few details to the depositors for their consent in order that the reopening may come about. Under the plan which will be presented, acquiesence by depositors will result in the opening the bank within seven days following the meeting. Out of 1,350 depositors of the bank, only 56 have failed to sign the reopening plan submitted some time ago, This small number represents depositors who have moved are The number of signatures ready secured is more than sufficient to authorize reopening, due to legislation which makes necessary for only 75 per cent permission to be secured. The necessity for speed, which combined with absolute safety, will be stressed at Thursday night's meeting. When the Merchants opens its doors for business, the bank debt to the slightest extent. All obligations have been paid off during the liquidation period. Due graduation liquidation, there (Continued on Third Page)