145. Citizens Bank & Security Company (Fort Payne, AL)

Bank Information

Episode Type
Run → Suspension → Reopening
Bank Type
state
Start Date
March 24, 1921
Location
Fort Payne, Alabama (34.444, -85.720)

Metadata

Model
gpt-5-mini
Short Digest
ea35e1ef

Response Measures

Borrowed from banks or large institutions, Capital injected, Full suspension, Books examined

Description

A run on March 24, 1921 exhausted cash; bank was turned over to the state bank examiner and suspended. Plans raised capital and secured time deposits; bank reopened mid-May 1921. Cause of run was unfounded rumors. Closure was effected by the state banking department (examiner).

Events (3)
1. March 24, 1921 Run
Cause
Rumor Or Misinformation
Cause Details
Run triggered by circulated unfounded rumors about the bank's condition; examiners and officials said rumors were without foundation.
Measures
Withheld payment of several checks briefly during an inspection; affairs turned over to C. R. Keener, state bank examiner; payments suspended when cash exhausted.
Newspaper Excerpt
was forced to close its doors here shortly before noon today as a result of a run which began soon after the bank opened this morning and continued until all of the cash in the bank had been paid out to meet withdrawals by excited depositors
Source
newspapers
2. March 24, 1921 Suspension
Cause
Government Action
Cause Details
After the run exhausted available cash the bank's affairs were placed in the hands of the state banking department/examiner and payments were suspended.
Newspaper Excerpt
the affairs of the institution were turned over to C. R. Keener, state bank examiner
Source
newspapers
3. May 16, 1921 Reopening
Newspaper Excerpt
announcement was made here today that the Citizens Bank and Security company of Fort Payne would re-open for business on next Monday, May 16 ... early Monday morning shipments of currency will arrive at the bank in order to take care of any withdrawals which might be made ... the bank reopened for business yesterday. More than twice the amount of the money withdrawn during the run of seven weeks ago was deposited ... There were no withdrawals all during the day and depositors ... filed into the bank almost continuously. (May 16-17, 1921 articles.)
Source
newspapers

Newspaper Articles (8)
1. March 25, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, March 25, 1921

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Article Text

PLAN TO REOPEN FORT PAYNE BANK Institution Closed Yesterday Following Run of Several . Hours Fort Payne, March 24.-(Special.)-A movement is on foot to reorganize the Citizens Bank and Security company which was forced to close its doors here shortly before noon today as a result of a run which began soon after the bank opened this morning and continued until all of the cash in the bank had been paid out to meet withCrawals by excited depositors who crowded into the bank by the hundreds. It is said that Chattanooga people are interested in the reorganiaztion movement and that if present plans mature the bank will be reopened shortly with increased securities behind it. This morning's run was the culmination of rumors which have recently been circulated in the county relative to the condition of the bank, according to officials of the bank who declare the rumors were without foundation and an effort is now being made to locate the source from which they came. They state tha: the bank is solvent, but that as is the case with all banks they were unable to withstand a continued run and after the cash had been paid the affairs of the institution were turned over to C. R. Keener, state bank examiner. According to T. J. Cook. cashier of the bank, Mr. Keener, came here this morning to make an inspection of the bank and during the time he was making an examination of the bank's cash it was necessary to withhold payment of several checks for a few minutes. which precipitated the run. The bank has deposits of $175,000 and paid in capital of $22,000.

2. March 28, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, March 28, 1921

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Article Text

TO DISCUSS PLANS TO REOPEN BANK President of Fort Payne Institution Calls Meeting of Stockholders and Depositors Fort Payne, March -(Special.)-R. - A. Burt, president of the Citizens Bank and Security company of Fort Payne, which closed its doors Thursday morning after a run had been made on the institution by excited depositors, has called a meeting of the stockholders and depositors for Wednesday to take place in the courthouse. It is understood that the meeting was called for the purpose of discussing the various plans which have been set forth for the reopening of the bank, which is now in the hands of the state banking department. It is said that one of the suggestions which has been received with favor by the officials of the bank is to secure an agreement of the larger depositors to place their deposits on time deposit and thus protect the bank from a run of any considerable size when it is re opened. The proposition of increasing the capital stock from $22,000 to $100,000 is also being strongly considered, officials declaring that an increased stock subscription at this time would provide additional funds with which to meet withdrawals which might occur when the bank is reopened and at the same time lend added strength to the institution. Bank examiners who are making an investigation of the bank's affairs stated today that they are in good condition and that the run of last Thursday was unwarranted and based on wild rumors which have recently been circulated. It is said that the bank was somewhat handicapped on account of heavy loans made last spring, a great portion of which cannot be collected on a moment's notice on account of the unsettled financial conditions. According to reports, this same situation exists in many banks and many of them would be closed should a run be made.

3. April 1, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, April 1, 1921

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Article Text

Am FORT PAYNE BANK TO REOPEN WITHIN NEXT THIRTY DAYS Four Hundred Depositors Meet and Declare Entire Confidence In Institution-Unfortunate Rumor Fort Payne, March 31. (Special.)It was definitely decided yesterday to reopen the Citizens Bank and Security company of this place at an early date when about 400 depositors met in the courthouse in response to a call of President R. A. Burt for a meeting to discuss the affairs of the bank and the propositions which had been set forth for reopening. The bank will open, it is said, within 30 days. Under the plan the larger depositors will take time certificates of deposit for their deposits, thereby giving the bank the continued use of their money for a stated period of time. To meet possible withdrawals of the smaller depositors, an additional stock subscription is being raised and it is said that arrangements have already been made to secure more than enough

4. April 4, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, April 4, 1921

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Article Text

FORT PAYNE BANK COMES BACK WITH BIGGER INSTITUTION Business Men Hurry to Aid Citizens Bank and Capital Is Hiked to $50,000-Reopens About May 1 Fort Payne, April -(Special.)-At a meeting of the directors of the Citizens Bank and Security company yesterday afternoon, it was decided to increase the capital stock of that institution from $22.000 to $50,000. and to reopen the bank not later than May 1. Arrangements are now being made with the larger depositors to place their money on time deposit sub ject to paynient at stated times, in order to prevent further withdrawals before the bank can collect on the large amount of notes now held by the institution. It will be recalled that this bank was forced to close its doors about 10 days ago after a run on the institution which exhausted all available cash before the officials turned the bank over to the state banking department. An investigation of the whole situation by the state department revealed the fact that the rumors which caused the run were unfounded and the affairs of the bank were found to be in good condition. It was therefore decided to re-open the bank at an early date and a mass meeting of the stcokholders was called by R. A. Burt, president of the bank. At the meeting more than 400 depositors pledged themselves to accept time certificates instead of their present checking accounts. This paved the way for a reopening of the bank without further embarrassment due to withTrawals. It is stated that confidence in the institution and its officers has already been restored to its fullest extent, and that with the increased capital and the assurances that no more money will be withdrawn. ther eis no reason why the bank: should not continue business as heretofore. The following Fort Payne business men have been added to the board of directors: Dr. W. F. Quin. E. S. Killian, A. E. Hawking J. W. Walker. C. G. Ward. Dr. W. A. Richardson, and R. L. Wright.

5. April 21, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, April 21, 1921

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FORT PAYNE BANK, AUDIT SHOWS, WAS IN GOOD CONDITION Laudable Spirit to Assist Planters Made It Quick Victim of "Run" Founded on False Rumors Fort Payne, April 20.-(Special.)-J. E. Miller of Wright, Aldridge & Co., certified public accountants of Montgomery, has completed an audit of the books and accounts of the Citizens Bank and Se curity company of this place, and has announced that the affairs of the bank are in perfect order. Immediately after the bank was closed last month Mr. Miller was called to Fort Payne and since has been engaged in making a thorough audit. Mr. Miller's announcement is gratifying to the officials of the bank, as it removes all doubt as to the actual condition of the bank, and dispels absolutely the expectation on, the part of some that a shortage in the bank's accounts would develop if proper investigation were made. The report of the accountant evidences that the run which caused the closing of the bank was based on unfounded rumors, and was not justifiable. It is anticipated that no further trouble will be experienced in opening the bank on May 1, as originally planned under the arrangements now being made with the larger depositors who are to take time deposits for their checking accounts held with the bank at the time of its closing. Many of them have signed an agreement to that effect and others are signing daily. The substituting of time deposits for the regular deposits of the larger depositors will render the bank in a position to collect on its outstanding paper without further embarrassment on account of withdrawals. It is said that the bank's present condition was brought about by its sincere desire to relieve the financial situation brought about by the low price of cotton and general business depression. For that

6. May 12, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, May 12, 1921

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FORT PAYNE BANK WILL REOPEN FOR BUSINESS MONDAY Institution, Which Was Closed By Run Seven Weeks Ago, Will Resume With Big Capital Increase Fort Payne, May 41.-(Special.)-An- nouncement was made here today that the Citizens Bank and Security company of Fort Payne would re-open for bustness on next Monday, May 16. This bank suspended payment about seven weeks ago after a run which exhausted all of the bank's available cash and which later proved to by have been without foun-

7. May 16, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, May 16, 1921

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FORT PAYNE BANK WILL OPEN TODAY Barbecue and Speechmaking With Sort of a Holiday, Will Mark Affair Fort Payne, May 15.-(Special.)-All details looking to the reopening of the Citizens Bank and Security company of Fort Payne tomorrow were completed Saturday, and early Monday morning shipments of currency will arrive at the bank in order to take care of any withdrawals which might be made, although none are expected. Numbers of old customers are said to be waiting for the reopening of the bank in order to make substantial deposits to their funds already in the bank. In appreciation of the strong support that has been given the bank in its reorganization plans it is planned to make the reopening day a sort of holiday, with speech-making and a big barbecue in Union park. The speakers will include C. M. Preston. vice president of the Hamilton National bank of Chattanooga, and H. H. Montgomery, state superintendent of banks. The expenses incident to the barbecue are being borne by H. B. Brock, former president of the bank, who was prevailed upon to again become president. According to the statements of the state banking department the run which closed the bank last March was unjustifled, and the bank is in good condition, according to their reports. It is said that the general business depression resulted in such serious financial straits to the cotton farmers of this section that the bank, through an earnest desire to be of assistance, carried over many of the notes which were due last fall. As a result of this the bank was forced to borrow some money in the open market to meet withdrawals caused by the same business depression. According to officials of the bank, they are confident that all of the bank's paper will be collected as soon as the situation readjusts itself.

8. May 18, 1921 The Birmingham Age-Herald Birmingham, AL
Article from The Birmingham Age-Herald, May 18, 1921

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ALL COMING IN AND NOTHING GOING OUT Fort Payne's Bank Reopens With Big 'Cue, With No Withdrawals and Large Deposits Fort Payne, May 17. - (Special.)- More than twice the amount of the money withdrawn during the run of seven weeks ago was deposited in the Citizens Bank and Security company of this place when the institution reopened for business yesterday. There were no withdrawals all during the day and depositors from all walks of life filed into the bank almost continuously. The crowds were said to have actually - equalled those of the