1.
December 11, 1930
The Chattanooga News
Chattanooga, TN
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NEW YORK BANK FAILS TO OPEN DOORS THURSDAY
Bank of United States Placed in Hands of State Department After Run.
New York that the was hands banking were posted the main office and the branches of the of the of the smaller and the regular opening time this action was taken after flurry of of lasting into the morning New Federal Reserve The has with the but cause action the States when the lower east side Present the new Had Rapid The in and panded total the with Wall only branch in the financial Notice on the door of the office New the United States. 535 Fifth (Signed) JOSEPH BRODERICK of
Large Deposits. On the basis its of September and deposits that deposits considerab duced since While total resources are amount to only one of the city's lead any The bank's officers include Singer, the and Mr. announced that though the was the New distress which closing these banks has offered claims the depositors the extent such claims, properly authenticated.
Laurens Bank Closes. Farmers bank to board of the the hands national bank was closed temporarily four aminer. but was Bryson president. The bank was capitalized
Paper Company and Bank ceiver File Action Companies.
CLAIM AGREEMENTV TED
Col. Lea Charged audylent Use of Liberty Bank Funds in Suit for $166,000. suit on file in chancery court day the celver Publishers. Inc., Nashville, holding pany for the of the MemAppeal, the Journal and Tribune company. necessary. the to the company its investigated. necessary that be named to Appeal, Inc., stock pledged to the Nashville Trust security for $1,500,000 bond Southern purby the Paper the The avers that the Southern violated its ment the trust involving the Southern the Memphis Commercial Appeal, in in said by trust. might could be hindered imperiled.
Col. Lea President. The Commercial Memphis Evening the company the Knoxville Col. Luke Les of Nashville is pres!of the Southern the the Journal and Tribon file today lishers the this the company filed by the MinnePaper company of sota the fair the property for benefit creditors. alleged has The paper 894,000 for newsprint sold the bill the Publishing against company for paper Charge Lea Used Funds Col. defendant filed yesterday by the receiver for of him against him and was that Col. had deposited of deposit had by Central and and then Asheville, to The petition the receiver. the bank. ventures own personal nancial gain and began to the (Continuedon Next Page.)
2.
December 12, 1930
Record-Journal
Meriden, CT
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United States Bank Closed On Order Of Bank Commissioner
One Of Smaller New York Institutions-Action Follows Run On Bank
New York, Dec. 11-(AP) The Bank of United States, state institution with 59 branches specializing in serving small depositors in New York City, but with virtually no out of town correspondents, was closed today by the state superintendent of banks, Joseph A. Broderick.
Follows Run On Bank.
Immediately after that official action, which followed a run on some of the bank's branches yesterday, 23 powerful members of the New York Clearing House association took steps to help 400,000 depositors gain prompt access to half of the $202,972,000 standing in their names on the books. The bank was not a member of the clearing house and was one of the smaller New York institutions. With Christmas only a fortnight away, it was announced that the clearing house banks would lend depositors up to 50 percent of their accounts charging five percent interest for such service. The closing, made effective from the hour of opening this morning, was attended by no disorders. Depositors congregated before the main office in Fifth avenue and at some of the branches, but were kept in line by police who assured nervous inquirers: "Everything is all right.
Don't worry.' The crowds were content to peer through the plate glass windows at the clerks working over the books within. For several months there had been rumors that the bank, which has no connection whatever with the federal government, might be embarrassed. Not long ago plans were made to merge it with three others into a billion dollar bank, but these proposals were abandoned last Sunday night. Some of the city's most prominent bankers worked day and night thorugh Monday, Tuesday and Wednesday in an effort to solve the difficulties, and it was not until early today that the final action was decided on. The opinion was expressed among Wall Street's most powerful bankers that the closing of this institution had definitely clarified the banking situation, and that any unforeseen emergency could now be promptly and effectively met.
Frozen Loans. Mr. Broderick, it was said, felt that the Bank of United States, which was understood to have been embarrassed by frozen loans, could eventually have liquidated, but that It had been impossible to determine the amount of cash required for such purposes. It was largely for this reason, bankers said that the other three banks the proposed merger had decided to abandon the consolidation plan. Two of these institutions, the Public National bank and the Manufacturers Trust company, were admitted to the Clearing House association today. The requirements of this assoclation are unusually stringent.
New York-Three square meals daily for four healthy adults for week for a total cost of $10.42! An experiment is described by family, a magazine for social workers. Dieticlans prepared the meals. The materials were purchased in the poorer districts. Three social workers making the test gained weight. the other maintained the same weight.
3.
December 15, 1930
The San Francisco Examiner
San Francisco, CA
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Cleared Removal of Menace, Declares B. C. Forbes
By B. C. FORBES
NEW YORK. Dec. 14.-The banking situation in New York has been greatly improved by the closing of the grossly mismanaged Bank of United States. was the known bad condition of this bank that was responsible for the unsettled feeling in New York financial circles. Now that this sore has been cut out, New York feel entirely confident. No other institution was or is in the same shape as was the Bank of United States. A political scandal of the first magnitude is predicted in Wall Street when the inside story of the bank's extraordinary activities is brought to light. that when they began to run out of names to give their 57 varieties, they got hold of Paris directory and used the names of Paris streets. Who was-who sible for lending these "dummy" companies, as Wall Street calls them, $20,000,000 of the bank's money? Who wereresponsible for lending nearly $100,000,000 of depositors' money to real estate interests? Were any of the borrowers, contractors, etc., affiliated or connected in any way with those with the bank?
Here are questions the stockholders' protective committees will dig into and want answered: How came it that such title, Bank of United States, was granted by the State Superindent of Banks over the protest of the lawyer sent to Albany by the most influential bankers in New York, who pointed out that such title would mislead the ignorant into believing that the institution was run by the United States government?
Who was responsible for the report, as finally prepared, covering the State Bank Examiner's investigation of the bank last June? By what unique coincidence were the bank's losses figured out as equaling. to penny, the institution's total surplus? Had the losses been given as one dollar more, the State banking law would have required that the capital stock be made good immediately or the stockholders be assessed.
Who was-rather, who wereresponsible for the lodging of $2,500,000 official New York City deposits in the Bank of United States, of which only $1,000,000 was withdrawn before the bank closed? Whose judgment left $1,500,000 in that weak bank when such banks as the National City, the Guaranty Trust, the Bankers Trust and the Chemical Bank each had no more than $500,000? (The Chase Bank. carrying city checking account, was in dif ferent category.)
What purpose underlay the or ganizing of no fewer than 57 subsidiary companies by the Bank of United States people? It is said
What were the financial dealings between the Bank of United States and the Bankus Corporation, its adjunct, which, together with the bank, had hand in organizing company after company carry on various multifarious activities, including borrowing and lending to and fro?
Just when did the State Superintendent of Banks first receive an unfavorable report on the Bank of United States from his own examiners? What did he do about such first unfavorable report? And how long did It take him to institute corrective measures? Who sible for opening a'new branchand taking money from innocent three weeks of the bank's suspension?
New York bankers have long complained that the Bank of United States was favored above all others by the political powers that These wondered who befriended this "outlaw" bank. as they called this institution because kept itself outside the New York Clearing House and thus removed itself from the very strict discipline imposed upon Clearing House banks. Responsible bankers now won der whether it was not the political favor enjoyed by the bank which ultimately proved to have been earned and retained at too high price to the bank's depositors.
Happily, no other New York bank is similarly circumstanced. The New York banking position today is the strongest it has ever been in all banking history. Now that the Bank of United States menace has been removed. the sky has cleared and bankers predict distinctly brighter days.
4.
December 23, 1930
The Brooklyn Daily Times
Brooklyn, NY
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MEN ARRESTED IN RUN ON BANK has six branches in Manhattan and one in borough. There were about 400 in line the branch at 10 M. when the institution closed and they departed without making any when police told them to call this morning. During the night one taxicab after another arrived branch, presumably carrying cash to the threatened branch. Gregory Noonan, of the bank's legal staff said was planned to have $16, in cash at the bank today to meet every possible demand. Two men were arrested, charged with circulating false rumors regarding the bank. Arraigned before Magistrate Getlieb, in Night Court, they were released in their own custody for hearing tonight to give the bank time to determine whether it would press the charge. The defendants Thomas Lodge, 560 West 144th st., Manhattan, and Michael Melrose. 1620 Mermaid ave. According Mr. Noonan, they made predictions to various persons that the bank would not open today. Melrose described himself as manager of a restaurant. Lodge said he composer of music. While there is possibility of assessing stockholders of the Bank of United States, Mr. Broderick understood to reluctant to take this step, largely because number of small depositors bought small blocks of stock and their troubles would be In Brooklyn more than 300 who filed applications last Tuesday got their money on loans yesterday at the South Brooklyn branch, Fifth ave. and 15th st., and at the East New York branch loans taken by 800 or 900. This branch is at Butter ave. and Ashford st. There disorder at either institution, depositors standing quietly line. They were admitted in blocks of 25 and the work completed rapidly.
Amount Kept Secret Officials the branches declined to make an estimate on the total amount loaned. The branches remained open until M. there some by tellers. those had failed to reach the Speculation on possible liquidaof assets continued throughout the day, with Supt. Broderick being quoted by persons close to him being reluctant to attempt convert of the real estate held by the bank into cash. If this attempted the moment, he understood to hold, there would be
5.
December 26, 1930
The Brooklyn Daily Times
Brooklyn, NY
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STATE TO PROBE REDS' ACTIVITIES IN BANK CRASHES
Fraud Bureau and Banking Dept. Keep Close Watch on Communists Here.
Two State the Bank ing Departme Fraud reau of Attorney General's fice. are watch to. day activities of Communists officially held responsible measure for the of two the first of month. attempted attack on third which checked after had been started. Strong on the of the Department discovery the third plot revealed today by an official of the in ing the run after line of about 1,000 depositors had formed in front on of the branches this bank line the depositors fears Banking Department official learned last of Com munist campaign being discussed to launch the attack on this institution
Run Checked Within hours this learned. the but it quickly nothing regarding learned by the general With this example them coupled the runs on the Bank of United and the naBk & Trust officials are convinced of strong to one bank with faiding the munist world revolution against capitalism and all its instiWatson Washburn assistant At. torney General charge bureau. questioned heads eight brokerage houses and their records. out for other and relating to deals in bank time in pressing charges against brokers whom find had slightest connection whispering and against he said He question 100 brokers about Chelsea Bank trading. learned today that District Attorney of New County also taking an interest in the
To Probe Red Activities
Assistant Attorney Charles Pilatsky has directed look into activities of Communist to foundation for that the Reds are plotting against the and he has quietly tracing calls depositors bank to withdraw their Broderick of the banking questioned garding reported run on the third Institution run there was that one being ed. by to thousands of depositors another two or three days, the said, he would be in position to make complete statement the conditions of the bank He 80 far he knew no tion was done the of the Bank of "nited States He denied he had issued that the Chelsea bank were assured of 100 on the dollar He had not discussed this phase he and would no on until his was to tonight Girls Commercial H. 883 Classon to discuss Max D. Steuer. chief counsel for the Depositors tion. is to make revelations startling made to broadcast his remarks
6.
December 27, 1930
The Brooklyn Daily Times
Brooklyn, NY
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FRAUD
Page) officers of the bank had enriched themselves through stock manipulation. He charged. as he had done previously, had Sept. and Dec. 11, when the State Banking Department closed the Institution. He declared either the bank did not have $7,000,000 in undivided profits reported on Sept. if it did the directors and officers must tell what became it. 'No institution with undivided profits can be bankhe He added they had money. must be somewhere had dis. appeared. they did not have he said. the "door the jails about to If they did and disappeared. he said, "then the doors to the jail are still open." Steuer Demands Explanation Mr. Steuer called for explanation of an item in the September 24 report to the State Banking partment listed discounts and totaling $123,000,000. He said his investigation had convinced him there were no such assets, and the merely the amount of worthless paper held by the bank form of notes from depositors who had bought units of Bank of United Corp., virtually forced on them by officers of bank. believe it may be possible the bank had paper to this amount," said Mr. Steuer. "Paper, paper, paper! You depositors did not put in paper. You put in money, hardearned money, real money. paper did they have for How much are you going collect for this Getting down the officers of the closed institution. he named Bernard Marcus, president: Paul Singer, vice president, and Stanley Mitchell. chairman of the board Charging "these men have enriched themselves to the extent of by manipulating the stock of the bank and its affiliates. Mr. added "they lied to the people they said they had $123,000,000 discounts when they knew they had nothing of the sort." The association's counsel told his hearers he had called on Superintendent, Broderick, of the banking department, to the report of his examiners of the conditions of the bank and the request had been denied. He would see them, he said, for he would apply to the courts to compel Mr. Broderick to disclose the information. Hits "Whispering Campaign" In closing address he begged those attending the meeting to lose faith in banks or the nation. There were laws, he said. which would protect them. He asked that they pay no attention to "the whispering campaign" and to take no part such campaign. Mr. Steuer disclosed he and others had conferred Bennett and had been assured Mr. Bennett would start an investigation he took over the office of the State Attorney General. Today's session with Mr. Bennett merely put the matter before him formally in the form
7.
January 2, 1931
The Producers News
Plentywood, MT
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ANOTHER BANK
(Continued from First Page) blame the closing of the bank On Monday night the officials the arrest two depositors for "spreading false rumors did prove false this morning when positors branch alone tried their money. order to try stop the run the bank Broderick issued which he said. plenty of money satisfy This proved lie. There was plenty money the depositors wait 400,00 Bank of are waiting. Examiner Peddles Lies
The fact that the run the bank continued after Broderick's shows that the people are losing faith the of when come question of the money this $25,000,000 bank within weeks after the of the Bank the heart the financial center United States shows the of the crisis and effects the banking There already been 1100 bank failures 1930, with assets 700 million dolinvolved. This exceeds ords the history of the United States.
Depositors Total The total number of depositors New bank fail and with families they represent more Run Started by Rum Seizure reliably that the closing the was by the recent capture officials several large cargoes of liquor, the which been financed by the bank officials.
TEN MORE IN THE SOUTH
Memphis, Tenn., Dec. banks eleven northeast Mississippi towns were closed today. All were within dius of about 30 miles the and uation described local president Peoples Bank Trust Company, Tupelo, the largest of the
8.
January 16, 1931
Brooklyn Eagle
Brooklyn, NY
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Lack of Aid by Other Banks
Efforts of Officers to Obtain Accounts of Bank of United States Depositors Brought DiffiTheories Scouted
The Eagle has retained Charles Recht, an attorney of the New York Bar, to act as its counsel and legal advisor in an investigation of banking conditions in New York City. Mr. Recht will give his services free and will also advise depositors in any failed bank. Inquiries should be addressed to The Brooklyn Eagle and not to Mr. Recht.
What caused the run and the closing of the Chelsea Bank and Trust Company, which an outside financial group is negotiating to take over and reopen under another name after supplying new capital? for Banking Superintendent Broderick in midafternoon on Dec. to take over this "Great White Way" institution on whose ledgers appear such names MorGest, Roxy's, Texas Harry Richman latter place frequented dered gambler, Arnold Rothstein? Overshadowed by recordbreaking smash of the Bank the United States, there been little official unofficial taken answer although the funds involved the Chelsea closing are amount volved City Trust collapse. The Chelsea closing involved surplus and deposits the City Trust book without taking account the looting, did not reach $10,000,000.
Chelsea Lacked Support Investigation by the Eagle indithat the for the run and closing the Chelsea the part the bank's officers obtain counts depositors the closed Bank the United States and the failure other banking institutions to give full support when the Chelsea got into acute difficulties. Charles special counsel Eagle in inquiry into banking analyzed the Chelsea run closing 'Reports published the day after
Please Turn to Page
9.
January 22, 1931
Chicago Tribune
Chicago, IL
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CHARGE BANK'S RECORDS FALSE CALIFORNIA BEFORE CLOSING AND PACIFIC
Directors Are Witnesses FARES TO FIT at Investigation.
New York, Jan. cers of the closed Bank of United States concealed the condition of the bank when was near collapse, it brought out at the opening of an One way fare Chicago today. joint state to California or Pacific and county into inquiry the bank's Northwest. Good in suspension is being directed by Attorcomfortable coaches ney Max D. Steuer, who will present chair cars only. his evidence to the grand jury. pointed also to the facts that the bank's books had been falsi$6500 loans had been made without the or approval of the board of and that the One way fare Chicago to minutes of California or Pacific board had since Dec. 12, 1929, Northwest. Good in
33 Witnesses Called. witnesses were Julius Blauner, director of the bank, and Robert director and vice president. They were first the of 33 witnesses, to include other officers and directors of the bank, subpoenaed. Mr. Steuer's Mr. of Blauner Mr. Adamson revealed that on Sept. ten weeks before the bank was closed and taken over by the state banking department, the bank reported in its regular quarterly statement to the epartment that it had surplus of $10,000,000 $7.and in profits, contrary to the findings of examiners of the state banking department, who found not penny in the bank's treasury under these items. Loan Made to Kresel.
It was also brought out by Mr. Steuer that $16,000,000 in loans were granted to the bank's affiliates with- out knowledge or approval of the directors and that a total of $4,510,217 in loans and accumulation indorsements granted to directors of the bank without official knowledge of the board. these loans one was of to Isidor J. Kresel, ney and director of the bank and cial counsel in the appellate division's inquiry into magistrates' courts. Mr. Kresel put up collateral of $190,111. Bernard M. Marcus, president, and Mr. Kresel, it was brought out, virtually ran the bank, with the majority of the directors kept in ignorance for the most part of matters with which they are required to be familiar under the One of the outstanding revelations before Steuer was that while Mr. Marcus had reported to the board of directors that the total of what might be termed weak loans was not above $600 or reports of state examiners, produced by Steuer to the surprise of both Mr. Blauner and Mr. Adamson, showed that of loans amounting to $37,498,290. the bank. ing department had criticized as quiring watching and had characterized $14,065,366 as "slow and $9,321,088 as doubtful.
10.
February 12, 1931
The Cincinnati Enquirer
Cincinnati, OH
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INVESTIGATOR
Of Judges Arraigned
At New York With Seven Bank of United States OfficialsKresel's Bond $10,000
February Kresel of in York Courts answered charging today The signed last as investigator of the arose from Bank of United not guilty to charges resulting suspension but Kresel faced the ordeal of and the he displayed in the Magistrates pigeons Only when Allen shattering all of the reached hand and him how he did Kresel betray his Kresel five held for $10,000 bond the of Bernard Marcus President and Saul Singer Vice the bond was set at Through his attorney, John Kresel issued statement for the confidence of the and his "brethren at the bar He declared his innocence and his belief he would be vindicated Samuel Rosoff. subway contractor submitted to Banking Superintendent Broderick plan for reorganizing the closed bank Under this plan would reopen under new name with $10,000,000 new capital The closed bank has no connection with the Government
11.
February 12, 1931
The Springfield Daily Republican
Springfield, MA
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Milton, lawyer and of John D. Rockefeller, Jr., and H. Satteranother planned to sent to the state banking plan for reopening the bank The plan conceived by Samuel Rosoff, millionaire subway The closed bank has no connection with the government.
12.
February 12, 1931
The Bangor Daily News
Bangor, ME
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Kresel and His Associates Held In $10,000
NEW Feb. dor Kresel, sourge corruption York courts, answered an dictment charging felony in general sessions The small, quiet man. resigned last night investigator of the bench, arose from sick bed and, with seven other associates in the closed Bank of United States pleaded not guilty charges resulting the bank's suspension. but unruffled Kresel faced the ordeal of and "mugging" same equanimity in the defenses of vice squad men, stool pigeons and Only when Judge Allen, shattering all of the court, reached down shake his hand and ask him did Kresel betray his how felt, badly," was his very voiced reply. Kresel five of his associates $10,000 In held trial the cases Bernard Marcus, president and Singer, the bond John W. Through Davis, issued askthe confidence of the public ing for his "brethren at the bar. He declared innocence and his belief would vindicated. he demand directors of the affiliate of the pay back losses of the corporof $50.was in suit for filed by the The latter Irving Trust concern is in for the Bankus Kresel, Marcus Singer were among named. Samuel Rosoff. millionaire subway contractor, submitted Banking SuBroderick plan perintendent closed bank. Under reorganizing the reopen under this plan capital. discuss its details, declined to He had backbut depositors 100 and would yield ers" the dollar. cents has no connection closed bank with the government.
13.
February 12, 1931
Press of Atlantic City
Atlantic City, NJ
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Kresel Not Guilty
Resigned Investigator in Bench Quiz Denies gling Bank Funds
NEW YORK, Feb. Kresel, scourge of corruption in New York courts, answered an dictment charging felony in general court today. The small, who quiet man, signed last night investigator the magistrates' from arose sick bed and, seven other associates in closed Bank United States. pleaded not guilty charges resulting from the bank's suspension. Pale Kresel faced ordeal fingerprinting "mugging" with the same equanimdisplayed penetrating the defenses magistrates, vice squad stool pigeons Only Judge Allen, shatterprecedents court, reached down shake hand asked felt, did Kresel betray feelings very badly,' was his voiced reply. Kresel and five of his associates were held trial $10,000 bail. cases Bernard Marcus, president, Saul Singer, president, bond set Through attorney, John Kresel issued statement asking for the confidence the public his "brethren the declared innocence his belief would be dicated. demand that directors of the Bankus affiliate of the bank. back losses of the poration. "upwards $50,000,00" filed today the Irving Trust The concern trustee bankruptcy for the Bankus corporation. Kresel, Marcus Singer among directors named. Samuel Rosoff. millionaire subcontractor, BankSuperintendent Broderick reorganizing closed bank. Under this plan it would open under name with $10,000,000 new capital.
14.
February 20, 1931
Buffalo Courier Express
Buffalo, NY
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BANK HEARING CRITICISM
New evidence uncovered to show unfavorable reports were concealed
New York, Feb. evidence recorded today officials of the closed Bank United States from its directors reports state bank exWhereup Max Steuer, inquiry the indicated further be sought. Several officials already have indicted. "Did you know the indebtedness of the the bank by the desaid these should asked Frederick Hobbs, estate man and former director of the bank. Hobbs. Never Heard "Did know the officers plan make these loans were cleared never heard of Steuer Hobbs 1929 erport state bank examiner an affiliate the bank. Hobbs spent fifteen minreading think we were very much deEarlier Steuer asked Herman Metz, director, that the bank had pages "Shouldn't the superintendent banks known about that?" Metz countered. going to find out about exclaimed Steuer.
15.
March 3, 1931
Wilkes-Barre Times Leader
Wilkes-Barre, PA
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BANK PROBE REVEALS NEW SENSATION
60,000 New Depositors Enrolled After State Published Unfavorable Report
New York. Mar. mony that Bank States marshaled more than depositors shortly after the State Banking Department issued an unfavorable report on its condition stirred the Steuer investigation yesterday that high officials had instituted drive mcre depositors in February, 1930 and that he self had recruited 1,400 among his in venture. "This is the most startling mony said Deputy torney General Max D. Steuer is delving into the reasons for bank's suspension. Attorney General John H. that several had started an independent to depositors 160 cents on the dollar, either constructive liquidation or by and reopening of the bank.
16.
March 3, 1931
The News Journal
Wilmington, DE
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ASSERT BANK MADE NOVENA OF GRACE DEPOSITORS DRIVE BEGINS TOMORROW AWARE OF FAILURE AT CHRIST OUR KING
Steuer Says Bank of Signed 60,000 Patrons in February.
REOPENING IS SOUGHT
(By The Associated NEW Mar. that the Bank United marshaled than 60,000 depositors shortly the State Banking Department issued unfavorable report condition stirred the Steuer investigation today. Morris testified yesterday that high officials had instituted drive more depositors in 1930. and that he himself recruited 1,400 from among his in another "This the most startling testimony yet Deputy Attorney General Max Steuer who delving into the reasons for the Attorney General John H Bennett announced that several directors had started independent movement to recompense depositors 100 cents dollar. either by tive liquidation by reorganization and reopening of the bank.
17.
March 3, 1931
Wichita Falls Times
Wichita Falls, TX
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BANK SOLICITED DEPOSITS AFTER ADVERSE REPORT
NEW YORK. March 3. Testimony that Bank of United States marshaled more than 60,000 depositors shortly after the banking issued report on its condition stirred the Steuer investigation today. Morris White, director. testified yesterday that high officials had instituted drive more depositors in 1930 and that he self had 1,400 from among his the most startling testimony said Deputy torney General Max D. who is delving into the reasons for the Atty. Gen. H. Bennett Jr. announced that an movement to recompense depositor 100 cents on the dollar, either by constructive liquidation or by reorganization and reopening of the bank
18.
March 25, 1931
Seward Daily Gateway
Seward, AK
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CASE SET FOR TRIAL NEW YORK, Mar. 24. (AP)-Trial of Issidor Kresal, Bernard Marcus. Saul Singer, Herbert Singer and Henry Pollock, directors of the defunct Bank of United States, was ordered to start March 30.
19.
May 21, 1931
Press of Atlantic City
Atlantic City, NJ
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Recites Officials Conference
Two Institution Vice Presidents Excluded Talkative, Probers Told
NEW YORK, May McArdle, accountant for the closed Bank United States, testified today that two of its vicepresidents were excluded from conference with the state superintendent banks because couldn't keep their mouths shut." testimony witness Bernard and three the bank accused of funds. At conferences which followed report the 1929 Mr. McArdle Henry Pollock and Robert Adamson, absent themselves when the report discussion. Mr. McArdle was present. The four the bank the that through subsidiary, the bank had debt with money The ment outlined assistant Joseph superinby Mr. The cashier testified that "one the chosen make the that he had known Broderick for several His testimony included the statement that the contemplated the tual securities the sidiary and they possess he found that the companies never got the securities.
20.
July 11, 1931
Evening Star
Washington, DC
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# STATUS OF BANKER BILL IS DEFINED
New York Court Rules on Acceptance Matter Involving Contract.
BY C. B. UPHAM.
One of the few court decisions dealing with the problem which arises with the failure of a bank which has acceptnaces outstanding vas handed down this week by the appellate division of the Supreme Court in New York. Because of the scarcity of such decisions, it is of unusual interest.
The business of creating bankers' acceptances, or bankers' bills, as they are commonly called in the New York market, has been largely concentrated in the larger banks of the country in the 17½ years which have elapsed since the Federal reserve act gave to American banks the power to accept time drafts. Consequently the problem has not been an acute one, since few failures have occurred among the larger banks.
# Origin of Case.
The present case grew out of the failure of the Bank of United States in New York City. A New York silk house had bought silk from a Japanese seller and had arranged with the Bank of United States to accept the seller's 90-day draft. Between the time of acceptance and maturity of the draft the bank failed. It sought to collect the amount of the draft from the New York silk merchant under the acceptance agreement, but refused to use such funds for the specific purpose of retiring the acceptance, which it had dishonored, desiring rather to increase its general assets by that amount.
The silk merchant paid the Japanese seller for the merchandise, receiving the dishonored acceptance in exchange. The attempt of the bank, in the hands of the State Banking Department, to compel the silk merchant to pay it the amount of the draft, as agreed upon in the acceptance agreement, failed. The court held that the refusal of the bank to honor the acceptance at maturity constituted a failure of consideration under the agreement.
The suit involved only the rights of the bank and its customer under the letter of the credit agreement. There was no third party bona fide holder of the draft in the case. There was no right of set-off involved, there being no indication in the court opinion that the silk merchant was even a depositor of the Bank of United States, although it is not good banking practice to establish letters of credit for account of non-depositors.
Upon whom should the less fall in a situation of this kind? In discussing this matter before the recent convention of the American Institute of Banking, Wilbur Ward, an officer of the National City Bank of New York, declared that merchants and bankers would probably be of the opinion that the buyer should bear, and not pass along to the depositors, the loss attendant upon the inability of the bank to retire an outstanding bill accepted for his account. He should be penalized for choosing an unsound bank, Mr. Ward said.
# Result of Decision.
The court in the Bank of United States case apparently considered that a contract was involved to which there were only two parties. The bank, it apparently reasoned, agreed to do a certain thing for its customer and failed to do it. Therefore, such reasoning concludes, the customer is excused from performance of his part of the contract.
What the court failed to take into account, evidently is that now, since the bank is not actively in operation, its depositors and other creditors have an interest in the matter. The practical result of the decision is that one creditor of the failed institution, the holder of the acceptance, recovers in full, while other creditors take pot luck.
(Copyright, 1931).
21.
July 31, 1931
Brooklyn Eagle
Brooklyn, NY
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Corn Exchange Bank To Open New Branch
The Corn Exchange Bank Trust Company today announced will open its Colonial branch Columbus Ave. 81st St., Manhattan next Monday George 8. Carr will be in charge of the office This was formerly branch of the Bank of United States was sold to Corn Exchange by the Raw Silk Futures State Banking Department in liquidating the closed institution Prices York Exchange Before merged by the Bank High Last of United States it was the Colonial 2.25 2.25 2.25 2.27 Mr Carr was vice president of the Colonial and 2.24 vice president of the Bank of United 2.24 2.24 2.24 2.25 States
22.
August 19, 1931
The Evening Sun
Baltimore, MD
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ANK FAILURE TOTAL GIVEN OUT BY BOARD irst Seven Months Of Current Year Put Number At 778
VER 1928, 1929 TOTALS
Criticism Increasing Against U. S. Loans To Foreign
Countries
By C. B. Upham deposits less than half million. Special Dispatch to The Evening Sun] The record of 7,800 bank suspensions Washington, Aug. 19-The failure of since the first of 1921, with apparently an acceleration in the number of curfour banks with thirty-four branches rent failures, is causing more and more and resources of more than $100,000,000 demand that active measures be taken in an Ohio city gives added signifito put stop to it. More and more the cance to bank suspension figures recountry districts are inclined to blame leased by the Federal Reserve Board the laws or the Federal Administratoday. The reserve board compilation tion for conditions. There are increasshows that suspensions for the first ing criticisms of large Federal Reserve seven months of 1931 numbered 778. loans to foreign countries and to for which is not only more than for the first ten months of 1930, but more than for the entire year of either 1928 or 1929, or any other prior year with the exception of 1926. Similarly the deposits, nearly half Domino billion dollars. involved in the failures during the first seven months of this year are greater than those for any Largest selling entire year, with the exception of 1930 Only eight States and the District of Cane Sugar Columbia have escaped bank failures so far this year. Five of the States are On the air Saturday in New England, and the other New nights at 8.30 England State, Massachusetts, has had but one. Illinois leads with 105 and "Sweeten it with Domino" Iowa comes second with 65. The Toledo suspensions leave that city, of some 300,000 population, with two National banks, a trust company small State bank and two industrial banks, one of which operates on the Morris plan. Out of total bank deposits in the city of $184,000,000 last June there are now only some $50.000,000 in open banks. per cent. of the deposits in the city have been tied up by these four bank failures and that of large trust company in June. Simultaneously with the announcement of the Toledo suspensions word was received of the failure of the only two remaining State banks in Omaha, Neb. The situation there is not serious, however, as in Toledo because Omaha what is known National bank town. There are still six substantial National banks in Omaha Toledo, on the other hand. has been State bank town. It has only two National banks and one of them has eign banks, while no help seems to be forthcoming for the banks in distress at home. Regardless of the validity of these comments and criticisms, they are being made, and there is no easy answer to them that the ordinary run of bank depositor, and, incidentally, voter, can understand. Millions To Save Germany Millions, they say, have been sent to save the banks of Germany, hundreds of millions are being made available to other foreign banks, but the banks in one Ohio town cannot get help to save hundred million of the deposits belonging to its citizens. Theoretical economics and the hard facts of practical finance are not satisfactory answer to these people. Heretofore the demand for action has been scattered. for, while many banks have failed. there has been nothing quite comparable to the Toledo situation. Most of the failures have been of small banks, and in scattered rural areas. True, whole counties have lost their entire banking facilities, but they have been relatively unimportant counties financially. The Bank of United States failure was drop in the bucket of New York city's total banking resources. So, too, were the failures of numerous outlying banks of Chicago in comparison to "loop" bank resources. But now we have the elimination of seventy-five per cent. of the banking resources of an important city, in State which has both financial and political importance. It may bring action.
23.
August 20, 1931
Columbia Daily Tribune
Columbia, MO
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Depositors Are Beginning to Ask Why Federal serve Should Go to Germany's Aid, but Permit Banks at Home to Go by the Board.
By UPHAM Special Leased Wire to Tribune Copyright WASHINGTON, D. Aug. failure of four banks with branches and resources than $100,000,000 in an Ohio city gives added significance bank suspension figures released by the federal reserve board today The reserve board compilation shows that suspensions for the first seven months of 1931 numbered 778, which is not only more than for the first months of 1930, but more than for the entire year either 1928 or 1929. or any other prior with the exception of Similarly the deposits involved the failures during the first months of this year. nearly half billion dollars, are greater than for any entire year with
TOLEDO BANK FAILURES MAY BRING SOME ACTION TO HALT MOUNTING FINANCIAL TOLL exception of 1930 Only eight states and the trict Columbia have escaped failures far this the states are in New Engand the other New England state, Massachusetts has had but one. Illinois leads with 105 and Iowa comes second with 65. The Toledo suspensions leave that city of some population with two national banks, trust company. small state bank and two industrial banks, one which on the Morris plan Out of total deposits in the city of $184,000.000 last there are now only some $50,000 per cent the deposits in the city have been tied up by these four bank failures and that of large trust company in June. Simultaneously with the nouncement the Toledo suspensions, word was received of the failure of the only two remaining state banks in Omaha, Neb The situation there not so as Toledo, because Omaha what known national bank town There are substantial national banks Toledo the other hand. has been state bank town has only two national banks and one of them has deposits than half million The record of bank sussince the first of an acceleration in the number of current failures. causing more and more demand that be taken put stop More and more the country districts are inclined to blame the laws of the federal administration for conditions There are increasing criticisms large federal reserve loans to eign countries and to banks. while no help seems forthcoming for the banks tress at home. Regardless the validity of comments and criticisms, they are being made, and there easy answer them that the ordinary run bank depositor and voter. understand. they have been sent to save the banks of Germany. hundreds of millions being made available to other foreign but the banks Ohio town cannot get help hundred million the deposits belonging to its citizens. Theoretical economics and the hard facts practical finance are not satisfactory answer these people. Heretofore the demand action has been scattered. while many banks have failed. there has been nothing quite parable the Toledo situation. Most of the failures have small banks. and rural areas. whole have their entire banking facilities, but they have been atively unimportant counties, nancially The bank of United States failure was drop bucket of New York city's total banking So were the failures of outlying banks of Chicago in comparison to bank But now have the elimination of per cent of the banking an state which has both financial and political importance may bring action.
24.
December 26, 1931
Green Bay Press-Gazette
Green Bay, WI
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Outlook for 1932
There been six stages of the process stocks, during which depreciaand directly influenced the per decline the associated the cent fall was the the end the spring 1930, when real intimation of prolonged was in the minds the banker and business occurred December, 1930. when confidence was shattered banking failures the and culminating episode the Bank United States New appeared slump this which recognition seriousness of Germany's credit The at the end of Augthe banks, the susBritain threat American withdrawnls gold United States nations. and was checked the early part October the formation the National Credit corporation. Basis of New Fortunes The which Dehas been due to tion of fear and of the Amerrailroad structure and alarm Germany's outlook During last phase depreciation for and bonds and for institutional hibited less resistance any the periods and disbe the of the thirty sixty that securities and commodities No healthy can fail appreciate the and foreign nations what would crisis in credit. reality of crisis those who must suffer from this son the that the Trend of Industry Charts the recording the of dustrial output the tribution kinds Most gains normal average. the finds industrial smaller percentage that which stood for some the low point the depression These been temporary and slight upward curves during the twelve in the second quarter when production averaged per its low level the last year fallMay per This was due to such influ-
25.
April 30, 1932
Miles City Star
Miles City, MT
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Roosevelt Testifies In N. Y. Bank Trial
New York Ap il In session marked by frequent and heated argument by counsel Gov Franklin D. testified today as defense witness in the trial of Joseph A Broderick state superintendent of banks At one point, when the governor asked permission to ask question Judge George L. Donnellan, presiding at the trial, Max D. Steuer special prosecutor, replied "No. no, no. It is absolutely improper to deliver lecture in the form of quetsion to try to fritter away the people's case Judge Donnellan offered to excuse the jury while the governor asked the question if Steuer wished that The prosecutor refused. and said if Judge Donnellan wishe to exclude the jury that would be different matter The flurry ended by Martin Conboy, defense counsel, resuming his questioning Steuer refused to cross examine the governor at the conclusion of his direct testimony and Governor Roosevelt was excused. Steuer's constant objections to questions put to the governor by Conboy succeeded in limiting the governor's testimony virtually to the statement that he knew of and participated in efforts to merge the Bank of United States with stronger institutions. coupled with an endorsement of Broderick's reputation as "none higher in the state of New York. Broderick is on trial for alleged neglect of duty in failing to close the Bank of United States before he did.
"SEEMED TO SINK" so CITY DADS INVESTIGATE complaints from automobile drivers who said the pavement of Woodward avenue, Detroit's principal thoroughfare. "seemed to sink' as they drove over it. city officials found hole, 20 feet deep under the pavement near the Kirby avenue Street cars and automobiles had been crossing the enormous cavity supported only by pavement a foot thick.
PARAGUAY BOUND Montevideo, Uruguay, April 29 -(P)-A group of 370 "white" Russian Mennonites passed through here on steamer today on the wav to the Chaco region in Paraguay where they plan to found colony under the sponsorship of the League of Nations.