1586. Merchants Trust Company (Waterbury, CT)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
trust
Start Date
December 23, 1931
Location
Waterbury, Connecticut (41.558, -73.051)

Metadata

Model
gpt-5-mini
Short Digest
3224725da5c0c0e5

Response Measures

None

Description

Newspaper account (Dec 23, 1931) describes heavy withdrawals/public alarm and directors' decision not to open (suspension) that morning. Examiners took charge Dec 24 and a permanent receiver (Citizens & Manufacturers National Bank) was appointed and the institution remained in receivership with liquidation and dividends over subsequent years. Immediate trigger included circulating wild rumors/panic and heavy withdrawals, while directors cited deteriorating liquidity (depreciation of securities).

Events (6)
1. December 23, 1931 Run
Cause
Rumor Or Misinformation
Cause Details
Newspapers report 'wild rumors' and panicky withdrawals in Waterbury on Dec. 23, 1931 that precipitated large cash withdrawals and public alarm.
Measures
Directors voted to suspend business for the day and later chose to suspend operations; local banks and National Credit Corporation arranged support/loans to meet demands.
Newspaper Excerpt
Within a few minutes after 9 o'clock early visitors to the bank were greatly surprised to view the notice that the institution would not open to-day... Thousands of depositors of The Merchants Trust company must now await developments.
Source
newspapers
2. December 23, 1931 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Directors cited a developing situation aggravated by depreciation in market prices of securities that 'seriously impaired the liquid position' and steadily decreasing deposits; suspension was voluntary to protect depositors.
Newspaper Excerpt
The action of the directors of the Merchants Trust company in deciding to suspend business this morning was taken when in their judgment it became apparent that the interests of the depositors would best be served by such action.
Source
newspapers
3. December 24, 1931 Other
Newspaper Excerpt
Four bank examiners took charge today of the books of the Merchants' Trust Company... preliminary investigation to determine the solvency of the institution is now well underway. The examiners with A. F. Austin of Hartford were detailed here under the direction of George J. Bassett, state bank commissioner.
Source
newspapers
4. February 5, 1932 Receivership
Newspaper Excerpt
The Citizens and Manufacturers National Bank confirmed as permanent receiver for the Merchants Trust Company and time limit of four months was set for the filing of claims against the closed bank following hearing before Judge Frederick M. Peasley in superior court to-day.
Source
newspapers
5. February 26, 1932 Other
Newspaper Excerpt
Receiver will apply to Reconstruction Finance Corporation for a loan; receiver and court proceedings described (plans to negotiate loans, liquidation steps, dividends).
Source
newspapers
6. September 16, 1933 Other
Newspaper Excerpt
Receiver asked permission to pay dividends; commercial and savings dividends paid in subsequent years as receiver liquidated assets—indicates continued receivership and partial payments rather than reopening.
Source
newspapers

Newspaper Articles (22)
1. December 23, 1931 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, December 23, 1931

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Article Text

Local Banks Will Take Speedy Action (Continued From Page 1) tarily, the Sanditz & Traurig Bank banks. This will prevent any raid officials declared but matters are upon the treasuries of the banking now in the hands of State Bank institutions by panie-stricken deCommissioner Basset. positors and will serve to protect Charles Kazemekas of Kazemetheir interests eventually. All dekas & Company, Inc, private bankpositors, however, have been given official assurance of receiving $50 ers of the Brooklyn section, stated early this afternoon that his bank's weekly, which will be the maximum amount of withdrawals until doors had not yet closed. He adfurther notice. mitted, though, that a meeting of the officials of the bank: would take Plenty of Funds With thousands of dollars en place "sometime this afternoon" to route to Waterbury from Boston, discuss the situation, New York and Hartford and exAccording to reports, both the pected here this afternoon or in Sanditz and Traurig and Kazemethe morning at the latest there is kas banks deposited much of their no fear of a shortage of funds and funds with the Merchants Trust banking officials have promised to company and were, therefore cooperate with all their patrons to greatly affected by the suspension prevent any embarrassing situaof business at the latter institutions. tion. One of the most essential facts Payrolls Cared For discussed at the special meeting Despite the closing of the Merthis noon was the fact that the Nachants Trust company, the city's tional Credit Corporation had appayroll was taken care of to-day proved of a substantial loan by as in the past. The city's deposits local banks to the Merchants' Trust are scattered through several local Company. This was cited as evibanks. No concern over the safety dence that the corporation had suof the municipal deposits in the preme confidence in the solvency Merchants Trust company was exof the bank which failed to open pressed to-day at the City Hall. this morning. It also substantiThe Chamber of Commerce and ates the impression that the directhe mayor's office were both kept tors of the Merchants' Trust Combusy to-day answering queries on pany acted voluntarily to bring the closing of the bank. In both their affairs to a crisis and to places persons asking information place matters officially in the were infromed that as far as could hands of the state bank commisbe ascertained there was nothing to sioner. It also serves to protect worry about. them from any personal responsiThe city's deposits in the Merbility in event of any unpleasant chants Trust company total about incidents. $230,000. However, the net deBelieve No Rumors posit is approximately $130,000 in Notwithstanding the circulation view of the fact that the city has of many wild rumors as to bankan outstanding loan of $120,000 ing cooditions in Waterbury the from the same bank. meeting of the bankers today was Public Await Results one marked by optimistic confidence and with statements of asThe conference of banks led to surance by Lewis S. Reed of the the statement that if the public Citizens-Manufacturers and chairwould remain unmoved by the inman of the senate state committee cident and awaited results they on banking, E. O. Goss, Edwin S. would discover that their confiHunt, Fletcher Judson. John P. dence in the ability and integrity Elton, Wilbur P. Bryan, Edwin S. of the banks of Waterbury would Northrop and others present at the not be misplaced. Lewis S. Reed, meeting. who is very familiar with banking Test of Confidence conditions here and throughout While admitting that the incident the state, was very confident that affecting the Merchants' Trust Waterburians would act wisely in company and the general public this emergency. He was also the was one of sincere regret it was authority for the statement that not an occasion to warrant pessome of the largest banks of the simism. It was an emergency that country have pledged their supwould perhaps test public confiport and would rush thousands of dence in banking institutions. but dollars here to meet any unusual demand. if persons refused to be stampeded by unfounded reports they would As a safeguard for both the appreciate readily the fact that the banks and depositors notices of interests of thousands would be the 90-day clause were promptly protected without the loss of a posted in savings banks. "We are penny. trying to make it plain to the peo9 Within a few minutes after pie," remarked Wilbur P. Bryan of the Colonial Trust company that o'clock early visitors to the bank were greatly surprised to view money withdrawn at a time like the notice that the institution this becomes "hoarded money' and retires from circulation. It would not open to-day. In a reworks to the disadvantage of all markably short time the city was concerned." buzzing with comments. Thousands Thousands of depositors of The of persons paraded past the instiMerchants' Trust company must tution seemingly amazed by the now await developments. They development, but there was no have the assurance of the direcevidence of disorder or excitement. tors, who include many of WaterNaturally scores were disappointed bury's most successful business and shocked, but there was no A men, that they will not suffer any manifestation of resentment. loss. President Henry Weyand has small squad of policemen remained announced that the condition of in the vicinity of the bank during the bank would be made known to the day and kept the sidewalk the public within a few days and free of obstruction of curious speca statement published. He also astators. sures everyone that their interests While the city was recovering will be protected. from the shock of the affair aiIn addition to the wild reports rectors of the bank held a meeting circulated, there were stories told and issued the following statement: of persons being unable to cash Directors' Statement checks to buy gifts, pay rent, doc"The action of the directors of tor bills, insurance premiums and the Merchants Trust company in for other purposes. Some told of deciding to suspend business this unusual deposits being made only morning was taken when in their yesterday with the Intention of judgment it became apparent that having them paid out in checks. the interests of the depositors The Merchants Trust Company would best be served by such acwas organized November 28. 1910, tion. The present situation has with a capital of $100,000. Its debeen developing over the past year posits at the end of the first year because of the difficulty of reducof its existence were $150,000. In ing the amount outstanding on 1917 the deposits were over $2.loans and discounts combined with 000,000 and its surplus $88,000. At steadily decreasing deposits. The the annual meeting the bank immediate crisis developed because showed the results of excellent proof the depreciation in the market gress during the ensuing 13 years. prices of securities which has seThe first quarters of the bank were riously impaired the liquid position at 142 Grand street and a number of the company. The total deposts of the bank are of years ago the institution moved less than six million ($6,000,000.00) to the present location on Bank street. dollars of which three million six hundred thousand ($3,600,000.00) A year or so ago new land adjoining the County court house on dollars are in the savings department. The capital surplus and unLeavenworth street was bought by

2. December 23, 1931 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, December 23, 1931

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raid This will prevent the any banking banks. the treasure of deupon institutions by serve to depositors their interests and will eventually. have been All given $50 positors, however, of receiving maxiassurance will be the until mum amount official weekly, which of withdrawals further notice. Plenty of Funds of dollars en With thousands Waterbury from Boston, exroute to and Hartford and or in New York this afternoon there of no pected the morning here of a shortage at the latest promised funds and to to is banking fear officials all have their patrons situaprevent cooperate any with embarrassing facts at the that tions. One of the the most special essential meeting Nadiscussed was the fact had approved this tional noon Credit of to a Corporation the substantial Merchants' cited loan as Trust evi- by corporation that the in the dence Company. local banks confidence This was failed solvency to had open suIt preme the bank which also substantidirecthis of morning. impression that Trust the Comates tors of the the Merchants' voluntarily to and bring to pany acted to a crisis in the affairs officially place their matters of the state bank to commis- protect sioner. from any any Believe No the hands incidents. them bility in It event also serves of personal Rumors circulation unpleasant responsiNotwithstandinmora as to bank- the was of ing many co® ditions wild bankers in Waterbury today confimeeting of the by optimistic of asone marked with statements of the dence and Lewis S. Reed and chairthe senate Edwin Citizens- Hurance man of Manufacturers E. O. state Goss, committee John P. S. S. on banking, Judson, Edwin Northrop meeting. Hunt, Elton, Fletcher Wilbur and others P. Bryan, present at the Test of Confidence the incident While admittingerchant#" the that general public Trust affecting company and sincere the regret it pes- was not an an was one occasion of It was test to emergency public warrant confi- that simism. would dence in perhaps banking refused to institutions. be they stampeded would but if persons reports fact that the be appreciate by unfounded of readily thousands the the loss would of a interests protected without 9 o'clock penny. a few minutes to the after bank were Within greatly early that visitors surprised the institution to In a view rethe the notice open to-day. city was markably would not short comments. time Thousands the instibuzzing with paraded past the of tution persons seemingly but amazed there was by no evidence were development of disorder or disappointed excitement. no A Naturally scores but there was and shocked, of resentment. remained manifestation squad policemen the bank during small vicinity of the sidewalk in the free the of day obstruction and kept of curious recovering spectators. While the shock city of was the affair meeting alfrom rectors the of the bank following held statement: a and issued the Statement of Directors' action of the directors company in Merchants business the "The suspend Trust when in their that this deciding was to taken apparent judgment morning it became of the depositors acinterests served by such has The over the past difficulty the tion. been would developing best of the be present outstandingwith situation of reduc- year on ing because the amount discounts combined The steadily crisis developed market which immediappreciation loans the and decreasing deposits. in the has because seriously impaired prices of of securities the liquid position are of the total company. deposts of ($6,000,000.00) the bank six less The than of six which million million hundred dollars thousand the savings depart- undollars are in surplus and million ment. The capital total one ($1,300.dollars to divided three hundred profits which thousand amount depositors rep000.00) against resents a the protection depreciation of the in officers, surplus assets. In the opinion of the capital sufficient the save and the amount undivided depositors profits is from any loss." to Sanditz Traurig, & Traurig. local priand 10 o'clock bank bankers, of vate Sanditz morning. closed Officials closing at the was pri- at denied this that the by the suspension The marily caused Trust Company. opened for the Merchants & Traurig Bank this morning an intensive and business Sanditz closed at at 9 "run" o'clock 10 o'clock on the following funds deposited The closing there. was ordered volun-

3. December 24, 1931 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, December 24, 1931

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EXAMINERS TO TAKE CHARGE OF THE BANK Four Bank Officials of PEOPLE BACKING State Are Now Going Over the Books of MerCONFIDENCE IN chants Trust Co-PresOUR CITY BANKS ident Weyand Again Insists Depositors Will $800,000 Came Rushing Get Dollar for Dollar Into Waterbury to FulOTHER BANKS IN fill Any Demands-PeoCITY CONFIDENT ple Themselves Are Showing Their True Four bank examiners took charge today of the books of the Spirit Merchants' Trust Company, which yesterday morning on a vote of its The arrival of over $800,000 in board of directors failed to open currency for distribution among for business, and the preliminary local banks to meet any possible investigation to determine the demands was a development secsolvency of the institution is now ond only in importance to the magwell underway. The examiners nificent spirit of confidence shown with A. F. Austin of Hartford in by the public of Waterbury in 10charge were detailed here under cal banking institutions following the direction of George J. Bassett. yesterday's action of the directors state bank commissioner. Mr Basof the Merchants Trust company sett was expected here sometime not to open its doors. today for a conference with officials of the bank. To-day while some banks reported unusual demands for withAs the examiners carried on drawals, others reported normal their work this morning officers holiday business and the surprisand directors of the bank held a ing fact that hundreds of new deconference to decide upon a course positors were secured. Scores of of action to protect the present business men and persons accusand future interests of the institutomed to frequent usage of checks tion, An announcement of genopened new accounts to-day and eral public interest was expected are' apparently prepared to wait at the close of the special meeting. until the affairs of the Merchants It was expected that some action Trust company have been adjusted. would be taken at the conference Hints of reorganization and possion an application for the appointble action of a local bank taking ment of a temporary receiver. A over its complete affairs were cursuperior court judge would rerent to-day, but until an inventory ceive the petition and take action has been made of the bank's assets possibly Saturday. Attorney John all possible courses of action are H. Cassidy, representing a number but speculation. of depositors of the bank, anLewis S. Reed. president of the nounced today that he was willing Citizens-Manufacturers bank and to co-operate with the officials or chairman of the state senate bankthe receiver in any possible manner as to bring about a satisfactory ing committee, remarked to-day that the public's attitude and calmadjustment. (Continued on Page 2) (Continued on Page 2)

4. February 5, 1932 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, February 5, 1932

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Shift $200,000 In Notes To Savings From Commercial Four Months Allowed for Filing of Claims Against Merchants Trust-Judge Peasley Asked to Rule on Status of Set Offs in Closed Institution Affect= ing Heavy Transfer of Paper The Citizens and Manufacturers National Bank confirmed as permanent receiver for the Merchants Trust Company and time limit of four months was set for the filing of claims against the closed bank following hearing before Judge Frederick M. Pensein superior court to-day. The filing of claims applies to anyone having claim against the Merchants Trust Company excepting the depositors. Notices of the time limare to be advertised in all papers the city. In setting four months as the time limit, Attorney Francis Reeves, the receiver. explained that depositors will not have file because the law says they have priority over other claims excepting administration expenses. Judge Frederick M. Peasley ing set in closed banks which expected to set precedent that will affect future motions regarding the Merchants Trust Company. The was short calendar session of superior court to-day. Matson asked that $730.21 he had on deposit as checking account in Naugatuck Bank Trust company at the time of suspension, applied against note the bank amount $5,000. his contention, as argued by Attorney William Larkin, that he secured the note from the commercial side the bank that unruling court, the amount he had on deposit the checking or commercial side the bank. could be applied against the loan. Attorney W. Gager, appearing for the Naugatuck National Bank pointed out that the note since transferred the savings side of the bank and that supreme court ruling is that set off can apply when the note or loan is savings Attorney argued that Mr Matson did not control the the note and felt he was entitled the set The question Judge Peasley must decide whether the right of set off can apply if made from commercial department and then later is transferred the savings side by bank officials. important to the Merchants' company inasmuch as reported that approximately $200,000 worth of have been transferred from the commercial the department in the Merchants' Trust company. officiating. Burial will be in the spring in South Sharon. CASEY Irene Brew Casey. age 33 years. wife of Francis Casey, died yesterday her home on Dayton street, Sandy In addition to her husband she is survived by her father, William Brew: two sisters, Marguerite and Catherine; one brother, Frank, of John of Sandy Hook: aunts. Catherine nad Mary Brew of Waand three uncles, Thomas of Sandy Hook. John of Waterville and Frank of Kansas City. The funeral will place tothe Sandy Hook o'clock to St Rose's church where requiem mass be celebrated at o'clock. Burial will be in St Rose's cemetery, Sandy Hook. GOW James Gow. age 89 years, of 33 West View street, died suddenly yesterday while visit to the home son, Harry Gow of Derby. He is by two sons, Andrew of this city and HarDerby: and daughter, Mrs Catherine Thompson of ShelThe funeral will be held afternoon o'clock from the home son in Derby with burial in Oak Cliff cemetery, Derby. ALVEY-Edward Alvey of Spark street, died at the Norwich hospital last evening. He was born in Holyoke. Mass but had resided this city for 30 survived his wife Nellie: two sons, Edward and Richard; and daughters, Mary of New York Anna of Willimantic. The body was removed to the Clark funeral home, 20 State street from where the funeral held, time arrangements be announced later. been received by relatives hereabouts of death on Saturday, in New York city, of William H. Hunter, 69. He was, for over 30 years, the Sheffield Farms of New York, dealers fancy farm dairy products. He the brother of Mrs W. Palmer Oakville. Funeral services and burial were in New York. BORELLI Borelli, age 58 years, died morning at the Waterbury hospital after brief illness. He came to this country from Italy 37 years residing for the first 20 years in Stony Creek and the past in this city. He was stone cutter by trade but discontinued this line of work years ago when was employed by the Chase Rolling Mills where he worked up to the time of his illness. He was well and highly among the Italian residents of the city. Mr Borelli is survived by his wife, Graziella; Michael and Santo, one daughter, Mrs Sher man this one Rocco of New and two sisters, Filomena and Josephine Borelli of Italy. The funeral will be held from his late home 29 street, time and arrangements to be nounced Antionetta Santolupo, 66 widow of Lupo died this morning at her home 147 Fairfield avenue, after brief illness. She was native came to this city ago residing here that Mrs Santolupo leaves one Pellegrino and daughter, Filomena Lombardi of this city. funeral will held Monday time ments to announced later. DIED February 1932, Lane Grove street. Private services Burial in Riverside cemetery. Norwich, February Alvey, street. Funeral arrangements later. this Februkiss Lone Oak avenue. neral Monday afternoon church. Burial South Sharon. this city, February 1932, Salvatore of Bronson Funeral arrangements later. this city, FebruAntoinetta lupo Fairfield Monday time and arrangements later. MASS NOTICES niversary will St for the the soul of the late John Mitchell Helen Lane Smith, widow of Richard Smith, died yesterday morning her home, 195 this the daughter of the late Merritt and Olive (Ives) Lane of Waterbury. She was acquainted Waterbury citizens who be deeply grieved to learn of her She educated in local schools and at Grove Hall, New Haven. She communicant John's Episcopal church, but following her in 1875 to Richard she memthe First church. She descendant of several prominent families, among them being Thomas Hooker, founded Hartford. and Rev James the first trustees Pierpont, of Yale college. Her husband died She is survived by five daughters, Mrs Sanford bur Bryan, Mrs Warren Kaynor and Mrs Sperry, terbury and Mrs Wendell Curtis of Rochester, and eight grandchildren. first anniversary mass Funeral will be held tobe morrow will be Intermorning ment will in the Conception church, the Friends requested to omit the of the soul of repose late Kane. sending of floral offerings. Edward month's mind mass THIS IS SPEED Berlin.- in 90 morning is the goal by Reinfor Margaret's soul church, of the late Thom- hold Tiling, rocket of Germany. He plans to build pasSheehan. anniversary mass the Facred Heart church, o'clock, the for of late Elizabeth McCarthy. CARD OF THANKS We many friends, neighbors relatives, Street Fire House, Hill Athletic for their kindness and recent sympathy shown during beloved mother sister. Mrs Sadie Rielly. AND GEORGE THE FAMILIES. senger rocket which carry him aloft and transport him around the world that time. He plans to have it completed before the end of this year. WING FLAP Dayton, wing flap for airplanes which. it, is said, will duce speed from 65 to an has been Howard M. Reinhart. The flates are placed on the under side of the plane wing and are operated from the cockpit. are sald to also lifting capacity and aid in taking off.

5. February 26, 1932 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, February 26, 1932

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of the Merchants Trust Co have agreed on the reorganization and reopening plan and provided this plan is not followed, that a distribution of less than 30 per cent would be paid savings account depositors. Mr Reeves said the Merchants Trust Co had savings deposits at the time of its closing of approximately $3,600,000 and that if the distribution were made it would approximate about 30 per cent. The loan would be negotiated the same as any collateral loan. That is, the receiver would turn over as collateral, first mortgage notes, stocks and bonds in sufficient quantity to represent adequate collateral for the million dollar loan. The Merchants Trust, the application states, had first mortgage notes totaling $1,700,000 at the time of its suspension of business. # THE RECONSTRUCTION FINANCE The Reconstruction Finance Corp. came into being through the passage of an act by Congress several weeks ago. Mr Dawes, who was the former ambassador to England, was put at the corporation's head. The United States was divided into districts and managers placed in charge of each district. The local loan would be negotiated through the New England division, whose manager is located at the Federal Reserve Bank at Boston. The Reconstruction Finance Corp. was given about two million dollars to work with. About $200,000,000 of this sum Mr Reeves explained, was set aside for the assistance of banks which encountered difficulties such as that facing the Merchants Trust Co. Providing Judge Peasley rules that the application for the loan may be made, immediate steps for its realization will be taken.

6. March 4, 1932 Hartford Courant Hartford, CT
Article from Hartford Courant, March 4, 1932

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Closed Waterbury Bank To Ask $1,000,000 Loan Waterbury, March Trust Company will apply to Finance for loan which will either an early dividend the savings depositors in the bank or facilitate reopening of the closed banking inFrederick M. ley the Court this morning the application submitted the and Manufacturers National Bank. receiver for the Merchants Trust Company. Lewis Reed and Thomas Moore. officials the Citizens and National Bank go Boston to confer the gional director the Federal construction on proposed Mr. Reed on advisory committee of the fund

7. September 16, 1932 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, September 16, 1932

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DIVIDEND LOOMS 10 P. C. COMMERCIAL Merchants Trust Asks Permission To Make Payment $200,000 Available If Court Grants Request-$14,344 Allowance to Receivers Covers Actual Cost of Operating Defunct Institution Permission to pay a 10 per cent dividend on the commercial side the Merchants Co, first in this department, be asked of the superior court next Friday. Attorney Francis T. Reeves, counsel for Citizens and Manufacturers National receiver, stated today. The application is expected to be filed to-day or but will not be of until week from to-day. About $150,000 will be paid out should the court grant the application. This will be the dividend paid out by the receiver taking over the erchants Trust Co. A 10 per cent payment was made couple of months on the savings side. Mr Reeves there is about $200 000 available for the Judge Allyn Brown granted the motion asking as an allowance to the receiver, covering expenses in the conduct of the business since last January. Thomas F. Moore. in of receivership at the bank, stated this represents actual cash paid out by the Citizens and Manufacturers National bank to its executive officers as receivership. salaries while This enin the gaged money was the refrom its own funds. ceiver As far as an allowance to the receiver for the receivership concerned, Mr Reeves stated that the status the depositors the closed bank would be considered In other first. words, he explained that if all the depositors paid and the receiver feels has done creditable job in the operation of the receivership an application would be filed for an allowance. Mr Moore pointed out that when it the Merchants Trust Co closed, was in critical situation inasmuch as its deposits 10 per cent the total all the banks of the city He said that the board of directors of the Citizens and Manufacturers National bank did not desire to take over the receivership. but only did so upon the insistence of the commissioner, who suggested that be done in the light of public That service to the community. has been the idea behind the movement, Mr Moore stated, and if the receiver feels that creditable job been done, then perhaps small allowance to cover the services rendered would be sought Mr Reeves stated that when receivership was started last Jan. the weekly $600 but since that time the employes been cut 15 per cent, working on weekly shifts, one week on and one week off, and that the number has diminished that payroll to-day is Mr Reeves $300. also lauded the law- MASSES. TEHAN-A month's mind mass requiem be at Francis row Xavier church, for the pose the of the late Mrs Anne Conlon Tehan. SALINARDI-1st anniversary mass will be of urday September Lady of Lourdes repose the soul of church, the late for Mrs the Marie Salinardi. yers of Waterbury in commenting upon the fact that 220 motions have been filed in court since the receivership was started, but not one contest materialized over any one of the motions. He thought it fine gesture on local lawyers' part. Judge Brown reserved decision on the question to the receiver should take pass books given as collateral for loans, in keeping with recent supreme court decision. These books ac. cording to Mr Reeves, are allowed to be taken when the notes mature and apply the amount of debt against the balance listed on the book. Attorney J. Joseph Smith suggested that the consider whether the setting off of these debts be at once, only when dividends are declared Permission to sell certain securities totaling about $40,000 was granted. Mr Reeves explained that the present market value these above the figure set by the appraisers, and in some cases, greater than the Merchants Trust Co paid for them.

8. November 18, 1932 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, November 18, 1932

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of Trustee Bankrupt Estate of I. M. Shapiro Wanted Funds in the Merchants Trust Co Be Decided as a Preferred Claim SIMILAR CASE IN THE HIGH COURT A ruling of the United States Supreme court governed the decision which resulted in the denial of the claim for preference made for an estate included among the deposits of the Merchants Trust company, it was reported in the superior court here to-day. The claim for preference was made by Attorney Phillip N. Bernstein, trustee of the bankrupt estate of the I. M. Shapiro company. His counsel, Attorney Max R. Traurig, filed a claim asking that the estate, amounting to approximately $9,000 on deposit in the Merchants. Trust company, at its suspension, be given preference over the other claims, because it was debt owed the United States, as represented by the bankruptcy court. The claim was heard by Judge Newell Jennings presiding over the court here last spring. There was no law governing the case in this state, it developed, but the United States Supreme court had a case, similar in all respects to the local one. It was decide to await the Supreme courts cision. The high court handed down a decision recently in which it held that claims such as the one made in Waterbury are not to be given preference over other "claims, because they are only ordinary claims and not debts owed the United States. (Continued on Page 8.1

9. April 7, 1933 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, April 7, 1933

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Plan To Reorganize Merchants Trust Co. (Continued from Page 1) der this plan, the depositors instead According to reports the reorganof waiting from time to time for ization plan would be in conformdividends on their deposits would ity with the emergency bank legdraw interest from their preferred islation passed under President stock. Franklin D. Roosevelt's suggestions. Interested citizens would be canvassed to purchase some of the In that legislation, authorization stock and the Reconstruction Fifor the reopening of closed banks was vested with the bank commisnance Corp would be queried on gioner in each state. The legislapurchasing blocks of the stock. The funds realized in the sale of tion provided that closed banks that were not too insolvent, could this special issues would bring into realization, sufficient working capiapply to the bank commissioner in tal with which to reopen the bank each state, for permission to issue on an unrestricted basis. The offipreferred stock to secure working cers of the bank would then be capital. Under the plan being discussed faced with paying only 25 per cent for the reorganization of the Merof the deposits and these would be chants Trust Co, a petition to reonly the deposits in the smaller amounts. open would be filed with State Bank Commissioner William BlodAccording to Attorney Smith, the situation will remain as it is until gett, provided the state legislature action is taken by the state legispasses the bill now before it which is drawn in accordance with the lature on the bill now before it. provisions of the measure passed Attorney Francis T. Reeves who by congress. presented the receiver's motion askThe closed bank would issue preing for permission to pay a ten ,ferred stock which would have priper cent dividend, offered no obority over all other claims against jection to Attorney Smith's request the bank. for a two weeks' continuance. Seventy-five per cent of the deHe pointed out that the receiver positors of the Merchants Trust Co has $308,000 in cash that has been would be asked to purchase this realized from liquidation of part of the assets of the closed bank preferred stock issue, paying for it by turning over their deposits in since the last dividend payment. the Merchants Trust company. UnOnly about $25,000 of that amount, he said, is money taken in on savings side assets, the balance being received from commercial side asGovernor Signed sets. He said approximately two milState Salary Cuts lion dollars' worth of assets in the savings side are in first mortgages, (Continued from Page 1) which will be impossible to liquidate at this time unless some plan "Accordingly I asked the general of reorganization or liquidation is assembly two years ago and again presented. He added that it will be this year to authorize me to proa long time before a dividend can ceed in this way. The authority in be paid savings depositors. He also both instances was denied me. It is pointed out it did not seem fair equally well known that I would that commercial depositors should eliminate from the payroll a rather have to wait for a dividend on large number of political office their deposits when the receiver is holders who are receiving comaccumulating so much cash on that fortable salaries for little or no side. He said the receiver could service to the state, particularly easily pay a 20 per cent dividend those who are on the payrolls of to commercial depositors out of the two departments. cash now on hand. "These office holdres are in the

10. April 21, 1933 The Waterbury Democrat Waterbury, CT
Article from The Waterbury Democrat, April 21, 1933

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Merchants Trust Co to Restart (Continued from Page 1.) ufacturers National Bank, receiver, who filed the dividend motion, fered no objection. Attorney Smith said in asking that the motion off the calendar that the plans ing effected would greater benefit the depositors than vidend payment. Queried after his court remarks, Attorney Smith said he in position enlarge his statements at this time but would have an announcement make within short time. Judge Booth granted the motion for an allowance to Attorasking ney Herman J. Welsman for services rendered as counsel for the Company prior to its going into receivership and for ervices in several matters after the receivership. The allowed is $3,900. it to be considered general claim and will not be paid until the receive their full depositors amount. Judge Booth gave permission to the receiver quit claim its equity on North Elm street held an asset of the bank. The does warrant the receiver to attempt to redeem foreclosure judgment granted the Waterbury Savings Bank against the property Attorney Reeves said. This step considerable expense and matters. Permission to hire real estate agents sell the pieces of property the receiver has taken over as part the liquidation plan, was granted. agents will buy ers the property but the court first all sales before they are to be consummated. The court granted permission allow an claim of $400 as an item on he Federal Income tax return. son. He was unshaven, but appeared in good health. When he arrived at the house, both his and father were absent. Mrs Marcus was at the Morrison hotel, where Factor had set up headquarters to direct the hunt for his son. Factor himself had left the hotel some hours before, he was to the haunts of known kidnapers for some clue to his son's whereabouts. Release of the boy who is student Northwestern University, came after night of intense Erstwhile Capone leaders including Murray Humphries and Sam (Golfbag) Hunt. and more than 125 Chicago gangsters. the United Press learned, banded to aid Factor. Police and Federal agencies were active. Shortly before young Factor his police arrested Hunt the second time. With him took into custory Mike also Capone lleutenant. They also engaged in, gun battle speeding autoThe car appeared in sev. eral and believed to contain the gangsters hunting the Factor youth. Federal authorities spurred to action by possibility that the NOcalled had been violated, arrested four men here for questioning. others held at Tuscola, III. Earlier three suspected of mid. kidnap ring. had been seized in raid by acting information obtained from Factor's Captain Dan Gilbert. who went to the Marcus home question the youth, slad young Factor peared regarding the details "The kidnapers told me they didn't get ransom, were any bringing me home just the same, young Factor His ather this statement and he had paid no money for his son's release. Belief per. sisted that some ransom had been collected. The youth had only meager the kidnapers. "They made me take off my glasses whenever they proached. he said. "I do not very well without glasses and could not tell what the men looked like. Some the time lowcases over their heads. Other times they made me turn away they entered the room. men grabbed as walked up to apartment week took ago night. They me to the curb and forced me enter an was on the floor in the rear. The men said. 'Now find out how much your father thinks of They then led be blindfolded, up flight stairs to small room with maton the floor."

11. July 28, 1933 The Waterbury Democrat Waterbury, CT
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Can't Be Paid Prior To Other Bank Deposits Must Be Listed as "Other Liabilities" and Paid After Savings and Commercial Depositors - Claims, Some Hundreds of Them, Are Listed Under Various Headings Hundreds of claims filed against the Merchants Trust Company, the Merchants Trust Company afwho asked the court to fix the status of the claims after the mass of ter its suspension are given the status of "other liabilities" and will claims was filed against the closed bank. not be paid until after savings and commercial depositors are paid, It was upon agreement of counaccording to a decision handed sel interested in the. claims and down in superior court today by Attorney Reeves that a hearing on Judge John Richards Booth of all the claims was held before Danbury. State Referee Isaac Wolfe during The claims come under the headthe spring term of the superior ing of "Claims based upon checks court here. issued by the Merchants Trust Referee Wolfe handed down his Company," "Collection Items," "Definding on the claims in a bulky posits Transferred," "Savings Dedocument. His finding recomposits Withdrawn" and "Checks mended the granting of some and Certified to by the Merchants the dismissal of others. Trust Company." Attorney Reeves then filed a The decision follows a request ;by motion asking the court to determAttorney Francis T. Reeves, counine the status of the claims. cil fo rthe Citizens and ManufacPreviously his motion asked that turers National Bank, receiver for

12. August 12, 1933 The Waterbury Democrat Waterbury, CT
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State Police In The Milk Strike Local Bank Seeks New Dividend Merchants Trust Co. May Dispose Of Its Mortgages Receiver for the Bank Will Ask Superior Court to Allow Liquidation of Million and a Quarter of Frozen Mortgages Through the Home Loan Bank System MAY MEAN 20 OR 30 PER CENT DIVIDEND The Citizens and Manufacturers National Bank, receiver for the Merchants Trust Company sees possibility of liquidating the miland quarter worth of frozen mortgages of the closed bank plan be considered by Judge Frederick M. Peasley at the chamber session of superior court next week, probably Monday. At the chamber session, Attorney Francis T. Reeves, counsel for the receiver is expected to present several applications asking the reclever to accept Home Loan Bank bonds in place of mortgages held by the Merchants Trust Company. Permission must be secured from court before any action can be taken plan. The receiver will point out to the court that the point has been reached where payments of the million dollars worth of gages will have to be demanded. The plan is simply this: A person owing the Merchants Trust company mortgage, can file an (Continued on page

13. September 2, 1933 The Waterbury Democrat Waterbury, CT
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BUSINESS AT THE LOAN OFFICE Staff Large But More Will Have to Be Added to It FIELD WIDE COVERS Persons who have homes mortgaged to the Merchants Trust company have applied to the Home Loan corporation for loans totaling more than $150,000 so far. Under the law (he receiver of the Merchants Trust company could receive the Home Loan corporation bonds in payment of the mortgage. The receiver can then proceed to make the bonds available to furnish a third dividend, If the depositors are willing to acept them. or sell them on the open market so as to raise cash or use them as collateral for a loan rom the RFC. Although the staff of the local Home Loan corporation office is now a large one a few more appointments may be made later. The local appraisers are: Chief Appraiser George Horan, James J. Dillon, D. T. Farrington, Jr., Joseph Hosey, John M. Hutchinson, Frank Campbell, Charles Rosengarten, John L. Washburn, Lester Young. T. G. Smith and John J. Horan. Title searchers are the Waterbury Title Co., Bernard Carroll, Herbert Rowley, James R. Lawlor, Joseph Kelley, Joseph Davis, Joseph Bowes, Harry Spellman and Harold Green. Attorneys are Carmine G. Cipriano, Frank Healey, John D. Thoms, J. Joseph Smith and John McLinden. The Litchfield county appointees are as follows: 'Vatertown, Woodbury, Morris and Bethlehem, George D. Sullivan. appraiser; John A. Shields, title worker and T. Fayle Butler, appraiser. all of Watertown. Torrington, James Hogan, title worker: Thomas D. McLaughlin and Frank Buonore, appraisers. Thomaston, William H. Lyons. appraiser. Kent, Frederick T. Johnson and William R. Tobin. appraisers; North Canaan. George Heffernan, appraiser, and Edward c. Finney, titles; Norfolk, Mary O'Brien Whalen, titles, and William R. O'Connor. appraiser; Salisbury, Frank W. Pierce and Edward G. Woodward. appraisers, and Joseph Estill, titles: Winsted, Edward Meyers. titles, and R. L. Carmody and Raymond O'Meara, appraisers: Goshen, Harry H. North, appraiser and titles: New Hartford, Frank M. Chapin. titles, and Timothy Mulcunry. appraiser; Litchfield, Dr James Sedgewick, appraiser, and Gertrude M. Ryan, titles: Washing ton. Warren, New Milford, Rox. bury and Bridgewater, George Sullivan, J Leo Murphy, Thurber R. Chatfield and Arthur Titus, appraisers and Norman Dube and John Addis. trustees: Cornwall. Michael Kennery, appraiser, and c. B. Breen, titles: Canaan and Falls Village, Miles Blodgett. Martin Muney and Vincent Brenton. appraisers and Miss Catherine Smith. titles :Sharon, William Kennedy titles, and D. A. Pequisney, appraiser.

14. January 4, 1934 The Waterbury Democrat Waterbury, CT
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$130,569 Realized Through Mortgages Merchants Trust Receiver Reports Business For December - Home Loan Bonds Taken For Mortgages The monthly report of the doings $12,022.17; demand loans $65; colof the Citizens & Manufacturers lateral loans $10,047.81; industrial loans $159.25; personal loans, $1,National bank, receiver for the 145.71. Merchants Trust Co, for the month of December was filed to-day in the superior court clerk's office. The ALL BANDITS IN report shows first mortgages in the amount of $130,569.19 were liquidated through the acceptance RAID CAPTURED of Home Owners Loan Corp bonds. Disbursements from the com(Continued from Page 1) mercial side amounted to $14,375.72 and from the savings, $3,James Bozzuto, 23, of 1058 Bank 040:52 Included in the comstreet, manager of the place, was mercial disbursements was the shot in the chest when he failed to $7,500 fee of Attorney Francis T. obey the instructions of the gunReeves, counsel for the receiver, men. Young Macerino has admitand the $4,460 commercial dividend ted that he fired the shot. He is to Dora Feinn. Salaries and other unable to explain the motive exincidental expenses make up the cept that his fingers were itchy." difference. Spallone was arrested the mornIn the savings side was a paying following the hold-up, the local ment of $1,798.84 to the City of police having obtained a tip as to Waterbury for taxes due the city the marker numbers on the maon Waterville street properlq. chine. He was captured as he sat The report shows the receiver in the car parked in front of his has cash on hand in the amount home in Brooklyn, N. Y. Macerino of $102,801.84. Payments received returning to New York after hidby the receiver came from the foling in Pittsburgh was captured by lowing sources: Bills discounted, the same detective who aprehended

15. January 6, 1934 The Waterbury Democrat Waterbury, CT
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Home Loan Bonds Quoted On Market At Very High Mark The Price Is 92, the Highest Figure Ever ReachedThis Is Good News to Depositors of the Merchants Trust Company Savings depositors of the Merchants Trust Company will be pleased to learn that Home Loan bonds are quoted today on the market at 92, the highest figure they ever reached, as a result of the press reports from Washington that President Roosevelt is contemplating the guaranteeing of the principal payment of the bonds. Savings depositors of the local closed bank had applied for $416,000 worth of these bonds. They will be assigned

16. April 7, 1934 The Waterbury Democrat Waterbury, CT
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Merchants Trust Co. May Be Reopened (Continued from Page been quietly studying the reorplan and that members its personnel will call upon the officials in charge of the receivership today to toward tion of the plan. will See Commissioner It is also, that the bank present plan before him for views. The committee representing former directors of the Merchants Trust Company, but stockholders, to advices. The committee, when it calls officials charge of will make liquid analysis of the assets of the closed bank. It understood that the committee looks upon reorganIzation much detail will have to be worked Plan In Abeyance what reorganization will could not learned detail. but is understood that the assets of the company be assets they stand show appraisal they be would pay all claims depositors in full still surplus quarter million dollars. It understood that provided favprably toward would raised ahead with actual reorgani- Depositors Hopeful reorganization of Reports clased bank, which had assets appraised than dollars its closing ber 23, have been current since after the doors were fully forward dream. although futile taken that dream never became The present really going ahead not expect made. that the of the ship appears in favorable light the persons interesting themselves in the reorganization plans.

17. April 9, 1934 The Waterbury Democrat Waterbury, CT
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(Continued from Page 1.) because Attorney Reeves was engaged in a probate court matter for the whole day. Plan Is Feasible Attorney Reeves admits that the plan for reorganization is feasible. He confirmed the Democrat's story Saturday that a plan to reorganize the bank for reopening had been launched. The depositors of the bank which closed in 1931 are eagerly awaiting the announcement of the plan. It is understood that their reaction to a plan such as is proposed would be favorable. Attorney Reeves declined to make public the names of the committee or the stockholders who are interesting themselves in the reorganization. He said the men behind the movement prefer to remain in the background until the state banking commissioner makes known his views. Assets of Bank The assets of the Merchants Trust Co. are appraised as of April 1 as being worth $3,077,874.36. The total depositors' claims against these assets amount to $2,833,721.17. Included among the assets are bills discounted, known more familiarly as notes, valued at $631,314.02 and first mortgages of $859,119.19. It is reported that under the plan either of these two assets could be used as a basis for securing a loan from the Reconstruction Finance Corp. toward the reorganization. According to advices from Washington there is considerable sentiment in favor of the so-called McLeod bill which provides for the government's paying all depositors of closed banks in full. The bill would utilize the funds of the RFC, which would acquire the assets of closed banks. The RFC then would take over the job of liquidating these assets in place of receivers. What Depositor Says As one depositor pointed out today, these mortgages of the Merchants Trust Co. are paying 6 per cent interest and income is being received by the receiver from the other assets. This income is used in carrying on the receivership and accumulating cash, which from time to time is used for payment of dividends. So far the commercial depositors of the closed bank have received three 10 per cent dividends and savings depositors, two ten per cent dividends. There is cash in the hands of the receiver of $178,539.77. Stocks and bonds included among the assets amount to $179,993.75. Real estate, including a valuable piece on Leavenworth street and the building which the bank formerly operated on Bank street is listed in the assets as $540,885.39. That item also includes the real estate that has been taken in foreclosures. Collateral loans included in the assets amount to $493,047.34. Personal loans are listed as worth $130,573.76; industrial loans, $3,186.22 and second mortgage loans of $19,318.35. Other securities are listed as worth $31,780. It is expected that the committee will make a liquid analysis of these assets when the conference with Attorney Reeves is held.

18. May 15, 1934 The Waterbury Democrat Waterbury, CT
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This is done in a spirit of cooperation with the Superior Court and the Receiver; to relieve individual depositors from the hardship of delay and to facilitate the liquidation of the Merchants Trust Company. Depositors, particularly with checking accounts, may verify their balance by calling the Merchants Trust Com. pany, 65 Bank Street.

19. June 29, 1934 The Waterbury Democrat Waterbury, CT
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(Continued from Page 1.) the amount of 10 per,cent. Under the court's order the money will be paid by the middle of July, Attorney Thoms placed Lewis 8. Reed, vice president of the Citizens and Manufacturers National bank, receiver, on the stand to read is statement of the condition of the closed bank, how the dividend money would be paid and reasons why the dividend should be paid. The receiver will borrow the money from the commercial wide to pay the dividends. There was some talk of reorganization several months Ago and steps had been taken In that 11. rection. Those interested 'In the bank's reorganization had in mind requiring the cash, then close to $200,000, in the reorganization plan. What Mr Reed Said Mr Reed maid there are 3,106 depositors remaining in the savings department of the Merchants Trust Co and the urgency of their need for funds, prompts the re. celver to recommend the dividend. Mr Reed recalled that the borrowing from the commercial mide to make the dividend payment was done In July of 1933 when $275.000 was borrowed. Up to now he said there have been two navings and three commercial dividends paid depositors, each being at the rate of 10 per cent.

20. October 27, 1936 The Waterbury Democrat Waterbury, CT
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Mrs. Wallis Simpson Wins Divorce THEY ELOPED Merchants Trust BONDED DEBTS Ernest Simpson, Her Husband, Co. Total Assets OF CITY WILL Guilty Of Infidelity-She May Bank Commissioner Walter Perry, Receiver, ApBELESSENED praised Them at $1,740,761.98-Total Claims WedKing Edward Very Shortly Amounted to Sum of $1,611,813.49 WPA Bonds, However, to Divorce Becomes Absolute Mrs. Simpson Escaped Re= Wins Divorce In England Assets of the Merchants' Trust Bank are appraised at Relieve Needy May Be in Six Months-Decree $1,740,761.98 by Bank Commissioner Walter Perry, receiver, porters Twice, Both on Issued Promptly in his semi-annual report to >superior court today. Total Given in 10 Minutes Entering, Leaving claims, both in the commercial and savings departments aggregate $1,611,813.49. The report covers the period from ALDERMEN ASKED CO-RESPONDENT NOT April 1-October 1. WAS VERY NERVOUS TO ATTEND SESSION Cash on hand, and in the bank, in the commercial REVEALED TO PUBLIC ON WITNESS STAND department, totalled $109,257.53 to September 30, as against

21. April 17, 1942 The Waterbury Democrat Waterbury, CT
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company, which occupies the first floor, other tenants include the Hartford ordnance district office of the war department on the second floor; third floor, Barrow, Wade, Guthrie and Co., International Business Machines, Henry C. Robinson Co., and the law offices of Judge T. E. Conway and Atty. John F. McLinden. The building, which is air-conditioned and of modern construction with banking vaults and walnut paneling on the first floor, is bounded on the north by property held by State Bank Commissioner Walter Perry for the closed Merchant's Trust Co., on the east by Leavenworth street; and on the south and west by the Chase company. It has a frontage of 35 feet with a depth of 122 feet. In discussing the planned change Mr. Smith said: "Our association was chartered October 11, 1935, and bursements are listed at $26,246.77. It is stated that $9,049.16 of the claims allowed by the court have been eliminated by compromise leaving a balance of $4,511.68 to be settled. The statement reveals that the only thing which can prevent the company from coming out of receivership would be inability to obtain chemicals and glassware necessary for the manufacture of the company's product. It is stated that chlorine gas which is necessary for the manufacturing is severely rational at the present time. If the company can continue to obtain materials it is said that dividends on the remaining claims will be paid in the near future.

22. October 2, 1944 The Waterbury Democrat Waterbury, CT
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(Navy photo from NEA Telephoto) lations at Peleliu from the air and sea, invasion barges filled with Marine waters to take another Jap stronghold in the Pacific. itter Over Lack By Allies In War Merchants Trust May Pay In Full Both savings and commercial depositors of the Merchants Trust Company may be paid in full If the De Gaulle assets of the bank should be sold, it was declared in superior court today by Attorney Herman Welsman, And Govt. Set attorney of record for the bank. The comments were made during a special hearing before Judge Edward J. Daly, who was asked by the For Economy state bank commissioner if the asBy BRUCE W. MUNN sets might be sold in a single sale. (United Press Correspondent) Judge Daly, who last week heard London, Oct. 2-Gen. Charles Desimilar motions on 10 other banks Gaulle and his government were now in receivership, said he would committed today to a "planned study the matter and issue an order economy" program for the resonon all of the state banks at the same struction of France, including state time. control of all resources and an equal share of national income for every Attorney Weisman questioned the Frenchmen. advisability of disposing of the assets of all of the 11 banks in one The extensive social program was outlined in a speech at his native single sale. He stated there are few city of Lille, industrial center of persons who would have enough northern France, and broadcast by money to bid for purchase of all of the Lilleand Paris radios. the banks, but that there may be (A Paris radio broadcast, recorded many who would be able to make offers for assets of one or several of by FOC, said De Gaulle returned to them, Paris by automobile last night). It was pointed out by the attorney, In modern times, governments who described himself as a stockare much better fitted than indiviholder of the bank, that the numduals to exploit the riches of the ber of bidders might not be limited earth, De Gaulle declared. if the assets of the local bank were "The reconstruction of France is soli in one sale individually rather an enormous task but good relathan combined with the other detions between government and labor funct banks of the state. will facilitate it," he said. "And the Judge Daly stated the suggestion ardent faith which Frenchman was a good one and said that if showed in the last five years will an order is passed for sale of the make it possible. We will show the assets that probably bids would be world and show ourselves that sufcalled for "any or all' of the asfering has not weakened but has sets of the 11 banks. He said all strengthened us." bids would be subject to approval De Gaulle said the task of reof the court and that an open construction was enormous and was hearing would be conducted on acbeginning under "very hard and ceptance of them. very difficult material conditions." Further indication that the court Greater Boldness was eager to close the receiverships "This will only make us tackle was given when Judge Daly comthe problems with more boldness, mented, "It may well be that this greater effort and greater deteris the best time to sell." He mination," he said. "This is the secadded that first some order should ond triumph which will accompany be issued on the nature of the sale, the military victory. However, we and that he would study the situaFrench men and women have well tion carefully before deciding the understood that the effort all wish to make in common must not lead