United States Trust Company

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: trust company
Start Date: November 21, 1913
Location: New York, New York (40.714, -74.006)

Metadata

Model: gpt-5-mini
Short Digest: 01d131bb

Response Measures

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

Other: Bank was acquired/absorbed by Munsey Trust Company; Treasury arranged funds through national banks to facilitate takeover.

Description

Articles report a run on the United States Trust Company beginning November 21, 1913; that evening Munsey Trust Company acquired the assets and deposits and guaranteed depositors. The original institution was absorbed/taken over, so the run led to suspension/closure (absorption). Cause is treated as bank-specific adverse information (internal condition/examiner findings made public) which triggered withdrawals. Treasury and national banks intervened to facilitate the transfer.

Events (3)

1. November 21, 1913 Run

Cause: Bank Specific Adverse Info
Cause Details: Internal examiner findings and revelations about the institution's condition became known to depositors, prompting withdrawals beginning November 21, 1913.
Measures: National banks signaled support; Treasury arranged $1,000,000 in deposits routed through national banks to Munsey Trust Company; Munsey Trust Company agreed to acquire assets and guarantee deposits.
Newspaper Excerpt: The condition of the institution had come to the knowledge of its depositors on November 21 to an extent which resulted in a run on the bank, which continued until the close of business on that day.
Source: newspapers

2. November 21, 1913 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Following the run and loss of depositor confidence after disclosures and disputed examiner findings, the institution's assets and deposits were transferred to Munsey Trust Company (effectively ending independent operations).
Newspaper Excerpt: at 10 p. m. it was announced ... that the Munsey Trust Company had acquired the assets and deposits of the United States Trust Company, guaranteeing to return to the stockholders anything left after paying off the depositors.
Source: newspapers

3. December 1, 1913* Other

Newspaper Excerpt: Mr. Munsey ... submitted two propositions ... the Munsey Trust Company had acquired the assets and deposits and would guarantee the deposits of the United States Trust Company.
Source: newspapers

Newspaper Articles (5)

1. December 3, 1913 New-York Tribune New York, NY

Article from New-York Tribune, December 3, 1913

Click image to open full size in new tab

Article Text

Overruled by Williams. On the following forenoon, at a meeting of the representatives of the United States Trust Company in his office, Assistant Secretary Williams, according to the story, severely criticised the bank examiner overruled the decision of the acting Controller of the Currency, and intimated to the officials of the threatened bank that he did not consider warranted the findings of the examiner or his superior, the acting Controller. Despite the view entertained by Assistant Secretary Williams, however, those on the inside began quietly to withdraw their deposits, and certain stockholders were believed to be preparing to sell their holdings. The national banks of the district, which did not share the optimistic view entertained by Assistant Secretary Williams, notified their respective brokers that they must neither buy nor sell the stock of the United States Trust Company, thereby checking any efforts which might have been made to unload. The condition of the institution had come to the knowledge of its depositors on November 21 to an extent which resulted in a run on the bank, which continued until the close of business on that day. The eleven members of the Clearing House were still prepared to take steps to I protect the depositors. That evening, however, Frank Munsey appeared in Washington, and at 10 p. m. it was announced by Stuart Olivier, on behalf of Mr. Munsey, that the Munsey Trust Company had acquired the assets and deposits of the United States Trust Company, guaranteeing to return to the stockholders anything left after paying off the depositors.

2. December 5, 1913 New-York Tribune New York, NY

Article from New-York Tribune, December 5, 1913

Click image to open full size in new tab

Article Text

Take Issue with Secretary. Those who take issue with Secretary McAdoo's views, as expressed in his official statement, assert that the depositors of the United States Trust Company were never threatened with loss until after the interference of the Treasury Department and after Assistant Secretary Williams's rejection of the report of the Acting Controller of the Currency. In support of this contention, they point out that when the Controller first took up with leading bankers of this city, the condition of the United States Trust Company on Tuesday, November 18, the bankers were prepared to guarantee the depositors against all loss, a step which, in effect, they ultimately took when they agreed to become responsible for the $1,000,000 of Treasury funds deposited with the Munsey Trust Company. The overruling of the acting Controller of the Currency and the delay of action by the Treasury Department until Friday night, these persons contend. at least afforded the larger depositors-those who were more or less familiar with the internal affairs of the United States Trust Company-opportunity to withdraw their deposits, a course which could not fail to prejudice the interests of the smaller depositors, who did not become alarmed until Friday. It is declared by bankers here that only to-day did the Treasury Department, following the publication of The Tribune's second dispatch, attempt to secure from the national banks their guarantee of the $1,000,000 deposited with the Munsey Trust Company. This sum, according to the receipts sent to the various banks for signature, was taken from the "cΓop moving" fund of the Treasury. It was secured by the paper taken from the assets of the United States Trust Company before the million dollar deposit was made in the Munsey Trust Company, but the law forbids the deposit of Treasury funds in other than national banks, so that theoretically the sum was deposited with the national banks, which in turn deposited it with the Munsey Trust Company, although in fact there was no such circumlocution about the procedure. Now the Treasury is asking the receipts from the national banks for their several shares of the total sum, and some bankers are understood to have expressed some reluctance to sign them. while others manifest surprise that it was the "crop moving" fund which was utilized for this purpose.

3. December 12, 1913 New-York Tribune New York, NY

Article from New-York Tribune, December 12, 1913

Click image to open full size in new tab

Article Text

Trust Company before Mr. Munsey company had made' any formal proposition. Apropos of this proposition, John Skelton Williams declared that "we must have competition, must give the Munsey Trust Company an opportunity to make an offer. Perhaps its offer will be more generous." Then, after Friday's run on the United States Trust Company, according to Mr. Munsey's own statement. he submitted two propositions, as has been related in these dispatches, and his second proposition, although made later and identical with that which had been made by the Continental Trust Company, was accepted, and the bankers assembled during the night and early morning of Saturday were informed that the Munsey Trust Company had acquired the assets and deposits and would guarantee the deposits of the United States Trust Company. "The Treasury Department had made a similar proposal several days before to the Continental Trust Company, and, I think, to at least one other bank," says Mr. Munsey, in his statement of yesterday. Officials of the Continental Trust Company declare that Mr. Munsey is misinforme on this point; that no offer had been made to the Continental Trust Company, but that it had made the offer to the directors of the United States Trust Company and to John Skelton Williams, and that it was never accepted. Much has been made by Secretary McAdoo of a letter signed by an officer of the Continental Trust Company, deploring the agitation in the press and stating something to the effect that the Continental Trust Company had not cared to accept the assets of the United States Trust Company and guarantee its depositors against loss. It is noteworthy that this letter is dated December 8, five days after the Treasury Department had been placed under fire by The Tribune's disclosure of the facts attending the absorption of the United States Trust Company by the Munsey Trust Company. Other officials of the Continental Trust Company declare that this letter misstates the case and intimate that it was written to help John Skelton Williams out of a dilemma and, perhaps, because the writer, who said it was a personal communication, deemed it good business diplomacy to go to the assistance of the man who exercised supervision over the deposits of upward of $90,000,000 of government funds. Seeks to Comfort Williams. Charles A. Douglas, a Washington attorney, who is counsel for the Continental Trust Company, came to the support of John Skelton Williams yesterday with a statement which he said was "unsolicited and simply in the interest of truth," and which is designed to afford comfort to Mr. Williams While it is probable that the categorical assertions in the statement are correct, it conveys an impression wholly at variance with the understanding of high officers of the Continental company, who do not believe that they "stood the slightest chance of acquiring the deposits of the United States Trust

4. December 12, 1913 New-York Tribune New York, NY

Click image to open full size in new tab

Article Text

Williams Rejected Proposition Made by Continental Trust Company. ITS TERMS SIMILAR TO THOSE ACCEPTED Stockholders of United States Concern Asking What Influences Were in Play. [From The Tribune Bureau.] Washington, Dec. 11.-Evidence of a complete usurpation of the powers of the Controller of the Currency by John Skelton Williams, Assistant Secretary of the Treasury, of a reckless disregard of the rights and interests of the United States Trust Company, and of the determination of John Skelton Williams and his brother, R. Lancaster Williams, to procure for the Munsey Trust Company the $6,000,000 deposits of the United States Trust Company continues to multiply. Every effort of the Treasury officials to avert a Congressional investigation and each new statement of Frank A. Munsey simply add fuel to the flames. Mr. Munsey's latest statement has aroused so much indignation among the bankers that it has opened up a new and important avenue of information. Nathan Bay Scott, president of the Continental Trust Company, formerly a United States Senator and until two years ago president of the United States Trust Company, after repeated urging by the directors of that company agreed at 11 a. m. on Friday, November 21, the day the run on the United States Trust Company started, to accept the presidency of the institution. He made arrangements to bring from another city $500,000 in cash, for which he furnished securities from his own private estate as collateral, with which to tide over the difficulties of the United States Trust Company and to save from all loss not only the depositors but the stockholders. Ex-Senator Scott had been reluctant to assume this heavy responsibility, but finally consented to do SO solely to protect the depositors, and on the representation that by so doing he could avert the failure of the institution. But influences which Mr. Scott cannot identify prevented the acceptance of his offer, and ten hours later the deposits and assets of the institution were turned over to the Munsey Trust Company.

5. February 24, 1918 New-York Tribune New York, NY

Article from New-York Tribune, February 24, 1918

Click image to open full size in new tab

Article Text

John Skelton Williams Offers Some Corrections THE following letter from the Controller of the Currency has just been received by The Review: "Sir: It is not pleasant to ask correction of newspaper articles, but I can see no reason why a man should be expected to submit silently and continuously to untrue assertions concerning himself apparently intended to injure him, even if he is an official of the government. "In your issue of the 10th, which has been brought to my attention, is an article referring to my appointment on the staff of the Director General of Railroads, in which occurs the following assertion regarding me: "In 1913, while he was Assistant Secretary of the Treasury, he was connected with the absorption by the Munsey Trust Company of the United States Trust Company.' "This is misleading and flatly untrue, and is contradicted directly by the record and the easily obtainable facts. I was not 'connected with the absorption by the Munsey Trust Company of the United States Trust Company' in any way; I had no personal interest of any kind, near or remote, in either company, and was not a party to the negotiations between those companies. "The same article says, further, again alluding to me: 'It was charged that he placed a million dollars of public funds at the disposal of the Munsey Trust Company, of which his brother was a director, to assist that institution to meet a possible run following the announcement that it had taken over the United States Trust Company.' "Thi is so misleading and is a perversion of the facts so gross and ingenious as strongly to suggest malicious intent by. The Tribune's informant. There had been no suggestion of a run on the Munsey Trust Com. pany, but a run on the United States Trust Company had already begun, and threatened disaster to many and a panic. The Munsey Trust Company, on which there had been no run, or suggestion of run, went to the rescue of the United States Trust Company, and thereby stopped the panic. "Under the law neither I nor any other official of the government had authority to deposit a dollar of public funds in any trust company. The Secretary of the Treasury re. lieved a tense and dangerous situation and averted strain upon the other banks of the city by depositing a million dollars in eleven rational banks here, the government being secured by the deposit with the Treasury Department of ample collateral. These banks thereupon deposited a like amount of money with the Munsey Trust Company, enabling it to take over the United States Trust Company without cramping themselves. Confldence was restored immediately. The more than 40,000 depositors of the United States Trust Company were paid in full. "The Munsey Trust Company, of which my brother was a director, had no connection with the United States Trust Company, but stepped in to save it after a run on it had begun and much anxiety had been caused among bankers and business men here and elsewhere. The Secretary of the Treasury, before the Munsey Trust Company acted, had offered to deposit the million dollars with local national banks if some other banking institution here would take over the United States Trust Company so as to guarantee its deposits and other obligations, but the offer was not availed of. JOHN SKELTON WILLIAMS." It is needless, or we hope needless, to add here in our own behalf that no "malicious intent" lurked behind the items of misinformation which unfortunately found their way into The Review's little sketch of Mr. Williams's public career.[[[be Editor.]