17448. Defiance City Bank (Defiance, OH)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
May 6, 1908
Location
Defiance, Ohio (41.284, -84.356)

Metadata

Model
gpt-5-mini
Short Digest
61f656a0

Response Measures

None

Description

Articles report the Defiance City Bank (Defiance, Ohio) made an assignment on May 6, 1908 and is described as 'now defunct' / 'failed'. The pieces focus on a fraudulent deposit-insurance company that the bank had contracted with and on the bank's failure; there is no mention of a depositor run. Classified as a suspension/closure (assignment leading to permanent closure).

Events (1)
1. May 6, 1908 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank made an assignment (May 6, 1908) and subsequently failed; failure appears tied to insolvency and inability to collect on a deposit-insurance contract from a fraudulent insurer rather than a depositor panic.
Newspaper Excerpt
the Defiance City Bank of Defiance, Ohio, investing in a contract... The bank made an assignment on May, 6. 1908... One contract was taken in December last by the Defiance City bank of Defiance, Ohio, (now defunct) ... The bank failed.
Source
newspapers

Newspaper Articles (4)
1. November 14, 1908 The Washington Times Washington, DC
Article from The Washington Times, November 14, 1908

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Article Text

WASHIN GTON FIRM GETS FRAUD ORDER Bank Depositors' Insurance Company Said to Operate Illegally. Fostmaster General Meyer today denied the further use of the United States mails to a Washington concern, the Bank Depositors' Insurance Company, capitalized at $1,000,000, which has been doing business since November, 1907. The order applies to the company and its officers and agents as such, and H. J. Waring, the vice president, and E. M. Carroll secretary. The inspector alleges in his report that the business was managed by professional promoters without business stability. The charter for the Bank Depositors' Insurance Company, according to the in was the District of the spector's laws of report, granted Columbia under to other persons on August 20, 1903, and was subsequently purchased by the late managers of the company. The plan was to self by mail to banks and banking institutions throughout the country, contracts guaranteeing depositors in such banks against loss of their funds through suspension of payment or failure of the bank for any reason. Advertised Well. These contracts were advertised extensively in a monthly publication called the National Examiner, the first number of which appeared November 1, 1907. The scheme was therein exploited in extravagant terms. the claim being made that the company was chartered by act of Congress, and that its authorized capital stock of $1,000,000 had been fully paid, together with a surplus of $100,000. Several banks throughout the country purchased the guarantee contracts, the Defiance City Bank of Defiance Ohio, investing in a contract to indemnify its depositors to the limit of $80,000 in the case of suspension of payment or failure of the bank. This contract was made on January 31. 1908, and the bank made an assignment on May, 6. 1908, resulting in a call being made on the Washington concern for a settlement on behalf of the depositors. The officials of the bank were proniptly notified to prepare a statement, and that the auditor of the company would call and adjust the account. The auditor failed to put in an appearance and an investigation was instituted. resulting in the complaint being filed with the department. Claims Said to Be False. The assistant attorney general for the Postoffice Department, in recommending that the fraud order be issued against the company. stated in his report to the Postmaster General: "The pretenses upon which Mr. Carroll and Mr. Waring have sold these contracts, to the effect that the comhad over $1,000,000 false, the pany to be absolutely assets, plan appear being one to collect the premiums without serious intention of keeping their end of the contract." 3 that the scheme had

2. November 15, 1908 Evening Star Washington, DC
Article from Evening Star, November 15, 1908

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Article Text

samples of its certificates to banking institutions all over the country, together with contracts for sale to insure the banks against loss from suspension or fallure, and literature in which it was claimed that it had insured 250 banks, including national banks, in various parts of the country. This insurance, it was claimed, gave the banks additional stability and insured the depositors against loss in the event of the bank's failure. The inspectors who investigated the case, which was first brought to the attention of the department by District Supt. of Insurance Drake, because there was no one else to complain as matters stood. report that they were able to find but twenty-five banks, five of them national banks, which had been insured, at a premium of one-quarter of 1 per cent. These banks were situated in various parts of the country. the bulk of them in the south, the nearest one to Washington being a national bank in West Virginia. The contracts were widely advertised for sale in a publication called the National Examiner, the first number of which appeared November 1, 1907. The literature was extravagant in its terms, setting forth that the concern was chartered by act of Congress, that its capital stock of $1,000,000 was fully paid up and that it had a surplus of $100,000. Among the banks insured by it was the Defiance City Bank of Deflance, Ohio, for $80,000. The contract was made January 31, 1908. The bank made an assignment May 6, 1908, when a call was made on the insurance company for a

3. November 16, 1908 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, November 16, 1908

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Article Text

MAIL CLOSED TO BANK INSURERS FRAUD ORDER ISSUED AGAINST FIRM WHICH GUARANTEED DEPOSITS. Washington, Nov. 16-Postmaster General Meyer has issued a fraud order against the Bank Depositors Insurance Co., H. J. Varing, vice president, and E. M. Carroll, secretary. The concern was organized under the laws of the District of Columbia. This company has been doing a considerable business in North Dakota, and was the subject of an inquiry by North Dakotans in Washington last winter. At that time the bank examiners of this city and the Insurance commissioner of the District of Columbia declared they had no jurisdiction and the matter was dropped temporarily. Later, however, the local postoffice Inspection force took the matter up and on their report being laid before the postmaster general, the fraud order was issued. Guaranteed Bank Deposits. A statementsissued by the department says that Waring and Carroll acquired the company from other persons in July of last year. They have been engaged in selling by mail to banks and banking institutions contracts guaranteeing depositors in such banks against loss of their funds through suspension or failure of the bank. The claim was made that authorized capital of $1,000,000 had been fully paid in. together with a surplus of $100,000. The extent to which Carroll and Waring have been able to place these contracts is unknown to the department. An Inspector found that many policies had been sold, running from $100 up. Closed When Claim Was Made. One contract was taken in December last by the Defiance City bank of Deflance, Ohio, (now defunct) to indemnify depositors of that bank to the limit of $80,000. The bank failed. demand was made for payment under the contract and almost immediately the offices of the insurance company in this city were closed. Considerable mail for the company has accumulated here. The letters will be returned to the writers.

4. November 18, 1908 Evening Times-Republican Marshalltown, IA
Article from Evening Times-Republican, November 18, 1908

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banks against loss of their funds thru suspension of payment or failure of the bank. The claim was made that authorized capital of $1,000,000 had been fully paid in, together with a surplus of $100,000. The extent to which Carroll and Waring have been able to place these contracts is unknown to the department. An inspector found that many policies had been sold, running from $100 up. One contract was taken in December last by the Defiance City bank of Defiance, Ohio, (now defunct) to indemnify depositors of that bank to the limit of $80,000. The bank failed, demand was made for payment under the contract and almost immediately the offices of the insurance company in this city were closed. Considerable mail for the company has accumulated here. The letters will be returned to the writers.