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Deposits got about that the First National Magruder Bank would not open its doors that day, for an indefinite number of days to come, that its doors had been closed Thursday afternoon at 3:30, by order of the federal comptroller of currency. Directors had intended to straighten out the difficulties which had ariswithout its becoming public knowledge, yet on Thursday the fact that there was trouble leaked out, and depositors began drawing out their hall. money. By Friday this would have amounted to a run on the bank, the doors had to be closed to save depositors from loss. The difficulty was caused by bad investments in leasehold bonds of the George W. Stone Co., Cleveland brokerage concern which recently failed. Seventy-seven banking institutions in the state held some of these seven percent bonds, yet not in such great amounts that business had to be suspended. The bonds had been purchased about three by the First years ago National bank, the Magruder bank at bonds. We understand that the leases these floors of bonds covered were on upper office Leases of this kind buildings. termed "air leases". are Almost immediately with the closing of the bank reports of various plans for its reorganization were afloat. A of the 164 stockholders meeting called for Tuesday evening and was 90 cent of these met in the city per After bank inspector, who was fully explained the situation present, the stockholders voted to surrender their stock and to make a contributo 50 cent of their tion equal per holdings. This will make up $50,000 deficit, which remained after the directors had made their contributions. A new organization is being formed to take the bank's interest with over capitalization of $100,000, of which amount more than per cent has been spoken for. The present stock holders will be given the first chance on the new stock and the will be made up of local organization capital. The new bank is to be operated under new management if present plans carry. The depositors will receive 100 per cent on all of their deposits. At the annual meeting last January the number of directors was reduced from 11 to 9. Officers then elected were: President, S. A. Magruder; vice president, Dr. Paul de la Barre; cashier, Frank Holt; other directors, E. F. Kuhnle, Stensen, Richard Gerner, Sprenger, H. Bredbeck, Duff. The First National and Magruder banks agreed on merger in May 1922, the actual consolidation taking place in January 1924. The combined business was then conducted in the Magruder building until August of that year, when the remodeling of the present location was completed. The Magruder bank was the oldest banking institution in Ottawa county. It was established in 1872 by S. A. Magruder, in connection with his father, the late J. M. Magruder, and J. Graves, of Danbury. The First National bank was established in 1902. It is expected that a reorganization will be perfected within week or ten days. The situation is briefly as follows: Before the consolidation of The First National Magruder Bank, certain bonds issued by The George W. Stone Company of Cleveland, Ohio, had been purchased by the banks entering into the consolidation. These securities were held by the new bank, and in the spring of 1926, the George W. Stone Company became involved in difficulties in Cleveland, which resulted in the bankruptcy of that firm and serious impairment in the value of the securities which had been issued by that company. The directors came to the front with substantial amounts of money for the purpose of tiding over the situation, and with the hope that the values which had been placed on the securities would return. Instead of these securities coming back, they contiued to decrease in value until finally the bank examiners determined that the capital of the bank was too seriously impaired to permit this condition to continue. A re-organization of the bank is now in progress; the depositors need have no worry as the assets will pay them in full, and when the re-organization is completed, which is hoped will be accomplished within week, the bank will open and be up ready for business. Charles Stensen, who is planning on two bus loads of passengers his conducted tour to Florida, January 12, reports large number of persons having already made reservations. Some of these passengers are expecting to remain in the south for the rest of the winter and others will make the round trip by bus.