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BANK EXAMINERS TAKE OVER INSTITUTION WHEN SHORTAGE DISCOVERED IN CASH ACCOUNT
Groom Says He Used Money to Take Care Of Assessments Against His Stock When Examiners Charged Out Slow Paper
Directors of the First National bank placed the institution in the hands of L. K. Roberts, national bank examiner Tuesday night, after it was discovered that funds of the bank had been used to make good losses from charged off loans. The bank did not open Wednesday morning, and the examiners were busy preparing to make a check of the assets of the institution.
O. D. Groom. vice president of the First National. told other officers and stockholders of the bank Tuesday night that he had used $96,000 of the deposits and assets of the bank from time to time over a period of several months to replace assets charged by the federal banking department. Confronted with the problem of raising money to meet shrinking assets, the vice president said that he had diverted through various methods that amount to keep the bank from failing, and to meet the lemand of the banking department. USE NOT PERSONAL
No part of the money. Groom told the directors and examiners, had been used for his personal benefit, and every penny of it was used to save the bank from closing. The vice president of the bank left Bristow Tuesday night, but is awaiting orders from the national bank examiners. He was in Tulsa at 11 o'clock Tuesday night it was reported. At the call in March. the bank had gross assets of and deposits of $578,961.83. The capital stock and surplus was $59,339.25 at the last call. At the direction of the bank examiner, portion of the notes and loans in the bank were taken out of and cash put in. To do this, the Groom estate and the vice president and W. W. Groom, the president, turned over their entire personal assets as a guarantee against the cash used to replace the slow paper. This was done March than a month ago. OTHER BANKS READY Immediately following the information being given out, business men and bankers fortified themselves against the sheck that was to follow in the morning. Through the Federal Reserve bank of Kansas City, and its correspondent banks in Tulsa and Kansas City, the American National bank arranged to get half a million dollars in cash to take care of community demands. The Community State bank. already fortified against almost any emergency, arranged for additional Funds, and announced that it could and would pay every depositor in full on demand. Directors of the chamber of commerce met at 10 o'clock and offered the services of the organization to the bank examiner and the other banks in handling the situation. "We an emergency,' declared JJ. B. Nichol, president of the chamber of commerce. "Bristow has never failed to meet every emergency, and at this time it is fortunate that we are organized and prepared to function. "CAN MEET EMERGENCY" "There is an emergency, but not so great a one but what Bristow can meet it and solve it. The directors urge the people to meet the situation with fortitude and determination, and by working together, we can make it easier on Mr. Roberts, the bank examiner, said that he knew the strength of the two remaining banks in Bristow. and that he had personally arranged to have ample cash on hand to meet any demand of depositors, either by train, motor car or airplane, He was much pleased at the temper of the people in the face of the disaster. Two airplanes were stationed at the airport all day, ready to make a trip to Tulsa or Kansas City, if needed. The danger, bankers pointed out, is a punic that often follows such a tragedy. But Bristow people seemed to sense the solidity of the two banks, the American National and the Community State, and there were no of deposits. RUN THE BANK The First National never fully recovered from run made on it two years ago. Rumors started at Slick and in the country brought in steady stream of depositors at that time, and there were large withdrawals. This took the cash and sight exchange of the bank and ate into the reserve. Following this certain notes in the bank were criticized by the examiners, and ordered collected charged off. Gradually the bank was recovering from the loss on these bad accounts, and was getting its note case in good shape. But every time one of these slow notes went out, cash had to go into the bank's assets. At the end of his own personal cash resources, Groom gave up his personal property. until he had no more. Further demands led to irregularities in accounts. and cash belonging to others on deposit in the bank was used to cover up the added losses.
CHECK WAS "IRREGULAR" A check for a large sum came into the bank this week, which later found in the cash items. which was This was irregular. was noted by the other officers of the bank, and which led to an and calling in of bank examiners to take over the institution. In March. $60,000 of the slow paper in the bank was ordered out. and it was necessary to arrange for a loan to furnish the money to meet this drain on the assets. that time the personal investments of the bank officials and the Groom estate were up to secure the loan. put Based on this condition, with of the unliquid assets taken out. predictions are made that depositers will suffer the minimum loss. Pending a complete examination and check of one would hazard guess as to the possible
