18306. Aurora State Bank (Aurora, OR)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: February 5, 1931
Location: Aurora, Oregon (45.231, -122.756)

Metadata

Model: gpt-5-mini
Short Digest: d64347b0

Response Measures

Full suspension, Books examined

Other: State superintendent placed bank into liquidation; deputy examiner put in charge.

Description

Contemporary articles (dated Feb 6, 1931) report a two-day run that forced the bank to close (run began when bank opened Feb 5, 1931) and the board requested the state superintendent to take over and liquidate the bank. Cause is bank-specific adverse information: a suit alleging fraud against officers of an associated mortgage company (two officers were also bank directors) triggered the withdrawals. Dates derived from publication dates and text saying 'yesterday'/'Thursday'.

Events (3)

1. February 5, 1931 Run

Cause: Bank Specific Adverse Info
Cause Details: Newspaper story about a suit alleging fraud against officers of the Willamette Valley Mortgage Loan company; two of those officers were also bank directors, intimating a tie-up and prompting withdrawals.
Measures: Directors closed the bank to conserve assets; directors passed resolution requesting state bank superintendent/examiner to take charge and liquidate assets for depositors.
Newspaper Excerpt: there has been a run on the bank and it is necessary to close in order to conserve the assets for the benefit of depositors.
Source: newspapers

2. February 6, 1931 Receivership

Newspaper Excerpt: S. M. Laws, deputy state superintendent, has been placed in charge of the bank. ... placed into liquidation. The request for the state to take over the situation came from the officers in a resolution to the superintendent.
Source: newspapers

3. February 6, 1931 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Board of directors asked the state examiner to take over and liquidate following the run caused by the fraud suit allegations involving bank officers and an associated mortgage company.
Newspaper Excerpt: A. A. Schramm, superintendent of state banks, today announced the Aurora State bank, which closed its doors yesterday because of run on the institution, would be placed into liquidations.
Source: newspapers

Newspaper Articles (11)

1. February 6, 1931 The Evening Herald Klamath Falls, OR

Article from The Evening Herald, February 6, 1931

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Article Text

AURORA BANK CLOSESFOR SALEM, Feb. 6. (AP)-A. A. Schramm. superintendent of state banks, today announced the Aurora State bank, which closed its doors yesterday because of run on the institution, would be placed into liquidations. The request for the state to take over the cituation came from the officers in a resolution to the superintendent. Further than this announcement, Schramm stated, his department had no other statement to make. The resolution signed by the four directors of the bank, B. F. Giesey, J. H. Miley. G. Scram- "there has been a run on the bank and it is necessary to close in order to conserve the assets for the benefit of depositors. The officers stated the run was occasioned by a newspaper story of the suit filed against Giesey, Schwab and William Phoenix, as officers of the Willamette Valley Mortgage Loan company for $25,200. by Andrews C. Snyder, who alleged the company had defrauded him. Two of the officers are also directors of the bank, and the intimated tieup. they stated, started a run yesterday. S. M. Laws, deputy state superintendent, has been placed in charge of the bank. Schramm announced. The Aurora State bank was organized in 1905 and since has not increased or decreased its capital stock, thus does not come under the 1912 law of double liability for stockholders. It is the only bank in Aurora, the merger of the two in that city into this being effected two years ago. The December 31 statement showed deposits of $352,576.06.

2. February 6, 1931 The Capital Journal Salem, OR

Article from The Capital Journal, February 6, 1931

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Article Text

Good Evening! COMPELS AURORA BANK State Superintendent of Banks To Liquidate Affairs of Concern Directors Act To Starts Aurora, deputy examiner in charge, the state superintendent of banks Friday was in control of the affairs of the Aurora State bank here, the result of two-day run the board directors late Thursday adopted resolution asking state bank examiner to take over the bank and liquidate its assets for the benefit of depositors. Schramm, superintendent banks, was unable make statement regarding the situation other than announce the action of the bank board. The statement showed deposits of $352,570. The bank capitalized Officers Dr. Glesy, president; Nuly, vice president: W. Scramlin, vice president, and Zeno cashier. Schramm, superintendent state banks, Friday announced Aurora State bank, which closed. its doors Thursday because of on the would column

3. February 6, 1931 The Capital Journal Salem, OR

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Article Text

COMPANY Water company. Offices streets. Bills Daymonthly. Phones LEGALS Highland Richmond McKinley Garfield Grand Stand OF AURORA FORCED TO (Continued from page placed into liquidation. The request for the state to take over the situation from the officers in the superintendent. Further than this announcement, stated, department had no other statement to make. The signed by the four of the bank, Glesy, H. Miley, Scramlin and Zeno Schwab, stated "there been run on the bank and necessary close in order to conserve the assets the benefit of depositors. The officers stated the run was casioned by newspaper story the suit filed against Glesy, Schwab William Phoenix, as officers Willamette Valley Mortgage Loan company for $25,200, by Andrew Snyder, who alleged the company had defrauded him. Two the officers are also directors the bank, the intimate they stated, started run ThursM. Laws, deputy state superinhas been placed in charge of the bank, announced. The Aurora State bank organized 1905 and since has not indecreased its capital stock, thus does not come under the 1912 law of double liability for stockholders. is the only bank Aurora, the merger of the two that city into this being effecttwo years December statement showdeposits $352,576.06. Glesy stated the Willamette Valley Mortgage Loan defendant in the suit, had no with the bank, also that the charges false. Portland R. Rankin, attorney for Andrew Snyder, retired farmer of Aurora, who sued the Willamette Valley Mortgage Loan company and its officers the of which he declares he was defrauded, announced Friday number of other in the company called at his office with notes allegedly those held by Snyder. Snyder's named Dr. B. F. Giesy, of the mortgage Zeno Schwab, secretary, William G. Phoenix, manager. Glesy president, and Schwab, cashier of the State bank which went into the hands of bank Friday. Rankin declared paper of the some was only by mortgages on worth mere fraction the obligations against A court has been issued of to show cause why should not be placed

4. February 6, 1931 The Daily Inter Lake Kalispell, MT

Article from The Daily Inter Lake, February 6, 1931

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Article Text

OREGON STATE BANK IN EXAMINER'S HANDS (By Associated Press) Aurora. Oregon, Feb. AuΓoΓa State bank is under process of liquidation following a two day run. with the state bank examiner in charge. Dr. B. F Giesy, president and Zeno Schwab, cashier, two officers of the Willamette Valley Mortgage and Loan company, were recently made defendants in a $25,000 suit, alleging fraud through mortgages insufficiently secured.

5. February 6, 1931 Medford Mail Tribune Medford, OR

Article from Medford Mail Tribune, February 6, 1931

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Article Text

FARMER'S SUIT CAUSES RUN ON AURORA BANK State Examiner in Charge of Institution After TwoDay Scramble By Depositors. With deputy bank examiner charge. the state of banks today in control the affairs the Aurora State Bank here, the result twoday run the The board of directors late yesterday adopted resolution asking the bank examiner to take over the bank and liquidate its assets for the benefit of depositors The last statement showed posits of $352,570. The bank capitalized at Officers are Dr. dent. and Zeno Schwab, cashier. R. attorney for Andrew retired farmer Aurora. who has sued the WILlamette Valley Mortgage Loan company and its officers for $25,200. the amount of which he clares he was defrauded. announc. ed today number other vestors the company called at his office with notes allegedly similar to those held by Snyder Snyder's suit named Dr. B. Glesy, president of the mortgage company Zeno Schwab, secretary, and William Glesy is president and eashier of the Aurora State bank which went into the hands bank examiners today

6. February 7, 1931 Statesman Journal Salem, OR

Article from Statesman Journal, February 7, 1931

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Article Text

of morning daily for some months past used portion of column eight of its front to page give optimistic "notes of progress' calculated to inspire fresh confidence in the business world. Thursday it used the lead on this column with news story involving loan company Aurora, officers of which were also officers the Aurora of State bank. The story was based on the complaint of gant and his attorney charging fraud against the individuals and alleging that the loan company was bankrupt. The effect of this story in Aurora could easily have been foretold. A run developed when the bank opened and the directors had to close bank. is the business of newspaper to print the news regardless of whom hurts. It is also the responsibility of newspaper weigh the news, both to the as probability of its truthfulness and its as to effect and upon communities in deciding on the prominence should ceive. Here have, partly if not largely as result of this inflammatory story in the Oregonian, bank closed, community given serious blow, individuals injured financially and in reputation! All this in the allegations of doubt in civil action the truth of which remains in until determined by judicial process. "Notes of progress" will have an empty sound in Aurora for some time to come.

7. February 12, 1931 Statesman Journal Salem, OR

Article from Statesman Journal, February 12, 1931

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Article Text

Door Closed Only After Officers Make Strenuous Effort to Keep Going Panic on the part depositors the state bank forced the bank to close Wednesday. Following run the Aurora bank, officials the Hubbard institution prepared meet possible the Hubbard bank but It failed develop. People there were evidently alarmed and business continued usual. During this week mail withdrawals an alarming and more than said have been withdrawn within the last few days. Officials made every effort meet the demand, but the heavy withdrawals that came Tuesday's mail forced them to ask the state banking department to take charge. Laws, who is in charge the liquidation of the Aurora bank, will be in charge of the affairs of both institutions. Gilbert, assistant state superintendent of banks, is in charge at Hubbard and said Wednesday that bank's finances were in good condition. August Will, president, and Hershberger, director, were outstanding their efforts keep the bank open, with the hope overcoming the run, according Schramm, state superintendent banks. Haveman vice president the bank and Ruth Calvert cashier. August Will, Hershberger and Ruth Calvert directors.

8. February 12, 1931 Statesman Journal Salem, OR

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Article Text

DEPOSITORS AWAIT SNYDER'S DECISION At mass meeting of depositors in the Aurora State bank, which closed its doors February patrons of the Willamette Valley Mortgage Loan company held Monday Snyder was asked to withdraw his suit against the loan company. This suit in held rectly for the run the bank which forced its closing. spokesman for Snyder said that he would go Portland Tuesday and confer with his attorney before giving his At late hour Wednesday word had reached Aurora as to Snyder's decision. Snyder, who stockholder in the Aurora bank, had signed statement the Aurora paper Friday to the effect that there no connection between the was bank and the Mortgage Loan company mass meeting was called hope the the Citizens of Aurora ing possible affairs the bank are the trouble.

9. February 14, 1931 The Capital Journal Salem, OR

Article from The Capital Journal, February 14, 1931

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PROBE AURORA Schramm Indicates Facts To Be Laid Before District Attorney Dr. Giesy, Bank President, Affairs of the Aurora State bank. recently closed by the banking department and the Valley Loan Mortgage company also Aurora, have switched Salem. Well that certain phases the Aurora bank's affairs reach the Marion county grand jury now taking brief reconvene next developed Saturday and not denied by State Bank Schramm. In fact, he pointed to section the law which that under certain conditions was the duty of the state bank superintendent facts and figures of closed bank's situation before the district attorfor an investigation. And such facts and figures are laid fore district attorney there little doubt they turn will by him before the grand jury. While these developments are takplace connection with the Aurora State

10. April 2, 1931 Statesman Journal Salem, OR

Article from Statesman Journal, April 2, 1931

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Petition Filed Against man Who Filed Suit Causing Run on Aurora Bank Another item in sidelights developing from failure of the Aurora State bank is surmised to be back of petition filed with the county clerk yesterday for removSnyder patrolman road district No. 1, near Aurora. The petition is signed by Hunt and 48 others, and gives only reason for the request that change would best interests of the district." In presenting the petition, no mention was made of candidate succeed Snyder, far that goes of the real reasons why the petition circulated. is believed by those who know something the situation that move result of the bank failure and preliminary incidents. Brought Suit That Run Bank Snyder suit against the Willamette Valley Mortgage and Loan company, charging that the frauded of This suit generally held to cause of which resulted in closing of the doors of the bank. Officers the loan company also were the board directors of the bank, although the time doors were closed bank officers denied that the company had any connection with the bank. Snyder lives in Aurora but has large farm in the road district which supervisor. held that position since 1919, his have been satisfactory, members of the councourt declared when questioned yesterday.

11. September 7, 1932 The Capital Journal Salem, OR

Article from The Capital Journal, September 7, 1932

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Article Text

(From page one) command to save the they built up in 26 years of service." Barnett H. Goldstein, special for the state, had ceded Winslow opening statement outlining the case he tended build against former Aurora Showthe charge the bank had loaned Willamette Valley Mortgage company when had already stretched its credit the company beyond statutory limit, he stated the banking department had time and time again against granting extended had with them to discontinue the policy. He said credit had been stretched in 1928 been reduced some on advice banking through advances made by and ficers. But times got worse in 1929 he said the old from 1929 until the bank closed in 1931, officers had dipped into the bank's funds, he averred, had loaned the Willamette Valley Mortgage Loan company when the bank's capital only $25,000 money to be paid back on they knew worthless, with taxes not paid, and interest not paid for Goldstein. year and half of receivership of company by ex-Governor W. Olcott found able scrape together only from assets of the company.' agreed by attorneys on both that the $6000 which based indictment sulted cancellation of $4000 note which the $6000 note making increase loan in this particular case $2000. Goldstein charged that this loan made by Giesey and Schwab without the consent the directors which, alleged, was secured after the loan made. Winslow his argument flatly denied this, saying the directors approved days before was made. Winslow averred in his argument that the banking department approved securities taken by the bank Aurora from another bank which the process liquidation have gone point twice taken from mortgage company. This, declared, showed that the officers were victims of depression ther criminally "The bank might have weathered the Winslow, "but for ill-feeling which resulted institution of which in resulted run the Winslow that all loans made by the bank to the mortgage but the $6000 question what tingent and that the ficials the bank made these loans on of their that were not stretching the credit