1845. Windsor Locks Savings Bank (Windsor Locks, CT)

Bank Information

Episode Type: Suspension → Run → Closure
Bank Type: savings bank
Start Date: January 27, 1912
Location: Windsor Locks, Connecticut (41.929, -72.627)

Metadata

Model: gpt-5-mini
Short Digest: 49edd816

Response Measures

Partial suspension, Books examined

Other: Directors scaled deposits (26%) and court restraining order limited payouts to 50% on reopening; receivers later appointed and liquidation proceeded.

Description

State banking commissioners obtained a court restraining order preventing payments (late Jan 1912) after discovering large bookkeeping shortfalls/defalcation by former treasurer Alfred W. Converse. The bank was restrained/suspended, later permitted to resume limited business April 27, 1912 (directors scaled deposits 26% and court limited withdrawals to 50%). After reopening there were runs/large withdrawals in May 1912, and a receivership order was issued/announced, leading to liquidation. Sequence: suspension → reopening → run following receivership news → closure/liquidation (receivers).

Events (6)

1. January 27, 1912 Suspension

Cause: Bank Specific Adverse Info
Cause Details: State examiners discovered incomplete books and an apparent large shortage (reports cite ~$175,000-$200,000 due to defalcation by former treasurer Alfred W. Converse), prompting a court restraining order preventing payments.
Newspaper Excerpt: restraining order ... from paying out any of the funds of the bank or from declaring any dividends
Source: newspapers

2. April 10, 1912 Other

Newspaper Excerpt: directors ... voted ... deducted 26 per cent. thereof for the purpose of meeting the losses sustained by the bank ... request the continuance of the present restraining order ... modified ... payment to each depositor of 50 per cent. ... and the payment thereafter of dividends on all balances.
Source: newspapers

3. April 27, 1912 Reopening

Newspaper Excerpt: bank was permitted to resume business decreed that not more than 50 per cent of any deposit could be withdrawn
Source: newspapers

4. May 11, 1912 Run

Cause Details: Withdrawals followed reopening under a court order that limited withdrawals to 50% and after directors had scaled deposits; later reports tie renewed withdrawals to appointment/order of receivers.
Measures: Directors scaled deposits by 26% and court order limited withdrawals to 50% when bank resumed business.
Newspaper Excerpt: More than $60,000 has been withdrawn in a run on the reopened Windsor Locks Savings Bank.
Source: newspapers

5. May 24, 1912 Receivership

Newspaper Excerpt: order of Judge Howard J. Curtis ... appointing Bank Commissioners Fred P. Holt and Norris S. Lippitt as receivers to liquidate the Windsor Locks Savings Bank
Source: newspapers

6. May 24, 1912 Run

Cause Details: Announcement/entry of receivership renewed depositor panic and led to additional withdrawals; treasurer closed doors when cash ran out.
Measures: Bank doors were closed by treasurer when cash exhausted; receivers were appointed to liquidate.
Newspaper Excerpt: The order ... appointing Bank Commissioners ... as receivers to liquidate the Windsor Locks Savings Bank had the immediate effect of renewing the withdrawals ... Over $3,000 was withdrawn by thirty depositors ... then Treasurer Charles F. Cleveland closed the doors ...
Source: newspapers

Newspaper Articles (18)

1. January 27, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, January 27, 1912

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State Commissioner Has Expert Going Over Accounts of Windsor Locks Savings Institution Postmaster Converse, Aged 77, Killed By Accidental Discharge of Revolver, Responsible for Loose Bookkeeping. (Special from United Press.) Windsor Locks, Jan. 27.-Although the Windsor Locks Savings Bank was not closed, today, deposits were refused and C. W. Dutcher, a Hartford expert accountant, was going over the books at the order of the state bank commissisoners. The latter discovered clerical errors in the books after the death, two weeks ago, of Postmaster Alfred W. Converse, 77, treasurer of the savings bank for the last 40 years. Converse was killed by the accidental discharge of a revolver he was cleaning. The bank officials and county authorities strenuously denied, today, that he committed suicide. The errors in bookkeeping, they said, were due to the late treasurer's old age and were unintentional, There has been no run on the bank and its credit in the community has not suffered. The bank's last financial statement made Oct. 1, 1911, showed deposits of about $410,000 and assets of $420,247.56. The institution will resume its normal business routine as soon as the books are trued up.

2. January 28, 1912 The Sun New York, NY

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CLOSES BANK THAT NEVER TOTTED UP Court Order for a Connecticut Savings Institution 11 Years Old. LIABILITIES ALONE SURE Officers Had Apparently Never Heard of H Trial Balance in Their Profession. HARTFORD Conn Jan 27 The Windsor Locks Savings Bank of Windsor Locks. Conn. was restrained to-day on an order issued by Judge Samuel O Prentice of the Superior Court to State Bank Commissioners Norris S Lippitt and Fred P. Holt from paying out any of the funds of the bank or from declaring any dividends The Bank Commissioners petitioned Judge Prentice for the restraining order Within a week. so they told the Judge they have made an examination of the bank and found the books to be in an unsatisfactory and incomplete condition No trial balance even had been taken in many years. The books indicated that the assets of the bank are largely impaired and perhaps insufficient to pay its depositors in full The commissioners desired to make a more complete and detailed examination to get at the exact financial status of the bank One of the questions put to the treasurer of this bank by Commissioner Holt while he was informally looking over the bank records a few days ago was as to when the last trial balance was taken The treasurer seemed to be surprised at the novelty of it The query was a new one to him. He replied that he did not think there had been a trial balance made since the bank was organized in 1871. forty-one years ago. Commissioner Holt told the treasurer to lose no time in having a trial balance made It would the Commissioner said. take about sixteen days. or at the rate of a little more than a hundred accounts a day. The commissioners have not power to compel a bank to make a trial balance In the meantime the Bank Commis sioners sent their expert. William P Landon to Windsor Locks to examine the books of the bank and to report to the commission The report of Mr Landon was surprising According to the report of the bank to the commission for the year ended September 30. 1911 its assets amounted to $420,247.58 The report of Mr. Landon convinced the commissioners that the bank was not able to pay the full amount of deposits in case a demand was made on it The opinion of the commissioners was based entirely on what the books of the bank showed Commissioner Holt called the directors of the bank together the other day to discuss the situation with them. They were reluctant to believe that the bank was unable to meet its obligations. But when the commissioner submitted facts to prove that appearances were against the position of unshakable confidence which they took they agreed that if the conditions warranted it it was better to suspend the paying out of money Commissioner Holt then had a conference with Gov. Baldwin on the sitnation and he advised the Commissioner that there was nothing for the Bank Commission to do but to make application to a Judge of the Superior Court for a restraining order The prompt action of the Bank Commissioners will have the effect of preventing a run on the bank It has 1.636 depositors The officers and directors of the bank are: President. George Glover; treasurer. C. F. Cleaveland directors, J W. Johnson. J. R. Montgomery, Allen Pease. George P. Clark George Glover. G. M. Montgomery, E B. Bailey, A. B. Stock well. M. P. Robinson F. L. Ashley John M. Morse, James Keevers, C. W Sadler and Charles S. Hoar Alfred W. Converse, who died a few days ago from wounds received from the accidental discharge of a revolver he was cleaning on January 14. was for forty years treasurer of this bank. He resigned a year ago.

3. January 29, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, January 29, 1912

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BANK SHORTAGE OF $175,000 IN WINDSOR LOCKS Wall Street Said to Have Been Undoing of Aged Banker, Now Reported a Suicide Bank Commiss oner Blamed For Allowing Lax Bookkeeping Methods That Hit Hard Many Mill Workers (Special from United Press) Windsor Locks, Jan. 29-The examination of the books of the Windsor Locks Savings bank continued, today, behind closed doors, while the town simmered with gossip concerning the lax bookkeeping methods of the late treasurer, Alfred W. Converse, who is blamed for an apparent book shortage of about $175.000. The belief was expressed, today, that Wall street was the aged and trusted banker's undoing and that he suicided January 14, to escape his shame. Geo. Glover, president of the bank, today, supported this theory. However, Coroner J. G. Calhoun. whose verdict of accidental death in the Converse case still stands, said that he would not reopen the investigation" unles there was stronger evidence of crime. Bank Examiner Holt said he felt the bank shortage was a large one although he did not care to say what the figure would be. It had been largely a one man bank since it was formed. in 1871, said Holt, and Converse Holt, always had been in charge. learned, Jan. 8, that no trial balance had been taken in the bank since it first opened its doors. The resulting investigation developed that the last report of the bank showed deposits of $403 816.78, but interests payments on about $175.000 in excess of that amount and that the institution reported 1,626 depositors while the books showed over 1,800 live accounts. Practically every one of the thousand families in town have been hard The by the bank's suspension. depositors hit were mill hands and farmand in this case a few tobacco ers growers. The mill hands were particularly hard hit, now in midwinter. Just why the bank commission for years permitted Converse to do his 40 rusiness as he did has not been explained. Had the law been enforced have his bookkeeping methods would Bank been uncovered years ago. Commissioner Holt. newly appointed, ormade the discovery and at once dered the employment of an expert accountant. Converse, veteran of the Civil War, postmaster and respected his retired on his dignity to citizen, home and predicted that everything would be found all right. the investigation progresed, ConAs who had resigned the treasur- furverse. heard of the discovery of ership. proofs of bookkeeping errors. bether bank directors. however, still The this was unintentional and ascribed lieved it to the former treasurer's old age and his use of memory. On Sunday, Jan. 14. the word came Converse had been accidentally that below the heart while cleaning shot he had won at a town fair a pistol the most popular citizen 30 years himas The 77 years old banker. the ago. this explanation of the self. gave It was not until after public shooting. trouble at the bank became suicide was hinted at. that Converse is said to have correspond- firms, New York brokerage ed with is quoted to support the theory his which Wall street got some of that that The bank. officers admit just money. ghooting, coming as it did hard the when he was under suspicion, is to explain. examination of the books, it two is believed, The will require about months. The gigantic task of tracing every pass and writing up every deposit was started in earnest. today. were book one hundred pass hooks reAbout in. The bank's files are markably handed well preserved and complete. Glover. in a later state- rePresident qualified his earlier ment. the suspected to the marks today, about went back statement suicide. other Glover consistently maintained by the instituand directors of the officers no intentional tion. that absolutely has been proved against falsification and that, until the experts sitcompleted Converse their investigation. the Glovmust remain a muddle. and ofuation speaking for the directors believed er. stated that they still The ficers. that Converse would be Wall cleared. street has been story denied of gambling by every in intimate friend of Converse.

4. January 29, 1912 The Washington Times Washington, DC

Article from The Washington Times, January 29, 1912

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FAILURE OF BANK IN CONNECTICUT TOWN STUNS DEPOSITORS Life Savings of Many May Be Swept Away by Suspension. WINDSOR LOCKS, Conn., Jan. 29.Their savings of years in jeopardy and they in ignorance whether they will get back even a part, more than 1,000 families in this village and vicinity were stupefied today over the closing or the Windsor Locks Savings Bank, following the death of its treasurer, Alfred W. Converse, the town's most eminent citizen, who is blamed for an apparent shortage of $175,000. The depositors were farmers, mill hands, and a few tobacco growers, none of whom make much money, and the funds tied up represent in many instances the savings of lifetimes. Some, who were dependent on the interest on their deposits for their daily expenses, were actually facing poverty today, while a number of the local business men, who cannot get the money they put in the bank, were facing ruin. None of the examiners would talk, but it seemed certain the State laws were violated, as it was learned no trial balance had been taken in the bank in forty years. The examiners will not know for at least a week just how much the deposits are short.

5. January 29, 1912 The Birmingham Age-Herald Birmingham, AL

Article from The Birmingham Age-Herald, January 29, 1912

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FEAR FOR SERIOUS BANKING SCANDAL Windsor Locks Bank Books Not Balanced Since Year 1871 o Hartford, Conn., January 28.-(Special.)Fears of one of the worst banking catastrophes in Connecticutt's history and suspicion of a scandal in the death of Albert W. Converse. the erstwhile treasurer of the Windsor Locks Savings bank at Windsor Locks, near here, were aroused today when the banking commissioner obtained a court order preventing payments for three months to the depositors, who have more than $400,000 in that bank. Depositors say the shortage will amount to $180,000, and the banking commissioners assert that when they footed up the depositors' ledgers there was not enough cash or assets to cover the total. Where the funds believed to be missing could have gone, or to what use they have been put is a mystery to the depositors and bank officers. Much excitement and distress was created among the depositors, who are most. ly mill employes, whose lifetime savings are in the bank. Discrepancies in the depositors' ledgers covering possibly 40 years have been found by the commissioner. These ledgers, the commissioner says, have not been balanced since 1871, for which period Converse had been treasurer of the bank. Two days after the commissioner ordered a trial balance or the depositors' books Mr. Converse shot himself and, as he was placed under an anaesthetic told the physicians the wound was accidentally inflicted. He died a few days ago. Reports of shortages in the accounts of the Windsor Locks postoffice will be investigated by the postal inspector for this district. Converse has been postmaster of the town for about 40 years. Banking commissioners assert that the discrepancies in the Windsor Locks bank accounts are too large to justify the hopes of the bank's officers that they are due to some great bookkeeping error. Mr. Converse was treasurer of the bank until about a year ago, when he resigned and was succeeded by Charles F. Cleveland. The state banking commissioners, Messrs. Lippitt and Holt, examined the January 8 and requested be that bank's its books accounts balanced. but Mr. found Cleve- the land attempted to do so, accounts so involved that he had to call expert aid. As a result of the revefollowed the lations for which commissioners bank's that officers payagreed with the ments should be suspended until the accounts were cleared up. The crisis in the bank's affairs was first brought to public notice today when Justice Samuel O. Prentice of the supreme issued the order restraining the officers from paying out court bank's pending the funds a of the bank for three months thorough inquiry.

6. January 31, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, January 31, 1912

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THE WINDSOR LOCKS BANK. (Springfield Union.) Connecticut has another startling object lesson of the laxity of its bank inspection, this time from Windsor Locks, where the savings bank has been closed, after the state examiners had partially completed an examination of its accounts. According to the latest report the bank is short of funds to the extent of $175,000. Who took this money and where it went to are questions that remain to be answered. The discovery will point a moral, doubtless, but it is to be feared it will not help the mill hands of Windsor Locks and Warehouse Point who kept their savings in that institution. Here is a bank that had been running for 40 years, and it is asserted that in all that time no audit of its accounts was ever made, nor a trial balance struck. A comparison of the depositors' ledger and the cash book would have revealed that something was wrong, but it seems that nobody took the trouble to institute such a comparison. Implick confidence was placed in the honesty and accuracy of one man, ard even when the former treasurer, old and feeble, was succeeded by another, no attempt was made to get at the real facts, and the old, unbusinesslike methods were continued. Now, after all these years and following an attempt by a newly appointed banking commissiorer to make an audit of the books, a rude awakening has come to the little mill community. The depositors have been told there is a shortage, but only patient waiting will enable them to learn how much they can recover or row long they will have to wait for money they were depending upon in time of need. It is amazing that such lax methods prevailed in the face of a law that required regu'ar semi-annual ingrections by the state ranking authorities. The lesson of William F. Wa'ker's heavy defalcation in New Britain ought to have been sufficient to bring about a different order, but evidently it was not. However, the warning of these cases is not for Connecticut alone. Massachusetts is guilty of the same delinquency as Connecticut in not providing for an audit system that will enable the banking department to live up to the plain requirement of the law. And we had our warning in the Southbridge case, and thus far have failed to profit from the lesson. The duty which both states owe to savings bank depositors is clear. On'y recently it was brought to the attention of the Bay state public by Commissioner Chapin in his letter of resignation. The department should be established at once on a basis that will admit of the full safeguarding of the rights of depositors.

7. February 7, 1912 The Washington Times Washington, DC

Article from The Washington Times, February 7, 1912

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Receiver Will Aid Victims of Bank Crash HARTFORD, Conn., Feb. 7.-The 2,500 depositors in the Windsor Locks Savings Bank, closed by reason of the alleged shortage of its former treasurer, A. W. Converse, soon will be able to get at least a part of their money. An application for a receiver made by the State banking department, which alleges Converse's defalcation was $200,000, will be passed on by the superior court at once, and it is considered certain the bank will be ordered wound up immediately.

8. April 11, 1912 Norwich Bulletin Norwich, CT

Article from Norwich Bulletin, April 11, 1912

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TO SCALE DEPOSITS IN WINDSOR LOCKS BANK. Method Adopted to Meet Losses Due to Defalcation. Windsor Locks, Conn., April 10. -The latest development in the proceedings over the settlement of the affairs of the insolvent Windsor Locks Savings bank was the announcement tonight that the application for the appointment of a receiver is to be withdrawn and the plan for scaling the deposits adopted, to make the bank solvent. This result is the outcome of a conference between Attorney General John H. Light, Bank Commissioner Holt and Attorney E. M. Day of Hartford for the bank directors. In accordance with the recommendation of the attorney general and the bank commissioners, the directors of the bank held a meeting this afternoon and adopted resolutions in which it was voted: "That from each depositor's balance as it stood on the books March 30, 1912, there be and hereby is deducted 26 per cent. thereof for the purpose of meeting the losses sustained by the bank and that any moneys hereafter recovered, shall be distributed pro rata among the depositors as their accounts stood on March 12, 1912. "And voted further, that the directors join with the bank commissioners in requesting the continuance of the present restraining order, which expires April 27, 1912, modified, however, to allow the payment by this bank to each depositor of 50 per cent. of his balance as it shall appear April 27 and the payment thereafter of dividends on all balances."

9. April 30, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, April 30, 1912

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Hearing For 1 Appointment Of Bank Receiver Hartford, April 30-A hearing over the appointment of a receiver for the Windsor Locks Savings Bank was held before Judge Curtis in the Superior court today, and it is expected that he will reserve his decision. Bank Commissioner Fred Holt stated that he thought the appointing of a receiver was the best solution of the difficulty. It was also brought out that the recent scaling of the deposits in the bank 26 per cent. was not approved by either the bank commissioner or Attorney General Light.

10. May 3, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, May 3, 1912

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receiving any larger amounts. Never Saw Charter Provision. Mr. Cleaveland, called by Mr. Day, said that after he became treasurer in December, 1910, he continued the practice for awhile of receiving as much as, $1,000 a year. He said he never saw the charter provision that deposits of not more than $400 should be received from any one depositor in any one year. His attention had never been called to the charter provision by the directors. Converse Started Bank. John R. Montgomery, one of the directors of the bank since 1872, said he had known the late Mr. Converse for about forty-one years. He said Mr. Converse was the moving spirit in the establishment of the Windsor Locks Savings Bank. People in the Village used to ask Mr. Converse to take their money to Hartford to deposit in banks for them. This practice increased until it became a burden to Mr. Converse and he broached the idea of a savings bank in Windsor Locks. The business men there approved and the bank was organized in July, 1871. The incorporators were leading citizens. The presidents of the bank have been John D. Windsor, Jabez H. Hayden, William Mather and George C. Glover. Mr. Converse was the first secretary and treasurer and kept the books until December, 1910. Mr. Montgomery said that J. Warren Johnson is the only original director now on the board. Only three of the board of 1879 are now serving and the board personnel has been varying constantly in the past forty years. The incorporators passed a vote in April, 1902, authorizing the bank, beginning in October, 1902, to receive deposits up to $1,000 from any depositor within one year. If Treasurer Converse had received more it was contrary to any instructions from the directors, said Mr. Montgomery. He said the bank's investments are first class. Auditors Bell and Porter are considered reputable.. competent auditors, witness said. The directors had relied on the reports of the bank examiners and the auditors for knowledge of the bank's condition. It was impossible for the directors to go through the bookkeeping of the bank. Mr. Montgomery said the directors had never authorized any illegal act. The bank is at present running and paying deposits under instructions of the court. There is plenty of money to meet any demands. Witness said in his opinion if the proceedings in court quieted down the bank would continue successfully. Some people are drawing out their deposits now, as they fear a receivership will tie up the bank again. Didn't Know Charter. On cross-examination Mr. Montgomery said he did not know of the charter provision relative to receipts of han $100 He did not know

11. May 11, 1912 East Oregonian : E.O Pendleton, OR

Article from East Oregonian : E.O, May 11, 1912

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Run on Reopened Bank. Hartford, Conn.-More than $60,000 has been withdrawn in a run on the reopened Windsor Locks Savings Bank. Though no disorder has occurred, tehe ris general dissatisfaction among the mill hand depositors, who are drawing as a maximum anly 37 per cent of their original deposits. In order to make up partially the $200,000 deficit which resulted from the peculations of Col. Alfred W. Converse, the treasurer, who committed suicide, the bank directors scaled the deposits 26 per cent. The court order under which the bank was permitted to resume business decreed that not more than 50 per cent of any deposit could be withdrawn.

12. May 24, 1912 Putnam Patriot Putnam, CT

Article from Putnam Patriot, May 24, 1912

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Run On Savings Bank. The order of Judge Howard J. Curtis of the superior court appointing Bank Commissioners Fred P. Holt and Norris 8. Lippitt as receivers to liquidate the Windsor Locks Savings Bank had the Immediate effect of renewing the withdrawals of accounts as soon as it became generally known and many depositors, who had been content to leave their money with the institution became anxious to get it out. Over $3,000 was withdrawn by thirty depositors. Then Treasurer Charles F. Cleveland closed the doors, and twenty waiting depositors had to go away without getting their money. It was said that the bank's supply of cash had run out. Approximately $139,000 has been withdrawn of a total liability of $450,000, since the bank resumed business April 27.

13. November 7, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, November 7, 1912

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RECEIVERS ISSUE STATEMENT. $219,153.36 Payable To Former Depositors of Windsor Locks Bank. Hartford, Nov. 7-A detailed statement of the receivers of the Windsor Locks Savings Bank has been filed in the Superior court by the receivers, Morris S. Lippitt and Fred P. Holt. The report shows that $219,153.36 is now payable to former depositors. After the scaling of 26 per cent. made by the directors of the bank, creditors, other than depositors have presented claims. amounting to $476.28 and $297.49 that have been allowed. Assets on hand Oct. 1, were $112,525.15, composed of real estate and mortgages,

14. November 16, 1912 The Bridgeport Evening Farmer Bridgeport, CT

Article from The Bridgeport Evening Farmer, November 16, 1912

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ATTACHMENTS FOR $420,000 ON BANK IN WINDSOR LOCKS Windsor Locks, Conn., Nov. 16-Another chapter was added, today. to the defalcation of Treasurer Alfred W. Converse, of the Windsor Locks Savinge bank when attachments amounting to $420,000 were made on the property and holdings of the directors of the bank. The suits are brought by the receivers of the bank, Banking Commissioners Fred P. Holt and Morris Lippitt. The amount sued for its the difference between the amount of deposits called for by the books of depositors and the amount realized from the bank's securities or 26 percent. The actual shortage of Converse was $91,715.36. There has been paid in dividends $57,292.36 in excess of the earnings of the liabilities. The suits are returnable to the superior court in Hartford, the first Tuesday in December.

15. April 15, 1914 New Britain Herald New Britain, CT

Article from New Britain Herald, April 15, 1914

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RECEIVERS FILE REPORT. $11,206 on Hand in Windsor Locks Savings Bank According to Statement. Hartford, April 15.-The receivers of the Windsor Locks Savings bank, Fred P. Holt and Norris S. Lippitt, have filed their semi-annual report in the superior court. It shows $11,206 on hand. Dividends paid to depositors during the six months aggregated $165. Total disbursements for the period, including settlement of a suit for $1,595 totalled $1,999. There was received October 1, 1913, about $6,000.

16. July 2, 1914 The Sun New York, NY

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RULES AGAINST DEPOSITORS. Connecticut Court Holds Savings Bank Directors Not Responsible. HARTFORD, Conn., July 1.-Judge William L. Bennett of the Superior Court gave judgment this afternoon for the defendants in the four important suits brought by the State bank commissioners as receivers against the directors of the suspended Windsor Locks Savings Bank. which was looted by Cashier Alfred W. Converse for a period of seventeen years prior to his suicide. Most of the depositors were poor mill hands and the decision not only prevents the bank commissioners as receivers from recovering for the depositors from the directors but It establishes the precedent in Connecticut jurisprudence that savings bank directors assume no liability.

17. April 2, 1915 Putnam Patriot Putnam, CT

Article from Putnam Patriot, April 2, 1915

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# DIRECTORS ARE RESPONSIBLE Supreme Court Holds That Bank Men Failed to Do Their Duty # RETRIAL ORDERED. FOR TWO Chief Justice Prentice and Judge Roraback Dissent in Windsor Locks Bank Case-Statute of Limitations Operates. Hartford. — The Connecticut Su- preme Court of Errors, by a three to two decision, held that the superior court erred in finding that the direct- ors of the Windsor Locks Savings Bank fulfilled their full duty in safe- guarding the interests of the deposit- ors, who lost through the defalcations of A. W. Converse, the former treas- urer of the institution, and found that the directors, while they may have exercised the care of ordinarily pru- dent men, failed to fulfill their duty as ordinarily prudent bank directors. New trials were ordered in the cases against two groups of directors, and no error was found in the actions against two other groups. The majority opinion was written by Judge Beach and was concurred in in its essential features by Judges Thayer and Wheeler. A minority, dis- senting opinion, was handed down by Supreme Court Justice S. O. Prentice, which was concurred in by Judge Ror- aback. Damages of $390,000 were asked in the four suits, which were tried be- fore Judge William L. Bennett in the superior court. The groups were made up according to terms of service. The actions were brought by Norris S. Lip- pitt and Fred P. Holt, then bank com- missioners, as receivers of the bank, against the directors, for negligently permitting the corporate assets to be wasted, and for illegally declaring and paying dividends. The object was to recover for the depositors for losses sustained because of the misappropria- tion of nearly $100,000 by Converse. The stealings, it was alleged, had gone on for about thirty-nine years. It was alleged that the directors were re- sponsible because of neglect to exer- cise due diligence in their oversight of the bank's affairs. The two groups of directors for whom new trials are ordered are those whose terms of service included all or a part of the period covering six years prior to the institution of the action, the six years being the time limit prescribed in the statute of lim- itations. The cases in which no error was found are those of men whose terms of service ended prior to six years before the institution of the suits. Cases for New Trial. The cases which will go back to the superior court for a new trial are those against F. L. Ashley and others and Ezra B. Bailey and others. The co-defendants, with F. L. Ash- ley are Ezra B. Bailey, George P. Clark, George Glover, George M. Mont- gomery, John R. Montgomery, Allen Pease, and M. P. Robinson of Windsor Locks, J. Warren Johnson of Enfield and Charles F. Cleveland of Southing- ton. Damages of $50,000 were asked. The co-defendants with Ezra B. Bailey are George P. Clark, James T. Coogan, George Glover, William Mather, George M. Montgomery, John R. Montgomery and Allen Pease of Windsor Locks, and J. Warren John- son of Enfield. Damages of $140,000 were asked. In the cases against George P. Clark and others and James T. Coogan and others there will be no new trial. The co-defendants with George P. Clark are James T. Coogan, William Mather, John R. Montgomery, and Allen Pease of Windsor Locks and J. Warren Johnson, of Enfield. The damages asked were $180,000. The co-defendats with James T. Coogan and John R. Montgomery of Windsor Locks and J. Warren John- son of Enfield. Damages of $20,000 were asked. Two opinions were written, one a concurrent opinion by Judge John K. Beach and one a dissenting opinion by Chief Justice Samuel O. Prentice. In the opinion of Judge Beach and Judge Thayer, the statute of limi- tations operates in this case, making the directors in the cases in which error was found liable for only six years prior to the institution of pro- ceedings. In this, Judge Wheeler dis- sented, holding that the directors were liable for all the period of Con- verse's stealings. Chief Justice Samuel O. Prentice dissented from the result in the cases where error was found, and concurred in the result in the cases in which no error was found. He consurred in that part of the opinion in which the operation of the statute of limitations in the case was upheld. In this des- senting opinion. Judge Alberto T. Roraback concurred.

18. October 8, 1915 New Britain Herald New Britain, CT

Article from New Britain Herald, October 8, 1915

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$10,000 FOR COUNSEL. Judge Tuttle Allows Sum For Attorneys for Bank Receivers. Hartford, Oct. 8.-Judge Tuttle in the superior court today allowed $10,000 for payment to counsel of the receivers of the Windsor Locks Savings Bank. He said he thought the sum reasonable. Sixty thousand dollars have been collected through litigation. Authority was given the receivers to compromise claims against the directors for $35,000. The court was told that including $17,449 on hand and the $35,000, a final dividend of fiften per cent. would be possible, making eighty-nine per cent. which depositors will receive.