18578. Citizens National Bank (Connellsville, PA)

View Charter #6452 on SPMC

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
national
Bank ID
6452
Charter Number
6452
Start Date
July 2, 1930
Location
Connellsville, Pennsylvania (40.018, -79.589)

Metadata

Model
gpt-5-mini
Short Digest
821eee1c

Response Measures

Borrowed from banks or large institutions, Full suspension, Books examined

Other: Receiver appointed and later legal actions; change of receivers noted.

Receivership Details

Depositor recovery rate
74.0%
Date receivership started
1930-07-31
Date receivership terminated
1941-05-31
OCC cause of failure
Economic conditions
Share of assets assessed as good
38.6%
Share of assets assessed as doubtful
58.7%
Share of assets assessed as worthless
2.7%

Description

Directors voted to close and place the bank in hands of the Comptroller/receiver after heavy withdrawals following the earlier closings of two local banks (Title and Trust Co. and Union National). The bank did not reopen; a receiver was appointed and litigation continued in 1931–1932, indicating permanent closure.

Events (5)
1. October 7, 1902 Chartered
Source
historical_nic
2. July 2, 1930 Run
Cause
Local Banks
Cause Details
Heavy withdrawals on July 2–3 following the prior closings of Title and Trust Company and the Union National Bank in Connellsville
Measures
None recorded for these early withdrawals beyond normal operations; later directors met and voted to suspend business
Newspaper Excerpt
it was believed the institution had experienced heavy demand for funds on July 2 and July 3, following the closing of the Title and Trust Company ...
Source
newspapers
3. July 31, 1930 Receivership
Source
historical_nic
4. July 31, 1930 Suspension
Cause
Local Banks
Cause Details
Directors cited unusually heavy withdrawals and the recent closing of two other Connellsville banks as the reason for suspending business and placing assets in hands of the Comptroller of the Currency (run precipitated by local bank failures).
Newspaper Excerpt
Citizens' National Bank failed to open its doors today ... the bank had been placed in the hands of the comptroller of the currency, who has designated D. J. Bleakley, national bank examiner, to take charge.
Source
newspapers
5. August 1, 1930* Receivership
Newspaper Excerpt
The Citizens National which failed to open yesterday morning placed in the hands B. national bank examiner ... There was heavy run on the Second National Bank ... receiver in charge (later articles reference George H. Smith as receiver). (Receiver notices on doors; receivership transfers reported Aug 12.)
Source
newspapers

Newspaper Articles (14)
1. July 31, 1930 Wilkes-Barre Times Leader, the Evening News Wilkes-Barre, PA
Article from Wilkes-Barre Times Leader, the Evening News, July 31, 1930

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Connellsville Bank Closes Doors Today; Third Within Month Pa., July Citizens Bank Connellsville failed open its doors, making the third bank closing here within 30 on the doors of notice posted the bank depositors that the had been closed by institution tion of the The notice further stated that the bank had been placed the hands of the comptroller of the currency who has D. Beakley, National Bank examiner, take charge eparations were immediately Second National Bank, by the banking instithe remaining for following the feared inevitable result of three banks Officials of the Secwithdrawals. ond National Bank that all demands be met, dolfor dollar. official statement as Although no to the condition of the Citizens National Bank was forthcoming it was believed the institution had experlenced heavy demand for funds on July and July following the closing Title Trust Company and Union National The Title and Trust Company and the Union National Bank discontinued business July and 2 respectively. The Citizens National Bank was established years age and several years ago absorbed the First National Bank. It resources of surplus 000. Demand deposits $805.275 and savings of $1,958,620. stateJune Markell is president of the institution which was capitalized at $100,000.

2. July 31, 1930 Republican and Herald Pottsville, PA
Article from Republican and Herald, July 31, 1930

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CONNELLSVILLE CLOSED DOORS Heavy Runs Being Made Today on Remaining Bank. THIRD CLOSED IN MONTH Directors Placed Institution in Hands of Comptroller of Currency. Connellsville. Pa., July 31. (U.P.) The Citizens' National Bank failed to open its doors for business today and "run" being made on the city's remaining bank-the Second The Citizens" National, after meeting of the board of directors last night, posted a notice on it today the effect that assets of the bank were in the hands of the Comptroller of It was reported the Second National Bank was ready meet heavy withdrawals and that money was received from Pittsburgh banks to aid it. It was believed that closing of two other banks here earlier this month was responsible for today's On July 1. the Title and Trust Company of Western Pennsylvania closed here and the next day onother national bank failed to open its doors. Heavy withdrawals were then said to have been made on the Citizens National and the Second National At meeting of the board of dlrectors of Citizens National Bank last night the following resolution was passed "Whereas. During the past month there have been made by the depositors of this bank unusually heavy withdrawals. whereas, in the best judgment of the board of directors of the best Interests of the loyal remaining depositors will be best subserved by suspending business and conserving asset. "Therefore. Be it resolved. that the doors he closed and the assets placed In the hands of the comptroller of the currency for liquidation as provided under the laws of the United States. The following notice was on the door of the Citizens bank today: "This bank under the direction of the of currency. is in charge of B. J. Bleakley national bank exam ner. Closed by resolution of the board of directors." Signed. B. J. Bleakley. Anthracite ccal is an economical fuel. Buy and burn anthracite. President Takes Three. Holiday. Washington, July 31. (U.P)-Prestdent Hoover will leave tomorrow for a. three-day stay at his Virginia mountain camp. was announced at the White House today. Mrs. Hoover went to the camp today to prepare the lodge the Prestdential party. The President is ex pected to discuss the New York Republican situation over the week end with William H. Hill, Binghamton, N. Y., publisher, one of the State party leaders, who, with Mrs. Hill, will be among the guests, Other guests invited Rickard, mining engineeri York, and Mrs. the Hoovers, secretary of the Treasury not the same da customs to that date Anthracite fuel, Buy

3. July 31, 1930 The Evening News Harrisburg, PA
Article from The Evening News, July 31, 1930

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THIRD BANK AT CONNELLSVILLE CLOSES DOORS International News Service CONNELLSVILLE, July 31. The Citizens' National Bank of Connellsville today failed to open its doors, marking the third bank closing here within thirty days. A notice posted on the doors of the bank notified depositors that the institution had been closed by action of the directors. The notice further stated that the bank had been placed in the hands of the comptroller of the currency, who has designated D. J. Bleakley, national bank examiner, to take charge. Preparations were immediately taken by the Second National Bank, the only remaining banking institution, for a heavy run, which was feared inevitable following the failure of three banks as a result of withdrawals. Officials of the Second National Bank gave assur ances that all demands could be met, dollar for dollar. Although no official statement as to the condition of the Citizens' Na tional Bank was forthcoming, it was believed the institution had experienced heavy demand for funds on July 2 and July 3, following the closing of the Title and Trust Company of Western Pennsylvania and the Union National Bank. The Title and Trust Company and the Union National Bank discontinued business July and 2, respectively. The Citizens' National Bank of Connellsville was e he twenty-five years ago and several years ago absorbed the First Na tional Bank. It had resources of $3,377,507, surplus of $200,000, demand deposits of $805,275 and savings deposits of $1,958,620, according to its statement of June 30. F. E. Markell is president of the institution, which was capitalized at $100,000.

4. July 31, 1930 Shamokin News-Dispatch Shamokin, PA
Article from Shamokin News-Dispatch, July 31, 1930

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CONNELLSVILLE BANK FAILS; THIRD MONTH Citizens National Bank Failed to Open Its Doors Only One Bank Now Open Special INS Leased Wire CONNELLSVILLE, Pa., July 31The Citizens National Bank of Connellsville today failed to open its doors, marking the third bank closing here within 30 days. A notice posted on the doors of the bank notified depositors that the institution had been closed by action of the directors. The notice further stated that the bank had been placed in the hands of the controller of the currency who has designated D. J. Bleakley, National Bank Examiner, to take charge. Preparations were immediately made by the Second National Bank, the only remaining banking institution, for a heavy run which was feared inevitable following the failure of three banks as a result of withdrawals. Officials of the Second National Bank gave assurances that all demands could be met, dollar for dollar. Although no official statement as to the condition of the Citizens National Bank was forthcoming it was believed the institution had experienced heavy demand for funds on July 2 and July 3. following the closing of the Title and Trust Company of Western Pennsylvania and the Union National Bank The Title ad Trust Company and the Union National Bank discontinued business July and 2 respectively. The Citizens National Bank of Connellsville was established 25 years ago and several years ago absorbed the First National bank. It had resources of $33,377,507. surplus of $200,000. Demand deposits of $805,275 and saving deposits of $1,958,620, ac-

5. July 31, 1930 Berwick Enterprise Berwick, PA
Article from Berwick Enterprise, July 31, 1930

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Article Text

CONNELLSVILLE 'Run' Made on Remaining Bank After Notice Is Posted That Assets Were In Hands of Cur- rency Comptroller. Connellsville Pa., July 31 (LP) Citizens' National Bank failed its doors for business here today and the city's remaining Second for increasdepositors. The Citizens' National, after meetthe board of directors night, posted notice its doors today to the effect that assets of the bank in the hands of the comptroller currency. was reported the Second NationBank heavy ceived from Pittsburgh banks was believed that closing of two other banks here earlier this month responsible for today's action. July the Title and Trust Co of Western Pennsylvania closed here and the next day another National Bank falled to open its doors, Heavy withdrawals were then said to have been made on the Citizens' National and the Second National.

6. August 1, 1930 Evening Star Washington, DC
Article from Evening Star, August 1, 1930

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THIRD PENNSYLVANIA BANK CLOSES DOORS Citizens' National, at Connellsville, Suspends Business Because of Withdrawals. By the Associated Press. CONNELLSVILLE, Pa., August 1.The Citizens' National Bank, one of the two remaining banks in Connellsville, closed yesterday, within a month of the closing of the Title and Trust Co. of Western Pennsylvania and the Union National Bank here. Withdrawal of deposits was reported the cause of the closing The directors of the bank voted to place the affairs of the institution in the hands of the controller of currency. In its last statement, the bank reported savings deposits of $1,958,629 and check deposits of $805,275. Total resources were given as $3,375,507 and the surplus at that time as $200,000.

7. August 1, 1930 Pittsburgh Sun-Telegraph Pittsburgh, PA
Article from Pittsburgh Sun-Telegraph, August 1, 1930

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Connellsville Bank Receiver in Charge The Citizens National which failed to open yesterday morning placed in the hands B. national bank aminer. who closed the There was heavy run on the Second National Bank. the city's remaining through the forenoon. but officials said they were able to pay every If necessary.

8. August 12, 1930 The Daily Courier Connellsville, PA
Article from The Daily Courier, August 12, 1930

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BANK RECEIVERS ARE SHIFTED change in receivers in charge of the Citizens National and Union Natlonal Banks has become effective here with the transfer of Lloyd Littrell from the former to the latter. It is also understood he will be receiver for the First National Bank of Vanderbilt. Littrell's place the Citizens National Bank George R. Smith, had been receiver at the Union National Bank. Notices on the doors of the banks indicate the change.

9. March 10, 1931 The Morning Herald Uniontown, PA
Article from The Morning Herald, March 10, 1931

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Connellsville Bank Receiver Wins Suit Judge McVicar of the District Court of the United States for the Western District of Pennsylvania has Just handed down a decision in the case of George H. Smith, Receiver of the Citizens National Bank of Connellsville, against the BaHimore and Ohio Railroad Company, sustaining the contention of the receiver. As a result of this decision. various securiUes, aggregating $54,000 in par value, will be added to the assets of the bank and depositors in the bank will benefit proportionately. In February, 1928,-the old First Na(Ional Bank (later taken over by the Citizens National Bank) pledged these securities in order to protect a deposit account of the railroad company. The bledge continued until the closing of the Citizens bank, when the railroad threatened to sell the 88qurities In order to pay the balance ***$40,000 then on deposit to the credit of the railroad. The Receiver thereupon instituted an injunction proceeding to restrain the sale of the securities and to compel their return to him. In the decision now made, the pledge agreemnt was held to be illegal and void, and the pledged securities were ordered to be returnd to the receiver, without the prior payment of the railroad's deposit balance. The court's reasoning was that the power to pledge was contrary to the spirit « the acts of Congress "which have for their primary purpose the sufekeeping and protection of the deposits of all the depositors of a bank. If the act, under consideration is construed 80 that national banks possess implied power to pledge all their assets, or a material portion thereof, as security for a few private depositors, it takes away from the great major. 11y of the depositors the greatest security which the law intended that they should have, and it violates the public policy of the nation as declared in its national banking laws Public policy will not, therefore, tolerate a practice which might, sooner or later, in the event of financial trouble with the bank, enable It to pay and protect the favored few at the expense of the equally deserving many. The case is attracting wide Interest since this is the first time in the history of American banking that this question has been raised as respects a national bank. There are a num. ber of similar cases now pending in other states, but the Comptroller of the curency has decided to let the fate of those cases depend upon the decision in the local case. Attorney H. Eastman Hackney, of Uniontown, presented the case for the receiver, and Attorneys Smith,, Buchanon, Scott and Gordon of Pittsburgh represented the railroad. It is understood that the railroad intends to appeal the case.

10. March 28, 1931 Evening Star Washington, DC
Article from Evening Star, March 28, 1931

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VERDICT PROTECTS SMALL DEPOSITORS U. S. Court Gives All Customers Equal Rights When Bank Fails. BY C. B. UPHAM. The man with only a few dollars in a national bank that fails stands just as good a chance of recovering a part or all of his deposit as the strongest corporation with millions of dollars to its credit. according to a decision just handed down by the District Court of the United States for the Western District of Pennsylvania. National banks, the court holds, cannot enter into special agreements with large. depositors whereby bank assets are pledged for the security of individual or corporate deposits. History of Case. The Baltimore & Ohio Railroad Co. maintained a deposit account with the Citizens' National Bank of Connellsville, Pa. In order to keep the account of sizable proportions on its books, the bank entered into an agreement with the railroad under the terms of which bonds and securities belonging to the bank were pledged with a Pittsburgh bank in trust for the purpose of guaranteeing repayment of the railroad company's deposit. The Connellsville bank failed on July 31, 1930, and its recelver, by the decision, recovers the bonds for the benefit of all depositors and other creditors rather than the railroad company, as contemplated by the agreement. It is frequently said that one of the causes of bank failures in recent years has been the concentration in the large centers of funds of corporations daing a national business. Conversely, scine of that concentration has been caused by bank failures among country banks. Special inducements of various kinds have been held out to the large concerns to keep their accounts in the smaller banks. One company with several million dollars on deposit in a large number of banks throughout the Southern States felt that it could not withdraw its accounts, contributing to the general uneasiness and perhaps even causing failures. It was unable to procure corporate surety bonds covering many of its accounts, and so was forced to stand by inactively, in the almost certain knowledge that, by all the laws of averages, several of its banks of deposit would fail. Small wonder that in such a situation there would be attempts to establish preferred positions. Public funds are so preferred, in fact. National banks, when designated by the Secretary of the Treasury as depositaries of public moneys, are required to deposit Government bonds or other security for their safekeeping and prompt payment. Last year this provision of the national bank act was amended to cover deposits of States and their political subdivisions as well, to enable national banks to compete with State banks for State and municipal deposits. Controller's Opinion. The controller of the currency has repeatedly held that national banks have no power to secure private deposits. His regulation is now supported by the first decision of a Federal court on the point. If any other rule were followed, the court states, "it would follow that a bank could pledge all of its assets to secure the deposits of a few depositors" and the whole principle of protection abandoned. The court points out that State banks probably have no implied power to secure private deposits in this way, although "two old and rather feeble decisions" seem to hold that they do. Judge McVicar, in his opinion, expresses doubt of the wisdom of permitting even public deposits to be secured, but points out that the aggregate of public deposits is generally very small as compared with the total of private deposits. (Copyright, 1931.)

11. May 27, 1931 The Daily Courier Connellsville, PA
Article from The Daily Courier, May 27, 1931

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CITIZENS BANK RECEIVER MOVES PITTSBURG ST George H. Smith of the Citizens National Bank and his clerlcal force moved last evening from the First National Bank Building in avenue '0 the Citizens Na. tional Building in No th Pittsburg street where the further liquidation of the bank's ashest carried on The National Building will he offered for sale June according by Mr. Smith

12. May 27, 1932 The Daily Courier Connellsville, PA
Article from The Daily Courier, May 27, 1932

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Two Sue Citizens National for Missing Deposits Special The Courier. that Citizens Bank of accepted three sums of money for purchase of Italian lire and never transmitted such money to Italy were made Friday customers defunct institution who filed bills in equity asking that George Smith, present receiver, account for missing funds. Tomaso Catullo, resident of Dunbar, that on June 11, 1927. he turned bank $565 for the purchase of 10.000 lire, and again June 30. 1927. gave the bank $351 6,000 lire. secured receipts for the signed Charles Schepis, but he finds that the lire were not purchased, he says. similar charge contained in the bill of Ankelo Amadori of Star Junction. asserts he gave the bank $1,057.95 for the purchase 30,000 lire June 14. 1930. The money never forwarded, he An odd part the transaction, the Amadori petition sets up. Is that he given receipt for his money the stationery of the First National Bank Connellsville although institution merged with the Citizens March 2S, 1928, and out business at the time his transaction. On July 30, 1930, the bank was closed and went into the hands government receiver. Attorney Goldsmith of Connellsville represents the two men.

13. June 8, 1932 The Evening Standard Uniontown, PA
Article from The Evening Standard, June 8, 1932

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Sues Bank Receiver For Money Lost In Institution George H. Smith, receiver for the Citizens National Bank of Connellsville, was m: defendant in suit filed in common pleas court today by Gregario Nazarre, Smock, who claims sum of $2,000 due him from the institution because of its failure to carry out four agreements during the past four years. On four different occasions the bank commissioned to convert sums of $500 into Italian lire and deposit the lire to the plaintiff's credit at the PostSevings Bank of Rome, Nazarre claimed charging that the agreements had never been carried out. In all lire was to have been The bank, closing, has retained his cash, the plaintiff declares in asking court order making mandatory for the bank to refund him his money. Attorney Samuel Goldsmith represents the plaintiff.

14. June 11, 1932 The Daily Courier Connellsville, PA
Article from The Daily Courier, June 11, 1932

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SUES CITIZENS BANK RECEIVER, ASKING $2,112 Special The Courier. UNIONTOWN, June George H. Smith, receiver the Citizens National Bank nellaville, were instituted by Nazzari, who alleges he has been defrauded to the extent $2,112 by officials of the closed institution. On four different occasions, Nazzari alleges, through his counsel Attorney R. Goldsmith, placed sums of with the bank to transmit money Italy for the purchase of Italian lire. He supposed that these purchases had been credited to his account the postal savings department at Rome, Italy. He now finds he has no such amount, say Nazzari. The money he suys given December sums 1928' March 27. 1929: September 20, 1929, and May 14, 1930. peculiar part transaction the orator sets forth that receipts are on the stationery of the defunct tioral Bank although that bank ceased to exist when these eceipts issued bill asks that receiver be called upon an accounting of the money the third of equity guits brought against