20132. Farmers & Merchants National Bank (Lake City, SC)

View Charter #10681 on SPMC

Bank Information

Episode Type
Suspension → Closure
Bank Type
national
Bank ID
10681
Charter Number
10681
Start Date
October 1, 1926*
Location
Lake City, South Carolina (33.871, -79.755)

Metadata

Model
gpt-5-mini
Short Digest
2476dd15

Response Measures

None

Receivership Details

Depositor recovery rate
53.7%
Date receivership started
1926-10-18
Date receivership terminated
1935-04-10
OCC cause of failure
Economic conditions
Share of assets assessed as good
38.0%
Share of assets assessed as doubtful
38.2%
Share of assets assessed as worthless
23.8%

Description

The bank failed in October 1926 and a receiver (Thomas A. Early) was appointed. Later (1930) Supreme Court rulings concerned whether the Federal Reserve Bank of Richmond could apply the failed bank's deposit balance to pay checks. There is no mention of a depositor run prior to suspension in the provided articles, so this is classified as a suspension leading to permanent closure/receivership.

Events (6)
1. January 13, 1915 Chartered
Source
historical_nic
2. October 1, 1926* Receivership
Newspaper Excerpt
Thomas A. Early, receiver, of the Farmers and Merchants National Bank of Lake City, S. C.; When the Farmers and Merchants National bank of Lake City failed in October, 1926. ... receiver assessed the stockholders ... (Washington Times, 1930-02-25).
Source
newspapers
3. October 1, 1926* Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank is described as having failed (insolvency) in October 1926; articles do not attribute failure to rumors or external runs but to bank failure/insolvency itself.
Newspaper Excerpt
When the Farmers' & Merchants' Bank Lake City failed in Octo1926.
Source
newspapers
4. October 18, 1926 Receivership
Source
historical_nic
5. February 25, 1930 Other
Newspaper Excerpt
The Supreme Court so ruled yesterday in a suit brought by the Comptroller of the Currency against the Farmers and Merchants National Bank of Lake City, S. C., and Thomas A. Early, receiver. (The Washington Times, 1930-02-25).
Source
newspapers
6. March 12, 1930 Other
Newspaper Excerpt
The Federal Reserve Bank of Richmond, Va., Wednesday was sustained by the Supreme Court in applying funds it had on deposit to the credit of the Farmers' & Merchants' National Bank of Lake City, S. C., to the payment of checks drawn on the latter bank received for collection after the South Carolina bank had failed. (The Atlanta Journal, 1930-03-12).
Source
newspapers

Newspaper Articles (5)
1. February 25, 1930 The Washington Times Washington, DC
Article from The Washington Times, February 25, 1930

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Article Text

# BANK LIABILITY # IS UPHELD Placing of bank stocks in trust for a minor child does not relieve a parent of liability for assessment in event the bank fails and it becomes necessary to assess the stockholders to pay off depositors' claims. The Supreme Court so ruled yesterday in a suit brought by the Comptroller of the Currency against the Farmers and Merchants National Bank of Lake City. S. C., and Thomas A. Early, receiver. A father who owned stock in the bank placed certain shares of the stock in trust for a minor son. When the bank failed and the receiver assessed the stockholders, the father refused to pay the assessment on the contention that the stock was no longer his as he had given it to his son, and that the son was not liable because he had no knowledge of the condition of the bank or the value of the stock and as a minor could not be assessed.

2. February 28, 1930 The State Columbia, SC
Article from The State, February 28, 1930

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Article Text

BANK RECEIVER MAKES PROTEST Challenges Authority of Federal Reserve Bank to Check Out Deposits. Washington Feb. 27 (By A. P.)Thomas A. Early, the receiver of the Famers and Merchants National bank of Lake City, S. C., Wednesday challenged in the supreme court the authority of the federal reserve bank of Richmond, Va., to use aproximate23,500 of the funds of the South Carolina bank it had on deposit when that bank failed, to pay checks drawn on the Lake City bank and passing through the Richmond reserve bank for George P. Barse opened the argument for the receiver and was followed by M. G. Wallace for the federal reserve bank at Richmond. The argument was continued today by Wallace, and was closed by R. E. Whiting for the reeciver. Counsel for the receiver insisted the Richmond bank had no authority to withhold the funds which the Farmers and Merchants National bank had on deposit with it, and counsel for the federal reserve bank contended that under the regulations the funds could be applied to the payment of checks drawn on the Lake City bank which had not been paid within three days.

3. March 12, 1930 The Atlanta Journal Atlanta, GA
Article from The Atlanta Journal, March 12, 1930

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Article Text

RESERVE BANK'S ACTION IS UPHELD IN FAILURE CASE Court Sustains Application of Funds to Pay Outstanding Checks The Federal Reserve Bank of Richmond, Va., Wednesday was sustained by the Supreme Court in applying funds it had on deposit to the credit of the Farmers' & Merchants' National Bank of Lake City, S. C., to the payment of checks drawn on the latter bank received for collection after the South Carolina bank had When the Farmers' & Merchants Bank Lake City failed in Octo1926. $22,088 on deposit with the Federal Reserve Bank on whether the Federal Bank could use this deposit balance towards the payment of checks drawn on the Lake City bank which it had received for collection from customer banks or whether the deposit balance was an asset of the failed bank which must be turned over to the receiver The Federal District Court decided in the receiver, the Circuit Court Appeals held that under the collection contract with the Lake City Bank the Federal Reserve Bank had the right to use the deposit balance the payment checks it had received for collection drawn against the failed bank The receiver contested this ruling that the contract did give the Federal Reserve Bank to apply the deposit balance but that must be returned to the failed bank to be come part assets for the benefit its creditors. contended that the the Circuit Court of Appeals result in the tomers the reserve bank being given an illegal preference the pense of creditors of the failed ALABAMA TOBACCO TAX APPEAL IS THROWN OUT WASHINGTON March The Supreme Court Wednesday refused the constitutionality fthe Alabama tax on retailers of cigarettes and had attacked the Exchange Drug Company Montgomery The court stated the appeal had to be dismissed for want of substantial federal question The drug company insisted that the tax unjustly discriminatory and gave chain and other large purchasers of cigars cigarettes and cheroots an advantage the small dealers asserted that the large dealers buying directly from the manufacturers outlined beter prices than the small dealers buying from wholesalers or jobbers It also contended that while the tax had been designated excise privilege taxx it was in fact cess of that permitted by the state constitution. The company sought to prevent the State Tax Commission from examining its books and from levying the tax. When its appeal from the decision of the State Supreme Court was

4. March 13, 1930 Evening Star Washington, DC
Article from Evening Star, March 13, 1930

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Article Text

HUGHES DELIVERS "FIRST" OPINION Inaugural Ruling as Chief Justice Sustains Ohio Parking Law. Chief Justice Hughes of the Supreme Court delivered his first opinion yesterday since resuming a seat on the bench in ruling upon two cases from Ohio challenging the validity of the State law creating metropolitan parking districts at Cleveland and Akron. His decision sustained both the State act and the constitutional provision which had been attacked in the suit. The Supreme Court declined to interfere with Alabama statutes imposing a tax on cigars and cigarettes and cheroots, which had been attacked by the Exchange Drug Co. of Montgomery. It consented to review 2 cases and refused to review 35. Among those it declined to consider on the merits was a protest from New York City challenging the right of the Federal Radio Commission to require its broadcasting station WNYC to divide time on the air with station WMCA. As the question presented in this case involved the controversy whether the District of Columbia Court of Appeals in radio cases brought from the commission was open to appeal to the highest court, the action today in effect removed the last hope the commission had of setting aside the decision in the case brought by the Government seeking to set aside a ruling by that court which permitted the General Electric station WGY, at Schenectady, N. Y., to operate without time restriction. The court held that the Federal Reserve Bank at Richmond, Va., had the right to apply a balance it had on deposit to the credit of the Farmers & Merchants' National Bank of Lake City, S. C., to pay checks drawn on the latter which the Reserve bank had in hand for collection when the South Carolina bank failed. Chief Justice Hughes announced today that the court would take a recess from March 17 to April 14. He also stated that he would take over the fourth circuit, which had been assigned to his predecessor, the late Chief Justice Taft, and consists of the States of Maryland, West Virginia, Virginia, North and South Carolina.

5. March 13, 1930 The Columbia Record Columbia, SC
Article from The Columbia Record, March 13, 1930

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Article Text

LAKE CITY BANK LOSES IN COURT Federal Reserve at Richmond Had Right to Use Funds, is Ruling The Federal Reserve bank of Richmond. Va., today was sustained by the supreme court in applying funds had on deposit to the credit of the Farmers and Merchants National bank of Lake City, C., to the payment of checks drawn on the latter bank received for collection after the South Carolina bank had failed. When the Farmers and Merchants National bank of Lake City failed in October. 1926. It had $22,088 on deposit with the Federal Reserve bank at Richmond. The controversy centered on whether the Federal Reserve bank could use this deposit balance towards the payment of checks drawn on the Lake City bank which it had received for collection from customer banks, or whether the deposit balance was an asset of the failed bank which must be turned over to the receiver. The federal district court decided in favor of the receiver, but the circuit court of appeals held that under the collection contract with the Lake City bank the Federal Reserve bank had the right to use