Commercial State Bank

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: February 1, 1931*
Location: Platte, South Dakota (43.387, -98.845)

Metadata

Model: gpt-5-mini
Short Digest: 6693b0a5

Response Measures

None

Description

Article discusses the prior closing of the Commercial State Bank at Platte and an ensuing investigation alleging shifting of depositor funds, missing ledgers, and misstated accounts. No run or depositor panic is mentioned. The piece centers on regulatory/legal investigation and closed-bank balances, so classified as suspension leading to permanent closure/receivership.

Events (1)

1. February 1, 1931* Suspension

Cause: Bank Specific Adverse Info
Cause Details: Alleged transfers of deposit accounts, missing ledger sheets, misstated checking account totals and questionable assets (shift of funds when legislative investigation was pending). Filed petitions with court; investigation of superintendent's handling of closed bank funds mentioned. Estimated large losses to depositors on Platte bank were reported in the supplement report cited in the article. (Article describes bank-specific malfeasance and misstatement rather than rumor or contagion.)
Newspaper Excerpt: the closing at Platte of the Commercial State Bank
Source: newspapers

Newspaper Articles (1)

1. February 12, 1931 Deadwood Pioneer-Times Deadwood, SD

Article from Deadwood Pioneer-Times, February 12, 1931

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Article Text

asked his removal. Sharpe said: "Had Governor Bulow at the time this report was filed with him acted with any or all, had he given any support whatto the of that first report, this entire sum could have been saved to the creditors of closed banks throughout the state. Even by liberal the report said that more than million dollars would be lost at the Platte bank. In his introduction. Sharpe said: "We think due the many safe and efficient bankers of South Dakota to report that recent show that the bank lobby at Pierre and the malour state banking department were never truly representative of the wishes and policies of South Dakota bankers whole. It has been plainly us that the true conditions in the banking department and the handling of closed bank funds were not known the bankers of this state as whole and most of them had real conception how the situation was being handled by the superintendent banks nor by the small group which constituted the bank lobby Pierre and claimed to represent the banking business. Since the true situation has become known to bankgenerally, most of the reliable and bankers have been the first to denounce the entire situation and to demand that the governor and other state officers remedy the situation and provide legislation and faithfully adthereof which would bring the banking business back to the plane public service and confidence where rightfully belongs. Smith's administration was criticized during the 1929 legislative session, when headed the "banker's lobby Two Reports Before The first report made lengthly recommendations. for changes in the state banking laws. addition to charging and asking Smith's removal. Gov. Bulow refused to act and in the political campaign Mr, Sharpe was charged with "rocking the boat. The first supplemental report followed the closing at Platte of the Commercial State Bank went into further details and told of shift of funds when legislative investigation was pending two years ago. Upon his month ago, Gov. Green asked Smith to resign He refused and the case was taken to the supreme Soon af ter ouster hearing had opened the governor. who was represented by Mr Sharpe. the resignation of Smith was announced. He was replaced by Ruden. of Bryant The supplemental report. af telling of transfers of acqounts made at Platte by Mr. Smith. said it appears "that times when the true condition of the bank would show over million dollars of closed bank ac counts on hand, the published reports would show only $800,000 or $900,000 checking accounts. The only logical deduction is that some arbitrary sum must have at the time of each called report for the purpose exhibiting to public smaller amount than actually existed." Mr. Sharpe said some of the ledger sheets involved are missing from the Platte bank. Loans carired on the statement at as "worth not to exceed $75,000." Sharpe said "Liberty Bonds" account consisted only of two Sioux City grain exchange memberships and stocks Mr. Smith declared that no closed bank money would be lost because of Platte deposits in petition filed with the court last month before he resigned. List Banks The list closed banks having money in the Farmers State Bank included the following towns: wood, Rapid City, Cottonwood, Kadoka, Bison, Nisland, Reliance, Thunder Timber Lake, Fruitdale. McLaughlin. Sturgis, Meadow, Murdo, Chance, Fort Pierre, Hot Springs, Vivian, and White River. An account in the name of Smith as superintendent banks and two for the depositors guaranty fund commission were also included. For some of the cities more than two banks were listed. Towns were listed as having closed bank money in the Hoven State bank. included: Deadwood, Cottonwood, Bison. Kadoka, Lemmon. Presho, Timber Lake, Newell, Sturgis, McLaughlin, Fort PierHot Springs, Colome, and Wakpala. In the Kimball State bank. the list included Hot Springs, Belle Fourche, Rapid City, Lemmon, Kadoka, Reliance and Vivian Bill Would Provide Funds A bill in the senate by the joint vestigations committee would provide the attorney general $5,000 annually for investigations ordered by either house or senate. and would strengthen the machinery for conducting inquiries. From the senate banking committee came measure limit the sum of closed bank money that the banking superintendent can deposit in any one stitution to combined total of the capital and surplus of the depository. Aside from statement by Governor Warren Green that he would sup- request for thorough port Sharpe's audit "Smith's bank," officials involved declined to comment on the latest disclosures. Tax State Owned Lands The most important the nine bills passed in the senate today was the house measure permitting taxation of state owned rural credits land authorized by the constitutional amendment at the last election. The bill would permit levy for county purposes and 15 mills for school use, exclusive of interest and sinking fund levies. Other bills passed in the senate were all minor measures. A bill to require the use of pasteurized cream and milk in ice cream manufactured for sale was defeated. 28 to 16. Several measures were passed by the house. Insurance money up to $5,000 was exempted from debts of decedent and his beneficiaries under the provisions of one measure Another providlicense fee $3 annually for public person weighing scales. The mileage permitted county superintendent schools lowered from 15 10 cents by another measure which was approved. The senate bill defining ea and providing for the care of such persons was passed A similar bill of house origin was previously approved. Another senate measure acted upon favorably permits the secretaries of finance and agriculture to act as directors of divisions within their departments. Two senate measures providing minor changes in elections laws passed as bill providing for the appointment of members of the game fish commission for two, four and six year terms. Neither house will meet tomorrow. the anniversary of Lincoln's birthday.