21049. Merchants National Bank (Brownsville, TX)

View Charter #7002 on SPMC

Bank Information

Episode Type: Suspension → Closure
Bank Type: national
Bank ID: 7002
Charter Number: 7002
Start Date: March 29, 1932
Location: Brownsville, Texas (25.902, -97.497)

Metadata

Model: gpt-5-mini
Short Digest: 1b947105

Response Measures

None

Receivership Details

Depositor recovery rate: 45.0%
Date receivership started: 1932-03-28
Share of assets assessed as good: 45.2%
Share of assets assessed as doubtful: 41.0%
Share of assets assessed as worthless: 13.8%

Description

The bank closed in March 1932 and a receiver (John M. Young) was appointed (listed as receiver March 29, 1932). Reorganization plans were later disapproved by the Comptroller and the institution proceeded to liquidation with receivers handling dividends and asset dispositions. There is discussion of a panic and depositors' committee, but the articles do not describe a discrete run triggered by misinformation; the closure and subsequent receiver actions indicate a suspension that became permanent (receivership/liquidation). Dates are taken from article text and publication dates.

Events (8)

1. October 16, 1903 Chartered

Source: historical_nic

2. March 28, 1932 Receivership

Source: historical_nic

3. March 29, 1932 Receivership

Newspaper Excerpt: Mr. Young, who was appointed receiver the Merchants March 29, 1932, shortly the bank closed, has served for the ... months receiver the bank.
Source: newspapers

4. March 29, 1932 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank closed and entered liquidation/reorganization efforts; reorganization plans were later disapproved by the Comptroller, indicating bank-specific insolvency/instability rather than mere rumor.
Newspaper Excerpt: closing of the Merchants National Bank, Brownsville ... depositors' committee which has been on the job since March 21
Source: newspapers

5. September 18, 1932 Other

Newspaper Excerpt: reorganization plans been disapproved by the comptroller and that plans being made to pay dividend within the weeks. ... Acting under directions from the comptroller ... (receiver's statement).
Source: newspapers

6. November 30, 1933 Other

Newspaper Excerpt: Merchants National Bank of Brownsville (receiver), $725,000; ... loan authorized ... (RFC authorized loan to bank (receiver)).
Source: newspapers

7. November 26, 1934 Other

Newspaper Excerpt: J. Fountain, 63, receiver of the Merchants' National Bank here, died while attending Sunday school ... (indicates continued receivership activity).
Source: newspapers

8. January 16, 1935 Other

Newspaper Excerpt: any and all listings ... of properties owned by or in the possession of The Merchants National Bank of Brownsville, Texas are hereby cancelled ... Ben Freudenstein, Receiver, The Merchants National Bank, Brownsville, Texas.
Source: newspapers

Newspaper Articles (12)

1. April 12, 1932 The Brownsville Herald Brownsville, TX

Article from The Brownsville Herald, April 12, 1932

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Article Text

Opening Greeted by Freezing Winds GRAND JURY TO PROBE KIDNAPING CASE IN VALLEY RECOVERED FROM the first shock of the closing of the Merchants National Bank, Brownsville today stands waiting the publication of the reorganization plan worked out by the depositors' committee which has been on the job since March 21. The committee may rest assured one thing. No matter what the rumors which have been circulated, matter what the street corner gossip may citizens of all walks life stand ready and anxious work with the committee plan which promises specdy organization the bank. The panic has passed. Brownsville now realizes that the closing of the bank docs mean the Brownsville or of Brownsbusiness. The city realizes that far worse things than the closing the bank might befall us. provided the bank and reorganized. not the closing of the bank, but the failure effect speedy that will paralyze local business, and local business stand ready and anxious to all in their power to push this All that is needed now is the anof workable plan and effective leadership. FEDERAL CROP LOANS are the That item has really ceased to be news. The real news feature of the crop loan business the Would appear to be the slowness Valley To for this federal money Those charge of placing the loans are More than eager to SCO the Valfarmer apply. They have loosened the restricHave cut the Gordian knot of red tape. You apply for the money, And within the available for Cameron for instance, Only $20,000 has been loaned to now expected that arrangements will Whereby may be secured for the planting crops, To be harvested during the winmonths. now available for Loans gation charges. They may also be bad for plantspraying. for fertilizer. The the only security demanded the government. DEAD MAN'S CURVE will following action takno more. by the State Highway Commission alloting funds the widening of the main highway that point. has long been mystery to those who have followed the work the State Highway Commission just why this curve was allowed in the road In flrst place. The very unexpectedness of the curve has made dancerous than would appear nt flrst and the Valley breathe sight relief the announcethat be eliminated. GROWERS last night the response given the join the Rio Grande Valley Exchange. No for the evils of the citrus exchange does offer the first of hope. ray the growers of the have seen. For Control of crop is the thing. And the organization offers that Provided of course. the of per cent the acreage. reached. Every known system of marketing fruit. Has been tried In the Valley. With the exception the offered the exchange. might be Just as well to try that. AS OF Arelculture Geo. tried and friend the Valley. Carrying the masle name of Texpolitics. backed ability energy. Mr. Terrell has had little difficulty being elected to office which he has aspired in the state. Now he in the grand for and doubt will poll large vote. Hard as may be to believe. in more than three months Texas will to the polls the Democratic select state officers, to say nothing some political not already bolland almost over in politics would seem the the day from now in the Valley.

2. April 12, 1932 The Brownsville Herald Brownsville, TX

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IN OUR VALLEY RECOVERED FROM the first shock of the closing of the Merchants National Bank, Brownsville today stands waiting the publication of the reorganization plan as worked out by the depositors' cominitteo which has been on the job since March The committee may rest assured of one thing. No matter what the rumors which have been matter what street corner gossip may Brownsville citizens of life stand ready and anxious to work with the any plan which promises speedy organization the bank. panic has passed. Brownsville now realizes that the closing of the bank does mean Brownsville or of Brownsvillo The city realizes that far worse things than the closing the bank might bofall us, provided the bank and reorganized. not the closing of the bank, but the failure to effect speedy reorganization that will paralyze and local business men stand ready and in their power to push this All that needed now Is the plan and effective leadership. FEDERAL CROP LOANS available the Valley That Item has really coased to he The real nows feature of the crop loan business the ValleyWould be the slowness appear Valley farmers. To apply for this federal money. Those charge of placing the loans are More that onger to SCC the Valfarmer apply. have loosened the restricThey Have cut the Gordian knot of red tape. You apply for the money. And within available for Cameron for Instance, Only $20,000 has been loaned to date. is now expected that arrangements will Whereby may be secured for the planting of crops, To harvested during the wintor months. Loans nre now available for irricharges. They may also be had for plantspraying. for The the only security demanded by the government. DEAD MAN'S CURVE will no more, following action takyesterday by the State Highway Commission alloting funds for the widening of the main highway that point. has long been those who the work the Highway mission just why this in the rond the The very of the curvo has more than at glance. and will of relief announcethat be eliminated. GROWERS last were At the response given the To join the Rio Grande Valley Citrus No euro-all for the cvils of the citrus The exchange does offer the first real ray That the growers of the Valley have seen. For many years Control of the crop the And the new organization offers that Provided course, the toal of per cent of the acreage. reached. Every known system of marketing fruit. Has been tried In the Valley, With the of the offered by the might be just well to try that. AS COMMISSIONER OF Areiculture Texas. Geo. Terrell tried and friend of the Valley. Carrying the masic name of Texpolitics. backed ability energy. Mr. Terrell has had little difficulty being elected any office to which he has aspired In the state. Now he in the groud for and doubt will noll large vote. Hard may be to believe, just more than Texas will to the nolls in the Democratic select state and county officers. to say nothing some The not already and and has almost boiled in IIIpolities would seem the order the day from now in the Valley.

3. September 18, 1932 The Brownsville Herald Brownsville, TX

Article from The Brownsville Herald, September 18, 1932

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RECEIVED WITH MINGLED feelings will the announcement John Young. receiver of the closed Merchants National Bank, that reorganization plans been disapproved by the comptroller and that plans being made to pay dividend within the weeks. what appeared the Up against be an almost hopeless outset members of the the committee have labored depositors hard to bring about reorganizawhich would benefit alike both tion and debtors of the closed creditors institution. there no doubt, who Some will feel that with the announcetheir non-success there ment of dire days for Brownsville. come Others there are who feel that have the status of well to decided and that fairs definitely of 20 per cent the payment the will bring dividend to benefit to the entire comdirect fairly large munity by putting actual cash into amount of culation. there is room for Certainly to congratulate announced course which on the receiver proposes to Mr. as take. The fact that those who owe the bank will not money pressed for, an immediate payment due should the total amount debtor of the bring to every bank. whole may The community that busibreathe sigh are not going to institutions what they cannot be forced to pay in that property pay one lump to be foreclosed upon not going the market to the and thrown on demoralization of values. of this dividend. this Payment means that column sces simply the comptroller's department convinced that there has not yet workable plan of been evolved does not mean the road closed to that in the future If organization can devised. workable plan of the community Appreciation committee for due the depositors' have spent in its the they also due behalf. and appreciation receiver for the Young friendly plan of sensible and he has stated he liquidation which follow as the representative banking department. the national TO READ AND WE LIKE to read newsespecially do have we had quite But we degenuine pleasure week's issue of reading the Mercedes the heading RememUnder score or more of Mercedes incidents of the early Related of that Incidents most interesting. amusand instructive. want to get real kick out If you the Valley as used to in to beg. borrow We advise you last of the copy the GREEN FRUIT SHIPCRY OF reaches us this season before ments have even been the shipments made. call from Miles Telephone the other day says he has "on authority" that few "selfish good interests" of the Valley plainto artificially colored ship fruit which too geen to live up to the Valley's reputation. Says these shipments are going to be made the eastern markets and that they will ruin our market and retard the demand for from to 60 days. We cannot believe it, somehow. We have no doubt but that Mr. Miles sincere his belief, but cannot believe that anybody going to take chances with the reputation of Valley fruit this One thing do the state would pass green fruit law that would prevent the shipment fruit which not up to standard. If fruit which unfit to the standard by the (Continued

4. September 18, 1932 The Brownsville Herald Brownsville, TX

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TO CLOSED BANK Receiver First Ready In Payment Few Weeks dividend will paid to positors and other creditors the closed Merchants National within the next four five weeks, according made Saturday afternoon by Young, receiver. Decision to proceed plans payment of Mr. Young stated. follows receipt letter from the comptroller stating that plans for the bank by the could proved. Suggests Action The letter from the comptroller. according the receiver. also tained the that the mittee not further delay the paydividend. Exact amount the dividend paid divulged from amount funds hand shown statement. anticipated that depositors will than per cent their deposits first dividend payment made. office of the comptroller any effort to organize closed bank and ready times to assist when there basis which will insure safe sound which will function safety for the Institution and serve the Young stated. because local conditions. has been possible effect such ization in the that the depositors has been Copies of the letter from the comptroller which the reorganization plans disapproved were delivered the depositors committee meeting held Saturday. Sept. Mr. Young stated. and since that time he has receivstates. letter from one member of the committee who large depositor in the stating that opinion the reorganization could not be effectAssurances that the liquidation the bank conducted future. the past, local conditions and the that enforce immediate many the notes due the bank would be not the but he bank itself, were the statement Young in announcing the proposed dividend. Statement Issued Statement issued by the receiver follows: "Acting under directions from the comptroller's nothing been done which might in hamper interfere efforts toward until every opportunity had been given depositors committee perfect possible. that compwould not approve the plans agreed the other parties the ahead looking toward payment dividend at as carly date possible the request of the depositors' was made the bank's assets and representative committee permitted to designate what notes would willing take into the new bank. This classification later gone with the committee San Antonio the amount acceptable notes reduced. made that feasible undertake the reorcanization bank ported the comptroller's office which in turn made the suggestion that inasmuch as reorganizaseem feasible that the depositors' committee cease operations the end that divimight paid. time there been any suggestion made plan offered whereby capital brought into the and fact that bank firm without being the plans by the committee and fact liquidating propositions. based upon and much more expensive scale liquidation through the comptroller's office. Claims Filed "About 95 of the claims have been filed and has decided upon takes least the Plans now going ward and to the should paid within the next four five the the depositors' have the they have sured the should time come when they that (Continued on Two)

5. July 2, 1933 The Brownsville Herald Brownsville, TX

Article from The Brownsville Herald, July 2, 1933

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YOUNG RESIGNS BANK POSITION Receiver Takes New Post At With Comptroller Resignation of John M. Young, receiver for Merchants Nationbank Brownsville since 1932. accepted office comptroller currency. Mr. Young leave Tuesday for announced late Saturday. In Young will associated with the office the comptroller the connected with supervision national banks not licensed open the since their closing holiday March. has been working that for the past He left for April Fountain of ence, arrived in Brownsville Saturday succeed Young be actively in charge closed bank Monday morning. The receiver to the Valley by Mrs. Fountain has in lingen. Fountain highly pleased his transto Brownsville and stated that would to carry out, as aspossible, policies urated by Young during months receiver the bank. Mr. Young, who was appointed receiver the Merchants March 29, 1932, shortly the bank closed, has served for the and has made friends the district systematic treatment the problems which have arisen during tenure of office. His appointment to the office comptroller the ture of distince promotion. receiving congratulations of his friends Saturday.

6. January 24, 1934 The Houston Chronicle Houston, TX

Article from The Houston Chronicle, January 24, 1934

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SIX BANKS IN TEXAS GIVEN R.F.C. LOANS Subscriptions For Preferred Stock Mount; Federal Land Bank Gets Two Loans During Month. By Associated Press. construction Finance Corporation has announced loans were authorized to six Texas banks during November. They were Union State Bank, Asherton. $6000: Republic Bank and Trust Company of Austin, $50.000: Merchants National Bank of Brownsville (receiver), $725,000; State Trust and Savings Bank (re000; First National Bank of Jay. ton (receiver). $6100: The First State Bank of Vega, $10,000. No part of the authorized loan had been disbursed up to November 30 in the cases of the banks at Asherton, Brownsville, Dallas and Jayton. A loan to the Carter Investment Company of Houston also was authorized but no part of it had been disbursed up to November Loans and $6,996.000 the Federal Land Bank of Houston authorized but no part of the latter had been disbursed up to November 30 $23,375 loan was authorized to the Regional Agricultural Credit Corporation of Fort Worth Other establishments to which authorized included the Hidalgo and Cameron Counties Water Control and ImDistrict No. 655, none of which had been disbursed up November 30. on stock of the First National Bank George West was authorized but none of it had been disbursed up to November Subscriptions for preferred stock included National Bank tional Bank and Trust Company, Dallas, $2,000,000: Fort Worth National Bank. 1,000,000: National Bank Commerce, Houston, $2,500,000: First National Bank, Mission, $50,000 Alamo National First National Bank of San Marcos, $30,000: Merchants and Planters In none the authorized subscriptions had any part of the amount been disbursed up to November 30. Loans authorized during the period from July 21, 1932. to October 31, 1933, inclusive, which were withdrawn or canceled in part during included Commercial State Bank, Ranger, $7544 Nueces Mortgage and Loan Company, Inc., Houston, $3720: Union Mortgage Loan Company, Houston. $3191.

7. January 26, 1934 Bryan-College Station Eagle Bryan, TX

Article from Bryan-College Station Eagle, January 26, 1934

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Six Texas Banks Given RFC Help During November WASHINGTON, Jan. The Reconstruction Finance Corporation has announced loans authorized to six Texas banks during November. They were: Union State Bank, $6,000; Republic Bank tal and Trust Company of Austin, $50,000; The Merchants National Bank of Brownsville (receiver), $725,000; State Trust and Savings Bank (receiver), Daland The First National Bank of Jayton $6,100; The First (receiver), State Bank of Vega, No part of the authorized loan had been disbursed to November 30 in the cases of the banks at Asherton, Brownsville, Dallas and his Jayton. A $100,000 loan to the Carter Investment Company of Houston also was authorized but no part of it had been disbursed up to Nov. 30. Loans of $10,000,000 and $6,to the Federal Land Bank of Houston were authorized but no part of the latter had been disbursed up to Nov. 30. A $23,375 loan was authorized to the Regional Agricultural Credit Corporation of Fort Worth. Other Texas establishments which loans were authorized included the Hidalgo and Cameron counties water control and improvement district No. $2,449,655, none of which had been disbursed up to Nov. 30. A $25,000 loan on preferred stock of the First National Bank in George West was authorized but none of had been disbursed up to Nov. Sbuseriptions for preferred stock included: The Commercial National Beeville, Republic National Bank and Trust Company, The Fort Worth National Bank, 000,000; The National Bank Commerce, Houston, First National Bank, Mission, $50,000; Alamo National Bank, San Antonio, $1,000,000; The First National Bank of San Marcos, $30,000; The Merchants and Planters National Bank, Sherman, $400,000. In none of the authorized subscriptions had any part of the amount been disbursed up Nov. 30. Loans authorized during the period from July 1932, to Oc tober 31. 1933, inclusive, which were withdrawn cancelled in part during November included: Commercial State Bank, Ranger, Nueces Mortgage and Loan Company, Iné,. Houston, 720; Union Mortgage Loan Com$8,191. pany, McCallum. Wilson, and Charles Presnal were in from Tabor Thursday. Our job department Is equipped to render efficient service. Quality printing at reasonGive trial. Eagle Printing Phones 36 or 48. Old for sale at the newspapers Eagle Printing Company.

8. November 26, 1934 Fort Worth Star-Telegram Fort Worth, TX

Article from Fort Worth Star-Telegram, November 26, 1934

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BANK RECEIVER DIES AT SUNDAY SCHOOL BROWNSVILLE, Nov. 26.-J. Fountain, 63, receiver of the Merchants' National Bank here, died while attending Sunday school at the First Baptist Church Sunday. Fountain came here from Marlin, where he had been in the banking business for many years. Surviving him were his widow, four daughters and two sons, all of whom live in or around Marlin. Funeral services will be this afternoon at Marlin.

9. November 27, 1934 El Heraldo De Brownsville Brownsville, TX

Article from El Heraldo De Brownsville, November 27, 1934

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# SHERIFF'S SALE THE STATE OF TEXAS ) COUNTY OF CAMERON ) Notice is Hereby Given that by virtue of a certain Order of Sale issued out of the Honorable 103rd Judicial District Court of Cameron County on the 9th day of November 1934, by J. J. Bishop, Clerk of said Court, for the sum of $726.00, with interest and costs of suit, under a Judgment, in favor of Los Ebanos Estates, Incorporated in a certain cause in said Court, No. 12913 and styled: Los Ebanos Estates, Inc., vs. Robert Ernst, et al., placed in my hands for service, I, W. F. Brown, as Sheriff of Cameron County, Texas, did on the 10th day of November, 1934. Levy on certain Real Estate, situated in Cameron County, Texas, described as follows, to-wit: All of Lot No. Seven (7) in Block No. Three (3) in Brownsville, Texas, as said property appears on map entitled, "Map of Los Ebanos, an addition to the City of Brownsville," and levied upon as the property of Robt. Ernst, John Gregg, Trustee and J. C. Fountain, Receiver of the Merchants National Bank of Browns-

10. January 16, 1935 El Heraldo De Brownsville Brownsville, TX

Article from El Heraldo De Brownsville, January 16, 1935

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NOTICE TO THE PUBLIC Notice is hereby given to all persons, firms or corporations, and to the public generally, that any and all listings that may have heretofore been made for sale or rent of properties owned by or in the possession of The Merchants National Bank of Brownsville, Texas are hereby cancelled, and notice is hereby given that any and all such listings that may be hereafter made will be made in writing by the undersigned. Ben Freudenstein, Receiver, The Merchants National Bank, Brownsville, Texas. 1-16-23-30-6-4t-4905

11. February 13, 1935 El Heraldo De Brownsville Brownsville, TX

Article from El Heraldo De Brownsville, February 13, 1935

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Freudenstein Named Pharr Bank Receiver Ben Freudenstein, receiver for the Merchants National Bank of Brownsville, has been named also as receiver for the defunct First National Bank of Pharr. The duties will be added to his duties as receiver for the Brownsville bank. He succeeds W. W. Collier, former state banking commissioner.

12. July 21, 1935 El Heraldo De Brownsville Brownsville, TX

Article from El Heraldo De Brownsville, July 21, 1935

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Cameron Records 103RD DISTRICT COURT Judge A. M. Kent SUITS FILED: Arrietta Price vs. Renzy Price, suit for divorce. Lazara C. Lopez vs. Eleuterio Lo'pez, suit for divorce. Angel Robledo vs. Gregoria M. Robeledo, suit for divorce. H. L. Stokely, receiver for Frontier Lumber company, vs. Luis Jaimes, et их, suit for debt and foreclosure. H. L. Stokely, receiver for Frontier Lumber company, vs. Rosa C. Trevino, suit for debt and foreclosure. ORDERS ENTERED: Gladys Rice vs. Frederick C. Rice, decree of divorce and custody of Frederick Clarence Rice, Jr., awarded plaintiff. National Loan & Investment Co., vs. Stephen P. Browne, defendant's plea to jurisdiction based on limitations sustained: cause dismissed. Plaintiff excepts and gives notice of appeal. Bonifacio de la Cruz vs. Maria Torres de la Cruz, divorce granted plaintiff. Lillian M. Smith vs. Sherman C. Smith, divorce and custody of Dora Leone and Sherman Smith, Jr., awarded plaintiff. Ben Freudenstein, receiver for Merchants National bank, vs. Starr County Water Control & Improvement District No. 1. suit on note, judgment for plaintiff. Jose Cruz vs. Susana Munoz de Cruz, divorce granted. Clemencia Martinez vs. Elijio Martinez. divorce and custody of EliJio Martinez, Jr., granted plaintiff.