Mercantile Bank (Memphis, TN)

Episode Information

Episode UID
26000671370
Episode Type
Suspension → Closure
Bank Type
state
Bank ID
2600067 routing
Routing Number
26-0006
Start Date
February 9, 1914
Location
Memphis, Tennessee (35.150, -90.049)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
a979f0a9a68ccd70

Response Measures

None

Description

Failure resulted from large embezzlement by the president; state officials appointed a receiver and the bank did not reopen as an independent institution.

Events (3)
1. February 9, 1914 Suspension
Cause
Government Action
Cause Details
State banking officials ordered the institution closed and a receiver was appointed after discovery of large shortages/embezzlement.
Newspaper Excerpt
With an admitted shortage ... the Mercantile Bank of Memphis ... closed its doors this morning following a meeting of the directors.
Source
newspapers
2. February 10, 1914 Receivership
Newspaper Excerpt
G. C. Hutton, state superintendent of banking, was appointed receiver for the bank in accordance with a chancery bill filed by attorneys representing the bank's directors.
Source
newspapers
3. February 10, 1914 Run
Cause
Bank Specific Adverse Info
Cause Details
Depositors agitated by discovery of large embezzlement by President C. Hunter Raine; angry crowd attempted to force access to bank.
Newspaper Excerpt
Feeling ran high when the bank closed its doors and a mob of angry depositors stormed the doors, but the police drove them away.
Source
newspapers

Newspaper Articles (19)
1. February 9, 1914 Atlanta Georgian Atlanta, GA
Article from Atlanta Georgian, February 9, 1914

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RAINE, OF MEMPHIS, ADMITS DEFAULT President Confesses Speculations-Pays Back $400,000. Luke Wright for Receiver. MEMPHIS, Feb. 9.-With an admitted shortage of approximatey $600,000, which C. Hunter Raine, the President, says he lost on cotton speculations, the Mercantile Bank of Memphis, one of the largest financial institutions in Tennessee, closed its doors this morning following a meeting of the directors Sundayy afternoon. when Raine fonfessed having wrecked it through his plunging on the wrong side of the cotton market. The directors will ask that General Luke E. Wright, former Secretary of War and ex-Governor General of the Philippines, be appointed receiver. Raine, the defaulting president. has for twenty years been one of the leading business men of Memphis and has stood high socially, belonging to the exclusive clubs and trade organizations. He has been leading the fight for Memphis bankers to secure a regional reserve bank for this city. He has turned over $400,000-all of his personal property-to the directors to secure part of the bank's loss. The men behind the Mercantile Bank are largely interested in the Memphis Street Railway, Memphis Gas Company and Memphis Commercial-Appeal, three of the strongest corporations in Tennessee. None of those concerns is expected to be materially affected by the bank's failure, as they are considered strong enough to withstand the losses they may suffer. Hunter Raine is a brother of Gilbert D. Raine, owner and publisher of The Memphis News-Scimitar, but they have not been associated in business enterprises for many years.

2. February 10, 1914 Atlanta Georgian Atlanta, GA
Article from Atlanta Georgian, February 10, 1914

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BIG MEMPHIS FINANCIERS IN FAILURE Grand Jury Probes Shortage That Passes Million Mark-Confessed Defaulter Jailed. MEMPHIS, TENN., Feb. 10.-With the Mercantile Bank of Memphis closed and Hunter Raine, its president, in jail, a confessed defaulter to the extent of more than $1,100,000, the Shelby County Grand Jury to-day was investigating the condition of the bank's accounts, with a view to returning indictments against Raine, charging embezzlement and fraudulent breach of trust. Other indictments were said to be considered today by the Grand Jurors against the other officers and directors of the bank. The officials of the bank, all of them prominent in financial and social circles of the South, include Vice President J. M. Fowlkes, Second Vice President Luke E. Wright, Cashier Claude Anderson, Directors C. Hunter Raine, Luke E. Wright, R. A. Speed, J. W. Schorr, E. B. Lemaster, A. S. Caldwell, T. J. Turley, H. H. Reese. F. G. Jones, E. W. Porter, S. T. Carnes, W. G. Reed, W. T. Overton, J. M. Fowlkes, F. G. Barton, S. Lundee and C. D. Smith. No other banks or business houses were closed to-day on account of the failure of the Mercantile Bank, and announcements were made to the effect that the defalcations of Raine would not affect any other institution in Memphis or other cities. Attorney General Z. N. Estes, of Shelby County, is directing the work of the Grand Jury and compiling the figures on Raine's admitted shortage. He agreed to allow the receivers for the bank to take charge of the cash in the bank's vau'ts about $52,000.

3. February 10, 1914 Atlanta Georgian Atlanta, GA
Article from Atlanta Georgian, February 10, 1914

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$1.500,000 SHORTAGE TOTAL AT MEMPHIS Beats August Ropke's Defalcation at Louisville by $100,000. Widow Loses $58,000. MEMPHIS, Feb. 10.-A new record in embezzlement will be recorded against C. Hunter Raine, president of the defunct Mercantile Bank of Memphis, whose shortage, it was estimated to-day, will reach $1,500,000 or more. The largest previous individual defalcation was that of August Ropke, of Louisville, who is serving ten years in the penitentiary at Frankfor* Ky., for having taken $1,400,000 from a Louisville trust company in 1909. Auditors going over the books of the Mercantile Bank to-day uncovered another shortage in addition to the $1,100,000, which Raine, in his cell at the county jail, has admitted he lost in cotton speculation. The auditors said that the records of the bank would show the largest embezzlement ever known in Tennessee and likely the largest ever known in the United States. Efforts are known to be made by the directors of the defunct Mercantile Bank to replace the money taken by Raine, but to-day it was said that only $300,000 had been pledged by the directors, who, under the Tennessee banking laws, are responsible for all of the depositors' money. Among the heavy losers in the failure of the bank is Mrs. Eldridge Wright, whose husband was killed three years ago at Kinmundy, III., when an engine crashed into a private car and killed J. T. Harahan, former president of the Illinois Central Railroad, and the party of men who were his guests. Mrs. Wright is said to have had $58,000 in the bank. Grand Jury Starts Probe. With Raine a prisoner in the Shelby County Grand Jury to-day was investigating the condition of the bank's accounts, with a view to returning indictments against Raine, charging embezzlement and fraudulent breach of trust. Other indictments were said to be considered today by the Grand Jurors against the other officers and directors of the bank. The officials of the bank, all of them prominent in financial and social circles of the South, include Vice President J. M. Fowlkes, Second Vice President Luke E. Wright, Cashier Claude Anderson. Directors C. Hunter Raine. Luke E. Wright, R. A. Speed, J. W. Schorr, E. B. Lemaster, A. S. Caldwell, T. J. Turley, H. H. Reese, F. G. Jones, E. W. Porter, S. T. Carnes, W. G. Reed, W. T. Overton, J. M. Fowlkes, F. G. Barton, S. Lundee and C. D. Smith. No Others Affected. No other banks or business houses were closed to-day on account of the failure of the Mercantile Bank, and announcements were made to the effect that the defalcations of Raine would not affect any other institution in Memphis or other cities. Attorney General Z. N, Estes, of Shelby County, is directing the work of the Grand Jury and compiling the figures on Raine's admitted shortage. He agreed to allow the receivers for the bank to take charge of the cash in the bank's vaults, about $52,000. will ea

4. February 10, 1914 Valdez Daily Prospector Valdez, AK
Article from Valdez Daily Prospector, February 10, 1914

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STOLE MILLION FROM THE BANK President Raine Had Lots of Opportunity, So He Worked at the Job and Made Big Haul. MEMPHIS, Tenn., Feb. 10.-The Mercantile Bank of this city closed its doors today and the court appointed a receiver in order that whatever assets remained might be conserved in the interest of the depositors and the owners of stock in the institution. President Raine is under arrest charged with having looted the bank out of more than a million dollars. The president has confessed to the crime and says that he lost it all speculating on the stock exchange. Feeling ran high when the bank closed its doors and a mob of angry depositors stormed the doors, but the police drove them away. Raine stated today that he would plead guilty and take his medicine and hoped the trial could be expedited so as to have his troubles quickly over. He says he has no part of the funds left.

5. February 10, 1914 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, February 10, 1914

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Apparent Discrepancy at Memphis Now Over Million. The accounts of the bank which is Memphis, Feb. 9.-With the discova state institution, are alleged to be ery tonight that of $527,867 listed acshort between $700,000 and $1,000,000. tual cash on hand when the bank closState banking officials ordered the ined its doors, $410,000 was represented stitution closed after the reputed by the personal checks of the presishortage became known yesterday. dent, C. Hunter Raine, now imprisoned charged with embezzlement, the G. C. Hutton, state superintendent amount of the apparent discrepancy in of banking, was appointed receiver for the accounts of the mercantile bank the bank in accordance with a chanhere advanced to more than a million cery bill filed by attorneys representdollars. ing the bank's directors. Investigation The exact amount will not be known of the condition of the bank was startuntil the audit being made under- the ed immediately. direction of J. L. Hutton, state suJ. C. Ottinger, president of the Memperintendent of banks, is completed. phis Clearing House Association, isSight exchange and clearing house sued a statement declaring none of certificates not counted in detail to= the members of the association was night, with the personal checks of the affected by the failure of the Mercanpresident, it sibelieved, will make up tile Bank. the difference betwen the money found The warrant was served on Mr. and the amount listed as cash on Raine at his home. He was taken behand. fore Criminal Judge Palmer, where he pleaded guilty. Despite his protest Memphis, Tenn., Feb. 9.-C. H. that he did not want any bond fixed, Raine, president of the Mercantile Judge Palmer placed the amount at Bank, one of the leading financial in$250,000, but Mr. Raine declared he stitutions of the city, was charged would make no effort to get the sewith embezzlement in a warrant curity and accompanied a deputy shersworn out today by Z. N. Estes, couniff to the county jail. ty attorney general.

6. February 11, 1914 Atlanta Georgian Atlanta, GA
Article from Atlanta Georgian, February 11, 1914

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$1.500,000 SHORTAGE TOTAL AT MEMPHIS Beats August Ropke's Defalcation at Louisville by $100,000. Widow Loses $58,000. MEMPHIS, Feb. 10.-A new record in embezzlement will be recorded againsti C. Hunter Raine, president of the defunct Mercantile Bank of Memphis whose shortage, it was estimated to-day, will reach $1,500,000 or more. The largest previous individual defalcation was that of August Ropke, of Louisville. who is serving ten years in the penitentiary at Frankfor Ky., for having taken $1,400,000 from a Louisville trust company in 1909. Auditors going over the books of the Mercantile Bank to-day uncovered another shortage in addition to the $1,100,000, which Rains, in his cell at the county jail, has admitted he lost in cotton speculation. The auditors said that the records of the bank would show the largest embezzlement ever known in Tennessee and Hkely the largest ever known in the United States. Efforts are known to be made by the directors of the defunct Mercantile Bank to replace the money taken by Raine, but to-day it was said that only $800,000 had been pledged by the directors, who, under the Tennessee banking laws, are responsible for all of the depositors money. Among the heavy losers in the fallure of the bank is Mrs. Eldridge Wright, whose husband was killed three years ago at Kinmundy, III., when an engine crashed into a private car and killed J. T. Harahan. former president of the Mlinois Central Railroad, and the party of men who were his guests Mrs. Wright is said to have had $58,000 in the bank Grand Jury Starts Probe. With Raine a prisoner in the Shelby County Grand Jury to-day was investigating the condition of the bank's accounts, with a view to returning indictments against Raine, charging embezzlement and fraudulent breach of trust. Other indictments were said to be considered today by the Grand Jurors against the other officers and directors of the bank. The officials of the bank, all of them prominent in financial and soclal circles of the South, include Vice President J. M. Fowlkes, Second Vice President Luke E. Wright, Cashier Claude Anderson, Directors C. Hunte: Raine, Luke Ex Wright, R. A. Speed. J. W. Schorr, E. B. Lemaster, A. S Caldwell, T. J. Turley, H. H. Reese F.G. Jones, E. W. Porter, S. T. Carnes, W. G. Reed, W. T. Overton, J. M. Fowlkes, F. G. Barton, S. Lundee and C. D. Smith. No Others Affected. No other banks or business houses were closed to-day on account of the failure of the Mercantile Bank, and announcements were made to the effect that the defalcations of Raine would not affect any other institution in Memphis or other cities. Attorney General Z. N. Estes. of Shelby County, is directing the work of the Grand Jury and compiling the figures on Raine's admitted shortage. He agreed to allow the receivers for the bank to take charge of the cash in the bank's vaults, about $52,000. --

7. February 12, 1914 The Manitowoc Pilot Manitowoc, WI
Article from The Manitowoc Pilot, February 12, 1914

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DEFAULTING BANK HEAD IS JAILED President of Wrecked Memphis Bank Admits Guilt. WILLING TO TAKE PENALTY Cotton Speculation Is Cause of Defaication-Declared Shortage Will Reach $1,000,000 Liabilities Placed at Over Two Million. Memphis, Tenn., Feb. Acting under supervision of J. L. Hutton, state superintendent of banks and receiver for the Mercantile bank, officers of the institution, which closed its doors yesterday morning, are examining the books in an effort to determine the exact amount of shortage, for which C. Hunter Raine, president of the bank, asserts he alone is responsible. A report in circulation late Monday was that a director of the Mercantile bank, one of the heavy losers in the failure, had announced that be was willing to stand his share of the loss necessary to pay savings department depositors. It is understood that if other directors agree it will cost this director $40,000. His loss in the failure is said to amount to $60,000. Up until a late hour, Receiver Hutton had reached no definite acounting. General indications are. it is said, that the audit will show a deficit in the meighborhood of $1,000,000. Raine Is Arrested. Mr. Raine has made no effort to give bail, according to attaches of the criminal court. He was arrested shortly before noon on a bench warrant charg. ing embezzlement of $788,804.76 of the bank's funds, and was taken to the county jail. The bank president was escorted before Judge Palmer by Sheriff Tate and Deputy Sheriff M. W. Palmer. Taking the warrant under which the banker was arrested and which was sworn out by Attorney General Estes, the court read the document to Mr. Raine and asked him if he had anything to say. "I am guilty," replied the banker. "Mr. Attorney General," continued the court, "what bond do you recommend!" Before the attorney general could reply the banker interrupted with: "I don't want to give bond; I want to go to jail." He was taken to the jail by Deputy Sheriff Palmer. When he was searched at the jail, preparatory to being committed to a cell, he informed the jailer that "You needn't be afraid. I'm not going to make any trouble." Bond Fixed at $250,000. Judge Palmer fixed the banker's bond at $250,000. It is understood, however, that Mr. Raine will make no effort to furnish ball. His attitude is taken by the county authorities as indicating his willingness to take without resistance any punishment that might be meted out by the criminal court. Criminal proceedings against the banker came as the culmination of the bank's failure. An application for the appointment of J. L. Hutton, state superintendent of banks, as receiver for the Mercantile bank, was granted by Chancellor Fentress. Mr. Hutton arrived in Nashville early in the day, and immediately upon the chancery court's decree naming him receiver, took charge of the bank's affairs. The bank was officially closed following an order by the board of directors, who subsequently filed a bill in chancery, charging C. Hunter Raine, president of the institution, with having lost, through cotton speculations, $788,804.76 of the bank's funds. Owing to the bank's extensive operations, a complete report of the receiver's audit is not expected for several days.

8. February 12, 1914 The Tabor Independent Tabor, SD
Article from The Tabor Independent, February 12, 1914

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HEAD OF MEMPHIS BANK IS ACCUSED OF HUGE SWINDLE Memphis, Tenn., Feb. 10.-C. H. Rains, president of the Mercantile bank, one of the leading financial institutions of the city, was charged with embezzlement in a warrant sworn out today by z. N. Estes, county attorney. The accounts of the bank, which is a state institution, are alleged to be short between $700,000 and $1,000,000. Memphis, Tenn., Feb. 10.-Ten directors of the Mercantile bank, one of the most important financial institutions in the city, today filed a petition in chancery court, charging that the bank was insolvent as the result of the alleged misappropriation of more than $750,000 by C. Hunter Raine, president of the institution. In the petition Raine was held solely responsible for the apparent shortage, approximately $788,804, which, it is charged, he obtained "by a system of handling the bank's drafts, property and exchange in such a way as to deceive the directors and to conceal his manipulations," the total amount of which it was alleged, he lost in speculation. The petition places the liabilities of the bank at approximately $2,196,594 with assets of $1,408,089. In a published statement January 9, liabilities were given as $2,436,197. At that time the total deposits were $1,861,109, of which $344,233, were savings accounts. The bank is capitalized at $200,000 and has a surplus of $100,000. Resources, loans and discounts at the time of the statement, amounted to $1,130,496; actual cash on hand was $424,784; sums due from other banks amounted to $489,165; cash items in transit amounted to $137,778. These amounts with other items balanced the amount given as liablities. The alleged discrepancy was discovered by a representative of a New York correspondent of the bank who was sent to Memphis last week to audit the books of the Mercantile bank, when loans requested were found to be out of proportion to the amounts usually asked for at this season of the year. His report to the directors yesterday, which brought the situation to a climax, was the first intimation that the bank was not in a prosperous condition according to the directors. The bank was ordered to remain closed today by state banking officials, who are making an investigation of its affairs. It is stated that President Raine, who attended yesterday's meeting absolved all of the officers and directors of the bank of implication in alleged shortages and tendered his personal estate, which he valued at $350,000 to the bank. So far he has made no formal statement. G. C. Hutton, state superintendent of banking, arrived here today from Nashville and was appointed receiver for the bank, in accordance with a chancery bill filed by attorneys representing the bank's directors. Investigation of the condition of the bank's resources was started immediately. There was little excitement evident in financial circles. J. C. Ottinger, president of the Memphis Clearing House association, issued a statement declaring none of the members of the association were affected by the failure of the Mercantile bank. The warrant was served on Mr. Raine at his home. He was taken before Criminal Judge Palmer, where he pleaded guilty. Despite his protest that he did not want any bond fixed, Judge Palmer placed the amount at $250,000, but Mr. Raine declared he would make no effort to get the security and accompanied a deputy sheriff to the county jail.

9. February 13, 1914 The Jasper Weekly Courier Jasper, IN
Article from The Jasper Weekly Courier, February 13, 1914

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THEFTS WRECK BANK HEAD OF MEMPHIS CONCERN ADMITS GUILT AND IS JAILED. Makes No Effort to Give Bail-Criminal Proceedings Follow Closing of Bank. Memphis, Tenn., Feb. 11.-The Mercantile bank closed its doors Monday. Officers of the institution, acting under supervision of J. L. Hutton, state superintendent of banks and receiver for the bank, are examining the books in an effort to determine the exact amount of the shortage. C. Hunter Raine, president of the bank, admits that the alone is responsible for the defalcation. General indications are, it is said, that the audit will show a deficit in the neighborhood of $1,000,000. Mr. Raine has made no effort to give bail, according to attaches of the criminal court. He was arrested on a bench warrant charging embezzlement of $788,804.76 of the bank's funds, and was taken to the county jail. The bank president was escorted before Judge Palmer by Sheriff Tate and Deputy Sheriff M. W. Palmer. Taking the warrant under which the banker was arrested and which was sworn out by Attorney General Estes, the court read the document to Mr. Raine and asked him if he had anything to say. "I am guilty," replied the banker. "Mr. Attorney General," continued the court, "what bond do you recommend?" Before the attorney general could reply the banker interrupted with: "I don't want to give bond; I want to go to jail." He was taken to the jail by Deputy Sheriff Palmer.

10. February 13, 1914 The Holly Chieftain Holly, CO
Article from The Holly Chieftain, February 13, 1914

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AND REFUSES HELP PRESIDENT GOES TO JAIL DAYS WHEN WALL STREET STACKS CARD AGAINST YOU. THE END COMES Weeksh - Union News Service Memphia Tenn.-Wirh the discov ery that of $627,867 listed as actual cash on hand when the bank closed its doors, $410,000 was represented by personal checks of the president C. Hunter Haine, now imprisoned charged with embezziement the amount of the apparent discrepancy in The accounts of the Mercantile Bank advanced to more than 11. 000,000. The exact amount will not be known until the audit being made un der the direction of J 1. Hutton state superintendent of banks, is completed which will require several days, Haine maintains silence When ar raigned on a warrant charging em bezzlement, he entered a formal plea of guilty and elected to go to jall, de clining the proffer of friends to ar range $350,000 ball Representatives of other banks here Issued statements declaring that the suspension of the Mercantile Bank was without effect on their institutions According to a statement made up Saturday the Mercantile Bank held deposits of $1,381,525, of which approx hostely $840,000 was in savings ac counts In addition $160,000 in ceruficates of deposit were outstanding About 2,000 commercial and 4,000 Bay ing accounts were carried Raine had no comment to make on the bank's affairs other than to ad mil his guilt and absolve his fellowofficers of implication "My life is spent," he told a friend "When Wall street stacks the cards

11. February 13, 1914 The Wisconsin Tobacco Reporter Edgerton, WI
Article from The Wisconsin Tobacco Reporter, February 13, 1914

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MEMPHIS, TENN. - C. R. Raine, the president of the Mercantile bank, one of the leading financial institutions of the city, was charged with embezzlement in a warrant sworn out by Z. N. Estes, county attorney general. The accounts of the bank, which is a state institution, are alleged to be short between $700,000 and $1,000,000. State bank officials ordered the institution closed after the reputed shortage became known. Raine went to jail in default of $250,000 bail. NEY YORK - Judge Edwin S. Thomas in the United States district court sentenced ex-Congressman Lucius N. Littauer and his brother William Littauer to prison terms of six months each as well as finding them $1,000 apiece. The judge announced, however, that the brothers who had pleaded guilty to smuggling a diamond tiara into the country would be released on suspended sentences for the period of five years.

12. February 13, 1914 The Elbert County Tribune Elbert, CO
Article from The Elbert County Tribune, February 13, 1914

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BANK SHORTAGE PASSES MILLION MEMPHIS MAN ADMITS HE IS GUILTY OF EMBEZZLEMENT AND REFUSES HELP. PRESIDENT GOES TO JAIL SAYS WHEN WALL STREET STACKS CARD AGAINST YOU, THE END COMES. Western Newspaper Union News Service. Memphis, Tenn.-With the discovery that of $527,867 listed as actual cash on hand when the bank closed its doors, $410,000 was represented by personal checks of the president, C. Hunter Raine, now imprisoned, charged with embezzlement, the amount of the apparent discrepancy in the accounts of the Mercantile Bank advanced to more than $1,000,000. The exact amount will not be known until the audit being made under the direction of J. L. Hutton, state superintendent of banks, is completed, which will require several days. Raine maintains silence. When arraigned on a warrant charging embezzlement, he entered a formal plea of guilty and elected to go to jail, declining the proffer of friends to arrange $250,000 bail. Representatives of other banks here issued statements declaring that the suspension of the Mercantile Bank was without effect on their institutions. According to a statement made up Saturday, the Mercantile Bank held deposits of $1,381,525, of which approximately $340,000 was in savings accounts. In addition, $160,000 in certificates of deposit were outstanding. About 2,000 commercial and 4,000 saving accounts were carried. Raine had no comment to make on the bank's affairs other than to admit his guilt and absolve his fellowofficers of implication. "My life is spent," he told a friend. "When Wall street stacks the cards against you the end is there."

13. February 16, 1914 Rock Island Argus Rock Island, IL
Article from Rock Island Argus, February 16, 1914

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Memphis, Tenn., Feb. 16.-Feeling against President C. Hunter Raine, of the wrecked Mercantile bank of this city, is running very high among the 4,000 depositors, many of whom lost the savings of a life time in the crash. The fact that Raine has not sought to secure his liberty on bail gives color to the rumor that he is in fear of crazed depositors who have threatened to take his life. Raine seems to regret that he should have robbed so many people. "I robbed the people who trusted me," he said in jail here. "I took their money and lost. I am ready to go to prison for a life time if I can save one single man, woman or child from any suffering." Raine's thefts total more than a million. He used the money in cotton speculation. Losses by reason of the failure are widespread. A washerwoman had $400, all her life savings in the bank. She said that Raine himself, just before the crash, told her the bank would be all right at present, even if it was in a hole with a rock on top of it. A woman, prominent in society life here, is reported to have lost $52,000. A city detective who had $1,200 in the bank on deposit said that he passed one of the bank officials a few hours before the crash and that the man did not speak to him. He said that because of this he started for the bank to withdraw all of his money, but at the door was delayed by a friend. He lost everything. A liquor dealer is reported to be another heavy loser, having had $20,000 or more on deposit there. Bankers generally predict that the depositors will not realize 25 cents on the dollar.

14. March 6, 1914 Pine Bluff Daily Graphic Pine Bluff, AR
Article from Pine Bluff Daily Graphic, March 6, 1914

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INDICT CASHIER ON FIVE COUNTS Claude Anderson, of Mercantile, Held by Shelby Grand Jury. MORE AGAINST RAINE. Twelve Additional Ones for Former President-Majority of Depositors Had Small Amounts. 1 Memphis, March 5.-Claude Anderson, cashier of the failed Mercantile Bank was indicted on five counts here today by the Shelby County grand jury. At the same time twelve additional indictments were returned against C. Hunter Raine, president of the bank, now in jail on an indictment charging larceny, embezzlement and fradulent breach of trust, which grew out of the failure of the Mercantile Bank The indictments against Anderson charge fraduient breach of trust, larceny, receiving funds in an insolvent institution, making a false statement to the superintendent of banks, and swearing to a false bank statement. indictments returned The new false against Raine charge issuing a bank statement and receiving in an insolvent institution. Mos. Depositors Small. Only 258 of the 5,500 depositors of the Mercantile Bank had deposits amounting to more than $1,000 each when the bank failed. That includes commercial and savings accounts and certificates of deposit. A small number of hills of exchange, the exact number of which has not been ascertained. is not included. The exchange referred to was refused by New York banks. Some of it is still in transit. J. L. Hutton, receiver, hopes to secure the signature of enough depositors with accounts in excess of $1,000 before the end of the current week to make up the $200,000 shortage which will have to be met to pay I the other depositors in full. More than 5,000 will be paid in full if the plan on which Mr. Hutton is I working meets with success. Mr. Hutton is pleased with the progress , made. Only 258 have been asked to sacrifice any part of their deposits. : They have been asked to concede 25 per cent of their claims in order that the affairs of the bank may be promptly closed up, expenses and litigation avoided and that 95 per cent of the depositors, those the least able to lose, may be paid in full. About two-thirds of the depositors , asked to accept a loss, temporary f only, perhaps, have signed agreen ments to compromise for 75 per cent. Few have shown a disposition to h hold back. a "I have observed less of the letthe-other-fellow-do-it spirit in Memphis than in any other place I have ever been," commented Mr. Hutton G yesterday.

15. April 12, 1914 New-York Tribune New York, NY
Article from New-York Tribune, April 12, 1914

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# Memphis Bank Settlement. Archibald R. Watson and Caruthers Ewing, attorneys for the receivers of the Mercantile Bank, of Memphis, Tenn., announced yesterday that the affairs of the institution, in so far as they concerned the American Exchange National Bank, of New York, had been adjusted. The full amount due the American Exchange National Bank was paid to it and the collateral held by it, amounting to over $500,000, will be released by the settlement.

16. May 23, 1914 The Semi-Weekly Leader Brookhaven, MS
Article from The Semi-Weekly Leader, May 23, 1914

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NOVEL AND INTERESTING CHAPTER IN BANKING. The announcement that the depositors of the failed Memphis Mercantile Bank have already had their losses settled by the bank directors-those with deposits less than $1,000 paid in full and the rest 75 per cent-tells a new and interesting story in American banking. Not that we know of bas there ever been such a ready and full response by directors to the call of duty. The following appreciative comment is reproduced from the Commercial Appeal: Within three months, almost to the day, the losses caused by the failure of the Mercantile Bank through the defalcation of its president, have been as far as possible, repaired. The depositors under $1,000 have been made whole, and the larger depositors have to their credit 75 per cent of their claims. The methods by which these good results have been brought about are unparalleled in the history of American banking. Voluntarily the directors, without thought of the question of liability, put up $300,000. Most of them were heavy losers. In spite of their losses, they undertook this additional burden. Actions such as this strengthen the faith men have in their fellow beings and show to what splendid heights men may rise by the exercise of the manly qualities that moved these directors. The receivership of the old bank, under J. L Hutton, was splendidly handled. Court costs and law fees were kept at a minimum and the general expenses were almost negligible. The Mercantile Bank having been looted once, it was determined that it should not be looted again during the receivership under forms of the law. This is all well said. Only we choose to believe that the action of the directors was prompted, in the main, by a true sense of their "liabilities"-moral and legal. It argues best for the banking business to take this view. For with it thoroughly established as a principle of banking, that directors ARE liable to depositors, there will be a Lew rule of conduct of directors meetings, and of scrutiny of banking statements and affairs. And where directors take their duties and liabilities thus seriously, there will be an end of bank fail. ures.-Vicksburg Herald.

17. June 26, 1914 The Columbia Herald Columbia, TN
Article from The Columbia Herald, June 26, 1914

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MR. HUTTON IN MEMPHIS. The effort to question the good motives or the sincerity of Jo L. Hutton, former receiver of the old Mercantile Bank, is outrageously unjust, in view of what Mr. Hutton did for the depositors in that bank and his remarkably able work in the conduct of the receivership. The splendid returns made to the depositors in the Mercantile Bank, whose money had been stolen, is due probably more to the efforts of Mr. Hutton than any other man. His career in Memphis is such that to attack him in any way cannot hurt him, but rather is a reflecion upon the intelligence and proof of the insincerity of those making it. An attempt to detract attention from the guilty by seeking to besmirch the innocent is a trick which usually exposes itself. -Memphis Commercial Appeal.

18. March 4, 1918 New-York Tribune New York, NY
Article from New-York Tribune, March 4, 1918

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Sues Brokers for $201,895 Action Against Hubbard Bros. & Co. Begins To-day The trial of an action brought by Barber, Watson & Gibboney, of 165 Broadway, as counsel for John L. Emerson, receiver of the Mercantile Bank of Memphis, Tenn., to recover $201,895 from Hubbard Brothers & Co., cotton brokers, of 66 Beaver Street, will begin to-day in the United States District Court. It is alleged that the $201,895 is part of $800,000 of the bank's funds used by C. Hunter Raine, acting president of the institution, in unprofitable speculation in cotton futures through H. Reese, a director, acting as representative of Hubbard Brothers & Co. Under agreements which have the approval of the State Superintendent of Banks in Tennessee, Reese, by the payment of $16,000, and Hubbard Brothers & Co., by the surrender of $11,000 worth of stock, put up by Reese as collateral, have been released from responsibility and litigation in the courts of that state.

19. March 7, 1918 New-York Tribune New York, NY
Article from New-York Tribune, March 7, 1918

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Brokers Sued for $201,895 Bank Receiver Charges Its President With Speculation Recovery of $201,895 is asked in a suit begun yesterday before Judge Martin T. Manton, in the Federal District Court, by John L. Emerson, receiver of the Mercantile Bank of Mem. phis, Tenn., against Hubbard Bros. & Co., brokers, of 66 Beaver Street. The complaint alleges the sum named was used by C. Hunter Raine, president of the bank, in personal speculations in cotton futures, known and intended to be wagers or bets depending upon the fluctuations and variations of the price of cotton on the New York Stock Exchange. Alleging that the .transactions were in violation of the status of the State of New York, and were therefore wholly unlawful and void, Receiver Emerson, in the complaint, which is drafted by Archibald R. Watson, of the law firm of Barber, Watson & Gibboney. asks that the margin money paid to the brokers by Raine be turned over to him for the benefit of the bank. It is alleged that Raine's speculatitons were conducted through Hubert H. Reese, a director of the bank, who, as representative of Hubbard Bros. & Co., received one-third of the gross amount of commissions paid upon any and all orders received from customers of the concern's Memphis office. Further is is charged that Samuel T. Hubbard and W. Eustace Hubbard, composing the brokerage firm, aided and abetted Raine in carrying out and concealing the fraudulent devices by which Raine utilized the bank's money. The brokerage firm in its answer says that the transactions recounted were made with the knowledge. consent. approval and authority of the bank. and, therefore, the payments are binding on the bank. The trial is expected to last several days.