f3d028b6Full suspension, Books examined
Other: Receiver appointed and bank placed in receivership; extensive litigation and asset recovery followed.
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Receiver for Bank. [United Press Leased Wire Service.J DES MOINES, Iowa, April 26.The state banking department will make application late this afternoon to one of the two district judges of Carroll county for a receiver for the Carroll Trust and Savings bank. The cause of closing the bank, according to George Messenger, state banking commissioner, was the indifferent quality of the receivables,
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TRUST AND SAVINGS INSTITUTION HAS TOO MUCH DOUBTFUL PAPER. RUN ON INSTITUTION PRECEDES STATE'S ACTION Contributing Difficulty Was Loss of Law Suit and Judgment Against Bank For $10,000-Available Cash Depleted by Run-Examiners Now Going Over Books. Carroll, April 26.-The Carroll Trust and Savings Bank has been closed and is in the hands of the state banking department examiners. A quiet run on the bank depleted its cash and the doors did not open yesterday. John Roelfsema is president and manager of the concern. It is said he has turned over a deed to one of "his farms to try to make good. It is reported that the examiners found $150,000 pad paper in the bank's securities. They refuse to confirm this. It is stated by the banking department. however, that the paper is not satisfactory and that its condition was responsible for closing the bank. The examiners appeared Thursday morning. The run on the bank was precipitated by their presence and other circumstances. A large amount of deposits were withdrawn during the afternoon. The doors were closed as usual and the examiners posted their notice on them during the night. The bank on March 4 had $416,668.37 deposits. Its capital is $50,000. It had $20,000 surplus on March 4. It has been in existence many years. Roelfsema has been in charge for a year and a half. He has been in the county about eight years. Some time ago a dispute arose as to time of payment of a certificate of deposit held by W. S. Handley for $10,000. A lawsuit resulted and the court just decided that the bank must pay the $10,000. The sheriff demanded payment of the judgment. Roelfsema declared that the case would be appealed and sought to get a $20,000 bond for the purpose of appealing the case. This bond, it is said, he could not get. This contributed to the misfortune.
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Carroll Bank Closed by State Officials to Pay 75 Cents on $1 Carrol, Ia., April 26.-Following the action of the state bank examiners in closing the doors of the Carroll Trust and Savings bank Friday, it was announced Saturday that the stockholders of the bank would be able to pay about 75 cents on the dollar to the depositers. At the recommendation of the presidents of the other three banks in Carroll, C. A. Dougherty has been appointed receiver and will take charge about the middle of next week. President John Roelssema is practically under arrest, although not confined to jail, and the bank examiners are still working on the books. The bank was capitalized for $50,000, with a surplus of $20,000. The last statement, issued in March, showed deposits of nearly $500,000. This is the second bank failure in Carroll in 11 years.
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Iowa, Bank Is Closed. Carroll, Iowa, April 28.-Examiner> of the state banking department have taken charge of the Carroll Trust and Savings bank, declaring the quality of certain of the bank's assets did not meet with the approval of the department. The bank will remain closed until a receiver is appointed, or until the bank can supply acceptable assets, according to the examiners. No shortage is charged by the state banking department.
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Fairfield-The Batavia Savings Bank opened after being closed for three weeks on account of the death of the cashier. W. A. Lewis. and later the death of the president. J. T. Hackworth. of Ottumwa. Fred L. Bissell, of Ottumwa. will be the new cashier. Williamsburg-Rev Robert Tipton has tendered his resignation as pastor of the Congregational church here and has accepted a call to Belle Plaine. He has been here for four years and has been very active in the building of the new church structure. He is an orator of state-wide reputation and is prominent in Masonic work. During the war he was a tireless worker for all national interests. Carroll-The state banking department has asked for the appointment of a receiver for the Carroll Trust and Savings Bank. J. A. Dougherty has been agreed upon. The presidente of the other three banks here joined in recommending his appointment. He is chairman of the liberty loan campaign and a big real estate dealer. It is reported now that the Carroll Trust and Savings will pay out 75 cents on the dollar. President Roelfsema has turned over his farm. New London-A most unfortunate accident occurred at the home of Mr. Orlan Calloway. Mr. Calloway and his brother David Calloway, were plowing. Mr. Calloway was using a tractor and he had stopped to oil his machine, climbing on the wheel. In some manner the machine was started, the large wheel passing over the forearm. crushing the bone and lacerating the flesh. His brother immediately
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THE RUMORS ARE DENIED And People Are Calmly Waiting to See What Official Action Is to Be Taken-$416,668 Deposits CARROLL, April 26-No action in court looking to the appointment of a receiver has yet been made in the case of the Carroll Trust & Savings bank, which failed to open yesterday and which is now in the hands of the state bank examiners. As no official statement has been made no one, not even the directors, so they claim, have any knowledge of the extent of the failure. Sensational rumors of a big shortage and of the detention under guard of President John Roelfsema are vigorously denied, Roelfsema is about town at least. It is said there was a quiet run on the bank Thursday. The bank examiners had been here at work on the books of the institution for some time. The failure of the bank has caused no excitement and depositors are simply waiting to see what action the authorities may take. John Roelfsema is president and manager of the concern. It is said he has turned over a deed to one of his farms to try to make good. It is reported that the examiners found $150,000 bad paper in the bank's securities. They refuse to confirm this. It is stated by the banking department
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Iowa, Bank Is Closed, Carroll, Iowa, April 28.-Examiners of the state banking department have taken charge of the Carroll Trust and Savings bank, declaring the quality of certain of the bank's assets did not meet with the approval of the depart. ment. The bank will remain closed until a receiver is appointed, or until the bank can supply acceptable assets, according to the examiners. No shortage is charged by the state bank. ing department.
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HIGH FINANCE CAUSE OF RUIN Carroll Trust & Savings Bank's Fail ure Said to Be Due to Piece of Frenzied Finance PROMOTED A FIRE COMPANY Company Capitalized for $25,000 and Sold for $27,000-Bank Takes Paper-Gives Up Hard Money CARROLL, Ia., May 3-High finance in the Carroll Trust & Savings bank helped its downfall. I Despite its other troubles, it may be assumed that the bank would have run along, but for a piece of frenzied finance that was pulled off within the last few weeks. President John Roelfsema promoted an incorporation, the Carroll Tire company, capitalized for $25,000, obtaining a charter under the laws of the state, with scant visible assets. This "company" was sold to a local business man for $27,000 which was paid for mostly in paper. This paper was turned into the bank and hard money taken from the vault in its stead. When the state banking department was apprised of this deal, it immediately got busy and sent two of its most competent examiners to look into the transaction. An investigation into the general condition of the bank and its assets followed. Roelfsema was called in but neither admitted nor explained anything. Nevertheless the facts were brought out that the "company" consisting mostly of blue sky was sold as above stated, at an estimated profit of $20000 to the president of the bank. Roelfsema has turned back to the bank, his farm in Richland township, the land on which he applied the money obtained by the Carroll Tire company deal. He has turned over all his holdings of real estate in the county and his Cadillac car is now in the hands of the receiver. Stockholders will be assessed 100 per cent on their stock, and it is estimated that from property turned over by Roelfsema and others, together with the stock assessment, over $40,000 will be gathered for the benefit of the depostors. Thus will the bank be fortified against claims of depositors by the $70,000 stock and surplus and about $40,000 realized from sources named. In other words, a loss of $130,000 in bad paper can be encountered before the depositors lose anything. J. A. Dougherty has taken charge as receiver of the defunct bank and has already begun work in getting the accounts in shape. J. B. Hungerford of the Carroll Herald says: "The reeciver will have to exercise great care, his very best judgment in disposing of poor paper. "We believe that had a local man been made receiver of the old First National, the assets would have paid every dollar of deposits and part of the stock would have been saved. We knew at the time that Mr. Dougherty frequently interfered and tried to prevent the wholesale despoilage of bank assets. "But he was not regarded by the broken down politicians sent here as receivers. They evinced little interest in the outcome, being chiefly interested in the princely salary allowed them by the governmental banking department. Mr. Dougherty's advice at the time, had it been accepted, would have prevented loss. "The affairs of the defunet bank will be settled at Mr. Dougherty's office on Main street. Every possible economy will be practiced and the expense of settling the unfortunate muddle will be observed."
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Receiver Dougherty Organizing Business of Failed Carroll Institution. Special to Times-Republican. Carroll, May 13.-Receiver J. A. Dougherty of the defunct Carroll Trust and Savings Bank, has opened an office and is extremely busy with the affairs of the failed institution. He has listed the assets and is endeavoring to get additional security where the security given the bank does not seem ample to the receiver. An appeal has been made for co-operation of all interested parties to avoid waste of time and possible dissipation of the assets and a warning has been given to those who would interfere with the work of the receiver, to keep their hands off. It is hoped that the loss of the depositors will not be large. The stockholders, it appears now, will be hit hard. The stock held by President Roelfsema, amounting to $30,000, has been absorbed, hypothecated for borrowed money and is said will not yield the bank anything.
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WORKING ON BANK'S AFFAIRS. Receiver Dougherty Organizing Business of Failed Carroll Institution. Special to Times-Republican. Carroll, May 13.-Receiver J. A. Dougherty of the defunct Carroll Trust and Savings Bank, has opened an office and is extremely busy with the affairs of the failed institution. He has listed the assets and is endeavoring to get additional security where the security given the bank does not seem ample to the receiver. An appeal has been made for co-operation of all interested parties to avoid waste of time and possible dissipation of the assets and a warning has been given to those who would interfere with the work of the receiver, to keep their hands off. It is hoped that the loss of the depositors will not be large. The stockholders, it appears now, will be hit hard. The stock held by President Roelfsema, amounting to $30,000, has been absorbed, hypothecated for borrowed money and is said will not yield the bank anything.
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CARROLL BANK RECEIVERS BUSY Receiver J. A. Dougherty Has Opened An Office for the Transaction of Business ACTION WANT HARMONIOUS Useless Interference With Receiver Is Said Will Endanger and Delay Receivership CARROLL, May 17-Receiver J. A. Dougherty of the defunct Carroll Trust and Savings bank has opened an office in the Trowbridge building on Main street and is busy getting things in order. The most important work is to get the assets on the most reliable basis and where there is paper that is in any way questionable additional security is required. It is hoped that all interested persons will work harmoniously to save all possible from the wreck and any movement to interfere with Mr. Dougherty in his work will be detrimental to the interests of the depositors. The state law provides that depositors are preferred creditors and must be paid before other obligations. This adds hope to the belief that their loss will not be heavy, if anything. The prospects are good, but there is nothing certain yet. Stockholders will be assessed the amount of their stock. But the Roelfsema stock, over $30,000, was hypothecated for borrowed money and is regarded worthless and will yield nothing by assessment.
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FIGHT OVER BANK ASSETS. Court Proceedings Open to Gain Control of Carroll Bank Assets. Special to Times-Republican. Carroll, Aug. 22-The City Natoinal bank of Council Bluffs, the Merchants National bank of Omaha and the Durant (Ia.) Savings bank have begun proceedings in court to have John Roelfsema, late president of the defunct Carroll Trust and Savings bank, declared bankrupt. The plaintiffs have stock held as collateral for funds advanced when the so-called Specht sale of bank stock was made. When the bank was closed by the state banking board President Roelfsema turned over his equity in a Richland township farm, his town realty and some personal property, amounting to about $50,000. This property is now in the hands of Receiver Dougherty and the filing of these suits indicates there will be a contest in court for control of the Roelfsema assets. No dividend has yet been paid by the receiver but it is thought the first payment to depositors will be made within thirty days. It is understood that it will not be large.
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RECEIVER OF CARROLL TRUST AND SAVINGS TO REALIZE QUICKLY. SECURES $90,000 TIED UP IN CHICAGO BANK Receiver Hopes to Pay Depositors AImost in Full-May Be Some Shortage Due to Bankruptcy Proceedings Against Former President, Roelfsema -Trustee After Personal Property. Carroll, Sept. 20.-J. A. Dougherty, recelver of the Carroll Trust and Savings Bank, states that he will begin to pay the first dividends on the 25th of September and the amount will be 50 per cent. The bank was closed on the 24th of April, and five months after that date the receiver will be able to pay the dividend named. When Mr. Dougherty took charge a large portion of the bank's available assets were in the hands of the Continental and Commercial bank of Chicago and a collateral for the $30,000 borrowed from that bank. Before a dollar could be available for the depositors it was necessary to collect this $90,000 to redeem the notes held as collateral. It took time to make these collections and the work was accomplished after the most strenuous efforts on the part of Mr. Dougherty. The first dividend of 50 per cent is considered good in view of conditions. Much of the assets were not due and of course could not be realized on. Other parts have the value, but have not yet been turned into cash. Mr. Dougherty is using his judgment and is governed wholly by what he considers the'best ultimate result to the bank's creditors. He appreciates, as well as anybody concerned, that creditors want their money as soon as they can get it. but he would not be acting for their best interests if he were to make haste that would incur unnecessary loss. Depositors are interested in the next dividends to be paid. It was thought some time ago that assets would be sufficient to pay 100 cents on the dollar, ultimately. But there is now some doubt. Creditors other than depositors, to whom was due a considerable amount of money, forced John Roelfsema, the presilent, into involuntary bankruptcy. Action likely will be brought to recover from the receiver the property Roelfsema assigned to the bank, consisting of his equity in the Richland township farm, a Cadillac automobile, a house and lot, and a number of vacant lots in Carroll. The house and lot were sold for $3,000, the automobile for $1,000, and the lots are worth about $2,000. The amount of equity in the farm is probtematical. Should the trustee in bankruptcy recover from the receiver the property assigned to the bank by Roelfsema, just that much will be taken away from the depositors.
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OREDITORS GET DIVIDEND. Total of 70 Per Cent Now Paid to Depositors of Carroll Bank. Special to Times-Republican. Carroll, July 24,-J. A. Dougherty, receiver for the Carroll Trust and Savings Bank is paying a second dividend of 20 per cent to creditors of the failed institution, making a total of 70 per cent that has been realized.
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IMPORTANT DECISION BENEFITS DEPOSITORS IN ROELFSEMA BANK AT CARROLL. DECISION ON TRANSFER OF FARM AGAINST ROELFSEMA Creditors Benefit to Extent of $50,000 and Probably Will Be Paid in Full-Farm Transaction First of Series Which Plunged Bank Into Financial Difficulties. Carroll, Aug. 12.-Judge M. E. Hutchison has given out his decision in the case of F. F. Faville trustee in bankruptcy for John Roelfsema, against J. A. Dougherty receiver. The matter concerns the defunct bank's share in the Loeschen farm which had so much to do with the failure. In the judge's decision he rules that the receiver of the bank is entitled to the equity in the farm to the amount ge seventeen twenty-firsts of its total value, leaving the small remainder to the trustee for the personal creditors of Roelfsema. o It will be recalled that a short time before the Carroll Trust and Savings Bank failed Roelfsema bought the Loeschen farm in Richland township. After the crash came and Roelfsema was declared a bankrupt his personal creditors tried to have the equity in the farm applied in their favor. The farm was already in possession of Mr. Dougherty, but Faville brought suit, which first came up in the May term. It is said that Faville will appeal. The receiver's interest in the farm will amount to nearly $50,000 which practically insures dollar for dollar for all depositors, if the decision of the lower court is upheld. The court has also rendered another decision which directly relates to the defunct I bank. It has ruled that the contracts made between Roelfsema and Phillips are void. It embraces notes to the extent of $26,000 and a bill of sale for an undivided half interest in the Carmoll bakery which were given Roelfsema in the Carroll Tire Company deal. Judge Hutchison directed the clerk of court to cancel all contracts and notes. He also declared the tire company insolvent in his decision and directed C. H. Rafferty to liquidate its business. When the deal was turned /with Roelfsema it was represented to Mr. Phillips that he was receiving value for the $26,000. for which the note had been given. The former represented that the company was clear of all indebtedness and that all of the stock would be in Phillip's possession. After the transfer was made it developed that a $6,000 note was outstanding and $5,000 due the Diamond Tire Company, neither of which amounts the purchaser was aware of. It also came out that instead of securing the total stock in the company Roelfsema and his associates had only delivered fifty-one per cent of It to Mr. Phillips. The apparent fraud of the deal makes it plain, according to the court, that Mr. Phillips would not be held for the notes and bill of sale and is entitled to relief from meeting them. The notes in connection with the tire deal are what was the beginning of the end of the bank. They were placed in the bank and Roelfsema withdrew money to their amounts to pay for the Loeschen
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Bank Situation Improves CLOSED IOWA BANKS NOT IN TABLE to 1923. bank failures were rare and when a state supervised bank occasionally suspended business receiver for it was appointed by district court. as receivers are still appointed for private and national banks. No systematic records were kept by any state official, such as are now kept, for banks which failed prior to 1923. hence the information about the state supervised banks listed here is not readily available as for the banks closed after 1922. For the same reason information concerning closed and private banks was not available for the table. The national list of banks closed but not in the table, from 1918 to June 30, 1922, as follows: far been held at a net cost of receiver confident that this loss more than offset by receipts from sales properties advantageous times and the report states that had not the advances been made the assets would have been lost 1918. STATE BANKS. Name of bank. Capital. Date closed. Town. Conway Savings 20,000 May, 191: Conway PRIVATE Cedar Cedar Bank 10,000 Dec., 1918 YEAR ENDING JUNE 30, 1920. STATE BANKS. Carroll Carroll T. 50,000 Apr. 1919 Decatur Decatur State Savings 25,000 May 1919 Hartley Iowa Savings 30,000 June 27, YEAR ENDING JUNE 30, 1921. STATE BANKS. Citizens Savings 50,000 May 13, 1921 Anita Braddyville Farmers Savings 25,000 Nov. 5, 1920 Clarinda Clarinda T. 75,000 Dec. 1920 bElliott Elliott Savings 25,000 June 1921 Farmers Savings 15,000 Mar. 1921 Harper Marathon Marathon Savings 40,000 April 1921 Onawa Citizens State 30,000 April 1921 Rome Rome Savings 12,500 Mar. 23. 1921 Sioux City Union T. 100,000 Feb. 1921 Ulmer Farmers Savings 10,000 Mar. 1921 PRIVATE BANKS. July 1920 Jefferson City Bank Emmet County bank Dec. 1920 Armstrong Percival Percival bank Dec. 28, 1920 Davis City Valley bank April 11, 1921 Lawton Farmers bank April 14, 1921 NATIONAL BANKS. Emmetsburg National March 1921 Emmetsburg Milford National 25,000 April 13, 1921 First National 50,000 April 14, 1921 Marcus as Citizens*State. bReopened as Farmers State. cReorganized as Security National. YEAR ENDING JUNE 30, 1922. STATE BANKS. Bevington Bevington Savings 10,000 Citizens Savings 15,000 1921 Curlew Harris Savings 30,000 Oct. 1921 Harris Farmers Savings 15,000 Sept. 1921 aLamont Massena Savings 20,000 April 1922 bMassena Liberty North Liberty Savings 10,000 Aug. 1921 North Melcher State 25,000 May 20. 1922 Melcher State Bank of Oto 25,000 Dec. 1921 50,000 Nov. 1921 Sioux City American Savings Swaledale Savings 15,000 Sept. 14, 1921 Swaledale aReopened as Farmers State. bReopened as Massena State. PRIVATE BANKS. Grafton Farmers Exchange Bank Sept. 19, 1921 NATIONAL BANKS aCherokee Security National 50,000 Feb. 1922 bJefferson Farmers and Merchants 40,000 June 30, 1922 bReopened.