Leominster National Bank (Leominster, MA)

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NATIONAL CLOSED; SAVINGS RUN ENDS

(Continued from Page One) bank was under "he direction of the bank shortly before 9 o'clock this

"This bank IS under the direction of the Comptroller of the Currency. Daniel Murphy, National Bank Examiner in charge (Signed)

Daniel F. Murphy, National Bank "Closed by resolution of the board of directors The Leominster National bank and the Leominster Savings bank are entirely separate financial institutions. It appears to be an accepted fact, that the savings bank suffered from the proximity of the two banks in the same building The savings bank was prepared to meet all demands Saturday night Promptly at o'clock the doors swung open for business There were large number waiting and demands were paid without question and with promptness Trustees mingled with the people reassuring them. The pub-

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was given every assurance that they wanted to withdra their money it was ready and walt ng for them At o'clock Saturday night, the usual hour for the bank to close, Raymond Middlemas, treasurer of the bank, went = the lobby to inform those gathered there that the doors were to be closed and ive invied all those who ished to draw their money to go inside. The large force remained on duty until every demand was met. Again the morning large number was on hand when the bank opened at o'clock More than ple funds were hand to meet all demands. indicated in the statement of the bank on Page Judge Ward Healey issued statement for the trustees of the savings bank which discloses that the bank has ample cash available to meet all demands Judge Healey's statement was as follows. "The Leominster Savings bank was fully prepared meet the run on the bank which developed this evenwhen it opened its doors at 6.30 ing o'clock. A large number of people had assembled at the entrance of the bank which was used in common for the Savings bank and the Leominster National bank. Many them had come with the intention of doing business at the Leominster National bank, but found the bank doors closed. The savings bank officials had on hand large amount of money and paid promptly to all persons who presented themselves at the bank such moneys as depositors wished withdraw. Several trustees of the bank were in the lobby and helped and advised the customers Some of the trustees even assisted customers in making out deposit and withdrawal slips. full corps of clerks was behind the windows and when the bank doors closed at o'clock all persons within the bank were allowed remain until each had transacted their business. "Mr Middlemas, the treasurer of the bank, mingled with the people and at 8 o'elock went outside and invited all in who wished to transact business Eight o'clock IS the usual closing time of the bank on Saturday nights. "The customers who were in the bank were in good humor at all times and there were no instances of panic or fear among them In many cases they withdrew portion their money. Whatever their demands they were given money they requested without question. "The bank on Monday morning is prepared ineet every demand that may be made upon it. It has large quantity of cash on hand, ready to meet any emergency that may arise The bank has quick assets of more than three and one-half million dollars. The trustees of the Leominster Savings bank are united in saying they have full confidence in the integrity of the bank and its ability to meet all of its obligations promptly and without resorting to moratorium

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The bank is affiliated with or delay. the Mutual Savings Bank Fund, Inc., fund which was created to meet emergencies caused by present-day conditions The total deposits are $8,901,000.00 The guaranty fund, profit and loss and undivided profits of the bank total Everett B Richardson, vice-president of the Leominster National bank, Issued the following statement Saturday Due unusual withdrawal from the Leominster National bank, the board of directors thought it advisable to suspend busiless Saturday evening pending conference Federal Bank Exammer C. Williams to determine how best to meet the situation The deposits of the Leominster National bank as of were announced as The total sets given as $2,238,893.42 The capital of the bank is $150,000. On Jan. 1932, the officers of the Leominster National bank were follows President, Fred A. Young; vice-president, Everett B. Richardson, cashier, Robert B. Young; sistant cashier, Claude Vallant; directors, Marvin W. Sherwin, Howard H Chase, Horace F. Cook, Murray C. Damon, Warren H. Goodale, Arthur H. Hall, George H Harrison, Edward B. Kingman, William H. Lane, D Curtis Nickerson, Everett B. Richardson, Harold F. Shaw, Alfred C. Rockwell, Edward H. Saxton, Edward B. Tilton, Albert A. Tisdale, Frank Whitney and Fred A. Young Replying to an inquiry from Mayor

Frederic T Platt, Bank Commissioner Arthur sent the following "The Leominster Savings bank 's in good condition. There no neel of any anxiety on the part of depositors. Resources of the Central Savings fund amounting to $60,000,000 are available The state had $5125 on deposit in the Leominster National bank, the state treasurer's office announced today. City Treasurer Harndon said today the city of Leomdinster has $1223.69 on deposit in the bank

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LEOMINSTER

City Treasurer to Pay Employes Who Had Not Cashed Checks Issued on National Bank

LEOMINSTER, June 3 There was good news for 191 city employes at city hall this morning when City Treasurer Charks D. Harrder. with the approval of City Solicitor James H. P. Dyer. cut the red tape and announced that the checks issued to the employes on the Leominster National bank, which were not cashed before the bank closed, would be replaced today. On Thursday, May 12. part of the city payroll was drawn on the Leominster National bank Up to the time the bank suspended business 191 emhad failed to cash checks.

The employes holding the checks which total $3144 appealed to Mr. Harnden to cash them after the suspension of the bank Many of the holders were men working on the emergency employment projects in the city and were badly in need of the Mr Harnden immediately started to get record of the checks which were not cashed and it proved to be difficult task This morning he completed the record and received City Solicitor Dyer's approval. New checks will be ready this ofternoon and Mr. Harnden will request their the employes to turn in the old checks to be exchanged. booked last night on charges of operating while under the influence of liquor and drukenness by Patrolmen Fred D. Bernier and Robert P. Quirk, pleaded not guilty to the drunkenness charge. The case was continued 10 days. Edmond J. Beaulac, Mechanic street, pleaded not guilty to charge of operating 80 that the lives and safety of the public were endangered and the case was continued until June 11 for trial.

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Leominster Bank Assessment Levied to Pay $150,000 by Sept. 25.

LEOMINSTER Aug. 23-(AP) An assessment upon the stockholders closed Leominster National Bank for to paid by on the before 25, was bank morning by William G. the bank's The was received by him notice W. Pole, Comptroller of the Currency Washington. The bank was closed May 19.

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STOCKHOLDERS ASSESSED

Leominster, Mass., Aug. 24, (P)-An assessment on the stockholders of the closed Leominster National bank for $150,000, to be paid by them on or before September 25, was posted at the bank this morning by William G. Roelker, the bank's receiver. The notice was received by him from J.W. Pole, comptroller of the currency at Washington. The bank was closed May 19.

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Bank Receiver Moves Against Whitney Reed

Special The Sentinell The Reed Corp.. manufacturers furniture and toys, and one manufacturing concerns. has been tioned into the court Boston The ing creditors William Roelreceiver the Leominster National for money $3034 Wilder Walker Davis lumber. $1000; Gavin Hardware

The petitioners contend that the company executed while to the Whitney Carand that the latter ence obtained the Over the from this morning, Mr. Roelker gave out the following "The involuntary petition bankruptcy was filed Oct. 15 me. the receiver of the LeominNational bank, and the Wilder, Walker and Davis the Gavin Hardware Co. contended the petitionthat the Whitney Reed Corp., while insolvent, executed gage the Whitney Carriage its personal property The mortgage dated June 1932.' "Every effort has been made avoid this action. The WhitCarriage Co. would not preference obtained by mortgage there was no choice the other creditors. The hearon the petition will be held Boston Oct.

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By The Associated Press.

BOSTON.—Boston Art club, after a half century of discussion, votes to open its membership roll to women.

WOBURN, Mass.—Safebreakers obtain between $1,200 and $1,500 from the safe of the Horn Pond Ice Co.

BOSTON.—The Boston Herald says in a copyrighted story that the federal grand jury will be asked to indict 46 Boston men this week in an attempt by prohibition agents to break up the most powerful rum ring that has operated along the New England coast since prohibition.

GILMAN, Vt.—General store operated by John Nigro and situated on the Connecticut river is destroyed by fire. Loss is estimated at $5,000

BOSTON.—Coastguard patrol boat Harriet Lane sent to the assistance of the fishing boat, Notre Dame, which had run out of lubricating oil and could not use her engines.

LOWELL, Mass.—William G. Roelker, receiver for the Middlesex bank of Lowell and Leominster National bank of Leominster, says both banks will pay dividends sometime before Christmas.

WOONSOCKET, R. I.—Heater which exploded in the basement of the parsonage of the First Baptist church causes damage estimated at $10,000.

MANCHESTER, Mass.—Fire destroys the building of the former Park hotel. Damage is estimated at $20,000.

WASHINGTON.—Federal radio commission grants the Philip Weiss Music Co. of Rutland, Vt., special au-

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OVERNIGHT FEATURES

By The Associated Press Art club, after half century votes to its women. Woburn, breakers tain $1200 and $1500 from the of the Horn Pond Ice Boston Herald says in copyrighted story that the federal grand jury will asked to indict Boston this week in attempt by prohibition agents to up the most powerful rum ring that has operated along the New England coast since prohibition. store operated by John Nigro and situated on the Connecticut river destroyed by fire. Loss estimated at $5000. guard patrol boat Harriet Lane sent the assistance the fishing boat Notre Dame, which had out of lebrecating oil and could not use her engines. Randolph-John Stimets, 60, for 25 years manager of the Milk company plant here, is found dead in his automobile near an abandoned creamery building. Lowell, G. Roelker, receiver for the Middlesex Bank Lowell and Leominster National Bank Leominster, says both banks pay dividends before Xmas. Woonsocket, R. L-Heater which ploded in the basement of the parsonage the First Baptist church causes damage estimated $10,000 Manchester, destroys the building of the former Park hotel. Damage estimated $20,000 Derry, Helen Miller, Albert Dufour, both of Nashua killed their automobile skids. careens off fence and crashes tree. Miss Viola Rancourt, also of Nashua. escapes with minor injuries Washington-Slight recessions the textile industry in October noted by the department of commerce Hardwick, Norcross, burned to death and his sister Mrs. Olive Norcross, 82, is seriously burned as fire destroys the home Philip Eastman. Charlestown, H.-John L. Putnam, Jr., 12, killed by the accidental discharge of shotgun while hunting hedgehogs. nine persons killed in automobile accidents in Massachulast week. Cumberland, causes $25.000 at the convent Patrick's Roman Catholle church in the Valleys Falls Norwalk, of Stephen Rous, watchman the Goldstein Fur company, is found by firemen searching the ruins the plant after it had been destroyed by fire Houlton, Aroostook Pionand the oldest newspaper Aroostook county, purchased by Charles Fogg, owner and editor Houlton Times, and will suspend publication January Mass Crates of Christmas toys packed for shipment destroyed by fire number three mill of the Mason and Parker Manufacturing company. Loss was estimatWinchendon, Wy. man. 37. of Keene, H., killed his truck goes over an embankment.

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Hearing In Accounting

Administration Fees Contested By Stackpole Trustee

A hearing the contested the $60,000 Stackpole counting trust fund held Harry H Atwood in Probate court this morning. Atty Joseph new contested the trusteeship accounting made by the suspended Leominster National bank Sept three points; fees Investments. and delayed transfer of the trust from the time of the bank's final accounting to Nov. The trust, established the late 1923, terminates February. 1933 The four beneficiaries are Charles and Stacksons: Mrs BerSachse of Clinton, daughand Mrs. Bertha Charles Stackpole testified that was employed by the bank from 1923 1931. the last four years trust officer. He said he made investments. but merely took charge and clerical work. He said that Fred Young. charge of investments and told whenever he bought bonds for trust He said that all bond were made from local resiHe cited 40 shares Standard Pyroxcloid which said he purchased at $100 share. Questioned his attorney regarding market for that stock said: "There no market for except perhaps the office of the comAtty Lovering summing up the said an initial payment paid when fund was created, had been agreed upon that time the He protested charge in the cost. final accounting of $500. Atty Thomas Higgins, torney for the receiver of the bank, said that the original charge the executor's charge and the latter trustee's Mr. Stackpole testified he had market prices of the bonds held the trust of the latter part November Atty. Higgins objected on the grounds that the prices were not the 23d. the when Atty. Lovering received the transferred trust the list Counsel agreed to secure third party submit bond prices of that date and submit Judge Atty. Higgins, explaining the delay the transfer said that the bank had suspended and was the hands receiver who could not nender the accounting was com- closed May indicated the duties connected with He that the the money for nine months more than compensated the bank for might have had handling the Atty. Higgins said that the bank closed, $10,000 earning interest and that the contratants should sausfied that they reived 100 cents on the dollar their Atty Lovering pointed out that of the bonds the First mortgage type and had defaulted their interest payments Judge Atwood declared that all trusts greatly affected now because of the drop values and that the income of pracall had been cut nearly

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Judge No Probable Cause To Believe Whitney Guilty From Bank

Judge Gallagher found no probable cause to believe John Whitney, 68 Winter street, guilty of the larceny of $2000 from the Leominster National bank after trial which was completed in district court today, The trial started last Saturdav but was continued until today on account of the illness of Claude Vaillant of Leominster, assistant to William S. Roelker, receiver of the bank The complainant contended that Mr. Whitney received loan from bank and assigned the bank money due him for work state contract for bridges on the GrotonPepperell road The complainant contended that Mr. Whitney ceived check for $2000 from the state and did not turn the money The defendant. through Atty M. Salny, contended that the check was for road work tract made after the bank had closed and had no connection with the original contract agreement with the bank The defendant also contended that there disagreement between the defendant bank to defendant's account. intimated by Atty. Salnv during the hearing that there breach civil rights by one party or the other, but crimbreach. Atty. John Higgins, represented the bank receiver, claimed the breach was Mr. Vaillant testified today in gard to various notes secured

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MASSACHUSETTS OPERATIONS DESCRIBED

West Springfield Trust in Classification of Loans Withdrawn or Canceled

Washington. March Reconstruction Finance corporation reported had the Hill NeighCredit union Dorchester, during last July December which drawn canceled in part during January included: Lawrence Mercantile Trust company $17,000. Leominster National bank (receiver) West Springfield Trust company $500.

TO PROSECUTE

Dist-Atty Thomas Moriarty left night Washington where for the inauguration Franklin President Garner In Granfield cial of court which will end its session this week.

From Empress Britain Kobe: at Vulcania at Bahia.

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LEOMINSTER

Closed Bank Head Indicted On Five Counts; Is Charged With Diversion of Funds

Fred A. Young Accused By Federal Grand Jury of Converting to His Own Use Demand Notes Totaling $10,200 and With Making False Entries Purport. ing to Show That Two D. & C. Construction Co. Notes, Also Aggregating $10,200, Had Been Diacounted; to Be Arraigned Monday

LEOMINSTER, July 27-Charging in five counts that he abstracted and converted to his own use demand notes aggregating $10 200 and that he made false entries purporting to show that demand notes of $5700 and $4500 had been discounted an indictment was returned by the fed- eral grand jury in Leominster yesterday against Fred A Young, 116 Grove avenue president of the closed Leornunster National bank He . also charged with making false entries to deceive bank ex. aminers to conceal his alleged acts. The indictment states that Young allegedly abstracted two of his demand notes. for $2200 and $3500. on Dec 19. 1931, and third demand note for $4500 on March 19, 1932.

The indictment charged, that Young, with intent to deceive bank examiners, entered on the bank's discount register false entries purporting to show the D & C. Construction Co. on Dec 19, 1931, discounted a note for $5700 and on March 19, 1932, discounted a note for $4500 Atty. Samuel M Salny of Fitchcounsel for M. Young, said today that he had conferred over the telephone with U S Atty Elihu D Stone and that he was informed by Mr. Stone that no capias had been issued. Mr Salny said that it was agreed that his client would voluntarily appear in Boston Monday afternoon at o'clock for arraignment Mr Salny said that he anticipated that bail would be fixed at $5000

Fred A. Young's Career Fred A Young was born in Fitchburg in 1869. When 17 years old he entered the employ of the Fitchburg National bank as clerk A faithful and conscientious employe promotions followed. Step by step as bookkeeper. teller and cashier Mr Young continued to advance in the bank until 1915 when he was elected treasurer. He held this position until 1917 when he was elected president of the Leominster National bank At one time Mr Young was active in politics in Fitchburg and served as an alderman from Ward in 1906-1907 History of Bank The collapse of the Leominster

National staggering blow to the industrial and business 2 The people of the city aghast at the news because for many years the and of business the city, was considered one of the most small banks the Although the bank was founded 1884, actually its history dated back succeeded the First National bank The First National founded 1864, the second year of the national system of banking in this country during the threes of the Civil war Its charter was for 20 years, and at the expiration of the charter the Leominster National was organized with capital of $150,000 For many years It enjoyed steady growth. Sons of the original founders succeeded in many cases to the board of directors In the years after the World war the bank continued to grow under the leadership of President Young Deposits reached $2,300,000 in 1930 When the bank closed. deposits had faded away to about $1,200 000 The shares of the bank which had par value of $100 increased in value. Only few years ago shares were paying 12 per cent interest and were bought and sold at over $300 per share Surplus and undivided investment The decline of the bank was gradual Naturally its resources and sets were effected by the crash of 1929 Loans were frozen Funds invested in bonds declined in value As the industrial plants of the city slumped the bank became more and more involved. It was not only confronted with frozen assets but in many cases with loans that there was no chance of liquidating until there was an upturn in business conditions, which did not come. Early in 1932 there were reports, rumors and gossip about the stability of the bank Among those in close touch with the financial affairs of the city it was known that the affairs of the bank were actually in the hands of an executive commuttee consisting of members of the board of directors. Withdrawals were heavy. could Through and and the called the of the them day May concoded the to the bank would be At 9 the morning notice was posted on the door that the bank has been taken over by Federal bank examiner

Receiver Appointed former banker in Providence, R. was appointed receiver It was not long before stock holders were called upon to pay their 100 per cent assessment In December of last year Mr Roelker, as receiver, was authorized to pay a 50 per cent dividend. Only recently another 10 per cent dividend was authorized. And yesterday Senator Walsh announced that still another 10 per cent would be paid. Evidence which came out recent. ly at hearings on litigation in wh.ch the bank was involved was heard by the Federal grand jury The hearings were held before Atty. George E O'Toole of Clinton as auditor ker. claimed that certain sums of money were owed the bank on notes. Samuel Cantenese and Daniel Onfro, partners of D & C company, denied the indebtedness and claimed that the notes were manipulated by Mr Young for his personal gain without their knowledge Mr. Young contended that he was authorized to use the money in payment for his personal services to the company A federal investigator sat through the hearings as an dbserver Several of the interested parties and witnesses at the hearing were called to appear before the grand jury within the last few days. The books of the Leominster National bank were transferred to Boston several days ago.

Affairs Become Critical In May, 1932 if not before. the affairs of the bank became critical. Representatives of other banks were called on for assistance and advice Meetings of the board of directors were almost daily in an effort to keep the bank going But withdrawals continued at an increased pace Ugly rumors concerning the soundness of the bank were spreading With the suddenness of lightening the rumors developed into run on May 14, 1932 When the bank opened for business on that day it appeared to be like any other business day of the preceding few weeks. At 10 clock depositors withdrawing their funds increased In less than an hour it was run on the bank. Right up to 12 o'clock noon the bank paid out money to its demoralized depositors The bank closed at 12 o'clock. its regular closing hour on Saturday But the 31g was up. Cash was not available meet the anticipated demands Shortly after 2 o'clock that afternoon Federal bank iner was LN conference with the board of directors Although not required by law the bank usually was open Saturday evenings for the accommodation of its customers It failed to open its doors that night

Run Precipitated Hundreds of people were on hand to draw their accounts The only result was to precipitate a run on the Leominster Savings bank. which was in no way involved in the difficulties of the national bank. The savings bank, however, was prepared to meet every demand and the run was of short duration The directors of the National bank still clung to the hope that the bank

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ing to certain facts will be filed by counsel, and the case marched for immediate hearing

The bank receiver is seeking to have the defendants restrained from transferring some collateral they put for loans pending settlement of the Leominster National claim against Mrs. Jones for an assessment on 20 shares of bank stock.

Wants Mail Service In Whalom District

LEOMINSTER, May 7—Councilor John W. Mackey has requested Mrs. Mary E. O'Toole, postmaster, to extend the postal carriers' service in the Kings corner and Whalom section of the city.

At the present time the district is covered by R. F. D. service from Fitchburg. There is only one service a day and mail is a day late.

Mrs. O'Toole and Councilor Mackey will meet to discuss the plan the latter part of this week. He will request that carrier service be extended on Main street from King's corner to Whalom and on North street to the city line, including all adjacent streets.

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Pleadings To Be Filed Forthwith In Bank Suit (Special to The Sentinel)

WORCESTER, May 7—Pleadings in the equity action of the receiver of the Leominster National bank against Mr and Mrs. George W Jones of that city were ordered completed forthwith by Judge Edward T Broadhurst in superior court yesterday. Stipulation agree-