4095. Peoples Bank (Belvidere, IL)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
May 1, 1933*
Location
Belvidere, Illinois (42.264, -88.844)

Metadata

Model
gpt-5-mini
Short Digest
5f13041e

Response Measures

None

Description

Peoples Bank of Belvidere was closed in the spring of 1933 and its deposit liability was assumed by Farmers State Bank under a refinancing/takeover plan authorized by State Auditor Barrett. Depositors signed 30% waivers and stockholders were assessed 100%; the bank did not resume independent operations but was taken over, so this is a suspension followed by closure/takeover. Dates are taken from April–May 1933 articles; Article 5 references May 1933 as the takeover date.

Events (2)
1. May 1, 1933* Other
Newspaper Excerpt
depositors received immediate cash payment of 70 per cent with assurance of remaining 30 per cent in three years; Farmers State to take over deposit liability of Peoples Bank if refinancing requirements met; stockholders to pay 100% assessment; depositors sign 30% waivers for deferred certificates; slow assets administered by trustee for deferred certificates' benefit. resulted in an immediate cash payment to all depositors of 70 per cent with full assurance of receiving the remaining 30 per cent at the end of a three-year period.
Source
newspapers
2. May 1, 1933* Suspension
Cause
Government Action
Cause Details
Closure/takeover arranged under the State Auditor Barrett's refinancing/reorganization plan; state banking authorities set requirements (stockholder assessments and depositor waivers) and threatened receivership if not complied with.
Newspaper Excerpt
If the refinancing requirements ... are fully met the depositors of the bank ... will not lose one penny. ... the deposit liability ... will be taken over by the Farmers State bank.
Source
newspapers

Newspaper Articles (5)
1. April 17, 1933 Belvidere Daily Republican Belvidere, IL
Article from Belvidere Daily Republican, April 17, 1933

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Article Text

STATE AUDITOR MAPS LOCAL MERGER PLAN FARMERS STATE TO TAKE OVER PEOPLES BANK, IF REFINANCED STCOWHOLDERS OF PEOPLES BANK ASKED TO PAY ASSESSMENT OF 100 PER CENT -DEPOSITORS TO GIVE WAIVERS OF 30 PER CENT STATE AUDITOR ARE COMPLIED WITH, DEPOSIT LIABILITY OF PEOPLES BANK TO BE ASSUMED BY FARMERS STATE PLAN IS BEING GENERALLY ACCCEPTED. If the ref.nancing requirements in the case of the Peoples bank, as ontlined and authorized by State Auditor Barrett's office. are fully met the depositors of the bank, with over $800,000 at stake, in all probability, will not lose one penny. If the state anditor's plan is consummated Belvidere will have but two banks. The Farmers State and the Second National, both being, it might be proper to state, in sound and liquid condition. Briefly summarized, the refinancing or reorganization set-up authorized by the special board of banking experts of the state auditor's office in Chicago, and handed to the directors' committee of the Peoples bank late Friday directed that the following steps be taken if the bank is to avoid being placed in the hands of First-That the stockholders be required to pay an assessment equal to the par value of their stock (100 per cent) which shall be used in the na ture of a guarantee fund. Second- That the depositors sign waivers for 30 per cent of their deposits for which sums waivered they shall be given deferred certificates which certificates shall be paid as the bank's slow assets are liquidated. Third When the stockhold ers. have paid or guaranteed their ments and when the depositors have signed the required waivers. then the deposit liability. together with the sound and approved assets of the Peoples bank. will be taken over by the Farmers State bank Fourth-The slow and socalled "frozen" assets of the bank to be administered by trustee for the benefit of the deferred certificates given depositors and the stockholders of the People bank. giving priority to those who pay assessments, and that a period of three years be given to carry on the liquidation by as easy and as reasonable extensions as possible for the purpose of conserving the slow assets in the greatest possible degree. Is Virtual Untimatum The plan submitted and officially authorized by State Auditor Barrett amounts to virtual ultimatum. If It is not accepted and complied with the other horn of the dilemma is to have the bank thrown into a receivership with all of the excessive burdens in the way of receiver's costs and fees, lawyers' fees, court costs and endless delays in partial payments to the depositors, not to mention the statutory requirements compelling all stockholders to pay an assessment of 100 per cent with the added expense of court costs in cases where the receiver is compelled to levy on the property of a Situation Explained to Stock. holders at Special Meeting At a special meeting of the stockholders of the Peoples bank held Saturday evening in the Chamber of Commerce rooms the situation in all of its details was explained by Judge W. C. DeWolf, chairman of the directors' committee, which was in conference with the special board of the state auditor's office in Chicago Friday. County Judge R. V. Carpenter, one of the bank's directors, acted as chairman of the meeting. Hon William L. Pierce and Frank T. Moran. members of the depositors' committee, also addressed the meeting. Directors Lead the Way In his extended remarks Judge DeWolf informed the stockholders that the directors were unanimous in giving their support to the state auditor's plan and he exhibited a paper showing that each member of the board had signed his pledge to pay his assessment in full. Before making known the terms of the ultimatum laid down by the state auditor's office. Judge emphasized the point that the not what the (Continued Page

2. April 18, 1933 Republican-Northwestern Belvidere, IL
Article from Republican-Northwestern, April 18, 1933

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Article Text

STATE AUDITOR MAPS LOCAL MERGER PLAN FARMERS STATE TAKE OVER PEOPLES BANK, IF REFINANCED STOCKHOLDERS OF PEOPLES BANK ASKED TO PAY ASSESSMENT OF-100 PER CENT -DEPOSITORS TO GIVE WAIVERS OF 30 PER CENT -WHEN REQUIREMENTS OF STATE AUDITOR ARE COMPLIED WITH. DEPOSIT LIABILITY OF PEOPLES BANK TO BE ASSUMED BY FARMERS STATE PLAN IS BEING GENERALLY ACCCEPTED. If the refnancing requirements in the case of the Peoples bank, as outlined and authorized by State Auditor Barrett's office, are fully met the depositors of the bank, with over $800,000 at stake, in all probability, will not lose one penny. If the state auditor's plan is consummated Belvidere will have but two banks. The Farmers State and the Second National, both being, it might be proper to state, in sound and liquid condition. Briefly summarized, the refinancing or reorganization set-up authorized by the special board of banking experts of the state auditor's office in Chicago, and handed to the directors' committee of the Peoples bank late Friday. directed that the following steps be taken if the bank is to avoid being placed in the hands of receiver: First-That the stockholders be required to pay an assessment equal to the par value of their stock (100 per cent) which shall be used in the hature of a guarantee fund. Second That the depositors sign waivers for 30 per cent of their deposits for which sums waivered they shall be given deferred certificates which certificates shall be paid as the bank's slow assets are liquidated. Third When the stockholders have paid or guaranteed their assessments and when the depositors have signed the required waivers, then the deposit liability together with the sound and approved assets of the Peoples bank, will be taken over by the Farmers State bank. Fourth-The slow and socalled "frozen" assets of the bank to be administered by trustee for the benefit of the deferred certificates given depositors and the stockholders of the People bank. giving priority to those who pay assessments. and that a period of three years be given to carry on the liquidation by as easy and as reasonable ex tensions as possible for the purpose of conserving the slow assets in the greatest possible degree. Is Virtual Untimatum The plan submitted and officially authorized by State Auditor Barrett amounts to virtual ultimatum. If it is not accepted and complied with the other horn of the dilemma is to have the bank thrown into a receivership with all of the excessive burdens in the way of receiver's costs and fees, lawyers' fees, court costs and endless delays in partial payments to the depositors, not to mention the statutory requirements compelling all stockholders to pay an assess ment of 100 per cent with the added expense of court costs in cases where the receiver is compelled to levy on the property of a stockholder Situation Explained to Stock. holders at Special Meeting At a special meeting of the stockholders of the Peoples bank held Saturday evening in the Chamber of Commerce rooms the situation in all of its details was explained by Judge W C. DeWolf chairman of the directors' committee, which was in conference with the special board of the state auditor's office in Chicago Friday. County Judge R. V. Carpenter, one of the bank's directors acted as chairman of the meeting Hon William L. Pierce and Frank T. Moran, members of the depositors' committee, also addressed the meeting. Directors Lead the Way In his extended remarks Judge DeWolf informed the stockholders that the directors were unanimous in giving their support to the state auditor's plan and he exhibited a paper showing that each member of the board had signed his pledge to pay his assessment in full. Before making known the terms of the ultimatum laid down by the state auditor's office. Judge DeWolf emphasized the point that the set-up was not what the board (Continued on Page Four.)

3. April 26, 1933 Belvidere Daily Republican Belvidere, IL
Article from Belvidere Daily Republican, April 26, 1933

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DEPOSITORS TO STAND AS UNIT IN SUPPORTING BANK WAIVERS SENTIMENT OF MASS MEETING IS UNANIMOUS IN BACKING PLAN TO SAVE PEOPLES BANK FROM ERSHIP -STATE AUDITOR'S SET-UP TO PROTECT DEPOSITORS' INTERESTS AHEAD OF STOCKHOLDERS EXPLAINED BY MEMBERS OF THE DEPOSITORS PROTECTIVE COMMITTEE. BULLETIN Springfield, III., Apr. 26- The emergency banking law amendment, providing that when 75 per cent of the depositors or other creditors of a closed bank shall have signed waivers, the minority depositors shall be bound by the action through court order, passed the Illinois senate by a vote of 87 to 2. The bill, previously passed by the house, now only awaits the signature of Governor Horner to make it a law. Many banks are anxiously awaiting the benefits of the act. About the same time Tuesday evening that State Auditor Edward J. Barrett was making a statement to the Chicago newspapers saying that only few of the 226 state banks. which are still closed. will be permitted to reopen and that he expected to liquidate all closed banks through receivership action as soon as the Illinois supreme court passes on his right to appoint bank receivers, depositors of the Peoples Bank of Belvidere were being told that the local bank faces certain receivership if the depositors fail to give waivers of 30 per cent of their deposits. It is an odd coincidence that the depositors of the Peoples bank were hearing from members of the depositors protective committee along about the same line of action as explained to the press by the state auditor, at least so far as receivership is involved. The meeting held in the Belvidere Chamber of Commerce hall was addressed at 7 o'clock by Frank T. Moran. chairman of the depositors' committee, while at 8 0"clock a second assemblage of the depositors in the same hall was addressed by Attorney W. L. Pierce, also a member of the committee. After hearing a candid and somewhat detailed explanation of the situation every depositor present either signed the 30-per cent waiver or agreed to sign it after explaining the matter to members of the family. As a result of the first few hours' work by two or three members of the committee, it was announced at the close of the meeting last night that over 200 waivers had already been signed, including waivers by the heaviest depositor, the second heaviest and at least twenty depositors whose accounts are among the largest in the Will Avert Receivership The speakers at the depositors' meeting both emphasized the point that it would be disastrous for the depositors to allow the bank to be thrown into receivership. They told of state and national banks in nearby cities having been in receivership for a long time with small returns to the depositors. Receivership would mean an assessment of 100 per cent on all stockholders with court action to enforce payment whenever necessary. An example of the long delay and extra costs in trying to enforce assessments is afforded by the case of the Manufacturers National bank at Rockford. Since July, 1931. the receiver has been bringing numerous lawsuits against stockholders. At the present time a contested case is pending in the circuit court at Rockford. In this case heirs of the late Rockwood Sager, one of whom lives in Belvidere, are contending that the estate left to the widow is liable for the assessment of $4,900 rather than the heirs. who never received the stock. Attorney W. L. Pierce represents the heirs. The case has been tried and Judge Arthur E. Fisher will make his decision soon. Long Delays, Small Returns The Rockford case was cited to show the delays and expenses incident to nearly all bank receivership liquidations. At LaSalle, IIlinois, the experience of depositors in a state bank, which closed in June, 1931. was related. Up to the present time the depositors have received but 5 per cent. The speakers stated that if the Peoples bank is forced to liquidate through receivership the depositors probably would receive 50 to 60 per cent of their money in three to five years. They possibly might get more as the bank owed no borrowed money, when It closed. If the assets were not sacrificed by a receiver by foreed liquidation and compromses it naturally would follow that the receiver would have to take a long time to close up the financial (Continued on Page Four.)

4. May 2, 1933 Republican-Northwestern Belvidere, IL
Article from Republican-Northwestern, May 2, 1933

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tributed under, the will BANK FROM AUDITOR'S PROTECT DEPOSITORS' AHEAD OF INTERESTS EXPLAINMEMBERS OF THE COMMITTEE. BULLETIN The banking law that when 75 per other cent the depositors closed bank shall of the minority have shall bound by the depositors action through court order, the Hlinois senate by vote of The bill. only awaits the the house, signature of Governor Horner to Many banks make anxionsly awaiting the benefits of About the same time Tuesday that State Auditor Edward evening Barrett making statement to Chicago newspapers few of the 226 that only which still clospermitted reopen expected to liquidate closed banks through the Illinois action court passes on his right supreme to appoint bank positors of the Peoples Bank of being told that local bank faces certain reivership the depositors fail give waivers of 30 cent their deposits. odd coincidence that the depositors of the Peoples bank from members of hearing depositors protective commitabout the same line of along action explained the press at least far state receivership involved. The held in the Belvidere meeting Commerce hall was o'clock by Frank Moran, chairman of the deposwhile second assemblage of the depositors in the same hall addressed by Attorney also member After did somewhat detailed every depositor present either signed gent waiver agreed after explaining the matter of the family. result of the first few hours' by two three members announced the close of the meeting last night over 200 waivers had already been including waivers depositor, second heaviest least depositors accounts the largest in the among Will Receivership The speakers the would be disastrous the depositors allow the thrown into receiverThey told of state and (tional banks in nearby cities been receivership for time with small returns depositors. Receivership would assessment cent all with court enforce payment necessary. the delay and extra costs enforce afforded the case of the National bank Rockford. Since July, 1931. has been bringing lawsuits against present time tested case pending the cuit court this heirs of the one whom lives Belare contending that the left widow liable the than the stock. Attorney Pierce represents the case has been tried Arthur Fisher his decision soon Long Delays, Small Returns cited show delays and expenses cident all bank experience depositors state which closed June, related Up present time the depositors but The speakers stated that the Peoples bank forced liquidate through receivership the depositprobably would receive cent their money three to years. They possibly might more the bank owed closed: the assets sacrificed receiver forced liquidation and naturally would follow that would have close the financial of the bank and

5. November 30, 1934 Belvidere Daily Republican Belvidere, IL
Article from Belvidere Daily Republican, November 30, 1934

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BANK IN LAKE TEN PER CENT AFTER LONG AND TEDIOUS WAIT THE DEPOSITORS HEAR THEY WILL RECEIVE FIRST DIVIDEND-BANK IS THE ONE WHICH FURNISHED TEST CASE ON POLITICAL RECEIVERS INDIRECTLY AIDED BELVIDERE CASE. After a long and tedious wait by the depositors, the Lake Coun ty State Bank at North Chicago, which went into receivership sev eral months before the date in May; 1933, on which the Peoples Bank, of Belvidere, was taken over by the Farmers State Bank will pay its first dividend Announcement was made by Receiver W. L. O'Connell that the clos ed institution will parcel out the small dividend of 10 per cent. It. will be recalled that the Lake County State Bank furnished the test case to determine thright of State Auditor Barrett to name receivers for all closel state banking institutions. The stockholders and depositors wan ed to name a local man of their own choice and Judge Shurtleff upheld their contention. The argued that a politically appoint ed receiver would pay himself and his lawyers excessive fees and would delay payments to the depositors. While the Illinois supreme court upheld the law placing all state bank receiverships under the control of the state auditor the depositors are now saying, "we told you so." The litigation over the receivership question indirectly proved of considerable benefit to depositors and stockholders of the Peoples Bank of Belvidere. Judga Shurtleff's decision, holding the law unconstitutional, automatic ally prevented State Auditor Barrett from further appointment, of political bank receivers until the case could reach the supreme court. This delay gave the stockholders and depositors of the Peoples Bank time to protect their interests in the action subsequently taken and resulted in an immediate cash payment to all depositors of 70 per cent with full assurance of receiving the remaining 30 per cent at the end of a three-year period. The Belvidere bank case is said to be the only one in the United States, under similar circum stances, to hand out in cash as much as 70 per cent forthwith and to assure the depositors that a careful and orderly liquidation would give them the remaining 30 per cent in 3 years. Incidentally, one of the reasons for the fortunate outcome here is that the trustee, H. K. Funderburg, is serving the interests of all concerned without fee or even payment for personal expenses. Several state banks, in charge of State Auditor Barrett's sole receiver, W. L. O'Connell, have not yet paid waiting depositors a single penny.