416. American Trust Company (Jonesboro, AR)

Bank Information

Episode Type
Suspension → Closure
Bank Type
trust company
Start Date
November 1, 1930
Location
Jonesboro, Arkansas (35.842, -90.704)

Metadata

Model
gpt-5-mini
Short Digest
9ec93a0e

Response Measures

None

Description

The American Trust Company in Jonesboro closed and was taken into the custody of the State Banking Department (suspension) on or about 1930-11-01. A receiver (George Knox) and state-appointed attorney were later named and plans/proposals were discussed to liquidate or reorganize assets; the bank did not resume operations in the supplied articles. Cause of suspension was official action by the State Banking Department (inventory and state examiners in charge).

Events (3)

1. November 1, 1930 Suspension
Cause
Government Action
Cause Details
State Banking Department took charge and posted notice; Chief Banking Examiner J. W. Jarrett in charge to take inventory after bank failed to open.
Newspaper Excerpt
The American Trust Company failed to open its doors for business this morning. A notice was posted on the door to the effect that the institution was in the hands of state banking commissioners.
Source
newspapers
2. November 15, 1930 Receivership
Newspaper Excerpt
Attorney Sam Rorex of Little Rock has been appointed by the state banking department attorney for the defunct American Trust Company... Receiver George Knox here today ... he expects to spend every Friday and Saturday for the next several months in Jonesboro. (Nov 15, 1930).
Source
newspapers
3. December 11, 1930 Other
Newspaper Excerpt
A new bank for Jonesboro with capital stock of $100,000 that would take over the assets of the defunct American Trust Company and liquidate the affairs of that institution, with 35 cents on the dollar being guaranteed the depositors the first year... (Dec 11, 1930).
Source
newspapers

Newspaper Articles (9)

Article from Jonesboro Daily Tribune, November 1, 1930

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Airplane Brings Funds To Bank OFFICIALS ARE PREPARED FOR CONTINGENCIES Airplane Brings Sufficient Cash Here to Care for Any Situation that May Arise. Public Confidence Unshaken. Although there has been little discussion of a run on the Bank of Jonesboro as a result of the closing this morning of the American Trust Company, officials at the former bank are prepared for any emergencies that may arise, they said today. Just before noon an airplane arrived in Jonesboro from a federal rebank, carrying sufent cash to take care an emergency that may rise. The usual first of the month and Saturday crowd was present at the Bank of Jonesboro today but as many of them were depositing as were withdrawing and officials of the bank indicated at noon today that their deposits had been slightly greater than their withdrawls during the busy morning hours. The Bank of Jonesboro is taking extraordinary steps to assure the the public of a continuance. of service they have rendered during the past despite the unusual conditions resulting from the failure of the other bank. The confidence that Jonesboro people have in the Bank of Jonesboro is unshaken and affairs at the institution are expected to run in their usual smooth manner. Today is the first time in the memory of Jonesboro people that an airplane has been called into service to bring money here in response to such a call. It typifies the service that the Bank of Jonesboro is rendering its patrons.


Article from Jonesboro Daily Tribune, November 1, 1930

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Mrs. R. L. Johnson Has Completed Long Service Night Operator at Local Telephone Exchange For Past Thirty-five Years Retires on Pension After Long Service to Jonesboro. Many Interesting incidents During Long. Career. Plans to Visit Relatives For Some Time During Vacation. Miss Cecilia Carnes Promoted. It is three o'clock in the morning of November 11. 1918. A night operator ot the telephone exchange keeps lonely vigil Since midnight her nimble fingers have been at rest. The switchboard dozes. Jonesboro sleeps. The operator's thought turn to the muddy shot-torn battlefields of France. A son she has offered to the service of her country is over there. He too is keeping a lonely vigil. Will he be spared until the mighty conflict is ended? A tiny white light flashes on the switchboard. Deftly she inserts jack, completing the connection. She listens. Out of the night come words which the world has anxiously awaited and prayed for. The Armistice! Such news is too good to keep. The operator thinks of other Jonesboro mothers whose sons are at the fingers are busy at the switchboard, Insistent ringing of the telephone arouses a score of soundly sleeping citizens. "This is Mrs. Johnson war is over!' Their voices choked with happy sobs, Jónesboro mothers blessed Mrs. Johnson as a song of thanksgiving surged through hearts torn with anxiety and fear for the safety of their boys The incident alone if enough to endear Mrs. R. L. Johnson, night operator of the Southwestern Bell Telephone Company, to Jonesboro telephone users. It is typical of her thoughtfulness of others and the desire to be of service which has dominated her thirty-five years of duty in the telephone exchange It is with sincere regret local subscribers learn she is being retired with a pension, having reached the age limit at which telephone employees are retired. On the other hand, they are glad she can now enjoy the leisure well earned by buys and happy life devoted to helping others. "Mrs. Johnson is an institution in the telephone history of Jonesboro. and we are indeed sorry she is leaving the switchboard,' H. J. Kimbro, district manager, said. Mrs. Johnson is a Tennesseean by birth. When her husband died about thirty-five years ago she brought her three children to Jonesboro, where her brother was part owner of the telephone exchange She became an operator. "At that time I was the day opcrator and Miss Launa Morelock the night operator.' she recalls "Three of our early subscribers, whose telephone numbers today remain unchanged, were the Stonefield Grocery, C. A. Stuck and Son, and the Johnson Berger Company "We had fewer than 100 city subscribers. The only long distance facilities available was the circuit between Jonesboro and Lake City. It has been extremely interesting to be to play a part in the marvelous development of the telephone here. Today we serve more than 1900 customrs through the exchange] We have 34 long distance circuits. Jonesboro's communication with the outside world is not limited to Lake City. Any Jonesboro subscriber can lift his receiver and reach almost anybody, anywhere. with almost the same ease he can call his next door neighbor He can talk to most of the cities of Europe. to South America. to be continent of Africa, to Australia, to point within the Arctic Circle, or to ships enroute across the Atlantic Ocean. Most of Mrs. Johnson's long career has been spent as a night operator. While Jonesboro citizens slumbered she kept the lonely night watches, ever alert to arouse them in case of fire or other emergency. Before the exchange reached the size where the operators are kept busy completing calls, she performed many many little services not ordinarily within the scope of the operator's duties. For years subscribers called Mrs. Johnson to ascertain the correct time when their clocks ran down. She could tell you the whereabouts of the doctor if he was needed in an emergency If you were at tending a sick person, she would call you several times during the night to remind you it was time for the patient thereceive his medicine. Trainmen who must pile ou of bed in the middle or the night to go on duty never felt any apprehension they might over sleep. ring the telephone until they were aroused. She would cheerfully tell you what time the next train ar. rived or departed. who won the election, or the best recipe for baking a cake. The average person, when informed that his home is burning, will drop everything and try to beat the fire department to the scene of the blaze. But not Mrs. Johnson She was on duty when her home burned to the ground. Despite the trying situation she handled the emergency in the same salm. efficient manner which experience had taught her, remaining on duty until relieved. "This instance helps me to recall the loyalty of the telephone company to its employees when they meet misfortune, she said. "I would have been discouraged without the prompt and encouraging assistance o fthe company and my fellow-workers at that time Another time, when was confin d to a hospital bed for two months as the result of an automobile accident my salary for the entire period was delivered to me reg. ularly." Mrs. Johnson plans to take immediate advantage of her (irst long vacation by doing exactly what she has long wished to do. Her hobby is painting, and the looks forward with pleasure to having an uninterrupted sojourn with her beloved brushes, paints and canvas. Also, she intends to do considerable traveling and visit friends and relatives living in other states. She hopes to see her daughter, Mrs. Jenna Chism of Beverly Hills, California; her son, Hal, of Phoenix, Arizona; and two brothers. W. T. Young of Jackson, Tennessee, and A. M. Young of Indianapolis, Ind. Miss Cecilia Carns will take Johnson's place at the telephone switchboard. She has been an onployee of the company for a number of years. FACING ADVERSITY WITH CALM Jonesboro and Craighead county citizens today face the greatest test that has confronted them for years American Trust Company has closed its doors. There is perhaps nothing in the index of human experinence and calamities so conducive to panic as a bank failure involving the funds of hundreds of citizens. Men of calm judgement, under ordinary conditions, feell themselves swept into the stream of common confusion in the face of such dire calamity. What varied comments from the small groups of citizens gathered upon street corners this morning, their only thought the closing of the bank. Doubt, fear, and misgiving combined to produce a situation liable to result in almost anything. But through it all the calm business acumen of Jonesboro's men was evident. They swayed the turbulent crowd from rash action, pointed out the proper course of action to the unschooled in business methods. Already plans are on foot for reorganizing the bank. Indications this morning were that the closing of the institution was brought about to prevent a run on the bank in the face of poor conditions that prevailed. Under ordinary conditions that would have meant the usual large fall deposits in the bank, it is likely that no such crisis would have arisen. An inventory must be taken and a thorough investigation of prevailing conditions made before definite can be taken. In the meanwhile business interests of Jonesboro will be served by a sterling business institution, longestablished and in stable financial condition at the present time, the Bank of Jonesboro. The Bank of Jonesboro has served this community for the past forty years and it is stronger now than ever before during that period of time. The large percentáge of the bank's funds is invested in bonds and cash securities. The officials of the bank always have been conservative in their investments and have never taken over any interest in other banks. Statements of the Bank always have shown a high percentage of funds invested in cash and high grade conservative securities. The bank is at present in the finest condition in its history and will continue to be able to care for all the banking needs of the community. The present situation is one which will truly test the real spirit of Jonesboro and Craighead county. Conditions have been poor for severall months and to just what extent the failure of the American Trust Company will effect those condition depends largely upon the manner in which Jonesboro and Craighead County citizens respond to the demands of the situation. There is no reason for further fear regarding Jonesboro's banking institutions. No run on the Bank of Jonesboro is expected or feared, but bank official have announced that they are ready for any contingencies that may arise. A calm consideration of the situation-not hot-headed by industrious action along the proper lines will go far toward returning conditions to normalcy. DIRECTORS STATEMENT The following statement was issued for publication today by the Board of Directors of the American Trust Company: "The Board of Directors of the American Trust Company, decided at a called meeting to close the bank and ask the State Banking Department to take charge. This action was taken in the interests of the depositors, The bank hasn't been able to collect on the collateral on its loans sufficient to meet the regular daily withdrawal and keep on hand the cash reserve required. General depression in business throughout the whole year and a short crop of cotton at an extremely low price has prevented those owing the bank from meeting their obligations when due. The board could see no way to continue under these conditions. If affairs at the bank are handled properly and economically the depositors should be paid in full as there are sufficient assets to do this. The board realizes the position this places the depositors in in tying up their funds but we did the best thing for their interests. No one feels more keen regret at seeing the bank close than the directors but that this all could do under the circumstances. The Board of Directors: M. P. Welsh, President Eugene Sloan, Gordon Matthews, G. G. Brooks, R. H. Willett. R. E. Robertsen, R. E. Townsend, W. H. Lohnes, James Clair, S. Rosenfield, and Amos Hall.


Article from Jonesboro Daily Tribune, November 1, 1930

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Shrinkage Of Deposits Given As Reason Today For Closing Bank Here The American Trust Company failed to open its doors for business this morning. A notice was posted on the door to the effect that the institution was in the hands of state banking commissioners. J. W. Jarrett Chief Banking examiner of the State Banking Det. partment at Little Rock is in charge at the bank for the time being and probably will remain here for several days taking inventory, he said, after which definite announcements as to further action will be taken. Mr. Jarrett released the following figures garding the status of the defunct institution: Total resources $1,717,634.20 Deposits $1,022,143.98 Capital, Surplus and Profits $296,000.00 Bills Payable $385,000.00 The cause for the failure of the bank, regarded until recently, as one of the strongest in this section of the state, was given as a shrinkage of deposits and too much consolidation of smaller banking instiutions over this section of the state. The drouth and general financial depression produced a shrinkage in deposits that could not be foreseen. No statement was giv en out by officials of the bank. While the failure of the bank naturally will ef fect conditions in the county and surrounding territory considerably, it was indicated today that no fear need be felt regarding the possibility of additional banking calamities. The other banks in the County including the Bank of Jonesboro and Bank of Nettleton, are in good financial condition and are prepared Yor whatever emergent may arise, according to statements issued by ials this morning. The usual first of the month crowds were gather ed at the banks today but there was little excits ment evident and most of the people apparently realized that there is little possibility of further trouble A large crowd surged in front of the American Trust building this morning, but they were orderly and composed and while the bank failure was naturally the diminating tipic of conversation it failed to create a panic or a demonstration. The Bank of Jonesboro is in the finest condition in its history at the present time and will continue to be in a position to care: for the banking needs the community. The American Trust Company was organized 1905 and the Jonesboro Trust Company which merged into it in July 1927 was organized The Merchants and Planters Bank and Trust pany also was merged into the American Trust pany several years previously. M. P. Welsch is sident of the American Trust Company and B Robertson and R. E. Townsend are active vicesidents. W. H. Lohnes is cashier and assistant iers are G. G. Smith, Nathan Deutsch, and William Murray.


Article from Hope Star, November 1, 1930

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Bank is Closed in Jonesboro Today Suspension of American Trust Co Ordered This Morning Nov. ginnings this year were Trust company. one to per cent. banks fuiled to open Hempstead. with its doors this morning. The notier of suspension was posted leads all the doors without explanaof the East Arkansas statement was issued by tien. lands. Welch president the bank. Here the figures on June 30th statement showed The which had the bank have deposits of more apiece on and of County Trust company Ashley formed few years by the Ghicot of the Jonesboro Trust solidation Columbia and the Merchants & company Craighead Bank Crittenden leaves the Bank suspension Hempstead the only banking Jackson titution Motion Lonoke Perpetual make paper makes banks make Poinsett makes St. Francis loans make poverty. White Banker.


Article from Jonesboro Daily Tribune, November 2, 1930

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The home and the child should be on a parity of dignity with agriculture, commerce and national dense.-Representative Ruth Bryan Owen, who proposes introduction of a bill to create a Department of Home and Child in the president's cabinet. FACING ADVERSITY WITH CALM (From Saturday's Extra) Jonesboro and Craighead county citizens today face the greatest test that has confronted them for Years The American Trust Company has closed its doors. There is perhaps nothing in the index of human experinence and calamities SO conducive to panic as a bank failure involving the funds of hundreds of citizens. Men of calm judgement, under ordinary conditions, feel themselves swept into the stream of common confusion in the face of such dire calamity. What varied comments from the small groups of citizens gathered upon street corners this morning, their only thought the closing of the bank. Doubt, fear, and misgiving combined to produce a situation liable to result in almost anything. But through it all the calm business acumen of Jonesboro's men was evident. They swayed the turbulent crowd from rash action, pointed out the proper course of action to the unschooled in business methods. Already plans are on foot for reorganizing the bank. Indications this morning were that the closing of the institution was brought about to prevent a run on the bank in the face of poor conditions that preUnder ordinary conditions that would have meant the usual large fall deposits in the bank, it is likely that no such crisis would have arisen. An inventory must be taken and a thorough investigation of prevailing conditions made before definite action can be taken. In the meanwhile business interests of Jonesboro will be served by a sterling business institution. longestablished and in stable financial condition at the prodent time, the Bank of Jonesboro. The Bank of Jonesboro has served this community for the past forty years and it is stronger now than ever before during that period of time. The large percentage of the bank's funds is invested in bonds and cash securities. The officials of the bank always have been conservative in their investments and have never taken over any interest in other banks. Statements of the Bank always have shown a high percentage of funds invested in cash and high grade conservative securities. The bank is at present in the finest condition in its history and will continue to be able to care for all the banking needs of the community. The present situation is one which will truly test the real spirit of Jonesboro and Craighead county. Conditions have been poor for several months and to just what extent the failure of the American Trust Company will effect those condition depends Margely upon the manner in which Jonesboro and Craighead County citizens respond to the demands of the situation. There is no reason for further fear regarding Jonesboro's banking institutions. No run on the Bank of Jonesboro is expected or feared, but bank official have announced that they are ready for any contingencies that may arise. A calm consideration of the situation-not hot-headed followed by industrious action along the proper lines will go far toward returning conditions to normaley A CAUSE FOR OPTIMISM Although the Bureau of Business Conditions of the Alexander Hamilton Institute does not believe that business will improve to any satisfactory extent before next spring, at the earliest, it nevertheless sees reason for a strong, healthy optimism as regards the future. "Prosperity," it marks in a current bulletin, "depends on production, and the means to produce are as great now as in 1929. The United States still has machinery, abundant natural resources and an energetic, capable and intelligent people. Given these fundamentals, nothing can stop, over the long-term trend. increasing production, greater prosperity, a higher standard of living. A period of depression is not a sign of degeneration but a sign of progress. It is merely the result of zealousness overdone, a characterristic which is the root of progress." There is a lot of sound sonse in that. It comes as a good antidote to some of the gloomy pessimism which is popular right now.


Article from Jonesboro Daily Tribune, November 3, 1930

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INVENTORY IS BEING CHECKED CLOSED BANK No. Official Statements Today Regarding Further Steps With Regard To American Trust Company Which Closed Doors. No official statements were issued today by authorities in charge of the American Trust Company, which failed to open for business Saturday The affairs of the bank are in charge of the State Banking Department and an inventory is being made at the present time. J. W Jarrett, Chief Banking Examiner, who is in charge at the institution, announced Saturday that it would be several days before any official statement regarding further steps will be made A committee of Jonesboro citizens is in Little Rock today conferring with State Banking authorities. Reports are to the effect that they are using their influence to have a local man named receiver of the bank. if a receiver is appointed It aiso was reported that they will wait upon A. B. Banks with reference to a rumored reorganization of the bank whereby he might become connected with it. No official announcements regarding these activities have been made from any source. Meanwhile the Bank of Jonesboro continues to handle local business affairs and it is believed that the last chance for a run on that bank has been removed. Deposits Saturday were near normal for the first of the month and Saturday and several who withdrew their funds Saturday have re-deposited them today One of the largest deposits in the Bank of Jonesboro this mornwas made by J. Hummelstein, who placed $6,103.94 in the bank, he said. Mr Hummelstein expressed confidence that affairs in connection with the bank here would be cleared up without serious injury to the depositors, except for the inconvenience of having their funds tied up for time.


Article from The Sun, November 15, 1930

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SAM ROREX APPOINTED ATTY. FOR AMERICAN TRUST COMPANY Alleged Fowl Thieves Arrested On Indictments Chas. Wallace and Jack Loper were arrested yesterday afternoon by Deputy Sheriff Houston Johnson on indictment returned by the grand jury on charge of stealing chickens in the Herman neighborhood. Wallace again supplied bond. The men had been at liberty on bond since their preliminary hearing at which they were held to await the action of the grand jury. Attorney Sam Rorex of Little Rock has been appointed by the state banking department attorney for the defunct American Trust Company of this city. Rorex paid a short visit to Receiver George Knox here today and stated that he expects, to spend every Friday and Saturday for the next several months in Jonesboro. He will not appoint a local attorney as deputy for the present. Appointment of deputy may be made later. Rorex expects to give his personal attention to the legal work of the institution over which he will have complete charge. He is an able lawyer and his appointment will meet with general approval. Mr. Rorex is well known in Jonesboro. He spent several days here last summer making preparations for VOLUNTEERING the opening speech of Governor Parnell, being one of the governor's campaign managers.


Article from The Sun, December 11, 1930

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PREPARATIONS NEAR FINISH ON BANK OFFER A new bank for Jonesboro with capital stock of $100,000 that would take over the assets of the defunct American Trust Company and liquidate the affairs of that institution, with 35 cents on the dollar being guaranteed the depositors the first year, subsequent payments to be made them from the through liquidation processes after the debts of the closed bank are paid, are the high lights of a tentative proposition which Alex Berger, former Jonesboro banker, now bond dealer of St. Louis, will submit to Receiver George Knox of the defunct bank who in turn will submit it to the state banking department. The proposition is being properly drawn up and Mr. Berger, who has spent considerable time here investigating affairs of the institution, will return Saturday to complete few details of the plan so that It can be formally submitted. A brokerage charge of five per cent will be made for liquidation of all amounts after the 35 per cent is paid to depositors. Before the Berger proposition can become effective will be necessary for 65 per cent of the total deposits of the bank to sign the contract agreeing to the This will probably have to be done before it is submitted to the banking for approval. The bank had $1,025,000 deposits when it crosed. Two thirds of the money on deposit was held by parties having over $500 on deposit. While in number the depositors of the institution were 85 per cent in the under $500 class but in amount of money the depositors of the over $500 class held $827,of the $1,025,000. The taking over or the assets of the bank will not in any way prevent the 100 cent assessment of stockholders but such assessment can be called at any time it is deemed necessary, when it is known the assets of the bank will not pay depositors in full.. All bills payable will be paid out of the first moneys received or collected, all paper that is now pledged to other banks for money or bills payable will called back to the new bank and will be the assets of the American Trust Company. As fast as it can be collected, the money will be paid to depositors, when amount equal to five per cent has accumulated. All parties owing notes to the old bank and who have deposits the bank will receive full credit on their notes for the amount of their posits. It is claimed by those who have audited the accounts that least $200,000 will be saved to depositors by this action alone. About two to one of the bank's best notes have been put up for curity to banks where money has been borrowed by the bank and will be held and collected unless some one takes over the bank that can pay off the accounts owed to the larger banks which mean big loss depositors. Should the notes be held by banks as collateral, no credits will be: given for any deposits that parties owing the notes may have in the bank at the time closed. Under the proposition depositors committee will be appointed by the chancery court consisting of five citizens depositors the bank to supervise collection of notes and pass on any reductions legal actions be taken in the collection of paheld by the bank. per The plan is also tentative on the raising of the $100,000 capital stock for the new bank, which will be worked out within short time. As soon as Mr. Berger returns from St. Louis the proposition will completed and submitted to the bank receiver and to the depositors for approval and if approved will then be submitted to the state banking department. similar plan (Continued on Page 3.).


Article from The Commercial Appeal, December 22, 1931

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B. H. BERGER WILL DIRECT NEW BANK Jonesboro Citizens Asked to Subscribe $50,000, Half of Stock. new bank will be open and doing business here next month, according to Alex Berger. St. Louis financier. who has plans for establishing new bank with capital of $100,000 Subscription of stock for the new bank was started here Monday. Berger and his associates in St. Louis plan subscribe half the stock and to obtain from boro residents for the $50.000. Berger said he expected no trouble the funds. He has been the state banking department that he be granted charter for the new If his plans are successful the new bank be the second that Berger has established Jonesboro. More than 20 years ago he the now defunct American Trust Comprospered under his per sonal for 17 years. years ago he sold his interests in the bank to St. Louis the American Trust Compa ny failed slightly more than year ago Berger made an offer to over institution and later started plans for organizing new bank. He was refused a charter at that time. The failure of the Bank of Jones boro two weeks ago Jonesboro without bank and Berger returned here and plans for or. ganizing He expects the new bank to be known as "The Mercantile Bank' and has said that probably be located at Main and Washington, the old American Trust er of the will be dent: Judge Charles D. Frierson vice president. and R. E. Townsend. formerly associated with the American Trust Company Arkansas Supreme Court to Reconvene After Holidays on January 4. LITTLE ROCK, Ark., Dec. The supreme court started the Christmas holiday season today by adjourning until Jan Other officials and employes of state deaprtments will suspend work Wednesday until Monday Parnell will spend the holidays quietly with his family here Justice T. H. Humphreys of the supreme court expects to visit his mother at Fort Smith, while Justice Turrier Butler will visit his former home at Hamburg Other members of the court will remain here. The took its recess today after handing 17 opinions in civil and criminal cases, the larg eat number for the season. The court paid official tribute to the late James Harry Campbell, clerk of the court for 44 years, who died last Friday Ashton G. Sadler of Van Buren day was appointed as Mr. Campbell's Successor Can't Be Sued. A corporation cannot be sued for back taxes owed by Its predecessor even though both were owned by the same stockholders, the supreme court held in an opinion from which three justices dissented. The court decided that the Paepcke' ment of property Phillips and Mississippi could not be made the basis suit against successor, the Chicago Mill and Lumber The latter company. can be for back for the since 1929, when under laws of to take over properties of the Paepcke Com pany Justices Humphrey, Mehaffy and Butler the majority opinion, written by Chief Justice Hart Atty. Gen. Hal Norwood brought suit in Phillips against both corporations. and the supreme court sustained the lower tribunal's act in quashing the service on the Paepcke corporation on the ground it withdrawn from Arkansas. The Paepcke the property alleg edly in 1928, and there can be no recovery back taxes for that year, the court held. Banker Must Serve. Charles E. Crawford former president of the defunct Bank of Petti grew, in Madison County lost an ef fort to reverse verdict of guilty of his bank to be The bank closed in December, 1930.