4241. Central Republic Bank & Trust Co. (Chicago, IL)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: January 1, 1932*
Location: Chicago, Illinois (41.850, -87.650)

Metadata

Model: gpt-5-mini
Short Digest: e6f97f68

Response Measures

Borrowed from banks or large institutions, Capital injected, Full suspension

Other: Deposit liabilities were assumed by City National Bank & Trust Co.; assets transferred to Central Republic Trust Co. and liquidated.

Description

Contemporary articles state RFC made a large emergency loan in 1932 that stopped a run, but a prolonged run forced the bank to close about two months after the loan. Deposits were assumed by City National Bank & Trust Co.; remaining assets/liabilities were moved to Central Republic Trust Co. and liquidated. RFC sued in 1934 to collect unpaid balance and sought receivership of the trust company. Cause of the original run is not specified in the clippings (no discrete misinformation event described). Dates for 1932 events are approximate based on context (Dawes resigned RFC chair June 15, 1932; he recommended closing June 26, 1932).

Events (4)

1. January 1, 1932* Other

Newspaper Excerpt: Other liabilities and assets of the failed bank were transferred to the Central Republic Trust Co., which for two years has been liquidating the bank's semi-frozen assets and paying debts.
Source: newspapers

2. June 1, 1932* Run

Cause Details: Articles report a prolonged run on the bank in 1932 but do not specify a concrete trigger (no specific rumor or scandal described).
Measures: Emergency loan from the Reconstruction Finance Corporation negotiated in 1932 to meet deposit withdrawals; large interbank assistance and subsequent assumption of deposits by City National Bank & Trust Co.
Newspaper Excerpt: Norris cited the loan to the Central Republic Bank & Trust Co. of Chicago ... he said in that case the loan stopped a run.
Source: newspapers

3. August 1, 1932* Suspension

Cause Details: Closure was the consequence of the prolonged run; the bank suspended/closed and deposits were transferred to City National.
Newspaper Excerpt: A prolonged run forced the bank to close two months after the loan was made. Deposit liabilities were assumed by the City National Bank & Trust Co.
Source: newspapers

4. November 20, 1934 Receivership

Newspaper Excerpt: The RFC filed suit ... asking appointment of a receiver to collect the $14,000,000, equal to the trust company's total capitalization ... State Auditor E. J. Barrett planned to take over the trust company for liquidation under a state receiver.
Source: newspapers

Newspaper Articles (7)

1. July 11, 1932 Evening Star Washington, DC

Article from Evening Star, July 11, 1932

Click image to open full size in new tab

Article Text

PROBE IS ORDERED INTO R. F. C. LOANS Senate Votes in Favor of Couzens Resolution to Inquire Into Methods. By the Associated Press. An investigation of loans by the Reconstruction Finance Corporation was ordered today by the Senate. A resolution to create a Senate Co.nmittee of five members to make the inquiry also was approved. The resolution was adopted at the behest of Senator Couzens, Republican. of Michigan, its author. He said that under the law details of the corporation's loans are kept secret. adding the investigation should be made to determine whether loans had been granted "in accordance with the law,' and were "adequately secured." Will Report in January. Under the Couzens resolution, the Senate committee selected by Vice President Curtis will report to the Senate next January whatver it deems fit. Senator Norris (Republican), Nebraska, urged approval of his resolution providing for full publicity on all loans. Norris cited the loan to the Central Republic Bank & Trust Co. of Chicago, of which Gen. Charles G. Dawes, former head of the Reconstruction Corporation, is chairman. He said in that case the loan stopped a run. "The statement that publicity would injure legitimate banking institutions is not only groundless, but it would actually help them," Norris said. Oppose Full Publicity. Senators Walcott (Republican, Connecticut) and Watson (Republican, Indiana) replied that in some cases it might be harmful to banks to have it known they were borrowing. Senator Thomas (Republican, Idaho) contended that for the Senate to put a "guardianship" over the corporation directors would make it appear the Senate "questioned their integrity." Couzens said he did not believe it would be quite fair to make public loans already made. He said he had no question about the loans except in the case of the Dawes bank. "I don't know whether it was justified," he added. Senator Vandenberg (Republican, Michigan) said publicity in the case of the Chicago bank was helpful because they were able to announce they had all the money they needed, but in some cases banks might borrow but not get all they required. Senator Norris said that suggested favoritism to the Dawes bank. but Vandenberg said he did not believe there had been any. "I assume the loan was on the same basis as others," Vandenberg said. The committee to investigate the corporation was named as follows: Couzens, chairman: Goldsborough (Republican, Maryland), Walcott, Glass (Democrat, Virginia) and Fletcher (Democrat, Florida).

2. November 20, 1934 The Washington Daily News Washington, DC

Article from The Washington Daily News, November 20, 1934

Click image to open full size in new tab

Article Text

RFC Sues Dawes Bank to Collect Balance of Loan Receivership Asked by Federal Agency to Get $14,000,000 Institution Closed in 1932; Stockholders May Have to Dig Into Their Own Pockets By United Press CHICAGO Stockholders of the Central Republic Trust Co., headed by former Vice President Charles G. Dawes, today faced the prospect of having to dig up $14,000,000 from their own pockets to pay a part of $60,476,437 due the Reconstruction Finance Corporation. The RFC filed suit in Federal District Court yesterday, asking appointment of a receiver to collect the $14,000,000, equal to the trust company's total capitalization, under the law providing double liability for bank stockholders. UNPAID BALANCE The sum due the Federal loan agency is the unpaid balance of the famous $80,000,000 loan negotiated by Gen. Dawes in 1932 for the Central Republic Bank & Trust Co., of which he was chairman, shortly after he retired as head of the RFC. A prolonged run forced the bank to close two months after the loan was made. Deposit liabilities were assumed by the City National Bank & Trust Co., the Central Republic paying over out of the RFC loan an amount equal to the deposits. Dawes now heads the City National. Other liabilities and assets of the closed bank were transferred to the Central Republic Trust Co., which for two years has been liquidating the bank's semi-frozen assets and paying debts. RECEIVERSHIP PLANNED The RFC suit stated that State Auditor E. J. Barrett planned to take over the trust company for liquidation under a state receiver. Other liabilities have for the most part been paid off, the suit safd, while the RFC debt was left to the last. The loan has been in default since Dec. 24. 1932. It was made on a temporary basis purposëly to give the RFC power to guard its funds. At the time the loan was made Dawes declined a small loan to meet the emergency of a depositors' run and said he would close the bank if the RFC refused enough cash to cover deposits fully. Other Chicago banks, fearing the effect of a major bank failure, interceded to carry his point.

3. November 20, 1934 Imperial Valley Press El Centro, CA

Article from Imperial Valley Press, November 20, 1934

Click image to open full size in new tab

Article Text

DAWES' BANK TO FACE SUIT ON RFC LOAN Echo Of Famous $80,000,000 Transaction Bobs Up In Federal Courts. CHICAGO, Nov. 20. (U.P.)-Stockholders of the Central Republic Trust company, headed by former Vice President Charles G. Dawes, today faced the prospect of having to dig up $14,000,000 from their own pockets to pay a part of $60,476,437 due the Reconstruction Finance Corporation. The RFC filed suit in federal district court late yesterday, asking appointment of a receiver to collect the $14,000,000, equal to the trust company's total capitalization, under the law providing double liability for bank stockholders. The sum due the federal loan agency is the unpaid balance of the famous $80,000,000 loan negotiated by General Dawes in 1932 for the Central Republic Bank & Trust Co., of which he was chairman, shortly after he retired as head of the RFC. A prolonged run forced the bank to close two months after the loan was made. Deposit liabilities were assumed by the City National Bank and Trust Co., the Central Republic paying over out of the RFC loan an amount equal to the deposits. Dawes heads the City National. Other liabilities and assets of the failed bank were transferred to the Central Republic Trust company, which for twc years has been liquidating the bank's semifrozen assets and paying debts. The RFC suit stated that State Auditor E. J. Barrett planned to take over the Trust company for liquidation under a state receiver. Other liabilities have for the most part been paid off, the suit said, while the RFC debt was left to the last. The loan has been in default since December 24, 1932. It was made on a temporary basis purposely to give the RFC power to guard its funds. At the time the loan was made Dawes declined a small loan to meet the emergency of a depositors' run and said he would close the bank if the RFC refused enough cash to cover deposits fully. Other Chicago banks, fearing the effect of a major bank failure, interceded to carry his point.

4. November 20, 1934 The Courier Waterloo, IA

Article from The Courier, November 20, 1934

Click image to open full size in new tab

Article Text

STOCKHOLDERS OF OLD DAWES BANK SUED BY RFC Gov't Starts Action to Regain 14 Millions of Loan Still Due. of the Central Republic Trust company, headed by former Vice President Charles G. Dawes, Tuesday faced the prospect of having to dig up $14,000,000 from their own pockets to pay a part of $60,476,437 due the Reconstructic Finance corporation. The RFC filed suit in federal district court. asking of receiver to collect the $14,000,000. equal to the trust company's total capitalization, under the law providing double liability for bank stockholders. The sum due the federal loan agency is the unpaid balance of the famous $80,000,000 loan negotiated by General Dawes in 1932 for the Central Republic Bank & Trust Co., of which he was chairman, shortly after he retired as head of the RFC. Bank Forced to Close. A prolonged run forced the bank to close two months after the loan was made. Deposit liabilities were assumed by the City National Bank & Trust Co., the central Republic paying over out of the RFC loan an amount equal to the deposits. Dawes now heads the City National Other liabilities and assets of the failed bank were transferred to the Central Republic Trust company, which for two years has been liquidating the bank's semi-frozen assets and paying debts. The RFC suit stated that State Auditor E. Barrett planned to take over the trust company for liquidation under state receiver. Other Liabilities Paid. Other liabilities have for the most part been paid off, the suit said, while the RFC debt was left to the last. The loan has been in default since Dec. 24, 1932. It was made on temporary basis purposely to give the RFC power to guard its funds. At the time the loan was made Dawes declined a small loan to meet the emergency of depositors' run and said he would close the bank if the RFC refused enough cash to cover deposits fully. Other Chicago

5. November 20, 1934 The Cincinnati Post Cincinnati, OH

Article from The Cincinnati Post, November 20, 1934

Click image to open full size in new tab

Article Text

SUES DAWES' BANK FOR 14 MILLION Action Is Repercussion of 1932 Loan to Halt Failure By the United Press. CHICAGO, Nov. 20.-Stockholdof the Central Republic Trust Co., headed by former Vice President Charles G. Dawes, faced the prospect today of having to dig up $14,000,000 from their own pockets to pay part of $60,476,437 due the Reconstruction Finance Corporation. The RFC filed suit in federal court late yesterday, asking appointment of receiver to collect the $14,000,000. equal to the trust total under the law providing double liability for bank stockholders. The sum due the federal loan agency balance of the famous $80,000,000 loan negotiated by Dawes in 1932 for the Central Republic Bank Trust Co., of which he was chairman, shortly after he retired as head of the RFC. prolonged run forced the bank to close two months after the loan was made. Deposit liabilities were assumed by the City National Bank & Trust Co., the Central Republic paying over out of the RFC loan an amount equal to the deposits. Dawes now heads the City National

6. November 20, 1934 Imperial Valley Press El Centro, CA

Click image to open full size in new tab

Article Text

Echo Of Transaction Bobs Up In eral Courts. Nov. holders of the Central Republic Trust company, headed by former Vice President Charles Dawes, today faced prospect of having dig $14,000,000 from their pockets to pay part due the Reconstruction Finance Corporation The RFC filed in federal district court late yesterday, askappointment of receiver collect $14,000,000. equal the trust company's total capitalunder the law providing double liability for bank stockholders. The sum due the federal loan agency the unpaid balance famous loan negotiated by General Dawes 1932 for Central Republic Bank Trust Co., of which he was chairman. shortly after retired head the RFC. prolonged forced the bank close two months after the loan made. Deposit liabilities by the City National Bank and Trust Co., the Central Republic paying over of the RFC loan amount equal the deposits. Dawes heads the City Other liabilities and assets the failed bank were transferred the Central Republic Trust comwhich two years has liquidating the bank's semifrozen assets and paying debts. The RFC stated that State Auditor Barrett planned take Trust company for liquidation under state receiver. Other liabilities have for the most part paid off. the suit said, while RFC debt was left to last. The loan has been in default since December 1932. was made temporary basis purposely give RFC power to its At the time the loan was made Dawes declined small loan meet emergency deand said he would close bank the RFC fused enough cash cover posits fully Other Chicago banks, fearing effect bank failure, interceded carry his point.

7. June 10, 1937 Evening Star Washington, DC

Article from Evening Star, June 10, 1937

Click image to open full size in new tab

Article Text

DAWES RECOUNTS $90,000,000 LOAN Former R. F. C. Chairman Answers $8,000,000 Suit of Bank Stockholders. By the Associated Press. CHICAGO, June 10.-Former Vice President Charles G. Dawes' story of the much-discussed $90,000,000 "Dawes loan" was recounted publicly for the first time in a legal document on file in Superior Court today. Gen. Dawes disclosed his participation in the 1932 Chicago banking crisis in an answer to a suit instituted by stockholders of the Central Republic Bank & Trust Co., recipient of the loan from the Reconstruction Finance Corp. Seek $8,000,000. The stockholders sought $8,000,000 from Dawes, chairman of the City National Bank & Trust Co., and from the Republic Bank and its receiver. They contended that amount represented the "fair and reasonable value" of the banking business of the Republic Trust at the time it was taken over by City National in 1932. Gen. Dawes declared in the answer he was not an officer of Central Republic when he resigned as chairman of the Reconstruction Finance Corp. June 15. 1932; that he considered it a "moral duty" to aid the institution which had become known as the "Dawes bank" because of his honorary chairmanship of the board. The banker declared further that on June 26, 1932, he recommended immediate closing and liquidation of the institution and was persuaded to seek aid from the R. F. C. only at the insistence of colleagues. Expect to Make Repayment. He said he expected full repayment of the $90,000,000 principal to the R. F. C., but that liquidation of remaining assets plus a "reasonable recovery" on the $14,000,000 stockholder's assessment would not cover interest charges. The R. F. C. has been repaid $58,000,000. Gen. Dawes expressed the belief that no one suscribed for City National stock "except with the primary purpose in mind of saving a disastrous situation." Before City National was organized to take over Republic's deposits, he said, other Chicago banks were unwilling to accept the institution's business and deposit liabilities. "Far from being disastrous in those days," he said, "banking deposits were considered in the only available market as a dangerous liability."