442. American Exchange Trust Co. (Little Rock, AR)

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: November 17, 1930
Location: Little Rock, Arkansas (34.746, -92.290)

Metadata

Model: gpt-5-mini
Short Digest: aff032b1

Response Measures

Full suspension, Books examined

Description

The American Exchange Trust Co. suspended payments on Nov 17, 1930 after a run prompted by the receivership of affiliated Caldwell & Co.; many affiliated Arkansas banks also suspended. The state banking department took charge later and the bank was liquidated/placed in receivership; executives were later indicted. Classification: run leading to suspension and eventual closure/receivership.

Events (4)

1. November 17, 1930 Run

Cause: Correspondent
Cause Details: Public hysteria/withdrawals triggered by the receivership/collapse of affiliated investment house Caldwell & Co. (Nashville), leading depositors to run.
Measures: Bank directors decided to suspend payments and close for five days under Arkansas law (five-day suspension).
Newspaper Excerpt: Directors of the American Exchange Trust Co. of Little Rock, the largest bank in the State, to suspend payments and close for five days... Directors of the American Exchange Trust Co. attributed the closing to public hysteria resulting from the placing of Caldwell & Co., Nashville, Tenn., investment bankers, in receivership November 7.
Source: newspapers

2. November 17, 1930 Suspension

Cause: Correspondent
Cause Details: Suspension enacted as a response to heavy withdrawals and 'public hysteria' after Caldwell & Co.'s receivership; bank invoked five-day suspension allowed by Arkansas law.
Newspaper Excerpt: Directors of the American Exchange Trust Co. of Little Rock... to suspend payments and close for five days resulted in the temporary closing of the others.
Source: newspapers

3. November 22, 1930 Receivership

Newspaper Excerpt: The banking department has taken charge of the American Exchange Trust Co. of Little Rock... banks that suspended payments to depositors may reopen at the end of five days or be placed in the hands of the State banking department for liquidation.
Source: newspapers

4. April 29, 1931 Other

Newspaper Excerpt: The American Exchange Trust Co., with deposits of approximately $17,000,000, closed last November 17 after the collapse of Caldwell & Co... Mr. Banks was indicted a month ago at Osceola on a charge of accepting deposits as president of the bank there knowing it to be insolvent.
Source: newspapers

Newspaper Articles (12)

1. November 17, 1930 Evening Star Washington, DC

Article from Evening Star, November 17, 1930

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Close for Five Days. LITTLE ROCK, Ark., November 17 (AP). -Officials of the A. B. Banks Co., Arkansas financial institution, announced today that eight other banks in the State with which the company is affiliated have suspended payments to depositors for a period of five days. Other affiliated banks advised the A. B. Banks Co. they were remaining open. The company officials said they had not heard early today from 12 others in the affiliation as to what action they were taking. The decision of the Board of Directors of the American Exchange Trust Co. of Little Rock, the largest bank in the State, to suspend payments and close for five days resulted in the temporary closing of the others, the Banks company announced.

2. November 18, 1930 Evening Star Washington, DC

Article from Evening Star, November 18, 1930

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# 39 ARKANSAS BANKS CLOSED. Tennessee, Missouri and Illinois Institutions Suspend Payments. By the Associated Press. Approximately 39 banks in Arkansas Monday suspended payments to depositors for five days and two other small banks were closed for liquidation, while during the last two weeks four Tennessee banks have closed. Five Illinois banks have closed since Saturday. Four small banks in Missouri closed Monday. An optimistic view of the Tennessee situation was taken by D. D. Robertson, Tennessee superintendent of banks, who said "our banking troubles are over." Directors of the American Exchange Trust Co. of Little Rock, largest of the suspended Arkansas banks, said in their opinion the bank was solvent and with the "co-operation of our depositors a plan can be found to resume operations." Most of the suspended Arkansas banks were affiliated with A. B. Banks & Co., which was associated with the American Exchange Trust Co. With the exception of three, all were comparatively small. The three were the American-Exchange, the Merchants & Planters Trust Co., Pine Bluff, and the Merchants & Planters Bank of Helena. Directors of the American Exchange Trust Co. attributed the closing to public hysteria resulting from the placing of Caldwell & Co., Nashville, Tenn., investment bankers, in receivership November 7. A directors' statement said "the affairs of Caldwell & Co. are remote from Arkansas and nothing but an excited public mind could have forced the closing of this strong bank." The American Exchange Trust Co. announced deposits of $15,014,589.41 on the date of the last bank call. The bank was capitalized at $1,000,000 and had a surplus of $500,000. The banks acted under an Arkansas State law which permits them at the end of five days to reopen or turn over their affairs to the State Banking Department. Officials of A. B. Banks & Co. expressed the belief that more than half the banks would reopen. The four banking houses which have closed in Tennessee during the last two

3. November 18, 1930 Dayton Daily News Dayton, OH

Article from Dayton Daily News, November 18, 1930

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TWO CINCINNATI BANKS PASS TO CLEARING HOUSE Some of Their Stock Had Been Held bythe BancoKentucky Company. The Brighton Bank and Trust Co., and the Market Bank and Trust Co., some of whose stock was held by the Banco- Kentucky Co., today passed from individual control into the hands of the Cincinnati Clearing House association, it was announced by the clearing house. Eight of the largest banks in Cincinnati simultaneous statements and said they supported the clearing house in taking control of the two banks. The clearing house association issued the following statement: "We the undersigned banks of the Cincinnati Clearing House association announce that the clearing house association has bought the entire holdings of certain outside interests in the Brighton Bank and Trust and the PearlMarket Bank and Trust Co., and that the control of both said banks is now held by the clearing house association and that therefore the undersigned banks stand behind both of said banks The banks which signed the statement were the Fifth ThirdUnion Trust Co., First National hank, Central Trust Co., Provident Savings Bank and Trust Co., Westem Bank and Trust Co., Second National bank, Lincoln National bank. and Atlas National bank Officers of each bank signed the The Banco Kentucky Co., headed by James R. Brown, Louisville, former president of the National Bank of Kentucky, arranged on Sept. 25, 1929, to acquire control of the Brighton Bank and Trust Co. and the Bank and Trust Co. The two Cincinnati banks were consolidated but continued operation as separate units Gustave M. Mosler, who had been president of the Brighton bank, was made president of the combined banks. Brown's offer was accepted by stockholders of the two banks, Brighton shareholders being offered $900 share with the option of cash or part cash and part stock in the Banco-Kentucky, while stockholders were offered $750 share with the same option on stock. As a result of the deal it was announced the two local banks would have combined capital of $1,000,000, surplus and undivided profits of $1,900,000 and total resources of $30,000,000 After issuing the clearing house statement representatives of the various banks returned to their offices and took up regular duties refusing to comment on the clearing house action. They said the official announcement stood alone. The clearing house meeting lasted nearly 20 hours before any statement was made. Bank executives were called into session yesterday afternoon at 2 o'clock consider the Brighton and PearlMarket situation. The meeting lasted throughout the night and into this morning LOUISVILLE. Ky., Nov. 18.Eight Kentucky financial institutions with resources totaling more than $75,000,000 were closed today The largest of these was the National Bank of Kentucky at Louisville, which was under the control of receiver, Paul C. Keyes, of the staff of the comptroller of the currency at Washington. Its resources approximate $60,000,000. Directors of the National bank of Kentucky said the suspension yesterday was deemed necessary because of "wild rumors' concerning its condition. Simultaneously with its closing, two affiliated institutions, the Louisville Trust Co. and the Security bank, suspended operations Their directors said they were solvent and that they were closed as a precautionary measure. The three institutions are affiliated through the Banco- Kentucky, a holding comTwo small Negro banks in Louisville the American Savings bank and the First Standard bank, which cleared through the Louisville Trust Co., later closed. The bank of St. Helens, a Louisville B. CURTIS, JR., is the former Miss Louise MRS. WILLARD marriage took place Saturday, Nov. 8, in Joliet, III. Mrs. Curtis is the daughter of Mr. and Mrs. William H. Hough and formerly resided in this city Mr. and Mrs. Curtis will make their home in Chicago. (Don Wallace photo.) suburb, also suspended as a precautionary pleasure. Two outside outside Louisville also closed when IL was learned the National bank of Kentucky had suspended. They were the McElwain Meguiar Bank and Trust Co. at Franklin, and the First National bank at Horse Cave, Ky The National bank of Kentucky served as correspondent for both. Officers of other leading Louisville banks issued statements last night declaring yesterday's deposits were greater than withdrawals, reported new accounts were opened during the day, and reiterated earlier statements that the institutions were solvent. LITTLE ROCK, Ark., Nov. 18 for reopening some 43 banks which have suspended temporarily or closed were being worked out today by financial experts of the Closing of the American Exchange Trust Co. here. largest and one of the oldest banks in the state which suspended for five days, was followed by suspension of activities by the 42 other banks, the aggregate deposits of which were more than $27,000,000. WEDDING BELLS TROY, Nov. 18.-A marriage license was issued in the Miami probate court to Francis Karns, 89, production manager, Dayton, and Margaret Irene Weldy, 30, billing clerk, Piqua.

4. November 18, 1930 The Brattleboro Reformer Brattleboro, VT

Article from The Brattleboro Reformer, November 18, 1930

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EIGHT KENTUCKY BANKS CLOSE DOORS Resources of Over $75,000,000 Involved -National Bank of Kentucky In Receiver's Hands. LOUISVILLE, Ky., Nov. 18 Eight Kentucky financial Institutions resources totaling more than $75,000,000 were closed today The largest of was the Bank of at Louisville, which was under the of a receiver, Paul C. Keyes, of the staff of the comptroller of the currency at Washington. Its resources approximate $60,000,000. Directors of the National Bank of Kentucky said the suspension yesterday was deemed necessary of "wild rumors' concerning its condition. Simultaneously with its closing. affiliated institutions, the Louisville Trust Co. and the Security bank, suspended operations. Their directors said they were solvent and they were closed as precautionary Officers of the other leading Louisville banks last night declaring yesterday's deposits were greater than the withdrawals reported new accounts were opened during the day, and reiterated earlier statements that the institutions were solvent. Hope to Reopen 43 Banks, LITTLE ROCK, Ark. Nov. 18 (AP). Optimism in statements of Arkansas financial leaders as they laid plans today to reopen some 43 banks which have suspended or closed. The committee of the American Exchange Trust Co. here, largest and one of the oldest banks in the state, which suspended for five days, was engaged with plans to reClosing of the American Exchange was followed by suspension of activities by the 42 other banks, the aggregate deposits of which were more than A. B. Banks, president of the American and stockholder in 34 of the 42 other banks scattered over the state, said the boards of were trying to obtain pledges of loyalty from their capital to assure freedom of danger from a run. The Little Rock Clearing House association by statement the public that local banks were in sound condition. Hysteria following receivership proceedings against Caldwall & Co., Nashville, Tenn., bankers, until recently interested in the American Exchange, was attributed by directors of the latter as the cause steady withwhich reached about $4,000,000.

5. November 18, 1930 Evening star Washington, DC

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KENTUCKY BANKS DECLARED SOLVENT Directors Blame "Wild Rumors" for Closing of $75,000,000 Institutions. By the Associated Press. Eight Kentucky financial institutions with resources totaling more than $75,000,000 were closed today. The largest of these was the National Bank of Kentucky at Louisville, which was under the of Paul C. Keyes of the staff of the controller of the currency at Washington. Its resources approximate $60,000,000. "Wild Rumors" Blamed. Directors of the National Bank of Kentucky said the suspension yesterday was deemed necessary because of "wild rumors' concerning its condition. Simultaneously with its closing. two affiliated institutions. the Louisville Trust Co. and the Security Bank, operations. Their directors said they were solvent and that they were closed as precautionary measure. The three institutions are affiliated through the a holding company. Two small banks in Louisville, the American Mutual Savings Bank and the First Standard Bank. which cleared through the Louisville Trust Go., later closed. The Bank of St. Helens, Louisville suburb. also suspended as precautionary measure. Two Outside Louisville Closed. Two banks outside Louisville also closed when it was learned the National Bank of Kentucky had suspended. They were the McElwain Meguiar Bank & Trust at Franklin. Ky. and the First National Bank at Horse Cave, Ky. The National Bank of Kentucky served as correspondent for both. Officers of other leading Louisville banks issued statements last night declaring yesterday's deposits were greater than withdrawals reported new accounts were opened during the day and reiterated earlier statements that the institutions were solvent. 39 ARKANSAS BANKS CLOSED. Tennessee, Missouri and Illinois Institutions Suspend Payments. By the Associated Press. Approximately 39 banks in Arkansas Monday suspended payments to depositors for five days and two other small banks were closed for liquidation, while during the last two weeks four Tennessee banks have closed. Five Illinois banks have closed since Saturday. Four small banks in Missouri closed Monday An optimistic view of the Tennessee situation was taken by D. D. Robertson, Tennessee superintendent of banks, who said "our banking troubles are over Directors of the American Exchange Trust Co. of Little Rock, largest of the suspended Arkansas banks, said in their opinion the bank was solvent and with the of our depositors a plan can be found to resume opera- Most of the suspended Arkansas banks affiliated with A. B. Banks & Co., which was associated with the American Exchange Trust Co. With the exception of three, all were comparatively small The three were the American- Exchange, the Merchants & Planters Trust Co., Pine Bluff, and the Merchants & Planters Bank of Helena. Directors of the American Exchange Trust Co. attributed the closing to public hysteria resulting from the placing of Caldwell & Co., Nashville, Tenn., investment bankers, in receivership November A directors' statement said "the Affairs of Caldwell & Co. are from Arkansas and nothing but an excited public mind could have forced the closof this strong bank.' The American Exchange Trust Co. announced of the date of the last bank call. The bank was at $1,000,000 and had surplus of $500,000. The banks acted under an Arkansas State law which permits them at the end of five days to reopen or turn their affairs to the State Banking Department. of A. B. Banks & Co. expressed the belief that more than half the banks would reopen. The four banking houses which have closed in Tennessee during the last two weeks were the Bank of Tennessee, subsidiary of Caldwell Co.; the Holston Union National Bank at Knoxville, the Liberty Bank & Trust Co. at Nashville, and the Campbell County Bank & Trust Co. at Jacksboro. Attorney General D. Smith of Tennessee has reported $5,700,000 State funds were deposit in the Bank of Tennessee, the Liberty Bank Trust Co., and the Holston Union National Bank A merger of the Fourth and First National Banks into the American National Bank has been announced in Nashville, as was the acquisition of the National Bank by the Commerce Union Bank. The East Tennessee National Bank. the East Tennessee Savings Bank, and the City National Bank, all of Knoxville, have been into the East Tennessee National Bank. Federal Judge John J. Gore in Nashville Monday ordered creditors Cald& Co. to present their claims before next July and enjoined any creditors or claimants from separate suits against Caldwell & Co and enjoined all parties to any suits now pending from proceeding further except by consent of the court. The Illinois banks which closed Monday were the Bartlett & Wallace State Bank of Clayton and the Timewell State Bank of Timewell. They were correspondent institutions of the State Savings. Loan & Trust Co. of Quincy, which closed Saturday. Two other banks which State Auditor Oscar Nelson said closed in connection with the failure of the State Savings, Loan & Trust Co Quincy. were the Southside Bank of Quincy and the Payson State Bank of Payson.

6. November 19, 1930 Evening Star Washington, DC

Article from Evening Star, November 19, 1930

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BANKS PLEDGE AID TO THOSE- CLOSED All Affiliated With Little Rock Clearing House Offered Help of Stronger Ones. By the Associated Press. LITTLE ROCK, Ark., November 19.Little Rock and North Little Rock banks today were heartened by assurance from the Little Rock Clearing House Association that the combined banks of the city stood "ready to support in this crisis every member bank to the fullest extent." A pledge to aid every member bank with "our combined facilities and resources" was signed by seven members of the association after a conference seeking relief from financial strain caused by the closing or suspension of payments by 55 banks in the State in two days. Many May Reopen. Reopening of many of the suspended institutions within the five-day period was predicted by officials. Eleven small banks quit business yesterday, seven of them under a five-day suspension allowed by law, and the others for liquidation or reorganization. Forty-two closed or suspended business Monday after the American Exchange Trust Co., Little Rock, one of the largest and oldest banks in the State, stopped payments to depositors for a five-day period. 35 in One Group. Of those which have closed, 35 are in the so-called A. B. Banks group, including the American Exchange here. Most of the independent banks were in the same territories as the group institutions. The suspensions generally have been attributed by officials to fear of runs resulting from the American Exchange closing and for protection of the depositors.

7. November 23, 1930 Evening Star Washington, DC

Article from Evening Star, November 23, 1930

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REORGANIZATION PLANNED. Arkansas Banking Department to Aid in Effecting Re-Opening. LITTLE ROCK, Ark., November 22 (P).-Progress in attempts at reorganization was reported by several of the 67 banks closed in Arkansas during the week, but the State banking department received no reports today of re-openings. The banking department has taken charge of the American Exchange Trust Co. of Little Rock, as well as several others in the process of being reorganized. The department has announced it will assist in the reorganization of any of the suspended institutions and will do all possible to enable them to reopen soon. No additional closings were reported to the banking department today. Under Arkansas law banks that suspended payments to depositors may reopen at the end of five days or be placed in the hands of the State banking department for liquidation.

8. December 6, 1930 The Knoxville Journal Knoxville, TN

Article from The Knoxville Journal, December 6, 1930

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FUNDS CLAIMED BANK Arkansas Bank Report Made; Note Suit Is Filed. LITTLE ROCK, Dec. statement affairs the closed American Exchange Trust Co., filed in circuit court today by bank closed from the Bank at now Two other Nashville banks, the Fourth and First National banks, the statement said. statement assets and liabilities balanced The was filed accordance with state law after the state took over the bank it is liquidated or reorganized. Two Arkansas banks were named debtor institutions the American from the Exchange Bank Trust Co: of EH Dorado and owing from the and Plant Bank and Trust Co. of Pine Bluff. An inventory of assets listed unand overdrafts of Liabilities listed bills and deposits in Cash on hand listed assets amounted to cash items and items in transit $90,054.98. LOUISVILLE. Ky., Dec. James Brown of the National Bank Kentucky and former president of the BancoKentucky company, was named defendant to suit filed in circuit asking judgment suit avers was signed by The suit was filed by Joseph S. Laurent for BancoKentucky Co., whose bill said the long past Brown publisher of the here. that on November 28. Brown preferred and common stock in the Herald Post to cusfor the benefit Paul Keyes, receiver for the Bank of Kentucky, to cure the was being asserted against Mr. Brown by the bank's receivers Receiver Laurent asked in the that the hold the Herald stock all creditors in to the amount of their respective demands.

9. April 29, 1931 Evening Star Washington, DC

Article from Evening Star, April 29, 1931

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Pulaski County grand jury late yesterday at the conclusion of an extended inquiry into the closing of the bank. The American Exchange Trust Co., with deposits of approximately $17,000,000, closed last November 17 after the collapse of Caldwell & Co., Nashville, Tenn., investment banking house, which was affiliated with the American Exchange. Approximately 40 other banks of the A. B. Banks group in Arkansas closed after the American Exchange suspended, and within a few weeks about 75 other banks in the State closed Most of them have reopened. Mr. Banks was indicted a month ago at Osceola on a charge of accepting deposits as president of the bank there knowing it to be insolvent.

10. April 29, 1931 The Daily World Helena, AR

Article from The Daily World, April 29, 1931

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INDICTED FIVE GIVE BONDS TO PULASKI COURT FORMER EXECUTIVES OF AMERICAN EXCHANGE BANK POST BONDS WITH SHERIFF Little Rock. April of $5,000 each were posted with Sheriff Williams yesterday for the five former executives of the defunct American Exchange Trust Co., who were indicted by the Pulaski Coungrand jury Monday after an inquiry which extended over two At Fordyce, where A. B. Banks, who was president of the closed institution, is making his home, the bond required for his appearance in court here was filed with Sheriff R. Benton of Dallas county. He notified Sheriff Williams that he had approved the bond. Although H. Stanley, formerly executive vice president of the American Exchange, was out of the city, friends prepared bond for him, and it was agreed that his attorney would sign it for Mr. Stanley, who left several days ago en route to Ashland, Wisc., where he will live. The bonds for John M. Davis, who was chairman of the board of the bank; R. H. Thompson, vice president, and C. Conway, vice president and secretary, were approved by Sheriff Williams yesterday morning. Each of the former bank officers was indicted separately on eight charges and all were accused jointly in two indictments. They are alleged to have received deposits into an insolvent bank and to have been accessories to the receiving of such deposits. Two of the bills against Mr. Banks charge him with being an accessory and one of the indictments against all the accused ex-bank officers makes similar allegation. Investigation was said to have proved that deposits totaling $948,were accepted at the AmeriTrust Co. November can Exchange the bank 15, the last day suspended November 17 for five of which at the expiration days, commissioner took the state bank charge.

11. June 28, 1931 The Daily World Helena, AR

Article from The Daily World, June 28, 1931

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BANKS PAINTED AS BUILDER OF BLOCK HOUSES DEFENSE REPLIES BY SAYING FINANCIAL GENIUS SELF IMPOVERISHED TRIAL IS STARTED Senator Joe T. Robinson is Chief Defense That Detense Will Revolve Around Proof to Show American Exchange Solrent On Day of Closing Little Rock June trial Banks moved at a pace today through web surrounding teswhich the state fought he accepted a he knew to be testimony centered efforts to prove the Exchange Trust Co. M Banks was president on Nov. the opened for business. Frequent wrangles occurred beProsecuting Attorney Carl Balley, and the defense counSenator Joe T. Robinson and Donham Presidents of the three Little banks who as members of the clearing house association examhe American Exchange durthe critical days preceding its suspension and that of 45 affiliated banks were interrupted by wrantime and again in their testimony affecting the bank's condithat time. Alfred G. Kahn president of the Union Trust Company, testified clearing house committee found the American Exchange to have been insolvent but on cross examinatio nhe found no material change in the bank's assets from the time he examined It ten days later when was closed. He said he believe dif a run had not deflated its cash to the extent of $4,000,000 would have been able to continue Kahn and F. W. Neimier, president of the Bankers Trust Company both testified their examination of the bank's assets resulted in the clearing house writing a letter intended to restore confidence in the American Exchange. It was withdrawn a week later, after the run had attained serious proportions. The state sought to show withdrawal of the letter was the clearing house admission the American Exchange had become insolvent. but Kahn and Neimler testified it was possible for a run to close the bank without making it insolvent. Emmet Norris, president of W. B. Worthen Company, who was president of the clearing house assoclation last year testified the clearing house recommended that $2,300,000 of doubtful or slow paper of Mr Banks and his affiliated companies be withdrawn before the clearing house would come to the aid of the American Exchange. He said he did not belieev the $2,300,in loans were good or amply secured but later on cross examination he said he had arrived at that conclusion because of subsequent developmerts which sent those companies into receivership. The first witness was Mrs. Lillie Rothschild who testified to making deposit of $672.15 on the morning November 15 R. V. Cherry. a teller corroborated that testimony. Kelly Gilliland grand jury reporter read into the record a statement made by Mr. Banks before the grand jury subsequent to the Indictment. Mr. Bailey explained Mr wa smerely to establish the fact Banks had borrowed sums from affiliated banks, a matter he said would mony. be developed by later testi- Little both B. Banks Ark., today June was pictured as builder of a "house of financial blocks" and the victim general economic collapse, in opening and statements of prosecution defense counsel in his trial charge of accepting a deposit bank he knew to be insolvent. Senator Joe T. Robinson, chief of would defense counsel, hinted the defense center all its effort toward institution, was solvent Helena District (By Jas. A. Burfnett, Observer.) Twenty-four hours ending at 27. River stage, 9.1. Fall of 8. Weather, clear. Rainfall, 44. East wind. minimum, 74. Arkansas Forceast (By the Associated Press.) Generally fair Sunday and Monday.

12. July 5, 1931 Evening Star Washington, DC

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ARKANSAS BANKER IS GUILTY IN FRAUD 4. B. Banks, Head of Closed Trust Company, Sentenced to Year in Prison. By the Associated Press. LITTLE ROCK, Ark., July 4.-A. B. Banks, president of the closed American Exchange Trust Co. of Little Rock and until a few months ago one of Arkansas' foremost financiers, was convicted today of accepting a deposit in an insolvent bank. The jury fixed his sentence at one year in prison. Banks went on trial a week ago. The charge was that he assented to accepsance of a $672 deposit from Mrs. Lillie Rothschild in the American Exchange Trust Co., last November 15, the day before the bank closed. The closing of the bank was followed by the failure of more than 40 other banks in Arkansas in which Mr. Banks was interested, and likewise resulted in the collapse of his insurance companies. Faces Second Count. Mr. Banks' bond of $5,000 was allowed to stand, pending an appeal to the State Supreme Court. Four other officials of the closed bank were indicted with Banks. He was the first to be tried. He also is under a similar indictment at Osceola, growing out of the failure of a bank there of which he was president. Beginning his business career with a small insurance agency at Fordyce, Ark., 38 years ago, Banks gradually branched out into banking as well as insurance, and became head of a big insurance banking group. Blames Caldwell Failure, He founded the Home Insurance Companies of Arkansas, which were carried under with the collapse of his banking interests last November. On the witness stand yesterday, Banks attributed the run on the American Exchange Trust Co. to the interests which Caldwell & Co., investment house of Tennessee, held in it. He asserted the failure of the Tennessee concern wiped away the depositors' confidence. Caldwell & Co., in 1929, purchased a large stock ownership in the American Exchange Trust Co., and also controlling interest in the Home Insurance Companies of Arkanasas.