Kaufman State Bank - Chicago, IL

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: February 17, 1932
Location: Chicago, Illinois (41.850, -87.650)

Metadata

Model: gpt-5-mini
Short Digest: e101deb0

Response Measures

None

Description

Article (Chicago Tribune 1932-04-01) states the Kaufman State Bank 'failed last Feb. 17' and describes large embezzlement by the president and estimated depositor losses. No run is mentioned; the bank is defunct/closed and receivers are discussed, so this is a suspension leading to permanent closure/receivership.

Events (2)

1. February 17, 1932 Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank failed following discovery of large embezzlement by its president (Louis Kaufman) and insolvency; estimated $150,000 loss to depositors.
Newspaper Excerpt: the defunct Kaufman State bank, 124 North La Salle street... The bank failed last Feb. 17. with an estimated loss of $150,000 to depositors.
Source: newspapers

2. February 23, 1932 Receivership

Newspaper Excerpt: Since the bank closed Kaufman has made restitution of $21,000... State bank receivers were word from Auditor Nelson ... whether they might pledge assets of defunct banks for loans from the Reconstruction Finance corporation ... the auditor is due back from Springfield this morning.
Source: newspapers

Newspaper Articles (1)

1. April 1, 1932 Chicago Tribune Chicago, IL

Article from Chicago Tribune, April 1, 1932

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Article Text

BANKER ACCUSED OF $65,000 THEFT N TRUE BILL ontractor, Bank Debtor, Gets Ten Days. A. true bill was reported voted by the grand jury yesterday charging Louis Kaufman, 55 years old, president of the defunct Kaufman State bank, 124 North La Salle street, with embezzling $65,800 of the bank's funds during the market crash of 1929. The bank failed last Feb. 17. with an estimated loss of $150,000 to depositors. Assistant State's Attorney Wilkie Ham. who presented the case to the grand jury. said the testimony in dicated that Kaufman had employed most of the money in market specula tions and had used for alimony payments to a. former wife and for traveling of his present wife and son. Kaufman lives at 3800 Sherroad. By reason of his position as principal stockho and virtual dictator of the bank, was able to hide his peculations from bank examiners for many months. Mr. Ham said. The evidence before the grand jury was produced by in the office of State Auditor Oscar Nelson, the prosecutor added. Charges of making false statements to bank examiners and accepting deposits while aware that his bank was insolvent may be made against Kaufman later, according to Mr. Ham Since the bank closed Kaufman has made restitution of $21,000. the prose. cutor said, adding that in addition to the alleged embezzled balance, Kaufman owes the bank $34,000 on unsecured notes. Gets 10 Days in Jail. Hjalmar Erickson, a building contractor of 12315 Lowe avenue, began serving a ten days' sentence for contempt of court yesterday afternoon as the upshot of hearing before Circuit Judge Feinberg in connection with the failure of the Roseland State Savings bank. Erickson was called to testify concerning $13,000 he owed the bank and to explain why he had given his father a chattel mortgage on all contracting equipment recently. This man was victim of unsound advice," said Erickson's lawyer, Frank C. Leviton. He went to free legal information bureau and was there informed erroneously that this court was entitled only to limited information in such as his." Angered, Judge Feinberg demanded further information regarding the free legal bureau. Erickson refused to answer. The judge immediately or. derer him into custody and sentenced him for contempt. Await Word on Loan Policy. State bank receivers were word from Auditor Nelson as to whether they might pledge assets defunct banks for loans from the Reconstruction Finance corporation in view of the opinion of Attorney General Oscar E. Carlstrom that such loans are legal. The auditor is due back from Springfield this morning. It is understood that a number of knotty legal points must be settled before the loans can be made. The auditor is reported eager to authorize the contracting of such loans providing the corporation evinces willing ness to make such loans on a substantial percentage of the face value of the pledged collateral. If the corporation decides to make the loans only on small percentage of the market value of the assets, however, the auditor is reported to believe it would be move desirable to conserve the assets until a gain in market prices Easy justify an outright sale. It is said that the auditor does not regard Mr. Carlstrom's opinion as significant factor in the question. It was pointed out that on Feb. 23 the attorney submitted an opinion holding that receivers of defunct build ing and loan companies might secure loans from the reconstruction corporation. Walter T. Fisher, legal adviser to the corporation, later held that building and loan mortgages were nonnegotiable assets.