Hardware State Bank - Lovington, IL

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: state
Start Date: January 29, 1932
Location: Lovington, Illinois (39.716, -88.633)

Metadata

Model: gpt-5-mini
Short Digest: 20dd0cc4

Response Measures

Partial suspension

Description

In late January 1932 the Hardware State Bank imposed temporary restrictions on withdrawals after depositors removed funds following failures of nearby banks (Merchants and Farmers State Bank at Sullivan, others). Articles describe this as a precautionary restriction with intent to restore regular privileges when conditions improve. Sequence: depositor withdrawals/run → restriction of withdrawals (partial suspension) → intended reopening.

Events (2)

1. January 29, 1932 Run

Cause: Local Banks
Cause Details: Depositors withdrew funds in reaction to recent failures of nearby banks (Merchants and Farmers State Bank at Sullivan, failures at Pierson, Cerro Gordo, Champaign).
Measures: Depositors' heavy withdrawals prompted bank to adopt temporary restrictions on withdrawals (limit withdrawals / emergency plan).
Newspaper Excerpt: number of depositors had been continually withdrawing funds from the Bank during the four weeks time since the closing of the Merchants and Farmers State Bank at Sullivan, III.
Source: newspapers

2. January 29, 1932 Suspension

Cause: Local Banks
Cause Details: Bank imposed emergency restrictions on withdrawals to prevent failure after runs triggered by failures of neighboring banks; precautionary, county-wide practice adopted.
Newspaper Excerpt: the Hardware State Bank in their decision Tuesday to take a stitch in time ... the bank's statement ... outlining in detail its plan to limit withdrawals from the bank. As soon as conditions improve sufficiently to warrant it, the regular privileges will be restored to depositors
Source: newspapers

Newspaper Articles (4)

1. January 29, 1932 Lovington Reporter Lovington, IL

Article from Lovington Reporter, January 29, 1932

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Article Text

Let's Help Our Bank Save Lovington From a Financial Crash The Lovington Reporter joins the scores of Lovington business men and citizens in commending the officials of the Hardware State Bank in their decision Tuesday to take stitch in time" and save Lovington from a financial crash, which would have reached every home in the community and from which it would require years to recover. Elsewhere in this issue appears the bank's statement over its signature, outlining in detail its plan to limit withdrawals from the bank. As soon as conditions improve sufficiently to warrant it. the regular privileges will be restored to depositors, and it is hoped, by all of us, that this improvement will soon come. The Hardware State B. nk is sound, always has been sound, and will always remain so as long as this community keeps its head and refuses to allow fear to take the place of sober judgment. But the greatest bank strength conceivable is clay in the hands of public fear. No bank can completely liquidate its resources in full. Common sense tells us that no bank stores its deposits away vault to await their withdrawals by depositors. If a bank couldn't loan— and keep large percent of its deposits, it could not long exist as bank. How many borrowers from a bank walk up to the teller's window and meet their obligations in full on the day that their notes come Ask your banker. He'll tell you that very few can do this. The banker in most cases simply accepts what you can pay, and either renews the note or grants an extension. Neither can the banker pay his of a moment's notice. He must have reasonable time, for only a certain percent of his assets are liquid. Every individual who loses faith and runs to the bank to get his money thinks, as rule, that he is the only one, or only one of a few. But his action soon becomes known and when enough depositors get the same idea it results in run on the bank and then the damage is done. Meanwhile, the money taken from the banks because of such fear, has been removed from circulation and the interests of every one accordingly affected. To go now to your bank and demand your money is simply a breach of faith with this community and with yourself, an act of shortsighted selfishness, which will only delay the hour when the bank can remove its precautionary restrictions. Two days after the Hardware State Bank started its withdrawal restrictions, the other banks of the county got together and adopted similar measures. Never since these hysterical times have beset us has the necessity of standing by our bank been SO important. We're all certain for disaster and ruin if we fail to use our heads. Our advice is, co-operate with the Hardware State Bank in this timely effort to save our community from a financial wreck that it has never known goodness knows, none of us can afford to experience it.

2. January 29, 1932 Lovington Reporter Lovington, IL

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LOCAL BUSINESS MEN EXPRESS CONFIDENCE Hoelscher, President LovingCommercial congratulate the Hardware State Bank officials their actions regarding the striction of withdrawals. Time does not permit for me to issue call for meeting of Commercial club but quite sure voice their opinions. Dennis hysterical of depositors taking their money out of banks in the past 30 days has assumed the proportion of plague. The officers of the Hardware State Bank are to be commended and congratulated for their wisdom in restricting withdrawals. Picture Lovington if you will in the same class the bankless cities and towns, be with dejection, woe and misery. Let us rejoice in the actions and doubly so when they celebrate the golden anniversary of its institution 1935. just had presented to me the plan adopted by the Hardware for temporary restrictions upon from the Bank. believe that the bank is entirely justified in adopting these rules under present circumstances, and that all depositors and business men of this community should heartily support them in their endeavor to protect all depositors alike. Alva observations and investigations of the plan adopted by the Hardware State Bank and other banks in Moultrie county, am convinced that this is real sound and safe plan. We must have must keep them can do and will do if work consistently with them. consider this measure of protection. M. are all aware of the fact that the condition of the country has been very bad for some time and that Lovington hasn't been any exception in the emergency. This fact has been brought home to us in the last few days by the action taken by the Hardware State Bank by putting on an emergency movement limiting withdrawls from the bank This seems like drastic move but the end justifies the means taken, for to save the bank to our community an incalculable service to the people, who live here. In crisis of this kind people should have the public good heart and think of what bank means to community, the commercial life, the and that condistability tions generally would indeed be at very low ebb if we had no bank to pend on. The same action has been taken in other towns and cities and has to all the people af worked for good and think all of ter being tried out, want Lovington to move on and keep going and do what we can for our city and add our in an unusual and acute situation confronts

3. January 29, 1932 Lovington Reporter Lovington, IL

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STATEMENT OF CURRY. called into conference few days ago by the officers of the Hardware State Bank, who informed me that number of depositors had been continually withdrawing funds from the Bank during the four weeks time since the closing of the Merchants and Farmers State Bank at Sullivan, III., these withdrawals had been and that increased when the information came to the failures nearby, such Pierson, Cerro Gordo and the large Bank at Champaign. In these conferences there was brought for the matter of the plan discussion McLean Ford adopted by county, county, and at least twenty other counties in the State of Illinois to restrict withdrawals during the ent emergency. At first thought such plan does not appeal to anyone. We have feeling that when we have money in the bank we shoud have the absolute right to withdraw it all for any reason, or for no reason at all, if to do However, see great number the depositors would decide to do this would wreck any bank, no difference how solvent and solid the institution was before number of people in our community bank failure on account have been of having funds deposited in the Lovbank, which was later State ington the Merchants and transferred to Farmers State bank, now closed, SO that the question has come very near all us. with group that made and talked to to county trip Bloomington, intercomMcLean withdrawals. criticism by We critiwhich entire save

4. January 29, 1932 Lovington Reporter Lovington, IL

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STATEMENT OF In my opinion the State bank, in taking the action to restrict withdrawals during the present ergency, have clearly taken the best course for the benefit of this entire community. This not taken hurriedly, but on the other hand has been carefully considered and investigated, the officers have counseled and advised with number of business men of Lovington concerning this matter. Desiring to find out first hand how this plan had worked in communities where it has already been enforced, personally made trip to Lawrence and Richland counties to find out for myself how the plan was working, what effect had those and communities. will say frankly that when the plan was first presented to me it did not appeal to me, because had not given careful consideralearned that in those tion. communities where this been force that not only the bankers, in but the business and men as well, were enthusiastic in their belief that the plan was absolutely necessary for the good of the entire community. The depositors of the bank, almost to man, were in way with operating every that this plan their banks, feeling by depositors were being and the interests of the community served. personally visited six ferent banks in these counties, and in case the plan was working every successfully, and in many cases the deposits had increased since the plan went into effect. The bankers could not explain as to this increase deposits except on one theory, and that that the people who had been withholding their money from the banks were re-gaining their conthat these fidence, knowing strictions the bank could not be jured by few people getting hysteria fear and drawing all of their deposits at once. will summarize this that an entire day saying spent in careful and investidid not find one single gation, and individual that criticized this plan handled these being will further that communities. say strongly advised the officers of the Hardware State bank to put this plan into operation at once, that can protect our Institutions and our busimen of Lovington and avoid the our entire of having possibility community wrecked by some unfoundrumor, or baseless fear on the part of the depositors. Let's work together in this matter, Institutions and our and support our community. submitted, Respectfully BRYANT.