gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
051f452f23af2adf
Response Measures
None
Description
Savings department invoked 90-day notice Sept 27; state commissioner took over and closed bank Sept 28.
Events (2)
1.September 27, 1920Run
Cause
Local Banks
Cause Details
Depositors alarmed by recent Boston bank closings and the Ponzi affair, prompting heavy withdrawals.
Measures
Invoked 90-day notice requirement for savings withdrawals
Newspaper Excerpt
The Fidelity Trust Company served notice it would take advantage of the law permitting it to require ninety days' notice of withdrawals from the savings department.
Source
newspapers
2.September 28, 1920Suspension
Cause
Government Action
Cause Details
Commissioner Allen closed/took charge citing steady withdrawals of deposits and slow and doubtful loans.
Newspaper Excerpt
Bank Commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company.
MONEY ASKED BY DEPOSITORS Ninety Day Law. Put Into Effect to Protect General Public. Boston, Sept. 27.-Several hundred persons gathered outside the offices of the Tremont Trust company here today when the doors were opened and lines quickly formed before the paying tellers' windows. After steady withdrawals for an hour with the crowds increasing, bank officials announced the law permitting a bank to require ninety days' notice for withdrawls from the sayings departments would be invoked forthwith "for the protection of the depositors. They regulation would be withdrawn "as soon as the public calmed itself. it was announced. 'We have plenty of money to pay everybody,' officials said, "and we are prepared to do so today but the crowd became so large it was impossible to handle and we invoked the law for the protection of depositors, not for our own protection." The Fidelity Trust company today served notice it would take advantage of the law permitting it to require ninety days' notice of withdrawals from the savings department. It was stated this was done upon the direction of Joseph C.- Allen, state bank commissioner. At his office it was said this action was optional with the banks. Several banks opened their doors with large amounts of ready cash as provision against a repetition of the rung which developed Saturday out of the closing of the Cosmopolitan Trust company. Bank officials announced there was no connection between the Cosmopolitan, which was the fifth bank closed here within two months, and their institution, and Bank Commissioner Allen declared no other banking institution was involved in the Cosmopolitan's troubles. More Runs Anticipated. Nevertheless a recurrence of the runs was anticipated, depositors having become alarmed and, in the case of the Tremont Trust company, having made constant withdrawals from early morning to nearly midnight Saturday. The feeling of uncertainty over the banking situation was the subject of discussion by Governor Coolidge and bankers yesterday, but without announced decision of any contemplated action. One effect of the close scrutiny of local banks which Commissioner Allen has been making was an order from him to the Old South Trust company to drop from its payroll former Governor Samuel W. McCall and four other officials. including two vice presidents. As chairman of the board of directors, Mr. McCall, who was appointed recently, is drawing a salary of $8,000 a year. The object of the order is to reduce the bank's expenses, it being the opinion of the bank commissioner that the men asked to have dropped are holding merely nominal positions. In .each instance, they may continue to, serve in their present capacities without salary, according to the order from the bank commissioner. The Old South Trust company was closed a year ago, but reopened recently after having rehabilitated its finances without loss to depositors.
2.September 27, 1920Evening Times-RepublicanMarshalltown, IA
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BOSTON DEPOSITORS GROW PANICKY Another Bank Closes Doors to Pro. tect Creditors After Runs Which Closed Another Institution Saturday-Banks Pile Up Money to Meet Demands. By Associated Press. Boston, Sept. 27.-Officials of the Tremont Trust Company, following steady payments of withdrawals for an hour after opening today, announced that the law permitting a bank to require ninety days notice for withdrawals from the savings department would be invoked forcnwith "for the protection of the depositors. The regulation would be withdrawn "as soon as the public calmed itself," it was announced. "We have plenty of money to pay everybody," officials said, and "we invoke the law for the protection of the depositors, not for our own protection." Similar action was taken by the Fidelity Trust Company. Several banks opened their doors with large amounts of ready cash piled high within the tellers' cages, as provision against a repetition of the runs which developed Saturday out of the closing of the Cosmopolitan Trust Company. Bank officials in several instances announced that there was no con nection between the Cosmopolitan, which was the fifth bank to be closed here within two months, and their institutions, and Bank Commissioner Allen declared that no other banking institution was involved in the Cosmopolitan troubles.
BANKS INVOKE 90-DAY " 'RUN" LAW BECAUSE OF / (By The Associated Press) BOSTON, Mass., Sept. 27.-The MINERS REFUSE TO Tremont Trust Company this morning announced that the law permitting the bank to require ninety days notice for RETURN TO WORK AT withdrawals from the ravings department will be invoked forthwith because crowds are withdrawing deTHURBER, TEX., MINE posits. "We have plenty of money to pay (By The Associated Tress) FORT WORTH, Tex., Sept. 27.everybody," said officials. "We are Gus Sparling, district committeeman prepared to do this this morning, but for the United Mine Workers of Amerthe crowd became so large that it was ica in this territory, returned today impossible to have paid them. We inafter conferences with six hundred voked the law for the protection of striking miners at Thurber. He andepositors, not for our own protecnounced that the men will not return tion." to work until their demands are met The Fidelity Trust Company took regarding tonnage and digging, de- similar action.
4.September 27, 1920Capital JournalSalem, OR
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Hundreds Line Up for Run On Bank In Boston Boston, Mass., Sept. 27.-Several hundred persons gathered outside the offices of the Tremont Trust company here today when the doors were opened at 8:45 a. m., fifteen minutes before the usual hour, and lines quickly formed before several paying tellers windows. After steady withdrawals for nearly an hour with the crowds increasing, bank officials announced that the law permitting a bank to require ninety days notice for withdrawals from the saving departments would be invoked forthwith "for the protectiion of the depositors." The regulation would be withdarwn "as soon as the public calmed itself," it was announced. Opening for business today, the Fidelty Trust company served notice on depositors that its savings department would take advantage of the same law.
TREMONT TRUST CO., DORCHESTER TRUST FIDELITY TRUST CO. Bank Commissioner Allen Advised Resort to the Law Which Requires 90Day Notice Before Withdrawal of Funds-All Them Are Believed to Be Able to Meet Calls. Boston, Sept. 27 Public unrest over conditions to-day caused a some institutions rerun banking on Trust with the sult that the Tremont company the Fidelity Trust company and the Dorchester Trust company invoked the law which makes it possible to require ninety days notice of withdrawals from the savings departments, in or der to stop the rush of frightened de positors. the Tremont Trust com was in by pany The run participated on crowd hundreds bethe of the so that were called upon to and and came afoot, proportions great police, mounted keep in order! The bank sought for hour to meet the officials announced was the it. and an crowd claims all, there but against the money on hand to pay Vice crush became so great that President Simon Swig announced that the ninety-day notice would be required. At the Fidelity Trust company, which also has offices in the downtown district, the run was in smaller volume, but the law was called upon, to it was stated. "to allow the public recover from the prevailing unrest. There has been a run on the Dorches ter Trust company for several days; and the invocation of the law there stopped the payments. Officials of the institutions in several instances announced by statement or advertisement that there was no connection between the Cosmopolitan, which was the fifth bank to be closed here within two months, and their in stitutions, and Bank Commissioner Joseph C. Allen declared that no other banking institution was involved in the Coemopolitan's troubles. Nevertheless, a recurrence of the runs was an ticipated in some degree. depositors having become alarmed and, in the case of the Tremont Trust company, having made constant hdrawals from morning Saturday almost to midnight, the management having ex a tended the closing hour from noon to accommodate them. The feeling of uncertainty over the banking situation was the subject of discussion by Governor Coolidge and bankers yesterday, but without an nouncement of any contemplated ac tion. One effect of the close scrutiny of the affairs of local banks, which Commissioner Allen has been making, was an order from him to the management of the Old South Trust company to drop M from its payroll former Governor Sam uel W. McCall and four other officials, As M including two ce-presidents chairman of the board of directors of the company, McCall, who was ap pointed recently, is drawing a salary el of $8,000 a year, and the other men involved are said to be receiving sev earal thousand dollars each. a The object of the order is to reduce f the bank's expenses. and it is the opinion of the bank commissioner that D the men whom he asked to have dropped are holding merely nominal positions for which the salaries might to well be saved. In each instance, they may continue to serve in their present capacities without salary, according to the order from the bank commissioner to the Old South management. The Old South Trust company was M closed a year ago and re-opened re to cently after having rehabilitated its finances without loss to the depositors of Several hundred persons had gath ered outside the offices of the Tremont W Trust company when the doors were th opened at 8:45. fifteen minutes before as the usual hour and lines quickly formed tl before the several paying tellers' win dows. After withdrawals had been going on steadily for nearly an hour & with the crowds constantly increasing be the bank officials announced that the m law permitting a bank to require 90 days' notice for withdrawals from the savings department would be invoked forthwith "for the protection of the m depositors. The regulation would be m withdrawn "as soon as the public th calmed itself. it was announced M We have plenty of money to pay everybody. officials said. "and we're prepared to do so this morning, but at he crowd became so large that it was el impossible to handle them and we in is roked the law for the protection of the he depositors, not for our own protec iden. The Fidelity Trust company also served notice on depositors that it f would take advantage of the 90 days ke law. It was stated at the bank that ha this was done upon the direction of the bank commissioner At the office of
6.September 27, 1920East Oregonian : E.OPendleton, OR
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BANK INVOKES 90 DAY CLAUSE TO HALT RUN BOSTON, Sept. 27.-(U. P.)-The Tremont Trust company today invoked the 90-day clause of the banking laws which requires depositors to give that much notice before withdrawing funds. The action followed a run on the bank in which the police were called to restore order among the excited depositors. BOSTON, Sept. 27.-(A. P.)-A crowd gathered outside the offices of the Tremont Trust Company today when its doors were opened. After steady withdrawals for nearly an hour bank officials announced the law permitting the bank to require 90 days notice for withdrawaly of savings would be invoked to "be withdrawn as soon as the public calmed itsself." The Fidelity Trust Company announced at opening that its savings department would take advantage of the same law. Several banks opened with large amounts ready to cash as a provision against runs which developed Saturday following closing of the Cosmopolitan Trust Company.
Three Boston Banks Suspend Payments (Continued from page one) was said, the taking of this action was optional with the banks. The run on the Tremont Trust Co. was participated in by hundreds and the proportion of the crowd became so great that police mounted and afoot were called to keep the crowd in order. The bank tried for an hour to meet the claims against it and officials announced there was money on hand to pay all, but the crush became so great that vice president Simon Swig announced that the 90-day notice would be required. At the Fidelity Trust Co. which also had offices in the downtown district the run was of small volume but the law was called upon. It was stated "to allow the public to recover from the prevailing unrest." There has been a run on the Dorchester Trust Co., for several days and the invocation of the law there stopped the payments. The virtual suspension of payments of these three banks follows the closing of five banking institutions in this city within the past two months by Bank Commissioner Allen. In no case was the bank a member of the Federal Reserve system. State officials say that the Ponzi crash was clearly reflected in the trouble of the several banks which hda been under a run by depositors. In each case except that of the Hanover Trust and the small affiliated private banks it has been indicated that the banks were solvent but were lacking ready cash to meet the demands of depositors. At all three of the banks that suspended payments in its savings department is was announced that transactions in the commercial department would proceed as e usual. Gov. Coolidge conferred with State treasurer James Jackson and Bank Commissioner Allen regarding the banking situation. The only statement issued was made by the governor, who said: "Some time ago I advised all big banks in Boston that plans should be worked out through which there would be co-operation between all the banks. A clearing house committee is now working out details of such a plan."
8.September 27, 1920Evening StarWashington, DC
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RUN BEGINS AGAIN ON BOSTON BANK Tremont Trust Company Invokes Ninety-Day Notice to Protect Deposits. BOSTON, September 27 (by the Associated Press).-Several hundred persons gathered outside the offices of the Tremont Trust Company here today when the doors were opened at 8:45 a.m., fifteen minutes before the usual hour, and lines quickly formed before the several paying tellers' windows. After withdrawals had been going on steadily for nearly an hour. with the crowds constantly increasing. the bank officials announced that the law permitting a bank to require ninety days' notice for withdrawals from the savings departments would be invoked forthwith "for the protection of the depositors." The regulation would be withdrawn "as soon as the public calmed itself." it was announced. "We have plenty of money to pay everybody." officials said, "and we're prepared to do SO this morning. but the crowd became so large that it was impossible to handle them. and we invoked the law for the protection of the depositors, not for our own protection." Notice Served on Depositors. Upon opening for business today the Fidelity Trust Company served notice on depositors that it would take advantage of the law permitting it to require ninety days' notice of withdrawals from the savings department. It was stated at the bank that this was done upon the direction of Joseph C. Allen, state bank commistioneer. At his office it was said that the taking of this action was optional with the banks. Several banks opened their doors with large amounts of ready cash piled high within the tellers' cages as provision against a repetition of the runs which developed Saturday out of the closing of the Cosmopolitan Trust Company. No Other Banks Involved. Bank officials in several instances announced by statement or advertisement that there was no connection between the Cosmopolitan, which was the fifth bank to be closed here within two months, and their banks, and Bank Commissioner Allen declared that no other banking institution was involved in the Cosmopolitan's troubles. Nevertheless, a recurrence of the runs in some degree was anticipated, depositors having become alarmed. and. in the case of the Tremont Trust Company having made constant withdrawal from early morning to nearly midnight Saturday, the management extending the closing hour from noon to accommodate them. The feeling of uncertainty over the banking situation was the schedule of discussion by Gov. Coolidge and bankers yesterday, but without announced decision of any contemplated action. McCall Ordered Dropped. As result of the close scrutiny of affairs of local banks which Commissioner Allen has been making, was an order from him to the management of the Old South Trust Company to drop from its pay roll former Gov. Samuel W. McCall and four other officials, including two vice presidents. As chairman of the board of directors of the company, Mr. McCall. who was appointed recently, is drawing a salary of $8,000 a year. The object of the order is to reduce the bank's expenses. it being the opinion of the bank commissioner that the men he asked to have dropped are holding merely nominal positions. In each instance. they may continue to strye in their present capacity without salary, according to the order from the bank commis-
Six Boston Banks Closed in 2 Months Commissioner Takes Over Affair of Fidelity Trust Company. Boston, Sept. 28.-Bank Commissioner Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth banking Institution in this city within two months. The others were the Hanover Trust company. of which Charles Ponzl, the "financial wizard." was director and largest individual depositor. the Prudenital and Cosmopolitan Trust companies and two small private banks. The capital of the Fidelity is $3,000.000. and according to the latest available statement from the company. had a surplus of $700,000. Its deposits totalled about $18,000,000. James G. Ferguson, its president. is affiliated with several other financial and industrial institutions as is Edwin T. McKnight. the vice-president. The latter is president of the state senate. The Fidelity Trust company was one of three banks which yesterday invoked the law requiring ninety days' notice for withdrawal of savings deposits. The reasons for the closing of the bank, Commissioner Allen said, were "the steady withdrawals of deposits and slow and doubtful loans. At the Tremont Trust company a small crowd gathered before the opening hour, but the police had no dimculty in keeping order. The bank continued business in its commercial dedepartment were require to give ninety department were required to ninety days' notice of intention to withdraw. The same situation existed at the Dorchester Trust company.
10.September 28, 1920The Richmond Palladium and Sun-TelegramRichmond, IN
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SIXTH BOSTON BANK IS ORDERED CLOSED (By Associated Press) BOSTON, Sept. 28.-Bank Commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth banking institution in this city within two months. The others were the Hanover Trust Co., of which Charles Ponzi, the financial wizard," was a director and largest individual depositor, the Prudential and Cosmo. politan Trust companies, and two small private banks. The capital of the Fidelity is $3, 000,000, and according to the latest available statement from the company, had a surplus of $700,000. It deposits totaled about $18,000,000. James G. Ferguson, its president, is affiliated with several other financial institutions, as is Edwin T. McKnight, the vice-president. The latter is president of the state senate. The Fidelity Trust company was one of three banks which yesterday invoked the law, requiring 90 days notice for withdrawal of savings depoalts. The reason for the closing of the bank, Commissioner Allen said, was "the steady withdrawal of deposits and slow and doubtful loans."
11.September 28, 1920The Bismarck TribuneBismarck, Mandan, ND
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SIXTH BANK IN BOSTON CLOSED BY COMMISSIONER Boston, Sept. 28. - Bank Commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth banking institution in this city within two months. The others were the Hanover Trust company, of which Charles Ponzi, the financial wizard, was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies and two smaller institutions. The capital of the Fidelity is $3,000,000, and according to the latest statement, had a surplus of $700,000. Its depostis totalled about $18,000,000. The reason for the closing of the bank, Commissioner Allen said, were "the steady withdrawals of deposits and slow and doubtful loans."
FIDELITY TRUST STOPS BUSINESS Bank Commissioner Allen Takes Charge of Institution DECLINING DEPOSITS AND SLOW LOANS They Are Responsible for Commissioner's Action - Its Officials Affiliated With Other Financial and Industrial Concerns. BOSTON, Sept. 28.-Bank Commissioner Joseph Allen took over the affairs of the Fidelity Trust Co. here today. His action marked the closing of the sixth banking institution in this city= within two months. The others were the Hanover Trust Co., of which Charles Ponzi was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies and two private banks. The canital of the Fidelity was $3,000,000 and according to the latest available statement the company had a surplus of $700,000. Its deposits totalled about $18,000,000. James G. Ferguson, its president, is affiliated with several other financial and industrial institutions, as is Edwin T. McKnight, the vice president. The Fidelity Trust Co. was one of three banks which yesterday invoked the 90-day law for withdrawal of deposits. The reasons for the closing of the bank, Commissioner Allen said, are the steady withdrawal of deposits and slow and doubtful loans. 'Only a few persons were on hand when the formal notice announcing the closing was posted on the door of the Fidelity Trust Co. at 9 a. m. A squad of policement were on duty and extra officers patrolled the financial district but there was no excitement. At the offices of the Tremont Trust Co. a small crowd gathered before the opening hour but police had nothing to do. The bank continued to do business as usual in its commercial department but depositors in the savings department were required to file 90 days' notice of intention to withdraw. The same sitnation existed at. the Dorchester Trust Co.
months. The others were the Hanover Trust Company of which Charies Ponzi, the financial wizard, was a director and one of its largest ind.vidual depositors, the Prudential and Cosmopolitan Trust Companies and two private banks. The capital of the Fidelity Trust Company is $3,000, 000 and according to the latest available statement from the company, it had a surplus of $700,000. Its deposits totalled $18,000,000. The President, James G. Ferguson is affiliated with several other financial and industrial institutions as is Edwin T. McKnight, vice-president. The Fidelity Trust Company was one of the three banks, which yesterday invoked the law requiring 90 days notice for the withdrawal of savings deposits. The reason for the closing of the bank, Commissioner Allen said was the "steady withdrawal of deposits and the slow and doubtful loans.' Only a few persons were on hand when the formal notice announcing the closing was posted on the doors of the Fidelity Trust Company at 9 a. m. A squad of policemen were on duty and extra officers patrolled the financial district but there was no excitement. At the offices of the Tremont Trust Company, a small crowd gathered shortly before the opening hour but the police had no difficulty in keeping order. The bank continued to do business in its usual commercial department but depositors in the savings department were required to give a 90 day notice of intention to withdraw. The same situation existed at - the Dorchester Trust Company. The closing of the Fidelity ties up between $50,000 and $52.000 of state funds, State Treasurer Jackson announced. On August 1, the bank held $633,023 of state money. The state treasurer expressed himself as "content that the money of thes tate on deposit at the Fidelity is safe." "I believe also that the money of all depositors is safe. This is a time for the public to remain calm and to have confidence in our banking institutions. They deserve it."
14.September 28, 1920Capital JournalSalem, OR
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Sixth Bank In Boston Closed By State Today Boston, Sept. 28.-Bank Commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth banking institution in this city within two months. The others were the Hanover Trust company of which Chas. Ponzi, the "financial wizard," was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies, and two small private banks. The capital oft he Fidelity is $3.000,000, and according to the latest available statement from the company, had a surplus of $700,000. Its deposits totalled about $18,000,000. The reasons for the closing of the bank, Commissioner Allen said were 't'he steady withdra wals of de posits, and slow and doubtful loans."
15.September 28, 1920El Paso HeraldEl Paso, TX
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COMMISSIONER CLOSES SIXTH BOSTON BANK Boston, Mass., Sept. 28.-Bank commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth banking institution in this city within two months. The others were the Hanover Trust company of which Charles Ponzi, the "financial wizard' was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies and two small private banks, The capital of the Fidelity is $3,000,000 and, according to the latest available statement from the company, had a surplus of $700,000. Its deposits totaled about $18,000,000. James G. Ferguson, its president, is affiliated with several other financial and industrial institutions as is Edwin T. McKnight, the vice president. The latter is president of the state senate. The Fidelity yesterday invoked the law requiring 90 days' notice for withdrawal of savings deposits. The reasons for the closing of the bank, commissioner Allen said, were "the steady withdrawals of deposits, and slow and doubtful loans."
16.September 28, 1920New-York TribuneNew York, NY
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Law Invoked to Check Runs on 3 Boston Banks Thousands of Depositors Clamor for Savings, but Are Held Off by NinetyDay Notice Requirement State Takes Action One Institution Will Be Taken Over by Examiner; Police Keep Crowds Back (Special Dispatch to The Tribune.) BOSTON, Sept. 27.-The Fidelity Trust Company, one of three banks which to-day invoked the ninety-day clause covering the withdrawal of savings deposits, will be taken over by the State Bank Commissioner at 9 o'clock to-morrow morning, according to a statement to-night by Commissioner Joseph C. Allen. Thousands of depositors, uneasy over the closing of five other banks in Boston in the last two months and the Ponzi financial bubble, were clamoring to withdraw their funds at once when three institutions resorted to the law requiring that ninety-days' notice be given before withdrawals of savings deposits can be made. Besides the Fidelity Trust Company, the banks were the Tremont Trust and the Dorchester Trust companies. Governor Coolidge held 8 conference to-day with State Treasurer James Jackson, Bank Commissioner Allen and the bank commissioner's counsel, former Attorney General Wyman, after which the Governor said he was making efforts to have all the banks join in a plan to prevent any solvent bank from being forced to close. It is understood the plan is now being worked out by the Clearing House Commission, the members of which include representatives of the Shawmut, Merchants' and First National banks and the Old Colony Trust Company. "I suggested some time ago," the Governor said, after the conference, "that the banks cooperate and support each other, so that no bank that is solvent should be forced to close its doors because it cannot get funds to meet the demands of its depositors." The Governor said that the meaning of the Federal Reserve act is that banks sustain each other. The Federal Bank also has been asked to take any action it can to clear the situation. "The money of the people of Massachusetts is safer in any banking institution in the commonwealth than in their pockets or their homes," said the Governor. "The present crisis apparently was started by the Ponzi affair. I don't know that there has been anything malicious, but it is well known that there are interests in the community that would like to break down all our institutions, whether banks or churches or institutions of government. I do not know whether these interests have had the ear of the class of people depositing in such banks as
17.September 28, 1920Every Evening, Wilmington Daily CommercialWilmington, DE
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DEPOSITORS MAKE RUN ON BANKS AT BOSTON Public Uneasiness Forces Three to Invoke 90-Day Notice Law. Boston, Sept. 27.-Public uneasiness over banking conditions yesterday caused runs on some institutions with the result that the Tremont Trust Company, the Fidelity Trust Company and the Dorchester Trust Company invoked the law which makes it possible to require 90 days' notice of withdrawals from the savings departments in order to stop the rush of frightened depositors. In the run on the Tremont Trust Company the crowd became so great that the police were called to maintain order. The virtual suspension of payments for the present by the savings departments of these three banks, follows the closing of five banking institutions in this city within the last two months by bank Commissioner Joseph C. Allen. The several closings and suspensions of payment have occurred since the collapse of Charles Ponzi's get-rich-quick scheme, which involved the Hanover Trust Com-
18.September 29, 1920The Sun and the New York HeraldNew York, NY
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ANOTHER TRUST CO. CLOSED IN BOSTON The Fidelity Suspended by Banking Commissioner After Heavy Withdrawals. Special to THE SUN AND New YORK HERATO BOSTON, Sept. 28.-The Fidelity Trust Company was closed by the State Bank ing Commissioner to-day, which action brought quick announcement from the Boston Clearing House Committee that steps would be taken to prevent further trouble among Boston banks by guaranteeing to come to the assistance of all solvent Institutions, While the head of the committee, President Beal of the Second National Bank, was quoted as declaring there was no crisis, a director of the Fidelity Trust Company told of Ineffectual efforts last night to prevent the closing of the bank and referred to the "panicky conditions prevailing in the banking crisis." Notice WAB posted of the closing of the Fidelity this morning at the opening hour for business. The cause given was "henvy withdrawals of deposits and slow and doubtful loans," The Fidelity was one of the three trust companies that yesterday invoked the ninety day law on withdrawal of savings deposits to stay runs. President McKnight of the Massachusetts Fenate is vice-president of the Institution. Mr. McKnight and the other officers of the company were summoned to the State Bank Commissioner's office last night. They asserted that the Institution was solvent and offered to pledge their entire personal resources to protect the institution If It could be allowed to remain open. State Bank Commissioner Alien, however, could see no other way than to close the company, McKnight Narrows His Activities. Right on the heels of the closing of the Fidelity came the report that Mr. McKnight had severed all connection with the Dorchester Trust Company, Charlestown Trust Company, Stoughton Trust Company and the Atlas Trust Company of Springfield. He still retains his connection with the Fidelity and the Medford companies It is said. The city of Boston had no money In the Fidelity when It was closed, although its deposit there last December totalled $500,000. The State, however, was not so fortunate, as it has $50,000 in the Fidelity, on top of the hundreds of thousands tied up in the closed Hanover Trust, Prudential and Cosmopolitan. It should be said in behalf of State Treasurer Jackson, however, that none of this money was placed with the trust companies during his term of office, which term dates from this month only, but on the contrary has been gradually reducing the amounts of the State's deposits. The money was largely placed there by his predecessor. Mr. Burrell, who resigned as the result of the storm of criticism aroused by his conducting an advertising business largely with banks while holding the office of State Treasurer. Other Banks Guarded. As a result of the unrest In banking circles special guards have been placed about the banking institutions until the unrest disappears. A crank was arrested at the State House to-day. After invading the bank commissioner's office and failing to see the commissioner, he declared: "It's no use for him to try to hide from me. I'll get him if he does. I'll shoot him." Special guards were then placed about the office to prevent a repetition of the scene. Mr. Allen will also be guarded on the street. Gov. Coolidge issued a reassuring statement to-day. saying: "From all can hear the banking situation is quieting down. I understand the demands for deposits have practically stoppeds The bank commissioner assures me everything he hears is reassuring. "The second thought of the people is in favor of coming to the rescue of the situation. The disquieting rumors have ceased and the ordinary confidence has returned. All that is needed for an adequate remedy is a continuation of publlo confidence. This seems to exist today."
SIMON SWIG PROMISES STARTLING EXPOSURE BOSTON, Sept. 28-The runs on local banks within the past few days as the result of which two have been closed and two others have suspended payments in their savings department was due to a plot Simon Swig, vice president of the Tremont Trust Co. charged in a statement given out today after an interview with Bank Commissioner Joseph Allen. "It is a case of business rivalry of lion eat lion," he asserted. He announced, his intention in a day or two to expose publicly one of the greatest plots known in the banking history of the U. S. In this exposure he said a director of the Fidelity Trust Co., which was closed yesterday, would join with him.
20.September 29, 1920Omaha Daily BeeOmaha, NE
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Sixth Boston Bank Ordered Closed Fidelity Trust Company, That Experienced Run Monday, Taken Over. Boston, Sept. 28.-Bank Commissioner Joseph C. Allen today took over the affairs of the Fidelity Trust company. His action marked the closing of the sixth bank institution in this city within two months. The others were the Hanover Trust company, of which Charles Ponzi, the "financial wizard." was a director and largest individual depositor, the Prudential and Cosmopolitan Trust companies, and two small private banks. The capital of the Fidelity is $3,000,000 and, according to the latest available statement from the company, had a surplus of $700,000. Its deposits totalled about $18,000,000. James G. Ferguson, its president, is affiliated with several other financial and industrial institutions, as is Edwin T. McKnight, the vice president. The latter is president of the state senate. The Fidelity yesterday invoked the law requiring 90 days' notice for withdrawal of savings deposits. The reasons for the closing of the bank, Commissioner Allen said, were "the steady withdrawal of deposits, and slow and doubtful loans."
21.September 29, 1920The Abbeville Press and BannerAbbeville, SC
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BANKS IN BOSTON HOLD ON TO MONEY Depositors Alaarmed And Seek To Withdraw Savings Boston, Sept. 28.-Three Boston banks were forced today to invoke the law requiring ninety days' notice of withdrawals from the savings departments, as a measure of protection from depositors who had become alarmed over local banking conditions as a result of the closing of five banks in the last two months and the Ponzi financial fiasco. Officers of all three, the Tremont Trust Company the Fidelity Trust Company and the Dorchester Trust Company, asserted that their institutions were solvent, but lacked ready cash to meet the heavy demands made upon them by thousands of depositors who desired to withdraw their accounts at once. The bank officers were joined by Governor Coolidge, Bank Commissioner Jos. C. Allen and city officials in statements assuring the public that the Boston banks were in sound condition and that funds entrusted to them were safe. At all three of the banks which suspended payment in their savings departments it was announced, that business in the commerical departments would continue as usual with no ban on withdrawals there.
22.September 30, 1920New-York TribuneNew York, NY
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Runs on Boston Banks Declared Result of Plot Heads of Two Trust Companies Charge Rivals Conspired to Ruin Them; One Threatens Expose Special Dispatch to The Tribune BOSTON, Sept. 29.-Officials of two Boston trust companies charged to-day that recent runs on their institutions were the result of plots to injure them. One of the officials was Simon Swig, vice-president of the Tremont Trust Company, which Monday declared a three months moratorium on withdrawals from its savings department. The other was an officer of the Fidelity Trust Company, which was closed Tuesday morning at the hour of opening, the sixth bank to be closed here in recent weeks. Swig fainted while conferring with Joseph C. Allen, State Bank Commissioner, at the latter's office to-day and a doctor was summoned. Later Swig said he knew of the existence of "one of the biggest bank plots in the country," and added that he would expose the plot and its originators at a mass meeting next week. According to Swig the exposé will rock financial foundations. "Within a few days, when the situation clears up, I shall hire Mechanics Hall to expose one of the greatest plots ever known in this country," Swig said. "This plot is responsible for the financial situation that has developed in this city. Ponzi had nothing to do with bringing about this situation. It is a case of business rivalry, a case of the lion eating up the lamb; it is deliberate murder. "I told the Bank Commissioner today that' I had received every courtesy from him, but I could not say the same for some of his examiners." Mr. Swig charged that 8 bank examiner aided in an alleged attempt last year to drive him to the wall. Asked about the ninety-day suspension of payments in his savings department, Mr. Swig said he "didn't intend to have it remain long." The Fidelity Trust Company officials said the run on their bank was instigated by "certain powerful interests" which, he said, had conspired to drive the bank out of business. The bank issued this statement: "Monday before opening we deposited $1,200,000 in gilt-edge securities to meet our clearances of the day. In less than twelve hours we were ordered to close our bank. There was a substantial balance from our clearings and our officers pledged their personal fortunes to guarantee whatever other sums might be needed to meet our clearances for the next day, but we were denied permission to reopen. It was late at night, so that we were unable to meet the situation as we could have met it had we had notice early in the day that additional funds were required. "The whole thing was a deliberate attempt to wreck the bank, which is absolutely sound. The law should give us redress against such criminals." Bank Commissioner Allen later announced that the bank situation in this city was now "very reassuring." and that the closing of no more banks was in sight. Mr. Allen declared that the Tremont Trust Company (Mr. Swig's bank) was "all right."
Bank runs are almost always and everywhere a deterioration of bank fundamentals.
But not for you.
You are the measure-zero exception: great fundamentals, solid bank, and yet the Diamond Dybvig fairy spread its rumor. Depositors woke up. Your collateral was not prepositioned. The Clearinghouse had it for you.
Do not pass Go. Do not collect $200. Go directly to jail… or worse.
