Peoples State Bank (Lakota, ND)

Episode Information

Episode UID
5285351191321
Episode Type
Suspension → Closure
Bank Type
state
Bank ID
528535119 hash
Start Date
January 27, 1910
Location
Lakota, North Dakota (48.043, -98.336)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
ff29e6fb6570c680

Response Measures

None

Description

Closed by the state bank examiner and later placed in receivership; criminal charges against officers followed.

Events (8)
1. January 27, 1910 Suspension
Cause
Government Action
Cause Details
State Bank Examiner Oliver Knudson ordered the bank closed and took charge, citing an unspecified embarrassment and cash shortage.
Newspaper Excerpt
The People's State bank of Lakota was ordered closed last night by State Bank Examiner Oliver Knudson.
Source
newspapers
2. January 29, 1910 Other
Newspaper Excerpt
It was when these drafts commenced to come back protested that the doors were ordered closed. It is believed that the bank's resources are ample to cover all liabilities, and that the suspension is due to shortage of cash which it was impossible to obtain on short notice.
Source
newspapers
3. February 5, 1910 Other
Newspaper Excerpt
According to a statement given out today by the state bank examiner, the shortage in the accounts of the Peoples' State bank of Lakota will aggregate $90,000. Both Messrs. Rahders and Floren have been placed under $7,500 bonds each. On Monday ... an application will be made to have a receiver appointed for the defunct institution.
Source
newspapers
4. March 2, 1910 Receivership
Newspaper Excerpt
Judge C. F. Templeton today appointed George A. Kellogg of this place receiver of the failed People's State bank.
Source
newspapers
5. June 18, 1910 Other
Newspaper Excerpt
An agreement was practically reached ... Attorney George A. Bangs ... will be actively identified with the prosecution of Cashier Floren and President Rahders, arrested for forgery in connection with the affairs of the institution.
Source
newspapers
6. July 6, 1910 Other
Newspaper Excerpt
Both defendants waived examination and ... both entered their pleas of guilty. The failure of the institution was extremely disastrous, and the depositors will receive only about twenty-five per cent.
Source
newspapers
7. November 16, 1910 Other
Newspaper Excerpt
Judge Templeton yesterday issued an order ... authorizing Receiver George A. Kellogg to pay a dividend of 10 per cent to the depositors of the defunct institution.
Source
newspapers
8. April 21, 1913 Other
Newspaper Excerpt
The undersigned Receiver of the Peoples State Bank of Lakota, N. D., will sell at public auction ... all the remaining assets of the said Peoples State Bank.
Source
newspapers

Newspaper Articles (15)
1. January 27, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, January 27, 1910

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Article Text

State Bank Examiner Shuts Up People's State Bank SUSPENSION IS TEMPORARY FRANK FLORIN, RECENTLY CONVICTED IN FEDERAL COURT, CASHIER OF CLOSED INSTITUTION - BANK CAPATILIZED AT $10,000-CAUSE A MYSTERY. Lakota, N. D., Jan. 27.-The People's State bank of Lakota was ordered closed last night by State Bank Examiner Oliver Knudson. According to a statement given out today the bank's suspension will be but temporary, and it is expected that the institution will reopen for business shortly. The state bank examiner, who is now in charge of the bank, and the bank officials both decline to divulge the nature of the present embarassment. Frank Florin, who was convicted in the federal court at Fargo on Tuesday on a charge of sending obscene matter through the mails, is cashier of the closed banking house. The bank is capitalized at $10,000. Efforts made today to learn the amount of deposits in the bank proved of no avail.

2. January 29, 1910 Bismarck Daily Tribune Bismarck, ND
Article from Bismarck Daily Tribune, January 29, 1910

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Article Text

LAKOTA BANK CLOSED BY THE EXAMINER Lakota, N. D, Jan. 28,-The People's State bank of Lakota was ordered closed by State Bank Examiner Oliver Knudson. According to a statement given out the bank's suspension will be but temporary, and it is expected that the institution will reopen for business shortly. The state bank examiner, who is now in charge of the bank, and the bank officials both decline to divulge the nature of the present embarrassment. Frank Florin, who was convicted in the federal court at Fargo on Tuesday on a charge of sending obscene matter through the mails, is cashier of the closed banking house.

3. January 29, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, January 29, 1910

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BANK'S DRAFTS WERE PROTESTED NO NEW DEVELOPMENTS IN CLOSING OF PEOPLES' BANK AT LAKOTA-HAD $100,000 DEPOSITS. Lakota, N. D., Jan. 29.-No statement as to the condition of the Peoples' State bank at Lakota would be given for publication today by State Bank Examiner Oliver Knudson. Mr. Knudson closed the doors of the bank Thursday morning after having stepped in and taken charge the previous evening. For the present he remains in charge of the institution. It is expected that within a few days something definite as to the prospects of reopening and reorganizing will be given out. Last Public Statement. Cashier F. A. Floren is absent from town and his whereabouts are unknown. although it is presumed he is in the twin cities. No statement of the bank's condition has been made public. The last published statement shows deposits of about $100,000. The capital of the bank is $7,500. The statement last published showed bills payable to the amount of about $15,000 and bills receivable of $40,000. The president of the bank. Mr. Hhaders, has been ill for some time and is still confined to his home. For sometime the affairs of the bank have been entrusted entirely to the hands of Cashier Floren. Recently the bank has been paying its clearance balances with drafts on banks below, and it was when these drafts commenced to come back protested that the doors were ordered closed. It is believed that the bank's resources are ample to cover all liabilities, and that the suspension is due to shortage of cash which it was impossible to obtain on short notice.

4. February 5, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, February 5, 1910

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Article Text

Lakota, N. D., Feb: 5.-The sensation that has been expected in connection with the closing of the People's State bank of this city a couple of weeks ago by State Bank Examiner Oliver Knudson, was forthcoming yesterday when F. A. Rahders, the president of the bank, was arrested on a charge of forgery. He waived preliminary hearing and was bound over to the next term of the district court under $3,500 bail, which was furnished. S. A. Floren, the cashier of the bank, will be arrested today on a similar charge and undoubtedly the same commse of procedure will be gone through with, as in the case against Rahders. The amourt of the deficit is $3,500 and both men have turned their property over to the receivers of the bank to make restitution. The offense is that of subscribing to a false statemert which was issued Nov. 16, and under the North Dakota statute this becomes a forgery. Owing to the prominence of the men arrested, the case is attracting considerable interest all over this section of the state.

5. February 5, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, February 5, 1910

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Article Text

LAKOTA BANKERS HELD FOR FORGERY PRESIDENT RAHDERS AND CASHIER FLOREN OF CLOSED BANK ARE PLACED UNDER ARREST. SHORTAGE IS $90,000 Lakota, N. D., Feb. 5.-According to a statement given out today by the state bank examiner, the shortage in the accounts of the Peoples' State bank of Lakota will aggregate $90,000. Both Messrs. Rahders and Floren have been placed under $7,500 bonds each. On Monday, it is, said, an application will be made to have a receiver appointed for the defunct institution.

6. February 9, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, February 9, 1910

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Article Text

DEPOSITORS OF LAKOTA BANK ACT STATE BANK examiner KNUDSON IS REQUESTED TO REMAIN IN CHARGE PENDING REORGANIZATION. Lakota, N. D., Feb. 9.-Between two and three hundred depositors of the defunct People's State bank of Lakota gathered yesterday at the courthouse to take action regarding the appointment of a. receiver. Contrary to rumors that the meeting would be in the nature of an indigation gathering, there was nothing sensational and the business before the depositors was dispensed with in a very orderly manner. Robert Grant was chosen chairman of the meeting and Charles R. Pettis. sercetary. Bank Examiner Oliver Knudson told of the condition of the bank and stated that the shortage was exactly $98,400.88. Then followed a three hours' discussion of the situation by the depositors. It was generally expected that the meeting would take action toward the election of a receiver but this did not prove to be the case. A resolution was passed, asking that Bank Examiner Knudson remain in charge pending a reorganization. Mr. Knudson thanked the depositors for the confidence shown by their action and will proceed with the investigation. To Assist Examiner. The only other action of the depositors was to appoint a. committee of seven to assist the examiners in their work. The state officials will undoubtedly report in a few days as to the bank's assets when an inventory has been made of the property turned over to the bank by Pres. F. H. Rahders and Cashier S. A. Floren. It is stated on good authority that although the irregulars date back several years, the greater part of the $98,400.88 went to S. A. Floren. Further than this nothing can be officially known until the state officials are willing to give out their report.

7. February 19, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, February 19, 1910

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EXPERTS AT WORK ON BOOKS Depositors of Defunct Bank at Lakota Urge Appointment of Receiver. Lakota, N. D., Feb. 19.-The executive committee selected by depositors of the defunct People's State bank to look after their interests has engaged the services of J. Gordon Stole, a certifled public accountant of Minneapolis. He arrived yesterday and is engaged in ferreting out the affairs of the bank under the supervision of the state bank examiner's department. A petition signed by a majority of the depositors asks Judge Templeton to appoint G. A. Kellogg of this place receiver.

8. March 3, 1910 Bismarck Daily Tribune Bismarck, ND
Article from Bismarck Daily Tribune, March 3, 1910

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RECEIVER NAMED. Lakota, N. D., Mar. 2.-Judge C. F. Templeton today appointed George A. Kellogg of this place receiver of the failed People's State bank. Mr. Kellogg was backed by the depositors and is the choice from all the candidates mentioned for the place. The fight against Mr. Kellogg was most bitter. He will enter upon his duties as soon as his bond has been approved by the court.

9. June 18, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, June 18, 1910

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WILL PROSECUTE LAKOTA CASHIER Lakota, N. D., June 18.-An agreement was practically reached here today whereby Attorney George A. Bangs, who has been working with the receiver of the defunct People's State bank. will be actively identified with the prosecution of Cashier Floren and President Rahders, arrested for forgery in connection with the affairs of the institution. The term of court at which their cases will be tried has been set for July 11. and on that date they will be arraigned to plead to the informations.

10. July 17, 1910 Bismarck Daily Tribune Bismarck, ND
Article from Bismarck Daily Tribune, July 17, 1910

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A SENSATIONAL BANK LOOTING CASE ENDED Grand Forks, N. D., July 16.-The sentence of President Rhaders and cashier Flohren of the Peoples State bank ends one of the sensational cases of bank looting in the state. The Peoples' State bank was organized at Lakota on Nov. 5, 1892, the stockholders being F. A. Rhaders. Merritt and several others closely associated with the former in business. The capital stock of the bank was the very small sum of $7,500. About ten years ago S. A. Floren, then of Minneapolis, came to Lakota and became cashier of the bank. Mr. Merritt withdrawing and removing to another state. Later the health of Mr. Rhaders failed considerably and the business of the bank was largely transacted by Mr. Floren. Upon the closing of the bank in January of this year. action was commenced before Judge Templeton of the district court asking that the institution be dissolved and that it forfeit its charter, and in these proceedings Judge Templeton appointed George A. Kellogg of Lakota as receiver. Immediately after the failure, Mr. Floren was arrested on three separate charges of falsifying the records, and forgery. and Mr. Rhaders was arrested on the charge of forgery, these charges being based upon his statements made to the state banking board. On July 6 additional complaints were filed against Floren, he being charged this time with receiving on three different occassions, three separate deposits after the bank became insolvent. while Mr. Rahders was charged with one offense of a similar nature. Both defendants waived examination and at the opening of the term of the district court this week both entered their pleas of guilty. The failure of the institution was ext-mely disastrous, and the depositors will receive only about twentyfive per cent. The books showed that on the day of closing there should have been $14,467 in cash on hand. when as a matter of fact there was but $2.774. Further examinations of the books showed that the process of looting had been in progress for a period of more than eight years prior to the time its doors were closed; the method by which this was accomplished and concealed was systematically under-stating the liabilities of the bank in the footings as the liability of the bank; the method was exceedingly crude but served its purpose in the absence of supervision by the banking officers and directors. In 1902 the shortage of the bank was first found by the expert accountants, being $2,500; in 1903 it had increased to $5,000; in 1904 to $8,000; in 1905 to $11,000, and in 1907 to $20,0000. The year of 1908 ended with an increased shortage of $10,000, making the total amount of the shortage Jan. 1, 1909, $30,000. From that time forward the increase was rapid; on July 24. 1909, $7,000 appears to have been taken from the vault in the bank; on September 10, another $1,000 was removed; on September 28 $1,000 more

11. November 16, 1910 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, November 16, 1910

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DIVIDEND FROM DEFUNCT BANK JJUDGE TEMPLETON AUTHORIZES 10 PER CENT DIVIDEND FOR LAKOTA DEPOSITORS. Grand Forks, N. D., Nov. 16.-Judge C. F. Templeton yesterday issued an order in the case of the People's State bank of Lakota authorizing Receiver George A. Kellogg to pay a dividend of 10 per cent to the depositors of the defunct institution. The judge's order was made in answer to a petition presented by Mr. Kellogg through his attorney, George A. Bangs of this city, in which a report of the present state of the bank's affairs was outlined and the receiver asked that an order be given allowing him to declare a dividend of 10 per cent. The reason for this action, as set forth iin the petition, is that the crop conditions in the vicinity of Lakota were especally bad this year, the result being that there is a money shortage and oven such a dividend would be received by the former depositors of the defunct institution more gladly at this time than later when the whole matter is closed. ,Tust how big an additional dividend will be declared when the whole matter is settled up is hard to say. There are a number of suits pending on the part of those who claim to be preferred creditors. The chief claim of this kind is that of Nelson county for approximately $9,000. The sum of $16,000 will be used in paying the 10 per cent dividend. This leaves some $10,000 in the hands of the receiver to meet the preferred creditors, if they are declared to be such by the courts. It is an interesting fact to note that of the money gotten together by Receiver Kellogg, about $15,500 was taken out of the Beek & Floren Automobile Co. The total liabilities of the bank are $129,557.03

12. June 19, 1911 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, June 19, 1911

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# SUPREME COURT IS HERE TODAY NORTH DAKOTA COURT HEADED BY JUDGE SPALDING IS SITTING IN FARGO TODAY - POLLOCK SITTING WITH THE COURT AT THIS TERM. For the first time in several years the North Dakota supreme court is sitting in Fargo today for the purpose of hearing cases. Two cases were argued today before the court and two more were entered. The supreme court is headed by Judge B. F. Spalding of Fargo, the acting chief justice. The other judges here are O. J. Fisk, E. T Burke, and E. B. Goss. Judge Morgan, the chief justice of the court is not here to sit with the other jurists. The court being minus one of its members, asked Judge Charles A. Pollock of Fargo to sit In place of the absent member. In the case argued this morning, Judge Burke was ruled out and only four of the jurists will decide the matter. The case argued this morning was that of Stewart vs. Lyness brought in from Valley City. It deals with a mortgage of some land and the argument was not on the merits of the case but on the validity of the appeal. C. J. Maddux of New Rockford is the attorney for the respondent and Herman Winterer is the attorney for the appellant, although D. S. Ritchie of Valley City acted for Mr. Winterer this morning. Two other cases were entered this morning. One of these was the township of Davenport vs. the township of Leonard, both of Cass county. V. R. Loval is the attorney for the appellant and Engerud, Holt & Frame, the attorneys for the respondents. The case of R. M. Pollock vs. W. B. and W. G. Jordan, et al was also entered, but was not argued The matter is one in which Mr. Pollock was the trustee of a store in Griggs county and Johnson & Johnson conducted a sale at the store four months before the fiing of the petition of bankruptcy and put the money on their own account. The trustee held that such was a preference and is contesting the matter. The respondent and plaintiff is his own attorney and Stambaugh & Fowler are the attorneys for the appellants. This afternoon the case of L. C. Widman vs. George A. Kellogg, as receiver was heard on the ground that Widman is a preferred creditor of the People's State bank of Lakota, of which Kellogg is the receiver. Widman purchased, as agent for the Great Northern, drafts on the bank, which was insolvent. Frick & Kelley of Lakota are the attorneys for the appellant and Bangs aand Robbins are for the respondent. The court will sit tomorrow. Ben Tillotson of Moorhead, private secretaray of Judge Spalding, is with the court as acting clerk.

13. August 26, 1911 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, August 26, 1911

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DECIDED AGAINST BANK RECEIVER TEMPLETON DECIDED IN FAVOR OF PLAINTIFF IN CASE OF DEFUNCT BANK. Lakota, N. D., Aug. 26.-A decision has just been handed down by Judge Templeton at Grand Forks, N. D., in the case of Simon Schmid of Bartlett, N. D., against the receiver of the defunct Peoples' State Bank of Lakota for the plaintiff in the full amount involved, which was $612. The facts in the case were rather peeuliar and made the matter somewhat complicated. It seems that about a year before the bank failed Mr. Schmid borrowed this amount of money and signed a note for the same which he thought was due to the Peoples' State bank when in fact the note ran to the Bank of Pekin, who were really making the loan through the Peoples' béfore the failure of the Peoples' State bank. When the note was due shortly before the failure of the Peoples' State bank, Mr. Schmid sent them a check for the amount of the note and interest and it afterwards turned out that instead of paying the note the Peoples' State bank sent the check to the Security Bank of Minneapolis and had it placed to their credit there. Then the bank failed and Mr. Schmid found that his check had been cashed and the note unpaid. He then brought action against the receiver and the decision which has just been rendered in his favor makes a judgment for the full amount due him a lien on certain collateral paper that was returned to the receiver from the Security Bank of Minneapolis and this will result in the full amount being paid instead of a few cents on the dollar, which is all that will be paid on the general claims against the defunct bank. John J. Samson of Devils Lake and Scott Rex of Grand Forks appeared for the plaintiff, Mr. Schmid, and Geo. A.- Bangs of Grand Forks for the defendant, the receiver of the Peoples' State Bank of Lakota.

14. February 29, 1912 The Fargo Forum and Daily Republican Fargo, ND
Article from The Fargo Forum and Daily Republican, February 29, 1912

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NELSON CO. HAS PREFERRED CLAIM RECEIVER OF DEFUNCT BANK PRECLUDED FROM APPEALING FROM DECISION. Lakota, N. D., Feb. 29.-Under the decision of the supreme court, Receiver George W. Kellogg of the People's State bank of Lakota, which failed two years ago, has no right to appeal from the order made by Judge Templeton under which Nelson county is adjudged a prior claimant as against other depositors. The county of Nelson had a deposit of $10,000 in the institution, and the judge has ordered that that amount shall be paid before other claims of depositors are considered. As a result of the supreme court's decision refusing to entertain an appeal from the receiver, action probably will be started by individual depositors. The court holds that the receiver has no authority to take sides against any depositor, having no personal interest in the estate.

15. April 10, 1913 The Evening Times Grand Forks, ND
Article from The Evening Times, April 10, 1913

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# NOTICE OF SALE. Notice is hereby given that in pursuance of an order of the District Court of the First Judicial District of the State of North Dakota in and for the County of Nelson, the undersigned Receiver of the Peoples State Bank of Lakota, N. D., will sell at public auction, at the City of Lakota, N. D., on April 21st, 1913, at two o'clock, P. M., of said day, all the remaining assets of the said Peoples State Bank particularly described as follows: