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national
10be7be4ba85dc27Accommodated withdrawals, Public signal of financial health, Full suspension, Books examined
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Bank Closing Brings Louisville (Ky.) Run LOUISVILLE, Ky., Nov. 17 (I.N.S.) at the closing of the National Bank of Kentucky, depositors today started a run on practically every bank in the city. Similar conditions existed in other parts of the State. The bank was closed following a meeting of the board with rep resentatives of every Louisville financial house.
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Banks Over Many State of Kentucky Close Their Doors Six Institutions in Kentucky Close Their Doors as Precautionary Measure By The Press Nov. closing of the National bank of Kentucky here today was followed by the closing of of five smaller banks precautionary measure for four here and one at the of the Meanwhile, presidents other banks issued statements that were solvent and unaftheir banks fected. Bank of Kentucky's resources were given
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National of Kentucky Closes Five Smaller Banks Closed as Precautionary Move LOUISVILLE, KY., Nov. Closing the National Bank Kentucky here today followed five smaller banks closing as precautionary measure. here and one in Franklin, Ky. Meanwhile presidents of the other banks in city issued statements asserting their solvent every respect and would not affected. The National Bank of Kentucky which James Brown president was placed the hands of Paul Keyes of the federal comptrolgeneral's office as receiver. The other Louisville banks closed the Security Bank which was stated was closed purely precaution; the Louisville Trust Company which is affiliated with the National Bank of Kentucky, and two small Negro banks, the American Union Savings Bank and the First Standard Bank. The latter two members local clearing house association but their clearing through the Louisville Trust Company. Bankers Optimistic The McElwain Bank and Trust company Franklin, the fifth close. Its said had to shut because the National Bank Kentucky one of its correspondents and that its depositors would paid in full. In Louisville slightly more than the normal numbers patrons gathered the other banks but nothing approaching was noted and bank officials issued timistic statements that the public would not become excited. Crowds the National Bank Kentucky and the Louisville Trust Company delayed traffic slightly and special police were duty. LOUISVILLE, Nov. National Bank of Kentucky, the oldest bank in Kentucky, was closed today by resolution of its board of directors and placed in the hands of national bank examiner. The Louisville Trust company, an affiliated institution, also closed by action of its board of directors. James Brown, president of the National Bank of Kentucky, issued the following statement: "Due to withdrawals in the past and constantly rumors on the streets was deemed advisable by majority of the board of directors to close the bank, least temporarily, for the best interests of depositors and all concerned." Presidents of other Louisville banks issued statements that their institutions were solvent. The National Bank Kentucky, founded in 1834 the Bank Kentucky, and capitalized at $5.last statement listed and deposits Act Protect Creditors Directors of the bank in their resolution the action was taken conserve resources of this bank for the benefit of its crediDirectors of the trust com-
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Bank Closing Brings Louisville (Ky.) Run LOUISVILLE, Ky Nov. 17 (I.N.S.).-Alarmed at the closing of the National Bank of Kentucky, depositors today started a run on practically every bank in the city. Similar conditions existed in other parts of the State. The bank was closed following a meeting of the board with representatives of every, Louisville financial house,
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Closing of Bank Institutes "Runs" LOUISVILLE. Ky., Nov. (INS) -Alarmed at the closing of the National Bank of Kentucky, positors today started a run practically every bank in the city. Similar conditions existed in other parts of the state. Most of the institutions *ssued statements declaring, they had no connection with the Bank of Kentucky.
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EMPLOYES OF HOSIERY OUT ON STRIKE Reading. Pa., Nov. thousand workers. including men, women and girls, of score Reading and Berks county hosiery mills, held huge mass meeting in the International League baseball here today with the inauguration of strike protest against wage cutting general strike was at vote of 1200 meeting the Orpheum theatre Sunday under the auspices of the Reading branch of the American Federation of Labor. John Phillips, president of the State Federation of Labor. presided, while Emil Ritchie, representing the National Federation. and Emil Reuve national president of the hosiery workers, were present. It estimated between and 15,000 employes are affected by the The meeting this morning was for the purpose of registering the strikand seemed quiet and peaceful the task of registration went on. RUN ON BANKS Louisville, Ky., Nov. the closing of the National Bank of Kentucky, depositors today started on practically every bank the city. Similar conditions existed in other parts of the state. DEATH TOLL MOUNTS Kittanning, Nov. fatality toll the automobile crash which resulted yesterday when the driver machine lost control of his mounted to three today when Miss Ethel Callen, of Ford City, died in the Kittanning General hospital. Queen Anne Mahogany Dining Room Suite, from Exchange $75. Ellison Ellison. Notice Protected Home Circle Meeting Monday night in Ertz Joseph's Hall, Nov. 17th, o'clock. Public card party postponed. x15-2t
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THIRTY BANKS CLOSE IN ARK Continued from Page financial difficulties of Caldwell Company, bankers Tenn." also said affairs Caldwell & remote Arkansas nothing but an from excited public could have forced closing of this strong Nov. the closing the National Bank of Kentucky. today started run depositors every the city practically Similar existed in other parts the Most institutions issued of statements they no connection with the bank of Kentucky. The bank was closed following meeting of the board with repreof Louisville finanhouse. The meeting was in cial session from p.m. Saturday until 10 p.m. Sunday, when agreed that no immediate solution could be attained. SPRINGFIELD, Ill., Nov. Illinois banks were closed today, the number of failures in the state since Friday The Bartlett and Wallace State bank, Clayton. and Timewell State bank, Timewell, were closed today, auditor Oscar Nelson announced. All the closings in connection with the failure of the State Savings Loan and Trust company of Qunicy, which Timewell and Clayton institutions were correspondents. Timewell bank had deposits of $150,000 and the Clayton bank $50,000. NASHVILLE, Tenn., Nov. 17. Federal Judge John Gore today sustained for creditors' bill against Caldwell Company, investment banking house and dered to their claims before next July JEFFERSON CITY, Mo., Nov. Exchange bank, Rutledge, in with total of $43,790, and the Downing State bank, at Downing, in Schuyler county, were clostoday placed the hands the state finance department. The Downing bank had total resources of $193,929. Both banks were closed as sult the failure recently of the State Savings Loan Trust company Quincy, III., where they transacted business. LOUISVILLE, Ky., Nov. 17. Security bank, affiliated the bank Louisville Trust company through inclusion in the company, temporary suspension here today. LOUISVILLE Ky., Nov. 17.Kentucky, the oldest bank Kentucky, was closed by resolution of its board of placed the hands National bank examiner. The Trust company, an was closed by action of its board James B. Brown, president of the National of Kentucky, issued the to withdrawals in the past week and ruon the streets was advisable majority of the board of directors to close the bank, least temporarily, for the best interests of depositors and all concerned." Presidents of other Louisville banks issued statements that their institutions were solvent.
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Run Starts as Bank Closes LOUISVILLE, Ky., Nov. 17 Alarmed the closing of the tional Bank of Kentucky depositors today started run on virtually every bank in the city. Similar ditions existed in other parts of the state, was reported. Most of the institutions issued statements declaring they had connection with the Bank of Kentucky. closed following of the board with representatives of every Louisville finanhouse. The meeting was in continuously from urday until m. Sunday when agreed that no immediate solution could be obtained.
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8 Leading Financial Institutions Close in State of Kentucky LOUISVILLE, Ky., Nov. Eight Kentucky financial institutions resources totalling more than $75,000,000 were closed today. largest these the National bank Kentucky at Louisville, which was under the control of receiver, Paul C. Keyes, of the staff the currency resources approxi$60,000,000. Directors of the National bank of Kentucky said the suspension terday necessary condition. with closing, affiliated institutions, the Louisville Trust company the Security bank, suspended operations. Their said they solvent that they were closed The affiliated through the holdcompany. small negro banks in ville, The Mutual the First which cleared through the Trust company later closed. The bank of St. Helens, subalso suspended as precautionmeasure Two banks outside Louisville closed when learned The National bank of Kentucky pended. They were Meguiar Bank and Trust company Franklin, the First tional bank Horse Cave, National bank served Officers other Louisville banks night declaring yesterday's deposits greater than withdrawals, reported new accounts were opened during the day, earlier statecents that the institutions were vent.
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Eight Kentucky Banks Close as Safety Measure Resources Total 75 Officers Deny Insolvency Whole State Affected institutions largest Louisville control of staff Comptroller Currency resources National Bank Kentucky the deemed necessary closing. Trust Company and suspended they solvent and they tutions are through the holding Negro hanks Louisthe Mutual Savings the First Bank. through closed. Louissuburb. outside learned the Kentucky the McElMegular Bank Trust Company the First National Bank at Horse
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SUSPENSION DUE TO "WILD RUMORS" By The Associated Press. LOUISVILLE, Ky., Nov. 18.Eight Kentucky financial institutions with resources totalling 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 a receiver, Paul C. Keyes, of the staff of the comptroller of the cur rency 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. Simulaneously with its closing, two affiliated institutions, the Louisville Trust Company 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 BancoKentucky, a holding company.
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GOVERNMENT DEFICIT NOV. 15 IS $278,291,356 WASHINGTON, Nov. 18.-(P) -The Government's deficit on November 15 was $278,291,356 or $71,000,000 greater than last year. Income tax collections the mid- The largest of these was the Na. tional Bank of Kentucky at Louisville. under control of receiver, Paul C. Keyes, of the Comptroller of the Currency at Washington. Its resources $60,000,000. Directors of the National Bank of Kentucky said the suspension yeeterday was deemed necessary because of wild rumors concerning its condition. Simultaneously with closing. two affiliated institutions. the Louisville Trust Company and the Security Bank, suspended operations. Their directors said they were solvent and were closed as die of next month and in March will wipe it out temporarily at least. Whether the Treasury will finish the fiscal year in July with the deficit expected by President Hoover will depend on the March and June collections. Treasury figures today also showed Federal expenditures had increased $55,000,000 in the first four months of this fiscal year as compared with the same period a year ago. From last July to October 31, $790,000,000 was spent. At the close of business Saturday the Government had collected $1,075,181 since July 1 and had spent $1,353,473,345. The Farm Board spent $24,655.000 in four months and another $15,329,790 in the fifteen days of November. The total collections of the Government from July to November 15 were $184,000,000 less than that collected in the same period of last year, while the total expenditures were 13,000,000 less than year ago.
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8 BANKS CLOSE Ky., Nov. 18. (AP.) -Eight Kentucky institutions totalling more $75,000,000 were closed today. The largest of these the National Bank Kentucky at Louisville, which the control receiver, Paul of the staff of the comptroller the rency Washington. Its resources approximate Directors the National Bank Kentucky said the suspension yes terday deemed necessary eause concerning its condition. its closing, affiliated institutions, the Louisville Trust Company and the Security Bank, suspended operations. Their directors they solvent that were closed precautionary measure. three institutions affiliated through Banco tucky, holding company Two small negro banks in Louisville, the American Mutual Savings Bank and the First Standard cleared through Louisville Trust closed. Bank Helens. Louisville suburb, also precautionary Two banks outside Louisville also closed when learned the Na tional Bank of Kentucky had sus pended. They were the McElwain -Missionary Group No. of the temple, Thursday evening o'clock at the home of Mrs. Patsie Taylor, Douglas avenue. Mrs. Isabella White is the leader. -Envelopes are out for "Ten Friends" rally to on this Sunday 3:30 m., when an excelent program will be and missionary sermon be Friends are especially This rally is under auspices of Boone's H. and Missionary Society, of which Miss A. V. Bailey president. Eva DeGreffried of Selma. N. the guest cousin, Mrs. Geneva Harris, of Douglas avenue. Sarah V. Diggs, of 1438 Kirn the members the Christmas Saving club on this evening. Mrs. Edith Westmoreland, president. But Loving November 1929, Year memory dear Sadly Alice Loving Remembrance Friend, November lingers, Sweetly, tender, fond Freddie, SADLY MISSED FRIEND CARD OF THANKS. extend thanks many friends for the other rendered during death
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40 CLOSED ARKANSAS BANKS CLOSE WELL AS OLDEST BANK KENTUCKY." During the ten days, forty banks throughout the country have according to news At Louisville, Kentucky, the National Bank of Kentucky, oldest bank in that state, closed Monday order of the board of directors. Heavy withdrawals of deposits and street gossip was given the direct cause of the closing. LouisTrust Co., an affiliated institution, also closed. Officials of the Banks Co., Little Rock. also announced that 27 banks in that state had suspended payments depositors. American Exchange Trust of Little Rock, the largest bank to suspend. At Pine Bluff, Ark., the Merchants and Planters Bank suspended under the state banking laws of Arkansas. Six more banks have closed result of the big clash among banks which occurred at Quincy, last week. As result of the closing of one of the largest and oldest banks in Quincy, four banks in Missouri towns closed, well as two smaller Illinois towns. Frozen assets given as the cause of these failures. Again, want express our confidence faith in the banks old Barry county Recent nancial statements issued by them. show they are all enjoying nice business and in and healthy safe condition, which highly commendable the part of their management.
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Group Banking Plan Prestige Unimpaired Not Adversely Affected by Recent Suspensions, Says H. L. Rackliff. A close analysis of the banking situation as it now exists in the southern and southwestern states result the recent small banking suspension supplies evidence strongest kind that American banking has been af fected and furthermore that the prestige which is attracted group banking has not been impaired any way. This statement made by Herbert Rackliff in an article entitled "Plain Facts Regarding Small Bank Suspensions, which appears the current issue of "Banking weekly published by Rackliff & Co., Inc. Mr. Rackliff that "those who by inclination by business interests are opposed the further growth of the group system of banking naturally eager to seize upon rapid succession of small bank failures as offering evidence that the group movement is doubtful benefit to American banking and to the in general. Affiliation Not Effected. The fact It had been anthis that CaldCo. was to be affiliated with Co., group banking organization It reportnever actually place, given as reason by Mr. Rackliff for the spread of disturbing rumors in Louisville regarding the latter company failure Caldwell & Co. These rumors were responsible for the closing of the National Bank Kentucky and small Banco Kentucky Co. he ly, however, the bank was placed receivership by controller of the currency. subsequent events prove the BancoKentucky Co. and the National Bank of Kentucky to have suffered heavy losses and to be actually insolvent as is not unlikely the facts will constitute no indictment of group bank ing. the article continues 'Group banking does not pretend to be immune poor management. The leading of the group have always welcomed the idea of supervision over the activities of holding companies for banks, and they, themselves, recognize the fact that the dangers inherent lack of supervision such companies is the only factor in the itself which may be open to justifiable "The suspension of 43 banks in Arkansas was voluntary and in with the state law which permits voluntary suspension of payments for five days. Mr. Rackliff ascribes the closing various small banks in Missouri Illinois, Indiana, Iowa and North Carolina the general excitement and to agricultural and business conditions "The remote cause however, he says, "is more important and that originated in an unsatisfactory condition the small unit bank throughout the ag. ricultural sections of the country "Unit banks in the agricultural sections of the country, particularin the south and southwest, have not satisfactorlly since the start of the deflation following the World war and the record unit bank failures bears eloquent to the adverse under which many of these institutions struggled for ex istence and finally fell by the way side. The merger movement in enterprise has resulted large distributing and manufacturing organizations and great public utility companies which converge their cash assets with the larger institutions in adjacent cities addition, small unit banks as
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Louisville Asks $41,493 From Bank Receiver Louisville, Ky., Dec. 30. (AP)Empress The city of Louisville made format demand today on Paul Keyes, Last Times receiver of the National Bank of Kentucky, for payment of $41,Today 493.50 check deposited by the finance director after banking hours November The city's law director said the check was cleared and colected from the Cleveland bank on which it was drawn on Tuesday afternoon. the second day after the National Bank of Kentucky was closed.
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ASSESSMENT Faces Banco Holders. Liability or Millions Involved In Closing or Kentucky Institution, Receiver Declares Post Building March of Company face an the itself can proits liability under the Paul C. Keyes receiver for the National Bank of Kentucky, said to We will take steps to collect stock Mr. Keyes "If the money be from the com Liability of of bank has never before but we been on the matter since the bank and we are about the initial There BancoKentucky Company outstand Ing. the majority of which is owned and vicinity. If the as by the receiver is upheld by the stockholders be called upon make up the defiafter due from the Keyes pointed are liable for losses sustained by bank the on in excess of 10 per Of combined capital and surplus in limit for the National Bank Kentucky was were number of over that limit where per anticipated. these loans in of legal Mr. Keyes said "but the facts coming out now and of the now stand chargeable what they should have reasonably known these loans Besides being liable for loans in ex of were also for the prudent and safe management of the bank A large battery of accountants also been engaged to assist lawyers the task of digging into bilities The is much in volved of the of the National Bank of Kentucky with the Louisville Trust Company prior formation of the BancoKentucky Company and the scrambling of seboth eventually in the shape of Comwhich now is threatened with an levy.
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were deadlocked, but were instructed by Judge A. T. Burgevin to continue deliberating. The defense presented no testimony during the trial. The indictments were based on a note Brown executed to his brokers, Wakefield & Co., and which subsequently was indorsed to the Bancokentucky Co., of which Brown was president. Brown also is president of the closed National Bank of Kentucky and publisher of the Louisville HeraldPost, now being operated by a receiver in bankruptcy. Misapplied Funds. Brown and Jones are under Federal indictments charging willful misapplication of funds of the National Bank of Kentucky in connection with a transaction involving $46,777.50. They are accused of ordering Wakefield & Co. to purchase stock without consent of the bank's directors. No date has been set for the Federal trials.
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of the re-organized Louisville Trust company is expected to release gross deposit liabilities of $13,859,914. This would make a total of gross deposit liabilities released of $20,270,591. The state banking department estimates that amount of gross deposit liabilities of state banks in suspension from the period beginning January 1, 1929, will be $8,816,846 after the re-opening of the Louisville Trust company, All but nine of these state bank suspensions date after the closing of the Louisville Trust company and the National Bank of Kentucky in Louisville last November. Liabilities of the National Bank of Kentucky are not included in the state banking department's statistics as it was under the supervision of the federal banking department. The National Bank of Kentucky has already paid a 67 per cent dividend Banks that closed prior to Novem- other one. the Guaranty Bank ber have been or are being liquidated. These banks with the date of Trust Company of Lexington, has been taken over by the Citizens their closing and their gross deposit Bank and Trust company under the liabilities are listed here: Hickman presidency of W. A. Dicken, former Bank & Trust Company, Hickman, state banking commissioner. Decemberf 30, 1929, $595,862: Hargis Thirty-seven banks and trust com- Bank & Trust Company, Jackson, panies, under the supervision of the February 5, 1930, $554,368; Grayson state banking department, have been County Bank, Leitchfield, March 10, suspended since January 1, 1929 1930, $357,254; the Peoples Bank, The gross deposit liabilities of these Mt. Vernon, April 22, 1930, $260,institutions totaled $29,087,437. Of 855; La Grange Bank and Trust the banks re-opened or liabilities Company, LaGrange, May 26, 1930. assumed, the gross deposit liabilities $352,232; Bank of Russellville, Rustotaled $6,410,677. The re-opening sellville, June 12. 1930. $183,660; Hazel Green Bank, Hazel Green, June 30. 1930, $184,054: Elsmere Savings Bank, Erlanger, July 3, 1930. $192,870: Vine Grove State Bank, Vine Grove, $91,464. The banks that have re-opened since November of last year include the Security Bank. Louisville with approximate gross deposit liabilities of $1,996,001. It was able to open for business a few days after November 17. Other banks, with their gross deposit liabilities, that have reopened are: McElwain-McGuiar Bank & Trust Co., Franklin. $373,509: Bank of St. Helens, Shively, $412,824: Peoples Bank, Sulphur, $132,950; Bank of Caneyville, Caneyville, $318,216; Crestwood State Bank. Crestwood, $139,297: Fern Creek Bank, Buechel, $151,279; Farmers Bank, Fulton, $292,638; Bank of Sturgis, Sturgis, $256,463. Two Negro banks, the First Standard Bank and the American Mu- tual Savings Bank. which closed in Louisville November 17. were later consolidated into the Mutual Standard Bank. The bank resulting from the merger closed May 7 of this year and is being liquidated. Liquidating agents have been appointed for the following banks closed since November: Owsley County bank, Boonevill, $100,329; Union Central Bank, Louisville, $503,578; Bankers Trust Company, Louisville, $553,279; Hopkins County Bank, Madisonville, $717,587; Woodbury Deposit Bank, Woodbury, $37,693; Citizens Bank & Trust Co., Middlesboro, $495,977; Webster County bank, Clay, $164,676: Bank of Ludlow, Ludlow, $363,359: Bank of Hardinsburg & Trust Co., Hardinsburg, $523,381 Liquidating agents hav not been appointed for five state banks which have closed since the first of July. These banks are: Citizens Bank, Drakesboro, $81,755; Bank of Barlow, $91,910: Butler Deposit Bank. Butler, $614,388; Bank of Wayland, Wayland, $145,348; Beaver Valley State Bank. Weaksbury, $113,269. Kentucky's Tourist Trade Geoffrey Morgan, acting executive secretary of the Kentucky Progress commission, attributes the increase in gasoline consumption in Kentucky this year to the Progress commission's efforts in advertising the state's tourist attractions. The first six months of this year showed an increase in gasoline taxes of $180,178.03 over the same period last year. "It certainly pays to advertise," said Mr. Morgan, citing these statistics. "Take the figures for Janusry. The tax commission showed gasoline taxes collected in January of this year totaled $620,885.50 as compared with $503,046.73 for January of 1930. That is an enormous difference. The reason for it is this. We had an open winter the first of this year. So the tourists in Florida began flocking home. We had been advertising Kentucky among the tourists and the result was many of these tourists returned northward by way of Kentucky."
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FUNDS AT HAND To Pay Additional Dividend To Louisville Bank Creditors Remaining assets of the National Bank of Kentucky are sufficient to make additional of 13 payment to the This will make total of 80 per cent the will from the of made Paul Keyes, of the hearing before Judge Nat referee in bankruptcy in the proceedings against the Kentucky Wagon facturing Keyes said the additional payment of per cent to be made from the remaining assets does not take account any recovery that might be from Directors and stock the all of whom have in Federal Court The did not say when the be made the The per was made through the First Bank Keyes was questioned by Ernest for attorney Henry operating trustee of the Wagon testimony showed that claims against the tional Bank of of June 30 and that the paid out up to that time
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National Bank Directors Can Be Required To Pay Own Fortunes To Depositors If Proven Negligent (By United Press) WASHINGTON, Dec. 21.-Bank directors can be compelled in specific cases to compensate losses to depositors to the full amount of their own as sets instead of just the amount of their stockholdings, Comptroller of the Currency Poole told the United Press today. Establishing the liability of the bank directors to the full amount of their assets may be one of the laws evolved to protect money and reduce bank suspensions. Such a law would inflict heavy penalities on violators. The government is now conducting a case against that directors of the National Bank of Kentucky at Louisville to recover $14,000,000 for depositors. A great deal of this sum, if awarded, will come from private assets other than shares held by directors. Should the government win its case the effect will be far reaching Considerable sums of money have been collected from bank directors, said Poole when they had misused their powers and failed to adhere to principles prescribed by law and advised by inspectors.
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JEFFERSON NOTES Circuit Judge John Marshall acting on petition for advice filed Paul Keyes. receiver the National Bank Wednesday the settlement the note William for 800 and the 000 note of Hal T. Jefferson In January. 1930 Mr. Keyes sued for payment the the same time filed Jeffersons to enjoin from collecting was set out that the note was cured with 260 shares of stock in the BancoKentucky Company $200,000 note with 9,000 shares the same stock In petitions filed at that time by the Jeffersons it was set out that the notes were executed with the agreement with the bank that as long the BancoKentucky was eral, the and interest be solely from the of the stock pledged and that the plaintiffs were to be under no further