5369. Waukegan State bank (Waukegan, IL)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
June 1, 1931*
Location
Waukegan, Illinois (42.364, -87.845)

Metadata

Model
gpt-5-mini
Short Digest
052c220f

Response Measures

None

Description

The Waukegan State bank was closed by its directors in mid-June 1931 (articles 1931-06-19 refer to the bank having closed 'yesterday'). The closure triggered runs on other local banks (Waukegan National, First National). The closed institution was placed in receivership (Fred B. Whitney and later other receivers), assets were managed and sold, trials of directors followed, and the bank did not reopen. Classification: suspension leading to permanent closure (suspension_closure).

Events (5)
1. June 1, 1931* Other
Newspaper Excerpt
receiver Fred Brown Whitney (mentioned later as receiver and claimant of assets/bonds). Receiver Fred Brown Whitney appears in court reporting regarding ownership of posted bonds (1931-11-19).
Source
newspapers
2. June 18, 1931 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Directors ordered the bank closed (collapse/insolvency suspected); subsequent indictments and trials allege false statements and conspiracies by officers/directors indicating bank-specific malfeasance.
Newspaper Excerpt
closing of the Waukegan State bank yesterday
Source
newspapers
3. May 12, 1932 Receivership
Newspaper Excerpt
Fred B. Whitney, was removed today as receiver of the Waukegan State bank and Circuit Judge Edward D. Shurtleff appointed L. J. Wilmot in his stead. Wilmot is clerk of the district court. Judge Shurtleff held that Whitney had failed to carry out his duties as receiver. Specifically... $841,000 in notes... from Trust company of Chicago. (Wausau Daily Herald 1932-05-12).
Source
newspapers
4. May 24, 1932 Receivership
Newspaper Excerpt
L. Elmer Hulse... was appointed receiver of the closed Waukegan State bank yesterday... appointment of Hulse would be satisfactory to the state auditor. (Chicago Tribune 1932-05-24).
Source
newspapers
5. June 22, 1932 Other
Newspaper Excerpt
assets of the closed Waukegan State bank be sold public auction on June 22, Hulse had petitioned the court for authority to hold the sale. (The Dallas City Review 1932-06-14 reporting order).
Source
newspapers

Newspaper Articles (11)
1. June 19, 1931 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, June 19, 1931

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SHUT-DOWN ORDERED BY BD. OF DIRECTORS MAY BE TEMPORARY, REPORT Move Is Taken To Protect terests Of Depositors Who Did Not Withdraw Funds, And Indications Are That The Bank Will Reopen Within Ten Days; First National Takes Care Of Heavy Run Of Withdrawals And Is Safe. To protect the interests of depositors who declined to withdraw their funds following the closing of the Waukegan State bank yesterday, the board of directors of the Waukegan National bank decided against opening the institution this morning in the face of vast horde of depositors who were waiting to get their money. Indications are that the bank will be reopened within few days. As word of the closing of the Waukegan National was circulated around town, vast crowds gathered at the city's busiest corner, Washington and Genesee streets, and terrific was started on the lone maining banking institution. the First National bank. Charles Nelson Steele, greatgrandson of the founder of the First National and at present the institution's president, radiated confidence he moved in and out among the crowds in the foyer, helping the people make out their withdrawal slips and smilingly promising that all would get their money. Contact with Steele caused many those who came to to throw their glips. step attempt to reason with neighbors in the who were. caught in the general financial hysteria. Money Brought In Huge amounts of breaking the record brought into the city yesterday when the Waukegan State bank closed, delivered to the First National today and with the exception of depositors seeking to withdraw. the situation calm and confident. Faced with heavy run that threatened the safety of the institution this morning. the Waukegan National directors decided against opening and called in H. Reimnational bank examiner out of the Chicago office the chief national bank examiner. Mr. Reimers was temporarily charge of the bank but was to relieved today by Harry W. Walker. national bank examiner. Mr. Reimers failed to any very serious consequences in the situation and intimated that in his opinion the would be reopened within few days. To Reopen Safety Vaults To avoid confusion the safe deposit vault in the Waukegan Safe Deposit company, subsidiary the Waukegan National bank, was closed the but will reopened as soon the hysteria subsides. There comparatively few people gathered about the Waukegan National during the H. Burnett, president of the Waukegan National, his home after the meeting and was reported to be considerably upset by the turn events. He was unable to make statement. The capital stock of the Waukegan National $250,000 and the surplus $150,000 according the bank statement of March 25. The undivided profits, net, that time were $26,845 and the bank carries serve The deposits amounted to with total assets $4,076,071.34. The bank building. furnishings and equipment are valued $248,915.10. List Stockholders Stockholders of the Waukegan National Bank and the number of shares credited to each for tax (Continued on Page 2, Column

2. August 7, 1931 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, August 7, 1931

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SUE FOR DECISION ON BANK FUND tained by the controller of the currency regard to national banks, but some states the courts have ruled the banks such right and the company will base its claims the on these decisions, Mr. Beexplained. In speed up settlement between the bank and the surity company, Mr. Behanna preparing suit filed behalf of the city forcing the bank receiver and the surity company settle the question of the ownership of the tax warrants. The threat of the bondholders to the city from accepting the offset suggested by surity company strengthens the opinion the corporation counsel against that move which, he claims, further illegal received to pay off tax anticipation warrants are held as trust until the tax warrants are paid off, and that the city has no right to accept an offtrust fund. For the city to accept the anticipation warrants as part the posit would the city holding the used special assessment funds to buy them and the city would depleted the fund of which it expected to pay the special bonds Mr. Behanna advising City Treasurer Hogan to tender the $85.700 in the anticipation tax warrant fund in the Waukegan State bank

3. November 19, 1931 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, November 19, 1931

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ASKS SURETY COMPANY TO PAY DEMAND Runyard Files Answer To Bill For Accounting Sought By Indemnity Company In Court In Chicago. Demanding that the court dismiss the bill for brought for the New York Indemnity company against County Treasurer Jay B. Morse want of equity, Attorney M. Runyard of Runyard & Behanna, today filed his answer in the federal hours in Chicago. Morse, Runyard argued in his answer, not proper party to the proceeding and for that reason the suit should be dismissed. or the surety company should settle with the treasurer in the amount of the penalty, or settle the penalty court to the satisfaction of the defendant. Bank Posted Bonds. The surety company indemnified Morse in the amount of $200,000 for which the Waukegan State bank posted bonds that amount protect the bond of the York Indemnity company. The suit is set largely, ownership of these posted bonds which have claimed as assets of the bank by Receiver Fred Brown Whitney. Morse has made demand on the surety In the answer Runyard this showing made, well the records the bank which showed Morse had $166,000 on deposit and $200,984 cashiers' checks drawn on the Waukegan State bank that had not been converted cash. The escrow holder of the Liberty bonds has refused to turn them to the bank or to the indemnity

4. February 24, 1932 Chicago Tribune Chicago, IL
Article from Chicago Tribune, February 24, 1932

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BANK RECEIVER ORDERED TOPAY VETS $250,000 Judge Gentzel Also Asks Prosecutor to Act. Superior Judge Robert E. Gentzel yesterday ordered the receiver for the Northwestern Trust and Savings bank to restore $250,000 in cash from the assets of the institution 100 disabled war all wards of the Probate in the form of trust funds had been deposited The given when the court that oficials of the bank had used the trust funds without of the court to purchase worthless real estate bonds. Judge Gentzel also ordered the re ceiver, David E. Shanahan, state representative and of the general assembly to report his findings Xo the state's attorney's office He asked that Receiver Shanahan report 6 him the progress of any prosecution of the bank officials within the next week, saying that if the delayed he would take the prosecu tion into his own Veterans in Hines Hospital. The bank had been appointed trus tee for the veterans. most of whom are patients at the Edward Hines Memorial hospital, by Probate Judge Horner. When the institution was closed last June the receiver prepared an audit of all the trusts. containing the reports of the bond submitted for to the law bureau of the veterans' hospital Attorney Frank A. Barry, representing the returned the report, ing to the bonds on the ground that most of them in default, and asserting that the court had not approved the purchase of any of the The charges were referred to Louis Behan, for Receiver Shana han, and the report laid before Judge Gentzel yesterday Orders Receiver to Take Bonds. There is only one thing to udge Gentzel said, "replace the bonds with cash from the assets of the bank, and take the bonds for what they are anything worth. The other will suffer but there nothing else for the court to do under the law. want this entire matter placed in the hands of the state's attorney so that the guilty individuals, whether they be the trust officers of the bank the will be prosecuted. If is no from that within one week I'll take over the The president of the bank was Frank Lackowski, and the cashier, John Budzbahn, the receiver said. During the years that the bank for these funds It is stated that there have been several trust officers. John Bain, head of the defunct bank chain bearing his name, will be arwith five others today before Chief Harry M. Fisher in the on charges of conspir acy growing out of the bank failures Nelson Trial Delayed. The of State Auditor Oscar with conspiracy to depositors in the closed Wau kegan State bank, was postponed yes terday at Woodstock before Circuit Judge E. D. Shurtleff to March 21 of Woodruff. former of the National Bank of the Republic, and Norman O. Geyer, former president of the Waukegan State bank, was set over to April 4. They were indicted with Nelson, but severance. The postponements were granted by of attorneys, pending com pletion of negotiations to reopen the closed bank. State's Attorney A. V Smith of Lake county has said that he will drop the case if depositors are guaranteed against loss. Louis Kaufman. of the Kaufman State bank, 124 North La

5. May 12, 1932 Wausau Daily Herald Wausau, WI
Article from Wausau Daily Herald, May 12, 1932

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Bank Receiver is Removed By Judge at Waukegan, III. Fred B. Whitney, was removed to day as receiver of the Waukegan State bank and Circuit Judge Edward D. Shurtleff appointed L. J. Wilmot in his stead. Wilmot is clerk of the district court. Judge Shurtleff held that Whitnety had failed to carry out his duties as receiver. Specifically, in a hearing yesterday, the court pointed out that Whitney should have regained for the defunct Waukegan bank $841,000 in notes given as collateral for a loan of $450,000 from Trust company of Chicago. Radio Introduced in Trial At Madison; Man Released Madison, May. 12.-(P)-Foster Perkins, 24, of Eau Claire, was for jury trial after preliminary hearing hero in superior court yesterday on charges of robbery. A radio involved in the robbery was introduced evidence the claim that Perkins had left it in his home near Eau Claire. Charges against Leighton Filner, 23. of Madison, involved with Per kins, were dropped.

6. May 13, 1932 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, May 13, 1932

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SMITH MAKES HIS OPENING STATEMENT Jury To Serve During Trial Of William H. Miller Sworn In About Noon; Shurtleff To Hear Testimony Monday. BULLETIN ordered locked up The jury week-end Judge this afternoon. It was Shurtleff agreed that the opening statement would not be made until Monday, because the court had appointment for this an urgent afternoon. The jury to hear charges conspiracy against William H. Miller. Chicago banker. was shortbefore noon today before Circuit Judge Shurtleff. State's Smith is make torney opening statement this afternoon and then the case will be adjournMonday when the actual until testimony will be opened. said would need Col. Smith outline what the state hour to intended to prove. Eight jurors were by the time the adjournment last night but one of these dismissed when opened was because he received this morning his was This word that son Angelo Menjuror was oni, Highwood contractor. Jurymen Listed jury follows: The Michael McCugo. Waukegan. con tracter and former city employe. Nelson, of Antioch, tired farmer. printer. Benjamin Ralph, mov. Arthur Krell, of Wauconda. contractor Joseph of carpenter. Hobart of Winthrop carpenter. of Round Lake, Stanley painter. Dorsay Ford. of man the Gabe of Winthrop Harmerchant. Walter of Round Lake, carpenter Elms. of lunch Irwin room The last five members of the jury added less than hours Col. Smith. Assistant State's Attorney George McGaughey and the defense counsel. Claire C. Edwards and Sidney H. Block Former Depositor Serves Cooprider depositor the Waukegan State bank when it closed and Krell said that he withdrew his savings from the Trust Savings bank the day before closed. Attorney William Boyden. associated with Edwards Block the defense, said that he would be responsible for witnesses to be brought Chicago. He was given until from Monday to them through an agreement with Col. Smith. he said business affairs would have in by number of these This explains the reason for delaying until Monday offer the actual Conspiracy Charged Miller one six who were indictin connection with the collapse the Waukegan State bank last June and the second to be brought to trial, as State Auditor Oscar Nelson was brought before jury in Woodstock charge of misfeasance in office. This case was halted midway Judge Shurtleff dismissed it by for lack Miller, Nelson, Murray Connors, Uorman O. Geyer, and George H. (Continued on Page 2. Column

7. May 24, 1932 Chicago Tribune Chicago, IL
Article from Chicago Tribune, May 24, 1932

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NEW WAUKEGAN BANK RECEIVER IS APPOINTED Trial of Miller and Bains Is Postponed. L. Elmer Hulse, a Waukegan real estate dealer, was appointed receiver of the closed Waukegan State bank yesterday as the trial of William H. Miller, former director of the bank, was postponed. In Chicago the trial of John Bain, head of chain of twelve banks now closed, also was postponed. Circuit Judges Edward D. Shurtleff and Ralph Dady, sitting at Waukegan, came to an agreement on the appointment of Hulse as receiver. Previously Judge Shurtleff had removed Fred W. Whitney as receiver and appointed John R. Fulton, but Judge Dady, claiming jurisdiction, ordered Whitney to continue. State Auditor Nelson, refusing to recognize either, appointed a custodian to take charge of the bank's affairs. Attorney Albert L. Hall, acting as a friend of the court and in behalf of commit seeking to organize new bank to replace the closed one, submitted the plan to the judges through which both Whitney and Fulton were asked to resign. He said the appointmentof Hulse would be satisfactory to the state auditor. In dismissing jury which had been selected to try Miller on charge of conspiracy to defraud the public through the issuance of false statements about the bank's financial condition, Judge Shurtleff said that owing to the receivership disagreement the custodian recently appointed by State Auditor Nelson had sealed records that would be needed in the trial. State's Attorney Smith said that a new bank probably would be organized by the time Miller's case is called, and he indicated that the charge against Miller and other officials of the bank would then be dropped. The Bain trial was continued because of recent decision by the Illinois Supreme court that no judge could sit in the Criminal court with. out being specificially assigned there. Judge John M. O'Connor of the Appellate court had agreed to preside at the trial, but decided he had better wait until he is duly assigned. The Douglas National bank, 3621 South State street, was closed yesterday by the board of directors. It has deposit liabilities of approximately $400,000 and a capital of $250,000. The directors said the bank is solvent but further operation would be dif ficult because of steady withdrawals.

8. June 14, 1932 The Dallas City Review Dallas City, IL
Article from The Dallas City Review, June 14, 1932

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Illinois Carmi Scott and Miss Margaret Bradshaw, both Peoria, inwhen their car overturned Weddings in Cook county during the first five months dropped 14 from the number recorded during the period last year. Federal agents, with county and Rock Island city officials, raided the newly established Casino club Rock Island and arrested Hubert Shroat, only three years old. accidentally shot and killed his aunt, Mrs. Christine Shroat, twentyhome East Louis. Three masked bandits entered the Seldler News Agency in Rockford. across the street from the county jail and sheriff's office, and robbed Conklin, Thomas Walsh of East St. Louis. railroad employee, went home to his under way. body found beside tracks had been Identified by five friends as his. E. Bogardus Shaw of Chicago, tired broker, brother of Walden Shaw. one of the founders of the low Cab company, killed In fall from the fire escape landing of his thirteenth floor apartment. Leona Sutherland, was killed outright and Miss Bernice Bryan, Cedar Rapids, Iowa, critically hurt when their car struck concrete abutment and overturned Charleston. Forty-two graduates were awarded degrèes exercises McKendree Lebanon. Bishop Ernest H. Waldorf of the Chfcago of the Methodist Episcopal church delivered the commencement address. drive has been started by police, following the death of Miss Margaret Chew, seventeen, school girl, In an auto crash, to prevent developed that car driven by George Hayes carried four persons single seat. Baptist leaders and churchmen from neighboring southern Illinois towns assembled in Duquoin attend monies the 75th anniversary of the organization of the First Bantist church of Duquoin, one of the oldest John Brown. allas Henry Lempke, serving one to for operating confidence game in Peoria. escaped from the honor farm outside the walls of the Stateville prison. The attempts of other prisoners unsuccessful. Dr. Fred Jackman. resident of since 1864. died of apoplexy at his summer home Bass Lake. Tnd. Doctor Jackman had been connected with the state hospitals at Topeka. Jacksonville and Mount Pleasant. Iowa. Circuit Judge Ralph Dady Waukegan ordered that the assets of the closed Waukegan State bank be sold public auction on June 22, Hulse had petitioned the for authority hold the Joseph Dudley Zook. president of the Illinois Coal Operators' association, died of cerebral hemorrhage in hospital Springfield. short time after he had stricken while standIng In the lobby of hotel In the state capital. Mr. who was fortyyears lived In Highland Park. Declaring that officials Calumet Union Drainage District No. are attempting to construct needless threemile covered drain from One Hundred and street and Dixle highway to the Calumet river, property owners Harvey, through committee, are raising fund for an tion prevent an assessment of $263,000. Stating that the only reason the death penalty was being withheld was because the defendant thrown himthe mercy of the court, Chief Justice Fisher Chicago sentenced George Copley, old, life in Jollet penitentiary for the murder of Policeman James Kelley of Gary in Oak Park March 31. Within 12 hours after they were given the case jury of in Peoria returned verdicts finding of the 11 defendants guilty of the kidnaping of Dr. James Parker. Three found guilty. Sentences 25 years each were specified for James Betson, Claude "Red" Evans. Arlo Stoops, and Cecil Menninger, alleged leaders of the kidnaping ring: Joseph H. Pursifull, lawyer and politician who acted as the was given five year sentence: Raymond Stoops, Homer Massey, years: Dwight Bartlett, years. BesStoops, thirty-four, and her son, Dean, seventeen, together with Edward Woodford. farm hand. acquitted. William Thomas and John Pingera were sentenced in Chicago to imprisonment for the kidnaping of Mrs. Georgia Gecht. Judge Philip Sullivan, Imposing the penalty, indicated belief the the principal bers kidnaping ring that been terrorizing the citizens Cook county for many months. Both men were taken Joliet to begin serving their sentences. Fred Schickler, sixty-six years old. for more than 30 years leading merchant Aurora, died of heart dishis home. was prominent affairs the Elks Illinois.

9. July 26, 1932 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, July 26, 1932

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LAWYER FOR MILLER HITS PROSECUTION Attorney C. Edwards Terms A "Confessed Crook" And Strikes At Col. Smith And Fred B. Whitney. Terming Carl Stenger "mentally incompetent confessed crook," Attorney Claire C. Edwards ripped into the prosecution of William Miller his closing argument before the circuit court jury hearing the conspiracy in connection the collapse of the Waukegan State bank. Edwards not only assailed Stenger but he attacked State's Attorney Smith. Fred Brown Whitney, merly receiver the bank, and nustate He completed his argument during the afternoon and Attorney is the talk for the Edwards Attorney William Boyden, the third member of the defense counsel, Col. Smith expected to conclude the either morrow early the following day. Arouses Edwards made several remarks brought Col. Smith Assistant State's Attorney George Gaughey to their feet with objecCircuit Judge Edward Shurtleff ordered of these marks the record. At one point said 3,000 last the and but one point officials Washington the general collapse banks through withdrawing support. these statements were stricken the court. Edwards launched his attack Stenger almost called the that Stenger visit Col. Smith his office after stories appeared in the newspapers saying was indicted, and told that his honor stake and offered to ask Col. Smith to tell you he his argument Stenger indicted," Edwards the was not returned against Stenger so he would be state "George McGaughey that Carl was dupe. McGaughey right certain tent Stenger had the ability bank. mentally incompetent and the only place he for manage beauty parlor stand behind counter measuring out Makes Accusation is crook told you from chair,' Edwards said as he pointed the witness chair which testified "He Connors sign note for $15,000 to buy oil himself and he knew the law that director could borrow money from his bank only resolution approved board directors. don't think Carl Stenger sufficient mentality to know that crook. He goes along street his head high the air and flower the buttonhole lapel. don't think he knows he admitted stand crook: but Edwards shares stock turned over by Chicago people reserve fund put that money the credit the bank. during this same he sold six shares his own (Continued on Page Column

10. August 9, 1932 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, August 9, 1932

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SERVE NOTICE ON BANK WITNESSES Deputy Sheriff Edgarton todispatched Chicago summons on for bank trials open Aug. before Circuit Judge Edward State's Smith bringing some the Chicago 18, and the others the following Those will be George H. Woodruff and Norman Geyer, indicted for conspiracy the failure of the Waukegan State bank.

11. May 18, 1933 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, May 18, 1933

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TEDDY GEORGE SUED BY BANK RECEIVER "Teddy" for years restaurant sued for $887 due the Waukegan State bank the circuit court Receiver Elmer Hulse confessed judgment for that amount George of the witnesses before the grand jury and later the Oscar state auditor. and Miller Chicago banker and director George to $700 the bank o'clock June the day that the bank nently was allowed to enter the after hours, said, by Norman Geyer, the president. who accepted money Prior to that, George Carl Stenger, once the him stock in the defunct