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Nashville Bank Closed: Receiver For Caldwell & Co.
Nashville Nov Donnell the Libhands for liquidation. He said would paid Donnell blame raging the said as climax heavy upon filed Douglas Nashville Company largest vestment banking houses the South stated if handled meet the obligations.
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Nashville, Tenn. Nov. 17 (P)Federal Judge John J. Gore today sustained a petition for general creditors bil: against Caldwell & Co., investment banking house now *in receivership, and ordered all ereditors to present their claims before next July All parties to "any and all suits now pending against Caldwell & Co." also were enjoined from proceeding further except by consent of the court.
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Ruled the State Its influence extended beyond the statehouse. It owned five newspapers in three of the four large cities of the state. It owned banks in two of the cities. Two years ago it had a narrow escape in the primary. Republican East Tennessee and the Crump machine of Memphis almost wrecked the political machine. This year. however, East Tennessee was lulled to sleep with promises of roads while the Crump machine did an about-face and Ed Crump was sent to congress. Two weeks ago Henry Horton was returned to the Governor's office by the largest majority in the history of the state. Late on election day a group of Nashville bankers took over control of the affairs of Caldwell & Co. But collapse of the financial half of the machine had staved off until after the votes had been cast. Banks Go to Wall Failure of Caldwell & Co. was the beginning of the end. Two days later the Bank of Tennessee of Nashville, a Caldwell subsidiary, went to the wall, followed four days later by the Holston-Union bank of Knoxville, connected with the Caldwell organization. Three days later a second Caldwell-connected bank in Nashville was taken over by a stronger bank. The bank failures created a financial crisis in both the cities affected and the sound institutions found it necessary to merge to protect themselves against runs and restore public confidence. Thus, Knoxville had three national banks at the start of the week and only one three days later. In Nashville, three national banks became two. State Money Involved More sensational than the news of the collapse of the house of Caldwell and its subsidiaries has been the revelation of the deposits made in those institutions. An inventory showed more than three millions of state funds on deposit in the Bank of Tennessee, a Caldwell-owned state bank, capitalized at only $500,000; more than a million had been placed with the Caldwell-connected Holston-Union at Knoxville, and the little Liberty bank, with a capital of only $100,000 had more than three times that amount of state money on deposit. In addition, two and a half million belonging to cities, towns and counties throughout the state had money in the Bank of Tennessee and Holston-Union, making a grand total for the state and its governmental units alone of around eight million dollars.
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CALDWELL & CO. EMPLOYES OUT
Staff of 250 Cut to 35 By Investment Firm's Receivers.
Retaining approximately Caldwell & the Receivers Lee Douglas and Maj. Rutledge Friday clerical and official force of the the banking firm. employe the the notice Friday: employes Caldwell Compa has this day that for period Noclerks, stenogand and wages for all due persons to "The reserved, however, and with branchCourt to their during will mailed out the are from the will be SMITH, Carter, and Harvey those the others main former employes the
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Caldwell Receivers Ask Stock Sale O.K. Receivers for Caldwell & Co., Nashville, Tenn.. investment banking house, petitioned United States District Court to authorize sale of 1,900,000 shares of InterSouthern Life Insurance Company, at approximately $1.50 a share. Petition stated that certain purchasers and certain stockholders have agreed to buy up to 2,000,000 shares provided stock is deposited with American National Bank. Nashville, as escrow agent.
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NASHVILLE, Tenn., December 6 (AP). -The racing stable and breeding stud of Rogers Caldwell, president of the investment banking house of Caldwell & Co., now in receivership, has been sold at public auction, the 64 thoroughbreds bringing a total of $85,435.
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NASHVILLE Tenn., Dec. ceivers for Caldwell and Company Nashville bankers, filed inventory in Federal court here Monday, listing liabilities of $39,589,656 and assets "of the same value, as listed on the hooks of the company. The receivreport, they pointed out "only reflects condition of the corporation as shown by examination of its books."
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Holston Bank Had Over $8,000,000 In Unencumbered Assets, Says Long
The Holston Union National bank had more than $8,000,000 of unencumbered assets on hand at the time it closed, excluding real estate conservatively valued at 500 000 It was revealed yesterday by Capt Mitchell Long. dig rector and attorney for the closed 'It may be said that a combina tion of to the closing of the Holston bank. Cap Long said, in my opinion the bank would be today had the federal government provided an adequate banking system that could be made to function in crisis. Capt. Long said the Federal Reserve would not allow dollar on the $350,000 first on the Holston bank building which was the only on the property at million dollars. He predicted that as result of this and other bank clos ings the entire federal reserve tem would be revised for greater protection of bank directors and depositors through assistance in a crisis. "POPULAR THEORY" know popular theory that loans to Lea and Caldwell are responsible for the closing of the can see no defense that could be made for some of these transactions. many had never heard of after the bank had been closed. "But the fact is. be pointed "that every dollar loaned to this group should be charged off the Holston bank would still be solvent as a going concern, were good He said that loans to Lea and Ca.d. large as had been and that the figure of $1,900,000 included about cerns with which or Caldwell. it has developed had something to
Heavy withdrawals by large desome of out amounts as high as $250,000 resulted the crisis that forced the closing of the bank, he said. There was no run on the bank in the sense in which It is generally understood. he added. "that is to say large of people did not come to the at one time and take out their money RESERVE INCREASE "I shall always believe. he continued "that the cash reserve could have been increased by million and half or two million. and particularly limitation had been placed upon the with drawals of time deposits as was later done by other Knoxville' banks. the Holston would have withstood there withdrawals until the public had become assured that there was no occasion for alarm. After the closing of Caldwell & Company at Nashville, Captain Long one of the directors advised President Basil Ramsey to arrange for large cash reserve in case of panicky feeling among the depositors. Ramsey said he would do this and later that he had done 30 and had the assurance of the Federal Reserve that plenty of money would be available if needed. Capt. Long said. The chief national bank examiner had been here all the week prior to the closing of the bank and left Saturday declaring that everything was all right and that he had better leave because his presence might cause alarm. Capt. Long said On the following Monday the last day the bank was open heavy withdrawals were made and efforts to obtain funds from the Federal Reserve had failed. CALLED MEETING "At the close of business that day group of us were called in and informed of the situation, he explained. "It struck us like bolt. Our cash reserve was down to $200,000 or $250,000 and we were almost certain there would run if we opened on Wednesday. There was nothing to do but close. There was not time enough to obtain loans from other sources and avert the calamity to the prospects for early establishment of new bank here, Capt. Long said that his sole interest in assisting to promote new bank was to release to depositors large percentage of the deposits of the old bank as possible. 'Negotiations to that end have been going on for some time but nothing definite could be done pending the receipt of an inventory understand that inventory has just been completed,' he said.
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STATE ASKS CALDWELL SUITS BE CONSOLIDATED By the Associated Press. NASHVILLE, Tenn., December 30.Consolidation of suits pending against Robert Caldwell, president of Caldwell & Co., investment banking house, now in receivership, was asked in a petition filed in Chancery Court today by the State of Tennessee. It was further asked that a single action arising from the consolidation of suits be sustained as a general creditors' bill. The petition was filed by Attorney General Nat Tipton.
Livestock Assistant General Attorney Farms Testifies Before The Senate The number of hogs, horses and
Claims Securities Used As Collateral in Banks Were Only Worth 15 to 20 Cents on Dollar.
Nashville, Tenn., Jan. Testimony that made for securities deposited additional collatteral upon mand of the state banking ment and reduction of its hand all probability' ered while was still accept was heard attorney general, told the committee that some those valued at which those alued which were originally deposited, were drainage district bonds worth from 10 15 cents on the Some the others he said he been informed by the bank street "cats and dogs. The been stated by Robert of banks bank Tennessee following in held as assets by the bank When the bank closed in November state deposits in excess Its cash hand of closing The Tip ton made October when shares of inter southern life insurance stock replaced by various other securities. Other with drawals all of the original had been shares Rogers Caldwell New York 000 shares of Nashvile ties company these securities were drawn authority so and others value substituted, what nal ofense would asked Chairman Faulkner think would by frandulent breach of trust, Tipton The assistant attorney general said the person making the with drawals was not stated the ords. were withdrawn officers or agents of Caldwe!! Co., have been he testified He read letter 29 from well pledging the demand ed securities bank of Ten nessee, said reply question that the pledge contain power substitution. testified that later date official of Caldwell bank that with the usual it the substituting urities of value its subsidi ary, bank of Tennessee, the witness ed. He understood owned the capital stock the bank Tennessee and that bank ficers of Caldwell Co. Mr. ipton repurch the would funds securities that agreed take original Speaker Fitzhugh the ber of asked between themselves, Tipton replied that agreement your your left hand
Nashville, Tenn., March 21. deposits made by the state less than two weeks before Caldwell and Company's Bank of Tennessee closformed the basis for dictments returned by coungrand jury today against Rogers Caldwell, president of the institution. The indictments, each containing counts, charged Caldwell with receiving deposits in an insolvent bank. The first count in each said Caldwell knew the institution insolvent and the second said he had reason to believe The deposits made, the indictments said by Highway Robert Baker, and Treasurer John Nolan. One said Baker deposited of bridge funds on October 1930, and other said Nolan deposited state general funds on October The bank suspended November and went into ceivership, November
NASHVILLE, Tenn., March made by state less than before Caldwell and Company's Bank closed, ments county grand jury today Rog. Caldwell, president the taining two counts, charged Caldwell with deposIts in an insolvent bank. first count each said Caldknew the institution was insolvent and the second reason to believe solvent. The deposits were made, the indictments by Highway Commissioner Robert Baker, and Treasurer John Nolan. One bill Baker deposited bridge funds tober 1930, and the other said Nolan $50,000 of state general funds on October 25. The bank suspended vember and went into receivership, November
Two More Indictments Are Brought Against Him.
NASHVILLE March 20 Two deposits made by the state less than weeks before Caldwell Co's. Bank of Tennessee closed formed the basis for indictments returned by county grand jury against Rogers Caldwell, president of the institutions. Both each contain ing two counts, charged Caldwell with receiving deposits in an insolvent bank. The first count in each said Caldwell knew the institution insolvent the second he had reason to believe it insolvent. The deposits were made, the indictments by Com missioner Baker Treasurer One said Baker bridge funds on October 28, 1930 and the other said Nolan deposited state general funds on October The bank suspended November and into receivership November week thereafter Caldwell & Co., went receivership. Criminal Court Judge Chester K. Hart set bond in each E. Rogers father, and Webb, formerly with James Caldwell in the Fourth and First National pledged estate valued $25,000 as bondsmen. Caldwell now under six indictments, two which relate alleged transactions at the Bank of operations Caldwell and the Bank and the National at Knoxville
Caldwell Charged With Taking State Funds in Insolvent Bank
Nashville, March 20.-(AP)-Two deposits made by the State less than two weeks before Caldwell and Company's bank of Tennessee closed formed the basis for indictments returned by county grand jury today against Rogers Caldwell, president institution. The indictment each containing two counts, charged Caldwell with in an insolvent bank. The first count each said Caldwell the was solvent and the second said he had reason to believe it The deposits were made, the in dictments said, by Highway Commissioner Rober H. Baker and Treas urer John F. Nolan One bill said Baker deposited $6,500 of bridge funds October 28, 1930, and the other said Nolan deposited funds on October 25. The bank suspended November and into receivership November week thereafter, Caldwell and Company, of which the bank subsidiary, into receivership. Criminal Court Judge Chester K. Hart set bond at $10,000 each James Caldwell, Rogers Caldwell's father, and T. D. Webb. formerly with James Caldwell the Fourth and First National Bank, pledged real estate valued at $30,000 and $25,000, respec tively, Caldwell now under six indict ments, two which relate leged transactions at the Bank of Tennessee, to operations of Caldwell Company and the Bank of Tennessee, and to transactions at the Holston Union National Bank of Knoxville.
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TENNESSEE'S FINANCIAL STORM. financial storm which The effects the Tennessee, centering chiefly in swept Knoxville, will Nashville and much in the political consequences pects, the losses depositors and committee bankers storm started when The affairs Caldwell and Comhad to over large Nashville bank which was centered investment in subsidiary the that smaller bank quick banks the followed largest and still another bank heavily city after run and ultimately deposits persistent taken yet bank. had over known heavy deKnoxville three banks there posits sustained runs but stood merged others heavy banks closed and In the two three counting handful merged, country banks. sums scores millions dollars. Since hysteria fected appears banks not likely lose at But large loss seems effects of such storm are severe openly Tenenough. nessee effects. For one thing. extraordicharged published off the Caldwell and until after the Company the was election. feared such would the camclosely allied paign the The conservative given reckless that "since Governor and the succession Henry Horton the chief has ruled the State's worst the that bound politically and
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Counter Claim Is Filed By Luke Lea
NASHVILLE. Tenn. July -Colonel Luke Lea. Nashville publisher. today filed counter claim against receivers for Caldwell and company. collapsed investment bank. ing house, for charging that the institution had illegally converted certain collateral he had placed with
WOMAN IS SENTENCED. NORFOLK Va., July Dorothy Skaggs. charged with perjury in connection with her testimony against negro was convicted and latter acquitted of criminal assault against her. was found guilty by jury this afternoon and her punishment fixed at five years im-
Lea in Counter Claim Against Bank Receivers
NASHVILLE, Tenn.- (AP) -Colonel Luke Lea. Nashville publisher, Thursday filed a counter claim against receivers for Caldwell and company, collapsed investment house for $107.000, charging that the institution had illegally converted certain collateral he had placed with it.
NASHVILLE Tenn., Nov. 25 Raymond Denney special appointed by United States District Court handle claims against Caldwell banking went into receivership years today judgment against the company favor Dillon, Read pany of New York and group of The was includ report filed the clerk this addition Dillon Read Co. the plaintiffs Norman Charles McCain New York Couch, Colpitts Slater Jersey Coverdale George W. Burpee George Burgess, Denney's the claim grew out November, 1928 between Caldwell and and the plaintiffs which Caldwell Co. obligated itself to purchase $500,000 of board Line Railway Company securities.