5997. First National Bank of Lagrange (Lagrange, IN)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
national
Start Date
October 24, 1927
Location
Lagrange, Indiana (41.642, -85.417)

Metadata

Model
gpt-5-mini
Short Digest
1882afb5

Response Measures

Full suspension, Books examined

Other: Federal examiner was appointed temporary receiver; sale negotiations with another bank/financier attempted.

Description

A run in late October 1927 (rumors circulated) depleted reserves and directors closed the bank Oct 24/25 1927. A federal examiner (John F. Utt / J. T. Ott referenced) was appointed temporary receiver; later criminal indictments and reports describe the bank as defunct. Although some articles predicted a reopening, the bank was ultimately closed and placed in receivership amid findings of excessive/forged loans and misapplication of funds.

Events (3)
1. October 24, 1927 Run
Cause
Rumor Or Misinformation
Cause Details
Depositors withdrew accounts after circulation of rumors throughout the county and country; directors feared a run and reserves were depleted.
Measures
Directors closed the bank; negotiations opened for sale and takeover attempts; bank examiners investigated.
Newspaper Excerpt
Its reserves depleted by a run the bank closed its doors yesterday.
Source
newspapers
2. October 25, 1927 Receivership
Newspaper Excerpt
John Utt, Federal banking examiner, appointed temporary receiver. Utt investigated its affairs and turned report to the comptroller of currency in Washington.
Source
newspapers
3. October 25, 1927 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Directors cited frozen assets and excessive loans; later examinations uncovered forged paper and alleged misapplication of funds leading to insolvency concerns and decision to close.
Newspaper Excerpt
The First National Bank of this city was closed Monday by the board of directors, this action being taken voluntarily ... Depositors have been withdrawing from the bank steadily for several days because of rumors ...
Source
newspapers

Newspaper Articles (7)
1. October 25, 1927 Rushville Republican Rushville, IN
Article from Rushville Republican, October 25, 1927

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Article Text

REOPENING OF LAGRANGE IN FEW DAYS PREDICTED Clyde A. Walb, Who Recently Resigned as Vice President, Denies He Has Excessive Loans WOULD NOT EXCEED $10,000 Lagrange, Ind., Oct. 25-(U.R) Reopening of the First National Bank of Lagrange within a few days was predicted by officials of the institution today. Its reserves depleted by a "run" the bank closed its doors yesterday. Negotiations also have been opened for sale of the bank to Samuel J. Jacobs, New York City financier, owner of the Noble county bank. Jacobs was expected to reach Kendallville, his former home, today or tomorrow. His interest in reorganizing the Lagrange institution arose, in part, from his wish to own another bank in a boyhood scene. Clyde A. Walb, republican state chairman who resigned as a vicepresident of the bank a few weeks ago, denied that "excessive loans" had been made to him. He said his borrowings from the bank would not exceed $10,000. John P. Caton was elected to take his place and became acting president as result of resignation of Valentine Weaver as president. The bank had $600,000 in deposits and had been established for 60 years. Its condition was attributed to frozen assets, but the closing itself was blamed on circulation of rumors throughout the country, causing depositors to withdraw accounts. Failure of negotiations to have the Lagrange county Trust Company take over the bank preceded decision of the directors to close the doors.

2. October 25, 1927 The Daily Republican Rushville, IN
Article from The Daily Republican, October 25, 1927

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Article Text

REOPENING OF LAGRANGE IN FEW DAYS PREDICTED Clyde A. Walb, Who Recently Resigned as Vice President, Denies He Has Excessive Loans WOULD NOT EXCEED $10,000 Lagrange, Ind., Oct. 25-(U.P.) Reopening of the First National Bank of Lagrange within a few days was predicted by officials of the institution today. Its reserves depleted by a "run" the bank closed its doors yesterday. Negotiations also have been opened for sale of the bank to Samuel J. Jacobs, New York City financier, owner of the Noble county bank. Jacobs was expected to reach Kendallville, his former home, today or tomorrow. His interest in reorganizing the Lagrange institution arose, in part, from his wish to own another bank in a boyhood scene. Clyde A. Walb, republican state chairman who resigned as a vicepresident of the bank a few weeks ago, denied that "excessive loans" had been made to him. He said his borrowings from the bank would not exceed $10,000. John P. Caton was elected to take his place and became acting president as result of resignation of Valentine Weaver as president. The bank had $600,000 in deposits and had been established for 60 years. Its condition was attributed to frozen assets, but the closing itself was blamed on circulation of rumors throughout the country, causing depositors to withdraw accounts. Failure of negotiations to have the Lagrange county Trust Company take over the bank preceded decision of the directors to close the doors.

3. October 25, 1927 Anderson Daily Bulletin Anderson, IN
Article from Anderson Daily Bulletin, October 25, 1927

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Article Text

LAGRANGE BANK CLOSED MONDAY Lagrange, Ind., Oct. 25.-(P)-The First National Bank of this city was closed Monday by the board of directors, this action being taken voluntarily, it is understood, after thorough investigation by J. T. Ott, national bank examiner, and Frank Cutshall, of Fort Wayne. Mr. Ott said that in his opinion the bank will be able to meet every obligation. The closing of the bank was decided upon Sunday evening by the board following the failure to get the Lagrange County Trust Company to take over. "I confidently expect the bank to reopen within the next few days," Hobart Weaver, cashier of the bank, said. Depositors have been thdraw ing from the bank steadily for sev. eral days because of rumors that have been widely circulated throughout Lagrange county. While there has been no run on the bank. It was feared by the directors that such a thing might occur at any time, and it was thought best not to reopen. Excessive loans was given as the cause of the present embarrassing condition of the bank Several weeks ago, Clyde A. Walb, Republican state chairman and head of the Walb Construction Company, reisgned as vice-president of the bank, and John P. Caton was elected to take his place. At the same time, Valentine Weaver relinquished his duties as president of the bank, and since then Mr. Caton has been act ing president. The change was made on Aug. 9. The bank statement published last week showed resources of $863,132.08: capital stock $100,000 with surplus of $25,000. Deposits are said to be $600,000.

4. January 1, 1928 Leader-Tribune Marion, IN
Article from Leader-Tribune, January 1, 1928

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Article Text

LEADERS DISCUSS WALB NEW YEAR ARRIVES THIS MORNING IN FACE OF SEVERE WINTER WEATHER JESSE MURDEN PERU, MAY SUCCESSOR Federal Jury Indicts Walb and Weaver Indianapolis, Dec. the indictment of Clyde Walb of Lagrange by the federal grand jury placing squarely before republican party chiefs, the matter of replacing him state chairman, numerous leaders of the party today indicated informally their reticence at proceeding prior to some commitment from Walb himself. Some time ago Walb announced he wished relinquish the party reins and that the first the year" he wished to devote his time to the interests of the Walb company, which he is president. Murden Is Favored Ever since Walb made Iris first there has been spirited candidates for the place. Jesse Murden, Peru, chairman of the eleventh now appears to have the Although the leaders were reluctant to discuss the state chairmanship publicaly until Walb has indicated his intended course, the opinion appeared prevail that though Murden scheduled for the place, the actual transfer may not made prior customary organization following the 1928 election. Indict Walb and Weaver Reaching back to New Years day six years ago to lay the foundation its indictment, the federal grand jury today lodged charges conspiracy to violate the National bank. ing against Walb, and Valentine Weaver, former president the refunct First National bank of Lagrange. The indictment containtwelve counts and enumerated scores of alleged overt acts of the defendants. The first nine counts charged that Weaver, as principal. and one "aided and abetted" Weaver. fraudulently misapplied funds the bank and falsely entered forged credits for the benefit Walb personally and of the Walb Construction company, which he president. The other three counts, blanket nature. charged defendants jointly with conspiracy acts contrary the banking the United States. Weaver president and Walb throughout the period. They continued to hold those positions until August 1927, when they resigned and John Caton became and acting run on the bank two months later directors closing October and turning Its affairs over to John Utt, federal banking examiner, who was ap. pointed temporary receiver. Utt investigated its affairs and turned in report the comptroller of currency in Washington. Each of the nine counts against Weaver sets forth specifie fraudul. ent act which he alleged to have committed, traces its course through books the bank, states the Federal law violated the action, and makes Walb person aided and abetted Weaver. The other three counts charge conspiracy. The conspiracy counts, after reciting the charge of conspirassert that the method of operation was: That Walb and the Walb Construction company kept the bank with balances not sufficient cover checks drawn against the over the period; that the checks. knowing them backed balances, and then proceeded make false entries credits to balance the accounts; that Weaver forked notes of various individuals and good to balance the books, listing them credits the Walb and company Walb himself, and that, in other and ed to their makers accommodation (Continued on

5. January 1, 1928 St. Louis Post-Dispatch St. Louis, MO
Article from St. Louis Post-Dispatch, January 1, 1928

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C. Walb and V. Weaver A. Accused of Fraud on Closed Lagrange, Ind., Bank. Ind., Dec. 31. Reaching back to New Year's day to lay the foundation years ago of its indictment, the Federal grand jury today lodged charges of conspiracy violate the national banking laws against Clyde Walb, chairman of the Repubtican State Committee, and Valentine D. Weaver. Bond be set and an day fixed by Judge of arraignment Thomas W. Slick of South Bend. president and Walb vice president the First National Bank of Lagrange until Aug. 1927, when they resigned and John Caton vice president and acting president. After run on the bank two later the closed Oct. 24. John Utt, Federal banking examiner, appointed temporary receiver. Utt turned report to the troller of Currency in WashThis report, understood, referred to the Department of whic sent Glenn aulson, Federal accountant. go over the bank's books. Paul has been of the principal before the grand jury in its four days' taking of evidence. According ot the indictment, the procedure that and the Walb Construction Co., of which he president, kept accounts the bank and continually drew checks against them am larger than the funds the bank falsely the benefit Walb and Walb accused and abetting the alleged acts. There are 12 the indictments. the first nine counts overt acts carries with fine up to $5000 of not more than in the penitentiary. Each last three counts carries upon of confine up to and imprisonment of not more than two

6. January 1, 1928 The Richmond Item Richmond, IN
Article from The Richmond Item, January 1, 1928

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INDICTED; Former Officials of Lagrange Institution Accused by Federal Grand Jury CONSPIRACY ALLEGED Defalcations Claimed in Charges Total Roughly $76,000, It Is Revealed Dec. 31. Reaching back to New Year's Day six years ago to lay the foundation its dictment, federal grand jury today lodged charges of to violate the national banking laws against Clyde A. Walb, chairman of the Republican state committee, and Valentine D. Weaver, former president of the defunct First National bank of Lagrange. The 40 indictment contained counts scores alleged overt the defendants. nine counts charged that Weaver, principal, and Walb, "aided abetted" Weavfraudulently misapplied funds the falsely entered forged credits for the benefit Walb personally the Walb Construction company, of which he president. The blanket charged the with to acts banking laws of the United States. After spent by Albert Ward, his sistants and proof the the grand heard the charges road, voted indictment, left their chamber trudged groups behind their Stunkle the library of Judge Robert Baltzell. Stunkle, his six feet and seven inches his handed indictment to the judge without comment "This completes your the asked. Stunkle replied gravely. court excused the jurors ject call and thanked them for services. The indictment was public by Ward. The was brought in the Fort division district in which Lagrange marshall them Weaver next week. Bond day fixed Judge Slick South Bend, the case transferred. The first date in the charges January when Walb And Weaver are charged with starting the alleged conspiracy which the trace from that June 25, 1927, the date of the Weaver president and Walb the period. to hold those until 1927, when they resigned Caton became on the bank terminated closing October and turning its affairs Utt, federal banking who subsequently pointed receiver. vestigated its affairs and turned report the comptroller of rency which derstood. departjustice. agency out Glenn Paulson, federal books. been the four day taking of eviin the Paulson brought books, journals, ledgers, cash books, correspapers, notes and affidavfrom Lagrange for submission jurors. During the inquiry, nearcalled, including employes of the bank, employes the Walb Construction company, and the bank and Lagrange county had been fixed forged Each counts against Weaver specific lent which he alleged to have course the books the states fedlaw violated by the action, and names Walb person aided abetted Weaver. names person aided and abetted charge conspiracy. counts, after re citing the charge unlawful spiracy fraudulent acts, assert that the method of operation That Walb and the Walb kept the with balances not suffichecks against the accounts (Continued On Page Twenty.)

7. January 2, 1928 The Tipton Daily Tribune Tipton, IN
Article from The Tipton Daily Tribune, January 2, 1928

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WALB INDICTMENT. Many Counts of Ilegal Banking Transactions Are Charged. Indianapolis, Jan. 2.-Indictments charging violation of the national banking laws and conspiracy to violate the same law were returned Saturday against Clyde A. Walb, and Valentine D. Weaver, of Lagrange, in Federal court. Walb is Chairman of the State Central Republican Committee. Weaver served as president of the defunct First National Bank of Lagrange until June, 1927; while Walb was its vice president. Walb also is president of the Walb Construction Company. Arraignment was set for January 7 by Federal Judge Robert C. Both men are charged with violations involved in the closing of the bank by National Bank Examiners. The indictment is in 12 counts. Two charge Walb and Weaver with conspiracy. The others charge specific violations of the banking law, in which Weaver is pictured as the perpetrator, with Walb as the abettor. Thousands of dolars of banks funds were appropriated by the two, according to the indictment. Weaver for himself and Walb for himself and the Walb Construction Company. Sale of preferred stock of the Walb Construction Company was stopped recently by the State Securities Commission because the company was unsound. The indictment specificially charges Walb with having overdrawn both his personal and business checking account. Weaver covered up for him by honoring the checks and entering credits to Walb's accounts whether the State Chairman made deposits or not, it is alleged. Among typical overt acts in the indictment are these: June 28, 1923, Walb signed a check for $305 without funds in the bank. June 28, 1923, Weaver credited $6,000 to Walb's account. June 28. 1926. Weaver forged the name of Tobias E. Yoder to a note for $1,906.20. February 5, 1923, Walb drew 99 checks upon his personal ac+ counts, totaling $5,956.72, when his account would not cover them. the same day Weaver credited Walb's accounts with $6,000. March 3, 1924, Walb overdrew his account $4,601. Sixty-six such overt acts are listed under the two conspiracy counts, with Walb charged with having abetted such overt act of Weaver. The bank was closed October 24, 1927, by J. F. Utt, Federal Bank Examiner, serving as temporary receiver, after Department of Justice agents called by him had found $75,000 in forged paper. Utt took charge after a run on the bank. Depositors probably will be paid in full, examiners said. After returning one indictment and recommending that three persons be cited for contempt of court, the Marion county grand jury made its final report of six months investigation Saturday and urged all citizens to assume the responsibility of their citizenship and vote at elections. The name of the person indicted was kept secret. but it was announced that he was a man not under arrest and that the charges were perjury and swearing to a false affidavit. Those whom the grand jury would have cited for contempt of court are: John H. Kiplinger, Rushville, Ind., attorney; Mildred Mead, former confidante of D. C. Stephenson and L. G. Julian, Evansville, former business asso ciate of Stephenson.