6332. Citizens Bank (Union City, IN)

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
state
Start Date
May 6, 1896
Location
Union City, Indiana (40.202, -84.809)

Metadata

Model
gpt-5-mini
Short Digest
c5b621fa

Response Measures

Full suspension, Books examined

Other: Receiver appointed; criminal suits and indictments followed.

Description

Multiple articles (May–Sep 1896 and later) report a run sparked by discovery of a cashier shortage/defalcation and subsequent withdrawals (including city funds), exhausting cash and forcing suspension in early May 1896. State examiner took charge and a receiver was appointed; the bank did not resume and was wound up with suits and receivership proceedings. I corrected dates using article dates (suspension reported May 6; examiner took charge by May 8–9).

Events (3)
1. May 6, 1896 Run
Cause
Bank Specific Adverse Info
Cause Details
Shortage/defalcation discovered by cashier/teller (E. W. Reeves/Charles H. Cadwallader) and related questionable transfers; rumors and withdrawal of municipal funds triggered heavy withdrawals.
Measures
Directors decided to suspend business; State Bank Examiner took charge; request for receiver and winding up of affairs.
Newspaper Excerpt
From article: The result of the whole thing was that there was a run on the bank. It did not take long to exhaust the supply of cash on hand, and then there was nothing left but suspension.
Source
newspapers
2. May 6, 1896 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Suspension followed exhaustion of cash after the run caused by discovery of teller/cashier shortages and related rumors; directors requested state examiner take charge and sought receiver.
Newspaper Excerpt
From article: The bank closed its doors yesterday morning... The application for the appointment of a receiver... it was not the intention of the management of the bank to attempt to resume again, but that it is the intention to wind up the business.
Source
newspapers
3. May 9, 1896 Receivership
Newspaper Excerpt
From article (1896-05-09): State Bank Examiner T. B. Millikan... to take charge of the Citizens' Bank, of Union City, pending the appointment of a receiver for that institution.
Source
newspapers

Newspaper Articles (6)
1. May 9, 1896 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, May 9, 1896

Click image to open full size in new tab

Article Text

A BANK HAS TO CLOSE STATE EXAMINER TAKES CHARGE OF THE CITIZENS', OF UNION CITY. The Assets Will Probably Equal Liabilities-The Former Cashier Was a Little Short. Auditor of State Daily yesterday notified State Bank Examiner T. B. Millikan, of New Castle, to take charge of the Citizens' Bank, of Union City, pending the appointment of a receiver for that institution. This was done in response to a request from President Cadwallader, of the bank, in a letter in which it was stated that the bank had decided to suspend business and close up its affairs. The receiver will be appointed by the Randolph Circuit Court, and until that time Mr. Millikan will act as custodian of the affairs of the bank. The bank closed its doors yesterday morning, after over thirty years of existence. It was founded in 1865 by ex-Governor Isaac P. Gray and Nathan Cadwallader. It was operated as a private banking house, and was known as the Gray & Cadwallader Bank until the passage of the State banking law, in 1872. In the spring of 1873 the bank was incorporated as the Citizens' Bank of Union City, being the second bank in the State to incorporate. The bank has always been looked upon as one of the sound institutions of its kind in the State, and It is still so considered by persons who know anything about it. Its reports at the Statehouse and the information which the Auditor is able to gather about to lead him to the belief that the suspension will not result in loss to either depositors or stockholders. The application for the appointment of a receiver, however, shows that it is not the Intention of the management of the bank to attempt to resume again, but that it is the intention to wind up the business. The last report of the bank made to the State Auditor, as well as many previous reports, shows that the bank held a large part of its assets in real estate. This fact would naturally weaken the ability of the bank to stand a heavy run, and would also make the winding up of its affairs slow. As to the reasons which led to its suspension the Auditor of State is not informed. The letter asking for some one to take charge of the oank gave no information concerning the condition of the bank. From a gentleman who has just returned from Union City, and who is in a position to know considerable about the bank, some facts were learned. The trouble began with the resignation some time ago of Cashier E. W. Reeves. Shortly after his withdrawal from the bank a shortage was discovered, and he was called upon quietly to make it good. He turned over to the bank some real estate, and the recorder's office at Union City shows a similar transfer made by his mother. This action is believed to have set rumors afloat regarding the solvency of the bank. The sureties on the bond of the city treasurer had a meeting, and the result was a request that the treasurer withdraw the city funds from the bank. The meeting of these bondsmen and the subsequent withdrawal of the funds was not kept very quiet, and gossip began to cause people to determine to get their deposits from the institution. The result of the whole thing was that there was a run on the bank. It did not take long to exhaust the supply of cash on hand, and then there was nothing left but suspension. In considering the situation Tuesday evening the directors came to the conclusion that they would wind up the bank's affairs, and wrote the State Auditor to that effect.

2. May 14, 1896 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, May 14, 1896

Click image to open full size in new tab

Article Text

Cadwallader Bank Affairs. Special to the Indianapolis Journal. UNION CITY, Ind., May 13.-State Bank Inspector Millikan has completed his work with the Citizens' Bank, which was compelled to close its doors, and has returned to his home in New Castle, awaiting the appointment of a receiver by the court next Saturday. An appraisement was made yesterday of the mortgages and notes, and it is said that the character of the notes is good, and the depositors will be paid in full. The directors say the affairs of the bank are in good condition, and the report that C. H. Cadwallader, cashier, was short, and that the bank was in a "rotten" condition, is said to be untrue.

3. May 15, 1896 Highland Recorder Monterey, VA
Article from Highland Recorder, May 15, 1896

Click image to open full size in new tab

Article Text

$130,000, insurance the weave the cloth ments is destroyed were card and picker room. rooms, boiler mule rooms, and dye live houses stock and dealer of Chambers- The 72d Wilson Ely, committed a suicide. School Sunday burg, Pa., of the American the United Congreat Conn. anniversary Union was celebrated New Haven, W Va., Church, at and Sistersville, bit several the grand jury of Jersey against Henry City gational Mad rected dogs at persons.- Palatine of corruption Justice Garrison. City to take was dithe charges F. Michellon. Neb., Treasurer Bolls, up city of treasurer Frank embezzlement of Omaha, in Ashland, Fire destroyed Wis. convicted valuable milling property saw Mike Rae, thousand people Birmingham, Ala., for of Angus a freight colored, the murder Five Au into open executed a shifting switch at engine caused McSwean at Air the Line. and Portsmouth, his train wife. to run of the Seatoard suicide in Spokane, S. Va., Hilgard, yard committed terrifle storm swept was through shot Wash. -A Annie Anderson J., who South Joseph Dakota. Graham in Trenton, N. from San schooner Seas, is by then killed himself. Norma, bound probably Haag, Francisco The for the South a member of a suistrychnine cide lost. club, George poisoned G. himself Patrick with J. indicted Sexton, by in millionaire, The charge Father grand jury. of the the Chicago spiracy. San federal Francisco.- Church, Kolaszewski, has been of Cleveland, is Inde- con- and is Catholic church property pendent to transfer the Methodist Church. ready to the was shot and while burglarat J. C. congregation Rodgers, fatally injured a colored Sylene, desperado, in o., Crawford's old, emizing the Fred postofice Crawford, sixteen Felpel, years an did the Lancast r Pa., The 1,200was Daniel B. store. ploye pany, of shooting. the crushed schooner -Henry to death. Caramel Fearing, about Com- a foor-master coal, went ashore Station, in a cargo of the Highland of nine men Masgachusetts. saved ton mile with north by the of life-savers. total The crew loss. Light The -The Railroa vessel Pennsyl- Is were will are Cumberland extension probably be a Vailey into vania on the Crawford sh ot at the killed work coal and Kintley regions. burglariz) Rogers, proposed -Fred one his arrested of store. two in men _James Wheel- who and on the W. Va., Juene's was trying and to his wife were charge of robbing the banks of the oldest one it?, Yaxwell Mansion. Bank. Citizens of for want funds. The Union City, Ind., paid closed out, and the auditor assets, in last dollar was Liabilities, $75,000; to col The of state notified. Cause of money. failure, inability Gamble Broth High$135,000. Ject and scarcity of lumber dealers at Fidelity Co., extensive assigned to the and ers & Ky., have of assets liabilities was gang of outlaws, the murder of land Trust of notorious Park, Company. made. No statement -Taylor for who Delk, captured has leader been a for several Ga., was Atwanted of Pike County, weeks Looney, of the sheriff by Detective Cotell, the lanta police murderer of was arraigned near self-confessed the Senola force. Romulus ago, the Stone family, Judge six weeks Pleas The in Akron, Kohler, O., and pleaded E. F. Voris judge to Pa. J.A. at Tallmadge, appointed Musser before Attorneys suicide defend Common in not him. York, guilty. blew Melchoin and out Harvey committed Bethlehem, Pa., ConGeorge Young, Methodist approference and Heiser his brains. passed to sectarian -The a of resolution the Indian Chicago opposing schools. General arrested Fort in priations Homer Judd. Company, of was violating. the on the charge R. D. the aid of the Linseed Fillsburys, in E. Worth Fort Interstate head Worth. Packing Commerce of law. the Oil of Trust, has Hubbard Rev. suc- perceeded. with the millers' combine. Theologica fecting a great of the Lane succeeded by D. Morris, will Freehold, N. Henry at the Cincinnati. head Smith, be of a Seminary Goodwin retired missionary Y. in Rev David Smith. at Hamilton, N. hanged the murderer, round houses Queer at committed J. Philadelphia H. Holmes, locomotives suicide The belonging was to the Somer $300, and twelve Railroad Company, loss, Crescent destroyed by fire: electric that passed over Pa., an unknown other persons get. storm and 000; ville Ky., fully were Abbottstown. insured. geveral East During Berlin, Philadelphia an Thomas mai and dead and of in aged forty Cape Charles City, at Westmont, at Works. were destroyer stunned. was hotel struck Point years. A. A. Stetson. attempted Va. suicide The N: @15. Cry J. loss is of 425 owned sta! Lake by James Flynn estimated & Co., at from to 98 th 000 to General and confer M. E. on the annual at Co by of fire. committee $20,000. The Conference & By eligibility, a vote adopted the refers repor th the question back again.- to A jury ex-Stat ences, woman to be voted the on case of Ohio vs. indicte for verdiet of not gui'ty. lumbus, Senator alleged John Ohio, solicitation L. in Geyer, of of bribes, Paulding. returned ADJOURN.

4. August 4, 1896 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, August 4, 1896

Click image to open full size in new tab

Article Text

Cadwallader Suit Dismissed. Special to the Indianapolis Journal. UNION CITY. Ind., Aug. 3.-The attachment suit brought some months ago by the Citizens' Bank of this city against the individual property of the president of that institution, ex-Senator Nathan Cadwallader, was dismissed in the Circuit Court to-day. This action was brought on the affidavit of Mr. Thomas McMahan, one of the directors of the bank. It was charged that Mr. Cadwallader was about to dispose of his property, and that he had wrongfully taken and used the funds of the bank to the amount of $50,000, and judgment was asked for that amount. The suit was dismissed at the request of the receiver of the bank, Mr. Jesse Canady.

5. August 8, 1896 New-York Tribune New York, NY
Article from New-York Tribune, August 8, 1896

Click image to open full size in new tab

Article Text

SUITS AGAINST AN EX-BANKER. Portland, Ind., Aug. T.-The receiver of the defunet Citizens' Bank of Union City had brought suits for $50,000 and $10,000 against Nathan Cadwallader, the ex-president. The complaint alleges that the bank has been in a bad condition for years: that Cadwallader was a member of four insolvent firms that were heavily indebted to the bank, and that he and members of his family took over $30,000 of its funds, for which there is no valid security. It is alleged that $50,000 was loaned on inadequate security. Depositors may receive 25 or 30 per cent. Cadwallader, who is

6. September 21, 1898 The Indianapolis Journal Indianapolis, IN
Article from The Indianapolis Journal, September 21, 1898

Click image to open full size in new tab

Article Text

# CADWALLADER'S CAREER. How the Union City Bank Was Looted and Wrecked. Special to the Indianapolis Journal. UNION CITY, Ind., Sept. 20. The dis- patch in this morning's Journal from Stock- ton, Cal., giving the details of the flight of Sheriff Simmons with his prisoner, Charles H. Cadwallader, late cashier of the Citizens' Bank of this city, was eagerly read by the citizens of this locality, and calls to mind the closing days of the Citizens' Bank, its failure and subsequent events. The Citizens' Bank was originally a pri- vate concern, owned and operated by the late Governor Isaac P. Gray and Nathan Cadwallader. In 1873 they incorporated under the state banking laws enacted about that time. The charter of this bank expired in April, 1893, and was reorganized at that time by the old bank turning over all of the assets to the new bank, which assumed the name of the old one and agreed to pay all of the liabilities. The capital stock of the bank was fixed at $100,000, but was subse- quently reduced to $80,000. Nathan Cadwal- lader was its president from its original or- ganization down to its suspension. His son, Charles H. Cadwallader, was for many years and up almost to the time of the failure of the bank, its cashier. The institu- tion stood high in the estimation of the people in this community, and Nathan Cad- wallader was regarded as one of the most conservative and successful bankers. It was the boast of this bank for years that it never had a litigated case, and that its busi- ness had been successful beyond measure. Its stock sold readily at a good premium and was always regarded as a good invest- ment. In the beginning of the year 1896 the bank was pressed for currency and discounted much of its paper in order to meet demands. The stringency continued until some time in the month of February, 1896, when it was claimed that the teller of the bank, Ed Reeves, was a defaulter, and on investiga- tion it was reported that he was short something like $11,000 in his accounts with the corre- spondent banks in New York and Cincinnati. The report of this shortage caused patrons of the bank to become suspicious and they began quietly to withdraw their deposits. An investigation of the condition by the bank officers did not come until the month of April. This was conducted by Pierre Gray, son of the late Governor Gray, and his brother, B. S. Gray, both of whom were large stockholders. They found many things not satisfactory in the management and laid the matter before the board of directors, first presenting the matter to Nathan Cad- wallader and his son. They demanded the resignation of Charles H. Cadwallader as cashier and the selection of some one else in his stead. Young Cadwallader resigned as cashier and George N. Edger, president of the Bank of Red Key, was elected. It was believed by the stockholders and officers of the bank that the election of Mr. Edger would allay all suspicion and restore the confidence of the public, Mr. Edger stand- ing high in this community for honesty. But the story was out and Mr. Edger's influence could not avail. On May 6, 1896, within two weeks after the resignation of young Cadwallader, the bank was forced to suspend. The bank ex- aminer took possession and Jesse Canaday was appointed receiver. Suits were brought at once against Nathan Cadwallader and Charles Cadwallader on obligations due the institution, and the grand jury was called to investigate the criminal side of the case. Six indictments were returned against Na- than Cadwallader, and indictments are sup- posed to have been returned against Charles H. Cadwallader at the same time. Before the suspension of the bank, Reeves, the teller, returned, and it was reported that he charged Charles H. Cadwallader with a heavy defalcation. The latter had estab- lished himself in business in St. Louis, where he had a partnership in the control of the Union Stock Yards, but when he learned that indictments would probably be returned, he fled for parts unknown, and kept concealed until run down in California. The receivevr of the bank has paid only 41 2-3 per cent. in dividends and has on hands now a sum of money for further distribu- tion. The receiver immediately brought suit against Cadwallader and other officers and directors of the bank for $50,000 for misman- agement, which case was tried in the Dela- ware Circuit Court, and in which action a judgment was returned for the sum asked. Suits are now pending in this county to set aside conveyances made by some of these directors and to recover the money due the bank. At the time of Charles H. Cadwallader's resignation as cashier he was indebted to it in large sums, which he secured in part by a second mortgage on the Cadwallader Theater building in this city, estimated to cost in the neighborhood of $30,000. He also gave a second mortgage on his farm north of town and on his sale stable in the same locality and turned over by chattel mort- gage his breeding stock. The receiver has reduced all of these items and obtained something in satisfaction, but only a small part of the money that disappeared. Nathan Cadwallader, the president of the bank, was twice tried on the indictments returned against him, on one of which he was fined $218. On the second indictment, tried last November, after a long and hotly contested suit he was acquitted. The cashier was found to have kept two sets of books, making false entries and issuing drafts for large sums and charging himself with but a small part of the same on the books of the bank. These probably constitute the charges under which he has been indicted. Charles H. Cadwallader was born and reared in this city, and was up to within thirty days of the failure of the bank re- garded as one of the most successful busi- ness men of this county. Since his de- parture it has been reported that he squan- dered large sums of money at the gambling table, and that he had dissipated his fath- er's fortune in other ways. The arrest of young Cadwallader is be- lieved to have been brought about through the information of Orville Simmons, a brother of Sheriff Simmons, who came across young Cadwallader in California, and on his return to this community gave the information that brought about his ar- rest. The Cadwalladers were great friends of Benjamin Simmons, late recorder of this county, and father of the sheriff and Or- ville, and it is claimed had done much for him and his family in times past. There is considerable feeling here against the man- ner under which Cadwallader was discov-