Washington Bank and Trust Company

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: October 28, 1930
Location: Washington, Indiana (38.659, -87.173)

Metadata

Model: gpt-5-mini
Short Digest: c7cd44b2

Response Measures

None

Description

The bank was closed by the state banking examiner in October 1930 and a receiver was appointed in mid-November 1930. Articles describe insolvency, grand jury probe, and receivership litigation. No article describes a depositor run prior to suspension. Dates in sources vary (Oct. 23, Oct. 27, Oct. 28) — receiver appointment reported Nov. 14, 1930; I note the date discrepancy below.

Events (3)

1. October 28, 1930 Suspension

Cause: Government Action
Cause Details: Closed by the state banking examiner after examiners found the bank insolvent and lacking cash to meet demands; directors had closed the bank and the commissioner brought proceedings; state action led to suspension/closure.
Newspaper Excerpt: closed last October by the state bank examiner
Source: newspapers

2. November 14, 1930 Receivership

Newspaper Excerpt: Nov. 14, Circuit Judge Harry O. Chamberlin appointed Brandt C. Downey, ... receiver.
Source: newspapers

3. March 26, 1931 Other

Newspaper Excerpt: Steps toward a grand jury probe into failure of the Washington Bank and Trust Company, closed last October by the state bank examiner, were being taken today by Prosecutor Herbert Wilson. RECORDS ARE STUDIED At Least Two More Weeks Needed to Prepare Enough Evidence.
Source: newspapers

Newspaper Articles (5)

1. November 15, 1930 The Indianapolis Star Indianapolis, IN

Article from The Indianapolis Star, November 15, 1930

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Article Text

OF BANK RECEIVER TODAY Chamberlin to Make Decision on Washington Company Insolvency Case. A receiver for the Washington Bank and Trust Company will be named by Judge Harry O. Chamberlin Circuit The bank was held be insolvent the judge following hearing yesterday petition filed by Luther Symons, state banking commissioner Judge Chamberlin heard only the state banking department. Leathers Refuses Action A few minutes before the hearing in Circuit court, Judge James M. Leathers of Superior court, Room refused appoint receiver for the bank on petition Iva Heeb, This suit was days before the filed in Circuit court by Mr. Judge Leathers his ruling, held that the state banking commissioner had exclusive right, during the fifteen-day period he has charge of affairs of bank after has its doors, of bringing receivership proceedings He ruled that depositors were not deprived of their rights because of this fact. way was opened by attorneys for Heeb appeal Indiana court were given eight days in which to file of exceptions Mr. Symons and William Rider of Waynetown, named state examiner the ington bank, were the only nesses. May Be Paid in Full. Mr. Rider declared the bank was insolvent when it closed by directors. He predicted that depositors will realize substantial amount He pointment treir deposits. of receiver, as did Mr. attorney for the Fred bank, told the that depositors directors of the opinion that were can be paid full in event the court names receiver and protects asJudge Chamberlin said that he had been deluged with who should be appointed receiver. would consider both an He said he individual and trust company for the post and that whoever is named serve minimum salary the interest depositors. Selection trust was discouraged by Ert Slack, mayor, having $300,000 on deposit in the bank. Bond Set at $125,000 Judge Chamberlin set the bond of The court the at with the insolvent bank, many of whom foreign-born residents. in his held Judge the act creating the banking and iners, the the bank examiner law to be receiver for the City Trust Comwill be appointed by pany probably Judge Chamberlin hearing on this receivership petition was

2. December 14, 1930 The Indianapolis Star Indianapolis, IN

Article from The Indianapolis Star, December 14, 1930

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Article Text

MAYR SEEKS RETURN OF FEES FROM BANK Frank of filed intervening the Circuit in the filed against the Washington Bank and Trust Company by the state deasks the court for with the defunct the was deposited as trust fund and therefore preferred claim, the petition A hearing will be held Dec. 22.

3. March 26, 1931 The Indianapolis Times Indianapolis, IN

Article from The Indianapolis Times, March 26, 1931

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Article Text

CLOSED BANK TO BE PROBED BY GRAND JURY Prosecutor Takes Steps to Take Washington Firm's Facts to Quiz Body. RECORDS ARE STUDIED At Least Two More Weeks Needed to Prepare Enough Evidence. Steps toward a grand jury probe into failure of the Washington Bank and Trust Company, closed last October by the state bank examiner, were being taken today by Prosecutor Herbert 'ilson. Scrutiny of records held by Brandt C. Downey, receiver, partially has been completed preparatory to laying facts before the grand jury, Wilson disclosed. Wilson said at least two weeks would be required before sufficient evidence was obtained from the records for submission to the jury. Wilson declined to say whether the scrutiny revealed evidences of irregularities, although he admitted he had searched statute books for laws bearing on criminal guilt of bank officials who accept deposits knowing a bank is in a state of insolvency. Failed October 28. The Washington bank failed Oct. 23, and Nov. 14, Circuit Judge Harry O. Chamberlin apopinted Brandt C. Downey, financial secretary of the Methodist hospital, receiver. Wilson said today that Downey had been urged to hasten a final report on the institution at the time of closing, and that the report would bear significantly on the grand jury probe. When Downey was appointed receiver, Chamberlin held that the bank was insolvent following a hearing on a petition of Luther F. Symons, state bank examiner. Bank examiners testified that a review of the bank's books shortly after the closing showed assets to be $3,127,975, and liabilities $3,127,975. Deposits amounted to $1,374,251, including demand deposits of $681,821 at that time, the hearing disclosed. Reached Borrowing Limit They testified further that the institution had reached the limit of its borrowing power, lacking cash to meet demands, and that all cash reserve had been borrowed. "I have studied as much information as I could get and have urged Downey to get his records in shape to lay before the grand jury," Wilson said. Receivership activities in circuit court, according to records, have included numerous petitions center around liquidation of assets. Downey said recently business conditions seriously hampered rapid liquidation of assets.

4. January 24, 1933 The Indianapolis Times Indianapolis, IN

Article from The Indianapolis Times, January 24, 1933

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Article Text

# Judge Attacks 'Secrecy' # of Closed Bank's Affairs Charging a "conspiracy of silence" has surrounded affairs of the defunct Washington Bank and Trust Company, Circuit Judge Earl R. Cox today asserted he would demand the matter be opened publicly. "The public should know the truth about the company," Cox said at a hearing on a claim against the bank's receivership. He indicated the state banking department's report on conditions of the bank prior to its closing, Oct. 28, 1930, was not satisfactory. A more detailed report will be demanded of the state banking examiner, Cox declared. "Why is there need for silence on certain matters pertaining to the bank? If there is anything to hide, the public has a right to know about

5. May 27, 1933 The Indianapolis Times Indianapolis, IN

Article from The Indianapolis Times, May 27, 1933

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Article Text

# EX-RECEIVER OF BANK TO FACE COURT INQUIRY Payments by Brandt Downey Are Questioned by Judge Cox. (Continued From Page One) show that the bonds, including those of Downey for his receivership, were written through the agency of Cooling, Grumme, Mumford Company, in which he held stock. Since the court hearing, Cox has ordered suit brought against the Fidelity and Deposit Company of Maryland for $100,000 on the officials' bonds. Directors are being sued for $1,00,000 on their personal liability, and stockholders are being sued to recover $50.000 in dividends. Downey is bonded in the amount of $150,000, represented in a $125,-000 bond given the court for his receivership, and a $25,000 banker's blanket bond. Painter's report contains the declaration that Downey's payment of cash to take up $472.511.17 collateral, of which nearly half is alleged to have been pledged illegally, incurred "a large potential loss" to the receivership funds. ### Interited Potential Loss The securities which had been pledged on the loan from the Fletcher American now are carried on the books at a value of $358,-395.95, the report states. "Therefore, it is certain that the receiver inherited a large potential loss when he paid the Fletcher American for the collateral, the amount of which can not be calculated until complete liquidation has been effected," the report states. According to the report, based on receivership records, the Fletcher American took $33,730.39 from the Washington bank's deposit account and proceeds of $33,633.14 from the collateral, at time of the failure of the Washington bank, Oct. 27, 1930. On Dec. 11, 1930, Downey paid $12,875.70 in cash, and on Dec. 31, 1930, made a final payment of $142,-470.28, according to the report. ### Deposit Called Illegal The collateral which secured the loan was real estate mortgages, "illegally deposited, because they previously had been pledged to the Washington Bank and Trust Company, trustee, to secure certificates issued by the Washington Company, according to the report The alleged illegally deposited mortgages totaled $220.077.31, which now are carried on the books at $187,090.19, according to Painter's audit.