6548. Peoples State Bank (Coffeyville, KS)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
January 20, 1921
Location
Coffeyville, Kansas (37.037, -95.616)

Metadata

Model
gpt-5-mini
Short Digest
331e1c81

Response Measures

None

Description

The People's/Peoples State Bank of Coffeyville was closed by the Kansas State Bank Commissioner on 1921-01-20, placed in charge of the commissioner/examiner and later a receiver was appointed. Closure resulted from inability to realize on loans (oil-field/local securities) and later revealed embezzlement/mismanagement. There is no evidence of a depositor run or later reopening.

Events (2)
1. January 20, 1921 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Inability to realize on loans and paper due to business depression and heavy loans on local oil-field securities; later revelations of embezzlement and misappropriation by officers.
Newspaper Excerpt
The Peoples State bank of this city closed its doors this morning. State Bank Commissioner Walter Wilson is in charge.
Source
newspapers
2. February 1, 1921 Receivership
Newspaper Excerpt
Frank Organ ... was today appointed by Walter E. Wilson, state bank commissioner, as receiver for the People's State bank of Coffeyville, which failed about ten days ago. ... To take charge of Coffeyville Bank Affairs February 1.
Source
newspapers

Newspaper Articles (12)
1. January 20, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 20, 1921

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Article Text

Peoples State of Coffeyville Closed by Walter Wilson. Could Not Realize on Paper Due to Depression. Coffeyville, Kan., Jan. 20. 1 -The People's State bank of this city closed its doors this morning. State Bank Commissioner Walter Wilson is in charge. Mr. Wilson issued a statement saying he had not delved deep enough into the bank's affairs to give an estimate of the probable loss. He said the inability of the bank management to realize on its paper account of the business depression caused him to close its doors as the bank's cash reserve was too low to permit of its continuing in business. He said a receiver would be named to take over the bank's affairs. In the last statement published the People's bank had deposits of $650,000 and published assets totaling $710,000. A. S. Newman is president of the bank and D. M. Cahill is cashier, both men of highest integrity. Local conditions in the Coffeyville oil field and trouble of the bank in handling of its securities was responsible for closing of the institution, according to reports from the state banking department this afternoon. Based on partial examinations, there was a belief that it might not be necessary to close the doors of the insti tution except temporarily. No steps have as yet been taken looking to appointment of a receiver, altho an examiner is in charge. Walter E. Wilson. state bank commissioner, is in Coffeyville today. W. W. Bowman, secretary of the Kansas Bankers' association, will go to Coffeyville tonight and will confer with Wilson and his assistants. Heavy loans on local securities which encountered big market slumps are declared to have caused the bank trouble. When markets broke borrowers were in some instances unable to clean up their paper. So far as reports sent to Topeka state, no charges of irregularities or defalcations by the Coffeyville banking officials have been made.

2. January 21, 1921 The Morning Tulsa Daily World Tulsa, OK
Article from The Morning Tulsa Daily World, January 21, 1921

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Article Text

COFFEYVILLE BANK CLOSES Kansas State Bank Commissioner in Charge of Institution. COFFEYVILLE, Kan, Jan. 20. The Peoples State bank of this city closed its doors this morning. State Bank Commissioner Walter Wilson is in charge. Mr. Wilson issued a statement saying he had not delved deep enough into the bank's affairs to give an estimate of the probable loss. He said the inability of the bank management to realize on its paper on account of business depression caused him to close its doors as the bank's cash reserve was too low to permit of its continuing in business. He said a receiver would be named to take over the bank's affairs. In the last statement published the bank had deposits of $650,000 and published assets totaling $710,000. Dr. W. D. Ownby, Osteopathic Physician, 310 Daniel Bldg. Osage 1344.-Advt.

3. January 24, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 24, 1921

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BANK SMASH IS SERIOUS Coffeyville Failure May Mean Loss to Many Patrons. Failure of the People's State bank of Coffeyville may prove one of the biggest bank smashes. in Kansas in several years, according to rumors today in the state house. Appointment of a receiver to take over affairs of the defunct bank may be made in a few days, it was reported. Several thousand patrons of the Coffeyville, bank are due for losses, according to statements. There is also a report that several large corporations which borrowed heavily from the bank's funds, may encounter embarrassment in meeting their obligations. No definite statement regarding detailed conditions of the Coffeyville institution has been made thru the state banking department. Walter E. Wilson state bank commissioner, spent the week-end in Topeka. He returned to Coffeyville today. The bank has been closed and is in charge of the state department.

4. January 26, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 26, 1921

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NOT UNDER GUARANTY LAW Coffeyville Bank Did Not Take Advantage of Kansas Act. The People's State Bank of Coffeyville is not under the state bank guaranty law, according to announcement from the state banking department. The bank was examined four times during the last year, but the failing conditions of the institution was not discovered until recently. No report has been given as to the exact losses of the Coffeyville institution. Examiners are now checking the books of the bank. A receiver will probably be appointed in a few days.

5. January 26, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 26, 1921

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THEY'RE IN MINES Coffeyville Men Were Bankers Just Week Ago. Today They're Facing ThirtyYear Stay in Leavenworth. Lansing, Kan., Jan. 26.-Bankers in good standing a week ago-prischers today with prospects of mining coal for thirty years. That was the transition of Allen S. Newman, president of the defunct People's State Bank of Coffeyville, and Rufus Newman, brother and vice president. The bank was closed last Thursday. Saturday a forged note of $1,500 showed up for collection. That was the beginning of a series of revelations that ended in confession of guilt by embezzlement and misappropriation of funds. Before the men pleaded guilty, they assigned all of their property in trust for their creditors.

6. January 27, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 27, 1921

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TO PREVENT - LOSS All State Banks May Be Forced Into Guarantee Law. Proposed Bill Is Result of Coffeyville Failure. As a result of the failure of the People's State bank of Coffeyville with a loss of approximately $300,000, a bill will be introduced in the legislature Friday or Monday requiring all state banks to come under the bank guarantee law. Representative Knapp of Coffeyville announced today he is drafting such a bill. The defunct bank was nct guaranteed. To Make Failure Impossible "I want to make it impossible for another financial catastrophe like this to occur," Knapp declared. "I believe if all state banks are under the law the whole banking fabric will be strengthened because bankers will watch each other for mutual protection. Of the eleven hundred state banks. 683 have voluntarily come under the guarantee law. The Knapp measure will also contain a section to strengthen the present laws requiring that banks maintain adequate cash reserves. A receiver for the Coffeyville bank probably will be appointed by Saturday. Walter E. Wilson, state bank commissioner, said today. The appointment was offered to Judge George W. Wark of the industrial court. whose term expires soon. but he declined, Wilson said.

7. January 27, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, January 27, 1921

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Article Text

ORGAN IS BANK RECEIVER To Take Charge of Coffeyville Bank Affairs February 1. Frank Organ, for the last three years head of the blue sky department and for six years assistant state auditor, was today appointed by Walter E. Wilson, state bank commissioner, as receiver for the People's State bank of Coffeyville, which failed about ten days ago. Dallas Knapp, of Coffeyville, representative from Montgomery county, was appointed as attorney for the receiver. Knapp will resign his present position February 1 to take charge of the affairs of the bank.

8. March 10, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, March 10, 1921

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Article Text

CLAIMS PREFERRED PLACE. Coffeyville Man Declares Defunct Bank Did Not Own Forfeit Bond. Coffeyville, Kan., March 10.-The question whether a sum of money place in a bank as a forfeit in case of failure to carry out a contract should be considered the bank's property, has been raised in the suit brought by C. H. Lamb.against the receiver of the defunct People's State bank of this city. Lamb recites in his peition that the money was placed in the bank, to be paid to him in the event an oil well contractor failed to comply with certain drilling and other obligations in an oil deal. He demands that the full $500 be delivered to him.

9. April 5, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, April 5, 1921

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TAXES LOST WITH BANK? Coffeyville Failure Involves $52,000 Belonging to Taxpayers. Taxes amounting to $52,000 were in the People's State bank of Coffeyville when that institution closed its doors. Property owners who had paid the money to an unauthorized agency today sought relief in the supreme court. Mandamus proceedings to compel the Montgomery county treasurer to issue receipts for the money were argued before the court this afternoon. Last fall the Weaver Realty company of Coffeyville collected large sums in taxes from persons in southern Montgomery county. The money was deposited to the credit of the county treasurer, altho neither the collections nor making of deposits had been authorized. Then the real estate agency sent to the treasurer deposit tickets for $52,000. When the county treasurer attempted to withdraw the money from the Coffeyville bank his three drafts were protested. At the same time the bank notified the state department that it was insolvent and turned the institution over to the bank commissioner. Two officers of the defunct bank are now serving terms in the state penitentiary. But the property owners who paid their taxes to the Weaver Realty company have been unable to secure tax receipts. Mandamus proceedings to compel issuance of the receipts were argued this afternoon. Unless the writ is issued the taxpayers must make a second payment.

10. May 25, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, May 25, 1921

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ARCH L. BELL IS NAMED Great Bend Man Appointed Special Deputy Bank Commissioner. Frank H. Foster, state bank commissioner, today announced the appointment of Arch L. Bell of Great Bend, as special deputy bank commissioner. He will be in charge of the blue sky department in the state bank commissioner's office. Bell succeeds Frank Organ, who was recently appointed receiver for the Peoples State bank of Coffeyville. The appointment of Bell is effective immediately.

11. August 26, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, August 26, 1921

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FRANK ORGAN RESIGNS Former Topekan Quits as Receiver Coffeyville Bank. Frank Organ, receiver for the People's State bank of Coffeyville, today announced his resignation. He was appointed by Walter E. Wilson during his term as state bank examiner. Organ was head of the state blue sky department for several years. He was formerly assistant state auditor. No action has been taken regarding appointment of Organ's successor. F. H. Foster, state bank commissioner, expects to go to Coffeyville Saturday to arrange for selection of a new receiver.

12. September 27, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, September 27, 1921

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BANKS DID WELL Made Good Record During Financial Depression. More Than 1,100 Now in Operation in Kansas. SEVEN FAILURES THIS YEAR Mismanagement and Dishonesty Given as the Cause. Heaviest Losses of Year Were Hanover and Coffeyville. The failure of two Kansas banks in September brings the totals to seven for the year to date and to twelve for the period of deflation, since May 15, 1920. "Kansas banks have weathered the storm of financial depression remarkably well," said J. H. Sandell, assistant state bank commissioner. "Where twelve state banks have failed more than 1)100 have continued to operate. Investigation has disclosed that the banks which have failed have done so in practically every instance because of mismanagement or dishonesty of officials. In most instances bank cashiers and other officials stole from bank funds to speculate in oil or other enterprises. When deflation came their holdings diminished and they were unable to make good their thefts as they undoubtedly had hoped. Readjustments Are Made. "Where bank officials were honest and the great majority of them are -the banking department has worked successfully with them to make the necessary readjustments to meet new conditions." Sample reasons shown for failures in the past are: "Cashier speculated in oil and lost." "Negligence on the part of bank directors and speculation on part of acting officers." "Defalcation of cashier. He dealt extensively on board of trade and covered up losses with forged papers." From 1900 to 1919 inclusive there were twenty bank failures in this state or an average of one a year. From 1892, when the first failure was recorded after establishment of the banking department, until 1899 there were 69 failures. Thirty-three of these were in 1893, the panic year. Numerous other banks closed temporarily. In Kansas bank failures of the last two years, the heaviest losses to depositors probably will be in the Hanover State Bank of Hanover and the Peoples State Bank of Coffeyville, the banking department believes. There is no way to estimate the exact loss until numerous law suits are decided. Seven Were Guaranteed. Seven of the twelve defunct banks were guaranteed under the depositors' guaranty law. Neither the Hanover nor the Coffeyville bank were guaranteed. In the other three non-guaranteed banks present indications are there will be no losses to depositors. Of the seven guaranteed banks it now appears at least three and possibly five will require drafts on the guaranty fund. List of Bank Failures. The list of failed banks follows: The Aulne State bank, Amine, (guaranteed), May 15. 1920. The Hanover State bank, Hanover, May 14, 1920. The Farmers State bank. Wamego, $25,000 capital, October 14. 1921. The Homewood State bank. Homewood, $10,000 (guaranteed), December 6. 1920. The Wellsford State bank, Wellsford, $10,000, December 18, 1920. The People's State bank, Coffeyville, $25,000. January 20. 1921. The Farmers State bank, Le Loup, $10,000 (guaranteed), February 4, 1921. Kansas The Banking Trust company. City, Kan., ($100,000), April 23. 1921. The People's State bank. Salina ($100,000). guaranteed, July 18, 1921. The Farmers State bank, Spring Hill, $20,000 (guaranteed), August 8. 1921. The Citizens State bank, Manhattan, $50,000 (guaranteed), September 19. 1921. The Farmers State bank. McCune, $15,000 (guaranteed), September 22, 1921.