6998. Peoples State Bank (Salina, KS)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
July 18, 1921
Location
Salina, Kansas (38.840, -97.611)

Metadata

Model
gpt-5-mini
Short Digest
2b52d8b1

Response Measures

None

Description

Bank was closed by the Kansas state banking department July 18, 1921 because of bad cattle paper and management irregularities (embezzlement by the cashier). A receiver was appointed and the bank's affairs were wound up; partial dividends were paid. No run on the bank is described in the articles. OCR variations: articles use both People's and Peoples'; used provided name 'Peoples State Bank'.

Events (6)
1. July 18, 1921 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Closed by state banking department because of bad cattle paper, irregularities in management and shortages; cashier McChesney had resigned and is implicated in mismanagement/embezzlement.
Newspaper Excerpt
Doors of People's State Closed This Morning. Bad Cattle Paper and Irregularities Given as Cause.
Source
newspapers
2. July 20, 1921 Other
Newspaper Excerpt
William Docking appointed as commissioner in charge ... with a view of working out reorganization plans for the bank. In the hopes that the bank can be reopened soon, a receiver will not be appointed.
Source
newspapers
3. August 5, 1921 Other
Newspaper Excerpt
Application for a receiver ... Discovery of new liabilities made a receivership rather than reorganization of the People's State bank ... losses are now expected to exceed the recent estimate of $130,000.
Source
newspapers
4. August 10, 1921 Receivership
Newspaper Excerpt
William Docking of Lawrence formally took charge of the People's State bank as receiver today. He stated that he hoped to be able to pay depositors a 50 per cent dividend in thirty days and to wind up the affairs of the bank inside of six months.
Source
newspapers
5. August 16, 1921 Other
Newspaper Excerpt
Three warrants ... were issued for the arrest of Earl McChesney, former cashier of the People's State bank ... charge embezzlement, making false entries ... The bank was closed by the banking department the middle of July.
Source
newspapers
6. September 1, 1921 Other
Newspaper Excerpt
A dividend of 50 per cent is to be paid by the People's State bank of Salina, which closed its doors several weeks ago. The dividend is being paid from disposition of assets of the bank.
Source
newspapers

Newspaper Articles (13)
1. July 18, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, July 18, 1921

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Article Text

Doors of People's State Closed This Morning. Bad Cattle Paper and Irregularities Given as Cause. MAY REORGANIZE THE BANK None of Details of Failure Given to Public. Many Prominent Kansans at Head of Institution. Another chapter of the book of today Sabank troubles was written bank lina Frank H. Foster, state of the when commissioner, closed the doors Bad People's State bank of that city. in the paper and irregularities E. McChesformer cashier, handling cattle of accounts were by reported tofor the trouble. ney, day to be responsible be made to reorganize the the An effort bank thru will assessments against of were stockholders. the details of irregularities made pubof None bank management department directors today. lic thru the state admitted that of it was the resignation Cashier altho had recently McChesney forced bank He is affairs reported loans. and to have mismanaged number of bad big have made a caught with a The to bank Texas was also cattle paper. state block of Under Guaranty under Law. the The bank operated law Its losses H. are San- exbank guaranty to exceed $50,000. bank commission- J. pected dell, assistant state that the loss surprise would denied, tho, expressed That at er. $100,000 He bank today. had was was reach the closing of the in trouble and known the institution a stock assessm for some time Mc- No planned department filed against several by complaint the has been left the bank careful checking weeks up way. of Chesney ago. He Since accounts that time is said a to have to condibeen under its sworn statement date of the as last showed state report tions In June 30 the institution This situacarrying bank $31,371.20 in overdrafts. due to items the against is conside cash deposit of tion a number had of been no prompt reported in worth $28,891.03 which of there funds The bank of collections also Bank. transit. Prominent Kansans were in at the of Prominent bank, Kansans which Salina was institu- one o head of the varatively new rapid growth during the comp It had made in a markets considered tions. until the slump months was The bank of 1 the and last few earning basis. number in the At the on a corresponden strong andent for Fifth a and Sixth time report smaller-banks districts. showed deposbanks congressional was made it and bankers f $1,361, its its of other to $192,036.40. were t amounting Assets It of was the capitalized bank $35,000 at and Loans $100.- unhad of to 741.64. a surplus of $10,756.01. $977,divided 000, discounts profits amounted deposits subject addi+ to and while the 636.37. Individual were items brought for safe keeping.com check tional total of depository and fundnvestment in the bank to more than Men. Business $1,100,000. Salina include a numC. Officers Many of known the bank Salina E. business Robinson and inber of well men. Its vice president wealthy Saprofessional R. itzpatrick, father of Col. United Fred was F. and appointed Burch, C. W. JusStominent lina Fitzpatrick-shal, and brother of Kansas directors o States lawy Burch and of the were J. t L. C. tice Rosseau court. A. Other o. Lyter. Theo R. B. suprements W. B. Dodge, Since Me- had H. Laugens ugengayer, C.L Cramer. Cramer was W. Seitz resignation C.P. Brown the 1 at been Chesney's assistant cashier of cashier the bank. and signed Salina. last commissioner report. commissioner Foster over Foster alto go officers. in State Salina with posted went to of Bank the bank Sunday notice institution was its anwindow it had been fairs morning a the turned over This nouncing the that banking of department to the pend- efto the are recently been the this , transfer ing Reporta reorga in bank process had of report, being fect that or was According in to Fifth dis- to sold ferred. Helvering, ering. forme was planning alread dy e Guy T. congress L. is Payne, W. trict the bank. Walter and Fred in the d associatedate buy with treasurer auditor, bank. than This former former state Salina more 1, started of a a little emingly apparent o ownership was It is state banking deal to s bank ago. of the that the been partment Institution a from year action today, tho, had not n sell the had failed. Receiver. will closed or May Appoint that the receistitution f a be the tho, his State bank It place state is probable ge in department had tment. of made plans. Commis- no die r f d by sioner tements, Foster, as People's to last several State bank follows lows of The rect Closing state of the within the the Kansas troubles of fact the o today failure financiaterests. unloss w years and Letterdink therainkinte operated State in- in event the as sures der its bank going organize Broeker- that the the state People's deposits bank Concern guaranty againmately reized Chinese July Famine 16 Spreadnational The Peking,

2. July 20, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, July 20, 1921

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Article Text

IN CHARGE OF SALINA BANK William Docking Appointed Commissioner for People's State. William Docking of Lawrence was today appointed as commissioner in charge of the People's State bank of Salina, which was closed this week under direction of the state banking department. Docking was named as commissioner with a view of working out reorganization plans for the bank. In the hopes that the bank can be reopened soon, a receiver will not be appointed. Frank H. Foster, state bank commissioner. returned to Topeka today after spending several days in personal control of the bank. He refused to discuss reports of irregularities in the bank management or existence of possible forged paper. He believes shortages will not exceed $80,000. Final examination of the bank records has not been completed. Plans for reorganizing the People's State bank have been under consideration for some time, according to reports. Some plan for reopening the institution will doubtless be worked out by the newly appointed commission. Docking is a well known Lawrence banker. He was formerly chairman of the board of directors of the Merchants' National bank of that city. The appointment of Docking is effective immediately.

3. July 21, 1921 Abilene Weekly Reflector Abilene, KS
Article from Abilene Weekly Reflector, July 21, 1921

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Article Text

BANK TO REORGANIZE Salina Net Excited Over Closing of Peoples State Bad cattle papers and irregularities of management were responsible for closing of the Peoples State Bank of Salina, J. H. Sandell, assistant state bank commissioner, stated today. E. McChesney resigned as cashier of the bank several weeks ago upon request of the directors, Sandell said. The state banking department ORtimated the losses would exceed $50,000 but would not reach $100,000. The bank is expected to reorganize through assessment of stockholders. The report of the institution for June 30 showed assets of $1,361,741.65, capital of $100,000, surplus of $35,000 and undivided profits of Loans and discounts $10,756.01. amounted to $977,636.37 with deposits slightly in excess of $1,100,000. The bank reported $31,371.20 in overdrafts and $28.891.03 worth of collections in transit. Officers of the bank included a number of well known Salina business and professional men. C. E. Robinson was president. Vice-PresIdents included F. R. Fitzpatrick, decided upon as the next United States Marshal and receiver of the defunct Kansas State Bank of Salina; and C. W. Burch, prominent lawyer and brother of Justice R. A. Burch of the Kansas supreme court. The bank will undoubtedly be reorganized and opened for business in a few days, according to a statement by F. H. Foster, state bank commissioner.

4. August 5, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, August 5, 1921

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ASK RECEIVER FOR BANK New Liabilities Said to Have Been Discovered in Salina Institution. Salina, Kan., Aug. .-Application for a receiver to take charge of affairs of the People's State bank and for permission to liquidate the affairs of the bank were made in telegrams sent to the state bank commissioner last night by C. E. Robinson, president of the closed bank. and William Docking placed in charge, it was announced today. / Discovery of new liabilities made a receivership rather than reorganization of the People's State bank of Salina necessary, J. H. Sandell, assistant state bank commissioner, said today. Additional claims are being unearthed as the check of the books proceeds and the losses are now expected to exceed the recent estimate of $130,000. The state bank guaranty fund may be called upon to make good a portion of the losses, since the combined surplus and capital of the failed bank was but $135,000. William Docking, Lawrence banker, who has been in charge of the Salina bank since it was closed, is expected to be named as receiver.

5. August 10, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, August 10, 1921

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NAME SALINA BANK RECEIVER William Docking of Lawrence Named - Half of Liabilities To Be Met. Announcement was made at the state banking department Tuesday that William Docking, of Lawrence, special bank commissioner in charge of the affairs of the Peoples State bank at Salina, has been appointed receiver and that the bank's affairs will be wound up as speedily as possible. Docking said that 50 per cent of the bank's liabilities probably will be met within the next sixty days. The balance will be met as soon as possible, he stated. Under the bank guaranty law the depositors are protected. If the double liability law holds good, the guarantee fund will not be touched. A question has arisen regarding the double liability law and the law is now being tested in a case in the supreme court.

6. August 10, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, August 10, 1921

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Article Text

Salina Bank Receiver in Charge. Salina, Kan., Aug. 10.- - William Docking formally took charge of the People's State bank as receiver today. He stated that he hoped to be able to pay depositors a 50 per cent dividend in thirty days and to wind up the atfairs of the bank inside of six months. excepting such matters as must be taken to the courts for settlement.

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

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ARREST A CASHIER Warrants Out for Earl McChesney, People's State of Salina. Move Brought About by Spring Hill Development. Salina, Kan., Aug. 16.-Three warrants, containing thirty-five counts, were issued for the arrest of Earl McChesney, former cashier of the People's State bank here, at noon today, by County Attorney Norton. The complaints are signed by William Docking, receiver for the bank and among other things charge embezzlement, making false entries in his books and making false reports to the banking department as to the financial condition of the bank. The warrants were delivered to the sheriff who said they would be served on McChesney immediately. The bank was closed by the banking department the middle of July. Arrest of McChesney has been contemplated since the Salina bank was taken over by the state banking department last month. Issuance of warrants was delayed from day to day during the last couple of weeks. News of the trouble of the Spring Hill bank is believed to have prompted quick action today in a move to arrest McChesney. According to information received by the state banking department McChesney made excessive and unsecured loans to a number of business enterprises in which he is said to have had a personal interest. He also loaned heavily on Texas cattle. He handled practically the entire work of the bank and growth of the institution led stockholders and directors to believe the bank was in excellent condition. One bunch of cattle paper which the directors had advised McChesney to clean up was later found to have been sold by the cashier to a neighbor bank and bore the endorsement of the People's State bank and McChesney's approval. The People's State bank will doubtless be compelled to apply its entire capitalization, surplus and profits to meet claims of creditors. The liabilities, which were originally estimated at $75,000, have now grown to $140,000 to $150,000.

8. September 1, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, September 1, 1921

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BANK TO PAY FIFTY PER CENT Affairs of People's State Bank at Salina Being Wound Up. A dividend of 50 per eent is to be paid by the People's State bank of Salina, which closed its doors several weeks ago. The dividend is being paid from disposition of assets of the bank. According to Receiver Docking, assets of the bank will probably pay most of the liabilities. It is probable, tho, that there may be a shortage of some $50,000 after these securities are disposed of under the receivership.

9. 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.

10. November 9, 1921 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, November 9, 1921

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BANK CASHIER BOUND OVER. Earl McChesney Gives Bond for $9,000 - -Depositors Will Not Lose. Salina, Kan., Nov. 9. Earl McChesney, the former cashier of the People's State bank. which closed its doors on July 18, was bound over to district court today under $9,000 bond, which he gave. At the preliminary the defense offered no testimony, preferring to save its side of the case for the hearing in district court. The bank has paid its depositors 75 per cent in cash and 25 per cent in state guaranty fund certificates. These, it is said, will all be taken up by remainder funds to be collected by the receiver, William Docking, and the state is expected to lose nothing.

11. September 20, 1922 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, September 20, 1922

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STATE CONTROLS TEN BANKS B. V. Curry Is Official Receiver for All Institutions. Ten state banks are now closed and under control of the state bank commissioner. B. V. Curry, an assistant bank commissioner, is the official receiver of all ten of these institutions. In addition to the ten, there are nine banks in the state now operating under individual receivers. The ten banks under state control and of which Mr. Curry is receiver: Farmers' State bank, Washington. State Savings bank, Leavenworth. Farmers' State bank, Quenemo. C. M. Condon & Co., State bank, Oswego. Traders' State bank, Arkansas City. Citizens State bank, Geuda Springs. Exchange State bank, Wichita, State bank of Hope. Citizens' State bank, Harper. Farmers State Bank, Belmont. Mr. Curry has just been appointed receiver of the Citizens State Bank of Harper, the last bank to be closed by State Bank Commissioner Foster. Following -are the institutions now operating under private receivers: Citizens State Bank, Manhattan. People's State Bank. Salina. Broeker-Lefferdink Bank, Salina. Farmers and Merchants Bank, Pawnee Rock. Farmers State Bank, McCune. Viola State Bank, Viola. Aulne State Bank, Aulne. Hanover State Bank, Hanover. Farmers State Bank, Spring Hill.

12. December 12, 1922 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, December 12, 1922

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ORDER STOCKHOLDERS TO PAY Receiver of Defunct Salina Bank Levies 100 Per Cent Assessment. Salina, Kan., Dec. 12.-William Docking, Lawrence, receiver for the People's State bank, which closed its doors in this city eighteen months ago, has issued notices to the stockholders of the CL :cern that it will be necessary for them to pay an asséssment of 100 per cent on the amount of the stock the: hold to meet the deficits of the bank. This order is made on the double

13. December 20, 1922 The Topeka State Journal Topeka, KS
Article from The Topeka State Journal, December 20, 1922

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TEST STATE BANKING LAW Receiver of Defunct Salina Bank Sues Stockholders. Salina, Kan., Dec. 20.-The first of a series of suits against the stockholders of the defunct Peoples' State bank has been filed by William Docking, receiver. Mrs. Florence P. Shellabarger, widow of the late Fred D. Shellabarger of the Shellabarger Mill & Elevator Co., is the defendant, she having ninety shares at a par value of $9 000. The suit is brought to collect on the double liability clause of the state banking law. The plaintiff in the petition states in part "the shareholder is liable to said bank for a sum equal