8064. Chelsea Savings (Chelsea, MA)

Bank Information

Episode Type
Run Only
Bank Type
state
Start Date
August 17, 1906
Location
Chelsea, Massachusetts (42.392, -71.033)

Metadata

Model
gpt-5-mini
Short Digest
9838e571

Response Measures

Accommodated withdrawals, Public signal of financial health

Description

Multiple articles report the failure/receivership of the First National Bank of Chelsea (Aug 17, 1906) which produced small runs on the Chelsea Savings and Co-operative Provident banks. Chelsea Savings experienced brief withdrawals but did not suspend and soon depositors ceased withdrawing when they saw ample cash on hand. Therefore this is classified as a run_only episode for Chelsea Savings.

Events (1)
1. August 17, 1906 Run
Cause
Local Banks
Cause Details
Small runs triggered by the closing/receivership of the First National Bank of Chelsea (excessive loans and failure), which alarmed depositors at Chelsea Savings.
Measures
Depositors soon ceased withdrawing when it was seen that there was a plentiful amount of cash on hand; bank continued operations.
Newspaper Excerpt
The failure of the First National was responsible for small runs on the Chelsea Savings and Co-operative Provident banks this morning.
Source
newspapers

Newspaper Articles (10)
1. August 17, 1906 The Minneapolis Journal Minneapolis, MN
Article from The Minneapolis Journal, August 17, 1906

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Article Text

BANK GLOSES DOORS; ANOTHER TO RESCUE First National of Chelsea, Mass., in Receiver's Hands-50 Per Cent Tendered. Boston, Aug. 17.-The business community of Chelsea was surprised when it became known that First National bank of that city, one of the oldest financial institutions in this section of the state, had been closed and Bank Examiner Alfred Ever placed in charge. Many of the small tradesmen had practically all of their ready money tied up in the bank, but it is expected that relief will be afforded by the Winnisimet National bank of Chelsea which has offered to pay to depositors of the First National 50 per cent of their accounts. The remaining banks in Chelsea have but a few thousand dollars to their credit at the First National, and will not be directly affected by the difficulty. It is said that the difficulty at the bank was brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. It has been learned also that the First National was heavily involved in real estate which tied up its money to the extent of about $500,000. The failure of the First National was responsible for small runs on the Chelsea Savings and Co-operative e Provident banks this morning. Stensland Not Found. Mobile, Ala., Aug. 17.-There is no truth in reports sent out from here that a man believed to be Paul O. Stensland the fugitive bank president of Chicago was seen in a house on the e outskirts of Mobile and that a posse C had surrounded the place. Another Bank Closed. Chicago, Aug. 17.-The Garfield r Park bank, a small institution located n at 2024 West Madison street, has been e placed in the hands of a receiver by e Judge Bethea. Three creditors with Is claims amounting to several thousand dollars, filed the petition in court, askiing that Ellis E. Drake, president of k the institution as well as the bank, be is declared insolvent. 1The collapse of the Milwaukee Avetnue tSate bank is said to have caused the doors of the smaller institution to be closed. Ever since the failure of the Milwaukee avenue bank the depositors k in the Garfield Park bank have been t withdrawing their deposits. aPresident Drake declared that he er was solvent and if given time to disd pose of certain securities he would be rable to pay all of the creditors in full.

2. August 17, 1906 Evening Star Washington, DC
Article from Evening Star, August 17, 1906

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Article Text

NATIONAL BANK FAILURE. Busines Community of Chelsea,, Mass., is Shocked. BOSTON, August 17.-The business community of Chelsea was surprised when it became known that the First National Bank of that city, one of the oldest financial institutions in this section of the state, had been closed and Bank Examiner Alfred Ever placed in charge. Many of the small tradesmen had practically all of their ready money tied up in the bank, but it is expected that relief will be afforded by the Winnisimmet National Bank of Chelsea, which has offered to pay to depositors of the First National 50 per cent of their accounts. The remaining banks in Chelsea have but a few thousand dollars to their credit at the First National and will not be directly affected by the difficulty. During the morning throngs of depositors appeared at the bank. There was no disorder, however. It is said that the difficulty at the bank was brought about by a steady transfer of large accounts to Boston banks, and the Chelsea bank was thereby hampered for ready money. It has been learned also that the First National was heavily involved in real estate which tied up their money to the extent of about $500,000. The failure of the First National was responsible for small runs on the Chelsea Savings and Co-operative Provident banks this morning. President Hinckley of the bank is seriously ill, and it is said he cannot recover. Bank Examiner Ewer refused to discuss the bank's affairs or to make any statement regarding the dispatch from Washington saying that the bank's failure was reported due to excessive loans to its officers and directors. Any reports on his discoveries at the institution, he said, would be made to the controller of the currency at Washington.

3. August 17, 1906 Waterbury Evening Democrat Waterbury, CT
Article from Waterbury Evening Democrat, August 17, 1906

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Article Text

Due to Excessive Loans. Washington, Aug 17.-The comptroller of the currency has received advice by telegram from National Bank Examiner Ewer that the First National bank of Chelsea, Mass, has been closed by action of the directors. Examiner Ewer has been appointed receiver. The failure of this bank is reported by the examiner to be due to large excessive loans to officers and directors of the bank. The following is a statement of the resources and liabilities of the bank at the date of its last report of condition made to the comptroller of the currency June 16, 1906: Resources-Loans and discounts, $1,114,586; U. S. bonds to secure circulation, $50,000; premium on U. S. bonds, $2,250; banking house and other real estate, $60,778; due from banks, $22,356; cash and cash items, $57,379; redemption funds, $2,500; total, $1,309,849. Liabilities-Captital stock, $300,000; surpluse and profits, $139,344; circulating notes, $49,500; due to banks, $10,733; dividends unpaid, $543; deposits, $679,729; bills payable, $130,000; total, $1,309,849. During the morning throngs of depositors appeared at the bank and at 10 o'clock more than 500 people were assembled there. There was no disorder, however, the police authorities having taken precautions to send a dozen patrolmen to the scene to maintain order. Bank Examiner Ewer permitted holders of safe deposit vaults to enter the bank and examine their property, but all other persons were excluded. It is said that the difficulty at the bank was brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank thereby was hampered for ready money. Examiner Ewer said to-day that he was unable to state how serious the failure was. Two years ago the bank had deposits of $800,000, with a surplus of $130,000. In addition to the withdrawal of large cash accounts it has been learned that the First National bank was heavily involved in real estate which tied up their money to the extent of about $500,000. The failure of the first National was responsible for small runs on the Chelsea Savings and Co-operative Provident banks this morning, but tne depositors at these institutions soon ceased with drawing their money when it was seen that there was a plentiful amount of cash on hand.

4. August 17, 1906 Deseret Evening News Salt Lake City, UT
Article from Deseret Evening News, August 17, 1906

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MASS. NATL BANK CLOSED. Washington, Aug. 17.-The comptroller of the currency has received advices by telegram from National Bank Examiner Ewer that the First National Bank of Cheslea, Mass. has been closed by action of the directors. Examiner Ewer has been appointed receiver The failure of the bank is reported by the examiner to be due to large excessive loans to officera and directors of the bank A statement of the resources and liabilities of the bank at the date of its last report of condition was made to the comptroller June 18. 1906 This shows loans and discounts to be $1,118,586: cash on hand. $57,879 capital stock. $300,000. and deposits $679,729 Boston, Aug. 17.-The business community of Cheslea was surprised when it became known that the First Na. tional bank of that city, one of the oldest institutions in this section of the state, had been closed. Many of the small tradesmen had practically all of their ready money in the bank and it is expected that relief will be afforded by the Winnisimet National bank of Chelsea, which has offered to pay to depositors of the First National bank 50 per cent of their accounts. Throngs of depositors appeared at the bank today. There was. however, no disorder. It is said that the difficulties at the bank were brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. It has ben learned also that the First National bank was heavily involved in real estate, to the extent of about $500,000. There were small runs on the Chelsea Savings and Co-operative Provident banks today,

5. August 17, 1906 The News-Democrat Providence, RI
Article from The News-Democrat, August 17, 1906

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500 DEPOSITORS GATHER AROUT SUSPENDED BANK Boston, Aug. 17.-At an early hour this morning Bank Examiner Ewer notified the police department that he would probably need the services of officers in front of the First National bank this forenoon, which was closed by order of the comptroller of the currency. During the morning throngs of depositors put in their appearance at the bank and at 10 o'clock more than 500 people were assembled there. There was no disorder, however, the police authorities having taken precautions to send a dozen patrolmen to the scene to maintain order. The employes of the bank reported for work at the usual hour today and Bank Examiner Ewer used them in assisting him to learn the condition of the embarassed institution. Mr. Ewer decided that holders of safe deposit vaults had a right to visit these vaults and examine their property there. but only persons who were able to prove conclusively that they rented such 'deposit boxes were admitted to the bank. It was learned during the morning that the closing of the bank will embarass hundreds of yersons' in addition to those who placed their savings in the institution. A number of business houses in the city kept sufficient cash on hand in the First National bank to make up their weekly pay-roll and it was apparent today that a number of shop and store employes might be compelled to wait until next week for their wages. It is said that the difficulty at the bank was a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. Examiner Ewer said today that he was unable to state how serious the failure was. Two years ago the bank had deposits of $800,000 and a surplus of $130,000. In addition to the withdrawal of large cash accounts it has been learned that the First National bank was heavily involved in real estate which tied up their money to the extent of about $500,000. Thomas Martin of Wakefield, one of the directors of the bank, is responsible for an application for a government examination of the bank's affairs. Some time ago he began an investigation of the condition of the finances of the institution with which he is connected and as a re: sult of this investigation Bankt Examiner Ewer was summoned. During the morning there were small runs of the Chelsea Savings and the Co-operative Provident banks, but as soon as the depositors realized that there was a plentiful amount of cash on hand to meet their demands the run ceased. and no further trouble was anticipated by the bank officials. EXCESSIVE LOANS TO OFFICERS. Washington Aug. The comptrol1er of the currency has received advices by telegram from National Bank xaminer Ewer that the First National bank of Chelsea, Mass. has been closed by action of the directors. Examiner Ewer has been appointed receiver. The failure of this bank is reported by the examiner to be due to large excessive loans to officers and directors of the bank. The following is a statement of the resources and liabilities of the bank at the date of its last report of con*ditions made to the comptroller of the currency, June 18, 1906: RESOURCES: Loans and discounts, $1,114,586; United States bonds to secure circulation. $50,000; premium on United States bonds, $2250 banking house and other rail estate, $50,778; due from banks, $22,356; cash and cash items, $57,379; redemption fund. $2,500; total, $1,309,849. LIABILITIES: Capital stock $300,000; surplus and profits, $139,344 circulating notes, $49,500; due to banks. $10,733: dividends unpaid, $543; deposits, $670,729; bills payable $130,000; total $1,309,849.

6. August 18, 1906 Los Angeles Herald Los Angeles, CA
Article from Los Angeles Herald, August 18, 1906

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CITIZENS ARE SURPRISED Closing of Bank's Doors Comes as a Shock to Depositors Bv Associated Press. BOSTON, Aug. 17.-The business sommunity of Chelsea was surprised when It became known that the First National bank of that city, one of the oldest institutions in this section of the state, had been closed. Many of the small tradesmen had practically all of their ready money in the bank and it is expected that relief will be afforded by the Winnisimet National bank of Chelsea, which has offered to pay to depositors of the First National bank 50 per cent of their accounts. Throngs of depositors appeared at the bank today. There was, however, no disorder. It is said that the difficulties at the bank were brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. It has been learned that the First National bank was heavily involved in real estate to the extent of about $500,000. There were small runs on the Chelsea Savings and Co-operative Provident banks today.

7. August 18, 1906 Daily Kennebec Journal Augusta, ME
Article from Daily Kennebec Journal, August 18, 1906

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REAL ESTATE. (Continued from Page One.) It is said that the difficulty at the bank was brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. Exeminer Ewer said today that he was unable to state how serious the failure was. Two years ago the bank had deposits of $300,000 and a surplus of $130.000. In addition to the withdrawal of large accounts it has been learned that the First National Bank was heavily involved ,in real estate which tied up their money to the extent of about $500,000. Thomas Martin of Wakefield, one of the directors of the bank, is responsible for an application for a government examination of the bank's affairs. Some time ago he began an investigation of the condition of the finances of the institution with which he is connected. and as a result of this investigation. Bank Examiner Ewer was summoned. During the morning there were small runs on the Chelsea Savings and the Co-operative Provident Banks, but as soon as the depositors realized that there was a pientiful amount of cash en hand to meet their demands the run ceased and no further trouble was anticipated by the bank officials. President Hinkley of the bank is seriously ill at his home in Brookline, and it is said he cannot recover. Bank Examiner Ewer refused to discuss the bank's affairs or to make any statement regarding the dispatch from Washington saying that the bank's failure was reported due to excessive loans to its officers and directors. Any reports on his discoveries at the insti- to tution. he said. would be made headquarters at Washington. Director Martin, who is said to be responsible for the investigation, which closed the bank. formerly was its president. In an interview today, he said: "I discovered things recently which did not please me as a director. I made an investigation as a result of which I obtained from President Hinkley the title for the bank in certain real estate held in the Back Bay and Brighton by Mr. Hinckley. The publication of the transfer of this property caused the withdrawal on Thursday of more than $100,000 in deposits. This showed how things were going and caused the action of the directors in closing the doors of the institution. When pressed for a statement of what in particular attracted his motive. Mr. Martin said that paper which he did not consider genuine commercial paper was being handled. When asked if this paper was signed by fictitious names, Mr. Martin said that he di not say that. "There are some papers there that are very doubtful," was all that he wanted to say. Mr. Martin says that the bank has now sufficiently equity in the Hinckley property to pay all of the depositors of the First National Bank in full. President Hinckley is suffering from liver trouble. It is understood that last Saturday when the real estate transfer was made : to the bank he was SO ill that he could not even gather strength sufficient to allow him to sign his own name to the papers and that he had to be content with making his mark. Mrs. $ Hinckley and one of her sons witnessed the "marks" of the bank president.

8. August 18, 1906 The Richmond Palladium Richmond, IN
Article from The Richmond Palladium, August 18, 1906

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First National Bank of Chelsea, Mass., Has Gone Into Receivers' Hands. NAMED EXAMINER BANK IT IS ALLEGED THAT EXCESSIVE LOANS WERE MADE TO THE OF FICERS OF THE INSTITUTION. [Publishers' Press] Boston. Aug. 17 - The business community of Chelsea was surprised when it became known that the First National bank of that city, one of the oldest financial institutions in this section of the state, had been closed and Bank Examiner Alfred Ever placed in charge. Many of the small tradesmen had practically all of their ready money tied up in the bank, but it is expected that relief will be afforded by the Winnisimmet National bank of Chelsea, which has offered to pay the depositors of the First National bank 50 per cent of their accounts. The remaining banks in Chelsea have but a few thousand dollars to their credit at the First National, and will not be directly affected by the difficulty. It is said that the difficulty at the bank was brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was thereby hampered for ready money. It has been learned also that the First National was heavily involved in real estate, which tied up their money to the extent of about $500,000. The failure of the First National was responsible for small runs on the Chelsea Savings and Co-Operative Provident banks.

9. August 18, 1906 The Salt Lake Herald Salt Lake City, UT
Article from The Salt Lake Herald, August 18, 1906

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Surprise in Boston. Bosten, Aug. 17.-The business community of Chelsea was surprised when it became known that the First National bank of that city, one of the eldest institutions in this section of the state, had been closed. Many of the small tradesmen had practically all of their ready money in the bank, and it is expected that relief will be afforded by the Winnisimet National bank of Chelsea, which has offered to pay to depositors of the First National bank 50 per cent of their accounts. Throngs of depositors appeared at the bank today. There was, however, no' disorder. It is said that the difficulties at the bank were brought about by a steady transfer of large accounts to Boston banks and the Chelsea bank was, therefore, hampered for ready money. It has been learned also that the First National bank was heavily involved in real estate, to the extent of $500,000. There were small runs on the Chelsea Savings and Co-operative Provident banks today.

10. August 18, 1906 New-York Tribune New York, NY
Article from New-York Tribune, August 18, 1906

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CHELSEA DANK CLOSED. Loans to Directors Said to Have Caused Massachusetts Wreck. Chelsea, Mass., Aug. 17.-Following the offlclal information given by Bank Examiner Ewer to the Controller of the Currency in Washington. that the failure of the First National Bank of Chelsea, the doors of which were closed last night, was due to excessive loans made to offand directors of the bank, it became factor in derstood cers to-day of the that bank the principal un- the suspension was a large indebtedness on the part of its president, Sylvester B. Hinckley. .This indebtedness is unofficially estimated at from $300,000 to $500,000, but statements made to-day by directors of the bank indicate that President Hinckley had transferred to the institution his equity in large real estate holdings, which, it was expected, would provide for the payment in full of all depositors. President Hinckley is said to be fatally ill at his home in Newton. So ill, it is said, is he, that on Saturday last he was unable to place his signature to the papers transferring his property to the bank, and it was necessary for him to resort to making his mark upon the document. This proceeding was legalized by the witnessing signatures of his wife and son. It is said that Mr. Hinckley had not been able to be at the bank for four weeks. Developments to-day indicated that Mr. Hinckley was involved in extensive real estate transactions, from which he expected to realize splendid profits for the bank as well as for himself. The failure of his plans in connection with his illness, as well as dissatisfaction on the part of at least one of the director with the nature of some of the papers placed with the bank as collateral, accounts for the closing of the bank. The director most active in bringing affairs to a crisis was Thomas Martin, formerly president of the bank, who in an interview to-day said that recently he discovered evidence of unbusinesslike methods, and as a director began an investigation. This disclosed the fact that papers held by the bank were not what Mr. Martin considered strictly commercial. He said that the signatures in some cases "needed explaining." Mr. Martin also said that sufficient property had been transferred by Mr. Hinckley to the bank to insure the payment of depositors in full. Examiner Ewer, having been appointed temporarily receiver by the Controller, was in charge of the bank to-day, and with a corps of clerks was busily engaged upon the accounts of the institution. Late to-day he was unable to intimate when he should be able to report further to his chief at Washington. During the morning throngs of depositors appeared at the bank, and at 10 o'clock more than 500 people were assembled there. There was no disorder, however, the police authorities having taken precautions to send a dozen patrolmen to the scene to maintain order. Examiner Ewer permitted holders of safe deposit vaults to enter the bank and examine their property, but all other persons were excluded. The failure of the First National was responsible for small runs on the Chelsea Savings and Co-operative Provident banks this morning, but the depositors at those institutions soon ceased withdrawing their money when it was seen that there was a plentiful amount of cash on hand. The cities of Chelsea and Everett and the town of Revere have funds deposited with the bank. About $35,000 of the money belonging to the Water Department comprised the deposit of Rewere. Everett had about $6,000 and Chelsea about $2,500 in the bank. Washington, Aug. 17.-The following is a statement of the resources and liabilities of the First National Bank of Chelsea, Mass., at the date of its last report of condition, made to the Controller of the Currency June 18, 1906: RESOURCES. Loans and discounts $1,114,586 United States bonds to secure circulation 50,000 Premium on United States bonds 2.250 00 778 Banking house and other real estate