California National Bank (Sacramento, CA)

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SILENT RUN REVEALED

Action Due To Heavy Withdrawals; Reorganization Plans Under Way

By McClatchy Newspaper Wire SACRAMENTO, California National Bank, one of "The California Trust Savings Bank taken over by the superintendent banks this morning, following meeting of the board of directors which adopted bank. in San Francisco last "Heavy withdrawals covering period several days and culminating Friday what was virtusilent run, brought the bank's reserve below legal quirements, and the closing followed. superintendent of banks will give consideration plans for which have been proposed. Directors' The statement issued the bank's board directors "Owing to agricultural and over riod of the last three years, Bank Sacramento and the Trust Savings Bank have met cent cordingly, the directors tection all depositors, decided ask the national state authorities to take charge of the institutions hoped that plan of the of deposidate." Hilliard president the Clearing House sociation, issued statement which assurance the other banks in Sacramento cash on hand for all clearing house banks Sacramento are fully the responsibility closing of the California National Bank and the California Trust and Savings Bank are prepared ner that need not disturb conditions.

Sufficient Cash "Sufficient cash available take and one feel concern the ability the banks to handle situation. behooves all of to recogthe seriousness co-operate the extent that business be allowed continue its normal course. is one the tests of the stability and courpeople this commuWe believe they will occasion and In the of local bankers, the of the California tional first time mento's history that bank failed to open. Crowd Gathers At an bank fail open the regular hour o'clock proportions at large crowd gathered front bank at Seventh streets. Shortly bulletin, signed Rainey, posted on the door. have taken the the fornia Trust and Bank unthe Section act of the State of CaliScores persons were astoundthe greater fic officer the by the bank because the heavy traffic. second bulletin was posted notice Price, examiner in charge, formal resolution the board directors, the California National Bank placed in effect. Last Statement might easier to keep hu- The the time than Dr Zeigler Bank 31st, that death fore the of from lobar seldom officials of occurs before the fifth day often delayed for three weeks Total deposits amounted longer. slower course time loans Pneumocholin produced by California Bonds and dissolving pneu- liquid assets monia olate, derived from bile. (See Page Col.

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Mrs. Roosevelt Leaves Plane On Chicago Trip

RANCE STOCK DROPS fornia Western States Life Insur Company's stock dropped one third of price on the San Francisco Erchange to failure of D. the Califor National Bank of nia forced her plane Sacramento the exchange afternoon and The stock down to $20 her trip to by share from the price Chicago terday Although only 285 shais The plane landed at Cleveland sold the half hour after the news before reached here this was turn Roosevelt immediately over for the usually quiet stock. rushed to the Linndale Railroad Station State Bill Would kept waiting She pected in Chicago about Restrict Oil Drilling M She the SACRAMENTO Jan League of Women Voters there to Drilling for oil within 300 feel of night public lands of be terms Rolph Names Dr. Kress of bill introduced the legislature Assemblyman George To State Health Board Bliss Carpinteria Bliss said the of the bill preSACRAMENTO Jan 21 Dr George H. Kress of Los An- pools of oil belonging to the pubgeles appointed by Governor Roinh to be member of the FINANCIER GETS PROBATION state board of public health SAN DIEGO Jan. Earl succeeding George E Ebright Farnsworth vice president of of San Francisco, whose term pired free on probation Dr. Percy T. Magan of Los An after being day on les was be member charge in of the board of medical the traffic death last October vice Bert of marine The banker was or deceased dered to pay $750 trial costs

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SILENT RUN' SHUTS BANK IN CAPITAL

Sacramento Institution, Subsidiary and Four Units Now Being Examined

SACRAMENTO, Jan 21. (P)-The California National Bank of Sacramento and its subsidiary, the California Trust and Savings Bank, said to be the oldest institution of its kind in California, failed to open for business today. Branches of the California National Bank in North Sacramento, Loomis, Ione and Arbuckle also failed to open. The California National Bank of Sacramento has no affiliation with banks of a similar name in this State. Federal and State examiners took charge of the bank and started checking its assets. Directors issued a statement crediting the closing to heavy withdrawals during the past several days. Airplanes and armored motor cars rushed $13,000,000 in cash from San Francisco to Sacramento to fortify the position of other banks subjected to runs when news of the Callfornia National closing became known. Approximately 9000 commercial and 36,000 savings accounts were tied up by the bank closing. The California statement of condition as of December 31, 1932, showed and those of the California Trust and Savings, $19,989,390.45 State Superintendent of Banks Rainey'ordered the California Trust and Savings Bank closed. He said withdrawals during the past several days "were virtually silent run which brought the bank's reserves below the legal requirement." State Treasurer Charles G. Johnson and Department of Finance officials said the State has $1,231,000 deposited in the closed bank, $1,100,000 of which are secured by Federal, State, county and city bonds valued at 10 per cent in excess of the

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MRS. JUDD HAS NEW EVIDENCE

(Continued from Page One.)

asked Superior Judge J. C. Niles, the committing magistrate.

"I know whether it is true or not."

"Then answer," admonished the court.

"No," she burst out. "I didn't kill Mrs. Samuelson."

SACRAMENTO, Calif., Jan. 21—(AP)—The California National bank and its subsidiary, the California Trust and Savings bank, failed to open its doors for business today. Heavy withdrawals during the past several days was advanced by officials of the institution as the reason for its closing.

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Close Sacramento Banks With $22,000,000 Assets

San Francisco, Jan Heavy withdrawals that neared the proportions of serious run caused state and federal bank ex aminers order the closing of two banks with total combined assets of $22,000,000 today. The California National and the California Trust and Savings an affiliate were the institutions affected by the orders

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DOUGLASS NAMED LIQUIDATOR FOR CALIFORNIA BANK

H. W. Douglass, whose appointment as receiver of the California National bank and its subsidiaries at Sacramento, California, was announced Saturday, left last night to assume charge of that institution. His family will remain here until suitable quarters have been secured.

Douglass, who came here as receiver for the Olympia National bank, was well known here. His successor as receiver for that and three other nearby defunct banks has not been announced by the comptroller of currency.

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FAIL TO OPEN

SACRAMENTO, Jan. 21—(AP)—The California National bank of Sacramento and its subsidiary the California Trust and Savings bank, claimed to be the oldest institution of its kind in California failed to open for business today.

Branches of the California National bank in North Sacramento, Loomis, Ione, and Arbuckle also failed to open.

Federal and state examiners took charge of the bank and started checking its assets. Directors issued a statement crediting the closing to heavy withdrawals recently.

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DOUGLASS NAMED LIQUIDATOR FOR CALIFORNIA BANK

H. W. Douglass, whose appointment as receiver of the California National bank and its subsidiaries at Sacramento, California, was announced Saturday, left last night to assume charge of that institution. His family will remain here until suitable quarters have been secured.

Douglass, who came here as receiver for the Olympia National bank, was well known here. His successor as receiver for that and three other nearby defunct banks has not been announced by the comptroller of currency.

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SAN Jan. 23, of the failure of the California National bank Sacramento were felt in other northern California towns today when five small banks were closed on orders of their boards of tors.

The Bank of Willows, the Colusa County Bank, Bank of Courtland, Bank of Folsom and the Fair Oaks bank failed to their open doors for business today, according to word received by the state bank examiner's office here. Heavy withdrawals which followed news the California National's failure the direct cause of closing of the banks. The action was taken after the boards had conferred state banking officials who agreed would best close banks before runs might develop. State banking officials did not look upon the situation with alarm. They pointed out that after the first flare of hysteria in Sacramento, when the California depositors in other banks quieted down and deposits exceeded withdrawals.

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TO FEAR

State Legislators, Press Seek New Confidence

RUN ON BANK SAID UNJUSTIFIED

Newspapers Rally People to Calmness, Courage

(Special The Star-News) curtain fell Saturday night upon the most dramatic day in the history of Sacramento. The city had experilike lightning first bank failure in its history. The California National oldest banking institution west the complete confidence not only of Sacramento, but of all Northern California. In banking circles considered the most substantial institutions in the West. This bank need not have failedshould not have failed. the insidious whisper which undermined confidence depositors and for several days there was silent run the bank. before compelled to close its doors. On the directorate of this bank of the most substantial business men the Sacramento Valley. Sacramento was full of panic for time Saturday. All the banks the city were subjected to runs. But they bravely withstood the strain and the principal banks held open far into the night, to convince depositors they could get their money they desired it, but that the banks sound.

Papers Urge Calmness The Sacramento newspapers are ralfying the people calmness The staunch old Sacracourage mento Bee says editorially: "Sacramento is bigger than any one And because bank has is that the foundations the city are crumbling has had her setbacks in the But she has past. always been able work herself out of them and go forward to bigger and better things, She will The pressing duty of the again. moment for citizenry to keep and about daily duties with the present underlying stability the community. The Sacramento Union says editorially: "There no reason to fear. We will weather the storm. storm of fear. The trouble the banks that closed temporarily was fear. Some one started rumor that was not justified and silent brought the bank's reserve below the legal requirements and the closing need not happened. The future in our hands. We must banish Fear End Aim

Around the state Capitol, among legislators and state officials, this slogan, "We must banish fear," heard most emphatically. Every legislator who has expressed himsends forth an urgent appeal his constituents stand by and good courage. This fear-failure great bank soon will be remedied through the courage and initiative of the people of this great There was romance about the old California National Bank. which founded in 1848. The original bank handled much of gold that mined by the The bank its operations were interwoven the most glamorous period in the history of California. The CalNational was strengthened consolidation the D. Mills banking interests in 1925. The California National Bank had some 36,000 depositors in savings and 9000 depositors. The bank's assets, January totaled

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E. B. BENN IS NAMED BANK RECEIVER HERE

E. B. Benn, former state senator and at present receiver for a Kelso bank, has been named receiver of the Olympia National bank here, succeeding H. W. Douglass, according to a statement issued by the federal comptroller of currency Monday. Benn will assume charge January 30.

Douglass left Olympia Saturday night for Sacramento, Cal., and there he will assume charge of the California National bank which closed its doors Friday.

F. C. Wing, assistant to Douglass here, is in charge of the bank pending the arrival of Benn.

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E. B. BENN IS NAMED BANK RECEIVER HERE

E. B. Benn, former state senator and at present receiver for a Kelso bank, has been named receiver of the Olympia National bank here, succeeding H. W. Douglass, according to a statement issued by the federal comptroller of currency Monday. Benn will assume charge January 30.

Douglass left Olympia Saturday night for Sacramento, Cal., and there he will assume charge of the California National bank which closed its doors Friday.

F. C. Wing, assistant to Douglass here, is in charge of the bank pending the arrival of Benn.

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CAPITAL CITY BRIEFS

Depositors of Bank Form Organization Depositors of the California National Bank have formed protective association to delve into reasons for the failure of the bank and Superior Judge Martin I, Welsh has been named temporary chairman. A thorough investigation is to be made.

K. of C. to Honor Veteran Members Four veterans of the Knights of Columbus, Sacramento Council No. 953, will be honored tonight in an "honorary members cere. monial." This is conferred upon members who have reached the age of 65 years and having been a member for twenty-five years. Recipients will be Supervisor Donald McDougal, John McGrath, Captain John Stephenson and John McMahon

Callahan Memorial Is Proposed The South Side Improvement Club is sponsoring a movement to erect a memorial to the late Robert E. Callahan, Sacramento county supervisor. John L. Boitano is in charge of the collection of funds. Already a substantial amount has been pledged.

New U. S. Attorney Sworn In

Emmett J. Peterson, recently named assistant United States district attorney, received the oath of office this week.

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MADE RECEIVER FOR TWO BANKS

McLean, receiver the Washington National bank has appointed the First National of Auburn the Enumclaw bank, according Tacoma Saturday. succeeds W. Douglass, federal bank receiver, who has transferred to Sacramento liquidate the California National bank. McLean formerly was cashier of the Auburn National He assumed of the affairs the Auburn and Enumclaw banks Saturday. He will continue be n charge liquidation the Washington National bank here.

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OUT OF CHAOS EMERGES STRENGTH

Closing of the California NationBank and the California Trust Savings Bank in Sacramento and the branches in North Sacramento, Loomis, Arbuckle and Ione most unfortunate cast pall of gloom over tens of thousands of northern California homes and business enterprises. caused near financial panic, during which there were runs on the other Sacramento banks, all which were successfully withstood. Again say It an unfortunand untimely that would never have occurred had the state bank examiners been strictly the job, looking faithfulafter the interests of the depositAffairs never have

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$6.00

This paper will not intentionally publish person, any and item if reflecting any erroneously publication upon brought the reputation to its attention standing it will do any all within its power proper correction. the In the event of an error sibility in any limited to the published amount charged in this for paper, adpubMshers will in which error occurred. the divertisement appears more than vertisement once, this limited responsibility shall apply only to the first insertion. THE EVENING RECORDER reserves the print right any to reject copy that advertising in any copy way which simnalso will not lates reading as advertising BANKS ARE SOUND, NO NEED FOR FEAR

Closing of the California National Bank in Sacramento was extremely unfortunate, particularly at this juncture. This was the oldest bank west of St. Louis, a romantic institution whose activities ran back to the days of the Argonauts-to the days when the horney-handed miner brought in his gold-dust and had it weighed on the scales of this old bank. The California National was regarded as one of the strongest banks in the state. It became the victim of a whispering campaign, however, and its depositors stampeded. The effect has been quite staggering, for the time-being, throughout the Sacramento valley. Other banks are being put to a severe test. It cannot be foreseen how far the frenzy will run. But the banking interests of Sacramento, strongly aided from San Francisco and other parts of the state, are facing the situation with courage and resourcefulness. From present indications they will weather the storm. The Sacramento newspapers are urging calmness and restraint on the part of depositors. The closing of this great bank demonstrates the folly of extreme and groundless fear. Nobody has been benefited by the unnecessary run on this bank. Many have been injured by it. And the psychologic effect is extremely bad. Fear is a phantom that spreads its grisly features far and fast. Say something good of a banking institution, and the word travels with leaden feet. But whisper a suspicion, and the rumor travels on wings of lightning. It is to be hoped that the people of California will maintain their poise and their sound judgment and will not be swept off their feet by vague, unreasoning and insubstantial fears.

Considerable discussion ensues, from time to time, of the matter of laws enacted or to be enacted by legislative bodies. There is one question much more vital to the public welfare that all the people well may consider all the time-that is, proper respect for and implicit obedience to all laws on the part of all the people. If this obtained throughout the country at all times, troit perts Tigers as the the United States would become indeed a real Utopia. But there the tendency is alarmingly the other way-to evade or to violate law with impunity.

Fear is the worst enemy which the country has to fight today. It is frenzied fear prolonged through the last three years which has been vast harm in retarding the return of normal economic conditions. It is fear that is endangering banks-that is, fear among depositors. These are groundless fears. Banking is on a sound basis in this state and in other states. If the people themselves will support the banks and not give way to unreasoning and unreasonable fear, all will be well.

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Early Withdrawals From Capital City Bank Investigated SACRAMENTO, Feb. Douglass, for the California National Bank which closed its doors weeks ago, yesterday he was investigating the withdrawal nearly $3,500,000 in deposits during three weeks prior to the bank's suspensuch a large sum of money Douglass said, "some of course, must, have been taken out large sums." He said his investigation so far shows deposits were withdrawn in both "front door and back door" run and that, he discovers certain large depositors had "inside" information the bank was close and their funds, forward the information the comptroller currency in Washington, D. C.

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Sacramento Bank Dealings Probed

SACRAMENTO, Feb. W. Douglass, receiver for the California National Bank which closed its doors several weeks ago, announced today he was investigating the withdrawal of nearly $3,500,000 in deposits during three weeks prior to the bank's suspension. He said his Investigation so far shows deposits were withdrawn in both "front door and back door" run and that if he discovers certain large depositors had "inside" information the bank was to close and withdraw their funds, he will forward the information to the comptroller of the currency Washington,

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Closed Bank Raps Rainey

Sacramento Banker Says State Acted Hastily In Dooming His Firm

SACRAMENTO, May 16 (U.P.) Charges that the state banking department acted "hastily" and precipitated the closing of the California Trust and Savings Bank and the California National Bank were under consideration today by the Sacramento county grand jury following testimony of Fred W. Kiesel, bank president. In appearing before the grand jury to deny he withdrew any of his own funds from the bank or that there were any irregularities, Kiesel said the financial institutions could have "weathered the storm" had Edward Rainey, state superintendent of banks, allowed the Trust and Savings Bank to remain open. Looking back to the closing of one of Northern California's largest financial institutions, Kiesel declared he had no knowledge that the bank's funds had fallen below the "margin of safety" or where Rainey learned of withdrawals which prompted closing of the bank's doors. Kiesel was reported as having said he felt no concern over these "seasonal" withdrawals. The bank president also criticised A. Q. Robison, deputy in Rainey's office, who had been acting as bank receiver. Kiesel declared Robison was only 29 years old and unfamiliar with valley agricultural affairs so that he was not in a position to speak authoritatively in saying that reorganization of the banks would be "impossible."

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Stockholders Sued by Closed Bank Receiver Suit to enforce stockholders' liability in the closed California National Bank of Sacramento was filed by H. W. Douglas, receiver, in Federal Court today against Joseph L. Steffens of Monterey County and William P. Burnham of San Francisco. The receiver seeks to recover $15,000 from Steffens and $10,800 from Burnham, the of bank stock owned by them, plus accrued interest, since June 24 last.

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NEW 'RUN' STARTS ON BANK AFTER FIRST DIVIDEND

Depositors Crowd Defunct Institution For Initial Payment

"Blue Monday" sunny Monday for 8,000 depositors of the closed California National Distribution of Initial liquidating of the institution started at 10 o'clock this morning, with steady stream of depositors seeking their 20 per cent share of $1,500,000 Nearly 500 depositors crowded the bank building as soon as the doors opened and the only who happy who thought the California Trust and Savings Bank likewise paying Women There At 7:45 Two women were at the entrance the bank early An fainted in the doorway 2414 Montgomery Way, proprietor the Washington Wood Coal Yard, was the first An immediate investigation of check reported in favor for and Douglass, large receiver the bank the 1933 pack Cali- sented him Mrs. Minnie fornia cling peaches asked in 4442 Seventh Avenue, was telegram sent to-day by Congress- ond. man Frank Buck Dr. Fifteen Employed. Tolley special administrator of the Fifteen persons have temporary agricultural adjustment adminisassist Douglass in tration San Francisco. the distribution the checks. "Break" Reported. Robison, receiver of the telegram hastened California Trust and Savings Bank, Buck's was by discloses for reports of between plication the RFC for loan resentatives of co-operative help that institution pay initial dependent canning interests and liquidating dividend deposithe peach board comtors completion, Koster, Robert application expected to Alex Johnson, secre filed in about ten days. the California Farm Bureau Federation the board had Long Time down 15,180,000 cases applied for The receiver declares months by about canners, the will be the required issue checks maximum pack 10,000,000 cases and the when loan approved specified industry agreement Twenty thousand Hits Discrimination. the state bank claims filed

His reads: strongly protest reported disagainst smaller ners pack by fornia Cling Peach Allocation Committee urge that you immediwith ward preventing such unfair practice Independent co-operative executives to the limit agreement me they have been allotted per cent their (Continued on Page 12, Column

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Bank Receiver Shows No Need Of Cash by Some

There lot of people in Sacramoney Nearly a month ago H. W Douglass receiver 01 the closed CaliforNational bank announced he the initial dividend from the institution total For 8.000 checks senting 20 per cent of the deposits the bank customer To date according to Douglass

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California Bank Grand Jury

SACRAMENTO, Calif., Nov. (U.P.)-The federal grand jury here today indicted Fred W. Kiesel, president, and A. B. Carter, vice president and cashier, of the closed California National bank, on charges of making false reports to the United States comptroller of currency on the bank's condition They were also charged with conspiracy to make such reports. Warrants for their arrest were issued and bond was placed at $10,000 each. Attorneys for the two were ready to post the bonds to keep the men out of custody.