City Bank - St Paul, MN

Bank Information

Episode Type: Run Only
Bank Type: state
Start Date: *
Location: St Paul, Minnesota (44.944, -93.093)

Metadata

Model: gpt-5-mini
Short Digest: dbfef5404420f417

Response Measures

None

Description

Articles describe a 26-business-day run on the municipally run City Bank of St. Paul after a grand jury report questioned its legal basis. Withdrawals were met in cash, a charter amendment was passed and the run ceased; the bank remained open and grew thereafter. Municipal bank type not represented in provided categories, so set to unknown.

Events (1)

1. * Run

Cause: Bank Specific Adverse Info
Cause Details: A grand jury report attacked the legal underpinning of the municipally run City Bank, precipitating withdrawals.
Measures: All demands were met in cash; supporters initiated and passed a charter amendment specifically sanctioning the plan, which helped end the run.
Newspaper Excerpt: The report started a 'run,' which lasted 26 business days and brought the deposits down to $1,039,840, every demand being met cash.
Source: newspapers

Newspaper Articles (1)

1. March 1, 1917 The Northwest Worker Everett, WA

Article from The Northwest Worker, March 1, 1917

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Article Text

LABOR UNIONS INVEST FUNDS IN "CITY BANK" ST. PAUL, Minn.-The St. Paul city "bank," the only bank in the United States run by a municipality, is making great inroads on private banks in St. Paul and Minneapolis. Many of the labor unions of both cities have withdrawn their money from local banks and invested their funds in St. Paul city bonds through the bank. St. Paul does not have to sell its bonds through bond houses as it sells many of them through the "bank," which was started July 1, 1913. The plan of the "bank" is very simple. Any one can go to the City Hall with $10 or any multiple of $10 and get a certificate of interest for that amount in a bond in the sinking fund. Any time, if he wishes to withdraw his investment, he surrenders the certificate and receives its face value and 4 per cent. interest for the entire period his money was on deposit. When the "city bank" was opened, the other banks of St. Paul with savings departments were paying only 3½ per cent. interest. They were also reckoning interest only on stated days and reserved the right to require notice of withdrawal. The "city bank" forced them to raise the interest rate to 4 per cent. and made exercise of the notice requirement hazardous. The "city bank" was therefore, unpopular with other banks. Last April a grand jury made an attack upon the "city bank" upon the ground that its legal underpinning was insecure. The "city bank," the day before this report appeared, contained deposits of $1,993,630. The report started a "run," which lasted 26 business days and brought the deposits down to $1,039,840, every demand being met cash. Meanwhile friends of the "city bank" initiated an amendment to the city charter specifically sanctioning the plan. It was submitted to vote, carried overwhelmingly and the "run" ceased. Today the deposits of funds in the "city bank" exceed $2,000,000. The real significance of the St. Paul experiment is in the opportunity it opens to cities to finance public improvements with which bankers might not be in sympathy, such, for example, as ventures into municipal ownership.