877. Farmers & Merchants National Bank (Merced, CA)

View Charter #10352 on SPMC

Bank Information

Episode Type
Run → Suspension → Closure
Bank Type
national
Bank ID
10352
Charter Number
10352
Start Date
September 20, 1926
Location
Merced, California (37.302, -120.483)

Metadata

Model
gpt-5-mini
Short Digest
b3c259c7

Response Measures

Full suspension, Books examined

Other: Receiver appointed by Comptroller; large embezzlement by president discovered; stockholders assessed later.

Receivership Details

Depositor recovery rate
50.1%
Date receivership started
1926-09-23
Date receivership terminated
1937-02-25
OCC cause of failure
Fraud
Share of assets assessed as good
20.3%
Share of assets assessed as doubtful
47.9%
Share of assets assessed as worthless
31.8%

Description

Multiple articles state the bank suspended Sept. 20, 1926, a receiver (Henry P. Hilliard) was appointed Sept. 24, 1926, and the failure followed discovery of large embezzlement/shortages by J. B. Hart. Newspapers also report a prior run on the bank driven by rumors and withdrawals. The institution remained closed and in receivership (assessments and payout to creditors followed), so this is a run leading to suspension and permanent closure/receivership.

Events (5)
1. March 26, 1913 Chartered
Source
historical_nic
2. September 20, 1926 Run
Cause
Rumor Or Misinformation
Cause Details
Wholesale withdrawals and dwindling deposits cited as caused by rumors that the bank was in bad straits; deposits fell sharply in months prior to suspension.
Measures
No specific emergency measures described beyond continued operation until suspension; later receiver appointed after suspension.
Newspaper Excerpt
RUN ON BANK TOLD ... Rumors that the bank was in bad straits said have been the cause the wholesale and While against liabilities...
Source
newspapers
3. September 20, 1926 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Suspension followed discovery of large shortages/embezzlement by J. B. Hart, the bank president and city treasurer; assets-discrepancy led to failure to find buyer and appointment of receiver.
Newspaper Excerpt
The bank suspended business Monday. ... suspended September 20
Source
newspapers
4. September 23, 1926 Receivership
Source
historical_nic
5. September 24, 1926 Receivership
Newspaper Excerpt
Henry P. Hilliard ... has been named receiver for the Farmers and Merchants National Bank of Merced. Appointment was made by the comptroller of the currency ... the bank which suspended last Monday was placed in his charge to administer the affairs of the Farmers and Merchants bank, which suspended last Monday. (Sept. 24, 1926 articles.)
Source
newspapers

Newspaper Articles (15)
1. September 24, 1926 The Modesto Bee Modesto, CA
Article from The Modesto Bee, September 24, 1926

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Article Text

NAMED BANK RECEIVER Sept. Hilliard of Santa Rosa bas been the Farmers and Merchants National Bank of Merced. which suspended last Notice appointment received this afternoon by Chorpening national bank examiner who has been in charge of the bank's affairs. Appointment was made by the comptroller of the currency Washington and the chief national bank examiner of the 12th federal district at San Francisco. Mr. Hilliard expected to take charge tomorrow. The statement of the closed gave and total assets of Hart was president and A. Keck

2. September 24, 1926 Modesto News-Herald Modesto, CA
Article from Modesto News-Herald, September 24, 1926

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Article Text

SHORTAGE FOUND MERCED CITY TREASURY FUNDS Bonds Worth $27,000 Missing; City Treasurer Also Short $2,600 in Current Account MERCED, Sept. shortage in deposit with city treasurer, 25 security for city funds deposited by him lu one of the Merced Lanks, was brought to the attention of the city trustees last night the closing of the Farmers' and Merchanis' National of which Hart is bank, The shortage, the trustees formed, involves boads alleged sold by 10 the have been First National Bank of Fresno, which had been security city funds reduced to the time of the closing of the at bank. lu addition, according to the stateby Fred to the who made city the there to of approximately rent tund and the Mr. is under boud. trustees plan legal city explained. the matter which with the bonding company. will continue the investigation.

3. September 24, 1926 The Fresno Morning Republican Fresno, CA
Article from The Fresno Morning Republican, September 24, 1926

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$27,800 BONDS MISSING FROM MERCED FUNDS City Treasurer, Head Of Closed Bank, Said To Be Short MERCED, Sept. Appointment of a receiver for the Farmers and Merchants National bank of this city and the discovery of an alleged shortage of $27,800 in bonds on deposit with J. B. Hart, city treasurer and president of the Farmers and Merchants bank, were today's developments arising from investigation of the tangled affairs of the closed bank, which suspended business last Monday. The alleged shortage. brought to the attention of the city trustees at their meeting last night by City Atorney Fred W. Henderson, involves bonds deposited with Mr. Hart as city treasurer as security for city funds on deposit in another bank and which Hart is alleged to have sold to Fresno bank. In addition, according to City Attorney Henderson's statement to the trustees, there is a shortage of approximately $2,600 in current city fund account, representing the dif. ference between a total of $8,200 and receipts held by the city treasurer for bills paid of approximately $5,600. No deposit to cover this was found on the books of the Farmers and Merchants bank, Mr Henderson said. Hart, as city treasurer, is under bond for a sum more than sufficient to cover any shortage, it was stated, and action in the matter rests with the bonding company. The city trustees plan no legal action. Henry P. Hilliard of Santa Rosa has been named by the federal of administer the affairs of the Farmers and Merchants bank, according to information received today by I. Chorpening, national bank examiner, who has been in charge since the bank closed Monday Appointment of the receiver followed failure of negotiations herein another Merced barik offered to take over the affairs of the closed institution, provided its officers would post a guarantee to make good any loss that might result. It was the discrepancy between the available assets and the liabilities of the suspended bank proved too great to be overcome and the negotiations were called off last night and naming of the receiver followed today. The last statement of the closed bank, published July 14, gave total deposits of $1,525,326 and total assets of $1,916,493. No statement of the bank's present condition has been made by those in charge since the closing, but it is thought the amount of deposit had been materially reduced by steady withdrawals in the last few months. Among the heavy deposits in the closed bank that of the Merced irrigation district, for which the bank was depository. No statement on the affairs of the bank or those of Hart's accounts as city treasurer has been made by Hart, who has been confined to his home, threatened with a nervous breakdown following the closing of the bank VISITS IN PATTERSON PATTERSON, Stanislaus 23.-Mrs. H. Raymont of Modesto was a Patterson visitor on Wednesday.

4. September 24, 1926 Santa Rosa Republican Santa Rosa, CA
Article from Santa Rosa Republican, September 24, 1926

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Article Text

Hilliard Named Bank Receiver at Merced Colonel Henry Hilliard has been named the national comptroller the currency as receiver of Farmers Merchants National Bank of Merced. which failed the extent of $2,000,000 Monday He left Thursday night to take over the bank's afHilliard has been receiver number occasions, having capacity when the Rosa National Bank failed

5. September 24, 1926 San Francisco Bulletin San Francisco, CA
Article from San Francisco Bulletin, September 24, 1926

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Merced Bank Awaits Probe Merced, Sept. 24.-With the tangled condition of affairs of the Farmers and Merchants National Bank of Merced rapidly becoming more involved, the arrival of Henry P. Hilliard of Santa Rosa, appointed receiver for the bank yesterday by I. Chorping. national bank examiner, was awaited today. The bank suspended business Monday. At the same time, it was announced today, city officials have opened an Investigation of charges by City Attorney Fred W. Henderson that a shortage of $30,400 in city funds entrusted to J. B. Hart, city treasurer of Merced and president of the bank, exists. Action in this matter, it was indicated. would rest with the bonding company sponsoring Hart as city treasurer.

6. September 24, 1926 The Morning Press Santa Barbara, CA
Article from The Morning Press, September 24, 1926

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Article Text

Treasurer of Merced Is Declared 'Short' MERCED Sept. alleged shortage of $27,000 in bonds supposedly on deposit with J. B. Hart as city treasurer as security for city funds deposited by him in one of the Merced banks was brought to the attention of the city trustees today as an aftermath of the closing' of the Farmers and Merchants National bank. of which Hart is president The shortage. the trustees were informed. Involves bonds alleged to have been sold by Hart to the First National bank of Fresno. deposited as security for $25,000 of city funds, reduced to $14,500 at the time of the closing of the bank Fred W Henderson. city attorney. asserted today that there is also shortage of approximately $2600 In a city current fund account. Henry P. Hilliard of Santa Rosa has been appointed receiver for the bank, which suspended last Monday Appointment was made by the comptroller of the currency

7. September 24, 1926 San Francisco Bulletin San Francisco, CA
Article from San Francisco Bulletin, September 24, 1926

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Article Text

Merced Bank Awaits Probe Merced, Sept. 24.-With the tangled condition of affairs of the Farmers and Merchants National Bank of Merced rapidly becoming more involved, the arrival of Henry P. Hilliard of Santa Rosa, appointed receiver for the bank yesterday by Chorping. national bank examiner, was awaited today. The bank suspended business Monday. At the same time, It was announced today. city officials have opened an Investigation of charges by City Attorney Fred W. Henderson that shortage of $30,400 in city funds entrusted to J. B. Hart, city treasurer of Merced and president of the bank, exists. Action in this matter, It was indicated. would rest with the bondIng company sponsoring Hart as city treasurer.

8. October 17, 1926 The Fresno Bee Fresno, CA
Article from The Fresno Bee, October 17, 1926

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Second Petition Counters First In J. B. Hart Estate F. K. Silviera Of Merced Would Administer November 13th And 14th Set Estate Of Late Banker; Barrage Of As Dates; Novel Display Lawsuits Forecast In Action; Will Be Staged Run On Bank Revealed ERCED (Merced Co.), Oct. second petition for letters of administration of the estate of the late J. B. former president of the Farmers and Merchants' Hart, Bank, whose alleged suicidal death followed revelation of alleged misappropriation of funds, was filed in superior court here by K. Silviera Merced. petition for adminfiled her husband's estate Both petitions named Hart, the hearing Mrs. Hart's to November was by Judge Rector. Silviera's petition also will be heard on date. Attorney's Statement attorney for explaining the petition, said: filed this petition behalf behalf other own similarly and the reason that they do not the business competent handle assets consist part interest prop. erty in this munity silent partner Law suits will have be Instituted order to obtain for the credItors the of such Interests, aside that shortly before his which might have been set aside he lived been declared bankrupt. The effect the transmade which are plained of, left his would sufficient to pay Henderson said Silviera's claim for and was upon note given Silviera to Hart. Henderson said he for other creditors had the Hart The total claims sort, he said, was about RUN ON BANK TOLD MERCED (Merced Co.), Oct. half million dollars in deposits in the Farmers and Bank Merced, 20th, in two shown prepared to-day by Henry HilHard, attached to the the institution. flatly refused to discuss matters pertaining the bank. The statement shows that on July 1st, when the last there deposits Two months later deposits dwindled to Rumors that the bank was in bad straits said have been the cause the wholesale and While against liabilities of $1,300.the "cash on hand" of $7,760.11 the only one in the asset column known The item, 'bills receivable," repand the third "assets other and cash real furnture fixtures by the bank. Both are artificially established figures subject siderable change. Bills receivable, according to statement, amount and other $280,273.17.

9. November 3, 1926 The Fresno Morning Republican Fresno, CA
Article from The Fresno Morning Republican, November 3, 1926

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WILL ASSESS DEFUNCT BANK STOCKHOLDERS Acting Comptroller Of Currency Makes Announcement MERCED, Nov. 2,-An assessment of 100 per cent upon the stockholders of The Farmers and Merchants' National bank, suspended September 20, is officially announced today by Charles W. Collins, acting comptroller of the currency. The assessment, aggregating $100,000, becomes payable on or before December 1. "It appears to my satisfaction that in order to pay the debits of such association It necessary to enforce the individual liability of the therefore. to the extent mentioned.' reads the official statement of Mr. Collins, following with the information that Henry P. Hilliard, receiver, is instructed to take any necessary proceeding by suit or otherwise to enforce the stockholders' liability. While the official order requires payment not later than December Mr. Hilliard explains that under the of the treasury department the stockholders, by meeting certain stipulations, may obtain extension of time. To do this, how. ever, each shareholder must pay 25 per cent of the assessment by December and provide written obligation satisfactorily guaranteed to pay 25 cent additional on or be. fore January 1, 1927, 25 per cent on or before February 1, 1927, and the remaining 25 per cent on or before March 1927. The notice of assessment issued today through the office of Mr. Hilliard accompanied by any other explanation, nor was the condition of the defunct bank otherwise discussed. The office of T. A. Mack. county sheriff, has been asked by Mr. HilHard to endeavor to locate certain chattels held by the bank and thought to been or sold illegally, The also is advertising rewards for recovery, reading as follows: "One hundred dollars reward-I will pay above reward for information that will convict any person or persons of stealing or illegally taking, concealing or disposing of any COWS, horses or other chattels or any other property formerly owned by The Farmers and Merchants' National Bank of Merced, now vested in me," signed, Henry Hilliard, receiver. Six head of cattle had been recovered this afternoon through the efforts of county officers, it was announced at the bank. LAST RITES HELD CLOVIS, Fresno Co., Nov. Funeral were held this afternoon for -months Angelina La Cava, daughter of Mr. and Mrs. Jene La Cava, died in Fresno yesterday. Burial in Clovis cemetery. Arthur Boice had charge of arrangements.

10. December 2, 1926 The Record Stockton, CA
Article from The Record, December 2, 1926

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LIBEL SUIT FOR $20,000 FACES INDEMNITY CO. Merced Agent Also Made Party to Action for Damages proprietor of a loan and business in Merced. through his attorney Edward Bickmore. filed libel action the Superior Court against the International Indemcorporation of Los Angeles. ad Evans. as agent. asking for $20,000 damages. The recites that since September 15. 1925. Brown had been representing the defendant corporation. that and A. Evans circulat and libelletter. reciting in effect that paid by policy holders not paid and that paid within five days from the date of the service of the notice the policies be that the defendants intended letters mean that Brown had embezzled money received by him the premium for policies and not warded or paid it corporaThe action indirectly arose from the late failure Farmers Merchants bank of this city.

11. January 14, 1927 The Fresno Bee Fresno, CA
Article from The Fresno Bee, January 14, 1927

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NATIONAL BANK AT BUSINESS TO-DAY Friends Visit Institution And Greet Officials; Bishop Man At Head MERCED (Merced Co.). Jan. 14.Opening its doors to-day the First National Bank in Merced welcomed many depositors and visitors in the quarters occupied by the Farmers Merchants' Bank which closed nearly four months Many prospective depositors hand and the visitors called extend wishes to the the project. The headed by George, formerly with the First National Bank Bishop On the who to to the of the bank associated the PacificSouthwest Bank of Los Angeles managing officer the Main Street office Others the directorate Emmitt McNamara. member family Merced and for past engaged estate business here, and Ford. comes from Owens Valley where he large land owner The remaining director, member law firm at Bishop.

12. May 9, 1927 Oakland Tribune Oakland, CA
Article from Oakland Tribune, May 9, 1927

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Bank Receiver Sues Stockholder MERCED. Hilfor the Farmers and Merchants bank, has filed suit superior against Josephine Bird. one of the The defendant. to the complaint, shares of stock assessed $100 The plaintiff asks for $8000 and cost of suit.

13. June 23, 1927 The Record Stockton, CA
Article from The Record, June 23, 1927

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RECEIVER FOR MERCED, June to Henry P. Hilliard, receiver the Farmers Merchants Bank, were filed in the Superior Court yesterday M. Peck to recover $32,620.25, said to be deposit, and Allan B. Ruddle, to recover $4681.25 on deposit. According th: petitions filed W. B. Bunker of Peck. Bunker & Peck, San Francisco attorneys, the plaintiffs presented Hilliard with claims against the bank for the money, but the claims were rejected.

14. September 13, 1928 The Record Stockton, CA
Article from The Record, September 13, 1928

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Bank Receiver Sues Teacher MODESTO OFFICE STOCKTON RECORD, Sept. 13. Henry Hilliard, receiver of the Farmers and Merchants National Bank of Merced, yesterday filed suit in the Superior Court against Y. Barnell, Modesto school teacher, to collect $500 alleged due on promissory note. Interest in the sum of $164.80 and $100 costs also asked for in the complaint.

15. June 6, 1929 The Record Stockton, CA
Article from The Record, June 6, 1929

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$100,000 MORE FOR CREDITORS DEFUNCT BANK Receiver of Merced Institution Ready to Pay, Bringing Total Up to 45 Per Cent MERCED June Henry. P. Hilliard, receiver of the defunct Farmers and Merchants' Bank of Merced will pay $100,000 to more than 2000 of its creditors at 10 o'clock Monday morning This payment of 10 per cent will bring the total up to 45 per cent. or about $450,000. The last payment was made in December 1927 Approximately $16,000 in claims has never been substantiated by the creditors. Hilliard declared. Several suits are pending in court. When the bank closed on September 20. 1926. following the discovery of the embezzlement of several hundred thousand dollars by J. B. Hart, president. there were about 3500 creditors. The total amount of Hart's embezzlement has never been discovered. He died shortly following the closing of the bank.