8943. First State Bank (Carsonville, MI)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
October 7, 1926
Location
Carsonville, Michigan (43.427, -82.671)

Metadata

Model
gpt-5-mini
Short Digest
0789193e

Response Measures

None

Description

The state banking department ordered the bank closed in early October 1926 after audit revealed extensive loans and inability to realize assets. Coverage indicates gradual withdrawals rather than a discrete panic run. A receiver was appointed in November and the bank will not reopen.

Events (2)
1. October 7, 1926 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Too extensive credit system and large loans (about $40,000 doubtful loans to farmers) that could not be promptly realized; reserves depleted after gradual withdrawals.
Newspaper Excerpt
The First State Bank of Carsonville closed its doors today orders from the state banking department in Lansing was placed in charge of the books.
Source
newspapers
2. November 6, 1926 Receivership
Newspaper Excerpt
Settlement of the affairs of the defunct First State Bank of Carsonville is under way with the appointment by the Sanilac circuit court of L. O. Wentworth, former cashier of the bank, as receiver.
Source
newspapers

Newspaper Articles (4)
1. October 7, 1926 The Times Herald Port Huron, MI
Article from The Times Herald, October 7, 1926

Click image to open full size in new tab

Article Text

STATE TAKES CARSONVILLE BANK OVER Slow Loan Repayments Are Blamed For Shortage In Reserve (Special to Times-Herald) Oct. 7-The First State Bank of Carsonville closed its doors today orders from the on state banking department in Lanfrom Lansing was placed in of the books. He to out statement a exthat require 30 days the that inthe affairs the would not available time was learned that extensive credit assigned as the reason failure. made on prompt realization could had Pay 65 To 70 Per Cent There run the no just gradual until the carry the the bank was fulfill. It bank will be 65 cent the deposits, which listed Commercial deposits, savings deposits certificates of Formerly a Private Bank The was organized in 1894 re-organized in 1918 as the First State Bank of Carsonville with A capital stock of One at year capital stock was reduced to of the bank at the time of filing the annual statethe state banking commission in June, were: Deckerville vice president. W. cashier. A. CarGeorge B. Forester, Deckerville, and William Harvey Port Huron. Tried to Save Bank None of the bank's 's officers were here today, except Cashier Wentworth, druggist, and he to on the bank's affairs He said he was made cashier six months ago and had been identified with the bank's previous to that Efforts made for more than 30 days bank, plan been whereby other banks in the county over the business of the bank with individuals giving bond guaranteeing full payments of bank's obligations. This plan did out. other in way involved. Finances The statement filled with the banking commission in shows: bonds. and securities, other assets. including $40,000 in loans to farmers are rated as "doubtful brought the resources It is said that the liabilities are figured at arounnd Farm Notes Out In the $40,000 "doubtful assets" are and other forms of to been unable to their fall crops and realized on. Payments of loan obligations the bank. was said, had been this summer consequently the reserve went to in June, the bank found in time to rebuild reserve. The of reserves made It impossible the bank to conto carry Yesterday officers and citizens here Lansing in an fort to keep the bank open but advised to close. The state took charge today.

2. October 8, 1926 Lansing State Journal Lansing, MI
Article from Lansing State Journal, October 8, 1926

Click image to open full size in new tab

Article Text

Auditor From Here Placed In Charge of Books Of Institution CARSONVILLE, Oct. First State bank Carsonville closed Thursbanking Lansing auditor from placed in charge of the books. He refused statement except that would require 30 days check the books bank would not be available until that time. From other sources, however learned that too extensive credit system assigned the the bank's failure. had been made realization could be had There on the bank, gradual withdrawal, until the to carry the daily transactions bank called upon fulfill.

3. October 8, 1926 The Herald-Palladium Benton Harbor, MI
Article from The Herald-Palladium, October 8, 1926

Click image to open full size in new tab

Article Text

STATE BANK OF CARSONVILLE CLOSES DOORS Banking Department Begins Audit; Heavy Loans Caused Crash (By Associated Press) CARSONVILLE, Oct. 8-The first State bank of Carsonville closed its doors yesterday 0 norders from the State banking department in Lansing. An auditor from Lansing was placed in charge of the books. He refused to give out a statement ex cept that it would require thirty days to check up the books and that information as to the affairs of the bank would not be available until that time. From other sources, however, it was learned that too extensive a credit system was assigned as the reason for the bank's failure. Loans, it was said, had been made on which a prompt realization could not be had. There was no run on the bank, just a gradual withdrawal until the reserves were too low to carry the daily transactions the bank was called upon to fulfill. It is said that the bank will be able to pay in due time around 65 to 70 per cent of the deposits which are listed as: Commercial deposit $38.111.64; time commercial deposits. $164,604.80; savings deposits $33,782,82; certificates of deposit $5,119.75.

4. November 6, 1926 The Times Herald Port Huron, MI
Article from The Times Herald, November 6, 1926

Click image to open full size in new tab

Article Text

RECEIVER NAMED FOR FAILED BANK Carsonville Institution May Pay 75 Per Cent Carsonville, Nov. -Settlement of the affairs of the defunct First tate bank of Carsonville is under way with the appointment by the Sanilac circuit court of L. O. Wentworth, former cashier of the bank, as receiver. Claims against the bank are being received, and a general settlement the affairs of the institution is under way Mr. Wentworth no statement of the condition, and probable settlement basis to depositors. although was expressed in banking circles here and among depositors that possibly 75 per cent settlement may be made on total indebitedness later. Bank Will Not Open Depositors are now filing their claims, submitted with proofs, and It is believed that all will be set tled without claims going through the courts. No hope is expressed that the bank will reopen The First State bank closed its doors after heavy withdraw. als. by farmer depositors, which coupled with inability to realize on its assets, large part of which were considered "frozen" hastened the downfall of the institution. The strain occasioned by the Inability to realize quickly on its "frozen" depleted the reserve fund, which at the time of making the June statement, in 1926, showed Scarcity of Cash The only apparent as to the amount to be paid depositors, is raised on the point of owe the bank can pay their obligations. No great concern is felt. however, here as to settlement basis, with sharing in the belief that no great amount will be lost.