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NO CONNECTIONS DEFUNCT BANK
Lack of Confidence in Montana Financial Institution Culminates in Closing of Doors.
Another Montana bank closed its doors Friday when John Dahlgren, president of the Montana Bank & Trust company, of Missoula, posted a notice in the bank's window saying that no further withdrawal would be paid and that the action was taken on the order of the board of directors.
As far as could be ascertained yesterday the defunct Missoula institution has no connections in Wallace.
The following story was carried in yesterday's "Missoulian" in regard to the closing, and conditions which resulted in the action becoming necessary.
"The American Bank & Trust company of Missoula closed its doors yesterday morning shortly after 11 o'clock following a run of depositors and heavy withdrawals that had started early in the week.
Immediately upon the closing of the doors, President John Dahlgren posted a notice in the window announcing the action taken and stated that it was done on orders of the board of directors.
"A plan for the reorganization of the institution is being worked out, Mr. Dahlgren announced later in the day, and amplified the statement with the expressed opinion that the move would be successful and that the bank would reopen.
"With the closing of the doors, Mr. Dahlgren called up the bank examiner's office at Helena and notified officials there of the condition of the Missoula institution and turned the affair over to them. He was told that a representative of the examiner will come to Missoula as quickly as possible.
Receiver to Be Appointed.
"It is understood that after his arrival, a receiver will eventually be appointed for the bank. If necessary the receiver may then pay the depositors in proportion from the funds available, though with a reorganization such action would be unnecessary.
"For the past few days there have been heavy withdrawals by the depositors from the American Bank and Trust company, it is said, though every effort has been made to overcome the lack of confidence which caused these withdrawals. This morning the rush became so heavy that it amounted to a run on the bank's funds, which it could not withstand, more than $50,000 being withdrawn. The board of directors then took what it considered the proper action, having in mind the legal requirements of the banking codes, and stopped all payments, closing its doors.
Carried Much Farm Paper.
"The American Bank & Trust company has carried the great bulk of farm loans in this vicinity, it is said, having nearly as much business of this kind as the other banking institutions of Missoula combined carried. Depreciation in the value of the farms on which loans were carried and the unfavorable years of the past decade brought on difficulties, which were followed by the unexpected series of withdrawals, which though unexplained, kept coming since the first of the week.
"John Dahlgren, president of the bank, has been associated with it since its organization, originally as the Scandinavian American State bank. G. F. Peterson and E. C. Mulroney are vice presidents, Fred Bedard, cashier; J. C. Harrah, assistant cashier, and the board of directors is composed of John Dahlgren, G. F. Peterson, E. C. Mulroney, J. T. Lacasse and S. Fredericks. There are 15 stockholders of the bank.
Organized in 1909.
"The Scandinavian-American State bank was organized in the fall of 1909 by Mr. Dahlgren, A. D. Stephens of Crookston, Minn., and others. It was opened in January, 1910, with Mr. Stephens as president and Mr. Dahlgren as cashier. In 1917 it was reorganized as the American Bank and Trust company, with Mr. Dahlgren becoming vice president and manager. At that time the capital was increased from $50,000 to $100,000. More than two years ago Mr. Stephens withdrew from active connection with the bank.
"A report of the bank, issued after the close of business on December 31, 1922, showed a capital stock of $100,000, a surplus fund of $25,000, undivided profits of $12,807, checking deposits amounting to $296,767.25, state, county and other municipal deposits of $80,030.35, savings deposits subject to 30 days' notice, $381,433.42; time certificates of deposit, $101,328, with $64,522 due to bankers, $85,000 in bills payable with collateral, and $102,490.35 in notes and bills rediscounted. As resources it carried $1,164,245 in loans and discounts, $115,794 in bonds, stocks and warrants, $50,308.72 in real estate and $135,492 from other sources, with $11,426.72 in overdrafts.
City Has $16,000 in Bank.
"The city of Missoula had a balance of $16,000 in the American Bank and Trust company, which amount was less than usual because of the large number of city warrants cashed by that bank recently. The city is protected by a bond guaranteeing payment of the deposits. The law provides for the giving of this bond, and also requires both city and county to distribute the funds among the different banks of a community."
