American Exchange Trust Company (Little Rock, AR)

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Banks Closed Arkansas

Sixteen Institutions Take Advantage of Five Day Law To Protect Depositors.

Little Rock, Nov. 17. teen Arkansas banks were closed for deportation. today for five day period under state law which permits such closure without the state bank commissioner taking over the banks. Fourteen of the banks are of the B. Banks company chain and two are private banks. The largest of the banks to close will probably was the American Exchange Trust the end of the week. company of Little Rock, one of the largest banking institutions in Arkansas. According to an announcement by the board of directors of the American Exchange Trust company the closing was forced by heavy withdrawals which followed announcement of the financial condition of Caldwell & Company, Nashville, Tenn., investment bankers. New York, Nov. 17. According to Walter Taylor, state bank commissioner other banks of the state are expected to take advantage of the five day closing period as means of landmarks on the tecting depositors.

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Sixteen Banks In Ark. Closed

LITTLE ROCK, Ark., Nov. 17 (INS) Sixteen Arkansas banks were closed today for five-day period under state law which permits such closure without the state bank missioner taking the banks. Fourteen of the banks are of the A. B. Banks company chain and two are banks. The largest of the banks to close was the American Exchange Trust company of Little Rock, of the largest banking institutions In Arkansas. According to an announcement by the board directors of the AmeriExchange Trust company the closing forced by heavy withdrawals which followed announcement of the financial of Caldwell Co., Nashville, Tenn., investment

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BANKERS EXPLAIN CLOSING Action Taken As Protection Of Depositors And Will Reopen Soon. LEADER OPTIMISTIC Plan Reorganization And Adjustment During Period Of Suspension. By United Press The closing of 59 banks in contral and south central states generally was considered by leading financiers today as a measure for protection of depositors and predictions were that most of the banks would reopen when their boards were assured the institutions were free from danger of runs. In Arkansas, where 39 banks suspended business temporarily yesterday and four others were closed by the state, an optimistic statement was issued last night by A. B. Banks, president of the American Exchange Trust Company, Little Rock's largest bank. Two other small Arkansas banks closed today on order of the state banking department and a third member of the Banks company, announced it has suspended for five days. Banks, who is a heavy stockholder in outstate Arkansas banks, said he was conferring with local boards and predicted an early resumption of normal business. The recent failure of Caldwell & Company of Nashville, Tenn. was blamed by Senator Joseph T. Robinson for the temporary closing of the Arkansas institutions, while in Missouri and Illinois the closing of six small institutions was considered due upon the previous closing of larger banks. Hysteria Prevails Robinson said the Caldwell & Company failure had created "hysteria" which resulted in withdrawals of $4,000,000 from the American Exchange Company within 10 days and made necessary the temporary closing to protect depositors. Most of the other Arkansas banks which closed were affiliated with the American Exchange Trust, which was the first to close. The Arkansas banking laws provide that an institution may be closed for five days for reorganiation and adjustment and the banks. it was said. took advantage of this law to remove danger of runs until the "hysteria" Robinson spoke of had passed. Besides the 39 banks in Arkansas. six banks were closed yesterday in Kentucky, four in Missouri, two in Illinois and one in Iowa. In practically all cases. it was emphasized that the banks were solvent and that the closings were protective rather than forced actions.

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39 ARKANSAS BANKS CLOSED.

Tennessee, Missouri and Illinois Institutions Suspend Payments. By the Associated Press. Approximately 39 banks in Arkansas Monday suspended payments to depositors for five days and two other small banks were closed for liquidation, while during the last two weeks four Tennessee banks have closed. Five Illinois banks have closed since Saturday. Four small banks in Missouri closed Monday. An optimistic view of the Tennessee situation was taken by D. D. Robertson, Tennessee superintendent of banks, who said "our banking troubles are over." Directors of the American Exchange Trust Co. of Little Rock, largest of the suspended Arkansas banks, said in their opinion the bank was solvent and with the "co-operation of our depositors a plan can be found to resume operations."

Most of the suspended Arkansas banks were affiliated with A. B. Banks & Co., which was associated with the American Exchange Trust Co. With the exception of three, all were comparatively small. The three were the American-Exchange, the Merchants & Planters Trust Co., Pine Bluff, and the Merchants & Planters Bank of Helena. Directors of the American Exchange Trust Co. attributed the closing to public hysteria resulting from the placing of Caldwell & Co., Nashville, Tenn., investment bankers, in receivership November 7. A directors' statement said "the affairs of Caldwell & Co. are remote from Arkansas and nothing but an excited public mind could have forced the closing of this strong bank." The American Exchange Trust Co. announced deposits of $15,014,589.41 on the date of the last bank call. The bank was capitalized at $1,000,000 and had a surplus of $500,000. The banks acted under an Arkansas State law which permits them at the end of five days to reopen or turn over their affairs to the State Banking Department. Officials of A. B. Banks & Co. expressed the belief that more than half the banks would reopen. The four banking houses which have closed in Tennessee during the last two

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PLAN TO REOPEN ARKANSAS BANKS Governor Issues Expression of Confidence in Financial Stability Little Rock. Ark. Nov. 18 (AP) Optimism was expressed in statements of Arkansas financial leaders as they laid plans today to reopen some 43 banks which have suspended temporarily or closed. The executive committee of the American Exchange Trust company here, largest and one of the oldest banks in the state, which suspended for five days, was engaged with plans to resume operations. Closing of the American Exchange was followed by suspension of activities by the 42 other banks, the aggregate deposits of which were more than $27,000,000. Seek to Avert Run A. B. Banks, president of the American Exchange, and controlling stockholder in 34 of the 42 other banks scattered over the state, said the boards of directors were trying to obtain pledges of loyalty from their communities and supporting capital to assure freedom of danger from a run. Expressions of confidence in the general ability of the state's financial structure were added by Governor Parnell and Senator Joe T. Robinson to those of bankers. The Little Rock Clearing House association by a statement assured the public that local banks were in sound condition. Hysteria following receivership proceedings against Caldwell and Company, Nashville, Tenn., bankers, until recently interested in the American Exchange, was attributed by directors of the latter as the cause of steady withdrawals which reached about $4,000,000.

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TO ARKANSAS BANKS

Optimism permeated Arkansas financial leaders as they plans today some of the 43 banks to reopen which temporarily suspended closed The executive committee of the American Exchange Trust Company here, largest and one of the oldest banks in the state which suspended for five days, was employed upon plans to resume erations. Closing of the American Exchange was followed by suspension of activities by the 42 other banks, the aggregate deposits of which more than 000.

B. Banks, president of the American Exchange, and controliing stockholder in 34 of the 42 other banks scattered over the state, said the boards of directors trying to obtain pledges of loyalty from their communities and supporting capital to assure freedom of danger from run. Resumption of normal business by the banks, he said, would folsuch assurances to directors. Expressions of confidence in the general stability of the state's financial structure were added Governor Parnell and Senator Joe T. Robinson to those of bankers. The Little Rock clearing house association by a statement assured the public that local banks are in sound condition, have large cash resources and latively small amount of bills payable. following receivership proceedings against Caldwell and company, Nashville: Tenn., bankuntil recently interested in the American Exchange, was attributed by directors of the latter as the cause of steady withdrawals which reached about 000,000. The American Exchange's capital was $1,500,000, with deposits about $17,000,600 as of the last bank call. Mr. Banks said the banks side Little Rock which closed independent units in affiliated with the American Exchange Trust Company, "although Mr. Banks president of the Little Rock institution. know the people of these towns are gravely interested to know when the banks will be reopened," he added. "That will be determined by the local boards with whom am conferring as rapidly as possible."

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RE-ORGANIZING BANKS

Little Rock, Nov. timism was expressed in statements Arkansas financial leaders as they plans today to re-open some banks which have suspended temporarily closed. The executive committee of American Exchange Trust company here, largest and one of the oldest banks the state, which suspended for five days, was engaged with plans resume operations.

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Many In Country CloseDoors; Might Open

Arkansas Hit Hard With 39 Institutions Going Down There

Eight Kentucky Banks Closed

Illinois and Iowa Also Dealt Hard Blow by Closing of Banks

(By the Associated Thirty banks in Arkansas to depositors five and other small were closed yesterday liqudation. Eight banks in Kentucky measure in the weeks closed Five Sat-

Is Optimistic An optimistic the was taken by Robertson Tennessee of banks said banking Trust of Little banks said their opinion bank solvent and that can be found to resume operaMost of the suspended Arkansas banks affiliated Banks sociated American Ex Trust Company With the three were Public Hysteria Directors closing public result from placing of Caldwell Nashville Tenn investment bankers, in receivership November statement said affairs of and remote from and an excited public mind could forced the closing of this The American Exchange Trust the The bank was and had surplus

May Reopen The banks acted under Arkansas State permits them the of five days to their affairs to the State Bank Closing of the National Bank of Kentucky at had Three)

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ARKANSAS BANKS ASK FOR PLEDGES OF PUBLIC'S FAITH

Loyalty From Affected Communities Sought to Assure Safety

LITTLE ROCK Ark., Nov. Opt permeated statements of Arkansas financial leaders as they laid to re-open of the banks which temsuspended or Monday The the American Exchange Trust Company largest and of the oldest banks in the state which for days. was employed upon plans operations Closing of the American Exchange was by activities the -eight banks. Banks, president of American rolling stockholder in of the other banks scattered the state, said the boards directors try. ing of loyalty from their and capital to assure freedom of danger Resumption of normal business by the banks, he shid. would follow such to Expressions of confidence in the of the financial added by nor Parnell and Senator Joe T. RobThe Little Rock Clearing House Asthe public that local banks are in sound cash resources and relatively small amount of bills Hysteria following proceedings against Caldwell & Co. until cently the Ex change was attributed by directors of the latter as the cause of steady withdrawals which reached about The Exchange Bank's capital was deposits of about as of the last call September

EIGHT CLOSED KENTUCKY BANKS INVOLVE $75,000,000 LOUISVILLE Kentucky more nan closed Tuesday The larg. est was the National Bank of at the of a Paul C. Keyes. of the staff of the comptroller the at Washing ton Its approximate $60, 000 Directors of the National Bank of Kentucky the suspension Monwas of wild its condition. with its closing two the Louisville Trust Company and the Security Bank Their disaid solvent and that as precautionary measure The institutions are affiliated the banks in Louisthe American Mutual Savings and the First Standard Bank, cleared through the Louisville closed. The of St Louisville subalso as precautionary banks outside Louisville also closed when the Na. tional Bank of Kentucky had sus. McElwain Me. & Ky. Bank at Ky. National Bank of as correspondent Officers of other leading Louisville Monday night deposits new were opened during the the were solvent.

CO RECEIVER IS APPOINTED FOR ALDWELL & COMPANY for the Railway entered his investment bank for ing house He and Lee Douglas. Nash Thursday night, will enjoy Mr Smith named co-receiver Monday by Federal Judge John. Gore application of AtGeneral Smith who torney pointed out that Caldwell & Co. was interested in the closed of Tenwhich the had on de$3 000 the time was tak by the superintendent further appears,' the attorney the may be in other respects dithe of Caldwell & ns for reasons later pointed out the had and Mr Douglas reason of the large far the best hat Mr Douglas said he weland tha had asked informally for and said in state Douglas in acthe be pursued and possible the tion for the benefit of all its credistatement follows The of the will & Co. work the rapidly as for the creditors Major for the ership has assumed the duties office this morning. and he and Mr Douglas in complete policies to be will utmost together during the entire period of the World naturally under stand one another's ideas During the Mr. Smith was chairman of the Council of National Defense, for Tennessee and Mr. Douglas was United States district attorney Nashville, and in these capacities they were closely assoCLEARING HOUSE TAKES OVER TWO BANKS AT CINCINNATI CINCINNATI The & Trust Company and the Pearl Market Bank & Trust was held by the Company Tuesday from trol into the hands of the Cincinnati Clearing House Association it was anounced by the clearing house Eight of the largest banks in Cincinnati issued a simultaneous state-

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TOTAL OF 69 BANKS CLOSED IN SIX STATES CHICAGO. Nov. 19. U.P.-Curtains were drawn and closing signs hung today on the doors of 69 banks in six central and south central and south central states as boards of directors held conferences to determine when most of them might be reopened without danger of experiencing runs. The list of banks which had closed or suspended business since Monday morning was raised yesterday when 13 small Arkansas institutions joined with 40 others which previously had taken advantage of a state law allowing them to close for five days for reorganization. The list of closings then was: Arkansas. 52; Kentucky, 8; Missouri, 4; Illinois, 2: Iowa, 1; and Indiana, 1. Practically all of the closings in Arkansas and Kentucky resulted from fear of runs after the failure of Caldwell & Company at Memphis Tenn., led to withdrawais of more than $4,000,000 on the American Exchange Trust Company at Little Rock. The closings in Missouri and Illinois also were due to failure of larger institutions, all having deposits in two large Quincy, Ill. banks which failed. In practically all cases, directors announced the closings were purely for the protection of depositors and predicted the institutions would reopen within five days after suspending business.

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FINANCES ARE CLEARING UP IN ARKANSAS

Opening of Bank at Heber Springs and Reorganization Plans Restore Confidence over Arkansas Following Bank Suspensions

LITTLE ROCK, Ark., Nov. Additional encouragement to Arkansas' banking situation was given today by the state banking department, when Walter E. Taylor, commissioner, announced that information coming into his office indicated that more of the 63 suspended institution than he at first anticipated. are working out reorganization and reopening plans. Mr. Taylor said that reports indicated that many of the institutions had progressed with their reorganization plans to the extent of expecting open for business during the later part of this week or carly next week. He expressed the belief that the situation in the state would show great improvement during the coming week. The National Bank of Arkansas of Heber Springs was the first to resume business. This institution reopened its doos yesterday morning after authority had been received from Comptroller of Currency W Pole at Washington. The national bank examiner reported that the institution was in position resume business Directors of the American change Trust Company of Little Rock today continued their conferences to consider reopening plans. Just when and how the local institution can reopen has been determined.

Five More Suspend Officials of the American Exchange stated that reorganization requiring the co-operation of the depositors were well under way and it was hoped that the bank could be reopened soon. The bank will be taken over Saturday by the state bank commissioner pending completion of the reorganization Five banks were added to the list of those suspending. The Bank of Corning at Corning suspended Wednesday afternoon. The Citizens Bank at Bald Knob did not open this morning, five day suspension. The Bald Knob State Bank opened, but was subjected to run during the morning and suspended at 11 clock as precautionary measure. The five brought the total banks suspending or closing up to 63, Two small institutions, the Bank of Ozan at Ozan, Hempstead Counand the Bank of Strawberry Strawberry, Lawrence County, both independent banks, announced suspensions for -days. The Bank of Strawberry suspended last Monday, but the first report of the action was not received at the state banking department until this morning. The Bank of McNeil at McNeil suspended for five days Thursday afternoon, and the Bank of Tyronza was taken over by the state bank department. A dispatch from McRae said the Peoples Bank at that place expected to reopen Saturday or Monday, under a proposed agreement that stockholders pay in $12,000, an amount equal to deposit the bank had in the Arkansas Trust Company at Newport when the latter suspended. Depositors also were being asked to agree to maintain 85 per cent of their deposits in the bank for 12 months, or as long as necessary to stabilize the institu-

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A leading financier in an interview to a news agency expressed the fear that by this time next year there will be hardly a country bank in the northwest, middle west and southwest that could lend a dime on the Chrysler building even if Chrysler's insurance were thrown in for security.

This financier attributed the disastrous situation facing the country banks to the low prices of wheat and unemployment. Though a New Yorker he also stated that the chain banking system was to a great degree responsible for the many bank failures this year. He feared there were more to come and he being a public spirited citizen did not relish the prospect of thousands of country banks closing their doors. He stated that the small town banker was a pillar of the present social order and that his passing would probably release forces that would not make for the stability of the present system. 36 Go to Wall In Arkansas "In Arkansas, where 36 banks suspended business temporarily yesterday and three others were closed by the state, an optimistic statement was issued last night by A. B. Banks, president of the American Exchange Trust Company, Little Rock's largest bank.

Predict Reopening Soon Banks, who is a heavy stockholder in outside Arkansas banks, said he was conferring with local boards and predicted an early resumption of normal business. The recent failure of Caldwell & Co., of Nashville, Tenn., was blamed by Sen. Joseph T. Robinson for the temporary closing of the Arkansas institutions, while in Missouri and Illinois the closing of six small institutions was considered due to the previous closing of larger banks.

Sen. Robinson Says "Its Hysteria" Robinson said the Caldwell & Co. failure had created "hysteria" which resulted in withdrawals of four million dollars from the American Exchange Trust company within 10 days and made necessary the temporary closing to protect depositors. Most of the other Arkansas banks which closed were affiliated with the American Exchange Trust, which was the first to close.

Close for 5 Days The Arkansas banking laws provide that an institution may be closed for five days for reorganization and adjustment and the banks, it was said, took advantage of this law to remove danger of runs until the "hysteria" Robinson spoke of has passed.

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ARKANSAS AND KENTUCKY ARE CHIEF VICTIMS

Failure of Caldwell Co. in Tennessee Is Start of Financial Troubles.

By The United Press of 72 banks in central closing states considered leading depositors and boards the their institutions were free from danger of where 39 banks Arkansas, business temporarily three others were closed week and optimistic statement Friday Banks, the president Company. Little Rock's largest who is heavy stockholder outstate said he with local boards and conferring an early resumption of predicted normal recent failure of Caldwell and The Nashville, blamed Company by Joseph Robinson for the temporary closing institutions, while Missouri the Illinois the closing institutions also was due upon the previous closbanks. Robinson the Caldwell and Company failure had created which resulted $4,000,000 from the American Ex change Trust company within ten days and necessary the tempoprotect depositors. other banks closed with the Exchange Trust, which the first laws prothat an may be closfor five days for the banks, took this law remove danger of runs Robinson spoke of had the western North Carothe in the and one in Iowa. In practically cases, was that the were solvent and that the were protective rather than lings actions. The closing of banks at Downing. Salle, La Grange and Rutledge, about by the closing last two large Quincy, banks, with the Missouri institutions had deposited surplus The Illinois banks, Clayton and Timewell, result of the failure In the of six and was said to protective necessary to prevent uns which because umors that followed the failure Caldwell and Company at Nashville,

Caldwell Company Receivership

NASHVILLE, Tenn., Nov. bankruptcy proceedwere United States Court against Caldwell and Federal receivers apweek under general bill the affairs. Caldwell has until and Company December answer of three purported creditors the company hopelessly insolvent and been for months." The inpetition declared Caldwell and committed an act to appointment unthe general creditors' bill. The petition also some the well and of poorly and some is unsecured. The added: further shown that said comin the its within the past four months committed and additional of bankruptcy in switching handling this comhas associated with many trading and interests and in the of its business has been con. able and has diverted switched from itself to different ones these subsidiary companies and doing created many preferences, acts of bank- petition was filed Dyer the for $18,818.99. by the petibe balance due on the bonds the county Caldwell others filed dge Douglas, and Rutreceivers, the suit. in the total for the week to ording mmissioner French, state nine, finance

Tenn. Bank Its Doors

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EPIDEMIC OF BANK CLOSINGS SPREADS Financial Institutions in Trouble Now in Eight of States Chicago. Nov. 22 (UP)-The epidemic of bank closings had extended today into eight central and southern states with business suspended or ended outright in a total of 115 institutions, most of them small. For many of the banks it was the last day they could remain closed under the state law allowing them to suspend business for five days for reorganization. Predictions were made that many of the banks would reopen soon. The five day period will end for a number of them on Monday and for still others on Tuesday of next week. Arkansas, where the closings started, led in number of closings, with other institutions under business suspension or closed in Kentucky, Missouri, Indiana. Kansas. Illinois, North Carolina and Tennessee. Beginning Monday of this week with the closing of the American Exchange Trust company at Little Rock, Ark., the number of suspensions grew rapidly. with numerous additions each day. Banking officials said the closing of the large Little Rock institution was due to heavy withdrawals brought on by the failure two weeks before of Caldwell and company at Nashville, Tenn. Most of the other suspensions in Arkansas were in sympathy with the American Exchange Trust company move. In Kentucky and Indiana the closings also were considered due to rumors of impending runs that followed the Caldwell and company failure. Several banks in Louisville were closed in sympathy with the Caldwell and company failure and other banks in Kentucky and Indiana then were closed in sympathy with the Louisville closings. In Missouri and Illinois, also. the closing of small banks was attributed to the previous failures of larger most cases. were about institutions. closings In brought by the the failure of two large banks at Quincy, III., with which the smaller banks in neighboring communities were (Continued on Page Two:

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REORGANIZATION PLANNED

Arkansas Banking Department to Aid in Effecting Re-Opening. LITTLE ROCK, Ark., November 22 (P).-Progress in attempts at reorganization was reported by several of the 67 banks closed in Arkansas during the week, but the State banking department received no reports today of re-openings. The banking department has taken charge of the American Exchange Trust Co. of Little Rock, as well as several others in the process of being reorganized. The department has announced it will assist in the reorganization of any of the suspended institutions and will do all possible to enable them to reopen soon. No additional closings were reported to the banking department today. Under Arkansas law banks that suspended payments to depositors may reopen at the end of five days or be placed in the hands of the State banking department for liquidation.

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FUNDS CLAIMED BANK

Arkansas Bank Report Made; Note Suit Is Filed.

LITTLE ROCK, Dec. statement affairs the closed American Exchange Trust Co., filed in circuit court today by bank closed from the Bank at now Two other Nashville banks, the Fourth and First National banks, the statement said. statement assets and liabilities balanced The was filed accordance with state law after the state took over the bank it is liquidated or reorganized. Two Arkansas banks were named debtor institutions the American from the Exchange Bank Trust Co: of EH Dorado and owing from the and Plant Bank and Trust Co. of Pine Bluff. An inventory of assets listed unand overdrafts of Liabilities listed bills and deposits in Cash on hand listed assets amounted to cash items and items in transit $90,054.98.

LOUISVILLE. Ky., Dec. James Brown of the National Bank Kentucky and former president of the BancoKentucky company, was named defendant to suit filed in circuit asking judgment suit avers was signed by The suit was filed by Joseph S. Laurent for BancoKentucky Co., whose bill said the long past Brown publisher of the here. that on November 28. Brown preferred and common stock in the Herald Post to cusfor the benefit Paul Keyes, receiver for the Bank of Kentucky, to cure the was being asserted against Mr. Brown by the bank's receivers Receiver Laurent asked in the that the hold the Herald stock all creditors in to the amount of their respective demands.

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Pulaski County grand jury late yesterday at the conclusion of an extended inquiry into the closing of the bank.

The American Exchange Trust Co., with deposits of approximately $17,000,000, closed last November 17 after the collapse of Caldwell & Co., Nashville, Tenn., investment banking house, which was affiliated with the American Exchange. Approximately 40 other banks of the A. B. Banks group in Arkansas closed after the American Exchange suspended, and within a few weeks about 75 other banks in the State closed Most of them have reopened.

Mr. Banks was indicted a month ago at Osceola on a charge of accepting deposits as president of the bank there knowing it to be insolvent.