Albert Lea State Bank - Albert Lea, MN

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: *
Location: Albert Lea, Minnesota (43.648, -93.368)

Metadata

Model: gpt-5-mini
Short Digest: 3b433d08

Response Measures

None

Description

Article (Feb 19, 1930) describes the Albert Lea State Bank as having 'suspended business Sept.' and repeatedly refers to it as the 'closed bank.' The story discusses bad loans/entanglements with the Albert Lea Foundry Company and Building & Loan, indicating bank-specific adverse information led to suspension. No reopening or receivership is explicitly described in the provided excerpt, so the bank is treated as remaining closed (suspension -> closure). The exact September suspension year is not given in the excerpt, so date is left null.

Events (1)

1. * Suspension

Cause: Bank Specific Adverse Info
Cause Details: Large uncollectible loans/notes tied to the Albert Lea Foundry Company and problematic mortgage/claim settlements left the bank insolvent or unable to meet obligations, leading to suspension of business in September (year not specified in excerpt).
Newspaper Excerpt: bank suspended business Sept. ... the ordered this checking account turned over to the closed bank
Source: newspapers

Newspaper Articles (1)

1. February 19, 1930 The Austin Daily Herald Austin, MN

Article from The Austin Daily Herald, February 19, 1930

Click image to open full size in new tab

Article Text

PARTIES AGREED IN DEBT TANGLE AT ALBERT LEA Finance Affair Casts Shadows Upon State Examiners compromise has been made the mdebtedness the Albert Lea Foundry Company with the Albert State Bank and with the Albert Building and Loan Association. bank suspended business Sept. the time the Albert Lea Foundry Company owed the bank on notes the amount of $62,544.00 At the time of closing the Foundry company had checking account of $1,418.84 The ordered this checking account turned over to the closed bank and payment percent of the balance or This in notes which the makers declared were mere accommodation paper. They threatened to contest any effort to collect and was estimated that only about percent were collectable so the promise of $24,450.06 was deemed satisfactory. The Albert Lea Foundry Company on January 6, 1927 was indebted to the Albert Lea Building and Loan Association $23,000 on its $25,000 fortgage bearing date of Aug. 12, 1924. In January 1927 the Foundry company made application for new loan of the proceeds of which to take up the mortgage and the balance of $17,000 was paid over sank at jured and to the company. Judge Makes Memorandum Judge Norman Peterson, in his memorandum of the case says: "Against strong objection the board of directors said Loan Association granted said loan and on Jan. 1927, mortgage evidencing said indebtedness was duly filed for record in the office of the register of deeds Freeborn county and recorded in in book 66, of mortgages, on page 597. "Unbeknown to the board of directors of the Building and Loan Association. as whole, judgment had been obtained in favor of the Iowa Savings Bank against the A1bert Lea Foundry Company, Erickson, Henry Harm and Oscar Subby, in federal court at Mankato, the sum of $18,020.83. This judgment had been docketed in the office the clerk of the district court of Freeborn. county on June 16. 1926 In its written application for the $40,000 loan above referred to, no mention was made therein of said judgment and it the claim of the Albert hea Foundry Company that in making said written application for loan did not then know that said judgment had been docketed in this county and that it constituted lien upon the real estate of said Foundry Company Wittmer Made Abstracts Wittmen customarily made abstracts for said Building and Loan Association and as part of the files and as preliminary to the making of said loan he completed the abstract of the properties of the Foundry Company to date. and erroneously certified that there were judgments on record against the said Foundry Company in this county. On the basis of the written application and the certificate of the abstractorywthe attorney of said Loan Association Alfred Vollum, passed the title as vesting in said Foundry Company, free from liens except the prior mortgage which was then of record in favor of said loan association and which was merged in and became part of the new $40,000 loan. "On Feb. 1927. the satisfaction of the Albert Lea Building and Loan Association of the said $25,000 mortgage was filed of record in the office of the register of deeds of said county. fair to say that the officers of the Building and Loan Association with the possible exception of Erickson and one or two others, did not know of the judgment of the Iowa Savings Bank. The legal this satisfaction caused the judgment of the Iowa Savings Bank to become first lien on said property. was contrary to the intention of the Building and Loan Association, the Foundry Company, or the individuals against whom said judgment was docketed. Unbeknown the Building and Loan Association, Tapager borrowed of the Merchants National Bank of Cedar Rapids, in excess of $18,000. and gave their note therefor. which money was used pay and satisfy said judgment. thus restoring as first lien upon the Foundry Company real estate, the $40,000 mortgage first lien. "The state commissioner of highways located state trunk highway No. across part of the real estate covered by said mortgage Damages to said property fixed and assessed at the sum of $16,500. Said damages were arrived at the basis of Damage to the real estate of said Foundry Company: (b) Damage to the business of said company." Mistake In Payment "Through mistake of the highway department or those in charge of the payment claims for and damages real estate by the location of state trunk highways, voucher for the said sum of $16,500 instead of being made payable to the Albert Lea Foundry Company and the Albert Lea Building and Loan Association, was made payable to the Albert Lea Foundry Company alone, and came into the possession of the said Foundry Company. The Foundry Company cashed this check on Aug. 24, 1928, and paid on the note of the Merchants National Bank of Cedar Rapids on that date $13,172.67; the balance of said collection amounting to was used by said Foundry Company to pay the indebtedness of said company wholly independent of the Loan Association indebtedness. ing In fairness and good conscience of $3,327.33 should be paid back to said Building and Loan Association. $38,500 Called Due "There approximately $38,500 due on the mortgage, and this settlement represents loss approximately to said Building and Loan "The present board of directors of the Building and Loan Association have advised me that the security for the present indebtedness of the Foundry Company held by may not be worth in excess of $30,000. Based thereon, and prompted by the moral obligation of the repayment the have released the foregoing order." The Albert Lea Tribune in lengthy editorial under the caption "Fair Settlement asks some pertinent questions of Viegel. commissioner of banks of Minnesota, in its closing paragraph as follows: "Was there ever an examination made of the Albert Lea State Bank and of the Albert Lea Building Loan Association of the same date. where the balance claimed by the Albert Lea Building & Loan Association the Albert Lea State not agree with the books of that institution? And they did not agree was it so so, to whom and what done about it?