Central National Bank (Oakland, CA)

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SEVENTEEN STATES CHECK RUNS ON BANK

Seven More Join Movement to Restrict Withdrawals of Deposited Moneys

THREE AND FOUR DAYS TO BE TEMPORARY HOLIDAYS

Situation Easing in Some States as Legislatures Planned Curb Laws

Mississippi, Arizona, Nevada and in Oregon today joined the states. which there are limitations placed on the withdrawals of deposits from banks. in which limitations on withdrawals now exist. The proclamation of Gov. Ralph at San Francisco makes mandatory the closing of California banks (or three-day period ending Saturday The three-day holiday called Gov. Murray in Oklahoma for same period also is mandatory. The of Gov. Allen of Louisiana provides for the sation until the end of the week "all public business including Banks and other public enterprises." Mississippi the decree of state banking called only (Continued On Page Two)

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BANK CLOSING'S EFFECTS

Thousands of theories are being voiced as to the causes and effects of the closing Thursday morning of all of the banks in California. Wise men who stand high in the financial world differ in their opinions on these two angles of the great crisis, so one guess is just about as good as another. But the fact remains that the three-days' holiday of closed banks will surely prevent any "run" on the banks which might come at this time. And "run" on bank is the worst thing that can happen, financially, to any community. It means, if carried far enough, that the bank must close permanently, and that means loss to the depositors as whole and the men who stand back of the bank stockholders. By the time the banks re-open next Monday it is thought the frenzy of withdrawal will have been overcome either in the minds of the people or through legislation making it compulsory. Other states that have declared similar banking holidays are now re-opening their banks with satisfactory results and business resumed in the normal channels. Let us have faith that this will be the outcome in California. Meanwhile, efforts to continue trade and business activity as usu will be made in Escondido. with an exchange worked out on confidence in the integrity of the merchants, business men and all citizens whose promises to pay are regarded as "good." So the whole thing sifts down to the matter of confidence, which is really the ultimate need and necessity of the situation, all the way from Escondido to New York, or even to Washington.

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California Bank Extended Holiday Until Thursday

Few Institutions Expected to Open Tuesday Morning

SAN FRANCISCO, March Federal Reserve Bank of San Francisco closed today for the duration of California's banking holiday.

Rolph tonight proclaimed an extension of the Callfornia bank holiday until Thursday, March The new three-day period will begin Monday with general holiday similar to the one now in effect. the governor said. The holiday Tuesday and Wednesday will be effective under terms of the special holiday bill passd today by the legislature. Provisions of the bill affect only banks and permit them to open or remain closed, it was explained. The action was taken by the governor after the assembly had approved the special holiday bill by vote of 54 or by exactly the required two-thirds vote. The senate passed the measure with only one opposition vote. The holiday extension will be fective for the three-day period re. gardless of what action is taken on specific bank bill now before the legislature, the governor said. Action on this measure was delayed until Monday.

SAN FRANCISCO, March officials were bit puzzled tonight as they tried to determine course of action to follow Tuesday, when "special holiday," proclaimed by Governor Rolph, becomes effective. Under bill passed by the state legislature late today, the governor was permitted to proclaim special as well as general holidays. The banking moratorium was extended until March with the understanding that Monday would be general and Tuesday and Wednesay a cial holiday On special holiday banks may close or be opened as their officers desire. It was believed some banks would open Tuesday and Wednesday while most of them would remain closed until the legislature approves bill permitting restriction of withOfficials of the Bank of America discussed the situation tonight but said they probably would not reach decision or have an announcement to make until Monday. Wells Fargo Bank and Trust Company officials were understood to be desirous of opening Directors of other banks preferred to follow along with the majority and wait for some protective legislation.

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Australia is of the few countries one the world that definitely on the back to financial equilibrium. Betprices for wool and other products, and firm determinaeconomy, tion to its and live within its pay way are the factors that have brought the commonwealth back from the bankruptcy. Seven months of the current financial will year nearly by the end of June. Australia has met every cent of its bond obligations. in the closed Central NaDepositors tional bank of Oakland have no for worry as to their accounts, for there assets to protect them are ample and in full, the loss falling directly pay stockholders should there on loss. not probable, howLiquidation but rather re-organization ever, The bank is in the hands merger. now who will of competent conservator, safeguard the interests of all.

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BUSINESS CONDITIONS IN 12TH DISTRICT

Banking developments in the 12th district, as in the United States generally, were of dominant importance during late February and the first half of March.- No outstanding changes in the general business or financial situation had been apparent during the first six weeks of the year, although the failure of two rather large and several smaller banks in January had been followed by withdrawals of deposits from other banks. About the time that the force of this adverse influence appeared to be coming to an end, however, widespread publicity given to the Michigan banking moratorium and to other unfavorable banking situations began to have an effect in the 12th district, and immediately following announcement of banking holidays or restrictions in other eastern states on February 25 a substantial run on California banks developed. This relatively heavy run lasted for three days -February 27, February 28 and March 1-when it was brought to an end by a proclamation of the governor of California closing all banks in the state for a three-day period. This action in California was followed by runs on banks in other far western states and by March 3 emergency banking restrictions had been placed in effect in all 12th district states. Withdrawal of currency during the week ending March 1, while at a re. cord rate, was SO short-lived that its effect upon district banks deposits was relatively small. Currency payments by banks to depositors were about 30 million dollars during the week ending March 1, compared with deposits in those banks of considerably more than three billion dollars at the beginning of this year. Banks met the unusual demand for currency by borrowing from the Federal Reserve bank of San Francisco and by drawing upon their reserve balances, which had been built up during the first half of February through transfers of funds from other parts of the United States.

Reopening of banks under licenses issued by the secretary of the treasury and by state authorities commenced on March 13 and proceeded

20 most 12th district banks had resumed customary operations, although a good many were either in the hands of conservators or had been closed for liquidation. Currency which had been withdrawn prior to the closing of banks on March 2 was redeposited in large amounts between March 13 and March 20 and considcrably more gold coin was turned in to the Federal Reserve bank of San Francisco than had been withdrawn from January 1 to March 4. 1933. Redeposited currency was sent in to the reserve bank to repay borrowings and to increase reserve balances. Volume of production was slightly smaller in February than in January. Department store sales and intercoastal trafic through the Panama canal increased, but the number of cars of freight loaded on district railroads during the month decreased. Other trade measures changed little. Petroleum production during February approximated that of the preceding month. The cut of lumber declined contrary to the seasonal movement and the volume of engineering construction decreased sharply. Employment conditions remained about the same in February as in January. Commodity prices declined slightly during February, but advanced considerably during and immediately following the banking holiday in March. Non-statistical reports inicate that the banking restrictions during the first half of March reduced business activity. particularly retail sales volume.

The engagement of Miss Edna May Bradbury and Willis Cruse has been anounced. Miss Bradbury, laughter of Mr. and Mrs. Lou Bradbury. was the incentive for a surprise party one recent evening given by a number of friends. During the evening she was presented with a shower of gifts for her new home.

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Bank Receiver Leaves Friday for Oakland

J. H. Grut, who has been appointed receiver of the Central National bank of Oakland, Cal., will leave Friday morning United Air Lines for Oakland Mr. Grut has resigned as vice president and cashier of the Continental National Bank & Trust company to accept the appointment by the of currency as receiver of the Oakland bank.

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Bank Receiver Picks Secretary

Appointment of Mrs. Irene G. DeSelms as secretary to F. M. Porter, receiver for the First National Trust & Savings Bank, was announced yesterday. Mrs. De Selms arrived from Oakland. where she was Secretary to the receiver for the Central National Bank of Oakland, last night and will assume her duties today. Mrs. De Selms was appointed because of her experience\ in bank receiverships, Porter explained.

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Richmond Students V. F. W. Auxiliary to El Cerrito Merchants Now Total 5644 Be Host to Mothers Study NRA Code RICHMOND Aug 22 total of RICHMOND Aug. Honor EL CERRITO. Aug. 22.-An NRA 5644 students are registered in the auxiliary, Veterans of Foreign Wars code for El Cerrito merchants and Richmond school district, Superin- will lentertain Richmond War Moth- businessmen is being studied by tendent of Schools Walter T. Helms ers, Gold Star Mothers and Ladies committee appointed by Donald S reported today. The figure is 213 of the G A R. at its meeting Sep- Moore. president of the El Cerrito less than last year. Of the total Businessmen's Association The comtember 7. Mrs. Valera Berk is in 1120 are registered in Uncharge of arrangements She was mittee members are: Ira E. Smith ion High School, 1272 in the two named by Mrs Mabel Davis, presi- chairman: M J. Brenneman, Edjunior high schools, and 3166 in the elementary schools dent of the auxiliary ward Smith and H. H. Tezzi

Bank Receiver Has Major Operation

Joseph Grut, recently appointed receiver of the old Central National Bank accounts by the Federal government, is recovering at Peralta Hospital today after undergoing a major operation there last Friday, hospital authorities announced toGrut is expected to be entirely recovered shortly.

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Central Bank of Oakland Sues To Recover Assets $699,543

The Central Bank of Oakland, yesterday filed suit in the United States District Court here for writ to compel Joseph H. receiver the Central National Bank of to take under terms of conservator's assets amounting to Federal Judge F. St. Sure will try the case. Trial date has not been The said that when the Central Bank suspended March the Fed Controller Currency pointed Mount He made an agreement for the bank to take over assets of the National which turn placed in his hands the sum of Then the provided the agreement complaint continued. for Mount his successor take up these assets when possible and May when Grut named reMount turned everything over April the charges assets of turned back Grut. under Mount but Grut refused accept on the money hand raised through was not sufficient.

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Bank Receiver Recalls Funds

Approximately Central National Bank of Oakland will read these lines with The 6,000 were permitted funds the bank during the 1933 bank holidays just before the bank closed. When the bank was reorganized and put under control receiver, depositors 70 per cent dividend their accounts. Grut announced yesterday that who withdrew during the holidays preferential position relation depositors did not withdraw, and that unless they return 30 cent the amount their 1933 they treceive any further dividend their deposit dividend scheduled early the spring.

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Receiver Starts Payment Of Dividend to Depositors

J. H. Grut Pushes Liquidation of Old Bank's Holdings Ahead at Rapid Pace

By L. D. CLARK

Nearly $2,100,000 is being paid into the hands of 14,455 persons, estates and corporations in Oakland today. It is a 15 per cent dividend on the residue of the assets of the old Central National Bank which failed to open following the bank holiday in March of 1933. It brings to 85 per cent the total of the claims of depositors paid by the old institution and sets a new standard of accomplishment for receivers of bankrupt properties.

A bit of history might recall the trying times of a famous Spring month in Oakland.

Credits were tight. The withdrawal of moneys from the banks was on a scale unprecedented. Then came the bank holiday. Near the end of the period, it became obvious that some of the banking institutions would not reopen. The old Central National succumbed.

A matter of fifteen million dollars was involved. Negotiations with the Federal Government under the emergency banking laws set up by Congress enabled the conservator to succor 70 per cent of the total at once. As a result about 10 millions were paid out, through the successor bank, the Central Bank of Oakland, to depositors. Thirty per cent of the claims were held back. On May 12 a receiver for the old institution was named.

No NRA Code for Receivers' Staff

Joseph H. Grut, of Salt Lake City, was appointed. Grut had held responsible banking positions with institutions in the Midwest and in Utah. He stepped into a tangle of depleted securities, notes, claims, counter-claims and grief. In short, he entered the usual situation of a bank receiver: the object of attack, of solicitation and hope. There was one distinct difference, however. The new official was not a professional receiver. He was a trained banker.

To establish the true claims of the thousands of depositors of the old institution was no small problem. It was put under way. To assess the responsibility upon stockholders was another step, unfortunate and fraught with grief and trouble. It had to be faced and faced it was.

At one time 45 employees worked on the books and claims in the receiver's office. That number has been reduced to the present staff of 14.

No NRA code was considered for receivers and their staffs. They worked when there was work to be done. The responsible official apparently felt that any expedition of the business would be to the benefit of all concerned. Consequently an item in the receiver's report of "Suppers $650" explained a good many things. Translated, it meant that over 1000 evenings of work had been performed by the staff. The food price, incidentally, was 65 cents per individual.