Cottonwood State Bank - Cottonwood, MN

Bank Information

Episode Type: Run → Suspension → Closure
Bank Type: state
Start Date: September 23, 1931
Location: Cottonwood, Minnesota (44.609, -95.674)

Metadata

Model: gpt-5-mini
Short Digest: b9b63821

Response Measures

Full suspension

Other: Closures announced by state banking commissioner after affiliated 'key' bank closed; boards decided to close to conserve assets.

Description

Articles (dated Sept 23, 1931) report the Cottonwood State Bank was one of several state banks in an affiliated chain that experienced heavy runs after the key Clarkfield State Bank was closed; directors then decided to close Cottonwood. Sequence: runs developed on the bank following Clarkfield's closing, and the bank was closed (suspended) permanently. OCR errors in articles corrected (county names and wording).

Events (2)

1. September 23, 1931 Run

Cause: Local Banks
Cause Details: Heavy runs developed on Cottonwood after the nearby key Clarkfield State Bank in the same affiliated chain was closed, causing loss of confidence.
Measures: Directors decided to close the bank immediately to conserve assets.
Newspaper Excerpt: Immediately following closing of the Clarkfield State bank heavy runs developed the other banks of the chain because the public ... this developed lack of confidence which immediately caused runs develop on these banks.
Source: newspapers

2. September 23, 1931 Suspension

Cause: Local Banks
Cause Details: Directors closed the bank after runs developed due to affiliation with the closed Clarkfield State Bank and consequent loss of depositor confidence.
Newspaper Excerpt: Owing to affiliated stock ownership in the Clarkfield, Echo, Hanley Falls and Cottonwood banks, the department has been obliged to announce that the board of directors of those banks have taken definite action in deciding to close the institutions.
Source: newspapers

Newspaper Articles (3)

1. September 23, 1931 The Albert Lea Tribune Albert Lea, MN

Article from The Albert Lea Tribune, September 23, 1931

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Article Text

CLOSES 4 COUNTIES Institutions With $1,300,000 In Deposits In Orwoll Chain Bank Closing Causes Run. Paul, Sept. state banks in four ties with total deposits of almost $1,300,000 were closed today Peyton, state banking commissioner, announced. Four of the banks, according to Peyton, belong to affiliated chain in which Orwoll of Minneapolis held controlling interest. Banks That Closed They the Farmers State Bank Hanley Falls, the Farmers State Bank Echo, Yellow Medicine county, the Cottonwood State Bank Cottonwood, Lyon county representing total deposits of and the Maynard State Bank county with The fifth bank was the First State Bank of Clearwater, Wright county, with deposits of $98,000. fifth bank of the so-called Orwoll chain, the Clarkfield State Bank of Clarkfield, Yellow Medicine county, was closed Monday. bank with deposits of described by Peyton as the bank of the affiliated chain. Runs Follow Closing "Owing to an affiliated ership in the ley and Cottonwood banks, the department has been obliged to announce that the board of directors of those banks have taken definite action and decided to close institutions,' Commissioner Peyton said. "Immediateafter closing of the Clarkfield State bank, heavy runs developed the other banks of chain cause the public in the towns in banks were located thoroughly conversant with the fact that the same ownership controlled all the institutions and this developed lack of confidence.' directors of these institutions believed was more desirable to close the banks immediateand conserve assets."

2. September 23, 1931 Post-Bulletin Rochester, MN

Article from Post-Bulletin, September 23, 1931

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Article Text

Peyton Takes Action Against Places Having Deposits of Million St. Paul, Sept. state three Minnesota counties, with total deposits most were John N. Peyton, state banking missioner, announced. Four of the banks. according Commissioner Peyton, belonged an affiliated chain which Minneapolis, held trolling interest. They are the Farmers' State bank Hanley Falls, the Farmers' bank Yellow Medicine bank Lyon county, representing total deposits of The fifth was the First State bank of Wright county. with deposits of capital surplus of $2,000 fifth bank of the so-called Orchain, Clarkfield State bank Clarkfield, Yellow Medicine counwas closed Monday The bank with of described by Peyton the "key" bank of the chain. "Owing to affiliated stock ownership in the Clarksfield, Echo, Hanley Falls and Cottonwood banks the department has been obliged to nounce that the board of directors of those banks have taken definite action in deciding to close the stitutions," Peyton said. Immediately following closing of the Clarkfield State bank heavy runs developed the other three banks of the chain because public in the towns in which the banks were located were thoroughly conversant with the fact that the same ownership controlled all these stitutions and this developed lack confidence which immediately caused runs develop on these banks. directors these institutions believed that was more sirable from point of view of the creditors to close the banks immediately conserve the assets." The banks closed assets for the depositaccording the The Hanley Falls bank had deposits of capital and surplus The State had deposits of capital $20,000 and surplus The Farmers' State bank Echo had deposits of capital and surplus of $3,000. The Maynard bank had deposits

3. September 25, 1931 The Minneapolis Journal Minneapolis, MN

Article from The Minneapolis Journal, September 25, 1931

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Article Text

Four Orwoll Banks, One Other Closed Five state banks in four counties, four of them under the stock control of S. Orwoll of Minneapolis, total deposits of approximately $1,500,000 were closed today, according to an of John N. Peyton, state bank comThe banks closed are the FarmState Bank of Hanley Falls and the Farmers State Bank of Echo in Yellow county, the Cottonwood State Bank of in Lyon county, the First State Bank of Clearwater in Wright county, and the State Bank of Maynard in Chippewa county. fifth bank of the so-called Orwoll chain, the Clarkfield State Bank of Clarkfield, in Yellow Medicine county, was closed Monday. This institution was described the key bank of the chain. Mr. Peyton that after the close of the Clarkfield bank heavy runs developed on the other institutions.