Astoria Savings Bank (Astoria, OR)

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Three Planes Land At Swan Island; Women Pilot Two

Here in the course of a tour to promote interaviation country clubs, Miss Fred in East Ruth R. Nichols, New York society aviatrix: Mrs. Margaret Gilbert Perry, New York; Robb Oertel, business Astoria Savings representative the clubs, and C. O. Bedford. Curtiss Field manBank Is Closed by ager, landed in three Swan island airport Tuesday Miss Nichols, last year made Persistent Run flight from New York to Miami in hours, piloted her own plane. Mrs. Perry, who joined the Astoria, June 18.-(U.R)-The Astoria group Los Angeles, also was flying Savings bank did not this her ship. They were met at the field morning following visit of the state by Lieutenant Arthur MacKenzie. bank examiner and his deputies last the Aviation comevening pany. For more than two months there Hopes are to establish an aviation had been sustained run on the country club here as part of nabank following the circulation tional chain of 114. Miss Nichols said. rumors it was impossible to stop.

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LOCAL BANK FORCED TO SHUT DOORS DUE TO RUN

The Astoria Savings Bank this morning closed its doors and, by the board of directors, was turned over to the state banking superintendent for liquidation. The suspension of business by this old financial institution came direct result of a sustained run which started more than two months ago and has continued intermittently ever since. To protect the interest of the depositors, the directors, following meeting with Supt. A. A, Schramm, which lasted through the day yesterday and late into the evening, reluctantly came to decision to close. The formal authority was voted this morning before banking hours and the public received its first announcement when notice was tacked the door of the bank shortly before 9 o'clock. The closing of this bank the second large bank failure in Astoria in little more than year, the National having suspended on February 23, 1928. Schramm in Charge A. Schramm, state banking soperintendent, is today in charge the bank and he has three of assistants, Ray Landon, R. H. Coppock and A. H. Olson, with him. He will name one of his deputies as receiver probably tomorrow though he will himself remain several days. Supt. Schramm stated this morning that the bank doors would be opened within two or three days in order permit those having safety deposit boxes have access to them. He will Immediately send out notices to all depositors asking them to call at the bank, present their claims and have them verified. His next task, which will require three or four weeks, will be to inventory and catalogue all of the bank assets. copy of this Inventory will be filed with the county clerk for public inspection. Liquidation will start immediately

3000 Depositors The closing of the bank involves more than 3000 separate depositors who have claims aggregating $2,065,675.96 against the bank. There is on deposit $226,000 of public funds for which surety bonding company is responsible and $112,500 of public funds in time deposits secured by that amount of bonds put up as collateral. Over $600,000 of the deposits is represented by certifi-

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Continued From Page One cates of deposit. The balance is in checking or savings accounts. Technically the Astoria Savings Bank was not a savings bank and, therefore, had no savings accounts recognized by law. What were known as savings accounts were in reality interest-drawing deposits and the law gives such accounts no preference over strictly commercial checking accounts. There is a serious question as to whether the stockholders are liable for double the amount of their stock. The law of double 11ability was not adopted until 1912 whereas the Astoria Savings Bank was chartered in 1906, thus exempting the stockholders from the provisions of the law. However, the capitalization of the bank has been changed since the law went into effect and Superintendent Schramm is now fighting out in the courts the question of whether change of capitalisation does not change the contract of the bank with the state and make the stockholders liable for double their stock holdings The question is being tried out in the circuit courts of Tillamook and Umatilla counties and will probably go to the supreme court for a decision. Those depositors having notes at the bank will be entitled to offset their deposits against their indebtedness to the bank, just as was the case with the Astoria National Bank Rumors Cause Run The first mild run on the bank was started several months ago but It caused no uneasiness to the bank officials until it' showed evidence of continuing. The bank then stood upon Its statutory rights in refusing to permit withdrawal of money represented by certificates of deposit until the certificates matured. The bank also made every effort to prevent the withdrawal of other interestbearing deposits. The rumors, many of them without foundation in fact, revived upon the death G. W. Sanborn and Fred Kendall of the Sanborn-Cutting Co. which it was generally known. was nanced by the Astoria Savings Bank. Repeated conferen were held. between the bank state banking officials with result that George L. formerly with the Bank of Call ornia, was made vice-preside of the bank with Instructions liquidate such loans as could liquidated without delay and not additional security on others. Through his afforts and these the directors more than neash was received by the from debtors. The situation eased up erably for two or three weeks lowing the sale of the property saleof the Timber Co. but another run precipitated by general circulatic of a report that the bonding pany, which had furnished bond for the funds on had served required 30-day notice tention to cancel the boad. was attended by proximately $200,000 funds. Last gossip-about the bank ran wildfire through the and, recognising that deplete cash respurces er than loans could be the directors tion but to protect their morning in situation stated his been working for more then year attempt to secure of the band and had every expedient saving this Institution for the community this program; he said, the directors had but the run was a factor which could not combatted Capital Wiped Out The bank was capitalised

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proved by the board of directors:

TO THE PUBLIC It is with profound regret that we are compelled to notify our customers that the Astoria Savings Bank, which has been actively engaged in the general banking business in this city since 1891, has been forced to close its doors and cease business for period of time. which we hope will prove only itemporarily It our firm Judgment and belief that this bank is wholly solvent and will promptly pay every depositor and creditor in full. The reason for the closing of its doors is probably as well known generally to you as to the bank officials.

For some time past, rumors, originating no. one exactly knows where, but wholly unfouned in fact, have been widely circulated to the effect that the bank was Insolvent. Little, If any, attention was given by us to such rumors in the first instance, for we knew they were false, and the fact that the bank had been in business here for so many years and had the full confidence of the people, it was hoped and believed that such rumors would die away In this, we were mistaken. Instead of dying away. they increased, with the result that for some considerable time, there has been a run on the bank so continuous and persistent, that after giving the matter our most careful consideration, we concluded to close, although the cash on hand was and is quite considerable. The situation presented to us was this: the people of this community were able to pay the bank their indebtedness to It, then, of course, the bank could have continued business. But you know as well as do we, that our customers could not do this, and if drastic measures should have been taken to enforce such payment, the result would have been financial ruin to our community, as well as 100g to the bank: but if, on the other hand, time should be for such payment the full amounts due would be realized but if such payments should not be enforced, the bank must close its doors. The bank officials chose the latter course, and did so before its cash on hand was exhausted, all for the purpose of protecting its depositors. We all realize that there is and has been for some considerable time financial depression throughout the Northwest, which has, to some extent, affected. least materially reduced, the value of real estate In our community to no Inconsiderable extent. Also, securities considered first class prior to the recent attractive interest rates demanded and received in the eastern money centers on call moneys are not now desirable, even though perfectly good. No bank can stand a run where the depositors are demanding on their deposits in full, no matter how solvent it may be. The Astoria Savings Bank is Against this run ,and before its cash had been exhausted, the directors deemed it advisable to close its doors. The business affairs of the bank have at all times been honestly and economically administered. We wish to thank our clientele for their confidence and assistance, and assure them that, in our honest judgment everybody will be paid in full. Doubtless the closing of the Astoria Savings Bank will produce in the minds of some people- lack of confidence In all banks, or the other two banks in this city We are wholly satisfied that the other banks in this city are entitled to your full confidence and support and that it is your duty to assist and protect them in every possible way. Banks are necessity to business progress, and it is the duty of every eitito protect and support its financial institutions. T statement is authorized by the board directors ASTORIA SAVINGS BANK, Frank Patton, President.

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Editorial

MONEY COMING IN.

While the closing of the Astoria Savings Bank temporary hardship to the people of this community, not time to give away pessimism or to lose heart. While it is, as yet, too early to obtain definite information garding the closing of the bank, safe to say that eventually the depositors will receive major portion of their savings and that possible change in conditions might result in complete payment. In the interim there is bound to be certain amount of inconvenience until adjustments can be matie. It should be kept in mind that the sources from which the $2,000,000 deposited in the Astoria Savings Bank were derived are still open and in healthy condition. This money came from fish, dairy cattle, poultry, logs and lumber, and other primary and productive resources.

There has never been time when these industries were in better or more stable condition. Fishing is returning one of the biggest payrolls in years; dairying is in excellent shape as are minor factors in our productive scheme. In other words, while this money in the Astoria Savings Bank is tied upfor time, there is more money coming in to this community and will continue to come in.

The closing of the Savings Bank was not due to failure of produedistrict. It due to slow collections and the general depression, that is not peculiar to this community alone general all over the country and felt particularly, at this time, in the Paeific northwest. There plenty of money in Astoria and more will come in. The community has suffered number of heavy Hows before and following the fire of 1922 which brought a $12,000,000 loss. It has survived these hardships and will survive the presThe only thing for the business men and people of the to do is to earry on with heads up and they will find that the real situation does not justify any tendency toward pessimism and despair.

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RUN MADE ON BANK COLLECTIONS GAIN

Liquidation Inaugurated By Institution Offset By Withdrawals. Heavy

Notices to creditors of the Astoria Sovings bank, which passed into hands the banking department yesterday for liquidation of its assets, will be mailed out soon as possible, according state perintendent of banks, who has charge the local institution. Mr. Schramm expects complete this work within two three weeks time. He urges that depositors and other creditors do at the bank until they receive their notices and then call promptly to file their claims. notices will be mailed out as they are made out. No Comment on Affairs. Mr Schramm refused comment the condition the bank affairs on other than to that there say considerable of "frozen" assets of which considered to be some worthless. He said that under the state no dividend could be paid until days after statement assets of the bank had been filed. This statement he expects to have prepared and filed at the county clerk's office an date. It will be available there early for all This will completely the bank with notations to their condiUnder the state law Mr. Schramm will act as receiver for the institution but will appoint deputy to remain in Astoria handle the work. He said yesterday that he had man in mind had experience bank liquidation work. Schramm will also appoint attorney to handle the affairs the bank but had not made such appointment Wrote Letter, July, 1928. Mr. Schramm stated that in July, 1928. that had written letter. copies which were sent by registered (Continued on Page Four)

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Astoria Savings Bank In Hands Of Department

(Continued From Page One) to all directors of the bank. point$2,718,745.82 ing out that over million dollars loans held by the institution Capital 200,000.00 either frozen non-liquid conSurplus 200,000.00 else of extremely doubtdition Undivided profits 1,854.92 ful In this letter he urged that Drafts transit with Bills steps be taken to liquidate least coreving shipments of half million dollars from this group merchandise and the addition of this fund Bills Payable 205,000.00 reserve. Deposits 2,065,675.96 This liquidation work was started early in year, Mr. Schramm stated, $2,718,745.82 proceeding good shape. Chartered in 1890. the last 30 days almost $300,The Bank had been realized from the liquidachartered 1890 and started operabut in the meantime tion process tions 1891 original capitalibut on the banks persistent 1908 this funds started withdrawals durincreased $150,000 1924 were in excess of the same period again raised $200,000. Frank $500,000 and cash reserve had dropPatton, of the bank, and who to around instead of the ped destinies for years, required figure of $330,000. holds per cent of the stock $338,000 in Public Funds. the The value per par bank There deposit share the $338,000 in public funds and time stock readily for postal The postal savings $200 This money paid bonds and the secured the surplus $200.public funds by bonding has been wiped the effort and balance of the operation of the instisecurities. The first step in liquidation, accordThe following has been ing Mr. Schramm, would issued the public by Mr. Patton pay off the savings balance and approval the secure the bonds which board of directors: would liquidated to be used in payTO THE PUBLIC. off profound regret that we similar will the taken in the compelled notify our customers case of $112,000 by securities. that the Astoria Savings Bank, which These securities will and has been engaged in the genimmediately liquidated. The bonding banking business in this city since companies will handle the balance has forced to close doors the public fund and will and cease period of time, to stand the same loss as the depositwhich hope prove only firm judgment and porarily Loans to Bank Next Item. belief that this bank wholly solvent The next item handled and will promptly pay every depositor be loans the and covered by and creditor The reason for heading "bills Where the closing its doors probably given for these loans has security well known generally to to value excess of the loan figure the bank loan will paid the security some time past, rumors, origdeemed. Where the the inating no exactly knows where, curity the that the loan but wholly unfounded fact, have matter to holder of the been widely circulated the effect to handle. security that the bank was insolvent. Little, The will include the next process any, given us to such regular liquidation procedure, namely rumors in the first instance, for the collection of loans due the knew they false, and the fact that attempted liquidation of all real the bank had been business here fór property equipment holdings many and had the full confithe dence of the people, was hoped and Stockholders' Liability. believed such rumors would The matter of liability of the away. this, were mistaken. is in question. The bank stead dying they chartered 1890 before the with the result that for some considdouble liability law adopted by erable there has run the state the stockholders take and the bank continuous persistent, position that they are not liable that after giving the matter most for than what they have already concluded careful we paid for their stock. However, the state the on hand was close, although banking department holds that since and quite considerable. the increased capitalization Debtors Couldn't Pay. 1924 then became amendable situation to us was laws then prevailing regarding bank this: If the of this people stock. The matter has already been were able to pay the bank their inbrought the courts similar debtedness then, of the course, and case, that of Tilla- bank could have business. bank now awaiting judicial But well do that you know as as we,

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customers could not do this, and drastic measures should have been taken enforce such payment, the result would have been financial ruin well as loss the bank: but on the other time should be given for such pay ment, the full amounts due would realized. but such payments should be enforced. the bank must close doors. The bank officials chose the latter and did before its cash on hand for the purpose of protecting its deposiall realize that there is and been for some cosiderable time nancial depression throughout the Northwest, which has, to some affected, least materially reduced, the value of real estate our community extent. Also, considered first class prior recent attractive interest rates demanded and received in the eastern money centers on call monys desirable, even though perfectly good. No bank can stand where the depositors demandpayment on their deposits in full, no matter solvent may Decide to Close. Astoria Savings Bank was against this run, and before its cash had been exhausted. the directors advisable close its doors. The business affairs of the bank have all times been honestly and economically administered. wish thank our clientele for their confidence assure them that. our honest judgment, everybody be paid in full. 'Doubtless, the closing of the toria Savings Bank will the minds people lack of confidence all banks. the other banks this We satisfied that the other banks this are entitled your full confidence support and that your duty and them Banks busiprogress, and the duty of citizen to protect and support financial This statement by the board directors. "ASTORIA By Frank Patton, President.

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Cooperation Planned To Assist In Liquidation Of Astoria Savings Bank.

The Astoria chamber of commerce directors are scheduled to meet Monwork out plans for co-operation with State Superintendent Banks Schramm, the matter of the statements to depositors will probably mailed out within the next few complete inventory the assets will probably be filed the have totaled about

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COURT ORDER ASKED IF IT IS REQUIRED

E. B. Hughes Is Chairman of Committee Seeking Reestablishment.

A resolution requesting the state banking department to grant an extension of 60 days beyond the statutory period for reorganization and reopening of the Astoria Savings Bank, which closed its doors here June 18, was adopted last evening at a meeting of about 750 depositors in the institution at the county court house. The depositors also appointed a committee of five to represent them in negotiations with the state banking department and with officials of the bank, in regard to reorganization plans. The resolution in addition to the extension plea declares that in event it is found that such an extension is not within the powers of the banking department that steps be taken at once to secure a court order granting the extension. Under the law the reorganization period for the bank will expire on August 18. The committee selected by the de positors consists of E. B. Hughes, B. Hauke, F. Carney, Charles Anet and (Continued on Page Three)

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Hobson Will Lose His Two Dollars In One More Day

George Hobson, fish and crab merchant, who achieved fame here month ago by buying the unfinished Hawkins building for $2 at an auction sale, seems to have profited nothing through his transaction, for the 30 days in which he was permitted to remove the building expires tomorrow and Hobson will have to violate the Sabbath with vengeance if he expects to remove it in one day. The removal of the building was contingent upon Hobson's payment of a reasonable rent to owners of the property on which it stands, and as he failed to pay the rent, the building reverts to W. C. Logan and the Astoria Savings Bank receiver, owners of the property.

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Orders in Court

Oregon Liquidation versus the Northwestern Pulp & Paper Co., dejudgment. Astoria Savings Bank, insolvent, order Port of Astoria bonds.

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Bids For File Suit To Bridges County Collect Last To Soon spened Day Deposits Feb. way commission

HAVE CLAIMS OF 46

Suit is Filed in Name Of A. Shapiro for $7336.45

The long impending suit of last day depositors in the Astoria Savings Bank today when Shapiro filed suit to collect $7336 on assigned claims of 46 last day depositors. The action was filed in the local circuit The complaint alleges that the bank. which is named as co-defendant with Schramm, state of banks, was insolvent on June 17, 1929, and for some time prior thereto, that its liabilities that time were and that the cash value of the assets was but 25 to 50 per cent of that amount. The complaint further alleges that each of the persons making claims in the suit later tried to collect from the bank receiver, but that by order of Schramm their claims were denied. The bank was insolvent for 18 days or more prior to June 17, when it was closed, and the serve from to approximately below the legal minimum during this period. Green and Wold filed the action for the depositors.

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Depositors Defunct Bank Lose Point

Savings account depositors of the Astoria Savings Bank must file actions in their claims for preference in distributing proceeds of liquidation of the bank Federal Judge Bean has ruled in decision in Portland federal court the action brought by three depositors for total of 294 claimants. Word of was yesterday by and Hesse, local legal firm acting counsel for the bank receiver contesting the account depositors' The suit in question was filed last December by Mrs. Rees, Mrs. R. Durrah, and George Parpala, all residents, the Portland federal court. Claims in the suit total around and payment of from the bank is being held up pending the Judge Bean Rules Judge Bean in his ruling yesterday also held that attorneys fees the amount of which were asked, cannot be allowed, and that claimants must pay their own attorneys' fees. What action the savings account depositors take sult of this ruling is not decided Franklin C. Green, of this city, who has acted leader of the group in initiating the suit, said today that he has not received copy the decision, and that he reluctant to discuss the matter until he receives copy. He indicated that there may still be other legal resources which the depositors can employ to file action to obtain preferential claims. The complaint in federal court alleged on the part of officers of the bank in claiming that the accounts were "savings" accounts when actually they were not. Judge Bean held that inasmuch these alleged acts of occurred at separate times, that separate suits must be filed for each alleged act of Oregon claimants under Judge Bean's ruling will have to file suit in the state courts, is believed.

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Astoria Column

THE LUMBER TARIFF IS up in the senate again and preliminary indications are that there chance for passage. If the tariff measure does go through the hints, previously cast, that the sugar and cement groups made "trade" with the lumber advocates will break out into open charges. However, the lumber industry, unlike the sugar and cement businesses, has been vitally effected by competitive imports, to an extent that it has become a losing game. The greater part of the country, however, buys lumber and does not produce it, hence the chances for protective duty without little political 'log rolling" are slim. A saddening comment on national there you are.

THE FIRST RULING IN THE battle of the Astoria Savings Bank "savings" depositors" seems to have been a distinet defeat for the depositor group. The situation is particularly regretable. It is apparent that the great bulk of this group of depositors firmly and truly believed that their money was being deposited in accordance with the ordinary protective provisions of the state banking laws regarding "savings accounts and it is equally apparent that in few cases at least, the bank officials used the provisions these laws to forestall efforts of these savings depositors to withdraw their accounts before the bank closed. Granting these premises, there has been an apparent wrong done to these depositors and the law should find way to right it, although we are not qualified to etaim that such legal remedy does actually exist. The state banking department can not be blamed for opposing the action.

It is acting for the depositos as whole and cannot lend an ear to the pleadings of any one group until satisfied that the legal situation has been fully clarified.

HAVE opened an "unemployment probe. They could probably accomplish more by hiring few of the employed" to do the work for them. There is plenty of other business on the senate calendar.

AL CAPONE HAS RETURNed to Chicago, newspaper accounts say, and add that the police are "looking for him.' They term the scarred crook ruler of the Chicago underworld "suspicious' character. What a suspecting lot these Chicago coppers are.

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25 New Depositors Get Dividend Check From Bank Receiver more depositors of the defunct Astoria Savings bank will receive per cent dividend check on Monday, according to court order filed yesterday at the county These depositors withdrew from the suit brought against the bank by Svenson and their claims amount to They will receive or 35 per cent of their claims when the checks are mailed Monday, was nounced today by H. Olson, ceiver.

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16 More Withdraw From Svensèn Plea To Bank Receiver

Sixteen additional petitioners in the original H. Svenson suit against the Astoria Savings bank withdrawn from the petition, was announced today the county clerk's office. The withdrawal took place on Oetober 20. Those Rudesill, A. Anderson, Mrs. R. Billington, June R. Brallier Edith Emil Jorgusen, Magnus LarLocal Barbers' Adolph Logfren, Robert Patterson, Leo Richter Julia Selbeck, Carl Tanel, James Tsoukas John Waglund. The combined claims the group' amounted to $11,208.20.