Washington Bank - Minneapolis, MN

Bank Information

Episode Type: Suspension → Closure
Bank Type: state
Start Date: *
Location: Minneapolis, Minnesota (44.980, -93.264)

Metadata

Model: gpt-5-mini
Short Digest: a639873c

Response Measures

None

Description

Article discusses the failure of the Washington Bank of Minneapolis and testimony of the receiver and examiner describing insolvency, misrepresentation of capital, and mismanagement. No description of a depositor run is given; the bank had a receiver and is described as failed/closed. Date of suspension/receivership is not explicitly given in the provided excerpt.

Events (2)

1. * Receivership

Newspaper Excerpt: the testimony of Judge Uelend, the receiver, shows... The report was accepted and ordered spread on the minutes... This gives a fair idea of the way the Washington was brought into existence, and it is the opinion of most of the committee that the assets at that time were really not worth a quarter of their face value. The books further show that as money was paid into the bank it was used by the officers to square their old debts so that at no time was the bank in a solvent condition.
Source: newspapers

2. * Suspension

Cause: Bank Specific Adverse Info
Cause Details: Bank had essentially no real capital at organization, absorbed another bank's assets, used incoming funds to pay old debts, misleading statements in books and weak/inexperienced management; examiner found insolvency and misrepresentation of assets.
Newspaper Excerpt: THE FAILURE OF THE WASHINGTON bank, as the testimony of Judge Uelend, the receiver, shows, was one of the worst that can be imagined.
Source: newspapers

Newspaper Articles (1)

1. April 7, 1897 The Saint Paul Globe Saint Paul, MN

Article from The Saint Paul Globe, April 7, 1897

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Article Text

was the very best portion of the reported assets. He hoped the committee would subpoena no one upon that question, as it might interfere with the receiver. The committee discussed this matter very thoroughly, and it seemed to be the opinion of a number of the members that inasmuch as the note was in the handwriting of Mr. Bickel that there was something rather suspicious about the transaction. Mr. Thompson wished to have Mr. Bickel before the committee in order to question him, that some foundation might be laid for criminal proceedings in case the suspicion was correct that Tanner was a fictitious personage. The committee argued this matter at length, but finally came to the conclusion that it was not their duty to lay the foundation for a criminal prosecution. It was decided that the scope of the committee was merely to ascertain the character of the conduct of these banks, honest or dishonest. At its next meeting evidence was submitted to the committee that such a person as Margaret C. Tanner resided in the city of St. Paul, and that her name was upon paper deposited in the bank in 1894. No connection between Margaret Tanner and M. C. Tanner, however, was shown, though it was taken for granted that they were one and the same. At this meeting Senator Wyman indorsed the stand taken by Senator Thompson at the previous session, and it was resolved to bring this Mrs. Tanner before the committee. At the next meeting Chairman Feig stated that a subpoena had been issued, the sergeant-at-arms sent after Mrs. Tanner, and that he had found her address, but that he had been told that she was out. The sergeant-at-arms made the attempt to find her a second time, but with no better results. She was still out. This was in the afternoon. After supper he was told that she would probably not return until the next day. The chief of police was then asked to detail an inspector on the case, and did so. He sent a man there, who found out while in conversation with a boy at the place that Mrs. Tanner was at home. The boy was in the yard working, and a woman, whom the inspector guessed to be the desired witness, came out to speak to him, to tell him to go on with his work. Thereupon the officer served his papers. She protested that her name was not Tanner, but refused to give her name. The officer told Mr. Feig that he was satisfied that she was the proper party, and then asked for a description, which Mr. Feig could not give. Later the officer obtained a description of Mrs. Tanner, which tallied with that of the person on whom the summons had been served. He also discovered that this woman was a sister to Mrs. William Bickel. Mr. Feig was highly indignant at the contempt shown the committee by the woman, but declined to take any further action, as the committee was unwilling to carry on proceedings for contempt. Relative to the Allemannia bank, Mr. Temple said in his testimony: "Before the receiver took possession of this bank, the bank examiner ascertained at the time of its suspension that they had outstanding in rediscounted paper, $244,103.88, which did not appear in their books as rediscounted paper, which fact was misleading, as the paper had not matured yet, and they are holding the Allemannia as indorsers." "While I was in the receiver's office some of that paper came in and I examined the indorsement on it and found that the paper was without "without recourse" indorsement. it was blank indorsement and it was signed not only by the cashier, but also by Albert Scheffer as president. This re-discount account was opened on ledger folio 578 and ordered open by the bank examiner after the bank had closed. No ledger statement of this bank since Jan. 27, 1894, disclosed any rediscount account. The Anchor Investment company account was credited and rediscount account charged for the amount that then, Jan. 26, 1894, appeared in rediscount account. They credited the Anchor Investment company account $64,603.67 in two entries and closed their rediscount account by debiting it with the same amount. "I asked Mr. Bunker if there had in his experience as agent for the receiver come to the surface any straw paper. He said: 'No, I believe it is all honest paper; nothing of that kind can be brought against the Allemannia.'" Later in the investigation Mr. Temple called attention to the fact that the Allemannia bank had appointed no discount committee for the years 1895 and 1896. Mr. Scheffer had assured him that they had such a committee, but no official record of meetings; that as a matter of fact they had made no new loans at all. Taking up this statement he pointed out that on Jan. 1, 1896, the balance of their bil's discounted accounts stood $392,622.69, while a year later the same item read $425,610.66, disclosing an increase in loans in this account of over $32,000. He next examined the bills receivable account, and ascertained that the balance on that account Jan. 1, 1896, was $193,872.93. The balance a year later, or rather Jan. 4, 1897, the date of suspension, adding to the balance shown by the ledger the amount shown by the bank examiner's statement to have been rediscounted, discloses the balance to have been $453,913.04, an increase during the year of over $250,000, with no reguiar discount committee. Mr. Temple declared, that the Allemannia failed, in his opinion, first, because of the lack of attention to details on the part of the directors, especially shown by the fact that they had held no meeting for over a year, and from some of the loans made he would say second, that it suffered from weak and inexperienced management. Said he: "There have certainly been a number of statements made to the bank examiner which have been very misleading to him, and to the general public." # WASHINGTON BANK. The failure of the Washington bank, as the testimony of Judge Uelend, the receiver, shows, was one of the worst that can be imagined. The causes of the failure are set out under several heads. The first of these is that the bank had no actual capital at the time it was pretended to be organized. The testimony of Mr. Temple, the special examiner who made the examination of the Washington bank, showed that this bank had started in with the affairs, business and assets of the bank of Haugen, Johnson & Co. on Wednesday, April 27, 1893. Mr. Temple said: "It appears that this Haugen, Johnson & Co. were conducting a bank, which, from evidence found in other parts of their record book, discloses to have been under the name of the Washington Bank of Minneapolis, and at the first meeting of the directors, April 27, 1893, Messrs. Brecke, Finseth and Reese were elected a committee to look into the condition of the bank of Haugen, Johnson & Co., examine its assets and report to the board. This committee was supposed to have gone to work immediately, and at a meeting of the board of directors May 4, Mr. Brecke reported that the committee had passed on the quality of the paper and had no remarks to make. How the bank came to be organized is thus shown by a report of the directors. To the Board of Directors of the Washington Bank: We submit the following as a correct statement of the condition of the Washington bank at the close of business May 3. (Then follows a condensed statement of the condition of the banking house of Haugen, Johnson & Co.) The bank statement is to the best of our knowledge correct. We can further state to the board that we looked over all bills receivable and did not find any notes, in our judgment, objectionable. (Signed) -0. E. Brecke, -C. M. Reese, -A. K. Finseth. The report was accepted and ordered spread on the minutes of the board and the committee discharged. "This, gentlemen," said Mr. Temple, "Is the organization of the Washington Bank of Minneapolis. It would appear that from their general balance book that they did continue in business on May 3, 1893, with the exact statement found condensed in this report, Haugen, Johnson & Co's bank was capitalized for $85,000, and it will be observed that the Washington County bank merely absorbed the assets of Haugen, Johnson Co., and really did absorb them without any action of the board of directors until July 3, 1893. They did business from May 3 until July 14 as the Washington bank with Haugen, Johnson & Co.'s liabilities." This gives a fair idea of the way the Washington was brought into existence, and it is the opinion of most of the committee that the assets at that time were really not worth a quarter of their face value. The books further show that as money was paid into the bank it was used by the officers to square their old debts so that at no time was the bank in a solvent condition.