United States Trust Company (New York, NY)

Episode Information

Episode UID
1018471367
Episode Type
Run โ†’ Suspension โ†’ Closure
Bank Type
trust
Bank ID
101847 routing
Routing Number
1-0184
Start Date
November 21, 1913
Location
New York, New York (40.714, -74.006)

Metadata

Model
gemini-3-flash-preview (chosen from majority vote of a three-model LLM ensemble)
Short Digest
4f8922aa79df8bce

Response Measures

None

Description

The bank was located in Washington, DC, not New York City as provided in the prompt; the articles are from New York papers but describe a Washington institution. The bank was absorbed by the Munsey Trust Company following a run.

Events (3)
1. November 21, 1913 Other
Newspaper Excerpt
the Munsey Trust Company had acquired the assets and deposits of the United States Trust Company, guaranteeing to return to the stockholders anything left after paying off the depositors.
Source
newspapers
2. November 21, 1913 Run
Cause
Bank Specific Adverse Info
Cause Details
Internal findings by bank examiners and the Acting Controller of the Currency regarding the bank's condition became known to depositors.
Measures
The bank sought assistance from the Treasury Department and local Clearing House banks, eventually agreeing to a takeover.
Newspaper Excerpt
The condition of the institution had come to the knowledge of its depositors on November 21 to an extent which resulted in a run on the bank
Source
newspapers
3. November 21, 1913 Suspension
Cause
Bank Specific Adverse Info
Cause Details
The bank was unable to meet the run and was forced into a merger/liquidation under Treasury pressure.
Newspaper Excerpt
it was announced by Stuart Olivier, on behalf of Mr. Munsey, that the Munsey Trust Company had acquired the assets and deposits of the United States Trust Company
Source
newspapers

Newspaper Articles (7)
1. July 23, 1913 The Washington Herald Washington, DC
Article from The Washington Herald, July 23, 1913

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Article Text

# IT'S ALL OVER # IN GAS MARKET Forty-Five Shares Cover Tuesday's Transactions at 891/2 to 90. # NEW YORK MARKET FIRM But Little Net Result So Far as Price Changes Are Concerned. Gossip. By I. A. FLEMING. It is either all over or appearances are more deceitful than usual. The road to 100 is rocky; it will be months, probably before Gas reaches the record of last Thursday, 95 bid, for the 98 bid is not a record, there being no sales at that figure. If the buyers wanted to bring out stock they certainly took the way to get it and had they thought wise to go on to the 95, again either Monday or yesterday they would have been swamped. Yesterday's transactions were 45 shares, 20 at 89 1-2 and 25 cash at 90. Mid-summer dullness reigned supreme on the exchange. Before the tap of the bell closing the session, a number of heretofore active traders were engaged in an elaborate discussion of the price of memberships on the New York exchange in the years that have been gathered to their fathers. Many prominent operators were absent and others are going. The chief broker in Gas for some time was interested in Capital Traction and the whole market presented a tired appearance-just as tired as Gas did. Railway preferred sold in a desultory manner at $75-8 with the old 891-4 for the common. Capital Traction was the active leader if transactions of 65 shares entitles a market to be called active. There was a very fair demand for bonds, much better than for weeks past. Railway 4s rose to 82 3-4a82 7-8, Traction 5s, 109, and Gas 5s, 107a1071-4. Nuts for E. Quincy Sith. E. Quincy Smith, formerly president of the Union Savings Bank of this city, who went to New York a year and half ago to become president of the United States and Mexican Trust Company, has resigned from the Trust Company to become the president of the Florida Pecan Endowment Company. The United States and Mexican Trust Company was organized eight or ten years ago mainly for the purpose of forming a fiscal agency for the Kansas City, Mexico and Oriental Railway, and when the railway went into a receivership the future of the auxiliary company also became problematical. The Trust Company went into liquidation a month or more ago, Mr. Smith: purchasing the major part of its interest in the Pecan Company; the company operating a plantation of some five thousand acres of nut groves at Tallahassee, Fla., which was one of the Trust Company's sub-corporations. The Pecan Company will retain ita present quarters on the twenty-sixti floor of the Singer Building, New York. Wall Street Firm. Wall Street markets gave a fairly good account of themselves, but the net changes of the day were by no means important, nor was the volume of activity equal to that of Monday. The opening was strong and the closing firm, but in the interim there was a weak spell, with a drop of about 5-8 on the average. The final recovery brought the market back to an even keel, to a slightly lower general range, but the losses were decidedly unimportant. Market slows down easier for the reason that the large covering of shorts has reduced the line, and there is less backing up of the strong tone, while it is but natural that there should be some profit-taking. Europe was a moderate buyer, and the feeling on the street was favorable to an early settlement of the European troubles. Most of the business was in the three leaders-Steel, Reading, and Union Pacific. Copper also attracted considerable attention and held its own. The Union Pacific directors are preparing a circular giving the price at which subscriptions will be received for Southern Pacific stock and the terms of settlement. At the same time it is expected that an announcement will be made as to the formation of an underwriting syndicate to take the stock unsubscribed for. Mr. Mellen's successor has not been selected as yet, but will be in the immediate future. New Haven financing was an important factor in the market, and helped to check an advance. Convertible 6s declined 31-2 points, the stock 27-8 on small sales. California Petroleum was weak, and Mexican Petroleum declined 1-2 point. B. & 0. Bonds. It was said yesterday that the Baltimore and Ohio Railroad had sold in New York $2,700,000 of its first mortgage 4s, dated July 1, 1898, and due July 1, 1948, redeemable after July 1, 1923, at 105 and interest. The bonds were being offered in New York by Harris, Forbes & Co., Clark, Dodge & Co., and White, Weld & Co., at 89, to yield 45-8 per cent, and some of the local houses were handling them. The Baltimore and Ohio has authority to issue $165,000,000 of these bonds and has issued $80,000,000. The appearance of the bond on the market was regarded as a proof of the reports which have been current for a week or more to the effect that there was a better inquiry for long-term bonds than there had been-an indication of the relieving of the dull condition which has existed in the bond market for some time. Apparently, the Baltimore and Ohio had done nothing with the $10,000,000 equipment trusts, to run ten years, redeemable at the rate of $1,000,000 a year, the authority to issue which it secured from the Public Service Commission of Maryland several weeks ago. Nor has the Seaboard Air Line taken any action regarding the $2,-450,000 which it was expected to bring out. Dividend Declared. The Equitable Life Insurance Company has declared the regular semi-annual dividend of 3 per cent, to be paid August 1. Mexican Petroleum. Mexican Petroleum Company is reported to be in a flourishing condition and has been unaffected by disturbances in Mexico. Three of the large tank steam-ers have been placed in service, and with two barges the company now has an aggregate carrying capacity of about 175,-000 barrels. Capacity will soon be increased to nearly 300,000 barrels by the addition of new tonnage. Although the building of more steamers and barges may be undertaken next year, the likely plan will be to hold new construction in abeyance pending arrangements which are being made by certain marketing concerns, including Standard Oil Company and Magnolia Petroleum Company, to take care of larger quantities of oil in the Mexican fields. Mexican Petroleum will use its own tankers in the

2. December 3, 1913 New-York Tribune New York, NY
Article from New-York Tribune, December 3, 1913

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Overruled by Williams. On the following forenoon, at a meeting of the representatives of the United States Trust Company in his office, Assistant Secretary Williams, according to the story, severely criticised the bank examiner overruled the decision of the acting Controller of the Currency, and intimated to the officials of the threatened bank that he did not consider warranted the findings of the examiner or his superior, the acting Controller. Despite the view entertained by Assistant Secretary Williams, however, those on the inside began quietly to withdraw their deposits, and certain stockholders were believed to be preparing to sell their holdings. The national banks of the district, which did not share the optimistic view entertained by Assistant Secretary Williams, notified their respective brokers that they must neither buy nor sell the stock of the United States Trust Company, thereby checking any efforts which might have been made to unload. The condition of the institution had come to the knowledge of its depositors on November 21 to an extent which resulted in a run on the bank, which continued until the close of business on that day. The eleven members of the Clearing House were still prepared to take steps to I protect the depositors. That evening, however, Frank Munsey appeared in Washington, and at 10 p. m. it was announced by Stuart Olivier, on behalf of Mr. Munsey, that the Munsey Trust Company had acquired the assets and deposits of the United States Trust Company, guaranteeing to return to the stockholders anything left after paying off the depositors.

3. December 5, 1913 New-York Tribune New York, NY
Article from New-York Tribune, December 5, 1913

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Take Issue with Secretary. Those who take issue with Secretary McAdoo's views, as expressed in his official statement, assert that the depositors of the United States Trust Company were never threatened with loss until after the interference of the Treasury Department and after Assistant Secretary Williams's rejection of the report of the Acting Controller of the Currency. In support of this contention, they point out that when the Controller first took up with leading bankers of this city, the condition of the United States Trust Company on Tuesday, November 18, the bankers were prepared to guarantee the depositors against all loss, a step which, in effect, they ultimately took when they agreed to become responsible for the $1,000,000 of Treasury funds deposited with the Munsey Trust Company. The overruling of the acting Controller of the Currency and the delay of action by the Treasury Department until Friday night, these persons contend. at least afforded the larger depositors-those who were more or less familiar with the internal affairs of the United States Trust Company-opportunity to withdraw their deposits, a course which could not fail to prejudice the interests of the smaller depositors, who did not become alarmed until Friday. It is declared by bankers here that only to-day did the Treasury Department, following the publication of The Tribune's second dispatch, attempt to secure from the national banks their guarantee of the $1,000,000 deposited with the Munsey Trust Company. This sum, according to the receipts sent to the various banks for signature, was taken from the "cฮ“op moving" fund of the Treasury. It was secured by the paper taken from the assets of the United States Trust Company before the million dollar deposit was made in the Munsey Trust Company, but the law forbids the deposit of Treasury funds in other than national banks, so that theoretically the sum was deposited with the national banks, which in turn deposited it with the Munsey Trust Company, although in fact there was no such circumlocution about the procedure. Now the Treasury is asking the receipts from the national banks for their several shares of the total sum, and some bankers are understood to have expressed some reluctance to sign them. while others manifest surprise that it was the "crop moving" fund which was utilized for this purpose.

4. December 11, 1913 New-York Tribune New York, NY
Article from New-York Tribune, December 11, 1913

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but would pay nothing for the deposits of the company. This was the offer which was accepted. "My decision to step into the preach rested on an offer from the Treasury Department of a million dollar loan to the United States Trust Company if the Munsey Trust Company effected a purchase of this bank and would guar- antee its depositors against loss," says Mr. Munsey, thus confirming all that has been told in these dispatches of the Treasury Department's making the advance of the million dollars condi- tional upon the directors of the United States Trust Company turning all they possessed over to the Munsey Trust Company. In further affirmation of the part played by the Treasury Department, which in this instance means John Skelton Williams, Mr. Munsey says: "I had not sought the loan from the department or had any negotiations with it concerning the matter." # Stockholders Want to Know. Incidentally, the minority stockhold- ers of the United States Trust Com- pany are demanding a reply to the question, raised by Mr. Munsey's statement: "How was it that the Treasury Department had offered a similar loan to the Continental Trust Company several days before?" ac- cording to Mr. Munsey, as several days before was before the run on the United States Trust Company had started. "If Assistant Secretary Williams's statement that the report of the Con- troller of the Currency was unwar- ranted was true," say the minority stockholders, "why was he trying to dispose of our property several days before Munsey acquired it?" "The proposition of the Treasury Department to make this loan with a view to saving a critical situation was not my affair," says Mr. Munsey, in further emphasis of his irresponsibility in the matter, and he adds: "The proposition which came to me was that the government would make this loan to the United States Trust Company on its securities, and that the money would come through the national banks." Mr. Munsey affirms all that has been said in these dispatches regarding the pledge of a deposit of $500,000 by him, made on his behalf by Stuart Olivier, who appeared as his personal repre- sentative, but says that this deposit was "volunteered" by his representa- tive, a statement at variance with the assertions of those who attended the meeting of bankers at which, they say, it was demanded that Mr. Munsey make this deposit. Mr. Munsey says that "Mr. Flather, of the Riggs National Bank," made the suggestion that this sum be deposited with the American Security and Trust Company, "an affiliated institution of the Riggs National Bank," but he neglects to explain that it was because Mr. Flather was chairman of the Clear- ing House that it fell to him to make the suggestion, and that it was the unanimous opinion of the bankers that the deposit should be made initially in some bank other than Mr. Munsey's own trust company, merely as an evi- dence that it was made. # May Plague Assistant Secretary. "The question as to what I would do, which came up after I had gone to my hotel," says Mr. Munsey, "was entirely foreign to my acceptance of the gov- ernment's proposal and could not be made a part of the transaction," a statement, it is pointed out by the bankers, which may seriously plague the Assistant Secretary of the Treasury when he has to explain his part in the transaction to a Congressional investi- gating committee. Mr. Munsey lays great stress on the fact that the Treasury Department has securities of the United States Trust Company amounting to $1,600,000, but makes no comment on the fear of the bankers that these may be tied up by an injunction sought by any stock- holder of the United States Trust Company, or on the discovery among these securities of the second mortgage notes already referred to in these dis- patches. Mr. Munsey adds that he will be pre- pared to return the government deposit of $1,000,000 whenever it is called for by the Treasury Department, but the bankers intimate that they would be glad of some assurance that he would return it when called for by them be- fore they accept responsibility for it, as otherwise they must await the call of John Skelton Williams and R. Lancas- ter Williams, and meanwhile would be responsible for the amount. Mr. Mun- sey makes no mention of the question of interest on the government deposits. Following the lead of the Secretary of the Treasury, Mr. Munsey, proclaira- ing that he would welcome an investi- gation of the entire transaction where- by he acquired $6,000,000 deposits of the United States Trust Company and $1,000,000 of government funds, asserts

5. December 12, 1913 New-York Tribune New York, NY
Article from New-York Tribune, December 12, 1913

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Trust Company before Mr. Munsey company had made' any formal proposition. Apropos of this proposition, John Skelton Williams declared that "we must have competition, must give the Munsey Trust Company an opportunity to make an offer. Perhaps its offer will be more generous." Then, after Friday's run on the United States Trust Company, according to Mr. Munsey's own statement. he submitted two propositions, as has been related in these dispatches, and his second proposition, although made later and identical with that which had been made by the Continental Trust Company, was accepted, and the bankers assembled during the night and early morning of Saturday were informed that the Munsey Trust Company had acquired the assets and deposits and would guarantee the deposits of the United States Trust Company. "The Treasury Department had made a similar proposal several days before to the Continental Trust Company, and, I think, to at least one other bank," says Mr. Munsey, in his statement of yesterday. Officials of the Continental Trust Company declare that Mr. Munsey is misinforme on this point; that no offer had been made to the Continental Trust Company, but that it had made the offer to the directors of the United States Trust Company and to John Skelton Williams, and that it was never accepted. Much has been made by Secretary McAdoo of a letter signed by an officer of the Continental Trust Company, deploring the agitation in the press and stating something to the effect that the Continental Trust Company had not cared to accept the assets of the United States Trust Company and guarantee its depositors against loss. It is noteworthy that this letter is dated December 8, five days after the Treasury Department had been placed under fire by The Tribune's disclosure of the facts attending the absorption of the United States Trust Company by the Munsey Trust Company. Other officials of the Continental Trust Company declare that this letter misstates the case and intimate that it was written to help John Skelton Williams out of a dilemma and, perhaps, because the writer, who said it was a personal communication, deemed it good business diplomacy to go to the assistance of the man who exercised supervision over the deposits of upward of $90,000,000 of government funds. Seeks to Comfort Williams. Charles A. Douglas, a Washington attorney, who is counsel for the Continental Trust Company, came to the support of John Skelton Williams yesterday with a statement which he said was "unsolicited and simply in the interest of truth," and which is designed to afford comfort to Mr. Williams While it is probable that the categorical assertions in the statement are correct, it conveys an impression wholly at variance with the understanding of high officers of the Continental company, who do not believe that they "stood the slightest chance of acquiring the deposits of the United States Trust

6. December 12, 1913 New-York Tribune New York, NY
Article from New-York Tribune, December 12, 1913

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Williams Rejected Proposition Made by Continental Trust Company. ITS TERMS SIMILAR TO THOSE ACCEPTED Stockholders of United States Concern Asking What Influences Were in Play. [From The Tribune Bureau.] Washington, Dec. 11.-Evidence of a complete usurpation of the powers of the Controller of the Currency by John Skelton Williams, Assistant Secretary of the Treasury, of a reckless disregard of the rights and interests of the United States Trust Company, and of the determination of John Skelton Williams and his brother, R. Lancaster Williams, to procure for the Munsey Trust Company the $6,000,000 deposits of the United States Trust Company continues to multiply. Every effort of the Treasury officials to avert a Congressional investigation and each new statement of Frank A. Munsey simply add fuel to the flames. Mr. Munsey's latest statement has aroused so much indignation among the bankers that it has opened up a new and important avenue of information. Nathan Bay Scott, president of the Continental Trust Company, formerly a United States Senator and until two years ago president of the United States Trust Company, after repeated urging by the directors of that company agreed at 11 a. m. on Friday, November 21, the day the run on the United States Trust Company started, to accept the presidency of the institution. He made arrangements to bring from another city $500,000 in cash, for which he furnished securities from his own private estate as collateral, with which to tide over the difficulties of the United States Trust Company and to save from all loss not only the depositors but the stockholders. Ex-Senator Scott had been reluctant to assume this heavy responsibility, but finally consented to do SO solely to protect the depositors, and on the representation that by so doing he could avert the failure of the institution. But influences which Mr. Scott cannot identify prevented the acceptance of his offer, and ten hours later the deposits and assets of the institution were turned over to the Munsey Trust Company.

7. February 24, 1918 New-York Tribune New York, NY
Article from New-York Tribune, February 24, 1918

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John Skelton Williams Offers Some Corrections THE following letter from the Controller of the Currency has just been received by The Review: "Sir: It is not pleasant to ask correction of newspaper articles, but I can see no reason why a man should be expected to submit silently and continuously to untrue assertions concerning himself apparently intended to injure him, even if he is an official of the government. "In your issue of the 10th, which has been brought to my attention, is an article referring to my appointment on the staff of the Director General of Railroads, in which occurs the following assertion regarding me: "In 1913, while he was Assistant Secretary of the Treasury, he was connected with the absorption by the Munsey Trust Company of the United States Trust Company.' "This is misleading and flatly untrue, and is contradicted directly by the record and the easily obtainable facts. I was not 'connected with the absorption by the Munsey Trust Company of the United States Trust Company' in any way; I had no personal interest of any kind, near or remote, in either company, and was not a party to the negotiations between those companies. "The same article says, further, again alluding to me: 'It was charged that he placed a million dollars of public funds at the disposal of the Munsey Trust Company, of which his brother was a director, to assist that institution to meet a possible run following the announcement that it had taken over the United States Trust Company.' "Thi is so misleading and is a perversion of the facts so gross and ingenious as strongly to suggest malicious intent by. The Tribune's informant. There had been no suggestion of a run on the Munsey Trust Com. pany, but a run on the United States Trust Company had already begun, and threatened disaster to many and a panic. The Munsey Trust Company, on which there had been no run, or suggestion of run, went to the rescue of the United States Trust Company, and thereby stopped the panic. "Under the law neither I nor any other official of the government had authority to deposit a dollar of public funds in any trust company. The Secretary of the Treasury re. lieved a tense and dangerous situation and averted strain upon the other banks of the city by depositing a million dollars in eleven rational banks here, the government being secured by the deposit with the Treasury Department of ample collateral. These banks thereupon deposited a like amount of money with the Munsey Trust Company, enabling it to take over the United States Trust Company without cramping themselves. Confldence was restored immediately. The more than 40,000 depositors of the United States Trust Company were paid in full. "The Munsey Trust Company, of which my brother was a director, had no connection with the United States Trust Company, but stepped in to save it after a run on it had begun and much anxiety had been caused among bankers and business men here and elsewhere. The Secretary of the Treasury, before the Munsey Trust Company acted, had offered to deposit the million dollars with local national banks if some other banking institution here would take over the United States Trust Company so as to guarantee its deposits and other obligations, but the offer was not availed of. JOHN SKELTON WILLIAMS." It is needless, or we hope needless, to add here in our own behalf that no "malicious intent" lurked behind the items of misinformation which unfortunately found their way into The Review's little sketch of Mr. Williams's public career.[[[be Editor.]