11832. Bank of Leicester (Leicester, NC)

Bank Information

Episode Type
Suspension → Closure
Bank Type
state
Start Date
November 21, 1930
Location
Leicester, North Carolina (35.655, -82.696)

Metadata

Model
gpt-5-mini
Short Digest
fbbb5396

Response Measures

None

Description

The Bank of Leicester is listed among several western North Carolina banks that did not open on Nov. 20–21, 1930 and was taken into liquidation. Causes cited in articles are collapse of inflated local real-estate values and ensuing hysteria/withdrawals after the failure of the Central Bank & Trust (Asheville). Audits and appointment of liquidating/receivership agents are described in December reports; a reopening was explicitly discounted and liquidation planned.

Events (3)
1. November 21, 1930 Suspension
Cause
Local Shock
Cause Details
Closed in the wake of the collapse of an inflated local real-estate boom and ensuing hysteria/withdrawals triggered by the failure of the Central Bank & Trust (Asheville).
Newspaper Excerpt
the closing of the ... Bank Leicester, Buncombe County
Source
newspapers
2. December 2, 1930 Receivership
Newspaper Excerpt
WILL ASSESS STOCKHOLDERS OF FIVE BANKS ... Stockholders of the ... Bank of Leicester ... will be assessed ... The audit of the Bank of Leicester will be completed next week. ... It will be liquidated in the same manner prescribed for other closed banks of this section. (Dec. 2 and Dec. 12 articles).
Source
newspapers
3. December 12, 1930 Other
Newspaper Excerpt
The rumor that the Bank of Leicester will reopen was discounted in official circles today. It will be liquidated in the same manner prescribed for other closed banks of this section. The audit of the Bank of Leicester will be completed next week.
Source
newspapers

Newspaper Articles (7)
1. November 21, 1930 Evening Star Washington, DC
Article from Evening Star, November 21, 1930

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WARRANT FOLLOWS FALSE BANK RUMOR AS LOUISVILLE, KY. (Continued From First Page.) voted unanimously to continue, whether salaries are paid or not, pending the clearing up of the present difficulties An armored truck with $1,000,000 in cash arrived here late yesterday from the Charlotte branch of the Federal Reserve Bank of Richmond, for the Wachovia Bank & Trust Co. Officials reported deposits in this bank yesterday practically equaled withdrawals. Officials of the National Bank of Commerce, another of the city's large financial institutions, said the bank gained in deposits yesterday. Banks besides the Central Trust Co. to close yesterday were the BiltmoreOteen Bank, at Biltmore, Asheville suburb; the First Bank & Trust Co., the Citizens' National Bank and the American Bank & Trust Co., all of Hendersonville; the Bank of Lowell, at Lowell, the Clay County Bank of Hayesvile, and the Bank of Leicester, Buncombe County. Total deposits tied up by the closings is more than $24,000,000. A statement issued by the directors of the Central Bank & Trust Co. said they had decided at a meting early yesterday not to open the bank and to turn the institution over to the State Banking Department for liquidation. Blames Land Boom. While the directors' statement gave no reason for the bank's failure, John Mitchell, chief State bank examiner in a statement at Raleigh attributed it to "collapse of a highly inflated plane of real estate values." He said: "Immediately preceding the collapse of the Florida real estate boom, a large number of high-powered real estate operators transferred their activities from Florida, concentrating largely in Asheville and Hendersonville. The result of their activities was to produce a highly inflated plane of real estate values. The resulting collapse in real estate, as well as other values, made it impossible for the failed banks to liquidate their receivables in sufficient volume to meet demands of depositors. "This situation is purely a local one and does not in any way reflect conditions in the State generally and should cause no uneasiness concerning the selvency of other banks within the State." SIX INDIANA BANKS FAIL.

2. November 21, 1930 The News and Observer Raleigh, NC
Article from The News and Observer, November 21, 1930

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BANKS CLOSE DOORS IN WESTERN TYING UP O'VER 22 MILLION DOLLARS Convicted Bankers Will Not Be Given Clemency Governor Also Includes Public Officials and Those Who Breach Judiciary Relations in Public Statement; Has Received Many Requests and Denied Them All Persons imprisoned for violation the banking laws, positions public trusts and breeches fiduciary relations need not apply for executive elemency unless there health of the prisoner in jeopardy, according served yesterday by Governor Gardner. The Governor's public ment based urgent appeals that have been made to him for clemfor some ten prisoners confined the State Prison far have made their pleas But although based on cases that occurred the past rather than anticipation anything that might happen North Carolina the future, statement followed receipt the news fresh bank Western North Carolina. time when public fidence sorely needed and this will do its power that confidence." declared Gardner statement, think that the should know that there will be pardoning paroling those convicted betraying trust under extraordinary circumstances. Governor Gardner's statement fol. lows full: "There has developed in recent many petitions from strong source applying for for prisoners confined the State's for violation the banking positions pubtrust, and for breaches fiduWhile there uniformity punishjudge his view the law and the also that most difficult down hard and uniform when stand merit, do this the public that will be the policy of this fice not interfere with the tences the courts in the of cases, there delevoped evidence the health the prisoner gravely by further Prisoners character mentioned, differing from ordinary criminals, (Please Turn to Eight) Closing of Six Banks Linked With Failure of Central Bank and Trust Comof Asheville pany CRASH LARGEST IN FINANCIAL HISTORY OF THE STATE Asheville Bank Was Fourth Largest in State; Three Banks Close in Hendersonville Leaving Town Without Banking Facilities; Other Asheville Banks Withstand Runs; Chief Examiner Mitchell Leaves For Asheville; Blames Crash Estate Boom Aftermath; City of Asheville and Counof Buncombe Were Largest Depositors in Closed Central Bank, Which Was Most Important Financial Western Carolina; Few State Funds in Banks and All Amply cured Eight North Carolina banks with deposit liabilities of $22,270,601 yesterday. All the banks located the the State, and cept the Bank Lowell, small bank County textile munity, the centered about crash the Central Bank and Trust Asheville, fourth largest bank the State and single bank. deposit liability the bank the largest history the State. Chief State Bank Examiner John Mitchell and Corporation CommisAttorney Bailey left for night. frankly feared banking circles other failures the far western would follow yesterday's closings, but Examiner Mitchell issued ment which he termed the situation "purely local" and reflecting conditions in the State generally, Wallace Davis was President the Central Bank, and Chas. Bradford, esahire. Seven the banks closing yester. day were State banks, running the total for the Others Withstand Runs. While largest failure took place Asheville, the other banks withstood runs. nate, and night was without banking three its banks closed. The First Bank and Trust Company failed its doors yesterday American Bank and Trust Company only minutes, and after hours the Citizens tional Bank, the only national bank suspend closed its doors the face the banks totalled the last call date, 24. by the directors of Central Bank Trust Company not few minutes yesterday morning. The bank had subjected heavy several days. The State fied by telephone take charge for liquidation. Others Close. Shortly thereafter banking department notified of the clos. the bank, and three Hendersonville banks. Later requested to send agents take charge of the Bank Leicester, Buncombe County, the Clay County Bank Hayesville. The cashier of the Clay County Bank reported grim humor. "Central closing closes Send wired the banking department. Attached the gram Thanksgiving seal, used by the telegraph company messages. Then came the news the failure the Bank Lowell, its closthe far western officials blaming failure of deposits of the Lowell yarn small bank, deposits. Cause Failure. Banking officials clined link Central with the house Cald. although current Asheville that Caldwell interests preparing refinance Mitchell laid the fail. from boom quent estate curity which imposdemands Central bank favorite for county months million dollars Park funds raised State were withdrawn. Large Public Funds. On reported had deposit 216,674 the city $2,445,975; and Board 177. These amounts (Please Turn

3. November 21, 1930 News and Record Greensboro, NC
Article from News and Record, November 21, 1930

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Real Estate Inflation Held Responsible For Failures (Continued From Page One) Raleigh and asked bankers called deposits practhat be given to the state of the wholly local of this not in the least affailure. banking and disastrous slight fect which is to the deposits durand the went with both this it served. it of nothBank the vanished in the least ing except could not be converted wind that de- into liquid assets. meet all this the culty tically equalling the withdrawals. National Bank of The another of the city's large financial withonly and gained in drawals day. Officials ing the and the Wachovia bank were not Trust company alarmed and announced that ample were on hand to funds mands. North CaroReports from western of the smaller indicated that all lina outside of Hayesville, were Flat Rock trouble in with no apparent steady were However, preparations sight. heavy made in many by any chance demands should they develop. OF REAL ESTATE PRINCIPAL CAUSE VALUES IS Raleigh, closing of the of the primary Central Bank and Trust North Asheville, and other today was named by Carolina banks John Mitchell, state examiner, of real estate values as the collapse from "highly inthe section flated plane. he said: "The In the statement the Central unfortunate closing of Asheville, and Trust has resulted in N. this closing of the following the First Bank Trust American Bank and BiltmoreTrust Co., Oteen bank, latter bank was closely affiliated with the the Asheville institution. Citizens National bank not member The Bank of the state Lowell also later in the day hys"In order that of the public may teria on the part feels not the that It should call attention to the and primary Central Bank and the failure of the Trust company of Asheville. preceding the colthe Florida real estate lapse of real number of transferred their estate operators activities from Asheville and Hendersonlargely in their activities The result of ville. highly inflated was produce plane of real estate values. collapse in real "The resulting as well other failed banks to for the their receivables liquidate meet demands of devolume to situation is purely local one reflect conand does not in any generally and the state uneasiness concerncause no of other banks withing the solvency September the date the last call report the North Carolina state of banks held cash reserve of $55.secondary reserve conand marketable securities sisting of Which the amount the strength of the financial institutions.' Mr. Mitchell late today been notified of closing of two he had western North additional banks Carolina, bringing the total number that during the day closed in to eight. two to close were the The last Clay County and the Bank Leiscester, The statement of the Clay county. bank, of 24. County showed resources of capital As of the deposits date, the Bank of Leicester listed of capital 820.000 and of $165,000. The state bank records as the Clay County bank, and G. H. Haigler, cashier: Davis, president of the Bank of Leiscester, and L. cashier. The closing of these two banks fol. lowed the closing of six others in and Mr. Mitchell announced he was tonight for Asheville to direct the activities of his department in with the bank close up. OF BANKS WAS FEARED BY STATE OFFICIALS News Bureau Telegraph Raleigh, Nov. Carolina's biggest the Central Bank and Trust of Ashewent down today, and sectional for all the that has wrought, Chief Bank Examiner John Mitchell said this after noon in giving list of the banks went down with The collapse had been feared and state officials touch with the all the week. Bank always difficult to run down had for even Everybody had feared the Asheville situation was the rutgrowth of People sense themselves unable to resist the blandishof the mountain realtor there material real estate in vicinity believed that the depositors will get their The department here naturally bad very little detailed information today. Big OTHERS GO DOWN WITH to AND TRUST Asheville, Nov. Central Bank and Trust financial institution in this largest immediate section, failed to open for business today and noon five other North Carolina banks had western closed their doors. Other banks closing were the Biltbank including its more-Osteen branch Osteen veterans hospital; the First Bank and Trust the American Bank and Trust the Citizens National bank, Hendersonville, the Bank of Lowell. John bank notified of the Central Bank and Trust company's failure to open and expected to send an here immediately to take charge of statement out by the board said the bank was closed directors in anticipation of heavy run. "This action," the statement said, solely to conserve the the depositors and only interests apparent such step was During the past few the bank has been forced days withstand heavy withdrawals funds. Wallace R. Davis civic leader. of the bank. He was president his home this but ported W. could not of the board of chairman refused amplify the givby the directors. en the door of the notice posted on First Bank and Trust company, Henthe institution had dersonville, the hands of the placed department for liquidaIt capitalized at was 000. Had surplus of $204,261 and to its deposits last statement of condition. Heavy runs developed in the morning on the American Bank and and the Citizens NaTrust bank Hendersonville and tional they closed. The American Bank and Trust company. smallest the three banks, $111,638. The Citihad deposits of National capitalized at had of $150,000 and desurplus posits $1,077,397 Bank of Biltmore-Oteen was capitalized $25,000 profits deposits of in its main and office at Biltmore and branch Oteen. The closing of the three banks Hendersonville left that city of approximately residents without banking Other banks Asheville said this that they had experienced some but were in condition to meet any demands their depositors might make of them. CONFIDENCE IN BANKERS mass meeting of Brevard citizens late day adopted vote of confidence officers and directors of the Bank of to be the oldest banking institution in western North Carolina. committee of 100 and volunteered active workers in movement to allay any apprehension that might be created as an aftermath of the failures

4. November 22, 1930 News and Record Greensboro, NC
Article from News and Record, November 22, 1930

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Hysteria Is Given As Cause Of Failure of Eight Banks John Mitchell, Chief Bank Examiner, Says Conditions, Causing Closing of Other Three Were Purely Local-Schools to Continue. of eight of the 11 banking institutions that have closed since the Central Bank and Trust company did not open its doors Thursday, was due to hysteria, John Mitchell, chief state bank examiner said tonight after careful survey of the situation in western North Carolina today. The which brought about the failure of the three is purely local and was the result of in the wake of deflated real estate values. coupled with the general business current throughout the country, he said. Both city and county arrangements to meet all payrolls and interest on notes due December 1, and the decision of the operation of city and county schools is being left open. Meanwhile the schools will carry on it is believed that arrangements the of all educational work will be made. City and county officials have announced that while strictest economy will be maintained. there will be no cutting off of employes or salary slashes for the immediate present. The National bank in Asheville, which yesterday, did not open its banks in Waynesville, City closed. Other financial institutions in Asheville received support today the that deposits exceeded in almost every instance The state bank officials arrived today ferred with D. M. Darden and B. R. Roberts, examiners, who the group went to City and Hayesville to take charge of institutions in that which had closed result of withdrawals. Two others Flat Rock to check up the closed that group while others visited the Bank of Leicester. BUSINESS AT HENDERSONVILLE IS VIRTUALLY AT STANDSTILL Nov., was at standstill here as the city of Henof ing facilities, but civic leaders expressed that the community's will be worked out within short time All three of the banks in Henderclosed yesterday morning. The First Bank and Trust company closed yesterday morning at the hour. The American and Trust company opened for minutes closed to protect depositors. The Citizens National bank was open until o'clock when run became eminent its doors were E. W. Ewbank, president of the Citizens National bank today said that the was in hand in the machinery was under way to provide relief from the that has quieted "I'm not position yet to give out Mr. Ewbank said, can say that machinery is on here our While was little business achere were optimistic and there was no hysteria or undue excitement. CUNNINGHAM NAMED RECEIVER FOR AMERICAN NATIONAL BANK Nov. today appointed receiver for the National bank Comptroller the Currency He will Mr. Cunningham with the comptroller's office. THREE BANKS CLOSE at THEIR DOORS IN TENNESSEE. for Nov. Three banks Tennessee failed bringing to seven the banks withfew as the while First State Bank Trust pany, at whose last resources of than The Peoples' of Lenoir with resources 000, and Bank Trust company, Nashville, were other banks to

5. December 2, 1930 The Asheville Times Asheville, NC
Article from The Asheville Times, December 2, 1930

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WILL ASSESS STOCKHOLDERS OF FIVE BANKS Total of $1,300,000 Will Be Filed as Liens Against Them. DECIDED ON STOCK VALUE Formal Action Will Not Be Taken for 30 Days, Says Mitchell. Stockholders of the Central Bank Trust BiltmoreOteen bank, the American National Bank, the Leicester the Bank of Black Mountain, combe assessed this sum to be used for benefit of depositors the five was indicated in of. ficial Tuesday Each whether an amount equal to the par value of his the federal and state banking laws. The assessments against the stockholders cannot the courts before period of days after the date suspension has Certain Step Neither ment the for the National bank was to give any definite information willing on the question of stock assessments. In distance telephone with John H. chief state banking Times was informed would done elapsed. on this matter until 30 days has such step virtually certain taken by the agent. The will be docketed in superior court, and they will have the standing regular such law does not judg- give bank priority any judgment or lien filed the Can Call On Stockholders satisfy cannot the sufficient property assessment, he call upon the stockholders record two months previous the bank's attorneys said today. If the liquidating agent able to the for the banks. $1,300,000 will realized the benefit of the de(Continued on Page

6. December 2, 1930 The Asheville Times Asheville, NC
Article from The Asheville Times, December 2, 1930

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WILL ASSESS STOCKHOLDERS OF FIVE BANKS tate Page from divided as With only one exception. the bank positors. not funds Central Bank and Trust company the of 10,000 shares at was with the Central This one inbank at Biltmore vestment. only 100 and at the request of Bank Leicester at Leicester, $25. vidual interested in 000. trust. American National bank. at Asheof Black Mountain. the Bank and Trust company, at Black Mountain. $25.000. To Follow Same Plan The same method will followed in the liquidation of the suspended banks at Hendersonville and other sections of North Carolina. was by John Mitchell, chief state that G. Henson, the state banking will be the liquidating agent for Central Bank and Trust company Similar duty for the closed AmerNational Bank will be by B. who was receiver by the Compof the Currency Pole. Mr. with the federal banking department Mr. Henson will arrive here as soon the auditors, Dixon, Russ and Carter of Raleigh. have their preliminary Well Known Here The liquidating agent well known Asheyille and western North Carolina. He is native and was associated with banks and Waynesville before the state banking department four or five years ago. Liquidating agents for the BiltBank of Leicester. Bank of Black Mountain and other suspended banks this section have not been Mitchell advised The Times. He unable say when would be named The task of auditing the financial records the trust department of the Central and Trust will begin week, probably Wed- In Charge of Russ This will charge of W. M. Raleigh, similar the Raleigh and Trust after Officials of the declared Tuesday that the assets the the were segregated from banking funds were in stocks bonds of Carolina Light company and was explained. Only small deposited the fact. the officials that the trust department was the of the bank's suspension. Had Deposit Boxes The trust department maintained its own deposit boxes and kept from the The said that trusts to any great by the bank's Where the cash in particular trust was the was dethe In where the was large, the money was bonds and first mortgage real estate notes All the provisions the reg. ulating were followed and every to the trusts, It was said. Will Be Transferred As the audit of the department completed. steps be taken for the transfer the trusts to another bank. most instances, the Wachovia Bank and Trust company and the National will be appointed as agents Ten employes have been added the Wachovia Bank Trust pany and the National Bank of Comcare for increased business M. Yost W. added as the Wachovia bank, while the following were ployed the and clerical departments: Williamson, Toney Frank Miss Ruth Brown and Lucile Fitzger ald. All were formerly connected the and Trust company The National Bank Commerce added C. Camp. and Charles Chapman. formerly of the American National Bank, and Miss Agathea formerly associated with the street branch

7. December 12, 1930 The Asheville Times Asheville, NC
Article from The Asheville Times, December 12, 1930

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Will Play to Aid Unemployed committee be appointed to draft bill covering the necessary details. 2. was made business circles that the legislature point liquidating commission handle all the deposit held securities by the city and This it was pointed out, would save the and would provide some definite plan for liquidating more than 000,000 of deeds trusts and real estate bonds held by the two governments. Legislators to Confer 3. A conference will be held by the three Buncombe county legislators in the near future to arrive at some definite decision the on plan of government for Asheville and Buncombe county Representative-elect Howell favors city manager and county manager, while Benator-elect Bernard will support any legislation that will give the people "representative form government.' he announced. There some question whether the members the proposed city council should be named in the bill or elected by the people at the regular municipal election in April and May. This one of the problems to be threshed out, it was explained. 4. The audit of the Bank of Leicester will be completed next week. Jack Rogers, of sometime Statesville, has charge of this work The rumor that the Bank of Leicester will reopen was discounted in official circles today. It will be liquidated in the same manner prescribed for other closed banks of this Another two weeks #ill be required to finish the audit of the Biltmore bank. The auditors hope to file the audit with the state banking department before January 7. Final details incident the transfer the department of the bank to Adams Tisdale company Inc., were completed yesterday afternoon. Steps Against Lea 8. counsel to the conferred with the city Thursday afternoon and urged them to proceed against Luke Les and other Tennessee individuals and cor: porations for collection notes held by the city as securities for deposits in the closed Central takes The city on I/We properties and which have been guarateed by the Nashville publisher 9. B. Cunningham. receiver for the closed American National Bank. is engaged in preliminary examinations of the financial records, but is work has not progressed far enough for definite announcement concerning the liquidation. Reidaville, N. C., who was arrested on charges that he participated in the recent revolutionary attempt. Smith and another American flier, Edward O. De LARM. were arrested together, but De Larm escaped and made his way to Buenos Aires in 500-mile trip=during which he ondured considerable hardship. Smith was De Larm's mechanic He spent brief time in prison but was released under ball last month with court recommendation that he be acquitted. Friday's declaion by the appellate court gives him his comThe Scandinavian languages are Swedish, Norwegian and Danish.