157701597 15770
national
5f78276b2bec8142Accommodated withdrawals, Capital injected, Full suspension, Books examined
TOWN TO HAVE 3-WEEK HOLIDAY Iowa- (AP) business holiday of three weeks Muscatine was proclaimed today by Mayor Herman Lord. Directors the First National bank Hershey State banks issued statements the effect that their institutions would remain closed for the duration of the hollThe Muscatine State bank was open usual, however, and ficial the bank said this policy would continue.
Holiday Proclaimed; Two Banks Close First National, Hershey Directors Issue Statement. business holiday of three weeks in Muscatine proclaimthis morning by Mayor Herman Lord, and directors of the First National and Hershey State banks issued statement the effect that their institutions will remain closed for the duration of the holistatement follows: "We, with other banks in the middle west, are confronted with problems over which no has control. Troubles in other cities have aroused state panic people, helped along by insidious and rumors fomented by people who should know better. The result been steady and cometimes withdrawals from There certain evidence that these will not Iowa City, Davenport and other cities show what happened when action was too long delayed. banks vinced that the logical solution problem does not lie payment of certain steady the detrideposits those depositors who remain steadfast. Some depositors have displayed courageto their banks and ous loyalty In their intheir community. have therefore taken terests, we of the holiday deadvantage in order clared by our mayor may have that such depositors to carefully conopportunity plan whereby conof these banks tinued operation may be reported but not conIt firmed this morning that organithe depositors of the two zation work out plan of banks will be attempted within tion few days. Muscatine State Open. statement forthcoming from officials of the Muscatine bank, other than reiteraState (Continued On Page Col.
Agreements Are Offered at Meetings Signatures Sought for Trustee Agreements. A depositors' agreement for dealing with the situation sioned by the "holiday" closing of the First National and Hershey State banks was presented to depositors of the two institutions two meetings this afternoon, after smaller group meetings had been held during the day. Original plans for presentation program to the main body of depositors called for single mass meeting the town theater this afternoon but the crowd that gathered for the event was far too large to be accommodated the theater, and an overflow meeting was held the First Baptist church. meeting smaller group depositors this morning city hall, the trustees each bank stipulated in the agreements which depositors being to the First Henry Otte, Henry and John Diercks. For the Hershey Barry, Arthur Grensing and William Cashman. Briefly. the plan presented the depositors for their acceptance rejection provides the lowing The establishment of trust fund in each bank, to be (Continued on Page Col.
EXTENSION HOLIDAY SOUGHT First National of Muscatine Asks Additional Time. Muscatine, Ia., Feb. tension of one week in the bank holiday which has been in effect here the past three weeks was quested of Mayor Herman Lord to day by committee chosen Friday mass meeting to represent de positors of the First National bank. No extension had been granted Mayor Lord this afternoon, the there possibility that such action might be taken prior Monday. Butler, chairman of the committee, also announced the in definite of meeting of depositors of the First National bank which had been scheduled this afternoon. The meeting be called later, he indicated. Action of the today follows meeting Friday two five bers were chosen to positors both First and Hershey State banks, both which have been closed the three weeks under the bank hollproclamation. In addition to Mr. Butler, who chairman of the committee represent First National depositors, others on the committee are the Rev. W. H. Schwiering, Albert Vetter, Mrs. Vera Shoemaker and Augusta Rumsey. Hershey State Reopens. Regardless the knowledge that the Hershey bank will reopen Monday under management of the state banking department committee to depositors was also the meeting, consisting Albert Vetter, Con nor, Hitchcock, Randall, Kemble. Bruno Mohnsand and the Rev. B. Schwartz sen named members. The meeting at which these mittees named originally hear the report of committee named Monday at mass meeting. Its covered negotiations report bank officials looking toward acceptable plan for reopening the banks. made and the committee was later thanked and relieved of fugeneral discussion of banks, banking law and allied followed. this morning of meeting the chosen to represent Hershey bank depositors, resolu tion five recommendations was follows: This committee We, the undersigned meeting of depositors named at to represent deheld Feb. positors in the Hershey State bank, hereby resolve: recommend to deposisign no agreement that they funds the Herregarding their shey State bank unless said agreeprovides at least per ment cent cash distribution of their funds them within 30 days, and, recommend that, the bank unable the event that this request for such meet tribution, that evidence of such submitted to the deposiability tors' in writing. recommend that the stockholders of said bank immediescrow cash or its ately put equivalent to the 50 per of value of their stock cent the par said fund to said bank, conditioned to provide that said fund only in case of and judgment against liquidation stockholders. recommend that any submitted must treat agreement called funds on the same public basis funds of other depositors. recommend that the above equally all types of deposits. Those present the committee meeting Connor, Jr., Dr. Schwartz, Bruno Hitchcock and Kemble. Mr. Connor made chairman. 100 Attend Meeting. Petitions embodying recommendations contained the resolutions presented to the Hershey State bank depositors for sign this meeting. The meeting was scheduled but was nearly an hour before the session got under At that time between and 125, representing depositors of both banks were attendance. After members the commithad explained of the resolution as adopted by the com mittee, general ensued and was finally decided pace copies of the resolutions on tile for signatures the depositors. This acted on when some depositors backward about signing. Happiness not of much use unless you take partner
Depositors Ask More Favorable Bank Pact (Continued From Page commended to depositors whole for their decision. After several preliminary clashes, with Albert Vetter and Horst of the committee favoring the all and Rev. W. H. Schwiering, chairman, opposing such course, motion by Mr. Horst favoring his stand was lost and later tion, authorizing the course of tion previously outlined, was adopted. Rejected. During the course of the discussion both Mr. and Mr. Horst tendered their tions, neither of which was accepted. Mr. Schwiering also took occasion to criticize The Journal being for the small at the meeting and for using the name First Trust Savings of First National his contention that there no First Trust Savings bank and that state officials supervision without proper authority. The Journal also criticized for giving the notice of the meeting although on the front page four column headline. Schwiering Issues Statement. In statement issued today over his signature chairman of the depositors' committee, Mr. Schwiering reviews the action taken at the meeting Wednesday, notes that small, and asks that depositors notify Mrs. Augusta of the committee, of their stand by Saturday. Although the statement is signby Mr. Schwiering as chairman the and it purports to the as whole, majority of the committee know nothing about it, they said afternoon. Mrs. secretary of the Rumsey, committee, when reached by telephone, that she had attendcommittee meeting since Wednesday was not advised any statement being issued. Bast and E. Horst, other members of the committee, also said they had been notified of no committee meeting and knew nothing of the An effort to reach Albert Vetter, the member of the committee not successful. The Statement. The statement, as presented to Journal, follows: "For depositors of the First National bank of Muscatine, Iowa: duly called meeting of the depositors the First National bank Iowa, the compromise waiver offered by the bank was rejected and motion carried in the national au thorities for an investigation of the affairs of the bank and tc same under national control found "With this proviso that the committee was to negotiwith the officials of the bank and see whether not better agreement was obtainable, such negotiations to be terminated by Saturday at the latest. "Now since at that meeting there was only cross-section of the present, chairman the committee and the positors organization issue this statement, that every depositor has due notice of the proposed action can take action according to his or her individual conviction in the matter and utter either or protest to the committee on or before March by such approval protest to Mrs. Augusta Rumsey, the secretary of the committee. "For myself and the committee wish state that would like to perpetuate the existence of the bank, possible, but feel that the depositors ought not in all justice fairness be called upon either the bank or the state banking of Iowa to bear whole loss of the bank, nor furnish all the money make bank proof. While we would heartily welcome run-proof national bank Muscatine, hold that the bank fairness be called upon to furnish of the assets for such part bank and also to share part of the loss of the trust fund to created. this incorrect we would like to shown such incorrectIf correct would like ness. and demand that our claims be met. "We hold contrary to the claim of the back officials and the state department, that the First tional still exists and has gally out existence gone this writing have any to the contrary. If such exists would preciate to have the proof us for but sented unless done the committee holds that the First National alive and all legally other claims to the contrary withstanding. statement is made for the sole and only of stating purpose and motives that our position have actuated us in our dealings with the bank in the interest of depositors. We have no personal grievances to nurse, charges make or barriers build against amicable settlement. Indeed the latter is our ardent wish but we will not consent to that do not fair and equitable to and alike "Signed Schwiering, "Chairman of the depositors committee. Hershey Group The in question been of the Hershey bank depositors all members of the Hershey positors' committee, the committee making no to the decision depostiors. Three of the five members of the First Trust committee were in sympathy with this same procedure. Ben Summerwill of the state banking department, who was Muscatine today, that state department is in charge of the banks under provisions senate file onl: give the bank and depositors chance reach agreement looking toward the reopening solvent bank and to conserve and protect the banks' assets. Any reached must meet the approval of the state executive and the state banking department, he declared. noting that such would not given on any proposal not providing for safe and sound organized bank. Proposed Agreement, The full text the under which it to submit to of both the First and Savings bank and the Hershey State bank, the depositor the above bank, the unusual economic and business conditions existing generally and the mark. depreciation in the value real estate, live stock grain and and in all other and and property thereby recognizing the consequent inability of borrowers said bank pay their notes said bank under the prevailing economic conditions, and further the great need for recognizing every way that and its borrowgiven time in which may to liquidate said loans in as orderly and just manner poswill thus inure to and will ultimately bring greater cash benefit to the undersigned and to other and to the community, and desiring the continuof said consideration similar signed to be signed various other depositors, hereby agree with said bank, officers, stockholders, their heirs, executors, cessors and assigns, for all posits in said bank that control, including those of any minor children, binding my heirs, executors, and assigns, as follows: allow 50 per cent of on posit in said bank, its and, assigns, with accrued interest thereon to January 1933, any, until the opinion the board directors said bank economic condition sufficiently improves, not later than March 1936, cept that 20 per cent of amount the bank shall made available lows: from day that this agreement has been declared erative by superintendent within ten days, within the next sixty days remaining 1-2 within the next days, hereby assign, transfer and set over the other 50 per cent all such deposits and crued interest thereon, to the trustees named below, in trust, hereby authorize said bank to make said transfer to said trustees of said deposits, to be used trustees, together with similar funds from other deposithe purchase from said bank, without recourse, of an equal amount of active sets, part any asset, now held by said bank, for face value, and real estate other property, cost, less any amounts heretofore charged off thereon, plus earned interest, if any, parts therepurchased to be selected by the board directors said bank as being the least desirable of those now held by said bank, and Until March 1936 as provided it further understood and agreed: That the present stockholders agree that transfer of said deposits said trustees shall not relieve the stockholders from their statutory liability for deposits remaining in said bank; That the present reduced salaries of the officers said bank shall not be increased except consent of the trustees; That all future net earnings of the bank after the deduction of future net losses, shall be paid ansually with ified statement of annual income and expenses of said bank; (4) That no dividend shall be paid to on the stock of this bank. is further understood and agreed: That no charge shall be made the trustees for their services unless meeting of the depositor shall so authorize; (2) That meetings of the depositor beneficiaries may called by any trustee on days written notice, either by ordinary mail, of notice in newspaper, and at such meeting, each depositor present person by written proxy shall titled to one vote for each fraction thereof the trust fund and that all depositor beneficiaries and the shall bound by the vote such and may be removed and vacancies their office filled thereby; (3) That the trustees or their trust shall have represent the power depositor beneficiaries trust, to collect, extend, compromise, sell, pledge, convey, exchange, otherwise deal said trust assets in their for the best terests protection of said positors, and fully, simply and completely said personally the same; That said trustees shall pay, pro depositors net funds hands truscoming tee,s, and often sufficient funds That represent clare that have not and will not said deposits other assign any than herein provided; That with respect deposits remaining said bank, hereby authorize the oficers said bank release additional deposits soon as they deem justified; Christmas club accounts shall not be bound terms of this agreement; That this agreement being of reorganization under tion of Senate File of the the 45th General Assembly and becoming January 23rd, 1933, shall be in effect only after being approved the superintendent of banking by the executive council of the and (9) That this state of agreement shall not and does not affect deposits made by me said bank after the signing this agreement (10) That constitute and appoint by name, and as trustees hereun-
POSSIBILITY OF RECEIVERSHIP FACING DEPOSITORS OF BANKS (Continued from page one) loans at five cents on the dollar. If the banks are going to liquidate in 1936 or sooner they would be better off to liquidate now. Stockholders received bank dividends for years and should be willing to share losses with depositors through stock assessments. The bank executives may not be capable bankers and if so should be retired from the banking business, If a receivership must come, delay will mean possibility of come stockholders relieving themselves of responsibility. Depositors Meet Depositors of the First National Bank meeting in the Muscatine city hall Wednesday afternoon voted to approve a receivership by the bank by Saturday night if the bank does not submit a better proposition than the proposed 'depositor's agreement." Rev. W. H. Schwiering, chairman of the bank's depositors' committee asserted that he would not approve the agreement. "I have fought from the start to avoid a receivership, but if this agreement is the best we can get as an alternative to receivership I favor receivership," Rev. Schwiering declared. The minister added that he be-i lieved the Muscatine Journal was favoring the bankers. He objected to the Journal terming the bank "the First Savings and Trust Bank" in the notice of the meeting stating that he had specifically asked that the bank meeting be called for "First National Bank" depositors. Rev. Schwiering stated he would make the open statement that if depositors wanted the real news of the banking situation they should read the Midwest Free Press. Chairman Explains Explaining the situation, Rev. Schwiering declared: "At a duly called meeting of the Depositors of the First National Bank of Muscatine, Iowa, the compromise waiver offered by the Bank was rejected and a motion carried to call in the national authorities for an investigation of the affairs of the Bank and to close same under national control, if found insolvent with this proviso that the committee was authorized to negotiate with the officials of the Bank and see whether or not a better agreement was obtainable, such negotiations to be terminated by Saturday at the latest. "Now since at that meeting there was only a cross-section of the depositors present, I, as chairman of the committee and the depositors organization issue this statement, SO that every> depositor has due notice of the proposed action and can take action according to his or her individual conviction in the matter and utter either approval or protest to the committee on or before Saturday, March 4, by addressing such approval or protest to Mrs. Augusta Rumsey, the secretary of the committee. "For myself and the committee I wish to state that we would like to perpetuate the existence of the Bank, if possible, but feel that the depositors ought not in all fairness and justice be called upon either by the bank or the state banking commission of Iowa to bear the whole loss of the present condition of the bank, nor to furnish all the money to make the bank run-proof. "While we would heartily welcome a run-proof National Bank in Muscatine, we hold that the stockholders of the bank ought in all fairness be called upon to furnish part of the assets for the run-proof bank and also share part of the loss of the so-called trust fund, to be created. If this position is incorrect we would like to be shown the incorrectness, if correct we would like and demand, that our just claims be met. "We hold, contrary to the claim of the bank officials and the state banking commission, that the First National still exists and has not legally gone out of exist- ence and up to the writing of this statement have never been shown any proof to the contrary; if such proof exists we would appreciate to have the proof presented to us for examination but unless that is done the committee holds that the First National Bank is legally alive and responsible, all other claims to the contrary notwithstanding. "This statement is made for the sole and only purpose of stating our position and the motives that have actuated us in our dealings with the bank in the interest of all depositors; we have no personal grievances to nurse, no charges to make or barriers to build up against an amicable settlement. Indeed the latter is our ardent wish and desire but we will not consent to a settlement, which we do net consider fair and equitable to depositor and stockholder alike." Copies For All When the new agreement was submitted to both committees at a meeting Monday with bank department executives and S. G. Stein, president of the First National and vice president of the Hershey State Bank, members of the Hershey committee agreed, that the banks should mail copies of the agreement to all depositors. The bank officials have stated the agreement will be-mailed to depositors that all will have copies of it by the first of next week. Under the plan approved at the Monday meeting the depositors will be asked to state if they favor signing the agreement or a receivership. J. R. Connor, chairman of the Hershey depositors' committee, after polling members of the committee, said most of the committee members were against holding a depositers' meeting until there had been an expression from depositors on the proposed agreement.
EVERY STATE JOINS IN MOVE TO SAVE BANKS Take Holiday or Impose Restrictions. Wilmington, Del., March 4.—(AP)—Delaware, the last of the nation's 48 states not under some form of banking restriction, declared a bank holiday tonight, effective Monday and continuing "until further notice." Harold W. Horsey, state banking commissioner, said Gov. C. Douglas Buck had directed him to notify all banks in the state as follows: "Not because of anything that has occurred in Delaware, nor any condition existing here, but wholly because of the action of practically all the other states in declaring a bank holiday and the observance thereof by the Federal Reserve bank, this bringing about a temporary suspension of banking business over the country, I am left with no alternative but to take action to protect Delaware banks and their depositors." Wisconsin Plans Reopening. Milwaukee, Wis., March 4.—[Special.]—Banks of this city and Wisconsin are making plans to reopen next week, but on what day had not been determined tonight. In Madison, Banking Commissioner Arthur C. Kingston said that a plan has been devised for reopening Wisconsin banks Monday morning, although he withheld details of the plan pending an expected announcement from President Roosevelt at Washington on the banking situation. On the other hand, Walter Kasten, president of the First Wisconsin National bank, and also a member of a committee appointed by the Milwaukee Clearing House association to work out a plan, said the Milwaukee banks will not reopen until Wednesday at the earliest, and then probably will operate under a scrip plan similar to that used in 1907. In the meantime the fourteen day bank holiday proclaimed by Gov. R. G. Schmedeman remains in effect. No Holiday in Indiana. Indianapolis, Ind., March 4.—[Special.]—Indiana banks, under the new bank code law recently rushed through the state legislature, have the power to limit withdrawals to one-tenth of 1 per cent. Therefore, no state-wide bank moratorium will be declared in Indiana Gov. Paul V. McNutt today informed state officials from Washington, where he attended the inauguration. Indianapolis banks today continued to pay 5 per cent on both savings and checking accounts, and 100 per cent on deposits made since they declared a 5 per cent withdrawal limitation last Monday. A few upstate banks have limited withdrawals to 2 per cent. Plan Michigan Reopening. Detroit, Mich., March 4.—[Special.]—There was an easing up of banking anxieties in Detroit because of the action of the state legislature on relief bills which are scheduled to be passed on Monday. They should become laws not later than next Saturday and thereby permit banks to re-open and permit another withdrawal of funds in amounts yet to be decided upon. Operations in Detroit will be immediately resumed by the First National bank and the Guardian National Bank of Commerce. Iowa Proclaims Holiday. Des Moines, Ia., March 4.—[Special.]—Lieut. Gov. N. G. Kraschel today ordered a banking moratorium effective at once. In his proclamation the lieutenant governor set no definite time, declaring only "a temporary banking holiday mandatory for all Iowa banks, savings banks and
IOWA'S BANKS MAY BE PERMITTED TO RAISE BAN FRIDAY Will Not Be Allowed to Open Before Under Permission from Treasury. NEED RESERVES TIED UP IN CHICAGO BANKS Use of Clearing House Scrip Will Afford Means for Circulation. Des Moines—(AP)—Iowa's bank holiday will be effective until the ban on withdrawals from New York and Chicago banks is lifted, Lieut. Gov. N. G. Kraschel said Monday. "Many reserves of Iowa banks are held by national banks in Chicago and New York," Kraschel said. "Until those reserves are available, Iowa banks that were opened would be exposed the dangers of withdrawals, particularly by business organizations which might wish to obtain money from Iowa deposits for use in other states." It was indicated that Iowa situation will continue unchanged at least until Friday, the earliest date when congressional action could lift the ban. Iowa's banking holiday remained mandatory despite the terms of President Roosevelt's proclamation that liquid banks could remain open during the national holiday if given permission by the secretary of treasury. Agree To Keep Banks Closed. Lieut. Gov. Kraschel said early Monday that Iowa banks will not be permitted to take advantage of that provision in the president's proclamation and that, the state holiday started Saturday will remain in effect on all Iowa banks. Agreement to keep the Iowa proclamation in force was reached in a telephone conversation between Lieut. Gov. Kraschel and Gov. Clyde L. Herring, who is in Washington. Officials of the Iowa Bankers association met here Sunday for a discussion of additional legislation to be considered by the state legislature which reconvened Monday following a week's recess. Fred J. Figge of Ossian, president of the association, said the legislation would deal with methods of bank withdrawals after the holidays are suspended. Details of the proposals could not be discussed, Figge said, as they were to be discussed further with the banking committees Monday. Two Banks Told To Stay Shut. Bank officials also discussed the issuance of clearing house certificates as provided for in President Roosevelt's proclamation. Information concerning the certificates, which would be issued under regulations of the Chicago Federal Reserve bank, was expected from Chicago. Lieut. Gov. Kraschel said he had ordered officials of two Iowa banks to observe the state holiday and not to open their banks today as they had declared they would do. Henry M. Carpenter, president of the Monticello State bank, and A. R. Robinson, assistant cashier of the Anita bank at Anita, were ordered by Mr. Kraschel not to open Monday. Must Restrict Openings. Des Moines—(AP)—Reopening of banks of the nation must be on a restricted payment basis, L. A. Andrew, state superintendent of banking, said Monday. "There is no question," he said in a formal statement, "that when the banks of the country reopen, it must be on a restricted payment basis and with the use, in many cities, of banking scrip consisting of clearing house certificates." Such scrip, he asserted, will provide a circulating medium for cities in which it is issued. This scrip, he said, "is a promise to pay by all of the banks in a clearing house and has behind it good assets to cover the entire issue." Calling upon the public to face
IA. BANK HOLIDAY WILL CONTINUE (Continued from Page One) ed from Washington, it was believed. The banking holiday, also added incentive to the stamp money plan which originated at Hawarden, Ia., and which, due to legislative action 10 days ago, may now be set in motion by every county in the state for poor relief. Some amendment to this law to make it applicable to present conditions was suggested to legislators. Kraschel, however, said that no emergency legislation by Iowa was necessary. The state, he said, had already set its financial house in order and would be ready to proceed with normal bank business at the expiration of the national holiday. Kraschel telephone Gov. Clyde L. Herring, who is attending the governors' conference in Washington, before announcing early Monday that the Iowa proclamation closing banks until further notice would be rigidly enforced. Several score banks thruout the state, it was said, were prepared to open their doors at the first possible opportunity in spite of the proclamation of the lieutenant governor, and had closed temporarily only under protest. One bank, the Iowa-Des Moines National here, had announced flatly that it would re-open Wednesday. In view of President Roosevelt's proclamation however, this plan probably will be changed to coincide with present developments. Pending a readjustment of emergency money matters, merchants scrip, several kinds of barter and agreements honoring checks of reliable firms in lieu of cash, were being worked out in individual cities thruout the state. Kraschel urged that all business houses cooperate in honoring these temporary adjustments made locally until Iowa's banks re-open.
Iowa Maintains Solid Front In Banking Crisis DES MOINES (AP)—Acting Governor Kraschel announced shortly after noon Wednesday that all Iowa state and national banks were closed to conform with the state proclamation. Several of the banks which opened Wednesday morning to accept new deposits discontinued the practice after conversations with state officials, Kraschel indicated. The banks may continue to make change and allow patrons to use their safety deposit boxes. "Iowa's position is extremely strong," Kraschel said in a statement. He commended bankers for their co-operation and said that Governor Herring in Washington has kept in hourly contact with the Iowa officials. "Within a few days a new and sounder banking structure will arise for the service of the nation," he declared. His statement was as follows: "All Iowa banks are closed in strict conformity with the state proclamation. The splendid co-operation that they have shown in upholding our hands gives us hope of obtaining release of Iowa bank money in Chicago and New York. It is perfectly obvious that if some of our banks were to disregard our proclamation and permit withdrawals of cash, our position would be lost forever. "It is unfortunate that America's business should be so paralyzed, but Iowa's position is extremely strong in such a crisis. "We have food products that the remainder of the country must have, and we would be weak indeed if we did not demand the creation of a sound currency for release of our own funds now in city banks before normal business is resumed. "We do not seek an unfair advantage of our sister states but the present bank crisis is due to exploitation and unsound banking practices in higher circles over which we had no control. We are not to blame for this situation, therefore we would be weak if we failed to exercise our position at this time for the protection of our own people. "President Roosevelt is moving forward boldly and in a constructive manner. Gov. Herring is in hourly contact with us, advising us as to the progress. Within a few days a new and sounder banking structure will arise for the service of the nation. We need to be patient but a few days more, and I commend the loyalty of our bankers and the patience of our people in the maintenance of our state program." DUBUQUE BANK OPEN. DUBUQUE (AP)—The First National bank here remained open for business Wednesday despite advice from Lieut.-Gov. Kraschel that all Iowa banks, both state and national, should remain closed in conformity with the state banking holiday.
NOTICE The First National Bank of Muscalocated at in the holders closing other its All and sociation to present the notes and other claims payment. Dated July
NOTICE The First National Bank of Musca located Muscatine, In the State closing its affairs All note holders and other sociation notified to present the notes and other claims Dated July 1933 Cashier.