Central Trust Company (Owensboro, KY)

Episode Information

Episode UID
4831649691585
Episode Type
Suspension → Run → Reopening
Bank Type
trust
Bank ID
483164969 hash
Start Date
January 2, 1932
Location
Owensboro, Kentucky (37.774, -87.113)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
56f45bcdb4a512c0

Response Measures

None

Description

Court orders repeatedly suspended liquidation and depositors agitated while reorganization proceeded; reopening was authorized though final resumption date not explicitly reported.

Events (5)
1. January 2, 1932 Suspension
Cause
Bank Specific Adverse Info
Cause Details
Bank closed due to 'frozen assets' leading to failure/placement in liquidation.
Newspaper Excerpt
Owensboro, Ky., Jan. 2 (AP). — The Central Trust company of Owensboro failed today. Frozen assets were said to have caused the closing.
Source
newspapers
2. June 24, 1932 Suspension
Cause
Government Action
Cause Details
Court ordered suspension of liquidation to permit reorganizational efforts under state statute.
Newspaper Excerpt
Suspension of Liquidation By Central Trust Co. Ordered Until July 15
Source
newspapers
3. August 27, 1932 Run
Cause Details
Depositor agitation/storming of the closed bank in protest against the liquidator and handling of liquidation.
Newspaper Excerpt
More than 500 depositors stormed the Central Trust Company today and demanded that Roy McFarland, liquidator ... resign.
Source
newspapers
4. December 17, 1932 Suspension
Cause
Government Action
Cause Details
Court order suspending liquidation for 90 days to consider reorganization and reopening.
Newspaper Excerpt
Judge M. L. Blackwell... today ordered suspension of liquidation of the closed bank for 90 days.
Source
newspapers
5. * Other
Newspaper Excerpt
Depositors signed agreements pledging more than 75% of deposits toward reorganization and reopening efforts throughout 1932–1933.
Source
newspapers

Newspaper Articles (17)
1. January 2, 1932 Omaha World-Herald Omaha, NE

Article Text

Bank Liquidation Aids Decline in Security Prices New York, Jan. 1 (AP). — The fall in security prices during the latter part of 1931 is attributed, partly, in the monthly review of the Federal Reserve Bank of New York, to an unusually heavy reduction of bank credit. In the second week of December, the review points out, the total loans and investments of weekly reporting member banks of the federal reserve system declined to a volume of $2,500,000,000 smaller than a year previous, and the deposits of these banks showed an accompanying decline of about $3,000,000,000. "Since September," it is stated, "the tendency toward credit reduction has been accelerated, as a decrease of investments has been added to the reduction in loans. This accelerated decline started with heavy withdrawals of deposits from banks, a considerable part of which represented the funds of foreign depositors, following the suspension of gold payments by Great Britain in September. "The ensuing rise in money rates was accompanied by a decline in the prices of high grade securities, and this decline in security values, together with the loss of deposits, appears to have set in motion a cycle of credit reduction which continued after the immediate cause ceased to operate." Bank Suspensions. Hammond, Ind., Jan. 2 (AP). — The Hammond National Bank and Trust company failed today and was placed in charge of R. L. Hopkins, national bank examiner. The bank had capital and surplus of $500,000 and $2,000,000 deposits at last examination. Hartford, Conn., Jan. 2 (AP). — The City Bank and Trust company did not open for business this morning. The bank was incorporated in 1851. In a report to the state banking commission the savings deposits were given at $16,961,220, commercial deposits at $8,622,227, capital $1,000,000 and surplus $2,000,000. Charleston, S. C., Jan. 2 (AP). — The People's State Bank of Charleston, with 44 branches in 41 towns and deposits at the time of its last statement of $24,443,690, did not open for business today. Its board of directors after a meeting, last night issued a statement saying it had decided to turn the affairs of the system over to the state bank examiners for a period of 30 days pending efforts toward reorganization. The bank, one of the oldest in the state, was capitalized at $2,000,000 and listed its total resources in its last statement, September 29, at $28,773,802. Owensboro, Ky., Jan. 2 (AP). — The Central Trust company of Owensboro failed today. Frozen assets were said to have caused the closing. The bank, established 43 years ago, had deposits of $2,481,124. Topeka, Kans., Jan. 2 (AP). — The closing today of the Home State bank of Junction City, was announced by the state banking department. Frozen assets was given as the reason for the closing. The bank's October 10 statement to the department listed $25,000 capital; $7,000 surplus; $160,000 deposits; $18,145 borrowed money, and $178,000 loans. Minneapolis Bank Stocks. Minneapolis, Jan. 2 (A. P.) — Bid. Ask. Close. First Bank Stocks..... 12 12 1/4 12 1/8 Northwest Bancorporation 21 1/4 21 1/2 21 1/4 Standard Statistics reports 68 unfavorable dividend changes last week compared with 86 in the preceding week. Dividends were reduced in 35 instances and omitted in 33. Favorable changes were made up of 12 extra dividends, two increased and two initial.

2. April 8, 1932 The Owensboro Messenger Owensboro, KY

Article Text

PLAN TO REOPEN Steering Committee Opens Headquarters; Commissioner Says Move Will Cut Liquidation. State Banking Commissioner R. Dorman has written the following letter to L. Freeman Little, chairman of the steering commiton the reopening of the CenTrust company, endorsing the plan being pursued. His letter follows: Freeman Little, Owensboro, Ky. "Dear Sir: "This advise you that this department in with and your in your efforts re-open the Central Trust have given careful company. study to your plan tion and am the opinion that, with the hearty cooperation the business people of your communyou able to work out this re-organization and save considerable money for the depositors of the Central Trust company. feel sure that you can liquidate the Central Trust company after this re-organization has been perfected at much less expense than can be done by this department. "We are pleased note that the financial conditions throughthe country in much better shape and the people gaining confidence. No doubt you find it hard work to perfect this re-organization but with the cooperation of the general public vicinity, feel sure that what assistance from this department, you can this save your depositors and stockholders from what seems this time considloss. "When can be of assistance not hesitate to call on With best wishes for your success, remain. "Very truly yours, DORMAN, "Banking & Securities Commissioner." The committee has opened headquarters Laswell's office. West Third street. where depositors the Trust company. are given opportunity sign the agreement reopening. This office be charge of Mr. and Mrs. Walter Gannane. Freeman Little, chairman of the steering committee on ganization. in presenting Mr. Dorletter for publication, said: "After reading the banking missioner's letter there cannot be any question whether not this agreement in regard the reopening is best thing the depositors. He states very plainly that this plan will the depositors the most money, in that penses will be saved and more

3. May 27, 1932 The Owensboro Messenger Owensboro, KY

Article Text

Local Laconics -Try Pardon on spectacles. -Born, to Mr. and Mrs. George Yeiser. of Masonville, Sunday, son, James Richard. fast card, preliminary. Lower floor, 75c; balcony, 50c. Ladies free! -Help yourself! Help Owensboro by helping reopen the Central Trust Company. Sign at the bank -Wrestling tonight, Armory fast card, preliminary. Lower floor, 75c; balcony. 50c. Ladies free! -Help reorganize the Central Trust Sign the Depositor's Agreement of the Reorgan-Catfish steak, fiddler cat, Jack salmon, Buffalo and perch. Hayden's Fish Market.

4. June 24, 1932 The Park City Daily News Bowling Green, KY

Article Text

HOLDS PAYMENTS BANK Suspension of Liquidation By Central Trust Co. Ordered Until July 15 DORMAN IS OVERRULED FRANKFORT June Court of Appeals today firmed judgment Daviess Circuit Court suspending liquidation the Central Trust Company Owensboro until July The lowcourt aside the act of James Commissioner, revoking an order of suspension In appealing from the decision of Circuit Court Commissioner Dorman attacked the validity House bill 84 passed by the 1932 Legislature providing for suspension liquidation closed bank or trust company the depositopportunity to reorganize the Hold Statute Valid "The statute question in so far addressed to the Bankwas valid," Judge Willis wrote, the whole court Commissioner Dorman revoked his order of suspension May ter had been effect 20 days. The provided for suspension for reasonable would constitute reasonable time might with cumstances,' Judge Willis said, in the present case no doubt can arise that 20 days was sonable time accomplish the onerous task which the appellees had undertaken. In the exigency was proper for the Court correct the error of the commis(Continued on Page

5. June 25, 1932 The State Journal Frankfort, KY

Article Text

APPELLATE COURT HOLDS STATE BANK LIQUIDATION SUSPENSION ACT VALID That part of an act of the 1932 General Assembly directing the State Banking Commissioner to suspend liquidation of a bank while an effort is being made to effect a reorganization was held valid yesterday by the Court of Appeals. The decision was in the case of James R. Dorman, Commissioner of Banking and Securities against Frank Dell and affirmed the judgment of the Daviess Circuit Court. On January 2. 1932, the Central Trust Company, Owensboro. suspended and placed its/assets in the hands of the Banking Commissioner for liquidation. The Legistature passed a bill pro- viding a plan for reorganization and pursuant to its provisions a group of depositors originated a plan to reopen the bank. On April 26. Mr. Dorman directed his deputy to suspend liquidation and twenty days later revoked the order of suspension. A number of deposi- tors intervened for the purpose of procuring an order of court setting aside the order of suspension. The circuit court set aside the act of revocation and Mr. Dorman appealed, taking the position that the act setting out a reorganization plan was The court. in an opinion by Judge S. S. Willis. held that the act In far as it directed the Banking Com missioner to suspend liquidation for a certain time while an effort is be ing made to reorganize a bank, is valid.

6. July 10, 1932 Messenger-Inquirer Owensboro, KY

Article Text

TRUST Committee To Confer With State Banking Commissioner In Frankfort On Next Thursday. A committee for the reorganization of the Central Trust company will go to Frankfort next Thursday confer with R. Dorman, state banking commissioner, garding the reopening of the bank. The committee will take with the depositors agreements which have been signed and represent more than percent of the deposits in the closed bank. The reorganization committee announced yesterday that Mr. Dorman has already approved the plan the reorganization and all that remains to be done before reopening the bank is to have the assets the bank appraised that may be decided what debts are to be charged off against the surplus provided for that contingency the election of directors of the reopened bank. The bills payable, owed to the Citizens Union bank, the Federal Reserve the National Credit association, all of Louisville, have been reduced $100,000. was announced, and that the remaining debt will take care of itself. Members of the committe who will go Frankfort are Triplett, H. Birkhead, BresCharles Smith, John BroDr. Kirk. John Friedman. Lawrence W. Hager, Kelly Short and Freeman Little Liquidation of the bank pended by Kavanagh. Louisville; special judge, until July 15 order to give depositors time which complete the reorganplans. is understood that approximately has been signed the depositors agreement. The total deposits amounted to Nearly 2,000 depositors each having deposits of more than $25 have signed the agreement. Deposits not signed to the agreeinclude of city school funds, of city sinking funds, $12,302 of master commissioner funds and $17,000 represented depositors. There left about in depositors' funds which has not been signed. The school funds were not signed on of the decision the board of education to file suit against the treasurer of the school board and his bondsmen for the amount. The sinking fund commission was advised by the city attorney not to sign the agreement. The master commissioner's funds cannot be signed account there being 80 many vergent

7. July 10, 1932 The Owensboro Messenger Owensboro, KY

Article Text

REORGANIZATION OF CENTRAL TRUST UP TO J. R. DORMAN Committee To Confer With State Banking Commissioner In Frankfort On Next Thursday. A committee for the reorganization of the Central Trust company will go to Frankfort next Thursday to confer with J. R. Dorman, state banking commissioner, regarding the reopening of the bank. The committee will take with it the depositors agreements which have been signed and represent more than seventy-five percent of the deposits in the closed bank. The reorganization committee announced yesterday that Mr. Dorman has already approved the plan for the reorganization and all that remains to be done before reopening the bank is to have the assets of the bank appraised so that it may be decided what debts are to be charged off against the surplus provided for that contingency and the election of directors of the reopened bank. The bills payable, owed to the Citizens Union bank, the Federal Reserve and the National Credit association, all of Louisville, have been reduced to $100,000, it was announced, and that the remaining debt will take care of itself. Members of the committee who will go to Frankfort are R. S. Triplett, H. A. Birkhead, A. Bresler, Charles T. Smith, John Brodie, Dr. A. Kirk, John Friedman, Lawrence W. Hager, E. Kelly Short and L. Freeman Little. Liquidation of the bank was suspended by J. J. Kavanagh, Louisville, special judge, until July 15 in order to give the depositors time in which to complete the reorganization plans. It is understood that approximately $1,250,000 has been signed to the depositors agreement. The total deposits amounted to $1,637,000. Nearly 2,000 depositors each having deposits of more than $25 have signed the agreement. Deposits not signed to the agreement include $92,000 of city school funds, $31,000 of city sinking funds, $12,302 of master commissioner funds and $17,000 represented by unknown depositors. There is left about $149,000 in depositors' funds which has not been signed. The school funds were not signed on account of the decision of the board of education to file suit against the treasurer of the school board and his bondsmen for the amount. The sinking fund commission was advised by the city attorney not to sign the agreement. The master commissioner's funds cannot be signed on account of there being so many divergent interests.

8. August 26, 1932 The Park City Daily News Bowling Green, KY

Article Text

NEW SUITS FILED OVER AFFAIRS OF OWENSBORO BANK OWENSBORO Aug. New litigation the affairs the closed Central Trust Company has been filed in Daviess Court. group of stockholders and positors late yesterday filed petisupplemental report by R. Dorman, State Banking Commissioner, which Dorman refused to consider reorganization and reopening the The petitioners seek an order claring invalid Dorman's ruling jecting the reorganization opening more than of the depositors, that the court take the bank of liquidation and place the hands of depositors. Three suits seeking $29,540.11 leged due the bank notes filed by McFarland, special deputy banking commissioner.

9. August 26, 1932 Messenger-Inquirer Owensboro, KY

Article Text

others. The late tone was strong. The turnover exceeded 3,000,000 shares. American telephone equipment to be installed Kweichow Province in South China. Britain's record non-stop freight train travels 191 miles from London to Liverpool with out stop. Depositors Central Trust Co., be sure to come to the meeting at Court House tomorrow, Saturday afternoon at m. get our bank open. Committee. Reorganization

10. August 27, 1932 The Owensboro Messenger Owensboro, KY

Article Text

MORE SUITS Account $25,845 In Notes Purchased Central Trust Co.; Little For Alleged Damages. R. McFarland, special deputy banking commissioner in charge of the affairs of the closed Central Trust company, filed two suits in Daviess circuit court late Friday afternoon, in which he is ing collect claimed to be due from W. Reno, president of the bank, on two notes and $40,000 from Freeman Little for alleged "carelessness negligence" the performance of his duty director of the institution. In the suit against Reno, the liquidator asserts that in Central Trust company purchased from the liquidating agent for the United States National bank, note which had been executed and delivered National bank by Reno, W. McCulloch and Trefz. The assigned to the Central Trust company for the then full face value, which was between and alleged the The plaintiff states that he to give the exact amount of the note because the "said note in the bank at the time the plaintiff took charge of the fairs assets" of the bank. February 28, the note with interest amounted to asserted. second note, the date the transaction not being given the the petition, was assigned Central Trust company the liquidating agent of the National bank, this note being the petition avers. ment for the amount the Judg- two notes plus interest asked by the liquidating agent. The suit against Little sets out that the two notes which were signed the Trust company by the National bank, and which the subject of the suit against Reno, have not been paid. Further, suit asserts that ing the said Little member of the board of directors said of bank and owed to the said bank the duty of exercising due care in superintending and managing the affairs of said bank, yet said Little such director and violation of his duty and through negligence, carelessness and tence, suffered said notes and the entire interest due thereon to main uncollected until said bank closed and until said Reno became insolvent." McFarland states in the petition that since bank acquired the said notes until closed, the bank had been paying salary to Reno, out of which the bank could have collected the notes. From 1923 through 1929, the salary paid Reno year and 1930 and 1931 the amount was year, the petition states. In conclusion, the petition alleges that "by reason of gross careless- (Continued on Page Column

11. August 28, 1932 The Harlan Daily Enterprise Harlan, KY

Article Text

Ask Resignation Of Liquidator Owensboro, Ky., Aug. 27 (P)_ More than 500 depositors stormed the Central Trust Company today and demanded that Roy McFarland, liquidator appointed by Banking Commissioner James Dorman, resign. Depositors favored reorganiza-

12. November 29, 1932 Messenger-Inquirer Owensboro, KY

Article Text

Blackwell May Rule Wednesday on Agreements that Judge M. Blackwell, Dixon, special judge Central Trust company liquidation, will complete today examination the depositors agreements looking reorganization and opening of the Central Trust company. Some the agreements have been questioned by posing the plan and efore ruling necessary for the court to inspect the signed agreements Judge Blackwell Indicated he would main in Owensboro tomorrow

13. December 18, 1932 The Lexington Herald Lexington, KY

Article Text

LIQUIDATION TO BANK IS SUSPENDED FOR 90 DAYS OWENSBORO, Ky., Dec. 17 (AP)—Judge M. L. Blackwell, of Dixon, special judge in litigation relating to the closed Central Trust Company of Owensboro, today ordered suspension of liquidation of the closed bank for 90 days.

14. December 23, 1932 The Owensboro Messenger Owensboro, KY

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SCHOOL REOPENING Recent Objections Filed Without Its Knowledge Or Consent; National Deposit Claims Its Name Used Without Authority. At special meeting of the Board of Education of the Owensboro city schools, with all members in attendance last night statement issued with the unanimous approval of the board, claring that recent petition filed in the Daviess circuit court in Central Trust company litigation. representing the board being petitioner objector was filed without its knowledge consent. The statement addressed to the "Citizens Owensboro," says: view of the false light in which the board of education of the city Owensboro has been placed during the past few weeks by certain phases of the bank controversy. we the members of said board. wish to make following statement: have neither authorized employed any attorney represent the Central Trust company litigation for the reason that are looking to the American Surety company against whom have filed suit on the treasurer's recent petition filed in the court of Judge Blackwell which represented petitioners and objectors was filed without our knowledge consent. Had $90,000 on Deposit The board had approximately on deposit in Central Trust when closed. Since that time has filed suit against the American Surety company to recover on the bond of Clarence Morehead, treasurer for the board of education, who with the Central Trust company. Recent pleadings filed by City Attorney John Dean made the members of the board of education parties the attack being made validity of the proposed plan for the and reopening of bank. Suspension Order Entered The order Special Judge Blackwell, Dixon. suspending the liquidation of the Central Trust company for period of ninety days, until the case is prepared for submission on its merits to the reorganization and reopening the bank, was entered in the Daviess circuit court Thursday. The order provides that L. McFarland, special deputy banking commissioner, remain as custodian of the records, property and sets of the bank, for which service

15. February 9, 1933 The Owensboro Messenger Owensboro, KY

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FUNDS ARE BANK REOPENING Sinking Fund Members Sign Agreement to Reorganize Central Trust. At meeting of the board of sinking fund of the city of Owensboro, composed of Mayor Logan E. Meredith, Sam Coots W. B. Booth, the depositors agreement providing for the reorganization and reopening of the Central Trust company, was signed Wednesday. The sinking fund had more than to its credit when the bank closed. Board of trustees of the city hospital and the library had previously signed the depositors agreement. Deposits totaling slightly in excess of $1,300,000 in the Central Trust company have been pledged to the reorganization. This rep. resents nearly 80 per cent of the deposits. House Bill 84 provides that at least 75 per cent of the deposits of closed bank shall pledged to a reorganization propos- Judge M. L. Blackwell, Dixon, special judge in Central Trust company litigation, has the proposed plan for reorganization and reop. ening of the bank under advisement ano has indicated he will render decision in the case this week.

16. March 1, 1933 The Paducah Sun Paducah, KY

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Owensboro Bank May Be Reopened Ky., March conference with committee of Owensboro citizens Tuesday, James R. Dorman, state banking securities commissioner, expressed the opinion the Central Trust Company of Owensboro could be re-organized and opened. committee headed by Wilbur Miller, attorney conferred with commissioner on details of the re-organization. Circuit court has approved the opening of the bank but left the details to be worked out by the committee with the banking partment. Mr. Dorman said he would make thorough study the reorganiation plan submitted by the committee. the and committee are unable to agree, each will submit plan to the court on or before March

17. June 8, 1933 The Owensboro Messenger Owensboro, KY

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TAKE BANKS OUT OF POLITICS Kavanagh Says Final Action Now In Hands of Courts Louisville, Ky., June 7. -The importance of the decision by the Court of Appeals upholding constitutionality of the 1932 bank reopening law "lies in the fact that the of the banks is taken out of politics. The final authority is placed in the courts instead of in the Banking commissioner," Judge J. J. Kavanagh said here yesterday. The decision upheld the ruling given by Judge Kavanagh while presiding as special judge in trial of the suit by majority of depositors of the closed Farmers' Bank & Trust company of Hardinsburg for approval of their plan to reopen the bank. It was the second time the bank reopening law had been before the Court of Appeals, the first case, involving reopening of the closed Central Trust company of Owensboro, having been defective in that the appeal from Judge Kavanagh decision upholding the law in that case was taken by J. R. Dorman, state banking and securities commissioner, instead of by minority stockholder, as was done in the case decided Tuesday, and no decision was given on constitutionality of the law. "It is furthermore important because this is the first banking relief law in the land to receive final interpretation. The Kentucky law was based on a Michigan sta- tute, but the Michigan law has never been ruled on finally." The immediate effect of the ruling is to permit the reopening of the Hardinsburg bank with resources of $500,000 and the Owensboro bank with resources of about $3,500,000. There are about 75 other banks in the state in process of liquidation that could avail themselves of the law, provided they can prove themselves sound. The deposit liabilities of the closed state banks amount to about $35,000,000. Under the law they may reopen provided 75 per cent of the depositors of each bank approve sound plan The Hardinsburg bank is expected to be the first bank in the country to reopen after litigation over bank relief legislation. The Owensboro institution held its final reorganization in pending the decision in the Hardinsburg case. Judge Kavanagh pointed out that since he upheld the constitutional ity of the law, enunciating the principle of majority of depositors controlling assets of closed banks, the Federal government had written similar provisions into its new banking act, the Glass-Steagall bill, providing for reopening closed national banks. The amendment making that possible was sponsored by Senator Steiwar, he said.