Medford Trust Company (Medford, MA)

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BANK DOORS SHUT WHEN DEPOSITORS WITHDRAW MONEY

Medford Trust Company Asks State to Take Over Its General Situation Sound, Ely-Says From Our Special Reporter Boston, Oct. 7-The Medford Trust company of Medford today closed its doors after a vote of its directors that State Bank Commissioner Arthur Guy be asked to take possessi n of the institution for protection of its depositors and assets. A. run upon the bank, oldest commercial banking institution in Medford, following als by depositors resulted in the closing Late yesterday the runs on the bank started and last night the directors met and decided that if it continued the institution should be closed. When heavy withdrawals occurred this morning they voted to ask the bank commissioner 36,032 Depositors

The bank has 14,739 savings accounts and 36,032 depositors in the Edwin Mc. Knight, of the Massachusetts Senate, is president of the bank Plans of Commissioner Guy are not completed, but he may place an agent in charge to liquidate the affairs of the institution and distribute the assets to depositors. There also is a chance that there will be ization, in the bank will be Other officers of the institution Vice presidents, Louis Lovering Ernest B. Moore, Charles H. Sawyer, W Daly and Charles H. Barnes: treasurer, E. Earl Blakely: treasurers, George H. Houlder and W. F. Carter The last examinaits affairs by the bank comwas in June. The treasury department had $144,000 on deposit in the institution when the present treasurer, Charles F. Hurley succeeded the office. He began once withdrawing state and had all but $3000 out of the before middle of July The last withdrawal of $5000 was made last month. Guy, on taking over the bank gave out this "The board of directors of the Med-

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ford Trust company, at a meeting held this morning, voted .0 request the commissioner of banks to take possession of the company for the protection of its depositors and the conservation of its assets.

"Resources Depleted"

"During the past few weeks, substantial withdrawals have depleted its resources, and it cash position is low. Certain losses, and the depreciation in the market value of the securities owned, have impaired its capital and rendered the continuance of the business unsafe and unsound. 'Negotiations looking toward reorganization of this company are already under way. "As of 30, 1931, the total resources of the department and the total resources of the savings department were $3,956,852. Commercial department deposits were $1,800,000, and the savings départment deposits including Christmas clubs, were $2,550,000. "The Medford Trust company is not with any other banking institution in the commonweal Ely Says Situation Sound Gov Joseph B. Ely, in his daily conwith newspapermen at the State House, "The banking situation in Massachusetts is sound. The closing of the Medford Trust company will result in temporary hardship to depositors of that particular institution. Plans are already under way for its reorganization. The Medford Trust company was not with any other banking institution and no other institution is involved. "The condition which brought about the closing of the Medford Trust company, at the request of the stockholders, is a condition peculiar to that bank alone and does not involve the banking Under terms of the state banking laws stockholders of the institution are liable to an assessment of 190 per cent of their holdings, for the benefit of depositors and creditors. The bank's capital stock is $600.000 was incorporated October 31, 1908, and began business the It has three branch offices, all in Medford.

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BANKS IN THREE STATES ARE CLOSED

Philadelphia, Oct. Philadelphia taken banking today the directors that would open latter is the Girard Avenue Title Trust statement reported and deposits individual trust funds of

Detroit, Oct. Fidelity Trust closed today. stated the bank been taken over the state department for the the the Motor chairthe bank's board would see are full. Deposits to $6,507,-

New banks New the last year have deposits totaling survey

Medford, Mass., Oct. Med. Trust cial banking in this city, closed today. the request directors who acted after the bank began yesterday, state possession the bank. deposits of $5,350,000.

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BANK DOORS SHUT WHEN DEPOSITORS WITHDRAW MONEY

Medford Trust Company Asks State to Take Over Its Situation Sound, Ely Says

Boston, Oct. 7-The Medford Trust company of Medford today closed its doors after vote of its that State Bank Commissioner Arthur Guy be asked to take possession of the institution for protection of its deposiand assets. run upon the bank, oldest commercial banking in Medals by depositors in the closLate yesterday the runs the bank started night the directors decided that if it continued the institution should be closed. When heavy withdrawals this morning they to ask the bank The bank has 14,789 savings accounts 36,032 depositors in the commercial department. Edwin T. McKnight, former of the Massachusetts Senate, is president of the Plans of Commissioner Guy are not completed, but may agent in charge the the the sets depositors. There chance there reorganization, the bank will Other officers of the stitution Louis H. Lovering, Ernest B. Moore, Charles Daly and H. Barnes: Blakely: Houlder and Carter. last examinaof its affairs the June. The state treasury had $144,000 deposit in the institution when the present Charles Hurley, succeeded to the He began once state of the July last withdrawal of $5000 made month. taking over the bank, out this board the MedTrust company meeting this morning voted the of take posseshe protection its depositors and the conservation its

"Resources Depleted" "During the past weeks, substantial depleted its resources, and it cash position is low. Certain losses, and the depreciation in the value owned, impaired its and the business and unsound looking reorganization this company are ready of September 30. 1931, the total the department and the total resources the savings department departthe clubs, were $2,550,000 "The Trust company not banking

Ely Says Situation Sound Gov Joseph B. Ely in his daily ference newspapermen at the State House, declared banking in Massachusetts sound The Medford Trust company will result hardship that institution. Plans already under way for its reorganizaMedford Trust was other institution and no other institution is involved. condition which about the closing of Trust pany, the request of the stockholders, condition peculiar to that bank not involve the banking Under terms of the state banking the are an 190 per of their for the benefit and The bank's capital stock was corporated October 31, 1908, the month. has three branch offices, all in Medford.

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TODAY'S GLOBE CONTENTS

Page Attack on Hoover for moratorium brings demand for proof in House. Culbertsons go into lead by 410 points. Head of Pennsylvania Railroad pledges cooperation in of Port of Boston in plea for encouragement of plan to enter New England. Judge Morton named to United States Circuit Court of Hugh D. McLellan prominently mentioned for United States District Court post. Herbert Pearson federal receiver, takes over affairs of Federal National Bank of Boston and affiliated banks in Lowell, Gloucester and Lynn. Wager over funeral expenses between friends results in loss of suit by survivor who made lavish expenditures. Chicago wins 1932 Republican conUnion of China in face of Manchuriah crisis now expected President Chiang's resignation at Canton demand. Ex-Mayor Quigley wins Chelsea Mayoralty Basel meeting may recommend extension of Medford Trust stockholders assessed 100 percent to pay debts of bank. will Rogers' dispatch. Page 2 Plea of wife persuades gangster to tell how he was shot. State Board of Appeals forbids issuance of auto liability insurance to Somerville man.

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Newfoundland not counting on sale of Labrador to get out of financial Boy bicyclist, 15, held for score of breaks in Fall River and vicinity. Man who served term for liquor violation banked $1,270,792 in six years since release, New York legislative is told.

Page Rum ring leader forfeits $40,000 bond when he fails to appear for commitment to prison.

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MEDFORD TRUST ASSESSMENT

MEDFORD, Dec 15-Stockholders of the Medford Trust Company must pay immediately 100 percent of the par value of the stock they own to Fred. erick D. Bonner, liquidating agent of the company, it was learned tonight. Bank Commissioner Guy will send out letters tomorrow to holders of shares telling them that it has become necessary to enforce individual liability of shareholders. The letter reads: "I have determined that it has become necessary in order to pay debts of the Medford Trust Company to enforce individual liability of the stockholders to the extent of 100 percent of the par value of stock held by them. You appear to be owners shares of capital stock. hereby demand payment by you of the par value with interest from the date the thereof. Payment will be made to Mr Bonner, Commissioner Guy's agent. The office on the second floor of the Medford Trust Company Building will be open tonight and tomorrow night to those who wish to make to obtain loans of 30 percent on their Christmas and Tax Club deposits These loans will be based on certifi cates of proof of claim approved by Fred D. Booner, agent of Bank ComGuy. The office aiso will open daily and on Monday, Tuesday and Wednesday evenings of next week. The loans will be made through the First National Bank of Medford at percent interest. must be made on or before Dec 31.

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DECLARES CONFIDENCE IN BANKING SITUATION

Depositors' Committee Also Endorses Guy

MEDFORD, Dec 18-The nine, representing depositors Medford Trust Company, today issued formal statement, expressing local banking and approval of the course of State Commissioner Arthur Guy his appointed liquidating the trust pany, Frederick D. committee sent letters to the Bank and Mr the dence in them and approval their signed by as Joseph W. Myers

Text of Statement today was "The of the Medford Trust has needless the about the security stability of banks. committee, acting in behalf of the depositors the ing itself not of the system the attitude Arthur Guy his agent for the Medford help expedite the of our believes that the 000 more the by can aid vitally the of the appeal you depositors not the hasty strongly who the touch with the in (Signed), Adelaide Kennett, Secretary.

Letters to Guy and Bonner Commissioner part follows: Frederick liquidating We bank was acting the the The upon his recent Mr part follows your and as the that approve of your slowly, surely, assets of the We hasty detrimental to best The its letter Bonner willingness with The company claims against the bank possible More half depositors already so,

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Tell of Fees Paid McKnight timony concerning fees and commissions alleged to have been paid Ed. win T. McKnight, president of the closed Medford Trust Co., on sales of time certificates of deposit was given today at the trial of McKnight and Frank W. Lovering, director, charged with violation of the banking McKnight and Lovering are on trial in jury-waived seasion or superior court before Judge Harold P. Williams

Medford Trust Co. during the 10 months before it was closed and who is also under indictment, testifying today as state witness, said the fees paid McKnight on sales of certificates of deposit deposited in trust to offset loss the bank had suffered on a mortgage

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CLAIMS STATE OFFICIAL MADE NO OBJECTION

Pres. McKnight of Closed Medford Trust Co. Concludes Testimony

Didn't Put All His Commissions Into Fund To Care for Bad Mortgage

CAMBRIDGE, Mass., Mar. Testimony that directors of the closed Medford Trust been assured that the then Bank Commissioner, Roy Howey did not object to the issuance of time certificates of déposit was given to-

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DID NOT OBJECT TO TIME CERTIFICATES

Bank Commissioner Did Not Forbid Practice that Brought Cash to Officers of Closed Bank.

CAMBRIDGE, Mass., March 2 (AP).—Testimony that directors of the closed Medford Trust Co. had been assured that the then bank commissioner, Roy A. Hovey did not object to the issuance of time certificates of deposit was given today at the trial of bank officers on charges of violating banking laws.

Edwin T. McKnight, president, and Frank W. Lovering, a director, are on trial before Judge Harold P. Williams in a jury-waived session of superior court.

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CAMBRIDGE, Mass., March 2 (AP).— Testimony that directors of the closed Medford Trust Co. had been assured that the then bank commissioner, Roy A. Hovey did not object to the issuance of time certificates of deposit was given today at the trial of bank officers on charges of violating banking laws.

Edwin T. McKnight, president, and Frank W. Lovering, a director, are on trial before Judge Harold P. Williams in a jury-waived session of superior court.

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Stock In Closed Bank Owned In Lewiston

Lewiston people were among the stockholders of the closed Medford Trust Co. in Medford, Mass. Most of the stockholders reside in Medothers lington, Boston. In behalf of the 18,000 depositors, bill in equity has been filed in the against more than 300 stockholders. In list of shareholders. published Saturday are the following Lewiston people, Ernest Small shares; Janet Small, 25; Thelma Small,

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JURY WAIVED IN

(Continued from Page Four) witnesses, among them Waite, were in. Andrew Highlands, secretary of the department of public utilities, was called by Mr. Murphy to testify division the the appointment of Silas Waite inspecFrom Edward Maloney, inspector the public utilities, Murphy drew story Hull's office 1930. Maloney that May early that year following the vestigation concerning the Medford Trust curities, he talked Hull's office with and McKnight there part time. The conference came about, Maloney said, suggestion Hull, related charged that Maloney branded McKnight disbarred gangster Maloney that denied having made statements Hull ranged have him meet McKnight. The following day said opened the door of Hull's office and visitor there, waited. Hull said would shortly the asked Mr. Murphy. Mr. McKnight." Maloney told Hull and MeKnight wanted know whether charges had made against him he discussed with them, wished charges writing and accusers. They assured that there charges and Knight finally all had concerning alleged hearsay. Mr. Maloney didn't McKnight but could make wished make those testified then stop this the Medford Trust start run bank and may Mr. Hull said the would that would stop stock $125 share. although he the was He stock figured the stock ought showed prospectus and the earnings asked showing more attention Herbert Herbert Mabey the defendants indictment which quashed yesterday. When Hull McKnight's seemed one the Maloney that didn't answer Waite came in, and renewed his plea investigation Trust asked hearing Wardwell Co. there would

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Waite Asserts Authorized

Investigator Is Witness at Trial of Securities Div. Head and McKnight

BOSTON, July Waite, an investigator in the sale of securities division of the department public utilities. state testified that John Hull head of that division, thorized to proceed against stock in the closed Medford Trust Hull and Edward president closed Medford Trust are trial before session, charged with conspiracy defeat the ends of just:ce by impedduties who investigated the sale of stock in the trust comtestified that at the time conference June 1930, he felt had sufficient material warrant going ahead with hearing question of the propriety the stock sale. Lawyers representing stockholders the conference, Waite indicated, were reluctant have any action taken that might endanger holdings their clients or cause the bank. He quoted Hull as saying he could no reason why Waite, should proceed bring the case to trial saw Waite said that after considering various aspects the case he decided to hold in abey- public utilities hearing the sale Medford Trust Co. stock was postponed because would have jured according testimony yesterday Waite and Edward Maloney, vestigators for the blue sky division which Hull head, testified terday regarding the stock sale and the personnel of the brokers, alleged to have handled the Medford Trust stock. Mr. Wardalso took the stand. of Maloney Weston Allen brought that Hull ordered Maloney tell Waite set the Wardwell company down for hearing and clude the General Management Corporation. wasn't public hearin the Wardwell asked Mr. Allen. "Because Waite and felt we had stopping the of Medford Trust stock high price and there question minds had our ficient evidence. Allen asked the witness Hull ever instructed him not have hearing case and Maloney said Hull never so instructed him.

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SAYS HULL GAVE HIM AUTHORITY TO SELL STOCK

BOSTON, July Waite, an investigator in the of securities division of the Department of Public Utilities, State witness, testified today that John C. Hull, head of that division, authorized him to proceed against stock the Trust Hull and Edward the closed Medford Trust Company, trial session conspiracy ends justice by Waite, investigated sale the trust company Waite testified that the time he felt he had sufficient material going ahead with hearon the the stock sale. Lawyers representholders the conference, Waite indicated, were reluctant have action taken that might endanger holdings their clients cause run the bank. quoted Hull as could no reason he, should not the case he saw Waite said the the decided to hold abeyances.

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WAITE SAYS HULL TOLD HIM TO GO AHEAD

Waite, investigator the sales of curities division of the department of public utilities, state witness testified Friday that John Hull. head of that division, authorized him proceed against stock in the closed company. Hull and Edward McKnigh president of closed Medford Trust company are on trial before jury session, charged with conspiracy to defeat the ends of justice impeding duties of Waite who investigated of stock in the Trust company Waite testified that at the time the conference, June 1930, he had sufficient material to warrant going ahead with hearing on the question of propriety of stock sale. Lawyers representing stockholders at the Waite indicated. were reluctant have any action taken that might endanger holdings their clients cause run the bank. He quoted Hull saying he could see no reason why he, (Waite) should not proceed bring the to he saw fit.

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Securities Division Head, Mędford Trust President, Freed of Conspiracy Charges

Cour+ Says Evidence Fails to Show Director Planned With Banker to Hamper Work of Inspector in Connection With Stock Sale Investigation

BOSTON, July 13 C. Hull of Leominster, directhe sale of securities division of the department of public utilities, and Edward McKnight, president of the closed Medford Trust Co., were today acquitted of charges of conspiracy to defeat the ends of justice. The finding was returned by Judge Edward Hanify at jury-waived trial.

Hull and McKnihgt specifically charged with impeding the duties Silas Waite, inspector in Hull's division, in connection with an investigation into sale stock in the ford Trus' Co. Judge Hanify said that the evidence fell short of proving that Hull had entered into any plan or agreement with interfere with hamper Waite the performance his duty. He said the evidence did show disposition on Hull's part have Waite proceed with the investigation and hearing on the complaint relating to the sale the trust comstock, despi'e requests for of the investigation by McKnight The judge held that, therefore, there was conspiracy. "The having failed prove agreement which the the gist the charge is not sustained. defendants adjudged not guilty and are discharged on this Judge Hanify concluded. Hull testified yesterday that the first heard of his possible appointment the office was on April of 1930. Asked started once quaint himself with duties position, he said did not. He was appointed early May. Murphy brought out that during grand proceedings Hell had not talk with Capt. Thomas Bligh the state police regarding police inquiry into the Medford stock sales began questioning him about Hull said that he telephoned Capt. Bligh result of being told that the police were making an investigation. At the conclusion of Hull's testimony Atty. Daniel Gallagher said that McKnight would rest his case without offering evidence Atty. Weston Allen, arguing for Hull, asked complete vindication for his client. He said that Hull unfortunate position being public official, having been dicted, could not hope have the truth "catch up with the even by acquittal. effort to prevent run on his bank certainly ignoble Gallagher argued Each counsel for the defense argued minutes.

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BANKER ADMITS PAID LOBBYING

Boston, Aug 5 (AP). Edwin T. McKnight, president of the closed Medford Trust Company, today admitted before a master in Suffolk Superior Court he had paid a member of the Legislature money to obtain building contracts for Franklyn Bros., Inc., in Medford and Somerville. He declined to name the legislator.

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DECLARES BANK RUN BY "CROOK"

Bushnell Says McKnight Dominated Directors

Argument in Medford Trust Co Hearing Before Master