550501584 55050
national
a435db3b9efb6e76Accommodated withdrawals, Capital injected, Partial suspension, Full suspension, Books examined
Badger Business Men Prevent Run on Bank ASHIPPUN, Wis., Jan. Combatting mob psychology, Ashippun business men bolstered position of the Ashippun State novel campaign. First National Bank Oconomowoc closed, rumors the Ashippun bank started. Busiconcerted effort, prevailed large percentage depositors sign waivers of withdrawal privileges.
Business Men Act to Prevent Run on Bank Ashippun, Dodge County, Wis. — (AP) — Fighting mob psychology, 30 Ashippun business men bolstered the position of the Ashippun State bank with a novel campaign. When the First National bank of Oconomowoc closed, rumors involving the Ashippun bank started. Business men, in a concerted effort, prevailed on a large percentage of depositors to sign waivers of withdrawal privileges.
Ashippun, Dodge County, Wis. — (AP) — Fighting mob psychology, 30 Ashippun business men bolstered the position of the Ashippun State bank with a novel campaign. When the First National bank of Oconomowoc closed, rumors involving the Ashippun bank started. Business men, in a concerted effort, prevailed on a large percentage of depositors
Federal Government Moves to Rescue Banks Change in Federal Banking Regulations and Appropriation About To Be Made By Congress Come Too Late To Prevent Closing of First National Here But May Aid In Reopening President Hoover's special message to Congress, delivered reportedly on January 5, 1932, urging prompt action on the bills to provide Federal credit for the relief of financial institutions and business generally is said to be having the immediate favorable attention of both houses of Congress and action is expected within a day or two, party lines being disregarded for the moment in the face of the emergency threatening the nation. 2,290 Banks Closed In 1931 Among other benefits to commerce and industry, the measures to be passed will, it is hoped, prevent the steadily increasing closing of banks, and aid in the reopening or liquidation of the 2,290 banks closed in the past year by broadening the basis of bank credit on which the Federal Reserve Banking System has been operating. The bills to be passed are said to be broad enough to provide immediate loans to closed banks that are solvent and with the passage of a separate bill, may permit aid even to the insolvent banks among those that have been closed. New Federal Banking Regulation Within the past week the U. S. Treasury Department is understood to have changed its orders to Federal Bank Examiners with respect to considering the current value of securities in which National Banks have invested the funds of their depositors and stockholders. Heretofore only the market value was taken into account in considering the value of such assets but from now on it is understood that the intrinsic value of such securities and the probability of their being redeemed in full at maturity will also be factors in determining whether or not a bank is solvent. Should Aid Local Situation This new ruling will in all probability have a considerable and favorable bearing on settling up the affairs of the First National Bank of Oconomowoc and the question of its reopening or reorganization, which will be determined by the Federal Banking Department. Council Elects E. M. Solveson Mayor Of City Resigns As Alderman To Fill Unexpired Term of Late Gunder Anderson — Alderman Doherty Elected President of Council Although the matter was delayed to near the close of the session, the Common Council Tuesday night was unanimous in electing Ald. E. M. Solveson to fill the unexpired term of mayor of the city, which term expires in the spring. The mayor-elect succeeds the late Mayor Gunder Anderson. Mr. Solveson's was the only name presented to the council. Werner Otto, Alderman Immediately following his election, Mr. Solveson resigned as alderman from the First ward, and Werner Otto was elected to fill the vacancy on the board. Ald. James Doherty was chosen as president of the council, in place of Solveson. One of the first duties of Solveson was to recommend E. F. Butcher as a member of Finance committee, which was once confirmed. The mayor announced he would recommend other appointments to place on committees on which he served while councilman, at the next meeting in February. Phone Ordered for Port The Council ordered a phone installed at the Oconomowoc port for use in case of forced landings on the field. A local air mail pilot was compelled to use the port, owing to heavy fog. After landing he was compelled to walk some distance to telephone in order to ask Oconomowoc for assistance. Officer Fred Grueschow drove out in the city car and brought the pilot in.
Federal Bank Examiners Called In To Decide When and How Depositors Can Draw Money So That the Bank's Investments Need Not Be Sold In Present Market Which Might Have Resulted In a Loss To All Depositors A series of false rumors, started by malicious persons who for various reasons were enemies of The First National Bank of Oconomowoc, and carried on like a prairie fire by irresponsible gossips, who did not realize the harm they were doing to themselves and everyone else in this community, caused a severe "run" on the bank during the last few weeks of 1931. Withdrawals Over $300,000 After meeting the steady drain continuously until the total cash withdrawals mounted over $300,000, it became apparent to Cashier J. F. Kettenhofen and the directors that a bank however strong cannot be "sold out" in times like these without severe loss and that nothing but closed doors would bring the community to its senses and save the assets of the bank to prevent loss to the depositors. Closing Entirely Voluntary At a meeting of the Board of Directors on Wednesday evening, December 30, it was finally and unexpectedly decided not to open the doors the next morning, although the bank had enough cash available and was still in a position to remain open and meet the "run" for some time, but only at a risk to depositors' rights. The U. S. Comptroller of Currency at Washington was notified of the action taken by the bank board and their reason for it, and was asked to send the Federal Bank Examiner to investigate fully the condition of the bank, consider the "panicky" local situation and determine upon some plan whereby all depositors would be equally protected in the orderly withdrawal of their funds, if that be their desire, rather than letting a minority of "gold hoarders" take all the ready cash and force the bank to sell the securities in which depositors' money is invested at a loss in the present low market where even U. S. Government Bonds issued within the past year are offered at a discount never equalled in history. Depositors' Interests Protected National Banks are governed entirely by the United States Treasury Department at Washington through the Comptroller of Currency. Their laws and regulations are very strict and are designed to protect the depositors' money. When, therefore, the time came that danger for depositors was near, the directors of the First National Bank of Oconomowoc took no chances, acted promptly and with conservative good judgment in closing the bank to protect its remaining assets. Further Protection By Law It is not anticipated that liquidation of the assets will leave any loss but according to law there is even further protection afforded depositors in the fact that all stockholders are held liable for an extra assessment equal to a full 100% of the value of their stock which can and will be levied if necessary. Nothing, therefore, but a forced sale of the assets in a hurry, to avoid which the bank was closed, can prevent depositors from recovering every dollar. Federal Examiner Will Set Plan Once a National Bank is closed, the officers and directors have nothing more to do or say about it until the Federal Banking authorities have examined its condition and decided what is to be done. An Assistant Federal Bank examiner took charge of the First National Bank on Thursday, December 31, and shortly a Chief Examiner and a staff of auditors will complete the work he has started. A plan fixing the rate at which deposits may be paid out will be made by the Federal Banking Department and further plans for the reorganization of the bank or the opening of a new First National Bank will be gone over and approved by the U. S. Comptroller of Currency at Washington before announcement.
Change in Federal Banking Regulations and Appropriation About To Be Made By Congress Come Too Late To Prevent Closing of First National Here But May Aid In Reopening
No Dates Set As Yet No time can therefore be given for the drawing of money or conduct of other business until the Federal Banking Department has finished its work or a part of it at least. The Enterprise has independently and thoroughly investigated all news concerning this bank closing and checked all information given by those connected with the bank and can assure readers that, according to the best information so far obtainable, no depositor in the First National Bank of Oconomowoc is likely to sustain a loss. Even Stockholders May Not Lose It is further the opinion of The Enterprise from carefully check- (Continued on page 5)
Bank Receiver Here--New Bank Under Way Receiver Will Liquidate Assets Of First National ---New Bank May Help
U. S. Treasury Department Reorganization Plan Provides For New, Stronger National Bank Foundation Here and Also Saves All of Old Assets For Benefit of Depositors, Preventing "Dumping" and Losses of Continued Forced Liquidation By Receiver About a month ago, Frank Gross, Jr., Receiver for the First National Bank of Oconomowoc called together in several meetings various local men, representative of all the many interested groups, to aid him in reorganizing the institution and getting its very essential service to the community in effect again and the money "frozen" through its closing back into circulation among the people of this district. Mr. Gross acting on his own initiative was decidedly helpful to the situation and the community owes him much for disregarding his own personal interests in furthering reorganization. Reorganization Committee The committee as finally shaped included the following: Grove E. Palmer, Chairman Colonel Roy F. Farrand Roy O. Henszey George C. Johnson Frank Jones Dr. G. R. Love Arthur D. Lyke Forrest Matheson Major F. W. Mouso Dr. H. A. Peters Stuart Reid Felix Sherffius E. C. Theobald Dr. M. R. Wilkinson Dr. J. Francis Wilkinson Judge N. W. Evans, Attorney for the Receiver Frank Gross, Jr., Receiver. Judge Evans, the only local man who stood to gain by the continuation of the Receivership, also put aside in the interest of the community his opportunity for personal gain by far the greatest in his career as an attorney and aided Mr. Gross in making clear to the members of this committee just what would happen if steps to reorganize were not promptly taken. Washington Committee This committee, after listening to all of the ideas and plans suggested by its various members listed above and placing them in Mr. Gross' hands for consideration, finally appointed the smaller committee which went to Washington ten days ago, Judge Evans, Colonel Farrand, Forrest Matheson, Dr. J. Francis Wilkinson and Frank Gross, Jr. The Washington committee brought back a fully worked out reorganization plan, as announced in The Enterprise last week, finally okayed by the United States Treasury Department. Plan Already In Effect The many complex problems attendant on putting this plan in effect have been solved by Mr. Gross and Judge Evans in less than a single week with the assistance of the Controller of Currency's office at Washington and now all that remains to be done is the terminating of the work of the Receiver and the necessary organization of stockholders and arranging of their payments etc., preparatory to beginning business. Bank Open Next Month The new bank growing out of the reorganization, to open in May, will take over from the closed bank only the assets which are unaffected by the low security market conditions of the times, at their current values, so that the bank will be from the start a solid, sound institution with no "hangover" and fully prepared to deal with any financial problems however long it takes for the markets to come back. Depositors Taken Care Of Although taking over only a very conservative selection of assets of the old bank, to doubly assure no further bank problem arising in this community, the Reorganization plan provided by the Federal Banking Department takes care of the depositors on a very happy basis compared to what might have occurred under less prompt, public spirited action. "Dumping" Assets Prevented By ending the Receivership, the wholesale "dumping" of the assets of the bank on the weakest security market in the history of the civilized world, is entirely prevented. The best assets will be turned into a liquid, newly capitalized, strong institution making all the money available that could possibly be needed for any emergency. Hard Cash "On Tap" These assets are sufficient to put a very substantial amount of their cash at the disposal of depositors at once, without delay of any kind. However, with the "hoarding" problem so recently experienced, the Treasury Department insists that depositors must agree to leave a reasonable portion of their newly released money on deposit in the new bank for six months and another portion for one year. When pass-books are made out therefore, permitting immediate withdrawal of some money, Certificates of Time Deposit will be issued for the six and twelve month deposit requirements. Expense of Liquidation Out The balance of the assets which must await more favorable business conditions to reach their stable value, will be put in a trust fund to be administered without expense by the new bank, and controlled by a committee of three representing the depositors, the new bank and the old bank. This trusteeship will sell these assets over any period of months or years that may be necessary to get the highest possible market prices for them and pay the full proceeds equally into the accounts of all old depositors at regular intervals, without any of the expense or deductions which would have applied had the Receivership continued for a year or two longer with all the waste, loss and "red tape" unavoidably connected with it. Full Details Monday Night A final rechecking by a special Federal Bank Examiner sent here this week by the U. S. Controller of Currency, is now under way to make sure that the present separation of first class assets from those to be held in trust for a time, will leave the new bank with a perfect background of investments that can go only one way—"up." This makes it impossible to state in exact figures at this time just what amount of cash will be credited to old depositors' accounts on opening day but it is positive beyond question that it will be a satisfactory and extremely helpful amount. The exact figures will be given to all depositors next Monday night, April 11, at 7:30 p. m. at the Armory. Stockholders' Assessments In At a meeting of the old stockholders held last Monday evening, April 4, in the Community Hall at the bank, Mr. Gross and Judge Evans explained to them the necessity of signing up without delay, the assessment agreements for payment of $100.00 a share within ten days. They offered their help in figuring out the problem of any stockholder who might not see his way clear to meet this obligation at once. About 110 of the 140 old stockholders were present and most of them signed up. Others who had reason to delay have done so since and many have already paid up. The meeting was a quiet and well ordered procedure except for the attitude of two stockholders, and was an excellent demonstration of community spirit and the accepted responsibility of the old stockholders to the depositors for a situation that is the result of conditions really beyond their control. The old stock certificates are to be surrendered to The Federal Banking Department at Washington, D. C. New Stock $140 Share The new cash capital structure provides 750 shares of a par value of $100 each plus $33 for a surplus and $7 undivided profits. The bank will therefore start with $75,000 capital plus $25,000 or one-third cash surplus and $5,000 of undivided profits—a cash safety margin of exactly 40%, in other words, over the $75,000 actually necessary to operate the bank. This of course makes it an unusually safe investment in times like these. The fact that all the old assets accepted by the new bank are Class A investments, taken up at present market prices, has insured the ready sale of the stock to many who wish to make up losses, including a group of the old stockholders many of whom had already subscribed on the previous strictly "new" bank plan, who see in this an opportunity to get back at least the $100 a share assessment they have paid. Willard Counsell has been appointed to supervise the stock subscription records by the Reorganization Committee, and will take applications and answer all questions on this phase of the matter. Mr. Counsell can be seen at the Bank building. Otto Sylvester, Jr. Washington D. C. Visited Committee A well known and popular former resident of Oconomowoc who has resided in Washington where he is employed by the Federal government, since the World War heard of the arrival of the local delegation which visited the Treasury Department in connection with plans to reopen the bank. He called at their hotel and spent several hours with them, telling them much about life in Washington, adding a pleasant occasion to break the grave atmosphere of the committee's hurried trip. Mr. Sylvester is a son of the Otto Sylvester's on Silver Lake street. Judge Evans visited his home in Washington. Public Dance Modern and Old Time public dance given at Dousman hall Friday, April 15, by the Ladies of Mooseheart Legion. Tickets 50 cents per couple. Good music. Everyone invited.
New Oconomowoc National Bank Charter Signed Comptroller of Currency Published Today On Under "Legal Notices"—Announcements of Monday, June 6, Now In The Mail The final signatures of officials were affixed Thursday afternoon, June 2, to the clearing up the technicalities centering around the Public Funds deposited in the old First National, together with those of the Board of Directors and of the State Board of Deposits, were signed up Wednesday. This "official" action ended the extra ten days of formalities and "red tape" which prevented the opening about May 25 as scheduled originally and leaves the new bank legally and completely ready for business Monday, June 6, five months and one week since the First National closed. Old Depositors Get Half Cash The new National bank will not in any way connect with the old First National, but on opening day pay over to depositors in the old First National, either or on their new pass-books as they may choose, 40% of the amount of their old accounts, placing more than a half million dollars in currency back into circulation in this community at 9 a. m. Monday, June 6. The old depositors may open new savings or checking accounts at once in the new bank and new customers will be welcomed. Rest of Old Deposits To Come The balance of the old accounts is to be paid back to the depositors over a period of years, beginning one year from now, as nearly in full as possible, by a Board of Trustees three in number: George E. Palmer, Stuart W. Finn and Frank Gross, Jr. These Trustees will work out under the supervision of the U. S. Treasury Department, the problem of getting for the best possible price that portion of the assets of the old First National not taken over by the new bank—assets worth originally nearly 50% more than the total of deposits which remain to be paid back, after the old depositors get their 40% cash in the new bank. Depositors Interests Safeguarded There is every reason to believe that the old depositors will receive from this Board of Trustees, over a period of years, a very substantial portion and possibly the full value of their claims, depending upon the recovery of the country from the depression. Trustees Carefully Chosen The Board of Trustees is made up of the largest individual stockholder in the old First National, the largest individual depositor and the cashier of the new Oconomowoc National Bank who will serve the Board of Trustees without charge in his efforts to administer the Trust. All of them are, besides working under the close supervision of the U. S. Treasury Department and its Bank Examiners, have a very definite interest as can easily be seen from the above, in administering the assets of the Trust in such a manner as to bring old depositors as much of their money as possible in as short a period of years as the recovery of the security market and business generally will permit. Mr. Gross also is exceptionally well fitted to serve on the Board, elucidating these Trustees' assets, having had to study their value from every angle for months, as the Bank Receiver for the old First National. FRANK GROSS, JR. Elected Director and Cashier of the new Oconomowoc National Bank. Mr. Frank Gross, Jr. who assumes his new duties as Cashier of the Oconomowoc National Bank on Monday, June 6, has been chosen for this important post in the new bank by the stockholders and Board of Directors primarily because of the constructive work he has done as Receiver for the old First National. Record Considered Phenomenal Both here and outside in Milwaukee, Chicago and Washington, his record of accomplishment in helping to reorganize the bank and thus saving the community from a continued and far worse financial depression for another year or more, is regarded as phenomenal for a Bank Receiver. Most Receivers either will not or find that they cannot work with the people in the communities to which they are sent and still carry out their instructions from Washington. Mr. Gross has managed to do both well and in a relatively short time, considering the size of the bank and the many obstacles that have had to be overcome. Not "Just Another Banker" Another factor that has weighed heavily in the selection of Mr. Gross is the fact that he has not previously been a bank man, and so does not have to do what every banker must do today if he and the institution he serves are to survive, namely: unlearn most of what he thought he knew from experience. "Prosperity" Experience Worthless The banks and the bankers of the country know now that their past experience gained in "good times" means very little under the radically changed conditions of today and tomorrow. Those "experienced" bankers who are succeeding are those who have started in this year to learn the banking business all over again as it is now—not as it was in bygone years. Mr. Gross has had wide contacts with banks and bankers for the twelve years before he came here, as a bondman but he has no old "rules of thumb" to unlearn as far as the inside workings of a bank are concerned. His ideas and policies on banking are being formed by the present experience under the up-to-the-minute, new, different viewpoint of the National Banking Department at Washington. 1932 Experience Best Possible Having just gone through a 1932 Bank Receivership and reorganizing operation very successfully with no old fashioned "prosperity banking" ideas to mislead him, Mr. Gross is surely in a position, with the help of his officers and Board of Directors and the close supervision of the Federal Banking Department at Washington, to keep the new Oconomowoc National Bank solid and free from danger and make it of even greater service to this community. Also as one of the Board of Trustees to liquidate the assets held for the further benefit of the old First National depositors, Mr. Gross is in a position to render extremely valuable service. No one knows more about the assets remaining to be sold than does the ex-Receiver who had to study them for months. Bake Sale The Catholic woman's club of St. Jerome's church will hold a bake sale Saturday, June 11, at Thompson's store. Mrs. M. B. Murphy and family of Chicago are occupying one of the Woodland apartments, Woodland lane. Confirmation At St. Paul's The rite of confirmation was administered to a large class at 10 o'clock Sunday morning, June 5, at St. Paul's Ev. Lutheran church, the Rev. Theodore Kissling officiating. The members of the class are: Elizabeth Frank, Margaret Weege, Laura Kleist, Margaret Born, Lorna Kissling, Frank Miller, Ewald Blank, Willard Blank, Jordan Zillmer, Carl Thurner, William Dames, Donald Kieck, Robert Kleemann. June Term County Court Twenty-four probate matters will be disposed of by Judge David W. Agnew, at the regular June term of the County court Tuesday, June 7. The calender comprises hearing on petition for sale of real estate in the estate of Mary Scheets; hearings on claims in the estates of Amy Lucia Young, Herman Engelsma, Linda Jungbluth, Grace D. Smart, Charles Jacobs, Minnie Klein, Mary Diessner, Jennie Brainard, Mary Siewert, Anna Gumann and John Mell; final hearings and determination of inheritance tax in the estate of Carrie Will; hearing on probate of will in the estate of Leila M. Leatherman, John Mell, Mary Morgan and W. B. Lardner; final hearings in the estates of Lars Peter Hansen, Gottfried Erikson, Jerosa Scheets and William Reich; hearing on petition for administration in the estate of Martin Kern and hearings on the appointment of guardians for Tena Schiellack and Joseph Mell.
Technicalities Finally Overcome at Madison Wednesday New Oconomowoc National Bank Charter Signed by U. S. Comptroller of Currency Published Today On Page 8, Under "Legal Notices"—Announcements of Opening Monday, June 6, Now In the Mail The final signatures of the city officials were affixed Thursday afternoon, June 2, to the papers clearing up the technicalities centering around the Public Funds deposited in the old First National, together with those of the former Directors and of the Wisconsin State Board of Deposits who signed up Wednesday. This "official" action all 'round, ended the extra ten days of formalities and "red tape" procedure which prevented the opening on or about May 25 as scheduled originally and leaves the new bank finally and completely ready for business Monday, June 6, five months and one week since the First National closed. Old Depositors Get Half Million The new National bank while not in any way connected with the old First National, will on opening day pay over to depositors in the old First National in cash or on their new pass-books, as they may choose, 40% of the amount of their old accounts—placing more than a half-million dollars in currency back into circulation in this community at 9 a. m. Monday, June 6. The old depositors may open new savings or checking accounts at once in the new bank and new customers will be welcomed.
Depositors Interests Safeguarded There is every reason to believe that the old depositors will receive from this Board of Trustees, over a period of years, a very substantial portion and possibly the full value of their claims, depending upon the recovery of the country from the depression. Trustees Carefully Chosen The Board of Trustees is made up of the largest individual stockholder in the old First National, the largest individual depositor and the cashier of the new Oconomowoc National Bank which will serve the Board of Trustees without charge in its efforts to administer the Trust. All of these men, besides working under the close supervision of the U. S. Treasury Department and its Bank Examiners, have a very definite self-interest as can easily be seen from the above, in administering the assets of the Trust in such a manner as to bring old depositors as much of their money as possible over as short a period of years as the recovery of the security markets and business generally will permit. Mr. Gross also is exceptionally well fitted to serve on the Board liquidating these Trusteed assets, having had to study their value from every angle for months, as former Receiver for the old First National. Confirmation At St. Paul's The rite of confirmation will be administered to a large class at 9 o'clock Sunday morning, June 5, at St. Paul's Ev. Lutheran church, the Rev. Theodore Kissling officiating. The members of the class are: Elizabeth Frank, Margaret Weege, Laura Kleist, Margaret Born, Lorna Kissling, Franz Riegler, Ewald Blank, Willard Sieloff, Jordan Zillmer, Carl Thurow, William Dames, Donald Kieck, Arthur Kleemann.
It Might Have Been Worse? A Whole Lot Worse! A number of "rock-ribbed" Republicans in this community are giving vent to their spleen these days by threatening to vote "a straight Democratic ticket." Whatever the present Republican administration has done or failed to do in other states and communities, where the statement that "things could have been worse" is being questioned, thinking voters here cannot fail to realize how dire would have been the result in this little community, if the big men of the regular Republican party state organization and at Washington had "forgotten" us last spring. Every citizen of this community, Republican or otherwise, knows or ought to know what would have happened if the closing of the First National Bank here had been permitted to go the ordinary course of bank receiverships. Last spring Oconomowoc was on the rocks and due to stay there for perhaps two years as the result of the run closing its principal bank. Local money difficulties