6268. American Trust Company (South Bend, IN)

Bank Information

Episode Type
Run → Suspension → Reopening
Bank Type
trust company
Start Date
June 13, 1931
Location
South Bend, Indiana (41.683, -86.250)

Metadata

Model
gpt-5-mini
Short Digest
49b11a8d

Response Measures

Full suspension, Books examined

Other: State deputy bank commissioner took charge; later liquidation and attempts to obtain RFC loan for partial distribution to depositors.

Description

Newspapers report the American Trust Company at South Bend closed mid-June 1931 (June 13 cited) after depositors became alarmed by malicious rumors; state banking officials took charge. Later coverage (June 20 editorial and April/June 1932 local pieces) indicates plans for reorganization and application to the RFC to permit distributions — consistent with a run causing a suspension and subsequent efforts to reopen. OCR errors in some articles corrected (e.g., 'frozen assets' and date June 13, 1931).

Events (4)
1. June 13, 1931 Run
Cause
Rumor Or Misinformation
Cause Details
Deposit withdrawals and hysteria triggered by spread of malicious/unwarranted rumors about the bank's condition
Measures
State deputy bank commissioner took charge; local authorities sought reorganization and later applied to RFC for loan to pay dividends
Newspaper Excerpt
caused by depositors who became hysterical after the spread of malicious and unwarranted rumors
Source
newspapers
2. June 13, 1931 Suspension
Cause
Rumor Or Misinformation
Cause Details
Bank closed after frozen confidence and runs spurred by malicious rumors; state bank commissioner/deputy took charge of the institution
Newspaper Excerpt
Closing of the American Trust Company ... at South Bend, Ind., because of frozen assets, was announced
Source
newspapers
3. June 20, 1931 Other
Newspaper Excerpt
this South Bend financial house closed its doors last week, but shortly is to reopen for business ... 'was caused by depositors who became hysterical after the spread of malicious and unwarranted rumors.' (editorial commentary on reopening plans and rumor cause.)
Source
newspapers
4. April 12, 1932 Other
Newspaper Excerpt
The American Trust company, which closed last June 13, will apply to the Reconstruction Finance corporation for loan sufficient to distribute ten per cent dividend to all depositors ... (reorganization/rehabilitation efforts).
Source
newspapers

Newspaper Articles (10)
1. June 15, 1931 Times Herald Washington, DC
Article from Times Herald, June 15, 1931

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3 BANKS CLOSE MID-WEST ROCKFORD, III., June 15 (I. N.S.).-Three banks with combined deposits of almost $6,000. 000 closed their doors here today on the heels of a jubilee celebration designed to mark the return of prosperity. The institutions were the Man ufacturers National. the Security National and the Peoples State Rockford has five other banks. all nationals. INDIANAPOLIS Ind. June 15 (I.N.S. .-Closing of the Amer ican Trust Company $5,370. 000 institution at South Bend. Ind.. because of frozen assets. was announced here today by Luther D. Symons. State bank commissioner PONTIAC Mich. June 15 (I.N.S.) The Pontiac Commer cial and Savings Bank. with listed assets of $16,000,000. failed to open its doors here today A heavy run on the bank is believed to have caused the action Officials declared that $2,300,000 in cash had been withdrawn during the past five days.

2. June 15, 1931 The Washington Times Washington, DC
Article from The Washington Times, June 15, 1931

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3 BANKS CLOSE IN MID-WEST ROCKFORD, Ill., June 15 (I. S.).-Three banks with combined deposits of almost $6,000, 000 closed their doors here today on the heels of a jubilee celebration designed to mark the return of prosperity. The institutions were the Man ufacturers National. the Security National. and the Peoples State. Rockford has five other banks, all nationals. INDIANAPOLIS, Ind., June 15 (IN.S.).-Closing of the Amer ican Trust Company, a $5,370,000 institution at South Bend, Ind. because of frozen assets, was announced here today by Luther D. Symons, State bank commissioner. PONTIAC, Mich.. June 15 (I.N.S.) . - -The Pontiac Commercial and Savings Bank. with listed assets of $16,000,000. failed to open its doors here tory y. A heavy run on the bank is believed to have caused the action. Officials declared that $2,300,000 in cash had been withdrawn during the past five days.

3. June 15, 1931 The Evening Sun Baltimore, MD
Article from The Evening Sun, June 15, 1931

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Rural Women Meet State Takes Charge 3 Who Reached Peak DEFICIT HANDICAPS For U. Of M. Course Of South Bend Bank Resting In Juneau CHILDREN'S HOME Gather For Annual Five-Day Sea. Suspension Of American Trust First To Ascend To Top Of Mount Happy Hills Institution Maintaining 50 Beds On Budget For 20 Still facing deficit of about $3,000 on their operations for the current year, the Happy Hills Convalescent Home for Children is maintaining fifty beds on a budget adjusted to twenty beds. Mrs. Louis Eliasburg. the secretary of the home, is the authority for that The home started the year with the prospect of an $8,000 deficit. Contributions by members of the board of the institution reduced it by about $3,000. A part of the Community Fund. the home is not permitted to make public campaign, says Mrs. Eliasburg. but it is permitted to receive checks which its friends send to the treasurer, W. W. Lanahan, Baltimore city. The home. which is devoted entirely to children, is located at Rogers ave nue and the Cross Country Boulevard sion On Varied Phases Of Farm Life College Park, Md., June 15 (P)Women from rural districts in all of parts of the State gathered at the University of Maryland here today for the annual rural women's short course conducted under direction of the ex tension department of the school. The five-day program of classes and lectures embraces practically every phase of rural life, from canning to how to keep the farm home. The course was arranged by groups, including the required courses and those elective. with certificates to be awarded at the close of the meeting. Last year more than 700 women at. tended the sessions, and officials of the extension department estimated that this summer's meeting, the ninth one. would be more widely attended than those in the past. Company Attributed To Frozen Assets Indianapolis, June 15 (U.P)-Closing the American Trust Company, South Bend, one of the largest banks in the Middle West, was announced today by Thomas D. Barr, deupty State bank commissioner, who took charge of the institution. E. H. Miller, president of the bank. said frozen assets were responsible for the closing. Financial standing of the bank is listed as Deposits, $5,370,000: undivided profits, $170,000: loans, $4,670.000: capitalization, $500,000, and surplus, $160,000. Pontiac Bank Suspends Pontiac, Mich.. June 15 (P)-The Pontiac Commercial and Savings Bank, the city's largest financial institution, was closed today by order of its directors. A notice stated the closing was ordered to conserve assets and preserve the interests of depositors. Fairweather-Report Trip Was Difficult Juneau, Alaska, June 15 (AP)-The first ascent of Mount Fairweather, 15,292-foot peak, has been made and the three climbers, two of whom were baffied by the peak seven years ago, were here today resting from their labors. The men are Dr. W. S. Ladd and A. Carpe, both of New York, and Ter- ris Moore, Boston. Ladd and Carpe 1. tempted the ascent in 1924 too late in the season and were forced to abandon the trip. The party left here in April and the climb to the summit of Mount Fairweather was made after several days of preparation at base camp. They returned here Saturday, reporting hard trip. northtwenty miles mountain is The west of Cape Spencer.

4. June 15, 1931 Telegraph-Forum Bucyrus, OH
Article from Telegraph-Forum, June 15, 1931

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Three Rockford Illinois Banks Close Doors Today ROCKFORD Ill., June 15-Three banks with combined deposits of $6,000,000 closed their doors here most the heels of celetoday on of prosperity The institutions were the manufacturers National the Security National and the Peoples State Rockford has five other banks, all nationals INDIANAPOLIS Ind June Closing of the American Trust company, $5,370 institution at South Bend, Indiana. because of frozen sets, was announced here today by Luther D. state bank com-

5. June 15, 1931 Waukegan News-Sun Waukegan, IL
Article from Waukegan News-Sun, June 15, 1931

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3 ROCKFORD BANKS CLOSE DOORS TODAY Three banks with combined deposits almost closed their doors here today the heels of jubilee celebration designed to mark the turn prosperity. The institutions were the manufacturers National. the Security tional and the Peoples State. Rockford has five other banks, all tionals. INDIANAPOLIS, Ind., June of the American Trust company, $5,370,000 institution, at South Bend, Indiana, because frozen assets, was announced here today by Luther Symons, state bank commissioner. PONTIAC. Mich. June Pontiac Commercial Savings bank. with listed assets of $16,000,000 failed to open its doors here today. heavy run on the bank believed to have caused the Officials declared that $2,300,000 cash had been withdrawn from the bank during the past five days.

6. June 20, 1931 The Herald-Palladium Benton Harbor, MI
Article from The Herald-Palladium, June 20, 1931

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THE NEWS-PALLADIUM COMPRISING THE EVENING NEWS Vol. 33. No. 230 THE DAILY PALLADIUM Vol. 51. No. 43 BUSYBODIES AND THE BANKS An impressive demonstration in what gossip and rumor will do to responsible banking institutions is afforded in the case of the American Trust company of South Bend, one of the large financial institutions of that nearby Indiana city. This South Bend financial house closed its doors last week, but shortly is to reopen for business Accord, ing to the deputy banking commissioner of Indiana the institution should never have been closed Its closing,' comments the state official. "was caused by depositors who became hysterical after the spread of malicious and unwarranted rumors. Efforts are now being made by the South Bend authorities to seek out some of those who circulated the stories which resulted in run on the bank and eventually caused its closing. with view to prosecuting them. Little, however. will be gained from such action. The harm has already been done and the work of years in building up public confidence in the institution has doubtless been seriously impaired It would be silly to argue that the banking business has not had its troubles ever since the depression started. Many banks have closed and both depositors and stockholders of such institutions have been the losers. However, where one bank has closed its doors scores have continued to do business. Banking mergers have prevented other failures and thus pro(tected all depositors. The banking departments, both state and national, have doubled their vigilance and are insisting that steps be taken to increase the security behind the public's cash. In many communities the larger banks have played the role of big brother and have gone to the assistance of smaller institutions. The thuth is that greater precautions are being taken today in the banking business generally to protect the public's deposits than have ever been taken before. What the banking business needs more than anything else at the present time is the assistance of its customers in helping to restore general confidence in the banking situation. At Indianapolis this week President Hoover said that frozen confidence was worse than frozen securities. This is everlastingly true in the case of the banks. Banking depends upon confidence good will more than any other industry. One untrue story about bank's condition can start a run against bank that is absolutely able to pay its depositors 100 cents on the dollar and if that run continues such bank will have to close its doors. Idle rumor and malicious gossip will ruin the finest and the safest financial institution in the world. Not long ago in New York an eminent banker, asked what he wanted most to strengthen his institution, replied: "Confidence. would rather have man say good word about my bank today than appear at the teller's window with a bag of gold. We have more money than we can wisely and safely invest. What I'm looking for is deposits of good will and not deposits of dollars." He spoke volumes as every banker in the country so well Many years ago Benton Harbor had a bank failure, the old First National bank. To this day business men of that time say the First National should never have been closed. But street gossip and baseless rumor sent depositors hurrying to its doors and eventually the bank was closed When the receiver had cleaned up the bank's affairs it was found that the depositors got every dollar of their money and even the stockholders had something to divide It was another case of frozen confidence. Sometimes we think frank discussion of the banking situation, especially when times are hard and the banker is having his troubles the same as any other business man, would help mightily to dissipate frozen confidence. Too often the public is left guessing when publication of the actual facts would much to allay fear and apprehen sion. If twin city bank depositors, as an example, could know the measures that have been taken in the last year and a half by twin city banking institutions to bring to these financial houses larger measure of security we believe they would have a great degree of confidence in the local banks. Certainly they would be happier in the knowledge that nothing has been neglected which should have been done, to bring added strength to the resources of our banks, that depositors might have the fullest possible measure of protection and security But no matter what the bankers and the banking departments do to strengthen the banks the greatest enemy that banking has-the gossipis an ever present peril The slightest rumor sends the gossip on his destructive way He not only repeats what he has heard but usually colors it. The most innocent incident in con nection with the banking business is twisted and exaggerated and misconstrued until, when the innocent depositor gets the yarn. it's tale that would set the redoubtable Capt. Kidd quaking in his bloody boots. The wonder is that bank runs are not more So long as there are banks there are going to be bank failures and in difficult times of business stress banks that should never have been started and banks that have been mismanaged are going to close their doors The average banker is no different than the business man-both are subject to the same laws of mortality when they run into But the public must never for moment lose sight of the fact that it has larger stake in the banking business than in almost any other commercial venture and if it insists upon lending a willing ear to every idle rumor that depression breezes bring it must take the consequences-and those consequences are always fearfully destructive. It isn't the civic booster who can do the most good today. It's the person who will say something good about his bank to neighbor and friend.

7. September 22, 1931 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, September 22, 1931

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COUNTY TO SUE THREE BANKS FOR $262,000 Martin Reveals Plan After Board of Finance Asks Legal Steps. DELAY ACTION IN TWO CASES American Trust, Toth State and Franklin Institutions to be Targets. County Attorney Alfred E. Martin announced to-day that suits will filed in the county courts immediately to collect $262,000 in public funds tied up in the closing of three South Bend banks. The announcement of the county attorney followed special meeting of the county board of finance late Monday at which resolution was adopted calling for force the funds, part of which have tied up for two years. The county has total of about in public tied up in five closed banks of the county but the suits for recovery will be filed against only The fourth bank has started payment of the county deposits and the board finance is awaiting word from the auditor before beginning tion against the fifth institution the fact that $60,000 in state funds is on deposit in bank Priority in Doubt. The court action to recover the county's deposits is liable to fraught with legal entanglements, however. because of matter before the state supreme court regards to claims in the stances bank The matwas carried to the high court six ago to termine public funds have priority after banking institution. No ruling has been handed down on the question and bank receivers throughout the state withholding the payments of any pending the decision. The banks against which the action will be started are the American Trust company, now in the process of reorganization. the Toth State bank and the Franklin Trust are operating for the Toth State and Franklin Trust and the county's funds in both are surety bonds signed by former officials of the the Toth State bank closed the county had $28,000 on deposit there and yesterday's meeting of the board finance several former bank officials who signed the surety bonds held by the county auditor appeared and said they were unable to make reimbursement from the liquidated Cash Reported on Hand. When the Franklin Trust company nearly years ago on orders of the state banking department the county had approximately $50,000 on deposit but the receiver recently paid dividend of $6,000 the county reducing the total $44,000. The former officials of the bank who were on Franklin Trust personal sureties have appeared before the board of finance on several stated that attempt was being made to raise county money from liquidation. It was reported to-day, however, that the receiver of the Franklin Trust company has considerable cash on hand but refuses to make any pending ruling on the question before the supreme court. The largest of the three suits will be against the American Trust company and the United States Fidelity Finance company bonders of the $190,000 in county funds on deposit there. Of the $90,000 protected by collateral bonds held by Continued on Page Two. Column Two.

8. November 28, 1931 The Indianapolis Star Indianapolis, IN
Article from The Indianapolis Star, November 28, 1931

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Post Holiday Auto Accidents Claim Lives of 3; Snow Blamed for Wrecks [Special to The Indianapolis Star.] VALPARAISO, Ind., Nov. Nick Marros, 35 years old, Hammond, killed, and John Napraton, Hammond, was injured critically today when their auto was struck by Chesapeake and Ohio freight train seven miles south of VICTIM OF HIT-RUN DRIVER. TERRE HAUTE, Ind., Nov. Small, 45 years was injured fatally last night when struck and run found the street. She died while being taken pital. SNOW BLAMED FOR DEATH. Ind., Nov. Fred M. Allen, 39 years was killed last night by an automobile while walking along United States highway No. here. The car struck Allen was driven Cary, said that snow his windshield his vision. survived by the widow and three daughters. CAR, TRUCK HIT IN STORM. LEBANON, Ind., Nov. Shaver, 23 years old, of Frankfort, injured probably fatally today when the which he riding with Gerald Miller collided headon with cattle truck front of Witham hospital here. Shaver suffered fractured skull. hospital attaches Miller said vision was which collected on the windshield. CHILD INJURED IN CRASH. Ind., Nov. Betty Havens, years old, daughter of Mr. and Mrs. Walter Havens, was and seriously today when the car in which she was riding with father hit truck driven Wilbur Atchison, 1641 College avenue, Indianapolis. The accident occurred four miles east of here on the child was taken to her home for HURT AVOIDING ACCIDENT. Ind., Nov. George son of ness Robert Conant. son of local cut badly today which were riding was ditched headon collision with machine coming from the opposite direction. Twenty stitches quired the wounds of was cut by broken window glass. WOMAN WRITER INJURED. SOUTH BEND. Ind., Nov. -Mrs. Eugene H. Miller Sr., wife of the president the American Trust Company, which was closed some time ago, was hurt critically today when automobile driven by her husband skidded overturned on the pavement of South pinning the couple beneath the Passing motorists freed the couple from the wreckage and brought them hospital. Mrs. Miller has possible fracture and other critical injuries. blood transfusion be to her life. She literary circles. being author of several books for children. CAR HITS BRIDGE, HURT. LINTON. Ind., Nov. and Mrs. Ova Sapp of Terre Haute. both 51 years old. in Freeman Greene county hospital with injuries suffered accident near Jasonville They were blinded by the lights an approaching automobile struck bridge severe scalp wounds. Mr. Sapp also suffered a dislocated hip.

9. April 12, 1932 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, April 12, 1932

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FOR DIVIDEND DEPOSITORS 10 Per Cent Distribution, Same as Union, Planned if Plea Succeeds. EMMONS MADE PRESIDENT Succeeds E. H. Miller, Sr., Who Resigned; Haberle is Board Chairman. The American Trust company, which closed last June 13, will apply to the Reconstruction Finance corporation for loan sufficient to distribute per cent dividend all depositors, was announced day. Such dividend, based on $3,044,in deposits on March would release $304,425.06 to local persons whose funds been tied up in the institution. The closed Union Trust company also seeking Reconstruction Finance loan for per cent dividend amounting to $276,000 and these projected dividends, together $41,376.12 distribution already declared Union Trust savings investors' accounts, makes total which may be released depositors. Announcement of the preparation an application the Finance corporation by the American Trust nection the election Emmons of the bank to M. Miller, resigned Mr. agent the institution since the closing. John B. Haberle has been elected the board succeed Mr. Miller and Albert named vice Rerick elected Albert McGann secretary and Titus trust officer. Mr. Emmons, Mr. Mr. Rerick, Mr. McGann M. Sanders, who represents the stockholders' and depositors' committee. Other members of the stockholders' and depositors' committee George Harrop and Herman Ries. the Haberle, Mr. Emmons, Fulk, Mr. Rerick. Alexis Coquillard, Adler, K. Vitus Jones and Herbert Sharlock. The were meeting Monday Takes Time for Results. Referring to the application to the Finance corpoMr. "It proposed to present an application loan to Reconcorporation which to pay dividend positors approximately cent. The application and supplemental forms are in process and will be ready to file with within time. difficult this money available for ment depositors but the the officials release the fund can procured. should borne mind, however, that take time and efto obtain desired Emmons said that the stockholders presented with reports Monday's meeting covering all phases the liquidation. Chief among these reoprts was ing net reduction assets since the closing. Deposits have transfer of posit by assignments, Surplus Reduced. Surplus and undivided profits show reduction, according to Emmons, since the closthe difference tween the earnings the since closing and losses sustained on the sale securities held banks as collateral for loans. The collateral was sold

10. June 26, 1932 The South Bend Tribune South Bend, IN
Article from The South Bend Tribune, June 26, 1932

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STATE COURT'S DELAY IN BANK RULING SCORED "Pathetic," Says One Receiver; "Dilatory" Second Charges. AFFECTED Public Funds Held Up; Also Prevents Distribution of $20,000 in County. More than $20,000 is lying dormant in St. Joseph county bank vaults awaiting decision by the Indiana supreme court that will provide for the distribution of the money by receivers for three defunct banks in the county. The same decision will directly effect nearly $1,000,000 in public funds tied up in three other closed South Bend which are now in the liquidation. Definite action by the higher court has been for nearly since the test case was transferred to that court from the Indiana court, where on file nearly two years before justices of that court disagreed decision. Since the Cound its way to the supreme court, several similar appeals have been taken from every section of the state. estimated that throughout the state effected by court's delay in handing down ruling. Calls Delay Attorney Orie Parker, who represents Miss Ethel receivfor the Franklin Trust company, declared: pathetic the way the court delays action on an important issue of that kind.' Schurz, receiver for the North Liberty State bank said: supreme court has the reputation being dilatory. or years making decision and, from past experiences, another five years before the ruling is made. The Franklin company has about $8,000 for the question the priority claims on public funds blocks the payment the money to depositThis question must be setin the higher Mr. Schurz said today that he could distribute about $8,000 if the priority claim dispute was The blocking the payment $5,000 ready the hands of Citizens' Trust Savings bank. receiver for Lakeville State bank Three Banks Affected. Three other large South Bend closed and in the process liquidation, are also hampered by the dispute to priority. They are Union Trust company half million dollars being held in public funds. The bank about $100,000 public funds tied up, of which $85,000 belongs to Bend school Over $100,000 school funds being held the American Trust comSeveral townships also have pany. funds in the closed South Bend banks. was pointed out that suits against surety bond signers coverthe money these banks have ing but determination been priority claims would exonerate the bond signers in event the public funds are given priority. Only recently the Union ship the town of this county, awarded in superior court No. against bond covering in Lakeville State the amounting to bank, $20,000. Will Be Appealed. This decision to be appealed the supreme court Attorney Walter Arnold, was said Saturday. petition by the receiver of the following the judgment, distribute blocked by town and until the higher court rules on the claims. The Washington State bank has one payment of 10 per but time that sufficient addithe tional funds were available to meet claims in the event the priority court ruled their favor. higher Continued Page Six. Column