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WESTERN BANKS CLOSE DOORS IN DAY Central Bank and Trust Co., Largest in Asheville, First: All Three in Hendersonville Close. and by Carolina banks closed Cen were tional and the Bank of State examinof board in statement step past
Central Bank & Trust Company (Asheville, NC)
Episode Information
- Episode UID
66003871571- Episode Type
- Run โ Suspension โ Closure
- Bank Type
- trust
- Bank ID
-
6600387routing - Routing Number
66-0038- Start Date
- November 19, 1930
- Location
- Asheville, North Carolina (35.601, -82.554)
Metadata
- Model
- gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
- Short Digest
b17863a9e5f437fa
Response Measures
None
Description
Failure tied to alleged fraud/insolvency; board closed bank Nov. 20 and receivership/legal actions followed.
Events (3)
1.
November 19, 1930
Run
- Cause
- Bank Specific Adverse Info
- Cause Details
- Heavy withdrawals due to knowledge/suspicions of insolvency and alleged misappropriation/fraud; declining liquid assets and mounting withdrawals.
- Measures
- Accepted deposits from city and county after banking hours; officers sought loans and liquidated assets to meet withdrawals.
- Newspaper Excerpt
- If the bank had opened the morning, its funds would have been depleted within an hour. A run of the bank was assured.
- Source
- newspapers
2.
November 20, 1930
Suspension
- Cause
- Bank Specific Adverse Info
- Cause Details
- Board voted not to open after heavy withdrawals and inadequate cash/liquid assets, effectively suspending operations due to insolvency concerns.
- Newspaper Excerpt
- Central Bank and Trust Co... failed to open for business today. notice was posted on the door advising the public that the bank was closed on order the board of directors
- Source
- newspapers
3.
December 9, 1930
Receivership
- Newspaper Excerpt
- Asheville Bank Receiver Asked In New Petition ... application for receiver filed here today in district court ... petition that the Central Bank and Trust company trustee enjoined from interfering with the company's property and assets.
- Source
- newspapers
Newspaper Articles (23)
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ASHEVILLE. BANK CLOSES ITS DOORS Asheville, N. Nov. 20 Central Bank and Trust Co., Asheville's largest financial institution. failed to open for business today. notice was posted on the door advising the public that the bank was closed on order the board of directors for the assets." The bank's last statement of condition showed more than $18,000,000 on deposit.
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Five Banks W. North Carolina Bank and Trust Co. Central At Asheville is Includin the Institutions Associated banks North including Western Central Bank and Trust company with deposits of closed today John state here. the Biltmore Oteen the First Bank Trust and the company American Bank and Trust Company Hendersonville.
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SECOND ASHEVILLE BANK IS SUSPENDED ASHEVILLE. N. C., Nov 21-(AP) -The American National bank here falled to open this morning, bringing the total number of banks to close in western North Carolina in two days to nine. A note on the door said the bank had been closed to protect depositors. On September 24, date of the last bank call, the American National listed deposits of $2,000,000. Failure of the Central Bank and Trust company of Asheville, fourth largest single bank in North Carolina, yesterday, precipitated a financial crisis in this section. Within few hours seven smaller banks had closed. More than $4,600,000 in city funds and $3,100,000 in county funds was tied up in the closing of the Central company, but city and county officials announced the greater part of the money was covered by col
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Asheville Bank Receiver Asked In New Petition WILMINGTON Del., Dec. that the assets the tral company. Asheville have unlawfully used for the benefit the close Central Bank and Trust company that city contained in application for ceiver file here today in district court. The application was filed by Kusterer and company on behalf of itself and other bond holders. The asked named "prevent further dissipation diversion the company's property and assets also petitionthat the Central Bank and Trust company. trustee enjoined from interfering with the the company any of the trust funds held the bank security for bonds of the defendant The officers the bank and curities company are the same. the suit set December set as the date for hearing.
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1 ROMANCE OF FINANCE THAT FADED INTO GHASTLY TRAGEDY entral Bank and Trust Company Had Dictated Policies In City and County for Decade-Controlled Financial, Business and Real Estate Finally Met Reverse After Reverse. Asheville Dec. collapse of he Central Bank and Trust Company if which Wallace B. Davis was pres ent, depicts a romance of finance hat faded into a ghastly tragedy. Its powerful influence spread to all sections of western North Carolina and with its closing last month, lozen banks closed their doors in symIts ramificat ons reached into all arts of the south and middlewest: is manipulations in finance caused ven the money-wise New York bankrs to give For a decade, it dictated the poliies and dominated the pol tieal leadrs of Asheville and Buncombe counWith only a few exceptions, it sereed what men should be elected to ffice. It dominated civic and comthe hurches were not overlooked. In Control For Years. For years, the finanial, business and real estate fields Asheville and Buncombe county It decided what public improvements should be made, what streets should paved, what new avenues of travel should be established. It fixed prices on real estate by its decisions to buy and sell. It determined the success or fa lure of businesses by its support or derision. In its collapse, the wealth and inluence of its friends tottered: its Ponzi-methods of finance bobbed into the pitiless spotlight of public ty; its political supporters were pushed to of disaster Innocent de the brink lost their life savings, the positors ruling class of the and county were hard put to defend their power. Never has financial institution in western North Carolina dominated so completely Never has one spread its influence into so many different fields, among so many Ifferent peoples. With the collapse of the called real estate boom in Asheville and western North Carolina, the strength of the Central, Bank and Trust company was severely tested. But it required years of depression and poor business to dip into its powerful reserves. Reverse After Reverse. Reverse after gnawed away at its foundation. For weeks, saw many of its depositors withdraw then support; only the intervention of the city and county prevented an earher break When the governmental agencies had reached their lim fact, overstepped their legal restrictionsthe end was inevitable. Desperate means were employed to keep cash on hand to meet the heavy withdrawals that grew in number and gravity as the days passed. Deposits were accepted from the city and county after bank ng hours. Every availliquid asset was sacrificed to able the dwindling amount of That important item, designated as and due from other shrunk more than $2,200,000 in only few The more liquid paper rushed to Cincinnat New York was Baltimore for loans. Collateral and of two and three to one was put up. Financiers Saw End Near. Financial recognized the end near November 14; they had was expected it for weeks, but it became inevitable that day it was only a quest on of days, probably hours. The bank opened for business Sat urday, November 15, with less than $100,000 in cash. Somehow. it managed to struggle through the day. The week-end brought respite. but heavy withdrawals Monday and Tuesday made serious inroads. Wednesday, November 19. was one of desperation; any one of 50 or more depositors could have taken all the approximately $7,000 in silver. The officers and directors tried des perately all Wednesday night to rais money. Friends were sent to ti interecde in behalf of the Central bank. Their efforts proved futile; no liquid assets were on hand to gua antee such loans. Telephone calls banks, investment hanking houses an friends in other cities failed to brin any response. It was with a heavy heart that th board of rectors voted early Thurs day morning, November 20, not to open the doors. There wasn't at crowd in front of the bank, but there were hundreds of people scattere around Pack awaiting to pounce upon the institution for the runds. If the bank had opened the morning, its funds would have been depleted within an hour. A run 01 the bank was assured. With the bank's suspens'o off cials began the task of unraveling th real story. In all sections of th south. there bobbed up transaction with the Asheville institution. Caldwell and company, the Nash ville investment banking house which collapsed several weeks previously was accused by the bank of convert ing Asheville city notes to its on use. information had been divulg ed, and the city had been credited W th the entire proceeds of the $305 000 note: although $55,000 was n nut on the books until the final day the bank was in business. The Guaranty Bank and Trust com pany, of Alexandria, La., filed a peti tion in federal court at Nashvil Saturday, December 6. asking fr possession of $150,000 in certificates of deposit upon the Central bank wh ch had been deposited by th closed Bank of Tennessee as a gual antee of deposits. The Bank of Ter nessee was a subsidiary of Caldwe and Tennessee papers, including th Chattanooga Times, had repeated! accused Gov. Henry H. Horton, Nashville publisher and former United States senator. and Rogers Ca well, head of the defunct Caldwell ar company. of nolitical alliance The also said that Caldwell and Lea had conferred with W. B. Davis, preside of the closed Central Bank and Trus company here. concerning the forms tion of southern investment bankin heuse. The Central bank was frequent mentioned as allied with the Caldwell Lea interests. financially and polit allv, and its failure was generally at tributed by Tennessee ะดัะตะณะฒ to close connection with the Caldwel Lea-Horton combine. Among the deposit securities hel by the tv of Asheville as a gua antee of its deposits in the Centre bank were notes. totaling more than $40 000. either indorsed by Col Ler or protected by collateral in newspa Ders and corporations owned by him The city might have to ask for a re order to force During the last fortnight. informr tion has trickled into the city about the county be ng used by Caldwell inter former Chairman Newton M. Ander son accuses the Central bank of mis apprepriating $875,000 which had been deposited in the bank to pay of notes due between November 12 an 15. Asheville business firms and ind viduals have received notices from the Fifth Third Union Trust compan of and other Balt more and New York, advisin them their notes had been purchas payment in full on maturity date WE demanded. As each day cames. more informs the real story has yet been told. Mechanized Agriculture. Salisbury Post The agriculture donartment of the chamber of commerce of the United States points out that one of the big factors in the scrambling of the farm situation is the steadily increasing mechanization of agriculture. Mere and more such crops as ton. wheat and corn are being proThis calls for more room. Mass prothe corn, cotton and wheat belts. in consequence are slowly moving away from their old habitats to new ones. Thus cotton is perseptibly moving to the west from the deep south. Wheat is heading for the wide open *nces Even corn is shifting its base Where this all will lend to is quite clear. In the end, probably will make agriculture as whole much stronger. But the period of joubt, just ask any tarmer News of Harmony, Route One. Harmony, R-1 Dec. 16. Anothen Christmas will soon be here The older you pet the more rapidly they nass. They are going to have Christ mas exercises at most all the churches neighborhood. The following families have it: Messrs Reed Laws. Will bea, Cecil Kinder and R. M. Dan- indisposed th side pleurisy Mr. Johnson has moved to the H F Heath place. A Mr Lucas, from South Carolina is going to move where John Cobb lives. Mrs L. W Gaither and daughters Borothy and Jewel. visited Mrs. Caither's father and mother. Mr and Mrs. J. L. Heath Mrs. J. L. Heath is indisposed The United States senate may be losing some of its colorful figures but the word from Nominee Huey of will Pittsburgh Post.
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Haywood Bank Fixtures ill Be Put On Sale of the Haywood street branch the suspended Central Bank and Trust were moved the building street and for of storage and Fixtures this and of the Central Bank and Trust pany are being sold through the courts by the liquidating agent, N. Henson. Auditors now are making formal audit the condition of the CenBank and Trust company as of the final day of The bank Nov. 19. the audit It will be filed with the clerk of superior court. in superior court The plaintiff based her action ASKS FOR DIVORCE grounds of infidelity. They Madeline Wilson filed suit for married C., in Greenville, absolute divorce from George tober, 1929.
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JOY AT BANK REOPENING! Whole Town Celebrates Opening of Institution Closed Last Fall. WEAVERVILLE, N. C., April 2 (P).The whole town celebrated today as the Farmers and Traders Bank, which suspended business last November, reopened. The mayor made a speech and the student bodies of the public schools marched in a body to the bank for exercises held in the street before 1t. The bank suspended during a financial crisis precipitated in Western North Carolina by the failure of the Central Bank & Trust Co., Asheville.
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NO LIGHTS Weaverville, N. C., April 2. (AP) The whole town celebrated today as the Farmers and Traders Bank here which suspended business last November reopened. The mayor made a speech and the student body of the public schools marched in a body to the bank for exercises held in the street before it. The bank suspended during financial crisis precipitated in Western North Carolina by the failure of the Central Bank and Trust Company, Asheville.
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TOWN CELEBRATES WHEN BANK REOPENED Weaverville, N. C., April 2-(AP)The whole town celebrated today as the Farmers' and "raders' bank here which suspended business last November reopened. The mayor made a speech and the student bodies of the public schools marched in body to the bank for exercises held in the before it. The bank suspended during a financial crisis precipitated in western North Carolina by the failure of the Central Bank and Trust company of Asheville.
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The whole town celebrated today y the Farmers and Traders Bank here. which suspended business last November, reopened. The mayor made a speech and the student bodies of the public schools marched body to the bank for exercises held in the street before it. The bank suspended during financial crisis precipitated in Western North Carolina by the failure of the Central Bank and Trust Company Asheville Mrs. Peters said last night that her son returned home from Duke University, Durham. N. C., to recover from recent illness
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SEES ON DEBTS Goes to 'Make Acquaintance' Of a State Commissioner. United N. Nashville, Tenn., banker and publisher, visited of Banks Gurney P. Hood here today to Lea's to the Bank and Trust Co., defunct Asheville The Luke and E. Charlet, will go on trial July 27 Asheville. to defraud the Central Bank leged of certificates deposit, notes and cashiers checks. With Lea at his conference with Hood was Albert L. Cox, Raleigh, his Lea informed Hood that If he were to his fairs in an orderly and manner was not pressed too closely he believed could all obligaHood withany of his creditors will held soon, early in out plan for his said. The Central Bank and Asheville failed last Nov. 19. in public funds on and precipitated total approximately Lea said his visit here today nature and to make of Commissioner Hood.
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LEA IS SILENT UPON PROPOSAL Son of Publisher Says No Comment to Be Made Yet Upon Cash Demand. see publisher and financier said here today no comment would be made on the action of North Carolina creditors in demanding 10 per cent of his father's obligations in that state before liquidating proposal would be considered until official notice of that action had been received here The North Carolina creditors yesterday proposition submitted by Colonel Lea would not be considered until 10 per cent of the indebtedness had been paid. Colonel Lea had suggested plan whereby his obligations would be gradually retired The creditors agreed consider the plan after 10 per cent paid The total more than and are alleged due the receivers of the defunct Central Bank and Trust company of Asheville, and the City of Asheville
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$300,000 CUT FROM FRAUD CHARGE AGAINST LUKE LEA ASHEVILLE N. C., Aug. 24. By I. N. S. Delivering hour charge to the jury, Judge M V. Barnhill today reduced by $300,000 the sum of which Col. Luke Lea Tennessee publisher and three other men are charged with conspiring to defraud the closed Central Bank and Trust Company The amount now is $1,000,000
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Leas Forward Their Appeal To Raleigh Asheville, Aug. end another chapter the legal story growing out of the failure here last of the Central Bank and Trust Company had been writ. ten today and the manuscript starton its way to state Supreme Court for final editing. Luke Lea. Tennessee publisher son. Luke Lea. and Wallace Davis. president of the defunct bank looked the higher court possible means of escape from sentences imposed upon them their conviction of defrauding the bank.
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TO REPORT ON CASE TODAY Instructed By Judge To Come Into Court At Nine o'Clock (Continued From Page One) and of Attorney Curtis for Harris heard When arguments completed shortly Judge Webb when he charge Judge Webb read the tentions the then contentions of the defendant Harris. later contentions defined law as It applies to evidence in the That Davis and Harris devised scheme to defraud: that the ported fraudulent scheme was to Central Securities company bonds the United States scheme defraud: that while the mails used by only one of the defendants in both collaborated the purported fraudulent scheme; that Central Bank Trust condition greatly the boom 1925-26 bank was insolvent and that Davis then conceived the Idea of getting money through sale of Central curities bonds for bolstering the bank: by Davis directors the company concerning mortgage panies acquired the untrue. and that Davis' recommendations part scheme his prevent withdrawal mortgage from the Central Bank; concerning the condition the tral Bank Trust company. sent out by mail, were untrue; that Central Securities company stock was sold on that the comwas being organized for industrial in North Caroand these were from those made in selling bonds; that Central Securities bonds were not guaranteed, there were surety bonds for bonds sold and the bonds and the company wise that the tral Securities being prosperous firm and dividends were paid when the company was in reality operating Claims Outlined The contentions as submitted by counsel cited the letters, statements and other dence supporting the charges of In answer, counsel for Davis submitted the following which were read to the jury "The defendant contends in this that the Central Securities organized conducted for an purpose: and his honesty purpose by the which he used in securing the Board the highest character and best business ability available in the city of Asheville: he contends that man intending to defraud would not careful select smartest most honest men he could control the company the best legal he could secure and the trust and bonds were prepared by Francis Heazel lawyer highest standing and ability. Purpose of Frm "The defendant contends the purpose of the securities was and sell mortbonds and in financing that the did to Western North Carolina desirable mortgage company bonds became difficult beuncertainty tate values. but large mortgage bonds falling due in November and Decemand in and 1932 that these bonds must be paid and account of the difficulty securing new mortgage bonds, the money the Central the off the maturities big and purchasing take their place: that he and the board directors considered that Central Bank and Trust company would carry and that the funds the that the Mr. Davis thought would merge the strong chain make the deposits absolutely safe beyond any doubt and also was carrying negotiations secure trusts to give liquid to the capital bank that had assurances from Caldwell and the and all of Lea's paid and money for November which would the bank ample that failure of and November plans entirely Central Bank funds the that run on his bank After the 10,000 PEOPLE Every day 10,000 people are changing to St. Joseph's Genuine Pure pirin. This tremendous swing Joseph's due to the fact that realize is neither sensible necessarry to more tablets of "Et Joseph's both now proof cellophane preserve purity full Joseph's you lets be druggist for Joseph's recommended physicians druggists everywhere the largest ing aspirin world failure of Caldwell and company caused the failure of his and prevented from paying off the which due in and and many account causes beyond control not carry the plans they and that inability his plans not that money in faith and all the members of the the fact that character did not protest strong evidence you should find. Out Copies that sent the dealers of the showed on its that deposit be that every was and that he had intended to all this the bonds cash would used: that matters legal counsel authorized by the board of directors defendant further contends that every statement truth and bond buyer ment fact the fendant contends that all his he was acting good faith that he believed his would carry that business conditions would money safe and that he had defrauding was of circumstance caused worldwide which has caused many banks business to fail, and beyond his return "The defendant that you should that he acted good faith every act done committed by him connection with Central Securities Company its very inception of the Bank Trust Comand resulting failure of Central Securities Company The defendant contends the original idea conceived by him. in the of Central Comwould which would valuable need the community would able to render service Asheville and Western North Carolina. The defendant contends that he spent considerable of his personal time and money of kinds in Western Carolina, and he had planned use the company in financing business and industry which would rehabiliWestern North Carolina, bring prosperity to the inhabitants The that after labor along became apparent due the general and pression in the States where was extremely to launch and were to fields or large Successfully Operated "The should find that became parent the industrial aims and plans the then conceived Central engage in the issuance and and the refinancing and refunding mortgage company bonds mortgage companies, had been profitably operated The Mortgage the part standing large financial and ready issued sold and twenty their The contends by the founder that the mortgage there was an tunity Asheville local pany. to engage the refinancing the pany and large cial in Baltimore Mary which making large its the and profits be made stock holders Thought Sound "The that such was entirely legitimate every and financial was fundamentally economically and defendant further that after part the vinced business and that he believed would benefit both the stockholders company the the company and The defendant contends that find the was the for placed charge board the leading and business men Central Securities began the its you the the Central was necessary for the Central curities company to put quate financial and itself the for take the the bonds The that should find that the Trust company subof the United States Fidelity and which had previously doing refinancing Companies and that Central of curities possessed sufficient handle the various and To Create Funds that you should find
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BANK RECEIVER SUES DAVIS FOR $274.272 Claims Made for Indorsed Notes. ASHEVILLE, N. C., Oct. 12-(A) -Herbert Pearson, receiver of the closed Holston National bank of Knoxville, Tenn., has filed suit here against Wallace B. Davis. president of the defunct Central Bank & Trust company, of Asheville, for $264,272.27 and $10,000 interest representing unpaid notes the Knoxville bank bought from the Asheville bank which were indorsed by the latter's president. Mr. Pearson alleged that on June 30, 1930, the Central Secur ities company of Asheville, subsidiary of the bank, executed a $125,000 promissory note which was secured by 2,050 shares of stock in the Universal Mortgage 192 shares of Central Bank Trust company stock and 100 shares of Federal Mortgage company stock. In addition, Pearson alleged, Davis indorsed the note as part of the
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COMMISSION MEETS Raleigh, May North Carolina Park Commission held meeting here discuss rontine business. Attorney General Brummitt told it to to recover the it lost in the failure of the Central Bank and Trust Company in Asheville will probably be tried in July.
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LUKE LEA, HIS SON AND DAVIS DENIED RETRIAL July 28 Luke Lea, former Tennessee senator and publisher. denied trial Thursday on violating the state banking New trials also denied Lea and Wallace Davis. former head the closed Central Bank and Trust Co. of Asheville.
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ARREST LEAS N. C. Court Mails Judgment To Asheville Today RALEIGH, Dec. The state supreme court this ternoon mailed Buncombe court the judgment the perior Luke Lea bank fraud case. As papers reach county take steps imprison the nessee and former Unit ed States collect $25,000 fine from Luke Lea, or imprison The judgment was certified to the lower court receipt notification from supreme court the United States of the termination of the futile Lea ap peal in that court. The supreme court had ordered its judgment which affirmed conviction the Leas in the $17,000.000 crash of the Central Bank and Trust company of Ashe ville. withheld until final action in the nation's highest tribunal.
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$2,500 Attorneys' Fee Allowed. Asheville, March 7.โ(AP)โJudge Felix E. Alley in Superior court this afternoon signed an order allowing the law firm of Pitts, McConnico, Hatcher and Waller of Nashville, Tenn., $2,500 for services rendered the state banking department in connection with the closing of the Central Bank and Trust company.
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State's Answer In Lea Case Is Being Prepared Raleigh, Apr. ant Attorney General well today was preparing the the State North Caroswer of to be filed with the United lina States Supreme Court in the case of Col. Luke Lea. Nashville. Tenn. newspaper publisher. and his son, Luke, Jr., who resisting extradition to this state to serve on terms for banking law violaDeadline for the answer to he filed is May days after notice was received that the Leas had appealed from Tennessee extradition The Leas times before have appealed to Washington, once for their conviction and the second time for denial of new They were convicted In 1931 connection with crash of the Central Bank and Trust Company of Asheville in November, 1930. This time they are reststing Tennessee Supreme Court decision denying them writ of habeas corpus. Their present action is tition for writ certiorari, bring their extradition case before the U. S. Supreme Court.
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Former Bank Head Is Granted Parole RALEIGH, N. C., April 19. (UP). Wallace B. Davis, North Carolina state convict No. 27531, formerly one of the state's most influential bankers, today was paroled by Gov. J. C. B. Ehringhaus. Davis, president of the defunct Central Bank and Trust Company, powerful Asheville financial institution, was convicted of violating state banking laws following the bank's collapse.