Holdrege State Bank (Holdrege, NE)

Episode Information

Episode UID
76008971457
Episode Type
Suspension → Closure
Bank Type
state
Bank ID
7600897 routing
Routing Number
76-0089
Start Date
May 21, 1921
Location
Holdrege, Nebraska (40.440, -99.370)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
f1fffae6c0b5b1eb

Response Measures

None

Description

Bank entered voluntary liquidation in May 1921 but later had a receiver appointed; charter retention/late receivership creates legal controversy.

Events (2)
1. May 21, 1921 Suspension
Cause
Voluntary Liquidation
Cause Details
Holdrege State Bank entered into a contract with Citizens State Bank whereby Citizens guaranteed and paid the Holdrege deposits and the Holdrege State Bank effectively liquidated via assignment of assets.
Newspaper Excerpt
On May 21, 1921, the Citizens State bank of Holdrege ... entered into a contract with the Holdrege State bank
Source
newspapers
2. March 16, 1923 Receivership
Newspaper Excerpt
The receiver testified he had in his possession the records and assets of the Holdrege State Bank and could produce them at the March 16 hearing.
Source
newspapers

Newspaper Articles (17)
1. January 27, 1923 Daily Drovers Journal-Stockman South Omaha, NE
Article from Daily Drovers Journal-Stockman, January 27, 1923

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Bryan Orders Probe of Bank Involving Attorney Davis Lincoln, Neb., Jan. 27.—Governor Charles W. Bryan on Friday ordered the state banking department and the attorney general's office to probe the merger of two Holdrege banks, in which, it is claimed by the banking department, that Clarence A. Davis, former attorney general, while in office, accepted $16,000 for legal advice to the defunct Holdrege State bank. At the same time the Citizens State bank, of which Davis is vice president, took over the deposits and good sureties of the shaky Holdrege State bank and a draft of $107,000 was made upon the state guarantee fund to take care of liabilities, according to J. E. Hart, secretary of the trade and commerce bureau, which has charge of banking in Nebraska.

2. February 9, 1923 The Elmcreek Beacon Elm Creek, NE
Article from The Elmcreek Beacon, February 9, 1923

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The Citizens bank at Holdrege was closed Thursday morning. The last statement of the bank showed $480,000 deposits, with loans of $420,000, and no borrowed money. The failure of the Holdrege State bank caused a run on this bank. The American Beet Sugar company at Grand Island is offering a dollar a ton increase for beets in a new contract for the coming season. This contract also offers a dollar a ton in addition for siloing. The price of seed is reduced from twenty cents per pound to fifteen cents.

3. February 9, 1923 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, February 9, 1923

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Deposits have been withdrawn until the bank's reserve has been depleted to the point where it is useless to proceed further. At last I can now speak. My letter to Governor Bryan is complete. It sets forth the expense to which the officers of this bank have joined in an attempt to save it. Every proposal they have made has been rejected. The draft on the guaranty fund might have been $137,000. It will now be nearly $400,000. The conclusion is obvious. "Beyond the matters set up in my letter to the governor, I have nothing more to say." "Clean as a Pin." Mr. Davis told the World-Herald correspondent today that his own personal loss in the collapse of the bank will be about $125,000. "I am cleaned as clean as a pin," Davis said. Davis also said he felt keenly the fact that a bank failure such as this is a "stigma which a lifetime cannot wipe out." "At my age," he said, "and with my political activities, such a thing as this is very much of a tragedy." The former attorney general also made public a letter which he wrote to Governor Bryan under date of February 2 setting forth the details of the transfer and consolidation of the two banks at Holdrege and insisting that unless the governor permitted the state department to pay the $187,000 out of the guaranty fund to make up to the Citizens' State bank the loss which it sustained in taking over the Holdrege State bank, the failure of the Citizens' State bank was inevitable. The order of the district court of Phelps county to the state department of banking to pay $187,000 to the Citizens State bank was ignored by the department upon order of Governor Bryan. Governor Bryan held that the Citizens State bank had bought the other bank and that it was not proper to reimburse it from the guaranty fund for losses which it had represented it had sustained. Says Backed Governor. Attorney General Spillman, who also is blamed by Davis for the failure of his bank, admitted today he had made a report to the governor advising him that he had a good legal right to refuse to obey the court's order to pay the $187,000. Governor Bryan declined to make any statement further than to say: "I have followed the law." He intimated that as he understood a supervision of the guaranty fund, it is not a question of individual volition, but a question of following the law governing the administration of the fund. Former Attorney General Davis' letter sets out that in May, 1921, the Holdrege State bank was insolvent. Davis was at that time, he says, a small minority stockholder, owning fifty shares of the stock of the Citizens State bank, which was at that time solvent and in excellent condition. He says that at that time he was approached by one of the officers of the Holdrege State bank, who wanted to sell that institution to the Citizens State bank. Davis says that he was convinced that he did not care to purchase the bank, "because there was nothing to sell." Committee Investigated. "On May 19, 1921," Davis says, "the Holdrege State bank had reached the point where it was not able to longer continue in business. Had it closed its doors upon that date,

4. February 9, 1923 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, February 9, 1923

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pay it. The assets of the Holdrege State bank which the Citizens' State bank took for security, amount to only $171,000, and land, which it is returning to the Holdrege State bank as receiver. There is a difference of $187,000. This represents money which was paid the depositors of the Holdrege State bank by the Citizens' State bank. If the Citizens' State bank had not paid it, the guaranty fund would have had to. The Citizens' bank should be repaid by the guaranty fund where the loss must ultimately fall, and if the Citizens' bank is not reimbursed from some source for this money it has advanced to pay the guaranty fund's losses, it must of course, fail itself." Davis declares that the failure of crops in southwestern Nebraska last fall made it apparent to the Citizens' State bank that it "ought not to continue further with its attempted liquidation of the Holdrege State bank. Therefore," he says, "the officers of the Citizens' State bank, including myself, resolved to pursue our rights as assignees of the deposits of the Holdrege State bank as set forth in our contract and collect the remainder of the amount from the depositor's guaranty fund.

5. February 9, 1923 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, February 9, 1923

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the draft upon the guaranty fund of this state would have been $358,000, the entire amount of its deposit. As a citizen of Holdrege, interested in the community and knowing too well what havoc and disaster followed the failure of a bank I was anxious to prevent its failure. As attorney general at the time, I was anxious, if possible to minimize the draft on the guaranty fund." Davis continues to say that because of this consideration the Citizen's State bank took over the affairs of the Holdrege bank. He says that in order to be sure that there would be no criticism of the transaction the state agricultural loan association, an organization composed of practically all the state bankers in Nebraska, was called in and a committee was appointed to investigate the entire proceedings. This committee was composed of Dan V. Stephens of Fremont; W. A. Selleck of Lincoln, and Woods Cones, of Pierce. Davis says that the contract involved the following three considerations: That the Citizens' State bank was to guarantee the deposits of the Holdrege State bank and to see that these were paid either in money or by transfer to its own books. The Citizens' State bank was also to take over all the property, assets, real estate and bills receivable of the Holdrege State bank. Third, it was provided that if there was any excess in the collateral which the Citizens' bank took, this excess was to be returned to the Holdrege State bank. Contract for Liquidation. "From this brief summary," Davis says, "it will be apparent that this amounted to a contract for a voluntary liquidation of the Holdrege State bank, that it was not a consolidation of the two banks, and that the Citizens' State bank could not have made any profit on the transaction other than increasing the amount of its deposits." A complete copy of the whole proceedings was filed with the state banking department in May, 1921, Davis said. It is now apparent, Davis continues, that there will be considerable deficiency in the assets in the Holdrege State bank below the amount necessary to pay its depositors or to protect the Citizens' State bank in its presumption of liabilities. "In other words," says the letter written by Davis, "the Citizens' State bank has in good faith paid the depositors of the Holdrege State bank, $358,000. If the Citizens' State bank had not paid this, the guaranty fund would have had to

6. February 9, 1923 Omaha World-Herald Omaha, NE
Article from Omaha World-Herald, February 9, 1923

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Davis says that the contract involved the following three considerations: That the Citizens' State bank was to guarantee the deposits of the Holdrege State bank and to see that these were paid either in money or by transfer to its own books. The Citizens' State bank was also to take over all the property, assets, real estate and bills receivable of the Holdrege State bank. Third, it was provided that if there was any excess in the collateral which the Citizens' bank took, this excess was to be returned to the Holdrege State bank.

7. February 13, 1923 Lincoln Journal Star Lincoln, NE
Article from Lincoln Journal Star, February 13, 1923

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NEXT MOVE IN BANK CASE NO ONE PRESSING TO ENFORCE ORDER OF COURT. Attorney General's Letter Indicates His Intention to Resist Draft on Guaranty Fund. Attorney General Spillman has made no statement in regard to affairs of the defunct Citizen's State bank of Holdrege since he replied to a letter from Former Attorney General C. A. Davis, who is vice president of that bank. The attorney general's letter stated that he and Governor Bryan had delayed proceedings looking to resistance to the order issued by Judge W. A. Dilworth which directed Secretary Hart of the state banking department to draw upon the guaranty fund for $187,000 in favor of the Citizen's bank to make good losses of that bank in the matter of a contract whereby it agreed to take over deposits and assets of the Holdrege State bank nearly two years ago. The wording of the attorney general's letter is deemed a statement that resistance to that order is to be made by him at the proper time. Inasmuch as the order of the district court has not been complied with there is no immediate necessity for action. When a receiver of the Citizen's State bank is appointed that official may feel called upon to take the initiative to enforce the order of the district court by mandamus or other means. Such a suit would serve as a suit to test the legality of the order or the liability of the guaranty fund under the contract made between the two banks, and approved by the department of banking. Other questions may arise, such as the legality of the appointment of a receiver for the Holdrege State bank eighteen months after it was supposed to have voluntarily liquidated. A bank that closes by voluntary liquidation must surrender its charter to the state banking department. While the Holdrege State went out of business and its depositors were paid in full it did not surrender its charter. This was retained and eighteen months later a receiver was appointed and this resulted in an order by the district court upon the guaranty fund. By direction of Attorney General Spillman, that order has not been complied with by Secretary Hart. A bank which voluntarily liquidates must also pay into the state treasury its guaranty fund. This remains in the state treasury for three years and is drawn upon for a portion of losses that may occur during that time. Then if any remains it is paid back to the stockholders of the liquidated bank. The procedure which resulted in the merger of the two banks at Holdrege is declared by Attorney General Spillman to be contrary to law.

8. February 13, 1923 The Hamilton County Register Aurora, NE
Article from The Hamilton County Register, February 13, 1923

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Holdrege Bank is Closed by State For weeks there has been silence and apprehension surrounding the condition of the Holdrege banks, and on Thursday morning it was taken over by the state authorities with $400,000 for the guaranty fund to pay. Clarence Davis says the publicity caused the failure, but in reality it was lack of publicity. The public knew something was wrong; it did not know what or how much. The authorities were bound together in a conspiracy of silence in regard to something that the public had a right to know authoritatively and truly about. Their imagination multiplied the danger and the evil. The little handful of bankers that Mr. Davis took into his confidence may have approved his course and thought he could save the bank. They knew, but those who did not know withdrew patronage and terminated business as it was natural and prudent for them to do. When the mischief has been done a complete statement is made, and we will doubtless continue the policy of withholding facts and official censorship that is in national and state affairs doing so much injury. The Bryan letter states that as one of the officers of the bank, he was approached by officers of the State bank who desired to sell that institution, and a brief examination convinced the Citizens State bank that it did not care to purchase the institution. . . . On May 19, 1921, the Holdrege State bank had reached the point where it was no longer to continue in business. Had it closed its doors upon that date the draft upon the guaranty fund would have been $358,000, the entire amount of its deposits."

9. February 15, 1923 The Holdrege Progress Holdrege, NE
Article from The Holdrege Progress, February 15, 1923

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INTEREST STATEWIDE IN BANK CASE (Continued from page 1, Sec. 1.) ties with it, I desire to lay before you a complete and detailed statement of the entire situation as it has existed and as it remains. In the month of May, 1921, the Holdrege State bank, a banking institution of Holdrege, Neb., in which I was in no way interested, either directly or indirectly, to which I owned no obligations or had any other connection, was insolvent. This was true to the knowledge of the banking department and of myself. I was, at that time, a small minority stockholder owning only fifty shares of the capital stock of the Citizen's State bank, another bank in Holdrege, Neb., which was at that time solvent, free from bad paper and, I think, in excellent condition. As one of the officers of the Citizen's State bank I was approached by officers of the Holdrege State bank who desired to sell that institution, and a brief examination convinced the Citizen's State bank that it did not care to purchase the institution and that there was nothing to sell. On May 19, 1921, the Holdrege State bank had reached the point where it was not able to longer continue in the business. Had it closed its doors upon that date the draft upon the guaranty fund of this state would have been for $358,000 the entire amount of its deposits. As a citizen of Holdrege interested in the community and knowing too well what havoc and disaster follows the failure of a bank, I was anxious to prevent its failure. As attorney general at the time, I was anxious if possible to minimize the draft upon the depositors' guaranty fund. Therefore, between Saturday and the opening of business Monday morning, May 21, 1921, the Citizen's State bank entered into a contract with the Holdrege State bank, a copy of which you have in your possession and the general import of which is set forth in a letter by the state agricultural loan association, which is attached to this letter. I desire to point out to you that the state agricultural loan association is an organization composed of practically all of the state bankers in Nebraska who are contributors to the guaranty fund; that their membership in the agricultural loan association is based upon their pro-rata basis of contribution to the guaranty fund; that the purpose of the organization is to protect the interests of the depositors' guaranty fund and of the banks who contribute to it, so far as possible. There is no organization in the state besides this and the state bankers' association and no authority which can speak more accurately for the depositor's guaranty fund, and the nine hundred state banks which contribute to it. The agricultural loan association under date of December 30, says: "The entire matter was placed almost a month ago in the hands of the agricultural loan association and representatives of the Nebraska bankers' association by the officers of the Citizens State bank, together with a request that the agricultural loan association and the bankers' association make a complete investigation of the entire matter and inform themselves of its details. Pursuant to this request, the agricultural loan association appointed a committee consisting of the Hon. Don V. Stephens of Fremont, Mr. W. A. Selleck of Lincoln, Woods Cones, of Pierce, Nebraska, to procure the facts and submit them to the association. A little later a second committee, consisting of J. P. Palmer, attorney for the agricultural loan association and the state bankers' association, and L. K. Moore, a special representative of the banking department, have made a similar examination. The results of these examinations and the facts in the case are as follows: "On May 21, 1921, the Citizen's State bank of Holdrege, Nebraska, entered into a contract with the Holdrege State bank, the substance of which was as follows: 1. The Citizens State bank was to guarantee the payment of the deposits of the Holdrege State bank and to see that these were paid either in money or by transferring them to its own books. 2. To protect the Citizens State bank in its guarantee of the deposits of the Holdrege State bank, the Holdrege State bank, assigned all of its assets, it bills receivable, its building, furniture, and fixtures, its real estate and all other assets, to the Citizens State bank, and it was further provided that the Citizens State bank should be subrogated to all the rights of the depositors of the Holdrege State bank which it had paid. 3. It was further provided that if there was any excess in the collateral which the Citizens State bank took, that this excess should be returned to the Holdrege State bank."

10. February 15, 1923 The Holdrege Progress Holdrege, NE
Article from The Holdrege Progress, February 15, 1923

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signees of the deposits of the Holdrege State bank as set forth in our contract, and collect the remainder of the amounts from the depositors' guaranty fund. Realizing that my official position and personal interests in the matter were apt to be embarrassing, before I made the slightest move in this direction I placed the entire matter, with all of my plans in the premises, before a meeting of the agricultural loan association and some members of the state bankers' association and the secretary of the banking department, told them exactly what I expected to do, received their approval and proceeded. Following out this program a receiver was appointed: with other counsel than myself representing the bank, the district court of Phelps county entered an order directing a draft for one hundred eighty-seven thousand dollars on the depositors guarantee fund to be drawn immediately by J. E. Hart, secretary of the department of trade and commerce. This draft has lain ignored upon the desk of the secretary of the department

11. February 16, 1923 The Cozad Local Cozad, NE
Article from The Cozad Local, February 16, 1923

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N. D. Christiansen of Lexington, was looking after business affairs in this community the latter part of last week. Mrs. Andrew Adle and baby came from North Platte Saturday for a visit with her parents, Mr. and Mrs. Henry Scheele. Several fatalities are reported to horses and cattle from corn stalk disease in sections of the county. Will O'Brien reports the loss of a fine three-year-old mare by this disease Saturday. The Community Welfare Club held their regular meeting Thursday February 8th, at the home of Mrs. Jesse Andres. There was a good attendance and a fine time was reported by all. Refreshments were served by the hostess. The Citizens bank at Holdrege was closed Thursday morning. The last statement of the bank showed $480,000 deposits, with loans of $420,000, and no borrowed money. The failure of the Holdrege State bank caused a run on this bank, is the information received at this office. Miss Eva Gardner, who is taking nurse's training at a hospital in Boulder, Colo., came the first of the week for a visit with her parents, Mr. and Mrs. Horace Gardner. Miss Gardner recently underwent an operation for appendicitis, and is now recuperating.

12. March 6, 1923 The Hastings Daily Tribune Hastings, NE
Article from The Hastings Daily Tribune, March 6, 1923

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of trade and finance, who were called by the attorneys for the Holdrege State Bank. The receiver testified he had in his possession the records and assets of the Holdrege State Bank and could produce them at the March 16 hearing. Bank's Last Statement. Secretary Hart testified that the Holdrege State Bank had filed a statement on the last call before the merger, and that the state department has also in its possession the reports of the examiner prior to the merger, and these, he testified, could be produced for the hearing on March 16. The attorney general called no witnesses.

13. March 6, 1923 The Hastings Daily Tribune Hastings, NE
Article from The Hastings Daily Tribune, March 6, 1923

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Should the court find the contract legal his order that the guarantee fund pay $187,000 will stand, unless appealed to the supreme court. Vacating Order. On the other hand, should the court find that the contract was invalid, the vacating of the order to the guarantee fund to pay would follow. The only testimony at the Holdrege hearing yesterday was given by Roscoe J. Slater, receiver of the Holdrege State Bank, and J. E. Hart, secretary of the department. EFFECT FELT IN U. S. WASHINGTON, March 6—Serious interference with the commerce of American firms in the Ruhr Valley has developed from the French occupation, Secretary of Commerce Hoover declared today. BOSTON—When a South Boston taxi man returned her husband's wallet containing $4,000, Mrs. Harry Weston, of Greenville, N. J., kissed him as a reward.

14. March 8, 1923 Wilcox Herald Wilcox, NE
Article from Wilcox Herald, March 8, 1923

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Court to Determine Holdrege, Nebr., Mar. 6.—Judge Dilworth yesterday overruled the motion of Attorney General Spillman to set aside the order made in December to pay $187,000 from the guarantee fund to the State Bank of Holdrege. After this, the attorney general and the attorneys for the bank stipulated as to the main facts relating to the making of the contract in May, 1921, by which the Citizens State Bank took over the Holdrege State Bank, and fixed Friday, March 16, at 9 o'clock for the hearing upon the legality of the contract. Controversy as to the main facts having been eliminated, the March 16 hearing will have for its object the determining of the single question—was the merger legal? Should the court find the contract legal his order that the guarantee fund pay $187,000 will stand, unless appealed to the supreme court. Vacating Order On the other hand, should the court find that the contract was invalid, the vacating of the order to the guarantee fund to pay would follow. The only testimony at the Holdrege hearing yesterday was given by Roscoe J. Slater, receiver of the Holdrege State Bank, and J. E. Hart, secretary of the department of trade and finance, who were called by the attorneys for the Holdrege State Bank. The receiver testified he had in his possession the records and assets of the Holdrege State Bank and could produce them at the March 16 hearing. Bank's Last Statement Secretary Hart testified that the Holdrege State Bank had filed a statement on the last call before the merger has also in its possession the reports of the examiner prior to the merger, and these he testified could be produced for the hearing on March 16. The attorney general called no witnesses.—Hastings Tribune.

15. April 3, 1924 Holdrege Daily Citizen Holdrege, NE
Article from Holdrege Daily Citizen, April 3, 1924

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NEW RECEIVER APPOINTED FOR HOLDREGE STATE BANK Judge L. H. Blackledge presided at a couple of days' session of district court in Holdrege last week, being here Wednesday and Thursday. Hearing was had in the matter of the State of Nebraska, ex-rel Clarence A. Davis, attorney-general, vs. Holdrege State Bank. The receiver of the bank, Roscoe J. Slater of Lincoln, was discharged after his claim for services had been allowed. Van E. Peterson of Curtis was appointed to succeed Mr. Slater as receiver and his bond was fixed at $10,000. Attorneys appearing in the case were Stewart, Perry & Stewart of Lincoln; G. Norberg and Clarence A. Davis of Holdrege.

16. April 3, 1924 Holdrege Daily Citizen Holdrege, NE
Article from Holdrege Daily Citizen, April 3, 1924

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Judge L. H. Blackledge presided at a couple of days' session of district court in Holdrege last week, being here Wednesday and Thursday. Hearing was had in the matter of the State of Nebraska, ex-rel Clarence A. Davis, attorney-general, vs. Holdrege State Bank. The receiver of the bank, Roscoe J. Slater of Lincoln, was discharged after his claim for services had been allowed. Van E. Peterson of Curtis was appointed to succeed Mr. Slater as receiver and his bond was fixed at $10,000. Attorneys appearing in the case were Stewart, Perry & Stewart of Lincoln; G. Norberg and Clarence A. Davis of Holdrege. Other matters taken up at this time were as follows: Wm. Rumsteg vs. Amasa Pratt, Gould Land and Cattle Co., judgment confirmed. Thos. Frahm vs. Henry G. Swanson et al, foreclosure; sale ordered. Mutual Benefit Life Insurance Co. vs. Thos. L. Doherty et al, foreclosure; sale ordered. Mildred F. Sponberg et al vs. F. W. Kiplinger et al; land granted to plaintiff.

17. July 14, 1927 The Holdrege Progress Holdrege, NE
Article from The Holdrege Progress, July 14, 1927

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HUNT WINS DECISION IN SUPREME COURT ON NOTE CASE Poculiar Feature Of Law Is Brought Out When Bank Receiver Sues Acting as both plaintiff and defendant, Van E. Peterson, secretary of the Guaranty Fund commission, has demonstrated that in this peculiar role it is possible to loss on both sides of the case. When the Holdrege State bank operating loaned some money to Hunt, of Hastings, and sold the note he executed to the Citizens State bank. The note was not paid and the Holdrege State bank meantime went into the hands of receiver. Peterson was named receiver, the Citizens bank sued on the note, making the Holdrege State bank party endorser, making Peterplaintiff and defendant. Hunt defended on the ground that the court had no jurisdiction, he lived in another county, and could not be sued in Phelps county by the pretext of making the bank to which originally gave the note defendant. The supreme court today held for Hunt. Hunt formerly resident of Holdrege and was at one time of the Holdrege Ice Cream Co.