Article Text
AUXVASSE BANK WAS FOR 20 YEARS ONE-MAN AFFAIR Cashier, Who Dominated Closed Institution, Had Borrowed $77,730 of Its Money on His Notes. DIRECTORS DIDN'T KNOW THIS, THEY SAY
Auxvasse Bank (Auxvasse, MO)
Episode Information
- Episode UID
80075371495- Episode Type
- Run → Suspension → Closure
- Bank Type
- state
- Bank ID
-
8007537routing - Routing Number
80-0753- Start Date
- July 6, 1924
- Location
- Auxvasse, Missouri (39.018, -91.897)
Metadata
- Model
- gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
- Short Digest
e0b9f34c58ff777e
Response Measures
None
Description
Failure was driven by large unsecured loans taken by the cashier; directors closed the bank and state finance department took charge.
Events (4)
1.
July 6, 1924
Run
- Cause
- Bank Specific Adverse Info
- Cause Details
- Quiet run by larger depositors after discovery/dissatisfaction over cashier's large unauthorized loans and doubtful paper.
- Measures
- Directors met and then closed the bank; State Finance Department examiner examined affairs.
- Newspaper Excerpt
- Dissatisfaction among some larger depositors, it was said, caused a quiet run on the bank, which exhausted the cash the bank had on hand.
- Source
- newspapers
2.
July 7, 1924
Receivership
- Newspaper Excerpt
- liquidating the affairs of the Auxvasse bank at Auxvasse, which closed its doors July 7, 1924; S. L. Cantley ... was allowed $2,681.05 in salary and incidental expense. ... depositors ... would get 25 per cent of their money eventually. (Article 3).
- Source
- newspapers
3.
July 7, 1924
Suspension
- Cause
- Bank Specific Adverse Info
- Cause Details
- Directors closed the bank after discovery that the cashier had borrowed approximately $77,730 on personal notes and large amounts of doubtful paper; state finance department took charge.
- Newspaper Excerpt
- Auxvasse Bank ... closed by the directors on July 7 last
- Source
- newspapers
4.
December 28, 1926
Other
- Newspaper Excerpt
- Auxvasse bank ... today was to pay depositors 9.9 per cent of their claims against the bank ... The Auxvasse bank closed July 1924. (Article 5).
- Source
- newspapers
Newspaper Articles (5)
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Article Text
F. C. Stokes, the Cashier, Hopes to Return Tomorrow With the Money to Meet His Loans. By a Staff Correspondent of the Post-Dispatch. AUXVASSE, Mo., July 19.—How F. C. Stokes, the $2000-a-year cashier of the Auxvasse Bank, borrowed $77,730 of the bank's money on his own personal notes, most of it declared to have been without the knowledge of the directors, and what became of the money are questions to which depositors and stockholders of the bank closed by the directors on July 7 last, are seeking an answer. The loans by Stokes to himself on personal notes, declared to be unsecured, total more than five times the maximum of $15,000 authorized by State law in loans to an officer of a bank of this class. Directors of the bank assert they did not know Stokes was carrying more than the legal limit of loans from the bank until the notes were shown to them by State Bank Examiner D. R. Harrison after the bank had been thrown into the hands of the State Finance Department. Total Amount of "Bad" Paper. Approximately $125,000 of the bank's $365,349.12 in loans were classed as "doubtful or bad" by Harrison, the directors said, and the total of "bad" paper may run higher. Stokes' notes were included in the $125,000. No discrepancies or shortages have been discovered thus far in the examination of the bank's accounts, it was said. Verification of the notes in the files and the individual accounts of the depositors has just been started. Approximately $15,000 in bonds deposited with the bank by customers for safekeeping were sold by the bank to raise cash before the failure, it was learned by the Post-Dispatch correspondent, but the bank accounts of the owners were credited with the proceeds of the sales, and deposit slips sent to them. Claims for these bonds are preferred under the law, it was said. The directors confess themselves bewildered by the crash. Affairs of the bank had been left almost entirely to Stokes, who had been an officer of the institution for nearly 20 years, and in effect it was a one-man bank. The directors met monthly, and at these sessions Stokes would read off the month's accumulation of loans. Stokes never showed the board more than the legal limit of loans for himself, the directors say. Audit Made Six Months Ago. The board had a note committee to pass on loans when made, but it left matters in the hands of Stokes, it was said. It was recalled that a committee of stockholders made an audit of the bank at the close of last year, as required by law, and found that the notes in the files charged to Stokes did not exceed the legal limit. At that time the Auditing Committee found in the note files several notes bearing the names of immediate relatives of Stokes, it was said, but made no special inquiry. Those notes are not now in the files. Therefore, the directors say, Stokes must have borrowed virtually all of the $77,730 since the first of the year. On one point the directors are positive and that is, statements that the failure was not caused by "frozen" agricultural loans, as was explained immediately following the closing. They attribute the closing to the excessive amount of paper charged to the cashier. Stokes said that the money was spent in business ventures in Auxvasse, and he told the directors he would try to raise the money to pay the notes. His local property, estimated to be worth not more than $12,000 after incumbrances are paid, has been deeded to the bank. It includes his unpretentious home, his interest in the building occupied by the bank, and a small tract of land. Stokes departed early this week, stating he would go to the home of his father in Malden, Mo., and that he would return about Monday, and hoped to have the money to pay the notes. Financial Stress for Many. Liquidation of the bank, now in prospect, is assured unless Stokes can raise the money to pay the notes. It was said liquidation, usually a long-drawn-out, expensive procedure, would mean financial stress for many of the approximately 500 residents of the thriving agricultural and stock-raising community. W. H. Cornelius, a director, said Stokes had not explained to the board in detail what he had done with the money, but had promised a statement later. Stokes did state, it was said, that he put $1000 into the Ohio Mining Co., a coal mining project, which swallowed up the money, and used other sums in the purchase of some land in Oklahoma, which has not yielded expected returns. Directors of the bank say Stokes was not successful in his business ventures, including a garage, a farm and a restaurant. Stokes, who is 42 years old, is married, has two children and was prominent in religious and civic affairs. He was the only man in Auxvasse who had two automobiles and a washing machine. His father, it was said, was $1800 a year, and he and his family were considered wealthy. He owned 100 shares of the bank's stock, having a par value of $100, which had sold for as high as $250. About 1000 Depositors. The bank was the larger of two banks in Auxvasse. It had about 1000 depositors. Its last statement showed total assets of $258,812.47. A surplus fund of $80,000 was maintained, from which interest of 10 to 12 per cent, declared under favorable conditions, was paid. The statement showed $10,000 in cash available, represented by cash held by the bank and in other banks. Dissatisfaction among some larger depositors, it was said, caused a quiet run on the bank, was said, which exhausted the cash the bank had on hand. The night before the bank closed, called a meeting of the board and stated he was not able to meet an out-of-town draft on the bank. He said he would raise the money, but when without it Sunday, the day following the bank's closing, Cornelius went to Jefferson City to see the Finance Department. Cornelius and the other directors' meeting at the bank on the closing of the bank, and conferred with Harrison, the president, and other directors, and then local residents. Cornelius learned of the failure at 10 o'clock the night before.
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Article Text
BANK AUXVASSE RECEIVER GETS $2,681 Fulton Mo., July 13.-S. L. Cantley, a special commissioner of the Missouri finance department, who had charge of liquidating the affairs of the Auxvasse bank at Auxvasse, which closed its doors July 7. 1924, yesterday was allowed $2,681.05 in Desalary and incidental expense. positors of the bank had filed protest, declaring it was excessive. Cantof ley declared the depositors would get 25 per cent of their money eventually.
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Article Text
SAID IT TOO SOON Affairs of Auxvasse Bank Not Yet Disposed of as Stated in Saturday's Issue misunderstanding the Through Sun said on Saturday that the final report of the special commissioner in charge of the affairs of the defunct Auxvasse Bank had been accepted and that distribution of the funds on hand would be made at once. We thought at the time that this true statement. but learned after had been published that his final filed with the circuit had been port but would not court that until December 28. be passed on The mistake came through tion to the circuit clerk. who thought phase of were referring to one while the questioner had the Having heard the other in Commissioner Edwards say Special the suit to be that morning that the only thing tried Saturday was of the final closstanding in the way when told up of the the circuit clerk of the disposition of the case, the representative said Well. that will chance close the money to and pay over With his mind on the been in court that had already done, and replied: "That all settled.' It meant he was talking about one thing and the interviewer another and led to the premature nouncement that the report had been passed on
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Article Text
AUXVASSE BANK TO PAY 10 PER CENT DIVIDEND FULTON, MO., Dec. 28.-J. L. Edwards, special commissioner of the state finance department, in charge of the defunct Auxvasse bank at twelve miles north of here, today was to pay depositors 9.9 per cent of their claims against the bank by Judge David H. Harris of the Callaway county circuit court. The depositors previously received per cent. The Auxvasse bank closed July 1924.