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FT. SMITH BANK QUITS FOLLOWING A SHORTAGE AND OFFICIAL ROBBERY Ft. Smith, Dec. kansas Valley Bank depositors this morning were being paid in full, under the direction of John C. Gardner. who is acting as agent for the First National Bank and the Merchants National Bank, which last night took over the assets and liabilities of the Arkansas Valley. The institution was absorbed by its sister banks after the disocvery of a $30,000 shortage in the accounts of F. L. Sprinkle, bookkeeper of the Arkansas Vaalley Bank. The alleged defalcation. coming after the $12,400 robbery of the bank last January by M. M. Hayes, inactive vice-presi dent, made it impossible. in the opinion of the bank directors, to retain public confidence in the operation of the bank's affairs, and the institution formally went out fo business last night. Hayes is serving a term in the Arkansas penitentiary. To facilitate liquidation, directors of the Arkansas Valley Bank subscribed $70,000. the First National and the Merchants National Bank assumed a liability for $25,000. and Fort Smith business men called into the conference, subscribed a guarantee fund of $40,000 to indemnify the the two banks againsst any loss to them exceeding $25,000. The City National Bank contributed $5,000 to minimize any possible loss to absorb ing banks. President Hugh Branzon, of the Arkansas Valley Bank, said that Sprinkle, in a signed confession, ad mitted embezzlement during the last three years, but most of the $30,000 he was short was taken in the last few months. As an offset to his shortage, he has deposits aggregating $4,900." Information charging embezzle ment was filed against Sprinkle to day in municipal court by D. L Ford, assstant prosecuting attorney and bond was fixed at $7,000, and was signed by Sprinkle's father, J W. Sprinkle Fort Smith, and J. H Cole of Alma, an uncle. Preliminary hearing was set for 10 o'clock Dec ember 28. Sprinkle went to the sheriff's of fice about 11 o'clock in company of his father and surrendered to Sher iff Pink Shaw. The sheriff called Attorney Ford and bond was signed about 30 minutes later. Sprinkle de clined to make any statement. Little Rock, Ark., Dec. 23. (AP) The State Banking Department has been working on the absorption of the Arkansas Valley Bank at Fort Smith by other institutions or that city for several days Loid Rainwater bank commissioner said today. "We were notified last Sunday of the shortage in the Arkansas Valley Bank and since have been trying to wor kout a plan with other Fort Smith banks whereby it would be taken over," he said. "It is a source of satisfaction to the banking de pa tment that other banks and busimen of that city have come to Its aid and prevented any loss to de positors and creditors.'
