California Trust & Savings Bank (Sacramento, CA)

Episode Information

Episode UID
90003971597
Episode Type
Run → Suspension → Closure
Bank Type
trust
Bank ID
9000397 routing
Routing Number
90-0039
Start Date
January 21, 1933
Location
Sacramento, California (38.582, -121.494)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
61fb9b856be5b886

Response Measures

None

Description

Affiliated California National Bank closed simultaneously; state examiners immediately took charge.

Events (4)
1. January 21, 1933 Run
Cause
Local Banks
Cause Details
Heavy withdrawals sparked by runs/withdrawals tied to failures and depositor fears about other local banks and circulating rumors.
Measures
Directors issued statement hoping for reorganization; no successful emergency liquidity measures reported.
Newspaper Excerpt
Heavy withdrawals during the past several days ... advanced as the reason for the closing.
Source
newspapers
2. January 21, 1933 Suspension
Cause
Government Action
Cause Details
State and federal bank examiners ordered the banks closed and took possession following heavy withdrawals.
Newspaper Excerpt
failed to open its doors for business today. Federal and state examiners took charge of the bank and started checking its assets.
Source
newspapers
3. January 26, 1933 Receivership
Newspaper Excerpt
Robison was appointed special deputy ... to act as receiver for the California Trust and Savings Bank of Sacramento ... closed Saturday Robinson has been in for few days assisting with the inventory ... announcing Robinson's selection, said the appointment probably would be temporary (Fresno Bee, 1933-01-26).
Source
newspapers
4. May 6, 1933 Other
Newspaper Excerpt
California Savings Records Demanded In Grand Jury Probe ... persistent rumors several former directors stockholders of the bank withd: their funds just fore the institution closed last Jan uary 21st. (Sacramento Bee, 1933-05-06)
Source
newspapers

Newspaper Articles (23)
1. January 21, 1933 Modesto News-Herald Modesto, CA

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PHILIPPINE President Of Island Senate Will Vote Against Acceptance Of Measure Jan. Manuel Quezon, the senate litical figure in the islands, to-day Associated against ance of the pendence bill cently passed "first last statement termed every terest the Manual Quezon pino entirely principle, Quezon unfair' said were opposition caused political jealousy achievements the dependence mission which favored the bill. The senator rejection of the act would not be construed consistency insincerity. Held Unfair "When the HawesCutting bill we clear do not want is unfair humiliation to us people ruinous make clear also congress passes bill giving mediate independence we will without question. difference of opinion is blessing the people, pelling them to the generally the bill degree which they before to bring vital question." "My forecast is cleavage sult either coalition party or evenbalanced Two such strong parties what phatically need. Action Due To Heavy With Plans Under Way By McClatchy Newspaper Wire Jan. California National Bank, one of oldest financial institutions in the West, failed to open its doors business California and Savings Bank, state institution, likewise open. Heavy withdrawals during the several advanced reason the closing The board directors of the banks this morning and issued statement which expressed the hope that of reorganization with the of depositors, an The California National Bank about commercial counts, while the California Trust Savings Bank approximately 36,000 accounts Branch banks North mento, Arbuckle were affected by the closing order. California Trust and Savings Bank was closed by Rainey, state the ing in Francisco, Rainey said: Rainey's California Trust Savings Bank Sacramento over by the superintendent banks this morning, following meeting of the board of directors which resolution adopted closing the (This mesting held in San Francisco last night.) withdrawals covering period several days and culminating Friday silent run, brought bank's below the legal quirements, and the closing folsuperintendent of banks plans for reorganization which have proposed.' Statement The statement issued the bank's board of directors follows: "Owing agricultural and over of the last three years, Bank Sacramento and the Savings Bank have cent withdrawals cordingly, the directors, tection decided the state authorities to take charge of the institutions "It hoped that plan of organization can worked the of deposian date.' Hilliard president the House issued statement which that other banks in sufficient on hand to for all said: clearing house responsibility Sacramento are fully aware banks the occasioned closing the California National Bank the California Trust Savings are prepared that need not disturb conditions. Sufficient Cash "Sufficient cash available to take all requirements need feel ability the banks to handle behooves all of us to the seriousness the situation and to extent that allowed the tests of the and courthe of this We firmly believe that they will rise occasion and that In the of memory local bankers, of the Na. tional first time Sacrafailed history that bank has to Crowd Gathers At an early morning, the bank fail at the regular hour of o'clock tions and crowd gathered in front bank at Seventh and Shortly bulletin, signed Superintendent Banks Rainey, was posted on the door. have taken possession the the Callfornia Trust and Bank fornia.' bank act of the State of CallScores of persons were astoundAs minutes passed, the crowd became greater fic officer assigned the tersection bank because of the heavy vehicular second bulletin was posted This notice Price, examiner charge, formal resolution of the board of National Bank has been placed in suspension Statement The last financial statement sued by the California Bank December fore the run withdrawals began, regarded by officials of the bank fine of this of local leans largely properCalifornia. Bonds and other liquid assets amounted (See TWO, Page Col.

2. January 22, 1933 The Union Grass Valley, CA

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CALIFORNIA NATIONAL BANK GOES WALL News of the failure of the California National Bank of Sacramento to open its doors for business Saturday morning caused great surprise and wide comment in these communities yesterday. An affiliated institution., the California Trust and Savings Bank, also suspended business. Heavy withdrawals during the past several days advanced as the reason for the closing. The board of directors of the banks met Saturday morning and issued statement in which expressed the hope that plan of reorganization be worked out with the cooperation of positors, at an early date." The California National Bank has about 9,000 commercial accounts, the California Trust and Savings Bank has approxi 36,000 accounts. Branch banks in North Sacramento. Loomis Ione and Arbuckle also affected by the closing order.

3. January 22, 1933 The Ogden Standard-Examiner Ogden, UT

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MRS. JUDD HAS NEW EVIDENCE (Continued from Page One.) asked Superior Judge J. C. Niles, the committing magistrate. "I know whether it is true or not." "Then answer," admonished the court. "No," she burst out. "I didn't kill Mrs. Samuelson." SACRAMENTO, Calif., Jan. 21—(AP)—The California National bank and its subsidiary, the California Trust and Savings bank, failed to open its doors for business today. Heavy withdrawals during the past several days was advanced by officials of the institution as the reason for its closing.

4. January 22, 1933 The Charlotte News Charlotte, NC

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Close Sacramento Banks With $22,000,000 Assets San Francisco, Jan Heavy withdrawals that neared the proportions of serious run caused state and federal bank ex aminers order the closing of two banks with total combined assets of $22,000,000 today. The California National and the California Trust and Savings an affiliate were the institutions affected by the orders

5. January 22, 1933 The Daily Olympian Olympia, WA

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FAIL TO OPEN SACRAMENTO, Jan. 21—(AP)—The California National bank of Sacramento and its subsidiary the California Trust and Savings bank, claimed to be the oldest institution of its kind in California failed to open for business today. Branches of the California National bank in North Sacramento, Loomis, Ione, and Arbuckle also failed to open. Federal and state examiners took charge of the bank and started checking its assets. Directors issued a statement crediting the closing to heavy withdrawals recently.

6. January 26, 1933 The Fresno Bee Fresno, CA

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Sacramento Bank Receiver Appointed (By McClatehy Newspapers Wire) Q Robison was appointed special deputy superinte of banks to act as receiver for the California Trust and Savings Bank of Sacramento, which. with its affiliated institution the California National Bank closed Saturday Robinson has been in for few days assisting with the inventory now being State Banking Superintendent Edward Rainey, announcing Robinson's selection, said the appointment probably would be temporary WOMAN AWARDED $10,000 REDWOOD CITY Jan. Judgment of $10,000 for injuries received in an automobile collision was wararded Mrs. Mary Wilson wife of Wilson head of the California Fish and Game Commission against Edward A Quinn Palo Alto

7. February 6, 1933 The Sacramento Union Sacramento, CA

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KIESEL BANK OFFICIAL Plans Reorganize Closed Institution Move Forward Reorganization plans for California Trust and Savings bank went forward yesterday when word was received by Fred Kiesel, president of the bank, that at least one man who assisted reopening banks in the state of Nevada would be Sacramento today conferences regarding the institution here. Kiesel also was in continual touch with San Francisco financiers, whom he hopes will back plans for state bank, which would take over deposits and other activities the closed concern. This, Kiesel said, would be the only practical way of handling reorganization. Meanwhile, depositors of the fornia National California Trust and Savings prepared for Thursday night Memorial auditorium, where they will hear report named by Judge Martin Welsh of the positors' Protective Examiners the state bank were virtually finished with their audit, and an expected week on the condition of the state bank from Rainey, state of banks. The federal examiners pected to take at least week more completing their work.

8. May 6, 1933 The Sacramento Bee Sacramento, CA

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CLOSED BANK RECEIVER TO BE GIVE FACTS California Savings Records Demanded In Grand Jury Probe PLAN TO QUIZ RAINEY DROPPED Information Sought By Of. ficials On Withdrawal Rumors Q. ROBISON, chief deputy A. state superintendent of banks charge the liquidation of the California Trust and Savings Bank will be called before the SacramenCounty Grand Jury next week by District Attorney Neil R. McAllister to testify regarding persistent rumors several former directors stockholders of the bank withd: their funds just fore the institution closed last Jan uary 21st. McAllister announced plans call in Edward state supof Changes Plan. He to subpena Robiand the records. instead. because the receiver has information on the whereas Rainey, head of state banking department, would to on given by his district attorney asked the grand jury either Thursday Friday special conduct the He will also Robison books the bank such data would questions. To Give Information. "If anything criminal ture revealed the investigacertainly released for McAllister He also announced the former bank its ter institution, the California tional, be called before the inquisitors divulge what they know about the rumors and financial affairs the bank which caused the collapse. Depositors Appeal. McAllister's request for grand meeting prompted by appeal from the Deal Decommitbefore him yesterday and asked Rainey be questioned last Monday hearing the assembly committee on banking to the fect directors and some withdrawn "small" sums before the banks Walter Predovich association's spokesmen, declared the assistance the attorney sought "unable get in touch with Rainey.' Robison Explains. Robison declared: men never come into and any statement to the affairs institution want know what the assets the bank comprise, they need study the list assets public file the county clerk's office their they had unable get with Rainey they telegrams to Mr. Rainey's in San Francisco during bank holiday was flooded with and every the either the office calling Mr. Rainey on the

9. May 11, 1933 Tribune-Progress North Sacramento, CA

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Grand Jury Will Quiz Closed Bank Receiver SACRAMENTO-In compliance with the request of the Square Deal Depositors Association of the A. W. Sweet, foreman of the grand jury, probably will disqualify himself and resign on account of suit filed this week by Edward Rainey for the bank to recover $5,000 on a promissory note, it was announced last night. defunct California National and California Trust and Savings Bnks, the Sacramento County grand jury will conduct an investigation into the banking situation starting at 10 o'clock tomorrow morning. Neil R. McAllister, district attorney, has summoned A. Q. Robinson. special deputy of the state banking department in charge of the liquidation of the savings bank, to explain to the inquisitorial body certain alleged withdrawals of money by directors and stockholders of the closed bank before it failed.

10. May 16, 1933 The Californian Salinas, CA

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Closed Bank Raps Rainey Sacramento Banker Says State Acted Hastily In Dooming His Firm SACRAMENTO, May 16 (U.P.) Charges that the state banking department acted "hastily" and precipitated the closing of the California Trust and Savings Bank and the California National Bank were under consideration today by the Sacramento county grand jury following testimony of Fred W. Kiesel, bank president. In appearing before the grand jury to deny he withdrew any of his own funds from the bank or that there were any irregularities, Kiesel said the financial institutions could have "weathered the storm" had Edward Rainey, state superintendent of banks, allowed the Trust and Savings Bank to remain open. Looking back to the closing of one of Northern California's largest financial institutions, Kiesel declared he had no knowledge that the bank's funds had fallen below the "margin of safety" or where Rainey learned of withdrawals which prompted closing of the bank's doors. Kiesel was reported as having said he felt no concern over these "seasonal" withdrawals. The bank president also criticised A. Q. Robison, deputy in Rainey's office, who had been acting as bank receiver. Kiesel declared Robison was only 29 years old and unfamiliar with valley agricultural affairs so that he was not in a position to speak authoritatively in saying that reorganization of the banks would be "impossible."

11. May 16, 1933 Oroville Mercury Register Oroville, CA

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Rainey Will Testify On Bank Closing Fred Kiesel, President of Bank, Blames Rainey for Turn of Events perintendent of Banks Edward T. Rainey was to appear before the Sacramento county grand jury today to testify concerning affairs of the California Trust and Savings Bank which closed last January 21. At yesterday's session Fred W Kiesel, president of the bank, told the jury he did not know the bank was to be closed until SO informed by Rainey on January 20. SACRAMENTO Asserting the California Trust and Savings bank could have been kept open and blaming its close on Edward Rainey, state superintendent of banks, Fred W. Kiesel, bank president, appeared before the county grand jury late yesterday to deny withdrawing any of his own funds or that any irregularities took place. Kiesel was before the jury for several hours and brisk questioning at the hands of Niel R. McAllister, district attorney. The substance of Kiesel's testimony was that the California Trust Savings could have weathered the financial crisis had Rainey permitted it to remain open and that Rainey's action compelled the California National bank also to close. Kiesel testified that he felt no concern over heavy withdrawals from the bank. that they were seasonal in character, and that the bank could have outridden the storm. Criticizes Deputy Kiesel attacked not only Rainey's action, but criticized A. Q. Robison, deputy in Rainey's office, who has been acting as bank receiver. Kiesel said Robison is only 29 years old and that the state banking department is unfamiliar with valley and river agriculture affairs. For that reason he said that Robison could not speak authoritatively in saying that a reorganization now would be impossible. In testimony before the grand jury Robison had made clear that he believed it was hopeless to attempt to reopen the bank. Kiesel took sharp exception to Robison's statement. When asked by Foreman A. W. Sweet if there was anything that could be done that would make reorganization possible, Kiesel answered that if the 100 per cent assessment ordered against stockholders of both banks were forestalled at least 60 days, enough money probably could be subscribed to assure reorganization of the institutions.

12. May 16, 1933 The Sacramento Bee Sacramento, CA

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Kiesel's Statement On Pages 12 and 13 W. KIESEL, president of the California Trust & Savings Bank. told the county grand jury yesterday afternoon he did not know the bank to closed until informed by Edward Rainey, state superwas of o'clock on January 20th. The bank failed to its doors the day open its afternoon Kiesel related Appearing before the jury an story' of how the several jurors it bank president had no inkling the bank was in poor shape and would Bank of Yolo at Woodland "scared" deHe said the failure of the that the collapse of the Wingfield chain Sacramento and positors in Nevada also caused many withdrawals. in San FranKiesel said he was all the week becisco practically UNPAID LOAN fore the day the bank closed and learned from Rainey the bank meeting of the San close MADE TO BANK Francisco Clearing House WARNED BY RAINEY. "You have heavy withdrawOFFICERS BARED to-day," Kiesel testithere "and I'll have Rainey to close your After talking with Rainey. Kiesel Auditor Says Pair Failed To took next train for SacMeet Interest On $18,000 ramento. said he did not know Over Several Years where Rainev his informabeen heavy withtion there had At least two officers the closed drawals. said from the bank California National Bank made He no one and knew notified him as loans from the Institution without opened on Satthe bank interest due on them. This 21st. paying January Withdrawal Amount Differs. was the testimony given before the he Sacramento County Grand Jury The president said Janulieved' yesterday by Miss Hazel Tatum, 20th totaled but that ary formerly employed in the auditing "learned from the papers" department the bank. bank president "for named B. vice The She of officers the know, some the president and cashier of the instibeen making bank might tution. and Fred Martin. vice on withdrawals bank president, as making joint loan Withdrawals Held Usual. of $18,000 and fallKiesel said he knew about the ing to pay interest or principal on withdrawals that he saw nothfor at least couple of years.' ing unusual they were OTHER DEALS HINTED. made time of the year when Miss Tatum indicated there may funds are during 1932 were declared be other notes of similar nature, "around" $3,000,000 or $4,000,000. but she could not remember any of Kiesel admitted under close names. quizzing by McAllister that he Without reference to the records the bonds the bank, Miss Tatum owned by the bank. could not state definitely how long given was the note board directors bond she believed to have chases consisted, the banker testiseveral years. She testified the them read off was jointly executed by Carter their meetings after the bonds and Martin INTEREST NEVER PAID. Kiesel said both banks could continued to money don't think there ever any the Finance interest paid on it, or any princiCorporation if they had remained pal," she testified. open. Depreciation Blamed. Failure of the bank was laid by Kiesel to of Kiesel was difficult estimate how much the bank will liquidate until known whether the values of farm properties will rise. Kiesel denied he had shipped $100,000 Salt Lake City short time before the bank closed. testified he had knowledge of withdrawals by rectors. Meister Paid Loan. In connection with the withdrawal by George Meister, rector who closed his account, Kiesel said he took the out money pay note on the National side. When McAllister informed Kiethat J. Robison, deputy state (Continued on Page 13, Column 7)

13. May 18, 1933 Woodland Daily Democrat Woodland, CA

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Sacramento grand jury's probe Out of the the affairs of the defunct California Trust can't help but draw and Savings Bank one the conclusion that President Kiesel lacked the mental capacity to operate bank of that size. Also the conviction comes naturally that the directors, themselves, evinced too interest in what was going on, or else they were dominated by the officers in active charge. Banks and other business organizafor their boards of ditions which draft men rectors who cannot, or will not give sufficient unfair to their stockattention to the are holders and investors and the men who take do not do themselves these responsibilities else justice. aynone While Mr. Kiesel subsequently is reported to have told the State Banking Department that he was misunderstood and did not mean to find fault with Mr. Rainey and his assistants, nevertheless the criticism was implied when Mr. Kiesel, according to the Sacramenthat Mr. Rainey had to newspapers, charged business closing his California Trust and Savings Bank and Robison, assistant to Rainey, is too young to know the score. The insinuations cannot be justified. Mr. Kiesel, according to the printed testimony, that he, himself, did not told the grand jury know that his bank was in such a precarious The admission was reflection on condition. business ability even though his integrity may be unquestioned. Mr. Rainey followed Mr. Kiesel to the stand and when he finished the evidence was conclusive that Mr. Kiesel and his directors had been fully warned and either they were terribly dumb and incompetent in not heeding that warning or they were careless and indifferent toward putting their house order to avert collapse. Mr. Kiesel apparently is in a mood to blame most anyone but himself for his findifficulties. It was the last word, or ancial something or other, when he attributed the runs on his bank to the failure of banks in Yolo Ed. Wynn, the "perfect county. never appeared more foolish than Mr. Kiesel did before his home county grand jury. Strikingly absurd and inconsistent were the intimations that Mr. Rainey and his able Mr. Robison, have deliberately assistant, tried to block the attempts to reorganize and banks. The State Banking Dethe re-open partment has shown commendable willingness to co-operate to the limit in making it possible to rehabilitate all closed banks in California, but the extent of that co-operation is very properly governed by what they deem is necessary to safeguard the investments of the depositors. the financial arrangements can be SO arranged as to guarantee safety to the men and women whose money is at stake, then all banks now closed in California can rest assured they will receive permission from Mr. Rainey and his Department to re-open. The liberal but sound policy of Mr. Rainey toward all banks now in the process of liquidation or reorganization has been clearly manifested here in Yolo county. stockholders and depositors alike apprecia. the sympathetic and intelligent co-operation they have received from Mr. Rainey and his Mr. Kiesel certainly lost prestige when he provoked Mr. Rainey to disclose to the grand how bonds and securities were "juggled" to deceive the examiners. Usually grand jury inquisitions are waste of taxpayers' money, but in this case, even though nothing definite may be accomplished to help the depositors of the closed Sacramento banks, possibly the running down of lot of exaggerated rumors and reports and the revelations of how stupidly and carelessthe Kiesel institution was operated, may do some lasting good for the future.

14. May 18, 1933 Oroville Mercury Register Oroville, CA

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"LEAK" FROM WITHIN BROT RUN ON BANK SACRAMENTO from within California Trust and Savings caused the that closed institution, grand jurors investigating told yesterday by president in charge of the bank's branches. the same Azevedo testified Fred Kiesel and other officers the bank knew would have close, testimony Edward Rainey state banking perintendent, given the day previ- Kiesel told the that the close the to him and that did know until fore. He blamed Rainey for the order. The jury after hearing Azevedo Roy Blair trust officer close its hearings while an audit being made determine bond "juggling" tween national and state bank any fraudulent intent.

15. June 7, 1933 Santa Cruz Evening News Santa Cruz, CA

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Bonds Withdrawn From Bank After Closing, Alleged June the Bee: Robison, special deputy superintendent of banks charge of the liquidation of the California Trust and Savings Bank, testified before the Sacramento county grand jury yesterday that Fred W. Kiesel, president the defunct bank, made demand on him for worth of notes, bonds and stocks held by the Fred Kiesel Estate Company of Ogden, of which the Sacramentan held one-third interest. Robison added that when he declined to turn the securities over to Kiesel, the latter then sought assistance from Governor James Rolph and Edward Rainey, state superintendent of banks, both of whom referred him back to Robison. The bank receiver said he then delivered all but worth of the bonds to Kiesel, withholdthat amount in case of an assessment against the bank president.

16. June 8, 1933 The Sacramento Bee Sacramento, CA

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the law and listening To Take Sour Loans. understand from Carter that the California was organized frozen or loans the California National Bank the California Trust and SavBank could take them over from bank. Well, did from either over loans taken from savings bank. We taken some real but not sure about would have look up the see whether there were savings bank by the national wondering what the take of aggregatthe bank to take same Not Bank Property. That done. propwhich the corporation money from savings never owned by the they were The borrowed, and Sav National taking over those loans benefit Savings Bank, was the with That my point. The National Corporation loans over with the money California Trust and Bank and am trying the benefit accruTrust and ings the California Corhad been taking which had been ordered the portfolio of the bank by the bank with the California Corporation's see wherein the California Corporation was of benefit to the California Trust and ings but if the California National is taking sour or frozen loan with the money the California Trust and Savings Bank then think that detriment to the bank. That not the case altogether Mr. Referring to $65,000 loan which the corporation secured from the California Trust and money didn't go the California National for the purpose taking sour loans from the bank the National for the purpose of refinancing legitimate loan. Q. Refinancing it from whom? From Sacramento Guar anty Building Loan Association Trust Saves Deal. Q. Don't know that but for the fact Mr. Keisel and yourself and Mr. Martin held the stock of the stockholders of the California Trust and Savings Bank in trust, that your California Na tional Corporation could from the California Trust Savings Bank don't know Well, that Well, that point of law you know and don't know. Wasn't that the purpose holding the stock in not that know of. That done twenty years Your statement that you had borrowed from the Reconstruction Finance Corporation and from the Chase National Bank New York something $600,000. What those amounts, those moneys for, Mr Carter? Well, when the reserve began to show shrinkage was necessary to turn the into money we therefore took various loans of the bank various bonds the bank and hypothecated them cash to keep our cash position That on account of heavy assume? Yes. Were any of those moneys used for No, not that know of. Explains Closing. Grand Juror: Would you mind telling the jurors what you honestly believe to be the real cause of the bank's closing its doors? Well, there were several contributing causes. the first place bank subject steady incipient Nothing that noticeable the outside but steady decline deposits all the time. Rumors started that would get the people exercised and naturally they just began to quietly draw their money out. We know that going on. This where the real estate values went down and urally our savings bank loans came more less frozen. Farmers were unable to pay their interest We were doing anything we stop that situation but kept Hoping, as from day that would stop, it just kept going and of that there we felt we first loan from the Reconstruction Finance Corporation that would straighten up our cash position. We were position to pay people as they came in and hoping would eventually but It kept right on until finally came alarming. Of course know nothing about what happened the last days because left the bank in the middle of November and went to the knew nothing about it, but know that that condition existing every officer and employe of bank doing everything they could to stop the condition and bolster that to keep proper All sorts of plans were talked of and thing done by with everything that could doneto the situation but those continued bank the world can stand that they keep on running it: particularly where you have real estate loans that you can't go right out and collect. Those are the things in my estimation that were the rent cause, that an explanation A Grand Juror: Mr. Carter this had been thirty days so, the bank would have saved and the conditions the state, those conditions prevailing around there the could have been declared soonerA. Interposing: That is my opinion, yes. understand one-third of the banks of the State of California the banks, in the hands the banking examiner of the state, the condition was serious there was nothing to be done to declare general moratorium? A. That is correct. HUNGARY ACQUITS NAZL June first Nazi trial ended yesterday the acquittal the four who were cused fomenting revolutionary activities in the Tisza

17. June 9, 1933 The Register Santa Ana, CA

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PROBE INTO BANK AFFAIRS IN RECESS SACRAMENTO, June Investigation of affairs of the closed California Trust and Savings Bank by the Sacramento county grand jury today recessed indefinitely at request of District Attorney Neil R. McAllister, so that he could "study the testimony". The recess was ordered at conclusion of testimony by Fred W. Kiesel, president of the closed institution, in which he explained contradicted statements previously made to the grand jury, Kiesel asserted he had committed no wrong in shipping $342,000 worth of securities of the Kiesel Estate company to Ogden, Utah, last May. The securities were not his personal property, he ex. plained, were held only in trust for the company, and were returned at the request of the estate manager under permission granted by the bank receiver.

18. June 9, 1933 The Record Stockton, CA

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BANK INQUIRY RECESSES FOR STUDY PERIOD ed Press gation of affairs of the closed California Trust and Savings Bank by the Sacramento County Grand Jury today stood recessed indefinitely at request District Attorney Neil R. McAllis ter. so that he could "study the testimony The was ordered at conclusion of testimony by Fred W Kiesel, president of the closed institution. in which he explained con tradicted statements previously made to the Grand Jury Kiesel asserted he had committed no wrong in shipping $342,000 worth of securities of the Kiesel Estate Company to Ogden. Utah. last May The securities were not his per sonal property. he explained. were held only in trust for the company and were returned at the request of the estate manager under per mission granted by the bank receiver.

19. August 2, 1933 The Sacramento Bee Sacramento, CA

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THE SACRAMENTO BEE, WEDNESDAY, AUGUST 1933 PAGE TEN Bank Directors Closed Jurors Excoriate Grand Many Changes In State Act Urged To Protect Depositors In Penalties Demanded For Officials Lacking Due Diligence Handling Affairs And Lacking Knowledge Of Banks (Continued from Page One.) Bank stock Trust and Savings but the actual was recognized stock owner entity affairs voting and Savings the The the the the California Nagroup Bank and voted by tional Martin and A. Fred Carter Board Of Directors. direcThe California Clarence Savings Carter John Robert W. Geary. Marshall Kruse, Meister Miller. Em Arthur E. William Robert Thomson and W (Mr Pentz having Wright 1932 but whose place signed late been filled board on the board identical of the Caliand was fornia National the stock the vote elected Trust and Savings the the trustees above Bank cast by its prior selecnamed board of directors tion the National Thus the the California were the interests Savings Bank completely Trust and those the CaliNational which fornia contact with far less broadly in public Qualifying Shares. that Under no violation of the corporation necessary issue of the twenty-three selected. five shares directors so of the Califorof the capital nia Trust and Savings Bank. and while no evidence apparent that upon jury, it succession of directhe death the SO issued reverted the Califo: National Bank through the trustees, issued in the name of the new rector. Practice Assoiled. In the opinion of this committee. such practices are contrary pubpolicy and subordinated moral honesty to business expediency and paint an easy for evading of the law requiring actual qualification for directorship in corporations the feeling and recommendation of this that the grand jury urge the speedy amendment of the general corporation laws to the end that the issuance qualifying shares of capital and acceptance for the purpose to the posidirector of any without actual bona fide purchase, and full payment. each constitute felony "Loading" Charged. The evidence before grand jury shows that the board and the executive titular the California National Bank and the California Trust and Savings Bank employes and departmental heads those institutions operated under the same roof subsidiary. incidental, and opportunity other private institutions The Company and The California National Corporation. as investment and stock which "loaded" California Trust and Savings Bank with questionable securities excessive prices. Change In Laws Urged. It is the feeling of this commit- that while the might profitable, reprehensible and proximity has such banking conductfor the safety and and is contrary public policy our mendation bank of that ifornia be speedily bank can be per directly brokerage con any which dealing qualified the securities or hold to deal the banks and that every ings of the bank shall subemploye to the same conditions: ject shall any bank California be permitted with under the of any other cor- General Banking Conducted. Facts this grand Trust show Savings operated both branches and departments: the branch conducted in the ramento same building the California Na. tional Bank maintained no mercial department operated savings and departments: while addition to trust and branches the California Trust and Savings Bank Loomis, Ione and North Sacramento operated commercial departments. Thus California and Bank seen banking business comIn many respects under the state branch the sponsibilities and liabilities of arate banks only Uniform Liability Proposed. contrary the interests of the general public that the liability of branch made and equal the and that the law be so specify May your digress the end that attention be recalled the fact the state bank in the contests protecting the interests holders the institution financial enterprises too little with adequate and protection of the deposits the public Penalties Proposed banks under in an ownership opinion of committee that directors charged. should scrutiny of the under care that negligence should doubly that for tion and existing The perfunctory shown the before this jury and the pitiful showing knowledge as state the California and Savings Bank by and every one testimony was taken energetically be The failure the law to recognize criminal and the penalty of for crass indifference to the rights thoe whose means are entrusted their cannot be too speedily corrected. Charge Urged. It the dation of this that the bank act should amended that the failure bank directors know condition of the institution and to from exact truth falsity document and report bearing their signature shall constitute felony and that additional liability equal to four times the stock ership such shall should be shown that the bank served has been due either deceptions the neglect directors or their officials We further recommend that such phrases "knowingly violate' and "wilfully permit' the bank and included the oath of make their use the defense directors and officials of failed banks null and void and that the phrase the best our knowledge and belief the affidavit officials attached bank statements be made read "of our own knowledge Exact absolute knowledge the part of directors the least that be accepted of those controlling the funds others. Perjurers Protected. In this connection the grand jury will recall the expressed our legal advisor that "perjury is the hardest possible charge prove. when the question of dering such indictment raised in connection with evidence the bank and that the of this grand also this jury, specifying director, that mere perfunctory signing by rector of official report, though fense the opinion of this committee that indicates has the right and for which that state banking departments and officials the partially Responsibility Not Fixed. The evidence before grand jury failed to fix the sponsibility tions, the legality which is upon any offiemploye group of either. the opinion dation that the state bank act definitely and fix the absolute both stockholders for specifically that the policy shown by this bank designate vice presidents excessive salaries prohibited by High Reserves Urged. The before grand jury indicates that bank was required to maintain for amount equal to 10 per cent and its savings department equal per cent total exclusive public funds The testimony also shows this have been inadequate and public policy warrants the requirement not less than twice that which mittee should quired by worthy of note that specifically that receiving deposit does debt" the meaning of the Trust Department. The grand jury shows that the trust ment the bank operated both private and court trusts the permission the treasurer of which ceptable securities sufficient amount "for the performance' the bank the execution trusts are These deposited securities to be confused collateral security by law set aside for trust funds in banks other departments banks however travesty that there according testimony undisputed, differ protection required tween funds deposited "for distribution funds the posited further testimony that such segre gation could not made without knowledge of the terms of each Clarification Urged. That provision the bank which declares that trust ments "shall be for and by conthe that veys bility for "investments" covers sponsibility should be clarified strengthened to cover all trust though the same cared for under provisions the penal peculiarity the law protects "private trusts" from examination the and seems entirely "privileged communication" ex tended in this case and the of trust held The should be fully advised of public and so long as the practice recognized protected by law suffering losses during the private the of failure the part the seek the Loans Attacked. The evidence before grand shows certain material loans This permitted by the the feeling this that own or bank be prohibited Bank Separation Urged. The Califor Savings the the clusion financial directors policy fraugh danger to depositors al though affords sources profits feeling that ing its good brings itself of and the which also contrary the public policy recommend such modification the bank not permit any group banks either an ficer director in more than one bank The state requires specific reports at stated intervals made by the or mittee the stockholders of the bank for their which the bank commissioner may according to his cept guide such periodic examinations the affairs bank as he required to make. The bank examiner clear that ports not for his ment but for the banks forms and with data contained as is required his One the anomalies of the presbank act indicative of its adequacy the following vision the report above referred to: the make report of and liabilities shown by the books, together with any deductions from the sets or additions to the which such directors committee after examination determine to make statement detail of loans, if which their opinion doubtful collateral security and its actual value as nearly as possible. REPORT IMPOSIBLE We submit that such report from an examination by such examiners be completely insufficient and Such signed such directors the and Savings Bank have been submitted to the grand jury the truthfulness of some state ments of which in question The state bank act provides reports are "intended and for the preparation of falsehoods "wilful intent" to mislead or Bond Deal Explained The that block of defaulted Milwaukee and St. Paul Railroad bonds transferred of the California Savings Bank the California National Bank the period reports and the report form blank carries notation meaning that the bank had had no unauthsecurities portfolio further testified by the of banks that the bonds from the of the Trust and Bank that the made and there had nothing far discovered than with the affairs of the bank or in the records his department nor examination his examiners made. indicating criminal Diligence Questioned. the evidence before this body that same dividual acted as bond officer the California and the California Trust Savand Bank and that the two institutions were harbored the same building and officered by the same board directors, there may be question raised gence in the transfer under conditions and give rise suspicion. especially two vestment subsidiaries that and "juggling" practice unfortunate that "loading "juggling" fined legally declared felonithis committee that the holding un by any bank should be made felony amendment state bank act False Rumors Reported. Evidence before this grand jury false and unfounded rumored reports the failure during the Fall and Winter just passed citizen and business suffered particularly financial institutions The truths the general depres were marked enough threaten the stronger conand perings proved fatal many Policy Questioned. This might question of the state department in the matter failure to demand an repair of the depreciated capital California Trust and ings Bank regardless the judgment of this department that to precipitate acute spread run on many California inEvidence before this grand jury levied. in fear that action might an Weakness Admitted The weakness had been admitted the report to the Corporation loan however, the opinion of this comthat the way which the part for the holders themselves tify their confidence their own repair any impairment of its capital ture the of this the bank amended that the state bank be denied discretion in such and that any the capital structure any bank repaired by stock assessment immediately upon its PENALTIES ASKED this provision the law, recommendation of this com- mittee that the penal code be strengthen its operation and penalties for the circulation any rumor, the display any calculated directly or indirectly excite any bank to bring into question the ability the bank to meet its obligations, and that such activities shall be defined as constitutfelony. Because evidence submitted this grand jury by volunteer witnesses showing their utter lack of facts concerning the California and Savings Bank, our grand jury action and practice should modified vide the publication of such evidence to that public anxiety and interest be satisfied during and that purof reports credited only extent of their actual SECRECY SCORED In this recognizing value the four provided by the banks, committee still feels that the atmosphere secrecy failbanks and the subsequent uncalled for and calculated arouse popdistrust both bank examining officials: therefore, our that immediate and subsequent periodic progress reports be issued in bank examinations by the state superintendent banks Estimate Of Assets. Your committee finds evidence public statements prepared reports the California Savings regardless of the depression which had greatly actually "frozen" brought default many and other evidences of investment aggregated such investments prices above current market quotations. We consider this judgment, to lull both the its and practice. what be the values securities held assets by banks, matter of opinion frequently highly controcommittee that for the "statements of and the deterof the of banks, the law amended to the such securities as have been for vestment only prices revised June 30th and December 31st of year conform to those tablished and set by legally tablished from tations upon those dates recognized securities markets, and where bank securities offered assets are not found to be listed upon such recognized markets, the amounts for which they are cluded shall within certain definite limits to set up by the state banking in the judgment said general business conditions and marketability justifies. Law Enforcing Machinery. A study the law this that the state banking department uncover violations the bank which calculated replace the not penal and that upon the formation that department to violations of penal county prosecutors upon their own or or upon its own motion by having evidence laid before county jury may investigate matters of purported criminal nature and in case dence leading the conclusion "reasonable presumption guilt" indictments bank that the state banking department any zen knowledge of crime can criminal proceedings. That grand jury does not deem that information laid before to date sufficient upon which return indictments abbrogates the duty of either state bank should have, their crime sufficient to justify the tion, from filing information proper courts: of private citizens with knowledge crime from manding that the proper officials BANK OFFICE SCORED finds the the law called any time the stockholders California Trust and Savings Bank and laid before them the known by the partment exist. Evidence before the grand the state while Will Wood was the attention Fred W. Kiesel, president the bank, and others its official family shaky which Evidence before shows that from the bank closed department did possible secure tution impaired imperative order, but that the MORALLY CRIMINAL Unfortunately procrastinanot legally criminal although morally criminal in the opinion this committee any of expedlency which prompted the state banking department to permit it. However, we are prepared to think that probably lected and attentative directors, trained to operate financial stitution rather to count dividends, would have managed this institution as to have maintained sound condition To the qualification investment the selection of bank the that law defieducational standard and specified practical state certification. established prerequisite the election on the board of directors any Explains Transfers. The evidence before this grand showing certain trust funds the savings department without legally required security suggests evasion of law nothing but further showing that distinction between trust funds "deposited distribution" and trust funds "deposited for investment' is permitunder the indicating that trust funds "deposited for disrequire protection that there was way determining except by the terms individual trusts. many which might "privileged" coupled the testimony the state commissioner the failure department to intent indicates that is insuffiwithout banking department ruling definitely defining trust fund deposit the recommendation of this that the bank act be amended require that suffiof liquid assets postwith trust department trust deposited in savings and that neglect to collateral deemed felony on the of part the officer Loopholes Indicated. As special significance, indicative of the even its invitation responsibility. and the and inattention to duty not crimiunder the we recall the testimony of your grand jury ex pert he reports: cannot personally that transactions coming with- say my examination and which have been woefully irregular of my that California and Sav. ings Bank and their affiliates have provided temptation bilk the public under legal safeguards. TOO MUCH NEGLECT OF LAW. closing begs express the opinion that much has been by public to the laws, practices and comprehended the economics stitution banking. It has much been the interest of bankers only. matter of the California In the Savings Bank we Trust that institution could possibly no officered by and their business than their own evidence before grand showed. That ignorance and should have been a shame tention themselves MERELY In main proved Evidence showed that the president culpably ignorant-too seldom contact with affairs-too dependent his information Irresponsible subordinates: the institution top-heavy of economic conditions-too careless in appraisals stock securities-too obsessed with realty ditions which could not have been with trained men Interest in successful banking operation the extent that would detheir personal attention an institution departmentalized and involved subsidiary corporathe California National is: could such conditions been bank with teeth with. the opinion your committee. the tions made enacted into law; and last we that the bank amended to define 'due gence" make penalties for its violation by directors and officials

20. August 24, 1933 Tribune-Progress North Sacramento, CA

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California Savings Bank Receiver Undecided as to Acceptance of Loan Bonds SACRAMENTO Because "as yet no market value has been set on bonds issued by the Home Owners Loan Corporation, A. Q. Robinson, special deputy and ceiver of the California Trust and Savings Bank, now in liquidation, is refusing to exchange them for trustee deed notes. In answer to an inquiry concerning the policy of the bank, which has real estate loans in Northern Sacramento County, Robinson said: am endeavoring through the aid of the Reconstruction Finance Corporation, the Federal Reserve Bank, well as the officials of the Home Owners Loan Corporation, to find out if definite market value for the bonds to be established and until such time as we receive this information, we cannot make any commitments as to whether or not we will accept bonds in exchange for notes secured by deeds of trust covering homes.

21. July 14, 1935 The Sacramento Union Sacramento, CA

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CITY NEWS IN BRIEF Foreclosure on a valuable Sacramento river front property to satisfy a $20,000 promissory note given the defunct California Trust and Savings bank by George Spencer and John I. Neville was granted the yesterday in supe ning serv. No odor. Ficetti, M. 2540—Ad. he late Laura A. th $1,800, according y filed in superior Quick, safe, comum rate 25c, 2-mile ing fellow calls a —Adv. omas B. Richards valued at $300, ac-inventory filed in yesterday. -Rebuilt like new at ile Co., 16th and K. ork, radiators, paint. night. M. 808.—Ad. er $1,300 rental on eased J. Boyle and Suit to recover $364 owing on a $2,000 promissory note was filed yesterday by the defunct California Trust & Saving bank against Mavis McCampbell Harrison of Sacramento. Dr. Winn S. Davies, D. C., is located in beautiful new offices at 424 Forum Bldg., 9th st., bet. K and L sts.—Adv. Estate of the late Wilhelmina C. Imhoff is valued at $4,552, according to an inventory filed in superior court yesterday. Dr. H. V. Hjelm, dentist, 620 Medico-Dental Bldg. Phone C. 2939.—Adv. Her husband is cruel to her and frequently struck her, Eudora Elizabeth Rust charged yesterday in filing suit for divorce from Norman Charles Rust. She seeks custody of their daughter and $50 per month alimony. McAllister & Johnson, attorneys, 409-13 Forum Bldg. Main 1150.—Ad. Edward A. Shelton, 633 Santa Ynez way, yesterday filed a peti- The late Samuel Taylor left an estate valued at $800, according to an inventory filed in superior court yesterday. Funeral director—Harry A. Nauman, Sr. The most modern funeral home in N. Calif. Lady attendant. 2021 28th St. M. 144.—Adv. Estate of the late Nettie B. Kirn is valued at $3,952, according to an inventory filed in superior court yesterday. Odd Fellows' Lawn—A cemetery with perpetual care. Graves and lots sold to the public. 2720 Riverside blvd. Cap. 4761.—Adv. Superior Judge Peter J. Shields granted Cecilia Cooper a divorce from George L. Cooper on grounds of cruelty. Hong Kim Lum Cafe. Dine and dance to the tuneful music of Wayne Tom and his Musical Mandarins. Superb service. 3rd and I Sts.—Adv. Estate of the late Arthur D. Goodell is valued at $382 in an inventory filed in superior court yesterday.

22. November 6, 1935 The Sacramento Union Sacramento, CA

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Woman's Court Victory Recalls 1933 Bank Panic Echoes of the financial panic that gripped Sacramento January 21, 1933 when the doors of the California Trust and Savings bank closed, were heard in a decision rendered yesterday by Superior Judge Malcolm C. Glenn. Judge Glenn ruled that Mrs. Bernice Vihel was entitled to $1,600 she maintained as a joint account with her late uncle, Charles C. Flint. Testimony showed that on January 23, 1933, two days after the bank closed, Mrs. Vihel and Flint withdrew their joint account from the Bank of America and deposited it in Postal Savings. However, the account was placed in Flint's name only, since the Postal Savings refused to sanction a joint account. Fred Flint, as administrator of Charles Flint's estate, took possession of the money. Mrs. Vihel sued to recover.

23. November 12, 1935 The Sacramento Union Sacramento, CA

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Defunct Bank to Pay $800,000 Here Today Checks for five per cent dividend from the closed California Trust and Savings bank will be placed in the mail for depositors today, George M. Walker, deputy superintendent in charge of liquidation, announced yesterday. The checks, totaling about $800,000, will go to some 18,000 depositors in Sacramento and the Sacramento valley in time for the holiday shopping season. AUTO KILLS BOY CYCLIST SALINAS, Nov. 11.—(AP)—Emmett Banks, 13, was fatally injured today while riding his bicycle along the Salinas-Monterey highway when he was struck by an automobile driven by Everett Woods of Salinas.