Peoples Bank (Hilo, HI)

Episode Information

Episode UID
9245954191466
Episode Type
Run → Suspension → Closure
Bank Type
state
Bank ID
924595419 hash
Start Date
February 1, 1922*
Location
Hilo, Hawaii (19.722, -155.087)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
8529c5bac407e552

Response Measures

None

Description

Embezzlement by an officer (Truslow) cited in sources and receiver appointed; bank did not resume normal operations.

Events (3)
1. February 1, 1922* Run
Cause
Bank Specific Adverse Info
Cause Details
Persistent reports and financial weakness of the bank (talk in financial circles about the bank's condition) and later revelations of embezzlement.
Measures
Management attempted to keep bank open; territorial treasurer later opened bank to receive payments of debtors.
Newspaper Excerpt
The action by its management followed a run on the bank.
Source
newspapers
2. February 21, 1922 Receivership
Newspaper Excerpt
Court Turns People's Bank of Hilo Over To The Bank Examiner ... formally closed and turned over to the territorial bank examiner; Waterhouse Trust Company named as receiver in later reports; receiver suits and administration followed thereafter.
Source
newspapers
3. February 21, 1922 Suspension
Cause
Government Action
Cause Details
Judge Ross issued order on application of Territorial Treasurer A. Lewis to close and turn the bank over to the territorial bank examiner.
Newspaper Excerpt
Court Turns People's Bank of Hilo Over To The Bank Examiner ... was formally closed and turned over to the territorial bank examiner.
Source
newspapers

Newspaper Articles (10)
1. February 21, 1922 The Maui News Wailuku, HI
Article from The Maui News, February 21, 1922

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Article Text

Court Turns People's Bank of Hilo Over To The Bank Examiner (ASSOCIATED PRESS) HONOLULU, Feb. 21-Territorial Treasurer A. Lewis, Jr., is in Hilo in connection with the affairs of the People's Bank which by an order issued by Judge Ross in the Fourth Circuit was formally closed and turned over to the territorial bank examiner, according to a special wireless to the StarBulletin. The order was issued on the application of Territorial Treasurer Lewis. News of the closing of its doors of the People's Bank was received here Saturday. The action by its management followed a run on the bank. Treasurer Lewis left for Hilo Saturday afternoon. According to the Star-Bulletin speci al Lewis said after a consultation with the bank officials that it is possible there are sufficient assets to pay depositors in full. Previously officials had been quoted as saying depositors will lose nothing. Lewis opened the bank to receive payments of debtors to the bank yesterday. For months there has been talk in financial circles as to the condition of the People's Bank and the report of its closing occasioned little surprise and no excitement here. Recently Waterhouse Trust Company bought the stock of Senator Russell and others in the bank. In financial circles here it is felt that the misfortunes of the Hilo bank will have no effect whatever on any financial institutions outside of Hilo as recent reports of all the other banking institutions show strength and stability and conservatism in loans.

2. April 28, 1922 The Maui News Wailuku, HI
Article from The Maui News, April 28, 1922

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Article Text

Bank, Trust Co. and Branch Bank Taken Over by Territory (ASSOCIATED PRESS) HONOLULU, April 27-Territorial Treasurer Lewis today took over the affairs of the Hawaii Bank of Commerce and its allied concern, the Commercial Trust Company, both promoted originally by the same interests that were identified by the People's Bank and the Security Trust Company of Hilo which went into the hands over a receiver several weeks since. His action resulted from impairment of the capital and inadequate resources of the institutions. Through Attorney General Harry Irwin he petitions for the appointment of the Waterhouse Trust Company as receivers for the institutions. That trust company was named as receiver for the two Hilo concerns. The Bank of Kauai branch was also ordered closed by Treasurer Lewis in a wireless message. Imparement of the capital amounts to about $2.50 a share, the par value of which is $20 and totals about $25,000. Bank officials said that the difficulties are due in a large measure to the burden of carrying the Kauai branch which was taken over with the formation of the Honolulu concerns. That branch has lost $40,000, officials said. Lewis states that the officials of the two institutions have been endeavor ing for some time past to effect a reorganization and to secure working capital and that every opportunity would be given them with the assistance of the receiver to carry out such plans. D. E. Metzger, former territorial treasurer, is president of both institutions which opened their doors for business on January 3, last. They are capitalized at $200,000 of which $100,000 has been paid in. It is considered unlikely that the depositors will lose anything. In Maui banking circles the news of the taking over of the two institutions occasioned no surprise. Something of the nature has been expected ever since the closing of the Hilo institutions. World financial conditions operated against the success of new banking ventures at the time the two institutions were opened and since and the former connection of the concerns with the Hilo interests involved in the bank failures there added further to difficulties that were encountered. Neither of the local banks have been in any way affected by the troubles of the Hilo or Honolulu banking concerns.

3. June 2, 1922 The Maui News Wailuku, HI
Article from The Maui News, June 2, 1922

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Article Text

Trial of Truslow in Connection Affairs Of Bank is Started (ASSOCIATED PRESS) HONOLULU, June 1-Declaring "I will show that not only was there intent to defraud but fraud was actually committed," Attorney General Harry Irwin made his opening statement to the jury in the trial of Herbert A. Truslow, former vice president and manager of the now defunct Peoples Bank and the Securities Trust Company of Hilo. Truslow is under indictment on charges of embezzelment as the result of the failure of the two institutions. Judge J. J. Banks is presiding at the trial. Irwin charged that Truslow after handling stock transactions for William McCallum, on margins, had in April 1921, sold out McCallum's holdings and, concealing the fact from McCallum, had accepted payments on the account, and in July of the same year had called on McCallum to furnish additional security, saying that otherwise the stock would be sold to meet his obligations, and had accepted payments on the account. Upon the taking over of the bank and trust company by the receiver the account of McCallum was found listed among the assets of the trust company and demand is now being made on McCallum for the payment of the account, which alleged indebtedness is said to amount in excess of $10,000. McCallum was the first states witness to appear on the stand this morning and his statements, for the greater part, coroborated with those made by Irwin.

4. June 9, 1922 The Maui News Wailuku, HI
Article from The Maui News, June 9, 1922

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Article Text

Hilo Bank May Pay 75 Percent Back -(ASSOCIATED PRESS) HONOLULU, June 9-Receivers of the Peoples' Bank and Trust Company hope to pay 75 cents on the dollar. George Vicars says. Liabilities of the Securities Trading Company are place at $215,000 with assets dwindled to $410,000 according to the report of Vicars, representative of the Waterhouse Trust Co., the receiver. The liabilities include claims of $68,000 of persons whose stocks were sold out and a loan from the Peoples' Bank of $140,000.

5. November 7, 1922 The Maui News Wailuku, HI
Article from The Maui News, November 7, 1922

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Article Text

Suit has been brought against the Securities Trust Co., of Hilo by the Waterhouse Trust Co., receiver for the People's Bank for $134,842.58. J. W. Russell was president of the company and Herbert Truslow, treasurer.

6. July 11, 1923 Honolulu Star-Advertiser Honolulu, HI
Article from Honolulu Star-Advertiser, July 11, 1923

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Article Text

Low Costs Reported By Bank Receivers A. N. Campbell, treasurer of the Henry Waterhouse Trust Company, receivers for both the defunct People's Bank and Security Trust Company of Hilo, said yesterday that from the very beginning of the receivership the cost of administration has been less than the interest collected so that all of the collections on account of principal have been retained in full for the benefit of creditors and depositors. Removal of the receiver's office to Honolulu will cut the costs of the receivership in half from now on, he said, and increase the total dividends by whatever is saved in that way.

7. July 28, 1923 Honolulu Star-Advertiser Honolulu, HI
Article from Honolulu Star-Advertiser, July 28, 1923

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Article Text

Waiakea Mortgage Transfer Awaits Governor's Consent (From Advertiser Hilo Bureau.) HILO, July 27.—Another claimant has come into the possession of the $10,000 mortgage on the Waiakea homestead given by Fred Patterson, the assistant United States district attorney, toward the repairment of the funds of the People's Bank before it failed last year. Court records at Hilo now show that P. C. Beamer is the claimant to the mortgage, and transfer to him only awaits the consent of the governor and land commissioner, which is necessary for the transfer or granting of all homestead mortgages. The mortgage was originally given to the People's Bank which later transferred it to J. A. M. Osorio. Osorio before accepting the mortgage required Mr. Beamer, one of the officers of the bank, to endorse the same. In a suit by Osorio to foreclose the mortgage, Patterson set up the defense that the mortgage was obtained by fraud by H. A. Truslow, who is now serving a sentence in the territorial prison. The district attorney contended that Truslow had assured him the mortgage would never be recorded or transferred. Patterson lost the decision in the local circuit court, but the supreme court reversed the decision on legal grounds. Osorio and his attorneys then obtained settlement from Beamer, who now comes into possession of the mortgage. Papers filed in the Hilo circuit court state that Beamer has paid Osorio "good and valuable consideration." It is generally understood that Beamer paid the full amount of $10,000, with interest. One of the conditions of the transfer is that Beamer release the bank's receiver from all liability of the mortgage. Locally there is much interest as to whether Beamer will start another suit against Patterson to recover his $10,000.

8. July 29, 1923 Honolulu Star-Advertiser Honolulu, HI
Article from Honolulu Star-Advertiser, July 29, 1923

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HAWAII (Continued from Page 6) on for appendicitis July 21 at the Hilo hospital. Frank Warren is ill at the Hilo hospital. D. L. Crawford, director extension service, and Prof. F. G. Krauss, of the University of Hawaii, will make an extension trip to Kona and Hilo the first week in August. Major Charles B. Lyman, U.S.A., and Miss Edna Mason Wetmore were married July 3 at the home of the bride's parents, Mr. and Mrs. Theodore Wetmore, in Minneapolis, according to an announcement received by Norman K. Lyman of Hilo, the major's brother. The evangelical association of churches of the island of Hawaii will hold a general convention at Kailua Friday. About 40 delegates are expected from Honolulu. There will be a celebration Sunday of the hundredth anniversary of the landing of missionaries at Kailua. A $10,000 mortgage on the Patterson lands has been transferred by the receiver of the People's Bank to P. C. Beamer. Beamer backed J. A. M. Osorio, who paid the bank $10,000 for the mortgage, but as the transaction did not have the written approval of the governor and land commissioner, the bank remained the legal holder of the mortgage. Judge Ross has approved of the transfer, the bank's receiver being released from all liability. The infant son of Mr. and Mrs. A. Aki of Puueo died Wednesday. Other Islands—HAWAII 2 C. L. Bowker, Boy Scout executive, will make a tour of the island of Hawaii beginning Wednesday. Mrs. Thomas A. McDonald, formerly Miss Esther White of Hilo, gave birth to a daughter in Denver July 11. Mrs. McDonald is the sister of Mrs. W. H. Hussman. Miss Jessie B. Evans of Topeka, Kansas, was married to James D. Brown of Papaaloa at the home of Mr. and Mrs. Robert A. Hutchinson, Papaaloa, July 21. A summer school has been opened by the Hongwanji Buddhist Mission on Kilauea street, Hilo, under the direction of Mr. and Mrs. E. H. Hunt and Mrs. Takada. The object of this school is to assist the Japanese boys and girls under 12 years of age so they can forge ahead by coaching in their grade work in the public school, to which they will return in September. The present enrollment of this summer school is 113. This includes pupils from the first to the sixth grades, inclusive.

9. September 25, 1924 Honolulu Star-Bulletin Honolulu, HI
Article from Honolulu Star-Bulletin, September 25, 1924

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PEOPLE'S BANK RECEIVERS SUE J. W. RUSSELL Company Seeks Judgment For $24,137 and $3197 Against Former Senator Papers To Be Served When Candidate Returns From Campaigning In Country (Special Star-Bulletin Radio) HILO, Sept. 26.—Two suits were filed late yesterday here against James W. Russell, former senator, by the Waterhouse Trust Co., receivers for the People's Bank and the Security Trust Co., asking judgment for $3197 on behalf of the former and $24,184 on behalf of the latter. The papers are in the hands of a deputy sheriff for service. Russell now is on the other side of the island, campaigning in the interest of his candidacy for the Republican nomination, but is expected to return here late tonight. The suit says that "between February 26, 1921, and September 30, 1921, at the special instance of this defendant, the Security Trust Co. advanced and paid for the use of said defendant certain sums of money, in consideration whereof the defendant undertook and promised to pay the Security Trust Co., on demand, the sum of $19,228." The suit against former Senator Russell is an outgrowth of the failure of the People's Bank in which he was one of the principle figures. The disaster was the first case of its kind in the territory, and caused much hardship, especially in Hilo. Herbert Truslow, former cashier of the bank, is serving a term in Oahu prison as a result of conviction of embezzlement growing out of his connection with the bank. Russell resigned as director and officer in the People's Bank and the Security Trust Co., in January, 1922, and disposed of his interest in the institutions in which he and Truslow had been the largest stockholders. In February, 1922, the bank suspended, with liabilities for the two concerns of approximately $500,000. Truslow and Russell were indicted, and the former, after three trials, was convicted and sentenced to serve from three to ten years in Oahu prison. The bank's failure was attributed to the large amount of unsecured paper held and the amount of loans made to stockholders who were interested in other businesses.

10. February 18, 1932 Honolulu Star-Bulletin Honolulu, HI

Article Text

Told From Files of 10 and 20 Years Ago TWENTY YEARS AGO Palmer, manager of the Courtland hotel, Percy M. Pond have taken over the lease the Hau Waikiki beach hotel, which they will the Wailana. The attractive cottages built by George Wilcox at Grove Farm plantation, Kauai, be remarkable innovation in housing facilities plantation laborers. Charles Warren, well known purser of the Matsteamer Lurline, the Seattle agency Alexander & Baldwin, Ltd., about March TEN YEARS AGO the People's bank at Hilo was stopped closed its doors the arrival Lewis territorial Archie Lister, former superintendent of the Pauwela Pineapple Haiku, Maui, has been appointed Kohala Co. Mrs. Paul Withington and Stanley Kennedy played roles in the Footlights club play, "Behind the