Merchants National Bank (Galena, IL)

View Charter #979 on SPMC View balance sheet

Episode Information

Episode UID
97901599
Episode Type
Suspension → Closure
Bank Type
national
Bank ID
9790 national
Charter Number
979
Start Date
March 4, 1933
Location
Galena, Illinois

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
ef68d58eb3b27eb2

Response Measures

None

Receivership Details

Depositor recovery rate
100.0%
Date receivership started
1933-10-09
Date receivership terminated
1937-11-27
Share of assets assessed as good
22.7%
Share of assets assessed as doubtful
69.1%
Share of assets assessed as worthless
8.2%

Description

Article 6 contains an apparent typo ('March, 1932') but refers to the March 1933 national banking holiday; receiver Charles E. Day is named.

Events (5)
1. April 5, 1865 Chartered
Source
historical_nic
2. March 4, 1933 Suspension
Cause
Government Action
Cause Details
State-wide bank holiday declared by Illinois governor (March 4, 1933) as part of national banking holiday
Newspaper Excerpt
A general three-day bank holiday affecting all Illinois banks was ordered...banks must reopen Wednesday, March 8
Source
newspapers
3. July 1, 1933* Other
Newspaper Excerpt
In July, 1933, the First National bank of Galena was created to succeed the Galena National bank and the Merchants National bank.
Source
newspapers
4. October 9, 1933 Receivership
Source
historical_nic
5. October 9, 1933 Receivership
Newspaper Excerpt
closed Merchants National bank of Galena would repay its depositors 100 per cent was announced by Charles E. Day, receiver.
Source
newspapers

Newspaper Articles (6)
1. March 4, 1933 Evening Star Washington, DC
Article from Evening Star, March 4, 1933

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Article Text

EARLY U. S. ACTION PLANNED ON BANKS New York and Illinois Declare Holidays—Only Four States Unrestricted. Connecticut took similar action, bringing to 43 the list of States in which restrictions on withdrawals are operative in some form or another. Only Montana, Colorado, North Dakota and South Carolina remained without restrictions at noon today. Delaware's banks were open, but the State Legislature has already taken emergency action. These developments had brought from Representative Rainey, the next Speaker of the House, the prediction that "an extra session of Congress will be called at the earliest possible time." He said he felt that early next week, possibly Tuesday, would not be too soon. Previously Rainey had told House members-elect to remain in Washington. Others at the Capitol said the session probably would begin Wednesday. The Federal Reserve Bank of New York was closed with all other banking institutions of that State. The Federal Reserve Bank at Philadelphia also closed, under a holiday declared throughout Pennsylvania by Gov. Pinchot. Later in the day the Minneapolis Federal Reserve Bank suspended business. The closing of the New York Federal Reserve Bank meant the tying up of its huge gold reserve for the period of the holiday against withdrawal by either domestic or foreign agencies. In discussing the banking relief program, Senator Robinson said: "We do not know just when it will be completed, but it will be expedited all possible. The details can not be announced right now but you may be assured there will be no delay." Wagner Plans Action. Previously Senator Wagner, Democrat, of New York, had told newspaper men he would carry immediately to Democratic leaders an appeal for immediate emergency banking moves. Informed at his hotel here of banking moratoria in New York and Illinois, Wagner said he would appeal this morning to Democratic leaders to begin working out a program and some time this afternoon would call on Mr. Roosevelt with the same objective. A bank holiday, he said, "is the only thing to do" to meet the emergency of the banks themselves, but he added quick steps are necessary to enable them to reopen and continue operations. Harvey Couch, Democratic member of the Reconstruction Finance Corporation, was the first White House caller this morning. He said after a brief conference with President Hoover he had discussed "matters incident to the banking situation," but declined to give details. Couch conferred last night with President-elect Roosevelt. Officials in Conferences. High officials both of the outgoing Republican and incoming Democratic administrations were in conference most of the night. Secretary of the Treasury Mills said afterward the Hoover administration would have no statement, but that governors of the Federal Reserve banks in Chicago and New York would have announcements. Demands Impossible. The hours between midnight and dawn saw banking officials in many States struggling with the problem, made acute by the flurrying of nervousness on the part of depositors. As a statement by the New York Clearing House Committee put it: "The unthinking attempt of the public to convert over $40,000,000,000 of deposits into currency at one time is, on its face, impossible." The statement added that the condition clearing house banks is such that "they could, through the facilities of the Federal Reserve Bank, pay on demand every dollar of their deposits," but that withdrawals throughout the country as a whole have increased so that a "halt" is necessary "to enable the proper authorities to consider and adopt remedies to meet this situation, not for New York primarily, but for the Nation as a whole." Only a few States remained today in which restrictions on withdrawals had not been invoked. No Holiday in Virginia. In Virginia, Gov. Pollard said no general banking holidays would be declared because the State's laws already protect the banks and their depositors. In Maryland, the General Assembly early today approved the emergency banking legislation without a dissenting vote in either House. Gov. Ritchie signed it this morning, but said that the banking institutions of the State will not reopen Monday. The resources of the Reconstruction Finance Corporation earlier had been made available to hard-pressed, but solvent banks in States that have imposed moratoria on withdrawals. This was one of a number of developments yesterday that included introduction of legislation to allow postal savings checking accounts and to confer upon the incoming administration sweeping authority to maintain the security of deposits. Reconstruction Corporation officials said their policy called for lending institutions—if the loans were well secured—enough money to pay the percentage of deposits that could be withdrawn, provided the banks did not have the funds immediately available. It was emphasized this was not a new departure, but was simply the application of regulations decided upon for individual instances in the past to a situation spread into a number of States. Pinchot's Statement. Gov. Pinchot of Pennsylvania here for the inauguration issued the following statement: "Because of the declaration of a bank holiday in New York, Illinois and most of the other States, similar action in Pennsylvania has become unavoidable. "Were our banks to remain open, the demands upon them would impose an impossible burden. "Therefore, upon specific recommendation of Gov. Norris of the Philadelphia Federal Reserve Bank, I hereby declare a bank holiday throughout Pennsylvania on Saturday, March 4, 1933, and Monday, March 6, 1933." Exchange Statement. A statement issued by the Governing Committee of the New York Stock Exchange said: "The Governing Committee at a meeting held this morning in order to give full effect to the banking holiday declared by the Governor of the State of New York directed: "First, that the exchange be closed during such holiday; "Second, that members and firms registered on the exchange be prohibited from making any contracts for the purchase or sale or the borrowing or lending of any securities, and also from permitting their offices or facilities to be used for the purpose of making or carrying out any such contracts; "Third, that all deliveries be suspended on all member contracts, except on such contracts as may be cleared by or settled through the Stock Clearing Corporation, and that in such cases deliveries shall be made as the Stock Clearing Corporation shall direct."

2. March 4, 1933 The Buffalo News Buffalo, NY

Article Text

ILLINOIS BANKS ORDERED TO CLOSE FOR THREE DAYS CHICAGO, March 4 (AP).—A general three-day bank holiday affecting all Illinois banks was ordered early Saturday after an extended conference between leading Chicago financiers and Gov. Henry Horner. Melvin A. Traylor, president of the First National bank, made the announcement. The order will be in effect Saturday, Monday and Tuesday. Traylor said that the three-day closing order is mandatory upon all banks in Illinois by virtue of a proclamation signed by Gov. Horner. The proclamation said that the banks must reopen Wednesday, March 8, but that withdrawals may be limited to 5 per cent. during the following eight days. A statement by Gov. Horner said: "For the past several days I have been in constant conference and communication with representatives of the banks of Illinois in an effort to determine upon the best course of action in the present emergency. It has been hoped and believed that, in spite of bank holidays in states surrounding Illinois and throughout the country, the banks of this state would be able to withstand the strain that has been placed upon them. This was my viewpoint until this hour. "Friday I issued a statement to the effect that a bank holiday did not seem to be necessary in Illinois at that time. The greatest effort has been made to avoid such a necessity. The banks in Chicago alone have paid out more than $350,000,000 in the past two weeks in an effort to stem the tide. It has also been expected that the national government might take some general action, but no word in that regard has been received by me. The picture has materially changed since Friday. "Finally, after a day of unprecedented withdrawals from the banks of this state, and at the request of the Chicago Clearing House banks and the Illinois Bankers' association and with the approval of the Federal Reserve Bank of Chicago, I now deem it essential to the welfare of our citizens, and necessary for the protection of depositors who have not withdrawn their funds, to declare the bank holiday referred to in my proclamation this day issued." The Federal Reserve bank of Chicago joined the holiday and no gold was exchanged Saturday. It was said it would not reopen "until conditions warrant."

3. March 5, 1933 Star Tribune Minneapolis, MN

Article Text

ALL U. S. JOINS BANK HOLIDAY Nation's Leaders Lay Plans to Restore Financial Normalcy. (Continued From Page 1.) orders and gave checks for the balances. Railroad companies took emergency action, announcing broadened credit and stating that travelers would not be left stranded anywhere because of banking difficulties. FINANCIAL MECHANISM OF U. S. STANDS STILL By Claude A. Jagger. Associated Press Financial Editor. New York, March 4.—(AP)—The great financial mechanism of the United States stood still Saturday. While a new president took office promising drastic and courageous emergency action, the banks of New York and Chicago, as well as the New York stock exchange, the Chicago board of trade and other security and commodity exchanges of the nation, were closed. Financial and government officials in New York, Washington and other cities bent their efforts towards development of procedure to permit resumption of financial transactions and business settlements next week. The banking holiday movement which started in Michigan February 14 finally embraced the big financial institutions of Wall Street and La Salle street early Saturday. End Tuesday in N. Y. The holiday period was scheduled to end on Tuesday in New York, on Wednesday in Chicago, and to terminate on either Tuesday or Wednesday in most other large states. Reports from over the country depicted a nation accepting with fortitude and good cheer an unparalleled experience in the modern industrial era in the United States. In the meantime, shortages of cash to meet ordinary living expenses failed to develop to any extent, and banks in a number of localities provided cash to meet payrolls. Business and commerce functioned with little interference, with the practice of extending credit or accepting checks widespread. The New York clearing house and associations of banks in other cities met to develop methods of resuming banking operations next week. Affects World. The effect of the virtual standstill in banking in the United States, world's richest nation with more than a third of the world's supply of monetary gold, brought international financial transactions to a standstill over much of the world. In London, long the world center of international finance, quotations on American dollars and all other foreign exchanges were suspended, as well as quotations on gold. As a result, foreign exchange transactions were at a standstill in Paris and many other capitals. It was the first time the dollar had not been quoted in a number of leading capitals since the Civil war. The New York and Chicago federal reserve banks, as well as most of the other 10 reserve institutions, closed, owing to general bank holidays, although no formal order was issued from the federal reserve board at Washington. The reserve banks of Cleveland, San Francisco and Richmond were open, however, and the Kansas City reserve institution transacted business for banks in its territory that were open. The closing of the New York reserve bank checked the large withdrawals of gold for hoarding and export which had developed. The sub-treasury in New York was open and redeemed treasury certificates for gold as usual, although it paid out metal only in $5,000 bars, doing no business in coin. Bankers Hold Meetings. Leading New York bankers held meetings at the New York clearing house and elsewhere Saturday after seasons through Friday night and early Saturday morning, resulting in Governor Lehman's proclamation ordering a two-day legal holiday, which came at 4 a. m. The net demand deposits of the 27 clearing house banks were reduced by $409,944,000 in the week ended Saturday the weekly clearing house statement showed, still leaving the huge total of $5,463,124,000. Bankers explained that the rush to convert bank deposits into currency had reached a point which taxed physical facilities to meet it, although the resources of the large banks and the federal reserve system remained enormous. A statement by the clearing house declared that the New York banks were in such condition that they "could, through facilities of the federal reserve bank, pay on demand every dollar of their deposits," but that it had been decided to call a temporary halt for the benefit "not of New York primarily, but of the nation as a whole." No Lack of Currency. Banking authorities said there was no lack of currency issuing facilities, or of actual currency, but that it had become imperative to check the rush for cash, to preserve the long established and efficient practice of doing business through bank checks clearances, and prevent an excess of currency which would not be needed when hysteria had subsided. The people received the news of the holiday calmly, realizing that the steps taken were in the interest of the general welfare and that the big banks here are actually in strong condition. One bank honored blanket payroll checks until the noon closing hour; and persons who sought access to safety deposit boxes, which had swallowed up large amounts of currency this week, encountered no difficulties. Financial authorities explained that 90 per cent of the nation's business was normally transacted through the medium of bank checks and pointed out that total currency in circulation, even at the record figure of $6,720,000,000 shown in this week's report, was only a fraction of the total of more than $40,000,000,000 in bank deposits in the country, so that it was apparent the hysterical movement to convert deposits into cash had to be checked unless currency were to be extended to ridiculous levels. Suggestions for resuming banking business dealt chiefly with methods of increasing check circulation, and the records of 1907, when a real shortage of money necessitated various expedients were closely scrutinized. At that time, clearing house associations in New York and other leading cities issued clearing house certificates, which were used to settle transactions and to some extent circulated as currency. The present problem was seen as reflecting chiefly a lack of confidence, rather than a lack of currency, or a lack of banking facilities. If currency were brought out of hoarding, it was explained, there would be more than enough, for the amount issued is now far above that outstanding in the halcyon days of 1928 and 1929. A statement was issued by the federal reserve bank, supplementing yesterday's statement, which resulted in a sharp reduction of the gold decrease reported Friday. Friday's report, showing transactions up to 3 p. m., had indicated a loss of $116,439,600, through earmarkings for foreign account and exports, the largest reduction ever reported for a single day. It was revealed Saturday, however, that after 3 p. m., there had been a decrease in gold held for foreign account of $39,754,500, resulting in the addition of that amount to American stocks of metal. This left the nation's gold stock at the end of the week at about $4,245,000,000, more than a third of all the monetary gold in the world, and about $336,000,000 above the level reached last June 15, as a result of the large loss of metal during the spring of 1932. Saturday's holiday was the first emergency action which stopped gold transactions since exports of the metal were restricted in the war years, from October, 1917, to June, 1919. The closing of the stock exchange was the first time trading has been halted in this market by economic circumstances since 1914, when the war scare forced suspension, although the bull market of 1928 and the selling panic late in 1929 forced restriction of trading hours to permit clerical forces to catch up with the work. Extended week-ends were also taken in November of 1929 to give rest to clerks who had been working night and day. After the closing of the exchange at the end of July, 1914, no trading was permitted until November 28, when restricted dealings in bonds were resumed, and December 12, when trading was again started in stocks. TERMS OF ILLINOIS HOLIDAY LISTED Chicago, March 4.—(AP)—Illinois dug down in its jeans for cash Saturday to pay its way while banks shut down for a three-day holiday decreed by Governor Henry Horner. The drastic order outlawed all checks and drafts made before Saturday unless already cleared and shut down effectively all banking in Chicago, second financial center of the country. Downstate, here and there, bankers defied the decree and opened for business as usual, declaring themselves ready to pay the full demands of depositors. But these were exceptions. Governor Horner remained in close touch with leading bankers. Terms of the holiday proclamation, briefly, were: All banks in Illinois directed to close Saturday, Monday and Tuesday. Upon reopening Wednesday for a seven-day period the banks must set aside 5 per cent of deposits as of the close of business March 3 to be paid depositors on demand. During the period March 8 to 15 any deposits made shall be segregated and held as in trust, subject to withdrawal in full if demanded. Any checks, drafts, etc., dated prior to March 4 shall not be honored. Unless the holiday is extended, all restrictions cease at midnight March 15. In the last fortnight $350,000,000 had been drained from Chicago banks alone, while the federal reserve bank's weekly report showed withdrawals of $846,515,000 by 141 banks in 36 leading cities of the seventh reserve district for the week ended March 1. The board of trade closed along with the Chicago stock and curb exchanges, stopping trading in grain and cotton futures. Immediate steps were taken, however, to maintain a cash market for grain. At the world's greatest packing center, the farmer still was able to sell his livestock for cash. Shipments Monday and Tuesday to the Chicago stockyards will be paid for by checks on the packers. Banks will be reopened in time to redeem the checks. After an extended conference at the Chicago livestock exchange, another conference on future plans was called for Tuesday. The Mercantile exchange, mammoth market for futures trading in butter and egg futures, also closed its doors, but wholesale dealers were ready to transact business with the sources of supply for fresh produce. Arrangements were made to extend personal credit. LONDON PRAISES U. S. BANK MOVE By Associated Press. Dollar transactions were suspended in the European capitals as a result of the American bank holidays. Tourists unable to cash checks were accommodated by hotels, travel agencies and some banks. London — All foreign exchange quotations were suspended and there was no quotation on gold. Currency rates in Europe are based on the dollar and there was some talk of the possibility of adopting the French franc or some other currency backed by gold as basis for exchange rates. The foreign exchange policy for Monday was not certain. American branch banks were open; the bankers praised the declaration of bank holidays in the states as a move in the right direction. The stock market closed dull after a quiet session. N. Y. CLEARING HOUSE TO ISSUE CERTIFICATES New York, March 4.—(AP)—Plans for issuing clearing house certificates as a medium for the conduct of trade at the expiration of the state banking holiday on Tuesday were worked out Saturday by the New York Clearing House association. At a meeting that lasted throughout the afternoon the large New York city commercial banks decided on this temporary arrangement as a means of facilitating commerce and providing a currency medium. Mortimer N. Buckner, president of the association, said the certificates would be printed over the week end and would be ready for distribution on Monday. The only previous occasion on which these certificates have been employed here was in the panic of 1907 when about $500,000,000 of such paper was in circulation. Clearing house certificates are paper based on bank deposits and in effect constitute currency jointly issued by a group of banks. They can be issued in small amounts. In the present situation it was pointed out workers may find it possible to have small checks honored in trade provided those checks bear a clearing house endorsement. Adoption of this plan, it was explained, would avoid issuance of an excessive amount of currency. RICH EXPLORER WEDS. London, March 4.—(AP)—Philip M. Chancellor, 25-year-old millionaire explorer, was married today to Frau l

4. March 6, 1933 The Buffalo News Buffalo, NY

Article Text

ILLINOIS BANKS ORDERED TO CLOSE FOR THREE DAYS CHICAGO, March 5 (AP).—A general three-day bank holiday affecting all Illinois banks was ordered early Saturday after an extended conference between leading Chicago financiers and Gov. Henry Horner. Melvin A. Traylor, president of the First National bank, made the announcement. The order will be in effect Saturday, Monday and Tuesday. Traylor said that the three-day closing order is mandatory upon all banks in Illinois by virtue of a proclamation signed by Gov. Horner. The proclamation said that the banks must reopen Wednesday, March 8, but that withdrawals may be limited to 5 per cent. during the following eight days. A statement by Gov. Horner said: "For the past several days I have been in constant conference and communication with representatives of the banks of Illinois in an effort to determine upon the best course of action in the present emergency. It has been hoped and believed that, in spite of bank holidays in states surrounding Illinois and throughout the country, the banks of this state would be able to withstand the strain that has been placed upon them. This was my viewpoint until this hour. "Friday I issued a statement to the effect that a bank holiday did not seem to be necessary in Illinois at that time. The greatest effort has been made to avoid such a necessity. The banks in Chicago alone have paid out more than $350,000,000 in the past two weeks in an effort to stem the tide. It has also been expected that the national government might take some general action, but no word in that regard has been received by me. The picture has materially changed since Friday. "Finally, after a day of unprecedented withdrawals from the banks of this state, and at the request of the Chicago Clearing House banks and the Illinois Bankers' association and with the approval of the Federal Reserve Bank of Chicago, I now deem it essential to the welfare of our citizens, and necessary for the protection of depositors who have not withdrawn their funds, to declare the bank holiday referred to in my proclamation this day issued." The Federal Reserve bank of Chicago joined the holiday and no gold was exchanged Saturday. It was said it would not reopen "until conditions warrant."

5. March 7, 1933 Waukegan News-Sun Waukegan, IL

Article Text

BANKS WAIT FOR OFFICIAL NOTE To Remain Closed Until Gov. Horner Instructs Officials To Obey Woodin. CHICAGO, March 7—(AP)— Uncertain over what action to take, officials of Illinois banks kept in constant touch with Washington today, seeking an interpretation of Secretary of the Treasury Woodin's new regulations. The Continental Illinois National Bank and Trust company in Chicago, largest bank west of New York, opened and accepted new deposits for a time but ceased doing so after conferences between bank officials and communications with Washington. In addition to declining to accept new deposits, most of the banks did not meet drafts for food shipments, payrolls, or other purposes described as necessary by Secretary Woodin. There was a clearing house association meeting, however, and the outcome of it was expected to provide banks with a definite program to follow. Most of the bank officials said variations between Secretary Woodin's lightened restrictions and a bank holiday declared for Illinois last week by Gov. Henry Horner made them hesitate to open on a modified basis. Governor Horner, however, planned to issue a new proclamation later today authorizing Illinois banks to follow the regulations made by the treasury secretary. The national banks were informed by A. P. Layburn, national bank examiner, that they should obey Secretary Woodin's regulations and disregard the provisions of the state holiday. Under Horner's proclamation of last week, banks would reopen tomorrow with a 5 per cent restriction on withdrawals for the next 10 days. Several Illinois cities solved the problem of a medium of exchange by issuing scrip backed by currency. Springfield, Urbana, and Peru were among the towns taking such action. The Federal reserve bank at Chicago was understood to be ready to issue millions of dollars in certificates if authorization were received from Washington. ZION DEMOCRAT SLATE REJECTED Town Board Votes To Throw Out Democratic Ticket On Legal Technicality. The Zion township Democratic ticket today was ordered off of the ballot by the town election board in a hearing held in the sheriff's office, and at the same time a similar action was started against Independent candidates in Cuba township to keep them from the ballot. The Zion board voted two to one to reject the Democratic ticket. Supervisor B. C. Thompson and Town Clerk A. E. Hueneryager voted for rejection and Justice of the Peace Thomas McEwen for acceptance of the slate. This leaves only the Voliva ticket in the field. No Sworn Statements Attorney Joseph Bishop, of the firm of Bishop, Carey & LaRose, argued that the petitions were insufficient because there was no sworn statements attached to the petition. Attorney Earl K. Cook, counsel for the Democrats, argued that the petitions were in substantial conformity with the requirements prescribed by law. The objection to the Independent candidates in Cuba township was filed by Bishop also. Besides the alleged deficiency of sworn statements of candidacy there are numerous other defects in these petitions, he declared. May Be Unopposed If he is successful in this action it will leave candidates on the Citizen's ticket unopposed at election. This ticket is headed by Supervisor Harold D. Kelsey, of Barrington. As Kelsey and Town Clerk A. F. Grom, of Barrington, are members of the Cuba board of elections, and also candidates for re-election on the Citizen's ticket, Bishop asked County Judge P. L. Persons to appoint two other members in their place who could be considered unprejudiced. He appointed Joseph Woller and Cornelius Snyder, Republican and Democratic precinct committeemen in Cuba township. This hearing was set for Saturday morning at 9 o'clock, and will be held in the county building in a room designated by the sheriff.

6. March 9, 1935 The True Republican Sycamore, IL

Article Text

Depositors May Receive 100 Pct. in Next Release Announcement that the closed Merchants National bank of Galena would repay its depositors 100 per cent was made Tuesday afternoon by Charles E. Day, receiver. Day said the Reconstruction Finance corporation had approved a loan on assets of the bank, which failed to reopen after the national banking holiday of March, 1932, and the loan would be large enough to pay the remaining 11 per cent of funds due depositors. In July, 1933, when the First National bank of Galena was created to succeed the Galena National bank and the Merchants National bank a 65 per cent dividend was paid by the Merchants National. A 24 per cent dividend was paid in December, 1934. Vouchers for the third dividend to complete the 100 per cent payment have been sent to the comptroller of currency at Washington and probably will be approved and returned for distribution to depositors in April.