Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-28
Frederick and HagerstoWn
Failures Are Traced to
Central Trust.
WITHDRAWALS HEAVY,
SAYS COMMERCIAL HEAD
Board of Directors Requests State
Commissioner to Take Charge
Immediately.
Special Dispatch 70 The star.

Special Dispatch to The Star.
FREDERICK, Md, September "a
Affected indirectly by the, recent failure
of the Central Trust Co. Of Frederick
and its IL branches, two more Mary
land banks and three branch institu-
lions closed their doors today.
The institutions which failed to open
this morning are the Mechanics Loan
and Savings Bank Of Hagerstown and
the Commercial Bank of Maryland, al
Frederick. The latter bank has
branches at Adamstown, Jefferson and
Mount Airy, which also were closed.
1t was understood both of the banks
closed today sustained heavy Withdraw
ais of deposits following the closing on
September of the Central Trust Co
and its branches, operated by Emory
L. Coblentz.
Casper c. Cline, president of the
Commercial Bank of Maryland, issued
the following statement:
Board Orders Action.
Following the closing of the Central
Trust Co. Of Maryland and II branches
on September 3, various rumorS and
gossip of a damaging nature have been
circulated about this institution, caus-
ing large Withdrawals and the giving
of notices for a very considerable
amount of time-deposit money soon
due for payment. It was ordered by
the board of directors at q special
meeting this morning that we request
the bank commissioner OF Maryland to
take charge of the bank Immediately.
This action was felt necessary to
protect interests of all depositors and
stockholders. Notwithstanding the pres
ent dsflation and unusual depression
through which we are passing, We be-
lieve the depositors should receive the
amounts due them. It Is most regret
able, indeed, that this action has been
found necessary, but every possible eff
fort has been made to prevent 1t and
no other prudent course remains open
in fairness to depositors and stock
holders. Consideration may be given to
a plan of reorganization, but nothing
definite can be stated ut this time
Capitalized fer 100000.
Mr.. Clines bank IS capitalized for
$780, 900 and has resources of $4,000, 900.
This would make its deposits amount
to apprc $4,000. 900.
A notice on the door of the Mechanics
u
institution is in the hands of the State
bank commissioner"
The directors Of the Mechanics Loan
g. Savings Bank, at Hagerstown, is
sued this statement:
I'VE announce with regret that we
have felt 1t necessary to suspend the
business of the Mechanics Loan & Saw
ings Bank for the protection Of our de-
positors and for the best interests of
our many stockholders. During the
past two years we have been suffering
from the effects of the general depres-
sion existing throughout the Nation,
this institution by its depositors have
depleted its more liquid assets.
"On July /, 1880, the deposits of our
bank were nearly 100000. and at
the close of business last Saturday we
had on deposit q total of $1,970, 632.
We have endeavored to be conservative
in the management of our institution
and have tried to render at all times
to this community efficient banking
service.
"It was impossible to liquidate our
mortgages and other investments rapid
ly enough to meet the unusual de-
mands made upon us, resulting from
false and unfounded run1orS recently
circulated by irresponsible persons. Act
ing in the best interest of our people
and the community at large. we did
not feel justified in sacrificing the value
of our assets, and our final action Is
the result of our best judgment in this
regard. Although we regret the ne
cessity Of this action, we feel confident
that with proper and orderly liquidation
our depositors will be paid.
Henry Holzapsel, president OF the
bank, refused to make any statement
at this time, but 1t was learned steady
seepage of deposits since the failure of
the Central Trust Co. is responsible for
the banks closing.
The banks statement of June 80,
1881, showed resources Of $2,950, 489 and
deposits, both savings and special, Of
$1,756,7 30.
George w. Page, State bank commits
sioner, began an examination Of the
books Of both institutions this morning.
The Central Trust Co. at the time Of
its failure held deposits of $4,000, 900,
about one-third of the total bank de-
posts of Frederick County. Coblentz
blamed frozen assets and miserable
publicity" received by himself in con-
nection with the Federal investigation
of the F. H. Smith Co. of Washington
for the banks failure.
Coblentz is under indictment in
Washington on charge of aiding in
commission of perjury In connection
with the operations Of the Smith COM
pany.