With responsible officials of the institution declaring that it is solvent, the Bankers Trust Company and its nineteen branches
were closed yesterday by the voluntary action of the directors and placed in the hands of
Peter G. Cameron,
State Secretary of Banking.
1Twoletters document that Von Moschzisker was
offered the role of president of Bankers Trust by Greenfield but declined.
retained as his counsel in the matter by Secretary Cameron, said that the directors and
Department "did a wise and proper thing in closing the institution at this
time to prevent the disastrous effects of a run."
Secretary Cameron, likewise reassuring, asserted at Harrisburg that [he sees no reason why the trust?] company cannot be reorganized.
He [also?] emphasized that the Bankers Trust Company has no
affiliations with [any?] other bank in this city and that
[its?] closing "will have no effect upon any other bank
in the city."
For months, the Banking Secretary disclosed, the Bankers Trust Company has been subjected
to [what?] amounted to a quiet run on deposits[,?] the withdrawals amounting to about $17,000,000 since last July and increasing heavily during the last three days of
As a result he conferred with officials of the trust company Saturday. A meeting of the directors was held yesterday morning and they decided
Continued on Page Six, Column Two
[State Takes?] Over Bankers Trust Company
protect the assets.
William R. Smith,
special deputy, took charge for Mr. Cameron. Throughout the day groups of depositors
gathered at the central office of the trust company at Juniper and Walnut streets and at
police details sent to all of them experienced virtually no difficulties.
As a matter of fact, facing the actual situation of closing as it existed, many persons
concerned with the trust company's affairs seemed more interested in possibilities of
prompt reorganization of the institution as a going concern. Several moves in that
direction were on foot yesterday.
Samuel H. Barker,
president of the Bankers Trust Company, in a statement announcing the closing, declared
the bank was solvent and that its immediate difficulties were due to "a steady seepage of
Plans, he also announced, are under consideration for early reorganization of the
institution. At the offices of Albert M. Greenfield &
Co., which became a scene of activity following the closing of the trust
company, attaches pointed out that his position in the matter is
simply as one of the thirty-nine directors.
In its most recent statement the trust company was shown to have 135,000 depositors,
aggregating $45,066,592.45 in deposits and with resources of $55,491,501.39. These figures
form part of the official statement of September 24, 1930.
The announcement of closing occurred a few minutes after 9 A. M.
Later, at Harrisburg, Secretary Cameron made his statement that he sees "no reason why
the bank should not be reorganized."
His statement also showed what the Bankers Trust Company faced, especially during the
"During the last several months," he said, "there have been abnormal withdrawals of
deposits from the bank, the withdrawals having greatly increased during the last three
days, apparently due to rumors circulating throughout the city, particularly, however, in
the northern section.
"[Since the latter part of last July?] the bank has paid
out more than $17,000,000 in deposits, thus requiring the liquidation of that amount of
assets. Because of these facts the Board of Directors and the Secretary of Banking, after
lengthy conferences and careful consideration, deemed it best to close the bank in order
that the assets may be conserved in the interests of the corporation, its depositors and
"This bank is not affiliated with any other bank in Philadelphia, and the closing of the
institution will have no effect upon any other bank in the city. According to the last
September call report, the capital, surplus and undivided
profits were approximately $8,018,000, and the deposits approximately $42,500,000."
"The committee," the statement said, "regrets the closing of the Bankers Trust Company
and advises that its closing does not involve any other institution in [the city.?]
We [believe that the financial situation?] in Philadelphia
is basically sound and there is no occasion for depositors in other banks and trust
companies to become alarmed on account of the closing of the Bankers Trust Company."
It became obvious later in the day that former Chief Justice Robert von Moschzisker will
play an important part in further developments regarding the Bankers Trust Company.
He conferred with its officials for several hours.
"I have been asked by the Hon. Peter G. Cameron, Secretary of Banking, to represent his
department in the
matter of the Bankers Trust Company of Philadelphia," he said. "I have accepted the
"Of course, I have no intimate knowledge of the affairs of the institution, but I shall
set about acquiring that knowledge at once. I have received, however, the assurances of
Samuel H. Barker,
the president of the bank, that when its doors were closed this morning there was a
substantial balance of assets over all liabilities, which balances, if depositors,
stockholders and all others concerned exercise patience and proper judgment, can be
realized upon in due course.
"I am also assured that a plan will be formulated for the rehabilitation of the
institution as a going concern, which, if brought to fruition, should protect all
interests. I must study this plan before announcing any judgment upon it.
Action Is Commended
"All I can say now is that the reports made to me indicate that the directors of the bank
and the State
Banking Department did a wise and proper thing in closing the institution at
this time to prevent the disastrous effects of a run.
"I ask the cooperation of all concerned, and I am hopeful for the future."
Trust Company, announced that he will endeavor to
get in touch with other shareholders to form a stockholders' committee that "will plan
early reorganization of the Bankers Trust
A similar statement was made by Harry Shapiro, an
attorney, who said he represents stockholders and depositors.
Both Mr. Smyth and
Mr. Shapiro declared they had been informed that the bank is solvent and that if proper
protective steps are taken depositors should suffer no losses.
Boards of directors of nineteen building and loan associations yesterday made a statement
that they had no affiliation with the Bankers Trust Company and that it will have no
effect on their status. The statement was sent out from the offices of Albert M. Greenfield &
Co., which acts as their conveyancer.
B. and L. Solvency Stressed
"These associations are safe, strong and solvent," the statement said, "with assets of
$25,087,494; profits, $5,431,875, and contingent reserve funds of $1,612,872."
affect them at all. Building and loan associations are
not required to maintain large cash balances, and the building and loan associations'
accounts in the closed bank are so small as to be negligible."
A city deposit of $203,327.06 was made in the Bankers Trust Company
by City Treasurer Kemp on
Saturday afternoon, and he referred the matter to City
yesterday when he learned that the bank had closed its doors.
The city is protected by a $600,000 surety bond.
The United States
District Court here recently made the Bankers Trust Company depository for
funds held by receivers and trustees in bankruptcies, but here again a $150,000 surety
bond serves as a protection of any court money now held.
The Mayor, in a radio address
last night, urged that "people should be calm and not precipitate a run on any bank."
Started in West Philadelphia
The Bankers Trust Company, which started in 52d street near Market, moved to its new
building at Walnut and Juniper streets in [1927?] and by
various mergers and expansions grew to a $50,000,000 [corporation
?] in ten years.
[Its?] existing branches are at 713 Chestnut
street, Broad street and
Erie avenue, Broad and Federal streets,
Broad and Diamond streets, Broad street and 67th avenue, 18th and
Market streets, 31st and Market streets, 60th and Market streets, 17-23 South 52d
street, 44th street and Lancaster avenue, 5517 Chester
avenue, 22d and Venango streets, 14-20 West Chelten avenue; 6601
Rising Sun avenue. Oxford Pike and Loney street, Rising
Sun and Cheltenham avenues, 17th and Tioga streets and 2531 W. Lehigh