Return to the Frank Passic
Any photos not otherwise credited are from the personal collection of Frank Passic, Albion Historian.
|
Morning Star, December 13, 2024, pg. 8 Albion has had three bank failures in its history; all of them occurred in the years before the Federal Depositors Insurance Corporation was established during the Great Depression. One painful failure occurred on December 22, 1931, when the Albion State Bank suddenly closed its doors, three days before Christmas! The Albion State Bank was located at 304 S. Superior St. (also expanded to include 302 in 1916) and was the successor to Albion's first bank, Hannahs' Exchange and Banking Office which opened in 1856. It became the James W. Sheldon Bank in 1858, and the Albion State Bank in 1895. President of the bank in 1931 was David A. Garfield. Bruce Green and Warren S. Kessler served as vice-presidents. The board of directors consisted of George Bullen, Norman H. Wiener, Daniel McAuliffe, and Carl M. Craeger. The Great Depression took its toll on local finances as jobs were lost, and bank deposits were at an all-time low. The Albion State Bank had also loaned thousands of dollars to the ill-fated Albion Coal Mine north of town and lost most of those funds. When the State bank examiner came in for a routine year-end audit in December, 1931, he sadly informed the board of directors of the dire state-of-financial-affairs of the bank. The board of directors thereby voted to close the bank in order to preserve the remaining funds of its depositors. The bank receivership began, with Williard R. Noyes appointed in charge of the process by the Circuit Court. Payments to depositors were issued in five or ten percent increments. Unfortunately, the receivership process took ten years to complete. You could not withdraw your money. Complicating the matter was the fact that the national "banking holiday" occurred only 14 months after the State Bank failure, and receivership funds had been deposited in the local Commercial & Savings Bank. Those funds became frozen there with the bank holiday and it took over a year for the funds to be released. Thus, the first receivership payment was only made on September 11, 1934. The receivership was finally ended in late 1942, and the bank's physical assets were auctioned off in July, 1942. In total, depositors received only fifty-five percent of their funds that had been deposited in the bank. Albion's school children also were victims of the closure. Many had faithfully affixed one-cent ASB "Stamps" into a booklet as part of the "School Savings Program," and turned them in for a 50-cent banking account. They too lost 45% of their funds. The Albion Public Schools itself had several thousands of dollars in deposits frozen, and a ten to fifteen percent school budget and wage reductions were instituted there in the weeks following the failure. Several older Albion families have stories about their grandparents losing their savings in the ASB, and subsequently not trusting banks again. Their funds were thereby deposited in the First Local Bank of the Mattress in future years during the Great Depression. A personal account of the failure is recorded in the 1936 book "Michigan's Irish Hills," a thinly-disguised expose of Albion College by Lita (Hindman) Luebbers on pages 192-93 where she writes, "The next morning Miss Bean [Note: Allegedly Annie G. Dean, home economics instructor at Albion College] was all in a flutter as she sat at the breakfast table with Miss Potter [College nurse]. Lila [Lita Luebbers] putting her tray on the table, casually asked, "What's happened?" Miss Bean was excited—more so than Lila had ever seen her. "Haven't you heard?" At Lila's negative response, she continued. "The National Bank [Albion State Bank] has closed!" Lila was unmoved, "I was afraid of that. Did you lose much, Miss Bean?" "Not much, but it was such a shock. I thought the bank was secure. It's such a terrible time to close a bank, just before Christmas." Ironically, the real Lita Leubbers had a premonition of trouble and withdrew her funds in the bank just before it closed. Her text continues, "Banks were cold material concerns and were not respecters of seasons or depositors when their assets became frozen. A despairing gloom, greater than if an eminent citizen in the community had died, settled over the city. Students wired frantically for transportation money to get home which was not as easy to get as the funds lost in the bank had been. Faculty members, panicky, rushed to the College office and anxiously asked if they could have an advancement on next month's salary." From our Historical Notebook this week we present an Albion State Bank school savings stamp that Albion's schoolchildren faithfully affixed to a booklet, and took to the bank upon completion. The rectangle stamp is red, and measures 32 mm. by 27 mm. in size. How many of our readers have ever heard old family stories about the failure of the Albion State Bank?  Albion State Bank school savings stamp
All text copyright, 2026 © all rights reserved Frank Passic | Artwork copyright Maggie LaNoue © 2026
| |
