Column #27 - April 25, 1999
PLAGUED BROWNSVILLE IN THE EARLY DEPRESSION YEARS
by Glenn Tunney
Banks. Can't live with them, can't live without them. Will the Y2K problem crash your bank's computers? What if you cannot get your money from the bank when you want it? Banks reassure us that any Y2K glitches will be quickly worked out and our assets are safe.
Seventy years ago in 1930, similar reassurances were heard. But there was a nervousness about banks. The October 29, 1929 stock market crash had christened a new decade, the most dismal of the century. Businesses failed, jobs were lost, repayment of debts became pipe dreams. Banks unable to collect outstanding debts began running short on funds themselves. Bank deposits were not insured, and rumors of "trouble at the bank" could easily spark a run on the bank.
In 1991, I spent an afternoon talking about local history with the late Donald Edwards at his Catherine Avenue home in Brownsville. He was nearly ninety at the time, a retired postal official and very knowledgeable about local history. We spoke of 1930, when Brownsville had at least five banks. We were discussing the Monongahela National Bank, once located in the Neck on Market Street opposite the Snowdon Building.
"Did you have any money in that bank?" I asked.
"No. I was with Sam Taylor in the old National Deposit Bank. People were making a run on the bank."
"All of them. You had the Monongahela Bank and the Brownsville Trust Company. It was in the middle of town, about where Sidler's used to be. There was the Second National Bank, up there across from the Flatiron Building.
"I didn't realize there were that many banks in Brownsville."
"Oh, yes. Jubelirer had one too. I think he was in the Flatiron Building. They all (except National Deposit) failed. People were taking their money out. Sam Taylor owned the National Deposit Bank. He had to put up security to take deposits, and he was putting it up, he was secure. People would take money out of the Monongahela Bank and
they'd bring it to the South Brownsville Post Office (where Edwards worked) or they'd take it to the Brownsville Post Office and put it in "Postal Savings." Postal savings paid 2% simple interest. Would you believe that we had between us, after consolidation of the two post offices in 1936, over a million dollars in postal savings!"
"Where did you keep it?"
"Where did we keep it? We took it back to the National Deposit Bank! Because that was a secure bank."
"So you not only ran a post office, you ran a bank."
"Oh, absolutely. I remember one man who stood out in the post office lobby for quite a while and watched these people depositing money. Then he came up to me and said quietly, 'You put money in this place?" I said yes. He pulled out his money. It smelled musty. He'd had it buried someplace."
In January 1930, all of the aforementioned banks were operating. The first sign of trouble came in the early summer.
Jubelirer Brothers operated a private bank established in 1901 by Oscar Jubelirer. Originally located in the Flatiron building, the firm was in the Monongahela National Bank building in 1930. It specialized in general and foreign banking, selling steamship tickets for all principal lines and even selling insurance. N. Norvin Karpen, who could speak and write foreign languages, was bank manager. In early summer of 1930, financial troubles forced the Jubelirer Bank to close. Prior to the closing, Oscar Jubelirer violated several banking regulations. He entered guilty pleas to the charges. Because Jubelirer aided state banking officials in clearing up the bank's business, the prosecution recommended and Jubelirer received a suspended sentence.
Depositors and creditors waited over a year to receive any of their money. In early September, 1931, they received a "dividend" of 41% of their money back. It is unclear if they ever received any more. The closing of the Jubelirer bank was an omen for Brownsville that was ignored.
Next to fail two months later was the Brownsville Trust Company. Located in the former J. D. Armstrong building in the Neck, it opened for business in 1921. In July 1929, Brownsville Trust boasted in newspaper advertisements that it had total resources of nearly a million dollars.
On Tuesday morning, August 19, 1930, the board of directors announced that "for the best interests of all depositors," Brownsville Trust Company was turning its affairs over to the state banking department. The closing, voluntary on the part of bank officials, was necessitated by a "slow run" of the previous several days, based upon "unfounded rumors of the institution's condition."
Five days later, depositors of the institution were requested to present their passbooks at the bank beginning Monday, August 25, so that an audit of the bank's records could begin. An inventory and appraisal of the bank was filed on December 31, 1930. By state law, nearly five months had to pass from that date until the first "dividend" could be paid to depositors. When it came, ten months after the bank closed, it amounted to 35% of the amount depositors had in the bank.
The failure of Brownsville Trust Company on August 18 may have spurred the next strategic move by two of Brownsville's remaining banks. On August 25, a merger of two of Brownsville's oldest banks was announced with great fanfare. A Brownsville Telegraph headline proclaimed, Monongahela and Second National Banks Merge." Below, in smaller bold type, the paper stated "Action Puts Boroughs in Enviable Position In State. $7,000,000 Bank Seen in Consolidation Today."
The Second National Bank was originally organized as the First National Bank of Brownsville in 1863. Due to a peculiarity in the banking laws, its charter ran slightly less than twenty years and could not be renewed. A few months before the charter was to expire, the bank voluntarily liquidated and was reorganized in 1882 as the Second National Bank of Brownsville. Its home was in the still standing Second National Bank building across Market Street from the Flatiron Building. That is where it was headquartered until the dramatic announcement that it had merged with Brownsville's oldest bank, the Monongahela National Bank.
The announcement proclaimed that as of 9 a.m. on August 25, all business of the Second National Bank would be conducted at the Monongahela National Bank building. Second National depositors were assured that their passbooks and checkbooks could still be used. The Telegraph characterized the merger as one "linking two of the oldest and strongest banking institutions in Fayette County, assuring for the Brownsvilles a new banking house that ranks as one of the strongest in this section of the state."
The new institution used the name "Monongahela National Bank." Merger negotiations had been underway for several months. As the Jubelirer Brothers and Brownsville Trust Company were sinking, Earl Huston, president of Second National and Charles L. Snowdon, president of Monongahela National, were negotiating to strengthen their defenses against a similar fate.
But the inevitable happened anyway. Eight months later, on April 7, 1931, the Brownsville Telegraph printed a front page editorial labeling the previous day as "Blue Monday" in Brownsville. The town had been struck within twenty four hours by two stunning body blows. Each drew crowds to stand on the sidewalk and stare helplessly at familiar buildings they could no longer enter. One of those buildings was a bank. A bank no one thought would fail.
Next week, the story of the collapse of Brownsville's oldest bank, an event which unbelievably took a back seat on the front page to another disaster that struck the reeling town on the very same day.
Readers may telephone me at 724-785-3201, e-mail me at [email protected]
or write me at 6068 National Pike East, Grindstone, PA 15442.