Column #28 -May 2, 1999
THE FAILURE OF
THE MONONGAHELA NATIONAL BANK LEFT BROWNSVILLE STUNNED
by Glenn Tunney
The aged bank deposit book's cover reads
"Monongahela National Bank." It
once nestled in the pocket of a 10-year old boy named Ralph. Eachweek on
"Bank Day," Ralph left his 521 Broad Street home with a fewcoins and
his tan 3" by 5" bank book and walked to Prospect Street school. His
teacher marked the deposit in his book and returned it to him. On June 3, 1931,
when school dismissed for the summer, Ralph's fortune totaled $2.11.
Today, Ralph Simpson is 78 years old.
Retired from the post office, he lives with his wife Alma in South Windsor,
Connecticut, but he still remembers the Monongahela National Bank's school
savings program. The Monongahela National Bank was Brownsville's oldest bank.
Founded in 1812 by Jacob Bowman and others, its president in 1931 was Charles
L.Snowdon. Its grandiose building, dedicated in 1925, stood opposite the Snowdon
Building in the Neck.
After the Jubelirer Brothers bank and
the Brownsville Trust Company failed in the summer of 1930, the Monongahela
National Bank and the Second National Bank merged. The resulting "new"
Monongahela National Bank had $7 million in resources. South Brownsville's
National Deposit Bank boasted $8 million, so the community's two national banks
were worth $15 million. The Brownsville Telegraph boasted that "the new
alignment places the three boroughs (South Brownsville, Brownsville and West
Brownsville) in the strongest financial position of any similar size community
in Western Pennsylvania if not in the entire state." It was late August
1930. It was the beginning of the bank's final eight month slide to oblivion.
The late Earnest Coulter Grafinger
and his wife, the late Della Busti Grafinger, were my great-uncle and
great-aunt. Earnest worked in the Union Station building as freight agent for
the Monongahela Railroad. In 1979,
I recorded a conversation with him in which he remembered the afternoon of
Monday, April 6, 1931.
"I kept money in the Monongahela Bank
all the time," he told me. "When I got married, I had $1800 cash. Dell
was working in South Brownsville for the railroad."
"Oh, she worked for the railroad
too?"
"Yes. She was a stenographer. I
was working second trick, four to twelve. I had just gotten up. She had been
working. She called me up and said, 'The bank is closing.' I said, 'It's not a
holiday.' She said, 'The bank's closed. It went under.' I said, 'That bank
couldn't close, it's been here forever.' I got up and got dressed, went
downtown. People were standin' there lookin' at it."
He shook his head and grimaced. After
a moment, the passage of years since the trauma of that day permitted his
expression to soften into a wry smile.
"I went in that bank on Saturday
night about ten minutes to nine. I was going to get some money for the weekend.
Every cage was busy with storekeepers putting in deposits. I walked out. We went
out that night. When I came home I had thirty-five cents in my pocket. And the
bank didn't open on Monday. We had checks outstanding to Kaufmann's and Horne's that didn't clear the bank."
He paused. He leaned toward me, his
grandnephew, and spoke in a quiet voice. "Here's what happened that week.
Dell lost her job, her brother lost his railroad job, Dell's mother died, the
bank went under, and I was cut down to two days a week."
I shook my head slowly at the
suddenness of it. I asked him if merchants were understanding.
"We didn't have any money,"
he said. "I had "trust" in this fellow at the store down the
street. He trusted me for groceries. When I started to work, I was only working
three or four days a week. It took me five years before I paid off all the money
we owed him. I wrote letters to Pittsburgh, explaining the situation. Gimbel's
and Kaufmann's wrote very nice letters back, saying they understood the
situation. Banks were failing everyplace. Wouldn't do any good to arrest you.
You couldn't do anything about it."
"Did Dell get her job
back?"
"No."
Across the street from the closed
bank, stunned citizens stood on the sidewalk in front of R. S. Goldstein's
"Women's Store," staring at the bank's locked doors. Inside the store,
Reuben "Ruby" Goldstein talked with a group of men. One of them was
John Claxton of Brownsville, who worked at Bush and Marsh Drug Store.
"Ruby Goldstein's store was next
to the drug store," John told me, "and they used to all loaf over
there. They were talking." John's voice suddenly changed and he imitated
Ruby's slow, drawn-out phrases. 'You know,' Ruby said, 'I didn't mind losing my
money. But they waited. They pulled
the shades down. I'd knock at the door, and they'd run up there and open the
door and let me make my deposit. Now, they KNEW they were going to close,' he
said dramatically, 'and STILL they took my money!'"
The daily Telegraph confirmed the awful
news. "The Monongahela National Bank," it reported,
"Brownsville's oldest bank, was closed this morning by action of its board
of directors after 119 years of service in this community. Heavy and continued
withdrawals, extending periodically during the last eight months, brought the
decision to close the bank before its liquid resources were exhausted."
The newspaper's report implies that
the withdrawals extended back to the previous August, when the Second National
and Monongahela National merged.
On April 16, 1931, a federal receiver
was appointed for the bank. On May 4, 1931, the doors of the bank opened
"for the convenience of the public" for the first time since April 6.
News reports gave no indication that depositors were able to withdraw any of
their money. Unhappy depositors did
not take events lying down. After a summer of hopeful waiting for a dividend
plan, a public meeting was held in October at the Brownsville High School on
Front Street. Sponsored by 25 depositors who had already met five times
themselves, it attracted over 700 depositors.
At that meeting, Dr. L. N. Reichard
was chosen to head an inquiry board. Enoch H. Easler was elected secretary;
Pauline Klaas, recording secretary; Charles L. Dorsey, treasurer. The permanent
citizens' committee included Chairman Reichard, David K. Orr, Thomas McCune,
John Matta Sr., William J. Forsythe, Edward Ryan, Dan Riley, Harry Yoho, and H.
H. Baer.
According to the Telegraph, the
committee planned to investigate "alleged irregularities that are reported
to have taken place prior to and after March 22, 1931, and 'if any person is
found to have violated the banking laws, to prosecute him to the fullest extent
of the law.'" The committee intended to "arrange to get records to
show dates and notices of withdrawals before the bank's formal closing, to put
to rest rumors of the manner in which money was loaned and the report regarding
collateral certain relatives put up for loans, and to find whether each and
every transaction of the officials was handled legally and with honest
intent."
On Tuesday, December 1, 1931 the bank
opened its doors for several days and distributed an initial dividend of 15% to
approximately 6,000 depositors. I have searched the Brownsville Telegraph
archives through issues of March 1932, a full year after the initial closing of
the bank, seeking notice of further dividends or results of the committee's
investigation. As of March 1932, only the initial 15% dividend had been
declared. I am requesting any readers who can supply additional information
regarding these bank closings of 1930 or 1931 to contact me.
When the Monongahela National Bank's
doors did not open on that morning of April 6, 1931, it shocked the people of
the Three Towns. Yet unbelievably, many of the citizens who assembled on
Brownsville's sidewalks that morning were not staring at the Monongahela
National Bank building. Instead, they were a block away, shaking their heads as
they discussed a second disaster that had befallen the town that same morning.
It was that calamity, not the closing of the bank, which stole the headlines in
the Brownsville Telegraph. Next week, more about the day the Telegraph called
"Blue Monday."