The Collapse of the Orting Bank
A small-town financial institution fails after a dubious draft and questionable loans, leaving local depositors to face the consequences of 'loose management.'
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
George H. Boardman was today appointed receiver of the First Bank of Orting upon application of K. A. Lorenz, a member of the board of trustees, who claimed the institution was insolvent. The bank had yesterday drawn a draft on the Citizens' National Bank of Tacoma, despite knowing that the Orting bank had no funds on deposit there. The draft was protested, and the bank closed its doors. Organized about fifteen months ago with a capital of $25,000, the institution struggled from its inception. Harry Hall served as president, with T. D. Yarrington as cashier. At no time during its existence did the bank have more than $15,000 on deposit. Allegations of loose management have surfaced, and it is feared that depositors will lose savings to the extent of half the bank's capital stock. President Hall claims the bank is solvent and that the closing was a strange bit of financiering initiated by Lorenz, while asserting that Yarrington, who managed the funds, had invested them in hop ranches and other property. As of tonight, Yarrington remains in jail pending further investigation.
“It is thought the closing of its doors is a strange bit of financiering, as its chattels will cover all liabilities.”
Bank failures in small Washington towns due to poor oversight and speculative lending remain a recurring theme in the history of the Pacific Northwest. Today's banking regulations were largely designed to prevent the kind of 'loose management' that left 19th-century Orting depositors holding the bag.
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