An early casualty of the Great Depression
The Park Bank failed spectacularly during the crisis of 1932
An empty bank building at the northeast corner of Charles Street and North Avenue is a landmark of a tattered financial history.
The old Park Bank, once an institution popular with Baltimore savers and shoppers, was a casualty of the Great Depression of the 1930s. Its failure — and the loss of millions of depositors’ dollars — played a role in taking down banking throughout the state.
On Feb. 25, 1933, all banks in Maryland were closed by order of thenGov. Albert C. Ritchie. On March 6, President Franklin D. Roosevelt ordered a similar shutdown nationwide, and banks remained shuttered until the Emergency Banking Act, passed by Congress on March 9, allowed them to reopen March 13.
Roosevelt called the shutdown a “bank holiday.”
Before the federal government insured banks against losses, scores of concerned depositors had sought to withdraw funds from financial institutions in what was known as a bank run.
A little more than a year after the 1929 stock market crash, Park Bank experienced its first run but managed to keep its doors open. Then in June1932, when John P. Baer, one of its directors and a prominent banker, committed suicide at his downtown Baltimore office a few blocks from the Park Bank headquarters, depositors grew worried.
An all-out run soon started, and by Aug. 11, 1932, lines formed out the doors. “Bank officials made an attempt to restore public faith by pyramiding bags of currency in a highly visible, six-foot stack behind the tellers’ counter,” said an account in the old News American.
George W. Ruths, a Park Bank bookkeeper and accountant, recalled his vice president told him to fill a Chrysler Super l i mousine with suitcases stacked with dollar bills and deliver them to the North Avenue bank. When he arrived, Ruths said angry depositors yelled: “Bring more … That’s not enough … Go back.” Park Bank never reopened. Those who lost their savings held mass meetings at Saratoga Street’s Rennert Hotel and at the Baltimore Polytechnic Institute’s auditorium. State’s Attorney (later Maryland attorney general and governor) Herbert R. O’Conor brought charges against Webster Bell, the Park Bank’s president, and Clinton O. Richardson, its board chair.
Richardson testified in the subsequent trial that he was trying to make good on his debts and was reduced to living “in a one-room flat in the Homewood Apartments [Charles Village] with no servants.” Before the trial was over, he took a pistol and ended his life at his Guilford Avenue insurance agency office. Bell was found guilty of conspiracy to defraud depositors. The former Park Bank, at the northeast corner of East North Avenue and North Charles Street, was the scene of bank runs during the Great Depression.
The Sun ran an article headlined: “Webster Bell enters pen as convict 29292.” An audit revealed that the bank made insider loans amounting to 30 percent of its portfolio.
“Bell is the first bank president on the memory of prison officials to be lodged in the Penitentiary — though by no means the first banker,” said The Sun’s 1933 article. After serving his time, Bell died in 1945 at his home on Midhurst Road in Pinehurst.
The Park Bank failure did not end the banking crisis. Other institutions suffered a lack of financial confidence as stock and real estate markets remained low.
By mid-February 1933, Baltimore depositors had withdrawn $13 million in cash from the city’s banks. Then on Feb. 24, 1933, some $6 million was withdrawn from city banks, a daily all-time high.
Gov. Ritchie established an emergency office at the Hotel Belvedere to monitor the crisis and made his decision to close banks.
In a 1972 News American article, Joseph Strausbaugh, who had been a teller at Commonwealth Bank at Howard and Madison streets, recalled his nonstop work that harrowing Friday. He said that he worked until midnight to balance the day’s accounting. He and a fellow bank employee then stopped for a cup of coffee and a sandwich at Penn Station.
“We saw the early editions of the morning papers there proclaiming Governor Ritchie’s bank moratorium and breathed a sigh of relief,” he said in the 1972 article. “The Commonwealth might have otherwise opened the next morning, but there wouldn’t have been any money left.”