The average life of receiverships of national banks is about four years. The shortest receivership in the history of the national system was that of the Metropolitan National Bank of Cincinnati, Ohio. This bank had a capital of $1,000,000. The association was placed in the hands of a receiver February 10, 1888. The creditors were paid in full within thirty-five days from the date of closing, and the bank was turned over by the receiver to an agent elected by the stockholders, with remaining assets of the nominal value of $1,164,063.
This bank was not insolvent at the time it was closed, as the speedy liquidation demonstrated, but it was in a very weak condition, due to an inefficient management. The officers and directors were heavy borrowers and resorted to irregular methods to conceal large loans. False reports of condition and other criminal violations of law were discovered. The growing distrust of the depositors in the management of the institution led to the adoption of a resolution by the board of directors to close its doors, with the results above described.
The most prolonged receivership of a national bank was that of the Third National Bank of Chicago, 111. A receiver was appointed for this bank November 24, 1877, but its affairs were not finally closed until December 31, 1907, thirty years afterward, during the closing months of Mr. Ridgely's administration. Within five years after the bank failed, however, the receiver had paid the creditors in full, with interest from the date of closing.
The reasons for the prolongation of this receivership, and the unusual results attained in the liquidation of the trust, were that the real estate in and around Chicago which came into the possession of the receiver, enhanced very materially in value with the growth of the city. The Act of June 30, 1876, required the Comptroller to call a meeting of the stockholders of a failed bank after the creditors had been paid in full, for the purpose of electing an agent to whom the receiver should turn over the remaining assets for liquidation for their benefit and thus terminate the receivership. A meeting was promptly called in this case, but the stockholders were unable to agree upon the selection of an agent and the bank was continued in the hands of the receiver.
To meet this situation and any similar contingency, the Act of June 30, 1876, was amended by the Act of August 3, 1892, authorizing the shareholders of an insolvent bank to determine by ballot at a meeting called by the Comptroller for that purpose, whether to elect an agent or to continue the receivership until the affairs of the association were finally wound up. On January 11, 1893, another meeting of the shareholders of this bank was held, at which they elected to continue the receivership until final liquidation.