THE BATTALION
Page 4 College Station, Texas Wednesday, January 27, 1971
Closing of bank
begins problems
for the depositors
HOUSTON UP)—Business went
on as usual Tuesday in the multi
million dollar Sharpstown shop
ping center and mall in south
west Houston except at one es
tablishment—the center's only
bank.
Shai’pstown State Bank—Tex
as’ largest state bank—was or
dered closed late Monday.
The closing came after some
of the estimated 26,000 deposi
tors made a run on the bank,
withdrawing $15 million after the
Jan. 18 filing in Dallas of a Se
curities and Exchange Commis
sion civil injunction suit naming
the Frank W. Sharp interests and
alleging stock manipulation and
fraud.
Sharp is the bank’s majority
stockholder.
Small groups all through the
day gathered on a street in front
of the 10-story glass-walled
structure that is the focal point
of the shopping complex of 57
stores and specialty shops.
They started arriving before
8 a.m. Some came from their
homes in the surrounding 6,000-
a c r e Sharpstown subdivision.
Others stopped by on their cof
fee breaks or lunch hours.
Some stayed minutes. Others
remained all day.
All had one thing in common.
They had bank deposits that had
been frozen.
They wanted answers to their
questions — complete answers —
“not in generalities.”
State Banking Commissioner
Robert Stewart said the deposits
probably would be frozen from
several days to a week. He said
he does not believe the funds are
seriously endangered.
Directors said the run merely
had depleted the bank of cash.
Stewart said he is trying to
reorganize the bank. He said if
this effort fails, he will turn it
over to the Federal Deposit In
surance Corp., which guarantees
individual accounts up to $20,000.
The commissioner said the
bank is “solvent from a capital
standpoint” but v t a s forced to
close and be reorganized by the
state because of the tremendous
depositor demand the past w T eek.
“This place is mass confusion,”
Stewart said. “There are 40 bank
examiners and all the bank’s em
ployes, all looking for some place
to work.”
He said there had been “a
gross misunderstanding during
part of the day w-hen customers
w r anting to get into their safety
deposit boxes w'ere turned away.
He said they should have been
the
and
allowed to check the boxes from
the start.
The bank will honor no checks
on depositors’ accounts during
the reorganization period.
Some of those outside
building Tuesday laughed
told jokes. Most, however, saw
nothing funny.
Like Kenneth Horak, 27, who
was laid off from his job with
a construction firm last week.
“All the money I have is in
this bank. I have just paid by
check $200 interest money for a
house I am buying. 1 know that
wmn’t go through. We ought to
have some sort of legal recourse.”
A wmman who refused to give
her name was bitter.
“The rich get richer,” she said.
“We asked for a loan from 111
bank once. They took our Im
chip stock and discounted
per cent as collateral fori
loan.”
“Do you think this happen
because of a run on the banlll
another woman asked. “Don'tla
yourself,” she said in answeii|j
her own question. “They
made some bad investments."
Bill Runnels, an insurance mil
said he wasn’t worried about i
getting his money back, but|
he needed money now. |!
“They will have to do
thing,” he said. “That’s whjl
have all these controls. |T|]
banking business is no goodaij
where if this is not the cast,’!
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