The failure and liquidation of the Bank of Black Rock was a sensational legal case in the early 1920s.
Background
The Bank of Black Rock, a state institution, opened in 1892 with J.H. Martin as president. It had over $13,000 in capital and $20,000 in deposits.[1] S.R. Morgan (1885-1969), a Little Rock financier, didn’t become involved with the bank until 1916. Five years later, the bank was liquidated due to “an inability to meet withdrawals.”[2]
Legal Battle
In April 1921, warrants were issued for Morgan’s arrest. He was indicted by the grand jury of Lawrence County for being complicit with “wrecking” the bank by accepting deposits from customers with full knowledge that the institution was insolvent.[3] Morgan’s attorney, G.E. Garner, said the charges came from a factional rivalry in Black Rock that grew worse when his client bought a controlling interest in the bank.[4] Morgan himself vehemently denied the charges, stating in an interview:
“I had not been in Black Rock during six months prior to the closing of the bank. I continued to have faith in the assets of the bank and never knew of the threatened failure. The affairs of the bank were entirely in the charge of A.H. Proctor [a former cashier], who was jointly indicted with me but later was dismissed. I was only president in name and had not directed any deals through the bank for more than six months. Three months prior to the closing of the bank, depositors stated a slow run on the institution, drawing out large sums. At the time the run began, the deposits totaled $250,000, and when closed, the bank only had $60,000 in deposits. I personally put $40,000 of my own money into the institution in an effort to stabilize the reserve fund, but accounts were canceled too swiftly.”[5]
Despite proclaiming his innocence, Morgan’s public image was marred by further scandal. While waiting to stand trial in Powhatan, the Consumer’s Ice and Coal Company in Pine Bluff (of which he had also been president) collapsed. On March 22, 1922, Morgan met with Alex Roswell, an attorney representing the company’s stockholders. According to Roswell, who was seated, Morgan became very angry; he perceived some slight had been inflicted upon him.[6] He drew a pistol and pressed it against Roswell’s head, but Roswell was able to deflect the gun downward before the shot was fired. He was wounded in the left thigh. For this crime, Morgan was arrested and charged with assault with intent to kill and carrying a concealed weapon (for the latter charge he received an unspecified suspended sentence).[7]
For the next two years, Morgan secured one continuance after another, mostly due to claims of poor health, delaying the case multiple times. He had several attorneys on retainer, including former governor George W. Hays.[8] When Morgan finally arrived in Powhatan to stand trial, he was put under a $6000 bond and lodged at a local hotel, where Sheriff John R. Long kept watch. For reasons unknown, Morgan decided to leave town and return to his home in Little Rock. Sheriff Long gave chase, and arrested Morgan with the cooperation of the city police. Long then hired a taxi to drive them back to Powhatan, but was overtaken near Searcy by two of Morgan’s attorneys. They presented Long with a writ of habeas corpus, and he was forced to release the prisoner.[9]
The Morgan case was widely publicized, and hundreds of people from all over the county came to witness the trial, only to leave disappointed when Morgan was granted a change of venue. His attorneys successfully argued that he wouldn’t get a fair trial in the western district of the county, so the new trial would take place in Walnut Ridge in March. In Walnut Ridge, Morgan was granted yet another continuance until October if he agreed to pay $10,000 towards reimbursing the depositors and another $30,000 by July 1.[10]
At this vital juncture, the case simply vanishes from the contemporary newspapers. There is no further mention of the case at all, and so its ultimate outcome remains a mystery.
Morgan’s Fate
Morgan seems to have survived the lengthy ordeal. Among other things, he was elected as one of the directors of the National Cottonseed Products Corporation.[11] This peace did not last long. As one paper article said of his life in 1922, it “…reads like the story of a monarch…”[12] His later life was plagued by scandal rising from numerous criminal charges. In Perryville, Arkansas, he was accused of embezzling funds from the Bigelow State Bank.[13] The details of the situation are remarkably similar to the debacle at Black Rock: a bank accepting deposits it cannot make good, a high-ranking administrator away when the ax fell, and a cashier who was supposedly in charge during the whole affair. The jury deliberated for forty hours and was unable to reach a verdict, seven to five in favor of conviction.[14] The trial was rescheduled for March 12, and a former cashier, M.F. Ray, was to be tried as well.[15] It appears nothing came of this case.
In 1938, Morgan was convicted of mail fraud, along with his brother M.B. Morgan, and sentenced to ten years in prison.[16] He was then implicated in a plot to kill D.D. Panich, a lawyer from Fort Smith, by bombing his car.[17] In Louisiana, he was accused of trying to destroy his competition by artificially lowering ice prices, as well as several violations of state health laws.[18][19]
Morgan died in hospital in Shreveport, Louisiana on March 6, 1969.[20]
[1] William, Chas. R. The Bankers Encyclopedia. The Bankers Encyclopedia Company. March, 1895. p.22
[2] The Arkansas Banker. Vol. 5. No. 1. April 1921. p.40
[3] “S.R. Morgan is Ready for Trial.” The Arkansas Daily Gazette. September 4, 1922. p.10
[4] “Warrant is Issued for Local Banker.” Arkansas Daily Gazette. April 27, 1921. p.6
[5] “S.R. Morgan is Ready for Trial.” The Arkansas Daily Gazette. September 4, 1922. p.10
[6] Morgan was sentenced to thirty days in jail and a $500 fine by the chancery court in Jefferson County for contempt because he was not present at one of the hearings. It is likely the cause of the grudge Roswell mentioned. This ruling was later overturned by the Arkansas Supreme Court in June 1922, which declared that the chancery court had violated its jurisdiction. (“Morgan et al v. State.” The Southwest Reporter. Vol. 241. West Publishing Co. St. Paul, Minnesota. 1922. p. 385-387). However, it was suggested in one newspaper that Roswell had conducted thorough investigation of Morgan's other legal woes to get leverage in court. See source referenced in Footnote #12.
[7] “Attorney is Shot by Local Banker.” Arkansas Daily Gazette. March 23, 1922.
[8] “Shortage Made Up by Former Sheriff.” Arkansas Daily Gazette. January 16, 1923. p.8
[9] “Little Rock Banker Secures Another Continuance at Powhatan.” Arkansas Daily Gazette. September 6, 1922.
[10] “Continue in Banker’s Case.” Hot Springs New Era. March 22, 1923. p.8
[11] “Investigation of Cottonseed Industry. Part II—Arkansas.” Congressional Serial Set. U.S. Government Printing Office. 1932. p.13,841
[12] “Morgan Has Had Stormy Career in Business…” Pine Bluff Daily Graphic. March 23, 1922. P.2.
[13] “Court Begins at Perryville.” Arkansas Democrat. February 5, 1923. P.6.
[14] “Special Team May Be Called to Try Morgan.” Arkansas Democrat. February 11, 1923. p.3
[15] “Court Fixes March 12 for Retrial of Morgan.” Arkansas Democrat. February 13, 1923. p.2
[16] “Two Brothers Get Prison Terms for Utility Fraud.” St. Louis Post-Dispatch. February 20, 1938. P.32.
[17] “Three Arrested for Bombing Attorney’s Auto.” The Jackson Son. Jackson, Tennessee. September 1, 1936. P.3.
[18] “Conspiracy is Denied by Morgan.” The Times. Shreveport, Louisiana. November 8, 1949. P.12.
[19] “Arraignment of Morgan Delayed.” Ibid. September 1, 1948. P.7.
[20] “S.R. Morgan Sr.” The El Dorado Times. March 14, 1969. P.11.
