Stockmen's Bank of Martinsdale - Martinsdale, MT - U.S. National Register of Historic Places on Waymarking.com

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Stockmen's Bank of Martinsdale - Martinsdale, MT

in U.S. National Register of Historic Places

Posted by:  T0SHEA

12T E 552615 N 5145232

This is a bank with an interesting history, including bank failure, resurgence, skullduggery, conspiracy and final failure.

In the beginning it wasn't the Stockmen's Bank of Martinsdale, but the State Bank of Martinsdale. The State Bank of Martindale was incorporated September 30, 1909, with $20,000 in capital and deposits totaling $200,000. Opened in a small wood frame building, in 1919 construction of a new $15,000 brick bank building was begun.

The majority of its clients were local ranchers grazing mostly sheep in the surrounding countryside, which, for the bank, would not be a good thing. Drought hit Montana in 1917 and lasted for several years, forcing many farmers off their land. Eventually, the banks which held the mortgages on these farms would fail, as well. In fact, over half of Montana's banks would disappear as a result of the protracted drought, this one included. The bank closed its doors on Saturday, February 3, 1923 and was taken over by the Montana Superintendent of Banks the following Monday.

Though area ranchers were still doing relatively well, the bank failed nonetheless and it transpired that the cause may have been a combination of the economic climate, reckless lending practices, lax bookkeeping standards and a trio of brothers, one of which controlled the bank, who may or may not have embezzled bank funds. In any event, the bank's failure put a substantial damper on Martinsdale, a situation which the local ranchers found untenable. They took the situation into their own hands and, on July 8, 1923 incorporated and August 28 officially chartered the Stockmen's Bank of Martinsdale, with a capital of $20,000, in the selfsame building.

From that time, all the way through the "Dirty Thirties" and almost into the '50s, things went relatively smoothly. Then suddenly and without warning, on May 5, 1949 the Big Timber Pioneer, and others, alerted readers to the merger of Stockmen's Bank of Martinsdale with the Continental National Bank of Harlowton due to a shortage at the former of between $80,000 and $208,000.

It turned out that cashier Olaf Haugan had concocted a scheme years earlier, in 1936 actually, wherein a woman named Annie Berg would cash cheques on an empty account, the money being charged to other accounts. The ploy was finally discovered when a depositor realized his account held substantially fewer funds than it should have. The bank was closed and its affairs immediately taken over by the Continental National Bank of Harlowton. Ultimately, it was discovered that $205,000 had been embezzled by the pair.

For many years after, the building was used in various businesses and, at last report, it was owned by an individual who has hopes of restoring the building with the aim of opening a facility in the building, its exact nature unknown, possibly a clubhouse or social space. As of 2013 some restoration work had been accomplished. When we visited the building was showing the signs of recent reparations, both inside and out.

Stockmen's Bank of Martinsdale

On September 30, 1909 the State Bank of Martindale incorporated with $20,000 in capital and deposits totaling $200,000. Samuel Hodges, the bank's first cashier, set up shop right next to the post office on Main Street in a small gable-fronted frame building with a shed-roof addition. It is unclear who exactly was responsible for the formation of the bank, but several area ranchers were heavily involved in its administration. For instance, in 1916, area ranchers M. T. Grande, Ole J. Eike, C. M. Holliday and Stanley Smith served on the Board of Directors, with Grande also serving as president. Later, ranchers G. K. Robertson and Andrew Hoyem served as president and vice-president, respectively.

Unfortunately, the good times would be short-lived for the State Bank of Martinsdale and the rest of Montana... ...Among the casualties was the recently-prospering State Bank of Martinsdale, which was closed by its directors on Saturday, February 3, 1923 and taken over by the Montana Superintendent of Banks the following Monday... ...Upon taking control of the bank, Deputy Superintendent of Banks, C. M. McCoy, prepared a report recommending a thorough investigation of the Olsen brothers, who, "were at the time of their employment without capital, but they immediately begun to accumulate until their worth was estimated at about ten thousand dollars."

Apparently, bank directors gave their cashier, George Nels Olsen, "blanket authority to borrow money," recordkeeping at the bank was questionable at best, and there were rumors of bank notes created that were never paid out to customers. Whether the Olsens were truly fraudulent or just participating in the general reckless lending policies of the era was never officially determined.

[After the 1949 closure] ...Indeed, that was the end of the bank, but the building continued to serve the community. Owned by the Federal Deposit Insurance Company after the bank's closure, the property was split into two parcels in 1950, with the east 65' of lots 1 and 2 on which the buildings sits, being sold to Frand Rognlie. In 1958, the property was purchased by W. H. Jordet & Roger Sears, who used the building to store salt, feed and an oil truck for their business, J&R Repair. It was housing the oil truck that necessitated the garage door alteration of the building's Main Street fagade. David L. Hereim purchased the building in 1978 and used it for his business, Martinsdale Repair, unit 2001 when it was purchased by the current owner, Peter Tolivasia. It remains Martinsdale's most iconic example of Main Street commercial architecture. From the NRHP Nomination Form