John R. Hulet

From Our Pioneer Heritage:

By June the situation was serious. J. W. Smith was told the loans must be materially reduced by July 14, or the bank would be closed. This was impossible with no cattle sales. Joseph W. Smith made a trip to Phoenix and with the help of Mr. Fairfield, Superintendent of Banks, and Governor Thomas E. Campbell, arrangements were extended until September. In July legal reserve was running low, so with Samuel F. Smith, Joseph W. went to Holbrook to confer with John R. Hulet and D. J. Thomas of the Merchants and Stock Growers Bank, then on to Winslow where they met Fairfield and Maritz for a day-long meeting and consultations. A wager was finally made to turn the Bank of Northern Arizona over to the Merchants and Stock Growers Bank. This was merely to save the depositors. Most reluctantly Joseph W. Smith consented.

July 27, 1921, D. J. Thomas came up to Snowflake and examined the bank's books. He remarked, "Things were in better shape than I expected." J. W. Smith did not owe a cent to any man. A buyer for his sheep made him an offer. It was less than the value, but he considered selling and giving $12,000 to the bank to relieve the strain if the examiner would let the business go on, but Maritz was contrary.

John R. Hulet was most helpful and offered funds, but Maritz had little interest for Snowflake. The bank was voluntarily closed July 29, 1921. Joseph W. and the Board had the consolation that the "letter of the law" was strictly adhered to, but the "spirit of the law" was forgotten.

It was a serious blow to Joseph W. and family. The drastic action was no fault of his but due to a national slump. The Merchants and Stock Growers Bank and the Winslow Bank were forced to close a few weeks later. But the banks were no sooner closed than the directors and J. W. Smith began making plans to reopen. Some felt to merge with the Merchants and Stock Growers Bank would be best. J. W. Smith favored caring for themselves. It was a great satisfaction to J. W. to know he had the support and sympathy of almost everybody. Early in August Homer F. Bushman commenced circulating a paper which read:

"To Whom It May Concern: We, the businessmen and citizens of Navajo County whose names are signed to this paper, having implicit confidence in the honesty, ability and integrity of Joseph W. Smith, hereby request that he be retained as cashier of the Bank of Northern Arizona, and that institution be reopened under its old management. And we pledge our moral and financial support if this request is granted." This was signed by 223 businessmen and farmers from Joseph City, Holbrook, Snowflake, Taylor, Shumway, Show Low, Lakeside and Pinedale.

The directors called a meeting of stockholders and it was voted to charge off the capital against bad notes. Joseph M. Smith and Joseph W. Smith went to Holbrook to confer with Maritz and then to Albuquerque to make terms with the First National Bank there. A telegram from Phoenix brought a favorable reply from state officials. Maritz requested J. W. Smith to go to Phoenix and discuss the arrangements with Fairfield, State Superintendent of Banks. Fairfield found objections to the contract with the depositors. Bitter as the pill was, J. W. Smith started over again, made up another contract, then reported to the department. After every technicality had been met, Fairfield wired from Phoenix a man would be sent to conduct the reopening.

Mr. Smith was under an awful strain. His family was pressed for money; pathetic appeals came from depositors, and duns for debts all added difficulties and perplexities to those trying days. But through the long ordeal, even though discouraged and heartsick for his family and every impatient depositor, J. W. Smith maintained a cheerful, hopeful appearance that the heavy burden would soon be ended. Through it all W. E. Stratton was steadfast in his support and Samuel F. Smith was most helpful.

Finally the red-letter day arrived. February 6, 1922, H. M. Maritz of the State Banking Department, C. B. Wilson, Attorney, Judge J. E. Crosby and a house full of local people were present to celebrate the reopening. The Snowflake brass band was out and such an outpouring of complimentary sentiments and expressions of confidence to J. W. Smith's honesty and integrity was seldom witnessed. The people commenced depositing after the speeches, handshaking and singing, etc. $3,400 was deposited that day.

Q. R. Gardner said, "I told someone at the closing of the bank that I would stake my life on the fact that they would find no dishonesty or any evidence of it in the work of Joseph W. Smith." These and other expressions helped Mr. Smith forget his anxiety and suffering.

All went well until June 1923. Cattle prices were very low, depositors were restless and large accounts were withdrawn. By November J. W. Smith mortgaged his land, sheep and cattle to redeem the bank. Samuel F. Smith and his wife assigned their land to the bank, as did James J. Shumway, W. E. Stratton and their wives, a most splendid exhibition of loyalty and trust to the institution. To one man who would not be satisfied, J. W. Smith gave a personal note of $600, at 10% interest, and W. E. Stratton did the same. People were strained and fearful; the county treasurer withdrew his support; the correspondent bank began dishonoring drafts; resources were disappointing. After long discussions and due considerations, the Board concluded to close the doors December 29, 1923. If only one of the big cattle notes could have been paid, it would have saved the bank. What a great sorrow this brought to J. W. Smith. He had given the bank his best thought and effort and devoted sincere prayer for its safety, put up his property to sustain it—but friends he depended upon failed him. Indeed it was a deep disappointment, yet his associates say no man could have made a more gallant fight. He had the satisfaction of having done all that anyone could for the Bank of Northern Arizona and the people. —Bess Erickson

We should remember the poor. —Gal. 2:10