History of Whiting’s Banks: Part Three

Anthony Borgo August 2025

Below is the final installment is the history of Whiting’s banks.

The Central State Bank

The Central State Bank opened its doors to the public in July, 1917.  The Central State Bank became the fourth financial institution to open for business in the city of Whiting. .  I previously documented the history of the Central State Bank in an article titled, “The Oil City Skyscraper.” To read about this Click Here.

Liberty Savings and Loan

The Liberty Savings, FSB mutual savings bank was established in September 1926.  At the time of incorporation the bank was located at 1916 Indianapolis Boulevard.  In 1959 the present building was erected at the corner of 119th Street and Indianapolis Boulevard.  To better serve the Calumet Region, Liberty Savings opened up a branch in Schererville in 1975.  And, in 1989 a complete remodel was done of its Whiting branch. 

As a smaller bank, Liberty Savings has had an excellent reputation for being a leading provider of home lending services.  Bank officials prided themselves on their commitment to the communities in which they served.  The bank’s mission was to provide customers with competitive lending and savings products.  Liberty Savings and Loan was also proud of its involvement in the Whiting Robertsdale area.  Liberty’s goal was to offer friendly and efficient service and to be continually looking for new ways to better service its communities.

Liberty Savings and Loan experienced a solid growth pattern over eighty years.  They were ranked among the top of all S & L’s in the nation.  However, Liberty Savings and Loan was wrought with scandal in 1961.

In November of 1961 embezzlement proceedings were conducted with officials of Liberty Savings and Loan.  As a result of these examinations the bank suffered a mass exodus of their customers.  Steve G. Kolina responded to this in a December 3, 1961 Hammond Times article, “today only five or six persons were waiting in front of the office when it opened for business.”  The article went on to state that this was a minor figure compared to the crowds who created a “near run” on the savings and loan the previous Friday.  The “near run” was subsided once customers were assured that their deposits were insured, up to $10,000 each, by the Federal Safety and Loan insurance Corporation.

It was on that Friday that an announcement was made regarding the arrest of two brothers, officials of the firm, for embezzling.  The two men were Joseph J. Chilla Jr., a former chairman of the board, and his brother Benedict, the association’s secretary and treasurer.  The men were charged before U. S. Commissioner Wilbur J. Glendenning with embezzling funds from Liberty Savings and Loan.

Officials of the Federal Bureau of Investigation estimated that the total amount embezzled was approximately $1 million.  The FBI agents believed that the two brothers started embezzling in 1958.  However, officials believed that the embezzlement actually began much earlier with their father, Joseph Chilla, Sr.  Chilla, Sr. passed away in 1958.  Joseph Chilla Sr. was convicted of embezzling funds early on in his banking career.  When he first was discovered of misappropriations he was put on probation.  Once he advanced at Liberty Savings, he began his embezzling scheme again.

In addition to the Chilla brothers, sisters Mrs. Clara V. Greskovich and Mrs. Helen M. Yancich were involved in the Liberty Savings and Loan scandal.  The sisters served as part-time tellers for the savings and loan. District Attorney Kenneth C. Raub believed the daughters to be more victims than anything.  At the time of Joseph Chilla Sr.’s death the embezzlement was so great the children either had to carry on or get discovered.  Raub stated that the father was very domineering over his children.

The men were accused of taking funds of depositors through the system of keeping a private ledger of accounts of about one-seventh of the customers.  They would then draw funds from these accounts replacing them from their own pockets if one of the customers in the ledger made a withdrawal.  The case against the brothers was not too hard to prove since they left behind books of the transactions that were quite detailed.

Joseph Chilla Jr. was charged on two counts with embezzling and misapplying sums totaling $10,188.  Benedict Chilla was charged on two counts, one of making a false statement to the firm’s board of directors and the other on falsifying a statement.  Clara Greskovich was charged with misapplying $12,500 in July 25, 1962 and $1,942 in November 20, 1961.  Likewise, Helen Yancich was charged with misapplying $4,000 in October 22, 1961 and $2,000 at an earlier date.

In March of 1962 the two Chilla brothers were sentenced to five years in the federal penitentiary.  The brothers were swiftly removed by U.S. marshals to the St. Joseph County Jail at South Bend and then relocated to the federal prison in Terre Haute.  The two sisters were given suspended sentences of three years apiece on each of two counts and placed on a year’s probation.

In July 2015 Peoples Bank completed its acquisition of Liberty Saving & Loan expanding its assets to $847 million. President and Chief Operating Officer Benjamin Bochnowski said, “Peoples and the Liberty team share a commitment to building strong, personal customer relationships, which is a cornerstone of community banking."

Northwest Indiana was once home to more than 50 independent community banks. But such banks have been consolidating for years, and the disappearance of Liberty Savings shrunk the number of local community banks based in the region to five.

"Liberty customers will continue to see familiar faces, and we think this is essential to the customer experience in any merger," Bochnowski said. "Customers are key to any bank acquisition, and employees are the key to reaching those customers and keeping us engaged in the community."

The Great Depression

Since the arrival of Standard Oil to Whiting, there has always been a close relationship between the refinery and the community.  This relationship was definitely highlighted during the 1930s and the Great Depression. During the 1930s industries across the country were forced to cut wages.  By the end of 1932 United States Steel found it necessary to cut wages by 25 per cent.  However, the Standard Oil Company, Whiting’s only major industry, saved that community from the worst effects of the depression.

When gasoline and oil sales declined, the refinery kept its employees on the pay roll.  During this time, Standard Oil launched a plant rehabilitation and construction program, which was reported at a cost of $10 million.  According to the book The Calumet Region it was stated in 1932 that Whiting “laughs at the depression.”  Ninety-eight per cent of the city’s taxes were paid and its citizens received regular pay checks.  However, early in the summer of 1930, the Calumet Region’s banks began to feel the full impact of this financial crisis.  But, Standard Oil was there to aid its “Oil City.”

In the first part if the 1930s, banks were failing throughout the country.  President Hoover instructed that all banks be closed for restructuring.  After 30 days of evaluating their assets, banks were allowed to reopen.  By 1932, 33 financial institutions were forced to close in Lake County, with only about 9 banks reopening.  Whiting had 5 banks operating during the Great Depression: Bank of Whiting, American Trust and Savings, First National Bank, First Trust and Savings Bank and Central State Bank.  However, in 1932 the Central State Bank did have to close its doors. 

As a way to keep Whiting’s head above water the refinery intervened and they took over the First National Bank and the First Trust and Savings Bank.  Standard Oil then combined the two institutions and reopened as the State Bank of Whiting.  A refinery executive was quoted in a Hammond Times article titled “Standard Executive Will Head New Bank” regarding Standard Oil’s intentions.  “It is designed to restore confidence in the general banking structure of the entire Calumet district and to provide for a more sound financial foundation for the return to normal business conditions.”  He went on to state, “The two moves met with universal favor throughout the district.  Bankers, business men, civic leaders, industrial executives, and the rank and file of banks customers view it generally as the outstanding piece of favorable banking news of the year.”

Standard Oil was not alone in preserving Whiting.  During the Depression, the Schrage family also participated in the merger of the State Bank of Whiting.  Likewise, Henry Schrage was dedicated to ensuring that his Bank remained strong.  He was so committed that, during the 1930s, he used his personal assets to replace Bank loans that had gone bad.  Knowing that the Standard Oil Company and the Schrage family were behind the new Whiting bank, the confidence of the public was restored.

Today, there are three banks in the city of Whiting.  They are Schrage’s Centier Bank, Horizon Bank and Peoples Bank.  These banks have all been able to manage through the test of time.  Each institution has seen its ups and downs, but their customers have stayed in order to help them flourish.  To find out more about Whiting’s history stop by the Local History Room.