In the summer of 1956, my family moved to Kinston when I was 16. I remember the town was abuzz with the scandal that had shook the community. It was probably the conversation in every home and wherever people gathered.

It took place downtown in the First Citizens Bank — formerly, the Farmers and Merchants Bank and today, The O’Neil Boutique Hotel. Inside the front of the building just to the left of the front door was the office of the bank’s vice president, Joseph Edward Peterson. Peterson had come from Smithfield to work and had worked for the Kinston bank for 20 years. For the previous 15 years he had been vice-president of the bank.

Peterson was a prominent man in town, well-liked and held in high esteem by many. He had been chairman of the board of Stewarts at Queen Street Methodist Church and at one time served as the president of the Kinston-Lenoir County Chamber of Commerce. He had been involved in many community activities and was considered above reproach.

Peterson was known as Pete by all that knew him. Pete and his wife Ruth were beloved by their many friends and neighbors. They never had children but young people enjoyed their company.

While going about his duties one afternoon after closing, the bank janitor found Peterson slumped over his desk, dead from a gunshot wound to the heart. There were two envelopes found near the body, one to the bank and one to his wife. His death was later ruled suicide by the coroner.

Shock and disbelief are the only words to describe what the bank employees felt when learning of the suicide. This man had not just been their boss but was a friend. With consternation they all wondered what could have been so bad that he took his life.

Shock waves shook the town as word of Peterson’s death spread quickly through the community. The look of incredulity was on the faces of many upon learning of Peterson’s death. Speculations as to why were numerous.

In his suicide note, Peterson revealed that he had been stealing from the bank. A few weeks later, the bank made a statement: There was a shortage of more than $800,000. Peterson was known to dabble in the stock market and played cards for small stakes. But in the investigation that followed, there was no evidence any of these things might have been the motive for embezzlement of such a large amount of money.

The Peterson embezzlement and suicide story made the newspaper headlines across the country. At the time it was the talk of the banking industry in North Carolina.

It has been said there were some bank officials who never trusted others again and taught new bank employees to do the same. In all the years that followed, it has remained a mystery as to what Peterson did with all that money.

Ruth Peterson stayed in Kinston and later remarried.

With the passing of so many years, there are few left that remember the incident but the story is part of the history of one of Kinston’s landmarks, the old Farmer’s and Merchants Bank/First Citizen’s Bank, now known as The O’Neil Boutique Hotel.

Sources for this column include:

The Robesonian June 20, 1956 Pg. 4
The Springfield News-Leader, Page 10
St. Louis Post-Dispatch,   Page e
The Daily Times-News (Goldsboro, NC),  20 Jun 1956, Wed,  Page 22
Rocky Mount Telegram,  20 Jun 1956, Wed,  Page 1
The Tennessean,  (Nashville)19 Aug 1956, Sun,  Page 52
Asheville Citizen-Times,  20 Jun 1956, Wed,  Page 1
The Ogden Standard-Examiner,  19 Aug 1956, Sun,  Page 4
Interview with former bank employee and person who knew Peterson
My recollection