Click image to open full size in new tab
Article Text
$50,000,000 RUSHED TO MICHIGAN BANKS
(Continued from page operate with the Guardian Bank had necessitated the Statewide financial paralysis. Later he retracted his statement, saying: "I have misunderstood the facts in the Union Guardian Trust Company situation." It was understood that Ford officials had objected strenuously to the Governor's first statement. The automobile industry promised its employes that they would either be paid in cash or else credit arrmaged for then in stores
Senator Couzens
Conflict with Ford Cited. and shops. Mayor Frank Murphy told indigent that welfare relief would be maintained. A large baking company was formulating a credit scheme as Detroit dairymen promised that milk would be delivered to each home regardless of their financial situation. Representative George J. Green (Dem.) of Saginaw said tonight he would introduce in the House tomorrow a bill to restrict postmoratorium withdrawals to fractions of depositors' accounts. with the object of preventing heavy bank runs upon resumption of business next Wednesday.
Couzens-Ford Conflict Cited in Bank Holiday.
Detroit, Feb. 14 (P).-The Detroit Free Press. in a coyprighted article, says that conflict between Senator James Couzens of Michi gan and Henry Ford, former partners in the Ford Motor Co., is reflected in Michigan banking difficulties. The Free Press tells of Ford's growing interest in the Guardian Detroit Union Group, Inc., particularly the Union Guardian Trust Co., culminating in his depositing $7,100,000 in the bank to assist in meeting cash demands. The paper states that 72 per cent. of the banks assets were in Detroit real estate, rendering its cash position difficult recently. Ford's deposit failed to enable the bank to reach a sound footing, the Free Press continues, and last December a $60,000,000 loan was sought from the Reconstruction Finance Corporation.
Couzens Objects
The request for the loan was by way of being granted, says the Free Press, when Senator Couzens protested that the collateral offered by the bank was inadequate to secure the Government from loss. The chief liquid asset listed was Ford's $7,100,000. Since Senator Couzens was chairman of the Senate committee charged with responsibility for investigating R. F. C. loans, his objections prevailed, the Free Press says. After an attempt to form a new company to take over the Unon Guardian Trust Co., Senator Couzens is quoted by the Free Press as having suggested to Ford that the motor magnet grant the Government a lien on his deposits in the bank, making them a "frozen deposit." This Ford declined to do. Senator Couzens then suggested that he and Ford jointly sign a note for the difference between the bank's collateral offered and the amount of the loan. Ford declined to adopt this plan, the Free Press says, holding that there was a "basic principle involved." Senator Couzens conferred with President Hoover, the paper's account says, and was requested by him to accede to the R. F. C. loan. Early this week R. F. C. representatives and prominent bankers were called here.
Four Banks Ask State To Take Helm Here.
Non-liquid condition of assets and fear of runs as a result of rumors caused four banks in the metropolitan area to appeal to State authorities yesterday to take over their affairs in the interests of their depositors and stockholders. The only one of the closed institutions located in Manhattan is the private banking firm of D. J. Faour and Brothers, a 42-year-old company at 85 Washington St., with deposits and other liabilities totaling about $600,000. Three other banks that failed to open their doors yesterday were the Sunrise National Bank of Baldwin, L. I., the Middlesex Title Guarantee and Trust Company, and the Citizens National Bank, both of New Brunswick, N. J.
