4361. Dawes Bank (Chicago, IL)

Bank Information

Episode Type
Run Only
Bank Type
state
Start Date
June 1, 1932*
Location
Chicago, Illinois (41.850, -87.650)

Metadata

Model
gpt-5-mini
Short Digest
985fac66

Response Measures

Borrowed from banks or large institutions, Public signal of financial health, Capital injected, Books examined

Other: Loans by Reconstruction Finance Corporation (~$80,000,000) and cooperating banks; public announcements to reassure depositors.

Description

Newspaper accounts describe a run on the Dawes Bank that was halted by an inquiry, emergency loans (RFC and cooperating banks), and the bank opening for business at 10 a.m. the following Monday. There is no mention of a suspension or permanent closure; deposits began returning. Exact day in June is not specified in the clippings (references to late Saturday June... and Sunday...), so date is given as June 1932 with day unknown. Bank type not stated in articles; name lacks 'National'/'State'/'Trust' so set to unknown.

Events (1)
1. June 1, 1932* Run
Cause
Rumor Or Misinformation
Cause Details
Sudden depositor panic/withdrawals threatened the bank; assets were found sound but not immediately salable, leading to heavy withdrawals. Accounts imply panic/rumor and political attacks contributed to the run.
Measures
Emergency liquidity provided by cooperating banks and a Reconstruction Finance Corporation loan (assurance of sufficient funds); public announcement that funds were available to pay every depositor, which restored confidence.
Newspaper Excerpt
At 10 o'clock on Monday all these banks opened for business as usual. Public announcement was made that ample funds were on hand to pay every depositor.
Source
newspapers

Newspaper Articles (11)
1. July 18, 1932 News and Record Greensboro, NC
Article from News and Record, July 18, 1932

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Politics As Congress Ended Sake of Appearance Democrats Had No Intention of Making Relief Bill More Than Reasonably Effective-Sullivan Explains Loan Made to the Dawes Bank. By MARK SULLIVAN. July politics the closing of Congress was aimed placid should be grateful there As no intention the than reasoneffective the complete result the Reconstruction Finance corporation has Three hundred to be loaned for direct billion and for to provide employpublic, for projects such bridges, and the like hundred and twenty for government public general of the defined, mainly to insurance companies railand solvency depends saving banks Loan to Key Points. cannot there when the had than to politics that practiced purpose making the campaign to appear the of conducted with Republicans and with to what Speaker Garthe "classes" as against the Every knows, that of banks, savand insurance companies the interest of depositors holders The function practicably points. would be utterly imloans individual" who There is to assume that publicity one apparently spoke for the Democratic candidate, Governor Roosevelt There is some appearance also that different Roosevelt favored yielding publicity. directors the Finance including the strongly pealed have the sion point was will and that relief rather than the bank The intend the to heavy fire already than to Charles bank suppose was merely favor Dawes other individual would conception the During the week had Chicago the biggest banks had taken 65 millions deposits. The one of the stopped run his address the line of to bank decided upon late Saturday June the the bankers and in conditions to this as 500 banks, big and throughout the middlebusiness the midnight telephone appeal and Democratic the corporation united in the deto The attacks this and on the generally merely the politics the and solid fact that in all has been put averting preventing closand in general bringing suspicion partisanship corporation's loans should unPresident Congress to require the directors evenly distributed between the intention give the headship of to Democrat.

2. November 5, 1932 Evening Star Washington, DC
Article from Evening Star, November 5, 1932

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money to quiet unreasonable fear and give absolute assurance that funds were available to pay every depositor in full without question. Had Ample Security. In the course of inquiry into the condition of the bank it was found that they had ample securities. which in normal times could have paid out their depositors, leaving a large margin. But the securities could not be instantly sold at any price, or at least at a price which would produce sufficient to pay all depositors, and they could not collect instantly from the notes. In the inquiry into the condition of the bank it developed they had 122.900 depositors, of whom 105,000 were savings depositors; that the average of the savings deposits was only $140 each many of them working women and children that the safety of these depositors could not be separated from the other depositors of the bank. It was found that there were 17,000 commercial depositors, most of whom were men and women engaged in small businesses, whose deposits represented the money necessary to meet their pay rolls, the purchasing of their materials and the discharge of obligations to others incurred in the course of business. Jeopardy to them meant that many thousands of men and women in factories and stores would be discharged into untold hardships. But these were not all who were dependent upon the maintenance of this bank It was found that among the 17,000 commercial deposits 755 were country banks, the great majority of them in towns of less than 5.000 people. If this bank should fail, many of these country banks must fall In the complex system of our economic life things that on the surface seem unrelated are, in fact. under the A surface inextricably tied together farmer in a small town in an agricul tural State might feel no concern for the safety of this important bank in a great city The widow with a small deposit in a small bank of a town of another State might know of no relationship between her bank and the city bank But the farmer in one State and the widow in another. even though they did not know it. had a direct financial stake in the fate of this city bank. For the country banks must conduct business with the city banks in the ordinary conduct of trade. and must carry their reserves with the city banks in order that they may draw interest upon them. which they in turn pay to their depositors Now. it was found on examination that these 755 depositing banks had 6.500.000 depositors, scattered over 15 States. But that is not all There were 21.000 other banks scattered throughout the country which had deposits in the 755 banks depositing with this particular city bank and in these 21,000 banks were more than 20,000,000 depositors and they involved widows, orphans. workers, insurance companies, manufacturers and merchants. Men of High Esteem. And in addition to all this there was the position of the borrowers from all this mass of banks If the city bank should fail there must be immediate demand for the payment of the money due from its borrowers. If any of the banks dependent upon it should fail their borrowers in turn would be compelled to make immediate payment of money due and to realize upon their property at a time when property could not be turned into cash at anyt thing like its real value. In this city bank and in the 755 banks who carried their reserve deposits in this city bank there were 695,000 men and women and institutions owing money on their notes. They were scattered throughout the length and breadth of the land. They were on the farms. in the cities. the villages and hamlets Most of all these groups of people were unaware of their danger They were in their homes and in their churches, concerned with their own affairs-bu they were not being forgotten. The men who had conducted this bank over great numbers of years were men of high esteem in the whole community To their credit be it said that their chief concern was the preservation of these hundreds of thousands or millions of people from disaster. They were not asking aid for themselves The investigations and the conversations occupied many hours of continuous communication from these two cities to Washington and back again Remember, this was on Sunday when the normal processes of business were difficult to conduct Countless difficulties were encountered and solutions worked out. They were working against time. Finally at three hours after Sunday midnight the task was completed The assets had been valued by the examiners of the Reconstruction Corporation. The banks of the two cities joined in lending assistance and the Reconstruction Corporation agreed to furnish a sufficient sum to assure that this. bank could open without fear and meet every demand of its depositors. At 10 o'clock on Monday all these banks opened for business as usual Public announcement was made that ample funds were on hand to pay every depositor As had been anticipated immediately excitement and panic subsided and confidence was restored The crowds melted away deposits began to return. The situation was saved, not only in this bank, but in the other banks which had been subject to heavy withdrawals The loans offered by the co- operating banks and the Reconstruction Corporation were never fully called for and have since been largely repaid, and every danger in connection with that episode is now over. National Necessity. The central human figure of that bank was a man who had served his country for 40 years in many high capacities, who in recent years had been absent from the country in position of first importance to the American people That is the story of the Dawes Bank in Chicago You know the use our political opponents have made of this incident. They ignore the fact that Gen. Dawes resigned from the Reconstruction Corporation three weeks before on his first news that attacks were being made on the bank with which his name had long been associated. He resigned to try to save that bank without call on the Reconstruction Corporation of which he had been a director. He knew and appreciated the use that would be made in this campaign of such calumny. He sought

3. November 5, 1932 The Daily Times Davenport, IA
Article from The Daily Times, November 5, 1932

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healing powers of international yourselves are familiar the history of the year which followed. know that the of the the entire of thought and changed the history of what otherwise would have been a tragedy to the whole civilization. It brought to new the realization of the burdens under which Germany had been laboring. "Under the impulses of these agreements and the recognition least of the peril in which they stood, there came out of this agreement great measure of redemption to the German people, sense of greater security to the world from the agreements at Lausanne. "That agreement and the humane sympathies which were evoked by that new understanding of the postwar difficulties the world has served greatly the healing of the wound of the great Saving the Dawes Bank As an example of what he called great constructive measures of the Mr Hoover told the first time his story of the loan by the Reconstruction Corp. to the Dawes bank of Chicago. constant misrepresentation of this episode for political purposes by Democratic politicians slander upon men of their own party as well as cruel injustice General Dawes," the president said with reference to the Dawes bank loan. Mr Hoover told of the run the Dawes bank and the quick investigation which, he said, showed its assets sound but not immediately salable for cash. The inquiry showed, he said, that the depositors were savings depositors, and that their average savings were only cash. Drawing picture of intertwined banking connections, the president said 755 country banks had commercial deposits the Dawes institution, and that these banks had depositors including 21,000 other banks with depositors. The Reconstrution Corp. loans, he said, ended panic. Dawes, the president said, "knew and appreciated the use that would made in this campaign of such calumny," and said would not ask for assistance. Mr Hoover said the action was finally taken on the insistence the two Democratic members the board and the leading Democratic banker Chicago, who was then mentioned candidate for the presidency" and others. Mr Hoover said that the had intervened to save banks 5,000 towns 25,000 population or less. He added not burden upon the taxpayer. But the salvation of millions of jobs to men and Stand on Prohibition "The evasions misleading character of the campaigr of the Democratic party are not less evident in their program for dealing the 18th amendment than in the other questions they have discussed," the president. "They know that their own Democratic strongholds in the south, if none other, will not accept the proposal for outright repeal of 18th amendment with the consequent return of the saloon and resultant lack of protection to states. stated in my acceptance speech what believe is the only practical common ground with adequate protection on which this whole can reach solution. This statement was the result of three years of intensive study and experience with this problem, was delivered the largest audience the radio and press ever gathered together the United States. known you. matter of public record. "Our are trying to make another false issue supposed coercion of voters employers. the first ballot in the United States secret, no can voter. In second place the interest employer employe is identical securing business upon which they mutually live. The Republican employer has the right publicly to express his opinion on this election as has the Demoorator. is with sadness that see attempts to mislead the people and avoid the real issues at an hour which demands campaign of the most serious character."

4. November 5, 1932 The Daily Advertiser Lafayette, LA
Article from The Daily Advertiser, November 5, 1932

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Hoover Claims Democrats Avoid Prohibition And Other Issues President Makes Address At St. Louis And Will Speak In St. Paul Tonight By NATHAN ROBERTSON Press Staff Writer ABOARD PRESIDENTIAL SPECIAL, En Route to St. Paul, Nov. 5-President Hoover carried his final drive for re-election back into Illinois, toward Wisconsin and Minnesota today after bidding for Missouri's support with the assertion that the Democrats are conducting a "campaign of avoidance" including "evasions' on the prohibition issue. On his way to California to vote, the President headed today for St. Paul where he makes major campaign speech tonight at 9:30 Central Standard Time after an address at Madison, Wis. and ten rear platform appearances along the route. From St. Paul, he will dash across the continent to his home in Palo Alto in order to vote election day. Stops en route to the coast will include a halt in Nevada, probably at Elko for a final nation-wide radio appeal eve The President will speak at Salt Lake City in the Mormon Tabernacle Invading Wisconsin today, the president enters state in which some of the leading Republicans, of the progressive wing, have declared for his opponent, Franklin D. Roosevelt The chief executive spoke at St. Louis last night before a crowd that jammed the 11,000 capacity coliseum, after strenuous day that started before breakfast and included formal address at Springfield, III. Starting half an hour late because of his crowded program, the President was unable to finish within the time reserved on the radio and was cut off the air to allow Roosevlt to speak. Discussing prohibition for the first time since his speech of acceptance, the President repeated that prohibition should be changed to eliminate "evils" and that states should be given control of the problem with protection from wet states and provision against return of the saloon. His proposal, he said "is the only common ground with adequate protection on which this whole can reach solution. Speaking of the Demorats, he said: "They know that their own Democratic strongholds in the south, if no other, will not accept the proposal for outright repeal of the Eighteenth amendment with the consequent return of the saloon, and its resultant lack of protection to dry states. As examples of what he called "the great constructive measures of the administration,' Mr Hoover told for the first time his story of the loan by the Reconstry Corporation to the Dawes Bank of Chicago and his negotiation of the one year moratorium on war "The constant misrepresentation of this episode for political purposes by Democratic politicians is slander upon men of their own party as well as cruel injustice to General Dawes,' the President said with reference to the Dawes bank loan. Mr. Hoover told of the run on the Daws bank and the quick investigation which, he said, showed its assets sound

5. November 5, 1932 The Times-Tribune Scranton, PA
Article from The Times-Tribune, November 5, 1932

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(Continued from Page 2) will deliver his last major campaign the Paul hit due for his response demands the president touched prohibition the second campaign Louis an the following two paragraphs to the subject: evasions misleading character Democratic resultant the coliseum, which had utterance, applauded mildly the president ended the first paraabsolutely his reference to the Interesting high light of speech, took two standing events which the Democrats tacking, but which the president the Dawes Chicago, the arranging the Ger- Loan To Dawes Bank. The president told how three groups into perate one New York the white the impending run the Dawes bank spread and affect banks. He revealed Monday found bank's securities rushed the averted major financial panic. Defending and others many few, Mr. Hoover totals today aggregate millions men and not Concerning the German moratorium, executive explained Sackett first came home Germany's pligh. had agreement leaders support meashow he had next the proposal within hours the other counpoliticians football finally, had used transatlantic secure support Italy; England, governments of Belgium Poland.

6. November 5, 1932 Deseret News Salt Lake City, UT
Article from Deseret News, November 5, 1932

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silent as he concluded his reference the moot topic. was reported the local New City last Monday the executive to promise urged bill short sign beer session of Congress adopt one. As an interesting high light of St. Louis Mr. the country stage' took events of the dewhich the but which the been "great president dramas, great joan of the Reconstruc to the tion Finance Dawes Bank of Chicago, and the arranging of the German told how three The president groups financiers went into des one perate in Chicago, one New York and one at the White House solve the problem of an impending run the Dawes bank which would spread out affect 775 country banks, whose ramification in revealed how small hours of Monday into the morning. found the Dawes bank's securities sound, and rushed out the money that averted major financial Defends Loans Defending this loan and others like the being good for the many than the few. Mr. "The totals today aggregate millions of men and women who were Concerning the German moratortum, executive explained how Ambassador Sackett first came home grave message of Germany's plight; how he has then secured the of congressional of both parties to the had next the proposwithin hours after submisto the other to prevent foreign ing football of it, and how finally. he had first the transAtlantic telephone to assurances support from Mussolini Italy, MacDonald, of England, and the governmnets of Beigium Poland.

7. November 5, 1932 Brooklyn Eagle Brooklyn, NY
Article from Brooklyn Eagle, November 5, 1932

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Hoover in Illinois on His Way For St. Paul Speech Tonight Continued from Page first time since his speech of ceptance, the President repeated prohibition should be changed to eliminate "evils" and that States should be given control of the problem with protection from wet States and provision against return of the saloon. Says South Opposes Repeal His proposal, said the only practical common ground with adequate protection which this whole question can reach solution." Speaking of the Democrats, he said: "They know their own Democratic strongholds in the South, if no other, not accept the proposal outright repeal Amendment with the sequent return saloon and its resultant lack of protection to dry States." examples of what he called "the great construction Mr. Hoover told for the first his story the the Corporation the Dawes of Chiand his negotiation of the on war debts. this episode political purposes der upon their own party General the with reference to the Dawes Bank Recalls Dawes Bank Loan Mr. Hoover told of the run on the bank and the quick investigation which, he said, showed its but not immedifor The inquiry he said, that the 122,000 depositors savings depositors and that their average $140 picture intertwined banking the President said 755 county banks commercial the institution that banks had depositors including 21,000 other banks with depositors. The poration loans. he said, ended the panic. the said, "knew and that would made in this campaign of such and said would not ask for assistance. Hoover said the action was finally insistence "of the Democratic members Reconstruction Board and the Democratic banker was mentioned candidate for the Presidency," and Loans for 5,000 Towns Mr. Hoover that the had intervened to save banks in 5,000 towns of 25,000 population or less. He added, not burden the but salvation millions of to men and After telling the historic negotiations which led up the moratorium proposal. the President know that the proposal of the diverted current of thought and changed the history otherwise would have been tragedy to the whole civilization. At the his address. the said the campaign of sues; campaign of avoidances." "From Congressional elections 1930 down the present moment strategy of the Democratic "has been effort implant in the unthinking mind misrepresentation colossal falsehood that the party sponsible for this catastrophe. Asks Rival's Program The candidates have sought constantly to distort the facts the depression; they have sought minimize by which the saved the United States from generation chaos." Turning to the tariff, the President said had the complete absurdity" of Governor Roosevelt's argument and that result Democratic candidate had uttered "confused changes contradictory statements.' Hoover said that although Roosevelt would "leave doubt ambiguity as where stands on any question of moment before the country "the people of the country are unable method which he will execute six-point program for farm relief." Hits Bonus 'Evasion' one of the great mysteries of this the President The Chief then listed he called other "evasions" the Democratic candidate, including proposes do in the soldiers' the Democratic for additional expenditures in the last session Congress. "Whether, proposes to negotiate tariffs, agricultural commodities these agreements. support repudiate Messrs. Wheeler, Norris, Huey Long, Hearst and others in their long efforts put in large business "Whether he has accepted the proposal his supporter William Hearst, for issue.

8. November 5, 1932 Press-Telegram Long Beach, CA
Article from Press-Telegram, November 5, 1932

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ST. PAUL SET FOR ROUSING HOOVER RALLY #Continued from Page A-1.) hour late because of a crowded program. The President was unable to finish within the time reserved on the radio and was cut off the air to allow Roosevelt speak. Discussing prohibition for the his speech ceptance, the President repeated that prohibition should be changed to eliminate "evils" and that States should be given control of the prob. lem with protection from wet States and provision against return of the saloon proposal he the only practical common ground with adequate protection on which this whole question can reach solu. tion. South to Balk Speaking the Democrats. he said "They know that their own Democratic strongholds in the South: If no other, will not accept the proposal for outright repeal of the Eighteenth Amendment with the return of the saloon. and its resultant lack of protection to dry States." As examples of what he called "the great of the Administration Hoover told for the first time his story of the loan by the Reconstruction Corpo ration to the Dawes Bank of Chi cago. and his negotiation of the one year on war debts The constant this episode for political pur poses by Democratic politicians slander upon men of their own party as well cruel injustice General the President said with reference to Bank Tells Dawes Episode. Hoover told of the run on the Dawes Bank and the quick inves tigation which said showed its assets sound but not immediately salable for cash The inquiry he said that of the 122,000 depositors were savings depositors and that their average savings were only $140. Drawing picture of intertwined banking connections the President said that 755 country banks had commercial deposits the Dawes institution and that these banks had 6.500 000 depositors among them other banks with depositors The Recon struction Corporation loans he said, ended the panic the President said "kney and the use that would be made in this campaign of such calumny said that he would not ask for assistance Hoover said that action finally was on the insistence the Democratic members of the Reconstruction Board and the leading Democratic banker of Chicago who was then mentioned candidate for the Presidency and others No Burden on Taxpayer Hoover that the Reconstruc-

9. November 5, 1932 The Valdosta Daily Times Valdosta, GA
Article from The Valdosta Daily Times, November 5, 1932

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Hoover Opponent Page One) continent to his home across the Alto in order vote tion day. Stops route the coast will include halt Elko final probably radio appeal election Invading Wisconsin today, enters state which president the leading Republicans, progressive wing, clared for his Franklin Minnesota he will find the Democrats night drawing support from high in the party. The chief executive spoke Louis last night before crowd that jammed the capacity coliseum. Discussing prohibition for the first time since ceptance, the president repeated prohibition be that to eliminate "evils" and changed that states should given trol of the problem with protection from states and provis ion against return of the saloon. His proposal. he said, the practical common ground protection on which this whole question can reach Speaking of the Democrats, "They know that their Democratic strongholds the South, no will cept the proposal for outright peal of the eighteenth amendment the consequent return of the saloon, and its resultant lack of protection to dry states. examples what he called great constructive of the Mr. Hootold for the first time his story of the loan by the reconstruction corporation the Dawes Bank Chicago, and his negotiation of the one year mora torium war debts. constant misrepresents tion of this episode for political purposes by Democratic politicians slander upon men their own party as well cruel injustice General the president with reference to the Dawes Bank loan. Mr. told the run Dawes bank and quick the investigation which, he showed its assets sound but immediately salable for cash The inquiry showed. he said that of the 122,000 depositors were savings depositors and that their average savings only $140 cash. The presi dent said 755 country banks had commercial deposits in the Dawes these banks institution that had depositors ing other banks with depositors. The recon 000,000 struction corporation loans, said, ended the panic Dawes, the president and appreciated the that would made in this cam paign of such calumny" and said would not ask for assistance. Mr. Hoover said the action finally taken the insistence Democratic members the reconstruction board and the leading Democratic banker Chicago was then mentioned candidate for the presidency and others. At the very outset of his dress. the president said Demoeratic campaign is campaign of issues: paign avoidances. Hoover said that although Roosevelt said he would doubt ambiguity where he stands on any question moment before the country people the country unable find the method which will execute his point program for farm relief.' The chief executive listed what he called other by Democratic candidate. including he proposes do spect the soldiers bonus. "Whether he repudiates the Democratic proposals for $350.additional expenditures in the last session of congress." "Whether, he proposes negotiate reciprocal tariffs. will omit the agricultural com modities from these agreements

10. November 5, 1932 The World-News Roanoke, VA
Article from The World-News, November 5, 1932

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HOOVER TO SPEAK IN ST. PAUL Discusses Prohibition For the First Time Since His Speech of Acceptance in St. Louis Is On His Way to California to Cast His Vote. B, Nathan Robertson. (Associated Press Staff Writer.) Aboard Presidential Special. En Route to St. Paul, Nov. President Hoover carried his final drive re-election back into Illinois, toward Wisconsin and Minnesota today after bidding for Missouri's support with the assertion that the Democrats conducting "campaign of avoidance" including "evasions" on the prohibition issue. On his way to California to vote. the president headed today for St. Paul where he makes major campaign speech tonight Central standard time after address at and then rear platform appearances along the From Paul, he will dash across the continent to his home Palo Alto in order to vote election day Stops en route the coast include halt in probably Elko for final appeal. president will speak Lake City in the Mormon tabernacle. Wisconsin today. the president enters the leading Republicans, the gressive declared his ponent, Franklin Roosevelt In Minnesota tonight find Democrats drawing support from high figures the Farmer-Labor party. The chief executive spoke Louis crowd that Jammed 11,000 after day started fore breakfast formal half an because his crowd. ed the president unable finish within time reserved on the radio and was cut off the air Roosevelt speak Discussing prohibition for the first time since his speech .cceptance the president that prohibition should be changed eliminate "evils" and that States be given trol the from wet and provision against return the His proposal, he said the only ground quate which this whole question can reach solution Speaking of the he said "They know that own Democra strongholds in the South. no other will accept the proposal for outright repeal the eighteenth amendment with the consequent the and lack of protection dry States to Dawes Bank As examples what he called "the measures the Mr. Hoover told for the time his the loan by the Corporation to the bank Chicago, his negotiation the one year moratorium on misrepresentation episode for political purposes Democratic politicians slander party well cruel injustice to General the president said with reference to th Dawes Mr. Hoover told of the run on the Dawes bank and the quick said. showed its assets but not immediately saleable for The inquiry showed said. that of 122,000 ings deposits and their average savings only $140 Drawing picture of entertwined connections, the president said 755 banks had commercial deposits in the that these banks had 6,500,000 depositors including 000 other depositors. The Reconstruction Corporathe panic Dawes. the said and that made this campaign calumny" and would not ask for said action finally taken the members of the construction board the leading banker of Chicago mentioned as candidate for the others Mr. Hoover the had intervened in 5,000 less He added upon the taxpayer. But salvation millions jobs and After telling the historic negotiations which led up the moratorium the the proposal of the the history what would tragedy whole civilization the very address the the campaign campaign campaign of avoidances.

11. December 3, 1932 Evening Star Washington, DC
Article from Evening Star, December 3, 1932

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# DEPOSITS MOUNT # IN LARGER CITIES Increase Laid to Hoarding Decline and Transfers From Interior. BY CHARLES F. SPEARE. Special Dispatch to The Star. NEW YORK, December 3.—One of the striking features of the current banking situation is the increase of the deposits of institutions in the larger cities. To illustrate: Twenty-one members of the New York Clearing House Association at the end of June showed deposits of $6,099,000,000. Of these, $5,361,000,000 were payable on demand. At the end of November these same banks and trust companies had deposits of $6,947,000,000, an increase in five months of nearly $850,000,000, or 14 per cent. Only one of the 21 institutions in June had demand deposits in excess of $1,000,000,000. The latest report shows two institutions with demand deposits above that figure. The members of the Boston Clearing House and those of the Philadelphia association also indicate deposit gains in the second half of this year, the one of $64,000,000 and the other of $80,000,000. The total gain in deposits in these three Eastern cities has been, therefore, nearly $1,000,000,000. Shifted From Interior. Some portion of the deposit expansion in these cities is due to a transfer of funds from the interior. It reflects a phase of banking caution that has developed since the period of acute banking troubles in the Middle West, which continued from the early part of the Winter until the end of June. There were large deposit transfers from Chicago to New York during the runs in the former city, which were only checked by the $80,000,000 loan of the Reconstruction Finance Corporation to the Dawes Bank. There are, however, other factors entering into the steady accumulation of idle funds in central reserve cities. Prominent among them is the heavy import of gold, which is rapidly offsetting the amount of gold exported to France last Spring. There also has been a considerable return of hoarded currency to the banks. This has materially reduced the amount, at one time estimated as high as $1,500,000,000, that had been taken out of circulation. A new influence is the issuance of $138,000,000 of new national bank notes under the provisions of the act passed by the last Congress. This has added its quota to the constantly increasing volume of unemployed funds, as the emisison of the new notes has forced a like amount of other types of currency back into the banks. Small Banks Losing. The experience of many interior banks is in contrast with that of the large metropolitan institutions. They are closer to the individuals who are of a demand and time character. They are closer to the individuals who are affected by reduced incomes or lack of employment. The testimony of large numbers of country banks is that their depositors are drawing on their savings accounts in order to balance the gap between income and outgo, or as the only remaining reserve where income has totally disappeared. The last report of the savings banks of the country showed a moderate decrease in deposits. Here again there is the contrast between savings banks as a whole and those in the New York area, which have frequently shown substantial monthly gains. The dilemma of the banks whose deposits are rising is to find profitable employment for them. In spite of efforts to abandon all payments of interest on deposits, members of the New York Clearing House Association are allowing depositors a nominal compensation for their funds. This permits them to buy United States Treasury certificates on a 2½ to 3¼ per cent basis and make a satisfactory return on the investment. They have more recently been inclined to enter the market for long-term high-grade public utility bonds on which yields range from 4½ to 4¾ per cent. (Copyright, 1932.)