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28th Banking House Closes for the Week
Melvin Traykor Lays Trouble in Chicago to Mob Hysteria
Chicago -(U.P)-The Ilinois State Bank of Evanston was closed today by the state auditor's office due to depleted reserves. It was the 28th bank of the week in the Chicago area and the second in the suburbs. The institution's capitalization was $100,000 and its deposits at the time of its last statement amounted to $650,000, making it one of the smallest banks to be affected. Chicago's banking system- disordered this week by 28 closings and three mergers-is in good condition, Melvin A. Traylor, president of the First National Bank and one of the nation's leading financiers, told the United Press today. "Public confidence is being restored,' Traylor said. 'Financial interests are working to restore the neighborhood institutions which have closed. Says They are Small "All of the closed banks were small ones. They were relatively unimportant in the city's entire bank ing picture, although their closing must, of course, be greatly regretted. Besides being one of the most pow. erful and tireless workers in Chicago's banking crisis, Traylor has come to be known to thousands of depositors as helpful, sympathetic and understanding. On one occasion, he hurried away from his many duties to help quiet depositors who were starting a run on an outlying bank. Standing on a chair in the lobby, the millionaire banker told the excited patrons that the bank had plenty of cash and deposits were safe. The crowd thinned out and the bank remained open until a.m. bearing out Traylor's statement that every depositor who wished could have his money. The bank still is open. Traylor gave his views of the situation from the same palatial office in the towering First National building from where he aided in directing the quieting of the bank unrest in the last four days. Traylor is tall, dark-haired and kindly-faced man of 55, who rose from a boyhood on a Kentucky farm to his present position as head of a billion dollar institution. Says Situation Stronger "The recent mergers have helped greatly the entire banking situation,' Traylor "Even the closing of the smaller banks was an aid to some extent. The banks closed were the weaker of the city's institutions and their removal from the field leaves the entire structure in a stronger position. "Depositors have ceased making wholesale and we can safely say today that the trouble mainly is past. Many patrons are returning their money to the banks from which they withdrew it in panfew days ago.' Mob hysteria was responsible for the situation which caused the 27 banks to close, Traylor said. Other banking leaders said that the nature of Chicago's population brought about the panic. Chicago has a high percentage of foreign born residents, they declared and many of them do not understand the American banking system. Most of them are thrifty and many of them of nervous temperament, they added. Foreigners Withdraw These characteristics, one banker said, were responsible for the heavy withdrawals and the crowds which milled about the smaller neighborhood banks making withdrawals. Traylor's part in bringing order out of the financial unrest included directing the merger of the First Na. tional and its affiliate, the First Union Trust and Savings, with the Foreman State National and its affiliate, The Foreman State Trust and Savings with assets of almost a billion dollars. He also was one of the leaders in a movement through which the great downtown banks, with total resources of more than $2,500,000,000 went to the aid of outlying banks. In one instance, he guaranteed dollar for dollar the funds of depositors who had started a run on a $17,000,000 bank.
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