Accommodated withdrawals, Borrowed from banks or large institutions, Fed/other loan, Capital injected, Partial suspension, Full suspension, Books examined
Receivership Details
Depositor recovery rate
89.5%
Date receivership started
1933-05-11
Share of assets assessed as good
62.6%
Share of assets assessed as doubtful
30.8%
Share of assets assessed as worthless
6.5%
Description
Contemporary articles describe heavy withdrawals of 'smart money' and other checks drawn on the Guardian National in the days before Michigan's Feb. 14, 1933 banking holiday (a run/large withdrawals). The governor ordered a statewide banking holiday (suspension) and federal conservators were later appointed; assets were taken over and new banks (backed by Ford/RFC/GM) were organized to replace the old institutions. The Guardian did not resume as the same open bank; it was placed in conservatorship/receivership and its assets/depositors were handled via reorganizations and payout plans (permanent closure of the original institution). Dates are taken from the articles' reported timeline (Feb–Mar 1933) and later payout notices in late 1933–Feb 1934.
Events (7)
1.May 22, 1907Chartered
Source
historical_nic
2.February 10, 1933Run
Cause
Local Banks
Cause Details
Large withdrawals (including 'smart money' and checks) were made from the Guardian National in days immediately before the statewide banking holiday; withdrawals tied to the Detroit clearing system and movements at other banks.
Measures
No specific in-branch measures described in articles; larger conferences with federal authorities and plans to reorganize/take over bank assets were undertaken.
Newspaper Excerpt
numerous instances of the withdrawal of 'smart money' from the Guardian bank just before the declaration Feb. 14 of Gov. Comstock's state banking holiday.
Source
newspapers
3.February 14, 1933Suspension
Cause
Government Action
Cause Details
Michigan governor proclaimed a statewide banking holiday (suspension of bank functions) in response to banking instability and heavy withdrawals in the state, including Detroit banks.
Newspaper Excerpt
Gov. William A. Comstock closed the State's financial institutions February 14, ordering an eight-day holiday.
Source
newspapers
4.March 21, 1933Receivership
Newspaper Excerpt
The United States Government ... Paul C. Keyes, conservator for the First National and B. C. Schram, Conservator for the Guardian National. New bank (National Bank of Detroit) will take over part of the assets of the First National bank and the Guardian National Bank of Commerce, Detroit and assume part of the deposits (March 21 articles). R.F.C. and Ford/GM backing arranged to reorganize/take over assets and form new banks to supplant present institutions (late Feb–Mar 1933).
Source
newspapers
5.May 11, 1933Receivership
Source
historical_nic
6.November 15, 1933Other
Newspaper Excerpt
Comptroller ... that a dividend to be paid ... will bring the total paid by this institution to 60 per cent ... On Nov. 15, possibly sooner ... 846,949 depositors the Guardian National Bank of Commerce and the First National Bank ... will be paid by receivers ...
Source
newspapers
7.February 23, 1934Other
Newspaper Excerpt
Announcement that 136,000 depositors with $1,000 or less in the Guardian National Bank of Commerce when it closed will be paid in full through plan ... payment will begin February 23 (1934).
Source
newspapers
Newspaper Articles (24)
1.February 23, 1933The Daily TimesDavenport, IA
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Immediate Payment Of by Detroit Banks Is Planned
DETROIT, Feb. ated Detroit News day says that payment 50 cent deposits in the First and the Guardian National Bank of Commerce Detroit is proposed under reorganization plans now being considered, contemplating the ganization Detroit of two new national banks. The Reconstruction Finance Corp., the News says, has been asked to advance in the neighborhood of to place the plans in effect, and further said that aid is expected from the Federal Reserve bank and New York banks. were understood to under way in New York and Washington concerning the plans under consideration, the paper The Guardian National Bank of Commerce the units the Guardian Detroit Union Group, Inc., some 20 banks operating trust companies in Michigan. other of the members the Guardian Group is the Union Guardian Trust Co., in which Governor William Comstock, in declaring banking holiday Michigan declared "acute financial existed. The bank has emergency" seven other units in the Detroit Metropolitan area. Rudolph Reichert, state banking commissioner, said that most banks were "doing business in the best possible and lated the state's bankers on their during the He said that most banks were cashing checks that had not ready been the depository percentage basis laid down the governor's second proclamation issued Tuesday. Generally, the banks were following plan under operation for the past week in Detroit, lowing depositors withdraw per cent of their deposits. In Detroit at the opening hour there were no lineups outside the banks and few instances of unusual numbers of customers inside. Silent Loan Feb. Couzens Vandenberg of Michigan day declined discuss reports the loan to two
2.February 25, 1933The Atlanta ConstitutionAtlanta, GA
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MICHIGAN STUDIES NEW BANK PLANS
Organization of State Reserve Bank Proposed by Senator Orr.
DETROIT, Feb. plans designed aid in releasing billion and half dollars in bank deposits were under scrutiny in Michigan tonight, while bankers awaited and national legislation for the 530 banks operating restrictions. One plan, calling for the issuance of transferra certificates against the frozen deposits of banks, brought forward by Rudolph E. Reichert, state banking commissioner, who under legislation pending before the state legislature would come the virtual banking dictator Michigan. The other, favoring the organization of state reserve was proposed by State Senator HerOrr, Caro, (Mich.) banker. plans make available at once 50 per cent of all deposits by organizing two take over the liquid assets of the First NationDetroit and the Guardian National Bank of Detroit, the two largest in city, were under cussion. Further it appeared, action tomorrow by the house in Washington on the Couzens giving powers over national banks to the comptroller of the currency. The olution was approve imously day by the house committee. Reichert's plan drew state-wide today. He proposed, in effect, the issuance of ferable which would be acceptable in virtually all purposes the same as currency. They would be issued the total volume of deposits that the banks are unable to pay cash. The only limitation circulation, Reichert said, would be the willingness of creditors to accept certificates on their face value. The certificates, Reichert said, aftbeing employed to pay rent, buy food, and other essentials, could be turned into the banks at full face value in payment of obligations owed to the banks. State Senator Orr, declaring he is proceeding with plan for organization of a state reserve bank, said reof many outstate banks now are held in Detroit institutions. which are withdrawals on the same basis as that of other itors- per cent of the total deposited. Under his reserve funds would be carried in outside In most parts of the state today, banks continued to pay out five per cent to depositors.
3.February 26, 1933The Philadelphia InquirerPhiladelphia, PA
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Michigan Bankers Hail Passage of Couzens Bill
DETROIT Feb 25 (A. Michigan's bankers, eager for legislation which would lift. at least in part, continued limitations on banking business, tonight saw in passage of the Couzens bill Washington the first definite step toward the State's jam The bill signed by the President late today will give the comptroller of the the same emergency power over national banks as may be enacted by State Legislatures. In Michigan, legislation is now pending enable the segregation frozen assets in banks, and to make to depositors funds up to the percentage of liquid After eight days of almost commactivity banking in Lower Michigan and three more days of operation under rigid limitations laid down by Governor William A. Comstock group of merchants today made the first demands for of the restrictions proclaimed on 14. Seventyfive business demanded of the Governor in Lansing that he use his newly acquired extraordinary powers to force the banks to open for more business. The group told the Governor they were unable to with their funds tied up in banks, and demanded that he require financial institutions remove restrictions in commercial checking accounts while continuing to safeguard savings withdrawals. The Governor ex. plained that reserves of many outState banks are tied up in Detroit are releasing only per cent. He said that only Federal legislation could compel the Detroit banks to release more. In Detroit, meanwhile conferences continued between large depositors officials of the First National- the Guardian National of Commerce on the proposed formation two new banks, was expected. will release between 40 and 50 per cent. of deThe Detroit Clearing House Association plans scrip as medium of exchange in the city pending termination of the holiday The method was adopted as the most effective device for keeping up business and industrial activity Details of plan remained to be worked out.
4.February 27, 1933The Washington TimesWashington, DC
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R.F.C. BACKING TO DETROIT MEET CRISIS Motor Magnate to Name Officers and Directors; Bans Speculation DETROIT, Feb. 27 (I.N.S.). Henry Ford, with the power of his millions, came today to the aid of Michigan's beleagured banks. He will become owner and controller of Detroit's largest two banks, which will be established to supplant present institutions, and he served notice that he intends to run the new banks according to his own "revolutionary" ideas of banking. The Ford banks will make no be of safe "speculative places loans." deposit They invest- and will agencies for "productive" ment. The motor magnate broke the news last night as Michigan was entering its third week virtually without banking facilities. Ford to Name Officers Gov. William A. Comstock closed the State's financial institutions February 14, ordering an eight-day holiday. Drastic restrictions in withdrawals had been in effect all last week. Ford will subscribe $8,250,000 as the entire capital for creation of two new banks, to be known as the People's National and the Manufacturers National. The People's will supplant the present First National and the Manufacturers' will take the place of the present Guardian National Bank of Commerce. Ford will choose officers and directors for both. Backed by a $78,000,000 R. F. C. loan, the two new banks will take over the liquid assets of the old institutions and pay depositors 30 per cent at once. May Merge Later The remainder will be paid later as frozen assets of the old banks are liquidated. Later the new banks may be merged. Posting of the new capital to be supplied by Ford was the major condition upon which the R. F. C. had agreed last week to grant loans for establishment of the banks. According to a statement issued from late was Thursday last the night, to Ford allow Motor Ford "freezing" Company asked of some of his deposits in the two old banks and to accept stock in the new institutions in return. His reply was a definite refusal. Failing to obtain Ford's aid, officials of the First National and Guardian banks strove desperately to raise capital elsewhere. Ford Ideas Prevail Friday they were ready to admit that without assistance from Mr. Ford, or some association of him with the new banks, their task was hopeless. At this juncture, Henry and Edsel Ford made their offer to join in the creation of two new banks, matching $11,000,000 ith that part of the banking experience and conscience of Detroit which should declare itself in harmony with Ford ideas of how banks should be managed. Saturday the R. F. C. reduced the amount it was willing to loan from $135,000,000 to 47,000,000 and set the necessary capital to $8,250,000. LANSING Mich., Feb. 27 (I.N.S.). he Federal Government is p werless to force Detroit National Banks to release reserve deposits belonging to 516 small banks throughout Michigan, Secretary of the Treasury Mills said today in a telegram to Gov. William A. Comstock. The State government fears that unless the reserve deposits tied up in Detroit are released, small banks may be forced to remain closed indefinitely.
5.February 27, 1933The DispatchMoline, IL
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Detroit Institutions to Buttressed by Millions of Auto Baron.
SEEKS ADVICE
Governor Plans to Hold Conference with Leading Citizens.
Detroit, Detroit banks, buttressed by the lions Henry Ford, today became the keystone of plans to lead out of the difficulties which resulted in the proclamation of statewide holiday two weeks ago. The new banks, whose capital will consist of $8,250,000 furnished by Ford and his son, Edsel, pected to open for business Wednesday. They will be built from the liquid assets of the First National bank and the Guardian National Bank Commerce, whose depositors able to receive immediately about percent of their deposits. Disbursement of the remaining 70 percent must await the liquidation the assets of the two banks.
Fast Moving Development. The Ford climaxed weekend of fast moving developduring which of the First National and the National accepted loan from the Finance corporation to be used in the formathe new banks. The Fords' offer to subscribe the capital stock of the banks accepted by directors and stockholders the First National the Guardian grants and his son right to name the official sonnel of the new institutions and to ultimately merge them into ganization These rights were cifically by the Under the plan the Fords will put for the First National and of the Guardian tional. Of the will to the bank built out of First National the remainder to the bank to be from the Guardian National.
Ford Policy.
Henry Ford's alone" policy been given another striking manifestation in his undertaking up two new banks to relieve the banking situation in Detroit. Under the terms of his officer, accepted after numerous other proposals had been discussed length at failed of Ford his Edsel, are the in the two stitutions, unless they choose otheralone" long has been the policy. Back in the days when automobile industry just getting started threatened impasse by the famed Selden suit. patent several motor combined opposing action, but ultimately they dropped out and left alone to He carry finally victorious and subsequently that but for the victory could have been an automoindustry such there
Maryland Solution.
Baltimore, Feb. Gov. Albert Ritchie today the advice citizens" bank legislation. described "those who and reflect the the general depositing pubto confer with Maryland's chief the began the second of its financial holiday. was late after steady from Baltimore banks had brought financial crisis. With exceptions, financial institutions banks, and loan associations and the Baltimore stock exchange, were holiday was expected Wednesday.
Seeks Outside Advice.
In making the announcement that seeking outside advice, Ritchie said: legislation under consideration must prepared cooperation with bankers, know the practical problems must met, want the and help those who are bankers and who reflect the the general depositing pub- state legislature. before which must convenes Annapolis
6.February 27, 1933The Macon NewsMacon, GA
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U. S. Moves to Strengthen Banks
NEW TREASURY HEAD TALKS TO MILLS
Woodin Called Into Conference as Federal Aid Is Extended Institutions
MONEY TO BE ADVANCED MICHIGAN ORGANIZATION
Feb. 27. The federal government Monday prepared to exert all available to strengthen weakened links in the country' banking system. William H. Woodin, secretary of the was here conference the outgoing are to act, not the said. With those words he turned aside all queries regarding the banking situations caused Michigan and Maryland to close their banks temporarily and led banks in number of Ohio cities limit withMills Sunday conferChairman Eugene Meyer of the federal reserve board assistance the treasury the banks could Directors the Reconstruction Finance corporation continued their study the They met in two protracted secret sessions Sun- m unusually authoritative sources was reported the R. F. has agreed to the two big Detroit banks reorganized new capital supplied by Henry Ford. said in the same quarter that an additional $40.would advanced by other financial institutions
FORD FINANCES two BANKS Detroit buttressed the lions Henry Monday came the of plans lead Michigan out of the difficulties which in the of statewide banking holiday two The banks whose capital will consist 250,000 furnished by Mr. and his are expected to open for business They be built from the of the First National Bank and the Guardian National Bank of whose depositors be able receive immediately about cent of their Disbursement remaining 70 per cent must await the Continued on Page
7.March 21, 1933Hickory Daily RecordHickory, NC
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New Detroit Bank Formed With Capital; Aid
WASHINGTON, March formation bank, the National Bank Detroit, capital of twenty-five lions dollars was day by the Corporand Alfred Sloan, dent of the General Motors corSecretarv Woodin approved the The announcement was made treasury, where been for days solution Detroit banking problems. bank will take over part of the assets the First National bank and the Guardian National Bank Commerce Detroit and sume part the deposits. Half of the capital. will be form of subscription the common stock and has paid by General Motors Corporation. The balance has been supplied the United States government through the Reconstruction nance form subscription to the preferred
8.March 21, 1933Detroit Free PressDetroit, MI
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Who Looks After the Small Depositor? Why, Uncle Sam
By Clifford A. Prevost
The great bulk of the hundreds of millions tied up in the First National Bank and in the Guardian National Bank of Commerce represents the savings of some 500,000 smal' depositors. Their voices have not been heard in the long series of conferences that have been held in an effort to resume normal banking activities in Michigan. Just who represents the small depositors?
The answer is easy. Their interests could be in no better hands. Uncle Sam is looking after them-and Uncle Sam asks no lawyer's retainer and no re- ceiver's fees.
The United States Government taking care of the small depositor, and if the United States cannot be trusted to give him square deal, then there is nobody on earth that can.
The Government has sent to Detroit the two best known and most experienced banking experts of the Treasury Department. They are Paul C. Keyes, conservator for the First National and B. C. Schram, Conservator for the Guardian National. "We are here as the agents of the United States Government, said Mr. Keyes. "Uncle Sam is vitally interested in the small depositor, and our task in the present banking situation to see that all are treated alike."
"Our business is to see that the big depositor does not have any advantage over the little fellow." added Mr. Schram. "We are more interested in the small depositors than we are in the large, because there are more of them. In the handling of the conservatorships of the two National banks, it is our purpose to see that the man with $100,000 deposit gets no advantage over the man with dollar in the bank, for the reason that the latter probably needs the money more than his more wealthy fellow depositor." "The little fellow has not been called into conference, because money is needed to organize new bank," continued Mr. Keyes. "Therefore the large depositors were consulted, because they must subscribe the capita' essential to the establishment of the proposed bank." Keyes and Schram are known the Federal service as career men. They have made the handling of bank affairs the work of lifetime.
They do not receive large salaries, are not paid upon fee basis, as the case in State receiverships, and their salaries are met by the Federal Government. In Detroit they are the absolute authority in the liquidation of the two National banks. Both conservators have had wide experience as receivers for the United States Government. Keyes, now 50 years old, has been in the Federal service for 28 years. Schram has been an active receiver for the past 12 years They have traveled for the Government in all states of the Union. Despite all the confusion that has followed the closing of the banks by order of Gov. Comstock, this one fact stands out clearly and should not be lost sight of:
It is to the best interests of the United States Government to get Detroit back on its feet as quickly as possible and in the most satisfactory manner to all concerned.
The motor car manufacture is one of the key industries of America. Upon its swinging back into its stride is very largely dependent the return of prosperity all America. Therefore, from the standpoint of good business-and practical politics, too-it is vital that Detroit be given every aid possible. The much discussed offset policy, the placing of deposits against debts at the bank, is provided for in law and cannot be changed by the conservators. However, it sounds more drastic than looks. The conservators have plained over and over again that they do come wreck business. but to help The offset policy, pointed out, does not mean the wiping out of business and industrial concerns. They are authorized under the law exercise their best judgment, and it is not the policy of the Government to be harsh, but to be helpful The Government has no fees to collect and no profit to make. If they can take an involved situation and straighten out and bring order and happiness to achievement their reward. They approach their problems impersonally, they have no local connections and their only purpose is to get the depositors their money quickly as possible without injuring the financial structure of the community in which they are work. The little depositors could not have their interests in bethands than those of Uncle Sam. That is the big thing for every depositor, large and small, to keep always in mind.
9.March 25, 1933The Roanoke TimesRoanoke, VA
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DETROITERS RUSH BANK TO DEPOSIT THEIR FUNDS
Detroit Mich. March 24 The per cent liquid and 100 fool deposit money on the bank's day turned away savings they that accepting only could deposits ing tellers the Total deposits for the day More than had been posited largest deposit was the deposit was that General The known the Guardian National and General Motors and the finance the tablished under new federal
10.March 30, 1933The Plain DealerCleveland, OH
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U. S. Union Trust Gets $25,000,000 Aid;
CHARGES FRAUD IN 2 DETROIT BANKS
Receiver of Mt. Clemens Bank in Suit Accuses Holding Companies.
March Detroit's largest banking ing companies for inoperative First and the Guardian National Bank of Commerce. tonight faced new difficulties as charges of deceit and trickery" were made against them the receiver for outstate bank The Detroit Bankers Co. the Group. facing ship with the Detroit banks and banking officials were charged Macy Watkins receiver the Citizens Savings Bank of Clemens, attempting to their ship majority of stock in the The charge was made in state ment filed Circuit Court petitioning for authorty levy 100 assessment on all stockholders of the Mount Clemens Bank, because bank's have preciated The asked for authority collect from the bring suit against of the two operative national banks Hearing the petition set for April Action for the appointment of holding was group of stockholders each group today petition for the Detroit Bankers Co filed by Thomas G. Long. attor for Hearing on petition mornThe included denial of all charges the suit filed by receivership for the company Aaron Kurland chairman of the Michigan Depositors Co-Operative League, oppose voluntary would permit the company to which name its The filed denies the First Bank of unable pay depositors that saying could banking by comptroller of
It denies there an but admits against that the Detroit Bankers panies the receiver for the by Mount and dition the following banks and Fred executive mercial Bank Harry former vice Bank president the First National First National the Guardian National the Common Bank State and the Detroit Bank banking and personal He charged the Detroit obtained in the and for payment the Bank Clemens the that of the earning Federal Reserve this procedure He the Detroit tually shares of Mount through ownership part through teller in the National The receiver the holding
11.June 27, 1933The Times LeaderWilkes-Barre, PA
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MILLIONS TAKEN OF DEPOSITS
Chairman Denies He Was Connected With Houston Withdrawal
Detroit, June 26 (P)-A witness' charge long-standing Wall Street plot to "strangle" Henry Ford lay directly behind the of two national banks in Detroit rested tonight in the records grand jury investigating the city's involved banking afThe charge, the most sensational in two weeks of open testimony, made by Herbert Wilkin, Detroit banker, in detailing his knowledge of affairs leading up to Guardian Naclosing Bank which, tional First National BankDetroit, did reopen after Michigan Street believed deposits had Ford's chance, declared Wilkin, deplete working capital that must broke. think they them was the time finish realized they fooled." But were sadly testimony the witness startled hearers the declaration that $4,000,000 banks from the statewide holiday before February 14. He proclaimed withdrawals those such and the Second Michigan National Bank Houston, asserted many checks He cleared through Detroit Clearing House after heliday had been declared. was the home Houston, Jesse Corin testiHe link the failure National Bank from Guardian which he said the loan drawn, to obtain Houston withdrawals, with the saying the the impression made, Wilkin said Jones with bank, while was received from testifying himself and Jones officials the Houston bank, from that the with the Texas connections with curt answers, Firmly, Wilkin what gave Wall Street termed Harry questioning Harry Keidan, before Judge the one-man jury, which sitting as public who remained on charged that stand assets of the day, National were under-valued Federal bank examiners, charged it for "fellows cooperating the bank back price wanted Most which not Saginaw Bank's stock was bank finally purchased Perry Shorts, director Bank of Detroit, and associates, Wilkins price He offer was $140,000, and, the group went into the offer to $54 bank's for and finally accepted testified. which conferred with Awalt, then comptroller of the curWilkin said Awalt told too all country. Now, they tough in any place except Judge Keidan. can't find any other place," "But they were tough plenty tough," said Wilkin.
12.June 27, 1933The TribuneScranton, PA
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Wall Street Plot On Ford Charged In Bank Crashes
(Continued from First Page) the Second National Bank of Houston, He also asserted many checks had been cleared through eDetroit ing house the bank holiday had been declared. Houston, he said. was the home town of Jesse H. Jones, chairman of the Reconstruction Finance corporation He proceeded in lin kthe failure of the G' rdian National bank. from which he said the money was withdrawn, to obtain loan with the Houston withdrawals, saying "wher. the withdrawals ere made, got the impression we going get the loan. In testimony, Wilkin said he understood was connected with the Houston bank. but while he was testifying word was received from Jones himself Washington, and from officials of the Houston bank, that the chairman had no connections with the Texas institution Firmly and with answers, Wilkin his story of what he termed "the Wall street plot,' in questioning by Prosecutor Harry S. Toy before Judge Harry Keidan, sitting as one-man jury, which is holding public sessions. Wilkin, who remained the stand all day, charged that the assets of the Second National Bank of Saginaw were undervalued by federal bank examiners, and charged was for the
13.June 27, 1933Richmond Times-DispatchRichmond, VA
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Banker Alleges Wall St. "Plot" Against Ford
Heavy Withdrawals Were Made Before Holiday to Tie Up Deposits, Charge
DETROIT June 26-(P)-A witness' charge that long-standing Wall Street plot to "strangle" Henry Ford financially lay directly behind the closing of two national banks in Detroit tonight rested in the records of one-man grand jury investigating the city's involved banking afThe charge, the most sensational in two weeks of open testimony, was made by Herbert R. Wilkin. Detroit banker, in detailing his knowledge of affairs leading up to the closing of the Guardian National Bank of Commerce which, with the First National Bank-Detroit, did not reopen after the Michigan banking holiday "Wall Street believed it had chance, by tying up Ford's deposits in the Michigan banks declared Wilkin to so deplete his working capital that he must deal with them
14.June 27, 1933The Lewiston Daily SunLewiston, ME
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WALL STREET TRIED TO BUST FORD
Banker Links Plot with Closing of Two Detroit National Banks
Tells of Huge Withdrawal by Wife of Sen. Couzens Before State Bank Holiday
Detroit, June 26-(P)-A witness charged today that Wall Street plot to "strangle" Henry Ford lay directly behind the ing National banks in Detroit. The testimony was before grand investigating the involved banking affairs. The charge. the most sensational in weeks open testimony made by Herbert Detroit banker, detailing his of leading the closing Guardian tional Bank with the First National troit, reopen after Michigan banking holiday. "Wall Street believed had tying Ford's deposits declared Wilkin, deplete his working capital that must them broke think they realized that here was the time to finish
15.June 29, 1933Mid-West ProgressiveMuscatine, IA
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WALL ST. GRIP ON DETROIT'S
Bankers Throttled Two Banks To "Get" Ford Says Witness
(Continued from page one) wide holiday was proclaimed February 14. He said two of the withdrawals were those of Mrs. James Couzens, wife of the Michigan senator, and the Second National Bank of Houston, Texas. Cleared Checks He also asserted many checks had been cleared through the Detroit Clearing House after the bank holiday had been declared. Houston, he said, was the home town of Jesse H. Jones, chairman of the Reconstruction Finance Corporation. He proceeded to link failure of the Guardian National Bank, from which he said the money was withdrawn, to obtain an R. F. C. loan, with the Houston withdrawals, saying, "When the withdrawals were made I got the impression we were not going to get the loan."
Bank Sold The bank finally was purchased by R. Perry Shorts, director of the new National Bank of Detroit, and a group of associates, Wilkin saying the price was $400,000. He said their first offer was $140,000 and, after the group went into receivership they reduced the offer to $54,000. The bank's receiver, however, held out for $500,000 and finally accepted $400,000, Wilkin testified. Wilkin gave as the basis for his opinion "an effort by almost the identical interests" in 1920-'21 toward the same end and the fact that the New York banks, after Henry and Edsel Ford announced their plans to finance two new banks in Detroit, discovered "a technicality or an excuse" to refuse the First National the loan of $20,000,000 which had been agreed upon as part of the arrangement for setting up two new banks. Wilkin had previously testified that there were numerous instances of the withdrawal of "smart money" from the Guardian bank just before the declaration Feb. 14 of Gov. Comstock's state banking holiday. Late Withdrawals Wilkin testified he had made a personal investigation of clearings made after the signing of Gov. Comstock's proclamation at 2:30 a. m. Tuesday, Feb. 14. He found, according to his testimony, that between the actual declaration and the following Thursday noon "approximately $4,000,000 in checks payable to banks were cleared." Asked by Prosecutor Harry S. Toy whether this "clearing constituted doing a banking business such as was prohibited by the governor's proclamation," Wilkin answered "certainly." Wilkin, who became vice president of the Union Guardian Trust company at the request of Ford, stated his belief that the new National Bank of Detroit is "the child of Wall street," adding that it had been planned before the state banking holiday and before the two old banks were ever closed.
16.July 14, 1933The Flint JournalFlint, MI
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Statement Upon Banking Decision Affecting Detroit Situation
Washington, July Jones, chairman Reconstruction Finance yesterday the following explanation the decision: after examination praisal of the assets the First National the Guardian National Bank Commerce by the receivers resenting the comptroller the examiners for the currency, corporation, that neither of these banks or ganized to pay depositors 100 per These banks were closed with other Michigan order the governor of Michigan There been many them their depositors and the lic confused to their real condiThere no of any contrary, directors officials The Finance tion and Treasury department the greatest possible sympathy for depositors and the tire the of but ate to state thousand banks the country have able reopen, and the feelings and disappointments of depositors and probably different section the distressing indihis funds either temporarily tied closed bank, suffer loss, equally distressing lose their investment, double be able that United States has pathetic consideration by the Treasury have Detroit and Before the bank holiday ordered directors and officials Finance corporation made effort prevent bank They fered loans these banks the extent authorized by After the bank granted of caused the Bank of Detroit. This for the purpose, not only of prowith banking facilities, the these two substantial their deposits. more than leased depositors, Detroit sound bank. With to being of further assistance these positors little delay directors of the prepared, upon the the comptroller of the receivers of each these banks, substantial amounts. This, made possible by in values, and after the securities now held by the corporation is willing to the the Guardian Bank Comtional distribution positors this time of original deposits, and leave ficient meet other liabilities the bank ratable cover his This made face amount, depending upon the exact amount would leave the receiver assets uncertain amount, assets and the equity might be used as the nucleus The deposit liability is much larger First National there litigation pending that must be account any further payments can be made depositors. that the raised this highly The gladly organization when plan agreed in this respect, and for the purpose the possible the First the poration prepared upon proval the comptroller the loans This, itself. permit distrithe depositors of their original would mean approximately
This additional of $50.together approximately the would be collateral round view the pending litigation, the this loan, disbursement the funds, depend upon the R. and comptroller the satisfied the legality propriety of from the collateral that the loans the First National bank. remaining assets the face sible National bank. funds provided the stockholders enable depositors menevents, the depositors of these banks made available approximately original deposits, for the balance cluding the stockholders' liability proper half Detroit, of the all and and the Treas efforts adjust the banking situation in Detroit. and feeling. the time of the organizathe National Bank of Detroit money as possible positors banks, these were quested least common Detroit to merit confidence. Mr. Alfred Sloan, Donaldson for General Motors, willingly subscribed common and according offered the pubthey felt hat could other ways, did directly Ford other the Fords and others Detroit there preferred stock The payment Guardian National Bank depositors full bank the the State bank, of Dearborn This Detroit another demonstrates ticability co-operation tween government dustry the general welfare. big new bank the National The Ford interests, General Motors have made that they engage banking made cilities, and to possible deposits closed banks.
17.November 3, 1933Detroit Free PressDetroit, MI
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Payoff Details
Definite Date Yet to Be Announced
Nov. comptroller the today that would be paid month to 846,949 depositors the Guardian National Bank of Comthe First National Bank of O'Connor said that the dividend to be the Bank would cent, bring the total paid by this institution to 60 per for The First National Bank divi will to bringing the total paid by this to per cent, for $168,992,357 Statement of Comptroller
The statement said "On Nov. 15, possibly sooner 846,949 depositors the two large closed Detroit Guardian National Bank Commerce and the First Bank paid by receiv those The receivers of the two Detroit banks and their staffs ing day and night an effort pay these large dividends positors possible. Present are that the middle month, the be completed the date be announced. "The dividend to be paid the Guardian cent claims, of $19, and will bring the paid to 60 per cent, of $58,338,958
18.December 8, 1933Marshall Evening ChronicleMarshall, MI
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Pay 104,000 Small Depositors of the Guardian Nat. Bank
Dec With the R. F. C. ready to advance funds to pay off 104,000 small depositors of the Guardian National Bank of Commerce. De troit, in full. federal officials today studied the legality of proposal making the payment possible. The proposal calls for large depositors to agree to 'freeze' percentage of their future dividends from the bank receiver. Chairman Jessie H. Jones of the R. C. announced Thursday that he had received the proposal He said. however. that his department is unable to make the necessary loan of $4,000.00 to $5,000,000. unAll Comptroller of the Currency T. O'Connor made application The comptroller could not be reached for statement. but at his office It was said no decision has been made on the proposal.
19.December 23, 1933Evening StarWashington, DC
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(Continued From First Page.) far beyond the point of conservatism and losses were not taken in the banks. "They have always been extremely reluctant to charge off losses and have always desired that they be taken from earnings, but the record of earnings of most of these banks is most unsatisfactory and this plan would not permit the elimination of many losses. "The Guardian Detroit Co.'s condition is very unsatisfactory." Commenting on Lord, Leyburn continued: "It is very apparent that Mr. Lord of the Guardian group is not a banker and he never was and never will be one. He is more of the 'glad-hand' promotion type and he always chooses the path of least resistance, which has now created the present problem with the group." Payments on Loans. In his defense, Lord said that of more than $4,000,000 loans to directors, which brought criticism from the committee, $2,100,000 had been paid up to last Summer, and that $1,250,000 had been paid on loans which directors had indorsed or guaranteed. He said of the $3,700,000 of directors' loans to corporations $2,100,000 had been paid up to last Summer. He insisted the actions by the group had in fost "if not all cases" been taken to "protect the interests of the depositors against the effect of a panic on the part of a few." Citing payments that have been made by the Guardian National Bank of Commerce since it has been closed, Lord said "as evidence of its soundness" it had paid more than $105,000,000 with the aid of the Reconstruction Finance Corporation and that he believed it would eventually pay "100 cents on the dollar." Pecora replied that "I will have some evidence when this session is resumed with regard to the condition of these banks when they were closed."
20.February 6, 1934Detroit Free PressDetroit, MI
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Afternoon Papers Scored for Disloyalty to City
To the Editor: one bank positor holds individual troubles secondary the he makes his have against One them deduces erroneously recently the bank receivers First National and Guardian Na. that they "under after months liquidation. own figures dsprove that statement. Another paints almost gloomy picture. Fortunately, the old reliable the "Dynamic City." Readers the afternoon papers could learned from the Free Press from Press dispatches even found the ceeding the closed. They learn those assets enough earned about under stricted receiverWe Detroit know that those bank fair cross section Detroit's wealth and its future prospects know bank rosy picnot going their my fidence for wish newspapers had more faith in their From the time our banks illegally these papers missed opportunity troit headand cruelly misleading stories assailed financial leaders community Now after year of waiting the ordered the heads the Treasury Department, have made public figures. Now papers Detroit fair and curate the trying other papers began thinking city's welfare than for cheap circulation. happened to Chicago and the story out sociated and impartial When returned Detroit, the afternoon buried that the banks when proved by the records, but played values under Why they their own home town ONE OF THE
21.February 13, 1934Oakland TribuneOakland, CA
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Birthday to See Depositors Paid
Feb one day of the anniversary of Michigan's momentous bank holiday, official notice was issued today that 136,000 depositors with $1000 or less the Guardian National Bank of Commerce paid full through plan believed be unique banking history One Governor William Comstock signed the request the state's major ordering bank pended for eight Before that period had the bank holiday other March by Presidential closing banks country Today's announcement told the Guardian National their claims any share per cent payoff nanced by loan, make posCorporation for smaller get all their depositors ready prorata ments totaling the announcement said, will begin February payment amount to about $8,000,000. could would be declare another bank holiday under the circumstances, Comstock believe prevented greater calam- holiday Detroit banks trust alone, the Guardian National and First National did not Since then Guardian deposittors $70,000,000, while First have ceived their accounts, per banks opened, the National Detroit, in the the First National Bank, the of the Guardian quarters Now, with Michigan industries, by motor car midst the greatest upturn and since the the early days which hung over the state gloom
22.February 13, 1934The Muskegon ChronicleMuskegon, MI
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BUILDING IN VIENNA HOUSING FAMILIES SOCIALISTS SHELLED
Austria Government Artillery Smashes Greatest Apartment Edifice in World as Civil War Grips Country; No One Knows How Many Persons Were Killed.
Vienna, Feb. and children were fed to the flames of civil war today as government artillery smashed the Karl Marx apartment building housing 2,000 Socialist families. No one knows how many were killed. The howitzers apparently smashed the third and fourth floors of the greatest apartment building in Europe, the middle arch collapsed. The shelling of the $4,000,000 structure only one corner DEPOSITORS TO of the aspect of Austria today while the forces of Chancellor Engelbert Dollfuss struggled through bloody streets to put BE PAID OFF down the rebellion of the Socialist party. Apparently at least 200 have been killed. 136,000 with $1,000 or Forces of Socialists were in possession of the great munitions plant. forces charged Less in Detroit Guardthe repeatedly desperate attempt take position ian to Get All Men fell. dead and wounded. but there was no time nor opportunity count the Detroit. one The Karl Marx buildday the anniversary Michigan's ing was horrible some momentous bank holiday. veterans fought had seen in notice issued that 136,000 days the World depositors less the Machine blazed from the winGuardian dows the homes laborers at the merce when closed, be paid soldiers sought in through plan believed to found unique banking history. grenades, and tear just ago tomorrow insufficient batter the that Comstock resistance. So they request howitzers. the state's banking associaThe ripped into the ordering bank functions concrete Cement rose suspended eight Before Whole corners of the that period had the building disappeared. holiday had spread Following the artillery attack. up government forces swarmed into the presidential proclamation all banks country. 200 Waive Claims Socialists continued their firing Today's announcement told of comarrangements whereby 200 was against the also larger depositors Guardian Na- tackers. tional waive their claims any share Hand grenades fighting developed in eight cent financed to close the combatants Reconstruction Finance quarters. tion loan, make broke Heavy fighting out (Continued on Page 9. Column 1) again, after hours comparative calm, Floridsdorf factory Man in Critical Socialists, lost fight for Condition Following possession of their captured. Bite by Pet Dog Eleven reported dead in this engagement. same time. defenders Raymond Wheater. 23 years Muskegon Heights, critically the big municipal flat the complex with blood poisoning which developed Schlingerhof, bite by his had been handed an sultation of doctors held afternoon. artillery opened Mr. Wheater. who employed by against the buildings. Field howitmers the Garnaat was suffer- used. minor illness when his dog The held off with ararmy bit was not tillery for hours. The big guns finaltime and were trained into day his fever ascended 106. with machine stationed He the Wheater, corners building former Muskegon Heights police pouring deadly fire into the sergeant. 885 Alberts Field artillery shells great Jean who fragments one corner of fered broken week. building moved hospital his Amelia 1044 socialist nest was home Church. Wood street, who fracture blown Elsewhere, whole hip surface the moved from the hospital to big only an airplane photo capable giving complete The condition Frank Steiner. 508 pockmarked by Amity street, brought For hours, the attackers confined Hackley hospital Saturday themselves machine gun and rifle Clock suffering (Continued on Page 9, Column 3) stroke, reported as
23.February 13, 1934The News JournalWilmington, DE
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DEPOSITORS TO
Announce Pay Off Within Day of Bank Holiday Anniversary
$8,000,000 TO BE GIVEN OUT FEB. 23
DETROIT Feb. 13 one day of the anniversary of Michigan's momentous bank holiday, official notice issued today that 136,000 depositors with $1,000 or less in the Guardian National Bank of Commerce when it closed. will be paid in full through plan believed to be unique in banking history. was just year ago tomorrow that Comstock signed at the request of the State's banking associations, all bank functions pended for eight days. Before that period had elapsed. bank holiday spread other States, be on March Presidential proclamation closing all banks in Today's announcement told of completion of arrangements whereby 200 larger depositors in the Guardian National waive their claims to share an eight cent pay-off financed finance corporation loan, make possible for smaller get all their money All depositors already shared pro-rata payments totalling per cent. The payoff. announcement will bethe about February 23. gin This payment will amount to about It exactly 1.32 o'clock on the morning February 1933, when Governor Comstock signed his "holiday" proclamation after series of conferences in which of the Arthur Ballantine, Secretary of Commerce Roy D. Chapother government officials had participated along with representatives of most Michigan banks.
24.March 1, 1934The Norfolk PressNorfolk, NE
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The announcement that Ponzi, the get-rich-quick wizard, who sold stock in a bogus scheme that netted him a million dollars, has served his 11 years in prison, and is discharged, calls to mind the fact that Ponzi's plan was no different from that of a hundred other plans promoted by recognized "going concerns," but who robbed innocent people just the same. They have not been molested, notwithstanding use of the U. S. mails to sell their worthless goods. There was a gentleman named Kreuger who did some extraordinary things, particularly in selling his scheme to some of our greatest financiers and inducing them to participate in anticipation of abnormal profits. A certain Mr. Lowenstein, who committed suicide by dropping from an airplane while crossing the channel, was another. Mr. Insull, now a fugitive in Greece, was another. Mr. Wiggins of the Chase National bank and representatives of several other banks and promoters were all in the same game. Today we have hundreds of concerns whose capital issue, on which they demand dividends, is from 2 to 10 times the actual value of the business. Hundreds of them have squeezed some of the water out. The late Edward Baker was said to be the largest holder of railroad stocks in the nation— estimated at 200 millions in 1928. When he died and the water was squeezed out, auditors and appraisers reported his entire estate at 75 millions. Then we have the Teapot Dome, the Sinclair deals, the airmail and steamship grabs. During the lifetime of the late Bob LaFollette, ranking member of the Interstate Commerce commission, he always held that the actual value of the railroads was not more than 15,000 millions, a large part of which had been donated by communities as "rights of ways." After LaFollette's death the roads manipulated a new valuation plan on which they demanded rates that would pay dividends. The new plan was based on what it would cost to purchase all the land donated, and what it would cost to replace with new, every building, car, engine and shop equipment. Result: the valuation was increased about 10,000 millions, and rates were increased more than 30 per cent. But the real object was to issue more bonds-and more stock. Billions of bonds were negotiated and millions of stock sold to employes under promises of holding their jobs. Today the bond issues of the railroads are equal to the "replacement costs"-and the stock is not considered. In this matter the President of the American Bankers association denounced the railroads as the only big business that had no sinking fund for bond redemption, yet had the nerve to ask banks to buy their bonds. Poor Ponzi, like Dr. Cook, the
IT NEVER HAPPENS By ART THOMAS
Arctic nagivator sent to the penitentiary for 20 years for being connected with a fake ofl company, was the goat in a free-forall field of get-rich-quick Wal- bank functions suspended for eight days. Before that period had elapsed, the bank holiday movement had spread to other states, to be climaxed on March 4 by a Presidential proclamation closing all banks in the country-and what a deplorable condition was revealed! On Feb. 13, just one year later, announcement was made that, with the assistance of the federal government, and the consent of 200 of the larger depositors, the 136,000 depositors with $1000 or less in the Guardian National Bank of Commerce of Detroit when it closed will be paid in full.
