First National Bank (Chicago, IL)

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Episode Information

Episode UID
801590
Episode Type
Run → Suspension → Reopening
Bank Type
national
Bank ID
80 national
Charter Number
8
Start Date
June 25, 1932
Location
Chicago, Illinois (41.850, -87.650)

Metadata

Model
gpt-5-mini (chosen from majority vote of a three-model LLM ensemble)
Short Digest
9b153403c53758ff

Response Measures

Accommodated withdrawals, Public signal of financial health, Capital injected, Partial suspension, Full suspension

Other: Management directed a merger of First National with its affiliate First Union Trust & Savings as part of restructuring responses.

Clearinghouse involved: Yes (loan, examination, or other measures)

Events (5)
1. June 22, 1863 Chartered
Source
historical_nic
2. May 1, 1882 Chartered
Source
historical_nic
3. June 25, 1932 Run
Cause
Rumor Or Misinformation
Cause Details
Incipient run reportedly provoked by a plotted demonstration/enemies and anonymous messages frightening depositors.
Measures
President Traylor appeared on banking floors, pleaded for faith; banks put themselves in highly liquid condition.
Newspaper Excerpt
Melvin A. Traylor ... stemmed an incipient run on his $25,000,000 First National bank ... by appearing on the banking floors and pleading for faith.
Source
newspapers
4. March 4, 1933 Suspension
Cause
Government Action
Cause Details
Statewide (and federal-guided) three-day banking holiday / moratorium ordered for Illinois banks.
Newspaper Excerpt
ILLINOIS BANKS ORDERED TO CLOSE FOR THREE DAYS
Source
newspapers
5. March 13, 1933 Reopening
Newspaper Excerpt
Holiday ... ended for 31 Chicago [banks] ... permission for reopening of Chicago banks ... given Woodin Reserve bank night. Later Barrett list state banks authorized reopen their doors this morning for busi-
Source
newspapers

Newspaper Articles (24)
1. June 12, 1931 Lincoln Journal Star Lincoln, NE

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wholesale withdrawals and we can safely say the trouble mainly past. Many patrons are returning their money to the banks from which they withdrew it in panic few days ago.' Mob hysteria was responsible for the situation which caused the twenty-seven banks to close, Traylor said. Other banking leaders said the nature of Chicago's population brought about the panic. Chicago has a high percentage of foreign born residents and many of them do not understand the American banking system. Most of them are thrifty and many of them of nervous temperament. Traylor's part in bringing order out of the financial unrest included directing the merger of the First National and its affiliate. the First Union Trust and Savings, with the

2. June 12, 1931 Lincoln Journal Star Lincoln, NE

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wholesale withdrawals and we can safely say the trouble mainly is past. Many patrons are returning their money to the banks from which they withdrew it in panic a few days ago. Mob hysteria was responsible for the situation which caused the twenty-seven banks to close, Traylor said. Other banking leaders said the nature of Chicago's population brought about the panic. Chicago has high percentage of foreign born residents and many of them do not understand the American banking system. Most of them are thrifty and many of them of nervous temperament. Traylor's part in bringing order out of the financial unrest included directing the merger of the First National and its affiliate. the First Union Trust and Savings, with the

3. June 25, 1931 The Northwest Enterprise Seattle, WA

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LOAD OF MONEY PILED IN FRONT OF CUSTOMERS the past two weeks Chicago suffered the worst financial flurry in its history. Twenwhite banks, several of them with heavy deposits, closed their doors within space three days. The disaster began with the merof the State National banks, institution, with the First National. Half dozimportant institutions which the Foremans controlled were foreed to Depositors throughout the city became panicky. Runs began on the smaller institutions, twenty-four of which closed. in Southside Close Colored people, scarcely recovering from the Binga, Banker's State, and Citizens Trust crashes, suffered severely. The Lincoln State, and State Streets, with $1,000,000 deposits, a good portion of which said to have belonged to colored peo(Continued on Page

4. December 12, 1931 The Macon Telegraph Macon, GA

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HOGAN FILES PETITION Jasper Thomas Hogan, former the defunct yesterday UnitStates and $5,220. the Among Mr. Hogan's liabilities obligation of the First National bank Chicago. secured There obligareceiver of Hatcher, Turpin All went jail default $1,000

5. June 26, 1932 Albuquerque Journal Albuquerque, NM

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STEMS RUN ON HIS BANK CHICAGO, June 25 Traylor, considered by many democratic presidential timber, nation stemmed an incipient run on his his First National bank The Union Trust and Savings bank Saturday pearing the banking floors and for faith.

6. June 26, 1932 The Los Angeles Times Los Angeles, CA

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FOUR IN CHICAGO AREA CLOSE CHICAGO, June additional banks the Chicago been closed. They the Chicago Bank Commerce, deposits about South Ashland with posits about $110,000; First tional Bank deposits about and Northbrook State Bank of Northdeposits about Chicago Bank Commerce State

7. June 26, 1932 The Index-Journal Greenwood, SC

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Melvin A. Traylor Stops Run On Bank By Timely Appeal CHICAGO, June A. Taylor, considered by many Democratic presidential timber. stemmed an incipient run on his $25,First National Bank and $10,000,000 First Union Trust and Savings Bank today by appearing the banking floors and pleading faith.

8. June 26, 1932 The Buffalo Times Buffalo, NY

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APPEAL BY TRAYLOR CURBS RUN ON BANK Head of Two Institutions Address Patrons CHICAGO, June 25 (A.P.)—Melvin A. Traylor, considered by many as Democratic presidential timber, stemmed an incipient run on his $25,000,000 First National bank and $10,000,000 First Union Trust & Savings bank today by appearing on the banking floors and pleading for faith. Traylor, who is president of both banks—among the three largest in the city—said a plot for a demonstration against the banks had been laid by "enemies."

9. June 27, 1932 The Daily Alaska Empire Juneau, AK
Article from The Daily Alaska Empire, June 27, 1932

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TRAYLOR STOPS RUNS ON BANKS Possible Presidential Candidate Acts Quickly in Chicago CHICAGO, Ili., June 27.-Melvin A. Traylor, considered by many as a Democratic Presidential candidate, stemmed an incipient run on his $25,000,000 First National Bank and $10,000,000 First Union Trust Savings Bank last Saturday by appearing on the banking floors and pleading for faith in the two institutions. Traylor is President of both the banks. He charged a plot had been laid by his enemies, but the banks put themselves in a highly liquid condition and the crowd then withdrew. The banks opened as usual this morning.

10. June 27, 1932 The Buffalo News Buffalo, NY

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LOAN OF $13,600,000 TO CENTRAL APPROVED WASHINGTON June 27 commission Monday authorized Reconstruction Fito the New York company The loan for three years and interest and due June 30, $4,895,037 due July $6,509,719; and Aug $1,867,817 This the second loan received by the In April the approved loan for already way in city TRAYLOR STEMS BANK RUN CHICAGO 27 (AP) Melvin A Traylor by many Democratic timber stemmed an incipient run the $25,000.000 First National and $10,000,000 First Union Trust & bank by appearing on the banking floors and pleading for faith PETITION GAINS FAVOR NEW YORK. June 500 had been placed on the New York Stock exchange on Saturday, July 2.

11. July 1, 1932 The Producers News Plentywood, MT
Article from The Producers News, July 1, 1932

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Article Text

Run on Chicago Banks The closing of the First National Bank and the First Union Trust and Savings Bank of Chicago on June 26 thru a run was averted by a speech of Melvin Traylor, president of both banks, in which he told depositors to "have faith." Four banks which closed on June 26 brought the total of Chicago banks which closed thus far this month to 39. These are among the largest banks in Chicago. Traylor's speech averted for a while the crash which is going to strike severely in the near future.

12. July 28, 1932 The Sheboygan Press Sheboygan, WI

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progress here" and "considerable runs on jugs in loop." Melvin A. Traylor, president of the First National bank and former head of the American Bankers association, blamed the "radicals." He said he believed the "plot to be nation-wide," and that he had reports from many cities that a similar system was used in frightening depositors by anonymous telephone messages. Other Chicago bankers told how radicals opened 300 to 400 bank accounts and then withdrew them simultaneously, spreading news of the "run."

13. August 4, 1932 The Miami News Miami, FL

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Horoscope What Tomorrow Means to You The BY HELEN ROWLAND EX-LOVERS Alas, for the fragility of these romances! Like poplar trees and morning glories, they are good," they die young To man, every little summer love-affair is just another woman, leaf the Book of Memory "LEO The Fates and will be man at gerheads Aug. and are apt receive jolt, which will force you to realize the necessity of being the worries There BORN but within family There be married. The girl will usually may cause regret the laxity find him Marriage doesn't UNITE him to parental married merely ATTACHES him to of way. couples may the of courtA bigamist is merely an altruist, whose misguided enthusiasm has led they wish have and to the shoulder the matrimonial responsibilities pair of bachelormate. Children this will They will slightly highly and capable affection the They jolly sympathetic friends and They will have set life. Your born the qualities your and You have good spirit the feelings and interests your fellows. able establish real contact the minds others, and are usually peace with your little world. You tact tience, all ing good friend, There nothing slovenly about habits, you lack neither Success for not from paid usefulness. but assets. brain in curate orderly files. You cannot motiveless life, and must peg which hang your efforts. effort never keep you from your goal, though you have "try There is great deal gentleness nature. be man your make nurse sickness within the outside help available. The Aug. 5th woman her delight visit, and whether rich state has good 1932. 500,000 gallons fuel its prison farm at Raiford the Standard Oil of Kentucky BEDTIME STORIES approximately $20,000. board of institutions called for for furnishing three the supply system at state hospital for the insane Chattahoochee. coroner's jury night verdict that Lester Youngblood, 18, to his death driven carelessly by Douglas, Gainesville charged manslaughter and posted $5,000 TALLAHASSEE The supreme court remanded E. Martin. Orange county tax collector, Sheriff Frank Karel's custody await trial criminal court record Orland charges embezzling more than $12. 000 excess fess from the county. The court's order based habeas corpus action brought by Martin in effort escape trial on the charges. BANK RECEIVER SUES CHICAGO. Aug. receiver for the First tional bank of has filed suit federal accounting from J. Fred McGuire, Chicago realtor.

14. March 4, 1933 The Buffalo News Buffalo, NY

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ILLINOIS BANKS ORDERED TO CLOSE FOR THREE DAYS CHICAGO. March general three-day holiday Illinois was early urday extended Chicago financiers and Gov. Henry Melvin the First National made announceeffect Saturday. Monday and Tuesday Traylor closing upon signed by The the reopen March may ited per cent. during the following eight Gov. Horner said the past several days have been conference banks Illinois effort the course tion has bank states surroundIllinois and the counthe banks this state would strain has them. This hour issued statement effect holiday The has made The banks paid more in the past effort tide also expected the national government might regard The picture has materially changed Friday day banks the banks and association the Federal Bank Chicago, deem the welfare citizens the protection bank referred my issued The Federal Reserve bank of Chijoined holiday and no gold Saturday would not reopen "until conditions

15. March 6, 1933 The Buffalo News Buffalo, NY

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ILLINOIS BANKS ORDERED TO CLOSE FOR THREE DAYS CHICAGO, March general three-day Illinois was urday extended Chicago financiers Gov. Henry Horner Melvin president First National made will effect Saturday Monday and Tuesday Traylor closing upon banks signed the reopen may limited per cent. during the follow ing eight statement by Gov. Horner said "For the past several the effort best emergency spite holidays surrounding Illinois and the the this state the has This was this that holiday Illinois time. greatest effort has such necessity The banks paid more in the past tide also been the might that regard has by The picture has changed Friday Finally after day of unprecefrom the the House banks the the Federal now the welfare the protection depositors have funds, declare the bank day referred my proclamation issued The of Chiholiday and was Saturday not reopen conditions

16. March 7, 1933 Waukegan News-Sun Waukegan, IL

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DEMOCRAT OFFICIAL NOTE To Remain Closed Until Gov. Horner Instructs Officials To Obey Woodin. CHICAGO. March Uncertain what action to take. officials Illinois banks kept in constant touch with Washington interpretation of Secretary the Treasury Woodin's new regulations The Continental Illinois National Bank and Trust Chicago, largest bank of and accepted deposits for time but ceased doing after conferences between bank officials and communications Washington. In addition declining to accept deposits, of the banks did not drafts food shipments, other purposes described necessary by Secretary Woodin. There clearing house assomeeting however, and the outcome was expected banks with definite program Most the bank officials said variations between Secretary Woodin's lightened declared for Illinois last week Henry Horner made them hesitate modified basis. ned to proclamation lattoday authorizing Illinois banks follow made by the The national banks were informed by national bank that they should obey Secretary Woodin's and disregard the provisions of the state Under Horner's proclamation of last week, banks would reopen tomorwith per cent restriction on withdrawals for the next days. Several Illinois cities solved the problem medium of exchange by issuing scrip backed currency. Springfield. Urbana, and Peru were among the towns taking such action. The Federal Chicaready certifireceived from Washington Town Board Votes To Throw Out Democratic Ticket On Legal Technicality. The Zion township Democratic ticket today was ordered off ballot by the town election hearing held in the sheriff's office, the same time similar started against Independent candidates Cuba township them the The Zion board voted two ticket. Supervisor Thompson Town Clerk Hueneryager voted for rejection and Justice the Thomas McEwen for acceptance the slate. This only the Voliva ticket in the field. No Sworn Statements Attorney Joseph Bishop, the firm of Bishop. Carey LaRose. argued petitions were there was statements attached the petition. Earl Cook counsel for the argued that the petitions substantial conformity with the requirements prescribed The objection the Independent candidates Cuba township filed by Bishop Besides the alleged deficiency sworn statements candidacy there defects in these petideclared. May If action will leave candidates Citizen's tion. This ticket headed pervisor Harold D. Kelsey, Kelsey and Town Clerk Grom. are members the Cuba and candidates the Citizen's Bishop asked County Judge Persons point two other members their be Woller and Cornelius Snyder, Republican and Democratic precinct committeemen Cuba township. This hearing day morning and be held the county building room designated by the sheriff.

17. March 9, 1933 Argus-Leader Sioux Falls, SD

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CHICAGO'S BANKS READY TO REOPEN Await Decision of Congress and State Is Withheld March ing of banks awaited the of national and state holidays and action of conBank employes were working on plans to open whatever may be forthfrom Ed banking business today was still the basis dictated by the He Scrip certificates had been prepared for the ciation, but under the new plan expanding the currency they probwill not be used. The banks handled transactions for produce, livestock, and other foodstuffs only in cash. The Chicago livestock exchange basis of holding drafts and checks pending reopenof the banks Many produce houses doing likewise The banks handled no drafts or checks.

18. March 10, 1933 Fort Worth Star-Telegram Fort Worth, TX

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$700,000,000 Bank Formed in Chicago CHICAGO, March 10.—Out of two affiliated Chicago banks arose Friday a single institution which its officials said had assets amounting to $700,000,000. It would open, they said, with the lifting of the presidential proclamation. The move was announced by Melvin A. Traylor, president of the First National Bank. He said the First Union Trust and Savings Bank, the affiliated of First National, had been merged into the larger institution "in view of recent developments and the prospect that banks which are members of the Federal Reserve System may enjoy wider privileges.

19. March 13, 1933 Biddeford-Saco Journal Biddeford, ME

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HOLIDAY IN Chicago, March national banking holiday ended for 31 Chicago today lowing orders from Secretary Treasury Woodin and State Auditor Edward Barrett that they might reopen without restricthe federal ban withdrawals for hoarding. The moratorium was efsuburban banks, however, but its duration short necessary time measure for his office, Barrett said. Permission for reopening of Chicago banks, including five ones the Loop, given Woodin Reserve bank night. Later Barrett list state banks authorized reopen their doors this morning for busi-

20. March 24, 1933 Chicago Tribune Chicago, IL

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REPORTS OF RESERVE SHOW MOST MEMBER [BY THE PRESS.] Reports from the twelve federal serve last night reflected the reopening of member banks under of the treasury, as provided by proolamation. The by districts, for member banks only. showed: Number. Boston Richmond Atlanta Chicago St. Louis Kasas City Dallas San [All but of approximately 800 open.)

21. April 27, 1933 Herald and Review Decatur, IL

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TEACHERS in Besiege Trust Company DEMAND RELIEF bankofficials shafts song. 3,000 militant school their anger the Icop Wednesday siege the Chicago Trust company and the First National bank. precipitated former when police tried to their advance. From the bank, they marched city the school board holding its meeting. Like major military offensive, the march began. Commanding general was TeachJohn who auto equipped with amplifying apparatus, his followers martial music reminding them their impelling purposes. was the second teachers have staged their annual spring cation period. Police Wield Clubs The challenge they hurled before offices of the Trust company today "Pay your general melee resulted and pedestrians felt the of the being jostled pushed. Traffic halted for the Some of the teachers forced their way into company's offices. milled about street and doors. clubs bring about some semblance of many them scratched and their Several teachers seriously, and several women fainted The demonstrators clamored for audience General Abel Davis, chairman the board of Trust company and shouted taxes on much of property controls. Referred to Solons committee teachers received by Holman president Trust company. told have been property could not present pay their to the remedy Pettibone them. then proceeded to the First National see president. Traylor. Despite carefully guarded got operations suspended they paraded about, chanting: Traylor not appear and president heckled into teachers then marched to the school board them and speak their views. All against the City Hall School Wallace Cald original proponent of plan close schools from May declared had students themselves would about shutdown by walking from their next The board voted to defer action the proposed closing adoptEdward Kelly's legislative relief program. teachers attempted storm meeting the city council and police cordons the aldermanic teachers mitted addressed the and councilmen he and of the teachers permitted to enter.

22. August 3, 1933 The Thomson Review Thomson, IL

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As Championship Form CHICAGO BANK AGREES TO GIVE CARROLL BANK POSITORS LOAN OF 15 CENT was made Carroll Saturday that First tional Bank has agreed lend percent the liquid assets of the First Carroll County State bank. This will be money paid percent dividend who agree the monto pay for stock the new bank which being organized Mt. Carroll. Officials the Carroll County State Bank, which has been closed since the March holiday, have plied to the Finance Corporation for loan, and representative of the expected Carroll soon. Three hundred the 500 shares the new bank have been sold. FARM AND STERLING ALL WIN SUNDAY GAMES INDIAN HEAD LEAGUE The Standings Fulton Savanna Bureau Sterling Shannon Thomson .300 Lanark Leaders the Indian Head leagretained their positions, Sunday, Fulton showing championship form the Whiteside boys the lowly Lanark Blues by Savanna took from Mt. Carroll; farm bureau had little trouble feating and and Sterlhard pressed eke over Lanark Pushed Lower Cellar The Lanark Blue Sox before the offensive fensive power the league Fultonites Sunday, and had take to beating most manner. seven rally first inning started the with the winners scoring the first six frames. Seven along with 18 hits garnered by Fulton, them the gave dozen and five Fulton 732 421 Lanark Shear and Wilkins; Cole and Garland. Savanna Just Manages Win five rally the eighth ninth made possible few solid and couple bobbles by the lads county seat the Brewers victory over the Mt. Carroll Cubs Savanna Sunday. The winners took the lead in the first three nings, only to have Mt. Carroll out front with three run batting spree the fifth and two affair in the sixth The Savandefense tightened then, and the county-seat another across the platter. Score by innings: Savanna Carroll Summary: Home runs, Adams, King. Three base Two hits, Reed, Bashaw, Hanna. Strautz. Stolen base, King, Grimm. Passed balls, Bashaw Wild pitch, Schaut. Struck out, by Ginie Schaut Bases balls off OR Cchaut Winning pitcher, Ginie. Losing pitcher Schaut Umpires, Crouse and McGrath. Time of game, 2:05. Eighth Wins for Sterling The Shannon entry the Indian Head league enjoyed comfortable lead on their diamond until the eights inning staged the Sterling when the dus. had cleared front The engineered the their balf the 8th fell and the game ended and county team the short Sterling. and Johnson led The Shannon and mier. the registering three Erdmier. Shanmon 001 Shannon Batteries: Thomson took one run lead the second inning were unable hold for long the Sunday, heavy hitting Farm Bureau taking an victory when the game was over. The boys from the melon village played ball most the time. the slugging Farm Bureau players were much handle, and the winners poked out 14 solid smacks. Manager Ware and his boys turned on full power the fifth, sixth and seventh, seven the eight runs. B. Ab Hawkins Royer Kensinger ef 2b 3b Goble 1b Weymeier 1b Sturtevant Rahn Ware Rahn Leavens Totals Holland 2b Lewis Tousley Hartman Groharing Brown Ores 1b Totals Score by innings: 020 Summary: Two base Royer. Leavens. Stolen base. Hawkins Struck out by Rahn Leavens Leavens Brown Winning pitcher Losing pitcher. Brown.

23. January 10, 1934 Chicago Tribune Chicago, IL

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FIRST NATIONAL STOCK SALE TO RFC SANCTIONED Traylor Doubts U. S. Will Seek Control. BY THOMAS FURLONG. Stockholders of the First National Bank of Chicago ratified the sale of $25,000,000 of preferred stock to the Reconstruction Finance corporation and reduced the board of directors of the bank from 44 to 25 members. The management's proposal to sell preferred stock to the RFC was approved overwhelmingly. Questioned by stockholders, President Melvin A. Traylor said that he was not concerned over the possibility that the sale of the stock would mean RFC dictation of the bank's management. "If the RFC elected to do so, at the next annual meeting," he said, "it could control the selection of officers of the bank. If I had any fear that we would lose control, provided we conduct the bank properly, I would be concerned. If they are satisfied with our management they will be content to let us run the bank." Woman Stockholder Fears Control. Among the stockholders who questioned Mr. Traylor about the possibility of the RFC taking control of the bank through the preferred stock was Mrs. Ethel G. Phillips, 985 Hill road, Winnetka. She pointed out that selling $25,000,000 worth of stock to the RFC would in practice give the government bureau control, as it would own as much stock as all other shareholders combined. "In presenting my views," Mrs. Phillips said, "I want to make it plain I do not believe it unpatriotic to criticize the centralization of government. There has been too much tendency to brand every criticism as unpatriotic." In reply to her argument Mr. Traylor said that the banking act of 1933 had so effectively placed the banks under the control of the controller of currency and the federal reserve board that the granting of additional control to the RFC made no practical difference. He said that he understood a bill will be introduced at this session of congress requiring a capital deposit ratio of 1 to 8, which would make an increase of the First National's capital essential. Board Reduced Under Law. The reduction in the board of directors from 44 to 25 members was made in accordance with the terms of the banking act passed last year. All the new directors elected were members of the old board. They are: Philip D. Block, Potter Palmer, Edward E. Brown, George A. Ranney, Ralph Budd, Edward G. Seubert, Augustus A. Carpenter, Silas H. Strawn, Richard J. Collins, R. Douglas Stuart, Mark W. Cressap, Bernard E. Sunny, Charles K. Foster, George G. Thorp, Bentley G. McCloud, Melvin A. Traylor, Charles A. McCulloch, Albert H. Wetten, Harold F. McCormick, Harry A. Wheeler, Ira N. Morris, C. J. Whipple, James Norris, John P. Wilson, John P. Oleson. Retiring directors are: William R. Abbott, Col. R. R. McCormick, Carl R. Gray, Charles S. Pearce, James B. Forgan, George Pick, John H. Hardin, Frederick H. Prince, Craig B. Hazlewood, Frederick H. Rawson, Marvin Hughitt Jr., Guy A. Richardson, John Hertz, Charles R. Walgreen, Walter J. Kohler, Daniel Willard, Albert D. Lasker, Thomas E. Wilson, Chauncey McCormick. All the retiring directors asked to be relieved of their duties, Mr. Traylor explained. Several expressed a desire to retire during the last twelve months, but were prevailed upon to finish their terms, he said. Stockholders May Waive Rights. Stockholders will have prior right to subscribe to the new preferred stock, but it is expected that all of the stock, which will pay 5 per cent cumulative dividends, will be taken by the government agency. In explaining the stock sale to shareholders Mr. Traylor emphasized that $15,000,000 of the $25,000,000 preferred issue is callable at the option of the bank at any time, providing the controller of the currency did not object, and that the remaining $10,000,000 may be retired at any time unconditionally. The new stock will boost the capital of the bank to $50,000,000, equally divided between common and preferred stock. In addition the bank will have surplus of $10,000,000, undivided profits of about $1,000,000, and special reserves of $5,000,000 under the new setup. After putting into effect the changes the common stock will have a book value of $140 a share, Mr. Traylor stated. During the course of his remarks to stockholders Mr. Traylor revealed that the bank had paid out $165,000,000 to depositors without resort to borrowing in the period from Feb. 14 to March 3 last year immediately preceding the bank moratorium. Mr. Traylor said he was unwilling to predict when dividends would be resumed, but added that if conditions improve the bank will be in a favorable position to profit. After the stockholders' meeting the directors met and reëlected all present officers of the bank. J. T. Keckeison was made an assistant secretary.

24. January 12, 1934 Chicago Tribune Chicago, IL

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Refers to First National. The nonintervention pledge was extended by Mr. Jones to cover specifically the First National bank of Chicago, which on Tuesday voted to sell 25 million dollars' worth of preferred stock to the RFC and which has, like the Continental Illinois, a vacancy in its chairmanship. Mr. Cummings, who is head of the Deposit Insurance corporation, left here this afternoon to attend the stockholders' meeting tomorrow in the bank which he will head. Although information on the board of directors which, it was agreed, would be elected tomorrow, was still being kept secret, it was learned on high authority that James R. Leavell probably will retain his presidency in the bank. Explains Policy of Control. After Mr. Jones had explained his intention of keeping hands off most of the large banks in Chicago and New York, which have sold the RFC preferred stock, other officials set forth the grounds on which the RFC will feel justified in exercising control through its preferred stock. They are: 1. Sale by a bank to the RFC of more preferred stock than there is common stock outstanding, thus giving the RFC control. The Continental Illinois fell into this group. 2. Failure by a preferred stock bank to earn two consecutive dividends. Intervention will be confined almost entirely to choosing new personnel for the management, Mr. Jones said. Satisfied with Management. He added that the RFC is thoroughly satisfied with the management of the First National bank of Chicago, headed by Melvin Traylor, president. The bank now has 25 million dollars preferred stock in the RFC's hands and 25 million dollars' worth of common stock in private hands. Although this arrangement probably will give the RFC a working control, it will not be exercised even in filling the vacant chairmanship. Mr. Jones announced that the RFC had sold 200 million dollars' worth of the special 2 1/4 per cent two year debentures which it is offering only to banks in which it has bought preferred stock. Another issue of 2 per cent one year debentures is being planned in the same way, he said.