Article Text
Number Two Continued from Page 1. ed Judge Keidan. Kanzler. "It has never been questioned. The corporation was organized in 1929 to deal in securities and that loan was made in time was as high as 000. has reduced to this amount. There was collateral on the loan and we indorsed it only when collateral did not present sufficient margin. The loan was approved by the bank's execcommitee.' Kanzler said the bank examiners never criticized the loan, but said he "supposed there is no question" that some of the loans of directors were Argument for Loan. Returning discussion of the Guardian units, Kanzler said one argument for loan was that would chain banks able to face almost any situation. "Our purpose was to strengthen them because they had competitor banks which were comparatively weak, he "In January our Port Huron bank faced substantial run bank across the street named the United States National bank had difficulty. would not have withstood that if it was not good. There is danger in banking group that one unit may get into difficulties and hurt the rest, so ve wanted them all strong as We could get them. At the time the loan was sought from the R. said Kanzler, the Guardian National Bank of was 41 per liquid, the Highland Park bank was 24 cent liquid. the Grand Rapids bank 30 per cent. Jackson Saginaw Flint 19. Port Huron 32 before the run which he mentioned 20, Battle Creek 35, Dearborn Royal Oak 87. Ionia 32, Niles 47, Trenton 10 and Hamtramck 44. "Did you ever ask the federal men why they opened other units and did not open the Guardian bank here it had liquidity of 41 per O'Hara asked. "Washington insisted that the Guardian bank and First National bank have be treated alike," said Kanzler able find out the reason for that attitude which they began to express as soon as the holiday was declared. of fact," O'Hara, "all but one of the National banks in your group which they permitted to reopen were less liquid than the Guardian bank here, weren't they the witness. "They opened the banks at Port Huron, and Creek, which were less liquid. They also opened the state banks at Highland Park and Dearwhich were less liquid. Kanzler discussing events leading up the refusal the R. loan. said he "had no question but what the loan made. He said to cover the quested, assets of face value of were selected collateral, and total of $330,000. worth of assets were available to pick Murfin Testifies. James former circuit judge bank attorney. today told the jury that days after calling of the Michigan bank hollday he was told by Mills. then secretary of the Treasury. that the First Bank Detroit was solvent and should not have been closed. Murfin also said a plan is making in which depositors of the First National would be paid 100 cents the dollar once. He declined make details of the plan public, saying that publicity would ruin Murfin's testimony followed that of Kanzler Under questioning rosecutor Harry Toy. he said was in Washington few days aft the holiday and was asked by bank associates in Detroit conwith Mills. and find out what the Treasury wished do in Detroit situation. He said he conferred for an hour Saturday. Feb. The banks did not open on the morning of Feb. told the secretary that had the closing the First National said told him following the closing. due to holiday. had urged the bank's board of directors to. reopen the bank arbitrarily and permit limited withdrawals. "That good why didn't they do it?' Mills to told him." continued Murfin, "that his agent, Leyburn (Alfred chief examiner for the Federal in this district) had declared the First National insolvent. had no right to do that, Mills Your bank solvent Had been insolvent. it would been my duty to have put in receiver only had the right to say whether or it was solvent' "Terrible Mistake." Murfin previously said he opposed the state bank holiday strongly. and declared he believed it was terrible mistake. He, said he was present the meeting the decision was made to banks. and was the only one to vote The witness further said that of not only sclosed no inkling of First insolvency in the National but, on the contrary. showed it was "making strong headway. said he was so convinced the strength of of the growing bank that, within the months previous to the closing. he bought 800 of stock. 200 December just before the closing Appeals to President. Lansing, Mich. June The state today had asked PresiRoosevelt to intervene Detroit to aid determining whether banks in closed without justification. Patrick H. O'Brien. attorney general. sent telegram to the Presiednt. stating that witnesses in the Detroit jury banking investigation testified the Guardian National Bank of Commerce and the First National Bank of Detroit are solvent and of paying depositors in full. Gov. Alex Groesbeck. and William F. Connolly receivers for banking offered testimony this groups. effect. Brien informed the President he denied access the comptroller of the books by the His telegram said: "Several of prominence influence in Detroit have testified the national banks now closed and the of govare solvent and of paying their depositors in full. that they should never have closed. that they were closed because or to some ulterior purpose, that the government was responsible for closing them keening closed and that with reasonable assistance from federal authorities either the system or the Reconstruction Finance tion these two great banking institutions could be reopened. Brien's telegram read. "We have asked for the cooperaof federal authorities towitthe Treasury department and the comptroller of the currency in ord er that we might the books and records of banks. and from the testimony of nesses having access to said books the exact facts The of the has refused on legal grounds to permit us access to the books and We have not received reply from the Treasury department. "The have been subpenaed but have declined to testify on the ground the state has no jurisdiction. it is important the people of Detroit and vicinity know the reasons why said banks have been closed and not allowed to reopen. If it is true they are should be permitted to reopen with such reasonable help from the government as would proper the circums If the banks are hopelessly insolvent think the federal government should voluntarily present the facts so the people will be satisfied these two banks have been treated fairly there been no crimination banks prove to solvent they ought be and they are inthe people know request. Mr President. that you extend the courtesy of personal interview on the whole matter of the banking situation in Michigan. with particular to the two national banks in the city of Detroit. there the contrary would like to the federal government release the attorney general's office witnesses, books and records may the true situation. the meantime the one-man jury now sitting in Detroit will main open until have made your final determination in these matters.
