City Trust Crash

Every night last week groups of workingmen, mostly Italians, stood at the corner of 109th street and Second avenue, Manhattan, gazing across the street at the windows of the City Trust Co. They wondered what, if anything, their bankbooks might be worth. On the windows were posted notices that the state banking department had taken possession of the bank. Back of the closed doors bank examiners checked books and investments and balances. Perhaps the bank was "broke."

Some of the laborers pointed to gold-lettered window announcements which proclaimed that City Trust Co. was a depository of the U. S. government, of the state and city of New York. Some of the laborers thought that therefore the U. S., the state, and the city were guaranteeing deposits. Others, less naive, were selling their bankbooks at 50 cents on the dollar.

The bank examiners issued no premature estimate of possible losses. City Trust Co., with its main offices and four branches, had deposits of $7,300,000. Its president, F. M. Ferrari, had died Feb. 2. There followed rumors of bad investments, of unsound conditions. It will be months before definite announcement of settlement will be made. Meanwhile depositors have only the comfort of knowing that their demands will be satisfied before those of stockholders.

General interest in the City Trust closure resulted from the fact that Dr. Attilio H. Giannini had succeeded Mr. Ferrari as the bank's president. Dr. Attilio H. Giannini is a brother of Amadeo Peter Giannini, famed Bancitaly Corp. man. Dr. Giannini is also board chairman of the Bank of America, National Association, which Bancitaly Corp. dominates. But there was no suggestion that the City Trust's disgrace was a Giannini disgrace, because Dr. Giannini had been connected with the bank for only a few weeks, and because he could show that he accepted the office only on the urgent request of the City Trust's directors. The latter had wished to assuage popular suspicion concerning their bank's solvency by securing a Giannini as chief officer. Finally, Dr. Giannini, who had taken an option on part of the bank's stock, refused to exercise the option when he saw the actual condition of the bank. Perhaps Dr. Giannini erred in allowing himself to become in any way associated with a sinking ship, but he was not the man who ran the vessel on the rocks.