In Chicago

The sky was already streaked with light when, last Monday morning, Chicago's most prominent bankers prepared to go home, happy in the knowledge that a major crisis in Chicago banking had been successfully passed. Centre of the disturbance was the Foreman-State National Bank and its affiliate, Foreman-State Trust & Savings Bank. In these two institutions Chicagoans had left $199,000,000 in deposits, only $3,000,000 less than the sum which was frozen when Bank of United States failed.

For 69 years there have been Foreman banks in Chicago. Their founder was Gerhard Foreman, a Jew who came to this country from Germany in 1850. His son, Oscar G. Foreman, 67, heads the Foreman executive committees. Oscar Foreman's nephew, Harold Edwin Foreman, serves as chairman of the board. Other Foremans have prominent executive positions in the system. Weakest spot in the Foreman system has been the large real estate interests of the banks.

Last Saturday morning the Foreman officers realized the frozen condition of many of their real estate loans had impaired the banks' liquidity, that disaster was near. The directors, including Albert Davis Lasker, William Wrigley Jr., John Daniel Hertz, and members of the Foreman family, raised sufficient funds to tide the bank through the day. An appeal was then made to other Chicago bankers.

By nightfall Sunday nothing definite had been reached. It had been rumored that Continental Illinois Bank & Trust Co. would take over the Foreman institutions. It had been rumored that a new bank would be organized. Newspapermen, lolling in the marble lobby of the Foreman Building, grew impatient for definite news of what was taking place on the 38th floor where James Barton McDougal and Eugene Morgan Stevens of the Federal Reserve Bank of Chicago were closeted with the city's biggest bankers.

Just before 2 a. m. Arthur Reynolds of Continental Illinois bank announced that First National Bank of Chicago would take over the assets of the Foreman institutions. To protect First National against loss, the Clearing House guaranteed a $10,000,000 indemnity fund, Foreman stockholders posted an additional $2,550,000. Yet even so the deal required courage and hero of the conference was Melvin Alvah Traylor, First National's able & active president. After the deal, First National will have resources of $883,000,000, ranking it as second in Chicago to only the $1,122,000,000 Continental Illinois.

Simultaneously another deal emerged from the conference. It was a deal long-rumored, without malign significance. Central Trust Co. of Illinois, long known as "The Dawes Bank" because its honorary chairman is Ambassador Charles Gates Dawes, announced it would merge with The National Bank of the Republic. The new Central Republic Bank & Trust will have resources of $350,000,000. Its existence will please the Continental Illinois and First National Banks, both of whom are said to have long-wished for a third big bank in Chicago. Not included in the deal were six small banks connected with the Foreman system. Monday morning they promptly closed their doors until their status could be learned. Knowledge that the "trouble-spot" has been erased brought cheer to La Salle Street, also to Wall Street where stocks again rallied. But no rallier was Foreman stock which opened at $30 offered, nothing bid, against Saturday's $105, a recent price of $250. And Chicagoans were of the opinion that the historic Foreman family has passed forever out of the Chicago banking scene.

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