More Bank Trouble

Two months ago Security-Home Trust Co. (deposits $27,000,000) collapsed in Toledo, Ohio, frightened bankers. Officials of three other big institutions put restrictions on withdrawals for 60 days. The time was up on Monday, Aug. 17. Last week, 48 hours before the time was up, the same officials said the three big banks, though still solvent, would not open Monday. Solvent in normal times, they feared there would be ruinous runs at the reopening, as business conditions have not improved in the last two months.

The closings brought to Toledo as grave a financial crisis as could possibly overtake a large U. S. industrial community. For last week only one of the city's great banking institutions could pay depositors; 70% of the city's banking deposits were frozen; eleven building-&-loan associations halted payments on their $50,000,000 deposits. The banks closed: Ohio Savings Bank & Trust Co. (deposits $45,526,000"); Commerce Guardian Savings Bank & Trust Co. (deposits $21,328,000); Commercial Savings Bank & Trust Co. (deposits $13,069,000). They dragged along with them American Bank (deposits $1,509,000).

With his city's financial apparatus toppling about him, one veteran banker stood out. He was President Henry Lawrence Thompson of Toledo Trust Co., with $44,401,000 in deposits and "The Strongest Bank In Northwestern Ohio" for a slogan. He announced that his institution had $25,513,000 in absolutely liquid assets, would remain open and keep paying until everyone was satisfied. To show that he meant business, trucks from the Cleveland Federal Reserve Bank drew up to his doors laden with $11,000,000 in crisp new currency. At the end of the day four other Toledo banks were still keeping their heads above water. Two were industrial banks; two were smaller concerns.

Elsewhere in the city there was unrest and panic. Retail business was at a standstill. A few smaller firms did not open. Police were recalled from vacations and the 148th Infantry held ready. The Inverness Golf Club, scene or the recent National Open tournament, was closed by its board of directors, all help was dismissed except two greenskeepers. Ira Fulton, superintendent of Ohio Banks, called together more than 100 frightened country bankers who were hit by the trouble, tried to calm them. From neighboring States, 100 bank examiners set out to help straighten Toledo's muddle. Brokers widely discussed the possible effect on control of Toledo's Willys-Overland Co., many of whose shares were held as collateral by the closed banks. As usual, assurances were made that there would be speedy reorganizations.

P:Many nearby country banks snapped the 60-day restriction upon withdrawals. In Akron and nearby Cuyahoga Falls twelve building & loan associations suspended payments.

P: In Omaha small Union State Bank failed, started runs on the city's three largest banks. The Federal Reserve Bank at Kansas City rushed $3,000,000 by airplane and stopped the panic. But six small country banks found the excitement too much, failed to open.

P: In Nebraska, six small banks closed their doors.

P: In Hopewell (Va.) Bank & Trust Co. failed.

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