Muck from March

Banks are no longer news in Manhattan or Chicago where the crises were passed months before President Roosevelt's national moratorium. But in three of the biggest cities of the land banks still splash the front pages with considerable regularity.* In Philadelphia the news is the prosecution or conviction of officers in several small defunct institutions. In Detroit it is the desperate effort to find out why its biggest banks were (and still are) shut tight./- In Cleveland it is the muckraking of Ohio's State Senate bank investigating committee. While liquidators began mailing the first payoff checks to some 400,000 depositors in Cleveland's defunct Union Trust and Guardian Trust last week, the Investigating Committee raked this muck left from March:

P: At the year end 34 directors of Union Trust owed their bank $9,250,000. Nearly $7,000,000 of these loans were either "under water" (inadequately secured) or delinquent in interest, or both. P: Three Union Trust directors who made an independent audit last December found $11,700,000 of loans to the Brothers Van Sweringen. These loans were under water and delinquent for $1,000,000 in interest, and the directors stated at the time that these loans "have done more than any other single factor to undermine public confidence in this institution. ... It is our opinion that these loans cannot be . . . worth more than 25-c- on the dollar. . . ."

P: The Guardian Trust's statement last September had been elaborately window-dressed to put the bank in a more favorable light than it actually was.

P: Some $2,000,000 of "smart money" was withdrawn from Guardian Trust by officers, directors, stockholders & friends in the ten days preceding the closing. President James Arthur House or his friends withdrew $660,000. Some of this President House promptly redeposited in Union Trust.

P: Guardian Trust held a $53,000 note from Governor Elvadore R. Fancher of the Cleveland Federal Reserve and one A. W. Dean which carried the notation: ''Because of Mr. Fancher's position with the Federal Reserve Bank we cannot press for payment."

P: Guardian Trust had affiliated security and real estate companies which it used to conceal losses including between $3,000,000 and $4,000,000 sunk in the Hollenden Hotel.

* And in many another U. S. town & city banks are still a problem. Of the 17,601 banks closed by President Roosevelt last March, 2,175 with $2,566,000,000 of deposits were still closed or restricted last week.

/-Detroit is convinced that its banking woes were due to governmental bungling. Last week Judsie Keidan, who is investigating the Detroit fiasco in the role of a one-man grand jury, announced that he would subpoena Herbert Clark Hoover.

This file is automatically generated by a robot program, so reader's discretion is required.