In Chicago, Cont'd

After last fortnight's big bank mergers in Chicago, La Salle Street and the Loop breathed more easily. But fear and suspicion grew rampant in outlying districts. Armored cars rushed from the big Loop banks, carried millions of dollars to little banks where unexpected runs had started. But not all the outlying banks were in a condition to warrant saving. In one crack the twelve banks of the John Bain chain went down, affecting laborers and commuting clerks in such Southside districts as Stony Island, Auburn Park, Englewood and Chicago Lawn. Although onetime Scot and onetime Plumber Bain said depositors would receive 100%, the alarm spread. By the end of the week 29 banks had closed, Evanston, Des Plaines, Washington Park and Beverly Hills had been added, along with other communities, to U. S. towns where bank failures have caused suffering. Biggest of these was North-Western Trust & Savings Bank, affiliated with the Foreman group, with $14,000,000 in deposits. Smallest was Industrial State Bank with only $265,000 entrusted to it. Total deposits in the 29 banks were almost $75,000,000. Talk of re-openings was widely heard.

Brave steps were made to calm public fears. The Chicago Daily News found encouragement in the fact that if all the resources of all Chicago banks were placed in $20 gold pieces they would fill a 30-foot street for 3 1/2 miles, that if they were placed in solid silver they would pave a road to Milwaukee. Mayor Anton Joseph Cermak (whose city last week was $5,000,000 in salary arrears) rushed to Lawndale State Bank to assure depositors that their bank was sound. When a run started on Chicago City Bank & Trust Co. (in Englewood on the South side), Melvin Alvah Traylor of First National Bank said his institution would guarantee that Chicago City Bank's depositors would be paid. Impatiently he added: ''They need a bank. If the people of that community want to wreck their own bank, they can go ahead." Chicago Bank & Trust was not wrecked. In other banks presidents and vice presidents stood in the lobby calming depositors. The best example of this had occurred early in the week in the lobby of Foreman-State National Bank. Announcement that the Foreman banks had been taken over by First National Bank was, of course, the beginning of the collapse of confidence. Frightened depositors came to Foreman Bank to get their money even after the deal was announced. The Foreman president, able Banker Walter William Head, assured them everything was all right, jumped on a chair to shout "Now, all of you who believe me raise your hands. All right, then, all of you who aren't afraid get out of the way and let those who are afraid get up to the windows and get their money." Few came up; some of these had foolishly taken their money, deposited in First National whither it would have gone if not withdrawn.

Bankers last week blamed Chicago's real estate situation for most of the trouble, also blamed Illinois banking laws for its spreading. In Illinois a bank can have no branches. This leads to many small banks, making possible a situation such as was seen last week. In 1930, 126 of Illinois' 1,683 banks were suspended.

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