Still Open Dawes

One memorable June night last year Chicago's biggest bankers worked and haggled until commuters were tumbling out of bed to catch early trains (TIME, June 15, 1931). Their work averted a Chicago catastrophe. Shaky Foreman-State National Bank was absorbed by Melvin Alvah Traylor's First National, and National Bank of the Republic by General Charles Gates Dawes's Central Trust Co.

Central Republic Bank & Trust Co., as the last two merged banks were called, had its troubles. Last spring its directors had sleepless nights until in June when, after General Dawes had resigned from R. F. C., they obtained $80,000,000 from R. F. C. and $15,000,000 from other banks (TIME, July 4). Last week the Central Republic board was again working far into the night.

Had they not accomplished something, other bankers might well have had an answer to the question, "Can a bad statement start a run?" For Central Republic last week reported its condition as of Sept. 30. This showed, in terms of millions of dollars, cash of $24 and U. S. bonds of 90-c- against deposits of $76. In addition to the money owed depositors, the bank still owed $35,000,000 to R. F. C. and others.

Last week's meetings made possible, instead of liquidation, the formation of the much-discussed new Dawes bank (TIME. Sept. 12). It is called City National Bank & Trust Co. (instead of Dawes Bank). It starts business with a capital of $4,000,000. surplus of $1,000,000. several new directors. These include Elisha Walker, onetime Transamerica head; Vice President Charles Schuveldt Dewey of Colgate- Palmolive-Peet; Publisher William Franklyn Knox of the Chicago Daily News. Announcement of the new bank and the fact that it had taken over all of Central Republic's deposits was made on the day that the statement of condition was reported, averting a possible run which might have left General Dawes with no bank at all. Central Republic's $76,000,000 in deposits compared last week to $112,000,000 three months ago. $250,000,000 when it was formed.

Not taken over by City National were Central Republic's burdensome leases (most of which can now be cancelled), its "bills payable," nor its trust and real estate business. Both of the latter will be handled by the new bank on a contract basis, may perhaps be worked out at a profit for Central Republic's shareholders. But last week "Dawes Bank, Old'' stock sold at $2.25.

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