Trouble in New Orleans

"I happen to know a great deal more about branch banking than the Senator from Virginia [Carter Glass] has had a chance to know. . . . The record of the State of Louisiana stands out with practically no such thing as a big bank failure." --Huey Pierce ("Kingfish") Long on the floor of the U. S. Senate.

Day after Huey Long blustered thus last week, not a big Louisiana bank but the $32,000,000 Union Indemnity group of insurance companies tumbled into receivership--biggest crash in New Orleans for nearly 50 years. They were Huey Long's pet companies. Since his ascendency he has seen to it that Union Indemnity got all state departmental insurance, that it bonded all state employes, all bridge and highway contractors. Most of the group's insurance and bonds were immediately taken over last week by the Aetna group of Hartford, including the $50,000 bonds of Colonel Luke Lea & Son, Tennessee publishers convicted of conspiracy to defraud a bank.

The rise & fall of the Union Indemnity group was written in the last ten years. But its roots go deep in New Orleans lore, back to the Brothers Vaccaro--Joseph, Lucca and Felix--who emigrated from Italy some 40 years ago to found one of the greatest fortunes on the Gulf Coast. Old Joe Vaccaro started as a field hand on a plantation far down the Mississippi Delta. His daughter married one Salvador

D'Antoni who sailed a lugger on the river. Soon the Vaccaros pooled their funds and chartered a leaky schooner, sent Son-in-Law D'Antoni to Central America for bananas. The venture was a little gold mine. Presently the Vaccaros bought a battered tramp steamer. Bananas boomed. The Vaccaros acquired a fleet of modern ships, bought up banana plantations in Mexico, Honduras, Nicaragua. Panama. Swart, stocky, with soft voices, the Vaccaros are now in their 70'$, are still known as shrewd traders. Until after the War they tended strictly to their banana business.

Then the Brothers Moss--Mike (not Michael) and Washington Irving--worked their way into the good graces of the Brothers Vaccaro. The Mosses ran a small insurance agency inherited from their father. Mike Moss persuaded the Vaccaros to invest their millions in things other than bananas. They bought the famed Grunewald Hotel, paying for it with Liberty Bonds dug out of a safety deposit box. They rebuilt it as the Roosevelt, "biggest hotel in the Deep South." Mike Moss, a tun-bellied man with a tiny bald head, was made manager. The Vaccaros backed Union Indemnity with slender, bespectacled, drawling Brother Irving Moss as president. New Orleans, where race is viewed frankly, chuckled: "Watch what happens now! The Jews have got their hooks in the Dagoes."

Though the Mosses had made no noise in New Orleans finance before, they now began to hum. And the Vaccaros hummed, too. While Union Indemnity was acquiring satellites right & left, the Vaccaros were diversifying their interests by buying: the world's biggest oxygen plant, an oil refinery, a smart tailor shop, an ice plant, a laundry, an undertaking establishment. In 1926 they sold out part of their banana kingdom to the public as Standard Fruit & Steamship, now United Fruit Co.'s only important competitor. The deal was engineered by Irving Moss, by this time regarded as something of a financial genius, assisted by his good friend President Rudolf S. Hecht of Hibernia Bank & Trust Co. Standard Fruit stock was issued at $100 a share, promptly slumped to $10.

Meantime Mike Moss had hired a shoe store clerk named Seymour Weiss, distant kin, as pressagent for his Hotel Roosevelt. The best publicity job Seymour Weiss ever did was to provide free and luxurious quarters for Huey Long, thereby wangling himself into the Governor's retinue. Governor Long made him Colonel Weiss and an important gumshoe henchman. Colonel Weiss was elected a director of Union Indemnity.

The crash of the Union Indemnity group last week was caused by the exuberant overexpansion of Irving Moss and poor investments. Irate New Orleans stockholders growled: "They just had a big mess of paper and they kept it churning around." The R. F. C. helped out with a $1,250.000 loan last year but to no avail. Reports of trouble have been current ever since the directors held a stormy all-day session last December at which Colonel Weiss and Mike Moss quarreled violently. New Orleans gossiped: "If Colonel Weiss and Mike Moss have split there is trouble ahead sure enough." Director Harold W. Newman went home from the stormy meeting, promptly died of a heart attack.

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