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Into a protracted Senate haggle over Louisiana's petty politics, Senator James Couzens of Michigan one day last week cut with a staccato demand: "Mr. President, I desire unanimous consent to take up, out of order, Senate Joint Resolution 256. It is of considerable importance." The Senate gave its consent. The reading clerk unintelligibly rattled out the contents of S. J. R. 256 and two minutes later, without debate or even notation by drowsy newshawks, it was unanimously passed.

Three days later S. J. R. 256 was whipped through the House in 40 minutes by a vote of 241-to-4 and hastily signed by President Hoover. Only then did it emerge on front pages as a new prop for sagging Public Confidence.

S. J. R. 256 was an extraordinary banking measure to meet an extraordinary banking situation. Brief and broad, it declared : The Comptroller of the Currency shall have and may exercise with respect to national banking associations any powers which the state officials having supervision of state banks in the state in which such national banking associations are located may have under state laws now in force or hereafter enacted. If a state Bank Superintendent "froze" 80% of the assets of all state banks and limited withdrawals of deposits to 20% to halt runs, the Comptroller of the Currency, under S. J. R. 256, could promptly do likewise with national banks in that state. His powers in each state were limited only by that state's banking laws--a fact which prompted the Treasury to send out a hurry call for the banking codes of all 48 states. The Comptroller's acts were subject to the approval of the Secretary of the Treasury, which meant in practice that the President of the U. S. was to have complete emergency power over all national banks.

When Senator Couzens first introduced this resolution, his own State of Michigan was the biggest, blackest blotch on the banking map of the U. S. When S. J. R. 256 reached President Hoover's desk a week later, the banking map was badly pockmarked with many another big black spot. Behind the Michigan moratorium, the effects of which were just beginning to be felt elsewhere, lay three grinding years of Depression and 5,096 bank failures throughout the U. S. Nevada had clapped its bank doors shut in self-protection, Louisiana had taken an extra-legal breathing spell. Instead of being permitted to recover from the big Michigan shock, Public Confidence was last week knocked groggy by fresh blows.

Millions of citizens were shocked by the Senate's revelations of doings in the high offices of Manhattan's big National City Bank. It was reported that the resignation of Charles E. Mitchell as chairman of the bank was suggested by President-elect Roosevelt. William H. Woodin, incoming Secretary of the Treasury, was said to have conveyed Mr. Roosevelt's views from Hyde Park to Wall Street.

New Jersey rushed through one midnight a bank relief law.

Maryland suddenly awoke to a three-day bank moratorium as the result of relentless runs. Outlook was for extension beyond its initial period.

Ohio broke out in a rash of urban bank restrictions which nearly blanketed the State.

Indianapolis, South Bend and Fort Wayne rationed deposit withdrawals.

Four Kansas City banks hastily consolidated.

In Washington, D. C. the $11,000,000 Commercial National Bank closed its doors.

In Pennsylvania Governor Pinchot rushed through measures giving dictatorial power over withdrawals to the Secretary of Banking.

Delaware, next-door neighbor to Pennsylvania, did likewise.

Arkansas passed banking relief legislation.

Indiana and Missouri, forehanded, passed measures to legalize temporary bank suspensions.

In such an atmosphere Senator-elect William Gibbs McAdoo, President Wilson's Secretary of the Treasury, blurted: "The credit structure of the U. S. is a disgraceful failure, our entire banking system does credit to a collection of imbeciles. ... I favor a constitutional amendment that will deprive all States of the power of creating and controlling banks and that will put one federal banking system into effect which will make every bank in the nation safe."

Michigan, first important state to suffer a banking collapse, last week was the first to make headway out of its troubles--under the spectacular leadership of none other than Henry Ford, foe of all bankers. Three weeks ago when Michigan's Governor Comstock closed all banks in the state, Mr. Ford had $7,500,000 in Union Guardian Trust Co., $22,000,000 in First National (TIME, Feb. 20, 27). After the shut-down the Detroit bankers began to scratch barren ground for new capital with which to reopen Guardian National Bank and First National. Finally the bankers betook themselves humbly out to Dearborn and asked for a conference with the one man who could save their city and State.

Mr. Ford's antipathy for bankers dates back to 1920 when he tried to borrow $85,000,000 in Wall Street only to learn that the lenders would demand a voice in running his automobile company. He distrusts the U. S. banking system, feels that bankers too often speculate with deposits. Said he earlier last week: "The first duty of a bank is to be a safe repository for money. . . . It's just as if I put my car in a garage and when I came to get it, I found somebody else had borrowed it and run it into a tree." He thinks depositors should pay a small bank fee for service just as automobilists pay a garage fee.

The Detroit bankers explained the situation to Mr. Ford. Would he convert his deposits into bank stock? He would not. He had never owned any bank stock because banks were not properly run. Would he subscribe to new capital in any other form? Certainly not. His position was on the side of the $500 depositors, not the directors.

Just when the conference was about to break up in failure Mr. Ford took a half sheet of paper and scribbled out his terms:

He and his son Edsel would put up the entire capital--$11,000,000--to take over the two crippled banks. As sole owners of the two new institutions, they would pick their own directors, run things to suit themselves. The Ford banks would eventually be merged.

The offer stirred the meeting to sudden action. A special wire was opened to Washington over which the Comptroller of the Currency and the R. F. C. directors were told what was happening. When it was suggested that Wall Streeters might get money into the Ford pot, Mr. Ford flared: "I'll not put a nickel in it if they're in--not a nickel!''

Over the week-end there were more Ford-banker conferences. But the picture was changing. In Washington the R. F. C. reduced its offer of aid from $135,000,000 to $78,000,000. Thereupon Mr. Ford cut his cash bid from $11,000,000 to $8,250,000--$5,625,000 for the First National and $2,625,000 for Guardian National. The R. F. C. sat through a quiet Washington Sunday. The bankers--Clifford B. Longley, Wilson W. Mills, Dr. Fred T. Murphy, James Thayer McMillan--shuttled between Detroit and Dearborn all Sunday. The sun set. The R. F. C.'s 6 p. m. deadline for a yes-or-no answer came & went. There was the Ford proposition. The bankers could take it or leave it. Before midnight they took it.

Mr. Ford's two new banks were called the Peoples National and the Manufacturers National. To be organized and operating this week, they would pay depositors of the two old banks 30-c- on the dollar, the rest later when frozen assets melted. Thus, where many a banker has found himself in the automobile business, Mr. Ford found himself in the banking business, willy-nilly. He became the dominant banker of Michigan, a leader in a profession he has long despised. He had done, inevitably, the American thing. He entered on his own terms, with the warning that his ideas of banking would prove "revolutionary." Detroit, Michigan, the nation waited and watched.

Although the Michigan moratorium was officially over, Governor Comstock imposed such drastic restrictions on withdrawals that actually the holiday was extended indefinitely. These were limited to a depositor's pro rata share of a bank's cash and government bonds, thus anticipating the "Michigan Plan" (not yet enacted) of segregating liquid and frozen assets. All out-State institutions opened for what business they could do, but in Detroit, a man could draw out only 5% of his deposits.

Maryland. The moratorium that closed 200 Maryland banks and tied up nearly a billion dollars in resources was decreed by Governor Ritchie because of: 1) the after-effects of the Michigan shutdown; 2) the National City disclosures before the Senate; 3) a silent run that was taking $6,000,000 per day from Baltimore banks. Declared Governor Ritchie: "There is no justification for the withdrawals. . . . My determination is that first, last and all the time the interests of the depositors must be protected." To that end he worked night & day to draft and get the Legislature to pass what was rapidly becoming a standard bill among the states for the division of liquid and frozen assets, with withdrawals limited to the former. Work & play went on in Maryland about as usual.

Ohio's Governor White, refusing to declare a bank holiday, prepared legislation to hold withdrawals down to the level of the liquid assets. On his own hook the Mayor of Dayton ordered a three-day moratorium. In Cleveland, Akron, Lima, Canton, and many a smaller city, bankers agreed among themselves to limit withdrawals to a mere dribble of cash. The good-natured, holiday-spirited crowd which thronged the great lobby of Cleveland's Union Trust Co. to get what money it could was typical of similar gatherings in hard-hit States.

Federal Reserve. Although to many last week the U. S. banking structure seemed ready to fall on their heads, there was one big beam that was still as sound as the day it was hewn--the Federal Reserve System. It stood last week as it has throughout the Depression, in an impregnable position. It pumped out $215,000,000 in credit, it saw the money in circulation rise to the highest point in a decade as fear of runs made bankers fill their tills with cash and fear of failure sent depositors scurrying to the tills. It saw its gold stocks dip $51,000,000 but its ratio of gold-to-notes was still over 60%. And it will continue impregnable as the job of renovating the U. S. banking structure goes on. That job is to get the banks back into the banking business, out of security selling, out of investing in unsalable bonds and frozen real estate mortgages, back into short-term, self-liquidating commercial loans.

Declared Pennsylvania R. R.'s William Wallace Atterbury before a Senate committee last week: "The only way to beat the Depression is to hit the bottom and then slowly build up."

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