Whitewash in Detroit

Early last June a Michigan judge mounted his bench as a one-man grand jury to hear the history of the decline and fall of Detroit banking (TIME, Sept. 4 et ante). For three months the prosecutor deployed scores of witnesses across the stand. Last week Judge Harry B. Keidan declared the show over and handed down his findings: 1.) that there was no evidence of criminal action on the part of Detroit's bank officials; 2) that there was no evidence of "smart money" withdrawn prior to the St. Valentine's Day closing; and 3) "most powerfully am I urged to conclude that the Government would not permit an insolvent bank to operate in fraud of its citizens, and I am constrained to find that the two national banks . . . were solvent." It was a thorough whitewash of Detroit's banks & bankers.

Judge Keidan discreetly refrained from placing the blame on anyone. No one knew better than Judge Keidan that the number of indisputable facts adduced by his investigation was pitifully small. His jurisdiction was purely State; the U. S. Treasury, prowling around Detroit on its own secret investigation, refused to open the books of the two big defunct banks and forbade its overworked officials to bother with testifying. What Judge Keidan received were rattling salvos of highly- personalized undocumented charge and countercharge. The whole story, the true story was yet to be told.

The two most disappointed men in Detroit last week were rambunctious Senator James Couzens and Father Charles Edward Coughlin, inflation-minded radio-priest of the Shrine of the Little Flower. Judge Keidan had given them several days each to damn the bankers for a pack of thieves. They had been almost the only witnesses who had not blamed the U. S. Government, Senator Couzens or Father Coughlin for the banking fiasco. And they both craved another chance to testify. Senator Couzens claimed he had been "prevented" from offering sensational evidence but declaimed: "While I may be denied a forum in my own State, I still have the forum of the Senate. . . ."

Father Coughlin, who observed in his testimony that "the U. S. is no Jesus Christ," rumbled irrelevantly: "If the U. S. Government is so craven as to rest its case on this testimony, which was given by more or less prejudiced bankers . . . then I am very much afraid that the people of this nation and of Detroit will begin to classify our Government as an Archangel Capone."

In Boston last week, result of a long U. S. Government investigation, a Federal grand jury indicted President Daniel C. Mulloney of defunct Federal National Bank, three presidents of affiliated banks and the treasurer of still another for looting their institutions of a total estimated at $2,000,000. Federal National and eight affiliated banks, with total deposits of $60,000,000, crashed in the line-squall of banking failures that tore through New England late in 1931.

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