Stomach-Ache

By error, the 1937 Moody's Manual of Investments quoted the stock of the New Jersey Title Guarantee & Trust Co., sixth largest bank in Jersey City, at $974 a share instead of $9. The bank's president, Walter Pennett Gardner, was formerly judge of the New Jersey Court of Errors & Appeals. Last fortnight word began to filter about Jersey City that these were not the only errors involved in the bank's history.

Quietly, persistently, depositors appeared at the bank's main office and five branches, demanded their money. In three days the bank dished out $2,179,280. N. J. Title Guarantee & Trust still had over a million in cash on hand, but it did not open for business again. With $21,500,000 in deposits still on its books, it was the biggest bank failure in five years. Reason: under Boss Frank Hague, Jersey City's tax rate on real estate is the highest in the U. S. and the bank's assets were frozen with $21,000,000 in real estate commitments, much of it in empty tenements and factories.

Time was when such an event would have brought cursing crowds banging at the doors of the bank's red brick building, when local payrolls would have stopped, local taxes gone unpaid, a resounding local depression started. But after the 1933 Bank Holiday, the New Deal set up Federal Deposit Insurance Corp. Since then banks have paid .08 1/4% of their average daily deposits to FDIC, thus insuring all deposits of $5,000 or less.

Last week when FDIChairman Leo Crowley announced that $17,000,000 of the $21,500,000 loss was completely covered, that another million consisted of uninvested trust funds that were fully secured, Jersey City knew it had only a stomachache, not appendicitis.

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