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CLOSED CHICAGO BANKS TO TEST U. LOAN PLAN
Asset Appraisal Started by Receiver O'Connell.
Appraisal of the assets of five six closed banks of Chicago and vicinity was begun yesterday under direction of William L. O'Connell, general IIIInois state bank receiver, with a view to testing the operations of the new Reconstruction Finance corporation program of providing up to one billion for the speedy liquidation of all closed banks in the United States. the category of state banks qualified for immediate loans there are five in Chicago and three in Cook county, State Auditor Barrett's office explained. These banks, and their deposit liabilities as of closing date, are as follows Cosmopolitan State bank, 696,000; Belmont Sheffield Trust and Savings bank, $248,000; Madison Kedzie Trust and Savings bank, $1,946,000; East Side Trust and Savings bank, $272,000; Halsted Street State bank. $1,073,000; State Bank of Blue Island, $317,000: State Bank of Palatine, $174 1,000, Berwyn Trust and bank, $152,000. 'Connell Is Optimistic.
Mr. O'Connell, who spent several days in Washington conferring with RFC officials before announcement of the billion dollar liquidation plan, returned here with an optimistic interpretation of how the program will affect Illinois. Various interpretations of the had been issued from official Washington For example, in the initial announceof the plan on Sunday, President was quoted as saying that RFC loans would be extended banks closed after Jan. 1, 1933, up to 50 per cent of their deposit liabilities. From the president's statement, the inference drawn here was that Illinois banks closed before Jan. would be from the plan, thus only 88 out of 532 Illinois state banks qualified for loans. On the following day, Jesse H. Jones, chairman of the RFC elaborated the announcement with statement that, although banks closed since last Jan. would be sole beneficiaries of the new loan policy for the time being, the plan might be extended to include other closed banks after next Jan. A Broader Loan Policy.
Mr. O'Connell said his understandIng of the new RFC program was the same as that of Chairman Jones. As O'Connelll envisions it, the RFC. which has been lending funds both to open and closed banks all along. but under stringent rules, relaxing its policies so as to knd cash on such collateral as real mortgages and construction onds, heretofore as frozen with little or no loan value Enunciation of the liberal policy up point which has heretofore perplexed Chicago banking fficials as to how the plan could be hade to work. The perplexity arose from the fact hat practically every Illinois bank since June had eptable assets for RFC loans before shutting doors With all such assets already pledged. Illinois banks at loss to discern where such institutions would find assets for further loans Mr Jones made his statement of the broader loaning policy
Illinois' Share Problematical.
Mr. Connell said it would be impossible, in his judgment, to estimate this time just what portion of the billion dollars will become available to Illinois banks. Based on President atement as to the opera. tion of the new policy. Chibanking officials had that no than or per cent of the total lending fund, flow into Illinois' closed banks The President had declared that loans be made up to maximum of 50 per of the total deposits given bank, from which local liquidating officials, aware of the depleted condition of the closed banks, estimated the loan average would run around 30 per cent. The 88 closed banks that will receive the first aid had total deposits of 000,000 at the time of closing, while the 444 banks closed before last Jan. had deposits
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