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PRESS PAGE Bank New First National Policies of Over Radio, Cannon Outlines,
Declares Any Guilty of Illegal Acts Still Liable to Prosecution; Anticipates Double Liability
V. Cannon's speech over the is the text of Following radio last evening talk to for a short RADIO FRIENDS: want to you MY bank in this city to be known as time on the plans new in Cleveland. want to tell you why First National Bank the the formation of it, what means became associated with Union Trust Co. and the Guar200,000 of the to the depositors the citizens of Greater Cleveit means to dian plainly, always land. frank in what have to say. to be brutally know their banks largely through loaning their This called money in the bank. ings account. banks pay interon the-acèount. checkaccount, usually the bank does pay interest that account. bank, order to pay this terest the its to pay its positors, to pay and other the the in the to individand the depositor's money may be times bonds. and in other securities. certain the money must be kept the bank so that can have your money when you want loaned and bonds moneys bought should be his that, money the pay. This called liquidity are not normal times We know that stocks real estate fallen treour and that market for many years ago. In and what have frequently called the golden ury and many loans made by both the Union Guardian. which that time have considered fairly safe. iron age necessity distress, they cannot Many investments made which today are questionable. result. we have what is called frozen sets.
"Called" Good Loans the bank loans on which the pay and the has too large the bank unable to too many deposipay tors demand their money once. Union Trust Co., years had April 1929. $301.The day when took charge of deposits. three have been paid to depositors. Guardian Trust Co. three The years had April of The when the conservator took charge had deposits. three years $67,995,852 have been paid its depositors. these large sums to the In paying banks depositors, had to good loans, sell good finally to borrow securities, from the Federal Reserve vast Bank and from the order Finance the banks notes and the Federal the pledge large amount nance assets there formed In addition, known the ReCo., company banks Reserve Mortgage Co. The Western two banks the from these their real estate greater portion mortgages, them part with the notes the and part Reserve Mortgage Co. Western Not Able the assets An banks leads one the concluboth sion that today they are not able the money owed their depositors They are in the the same condition which sell for enough to pay the present prices moneys owes the shoe which unable turer, sell in order what owes for raw such Both banks have large sums due them from which, the lateral sold placed in might result the persons who the notes with loss the banks. This, course, would result in great loss the bank depositors. the Western Mortgage Co. should foreclose the mortgage your which purchased from Trust the Guardian Trust Co. many homes owners would their homes and the banks would share the loss All these liquidate money than they today You have We there brighter but surely come. If they do chaos. situation Forty 175,000 peotheir food, clothing, from the AssociCharities, Social Bureau, Soldiers' Sailors' Reand organiza1929 the number of families about 1000. The drain today the social the city, the state and the tional tremendous. There over women children who have deposits the county over $8,000,000 closed greater Nearly every every its money the closed banks There of the Fund's money closed Adding that the funds hospitals charities, there over $1,000,000 money closed banks, which money for care of the sick, for the children, and for the feeding men and women who, through no fault their have obliged ask aid. There factories and stores need money for their
Today's Picture
This Union Trust Co. and the two our great banks, closed. The charge. How shall they dated? They they have in the past. Three ways First, liquidation by the superIntendent of banks that will take long period. We illustration this city in the Standard Trust Co., which was closed liquidation the superintendent of banks will result in most drastic liquidation. will result many failures. will into not the of the The through official who charge. will fast possible, the money. used First. for the payment expenses; Second. for the payment preferred secured claims, Third, for the general creditors, who the depositors. The plan would be reorganization of the two banks. This would mean that the assets which each the banks has, and which are not pledged. could be used carrying on the bank paying expenses conducting that the large assets which known frozen assets would liquidated Such plan would leave the charge, and not release the time any volume of The third plan the one which been asked to head, namely. form new National Bank which partner. United States government. bank not the cessor either assets. federal through the Finance Corporation, agreed to least up stock, the every dollar ment the new bank depositors the closed banks: citizens Cleveland, will common stock To illustrate, in that this bank be formed. the depositors and citizens Clevepurchase shares mon stock, equaling $5,000,000. stock has value of $10 per share. Ten dollars be paid for surplus $5 for profit. double liability stockholders this bank, should fail, would be $10.
Loan Promised
The Finance Corhas agreed the Union $20,rowings, and the Guardian Trust Co. dition to Its present borrowings This will allow Union Trust Co. and the Guardian Trust Co. to make distribution their and other creditors. Five per cent has by Trust Co. you the you right to draw That your There through the and 35 per the due This hae the right out. One has the Guardian Trust drawn you have the right That leaves 99 cent of your deposit.. There will through the new bank, and entered upon books deposit your favor, per cent the amount now due you.
Depositors Must Help
In make this deal the take of the moneys. which will the due and buy stock the new bank not required law to do this portion of the depositors which they reiceive and buy stock the bank, otherwise the $5,000,000 stock will and paid buy stock. one decide that for the stock cannot revert either plan plan number two. going to run to the board drafted. tively time bank out banker. for have devoted my time securing the unemGreater CleveMost know have mistakes, never consent, individual loans made any director while serves There will department bonds to the the public. commissions shape form.
Economy Stressed
Under the national can person excess which limits the the openthe $900,000 to any or corporation. will not retain general counsel When services counsel are required, will select that which, the judgthe best fied each particular The will purpose money factor the life the business that business entitled proper credit, may proper This drifted from the ideals city and hope that can brought the days mantake the position. take under obligation and will endeavor my duty and for the depositors and stockcare Mr. Joseph Kraus. who has the Union will president. investigated Mr. with the Co. He tion no money the Union any the of the He has and think he confidence of the depositors National Bank will First The be run in the department trust funds the Invested the stock the will and stocks which will be bought the are bought market various other brokers in
