Senate Revelations 7:2

Ferdinand Pecora, Inquisitor of the Senate's Banking and Currency Committee, last week found that Edsel Ford did not make an exciting witness. Son Ford, a director of the Guardian Detroit Union Group, owner of 50,000 shares of its stock, was exceedingly vague about what had gone on officially. Typical questions & answers:

Mr. Pecora: Did you attend meetings of the board of directors at which the conditions of the banks were discussed?

Son Edsel: I probably did, but I do not remember.

Mr. Pecora: Were you . . . active in the discharge of your duties as a bank director?

Son Edsel: I thought I was.

Mr. Pecora: How much counseling did you do?

Son Edsel: I do not remember, but there were many times. ... I do not recall advocating any policy.

Mr. Pecora: What was the general tenor of those discussions?

Son Edsel: That the banking situation was very tense and was getting worse.

Mr. Pecora: Did you sanction those dividends?

Son Edsel: I don't recall actually sanctioning them, but I knew they were being paid and I didn't criticize them.

Mr. Pecora: Have you a good memory?

Son Edsel: I think so.

But Son Edsel was able to give an account of the Ford family's losses in the Detroit banks. Grand total of Ford (father, son & motor company) funds tied up in the crash was $63,200,000 in deposits, loans and advances. Of this total $18,708,000 was tied up by the failure of Detroit's First National, the rest by the failure of the Guardian Detroit Union Group. Total recovered to date: $18,000,000, leaving over $45,000,000 lost or still unrecovered.

Edsel Ford likewise told his story of what occurred just before the crash. On Feb. 13, 1933 Secretary Roy Dikeman Chapin (Hudson Motor) and Arthur Atwood Ballantine, Assistant Secretary of the Treasury, visited Detroit, asked the Fords to permit the freezing of $7,500,000 of their deposits in Union Guardian Trust Co., asked them to put up $5,000,000 capital for a new mortgage company which was to assist in getting a $49,000,000 loan for the Guardian from the RFC.

Another important version of the Detroit debacle was given by Alfred P. Leyburn, chief national bank examiner in the Detroit area. His points:

Cause of the failures: Bad management . . . and when you say bad management you say a mouthful.

RFC: The RFC has been accused of being the Big Bad Wolf that came up to Michigan that February morning and closed the banks. The fact is that the government gave every bit of help it possibly could.

Wall Street (In answer to the question whether a Wall Street plot had a closed the banks): I think it a wonderful fairy tale.

Reopening the Union Guardian: Why, it would have taken Houdini to open that bank.

Mr. Pecora: "But he's dead."

Examiner Leyburn: "So's that bank.''

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