Evening star., 1933-02-27
BANKS WILL OPEN
W|THFORD MONEY
Manufacturer and Son Ex-
press Faith in RehabiIi-
tation of Detroit.
By the Associated Press.

DS tIle ASSOCldlcU FreSS.
DETROIT, February 27-Two new
Detroit banks, buttressed by the mil
lions of Henry Ford, today became the
keystone of plans to Lead Michigan out
of the difficulties which resulted in the
proclamation of a State wide banking
holiday two weeks ago.
The new banks, whose capital will
consist of S8,250,000 furnished by Mr..
Ford and his son, Edsel, are expected to
open for business Wednesday. They
will be built from the liquid assets Of
the First National Bank and the
Guardian National Bank of Commerce,
whose depositors will be able to receive
Immediately about 80 per cent of their
deposits
Disbursement of the remaining 70
per cent must await the liquidation Of
the assets of the two banks.
The Ford announcement climaXed
week end Of fast moving develop
ments. during which officials of the
First National and the Guardian Ma
tional accepted a $4,000, 900 loan from
the Reconstruction Finance Corpora
tion to be used in the formation OF the
new banks.
Rights Are Requested.
The F'ords' offer to subscribe the en-
tire capital stock of the two new
banks as accepted by directors and
stockholders of the First National and
the Guardian National grants the
motor manufacturer and his son the
right to name the official personnel
of the new institutions and to ul-
timately merge them into one organ
lzation. These rights were specifically
requested by the Fords.
Under the plan the Fords will put
up S5,625,00 for the successor to the
First National and S2625.0O0 for the
successor of the Guardian National. OF
the $4,000 600 r. F. C. loan $4,000 900
will go to the bank to be built out of
the First National and the remainder
to the bank to be built from the
Guardian National
In their statement which contained
their offer to the bankers, Mr.. Ford
and his son said:
be the type of financial structure that
will merit public faith in the ability
OF industrial Detroit to rehabilitate
ITSELF
The Detroit Savings Bank an
nounced yesterday it would resume its
commercial business today, but, would
limit savings Withdrawals to cases of
real necessity and accept checks on
other banks only subject to final pay
ment.
Henry Ford's Offices last night issued
a statement, reviewing the negotiations
OF the last few days in the Detroit
banking crisis. The statement sad in
part:
Efforts of the officers of the First
National Bank and the Guardian Ma
tional Bank of Commerce to meet con-
ditions laid down by the Controller of
the Currency and the Reconstruction
Finance Corporation before Govern
ment aid would be extended to Michigan
resulted Friday in an offer from Henry
and Edsel Ford to provide all the neces-
sary capital for two new banks. The
offer has now been accepted by the di-
rectors and depositors of both the old
banks. This will Immediately provide
Detroit with banking facilities and will
begin the liquidation of the old banks
with an immediate initial payment of
about 80 per cent.
THE Ford offer came upon the heels
Of Henry Ford's refusal to become a
stakeholder in any bank plan thus far
proposed. He had been appealed to on
Thursday for permission to "freeze"
part Of his deposits in both old banks
and nave these amounts credited to him
as bank stock in the proposed new in
stitutions. His reply was definite re-
fusal.
Grounds for Refusal.
1.-THE Ford refusal of Thursday was
based upon two distinct grounds. First,
that it would complicate the Ford re-
lstion to the general banking situation
in Detroit.
"The second ground of refusal was
his belief that as one stockholder
amongst many he would have little or
no influence over the type of banking
practiced by the new institutions. He
has very definite ideas concerning the
functions and management of banks.
He believes that bank loans should be
made for productive and not speculative
purposes. So revolutionary are some of
his ideas along this line that he saw
little hope of having them adopted by a
bank board of which he would be but
one member, and he would not own
stock in any bank that continued to
operate along the old lines"