Evening star., 1933-08-17
Couzens Says He Was Re-
quested to Announce Ap-
pr0VaI of Dawes Grant.
DENIES HE PREVENTED
AID FOR DETROIT BANK
Says Little Fellows Were Left
Holding the Bag in More
Than 1000 Closings.
BY the Associated Press.


DETROIT, August 17.-Senator James
Couzens, Republican, of Michigan. tes-
tifying before the Detroit bank inves-
tigating jury today, said he had been
asked by then President Hoover during
the last political campaign to issue "for
political purposes a statement ap-
proving Of the loan of s90,000,000 to
the Chicago bank of which Charles G.
Dawes was head.
The Nation was shocked when it
leaked out from some source unknown
to me that Dawes, former president of
the r. F. c. had got a loan from the
R. F. c. of s90,000,000" Couzens said
"Of course, the party that was out of
power capitalized on that"
Frankly, that scared the r. F. C.
and made it more cautious. I asked
the Senate to appoint committee of
five to investigate all loans made in
secrecy. You must remember Dawes
got his loan in June for a new bank
He was not going to put s9O,00O,0 900
in an old bank and have the wise ones
withdraw their money, but was going
to give all depositors an equal chance
to withdraw their money"
4AOO'CiS SlIC h1t14dIOl odl0s hdIlt-
ed the statement for political pur-
poses" The request, he said, came in
telephone call from the White House.
The Michigan Senator said that, while
his statement of approval was not
formally issued he did approve the
Dawes loan
Startling Data Presented.
Couzens startled the court room with
the statement that as early as last
November, three months before the
banks closed, Federal officials had ap-
prised officers of the First National
Bank, Detroit, that the solvency of
their institution was a matter of uueS-
ton" He declined to reveal the source
Of his information. saying it was conf
Dental, nor would he give the names
OF the Government officials who, he
said, made the criticisms.
In the course of his testimony
Couzens declared that during the Ma
tion-wide banking crisis there had
been over 1000 banks that closed
where smart money had withdrawn
its deposits after r. F. c. loans had
been made-and the little fellows who
were not in the know were left hold
ing the bag"
Did that happen in Detroit?" asked
Toy
No, but it happened in Mount Glenn
ems, Mich" said the Senator, "and I
want to say that this is the most out
rageous thing I ever heard The First
National crew went out to the Citizens
Savings Bank. if I have the name
right. paid themselves 100000. and
left the depositors with 10 cents on the
dollar. holding the bank
"A lot of things happened in banks
!or winch no criminal prosecution can
be brought. I venture to say that in
all probability in Mount Clemens there
was no basis for criminal prosecution.
But If civilization is to exist and reIv
only on criminal law and not on morals
and ethics, we might as well give up..
The ethics of banks here and outside
could not be prosecuted but some of
the acts were as vicious and shameful
as could be-
Obtained List of Loans.
Couzens said he went to the
r. F. C. and obtained a complete list
OF all the loans made, asking for COM
plete information on the Dawes loan.
I did not see the collateral because
that was in the Federal Reserve banks
and in Chicago" he said The Senate
had not given the committee money to
go there or to hire appraisers. The COM
mlttee decided to take the appraisal of
the II. F. c. examiners. All of them
came Before me and testified that the
collateral was valued at $4,000 ,OOO."
In brief discussion of the policy
OF the r. F. c. that followed, the Sena-
tor said he was in close contact with
conditions during the eight months be-
tween June, 1882, and February of this
year, pointing out that all during this
time the banking situation in the
united states had been getting worse"
| CouZens declared Wilson W. Mills,
former chairman of the board of the
First National Bank, Detroit-the
country's largest closed bank-did not
tell all he knows"
| Mills did not tell of the millions in
detault by employees and officers" he
SAID, and OF the loans to favored ones.
II he had, the court would have been
advised to an entirely different picture"
| or Henry Fords participation in
events preceding the State holiday. he
SAID the motor manufacturer had been
| asked to enter joint guarantee with
him that the Government would suffer
no loss if a S45,0O0,OOO loan were
granted for the trust company, but
Ford refused. The refusal, he said,
presumably was because Ford was an
noyed at the suggestion that he involve
himself further" in the trust company
He said he believed George P. Dawson.
chairman of the board of the Central
Hanover Bank & Trust Co.. who came
to Detroit shortly after the holiday.
took Mills up a high hill, promised
him the world, said he would head a
big New York bank if it was created
here, and then dropped him" He
charged Mills with attempting to kill
the plan of Henry Ford to form two
new banks which would have taken over
the assets of the closed First National
and the Guardian National Bank of
Commerce, because he was mot on the
Ford list of directors"
Denies Blocking Loan.
The Michigan Senator's testimony
concerning the Dawes loan came as a
depression in his discussion of the bank
ing situation in Detroit. of which he
had read chronological history of
events, in which he had a part, and
which led up to the declaration of a
bank holiday in the State, the begin
ming Of the National crisis. Couzens,
said by previous witnesses to have
blocked a $45, 100000 R. F. c. loan for
the Union Guardian Trust Co., which
it was testified would have prevented
the Statewide policy. denied any such
move. He said the r. F. c. was will
ing to approve a loan of S37,700, 900,
under Federal law. in the face Of as
sets offered. He said he told President
Hoover at the time he would "denounce
the CaYger) loan from the housetops"
If it were made, but said every R. F. c.
official and several other Government
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