The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-28
Safety for DepOSitOrS Is
Basic Principle for
His Program.
BY JAMES C. AUSTIN
United Press staff Correspondent

DETROIT, Mich, Feb. %. - A
new type of bank, its policy founded
on the conviction of Henry Ford
that money never actually can make
money, will be born in Detroit
within the week.
Ford, who Monday announced his
plan to take over the Guardian and
First National banks and become
sole operator of two new banks to
replace them, discussed his plans
in brief interview today. He in
timated three basic principles would
be introduced. They are:
First, safety for depositors.
Second, loans to productive enter
prises only.
Third, no interest.
First of these principles is found
ed on Ford'S contention that the
function of a bank should be to
provide safe place to keep money.
Holds Speculation Is Gaining
Once Ford likened the ideal bank
to a garage where a man leaves his
automobile for safekeeping and gets
it again, on demand, instantaneous
ly and without question.
The second principle has its foun-
dalton on Ford's contention that
most speculation is gambling-par-
ticularly stock market speculation.
The third is based on Ford's be-
lief that money never really can
make money-that only productive
labor and materials can.
Take a million dollars in gold"
he once said, and it won't produce
one penny. You can put hen on
it, but it will not hatch; water it
and it will not sprout."
Safety Held Main Thing
Ford's son, EdSel, was downtown
busy with the bank reorganization
plans when newspaper men called
on Ford, who had spent the morn
ing in his laboratory, working on
some new automobile problem.
Safety" he said, as the news
papermen were grouped around
him, is the greatest thing in bank
ing. There must be Safety-flrSt,
last, and always. BY safety I mean
that a man can put his money in
bank and get it back when he
wants it, 100 per cent"
Not long ago Ford illustrated his
idea of banking safety by another
alluSion to the subject nearest his
heart-the automobile.
The bank depositor, he said, puts
his money in bank and accepts 3
or 4 per cent interest in return for
granting the banker the privilege of
loaning that money to some one
else. Too often, he pointed out, the
depoSitor comes back to get his
money and finds that the loan the
banker made was no good. His
money has been lost.
Likened to Auto
He likened that situation to a
man putting his automobile in
garage and then calling for it only
to find that the garageman. had
loaned it and perhaps the borrower
had not returned it.
I believe in productive and not
speculative loans" Ford said today.
He defined productive loans as, for
instance, loans to manufacturers
who desire money to enlarge their
factories or to employ more men.
Speculative loans, he said, would be
those involving property, which
huctuates in value.
The two banks, Ford announced,
would cater to two distinct classes.
One, the Peoples National, will be
for the small depositor and inves-
tor The other, the Manufacturers
National, will be designed to serve
industry.
Two Glasses of DepoSitors
Recently Ford discussed an idea
for the division of bank depoSitorS
into two classes. One class would
be the depositor who placed his
money in the bank with the under
standing that he could have it back
100 per cent at any time he called
for it. On such deposits no interest
would be paid; even a small charge
might be made for the service.
he second class of depositors
would place their money in the bank
with the understanding that the
banker had the right to lend it.
The banker would share with the
depositor the profits of the loans.
Should there be losses, the depoSitor
would stand his share.
SNYDER is REAPPOINTED