The Waterbury Democrat. [volume] (Waterbury, Conn.) 1917-1946, 1940-01-20


The public has heard very little
about Crowley. But neither has 1t
heard very much In the last few
years about long queues Of fran.
tic depositors standing outside, Of
closed banks. That once quite
common tragedy has disappeared
completely from the American
scene.
Today, when o bank shuts Its
doors, II does 50 as part Of an Or
derby, regulated process Of liquida-
ton. There are no runs, no dis
traught depositors, no distressing
personal and economic aftermath.
Depositors get their money imrne-
diately and In full Up To- 5000.
Those with accounts shove that
figure have to wait for the bal.
ance, but In the end they gett heir
cash.
Unquestionably the TDrC Is the
most spectacular outgrowth Of the
memorable banking collapse that
gripped the nation In early 1888
Credit for the success Of this great
reform Is due to two factors.
First Is the Federal Deposit In.
surance Act. Passed during the
stress ana strain ofthe early New
Deal, both Republicans and Demo.
Gratis now acclaim II. Last year
the Senate Witnessed the extraor.
binary spectacle Of Senior Garter
Glass Of Virginia, bitter anti.New
Dealer, and Senator John q.
Townsend, rock.ribbed Delaware
Republican, joining forces TO give
the FDlC greater administrative
independence.
The second factor is Leo T.
Crowley, who has made the TD1C
one Of the most vital forces IN the
American financial system, ana
yet who has worked 30 quietly
and modestly that few Of the g..
100000 depositors whose earnings
he has 80 efficiently guarded even
know his name.
HOW FDIC WORKS
Secret Of Crowley's remarkable
record Of preventing bank crashes
has been his insistence on sound
business practices.
No FDiC Ensured bank (l3640
out Of the 1880 commercial banks
IN the country are FDIC ynembers)
Is permitter to pay out dividends
until all losses have been met.
There has been no piling UP OF
frozen assets under Crowley. Also,
before o bank 10 accepted IN the
EpIC 1t must satisfy three basic
qualifications: III have adequate
capital, (2) competent manage.
rnent. and (S) favorable business
prospects.
II In spite Of ell these safeguards
o hank runs into difficulty, then,
o. Crowley puts 1t, eve step In and
administer our medicine" IN the
six years Of It's existence, FDIC
has administered It's potent tnedi-
cine to $40 banks, paying out more
than $751; .O00. 600 and saving $780,.
900 depositors from loss. And oil
this has been done without grand
standing and without fanfare.
Illustrative Of how Crowley
works was the quiet liquidation
Of che Title Guaranty q Trust
Co., Of Jersey City, . large bank
with eel.oOo, 900 In deposits.
When FD1C examiners reported
that the bank was shaky, Grow.
Ley immediately took charge ana
Closed lie doors. Ten days later
every deposit up 70 SS,00O had
BEEN rad Of In eull--e total
Of ele,eoo,Oo0 out Of the S2l,.
O0o,0OO.
In pre-FDIC days the collapse
Of this bank would have rocked
the city-in fact, the whole region
Under Crowley there wasn't q
flicker. rev people outside New
Jersey even knew about II.
UP THE HARD WAY
There are two outstanding
thing about Crowley. One 70 his
coustiy gentlemaillineSs: the
other his quiet. inflexible liberal
Ism.
ne was q wealthy business man
long before he came 10 Washing
tom and he had 70 climb the lad
der Of success the hard way. But
there has been no stAuncher lib
eraI n the New Deal. Ne has
stood iiIllnoving for the things he
believes IN, yet he has never iias
dulked IN personalities.
one Of eight children, Crowley
was forced by the death Of his