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“The Man in the Street Is for It”: The Road to the FDIC

  • Christopher W. Shaw (a1)

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1. Galbraith, John Kenneth, Money: Whence It Came, Where It Went (Boston, 1975), 211. On the framework known as the history of capitalism, see Beckert, Sven, “History of American Capitalism,” in American History Now, ed. Foner, Eric and McGirr, Lisa (Philadelphia, 2011). Works in this field that focus on finance include Pak, Susie J., Gentlemen Bankers: The World of J. P. Morgan (Cambridge, Mass., 2013); Ott, Julia C., When Wall Street Met Main Street: The Quest for an Investors’ Democracy (Cambridge, Mass., 2011); Levy, Jonathan, Freaks of Fortune: The Emerging World of Capitalism and Risk in America (Cambridge, Mass., 2012); Hyman, Louis, Debtor Nation: The History of America in Red Ink (Princeton, 2011); Mihm, Stephen, A Nation of Counterfeiters: Capitalisms, Con Men, and the Making of the United States (Cambridge, Mass., 2007). Historical studies that focus on top-down policymaking include Grisinger, Joanna L., The Unwieldy American State: Administrative Politics Since the New Deal (New York, 2012); Rockwell, Stephen J., Indian Affairs and the Administrative State in the Nineteenth Century (New York, 2010); Carpenter, Daniel P., The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862–1928 (Princeton, 2001); Dudziak, Mary L., Cold War Civil Rights: Race and the Image of American Democracy (Princeton, 2000); Zelizer, Julian E., Taxing America: Wilbur D. Mills, Congress, and the State, 1945–1975 (New York, 1998); Barber, William J., Designs Within Disorder: Franklin D. Roosevelt, the Economists, and the Shaping of American Economic Policy, 1933–1945 (New York, 1996); Derthick, Martha, Policymaking for Social Security (Washington, D.C., 1979).

2. Laurence Laughlin, J., “Guaranty of Bank Deposits,” Scribner’s Magazine 44, no. 1 (1908): 101; Beard, Charles A., “The Idea of Let Us Alone,” Virginia Quarterly Review 15, no. 4 (1939): 503–14; John P. Willson, “William H. Harvey, J. Laurence Laughlin, and the Rhetoric of Free Silver” (Master’s thesis, University of Wyoming, 1964), 59–81.

3. There was a nineteenth-century American precedent for guaranty: New York State established the first guaranty program in 1829 to pay the debts of failed banks. The Safety Fund System’s resources were strained following the Panic of 1837, and the law was subsequently amended to guarantee only banknotes. See Chaddock, Robert E., The Safety-Fund Banking System in New York State, 1829–1866 (Washington, D.C., 1910). Vermont, Indiana, Michigan, Ohio, and Iowa set up guaranty programs before the Civil War as well. By 1866, all of these state guaranty systems had ceased to exist. See Golembe, Carter H. and Warburton, Clark, Insurance of Bank Obligations in Six States During the Period 1829–1866 (Washington, D.C., 1958); Golembe, Carter H., “Origins of Deposit Insurance in the Middle West, 1834–1866,” Indiana Magazine of History 51, no. 2 (1955): 113–20. Populists espoused guaranty during the 1890s. See Miller, Worth Robert, Oklahoma Populism: A History of the People’s Party in Oklahoma Territory (Norman, Okla., 1987), 159; Blocker, John G., The Guaranty of State Bank Deposits (Lawrence, Kans., 1929), 89; Bruce Robb, T., The Guaranty of Bank Deposits (Boston, 1921), 2021.

4. Golembe, Carter H., “The Deposit Insurance Legislation of 1933: An Examination of Its Antecedents and Its Purposes,” Political Science Quarterly 75, no. 2 (1960): 181200; White, Eugene Nelson, “State-Sponsored Insurance of Bank Deposits in the United States, 1907–1929,” Journal of Economic History 41, no. 3 (1981): 537–57; White, Eugene Nelson, The Regulation and Reform of the American Banking System, 1900–1929 (Princeton, 1983); Flood, Mark D., “The Great Deposit Insurance Debate,” Federal Reserve Bank of St. Louis Review 74, no. 4 (1992): 5177; Calomiris, Charles W. and White, Eugene N., “The Origins of Federal Deposit Insurance,” in The Regulated Economy: A Historical Approach to Political Economy, ed. Goldin, Claudia and Libecap, Gary D. (Chicago, 1994). Additional accounts that emphasize the role unit banking and its political allies played in advancing guaranty include Nicholas Economides, R. Glenn Hubbard, and Darius Palia, “The Political Economy of Branching Restrictions and Deposit Insurance: A Model of Monopolistic Competition Among Small and Large Banks,” Journal of Law and Economics 39, no. 2 (1996): 667–704; Susan Estabrook Kennedy, The Banking Crisis of 1933 (Lexington, Ky., 1973); Key, Jack Brien, “Henry B. Steagall: The Conservative as a Reformer,” Alabama Review 17, no. 3 (1964): 198209. For a notable dissent from the view that unit bankers supported guaranty during the early 1930s, Keeton, William R., “Small and Large Bank Views of Deposit Insurance: Today vs. the 1930s,” Federal Reserve Bank of Kansas City Economic Review 75, no. 5 (1990): 2930.

5. Sobel, Robert, Panic on Wall Street: A History of America’s Financial Disasters (New York, 1968), 297321; Filler, Louis, Crusaders for American Liberalism (Yellow Springs, Ohio, 1950), 312–15; Hagan, William T., Quanah Parker, Comanche Chief (Norman, Okla., 1993), 103; Mitchell, Wesley Clair, Business Cycles and Their Causes (Berkeley, 1950), 79; Cannon, James G., Clearing House Loan Certificates and Substitutes for Money Used During the Panic of 1907 (New York, 1910); “Holidays to Aid State Banks,” San Francisco Call, 31 October 1907, 1; “Million in Money Arrives for Reno Banks,” Nevada State Journal, 25 October 1907, 1; “Banks Reopen Early Next Week,” Tulsa Daily World, 1 November 1907, 1; “Re-issues His Proclamation,” Morning Oregonian, 4 November 1907, 5; “Governor Mead Proclaims Week-End Banking Holiday,” Morning Olympian, 30 October 1907, 1; Cyril James, F., The Growth of Chicago Banks, 2 vols. (New York, 1938), 2:761; Tarbell, Ida M., The Life of Elbert H. Gary: The Story of Steel (New York, 1925), 213–14; Noyes, Alexander D., “A Year After the Panic of 1907,” Quarterly Journal of Economics 23, no. 2 (1909): 211; Myers, Gustavus, History of the Great American Fortunes (New York, 1936), 627–28.

6. Hittner, Arthur D., Honus Wagner: The Life of Baseball’s “Flying Dutchman” (Jefferson, N.C., 1996), 239–40; Arizona Bankers’ Association, Proceedings of the Arizona Bankers’ Association, vol. 2 (The Association, [1908]), 32; Zanjani, Sally, Goldfield: The Last Gold Rush on the Western Frontier (Athens, Ohio, 1992), 179–80.

7. “Protecting Depositors,” Commoner 7, no. 44 (1907): 3. This was not Bryan’s first attempt to promote guaranty: in 1893, he had introduced a bill in Congress to guarantee national bank deposits (Congressional Record, 22 September 1893, 1700). Kazin, Michael, A Godly Hero: The Life of William Jennings Bryan (New York, 2006), 7276; Lawrence G. Buckley, “William Jennings Bryan in American Memory” (Ph.D. diss., University of Hawaii, 1998), 315–16; Bryan, William Jennings, “The Government Should Issue Notes and Guarantee Bank Deposits,” Journal of Accountancy 5, no. 5 (1908): 375–76; New York State Grange, Journal of Proceedings, New York State Grange, Thirty-Fifth Annual Session (Syracuse, 1908), 141–42; “Pennsylvania State Grange Meets,” National Stockman and Farmer 31, no. 37 (1907): 25; United Mine Workers of America, Proceedings of the Nineteenth Annual Convention of the United Mine Workers of America (Indianapolis, 1908), 298; “Farmers’ Problems,” Farm Journal 32, no. 4 (1908): 173.

8. Porter, Kirk H. and Johnson, Donald Bruce, eds., National Party Platforms, 1840–1956 (Urbana, 1956), 147; “The Guaranteed Bank Proposition Is Popular,” Commoner 8, no. 15 (1908): 12; Norbert R. Mahnken, “William Jennings Bryan in Oklahoma,” Nebraska History 31, no. 4 (1950): 272; “House in First Night Session,” Guthrie Daily Leader, 18 December 1907, 1; State of Oklahoma, Session Laws of 1907–1908 (Guthrie, 1908), 145–52; Tom Murray, “Currency Insurance Plea,” Chicago Daily Tribune, 24 January 1908, 8; Roosevelt, Theodore, The Letters of Theodore Roosevelt, ed. Morison, Elting E., 8 vols. (Cambridge, Mass., 1951–54), 6:1132.

9. Webster, W. C., “The Depositors’ Guaranty Law of Oklahoma,” Journal of Political Economy 12, no. 2 (1909): 65; Laughlin, “Guaranty of Bank Deposits,” 101; David Kinley, “Objections to Bank-Deposit Insurance,” American Review of Reviews 37, no. 3 (1908): 345–47; Committee on Banking and Currency, House of Representatives, Banking and Currency Reform, Part 1, 62nd Cong., 3rd sess. (Washington, D.C., 1913), 33, 31; Congressional Record, 28 February 1908, 2640; “The Fallacy of Deposit Insurance,” Commercial West 13, no. 3 (1908): 7.

10. American Bankers’ Association, Proceedings of the Thirty-fourth Annual Convention of the American Bankers’ Association (New York, 1908), 280, 281, 286; “Few for Guaranty,” Washington Post, 3 October 1908, 3.

11. Bryan, William Jennings and Bryan, Mary Baird, Speeches of William Jennings Bryan, 2 vols. (New York, 1909), 2:161; Carlson, Luvere, A Monetary and Banking History of Texas: From the Mexican Regime to the Present Day, 1821–1929 (Fort Worth, 1930), 62; “Sheldon Claims Right to Personal Opinion,” Norfolk Weekly News-Journal, 2 October 1908, 6; Z. Clark Dickinson, Bank Deposit Guaranty in Nebraska: An Historical and Critical Study (Lincoln, 1914), 17–18. The attorney general ruled against national banks belonging to state deposit guaranty programs. See Finch, James A., ed., Official Opinions of the Attorneys-General of the United States Advising the President and Heads of Departments in Relation to Their Official Duties (Washington, D.C., 1909), 37–42, 272–84.

12. “Why Kansas Bankers Object,” Kansas City Star, 16 January 1908, 1; State of Kansas, Proceedings of the House of Representatives of the State of Kansas, Special Session, January 16 to February 4, 1908 (Topeka, 1908), 29; “Bankers of Kansas Accept Inevitable,” Dallas Morning News, 4 February 1909, 2; “Calls Extra Session; Submits Bank Guaranty,” Dallas Morning News, 12 April 1909, 1.

13. Kansas established a voluntary system, in which state banks were permitted to choose whether or not to participate in the program. The Texas system allowed state banks the choice either to join a guaranty fund or to furnish the state with security equal to its capital. Nebraska required all state banks to join the new guaranty program. See Dassler, C. F. W., General Statutes of Kansas, 1909 (Topeka, 1910), 130–35; State of Texas, General Laws of the State of Texas Passed by the Thirty-first Legislature (Austin, 1909), 406–29; State of Nebraska, The Revised Statutes of the State of Nebraska, 1913 (Lincoln, 1914), 151–57. “Guaranteeing Bank Deposits,” Shoe Workers’ Journal 10, no. 5 (1909): 30; “Bank Deposit Guaranty,” Wall Street Journal, 27 March 1909, 8; “Letter from the People,” Commoner 10, no. 28 (1910): 14; “Maryland Favors Guaranty,” Dallas Morning News, 19 February 1909, 1; A. B. Butts, “Guaranty of Bank Deposits in Eight States,” Mississippi Law Journal 3 (1931): 186.

14. F. A. Hutchins to Knute Nelson, 8 November 1908, 21 August 1909, Box 13, Knute Nelson Papers, Minnesota Historical Society, St. Paul; Wisconsin Equity News 1, no. 16 (1908): 8; Theodore A. Andersen, A Century of Banking in Wisconsin (Madison, 1954), 101–2.

15. Wickstrom, John E., “A History of the Depositors Guaranty Law in the State of South Dakota” (Master’s thesis, University of South Dakota, 1951), 1314, 18–19; Shibley, George H., History of Guaranty of Bank Deposits in the States of Oklahoma, Texas, Kansas, Nebraska, and South Dakota, 1908–1914 (Washington, D.C., 1914), 9; Robb, Guaranty of Bank Deposits, 162. South Dakota subsequently enacted a mandatory guaranty law in 1915. See Wickstrom, “History of the Depositors Guaranty Law,” 28–37. Arizona Bankers’ Association, Proceedings of the Arizona Bankers’ Association, vol. 4 (The Association, [1910]), 77.

16. Willis, Henry Parker, The Federal Reserve System: Legislation, Organization, and Operation (New York, 1923), 142–45; “As to Guaranty of Deposits,” Banking Reform 2, no. 4 (1913): 5; Carter Glass, An Adventure in Constructive Finance (New York, 1927), 35; “No Bank Guarantees,” New York Times, 2 April 1913, 1; “Money Measure Ready for Senate,” Atlanta Constitution, 1 December 1913, 9; “Conferees Have Currency Bill,” New York Times, 21 December 1913, 1; “Money Bill May Be Law To-Day,” New York Times, 22 December 1913, 1; “Taking Out the Worst Apple,” Pacific Banker 18, no. 33 (1913): 1; M. T. Grattan to Knute Nelson, 30 March 1914, Box 20, Nelson Papers.

17. James H. Shideler, The Farm Crisis, 1919–1923 (Berkeley, 1957); Blocker, Guaranty of State Bank Deposits, 23–46, 57–58. The fate of Washington State’s short-lived voluntary guaranty program was not linked to the agricultural depression. Failure of the program’s largest bank as a result of mismanagement depleted the fund. See Preston, Howard H., “A Crisis in Deposit Guaranty in the State of Washington,” Quarterly Journal of Economics 36, no. 2 (1922): 350–56. Elizabeth Aldrich, Clara, “The History of Banking in Idaho” (Master’s thesis, University of Washington, 1940), 54; Vickers, Raymond B., Panic in Paradise: Florida’s Banking Crash of 1926 (Tuscaloosa, 1994), 9; Isaac M. Miller to William Borah, 5 December 1921, Box 111, G. Spongberg to William Borah, 16 August 1921, Box 98, William E. Borah Papers, Manuscript Division, Library of Congress, Washington, D.C.; Hugh T. Lovin, “The Nonpartisan League and Progressive Renascence in Idaho, 1919–1924,” Idaho Yesterdays 32, no. 3 (1988): 2–15; “Idaho Officially Recognizes Party of Progressives,” Idaho Daily Statesman, 28 June 1922, 10; “Convention Law Is Condemned By Democrats,” Idaho Daily Statesman, 28 August 1920, 3; “W. H. Hornibrook Heads Democratic State Committee,” Idaho Daily Statesman, 24 August 1922, 5.

18. Detailed studies of depression-era banking panics are provided by Vickers, Raymond B., Panic in the Loop: Chicago’s Banking Crisis of 1932 (Lanham, Md., 2011); Messer-Kruse, Timothy, Banksters, Bosses, and Smart Money: A Social History of the Great Toledo Bank Crash of 1931 (Columbus, 2004). Board of Governors of the Federal Reserve System, Banking and Monetary Statistics (Washington, D.C., 1943), 16; Ellis, Edward Robb, A Nation in Torment: The Great Depression, 1929–1939 (New York, 1970), 195; Illinois State Federation of Labor, Illinois State Federation of Labor, Proceedings, Forty-ninth Annual Convention (n.p., 1931), 203; “Californian Admits Theft of $7,500,000,” New York Times, 13 December 1930, 15; “Beesemyer No. 49471,” Los Angeles Times, 4 January 1931, 1; Hubbard, Timothy W. and Davids, Lewis E., Banking in Mid-America: A History of Missouri’s Banks (Washington, D.C., 1969), 171.

19. Green, Elna C., ed., Looking for the New Deal: Florida Women’s Letters During the Great Depression (Columbia, S.C., 2007), 30; Travers, Dempsey J., An Autobiography of Black Chicago (Chicago, 1981), 33; Childs, Marquis W., “Main Street Ten Years After,” New Republic 73, no. 946 (1933): 263.

20. Clarkson, J. B. to Peter Norbeck, 2 March 1932, Box 1, Peter Norbeck Papers, Archives &Special Collections, University of South Dakota, Vermillion; United Mine Workers of America, Proceedings of the Thirty-second Consecutive Constitutional Convention of the United Mine Workers of America, vol. 2 (Indianapolis, 1932), 717; “Nebraska Stock Growers Convene,” Producer 14, no. 2 (1932): 10; “Curbing Bank Failures,” Federation News 28, no. 2 (1932): 4.

21. Federal Deposit Insurance Corporation, The First Fifty Years: A History of the FDIC, 1933–1983 (Washington, D.C., 1984), 29; House, Committee on Banking and Currency, Branch, Chain, and Group Banking, vol. 1, part 5, 71st Cong., 2nd sess. (Washington, D.C., 1930), 572; Congressional Record, 27 May 1932: 11444, 7 March 1932: 5423, 14 April 1932: 8273, 19 April 1932: 8539; Subcommittee of the House Committee on Banking and Currency, To Provide a Guaranty Fund for Depositors In Banks, 72nd Cong., 2nd sess. (Washington, D.C., 1932), 245, 247.

22. Congressional Record, 27 May 1932, 11453; “Platform Adopted with One Loud ‘Aye,’” New York Times, 1 July 1932, 15; “Guaranty of Deposits,” Southern Banker 58, no. 4 (1932): 18; American Bankers Association Journal 25, no. 5 (1932): 41.

23. “Governor’s Proclamation of Bank Holiday,” Detroit Free Press, 15 February 1933, 4; “Ritchie Decrees Respite to Permit Legislature to Pass Protective Laws,” Baltimore Sun, 25 February 1933, 1; “Rolph Declares Bank Holiday to Keep Cash Here,” San Francisco Chronicle, 2 March 1933, 1; “All Western Banks Closed,” Los Angeles Times, 3 March 1933, 2; “What the States Are Doing About Bank Holidays,” Chicago Daily Tribune, 3 March 1933, 25.

24. Diary of Charles S. Hamlin, Box 3, Arthur A. Ballantine Papers, Herbert Hoover Presidential Library and Museum, West Branch, Iowa; Roosevelt, Franklin D., The Public Papers and Addresses of Franklin D. Roosevelt, ed. Rosenman, Samuel I., 13 vols. (New York, 1938–1950), 2:24–26; T. R. Walker, “Where Is the End?” Producer 14, no. 10 (1933): 19; Federal Reserve Bulletin 19, no. 12 (1933): 744; Sullivan, Lawrence, “Broad Powers for President Are Soon Used,Washington Post, 10 March 1933, 1. For an overview of the 1933 banking crisis, see Colt, C. C. and Keith, N. S., 28 Days: A History of the Banking Crisis (New York, 1933).

25. George Norris to William Hughes, 8 April 1933, Box 174, T. F. Stevens to George Norris, 11 March 1933, Box 173, George W. Norris Papers, Manuscript Division, Library of Congress, Washington, D.C.; “Federal Guarantee Asked for Deposits,” New York Times, 8 March 1933, 4; “U.S. Guaranty Pledge Advised,” Detroit Free Press, 26 February 1933, 5; “Economist Favors Deposit Guarantee,” Buffalo Evening News, 9 March 1933, 10; Subcommittee of the House Committee on Banking and Currency, To Provide a Guaranty Fund, 154; Ira M. Hardy, “Government Guarantee of Deposits Urged,” News and Observer (Raleigh), 12 March 1933, 4; Harry Woolever, “Favors Guaranteed Deposits,” Public Ledger (Philadelphia), 20 April 1933, 8.

26. “Three-Way Split over Glass Bill,” Wall Street Journal, 12 April 1933, 1; “Glass Bank Bill Ready for Senate,” New York Times, 14 May 1933, 6; “Bank Bill Taken Up with President,” New York Times, 5 May 1933, 27; Roosevelt, Public Papers and Addresses, 2:37.

27. Federal Reserve Committee on Branch, Group, and Chain Banking, Branch Banking in the United States (n.p., 1932), 1; Department of the Treasury, Annual Report of the Secretary of the Treasury on the State of the Finances, 1932 (Washington, D.C., 1932), 31; Gaines Thomson Cartinhour, Branch, Group, and Chain Banking (New York, 1931), 302. Branching assumed different forms based upon its ownership structure. Contemporaries who possessed a technical background in banking confined their use of the term “branch banking” to refer to a single bank that owned and operated multiple offices. “Chain banking” referred to a network of independently chartered banks that were controlled by one or more individuals through stock ownership, shared directors, or some other means. “Group banking” described a system in which some corporate entity—such as a holding company—controlled banks that were chartered independently of one another. See C. E. Cagle, “Branch, Chain, and Group Banking,” in Banking Studies, Members of the Staff, Board of Governors of the Federal Reserve System (Baltimore, 1941), 113, 125, 130. Congressional Record, 14 July 1932, 15303; “Resolutions Adopted by the Convention,” American Bankers Association Journal 25, no. 5 (1932): 41.

28. Congressional Record, 25 May 1932, 11233; Subcommittee of the House Committee on Banking and Currency, To Provide a Guaranty Fund, 7.

29. Dan Adamson to George Norris, 21 January 1933, Box 13, Norris Papers; National Grange, Journal of the Proceedings of the National Grange of the Patrons of Husbandry, Sixty-Fourth Annual Session (Springfield, Mass., 1930), 11; “A Letter to Governor Lehman,” Bureau Farmer (New York) 8, no. 8 (1933): 9; Kansas State Grange, Journal of Proceedings of the Fifty-Ninth Annual Session of the Kansas State Grange, Patrons of Husbandry (n.p., 1930), 46; “Big Chicago Banks Strengthen Rule as Little Banks Crash,” Federation News 25, no. 26 (1931): 11; Minnesota Federation of Labor, Proceedings of the Fiftieth Convention of the Minnesota State Federation of Labor (n.p., 1932), 63; Joseph A. Wise, “Battle for Empire Follows Chicago Bank Failures,” International Molders Journal 68, no. 1 (1932): 23; Laidler, Harry W., Concentration of Control in American Industry (New York, 1931), 338–39.

30. “Give Small Banks a Square Deal,” Progressive 3, no. 68 (1933): 1; Patricia O’Donnell McKenzie, “Some Aspects of the Detroit Bank Crisis of 1933” (Ph.D. diss., Wayne State University, 1963); Olson, James S., “Hoover, the R.F.C., and the Banking Crisis in Nevada, 1932–1933,” Western Historical Quarterly 6, no. 2 (1975): 149–61; Thomas J. Walsh to S. V. Stewart, 4 December 1930, Box 1:159, Thomas J. Walsh and John E. Erickson Papers, Manuscript Division, Library of Congress, Washington, D.C.; “Largest U.S. Bank in Number of Branches Opens Today,” San Francisco Examiner, 3 November 1930, 30; James, Marquis and James, Bessie Rowland, Biography of a Bank: The Story of Bank of America N.T. & S.A. (New York, 1954), 353; Josephson, Matthew, The Money Lords: The Great Finance Capitalists, 1925–1950 (New York, 1972), 148–50; Olson, James S., Saving Capitalism: The Reconstruction Finance Corporation and the New Deal, 1933–1940 (Princeton, 1988), 18. On branch banks and larger banks not being safer banks during this era, see Gambs, Carl M., “Bank Failures: An Historical Perspective,” Monthly Review (Federal Reserve Bank of Kansas City) 62, no. 6 (1977): 1020.

31. Robert D. Beery to Members of Congress, 7 May 1932, Box 77, Thomas R. Amlie Papers, Wisconsin Historical Society, Madison; “Protest Deposit Guaranty,” Wall Street Journal, 23 May 1933, 10. Despite the potential benefit of guaranty to unit banks, these bankers generally remained wedded to the prevailing opposition in financial circles. One survey found that sentiment among small-town bankers ran two to one against guaranty. See “Banks Oppose Deposit Insurance 2 to 1,” Commercial West 66, no. 5 (1933): 20. Another survey conducted in Texas, a unit banking state, found less than 2 percent of bankers in support of guaranty. See Grant, Joseph M. and Crum, Lawrence L., The Development of State-Chartered Banking in Texas from Predecessor Systems Until 1970 (Austin, 1978), 231. One potential source of opposition from small state banks was the proposed requirement that guaranty participants join the Federal Reserve System, which would place these banks under its authority, and also raised the prospect of failure to qualify for membership. See Keeton, “Small and Large Bank Views,” 31; “Deposit Guarantee Bill,” Trust Companies 54, no. 4 (1932): 434; Leake S. Covington to Josiah William Bailey, 19 May 1933, Box 219, Josiah William Bailey Papers, Rare Book, Manuscript, and Special Collections Library, Duke University, Durham, N.C.; Francis H. Sisson, “Where the Responsibility Lies for Constructive Banking Reform,” Trust Companies 56, no. 5 (1933): 538; Francis H. Sisson to Marriner S. Eccles, 25 May 1933, Box 218, Marriner S. Eccles Papers, Special Collections, University of Utah, Salt Lake City; Congressional Record, 23 May 1933: 4058, 10 May 1932: 9891, 13 June 1933: 5862, 25 May 1933: 4182.

32. Statutes at Large 44 (1927): 1224–34; Congressional Record, 13 June 1933, 5897, 5863.

33. Josiah William Bailey to H. G. Connor Jr., 15 May 1933, Box 219, Bailey Papers; J. F. T. O’Connor Diary, 2 June 1933, J. F. T. O’Connor Papers, Bancroft Library, University of California, Berkeley; “Wires Banks to Urge Veto of Glass Bill,” New York Times, 16 June 1933, 14.

34. O’Connor Diary, 7 June 1933; Statutes at Large 48 (1933): 162–95; “Over the Dam,” Southern Banker 61, no. 4 (1933): 14; “Bank Act of 1933,” American Bankers Association Journal 26, no. 1 (1933): 29; “Carefulness in the Guaranty Set-Up,” North Pacific Banker 42, no. 3 (1933): 1; Howard Wood, “Nation’s Bankers Urge Roosevelt Postpone Guaranty of Deposits,” Chicago Daily Tribune, 7 September 1933, 23.

35. Henry B. Steagall, “Recent Banking Legislation,” Tarheel Banker 12, no. 4 (1933): 71; “Deposit Insurance Wins,” American Federation of Labor Weekly News Service 24, no. 1 (1934): 1; National Grange, Journal of Proceedings of the National Grange of the Patrons of Husbandry, Sixty-Seventh Annual Session (Springfield, Mass., 1933), 159; “Yield to the Current,” North Pacific Banker 42, no. 10 (1934): 4.

36. James and James, Biography of a Bank, 75–76; “Giannini Appraises New Banking Act,” Trust Companies 57, no. 1 (1933): 8; “Branch Expansion of National Banks Continues,” Trust Companies 57, no. 2 (1933): 197; Federal Reserve Bulletin 22, no. 11 (1936): 858; Josephson, Matthew, “Big Bull of the West,Saturday Evening Post 220, no. 14 (1947): 128; Bonadio, Felice A., A. P. Giannini: Banker of America (Berkeley, 1994), 228.

37. Gutowsky, A. R., Arizona Banking (Tempe, 1967), 16, 20, 25; Hopkins, Ernest J., Financing the Frontier: A Fifty-Year History of the Valley National Bank (Phoenix, 1950), 243; Bridenstine, Don C., “Commercial Banking in Arizona: Past and Present” (Ph.D. diss., University of Southern California, 1958), 218–22; Bernays, Edward L., Biography of an Idea: Memoirs of Public Relations Counsel (New York, 1965), 615.

38. Simon Johnson, “A Healthy Financial System Cannot Be Built on the Expectation of Bailouts,” Baseline Scenario, 5 March 2011, http://baselinescenario.com/2011/03/05/a-healthy-financial-system-cannot-be-built-on-the-expectation-of-bailouts/; Dean Baker, “Why We Must Break Up the Banks,” Guardian Unlimited, 7 April 2010, http://www.theguardian.com/commentisfree/cifamerica/2010/apr/07/paul-krugman-break-up-banks; Sherrod Brown, “An End to ‘Too Big to Fail,’” Washington Post, 7 June 2012, A23; Paul Wiseman, “Banks Far from Safe Harbor,” USA Today, 21 January 2010, 1B; Jake Lewis, “Monster Banks: The Political and Economic Costs of Banking and Financial Consolidation,” Multinational Monitor 26, nos. 1 and 2 (2005): 31–34; Robert Weissman and James Donahue, Sold Out: How Washington and Wall Street Betrayed America (Washington, D.C., and Studio City, Calif., 2009), 28–32.

“The Man in the Street Is for It”: The Road to the FDIC

  • Christopher W. Shaw (a1)

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