Abstract: Candid comments, then and now Banking and bankers have come in for a lot of criticism during the past two and one-half years. Much of it is deserved. Far more, however, is utterly unfounded on fact. Banks and bankers never have been, never will be perfect because human material is fallible. But the average of demonstrated banking ability and integrity has been rather high.... That is a pretty fair statement, we think, and apropos of the current situation. Who said it? Craig B. Hazlewood, vice-president of the First National Bank of Chicago and a former president of the American Bankers Association. If the name is not familiar, it's not surprising. A few of our readers, however, may recall Mr. Hazlewood and may even recollect his words--they appeared on these pages in July 1932. Fundamental soundness. One of our editors in doing some research among our old volumes came across an article written Hazlewood entitled Master Banking! The title referred to the author's point that in the crucible of the Great Depression (it wasn't called that then, just depression conditions), bankers could no longer operate on the basis of guess and hunch, but must operate on the basis of facts. Before he got to that point, though, Hazlewood strongly defended banking's fundamental soundness. It was his opening comments, quoted above, that caught our eye because of their uncanny timeliness. But there was more. His next paragraph was this: ...One hears a great deal about the poor banking which uninformed critics hold uniformly responsible for the thousands of closed banks. At the same time, almost nothing is said of the feat accomplished ten banks to every one that has closed.... There was no deposit insurance in place at the time, of course, and banks were forced to liquidate assets by the billion, as Hazlewood put it, to meet the withdrawal demands of panicked depositors. Naturally this had severe affects on business borrowers that had their loans called, which, in turn, devastated the economy. Then, as now, banks were castigated Congress and the media for holding back business being too tight in extending credit, in Hazlewood's words. He responded that although there were isolated examples of this, many commercial banks wanted to lend but simply could not find borrowers to lend to. To the present. Today's credit tightness has little to do with deposit withdrawals, thankfully, but is nevertheless a real issue, publicly debated. Equally real and evocative of the 1930s are the issues of bank integrity, competence, and credibility. Many banks today are grappling with how to tell their customers that despite the S&L bailout and the fact that some banks are having difficulty, not every bank is in trouble. …
Publication Year: 1991
Publication Date: 1991-02-01
Language: en
Type: article
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