The Guardian Trust Company of Detroit — the good ol’ days

It was, however, the run on the Guardian Trust Company of Detroit, a bank controlled by Edsel Ford, scion of the Ford motor family, that transformed the new crisis into a national one.  The Guardian Trust had done well during the 1920s financing consumer purchases of Ford cars.  When auto sales dried up in the early 1930s, the bank found itself in serious trouble and had been forced to borrow from the RFC.  In early 1933, the RFC balked at providing more money unless the sponsors, who were, after all, the second richest family in the country after the Rockefellers, put in more capital.  Patriarch Henry Ford, now in his seventies and increasingly autocratic and unreasonable, refused to bail out his son.  He had a long-standing antipathy to bankers and could not quite grasp why banks should be allowed to use the money he deposited for making risky loans  — "It’s just as if I put my car in a garage and when I came to get it, I found somebody else had borrowed it and run it into a tree," was the way he saw it.  Faced with a statewide run on its banking system, on February 14, the governor of Michigan issued a proclamation closing all 500 banks in the state for eight days.  The residents of Michigan woke up on Saint Valentine’s Day to find that all that they could draw upon was the cash in their pockets.

That is from pp.442-3 of Liaquat Ahamed’s Lords of Finance: The Bankers Who Broke the World, a truly timely book.

As for the GTC, here is their Detroit Art Deco building, still standing.  Here is the lobby ceiling.  The splendid building is a National Historic Landmark.


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