Evening Star Newspaper, July 24, 1937, Page 15

Books—Art—Music he Fn FEATURES WITH SUNDAY MORNING EDITION ening St News of Churches By William 4. Millan. ORERUNNERS of a new first line of defense for America the keels of the new battleships North Carolina and Washing- #on will be laid shortly. For four long years workmen at the New York and Philadelphia navy yards will be engaged in perfecting these citadels of American seapower and about 1942 they will be in full commission, with trial runs and power tests written down as history. Just as the Indiana set the pace for battleship styles back in the pre- Spanish War days. just as the Dela- ware and North Dakota class, termed | “the first of the modern American ! U. S. S. West Virginia. carrying eight Heavy seas breaking over the bow of the U. S. S. Pennsyl- vania during recent Pacific maneuvers. Sir of her 12-inch guns are shown here. The newest battleships will have nine 16-inch guns each. dreadnaughts” gave the cue for the}flrn chance in national politics when |is that North Carolina and Washing- | on February 8, 1922, when she was | three-quarters completed. WASHINGTON A JRDAY, JULY 24, 1 7 16-inch guns. oS Keels Soon Will Be Laid for Battleships North Carolina and Wash- ington—United States and Other Navies Still Regard the Costly Battleship as Most Impregnable Fighting Unit, Aircraft Notwithstanding. The U. S. S. Idaho, a modernized battleship. Notice the absence December 1019238 of cage masts and the one pole and the small flag mast forward. ATTLESHIPS have been built at] navy yards before. The Arizona | was built’ at the New York Navy| Yard. That yard likewise constructed | the battleships New Mexico. New York and Tennessee. In fact, the most famous battleship of them all, the Maine, which was sunk in the | harbor of Havana, Cuba, on February | 15, 1898, precipitating the Spanish- | American War, was constructed at the New York yard. The California, flagship of the Bat- | tle Force, was built at the Mare Island, Calif., Navy Yard. There was a battleship named Wash- ington, authorized in 1916, but con- struction of her, slowed down during | the World War, was stopped entirely | She was sunk purposely, by explosions and gun- fire, on November 25, 1924, in keep- | ing with the Washington arms treaty. She was being built by the New York Shipbuilding Co. and was officially known as “First Class Battleship No. 47, Likewise, there was a battleship designated the North Carolina, a thorized in 1916-18, under construc- | tion at the Norfolk, Va, Navy Yard But the building of this first-class battleship was halted on February 8, | 1922, when she was little over one- | third completed. She was sold on October 25, 1923, and broken up and | scrapped under the terms of the Wash- | ington treaty. The two ships about to be con- structed will take the place of these. Uncle Sam possesses no battle cruisers, | but it is of interest to record that “Battle Cruiser No. 1” is now the air- craft carrier Lexington, which has come lately into the news again with |the search for Amelia Earhart ! ways of the Bethlehem Shipbuilding | stitution and United States | vessels began as battle cruisers, but | same Washington treaty that “sank” the prior Washington and North Caro- lina diverted the life of the Lexing- ton, for she began existence upon the Corp. at Quincy, Mass.. as the battle cruiser Constitution, having been au- | thorized in 1916. | i A similar life history is shown in| the case of the aircraft carrier Sara- | toga, which was also converted to an aircraft carrier on July 1, 1922. But | no such happy fate awaited the bat- | tle cruisers Constellation. Ranger. Con- | Those they ended in the scrap heap in No- | vember, 1923, thanks to the Washing- | ton treaty. | The first warship in the American Navy to bear the designation of battle- ship was the former Texas, the name The | of which was changed to the San| Marcos. The ship was authorized back in 1886 and was built at the Norfolk Navy Yard. She was orig- inally classified as an armored vessel. | Her name was changed to the San Marcos in February, 1911, and she was used as a target and stricken from | the Navy list on October 11, 1911. 'HE famous old Maine, authorized also in 1886, was originally classi- fied as “Armored Cruiser No. 1.” But when she was commissioned she was reclassified as a battleship. An ex- plosion in Havana harbor sent her to | the bottom and sent Theodore Roose- velt and his Rough Riders to San Juan and Admiral George Dewey to the battle of Manila Bay. ‘Then came the Indiana, the “grand- daddy” of American battleships of today. She was authorized in 1890 The old U. S. S. Missouri, scrapped under the Washington treaty. and built at the famous old shxpyanl‘ of William Cramp & Sons at Phila-| delphia. Her name was changed to| “Coast Battleship No. 1" on March | "29. 1919. She was sunk on November | 1, 1920, in underwater bombing ex-| | periments. On March 19, 1924, the | hulk of her was sold. | The old Massachusetts, which be- | came “Coast Battleship No. 2" was authorized likewise in 1890, She, too was built by the famed Philadelphia firm. She was stricken from the Navy | list on November 22, 1920, having| been & battleship of the second line | | Then she was used as a target by the | War Department. The plan was—back in 1919 when | Franklin D. Roosevelt was Assistant | Secretary of the Navy—to give the| names of the pioneer battleships| Indiana, Massachusetts and Iowa to| | the new battleships authorized in | 1916-18. The new Indiana was planned for the New York Navy Yard. The| new Massachusetts was started at the | plant of the Bethlehem Shipbuilding Co. at Quincy, Mass., while the new Jowa was begun at the plant of the Newport News Shipbuilding & Dry Dock Co. at Newport News, Va. But along came the Washington treaty on the limitation of naval| armament in 1922, after Chief Juctice Charles Evans Hughes, then Secretary | of Btate in the Harding administra- tion, threw a bombshell into the con- ference at the outset by proposing drastic reduction of capital ships. And | the great powers agreed to build no | more battleships. The new battleship U. § S. South | Dakota, under construction at the New York Navy Yard and 38 per| FAILURES ALM < Established by Government Since Banking Holiday Brought Recovery From Threatening Slough of Despond in 1933. By Lucy Salamanca. HE earnings of 5331 banks in resent a gain of more tnan 600 million dollars over the reported by 5,159 banks for 1933. National bank failures are al- most a thing of the past. Only nine national banks have failed since the national holiday, and only one failed during the past 21 months, setting. thereby, a record for more than 55 years, Here are but a few facts serving to show the almost incredible good that has been worked in the Nation’s finan- cial system since J. F. T. O'Connor, controller of the currency, took over the remns and guided bankers and public out of the welter of insolvencies, failures, loss of faith and confidence, and general financial confusion that threatened the entire banking struc- ire in the dark days of 1933, This young California attorney, for- mer law partner of William Gibbs McAdoo, fell heir to a task of such prodigious proportions that the re- sults achieved loom more astonish- ing from this vantage point of re- stored morale, unprecedented economic improvement, and a general unrav- eling of the knots and tangles that kept a whole nation from going ahead with its knitting a few ago. Practically by own boot- straps, the present controller of the defic its existing United States Fleet, so "h'iSecreury of the Navy Josephus ‘Washington and North Carolina are fighters. The Indiana’s influence ‘ gave the young New York State Sen- lasted until well into the twentieth|ator the assignment as his Assistant enshrining the lessons learned in the | 2 o Bpantsli War, has been 116 on the | SPOUSLOR Dor ihe uming, bowever, quies little clairvoyance to say that ton are the only two States that have the Washington and North Carolina, | not yet had battleships in active serv- ‘War battles afloat, will be the battie- | — ship construction guiding stars for the Why is the bearded Uncle, with his B A N [< red, white and blue suit, gambling equipping both the North Carolina, ! to be built at New York, and the New Financial Records delphia? Will battleships be good | for the next 25 years? Why does he | guarding these shores for nigh on | to hal! A century now? Why not | or for aircraft, man's newest fighting | vogue. engaging the brains of America. But Uncle Sam’s decision shows that he still the backbone of the fleet.” It is interesting to note that with the North Carolina the name of ever State in the Union will have been First of the battleships to be de- igned. laid down and built in ton and North Carolina will mark the beginning of & new era in American vealed by the X-ray of experience will be avoided in later vessels. In fact already—even before their keels are Iaid—for the New Deal has decided to ment-owned navy yards. Hitherto. private shipyards have had an equal recently at the Navy Department were far higher than estimates submitted Roosevelt, the sallor President, and Becretary Swanson decided to give the There is justice in the Roosevelt ad- ministration naming one of its first wax & man from the Tarheel State that gave Frankiin D. Roosevelt his Iaunching & new series of major sea | D8DI€Is, now Ambassador to Mexico, century. The North Dakota’s mark, | gecretary of the Navy. The official American Navy to this day. It re- embodying the quintessence of World ice named after them. next quarter of a century the sum of $120,000.000 for fully | Washington. to be built at Phila- | adhere to the battleship that has been | spend this money in smaller vesseis | These are vital questions that are 18 convinced that “the battiship is building of the Washington and the borne by an American battleship. post-World War period. the Washing- warship building. Defects tha these two warships have set a new pace eonstruct both of them in Govern- share of the business. But bids opened by the navy vards. And so President J0b to the Government's own workers battieships North Carolina. For it The above diagrams show disposition of collection dollar (including offset allowance) 1n closed receivership banks and the liquidation thereof to June 10, 1937. At left, 667 receiverships iquidated and closed, period March 16, 1933, to June 30, 1937. A rtgq;;t, 1,778 receiwverships liquidated and closed, 1865 to June 30,1 [ V| the United States for 1936 rep- | | | | is lof 75 a year! | age of 358 a year | | short years | currency yanked our tottering finan- | 10 | were under way for restoration, and | what | set turning? check was made during that holiday | 1290 of them, with deposits of $138 cial system out of the alough of de- spond. Today's facts and figures read like a miracle. To appreciate the picture better, a glance backward will serve to re- | call the hopeless situation that brought on the “banking holiday” in 1933. Banks were failing during the nine- | vear period from 1912 through 1920, on an average of eight a year. That| to say, that 75 National banks failed in this period. And failures increased from 1921 through 1930, until there were 756 failures for this second nine-year period—an average Things grew blacker and blacker as we entered 1931. And in the two years intervening between 1931 and 1933 there were in the United States 1075 failures—an aver- ERE was a situation that Presi- dent Roosevelt faced when he took office March 4, 1933, and 1t was one that demanded immediate at- tention. The entire banking struc- ture was threatened by collapsing public confidence and consequent heavy withdrawals By Presidential proclamation, all the banks of the country were closed, and from March 4 to March 16, 1933, | the Nation took a banking “holiday.” | It was a situation of extreme gravity— all the banks closed, credit paralyzed, and public faith in the financial in- | stitutions destroyed 1 What went on while we were all| holidaying from our periodical visits | the tellers’ cages? What steps wheels for rehabilitation were First of all, a careful of every national bank in the country, and only those shown to be solvent were permitted to reopen. This meant that at the conclusion of the period, 1417 national and District of Co- lumbia State banks were denied license to reopen These banks had deposit liabilities of $1,922,699.000. What happened to | these banks? Of the number, 1,096 with deposits of $1,772,971,000, were | reorganized under old or new char- ters or were absorbed by other banks; 210,000, were placed in receivership and 31, with deposits of $11,518,000, | went into voluntary liquidation ‘Today, four short years later, $1.- 844,643,000, or 80.33 per cent of the amount dus, has been mads available - | facts OST EXTINCT UNDER PR J.F.T.O'CONNOR, to depositors and other creditors of these banks that were refused license to reopen | The second step taken to restore the financial affairs of the Nation was (o strengthen the capital structure of going banks. To achieve this end, approximately 2261 national banks. since the banking holiday, have sold preferred stock in the amount of $563,960,550. Of this sum the Recon- struction Finance Corp. has purchased | $498,937,944, while $65022606 has | been purchased locally. One thousand, | five hundred and fifty-three of these banks have now returned $256,364,- 775 of that amount 'HE next problem before the new | controller was the: orderly li- quidation of all those national banks that were in receivership. This in- cluded orderly liquidation, as well, for those banks that had already been in receivership before the “holiday,” and the payment of dividends to de- positors as rapidly as possible. The | results here are as impressive as other indicating improvement, for from the conclusion of the banking holiday to June 30, 1937, 709 receiver- &hips have been terminated ‘Total disbursements, including off- sots allowed to depositors and other L} Controller of the Currency. creditors of these 709 receiverships— | exclusive of the 42 restored to sol-| vency—aggregated § 1,264. This | represents an average return to de- positors and other creditors of 77.23 per cent of total liabilitles. More- over, unsecured creditors have re-| ceived dividends amounting to an average of 6587 per cent of their | claims. The total cost of liquidation | of these receiverships amounted to| 7.18 per cent. That is to say, that out of every dollar collected by the re- ceivers, nearly 93 cents has been re-| turned to the creditors. Under the jurisdiction of the con- | troller there are now in receivership 1,023 trusts, whose deposit liabilities aggregated $1,760,745,055 at the date of closing. Depositors have already received 71.9 per cent of the amount due them—a& sum amounting to §1,- 265,742,755—and the controller in- | forms us that additional dividends, it | is expected, will be paid in some of these trusts. | The controller's office has sent to receivers, since March 16, 1933, 6,729,- | 499 checks for use in payment of dividends to depositors and other creditors of insolvent national banks. ‘The only way in which & depositor could get any money in the old days. when & nationsl bank was plased in ’ | quickly. | calling of loans represented a hard- | ship to the community. ESENT SYSTEM Nation Which Was Over Has Seen Constant Gains Under Way, Aided by Far-Reaching Deposit Insurance. supplied With Institutions receivership and a receiver appointed, | was to wait until the receivers col- | lected the money that had been loaned out, and had disposed of the proper- ties and securities held by the bank. | As a result, they often had to wait | several years for their money. More- over, it was frequently necessary, un- der the old system, to accept prices far below the actual value of the as sets in order to dispose of them In addition, the immediate | | FI'HAT method of liquidation was changed. It was made possible for receivers to obtain loans from the Reconstruction Finance Corp., pledg- | ing some of the assets of their trusts ak security. The money thus received was given to the depositors at once, and the receivers liquidated their as- sets carefully, taking the necessary time to obtain the best prices, and then repaid the Government. Mean- while, the depositors had the use of their funds. In this way, receivers have borrowed $385.073.219 from the | | Reconstruction Finance Corp. for divi- dend purposes, and up to June 30 of this year had repaid all but $10.433,- 375 of that amount | Having taken steps to repair the | damage that had been done to the! banking structure, the administration undertook to provide against a recur- | rence of a similar condition. The banking act of 1933 contained many progressive and helpful provisions, but | one of the most far-reaching was that | providing for the establishment of deposit insurance, to be compulsory for all national banks and all State banks which are members of the Fed- | eral Reserve System. For all other | banks it was optional. This bill was passed on June 16, | 1933, and the insurance became ef- | fective on January 1, 1934. To or- ganize the Federal Deposit Insurance | Corp. was & tremendous task. It in- volved obtaining a competent ex- amining force and making examina- tions of about 8,000 banks applying | for insurance. | As a member of the board of the| corporation, the controller of the cur- | rency was charged with the prelimi- | nary work until the appointment of the | two other directors on September 11,/ 1933, Thus, it was O'Connor who out- lined the general set-up of the cor- poration and obtained the approval of the President. He obtained from the | State banking commissioners and oth- | ers the names of 1500 men, qualified by five years or more banking experi- ence and knowledge of values in their respective States. to make examina- tions. Arrangements were made with the Secretary of the Treasury for the necessary funds to carry out the pre- liminary work. Replying to a letter from the chair- man of the Federal Deposit Insurance Corp. on January 1, 1934, making a report on the corporation, President | son cent completed was sold in October, 1923; broken up and scrapped, under terms of the Washington treaty. A similar fate was that of the Indiana. The new battleship Montana, under construction at the Mare Island Navy Yard and 27 per cent finished, was also sold, broken up, scrapped. The Iowa, on the ways of the Newport | News Shipbuilding and Dry Dock Co. and 31 per cent completed, also went to the junk heap. The battleship Massachusetts, at Quincy, was ane other victim of naval limitation. So, too, as aforementioned, were the bate tleships North Carolina and Wash« ington. lN ALL, due to the Washington arms treaty, the United States sacrificed seven new battleships for world peace. The Oregon, one of Uncle S8am’s pioneer battleships, still exists. She has been transferred to the State of Oregon and is now preserved at Port- land. She is out of commission, as far as the Navy is concerned. She was authorized in 1890 and was buflt | at the Union Iron Works at San Fran- cisco and later was designated as “Coast Battleship No. 3.” The famed battleship Oregon has an outstanding place in American his- tory. In the early days of the Span- ish War she made her peerless dash around Cape Horn and participated in the battle of Santiago, Cuba. The Navy's highest ranking officer today, Admiral Willlam D. Leahy, chief of naval operations, was a midshipman aboard the Oregon during that con- flict. The Indiana, Massachusetts and Oregon were constructed from the same set of plans. In the Winter of 1895 the Indiana was placed in com- mission. Capt. Robley D. Evans— later Admiral “Fighting Bob" Evans, who commanded the American Fleet when it started its cruise around the world in 1908—first commanded her. In their day the Indiana, Massachu- setts and Oregon were considered the “heaviest armed and armored battie- ships in the world,” and the famous trio participated In the battle of San- tiago. Capt. Charles E. Clark. later a rear admiral, commanded the Oregon when she made her thrilling dash from San Francisco around the southern tip of South America, through the Straits of Magellan, to Santiago. The Massachusetts was commanded by Capt. F. G. Higgin- later a rear admiral. The Indi- ana was commanded by Capt. H C Taylor, later a rear admiral and chief of the Bureau of Navigation Capt. William T. Sampson, who is knwn to history as the officer whose (Continued on Page (Continued on Page B-5) MRS OF mawks Tere PR ] 252288 = Diagram showing the number pf insolvent national banks, with number of receiverships clos A edy from 1912 through 1936, [k -