Henry Ford Bails Out Detroit Banks

Dusty D is reading a rather incredible story in 1933 Ypsi papers about Henry Ford bailing out 2 Detroit banks. As you might imagine, the onetime farm boy and self-made industrial titan despised banks and Wall Street and hated the idea of being enmeshed in the abstract wheeling-dealing machinations of people who didn't make anything.

I went to one of my Ford bios for more information ("Henry Ford, The Wayward Capitalist" by Carol Gelderman). It said Ford did indeed hate the idea of bailing out the banks, and said it was the government's responsibility to do so, but was urged to do so by no less than President Hoover (this was just before the inauguration of FDR).

When Ford refused, it caused a statewide bank "holiday" on Feb 14, 1933 that domino-like, triggered bank holidays in other states. The bio is a tad unclear, but it does appear Ford relented and funded 2 Detroit banks sufficiently to have them qualify for federal aid and keep them afloat, (as the Ypsi paper says), and the bank holiday in MI ended after a week--though withdrawals from the Detroit banks were restricted to only 35% of one's assets--much better than the rate other banks were offering at the time.

Ford's personal secretary Liebold "cracked under the strain," says the bio, and fled to Northern Michigan, "pursued by [Harry Bennett's spies." Liebold stayed on with Ford but "was stripped of more power each year."

In these days of the government bailing our car companies, it's fascinating to read of a time when it was the other way around. I believe this will be my topic for my upcoming Saturday Chronicle article.