Hard Times in Illinois, 1930–1940
A Selection of Documents from the Illinois State Archives
DOCUMENT 9LETTER CONCERNING A BANK CLOSING IN LANARK
ca. July 11, 1932
Nationwide 659 banks failed in 1929 with deposits totaling nearly $250,000,000. The number of failures rose to 1,352 in 1930 with deposits totaling around $853,000,000. The figures peaked in 1931 when 2,294 banks with deposits approximating $1,700,000,000 closed. Beginning January 16, 1932 the federal government began lending a total of $1,500,000,000 to banks and other credit lending institutions across the county to help shore them up and thus stabilize the economy. This spending was authorized by the Reconstruction Finance Corporation Act. Despite this massive infusion of capital 1,456 banks with $750,000,000 in deposits went under in 1932.
When a bank failed in Illinois its affairs were taken over by the auditor of public accounts whose office oversaw the banking industry. The auditor appointed a receiver who liquidated the bank's assets and then allocated receipts, minus expenses, to depositors proportionately. Liquidations often took several years because there were few buyers able to purchase foreclosed properties. Depositors usually were reimbursed a small fraction of their original outlays. In his response Governor Emmerson suggested that Mr. Eby contact the auditor of public accounts.
Points to Consider
J. Galen Eby had written Governor Emmerson. What was he requesting?
Locate Lanark on a map.
What were J. Galen Eby's chances of recovering his $40?
How might the Eby family have been getting by considering their earned income?