"One-Hundred Percent John" Vs the FDIC: Part Two

By Gerry Curran

In August, 1935, to everyone’s astonishment, "One-Hundred Percent John" reluctantly agreed to pay the bank’s assessment and join the FDIC. Though he still disagreed with the concept of deposit insurance, he felt that after the FDIC had reduced the amount to be assessed from one-half of one percent to one-twelfth of one percent, membership in the FDIC was the easiest way to wrap up the problem. With First National Bank of Englewood’s deposits of $6,277,000, the assessment came to $5,230.

"One-Hundred Percent John" remained low for the balance of 1935—other than a publicized letter that notified depositors that the bank was levying them directly for their portion of the FDIC assessment. He felt because his bank was sound and didn’t need such a thing, he would just pass that cost on to the depositors and opined that all banks would eventually follow suit.

In 1936, still smarting from his earlier treatment by the FDIC, Nichols would use any reason to berate them, no matter how minor. Once, he found a magazine article where FDIC chairman Crowley discussed the rule forbidding member banks from accepting savings accounts from corporations. He dashed off another letter to Crowley and made it public stating “...So long as our deposits are fully covered by United States cash and government securities, neither you nor anyone else is going to tell us whose deposits we shall or shall not accept. Who do you fellows think you are, anyway?”

That same year, Nichols, not satisfied with just shaking his fist at the Roosevelt administration with irate letters and posters, thought of a clever way to poke his financial finger in the government’s eye. Just before the feds came to examine his books that year, "One-Hundred Percent John" transferred $1.1 million to the Northern Trust Bank and an equal amount at the Harris Trust and Savings Bank—in cash, in $50 and $100 denominations, to be kept in their respective vaults. When the bank examiners came up $2.2 million short at 63rd and Stewart Ave., they asked, in their best Chicagoese: ‘Where’s the rest of the dough?’ Nichols told them he’d take them downtown for it. First stop: Northern Trust, where he wheeled out the lode of fifty- and one-hundred-dollar bills.

“You oughtn’t do this,” an examiner sputtered, “It doesn’t look safe, keeping all this money in a safety deposit vault in a bank.”

“Well, if that’s the way you feel about it, why don’t you go up and tell Solomon Smith that you don’t think his vaults are safe?” Nichols queried. “You know, he spent a lot of money on these vaults and is mighty proud of them.” After that, it was over to Harris Trust and Savings for more the same. It was well into the night when they finished. It became their yearly task after that. (That particular year, the First National Bank of Englewood was 108.71% liquid.)

A month prior to the presidential election that year, Nichols sent out yet another letter to his depositors. This time he urged them to support Alf Landon for president and described the election as “a choice between constitutional government and communism ... As the guardian of your funds, I urge you to protect your deposits by casting your vote for Alfred M. Landon.” Roosevelt won the election 62% to 37% of the popular vote and 523 to 8 in the Electoral College where Landon carried only Maine and Vermont.

Though his next four years were relatively quiet, Nichols couldn’t resist one more poke in FDR’s eye, who in 1940, who was campaigning for an unprecedented third term. Nichols placed a display ad in the Chicago Tribune which basically showed the bank’s outstanding financial condition. However, at the very bottom he added the following text: “In a last stand for democracy, every director and officer of this bank will cast his vote for Wendell Willkie.” House Majority Leader John W. McCormick (D-Mass.) fired off a letter to the Senate Campaign Investigating Committee charging "One-Hundred Percent John" with violating the Section 313 of the Federal Corrupt Practices Act which prohibited a national bank from making a contribution in connection with any election to political office. Never one to shy away from publicity, Nichols said he would be delighted if they investigated him and announced that he would run the same ad the next day in American Banker, a New York publication. The only difference would be a line of large type above the ad reading ‘We repeat’ with an arrow directing the reader to the Willkie support statement.

The committee turned the charge over to the Department of Justice which declined to prosecute. The point was moot: Roosevelt won 55% of the popular vote to Willkie’s 45%, and 449 to 82 in the Electoral College.

During the Willkie ad incident, Nichols had said if Roosevelt was reelected, he, as majority shareholder, would shut down his bank, pay off the depositors and distribute the assets to the shareholders. True to his word, in April 1941, "One-Hundred Percent John" requested that depositors completely withdraw their funds from the bank. The bank was left with deposits of $39,000, of which, $32,000 belonged to owners who could not be traced. In August, he announced his retirement from the banking business for the “duration of the Roosevelt-concocted emergency.” He kept the bank’s charter, but said its only activity would be real estate management.

First National Bank of Englewood, founded in 1889 by Nichols’ father, finally ended December 1943 when he contracted with Speedway Wrecking Company to have the 1½- story building, 347 West Sixty-Third Street, demolished. According to Time Magazine, nobody but bookies and nightclub operators offered to rent it.

In a final act of banker bravura, Nichols ordered that, following the demolition, the vacant lot be covered with black dirt to “give it an honorable burial...the lot will be just sitting there to give back to the Indians.”

"One-Hundred Percent John M. Nichols," 82, died at Hinsdale Hospital on Sunday, June 11, 1972. One can only speculate as to how he would react to today’s banking debacle. Chances are good that he would be 100% angry.

Gerry Curran is a Southern California based writer who was born in Chicago and raised on the South Side. His work has appeared in Nostalgia Digest. Gerry served in the Marine Corps, and is now happily retired with his wife, Vicki. He spends a lot of time studying Chicago's history.

Photo Credit: First National Bank of Englewood, interior, Chicago History in Postcards