With all of the recent turbulence in the financial markets, federal regulatory agencies, such as the Federal Deposit Insurance Corporation (FDIC), are receiving greater attention than ever before. But did you know that the first American to be reimbursed by the FDIC was a woman from East Peoria?
After winning a decisive victory in the 1932 election, President Franklin Roosevelt initiated a flurry of legislation that would come to be known as the New Deal. The Banking Act of 1933, signed into law in June, set up the FDIC to provide deposit insurance, handle bank failures and liquidate failed bank assets in an orderly manner. The establishment of the FDIC put a halt to bank runs, which had resulted in losses of about $1.3 billion over the previous four years.
On July 5, 1934, Lydia Lobsiger of East Peoria received the first federal deposit insurance disbursement, following the failure of the Fon Du Lac State Bank. Peoria Mayor Charles O’Brien, East Peoria Mayor W.O. Summerfield, Congressman Everett Dirksen and a thousand onlookers were on hand for the historic occasion.
According to an account in Time magazine, “a scrawny bespectacled widow in a cotton dress marched up to a cage marked ‘CASH F.D.I.C. ORDERS HERE,’ [and] posed for photographers. In her hand she held a check for $1,250, her life savings, which W. Kenneth Hayes behind the counter had just given her. ‘I don’t know how to thank you men,’ grinned Mrs. Lydia Lobsiger.” iBi