http://www.delmarvanow.com/article/20120626/DW08/206260331/Townsend-s-greatest- achievement?odyssey=mod%7Cnewswell%7Ctext%7CDelaware%20Wave%7Cs Townsend's greatest achievement Jun. 26, 2012 | Written by Michael Morgan • Delaware Wave • DW-Education • Poultry Industry OnlineConsumerLifestyles.com Fed by risky investments, unbridled regulation and a feeling that the good times would last indefinitely, the collapse of the financial markets rolled over the country until it reached the doorstep of the Baltimore Trust Company in Selbyville. Established in the early 20th century, when banks were scarce in Sussex County, the Baltimore Trust thrived under the leadership of its president, John G. Townsend Jr. During World War I and the Roaring '20s, the bank became a fixture in southern Delaware. When the stock market crashed and the Great Depression began, the bank's existence was threatened. Fortunately, the bank's president, Townsend, had risen to a position of political power. Townsend was born in 1871 on a farm just over the Delaware line in Worcester County, Md. An enterprising and affable young man, he moved to Selbyville, where he became a successful farmer, canner, and a pioneer of the Delaware poultry industry. During the strawberry boom that swept southern Delaware over a century ago, the innovative Townsend was credited with inventing the strawberry ice cream soda. Townsend's business success provided him with the available capital that allowed him to serve as an informal banker to people in the Selbyville area. Acting as a private lender taught Townsend the nuts and bolts of the banking business; and he put this experience to good use in 1903, when he became president the newly-chartered Baltimore Trust Company. In addition to furthering his financial career, Townsend was a rising star in Delaware politics. First elected to the Delaware General Assembly in 1901, he served as governor of Delaware from 1917 to 1921 and was elected to the United States Senate in 1928. Shortly after he arrived in Washington, the stock market collapsed, the Great Depression began and small banks -- such as the Baltimore Trust Company -- struggled for survival. Investments made by many banks were wiped out by the plunge in the stock market; and the high unemployment rate during the Depression also caused many to default on their home mortgages. A polyglot system of state and volunteer efforts to cope with the hardships created by the depression had little success. Fearing a general failure in the banking system collapse, depositors rushed to withdraw their savings; and this served to exacerbate the economic situation. In November 1932, Franklin D. Roosevelt was elected president amid the worsening financial crisis and the public's loss of confidence in the banking system. Sen. Townsend was acutely aware of the difficulties facing the banking industry. He put a substantial amount of his own money into the Baltimore Trust Company to keep the Selbyville bank afloat so that not a single depositor lost money. Although Townsend was a staunch Republican, and Roosevelt was a life-long Democrat, the two men found common ground in the banking crisis. As a member of the Senate Banking and Currency Committee, Townsend favored legislation that would help small banks, such as those that served Sussex County. The major banks were opposed to the idea, and President Roosevelt was less-than- enthusiastic; but Townsend persevered. Acting with unprecedented speed, Congress passed a wide-reaching banking bill that included authorization for the Federal Deposit Insurance Corporation, which guaranteed bank deposits. The FDIC is funded by the banks themselves, and since its inception, no depositor has lost a singe cent of insured funds as a result of bank failure. Townsend went on to serve in a number of important positions before he retired from public life; but the Selbyville businessman's greatest achievement was the FDIC that saved America's banks. Copyright © 2012 www.delmarvanow.com. All rights reserved.