RECOVERY IN U.S.A.

Auckland Star, Volume LXII, Issue 259, 2 November 1931, Page 7

RECOVERY IN U.S.A.

CREDIT IMPROVEMENT.

Hoover Expresses Optimistic

View.

BRITAIN PAYS £20,000,000.

(United P.A.-*E!lectric Telegraph—Copyright)

WASHINGTON, November 1

'The President, Mr. Hoover,' in summarising the assertion made in Government circles that, an improved economic condition Avas apparent, asserted that there was a very great change evident in the credit situation since the announcement of his plan to establish a bankers' pool of £100,000,000. ■ The President said: "Following the abandonment of the gold standard in England a wave of. great apprehension swept the United States." Although Mr. Hoover qffered no speculative opinions, he etated that the upward trend of • prices in cotton and Wheat reflected the recovery, which was supported - by the fact that country bank failures had practically . ceased. The hoarding of currency had apparently been checked, and 24,000,000 acinars in money had actually been returned to the banks within a week. • Mr. Hoover also pointed out that the, foreign exchanges had returned to a basis on which the shipping of gold abroad was no longer deemed advantageous. . More'over, Government financial circles hailed the Bank of England's announcement that it ■ would repay to-day £20,000,000 of the £50,000,000 lent by the United States and France as _ a highly favourable indication of the im-proved-conditions.- .. One prominent official said: "This is a good,' demonstration of the ability and determination of England to meet her obligations." .

BANKRUPT STATES.

Tennessee arid Alabama Have

Empty Coffers.

SALARIES UNPAID

NEW YORK, November 1

; Dispatches from* Nashville ■ and Montgomery indicate that the States of Tennessee and Alabama are eeriously embarrassed financially.

From the Governor to the Justices of the Supreme Court of Tennessee no October, salaries have been. paid. Teachers in six of the State normal schools have been without their salaries for six months and many of the county schools are closed. Millions of dollars of the State obligations have not been paid. The .Treasury is without funds. The Alabama Treasurer yesterday sent out warrants for £57,000 to pay the State employees for October, but added a warning that these must not be cashed, as there were no funds.

Bank failures, in which the' State's funds were lost, and the depression are responsible ,for the condition of both States. ; ,

"FROZEN ,, ASSETS. . FURTHER BANK CLOSURES. :' ' •■*', NEW YORK, November 1. The Federation Bank and Trust Company, one of the largest Labour banks in the country, with deposits of £3,127,000, closed its doors yesterday.

A message from Columbus, Ohio, says the Union Triiet Company of Day ton ,\ with resources of more than £6,000,000, has closed '"its doors, because of heavy, withdrawals and the fact thast its assets are "frozen."

DEPRESSION CAUSES. AMERICAN BANKER'S ANALYSIS WASHINGTON, November 1. Mr. Albert Wiggin, chairman of the Chase National Bank, and also of the German Committee of the Bank fo: International Settlements, .in discussing the depression before the Economic Committee of'the Senate, which is inquiring into unemployment, said: "Stripped of technicalities, the restoration of credit in Europe and a. revival of business in the , United States depend upon a iapprochement between France and Germany, and reductions in reparation .payments and inter-Allied debts, and in tariffs."

Mr. Wiggin asserted that the chief causes of the depression were excessive tariffs and other restrictive policies which impeded international trade; abnormalities in certain commodity markets due to Government and private attempts to maintain prices; low money rates and excessive credit,, which led to the diversion of bank funds-into slow speculative business; the political difficulties and the tardiness with which the wholesale prices of finished goods, retail prices, wages and rents adjusted themselves to last year's sharp fall.