"BANK HOLIDAYS"

Evening Post, Volume CXV, Issue 106, 8 May 1933, Page 6

"BANK HOLIDAYS"

EFFECTS IN AMERICA

DESERTED STREETS

"Bank holidays" have been general over a largo part of the United States. Some idea of what the closing of the banks means to the ordinary smalltown population can lie gathered from the following extracts from an article ,by Mr. W. A. S. Douglas in the "Baltimore Sun." Mr. Douglas is writing from rural Michigan, where tho first "bank holiday" was declared:— Along the broad boulevard that runs the ninety miles between Detroit and Lansing, the State capital, there arc scattered a dozen little towns, villages, and cross-roads congregating spots. These last invariably comprise a filling station, a barbecue stand, and a garland of ovcrallcd men and boys festooning the fronts of both business institutions. The all-absorbing subject of conversation along the line is the closing of the banks throughout the State. In fact, such discussion is the only active industry along the high road.-' In most of the little towns the banks were closed and in the hands of receivers before the order ;wcnt into effect. What banking business the communities without banks had was transacted at the nearest town in which a bank still operated. For instance, the merchants of Farniington carried their deposits to Eodferd, nine miles away. The inhabitants of New Hudson who possessed money —and faith—journeyed to South Lyons, six miles away. That procedure, as the . ■ postmaster and general storekeeper of New Hudson remarked today, "is all blowed up." His six-mile-distant bank account is tied up for the duration of the moratorium. TOWN'S CASH EXHAUSTED. The postmaster of New Hudson, who sells everything from a tractor to hard candy, has taken in 7.83 dollars in cash since - the moratorium went into effect three days ago. This, in his opinion, has exhausted the town's ready money, for he hasn't taken coin or bill across the counter since yesterday noon. ' However, he has a billfold full' of cheques—something over 100 dollars— and he drove gaily over to South Lyons yesterday with the idea of either cashing these _ cheques or depositing them and drawing some percentage against them for the purpose, as he put it, of '.'greasing the wheels of' progress in New Hudson.' The big Detroit banks had announced that beginning yesterday all depositors could draw 5 per cent, of their money and could deposit any funds they had collected during the first two days of the moratorium. But the South Lyons banker told the New Hudson postmaster that he (Wasn't going to accept the cheques for deposit, and, moreover, that he wasn't going to let him draw even 5 per cent, of his own money. The banker suggested that the postmaster could leave the 7.83 dollars cash if he cared to. . In fact, he reached for it as it lay on the top of the heap of cheques, ready for deposit, but the postmaster grabbed the money in time, demanding to know what was going to happen to the 400-odd inhabitants of New Hudson if all its available currency should disappear. The banker explained his own predicament—that of all the small-town bankers over the State. Their large funds—if any—and reserves—if. any-jr are held in the big Detroit banks. When the latter—whose difficulties brought about the moratorium—declared they would pay out 5 per cent, they withheld withdrawals of reserves and funds by the little banks, which declared all over the State that they could not follow the example of the Detroit institutions unless they get similar access to their set-aside funds. Only'the bigger cities were able to do as Detroit did. Each of these little communities along the road had the aspect today of Sunday. The streets were deserted. The stores wero empty. The manager of a chain grocery store in Farniington said business had fallen off 20 per cent, per day since the moratorium. He was accepting cheques for the value of purchases only, and these not to exceed 2.50 dollars. If the moratorium were extended he said that even this accommodation would be cancelled. The storekeepers, Testaurantmen, and such along the road are just beginning to figure what they are going to do if the moratorium is extended over next Thursday. There has been little enough money in these places heretofore, but the prospect of being completely moneyless appals them. Actual money, is disappearing, and the cash registers are already bulging with cheques lnd' lOUs. '