BANK FAILURES

Evening Star, Issue 19128, 21 December 1925, Page 5

BANK FAILURES

COLLAPSES IN AMERICA BAD MANAGEMENT AND EMBEZZLEMENTS. Press Association-By Telegraph-Copyright NEW YORK, December 19. The failure of five banks in Denver (Colorado) yesterday and to-day, making; the sixth institution to close its doors there since September, has again emphasised the economic danger which tlic United States faces irotn this source. Professor Oliver Sprague, professor of banking and finance at Harvard University, ivho was appointed by the Treasury Department to make an investigation oi file Denver failures, said they were due “Iro7.cn” assets which the institutions were unable to liquidate quickly enough to meet the demands oi the depositors. There have been similar collapses m the past four months, four banas falling in Prescott (Arizona) in November. and eight in South Carolina within a fortnight in September. Desultory failures have also been occurring daily throughout the country. Bad management and embezzlements have been largely responsible for the troubles. While the toatl failures m 1921 numbered 75.1, it. is believed that the number will be much larger lor the current year. The situation is causing anxiety because the general condition of_ prosperity this year is greater than it was Inst, year, and the basic economic conditions are so good that the hanks should he immune. There were failures in the first halt, of 1925. the total liabilities were B(i,7fis,(Hindol, Forty per cent, of all the failures have, hoou v occurring in Minnesota, Nonh and South Dakota, low'll, and Missouri. The Middle West has been particularly affected, owing to the large number ol farm mortgages held by the hanks with farm values falling as a result ol had crops for several years. Mr Moore, Prosecuting Attorney, ol Missouri, recently blamed a national gang of bank wreckers working from within and sapping the resources ol the institutions. . Proposals have boon sunniittcd to Congress suggesting the organisation of j” group of large banks with their resources under Government control, and working through many branches to assure safety.—A. and N.Z. Cable.