U.S.A. FINANCES

Greymouth Evening Star, 2 November 1931, Page 9

U.S.A. FINANCES

STATES HAVE NO MONEY [BY CABLE—PBESS AB N.—COPYRIGHT.] NEW YORK, October 31. Despatches from Nashville and Montgomery indicate that the States of Tennessee and Alabama are seriously embarrassed financially. No October salaries have been paid to officials from the Governor to the Justices of the Supreme Court of Tennessee. No salaries have been paid to the teachers in siv of the normal schools for six months. Many country schools are now closed. One million dollars in State obligations are unpaid; as the Treasury is without funds. The Alabama Treasurer to-day sent out 285,000 dollars warrants to pay the State employees for October, but he added a warning that these must not be cashed, as there are no funds. The failure of banks in which the State funds are lodged, and trade depression are responsible for these conditions in both States. MORE BANKS FAIL NEW YORK, October 30. The Federation Bank Trust Coy., one Of the biggest Labour Banks in the country with deposits of 15,630,000 dollars closed to-day. A Columbus (Ohio) message states the Union Trust Compalny of Dayton, with resources of thirty-one million dollars, closed to-day, because of the assets being frozen, and of heavy withdrawals. MR. HOOVER OPTIMISTIC. WASHINGTON, October 31. President Hoover, summarising assertions made in Goverinment circles, that improved economical conditions were apparent, asserted that “there is a very great change evident in the credit situation since the announcement of the financial plans on October 16.” ° Tho President asserted that following on the abandonment of tflie gold standard in England, a wave of great apprehension swept the United States, but, although he offered no speculative opinions, he stated that there was an upward trend on the prices of cotton and wheat, and that there reflected a “recovery,” which was supported by the fact that the country bank failures had now practically ceased.

The hoarding of currency had apparently been checked, and twenty-four million dollars in money had actually been returned to the banks within the past week. President Hoover also pointed out that the foreign exchanges had returned to a basis in which the shipping of American gold abroad was no longer deemed advantageous.

Moreover, Governmental and financial circles have hailed the Bank of England’s announcement that it will repay in gold to-morrow one hundred millions of dollars of 250 million dollars that were loaned by the United States and France, as a highly favourable indication of improved conditions.

One prominent official asserted: “This is a good demonstration of the ability and determination of England to meet obligations.” CAUSES OF DEPRESSION. U.S.A. EXPERTS SUMMARY. WASHINGTON, October 30. Mr. Albert Wiggin, Chairman of the Chase National Bank, and Chairman of the German Committee for the Bank of International Settlements, discussing the depression before the Senate Economic Committee stated: —“Stripped of all technicalities, the restoration of credit in Europe depends upon a rapprochement between France and Germany, and upon reductions in the reparations aud the inter-allied debts, and reductions in tariffs.” Mr. Wiggins asserted that the chief causes of the depression were as follow: —(1) Excessive tariffs. (2) Other restrictive policies impeding international trade. (3) Abnormalities in certain commodity markets, due to governmental and private attempts at valorisation. , (4) Low money rates and excessive credit, leading to the diversion of bank funds into slow speculative business. (5) Political difficulties and the tardiness wherewith the wholesale prices on finished goods, retail prices, wages and rentals adjusted themselves to last year’s sharp fall.