Many Bank Failures

Hawke's Bay Tribune, Volume XVI, Issue 8, 21 December 1925, Page 5

Many Bank Failures

ANXIETY IN AMERICA. AN ECONOMIC DANGER. New York, Doc. 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 tho economic danger the United States faces from this source. Professor Oliver Sprague, Professor of Banking and Finance at Harvard University, who was appointed by tho Treasury Department to make investigations. of the Denver failures, said they were due to frozen assets, which the institutions were unable to liquidate quickly to meet the demand of depositors.

There have been similar collapses in the past four months, four banks failing in Prescott. Arizona, in November, and eight in South Carolina within a fortnight in September while desultory failures have been occurring daily throughout the country. Bad management and embezzlements have also been largely responsible for the troubles.

The situation is causing anxiety, because the general conditions of prosperity this rear are greacer than last, and the basic economic conditions are so good that the banks should be immune.

There were 225 failures in the first half of 1925 the total liabilities being 86,785,000 dollars. Forty per cent of all the failures have been occurring in Minnesota. North and South Dakota. lowa and Missouri. Tho middle west has been particularly affected, owing to a. large number of farm mortgages hold by the banks, with farm values falling, as a result of bad crops for several years.

Prosecuting Attorney Moore, of Missouri, recently blamed a national gang of bank wreckers working from within and sapping the resources of the institutions. Proposals have been submitted to Congress suggesting the organisation of a group of large banKs, with their resources under Government control and working through many branches to assure safety.—(A. and N.Z.)