DRASTIC STEP

Nelson Evening Mail, Volume LXVI, 15 February 1933, Page 5

DRASTIC STEP

EIGHT DAYS’ HOLIDAY MICHIGAN BANKS GOVERNOR’S PROCLAMATION (United Press Association—By Electrio Telegraph—Copyright) {Received 15th February, 10.15 a.m.) DETROIT, 13th February.

Governor Comstock early oil Tuesday issued a proclamation calling for an eight day public holiday in Michigan, during which time all banks, trust companies, and other financial institutions conducting banking or trust business m the State shall not be opened for the transaction of banking or trust business.

ACUTE FINANCIAL EMERGENCY UNION GUARDIAN TRUST COMPANY (Received 15th February, 11.20 a.m.) DETROIT, 14th February. Governor Comstock’s proclamation said that the holiday was proclaimed in view of the acute financial emergency existing in the City of Detroit, and throughout the State ‘of Michigan. He explained that be was summoned to Detroit on Monday to a conference precipitated by an unforeseen acute situation which had suddenly arisen in the affairs of one of the leading financial institutions, the Union Guardian Trust Company. He said it was the consensus of opinion after a long conference that the difficulties might be ironed out provided time could be had for negotiations. ‘As matters stood,” the Governor said, ‘it would Have been necessary to close the doors of the institution this morning, which would likely have brought in its train disaster to many other of our banking institutions in Michigan.”

HENRY FORD’S ACTION

CRIIICI3ED BY GOVERNOR

(Received loth February, 12.35 p.m.) DETROIT, 14th Februaiy. A total of 1,510,386.767 dollars in Michigan’s 550 banks and trust companies is tied up by the holiday decree. The action is unprecedented in the State s history. The Detroit Stock Exchanges have closed.

Mr Henry Ford’s name was prominent in statements from the Governor. He declared that if Mr Ford had consented to subordinate his seven and a half million dollars deposit in the Union Guardian Trust Company the affairs of that institution might have been settled without delay. He said he was told that other largo depositors, including General Motors and the Chrysler Corporation, had agreed to subordinate their claims, but Mr Ford refused.

The Governor believed a plan would be completed within 24 hours to permit sufficient withdrawals from the banks tc Srovide payrolls and living expenses for epositors. Ho said that probably the holiday would be cancelled before it had run its full course. •'

WASHINGTON, 14th February. Federal officials said to-day that Mr Ford was holding out against allowing preferment of his huge funds in the Union Guardian Trust Company to smaller depositors only for the purpose of making other large depositors join him in such preferment