FAILURE OF BANKS.

New Zealand Herald, Volume LXVII, Issue 20722, 15 November 1930, Page 11

FAILURE OF BANKS.

PANIC IN TENNESSEE. HEAVY LIABILITIES. STATES' FUNDS AFFECTED. RECEIVERS IN CHARGE. By Telegraph—Press Association—Copyright. (Received November 14, 5.45 p.m.) NEW YORK, Nov. 13. A message from Knoxville says the collapse of tho long-established southern investment house of Caldwell and Company, of Nashville, which was followed by the closing of tho afliliated Bank of Tennessee and the Dolston Union Bank, which have combined liabilities of £5,000,000, has thrown tho State of Tennessee into financial and political turmoil.

While it is claimed tliat its assets aro adequate to meet its obligations the Bank of Tennessee has only 13 dollars in cash, while its liabilities are 13,000,000 dollars. The State of Tennessee had 5,000,000 dollars (£1,000,000) on deposit and a number of counties also had their funds there, and the State of Louisiana had 1,240,000 dollars deposited in the bank. A widespread investigation is impending, and one newspaper already is demanding the impeachment of the Governor of Tennessee.

In Nashville and Knoxville a two days' run on virtually all the banks occurred, as the populace became panic-stricken. 'loday three.banks announced their permanent amalgamation, in order to withstand the shock of the largo withdrawals, while other institutions, having brought in several million dollaYs in currency from the Atlanta District Federal Reserve Bank, paid all-comers, until something like calm was again restored. Federal receivers have been placed in charge of tho defunct institutions.