BANKS IN DIFFICULTIES.

New Zealand Herald, Volume LXVII, Issue 20725, 19 November 1930, Page 11

BANKS IN DIFFICULTIES.

FOUR, AMERICAN STATES. MORE CLOSURES REPORTED. THIRTY-FIVE IN ARKANSAS. By Telegraph—Press Association—Copyright. (Received November 18, 8.45 p.m.) NJ3W YORK, Nov. 17. Four States in America have suffered in a series of bank closures due to various causes. ]i| most instances smaller banks have been affected by the closing of larger institutions with which t liev wero associated.

Tho difficulties of many banks seem to havo been caused by reaction from the banking trouble at Nashville. To-day the closures are reported of 35 banks in Arkansas, two in Illinois, four in Missouri and six in Kentucky. It is announced that theso institutions will remain closed until the flood of unnecessary and heavy withdrawals shows a tendency to cease.

A cablegram from New York on November 13 stated: —A message from Knoxville says the collapse of tho longestablished southern investment house of Caldwell and Company, of Nashville, which was followed by tho closing of tho affiliated Bank of Tennessee and the Dolston Union Bank, which have combined liabilities of £5,000,000, has thrown the State of Tennessee into financial and political turmoil. While it is claimed that its assets are adequate to meet its obligations tho Bank of Tennessee has only 13 dollars in cash, while its liabilities are 13,000,000 dollars. Tho State of Tennessee had 5,000,000 dollars (£1,000,000) on deposit and a number of counties also had their funds there, and tho State of Louisiana had 1,240,000 dollars deposited in the bank. A widespread investigation is impending, and one newspaper already is demanding tho impeachment of llio Governor of Tennessee.

]n Nashville and Knoxvillo a two days' run on virtually all tlic banks occurred, as tlio populace becamo panicstricken. To-day three banks announced their permanent amalgamation, in order to withstand the shock of the large withdrawals, while other institutions, having brought in several million ill 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.