BANKS CLOSED

Taranaki Daily News, 16 February 1933, Page 5

BANKS CLOSED

HOLIDAY FOR EIGHT DAYS V * MICHIGAN FINANCIAL CRISIS ALL INSTITUTIONS RESTING TIME TO EVOLVE SOLUTION GOVERNOR ISSUES DECREE By Telegraph—Press Assn.—Copyright. Detroit, Feb. 13.. Governor Comstock early on 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 in the State shall not be opened. for the transaction of banking or trust business. 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 he 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 that 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 very likely have brought in its train disaster to many other banking institutions in .Michigan. A total of £302,077,355 in Michigan's 550 banks and trust companies is tied up by the holiday decree. The action is unprecedented in United States history. The Detroit stock Exchanges are closed. Mr. Henry Ford’s name is prominent in statements from the Governor. He declared that if Mr. Ford had consented to subordinate his £1,500,000 deposit In the Union Guardian Trust Company the affairs of that institution might have been settled without delay. The Governor said that he was told that other large depositors, including General Motors, .and the Chrysler Corporation, had agreed to subordinate their claims, but that Mr. Ford refused. The Governor believed that a would be completed within 24 hours to permit of sufficient withdrawals from the banks to provide payrolls and living expenses for depositors. He said it was probable that the holiday , would be cancelled before it had run its full course. Federal officials said to-day that Mr. Ford was holding out against allowing a preferment over his own huge funds in the Union Guardian Trust Company to smaller 'depositors only for the purpose of making other large depositors join him in such a preferment. Governor Comstock later issued ® a statement spying he had misunderstood the facts relative to the connection of Mr. Ford with Detroit financial institutions. '