BANK FAILURES IN U.S.A.

Timaru Herald, Volume CXXIII, 21 December 1925, Page 9

BANK FAILURES IN U.S.A.

Two Hundred in Six Months. COLLAPSES CAUSING ANXIETY. By Cable —Press Association —Copyright. Australian and N.Z. Cable Association Received Dec. 20, 5.5 p.m. NEW YORK, Dec. 19. The failure of five banks in Denver (Colorado) yesterday and to-day, making the sixth institution to close its doors there since September, aas again emphasised the economic danger the United States faces from this source. Professor Oliver Sprague, Profess6r of Banking and Finance at Harvard University has been appointed by the Treasury Department to make investigation of the - Denver failures, said to be due to frozen assets which these institutions were unable to liquidate quickly to meet the demands 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 dally throughout the country. Bad management and embezzlements have also been largely responsible for the troubles. While in 1924, the total failures numbered 753, it is believed this number will be much larger for the current year. The situation is causing anxiety, because the general condition of prosperity this year is greater than last, and basic economic conditions are so good that banks should be immune. There were 225 failures in the first half of 1925, with total liabilities of 86,785,000 dollars. Forty per cent, of all the failures have been occurring in ♦.Minnesota, North and South Dakota, lowa and Missouri. The Middle West has been particularly affected, owing to 3 large number of farm mortgages held by banks, with farm values failing as the result of bad crops for several years. A prosecuting attorney (Mr Moore of Missouri), recently blamed a national gang of bank wreckers, working ,from within and sapping the resources of these institutions. Proposals have been submitted to Congress suggesting the organisation of a group of large banks with resources under Government control, and working through many branches to assure safety.