BANKS AND THE CRISIS

Waikato Times, Volume 113, Issue 18928, 24 April 1933, Page 8

BANKS AND THE CRISIS

AMERICAN FINANCE. ENTERS UPON NEW ERA. BRITISH LINES FOLLOWED. One salient point emerges from the recent financial crisis In America, and that is that it marks the end of “smallman” banking in the United States, said. Air J. Collan, representing Equities,, Ltd., a Sydney, London, ana American group of financial agents, who was a through passenger by the Alakura, en route from Chicago to Sydney. “I am positive," Air Collan said, “that after the present trouble, America will resort to the British system of branch-banking." Americans were always suspicious of trusts, and possibly would not view with favour the placing of the national banking system Into the hands of a few, like England, where the “big live" controlled the major part of the business, Air Collan continued, but, nevertheless, he was conconvinced that the United States was in for an era of branch-banking, possibly with Government supervision, or with Government participation by means of partial ownership. Air Collan said that he was speaking with some authority when he said that in the past few years there had been about 10,000 bank failures in the United States. But now, he xvas quite convinced that all these crashes, which had been due to “small-man” ownership, were definitely a thing of the past. Panics Over. Panics on the part of Americans themselves were over, and there seemed to be a new spirit of optimism In everyone one met. Although he disapproved of dictatorial methods in normal times, Mr Collan said that he thought the Government control of banking, which America had adopted as a temporary expedient in an exceptional time, was a good thing. Alany people, who should really know better, were looking for an unprecedented boom in securities and business generally, Air Collan continued. Personally, he did not se things that way.

Ameliorative measures taken by the United States Government would possibly result in the forced selling of securities by those banks that had been badly hit, said Air Collan, and that might tend to cause the market to fluctuate, possibly depressing even the levels of Wall Street “leaders,” but it seemed to him that at the beginning of 1934 America would definitely “set” off on a great upward move.

He believed that strong methods of the present Administration, and ready response on the part of the people to the positive policy of the new President, will cause a great American revival with its positive repercussions throughout the British Empire.

Banks Had “Lid On.” The banks had the “lid on" properly, Air Collan'said in referring to the recent American moratorium, with special reference to the State of California. There were many amusing incidents, apart from the seriousness of the position, he continued, and many wealthy people in California found themselves without a cent. Adolph Zukor, the famous movie producer, found himself without any money when the banks closed, and the story was told that he gave five dollars to his chauffeur, who managed to build it up to 500 dollars at dice. Thus it happened that Adoplh Zukor and the people around him were the only ones in the vicinity that had any money.

In the midst of the crisis people were accepting almost anything as currency. For the first time in his life Mr Collan said he paid his restaurant bill and his theatre admission by cheque. There was still restriction in force, and only money absolutely essential was permitted to be withdrawn. Mr Collan said that banks in various Stales bad been declaring “holidays” at various times during the past two years. But thedast big crisis was brought about by foreign attacks on the dollar, particularly Continental attacks. People got rattled and began to withdraw deposits at such an unprecedented extent that something had to be done. A panic of hoarding currency and gold caused the President to resort to the measures did. Severe penalties were now provided for hoarding currency or for the export of certain capital.