The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1931-01-02
MAJOR

CONTINUED from page One)
posts in the banks closed during
November, 1904, 100000; and gross
deposits in the Bank of the United
States alone were over $200,000,-
600 on September "a, making its
failure probably the largest on rec
|ord in the United States.
Bank Busts In Boston
While depositors were learning
that it would take a year to liqui-
date this banks frozen assets, the
federal reserve districts of Phila-
delphia and Boston, both of which
had been immune in November,
were each treated to major
crash. The Bankers Trust Co. of
Philly, which had grown in less
than three years to 10 times its
former size by series of consoli-
dations, went under Dec. Fl.
It's deposits as of Sept. "a were
$45, 100000. New England did its
bit next day when the Riverside
Trust Co., of Hartford and the
New Haven Bank of Pallotti, An
dreatta & Co. were suspended.
Both were big institutions, the de-
posits of the former totalling near
ly $4,0O0,000. On the same day
seven banks closed in the south,
and the Federal Reserve Bank of
New York, by way of indicating
the banking system as whole was
, not suffering from any lack of
money, cut the rediscount to go,
the lowest in the world.
,, Failures PrOlOng Depression
D Banking journals are pointing
, out that the failures are bound to
Iprolong the depression. Deposits
. in a failed bank represent frozen
/ purchasing power, regardless OF
| the losses ultimately sustained.
! Town after town in the south
Q and middle west has been left
: without banking facilities. Insol-
h vent customers at the local stores
have to ask for credit; the stores
can get no bank credit and come
back heavily on the wholesalers.
American Bankers Fall Down
$ The Journal of Commerce takes
t the banking world to task rather
d sharply for permitting bank fail
e ures to continue. Canada" says
h it's leading editorial, "has made il
S a principle to have banks that are
/, about to fail taken over by the
: other banks in the community"
e England and continental Euro
n pean countries have been doing the
: same thing. Which merely indi
Y Gates that neither the much vaunt
u ed Federal Reserve system nor thu
. far-famed business judgment o:
the American banker who hal
Z evolved the present banking sys
I tenn, is worth much in a sever,
crisis. The Bank of United State
was a member of the Federal Re
serve system, though the Chelse;
Bank and Trust Co. which follow
ed it by a few day and left owe
$20,000,000 in deposits tied up, wa
! not.
IS Just as the short-sightedness o
. the bankers postponed adoption o
centrally located banking system
for generations, so the same bark
ers have failed to handle the ma
TONS credit intelligently.
Over Production Is Fiction
| The fiction that the depression
was caused by over production ha
= found no support from statistic
=. on inventories in recent months
There was not over production S
= much as over investment in instru
y mentS of production. Financial in
situations underworld a large pre-
portion of the $18,500,000,000
stock offerings, which found
- market from 1920 to 1929 an
. helped persuade a credulous publ
that the farmers and workers Q
the U. S. would somehow be abl
to buy the products of these bus
nesses, though they received
steadily diminishing share of tn
national income. The banks helpe
! divert the country's funds and fai
ed absolutely TO predict or prever
the crash.
No Hope for Prosperity 1881
So when bankers say 1881 wi
see recovery, workers ask, whel
e is it coming from? Crop values fl
1880 are $3.50 below 1929. The d.
partment of commerce shows tn;
in the first ten months of 49,
U. S. business sold about LOO
, 100000 less to other countries thu
in 1929, and DR.. julius Klein, puI
licity man for the department, r
Gently pointed out that Europes
unemployment will reach a. peak
January. Standard Statistics r
= Gently estimated shrinkage in Il
purchasing power of wage earne
of eight billion dollars for 1890.
Rich Are Gay
Capitalists at Palm Beach a
starting "the most brilliant seasC
g in years., but they can't spend :
the s1,121 1881 paid in dividen,
OF January 1. Much of the su
y viii be invested, as if there w
nc. too much money looking f
inveSruenf uaxu PoDlrove -