The Waterbury Democrat., 1931-12-23

banks. This will prevent any raid upon the treasuries of the banking institutions by panic-stricken de. positors and win serve to protect their interests eventually. All de- positors, however, have been given official assurance of receiving $50 weekly, which win be the maxi. mum amount of withdrawals until further notice.
 Plenty of Funds
 With thousands of dollars en route to Waterbury from Boston, New York and Hartford and ex- pected here this afternoon or in the morning at the latest there Is no fear of shortage of funds and banking officials have promised to cooperate with all their patrons to prevent any embarrassing situa- tions.
 One of the most essential facts discussed at the special meeting this noon was the fact that the Na- tional Credit Corporation had ap- proved of a substantial loan by local banks to the Merchants Trust Company. This was cited as evi- dence that the corporation had su- preme confidence in the solvency of the bank which failed to open this morning. It also substanti- ates the impression that the direc- tors of the Merchants Trust Com pany acted voluntarily to bring their affairs to a crisis and to place matters officially in the hands of the state bank commis- sioner. It also serves to protect them from any personal responsi- hiatt,, it, aVant of anV unnlpn 4a if incidents.
 Believe No Rumors
 Notwithstanding the circulation of many wild rumors as to bank ing COG ditions in Waterbury the meeting of the bankers today was one marked by optimistic confi- denco and with statements of as- surance by Lewis $. Reed of the Citizens Manufacturers and chair man of the senate state committee on banking, F. o. Goss, Edwin s. Hunt, Fletcher Judson, John r. Elton, Wilbur P. Bryan, Edwin s. Northrop and others present at the meeting.
 Test of Confidence
 While admitting that the incident affecting the Merchants Trust company and the general public was one of sincere regret 1t was not an occasion to warrant pes slmism. It was an emergency that would perhaps test public confi- dence in banking institutions, but if persons refused to be stampeded by unfounded reports they would appreciate readily the fact that the interests of thousands would be protected without the loss of a penny.
 Within few minutes after o'clock early visitors to the bank were greatly surprised to view the notice that the institution would not open to-day. In q re- markedly short time the city was buzzing with comments. Thousands of persons paraded past the insti- tuition seemingly amazed by tho development, but there was no evidence of disorder or excitement Naturally scores were disappointed and shocked, but there was no manifestation of resentment. A small squad of policemen remained in the vicinity of the bank during the day and kept the sidewalk free of obstruction of curious spec tators.
 While the city was recovering from the shock of the affair oi- rectors of the bank held meeting and issued the following statement:
 Directors Statement
 "The action of the directors of the Merchants Trust company in deciding 10 suspend business this morning was taken when in their judgment 1t became apparent that the interests of the depositors would best be served by such ac- ton. The present situation has been developing over the past year because of the difficulty of reduc- ing the amount outstanding on loans and discounts combined with steadily decreasing deposits. The immediate crisis developed because of the depreciation in the market prices of securities which has se- riously impaired the liquid position of the company.
 The total deposts of the bank are less than six million ($6,000, ,0O0 .00) dollars of which three million six hundred thousand ($3,600, 900. .00) dollars are in the savings depart ment. The capital surplus and un- divided profits total one million three hundred thousand ($1,300,- O0O.OO) dollars which amount rep resents a protection to depositors against the depreciation in assets.
 In the opinion of the officers. the amount of the capital surplus and undivided profits is sufficient to save the depositors from any loss."
 Sanditz & Traurig.
 Sanditz and Traurig, local prl- vate bankers, closed at 10 o'clock this morning. Officials of the bank denied that the closing was pri- marily caused by the suspension at the Merchants Trust Company. The Sanditz & Traurig Bank opened for business at o'clock this morning and closed at 10 o'clock following an intensive run" on the funds deposited there.
 The closing was ordered volun-