The Washington times., 1933-02-15
CASH RELEASED
IN DETROIT To
PAY WORKERS
$25, 900, 900 Available Tomor-
row, Says Clearing House;
Hoover Lends Aid

DETROIT, Feb. is G.N.SD.
Assured that observance of Gov.
william A. Comstock's eight-day
bank holiday may be governed by
individual circumstances, banks
in scattered districts of Michigan
were cautiously reopening today.
In Detroit, all banks were re-
leasing per cent Of commercial
deposits to employees needing the
cash to meet payrolls. Twenty.
five millions of the $1,220, ,000, 900
tied up by the governors edict
will be released by Detroit banks
to all depositors tomorrow, the
Detroit Clearing House Associa-
ton announced.
Throughout the State, similar
plans for limited release of funds
were being launched. In some
cities-notably Monroe, which is
only few miles from the center
of the financial disturbance
banks threw off all restrictions
and did business as usual.
Fears Being Allayed
These developments brought
new spirit of optimism to the
State. Fears appeared to be al
1ayed and there was total absence
of panic among depositors. There
were no runs on banks that re-
opened.
Governor Comstock said his
proclamation issued yesterday was
necessary in order to save the
Tat NJ TnfrNif
from collapse.
Hoover Acts in Crisis
The trust company'S failure, he
said, would have torn the States
banking structure and banks
would have fallen "like stacks of
dominoes"
Edict Clarified
The governor today ended un-
certainty over the legal st~5us OF
his edict. He said:
The proclamation is manda-
tory If there is a danger spot,
and it has to be used. 1t is not
mandatory as long as the
bankers use sense.
"The proclamation will not be
abridged. 1t must be left as 1t
is, so that 1t can be used effec-
lively if some bank or other fails
to use common sense, or at
tempts to turn its facilities
against the public interests"
Previously, Attorney General
Patrick H. O'Brien had issued a
strong statement declaring that
the State is under "semi dictator
ship" and the governors word is
law.
Benevolent Dictator
The total effect of the pro-
nouncementS was to strengthen
the position of the mild-mannered
executive as almost absolute
dictator of the States financial
system, but a benevolent dictator
who will allow the banks to use
their OIL judgment as long as
they work for the common veal.
Advices from washington that
President Hoover had marshalled
the resources of the National Gov
ernment and the Reconstruction
Finance Corporation behind the
Michigan banks did much to re-
ieve the situation.
The Federal Reserve System
was pouring millions into its
Detroit branch in preparation
for anything that might develop.
More than $4O,000,000 had ar
rived from Chicago and New
York last night.
The First National Bank, De.
troit's largest, went a sep fur
ther than the Clearing House
Association, and announced plans
to make sufficient cash available
so that every Detroit employer
might meet his payrolls.
The announcement Of the Clear
ing House Association said:
"AII depOSitOrs of Detroit
banks, both commercial and saw
ingS, may withdraw for emer-
genCy purposes Thursday not in
excess of per cent Of the net
amount on deposit"
This step was taken in accord
ance with an interpretative state
ment issued by the Governor to
soften the effect of his proclama-
ton.
Indications have come from
Lansing and Washington that the
Reconstruction Finance Corpora
ton has rallied to the aid of the
Union Guardian Trust.
DepOsitOrs' Deadlock
Just what happened to cause
the Union Guardians difficulties
remained somewhat of a mystery.
From apparently reliable in
formation, however, it appeared
that the holiday was made neces-
Sary by a deadlock among the
banks large depositors over dis
position of it's assets in obtaining
an r. F. C. loan.
Unable to break the deadlock,
the bank either had to fail to
open for business yesterday or
adopt some expedient to gain
time for negotiations. In the ex-
tremity, the bankers, led by Sec
retary of Commerce Roy D.
Chaplin, appealed to the Cover
nor to proclaim the holiday.