The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1933-03-02
MAYOR ANON
DECLARES A
BANK HOLIDAY
First National Takes Advan-
tage of New Law to Safe
Guard DepOsitOrs - Still
Open for Business

fOllOWlnR III the wake OF OIneE
banks turnout the state and ma
ton, the First National Of Kenne-
wick this morning hung a procla-
nation by Mayor Anon on the
front door, proclaming weeks
holiday. o..
Yesterday the same action was
taken by the Yakima Valley bank
at Yakima, and while the local in
stitution is in excellent shape, fear
of a run developing caused the di-
rectors to take the precautionary
measures as a matter Of protec-
tion to the depositors.
AS the news of the Yakima
banks action became known here,
some of the depositors asked for
their money. While not, developing
into what might be termed "run"
nevertheless the directors felt that
such uneasiness was dangerous and
determined to take advantage Of
the new banking law which permit
ted banks to protect themselves in
situations of the kind.
The new law provides for NOR
atorium of six months or less for
a bank. During that time, the sus-
pended institution will be open to
receive deposits and transact bus
mess as before, except that dur
ing the period of the moratorium,
no matters in connection with pre-
vious business can be concluded
except under the direction Of the
state banking department.
In other words, the concern will
go into a process of liquidation or
reorganization. It may receive de-
posits and this money will be held
in trust and may be checked out as
heretofore, but cannot be invested
or used by the bank in any way in
connection with its former busi-
ness.
Durig the day word was receiv-
ed that eight states had declared
banking holidays and the Old Ma
two banks there, gave orders TO
tional bank in Spokane. one Of the
its string Of Eastern Washington
banks to remain closed today. This
order closed practically every bank
in the Yakima, Spokane and Wal
la Walla districts. The Bank Of
Commerce in Pasco remained open
turnout the day.
The following statement was
given The Courier Reporter from
the bank today:
During the day preceding the
time for opening on Thursday
morning, the Directors were con-
fronted with the problem Of de-
termining upon q course of action
having as its object the protection
of all depositors. The recent clos
ing Of one large nearby bank had
caused a certain amount of uneas-
mess among the more nervous de-
positors. The fact that another
bank close at hand had elected to
avail itself of holiday privileges
had so emphasized the situation
and the action Of q few depositors
in withdrawing their deposits In
Dictated so clearly that increased
Withdrawals might be expected
that the directors felt compelled to
adopt some method of conserving
the assets of the bank for the
benefit Of all concerned.
In making their decision, the d.
rectors had in mind, first the equal
protection of all deposits, regard
less of residence of depositor or
character of deposit, and second,
the proper resumption Of normal
operations at an early date. Three
methods Of procedure were open:
Ia
operations and attempt to meet all
demands. IL successful, the COM
munity would be greatly benefited.
If unsuccessful, the attempt would
result in a depletion of cash, q
sacrifice of the best assest, follow
ed by actual closing and liquida-
ton. Such procedure would have
meant the safety Of those deposit
tors who elected to withdraw their
deposits and the sacrificing Of the
saving accounts and checking ac-
counts not withdrawn, or
2. The directors might close and
go Immediately into liquidation.
This would have been followed by
distribution Of liquid assets after
considerable period and by the
conversion of other assets into cash
in the usual manner and the final
winding up Of business with more
or less loss, or
8. They might accept the bene-
fit of National and State Stabili-
cation laws recently passed which
provide for the temporary suspen-
sion Of the payment of obligations.
In this manner it was possible
for the directors to conserve all
the assets Of the bank, including
the available cash, in such man
ner as to safeguard the interests
of all depositors alike, making IL
impossible for a few excited de-
positors to withdraw their money
70 the dstriment Of others
The directors realize that by
properly conserving the cash and
other assets Of the bank they
would be greatly increasing the
likelihood of normal resumption Of
business.
Under an Act Of Congress, ap-
J Continued on Page Eight.l