Evening star., 1933-02-15
BANKS TO RELEASE
PART OF DEPOSITS
Michigan Institutions to Per.
nit Small Withdrawals
During Holiday.
By the Associated Press.

the second day of the extraordinary
bank holiday proclaimed yesterday by
Gov. William A. Comstock, Michigan 8
900 900 bank depositors were encouraged
today by promises that part Of their
balances would become available by to-
morrow.
The Federal Reserve Bank Of De-
troit, which remains open, is receiving
millions Of dollars that are being poured
in from branches Of the Federal Re-
serve System in Chicago and New York.
Forty million dollars was on hand
today and the Detroit Clearing House
Association arranged to make $25,ooo,-
600 available to depositors tomorrow.
That will permit customers to withdraw
not in excess Of 5 per cent OF their
balances for emergency purposes before
the end of the eight-day holiday.
Wants Banks to Act.
II seemed a certainty that some such
plan would be put into effect for the
remainder of the State, although 1t was
not determined whether 1t would be by
gubernatorial proclamation or by volun-
tary action ON the part OF the banks.
In series of conferences last night,
representative bankers urged upon Gov.
Comstock the issuance OF supple
mental proclamation authorizing emer-
gency Withdrawals up to 10 per cent
Of balances.
The Governor, however, urged volun-
tary action. He said that while my
proclamation declaring a bank holiday
was mandatory. it Is not my disposition
to prohibit any bank from making q
sensible arrangement to permit with
drawals to meet family necessities or
to allow the cashing of pay checks, and
I believe many banks will do this"
He said the conferences with bankers
would be resumed today.
Meanwhile, the depositors whose ST.
SOC, 900, 900 bank balances were tied up
accepted the situation philosophically
Confidence was expressed that the
eight-day respite would permit sound
adjustment of the Union Guardian
Trust Co.'s financial difficulties which
precipitated the drastic action.
Bank Names Confused.
A similarity in names and difficulty
of the public in distinguishing between
the Union Guardian Trust Co., an in
vestment concern, and 10 trust COM
panies and 20 banks Of the Guardian
Detroit Union Group, Inc, with an esti-
mated $500, ,000,0 in deposits was given
as a major reason for the general clos
ing order.
No question was raised as to the sta
bility of other Detroit institutions.
Many out-State bankers knew moth
ing of the situation until they received
notice yesterday to close. A few had
opened for business before the order was
received.
Except for the upper peninsula, which
is separated both geographically and
economically from the remainder OF the
State, the banks were abiding by the
order The upper peninsula Is in a diff
ferent Federal Reserve Bank district and,
although the governor of the Federal
Reserve Bank of Minneapolis said he
was keeping hands off in the situation,
most banks above the Straits of Mack
mac were doing business as usual.
Business as usual also was the
policy below the Straits in other than
financial houses and the Detroit Stock
Exchange, which is closed. Larger
grocery stores and milk and fuel con-
Germs promised liberal concessions. The
Public Utilities Commission requested
the utilities companies to extend due
dates on current bills Some large en-
poyers announced they would pay in
cash instead of check, and some of
these who held to the check system
set up central stations for cashing OF
its employees pay checks.
Checks Hard to Handle.
1t was all but impossible to cash a
check, but in some communities checks
in small amounts were being written
and interchanged in lieu Of cash. State
employees are to be paid in split war
rants" issued in small denominations
and acceptable to most merchants. In
numerous cities stations set up to
change large bills did a rushing busi-
ness. but it was expected that banks
would resume that function when they
open on a limited withdrawal basis
The Governors unprecedented action,
which already has unofficial legislative
approval, was destined to receive legal
sanction soon. Admitting that possibly
his proclamation was without legal
effect. the Governor urged speedy en-
actment of measures covering the situ-
alton and bearing retroactive clauses.
Such bills were In the legislative hopper
today.
The part Henry Ford played in the
negotiations for salvation of the Union
Guardian Trust Co., in which he is
heavily interested, was somewhat clari-
fled overnight, but at his Office in Dear
born it was said he had no statement to
make-aS yet.
The Detroit Free Press, in a copy
righted story said that conflict be-
tween Mr.. Ford and Senator James
Couzens Of Michigan, once a member
of the Ford Motor Co., figured in the
breakdown of negotiations for a Re-
construction Finance Corporation loan
sufficient to tide the trust company
over the emergency. Senator Couzens
Is chairman Of the Senate Committee
investigating r. F. c. loans and the
Free Press says he insisted that Mr.
Fords 100000 deposit, listed as coll
lateral in an application for a loan,
be frozen" as security for the loan
Mr.. Ford, the paper said, agreed to that
procedure only In case all other large
depositors joined with him.
Gov Comstock, who had indicated
yesterday that controversy between
Henry Ford and competing automobile
companies figured in the failure of the
negotiations, said last night he had
been informed II misunderstood the
facts"
He had said in his earlier statement
that he was informed Mr.. Ford re-
fused to join other large depositors, in
cluding Chrysler and General Motors
in an agreement to subordinate their
claims to those of smaller depositors
and the r. F. c.
General Motors and Chrysler sSe
not depositors," his statement last
night said. Mr.. Ford had no agree
ment with the trust company or with
Chrysler or General Motors" He added
that when it was suggested the Ford
Co. put up substantial part" of nec-
essary funds, the company decided it
would not add to the approximately
$40, 100000 it had put into the trust
company.