Evening star., 1933-03-05
ALL STATES ORDER
BANK SAFEGUARDS
Financing at StandstilI as u.
S. Leaders Map Speedy
Action.
Continued From First Pa9e,)


Enid. Okla, where National Guards
men enforced Gov. William II. Murrays
mandatory closing proclamation on the
First National.
Virginia was one of the last States
to order bank restrictions. Gov. Pol
lard last night announced declaration
of a mandatory holiday tomorrow and
Tuesday. Pollard said his action was
taken with the recommendation Of the
Richmond Federal Reserve Bank.
Since making my statement OF Fri
day night" fC.!agd said. there have
been unforeseen Developments in New
York and in ether financial centers OF
the country where bank holidays have
been declared"
Cited State Law.
Friday night Pollard said he saw
no necessity for a holiday i'll view OF
Viyginia'S law permitting banks to close
individually by applying to the Corpo-
ration Commission.
The first thought of business in gen.
eral was to provide sufficient cash for
pay rolls and routine expense. AL
though nine .enthS of business nor
nally is transacted by check-and
checking was impossible everywhere
no cities reported serious curtailment
il commercial and industrial activities.
The New York Stock Exchange and
the Chicago Board of Trade largest
trading organizations. respectively, in
securities and grain futures. were closed,
and so were smaller markets OF the
kind. Live stock and cash grain mar
ketS remained open, but transactions
were at lower volume.
The average citizens chief trouble
appeared to lie in difficulty of caShing
pay checks. Stores generally extended
credit more literally TO- household
necessities. however. and larger places
gave some casn il accepting checks for
payment OF bills or ll41.ng OF pur-
chases.
Smaller merchants developed fear
that their supplies CT cash would run
short and We're cautious about accept
ing currency larger than $40 i'll de-
nomination The Chicago surface lines
feared shortage Of pennies for its i
cent car fare business.
Many taX-collecting bodies reported
increased revenue for the day as tax
payers took advantage Of provisions in
some mandatory closing proclam2 tionS
Il
permitted larger Withdrawals for pay
ment Of taxes. Unemployment relief
funds also were generally excepted from
the restrictions.
Reserve Banks Follow.
Federal Reserve banks generally fol-
lowed the route OF State and national
institutions, with the explanation that
such is the policy for holidays. No gold
exports were permitted with the holiday
In effect.
Students of finance explained the
situation arose not from lack of sta
bility, but rather because of huge de-
mards for cash. Authorities OF many
States declared holidays with the eX-
PLANTATION that previous action in neigh
boring States made it necessary.
No matter what lquidity financial
institutions attained. it was said
it would be impossible for the $40 000,-
100000 in American banks to be with
drawn suddenly in cash. The 140-odd
banks reporting to the Chicago Federal
Reserve Bank stated Withdrawals total
ing nearly a billion dollars were made
in the week ended March l.
The foreign effect of American bank
ing regulations was broad. International
payments were halted, foreign ex-
changes could not be bought in New
York and the dollar was not quoted
abroad.
Money orders generally were limited
to 500. One company paid 25 per
cent cash for incoming money orders
and gave checks for the balances. Rail-
road companies took emergency action,
announcing broadened credit and
stating that travellers would not be left
stranded anywhere because of banking
difficulties
Delaware was the last State to hold
out without banking restrictions, but an
indefinite holiday was declared last
night. Midwest and New England
States took action toward holidays in
rapid succession early in the day after
mCratOria had been declared in the i'm
portant banking centers of New York
and Illinois.