Evening star., 1933-04-05
PUBLIC IMPATIENT
FOR BANK RELIEF
Pressure to Reopen Closed
Institutions Creating
Hard Problems.
BY DAVID LAWRENCE.

Pressure upon the Federal Govern
ment to reopen by license the banks
that remained closed after the bank
holiday is so intense that it is about
the most difficult problem the authori-
ties here face nowadays.
Plan after plan for reorganization is
submitted. Examiners are hard at work
classifying assets and depositors are
growing more and more restive espe-
cially in areas where there are virtu-
ally no banking facilities.
The task is overwhelming because
the staff and personnel for the emer-
gency is many times smaller than the
number of institutions that must be
examined. Also a lack of detailed in
formation in the field prevents bank
officials and their stockholders from
knowing exactly how reorganization can
be brought about. Likewise it is diff
cult for the banks to find the capital
with which to match the dollars OF the
Reconstruction Finance Corporation
Proves Heavy Strain.
While the total sums tied up In
closed banks are relatively small, being
enly 10 per cent of the total OF de-
posits in the Nations banks, still it Is
ltSul VI UCLWCCn SO,OOO,oOVJooV esAN>A
a ,000, ,000, 900. Any such sequestratlon
Of funds constitutes heavy strain on
the working capital of business and on
the resources of the individual.
The officers of the Reconstruction
FINANCE Corporation where much OF
the relief is sought are working day
and night but judging by the slow
progress being made 1t Is doubtful
whether some institutions will be re-
opened for 80 days or even six months.
In several instances, additional loans
Are being requested from the r. F. G.
DO as to enable banks to increase the
amount they can pay depositors at
once. Varying comments are heard
from bankers who visit here as to the
ktrictness of the r. F. c., in measur-
jmg the collateral, the opinion COM
monly expressed being that the Gov
ernment Is insisting upon considerable
margin of protection for the funds 1t
lends.
This ultimately will mean that the
bank officials will have to present plans
Tor the scaling down of deposits as well
hs for the introduction Of new capital
Ind that 1t will be laborous process
n each community. On the other
klosed banks in normal times shows
That If so per cent of the deposits
Available for distribution can be OBJ
kained within six months, the progress
3 above the average. The hope here
that all the closed banks will either
be reopened or definite plan OF liqui-
hating their assets undertaken within
blk months.
Three Agencies at Work.
There are three agencies at work on
TIE closed banks, namely, represent
Atives of the Controller OF the Cur
tency who supervise national banks,
examiners Of the Federal Reserve Sys,
tenn who check up member banks, ana
agents Of the Reconstruction FINANCE
CORPORATION who consult the other Two
with reference to possible loans on col
lateral or purchases Of preferred STOCK.
1t is necessary for all three, as rule,
10 render report or, In the case OF a
state bank, data from the State bank
ing authorities also is required before
final decision Is made here as to the
character and extent Of the aid fur-
nished by the Reconstruction Finance
Corporation. This accounts for the nee
essarily slow procedure.
Mergers and consultations OF banks
now closed are expected to be worked
out in the reorganization of capital
structures, but 1t Is evident from letters
received by members Of Congress that
the people who have money In closed
banks are exhibiting considerable i'm
patience about it, and are insisting that
the machinery be enlarged, II not ac-
Copyright. 1889