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DIXIE BANKS REOPEN ABBEVILLE, La., March 17 (AP).Abbeville's two recently suspended banks, together with the bank at Breaux Bridge, near here, opened yesterday. The institutions are the First National Bank of Abbeville, the Abbeville Bank & Trust Co. and the Farmers & Merchants Bank of Breaux Bridge. The city was decorated and celebrating.
Blames Failure Of R. F. C. On Publicity Sullivan Thinks Michigan Situation Brought on by Publication of List of Borrowings by Banks. BY MARK SULLIVAN. (Copyright, 1933, for The Observer.) WASHINGTON, Feb. 19. — The closing of Michigan banks last week contributed a factor to the central problem which underlies or permeates practically every other question in politics. That question is whether there will be inflation of the currency. Superficially, the Michigan incident was interpreted as one more unsettling event and therefore as pointing toward inflation. In fact, however, the Michigan bank closings contribute toward greater likelihood that Mr. Roosevelt, as soon as he is President, will be given by congress large power over the government's fiscal affairs. That the Democrats, strongly in control of the new congress, will take this or an equivalent step, is now practically certain. It is universally accepted that Mr. Roosevelt, in the exercise of the unusual powers to be given him, and in all respects, will work in a direction opposite to inflation. PUBLICITY HURTS. The disturbing fact about the Michigan closings is that they came more than a year after the government had set up the Reconstruction Finance corporation for the purpose, among others, of preventing just such events by advancing government funds. Subsequently congress decreed that all loans made by the R. F. C. should be made public. What now transpires is that this enforced publicity seriously reduces the ability of the R. F. C. to avert bank closings. It is now almost possible to assert that loans by the R. F. C. when coupled with publicity, have the effect, not of preventing bank embarrassments, but of stimulating them. Newspapers on the 27th of last month printed a page and a half of the names of banks and other institutions which had borrowed from the R. F. C. There followed on February 4 in Louisiana, and on February 14 in Michigan, two of the most disquieting events of the whole three and a half years of depression, in the form of state-wide bank moratoriums. As a part of the same effect, what is loosely called "hoarding" of currency went to a new high peak. The quantity of currency outstanding last week was $5,854,000,000. The last previous peak had been $5,775,000,000 July 6 last year. MONEY IN TILLS. Not all the additional currency outstanding reflects hoarding. Some represents money kept in tills for normal business purposes by merchants in towns where banks have failed. Some represents unusual quantities of currency kept in tills by banks that fear runs. Undoubtedly much represents currency withdrawn by depositors who are fearful about the safety of banks. The sum of all is that unless the requirement of publicity is repealed by congress, the R. F. C. has to some degree ceased to have power to strengthen the banking situation. The fundamental fact is that a bank which has borrowed from the R. F. C. has at once strengthened its position and also demonstrated its soundness, for the R. F. C. makes loans only on good security. Unhappily this basic fact does not alter the disposition of a depositor in such times as these to become uneasy when he runs his finger down the column of a newspaper and finds his own bank listed as a borrower from the R. F. C. MAY REPEAL PROVISION. The hope of Washington officials is that by the present time, three weeks after the last publication of R. F. C. loans, the unfortunate consequences have worn themselves out. Bank failures last week dropped to 23, as compared with 55 the week before. Another publication of R. F. C. loans will not be due for some time. In the meantime there is reasonable expectation that congress may repeal the publicity provision. Conservative Democrats favor this course. The member of the house who led the movement for publicity last month, Edgar Howard of Nebraska, is a silverite, and was for many years secretary to William Jennings Bryan. In the Michigan episode, as throughout the depression, one question clamors for answer. Why have Canada and Britain been able to pass through the depression without one bank failure while the United States has had thousands? The answer was given to a senate committee last Friday by David F. Houston, Democratic secretary of the treasury in Woodrow Wilson's administration, and now president of the Mutual Life Insurance company of New York: "I see no other solution than a unified banking system," Mr. Houston said. PREVENTED BY POLITICS. A unified system is prevented, in part by members of congress who, during the recent debate on the Glass banking bill, stood up eloquently for preserving little, weak individual banks. A collateral answer to the same question has been given several times by Governor Eugene Meyer, Jr., of the Federal Reserve system. "We have bank failures in America, Mr. Meyer says in effect, because politics will not permit us to require sound practice by all banks. Politics insists that states, in addition to the federal government, shall have the right to charter banks. Between the federal government and the states a competition in leniency results. When Washington tries to make bank regulations rigid, the banks are able to retort, in effect, "Very well, we will get our charter at the state capital."
SEVENTEEN STATES CHECK RUNS ON BANK Seven More Join Movement to Restrict Withdrawals of Deposited Moneys THREE AND FOUR DAYS TO BE TEMPORARY HOLIDAYS Situation Easing in Some States as Legislatures Planned Curb Laws Mississippi, Arizona, Nevada and in Oregon today joined the states. which there are limitations placed on the withdrawals of deposits from banks. in which limitations on withdrawals now exist. The proclamation of Gov. Ralph at San Francisco makes mandatory the closing of California banks (or three-day period ending Saturday The three-day holiday called Gov. Murray in Oklahoma for same period also is mandatory. The of Gov. Allen of Louisiana provides for the sation until the end of the week "all public business including Banks and other public enterprises." Mississippi the decree of state banking called only (Continued On Page Two)
16 STATES NOW RELIEVING BANKS Nevada, Arizona, Oklahoma, Among Last to Join BY UNITED PRESS The movement to restrict withdrawals of deposits spread through the south and west today bringing the total number of states to enact emergency legislation to 16. Beside California, the four most recent states to take action are Arizona, Nevada, Oregon and Oklahoma. Mississippi acted late last night. Louisiana went a step further and also declared a three-day holiday for all business. Executives announcing the new holidays generally blamed conditions in other states for forcing the extension of restrictions by placing an unusual strain on banks which sought to continue business normally. EIGHT CLOSED Eight banks in the District of Columbia imposed restrictions on withdrawals as an aftermath of the closing of the Commercial National Bank. In several states already operating under restrictions, business appeared to be moving back toward normal. President-elect Roosevelt, after discussing the bank situation with William H. Woodin, who will be his secretary of the treasury, indicated that he would not issue any statement on the subject. Washington dispatches had reported pressure upon him to make a reassuring declaration before he is inaugurated Saturday. CUT WITHDRAWALS The states in which banks had been authorized to operate on emergency status before last night were Alabama, Kentucky, Tennessee, Michigan, Ohio, Pennsylvania, Arkansas, West Virginia and Maryland. In several others legislatures passed measures permitting governors and banking officials to restrict withdrawals should it become necessary. In Indiana, Illinois and some other states, some banks operated under restrictions without formal authorization of the state government. Efforts continued in Michigan to put into effect the plan of Henry Ford to take over two big banks and reorganize them. One of the banks, it was indicated, might reopen soon without Ford's assistance.
Louisiana Neros Fiddle While Nation's Business Halts FOR two milleniums, Nero has fiddled while Rome burned. But the great historian, Tacitus, tells us that Nero has been defamed. Instead of fiddling, while thousands of citizens were being burned out of house and home, the Emperor Nero threw open to the common people the imperial Campus Martius that the homeless might be protected and ordered food rushed to them that they might be fed. By his energetic conduct, Tacitus tells us that Nero proved himself not only the friend but the lover of his people. That happened in Rome nineteen hundred years ago under the reign of an ambitious, revelling, pagan emperor. But what would the historian, Tacitus, say today if he could take a look at the wild celebrations of High Hat Oscar Allen and his political and banking associates in the state of Louisiana. Like every good citizen, he would see this puppet of Huey P. Long, looked down upon as a figurehead in Louisiana's executive mansion, staging the most tragic onslaught upon the common people that has ever been perpetrated in the history of the state. And that tragedy was enacted under a mask of gaiety that turns the lurid light of Nero's reign into an incandescent glow that would make the brilliant Mazda blush for shame. High Hat Oscar Allen, jokingly called "Governor" of a great democratic state in the greatest republic that has ever been conceived in the mind of man, raises the curtain upon the most scandalous official revelry and contemptuous hatred of the people's good. Kingfish Huey P. Long, known at home as a body-guarded, vote-stealing, wage-cutting, bribe-taking, tax-grabbing politician, and throughout the nation as clown, buffoon, and sensational blatonist, joins hands with his high hat dummy governor to the utter amazement of starving and distressed Louisianians at home. These men, and other Louisiana officials who participated in the mad melee of the selfish few against the suffering many, have shown their true colors. Already had they lost the confidence, and now they fail to even command the decent respect of the people of the state of Louisiana. They are simply little fish in the great sea of democracy. Were it only for their personal actions, they could be scorned and ignored. But, while the good that men do is often interred with their bones, the evil that they do lives after them. The evil that Huey P. Long, through his High Hat Governor, and his banking associates, has done to the people of the state and the nation is so appalling that it must command not only the instant but the incessant attention of every lover of the people and the people's rights. Think of High Hat Allen calling a three-day holiday of the banks of Louisiana on the first of March, and immediately boarding a train for Washington in quest of the glee of an inaugural ball. Think of the satin, silk, and velvet dressed ladies of Louisiana's political life in a mad whirl of intoxicating dance music, bedecked in costly diamonds and showered with pricely orchids while those at home groaned beneath the load of an unexpected bank "holiday." Think of the officialdom of the state of Louisiana bowed down before the throne of hilarity when Louisiana was leading the sad spectacle to a national crisis. Think of Attorney General Porterie far away from home when Louisiana was in a mesh of business and legal confusion. Think of State Treasurer Cave engaging in Washington celebrations when his duty was to look after the state funds at home with banking suspended and the people's money tied up. Think of Alice Lee Grosjean, supervisor of public accounts, far away from the state with banks closed and public accounts paralyzed. Think of the uniformed staff of "Governor" High Hat Allen waltzing to the strains of carefree music while children at home weeped in hunger or wailed in despair. Think of the veterans of the World War depositing money from the United States on the first of March in Louisiana banks to be told on the second of March, after High Hat had issued his banking holiday, that they could draw a nickel against each dollar on the third of the month. And while the boys at home were eating doughnuts and coffee because their legitimate money had been tied up by the banks, Louisiana's political ladies, in imported gowns, were crying, "Dance me around again, Willie," to the uniformed staff of High Hat Oscar's brigade. Think of the school teachers of Louisiana who went without pay because the banking fraternity shut down on city and state official checks while Louisiana's highest officials thrilled in the vain glory of a Washington dance. Think of the clamping down of the scanty pittance that is being dispensed by the Welfare Association—hardly enough to feed an able bodied man, to say nothing of his wife and children. Think of that pittance being stopped by the bankers, under the proclamation of a dancing High Hat "Governor," while infants sucked their thumbs and older children cried themselves to sleep. New Orleans and Louisiana were hungry, but the dance went on. With banking, business, manufacturing, shipping, and commerce in general halted, woe, want, tribulation, anguish, yes, nation-wide hell has followed in the wake of the mad doings of Louisiana bankers and Louisiana politicians. Shameful as it is, Louisiana must assume the blame for having led the motley parade to the national crisis. Scan the sad spectacle—Union Indemnity failure and fraud—Hibernia Bank rescued by R. F. C. as it tottered to fall—a three-day banking holiday declared by the dancing governor—the opening of the New Orleans bank on the second day of the three-day holiday with a bait to the public to start new accounts that would be payable by check in full—the re-closing of the banks on the third day of the three-day holiday because of the President's proclamation—a national crisis demanding quick action by President Roosevelt and Congress to avert a complete collapse of the financial structure of the United States. Remember, had there been no Huey P. Long, the Wrecker, there would have been no Louisiana wrecked Highway Commission; had there been no wrecked Highway Commission, there would have been no Union Indemnity failure and fraud; had there been no Union Indemnity failure and fraud, Representative Fish of New York could not have hurt the Hibernia Bank by accusing Rudolph Hecht of being a party to this collosal fraud; had there been no run on the Hibernia Bank, Uncle Sam could have diverted millions to the hungry and the footsore; had the R. F. C. not been called upon in desperation to save the Hibernia Bank, there would have been no nation-wide loss of confidence in New Orleans and Louisiana banks that caused withdrawals and prompted the three-day farcical state holiday; had there been no three-day holiday farce, Louisiana could have helped stem the tide against banking stabilization instead of leading the way for nation-wide bank closings that led to the national crisis. Rudolph Hecht has been called the Bad Boy of Bankdom. Together with Huey P. Long, the Wrecker, through their dummy High Hat Oscar, they forced the nation to the brink of a mad maelstrom of banking collapse, script money, and limited withdrawals. If Tacitus, the great historian, could live today, believing in justice as he did, he would wish Franklin D. Roosevelt unlimited power in straightening out the mad muddle. Then he would truthfully proclaim, "Kingfish with his dummy High Hat went dancing while their people suffered the agony of the damned." And yet, the unkindest cut of all is the sad spectacle of a Louisiana Senator opposing the new deal as was done the early part of the week when Huey P. Long and two of his cohorts voted against the measure giving President Roosevelt full power to save the nation and stem the onrushing tide of distress and suffering. Louisianians should forever cherish in their hearts this vote of Huey P. Long. If he has any defenders they should hang their heads in shame.
facturing, shipping, and commerce in general halted, woe, want, tribulation, anguish, yes, nation-wide hell has followed in the wake of the mad doings of Louisiana bankers and Louisiana politicians. Shameful as it is, Louisiana must assume the blame for having led the motley parade to the national crisis. Scan the sad spectacle--Union Indemnity failure and fraud--Hibernia Bank rescued by R. F. C. as it tottered to fall--a three-day banking holiday declared by the dancing governor--the opening of the New Orleans bank on the second day of the three-day holiday with a bait to the public to start new accounts that would be payable by check in full--the reclosing of the banks on the third day of the three-day holiday because of the President's proclamation--a national crisis demanding quick action by President Roosevelt and Congress to avert a complete collapse of the financial structure of the United States. Remember, had there been no Huey P. Long, the Wrecker, there would have been no Louisiana wrecked Highway Commission; had there been no wrecked Highway Commission, there would have been no Union Indemnity failure and fraud, Representative Fish of New York could not have hurt the Hibernia Bank by accusing Rudolph Hecht being a party to this colossal fraud; had there been no run on the Hibernia Bank, Uncle Sam could have diverted millions to the hungry and the footsore; had the R. F. C. not been called upon in desperation to save the Hibernia Bank, there would have been no nation-wide loss of confidence in New Orleans and Louisiana banks that caused the withdrawals and prompted the three-day farcial state holiday; had there been no three-day holiday farce, Louisiana could have helped stem the tide against banking stabilization instead of leading the way for nation-wide bank closings that led to the national crisis. Rudolph Hecht has been called the Bad Boy of Bankdom. Together with Huey Long, the wrecker, through their dummy High Hat Oscar, they forced the nation to the brink of a mad maelstrom of banking collapse, script money, and limited withdrawals. If Tacitus, the great historian, could live today, believing in justice as he did, he would wish Franklin D. Roosevelt unlimited power in straightening out the mad muddle. Then he would truthfully proclaim, "Kinfish with his dummy High Hat went dancing while their people suffering the agony of the damned." And yet, the unkindest cut of all is the sad spectacle of a Louisiana Senator opposing the new deal as was done the early part of last week when Huey Long and his two cohorts voted against the measure giving President Roosevelt full power to save the nation and stem the tide distress and suffering. Louisianians should forever cherish in their hearts this vote of Huey P. Long. If he has any defenders they should hang their heads in shame.