Article Text
The Knoxville Clearing House members — Hamilton National, Commercial Bank & Trust Co., and Bank of Knoxville—voted unanimously to observe the holiday shortly after the proclamation was made public, although they had agreed earlier in the day to remain open in the face of the four-day extension of the state holiday.
Fountain City bank will also observe the holiday, Cashier W. H. Henry said.
"Members of the Knoxville Clearing House association will observe the holiday set down for Monday, Tuesday, Wednesday and Thursday, but all banks will be open Friday," C. M. Preston, president of the Hamilton National, said immediately after leaving a meeting of the association last night.
PLANNED SCRIP
It had been planned earlier in the day to issue clearing house certificates here in lieu of currency, the supply of which has been cut off by the closing of Federal Reserve banks in this district. The proclamation, however, made the immediate issuance of certificates unnecessary.
"As to the issuance of certificates, we will have to await regulatory instructions from the government, since the President's mandate, Mr. Preston said.
Bankers here were of the opinion that every bank in the country would observe the Roosevelt holiday, since it would be practically impossible to obtain permission of the Secretary of the Treasury to remain open before late Monday or sometime Tuesday. Every bank will be closed tomorrow at least, they agreed unanimously.
"Business as usual," was the slogan last night of Knoxville business men following the receipt of President Franklin D. Roosevelt's banking proclamation.
Although leaders of local commerce could not say definitely what effect the bank holiday would have on trade here, most of them took the attitude that a normal amount of buying although, necessarily, a large amount of it would have to be done on a credit basis.
Much of Knoxville's hoarded money is expected to come to light during the next four days.
CAN'T CASH CHECKS
The closing of Federal Reserve banks throughout the nation had made it practically impossible Saturday for banks to cash out of town checks, since a bank here would pay out currency in paying for the check, but would be unable to get cash from the payee bank. Under this procedure all the currency would soon have been let out. The Federal Reserve governor also announced that banks would not be allowed to draw on their reserve deposited with Federal Reserve banks.
This was explained as the only reason Knoxville banks would have had to issue certificates, which would have been secured by liquid security posted with the Clearing House. For every dollar in certificates banks would have been required to post $1 in liquid security with the Clearing House, which would act as a trustee.
Many other cities over the United States have already adopted the scrip plan.