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Have Assets Ample But Time is Required to Effect Reorganization, Says Financier Little Rock, Dec. 1.-Nearly every bank that is forced to close has credit assets that can be converted into cash, making it possible for the bank to be reorganized without loss to positors and operated profitably, if sufficient time allowed to put organization plans into effect, in the opinion of Guy Morrison Walker, New York In letter to Dudley V. Haddock manager of the Arkansas State Chamber Mr. Walker, commenting upon recent bank failures in Arkansas and other Southern states, suggested that Depositors Protective Committee, consisting of leading business men the community, should be organized to co-operate with the state bank examiner in investigating the assets of closed banks and in persuading depositors to sign agreements to withhold withdrawal deposits, thereby giving the bank officials time to liquidate credit assets Mr. Morrison served reorganization counsel the Syndicate of Cleveland, with $100,000,000 worth of property and $23.in loans outstanding helped to save the syndicate from failure He elso was chairman of the Depositors Committee of the Knickerbrocker Trust Company New York, which failed for $65,000,000 young man, Mr. Morrison lived for short time Little Rock. He well with conditions in the South, and widely known as an expert in the rehabilitation "sick" ralroads, banks and industrial corporations. In letter to Mr. Haddock, Mr. Walker enclosed the following statement concerning methods of preventlosses to depositors of closed ing banks: Text of Statement "When bank fails the first clination of every depositor is to call the banker thief and crook, and while this undoubtedly relieves the feelings of the depositor it does not collect any money or help reopen the bank. truth of the matter is that most bank are honest men and while bank failures are more or less due to their poor in making the facts of the case are that most bank failures due an entirely erroneous the function of banking by almost all depositors, and the banks themselves are largely to blame for this ignorance or misconception. "Every feels that it should be possible for him to go to bank and withdraw his money when he wants it. He has never been taught to realize that what he has deposited with the bank was not money but almost everything money. He has deposited checks. drafts, bills of exchange. but in the ordinary course of business it not likely that he has ever deposited as much 10 per cent of his total deposits actual money (cash) He has has only deposited and credit what he should be entitled to withdraw not money urged that banks print such on the of the pass-book which they issue to their is the very effort depositors to take money out when they have only deposited credit that forces the closing of and this will continue the learn more about banking and exercise greater discretion and wisdom in lation to the banks with which they do business bank deals in not and dépositors have money deposited credit with the bank the bank attempts to make the best use possible of that credit by lending the people are carrying on the business of the comthings stages of development and frequently something happens to shock the confidence the community The people who have previously been willing to grant credit become frightened. impossible to complete the project under way and get it permanently fimanced before the temporary loans become due The bank afraid to rethe loan and the borrower finds impossible to secure new loan in place. The news becomes noised around and the depositors the bank begin quiet run The bank has not sufficient funds on hand. although its credit assets are perfectly good. unable to meet the unfair for cash depositors who really are entitled only share of the credit by the bank. "Now this what has hapthe closing of the hunpened with dred or so banks that have found necessary to close their doors in Arkansas and Kentucky North Carolina If the depositors these banks permit themselves to be governed by their passions, they will force under most disadvantageous conditions and impose upon themselves utterly uncalled for losses have gone through this business of failed banks time and again, and my experience has shown me that in almost every instance the assets of the bank are really good and all that has been needed was an extension of time, little additional credit in few cases to complete and carry through the point of profitable operation the that were being by the bank, and that if this was done, almost without exception, the bank was able to resume business reopen without loss to depositors frequently without loss to the stockholders of the bank. "This what the present situation demands throughout the South There should be hysteria and the depositors should all lay aside their passions and look the situation in the face. Do they or do they not believe in their own South? If they believe in the South, then they should believe in their banks who are financing and veloping their South The banks now closed should in every case cause to be committees, consisting of five or seven of the leading and most men in the community who are depositors in the bank. This committee should with the bank examiner in investigating the assets of the banks and then should report to depositors and state the proportion of comparatively quick assets and the proportion of those which need nursing or further extension of credit to fully protect, and done this they should call upon the depositors to sign an agree. ment agreeing to withhold claim for such proportion of their deposits as tied up in these credits granted to propositions that cannot be liquidated at once without "The proportion of assets that will immediately available for checking will, of course, vary with the different banks, but the feeling of confidence in the value of the assets that will follow and the assurance that some of their deposits will be available once and the balance practically full some time in the not too distant future will entirely remove the panicky feeling that now exists In addition this will start again toward completion the projects that have tied up by the closbeen temporarily of the bank and the inability ing credits held by the bank for use the any purpose went through this identical situa tion with the Syndicate which had borrowed millions from the banks in their territory. We asked for secured from the creditors an and of 18 months. The reextension quested was not necessary. In the case of the Knickerbocker Trust Company, the bank was reopened within short time, the restrictions that were at first imposed upon the depositors regarding the withdrawal of funds were soon waived. and ultimately not only were the paid in full but depositors the stockholders recovered their even without loss that these Southern banks' deto exercise little positors sense to show their confidence their own their own their own city, and particularly their business