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EARLY U. S. ACTION PLANNED ON BANKS
New York and Illinois Declare Holidays—Only Four States Unrestricted.
Connecticut took similar action, bringing to 43 the list of States in which restrictions on withdrawals are operative in some form or another.
Only Montana, Colorado, North Dakota and South Carolina remained without restrictions at noon today. Delaware's banks were open, but the State Legislature has already taken emergency action.
These developments had brought from Representative Rainey, the next Speaker of the House, the prediction that "an extra session of Congress will be called at the earliest possible time." He said he felt that early next week, possibly Tuesday, would not be too soon. Previously Rainey had told House members-elect to remain in Washington. Others at the Capitol said the session probably would begin Wednesday.
The Federal Reserve Bank of New York was closed with all other banking institutions of that State. The Federal Reserve Bank at Philadelphia also closed, under a holiday declared throughout Pennsylvania by Gov. Pinchot. Later in the day the Minneapolis Federal Reserve Bank suspended business.
The closing of the New York Federal Reserve Bank meant the tying up of its huge gold reserve for the period of the holiday against withdrawal by either domestic or foreign agencies.
In discussing the banking relief program, Senator Robinson said:
"We do not know just when it will be completed, but it will be expedited all possible. The details can not be announced right now but you may be assured there will be no delay."
Wagner Plans Action.
Previously Senator Wagner, Democrat, of New York, had told newspaper men he would carry immediately to Democratic leaders an appeal for immediate emergency banking moves. Informed at his hotel here of banking moratoria in New York and Illinois, Wagner said he would appeal this morning to Democratic leaders to begin working out a program and some time this afternoon would call on Mr. Roosevelt with the same objective.
A bank holiday, he said, "is the only thing to do" to meet the emergency of the banks themselves, but he added quick steps are necessary to enable them to reopen and continue operations.
Harvey Couch, Democratic member of the Reconstruction Finance Corporation, was the first White House caller this morning. He said after a brief conference with President Hoover he had discussed "matters incident to the banking situation," but declined to give details.
Couch conferred last night with President-elect Roosevelt.
Officials in Conferences.
High officials both of the outgoing Republican and incoming Democratic administrations were in conference most of the night. Secretary of the Treasury Mills said afterward the Hoover administration would have no statement, but that governors of the Federal Reserve banks in Chicago and New York would have announcements.
Demands Impossible.
The hours between midnight and dawn saw banking officials in many States struggling with the problem, made acute by the flurrying of nervousness on the part of depositors.
As a statement by the New York Clearing House Committee put it:
"The unthinking attempt of the public to convert over $40,000,000,000 of deposits into currency at one time is, on its face, impossible."
The statement added that the condition clearing house banks is such that "they could, through the facilities of the Federal Reserve Bank, pay on demand every dollar of their deposits," but that withdrawals throughout the country as a whole have increased so that a "halt" is necessary "to enable the proper authorities to consider and adopt remedies to meet this situation, not for New York primarily, but for the Nation as a whole."
Only a few States remained today in which restrictions on withdrawals had not been invoked.
No Holiday in Virginia.
In Virginia, Gov. Pollard said no general banking holidays would be declared because the State's laws already protect the banks and their depositors.
In Maryland, the General Assembly early today approved the emergency banking legislation without a dissenting vote in either House. Gov. Ritchie signed it this morning, but said that the banking institutions of the State will not reopen Monday.
The resources of the Reconstruction Finance Corporation earlier had been made available to hard-pressed, but solvent banks in States that have imposed moratoria on withdrawals.
This was one of a number of developments yesterday that included introduction of legislation to allow postal savings checking accounts and to confer upon the incoming administration sweeping authority to maintain the security of deposits.
Reconstruction Corporation officials said their policy called for lending institutions—if the loans were well secured—enough money to pay the percentage of deposits that could be withdrawn, provided the banks did not have the funds immediately available.
It was emphasized this was not a new departure, but was simply the application of regulations decided upon for individual instances in the past to a situation spread into a number of States.
Pinchot's Statement.
Gov. Pinchot of Pennsylvania here for the inauguration issued the following statement:
"Because of the declaration of a bank holiday in New York, Illinois and most of the other States, similar action in Pennsylvania has become unavoidable.
"Were our banks to remain open, the demands upon them would impose an impossible burden.
"Therefore, upon specific recommendation of Gov. Norris of the Philadelphia Federal Reserve Bank, I hereby declare a bank holiday throughout Pennsylvania on Saturday, March 4, 1933, and Monday, March 6, 1933."
Exchange Statement.
A statement issued by the Governing Committee of the New York Stock Exchange said:
"The Governing Committee at a meeting held this morning in order to give full effect to the banking holiday declared by the Governor of the State of New York directed:
"First, that the exchange be closed during such holiday;
"Second, that members and firms registered on the exchange be prohibited from making any contracts for the purchase or sale or the borrowing or lending of any securities, and also from permitting their offices or facilities to be used for the purpose of making or carrying out any such contracts;
"Third, that all deliveries be suspended on all member contracts, except on such contracts as may be cleared by or settled through the Stock Clearing Corporation, and that in such cases deliveries shall be made as the Stock Clearing Corporation shall direct."