Canton, July 8.
One after the other, the native banks of Canton have been drawn into the financial tangle, ard their Gepositors have swarmed into their counting rooms with anxious asking the paying tellers for their money. The big run started yesterday with the National Commercial Savings Bank; but soon the Bank of Canton, then the Bank of Enct Asia, and then most of the rest had their hends full taking care of the ery for money, money money.
The salvation of all these financial institutions lies in the confidence that their Inrgest depositors have in their ability to weather the storm. The more substantial capitalists are. ina better position to now what is what, and realiza that the scare is unwarranted, so They have not been pressing for heir notes and silver as have the who have but a few dollars to th account, Tala scare cannot be said based on even a rumour, but having hhenrd that the Industrial & Commercial Savings Bank has gone under, the general run of people have easily been lead to believe that all native banks must be shaky, they had best_make hay while the sun shines, withdrawing before it too Into, But it is preposterous to suppose that all of the banks on which there are runs in Canton are financially unsound. For one, the Bank of Canton was never in belter shape, and the manager haa sivan assurance to your correspondent that if all of the savings 4 positors should come in together they could all be taken, care of. {in against the policy of this institution to speculate in gold or anything 0 the bad times brought about gold has not affected it in the 'The Industrial & Commercial Savings Bank, which got its charter in 1924, has its hend office in Hon; Kong, with branches in Shanghai, 'Tientsin, Hankow, Canton and Kon; Or. in the province of Kuangtung.' Last year its president, Won Heung-Iaan, died, and it has not fared so well since, under a new administration, it started to spoci-Tnte in the gold market, Although had been prospering, it was doomed advisable to put its capital on a gold basis, atid rather than to sell further shares to saigo the money required to accomplish this object, its management tried to make profits by gambling on the! future price of gold, it ie said, and urna out at the small end of the om, The doors of the main office in Hongkong cloted on the first, but the Canton branch did not suspend Payment until the fourth, when a telegram came from Hongkong ordering that this be done, At 11 o'clock that day business was going on a8 usual, 03 12 noon, the doors were locked' and have been locked ever since. Yesterday the Kongmoon branch stopped business. Its employees decamped, for there were school funds and sdme government aaoney in its coffers, and the poslity of arrest stared the staff in the face, They did not stop to offer explanations, and have not since returned, it is reported.
Worst of all is the' suspension of the Industrial & Commercial Bank, Ltd. which has brandies in Shang-fai, Canton, Kongmoon, Hankow, Jand Yaumati (just across the Hongkong harbour), It is said that the Jernsh is due to losses sustained in [Stanghai following some specclation in gold exchange. Officials of tie local bank said that if the Hongkong office arranges a separate liquidation from the Shanghai franch, there iso possibility that] the sBlongkong depositors may resive back seventy per cent, of thei deposits. Just. before it sion, a big crowd assembled Chater Road and demanded back their money, creating a veritable range.
The closing of the Industrial [Commercial Bank is one of the biggest banking failures of recent years, Some years ayo when the [Chinese Merchants Bank suspended business, there was a "run" on the industrial &* Commercial Dank, but Jat that time it was on a connd financial standing and was able to ie over the storm, Tue second run" occurred about thres weeks Jago when the Bank of East Asia was also affected.
Tee Canton branch was also involved and similarly suspended business. In the presence of representatives from the police headquarters and the General Chamber Jot Commerce, the amount of cash fand stock was examined. The man-lager of the bank declared that it] had a deposit. of $80,000 with the native banks, which together with the cash in the vault would enable to pay eighty per cent. to the de-rossiters and creditors.
Tt happened that about three days Foefore the difficulties of the Bank iwas announced, telegrams were received from the Shanghai branch telling the Canton office about the [coming crisis. The teltyrams were all. cussered and copies were sent to {the Bureau of Public Safety by the [Canton Telegraph Administration. [General Anyang Kui, the police chief, lad $80,000 deposited with the Bank, and the Aviation Bureaa of the 8th Route Army also had $110,000 deposited with the Bark for buying bombing planes and spare parts. Officials were francis fwnen they learned of the bad news through the telegrams and immediately demanded back all the funds [before the actual crash came.
[Colonel Huang Kuang-ful, commandant of the Bureau, took hur-ied trip from the front in connexion with the ease, and succeed-Jed in taking back the money which is in Hongkong currency.
The tragedy of the failure is that many poor people in Kowloon deposited money with the Yaumati branch, Although it is a Chinese frank, "its administration was an approved British banking system and. commanded the confidence of the local public, Many of the small Jdepositors in Kowloon are workers, Jelerks and other none too wealthy people. Among the depositors at {is howd once in Chater Road are natives of Sunning district who made their money in the United States. The failure of the Industrial & Commercial Bank also has adverse effects on the native banks here and in Canton.
Text read from the printed page and cleaned; old type leaves the occasional error.