In a letter sent on Thursday to Henry Paulson, the US Treasury Secretary, Mr Schwarzenegger, California's governor, made clear that his state was running out of money because its usual borrowing channels had suddenly closed.
He made clear there would be grave consequences for the ability of American states to keep providing basic services if the $700 billion Wall Street bailout plan is not passed by the US House of Representatives.
That even America's richest and most populous state should face such severe financial problems illustrates the extent to which credit markets have seized up in the two weeks since the failure of the investment bank Lehman Brothers.
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