Middlebury register. (Middlebury, Vt.) 1886-1937, 1888-08-03
SAFETY FOR DEPoslToRs.
Banks to BE Insured Against All Loss.
Novel Financial Scheme.

Banks to BE Insured Against AL Loss.
Novel Financial Scheme.
Early last winter the Depositors' Guar
antee company Of America was organ
lied under the laws of West Virginia and
a charter was granted to the corporation.
The capital stock of the company is
$4,000, 600, divided into shares of 800
each, and its object is to guarantee de-
positors in national and state banks
against loss from any cause whatsoever.
The incorporators and officers of the
company are among the most prominent
%financiers of the country, who believe
that the new financial institution, while
it is an innovation in banking affairs,
will ultimately become II of the most
powerful and beneficent corporations for
the protection of both banks and depos-
itors in the world.
Mr.. Serbia described in detail the OBJ
.jects of the new concern. 1T was" he
said, ''intended to absolutely insure the
solvency of state and national banks by
forming a combination of banks for self
protection through this corporation. As
a measure of the guarantee principle,
81, 900, 600 of the capital of the company
will be deposited with the treasurer of
the United States at Washington, and
such amounts in bonds with the proper
officers of the various states as the laws
of such states may require. Already
l, 900 of the most prominent banks in the
United States have signifed their inten-
ton of becoming stockholders and having
their deposits guaranteed by the COM
pany. These banks have agreed to pay
H. - q O.. q
nually upon their gross deposits, which
give a yearly income over estimated ex-
penses of about $500, 900.
In every banking center of the COM
pany there will be a competent bank ex-
hminer, who will make a thorough ex-
animation of a bank before a policy will
be issued to it, and the bank examiners
Of the company will have the right to
examine any bank included in the guar
antee at any time during the year with
put any notification to its officers and di-
'ectors. Upon the delivery of a guaran-
zee the company will have IN advertise
nent, to run for a period of six months,
Inserted in the leading newspapers in the
ocality of the bank bearing the notifica-
ion that all depositors in that bank are
guaranteed against loss, and that in the
vent of the banks insolvency all depos-
rs will be paid in full by the company,
With interest. The company will start
lpon a sound financial basis and with
[bundant resources, for not a guarantee
will be issued until the guarantee fund
f SIS, 000, 900 has been paid in in cash.
Nc bank will be guaranteed unless hold
ng stock in the combination. The char
er calls for a lease of fifty years, with
lower to extend"
In discussing the merits of the scheme
1r. Serbia called attention to the fact
hat there could be no such thing as a
un on a bank or a panic among a circle
f banks which are in such a combina-
on, for with the guarantee fund of
5, 200, 900 behind them all demands
ould be promptly met There was no
ray in which the company could lose
nything by guaranteeing a banks de-
osit ever if it paid its losses. In case a
ank were in temporary difficulty, he
hid, and needed a large sum of money
tide it over a crisis, the Guarantee
bmpany would advance the needed
honey, taking as security sufficient of
ne collateral assets of the bank to cover
be loan, which should be returned to
he bank upon the loans redemption. A
illion dollars in cash would be kept
Failable to meet any such emergency
lat might arise. Mr.. Serbia believed
at the constant supervision over the
links exercised by the company's exam
ers would almost entirely do away with
Pfal%cations, and by raising the standard
bank employees save the thousands
-
lally lost by compromising with dis
bnest officials. -New York Times.