Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-06-16
Method of insurance Proposed
by National Bank Audit Co.
WILL BE LOCATED HERE
Former Controller Ridgely to Be at
the Head.
MANY REQUESTS FOR STOCK
Incorporated Under District Laws
With a Capital of 81, ZOO, 900.
May Increase to 100000

Well known New York and Washington
bankers and business men have put their
heads together to evolve a plan By which
the depositors in banks, national, state
and private. may have their deposits
guaranteed, with the result that a new
company, the first Of its kind in the
pany. has been formed.
1t was announced today that this
company will be headed by William
Barrett Ridgely, former controller OF
the currency of the United States, and
Edward s. Munford Of this city will
be the first vice president. The ONCE
OF treasurer and secretary has not yet
been f1lled, but it is said that another
prominent banker Of this city will
probably be elected to this ONCE
The new company is to have its head
quarters in Washington, and has been
incorporated under the laws Of the Dis
trict OF Columbia, and is itself subject
to the supervision OF the controller OF the
currency. as are the national banks.
The company Is forming with a capital
OF S1,OOOCOO and a surplus of $780, 900. 1t
100000 and the surplus to S.. 100000 in the
future.
Many Requests for Stock
Already more than half of the million
and half dollars necessary for the be-
ginning OF operations has been subscrib-
ed, it is said. and many requests have
been received for stock The company
expects to begin its operations in the fall
AS soon as the company Is ready to be-
gin work . it will occupy one or more
floors In one Of the Office buildings Of the
city, and later 1t will either purchase or
erect building of its own.
The bankers who are interested in the
plan believe it to be national in scope
ana Tor that purpose they have selected
the National Capital as the headquarters
The legality of the plan is assured, for
members OF the company have obtained an
opinion in regard to 1t from the Attorney
General declaring the guarantee Of the
national banking laws. This permits the
national banks throughout the country to
avail themselves of the benefits Of the
company.
Insurance of Assets.
erai has held that under the banking
law bank deposit insurance per sc was
illegal. But the plan Of the new COM
pany differs from bank deposit insurance
per Sc in that it insures the assets of the
LII the emu, IL was explained to-
day, this amounts to the insurance of
bank deposits. but in case of q failure
of bank enjoying the insurance afforded
by the company, the company does not
pay the depositors, but makes good to
the bank its assets, and the bank takes
care Of its depositors
n partial canvass Of the country has
been made by members of the National
Bank Audit Company with the result
that they have found hundreds of banks
n fol ,yvHy,, l,as
anee which it offers. National banks
in states where the state banks have
their cepositors insured are most anxious
to participate in this new plan which
will give them the BENEFITS which have
been denied them under the banking laws
heretofore.
Banks Support Plan.
1t was said today upon reliable yau-
thority that banks with an aggregate Of
$500. coz. 600 in deposits have already sig
nified their intention of taking advantag &c
Of the new plan offered them by the
National Bank Audit Company.
There have been many advocates in
Congress OF the enactment Of law
whereby the government shall insure de-
postors in national banks against loss
But this plan has had strong opposition.
The members of the new company be-
iieve that the difficulty has now been
solved. and that instead of increasing
the paternalism and Capitalization of the
government private enterprise will now
accomplish what really should he accom-
plished.
P. c. Wadsworth of New York, one of
the organizers OF the company, said to-
day that the United States was far be-
hind most Of the foreign nations in its
methods. In England and
Canada plans had been evolved, he
said. whereby the depositors in banks
are guaranteed. At present in the
United States. he said. banks are iso-
lated. II there is run on a national
bank there is no way in which the
bank may receive support except by
to another bank for favor.
Mr.. Wadsworth said that the National
Bank Audit Company would be of great
assistance to banks and would see to
it that runs were met and that assist
ance was given banks in times of
stress.
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