Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1911-01-31
AMERICAN BANKERS
ASSURANCE co.
Solves Problem of Qua
rantee of Deposits and
Creating Confidence
ORGANIZED IN St, LOUIS
Admitted to Do Business in New
Mexico by Insurance
Commissioner

The problem Of guarantee OF bank
deposits has been solved by the or
Eanization of the American Bankers
Assurance Company The bankers
and duanciers of the United States
have realized for a number of years
that some method must be devised TO
increase the confidence Of the public
in the security of bank deposits. 4 few
states have passed state bank depos-
it guarantee laws, These laws have
not given entire satisfaction for the
very good reason that an official is
too apt TO be more Of politician than
a business man. Sound banking must
necessarily be divorced from politics.
Another very serious objection to
state guarantee OF bank deposits is
that it forces the honest, conserva-
tive banker to pay assessments to
make good deposits of any bank fail
ing through careessness or dishOn-
esty of its officers. Under the plan Of
insurance or guarantee of bank de-
posts by a private company only
banks conducting their affairs on busi-
ness principles can secure the insur-
ance This is an advantage to the
depOsiting public, as it encourages
conservative banking. But there arc
times when the most conservative
banker will find himself in difficulties.
Without apparent reason run may
be started, which will close a solvent
bank
The American Bankers Assurance
Association issues to bank policy
of insurance guaranteeing to pay all
depositors of that bank. The policy
can be displayed for the information
OF the public Such a guarantee will
tend to prevent a run on the bank.
Should a run start on a bank whose
deposits are insured, the American
/ Bankers Assurance Company immedi-
ately send a representative to the
bank with plenty Of money and the
depositors are paid off in full and the
bank kept open, Insurance of this
nature is beneficial both TO banks and
to the public.
Nothing is more detrimental to the
business interests than the withdraw
al of money from the channels of busi-
ness If a banker is afraid of a run
he must necessarily hold his deposits
in his vaults. This is not only an in
jury to business, but it depriyes the
bank of the interest on deposits.
Then, too, if bank deposits are guar.
anteed much money otherwise hoard
ed will be deposited in banks, thus
= increasing the amount of money in cir
culation.
The list of assets in the office Of
the Insurance superintendent shows
that the company has deposited money
in banks all over the country. This
system leaves the money in the coun.
try near to the banks whose deposits
are insured so that it will be con-
venient if those banks need help. 1t
is also beneficial in that the money IS
not taken to the already congested
money centers, but is left where it
may be needed.
. This company is a new organization,
, but it has already about one thou
sand bankers among its stockholders.
Practically all bankers who take in.
surance for their banks, buy stock in
the company thus sharing in the prof.
its and making it in fact, as well as
in name, the American Bankers AS.
surance Company, purely of bankers
and for bankers.
The principal object of the COM
pany is to guarantee bank deposits.
They, however, when requested, issue
plate glass insurance, burglary insur-
ance and fidelity bonds for bank en-
: ployes. Having guaranteed the de-
posits of the bank, this company
might have to pay the depositors
should the bank be burglarized, or
! one of its officers abscond with the
j funds. The company therefore, issues
e the other policies in addition to guar.
: antying bank deposits. AS bankers
: carry great deal of plate glass in
f surance, the company will insure its
= customers in that line. The company,
e however, confines its insurance entire
+ ly to banks and has endeavored to give
S every kind of insurance which banks
q may need.
h The authorized capital of the COM
S pany is ten million dollars. The sale
. of stock and the premium on insur.
a ance policies are in no way connect
t ed. That is, no stock is given in con-
@ sideration of insurance. A banker
4 holding a policy of insurance in the
d company wanting to buy stock, must
e buy 1t and pay for it on the same
4 terms and at the same price as any
n one having no policy of insurance
O The success Of any institution. the
y public confidence to which it is entit-
:. led, is measured by the power of it's
management. Perhaps no cor
poration ever began business with a
9 board of directors of such far reach.
= ing power in the financial world as
y. does the American Bankers Assur
u ance Company. The president, Harry
NJ. Ruby, is one of the most success.
e full bankers in the state of Missouri
i He is interested in a number of
Z banks in Missouri and was for sever.
al years president of the Missouri
9 Bankers Association. Honorable Lon
Continued on Page Eight.)