The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1917-09-12
GUARANTY FUND
is AVAILABLE
ON JANUARY |
Fund, Which Totals SAL
674.50, Will Protect De-
positors in State

Bismarck, N. D., Sept. 12.-North
Dakota's first guaranty deposit fund,
which is expected to become avail
able Jan. /, will total $41, 674.50, ac-
cording to an estimate made by
State Examiner J. r. Waters today.
That amount, 1t is believed. will de
sufficient to meet any demand which
will be made on the fund for the
reimbursement of depositors in any
one year. If 1t should prove INSULT
cient, the state guaranty board has
authority under an act passed by
the last legislature to call up to
$S33.49O.
The guaranty fund is based upon
the average daily deposits of the $50
banks and four trust companies
which are the benef1ciaries. Such av-
erage daily deposits, reports In the
office of the state examiner show, are
SIS, 349, 900. The law authorizes the
state board to levy for the guaranty
fund one-twentieth Of one per cent
of these deposits, which is equival-
emit to $41,674, the amount which the
board will have at it's disposal July /.
Remains on Deposit.
This guaranty fund is not remov-
ed from the state banks which set
Il aside, until there is a demand for
funds with which to reimburse de-
positors who have lost through the
failure OF some state bank or for
some other reason which the act
covers. Then only such percentage
Is called as may be actually needed.
Each year a sum equivalent to one
twentieth of one per cent is added
until the fund amounts to one per
cent of the average daily deposits.
At the end of 20 years this fund may
be expected to have swelled to not
less than a million dollars. When the
fund shall have become equivalent
to one per cent of the average daily
deposits no further levies are to be
made upon the state banks until the
fund through the payment Of losses
falls below that standard.
Likes the Act.
THE more familiar / become with
this guaranty act, the better / like
IT," said State Examiner Waters to-
day. 1T seems to absolutely safe
guard the interests Of the depositors,
and at the same time it places no
burden TO speak of on the banks.
They continue to have the use OF
their money; Ii is not removed from
circulation, but merely set aside as
a reserve on the books Of the instt-
tuition, subject to draft from the
guaranty board. We have had very
satisfactory experience in this state
SO far as state banks are concerned.
There have been no disastrous fall
ures, and liz we may base our judg-
ment on the past it will be safe TO
say that no heavy calls need be an
ticipated on this fund. The fund Is
there, however, IL it should be need
ed, and it constitutes an absolute
guaranty to depositors.
''SThe state guaranty law is moth
ing more than an economical form
OF mutual insurance. State banks
now probably pay an average Of at
least $50 yearly for surety bonds.
They cannot become repositories for
public funds of any description UNI
less provided with such sureties.
Under the state guaranty act the
average assessment will be little
greater; the money is not removed
from the bank until it is needed, and
at the end of 90 years the fund
s3ina1id have attained such propor-a
tons that further levies viii be un-
necessary for years 10 come"
Effective january 1.
Reports from all Of the state
banks and trust companies have
reached the state examiners ONCE,
and definite groundwork now Ia be-
ing laid for the placing of the act in
operation Jan. 1. Every bank in the
state has signified it's intention TO
comply with the provisions of the
act, and the slight opposition en-
countered at first is said to have
died away.