The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-01-19
GUARANTY LAW
IS TOO LOOSE
!. S0L0NS TOLD
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receiver, that the Guaranty Fund
las no deHnitc legal direction as to
he ncthod of paying out the money
its hands. that 1t had no power
protect or salvage assets that may
e IN jeopa rdy of sale under fore
losurc, that there is no method OF
Eliminating weak banks from the
ystem, that the banking board con-
lists of elected officials who do not
| AVE adequate time to perform their
mties; that the banking board has
10 power to sell the assets OF closed
banks although expenses may be eat
ing up the assets.
The commission viii later submit
detailed figures of the condition OF
each bank to the legislature.
Report in Full
The report follows:
"pursuant to the request contain
cd in the JOINT resolution adopted
by YOU, for report of the activlt'es
If the Depositors' Guaranty Fund
Commission for the past two years.
we beg leave to report. !,
"The Legislature of 1917 enacted
the law creating the Depositors
Guaranty Fund and provided therein
for n guaranty of certain deposits
in state banks, through an assess
mcnt upon the state banks proper
tionate to such deposits, and provid-
cd for commission of five, OF when
the Governor and State Examiner
are ex-officio mem bers, the three re-
naming members to be appointed by
the Governor from nominations made
by the state banks.
"The work and problems of tnls
Guaranty Fund Commi ssion for the
past two years have been principally
the problems Of closed banks. Since
tie enactment of law, seventy state
banks have been closed by the Bank
ing Departm and receivers ap-
pointed therefor as provided by law.
OF the banks which have been closed,
depositors of the First State Bank
at Jud and the Farmers State Bank
of Marmarth have been paid in full;
Nineteen banks have been reopened
and are now running, leaving now
fifty-one state banks closed and in
the hands of receivers appointed by
the Banking Board.
We submit herewith statement
as to these closed state banks show
ing, their condition in detail, and, as
a total. An examination of this state
ment will show that no substantial
amount can be expected to be realiz-
ed from the assets of these banks
after paying expenses.
Audit Made
The state banks, upon watch the
burden of losses must eventually
falL at their Annual Association
Meeting held in 1922, appointed a
committee consisting of Geo. H. Hol-
lister, H. P. Goddard and A. E. Sew
ereid, to represent them in all things
before this commission, and gave to
that committee as full powers as
was possible for them to do.
The rating Of the assets of these
closed banks has been, We think
thoroughly done. Mr.. H. P. Goddard
of the State Bank Committee and
Mr.. B. j. Schoregge, supervisor of
Receivers, have done the work in de-
.ail and the Guaranty Fund Com
mission and the Members of the
State Bank Committee all feel conf
dent that the values placed upon
these assets are as nearly correct
as can be determined at this time
In making these ratings they took
advantage of all information they
could secure from every source, and
mucn time and care was used in
making the ratings reliable.
SYou will observe that the total
deposits in the closed banks amount
to .S7,145, $4,000, and of this amount
according to the audit by the State
Bank Committee, less than fifty pei
cent is guaranteed under the Guar
anty Law.
"Tnis same COMMITTEE was ap-
pointed in June, 1921, by the State
Bankers Association, to aid in the
auditing of deposits in all the closed
banks, both for their own informa.
ton and to assist the Commission
in developing the facts that they
AAAA6hS S'ShShoAiy oAIlSS dL OH lIiIelll-
gent decision as to what claims were
guaranteed and what were not. The
origin and detail Of every deposit in
every one Of the closed banks were
investigated and the reports are now
on file with the Secretary of this
Commission, and to which reports
+, reference is hereby made
Much Undetermined
"The Commission has not finally
admitted nor denied liability to in
dividuals on their clans for guar
anty Of Their deposits; the law pro-
vides no method for certifying to
individual claims. Court decisions
will in many cases be necessary to
determine the liability of the Guar
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