The Bismarck tribune., 1924-10-14
Guaranty Fund Commission
Resolution Shows Reasons
For It's Dividend
MAKES BANKS CLASSES
Lack of Adequate Fund Rea.
son for Classifying Banks
For Purpose of Paying


sion in making its decision, announc-
ed yesterday, are given in the com
missions resolution as follows:
WHEREAS, the closing of banks in
the State has naturally divided it.
self into two periods, as follows; to-
wit: That prior to July lst, 1923,
there had been fifty-eight closings,
and since July lst, 1923, there have
been one hundred and thirty -four
closings, and of the banks clos
ing prior to July lst, 1928,
about fifty-two closed dur
ing the years 1920, 1921 and 1922.
and only about six (not previously
closed) during the first half Of 1924;
but about August 1923. frequent clos
ings again began, and
WHEREAS, the Commission has
completed its audit of all banks that
closed prior to July LIST, 1923, and
has acquired extensive information
upon which to base q decision. allow
ing or rejecting claims of depositOrs,
and it is prepared in large part to
consider and either establish or re-
ject such claims, in due course as
presented, and as to such banks in
general, the claims Of depositors
have, in the greater number Of cases,
been presented to and allowed by the
Receiver, and
Claims Not Presented
WHEREAS, as to the banks that
closed subsequent to July lst, 1923,
the presentation of claims Of the de- |
positors to the Receiver is very far ,
in course of presentation to the Re-
ceiver for allowance or rejection;
and the Commission has not complet-
ed it's audit of such banks, and cam |
not complete the same for consid-
cradle period of time, and, in the or
dinary course of things, many months
will elapse before the presentation
of the claims to the Receiver will be !,
complete, and
WHEREAS, by reason of the situa- /,
ton, it will soon be practicable to
begin paying off depositors in banks
which closed before July lst. 1923,
but it will not be practicable at this
time to begin paying off depositors
in such banks as closed after that
date, and
WHEREAS, several banks which |
closed shortly after July lst, 1928. !
have been examined, and others are
about to be examined for the pur-
pose of re-opening such closed banks,
and there is reasonable expectation
that still other of the banks which |
closed shortly after July lst, 1923, |
will on account Of bettered financial
condition, collection upon slow loans
and assets, be in position to be ex-
amined for re-opening, rendering it
inexpedient to include any such
banks in classification upon which !
payments of depositors would be |
made in the near future, and
Small Deposits Numerous
WHEREAS, an examination and
consideration Of the guaranteed
deposits, in large number Of closed
banks, has disclosed that the claims
of depositors, against the Depositors
Guaranty Fund, to the extent of over
thirty per cent, consists of deposits
ranging in amount from less than
one dollar to ten dollars, and it seems
probable that claims of depositors
must be paid off in several install
ments, and the expenses of admins !
tration, postage, clerk hire, etc. will
in the end aggregate considerable
and substantial sum in connection
with the payment Of each install.
ment; and such expense will be as
great in connection with the paying
of divendends upon small deposits a.
the larger ones, and it therefore ap-
pears that substantial fraction OF
the Fund would thereby be absorbed
in expenses, thus reducing the
amount available for paying divi-
dends to depositors, and
WHEREAS, the expenses Of ad.
ministration can be materially re-
duced in the aggregate through ell
minating the large number Of small
deposits, by paying the same in one
installment, and
WHEREAS, the costs and expenses
of administration, particularly the
payment of a number of dividends
upon Certificates Of Indebtedness
will incur considerable expense
which would have to be borne by the
Fund, it is desirable that small Ger
tificates of Indebtedness be eliminat-
ed, if possible, and in the judgment
and opinion of the Commission no
Certificates of Indebtedness should
be issued in sums Of less than two
dollars.
Regulation No. 10:
NOW, THEREFORE, Be It Re-
solved, that Regulation and Rule,
to be designated as Regulation num-
ber ten, be hereby adopted, classify
ing and dividing the closed banks as
follows, viz:
Class "A" shall consist of all those
banks closing on or prior to June
3Oth, 1928.
Glass "B" shall consist of all those
banks closing subsequent to June
3Oth, 1928.
Such classification being subject
to the right and authority Of the
Com ssion to hereafter subdivide or
subclassify such classes as may
seem necessary.
To Issue Certificates
Regulation No. IL:
BE IT FURTHER RESOLVED, that
! further Rule and Regulation, to
Be designated as Regulation number
eleven. be hereby adopted. to-wit:
That as fast - dspositors verify and