Evening star., 1933-12-30
BANK SAFETY NOVEL
IN EFFECT TUESDAY
Deposits Up to $500 to Be
Guaranteed by Participants
in Protective Fund.
BY EDWARD c. STONE.

BY EDWARD c. STONE.
When the banks in this city open for
business next Tuesday January 2, the
new Federal deposit insurance tempo
rary plan will go into effect, which
means that every financial institution
taking part in the guaranty fund Will
protect all accounts up to $500.
The new safety plan really goes INTO
effect January !. New Year day having
been the date set for it to become oper-
ative. The Federal Deposit Insurance
Corpora ton completed the final details
in the Nationwide protective move TINS
week and began notifying. the banks
which are to share in the safety pool
The corporation officials in the Treas
ury are sending certificates to all the
banks in the country which have been
admitted to the insprance iund. II was
decided, Chairman Walter j. Cummings
stated, not to publish a general list OF
the banks qualifying for participation,
and the banks getting the membership
certificates were notified not to adVer-
tise the fact until the plan goes into
effect
It was believed in the local financial
district today that all the banks IN
this city have been placed IN the guar
antv list The membership Certiflcates
aleady received are quite elaborate, as
well as decorative. They are about the
size Of the certificates issued to gradu-
ates of universities, law schools and
medical schools.
Cummings Sees Many Benefits.
Formal notices of admission were sent
BY mail or telegraph. Chairman Cum
mings said. All member banks in the
Federal Reserve System are entitled to
membership in the deposit safety pool.
However, certificates were sent to these
banks just the same as to the State
banks.
Deposit insurance" Chairman Cum
mings said. should have a stimulating
effect upon business throughout the
country In the first place. it should
forever end the fear Of runs on banks
which are members. Moreover. 1t
should return large sums from hoard
ing, make it unnecessary for banks to
carry such large reserves, free credit and
relieve unemployment"
1t develops that most Of the non
member banks in the various States
have been admitted 10 the fund. not
more than 200 or $50 failing to qualify,
according to Chairman Jesse H. Jones
of the Reconstruction Finance Corpo-
ration.
The R. F. C. has poured millions of
dollars into nOn-membor banks through
the purchase of preferred stocks and
capital notes. Up to a few days ago,
Chairman Jones reported, S796.000,0O0
had been authorized by the R. F. c. for
the purchase of preferred stock and
notes.
Most Deposits Protected.
One of the most interesting facts
about the insurance plan shows that
approximately 81 per cent of the bank
accounts of the Nation will be COM
pletely guaranteed. Figures compiled
by the Treasury and announced by
Chairman Cummings disclosed that 81
per cent of the bank accounts Of the
country total $500 or less
DepCsitors everywhere are eagerly
awaiting the new banking era. Count
less predictions are made Of increased
deposits. The temporary plan operates
until July /.
After July | the guaranty will cover
100 per cent all deposits up to $4,000,
IS per cent up TO S50.00O and SO per
cent above $4,000. The banks consider
this too great a liability, and will make
a hard fight in the next Congress to
have the banking act of 1888 amended
and toned down.
Bond Club Head Optimistic.
Frank P Morse. president of the
Washington Bond Club and manager Of
the local Office of Charles D. Barney &
Co. does not like TO make predictions.
But a short chat with him indicates
that he is optimistic over the general
prospects for 1884, and especially SO re-
+ln No4 =
Capital.
He casually mentioned the fact that
the administrations great national re-
covery program has filed all the Gov
ernment bulldogs and many other Office
buildings with Federal workers
These additional employees have tre-
mendously increased the population Of
the city. Opening of Congress brings
another army OF people here.
Washington hotels have enjoyed great
prosperity as a result of the y. R A
and other recovery measures. When the
apartment houses are filled, commented
Mr.. Morse, what more could the city
want to increase prosperity?
Mckee Explains Banking Code.
H H. Mckee. chairman of the Wash
ington Clearing House Association,
states that the new code of fair prac-
tICcoy NIuCIl Will ~ IllO 6IlGtJ III ILLS
city soon. will have no far-reaching
effects among bank depositors here.
Many Of the service charges, Mr.
Mckee said, have been in effect in
the local banks for years. New fees
to be introduced are not so much for
the purpose Of making profits for the
banks as for preventing losses which
have been going on for years due TO
too keen competition
Chairman Mckee is not ready to
state Just what the new code will in
clude as it has been approved by Gen.
johnson. The code for Washington has
already been approved by the Code
Committee of the American Bankers
Association and was adopted by the
Washington Clearing House Association
during the present week
II had been intended for the codes
to go into effect all over the United
States on January l. Gen. johnson
now says they will not go into effect
until he has had time TO give them
the fullest study to all the fair prac-
tices details.
Loan Association Dividend.
At a meeting of directors of the
Chevy Chase Building and Loan Asso-
citation, Inc, Friday night a semi
annual dividend at the rate of per
cent per annum was declared, payable
to shareholders of record at the close
Of business on December 10. 1888
The ASSOCIATION now Is occupying its
new home at $3.50 Wisconsin avenue,
near Bradley lane. and has received
many congratulations on the type of