The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-10-16
begin EXAMINATION
Of BANKS SEEKING
DEPOSIT INSURANCE
State Headquarters Established
in Bismarck by Walter
w. Olson
HOPE TO BUILD CONFIDENCE
Office Of Federal Corporation
Concerned Only With
State Banks
HOPE TO BUILD CONFIDENCE

EShoNAlAAatAOAA Va 4NOAVAA A0NSoeA SsssSS
banks applying for membership In
the federal deposit insurance corpo-
ration already has been started and
will be In fun swing in the near fu-
ture, it was announced Monday by
Walter w. Olson. state director, who
has established offices here.
Olson's office Is located In the
Hughes building over Bergesons on
Broadway avenue opposite the fed
eral building.
The prime purpose OF the federal
deposit insurance corporation. Olson
said, is to restore full confidence in
banks to permit them to better serve
the public and advance credit where
It Is needed.
Efforts are being made to pump
more money into banks, Olson said,
by drawing boarded currency from
stockings and mattresses" as we'll as
through aid from the Reconstruction
Finance Corporation.
The r. F. c., Olson said, stands
ready to advance cash wherever
banks can produce sound security.
Olson came here from Sioux Falls.
s. D. He formerly was national
bank examiner In this state.
The federal deposit insurance cor
poration was established to insure
depositors Of protection In case OF
bank failures.
Optional for State Banks
Under the set-up, 1t Is compulsory
for national banks to belong but op-
tional for state banks. Olson's Of
flee is concerned solely with state
banks applying for membership.
Impaired capital does not necessar-
lily make banks ineligible for men,
bership, he said. Where bank can
satisfy examiners that 1t has suffi-
cient sound assets to offset deposit
liabilities, 1t is eligible for member
ship.
The bank applies for membership
in the deposit corporation at WASH
ington. Olson then receives instruc-
tons from Washington to examine
the applying banks to determine their
eligibility.
Thirteen examiners and three as
sistant examiners have been assignee
to Olsons office to do this work.
One-half Of one per cent OF the
banks deposits (the total 80 days
prior to membership being used Is
the fee for the banks admittance to
the corporation. One-half Of this
fee is payable at once. the remaining
half being subject to call. This fee
carries the banks membership until
July l, 1884, when permanent or
ganization will be set up and new
scale Of fees worked out.
Banks which do not have capital OF
S?5, 900 OF more and cannot qualify
for the federal reserve system on July
l. 1886, automatically will become IN
eligible for membership at that time,
Olson said
Guarantees Up to $500
Up to july l. 1884. the corporation
will guarantee to each depositor IN
member banks up to $500 In case his
bank fails.
A graduated scale Of guarantees
will become effective on that date.
This provides payment Of the first
$4,000 In full to each depositor: IS
per cent OF the next $4,000; and SO
per cent Of the balance up to $4,000
to each depositor.
The corporation contemplates no
receiverships In cases OF failure.
Either the corporation will pay off
depositors or take over assets Of the
closed bank for establishment OF q
new bank.
Applications from North Dakota
banks at present are being retarded
because Of seasonal work in the insti-
tutions. At this time, Olson said.
banks are making extra efforts at col
lections and getting their paper IN
shape. Wlen this work Is cleaned up.
Olson expects applications to accele-
rate. The state has l49 state banks.
Regarding the r. F. g. loans to
banks. Olson said North Dakota sta
tutes do not permit state banks to Is
sue preferred stock, SO capital deben-
ture notes are being accepted by the
r. F. G. as security for all advances
made.
Examinations Are Free
Examination Of applying banks Is
made without cost to the applicant.
Examiners under Olson are William
L. Briley Of Glendale; ]. w. Chap
man Of Larimore: Paul Elliott, g. A.
Lowen, A. A. Swanson and A. A.
Wilcken Of Fargo: G. r. Hodge o.
Jamestown: H. r. Kneeland Of St.
Peter. MINI; Oswald Melgard OF
Cooperstown: e. D. Van Rhee and +.
Oyen Of Minneapolis; J. <. Nesv!k
of Grand Forks and H. r. Winter
81 Bismarck.
Assistant examiners are Finley Ba-
ker Of Bismarck, NJ. ]. s3krede Of
Toga and Fred G. Hauser of James
town. Most Of the examiners already
have reported.
Olson's office assistants are Marion
Upham and Franceska Davis Of Bis
marck.