Evening star., 1933-09-28

have 100 per cent protection even
under the temporary plan.
"On July !. 1884, the permanent
fund goes into effect and deposits up
to $4,000 will be insured 100 per cent;
amounts in excess Of $4,000 up to
$50, 600 will be insured 70 per cent. and
amounts In excess Of $4,000 for so per
cent.
Under the law It is necessary for
non-member State banks to be ex-
arnined to determine their eligibility
for deposit insurance In the temporary
fund. All member banks Of the Fed
erA Reserve System automatically be-
come members Of this fund. Bank ex-
aminers, under direction Of the cor
poration. are now at work examining
those banks that have already applied
for membership.
Let it be clearly understood that no
discrimination against non-member
State banks will be permitted in these
examinations. The law itself is specific
on this point. I quote roughly from
Section l2-B Of the act as follows:
1T is not the purpose Of this act
to discriminate In any manner against
State banks not members Of the Federal
Reserve System, nor in favor Of national
banks or other Federal Reserve mem
Der banks: the purpose is to provide
all banks with the same opportunity to
obtain and enjoy the benefits of deposit
insurance
"Quoting further from the act: No
bank shall be Disseminated against be-
cause its capital stock Is less than the
amount required for eligibility for ad-
mission into the Federal Reserve Sys-
tenn
THE whole purpose Of the act Is
to proyide insurance protection for
depositors In as many banks as pos
sible, thus extending the immeasurable
benefits Of deposit insurance to every
nook and corner Of the land.
Fair Interpretation Assured.
II assure you q fair and broad in
depreciation Of those provisions Of the
act relating to the eligibility for in
surance Of any bank operating under
the charter Of any State. The ex-
aminations are to be based upon 'solv-
ency.' not upon liquidity.' This cor
poration has been created for the pro-
lection Of depositors by affording them
insurance, and under such system
the test Of solvency can be substi-
sacrificing ultimate safety.
1.-The insurance fund will stimulate
the expansion Of credit. The depositor
will be treasured. He will have no
reason to withdraw his money. Dis
PEELED in the future will be the causes
for panics such as we witnessed last
Winter, when depositors clamored for
their money at the counters Of viz
tually every bank in the United States.
II would like to call attention TO
the immense capital resources Of the
Federal Deposit Insurance Corpora
tion. The initial capital is to be fur
nished by the United States Treas
ury in the amount of $50, 900. In
addition, the Federal Reserve Banks
will subscribe one-half Of their surplus.
This amounts to about $4,000, 900
more. Here We have $3.50, 100000 CT
capital initially provided.
During the first six months in
which the temporary fund Is opera
tive, all deposits up to a maximum
of $4,000 are insured, and all banks
that have the benefits of deposit in
surance are to subscribe one-half of
l per cent of the amount of such
insurable deposits, paying half In
cash at the outset-the balance being
subject to call.
"On July /, 1894, participating banks
will subscribe to stock in the corpora
ton In an amount equal to one-half
Of per cent Of their total deposit liza
bilities, and on that date the insurance
issincreased to cover all deposits up to
hfRher limits It Is estimated that ap-
proximately $200,000,000 will be sub