Evening star., 1933-08-17
BANKING LEADERS .
STUDY GUARANTY
Conferences of Reserve Off,
GERS and Supervisors Clear
Way for Action.
BY JOHN A. CRONE.
special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK. August 1.-THE guar
anty of bank deposits was the pripcipal
topic of conversation in the business
and banking worlds here today, follow
ing discussions of that subject by the
Association of Bank Supervisors at their
informal closed meeting at the Hotel
Roosevelt, and the gathering of COVER
nors and chairmen of the IL regional
reserve banks with the Federal Reserve
Board at Washington.
Preceding the reserve officials as
semblage in Washington, the Federal
Reserve Board asked every bank in
the country, member or non-member of
the system, for detailed figures on its
current condition. This request was in
terpreted as preparatory for Govern
ment aid to banks, If necessary, to en-
able them to qualify for membership
in the Federal deposit insurance fund
to be set up under the terms of the
Glass-Steagall act on January /. 1884.
Bankers linking the Federal Reserve
request for bank data and the reserve
boards discussions of the guaranty in
surance funds placed quite a different
Interpretation on the radio address of
Jesse Jones. president of the Recon-
struction finance Corporation, August
l. when the r. F. c. offered to pump
Federal funds into banks through the
purchase of preferred stock or capital
notes
Republication Foreseen.
Originally the financial and business
world had read into Mr.. Jones offer
an encouragement to banks in the freer
extension Of credit business. but its
real motive, according to the American
Banker, appears to be the fact that the
temporary Federal deposit insurance
fund to come into being January l
created crisis for the banks not able
to qualify under its terms of men,
bership. Now the condition OF all
banks is to be studied and classified.
and banks unable to qualify in their
present conditions are to be recapital-
lied with r. F. C. credit, is is under
stood
The Federal Reserve Board, in re-
questing data from all banks on their
current condition, asks them to clas-
sify loans as doubtful or slow: to reveal
losses on loans, on defaulted bonds and
stocks and on any other loans. and to
indicate bond depreciation in two
groups, according to the usual ratings.
1t is generally believed that doubtful
paper Is to be written off entirely The
total losses then shown are to be de-
Quoted from the capital structure The
r. F. c. is expected to provide the
difference.
Committee Named.
The Association of Bank Supervisors
did today appoint committee which
Is to cooperate with the controller On
this and other matters Until the Bank
Insurance Committee of three is ap-
pointed. however. and until it issues
rules and regulations, the State bank
supervisors cannot act
Meanwhile the supervisors discussed
their Chicago meeting. which is to be
held September IL. IL and 13, and
exchanged experiences on such matters
as liquidation. evaluation Of assets. the
supervision of opened banks and the
various provisions of the Glass -Steagall
bill as they affect State banks and nom
member Reserve banks. Considerable
discussion reVolved around the reOrgani-
zation of banks, the general view being
that values should be conserved through
the orderly liquidation of securities and
mortgages.
Pennsylvania closed banks hold
around Sl00.000,000 Of securities and
Sl25, 900 900 of real estate mortgages.
To attempt to jam through liquidating
dividends, which would require the
hurried sale of such assets. would.
however, smash values for going as well
as closed banks. Rather. liquidation
has been orderly and borrowers from
closed banks are being allowed to amor
tlze their loans.
Under the provisions Of the Federal
deposit insurance act after July /, 1884,
deposits up to $4,000. may be insured,
but between January l if they want to
Join the bank deposit insurance fund.
Attend Conference.
Attending the Hotel Roosevelt meet
ing the last two days were the following:
New Jersey, Col William H. Kelly COM
missioner of banking. and Messrs. Pere
and Compton, deputies; Pennsylvania
DR.. William D. Gordan, secretary of
banking; Maryland Mr. Hospelhorne,
deputy commissioner; Delaware, Harold
w Horsey. commissioner of banking;
Virginia. M. E. Bristow, commissioner
of banking; Ohio, Ira j. Fulton, super
intendent of banking; c. G. Satin.
counsel and j. c. Van Pelt, deputy;
Massachusetts, Arthur D. Guy. commits
sloner of banking; New York. Joseph A.
BrOderick. superintendent of banking;
Illinois, Supt. Barrett. and Michigan
r J. Riechert, commissioner of bank
ing.
(Copyright. 1880