The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-06
BANK DEPOSIT
SAFETY is aim
OF NEW BILL
Heads of State Financial
Houses Made Liable by
Jones Measure.

Contending that a bank deposit
guaranty law that really will work
is the only possible legislation
which will restore confidence in
Hoosier financial institutions" Rep
resentative John R. Jones Dem,
Plymouth prepared today to fight
for passage of such a measure.
His bill, setting up machinery for
a deposit guaranty, already is in the
hands of Judiciary A committee in
the house.
Although not recommended by the
administration, nor backed by the
survey commission, Jones predicts
that his bill will pass when the
people back home understand what
it means to them"
The trouble now is that the peo-
pie are scared of the banks and the
bankers are more scared than the
people," he declared "A deposit
guaranty law, as provided under my
bill, will remove cause of that fear.
ut will work because it places re-
sponsibility for bank failures where
the survey commission found that
it belongs-upon the bankers them
selves.
True, the bankers may not want
to assume the burden, but they
should be made to do so. They are
willing enough to assume the de-
posits, so let them also assure their
safety"
Bill Really Is Simple
At first blush the Jones bill seems
somewhat complicated, but once
understood it is simple and is bound
to work out, its author declared.
1t creates a zone around each
state controlled bank, which makes
that bank the central bank. over
which supervision is exercised by q
board comprised of three super
visors selected by other banks in the
zone.
A ten-mile radius is the minimum
for such zone, and the number Of
banks to be included will be suffi-
cient to equal double the capital and
surplus of the central bank.
Zones are divided into three sec
tors, from which the supervisors are
chosen, each sector being as nearly
equal as possible in the total OF
capital and surplus.
Examinations of the central bank
will be made by the state examiners
and the reports submitted to the
zone supervisors. Names of depos-
itors will remain confidential infor-
nation, not to be given to super
visors. All other business Of the
central bank will be disclosed to the
zone board.
A state bank board, to which APP
peals from the zone board may be
taken, is set up under the bill. 1t
would consist of one director from
each of the eight bank groups OF
the state, as now fixed by the In
dian Bankers Association.
Final Appeal With Board
Final appeal will rest with the
commission on financial institutions,
as provided ursder the administra-
ton bank bill, or with the state
charter board as now functioning.
A 2 per cent deposit guaranty
fund is set aside annually by each
qualified bank and reported to the
state, the per cent being based on
average daily deposits.
When the total reported to the
state reaches a fund of 100000, no
further levies are made unless need
ed, the fund to be kept at the So
100000 figure.
1t is from this sum that guaran-
teed deposits are paid, should a
bank be closed.
But the burden rests on the zone
banks themselves, which are doing
the supervising. If their central
bank goes under, theye will be as
sessed 2 per cent forthwith if any
losses occur, before the burden is
passed on to state banks generally.
1t is this feature that will make
his law work, Jones contends.