Evening star., 1933-03-11
TREASURY TO ISSUE
LICENSES TO BANKS
Sound Institutions to Be Re-
opened as Soon as Sound.
ness Is Checked.
Continued From First Page.)

Treasury nor the Federal Reserve au-
thorities have sufacient information
upon which to consider applications for
reopening by such State banks as are
not members of the Federal Reserve
System, the President will by decree
authorize the appropriate State author
ities IN each State to give licenses to
banks under their jurisdiction other
than members of the Federal Reserve
System, to open for the usual normal
business, or In their Judgment. and
under the terms Of the presidential
proclamation, to permit of such re-
opening under such restrictions and lin
itations as they in their judgment may
deem wise.
1T is to be expected, however, that
State superintendents in granting IL
censes under this authority will take
under consideration in determining
their own policy the general principle
to be adopted by the Treasury as re-
spects member banks that, in the in
terest of the depositors and of the
country as whole, only sound inSti-
tutions will be permitted to carry on
all Of their usual functions to the end
that no bank shall be reopened for
business on any basis that will run the
risk Of being forced to close again be-
cause of demands which 1t Is not in a
position to satisfy"
Order to Reserve Banks.
The statement issued at the Treasury
concerning the reopening Of the Fed
eral Reserve banks said:
THE Federal Reserve Board this
morning voted to authorize Federal Re-
serve banks under the terms Of section
403 Of the emergency bank act to make
advances tomorrow for payroll pur-
poses to individuals, firms or corpora
tions on their notes secured by Govern
ment securities. The Secretary of the
Treasury has issued a regulation ac-
cording to the terms of the Presidents S
proclamation permitting the Federal
Reserve banks to carry on this business
with the public.
Accordingly the Federal Reserve
banks will be open tomorrow for the
purpose Of making loans secured by d.
rect obligations of the Government, as
well as to conduct such other trans
actions with their member banks as
may be necessary to enable member
banks to carry out the purposes of
regulation number 10 as amended
Meanwhile, there appeared a differ
ence among congressional supporters Of
President Roosevelt over guaranteeing
bank deposits. Senator McAdoo, Demo-
crat. Of California introduced a bill to
that end, although some other admin
istration followers indicated they would
not approve such step.
Provisions Of Bill.
The bill would protect depositors in
banks of the Federal Reserve System
against loss and make provision for the
prompt payment Of amounts due them
in the event Of the failure or suspension
Of the banks.
Under the measure a fund would be
set up under the control of the Federal
Reserve Board. the fund to consist Of
assessments levied against member
banks in proportion to their deposits
payable as provided by the board until
1t equaled ! per cent Of the deposits in
the member banks
whenever any member bank shall
fail to meet its obligations to depositors
and close its business or its business
shall be suspended" the bill provided,
the Federal Reserve Board shall pro-
vide for the immediate payment out Of
the depositors' indemnify fund of all
funds due by such member bank to its
depositors, and thereupon such fund
shall become and be subrogated to all
the rights OF said depositors, and in the
settlement OF the affairs of any such
bank all dividends that would have been