The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1934-08-16

all deposits within the limited juris-
diction of one state.
1t is to be recalled that during con-
gressional debate on the federal law
much argument was advanced against
enactment of the national insurance
law on the basis Of the failure of the
numerous state attempts. The answer
apparently lies in the fact that con-
ditions in one state may be bad from
an economic standpoint or they may
be bad in several states, but it is sell
dom that the whole United States suf-
fers conditions of character that re-
suits in widespread wreckage of the
banks. Another strength which Off
Gals of the Federal Deposit Insurance
corporation see in their own law is
that no attempt is made to guaran-
tee all deposits. As heretofore said,
the limit is $4,000 for any individual
account. While that limitation does
not. protect the holders of great
amounts of capital, it is sufficiently
high, according to the studies by the
insurance corporation, to provide for
immediate repayment to at least 81
percent of the Individual depositors in
this country.
The federal corporation has more
than $400,0OO,00O at its command up
on which it can draw Immediately for
payment to depositors in case of any
bank failure. It is ridiculous to as
sumo that this amount would be suf-
ficient to meet any such debacle as
occurred in 1892 and early in 1888,
yet it ought to be said that great
many of the banks which closed their
doors during those black days would
not have been so affected had there
been funds available to pay off de-
positors in the banks that closed early
in those desperate times. .<.~.
There are many Washington OBJ
servers who still have their fingers
crossed as to success Of the deposit
insurance plan. They look upon it as
placing a premium on unsound bank
ing. think no one can doubt the psy-
chology of this guarantee in cases
where bank managers really desire
to be crooked. They can feel obvious
ly that their depositors will be pro-
tected for the most part and if they
sbleed" their bank the wrath of the
bulk of the citizens in community
will be dissipated obviously by prompt
repayment of their deposits from the
federal corporation. These observers
contend further that the federal law
has not had an opportunity for real
test. II is their thought that a period
of five years or more will be required
to gain an idea of how the machinery
is going to function. 1t is to be noted
that there has been no assessment
levied on the banks which are men,
bers of the pool thus far beyond the
original cash contribution for the
membership purchase. The test will
come, therefore, when the 100000
900 fund has been exhausted and the
banks which are members must again
dig up funds; to replenish the larder.
Nye Predicts New Party
Senator Gerald P. Nye of North Da-
kota, Republican Independent, is on
record with the prediction that new
political party is bound to come, and
that he believes it is now gaining
rapidly. The senator was not quite
specific in his declaration, however,
because he gave the impression that
he recognizes many of the problems
confronting the organization Of q
third party. He has SHE'D away from
campaigning for Republican regulars
seeking senatorial seats this fall and
to that extent has definitely put him
self in the position to be active in any
third party movement.
The thing which Senator Nye and
other Independents on the Republican
side are lodging is President Roose-
velt's direct action in drawing from
liberal members of both Republican
and Democratic affiliations. 1t is re-
garded by political students here as
quite obvious that only few of the
Republican independents ever will
stay put in party organized as they
believe Mr.. Roosevelt to be organic
ing new party. tt is the old story OF
new party ambitions existing in too