The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-01-06
LefOr States FDIC Should
Restore Bank Confidence
Points Out Depositors Need
Have no Fear Under
Federal Plan

North Dakota "has come out OF the
financial morass in which 1t has been
begging around during the last IL
years and has safely turned the corner
on the road to financial stability, =
State Bank Examiner Adam A. Lefol
said In an address here Friday night
He explained the banking situation
in the state and the operation Of fed
eral laws designed to strengthen
banking.
Lefor declared that the 127 state
banks applying to the Federal Deposit
Insurance Corporation have been ad-
mitted to membership in the fund
with the last bank to qualify admit
ted this week. Eight banks did not
apply, but may do so. the examiner
said, and 10 banks still are operating
under restrictions.
The eight banks that did not apply
for admission are eligible for admis-
sion under the federal insurance plan
Lefor said, but did not apply because
they deemed their positions impregn-
able and did not want to pay the cost
Of membership.
Some Of the 10 banks now operat-
ing under restrictions pursuant ia
presidential proclamation will doubt
less apply for admission and qualify
to come under the act within q short
tlme."
Insured Up to $500
Lefor outlined the manner III which
federal deposit insurance will ope-
rate, declaring that under the insur-
ance plan deposits up to $500 arc
fully insured for the first six months
Of this year, and thereafter the
amount Is to be increased to $4,000
for each deposit and proportionate
Increases for larger deposits. National
banks automatically come under the
deposit insurance act.
There now Is available In the insur-
ance fund more than q half billion
dollars, Lefor said.
If confidence in banking ever
existed on the part Of the public, and
we all know that 1t did exist" Lefor
continued. "such confidence ought
now to be restored in full measure
Never was any similar plan attempt
ed on such q scale to protect deposi-
tors in banks.
Money that recently has sought
safety in postal savings and in other
avenues for deposit or investment
ought now to be restored to banks
where it rightfully belongs, and
thereby permit funds to become avail
able for community needs.
"Depositors need have no fear as
to the debentureS issued for the money
obtained from the Reconstruction FL
nance Corporation. The debentures
are subordinate to the deposits.
Deposits Come First
TN case Of need, deposits are taken
care Of first: next comes the deben-
lures to the Reconstruction Finance
Corporation: and lastly comes the In
vestment Of the stockholders In the
capital stock Of the bank.
This Reconstruction Finance Cor
poration money, In the amount Of
81, 800. 900, Is put into the several state
banks and Is set up as q buffer
against any assets proving doubtful.
This amount will clean the state
bank IN North Dakota 50 that the
remaining assets are 100 per cent
sound.
The small institution has received
the same consideration as the larger
banks. The smaller bank In the
state, with deposits Of 5000, has re-
ceived equal consideration and u
equally insured With the largest bank
IN tho state.
'Your duty . depositors Is to pa
tronize your home bank. no matter
how small, and not journey to the
larger communities and larger banks
with more impressive figures but n6
more safety nor solidity."