The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-11-19
CREDIT OF BISMARCK
INSTITUTION insured
BY FEDERAL AGENCY
investors In First Federal Saw
lngs and Loan Associa-
ton Protected


First Federal Savings and Loan as
ISOLATION of Bismarck now are insured
by the Federal Savings and Loan
Insurance Corporation, an agency OF
the federal government, 1t was an
nounced Monday by A. w. Mundy,
president Of the unit.
Each investor in shares In the In
stitution now is fully protected against
loss up to 5000, Mundy said.
1.-THE safety feature now made
available by federal insurance IS open
to all savings and loan, building and
loan and homestead associations, and
cooperative banks which apply for in
surance, provided that they are ap-
proved as to solvency and operating
methods by the Federal Home Loan
Bank Board" said Mundy.
Disclosed Imperative Need
1.-THE financial breakdown Of 10
months ago disclosed an imperative
need for the protection Of long-term
savings invested for income in the
thrift and home financing institu-
tons of the country, which aggregate
the vast total of $1,000, 100000 to
$4,000, 100000, held by some ten mil
lion people Of all classes and occupa-
tions, largely wage-earners and sal
aired workers.
Safety for long term savings pres
ents a different problem than safety
of checking and time deposits, where
funds must be available for payment
on short notice. A special federal
agency, the Federal Savings and
Loan Insurance Corporation, was
therefore established to handle this
type OF insurance. It has a capital
Of $100,OOO,0O0. subscribed by the
government. 1r addition, the cor
poration is building up a substantial
reserve fund from annual premiums
paid in by all insured institutions.
Moreover, the privilege Of insurance
through the corporation is extended
only to well-managed, financially
sound institutions which meet the
strict eligibility requirements Of the
Federal Savings and Loan Insurance
Corporation"
The First Federal Savings and
Loan Association Of Bismarck was
organized under q 1888 act Of con-
gress, by which the formation Of pri-
vate, locally-managed thrift and
home financing institutions under
federal charter and regulation was
made possible.
Credit at Low Cost
THE purpose Of congress was to
make credit available at low cost for
home construction, refinancing and
modernization In parts Of the coun-
try where such funds were made
quate," said Mundy. AT the same
time, institutions so organized and
managed encourage the practice Of
thrift by people Of large as well as
small means.
ITO aid In the organization of these
associations, congress auth riz e d
United States treasury subscriptions
In their shares, 50 that the capitaliza-
ton now represents federal funds as
well - the investment Of private
savings. To date almost 600 federal
associations have been established
throughout the country.
"A substantial increase In the
amount Of home financing resources
In this locality will satisfy the grow
ing demand for home loans for all
purposes, strengthen the real estate
price structure, lessen foreclosures,
add to employment In the building
trades and the large number Of In
dustries dependent upon construction
activity"
Mundy pointed out that. In addi-
ton to the advantage Of safety,
shares In the First Federal Savings
and Loan Association Of Bismarck
can be expected to yield q reasonable
dividend return. and are exempt from
normal federal income tax, are non
assessable and have no contingent
liability.