Evening star., 1936-09-18
STEAGALL PRAISES
BANK SITUATION
Democratic Leader Points to
F. D. |. c. as Major
Factor in Gains.
BY EDWARD C. STONE.

chairman of the House Committee on
Banking and Currency, declared in an
J address before the National Super
| visors of State Banks. at Detroit, that
! the banks of the country are in the
soundest position they have expert
enced in years and gave very large
amount of credit for the situation to
the Federal Deposit Insurance Corp.
In stressing their safety, he said:
In 1882 We had 1,450 bank fail
ures, with deposits of more than
three-quarters of billion dollars,
involving enormous losses to deposi-
tors. Half the Nations currency had
been withrawn from the banks. The
year previous 2,234 banks had failed,
with deposits of nearly two billions.
Since the passage of the banking
! act of 1888 there have been no losses
Of consequence to depositors in banks,
no community has suffered demor-
! alization and distress because of
bank failure, no citizen is afraid to
{ trust his earnings in banks, no banker
/ Is afraid to employ his deposits in
support Of business because of the
| fear of runs or Withdrawals, and bank
| deposits have increased more than
ten billions of dollars"
Deposit Insurance Lauded.
Representative Steagall declared
that the provision in the banking act
Of 1888 which did most to restore
public confidence in banks was the
! insurance of bank deposits. He con-
tinued:
In the light OF the results that
followed the enactment of this legis-
| 1ation it seems unthinkable that
/. leaders in the financial world should
have opposed such a proposal. After
| all, the measure only seeks to apply
to bank deposits the principle of in
surance-the most universally ap-
proved principle known to the busi-
ness life of the civilized world. Yet
the American Bankers Association
at its annual meeting in 1888 passed
| sweeping resolutions condemning the
legislation and predicting that its en-
forcement would prove disastrous.
Despite these predictions of fall
Gre, the simple fact is that we have
during the past three years expert
enced for the first time in orr his
tory relief from the distress and de-
moralization of bank failures. The
number of failures has been negligible
and where banks have closed each
depositor has been promptly paid in
full up to the amount Of $4,000.
Ninety-nine per cent of depositors of
closed insured banks were paid in full
without Insurance to the business life
and activities of communities in
Folved.
This has been accomplished with
out dollar of cost to the banks The
Federal Deposit Insurance Corp. has
on hand every dollar that has been
paid into its fund, together with a
profit Of Sc 900, 900. State banks that
withdrew from the corporation upon
enactment Of the permanent law in
1885 were reimbursed every dollar of
their assessment. They enjoyed the
protection of deposit insurance for a
period of a year and a half without
one dollar of expense. Small wonder
that the American Bankers Associa-
ton in its annual meetings since 1888
has made no further mention OF de-
posit insurance!
Thinks Insurance Permanent.
'Of course this legislation is here
70 stay. but warn the independent
bankers of the Nation that all opposi-
tion to deposit insurance has not
ended.
with insurance of bank deposits
there is no longer any excuse for
perpetuating the system Of postal saw
ings. That system was never de-
signed to perform any banking func-
tions. 1t was originally designed to
furnish safety to depositors at the
cost Of lower rates of interest than
were paid by banks.
To-day the system presents a spec
tacle Of illegitimate competition with
banks and pays higher rates Of in
terest to its depositors than can or
should be paid by banks. This COM
petitive bidding for funds which right
fully and properly belong to the Ma
tion's banks must be stopped" Chair
man Steagall asserted.
Institute Committee Named.
e. Wallace Schreiner, chairman
Public Speaking Committee of WASH
4ngton Chapter, American Institute
OF Banking, has appointed the follow
ing members to serve on his commit
tee: c. T. Akre, L. E. Pernell, Frank
Rodgers and Miss Frances Nagel,
Riggs National Bank: Joseph R. Fitz-
patrick, Second National; j. Earle Nc
Geary, w. B. Hibbs & Co.; william
H. Laughlin, Washington Loan 81
Trust Co.; Alfred M. Sherman, Amer
lean Security g. Trust Co.; w. C. Cox,
jr., McLachlen Banking Corp, and
Miss Alice M. Whitton, First National,
Alexandria.
Chairman Schreiner Is connected
with the First National at Alexandria
and has won many public speaking
prizes. The instructor will be DR..
Elmer Louis Keyser of George Wash
tngton University.
Heard in Financial District.
Jules M. de Thebaud has become
associated with the Washington Office
of Hemphill. Noyes g. Co., stock ex-
change firm in the Shoreham Building.
He was formerly connected with jerks,
Gwynne & Co., in New York.
James NJ Lands, chairman of the
Securities & Exchange Commission,
will address the American Mining
Congress In Denver on October l and
speak before the nineteenth annual
convention of the National Association
Of Securities Commissioners on Octo-
Der 2.
The American Chain Co. has filed
an amendment with the Securities &
Exchange Commission stating that its
issue Of 10000 shares of per cent
cumulative convertible preferred stock
will be offered at 500 a share Hemp
hill. Noyes & Co. will be the principal
underwater of the issue.
The Atlantic Coast Line reports
$1.72 earned on common in the first
aeven months 0f this wear AGAINST n