The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1937-01-07
Deposit Insurance, Sixth
and Final Step, War
ranted by Other
Plans He Says
BY GURNEY p. HOOD
State Commissioner Of Banks
Written for United Press)

What is ahead of us in North
Carolina, from a banking stand
point, during the next four years?
Why limit the time?
The major efforts of the state
banking department are now, and
have been since the banking holi-
day in March, 1888, directed to-
ward making the banks under it's
supervision absolutely unbreak-
able. Quite a lofty effort, but one
that can be and will be accom-
plished.
Unbreakable banks can be es-
tablished through six avenues
achieving the first five, fully war
rants the sixth, as these items
show:
/. Personnel.
2. Supervised chartering.
3. Collateral supervision.
4. Staggered investment ma
turtles.
S. Service charges.
6. Deposit insurance.
State banking supervision is to-
day paying greater attention to
banking personnel than ever be-
fore, and from every angle. Edu-
cational efforts among officers,
employees and directors will be IN.
augurated in a practical school OF
banking at Chapel Hill during the
coming summer. The state OF
North Carolina. through various
boards and associations, requires
of nearly all professional classes
a certain amount Of schooling,
certain experience, character quail
ifications, so why not make GER
tain specifications along similar
lines for bankers. Education, then,
is the first step toward the I'M
breakable bank.
LESSON LEARNED FROM
LATE DEPRESSION
The recent depression taught
us a most Salutary lesson in con-
nection with the heretofore pro-
miscuous and indiscriminate char
tering of banking institutions.
Prior to 1881 almost any group
of men could secure n charter,
obtain quarters, and forthwith
open their doors for the purpose
of conducting banking business.
The result Of such a policy was
disastrous, as many communities
became grievously overbanked.
Today, there sa strict investiga-
ton made in connection with eacn
application for new bank. Inc
territory to be served is thorough
ly canvassed, and unless the IN
vestigation discloses that tne
banking facilities already estab-
lished in the community are IN
adequate, the application Will be
promptly denied.
INTEGRITY OF COLLATERAL
CONTINUOUSLY GUARDED
Through regulations adopted by
the Advisory Banking COMMISSION
of North Carolina, a commission
incidentally composed Of the state
treasurer, as chairman, the attor-
new general and three outstand-
ing, active bankers in our state
the commissioner of banks IS not
a member of this commission[,all
banking institutions in North Gar
dina are being required to leai,,
ously guard the integrity OF all
collateral One of the lessons
learned during the past few years
and a bitter lesson that was re.
sponsible in a large measure LOT
many bank failures, was the lac;
that while banks duly investigated
all collateral at the time IL was
rendered in connection with loans;
banks did not assiduously atteno
TO a Close scrutiny of such coiiat-
eral at stated periods Thereafter
Annual financial statements, ae-
tailed appraisals, title certificates
to real estate, and other support,
ing data in connection WIN al
collateral is now a routine re-
luirement in all state banks. a
Staggered maturities over ~
to Is year period of all bond ana
security portfolios, is ano'he.
mudsill in the foundation OF an
unbreakable bank. With the state
of North Carolina having a bona
watchdog in the Local Govern
ment commission, and that organ.
ization lending guiding mana "
counties, cities and towns m re-
vamping, rejuvenating and reor-
ganizing their financial obliga-
tions, we have seen our state
emerge from. the recent depreS-
sion with a high financial stand.
ing. With a banks investment
lists maturing in approximately
equal amounts each year over
ten to fifteen year period, bank
ing Institution need have any