Full text of Marriner S. Eccles Papers : Outline of Bill Proposed by Federal Deposit Insurance Corporation to Amend Section 12B of the Federal Reserve Act as Amended, Box 14, Folder 8, Item 8

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[Rev.

s December 14, 1934

CONFIDENTIAL

OUTLINE OF BILL PROPOSED BY FEDERAL DEPOSIT INSURANCE CORPORATION
TO AUEND SECTION 12B OF THE FEDERAL RESERVE ACT AS AMENDED.
OUTLINE OF SALIENT POINTS

TemjJd'rary Fund and Fund for Mutuals are merged into Permanent Fund,
whicnS4aecomes operative immediately upon enactment of the b l l .
(In amended bill as it now stands non-member state banks
are insured up to July 1, 1937 only. They must then become members
of the Federal Reserve System. Mutual Savings Banks and territorial
banks are excepted from this provision.)
2.

Maximum insurance for each depositor in any bank remains at $5,000.
as in present Temporary Plan.

3. Maximum annual premium of 1/8 of 1% of total deposits is substituted
for obligatory stock subscription amounting to 1% of total deposits
and unlimited liability thereafter. Mutual savings banks may be
required to pay an uniformly lower premium.
4.

Check tax is appropriated to Corporation.

5. Corporation is given the following authority not expressly stated in the
present lawt
(a)
(b)
(c)
(d)
(e)

Right to examine all insured banks;
Right to require reports from all insured banks;
Right to terminate insurance benefits;
Right to control new admissions;
Corporation approval is required before merger or
consolidation or reduction of capital takes place;
(f) Right to require adequate fidelity, forgery and
burglary insurance;

6. Non-Federal Reserve member banks may withdrew from insurance.
7.

Corporation*-s -present right to buy assets of closed member "banks is
extended to open banks until July l f 1936 to facilitate .ergers and
avert loss.

8. The Corporation is required to report to Congress needed revisions in
bank laws and other changes necessary for better administration and
for meeting all obligations of deposit insurance.
9.

Capital stock of Corporation changed to no par value with right to
allocate to surplus any portion of amounts paid in by Treasury or
Federal Reserve banks. All dividends are eliminated.

10. Obligations of Corporation may be issued only on approval of the
Secretary of the Treasury, wno is authorized to purchase the same.
11. Detail administrative and technical changes:
(a) In terminating affairs of new National Banks used to
pay off depositors in closed banks they may be moved to
central locations.
(b) Duplication of supervision over liquidation of National
Banks eliminated through centralization of all such
powers in the Federal Deposit Insurance Corporation.
(c) Definitions of terms used.