The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL DEPOSIT INSURANCE CORPORATION W A S H I N G T O N for release not earlier than Thursday Morning. April 19. 1934. |ADDRESS OF HON. LEO T, CROWLEY, CHAIRMAN OF THE BOARD OF DIRECTORS OF THE FEDERAL* DEPOSIT INSURANCE CORPORATION, BEFORE THE EXECUTIVE COUNCIL OF THE AMERICAN BANKERS ASSOCIATION, AT THEIR ANNUAL SPRING MEETING, AT THE ARLINGTON HOTEL, HOT SPRINGS, ARKANSAS, WEDNESDAY EVENING, APRIL 18, 1934. Gentlemen, it Is with great pleasure that I welcome this opportunity of ad dressing the Executive Council of the American Bankers Association at its annual spring meeting . . . etc. With your permission I wish to discuss with you the highlights of the his tory of the Federal Deposit Insurance Corporation to date, to outline the present set-up of the Corporation, and to explain some of the plans which we have in mind for ¡the future. On March 31st there were 13,870 banks which were members of the Temporary Insurance Fund, This means, gentlemen, that 91$ of all licensed hanks in the country which are eligible for membership, had made application and were admitted to the Fund, It is true that national banks and state Federal Reserve member banks were required to join the Temporary Insurance Fund but this group of banks represents less than 45$ ¡by number of all the banks which have joined, In other words then 55$, or more than ¡half of the members of the Temporary Insurance Fund on March 31st, were members because of their owh voluntary application. There can be no question that temporary Insurance as it now stands has been openly embraced by an overwhelming majority of the banks of the country, which means that insurance is welcomed by bankers, qnd I think we can safely conclude that on the whole this insurance of deposits which is p-ow in force appeals to them from a sound business point of view, Insurance of de posits as it exists under the provisions of the act which establishes the Temporary JAN m 1954 4 - 2 jInsurance Fund, of the F,D.I.C. has been accepted by the banking community of the country in an enthusiastic and wholehearted fashion. It.is one of the outstanding constructive contributions of the present administration* Total deposits in banks which are members of the Temporary Insurance Fund, exclusive of mutual savings banks, amounted to in excess of 31.7 billion dollars on ¡December 30, 1933. Total deposit liability for all licensed banks in the United ¡States, exclusive of mutual savings banks, amounted to in excess of 32,4 billion dollars, according to recent estimates. posits m It would appear that 98$ of the total de all licensed banks operating in the United States are in banks which are members of the Temporary Insurance Fund. Banks which are members of the Temporary fund, considered from the point of view of the number of institutions, as well as the deposit liability of those institutions, represent an overwhelming majority of |all the licensed banks in the United States. At the present time the Federal Deposit Insurance Corporation has insurled 55,6 millions of accounts. Put another way, the number of accounts which are insured through the operation of the Temporary Fund are almost as great in number jas half the population of this country. Finally, the aggregate amount of the accounts which are insured represents |372$ of the total deposit liability of all the licensed banks at present operating [in the United States. These are staggering figures. I do not wish to burden you further with Isuch dry statistics, but I cannoi help from pointing out a few of these vital facts linvolved with the insurance of deposits. Let me bring two more studies to your at tention* On May 13, 1933 tne Comptroller of the Currency requested an analysis of | 6 accounts in all national and state federal reserve member banks. The results |f thlS request were tabulated and published in the Federal Reserve Bulletin for 3 last July• Among 5,500 banks it appeared that $2,500.OOiwould fully cover over 96$ of the accounts. If the 5,500 banks chosen were representative of all the banks in the country, and they were not, it would lead one to believe that at the present time, througn the operation of the Temporary Fund of the F.D.I.C., over 96$ by num ber of all the accounts in the country are fully insured but, gentlemen, the 5,500 banks chosen were not representative, since they were all national and state mem ber banks. We know from the statistics which we have gathered that on the whole the average state member bank is larger than the average national bank, and likewise the average national bank is larger than the average state non—member bank. We know too that the average account a3 a result is larger in state member and national banks than it is in state non-member banks. We are lead to the conclusion then that the study made last May is a conservative estimate of the actual situation. It is probably true that the number of accounts which are at present fully covered by in surance is greater than we would have occasion to believe as a result of the study made last May. A recent preliminary study involving thirteen states in which the banks are classified as to the amount of total deposits shows the following enlghtening facts: For banks with total deposits of less than $150,000.00, the ratio of the aggregate amount of the insured deposits to the total deposit liability is 78.34$.. Taking the next size group, deposit liability of $150,000.00 to $500,00p.00, the ratio of the aggregate of insured accounts to total deposit liability is 68.79$, finally, taking the size group banks with total deposit liability of $500,000.00 to $1,000,000.00, the ratio of aggregate of insured accounts to total deposit liability is 64,49/0. This means that in the small banks throughout the country the probable percentage of deposits which are covered by insurance to the total deposit liabili ty is 67.38$. If the public funds deposited in banks in these first three size groups are eliminated, the percentage of the total deposit liability which is now - 4 - insured, would "be very materially greater* We hope to complete this study in the very near future, at which time we will he able to determine the number of banks, which fall within the various size groups, as well as the total number of deposit tors in such banks. The Temporary Insurance Fund has been in operation since January 1, 1934 There are now 13,870 banks which are members of this Fund. Since January 1st not a single depositor has lost a penny in a bank which is a member of the Temporary Fund. i It is well to give this a moment’s thought. I do not believe it possible to point to any other period in the history of the United States when for over tnree and a half months not a single dollar of deposits has been lost amongst so large a group o± banks as are represented by the members of the Temporary Insur— ance Fund. On the other hand, there have been during this same period approximate ly 60 suspensions of banks which were not members of the Fund. Such facts speak for themselves. At this time let me say a word about the Corporation itself, the exist ence and operation of which have made possible the complete elimination of losses to depositors in banks which are members of the Temporary Insurance Fund. Up to the first of this year and for a short while thereafter, the staff of the Federal Deposit Insurance Corporation, under the able leadership of the Chairman of the Board, Walter Cummings, and J. F. T. O ’Connor, Comptroller of the Currency, and E. G. Bennett, directors, was feverishly busy with the applications, examinations and iinally the qualifications of the many banks which applied for membership. As yon all know, the directors did an admirable job in completing in so short a time the work which faced the Corporation. I want to call to your particular attention the assistance made possible through the wholehearted cooperation of Mr. Bennett. Was Chairman of the Board of Review. which was ”E. G.n Bennett It was his group which passed upon the quali- - 5 - fications of every state nonmember bank making application for membership to the Temporary Fund. Reviewing in excess of 8,000 such applications in itself is a |task the magnitude of which I am sure you will all appreciate. She responsibility which rested on the shoulders of the Board of Review, and particularly upon the Chairman of that committee, was considerable. Such responsibility could not, in my estimation, have been more ably discharged and we are fortunate that we were able to secure the services of Ivlr. Bennett for this tremendous job. The F. D. I. C. built up a personnel practically over night to accomplish the tremendous task of examining and passing on all State nonmember banks which applied for membership in the Temporary Fund. As you know, they were successful in examining and reviewing by far the greatest proportion of the banks which had ap plied for membership prior to the first of the year. Just as soon as this job was completed the executives of the F. D. X. C. devoted their attention away from the outward problem toward the organization and personnel of the Corporation itself. . The Board of Directors and their assistants have been busily engaged in establish ing the organization throughout the country which will administer the affairs of the Corporation and which will conduct the regular examinations of all state banks other than members of the Federal Reserve System which are members of the Insurance Fund. At the present time we have established 15 offices of the F. D. X. C. throughout the country. Supervising Examiners. These offices have been placed under the direction of our These men are responsible for the examination of the banks which are members of the Temporary Fund. Such examinations are sent to the main office of the Corporation at Washington currently as they are completed. Each Supervising Examiner is furnished with a sufficient number of assistants and other examiners to accomplish regular examinations of the banks within his territory which are members of the Fund. ~ 6 - As the examination reports are received at Washington they are assigned to appropriate Review Examiners for careful analysis and attention. There are at present time nine Review Examiners and each Review Examiner has been assigned a definite territory comprising a certain number of states. The Bank Examiner*s reports are summarized and cards are made of the vital factors of each bank for I ready reference and comparison purposes. Over the Review Examiners and over the I field Examiners is one Chief Examiner. The business of the Corporation is divided between an Operations CommitI tee and a Board of Review. The Operations Committee is concerned with the poli- I cies of the Corporation as it affects its direct operations and more particularly las it affects examinations, examiners and the personnel and other details of the I Corporation, The Board of Review passes upon the applications of banks and de~ Itermines the policies directly concerned in individual bank problems. While up to the present we have had no need for a reorganization division, ■ nevertheless we a,re engaged in organizing such a branch within the Corporation. I This group will have charge of banks which have suspended, if and when that occurs, I Under the law the Federal Deposit Insurance Corporation is required to organize a I new national bank in place of any bank which suspends operations. 1 al bank is to be managed by This new nation- the F, D, I, C, and will take over the assets of I suspended bank.The reorganization division will be in charge the of this phase of the I Corporation*s activities. Tributary to the major functions of the Corporation as outlined above are ■ such service divisions as the legal department, the auditing department and the ■ other usual departments of a specialized nature which such a corporation requires. At the head of the Corporation is the Chairman of the Board of■Directors. ■The Board consists of three men, more than two of whom may not be of the same poliItical party and one of whom shall be the Comptroller of the Currency. The Directors - 7 - Lre assisted by Assistant Directors who are likewise members of the Operations Com mittee and the Board of Review. The capital of the Corporation at the present time consists of three ma[jor items. In the first place, there is the subscription of the Secretary of the Treasury, amounting to 150 million dollars. In the second place, there is the sub scription of the Federal Reserve Banks which amounts to a little less than 140 mil lion dollars, half of which has been paid at this time, the balance remaining on ¡call. Finally, there are the assessments of member banks, which on a recent date Lmounted to in excess of 39 million dollars. Here again the Corporation has called for one-half of the assessment due, the balance remaining on call. I have discussed the organization and method of operation of the F.D.I.C. in some detail with you. I hasten now to a brief discussion of our major object ives and our plans for the future of the Corporation. Our first concern has been with the capital structure of the various banks which are members of the Temporary Fund, We have analyzed state banks other [than member banks which axe members of the Temporary Insurance Fund and we understand that the Comptroller of the Currency and the Federal Reserve Board are doing likewise [for the national and state member banks with a particular view to determining the ■deficiency, if any, in the capital structure of such banks. These analyses have ■been made comparing the ratio of the net sound capital in the subject banks to the ■total deposit liabilities. If the ratio of such capital to deposit liability is 10$ * ■or better we consider the bank a No. 1 bank, believing that 10fo is a healthy ratio ■and that under such conditions there exists an ample cushion not only for the risk ■of the Corporation but for the interest of the depositors and stockholders as well. H l f , on the other hand, the ratio falls below this figure, we have classified the [banks into three other rating groups. It is these three groups of banks which are - 8 - ■engaging our particular attention "because of the fact that the net sound capital in ■such banks is below what we consider a healthy ratio to the deposit liability of the ■bank. We have been and are making, therefore, and effort to repair this situation. ■We have urged banks in such condition to obtain either local contribution to capital ■or to make application for R. IT. C. money for capital purposes. You will readily ■understand the importance of having an adequate capital cushion for the risk which ■ the Federal Deposit Insurance Corporation is taking in the banks which become memr* ■bers of the Temporary Fund. It is not only for this reason, however, that we are ■ making an effort to build up the capital structure of banks throughout the country. I It is for the best interests of all customers of banks as well as the owners for I their banks to have a strong capital position. It is to the best interest of all I concerned that every effort be made to place the capital of banks in such a position I that a healthy ratio of capital to deposits exists. In many cases we have been unable to admit a bank to membership in the I Fund because of an inadequate capital structure. In such cases we have been as I helpful as possible in aiding these banks to obtain R. F. C. money for capital ■ purposes, and where such action has been taken and where the F,. F. C. has made a I commitment it has been possible to admit the applicant bank. In short, gentlemen, I we have made every effort to assure an adequate capital structure in all banks which I become members of the F. D. I. C. Temporary Fund. I Corporation may start on a sound foundation. We have done this so that the We have done this in an effort to I make a constructive contribution to the banking structure of the country. You see then that it has not been a desire of the Administration to have H the Government invest in the capital of banks throughout the country. I It has, on the contrary, been a necessity for the Government to do so in order to place the I Capital structure of many banks throughout the country in a more sound position. ~ 9 - ■One might even go so far as to say that the Government has invested in the capital lof many hanks against its will. It lias done so, however, in the interest of the [people, for the Administration has felt that confidence in hanks would not return [until the capital structure of such hanks was adequate. During a time of depression the major weaknesses in hanking structures lean only he patched. ?/e should work toward a constructive program which will do more than surface-patch the illness which became so acute last March. We of the IPt D. I. C. feel that the capital structure of hanks is one of the most important fields for such constructive work. The assurance of a sound capital position is essential if a hank is to he able to withstand the strains which economic conditions ■ in the future may develop. Another important field in which much constructive work can he done em|traces particularly the management of hanks which in many cases is reflected by the earning capacity of an institution. The past decade has very forcibly developed Ithe fact that many hanks, because of lack of efficient management and because of the lack of proper earning capacity, are uneconomic units, the existence of which is not warranted. small communities. Your association has done much to educate hank executives in It is doubtless true that such education has had a marked ef fect in increasing the efficiency of operation of many small institutions. However, we are still faced with the fact that a great number of the hanks now operating are of such size that the available business does not afford the employment of a compe tent management. It is such units to which we must devote our particular attention in an effort to place them on a sound business basis. The quality of management is a factor which can he directly affected by the activities of the American Bankers’ Association, and it is urged that you continue with renewed vigor the good work which has been carried forward so ably under your leadership. The service which the various state banking associations in connection ¡Krith the American Bankers1 Association have offered the hanking community of the ¡whole country is one of great value. May X point out the opportunity which is af forded your organization, as well as the many hankers of this country, through the ■examinations which the various federal agencies are making available to hank ■directors and officers? A report of a, hank examination is an instrument hy which ■the management may learn a great deal. Such examinations afford the opportunity ■for a periodic perspective of the operations of a hank which may not he apparent [to those who are working with an individual hank’s problems day in and day out. [The proper use of such examinations in enabling the management to increase its ef ficiency has not as yet been clearly pointed out to hank executives. To my mind ■your efforts in this regard will augment very materially the constructive results ■in increasing the efficiency of management. During the past decade we have witnessed the failure of over 10,000 ■hanks. The existence of many of these hanks was not justified from the point of ■view of potential earnings. •To my mind an effort should he made to discourage the ■re-chartering of this large number of hanks, which re-chartering is, unfortunately, ■going on apace at the very moment. Looking at this particular phase of the situa- ■tion from every angle; from the point of view of depositors, as well as from that ■of the executives and owners of existing hanks, it seems obvious that the re-estab■lishment of uneconomic hanks is a procedure which should, under no conditions, he ■encouraged. Your efforts to discourage the re-entrance in the hanking field of ■many of the units which have failed, in my estimation will he a constructive ■activity. We are glad to report that progress has "been made toward the unification Ii ■of the hanking examination report form. f After several months of work the chief ex- . ■aminers of the B. D. I. C., the Office of the Comptroller of the Currency, and the ■Federal Reserve System have developed a unified form of hank examination report 11 - fcyhich is to "be used in the very near future "by all examinations made spective examining divisions. "by the re This, you will readily recognize, is a definite step kn the right direction, and is not only a definite contribution, but an encouraging lone as well. We are attempting to gain the cooperation of state examining authorities, paid in many states at the present time we and.the state bank supervising autho'riIties are making joint examinations. We realize' that many examinations of an indi vidual bank by different supervising groups is costly. Not only is there the di- M r ect cost of the examination to be considered but there is as well the expense of ■delayed business and the wear and tear on the nerves of the executives and the per■sonnel of the subject bank which increases the ultimate expense of such activity. ■We believe that the frequency and multiplicity of examinations may and should be ■curtailed. The number of visits to banks of those unpopular persons known as bank Mxaminers must be reduced. We invite your cooperation in this effort. I said earlier that greater use might well be made of- reports of examina■tions by the directors and executives of individual banks. A follow-up system has ■merit which affords the directors and executives of a bank an opportunity to go over ■in detail the report of an examination with a representative of the Federal Deposit ■insurance Corporation trained especially for such work. If, shortly after an exami- ■nation is made, a representative of our Corporation could meet with the directors ■">f the subject bank, and if together they could go over in detail the report of the ■examination, I believe that both the directors of the bank and the F. D. I. C. would ■be greatly benefited». Such a system will afford a closer connection between the ■Corporation and the insured bank which would doubtless react favorably for both ■groups. It is important that we do not lose sight of the need for unification of ■the banking system. It is quite possible that because the vast majority of all the banks in the country are insured at the present time, the issue of unification of the hanking system will he sidestepped. X need not dwell at this time upon the weaknesses which are inherent in the hanking structure as it exists owing to the fact that hanks are authorized hy and operating under 49 different supervising authorities. While I for one do not advocate the immediate establishment of one supervising authority under which all hanks are to operate, believing that such a [system has weaknesses in that it places too much power in the hands of one individ ual, I do on the.contrary urge for your further consideration the necessity of a greater unification than exists at the present time. The weaknesses which the present system of widely diversified hank supervision embrace are many. Many of the supervising authorities at the present time are so near the scene of action, they cannot he wholly unaffected hy political influences. Local [supervising authorities are often unable to exercise the degree of control which is essential for the efficient conduct of the banks under such jurisdiction. Local supervising authorities often are not able to present the directors of a bank with an adequately strict and yet fair examination report. On the contrary, it has been the policy of the F. D. X. 0. to make unprejudiced examinations. The primary pur pose of such examinations is to present fairly the conditions which actually exist in the local institutions. Our examiners have done this believing that it will be for the utmost benefit of all concerned. Directors and executives should be ac curately informed as to the situation in their bank so that they may face the con ditions and so that through such a realization they may take those.steps which.will bring about a fundamental improvement. On February 28, 1934 the Senate passed an act extending for one yea,r the operation of the Temporary Insurance Fund, It is now before the House Banking-and Currency Committee, and we are expecting it to be reported out any day, It is import ant for the House to make into law the bill as passed by the Senate. There are many reasons, a few of which are as follows: 13 In the first place approximately two-thirds of all the deposits in nrutual savings "banks are in banks which are members of the Temporary Insurance Fund, i Such mutuals are members provisionally, however, and may remain so only as long as the Temporary Fund is in operation owing to the fact that "before they may "become members of the Permanent Fund it will be necessary for the various states which | have chartered these mutuals to adopt certain enabling provisions in order that |he mutuals may subscribe to stock in the F. D. I. C. Since there are over ^ 8,000,000 accounts insured in mutual savings banks you may readily recognize the importance of protecting, through insurance, this large number of accounts. Another reason for the extension of the Temporary Fund develops from the fact that it would be impossible to examine all the national and Federal Reserve member banks between now and July 1, 1934* According to the Permanent Act as it is liow written, it will be necessary for the Comptroller of the Currency and the federal Reserve banks to certify as to the solvency of all Federal Reserve member qud national banks* Furthermore, it will be necessary to issue new certificates for nonmember state banks. examinations. Such certificates obviously must be based upon current In view of the fact that it is impossible to make such re-examina tions of all banks within the short period between now and July 1st, it is imprac tical to force into operation the permanent portion of the legislation. Then again, there are technical details in connection with the liquida tion of the Temporary Fund which unnecessarily complicate the situation, and the i*ort time between now and July 1st hardly allows for adequate handling of this Operation, ■ But more important than all of these reasons is the fact that we wish to study the situation further so that we may make recommendations for such changes in permanent legislation as seem advisable before the inauguration of the Permanent 14 - Fund* From the experience which we have had \ye are already aware of certain neces sary changes which will have to he made in order to assure the success of the ¡F. D. I. C. It must he realized that at the time the permanent legislation was writ ten there was no experience upon which to base the establishment of the Corporation. In creating such a vast enterprise as the F. D. I. C* it is humanly impossible to anticipate all of the practical details which may be embraced. framers of the legislation did an unusually good job. On the whole the It was inconceivable that they should have an understanding of some of the details which developed in the practical operation of the insurance idea* I have mentioned the fact that we have already become aware of certain changes, which, if made, will make the Corporation more successful. Let me elabo rate upon what I believe some of these alterations to be. In the first place it will probably be unnecessary to protect the large depositors to the extent implied in the legislation as it now exists. After all, the depositor with from 10 to 50 thousand dollars and over in his account is an in dividual who is well able to care for himself. the small depositors. of his deposit. Deposit insurance is designed for The small depositor must be assured the absolute protection The hardships which the recent untoward economic conditions have [developed have been felt most acutely by that large group of people whose right it ■is to have absolute protection for those hard earned dollars which are placed to ■ their credit for the so called ‘‘rainy day“. I should guarantee this minimum protection* I pects It is only just that the government Those who question the constructive as- of a program whereby a minimum amount of hard earned savings of half the ■ population of the country is absolutely insured fail to comprehend tne most funda— I mental aspects of American society. The insurance of such savings which it is the I right of every man to enjoy is essentially a government function. Just as the Constitution offers every man the protection of law and order, so should the govern ment insure the protection of the deposits of the masses. As the law concerning both the Temporary and the Permanent Funds now Blexists the Federal Deposit Insurance Corporation is sorely lacking in the power of ■supervision of the banks which are insured. At the present time the Federal Denosit ■insurance Corporation is obliged to insure all banks provided they can show suffic■ient assets to meet deposit liability. In other words, the law describes solvency ■only and says nothing about capital, management or any of the other important fac■ t ors determining the degree of risk involved. The Corporation, then, is obliged to ■insure all solvent banks and at the same time is given no power of supervision ■which it may exercise over such banks in order to minimize the risk factor. Let me ■elaborate on this further. At the present time the Federal Deposit Insurance Corporation is given ■the power oi examination only with no power to correct dangerous existing situations. ■Practically, the Corporation’s agents have met with little opposition in endeavoring ■to overcome such conditions which greatly weaken a particular bank’s situation. The ■Corporation has enjoyed the wholehearted cooperation not only of bank directors but Hof state supervising authorities as well. However, in order for the Corporation’s ■insurance Fund to be well managed and in order for the remaining banks which are ■nembers of the Fund to enjoy that degree of security which they expect to gain ■through membership in the Fund, it will be necessary for the Corporation to be kiven greater supervisory power over the banks which constitute its risks. At the present time the Federal Dejoosit Insurance Corporation has no way lof controlling the chartering of new banks. Such new banks once chartered may [easily become memoers of the Insurance Fund whether or not they are sound economic 1 knits and whether or not they will be able to continue operations over a considerable period of time. This obviously is a faulty condition. - 16 - And again, the Federal Deposit Insurance Corporation is obliged to in lure a solvent reorganized bank -without having any voice as to the soundness of the Reorganization. New branches may be admitted to the Fund without even being exam- lined by the Federal Deposit Insurance Corporation. Spreading the risk in such ■fashion is a mistake and works hardship to the remaining members of the Insurance lund. In the interest of pi'otecting the Corporation’s future stockholders such ■natters as these should be changed. As the law now reads, the Corporation upon assuming control of an insol vent bank is obliged to organize a new national bank. Such new national bank is ■o be operated by the Corporation until such time as sufficient capital can be Raised locadly to sell the institution to such interests. ■two fallacies. Such a scheme embraces In the first place, a provision should be made in the law allowing ■he F. D. I. C. the right to sell the assets in an insolvent institution to another Neighboring institution in order that the credit of the Corporation may be released. Un the second place, where the insolvent institution is not warranted it should be wholly eliminated from the picture. There is no purpose in perpetuating those in stitutions which experience has shown are not warranted from the point of view of Jervice to the community. Recent experiences have shown the banking system of the United States to te greatly at fault. |tate Banks operate throughout the country under forty-nine differ- and nationad governments to exercise over the banks has been sadly lacking ■ n effectiveness* We have heard much in the past few days about the moral obliga tion of the government to depositors in banks which have failed because of the fact tiat the various governments assume supervisory power over the banking institutions ! V the country. If it is true that the government is to exercise such supervisory ■>wer, it is likewise true that the people are entitled to full protection for at 17 - ■east a minimum amount of their deposits. In my estimation, the government has a ■oral obligation to depositors in the hanks throughout the country, and for this Reason the establishment of the Federal Deposit Insurance Corporation is a con structive step toward the realization of this moral obligation. The Federal Deposit Insurance Corporation has played a singularly im— Rortant part in the present recovery of the banking condition. The operation of ! Lie Temporary Fund has fulfilled admirably an emergency function but, gentlemen, le know now that the stronger banks in the industrial centers are intimately con^ lerned with the troubles of other banks in rural communities. The recent depress ion has proved that no group of banks in any geographical locality is isolated from the banking situation in the country as a whole. For this reason it is important R h a t the protection to depositors which an Insurance Fund makes possible be conlucted on a national scale so that all may enjoy the same degree of protection. |lt the same time, conducting such insurance on a national scale offers a degree of iliversification which is mutually beneficial and which heretofore has never existed, the success of the Permanent Insurance Plan of the Federal Deposit Insurance Corporation must be assured. In conclusion* I would point out that the maximum benefits have not as yet been realised from the membership in the F. D. I. C. because the public has not been informed as to the extent of the operations of this Corporation. It is your job, gentlemen, to inform the people as to the benefits which they are at present deriving from the activities of this Corporation. We trust that just as soon as you realize the advantages to be gained from an increase of deposits you will undertake wholeheartedly to disseminate to the public the benefits which are being derived | from memberships of your institutions in the Temporary Fund of the Federal Deposit B n sur once Corporation,
@FedFRASER