Show A National Topics Interpreted by William Bruckart y- y Washington Word Word has hns reached treasury circles In Washington Indicating IndIcating indicating indi IndI- cating some fear tear Depo Depositors tors amon among residents Protected of ot the drouth area that the prolonged prolonged pro pro- prolonged longed dry period and Its Us attendant effect on conditions may cause some fr fresh freish h trouble among banks I Inquired Inquired In In- among officials of the Federal Fed Fed- Federal eral Deposit Insurance corporation concerning these conditions and I have hu assurances that there Is little If any danger of ot new banking Furthermore the officials reminded me that even cven If new troubles troubles troubles trou trou- bles should arise nearly all nIl of the depositors In the distress communities are prote protected ted under the bank deposit guarantee law In reporting these assurances I Ido Ido Ido do not mean to Imply that every bank In all parts of the country has insurance coverage for its depos depos- But the scope of the Insurance insurance ance corporation membership Is so 50 broad that It Is almost possible to describe It as ns complete coverage among the small banks The corporation corporation corporation cor cor- figures show that 97 per percent percent cent of ot all depositors whose Individual Indi vidual accounts are less than 2500 per person are protected by the In In- Something like 95 05 per percent percent percent cent of or all the banks in the countr country country coun coun- tr try are members of ot the Insurance pool The Thc significance of ot these figures cannot be minimized For 1001 example a n recent bank failure in Illinois was cared for by the tho Deposit Insurance corporation and it paid 99 DD per cent of the number of or depositors with a total of 1 a figure that was exactly half haIr of the total deposits In Inthe inthe the bank That is to say say that only 1 per cent of the number of or depositors deposItors depositors depos depos- in the bank had bad accounts In excess of or each the each the maximum Insured under the temporary fund fund fund- hut but the total of these larger accounts ac nc accounts ac- ac counts was equal to the total de deposits deposits de- de posits of or the other 99 DD per cent of the In Individuals having haYing accounts with will that Institution With respect to the fear that tha t has been Indicated in the drouth strick en communities It was explained that many Individuals thought there would be a repetition of or conditions several years ears ago aso when the small banks s were unable to realize on loans and time short credits extended extend extend- ed in the same areas The depression depression depression depres depres- sion made It impossible for man many borrowers to repay The officials told me however that the conditions conditions condi condl now are somewhat different They hey pointed out for example that many of the distressed farm mortgages mort mort- mortgages gages ages hitherto privately held are arc arenow arenow now In the hands of of the government government government govern govern- ment and that the home loan bank system has been doing the same sort of ot thing for owners of residences in towns and find cities eWes It Is true of course that many I of the banks have e extended credit crediton I on what normally would woul be sound bases and that the drouth and Its consequent destruction of or crops will cause some loans to be able nule at nt this time But nut the point Is that the strain Is not so great as It was earl early in the depression and em- em officials here generally believe that the banks will pull through with the theYer Yer very minimum of failures It Is a n curious coincidence however however however how how- ever that this new fear fem of banking bank bank- banking ing trouble In n the Nebraska d drouth r 0 U t h R areas rea s Experiment should arise wise at a ar r time when the state of ot Nebraska a Is Just closing out its Us year 25 5 ear experiment with the state bank banle deposit guarantee law The Nebraska experiment was b by no means successful its 11 life fa was very ery short Nevertheless It has taken that state almost twenty years to clean up the wreckage that resulted from an nn attempt to Insure all nil deposits within tho the limited jurisdiction jurisdiction jurisdiction juris juris- diction of one state It is to be recalled that during congressional debate on the federal law much argument was advanced ad i against enactment of the national Insurance law on the time basis of the failure of ot the numerous state at at- tempts The he answer apparently lies Iles in n the fact that conditions In one state may be bad from an economic eco ceo standpoint or they may be bad In several se states but It Is seldom seldom sel dom that the whole United States suffers conditions of ot a character that t results in widespread wreckage wreckage wreck wreck- age of ot banks Another strength which officials of the tho Federal Deposit Deposit Deposit De De- posit Insurance c corporation see in their own law Is s that no attempt Is made to guarantee all deposits As s Heretofore said safa the limit Is jO O for tor any Individual account While that limitation does docs not protect the holders of great amounts of or capital capital cap cap- ital Ita 1 it is sufficiently high accordIng accord lag Ing to the studies by the Insurance corporation to provide for immediate Immediate Immediate Imme Imme- diate repayment ment to at nt least 07 per percent percent percent cent of the Individual depositors In Inthis Inthis this country The fe federal eral corporation has more than at its command upon which It can draw immediately immediate Immediate- ly 11 for tor payment to depositors In Incase Incase incase case of or any my bank failure It Is ridiculous rill ridi culous to assume that thIs tills amount would be sufficient to meet nn nay any such debacle as occurred In 1932 1032 and earl early 1933 1031 yet et It ought to be sal said that a 8 great many of ot the banks u. u which closed their doors during those black days would not have ha been so affected had there been funds available to pay off orr depositors deposit deposit- ors In the banks that closed early In those desperate times There are arc many Washington ton observers observers ob oh- servers who still have ha their fingers crosse crossed as ns to success of or the depos J rt It Insurance plan They look upon upon It as placing a l premium on unsound unsound unsound un un- sound banking Ing I think no one ona can doubt the psychology of ot this guarantee guarantee guarantee guar guar- antee In cases where bank mana mans managers managers gers tiers really desire to be crooked They can feel obviously that their depositors will be protected for the most part and If they bleed their bank the wrath of the bulk buIlt of tI Uil citizens In a n community will he be dissIpated dissipated dissipated dis dis- obviously ob by prompt repayment repayment repay repay- ment of or their deposits from the federal corporation These observers observers ob ob- servers c contend further that the federal law has not had hud an opportunity opportunity opportunity for a n real test It Is their thought that a period of ot five years jears or more will be required to gain gainan aln an Idea of ot how the machinery Is going to function It Is to be noted that there has been no assessment levied on the banks which are members of the pool thus far beyond beyond be be- yond ond the original cash contribution for the membership purchase The test will come therefore when the fund has been exhausted exhaust exhaust- ed and the banks which h are members members members mem mem- bers of ot the pool must again dig up funds to replenish the larder Senator Gerald P. P Nye of North 4 Dakota a n Republican Independent Is on record with Nye Predicts the prediction New Part Party y that a n new now polity politIcal Ical leal party part Is bound to come and th that t he believes it Is 18 Isnow Isnow now gaining rapid headway The senator was not quite specific In his declaration however because he ho gave the Impression that he recognizes recognizes recognizes rec rec- man many of or the problems confronting confronting con con- frontin fronting organization of a third party lie has shied away from campaigning for Republican regulars regu u regulars regulars lars seeking senatorial seats this fall Call and to that extent has definitely definite definite- ly put himself In the position to be active In an any third party movement move mOYe- ment mente The thing which Senator Nye Nyc and other Independents on the Republican lican Bean side are dodging is President Roosevelt's direct action In drawing from liberal members of both Republican Re Re- publican and amI Democratic tion lion It Is regarded by br political students here as quite obvious ious that only n a few Cew of the Republican independents independents inde inde- ever eyer will will stay put In a apart party part organized as ns tile they believe Mr Roosevelt to be he organizing a new news part party It Is the old story of nen ne newt nef f party ambitions existing In too many spots They exist Republicans Republicans Re He- publicans now in the North and the Northwest and in some sections of ot the time Middle West and they exist among the radical wing of or die Democratic Democratic Dem Dem- party in some somo sections of f- f the South and In most parts of or the Middle West But as far as Washington Washington Wash Wash- ington Information goes there are few points upon which these vari varl- various ous groups are yet able to agree asree Old line Republicans and the conservative conservative con win wing of the Democratic party are pa paying ng little attention however howe to the tho threats of party defection S t e Many efficiency experts are appearing ap ap- ap In the New Deal governmental governmental govern govern- mental agencies and the time heads of clerks are b beginning be- be Lose Lese Jobs afre ginning to fall The process of separating workers from the time fed federal ern 1 payroll always Is Isa Isa Isn a n proposition and so the efficiency ef ef- efficiency experts are moving er very slowly But nut authentic reports IndIcate Indicate indicate In In- there will be a sharp reduction reduction reduction tion in the government payroll shortly after election It seems possible that a few will join the ranks s of the unemployed even before before be be- fore ore election but the number Is likely to be Inconsequential according according accord accord- ing to the Information I have ob oh- tamed The appearance of ot the e efficiency boys however has started many Washington correspondents on the trail of ot something deeper While none of them as far as us I know have been able to learn definite and Irrefutable Information as to plans there is no doubt In their minds that the payroll reduction presages som something In time the way of tax legislation legislation leg leg- In the next congress How IIo far Car It will go o or what new taxation taxation taxa taxa- tion methods may mav result result- It Is s of course too carl early to tell One of or the time best proofs of ot this Is the time recent statement b by Senator Carter Glass the Virginia D m illo- illo w. w 0 crat who so lon long has hns been an nn o j standing figure In the time senate on financial questions Senator Glass said In a n speech and said It t with emphasis that there Is a pay day a coming He lIe amplified his rem remark rl only to the tile extent of ot saying that the tremendous rate of spending eventually has to be checked cd and that if It the time credit of ot the re federal government go Is to be maintained provision pro for retirement of the great groat public debt now debt now In excess of must must be bt made very er soon C. 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