Show 0 I 1 I 1 national topics interpreted by william bruckart washington word has reached treasury circles in washington indicating some tear fear depositors among residents of protected th the drouth area that the prolonged dry period and its attendant effect on conditions nay may muse cause some fresh freeh trouble among banks I 1 inquired among officials of the federal deposit insurance corporation concerning those condl conditions and I 1 have assurances that there Is little it if any danger of new banking difficulties furthermore the officials reminded mp me that even it if new troubles should arise nearly all of the depositors in the distress communities are protected under the bank deposit guarantee law in reporting these assurances I 1 do riot not mean to imply that every bank in all parts of the co country antry has insurance I 1 coverage for its depositors put but the scope of the insurance corporation membership Is so broad that it Is almost possible to describe it as complete coverage among the small banks banka the corporation figures show that I 1 07 97 per cent of all depositors whose individual accounts are less than 2500 per person are protected by the insurance something like 93 95 per cent of all of the banks in the country are members of the insurance pool I 1 the significance of these figures ca cannot ni be minimized for example a recent bank failure in illinois was cared for by the deposit insurance corporation and it paid 09 99 per cent of the number of depositors with a total of a figure that was exactly halt half of the total deposits in the blink bank that Is to say that only 1 per cent of the number of depositors in the bank had bad accounts in excess of each the maximum insured under the temporary fund but the total of these larger accounts was equal eidal to the total deposits of the other pa 9 per cent of the individuals divi duals having accounts with that institution with respect to the fear that has been indicated in the drouth stricken communities it was explained that many individuals thought there would be a repetition of conditions several years ago when the small banks were unable to realize on loans and short time credits extended in the same areas the depression made it impossible for many borro borrowers aers to repay the officials told me however tint thit the conditions now are somewhat different they pointed out for example that many of the distressed farm mortgages hitherto privately held are now in the hands of the government and that the home loan bank system has hag been doing the same sort of thing thin for owners of residences in towns and cities this naturally has alleviated some of the stress on the local banks it Is true of course that many of the banks have extended credit on what normally would be sound bases and that the drouth and its consequent destruction of crops will cause come loans to be at this time but the point Is that ty strain Is not so great as it was early in the depression and officials here generally believe that the banks will pull through with the very minimum of failures it Is a curious coincidence however that this new fear of banking trouble in the drouth areas nebraska should arise at a experiment time when hen the state of nebraska Is just closing out its 25 23 year experiment with a state bank deposit guarantee law the nebraska experiment was by no means successful its life was very short nevertheless it has taken that state almost twenty years to clean up the wreckage that resulted fro from in an attempt to insure all deposits within the limited jurisdiction of a one ne state it Is to be recalled that d during congressional 9 re ional debate on the federal law much argument was advanced against enactment of the national insurance law on the basis of the failure of the numerous state attempts the answer apparently lies iles in the fact that conditions in one state may be bad from an economic standpoint or they may be bad in several states but it Is seldom that the whole united states suffers conditions of a character that result in widespread wreckage of banks another strength which officials of the federal deposit insurance corporation see in their own law Is that no attempt Is made to guarantee all deposits As heretofore said the limit Is for any individual account while that limitation does docs not protect the holders of great amounts of capital it Is sufficiently high according to the studies by the insurance corpora tion to provide for immediate repayment to at least 87 97 per cent of the individual depositors in this country the federal corporation has more than at its command upon which it can draw immediately for payment to depositors in case of any bank failure it Is ridiculous to assume that this amount would be sufficient chent to meet any such debacle as occurred in 1032 1912 and early 1933 yet it ought to be said that a great many of the banks which velch closed their doors during those black days would riot not I 1 have ave bands been so affected had there been funds available to pay off depositors in the banks that clos closed c d early in those d desperate es times there are many washington observers who call artl have their fingers the deposit de of crossed as to success upon it as insurance plan they look bank premium on unsound placing a tile e doubt doub las ing I 1 think no DO one can taj psychology or of this guarantee ea 1001 in cases desire to where bank managers really obviously be crooked they can feel that their depositors will lie be protect pro act ed for the most part a nd if they bleed their bank the arat wrath h of the bulk of the citizens in a community will be dissipated obviously by prompt repayment of their deposits from the federal corporation these observers contend further that th the e federal law ha hat not had an opportunity tur lity for a real beai test it Is their thought that a period of five are years or more will be required to rain gain an idea 0 of how the machinery is going coins to function it Is to be noted that there has been no assessment levied on the banks which are members of the pool thus tar far beyond the original ca cash sh contribution for the membership purchase th e test will come therefore when the fund has been exhausted and the banks which are arc members member s of the pool must again dig up funds to replenish the larder a a senator gerald P nye of north dakota a republican independent is ls on record with the tha nye predicts prediction t that h at a new party new ew political cal party araj is bound to come and that he believes it I 1 Is s now gaining rapid headway the senator was not quite specific in his declaration however because lie he gave the impression that he recognizes many of the problems confronting organization of a third party ile he has shied away from campaigning for republican regulars seeking senatorial seats this tall fall and to that extent has definitely put himself in the position to be active in any third party movement the thing which senator nye and other independents on the republican side are dodging Is president roose belts direct action in drawing from liberal members of both republican and democratic affiliation it is regarded by political students here as quite obvious that only a few of the republican independents ever will stay put in a party organized as they believe sir roosevelt to be organizing a sew new party it Is the old story of new party ambitions existing in too many spots they exist among republicans public ans now in the north and the northwest and in some gome sections of the middle west and they exist among the radical wing of the democratic party in some sections of the south and in most parts of the middle west but as far as washington information goes there are few points upon which these various groups are yet able to agree old line republicans and the conservative serva tive wing of tile the democratic party are paying little attention however to the threats of party defection those with whom nhom I 1 have talked apparently rely on history as the basl basis for the conclusion that the current political uprising will die donn don in due time many eff efficiency iclene eer experts ts are appearing in the new deal governmental agencies a n nd d the r j iff i clerks federal her Rs heads of clerks are lose jobs beginning to fall the process of separating workers from the federal payroll always Is a difficult proposition and so the efficiency experts are moving very slowly cut but authentic authment ic reports indicate there will be a sharp reduction in the government payroll shortly after election it seems pa possible that a few will join the ranks of the unemployed even before election but the number Is likely to be inconsequential according to the information tion I 1 have obtained the appearance of the efficiency boys however has started man ganv washington correspondents on the trail of something deeper while none of them hem as far as I 1 know I 1 have been able to learn definite and irrefutable information as to plans there Is no doubt in their minds that the payroll reduction presages something in the way of tax legislation in the next neit congress how far it will go or what new taxation methods way may result it Is 1 of course too early to tell one of the best proofs of this Is the recent statement by senator carter glass class the virginia democrat who so long has been an outstanding figure in the like senate on financial questions senator glass said in a speech and said it with emphasis that there Is a pay day com coming 11 ng 11 ile he his remark only to the extent of saying baying that the tremendous rate of spen spending ding eventually has to be checked and tha that if t the credit of the federal government govern Is to be maintained men provision for re ti rement of the great public debt now in excess of be made very soon muil lt it Is this that tha t I 1 is S causing question alarm salon amongst of S so many business interests and sentor senator glas class called attention to that unless gross gress resorts to a sales tax con of it a eral character it gen Is obvious thattus that busl bus ness must t carry the brunt of the burden the tax ta sentiment of the last la congress and several prior to that 1 has been one directly opposed to the tax tax T legislation appears ceman sales to be a bone of 01 hot certain enss next congress contention in the d fc N alo r L alo |