Word: deposited
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Dates: during 1930-1939
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...money to pay depositors in insured banks will come from a Federal Deposit Insurance Corp. which is to start with about $500,000,000 acquired by the sale of stock...
...Deposit Insurance Corp. may also issue bonds, notes, etc. up to three times the amount of its capital against the assets of closed banks which it takes over for liquidation...
Senator Glass publicly admitted that this last provision was the only good thing he could see in deposit guarantee. He and many another expect that 1) once deposit guarantee is in effect, the public will withdraw its money from "uninsured"' banks, so 2) all banks will be forced to come in. therefore 3) by July 1936 all U. S. banks will belong to the Federal Reserve System...
...biggest objection to deposit guarantee is that it drains the strength of sound banks to save the depositors of banks already weak. Wherever it has been tried* it has been a disastrous failure. Hence few bankers are in favor of it. Last week the president of the American Bankers Association urged his members to ask President Roosevelt to veto the bill as "unsound, unscientific, unjust and dangerous...
Three days later the President signed the bill and many a good banker began to worry about the prospect of having his profits taken to pay the losses of bad bankers. Econostat, statistical weekly, calculated that if the deposit guarantee scheme had been in force from 1928 to 1932, 62% of the net profits of solvent banks would have been taken to pay the losses of closed banks. The banks of New England and the Middle Atlantic States having 61.5% of U. S. deposits would have had to pay 61.5% of all losses although only 19% of the bank failures...