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What Chance Has of Defunct Depositor Dixon Assuming that Smith, but convenient symbolic creatfound himself possessed of hundred dollars for which he had immediate demand, and in of his independence, posited the in bank, what chance would he of finding the bank there back money found the bank collapse, chance would have getting back hundred dollars, or any part of Assuming that John Smith's huncame upon him time October, 1920 and end of the calendar 1926, John Smith have out of of finding the bank and his money where left them, and his hapin one the starred woull get fraction than ten cents out every dollar his hoard deposited the bank when found of money for which he had no immediate To get at the problem in detail, and going little further with sumptions, agree that John Smith, being of cautious nature, had posited dollar of 100 different banks, would, upon turning money, found that of the banks had disappeared, and that, in the aggregate, would get cents from each the thirteen banks in which deposited dollar. From the banks he would have gotten back all of his dollar, together with little inter est. From others would have nothing at all, even though years, nor could have found anybody authority who could tell him what had become money, whether there any prospect his getting On general average the period, would in the 100 banks, salvage would have got cents the dollar. Thirteen chances out dred finding doing returned, chances hundred getting his money back even the bring John Smith contact with finanfractions that are too deep for mythical figures, but the Smith has had deal with for the past seven years substifor the family sock as for his money. banks out every hun North have failed. during the past seven years. Going further with the Smith, if he had set out bank seven years ago he would have found banks State charter. should go out search for this would find only 381 such institutions doing State charter. In years 149 banks have gone out business, surrendering their chareither through banksuptcy or through voluntary liquidation. Seventy two have bankrupt. these total of $2,014,982 capital stock, or an average of $27,985 capital per stock. Deposits in these 72 banks totaled Assets these banks aggregate $16,589,679.64. Receivers have paid back to positors The loss is 90 cent. The answer leads from the field fact into the field of opinion. Statistics hold only half the answer. Read down the columns figures that the listed capital, the listed deposits, the listed assets until you have come to the column that gives the results of receivership, and you come the notareport," and just frequently the more statement of which means that depositors have not yet been paid penny of the money they trusted to the banker. Any answer to the question must into the entire history banking, has been written records of the State Banking Department, and the the State's experience for the past quarter of century. The goes back further than 1903, bare quarter of century ago, when the State of for the banking industry of which washed its hands nearly three quarters before. Going back to 1903, when the first entry failure was made, the Bank of New Bern closed its doors. receiver named by the superior court judge of the district and its affairs closed. How they were settled the records Banking Department the State Corporation which given supervision of the bankbusiness. Presumably settlement made, but there record of was the only failure recorded that year. Four banks went the the following year, and in 1905 Fay etteville supplied the only entry the record when the Bank of Fay efteville went to pieces. During the years between 1903 1915 happened total bank failures. And then followed golden banking and for five years bank the State closed its The exact dates may be interest. Between July, 1915, and October, 1920, there was not single failure recorded. And then the deluge. The Bank Union Mills, Ruthercollapsed. capital stock $6,000, deposits of and assets The judge superior court, whose name among the available the Harris, receiver. That October eleven days after, the receiver according to the reports the Commission, collected and paid the depositors 50 cent of their per deposits. Within two weeks three other banks had gone under and named by the courts. One them has paid off 100 per cent deposits, the second has got gether half the money deposit and paid out. From the third report has ever been filed by the receiver, though the letters in the files the that effort has been put forth find out what he has been doing. The the bank were -nearly $600,000. While these banks were in the throes dissolution, hundred others the state were writhing in mortal agony. Deflation had caught them. The story of 1920 still vivid enough in public ory to need no re-hashing here. five fat years preceding 1920, when there had been no failures of any sort, when anybody with shoestring could get any sort of business stay in, were levying their toll. Not only banks but sorts enterprises were seeking storm cellars. Within next six actually little more than banks collapsed with loss to positors stockholders of approximately $15,000,000. With the lapse of banks came the collapse which leaned too heavily upon them, They were bitter years for people the state. Judges tinued name the receivers began and continued collect their cent for ceipts and five cent for bursements. Nor was North Carolina alone in its dilemma. failures insignificance comparison with the 279 failures in North kota, the in Iowa 155 Georgia in South Carolina. failures occurred even Maine Vermont, where such rarity cause vast sensation. Everybody had them except New Jersey and Delaware, which states have had them. Bank failures became an most Most people look upon bank failfrailty being what is. Experts attribute failure two and with inefficiency about 85 per cent, judg. from the prison records North Carolina. Either fatal sound banking, but more banks are wrecked. the experts, by by outright Chief Bank Mit chell thinks that the fault bankNorth Carolina between 1920 1926 was defective navigation. During the fat years almost anybody who could get together $5,000 could and did start bank. During the lean years that followed most the inffectives and rogues the wall, which is to the and other perts. Even bank experts regard certain amount of failure evitable, particularly under system that allowed almost anybody to get the business stay sheriff did not interlong fere with or the examiners close his doors. North Carolina had too many banks, Mr. Mitchell says, entirely too But even will not many. the length of saying that bankruptey the most salutary way getting rid them. The exthink one bank for 12,000 peoperts enough, among reserves wealth. North Carolina had one bank for each 4,000 which was about three times too many banks. ting rid of them has been blessing of magnitude, though the means unfortunate. Human nature as related banking being what there nothing be done about Examiners could and look the books, but finding mighty hard task banker upon hiding More often than not banks allowed to keep open in the hope that they would work themselves out their difficulties without the necessity of ceivership. The Commission erred admittedly the side of faith, hope and charity that had the interests of the heart. When bank did fail, the next step was up the about all that was left done, and the machinery for housecleaning was woefully any will admit upon examination