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YOUR MONEY'S WORTH BY SYLVIA PORTER Tribute to the FDIC When the Home National eral Deposit Insurance Corp. is Bank in the thriving community an independent agency of the of Ellenville, N. Y., was shut Government which was created down early this month after the by Congress in 1933 and which discovery of shortages totaling has headquarters in Washington D.C. $1.3 million, there was no hysFunctions Outlined teria, no semblance of panic, no run on neighboring banks. What does it do? The major On the contrary, the primary thing the FDIC does is insure response of Ellenville's citizens deposits in about 13,000 comwas one of astonishment that mercial banks and savings banks the bank's respected president, throughout the Nation up to a William R. Rose, could be remaximum of $10,000 for each desponsible for so awful a thing. positor. (Another independent Ellenville's citizens have been Federal agency, the Federal Savings & Loan Insurance Corp.inconvenienced. but they have not been wiped out. And since FSLIC-insures funds in savings and loan associations.) If you then they have banded together, have several accounts in differraised enough capital to start a ent institutions, each will be innew bank and today, when the new Ellenville National Bank is sured up to $10,000. scheduled to open, it will take Where does the FDIC get its over all the deposits of the closed funds? It gets its money by asinstitution and not a penny will sessing member banks at the be lost by any depositor or any rate of ½ of 1 per cent of the stockholder. insured bank's deposits. ConIt's a little financial tale singress sets the rate. At present gularly appropriate for the the FDIC returns about 60 per cent of the assessment to the Christmas season, for instead of banks. Its surplus now stands a heartening example of a quick at a fat $1.7 billion. recovery from trouble this could have been a grim tragedy. What happens when a bank closes? Either the FDIC pays Early '30s Recalled off on deposits to the insured I know-for I remember how maximum and does it fairly it was in the early '30s when quickly. Or it acts to merge the banks were collapsing on every closed bank with another healthy side. one, using its surplus to take over And that leads me to the point sour assets. Or, as in the case of today's column-a tribute to of Ellenville, it takes over the the FDIC, the Federal Deposit bad assets of a closed bank and Insurance Corp. which insured helps the citizens set up a new each depositor in the Ellenville bank. bank up to $10,000. How has the FDIC made out? Just the knowledge that the Since it was formed, it has paid deposits in the tottering bank out over $300 million to deposiwere insured to this level averted tors in about 429 banks. It has panic in the town. recovered a lot on sour assets Just the fact that FDIC exists taken over and has suffered only is a virtual guarantee that there a trifling loss. never will be another wave of bank failures in America. There's a lot of misunderCHICAGOLIVESTOCK standing about what the FDIC actually is, how it insures deposCHICAGO, Dec. 22 ®.-Butcher hogs its, etc. The Ellenville tale is a closed the week strong to 50 cents higher and SOWS steady to 50 cents perfect peg upon which to hang higher at the Union stock yards. Top .... this reminder. So here goes on Friday was $18.15. highest since June 7. A year ago at this time the What is the FDIC? The Fedtop was $12.50. Steers and beifere aloced the meek