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AMENDMENTS TO FEDERAL DEPOSIT INSURANCE ACT, 1950

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BEFORE THE

HEARINGS
U.S. ceva, uvre. House
COMMITTEE ON BANKING AND CURRENCY

HOUSE OF REPRESENTATIVES

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Printed for the use of the Committee on Banking and Currency

so-60-776

UNITED STATES

GOVERNMENT PRINTING OFFICE

68689

WASHINGTON : 1950

COMMITTEE ON BANKING AND CURRENCY

BRENT SPENCE, Kentucky, Chairman PAUL BROWN, Georgia

JESSE P. WOLCOTT, Michigan WRIGHT PATMAN, Texas

RALPH A. GAMBLE, New York A. S. MIKE MONRONEY, Oklahoma

FREDERICK C. SMITH, Ohio BROOKS HAYS, Arkansas

JOHN C. KUNKEL, Pennsylvania ALBERT RAINS, Alabama

HENRY 0. TALLE, Iowa FRANK BUCHANAN, Pennsylvania

ROLLA C. MCMILLEN, Illinois ABRAHAM J. MULTER, New York

CLARENCE E. KILBURN, New York CHARLES B. DEANE, North Carolina ALBERT M. COLE, Kansas GEORGE D. O'BRIEN, Michigan

MERLIN HULL, Wisconsin CHASE GOING WOODHOUSE, Connecticut HARDIE SCOTT, Pennsylvania CLINTON D. MCKINNON, California

DONALD W. NICHOLSON, Massachusetts
HUGH J. ADDONIZIO, New Jersey
ISIDORE DOLLINGER, New York
BARRATT O'HARA, Illinois
RICHARD BOLLING, Missouri

WILLIAM J. HALLAHAN, Clerk
ORMAN S. FINK, Professional Staff

JOHN E. BARRIERE, Professional Staff
II

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CONTENTS

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S. 2822. An act to amend the Federal Deposit Insurance Act--

Statement of -

Abbitt, Hon. W. M., a Member of Congress from the State of Virginia-

Amberg, Harold V., vice president and general counsel, First National

Bank of Chicago, representing the Association of Reserve City

Bankers

Arthur, Harry M., representing the American Bankers Association,

and president, the Arthur State Bank, Union, S. C.-
Bentsen, Hon. Lloyd M., Jr., a Member of Congress from the State of

Texas
Birdzell, L. E., former general counsel, Federal Deposit Insurance

Corporation, San Francisco, Calif.
Bliss, George L., chairman, legislative committee, United States Sav-

ings and Loan League, Mount Vernon, N. Y..

Brumbaugh, D. Emmert, chairman, legislative committee, National

Association of Supervisors of State Banks -

Cook, H. Earl, Director, Federal Deposit Insurance Corporation -

Cocke, C. Francis, chairman, committee on Federal legislation, Ameri-

can Bankers Association, and president, First National Exchange

Bank of Roanoke, Roanoke, Va.

Crook, Hon. Thurman C., a Member of Congress from the State of

Indiana

DuBois, Ben, secretary, Independent Bankers Association -

Gormley, R. E., chairman, legislative committee, the Georgia Bankers

Association, and vice president, the Georgia Savings Bank & Trust

Co., Atlanta, Ga.

Goss, A. S., master, the National Grange-
Harl, Maple T., Chairman, Federal Deposit Insurance Corporation.-
Kreutz, Oscar R., executive manager, National Savings and Loan

League
Miller, Russell, counsel, Federal Deposit Insurance Corporation-
Montgomery, Donald, representing the Congress of Industrial Organi-

zations.

Oliver, Fred N., general counsel, the National Association of Mutual

Savings Banks, New York, N. Y..

Reichert, R. E., representing the American Bankers Association, and

president, Ann Arbor Bank, Ann Arbor, Mich-
Stout, Richard H., executive vice president, Bank of Louisville,

Louisville, Ky., and chairman, legislative committee, Consumer

Bankers Association.

Wiggins, A. Lee M., chairman of the board, Bank of Hartsville,

Hartsville, S. C.

Miscellaneous information submitted for the record by-
Abbitt, Hon. W. M.:

Petersburg Savings & American Trust Co., Petersburg, Va.,

letter of June 21, 1950, to.---

Federal Deposit Insurance Corporation:

Applications for deposit insurance

Comparison of interest paid on time and demand deposits, service

charges on deposit accounts, and FDIC assessments, 1927–49,

Federal Reserve members and all insured banks..

Time and demand deposits, Federal Reserve members and all

insured banks, 1927–49.

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146
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AMENDMENTS TO FEDERAL DEPOSIT INSURANCE ACT,

1950

TUESDAY, JUNE 20, 1950

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D.C. The committee met at 10 a. m., Hon. Brent Spence (chairman) presiding.

The CHAIRMAN. The committee will be in order. We have met to consider S. 2822, to amend the Federal Deposit Insurance Act.

[S. 2822, 81st Cong., 2d sess.) AN ACT TO amend the Federal Deposit Insurance Act (U. S. C., title 12, sec. 264) Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 12B of the Federal Reserve Act, as amended, is hereby withdrawn as a part of that Act and is made a separate Act to be known as the “Federal Deposit Insurance Act”.

SEC. 2. The Federal Deposit Insurance Act is amended to read as follows:

"SEC. 1. There is hereby created a Federal Deposit Insurance Corporation (hereinafter referred to as the 'Corporation') which shall insure, as hereinafter provided, the deposits of all banks which are entitled to the benefits of insurance under this Act, and which shall have the powers hereinafter granted.

"SEC. 2. The management of the Corporation shall be vested in a Board of Directors consisting of three members, one of whom shall be the Comptroller of the Currency, and two of whom shall be citizens of the United States to be appointed by the President, by and with the advice and consent of the Senate. One of the appointive members shall be the Chairman of the Board of Directors of the Corporation and not more than two of the members of such Board of Directors shall be members of the same political party. Each such appointive member shall hold office for a term of six years. In the event of a vacancy in the office of the Comptroller of the Currency, and pending the appointment of his successor, or during the absence of the Comptroller from Washington, the Acting Comptroller of the Currency shall be a member of the Board of Directors in the place and stead of the Comptroller. In the event of a vacancy in the office of the Chairman of the Board of Directors, and pending the appointment of his successor, the Comptroller of the Currency shall act as Chairman. The members of the Board of Directors shall be ineligible during the time they are in office and for two years thereafter to hold any office, position, or employment in any insured bank, except that this restriction shall not apply to any member who has served the full term for which he was appointed. No member of the Board of Directors shall be an officer or director of any insured bank or Federal Reserve bank or hold stock in any insured bank; and before entering upon his duties as a member of the Board of Directors he shall certify under oath that he has complied with this requirement and such certification shall be filed with the secretary of the Board of Directors.

SEC. 3. As used in this Act“(a) The term “State bank' means any bank, banking association, trust company, savings bank, or other banking institution which is engaged in the business of receiving deposits, other than trust funds as herein defined, and which is incorporated under the laws of any State, any Territory of the United States, Puerto Rico, or the Virgin Islands, or which is operating under the Code of Law

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