tion. Losses to the Corporation in the receivership cases are expected to amount to $14,401,000 or 16.5 percent of disbursements. Those to depositors will average only 2 percent of their deposits. Further details regarding the paid and unpaid deposits are given in Table 4. Table 4. PAYMENT OF DEPOSITS BY THE CORPORATION AND BY RECEIVERS IN INSURED BANKS PLACED IN RECEIVERSHIP, 1934-1950 1 Less than $500. Includes in a few cases payments by receivers, either directly or into a trust, to meet claims presented after termination of receivership. The Corporation acts as receiver for all insured national banks placed in receivership, and for closed insured State banks when so appointed by State authorities. The Corporation has been able to terminate the receiverships in the cases in which it was receiver, except for one national bank where legal difficulties prevented prompt liquidation. This bank had deposits of about $1 million. It is estimated that no loss will be suffered by depositors or by the Corporation in this case. In the four remaining State receiverships, the Corporation was not appointed receiver. However, through cooperation with the State banking authorities, periodic reports by the receivers or liquidators are received by the Corporation. These banks had deposits aggregating $23 million at the time of failure. It is now estimated that in three of these banks neither the depositors nor the Corporation will have any loss. In the fourth, losses will amount to nearly $1 million for depositors and over $4 million to the Corporation. The Corporation anticipates that the process of liquidation of all five of these banks will be completed during the forthcoming year. Ten receiverships were terminated during 1950. Total deposits in these banks were $17,574,000. The Corporation disbursed $14,480,000 to insured depositors on which it recovered all but $269,000. The de positors with accounts in excess of $5,000 lost only $24,000. The Cor poration also incurred $94,000 in nonrecoverable expenses in paying of insured depositors. Absorptions. The Corporation's disbursements in the form of loans to banks in difficulty or purchases of assets from such banks amounted to $186,159,000. Liquidation of the assets acquired by the Corporation has been completed in 155 of the 170 absorbed banks. At the end of 1950 liquidation was in progress in the remaining 15 cases. Assets acquired by the Corporation in the absorption cases are liquidated in such manner and during such period as may be necessary to provide the largest recovery. In cases where the Corporation recovers more than the full amount of its investment plus advances, expenses, and an allowable return on its investment, the excess is delivered to the banks' stockholders. Recoveries and losses to the Corporation. By December 31, 1950, the Corporation had recovered nearly $291 million of its $319 million total disbursements in receiverships and absorptions. The Corporation expects to recover an additional $2 million from liquidations not yet terminated. Table 5 summarizes the Corporation's disbursements and its recoveries and losses in the two groups of cases. Table 5. DISBURSEMENTS TO PROTECT DEPOSITORS, RECOVERIES, AND 1 Includes only principal disbursements; i.e., excludes expenses incident to the transaction, the greater part of which has been recovered. See note 2 to Table 3. Insured deposits which have not been paid. See note 2 to Table 3. Losses on principal disbursements: see note 3 to Table 2. Losses in terminated cases are the estab lished losses; those in active cases are estimated. Detailed data: See Table 128, p. 282. The Corporation's recoveries include $244 million recovery on $273 million principal disbursements and full recovery of expenses incident to the transactions. The expenses which were recovered include advances for the protection and maintenance of collateral, expenses of liquidation of assets acquired in absorption cases, and the cost of assets purchased from receivers of closed banks or liquidating officers in absorption cases. The Corporation's losses in the 415 insured banks placed in receivership or absorbed with its financial aid are estimated at $27 million. Depositors' losses in the receivership cases are estimated at $2 million. In addition, losses of the Reconstruction Finance Corporation on preferred stock investments in these banks are estimated at $41 million. That Corporation had invested approximately $43 million in those banks, of which it will recover only $2 million. The total losses to depositors, to the Federal Deposit Insurance Corporation, and to the Reconstruction Finance Corporation is therefore approximately $70 million, or 13 percent of the total deposits of the 415 banks. In 1950 the total estimated losses to the Corporation increased because of the disbursements to four additional banks during the year. Estimates of losses are necessarily subject to substantial revision, as it is impossible to determine accurately the value of many of the assets acquired until after careful and detailed analysis has been made or, in some cases, until actual disposal. Table 6 gives the figures of total losses to the Corporation as estimated at the end of each of the past seven years. Comparable data for prior years are not available. Table 6. ESTIMATED LOSSES TO THE CORPORATION COMPARED WITH DISBURSEMENTS, BY YEAR OF ESTIMATE, 1944-1950 Bank examinations. The policy of the Corporation from its establishment has been to examine at least once annually each insured State bank which is not a member of the Federal Reserve System. The infor mation of the Corporation relating to national banks is derived chiefly from a review of reports of examination furnished by the Office of the Comptroller of the Currency; and information relating to State banks members of the Federal Reserve System from a review of reports of examination furnished by the Board of Governors of that System. In a few cases the Corporation has made special examinations of national banks or State banks members of the Federal Reserve System. These have been made in connection with proceedings to terminate the insured status of banks engaged in unsafe or unsound practices, or purchase of assets and the making of loans to distressed banks, or applications for continuance of insurance of banks contemplating withdrawal from the Federal Reserve System or conversion from a national to a State bank. The Corporation, since its beginning, has conducted approximately 113,000 bank examinations, of which about 200 have been of institutions regularly examined by another Federal agency. During 1950 the Corporation conducted 6,526 regular examinations. In addition, it made approximately 820 other examinations and investigations. The latter figure includes 127 repeat examinations, 55 entrance examinations of operating banks, 132 new bank investigations, 106 branch investigations, and about 400 miscellaneous investigations. The above figures do not include the regular examinations of 1,186 branches and 775 trust departments. In addition to reviewing and analyzing these reports, the Corporation reviewed and analyzed 2,085 reports of examination performed by the Federal Reserve banks and 5,745 reports of examination performed by the Office of the Comptroller of the Currency. During the year the Corporation approved the retirement of preferred capital amounting to $6,300,000, at retirable value, in 167 insured banks not members of the Federal Reserve System. About two-thirds of this was held by the Reconstruction Finance Corporation and the remainder by private investors. Much of this amount was replaced by cash subscriptions to new issues of common stock. In conjunction with its examining activities, the Corporation was instrumental in effecting capital increases in other instances, either through cash subscriptions or stock dividends. Altogether, cash increases totaled $5,100,000 in common and preferred stock, and $3,700,000 in other capital segregations. In addition, common capital accounts in these banks were increased by approximately $14,800,000 through the medium of dividends payable in common stock. Since the inauguration of deposit insurance in 1934, officials of the Corporation have repeatedly called attention to the need for adequate capital in insured banks. The Corporation has urged banks to retire as rapidly as possible, without impairing the adequacy of their capital, the 1 preferred stock which was issued to the Reconstruction Finance Corporation during the depression years of the early 1930's and to build up their capital through retention of earnings or through the sale of additional stock to private investors. The Reconstruction Finance Corporation originally invested more than $1 billion in the capital of about 6,000 banks. By the end of 1950 this had been reduced to $98 million in 423 banks. The Corporation continues to recommend that insured banks carry fidelity bond coverage equal to or above the amounts suggested by the Insurance and Protective Committee of the American Bankers Association. In June of 1950 the Insurance and Protective Committee revised upwards its schedule of recommended blanket bond fidelity coverage. Since the change was effected during the calendar year, tabulations of the number of insured banks which meet the suggested coverage are not comparable with those for previous years. There is evidence, however, that the banks should and are continuing to increase their coverage in compliance with the recommendations of supervisory authorities and the American Bankers Association. In 1950 the Division of Examination was successful in maintaining its field examining force at a point closely approximating its authorized numerical strength. During March and April 1950 the United States Civil Service Commission held examinations for appointment to the position of Bank Examiner. These examinations resulted in the reestablishment of registers of eligibles in the 11 districts of the Corporation in which the registers had been exhausted. They led also to conversion to permanent status for non-status incumbent examiners, and provided a pool of eligibles from which future vacancies in the examining force may be filled. At the same time the examining staff was brought up to practically full strength through the appointment of successful candidates. Educational program for examiners. The Corporation is continuing its education program for examiners. This program, which was started in 1946, consists primarily of correspondence work in courses of study given by the American Institute of Banking, but also includes evening residence courses offered by colleges or universities and local chapters of the institute as well as special graduate courses at two selected universities. Total enrollment in all educational projects numbered 285 at year-end. The more advanced courses of study are made available to a limited number of examiners each year through enrollment in the American Bankers' Association Graduate Schools of Banking held at Rutgers University and the School of Banking at the University of Wisconsin. These graduate sessions are held for a two-week period each summer and consist of an intensified educational training program sponsored |