The Federal Deposit Insurance Act was amended by Public Law 533, 82nd Congress, approved July 14, 1952, to require the insurance of deposits payable at Puerto Rico branches of insured mainland banks. Prior to this change an insured bank having its principal place of business in any of the States or in the District of Columbia which maintained a branch in Puerto Rico could elect to exclude from insurance its deposit obligations payable only at such branch.1 The National Bank Conversion Act was modified by Public Law 515, 82nd Congress, approved July 12, 1952, so as to eliminate features which made it difficult in some States for conversion from national into State banks. Congress enacted a National Bank Merger Act, Public Law 530, 82nd Congress, approved July 14, 1952, which permits the merger of national banks, or of State banks with national banks under the charter of the latter, without a right of dissenting shareholders of the absorbing bank to demand cash payment for their shares. Dissenting shareholders of the absorbed bank would be entitled to demand cash payment for their shares. Changes were made in the capital requirements for membership of a State bank in the Federal Reserve System and for establishment of branches by State member banks and national banks by Public Law 543, 82nd Congress, approved July 15, 1952. This law also requires the consent of the Board of Governors of the Federal Reserve System to the reduction of capital stock of a State member bank and to the establishment of in-town branches of State member banks. Rules and regulations. Section 329.3(c) of the rules and regulations of the Corporation was amended, effective July 1, 1952, to increase the grace periods in computing interest on savings deposits. The text of the amendment is given on page 79. State legislation. A summary of State banking legislation enacted during 1952 is given in Part Four of this report, pages 79-80. PERSONNEL Directors and employees. Throughout 1952 the Board of Directors of the Corporation consisted of Mr. Maple T. Harl, Chairman; Mr. H. E. Cook, Director; and Mr. Preston Delano, Comptroller of the Currency, Director ex officio of the Federal Deposit Insurance Corporation. Early in 1953 Mr. Delano offered his resignation as Comptroller of the Currency, effective February 15. In accordance with the provisions of the Federal Deposit Insurance Act the Acting Comptroller of the Currency, 1 Such exclusion continues to be permitted, under the Federal Deposit Insurance Act, in the case of branches in the Virgin Islands or in a Territory of the United States. Obligations payable only at an office in a foreign country, or in a possession of the United States not regarded as a Territory, are excluded from insurance. Mr L. A. Jennings, served as a Der of the Depuratin M. Gitter formerly President of the Fern Baniak berame Commier of the Currency in 42 A C 183 Mr. H. E. Cock, a member of the Bari f Des INT became Chairman of the Board of Irectors, soceseding T. Hari, who ecctiques as a member of the Board At the end of 1952 the Corporation had 1028 Fris's sci less than half of the peak number n 1941. Table 9 gives the to employees in the various divisions of the Corporation so the end i The Division of Examination had at that time 72 percent of 2 employees. Table 9. NoMBER OF OFFICERS AND EMPLOYEES OF THE Free D INSURANCE CORPORATION, DECEMBER 31, 1352 Educational program for examiners. The Division of Examinatio is continuing the educational program for its members which it begy in 1946. This program consists primarily of correspondence courses give by the American Institute of Banking, but also includes evening course, offered by colleges or universities, and local chapters of the Institute together with special graduate courses at three universities. Total er rollment in all educational projects numbered 394 at the end of the year the largest active participation since the program began. The special graduate courses are made available to a limited number of examiners each year through enrollment in The Graduate School of Banking at Rutgers University sponsored by the American Bankers Association, the School of Banking at the University of Wisconsin sponsored by the Central States Conference of Bankers Associations, and the School of Consumer Banking conducted by the Consumer Bankers Association at the University of Virginia. These courses combine both resident and correspondence study. Two years of intensive study are required for completion, including three annual resident sessions, each of two weeks' duration. To be selected to attend these schools, examiners must qualify by completion of other educational work. In the seven years during which the program has been in operation examiners of the Corporation have completed more than 1,200 educational courses. Of the examiners taking American Institute of Banking courses, 92 have qualified for the Pre-Standard Certificate, 49 for the Standard Certificate, and 9 for the Graduate Certificate awarded by the Institute. At the close of 1952, 52 examiners of the Corporation held diplomas from the graduate banking schools, and 43 were enrolled in those schools. A number of others received college degrees from study completed in part under the evening resident program, bringing to 265 the total number of college degrees held by Corporation examiners. The cost of courses taken with the American Institute of Banking and the special graduate courses is paid by the Corporation, although examiners who attend the graduate summer schools must forego ten days of their annual leave each year. The Corporation's educational program has also included substantial contributions to banker education through lectures by members of its staff at the schools of banking and by participation in seminars conducted by various bankers associations. FINANCIAL STATEMENTS OF THE CORPORATION Assets and liabilities. A statement of assets and liabilities of the Corporation at the close of 1952 is given in Table 10. Among total assets of $1,444 million, United States Government obligations and accrued interest thereon constituted $1,441 million, or 99.8 percent. Against the $1,444 million of assets were liabilities of only $81 million, leaving $1,363 million in the deposit insurance fund. Assets of the Corporation at the end of 1952 also included $2 million of assets remaining from those acquired through bank suspensions and absorptions since the beginning of deposit insurance. This figure includes $1 million of estimated future collections from transactions to protect depositors, and $1 million of net book value of unliquidated assets from transactions to facilitate termination of liquidation proceedings, as shown in Table 6, page 10. Income and expenses. The growth during 1952 in the deposit insurance fund is further analyzed in the statement of financial operations of the Corporation for 1952 in Table 11. Income for the year was $162 million and expenses or other deductions were $81 million. The remaining $81 million was added to the deposit insurance fund. Approximately four-fifths of the total income of the Corporation was derived from assessments paid by insured banks. Over half of such assessments was credited to the banks at the end of the year for application against assessments becoming due during 1953. TABLE 10. STATEMENT OF CONDITION OF THE FEDERAL DEPOSIT INSURANCE CORPORATION ASSETS ACQUIRED THROUGH BANK SUSPENSIONS AND ABSORPTIONS ...... FURNITURE, FIXTURES AND EQUIPMENT .... MISCELLANEOUS ACCOUNTS RECEIVABLE AND OTHER TOTAL ASSETS 2,025,138.96 1.00 218,468.17 $1,444,021,793.43 DEPOSIT INSURANCE FUND (See Table 11)........ 1,363,491,944.74 TOTAL LIABILITIES AND SURPLUS $1,444,021,793.43 1 Consists of Net Assessment Income credit for 1952 in the amount of $73,713,345.91; edjustments to Net Assessment Income credits for 1950 and 1951 amounting to $13,370.46 (see Table 13); and $5,353,032.85, representing unused Net Assessment Income credits for prior years and other assessment adjustments. * Capital stock issued to the United States in the amount of $150,000,000.00 and to the Federal Reserve Banks in the amount of $139,299,556.99, has been retired by payments to the United States Treasury in accordance with the provisions of Public Laws 363 and 813. These laws were recommended by the Board of Directors of the Federal Deposit Insurance Corporation and approved August 5, 1947, and June 29, 1948, respectively. TABLE 11. STATEMENT OF OPERATIONS OF THE FEDERAL DEPOSIT INSURANCE CORPORATION FOR THE YEAR ENDED DECEMBER 31, 1952 SURPLUS ADJUSTMENTS DEPOSIT INSURANCE FUND, DECEMBER 31, 1951 ....$1,282,187,948.38 ADJUSTMENTS APPLICABLE TO PERIODS PRIOR TO JANUARY 1, 1952 (Net Increase) 654,879.75 ..$1,282,842,828.13 DEPOSIT INSURANCE FUND, DECEMBER 31, 1951, AS INCOME DEPOSIT INSURANCE ASSESSMENTS $130,494,676.51 INTEREST EARNED ON U. S. GOVERN MENT OBLIGATIONS 31,324,465.48 3,251.63 179,168.89 .$162,001,562.51 EXPENSES, LOSSES, AND OTHER DEDUCTIONS NET ASSESSMENT INCOME CREDITS FOR 1952 (See Table 12) ... .$ 73,713,345.91 ...... DEPOSIT INSURANCE FUND, DECEMBER 31, 1952 ....$1,363,491,944.74 |