Section 87. If any National bank shall fail after three years from the time that the first tax upon deposits was paid, all depositors shall be paid in full, as hereinafter provided, as soon as the amount due them respectively has been ascertained.
Section 88. The Board of Control of the commercial zone where the failed bank is located shall issue in the name of its commercial zone perpetual securities subject to call equal in amount to the amount of the deposits held by the failed bank. The securities so issued shall be in the denomination of five hundred dollars and multiples thereof, and be known as Bank Bonds of —— Commercial Zone, and shall bear interest at the rate of 6 per cent per annum, payable annually.
Section 89. The Board of Control issuing Bank Bonds as in the foregoing section prescribed, may deposit an amount thereof with the American Reserve Bank equal to all deposits less than five hundred dollars and all fractions of deposits less than five hundred dollars, and receive in exchange therefor, an equal amount of money.
Section 90. The Board of Control may at its option sell the Bank Bonds so issued, and pay the depositors in cash in full or may pay the depositors in cash in part and in Bank Bonds in part.
Section 91. From time to time as cash is realized from the assets of the failed bank the Board of Control shall retire a corresponding amount of Bank Bonds, the bonds so retired to be determined by lot.
Section 92. As soon as the loss resulting from the failure of the bank is determined, the Board of Control shall proceed to assess a tax at the rate of one-fifth of 1 per cent per annum upon all the deposits of all the National banks in the commercial zone where the failed bank was located until one-half of such loss has been collected from such banks. The remaining one-half shall be borne by "The Depositors' Insurance Fund."
Comment:—Since the commercial zone where the failed bank is located is directly responsible for the failure because its board of control could have prevented it, that particular zone should bear at least half the loss. This is essential to impress upon all the bankers of the zone the importance of selecting the very best men upon the board of control.
Section 93. The board of directors of the American Reserve Bank may invest such part of "The Depositors' Insurance Fund" in United States Government securities as they may deem wise.
Section 94. If at any time in the future the board of directors of the American Reserve Bank shall find it necessary to reimpose upon all the deposits of the National banks the tax of one-fifth of 1 per cent to carry this act into effect, they are hereby authorized and empowered to do so.
Section 95. If the board of directors of the American Reserve Bank shall at any time deem "The Depositors' Insurance Fund" unnecessarily large, it may distribute a portion of the same among the banks as their interests may appear.