Zi) - MA.\'CHKST|‘:H IIKRALD. Siiturday. July 14, 19H4 BUSINESS Tonkin Gulf Incident Full text of three Legion nine How safe is our banking system? What can be done? linked to U.S. raids reports on CDBG on hot streak ... page 4 ... page 9 Your chiinc-fs of losing monoy if you have a deposit "Still, problems exist that must be addressed in the '83 against insured deposits of $1.3 trillion. The FSLIC, ... page 11 of up to $100.00(1 in an insured bank or insured savings next year or two or the stability of the system could be which insures about 80 percent of all S&Ls, had $63 and loan association arc just about zero. And this threatened. For instance, there’s uncertainty billion against $600 billion in deposits. includes not only savings and checking accounts. Also HL'm- Your whether the solution to Continental Illinois will apply insured are: Christmas savings and other open- elsewhere.” PLUNGES IN THE PRICES of many bank stocks account time deposits; uninvested trust funds; M oney's and the persistence of rumors that various banks are certified checks: cashier's checks; bank traveler's IN CONTINENTAL’S CASE, the regulators have in trouble show that confidence is wavering. The checks; and all other deposits "received by a bunk in Mi Worth infused interim capital to give prospective buyers culprits are easy to find; massive foreign loans and its-usual course of business ' time to assess the situation. The FDIC has assured the fears of losses on those loans; rising interest rates that But while our individual accounts may be safe, the Sylvia Porter bank's depositors of full protection. Steps have been could jeopardize more loans; uncertainty about the Clearing tonight; Manchester, Conn. stability of our nation's bunking system is now under taken — and more will be, if necessary — to stop a run effects of deregulation in these circumstances. Monday, July 16, 1984 greater scrutiny than at any time since the Pleasant Tuesday on the bank that would threaten to topple it. But Carron sums it up neatly: “ It doesn’t matter catastrophic depression of the 1930s — and rightfully But among the problems to be faced in comingyears what the resources of the funds are. The Treasury and — See page 2 Single copy: 25<t .so. The scrutiny has intensified as more and more The rate of failures is accelerating, however, and are ways to make sure the insurance funds are Federal Reserve back them up and I can't imagine a frightening details are revealed about the shaky state that worries every responsive source. Continued adequate and safe. The FDIC’s chairman, William case in which they wouldn't pay off depositors if the HattrliPHlpr Hrrali of the Continental Illinois National Bank of Chicago — deregulation of the banking system is unleashing new Isaac, believes that our current method of charging funds ran out of money.” once the eighth largest bank in the nation. and unknown competitive forces that might bring for premiums encourages risk-taking and doesn't 1984 is only half gone. Yet 41 banks have already down less competitive and poorly run institutions. fairly disti^bute responsibility. failed, according to the Federal Deposit Insurance No critic with any knowledge contends that our At this time, insured banks pay 'A of 1 percent of Money book available Corp.. against 48 in all of 1983 and an average of only nation's banking system faces collapse! But no critic their assets into the fund every year. One proposal "Sylvia Porter’s New Money Book for the 80s,’’ 1,328 four a year between the 1940s and 1970s. denies that problems do exist. "The regulatory would have banks with a rating of "3 " or above pay agencies have the power to prevent the kind of pages of down-to-earth advice on personal money higher premiums. The best ratings and the ones that management, is now available through her column. SO F AR THIS YEAH, three savings and loans have collapse that occurred in the Great Depression," apply to most banks are “ 1” or “ 2. "Savings and loans Settlements closed and four have been merged with the assistance observes Andrew Carron. a vice president at Send $9.95 plus $1 for mailing and handling to "Sylvia pay similar premiums into the FSLIC each year, and Porter’s New Money Book for the ’80s," in care of this of the Federal Savings & Loan Corp. In 1983. the Shearson Lehman/American Express and formerly changes in these premiums also are proposed. figures were six and 46 — not bud in comparison. on the staff of the Brookings Institution. newspaper, 4400 Johnson Drive, Fairway, Kan. 66205. The FDIC fund totaled $15.4 billion at end of fiscal Make checks payable to Universal Press Syndicate. Reagan lauds stable prices approved on Business in Brief Economic news is Democrats’ biues West Bank Marble is sales associate By Denis G. Gulino Lower prices for food and gasoline durable goods — the car and appliance recent months. And inflation remains TEL AVIV, Israel (UPI) - issues have been linked by the William Marble of Manchester, formerly United Press International offset higher prices for cigarettes and purchases consumers have put off for dormant.” Prime Minister Yitzhak Shamir’s opposition Labor party in its associated with Century 21. has joined the Carl A. jewelry, the Labor Department said. years. White House spokesman Marlin Likud coalition, facing elections campaign to oust Likud from Zinsser Agency as a WASHINGTON - Wholesale infla­ Food prices dropped 0.6 percent in Federal Reserve System economists Fitzwater said. “ This maturing of the next week, has acted to increase power in the balloting. real estate sales tion remained invisible in June while June, but Department of Agriculture also released their major monthly expansion to a sustainable pace, settlements in occupied Arab Labor, which favors .settlingonly associate. consumers caught up on their pur­ experts are still forecasting a 10 report Overall the figures showed the coupled with the rock bottom wholesale territory despite opposition sparsely populated areas of the Marble holds a chases of new cars and appliances and percent increase in pork prices and a 7 economy decelerating modestly while inflation level, shows the economy is charges the move is helping push West Bank, has blamed Ihe spiral­ bachelor's degree in factories kept up with the demand, the percent increase in overall farm prices demand remains strong and inflation still on a course of confident growth.” inflation to 400 percent annually. ing inflation on the Likud’s policy chemistry from government said Friday. for the year. stays weak. Commerce Secretary Malcolm Bal- of expanding outposts throughout Kent State Univer President Reagan was elated. The government said Shamir’s Higher food prices at the beginning of the occupied Arab territory and sity in Ohio and did "This morning’s news looks like Auto production increased 2.5 per­ drige, in a statement prepared by his Cabinet on Sunday approved five the year are the only reason overall economic advisers, said: "A s a result maintaining a military presence in post graduate work America hit the jackpot. W e’ve made a cent in June, the Fed report showed. new settlements — four in the wholesale inflation is running at a 2.8 l.ebanon at Akron State. He triple play,” he told 70 Republican Auto purchases were up 2.6 percent in of April's (3.5 percent) sales bulge, occupied West Bank and one on the percent annual rate for 1984 so far. Since the 1967 war. Israel has will be involved women at a White House luncheon. the Commerce Department sales household spending contributed sub­ annexed Golan Heights. report. moved more than 20,000 Jews into primarily in the list Reagan began his speech to the group The experts have been predicting stantially to second quarter growth in The announcement coincided GNP” more than 100 settlements and ing and selling of with the economic statistics, saying, " I higher meat prices since last summer’s "On balance this is excellent news on with the release of government figures that appeared to firm outposts in Ihe West Bank, Gaza residential property have to share some news with you drought but prices continue to decline. both sides," said Robert Ortner, the "The slower May and June advances projections of a record 400 percent strip and the annexed Golan in the greater Man­ because it’s too good to wait." At the retail level, the Commerce Commerce Department’s chief in consumer spending and the recent annual inflation rate. Heights. chester area. The Labor Department’s Producer Department Friday said sales im­ economist. decline in housing starts are signaling The government statistics Yuval Neeman. head of the He resides with Price Index showed a zero rate of proved 0.8 percent in June, more than "Output shows a good increase the economy’s transition to a more showed 13.3 percent inflation for ministerial settlement committee, his wife Barbara at change in June, the third consecutive May’s 0.55 percent increase. Most of although more more moderate than moderate rate of expansion,” he June — the highest for the month said the accelerated rate of appro­ William Marble Tracy Drive. month of absolutely stable prices. the improvempnt was in so-called some of the increases we’ve seen in added. Herald photo by Tarquinio since Israel was founded in 1948 — val of new Jewish outposts had and a total of 122.5 percent since nothing to do with the elections. Mall construction begins Koontz says thanks, promises fight the beginning of 1984 But analysts said the Likud’s Analysts noted that in the last last-minute settlemeni rush was DANBURY — Construction has begun on a $100 Stocks snap 3-day slump Ten states gain most Roberta Koontz of Coventry thanks delegates who voted will force a primary in the fall.