THE STATES: Nebraska's Guaranty

Nebraska last week put aside as a failure its 19-year-old bank guaranty law (TIME, Dec. 2). Once the law had helped to attract bank deposits from adjoining States. Today it leaves a $20,000,000 deficit and some 65,000 depositors waiting to get their money back.

Under the now abandoned law, Nebraska's State banks were taxed to maintain a special State fund with which to pay depositors in banks that failed. It seemed like a sure guaranty until farm deflation sent banks into bankruptcy faster than the State fund could be replenished. The State fund...

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