Business: How Sale is Your Money?

More banks failed during 1975 than in any year since World War II—and hardly anyone noticed. The Federal Deposit Insurance Corp. paid out $310 million to depositors in the 13 small U.S. banks that closed their doors, and that pretty much was that. The smooth performance illustrated a fact of paramount importance in any discussion of banking troubles: since the FDIC was created in 1934, the calamitous run on a bank has become a dim memory, and the safety of money deposited in banks has been just short of absolute.

The FDIC insures deposits of up to $40,000 a customer in nearly...

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