Potomac Savings Bank of Georgetown (Washington, DC)

Article Text

PHONE INCREASES August Total of $180,754 Reveals Large Gain Over Year Ago. BY EDWARD C STONE. Net operating income of the Chesa peake & Potomac Telephone Co., in August totaled $180,754 against $160. 896 in August, 1932. or an increase of $19,858. according to the monthly statement filed with the Public Utilities Commission today to Operating revenues amounted $735,396 with compared $732.188 August year ag The company made substantial reductions in operating expenses as the total stood at $478,559 against $514,965 in August last year leaving net operating revenues of $244. 629 in comparison with $220,431 last year Taxes required $63,875 of this August and $59.535 last $1.438 was Non-operating income against $2,951 in August 1932 Total gross income stood at $182.192 com pared with $163.847 Interest deduc tions took $25,003 against $24. 175 ing a balance before dividends of $157. 189 in compare rison with $139,672. gain in August of this year of $19,517 65.000 More Phone Calls. The increase in earnings was scored in spite of reduction during August 152 phones the District Columbia On August 31 there were 172.675 phones in operation here which is 5,175 fewer than were in use on the same month last year During August 081,000 phone calls were made approxi mately 65,000 more than in August 1932 The C. & P. Company also filed turns for the first eight months of 1933 showing operating revenues of 6.032 853 compared with $6.302 182 the like period in 1932 Operating expenses required $4.192.216 as compared with $4,544,448. the management by reducing costs more than offsetting the slump in operating income After deduction of taxes from op erating revenues the telephone com pany reported net operating income during the eight months of $1,344,587 against $1,298,040 Non-operating income was far under last year. $4,317 being compared with $39,488 year Total gross income stood at $1,348,904 compared with the lower figure of $1.332.528 Interest during the eight months called for $205,153 while this item year ago totaled $166.925 After these deductions the telephone com pany had a net balance before divi dends of $1,143,751. in comparison with $1,165,603 an advance in earnings during the eight months of $21,852. Open Banks Number 16.000 Open banks in the United States number 16.032 according the 115th edition of Rand McNa7 published Bankers Directory this week Total deposits as of June the last official statement amounted to $42,500,000,000. while capital surplus and undivided profit the stock holders equity, aggregated nearly $7. 000.000.000. Excluding conservator banks there are listed 4.983 national banks. 10.719 State banks and trust companies and 330 private banks In addition to the head offices there are 2.443 branches listed open Industrial banks Federal Reserve Banks. Federal Land Banks Federal Intermediate Banks and Joint Stock Land Banks bring the total listed banking institutions and branches to 18.797 for the United States Columbia Bank Votes Dividend Directors of the Columbia National Bank at their meeting yesterday after noon declared the regular quarterly dividend of $1.50 per share President Frank Strvker announced today The dividend is payable October to share holders of record on September 30 The conservators of the Potomac Savings Bank have moved from the bank at the corner of Wisconsin nue and M streets, in Georgetown. and opened new quarters at 1726 Pennsyl vania avenue. in the building in which the Departmetal Bank was formerly operated. The Potomac Savings Bank is now a branch of the Hamilton Na tional It was deemed best to have separate headquarters for the conservator George W. Offutt and his assistant. B Agee Bowles, and the Treasury Depart ment decided that a downtown office be desirable Both Offutt Mr would and Mr Bowles are hopeful that in time the depositors in the Potomac Sav ings Bank will get practically 100 per cent the frozen deposits, and that any levy on the stockholders will not be necessary The Commercial National Bank now in receivership, is doing a lively business passing out checks to deposit in paynemt of the first dividend since the bank closed last February Pay ment of this disbursement began last Tuesday The bank distr ributing $1. 030.601 or 20 per cent of the proven claims against the institution Trading on D C. Exchange Stock Trading on the Washington Exchange started today with $1.000 Capital Traction 5s selling at 55 prac tically the same as other recent transfers. The next transaction was $1.000 turnover in Washington Gas 1958 at 831/ Business was dull and there was but one other sale. 10 shares of The Capital Traction stock at 13 1/2 advance in this stock at least temporarily has slowed up The market closed with 12 bid and 14 asked 2 point drop in the asked price since yesterday. The Atlantic Coast Line Railroad Co today annound net income of $3 397,835 for the first eight months of the year compared with loss $266,456 for the sponding 1932 period. Although the L net opperating income last month was only $17,051. the figure contrasted exceed ingly favorably with August 1932, when a loss of $497.703 was shown The first luncheon meeting for the coming year of the District of Columbia Life Underwriters Association will take place next Wednesday noon at the Willard Hotel President Thomas P Morgan jr announced today The association is arranging for a special guest speaker The conservators of Washington banks which went into the Hamilton National out are deto checks sending merger positors in the individual banks who did not become connected with the new institution. These checks are drawn on a the Hamilton National and will put good deal of money into circulation About $30,000,000 000 of the $110.000. 000.000 of life insurance in this country is underwritten upon the lives of Amer ican farmers, including residents of towns of under 5.000 pop ulation. accord ing to Ralph Trubey of Fargo. N Dak who addressed the forty fourth annual convention of the National Association of Life Under writers He said that unless permanent security is given the rural worker and merchant all plans for national recovery will avail nothing.

Article Text

BILL WOULD AID DEPOSITORS (Continued from Page 1) witnesses from Detroit to testify in its behalf. Potomac Bank Moves Another development in the closed bank field today was the physical transfer of the Potomac Savings Bank to the District National Bank Building. Quarters of the Potomac Institution were taken over as a branch of the Hamilton National Bank. Since then it has been occupying offices formerly used by the closed Departmental Bank. The move brings into the District National Bank Building three of the five closed banks of which Norman Hamilton is receiver. Mr. Hamilton stated that the others would move in as soon as possible. Almost 30 million dollars belonging to the people of the District of Columbia still is tied up in closed banks, it was learned today from the office of the Comptroller of the Currency. Nineteen banks are closed, so far as the official record goes, although seven listed are included in the group which made up the Hamilton National Bank merger. Many Depositors Involved How many depositors are involved the comptroller's office is unable to estimate. Opinion in local financia circles was that provisions of the bill of Representative Clarence J. McLeod (R.) of Michigan will affect District the

Article Text

COURT DECLARES

POTOMAC SAVINGS

LIABILITY LIMITED

Chartered in Virginia, So Double Assessment on Stock Fails.

DISSENTING OPINION

PRESENTED BY HITZ

Decision Opens Way to 48 Different Standards, He Declares.

Stockholders in the Potomac Savings Bank were held not liable to double assessment under the District laws by the United States Court of Appeals today in an opinion described by Associate Justice Hitz, who dissented, as demonstrating "that a foreign charter for a local bank is a source of danger in the community."

The majority opinion, written by Associate Justice Groner, affirmed a decision by the District Supreme Court in a suit brought by Norman R. Hamilton, the bank's receiver, to collect a double assessment on 2,044 shares of stock in the estate of the late George W. Offutt.

The bank was incorporated in Virginia, whose laws do not provide for a double assessment, and Attorneys Charles V. Imlay and Ross H. Snyder, representing the trustees of the estate, contended this fact relieved the stockholders of such an assessment, even though the bank did business exclusively in the District.

Controller Can Take Charge.

It was pointed out the District Code authorizes the controller of the currency, in event of insolvency, to take possession of any bank doing business in Washington. From this it was argued that the laws of the United States, providing for a double assessment in certain cases, should be extended to cover a bank incorporated in Virginia and doing business here.

In refusing to accept this view, the majority opinion pointed out it is fundamental that the liability of a stockholder is determined by the charter of incorporation and the laws of the State in which it was incorporated. The court, therefore, held that since the Virginia law did not provide for a double assessment, the receiver could not enforce his claim against the Offutt estate.

In disagreeing, Justice Hitz said he thought the opinion proceeded upon a meager and narrow construction of statutory provisions to a conclusion contrary to their purpose and defeating their object.

D. C. Law Held Accepted.

"When this group of Washington business men brought their Virginia charter across the Potomac River and set up in the City of Washington the bank's only place of business, it necessarily accepted and adopted all provisions of local law governing local banks, including the acts of Congress intended in general terms to place banks created outside of the national banking system on the same footing as national banks doing business in the District of Columbia," he continued.

"I read these statutes as intending not only to give the national banking authorities certain powers of visitation and inspection, and to define how and why and when the controller may take control, but as imposing the same liabilities and regulations upon State banks as upon national banks doing business here, both in respect of report and condition, and in respect of protecting depositors and other creditors as against the owners of the bank by the same liability upon stockholders for the debts of the bank.

48 Kinds of Liability Seen.

"Under the judgment of the court in this case, 48 State banks engaged here in the same business at the same time could have 48 separate measures of liability of their stockholders to their creditors, all differing from each other and all differing from the liability of national banks in the same respect, yet all operating within the legislation of Congress intended to make such liability uniform and equal.

"While this construction of the statutes is legally possible, it is neither reasonable nor necessary, and I cannot accept the judgment as a sound conclusion, though recognizing its value as a demonstration that a foreign charter for a local bank is a source of danger in the community."

Article Text

BRICE CLAGETT NEW HAMILTON COUNSEL Succeeds Late Angus W. McLean in Receivership of Five Banks Here. Brice Clagett, attorney and former newspaper man, has been appointed counsel for Norman R. Hamilton, receiver of five insolvent banks of this city, succeeding the late Angus W. McLean. it was learned today. Mr. Clagett will participate in the extensive litigation already revolving around the banks in charge of Mr. Hamilton, particularly the District National Bank. He will have associated with him Charles E. Wainwright, attorney, formerly with the Treasury Department, who was associated with Mr. McLean. The banks concerned are the District National Bank, Potomac Savings Bank. Northeast Savings Bank, Seventh Street Savings Bank and Washington Savings Bank

Article Text

Receiver's Collections Grow

Receiver Norman R. Hamilton reports that in the last three months $155,748 has been added in collections for the District National Bank. $50,000 has been added to the cash balance of the Potomac Savings Bank and $36,415 collected from amounts due the old Seventh Street Savings Bank.

Article Text

CLEARINGS HOLD UPTURN Advance of 26.9 Over Year Ago Follows Climb During June. BY EDWARD C. STONE. Following the marked gain in bank clearings in Washington in June comes the report for the first week in July which indicates a continuation of the notable upswing. an advance of 26.9 per cent over the corresponding week year ago. Clearings in Washington in the first week of the present month totaled $20,823,476, against $16,407,784 in the corresponding week of last year, $12.573,685 in 1933 and $17,727,781 in the comparable week in 1932 Other cities in the fifth district showed interesting and important weekly percentage gains. Huntington. W Va. went against the trend. however, noting a decrease of 16 per cent while Norfolk, Va. was also behind last year by 14 per cent Charleston, S. C. enjoyed a boom of 86.4 per cent; Richmond, Va., reported an increase in clearings of 4.8 per cent and Baltimore scored gain of 5.1 per cent. The aggregate increase for Washington and the other five cities was 8.5 per cent. The Washington gain of 26.9 per cent was fractionally above the advance of 26.8 per cent for the whole country, as reported by the Financial Chronicle. To these figures is added a preliminary estimate for the second week in July which indicates the same trend, upward in spite of the midEummer season. Hamilton's Book Value Gains. President E C. Graham of the Hamilton National Bank sent a letter to stockholder today reporting book value of the bank's stock on June 29, as $29.40 per share as against $27.31 a share on December 31, 1934, an addition to undivided profits and book value equivalent to $2.09 a share in the half-year period. Mr. Graham reports net earnings from purely bankings operations during the six months at $84,887.74 or $1.69 per share. These operating results were augumented by net profits from transactions in Government bonds and other securities and miscellaneous non -operating credits, totaling $59,268.25 against which the bank charged off losses and established reserves for contingencies and other purposes amounting to $16,995.40, leaving a net profit from all sources for the half year of $127,160.59. The management is more than pleased with the results of the past six months' operations, the bank official says. However, lack of demand for sound loans and continuing tendency toward lower interest rates makes it inadvisable to attempt forecasts on the basis of past operations, he adds. During the first six months of 1935 branch operations as a whole resulted in net profits of $12,613.74, only one branch showing a moderate monthly loss There are certain developments in prospect at this time which will either place this branch on definitely profitable basis or materially improve the situation, Mr. Graham states. In concluding his letter, the president says business in the trust department has exceeded expectations. Edson Lauded By Financiers. The death of John Joy Edson takes A leading financial figure from the banking district a banker who had been an active leader for more than half century. Few financiers make such long record or such a brilliant one. Bankers today lauded his long bank ing and civic service to the community, saying that he leaves a vacancy which will be hard to fill. A review of his life shows an amazing number of accomplishments which could have resulted only through exceptional ability and untiring energy His service to the Washington Loan & Trust Co. for great many years has been most valued. After serving as president of the institution his advancing years caused him to retire to the chairmanship of the board in favor of the late John B. Larner, afterward being succeeded by the present head Harry G. Meem Up to the very last he kept in closest touch with the bank's affairs. In late years his services to the Equitable Building Association were of equal value His office was in the Equitable just across from the bank Always an optimist, he only recently expressed the opinion that the country will come out of the depression and enter period more prosperous a than any in the past. He felt that start toward the better times had already been made. Hill on Advisory Committee. President Roosevelt recently appointed Julien H Hill; president of the State-Planters' Bank & Trust Co. of Richmond, a member of his Advisory Committee on Works Allotment Mr. Hill. who will be the representative of the A. B.A., will assume his position immediately. All of the members of this advisory board serve in an honorary capacity and the duty of the board will be to pass upon all applications for funds and then recommend to the President such action as they may consider most advisable. Mr. Hill has always shouldered his full share of the work necessary to promote the development and the welfare of Virginia, Richmond and the South. He has been for years the treasurer of the Virginia State Chamber of Commerce and in 1931 served as its president. Potomac Bank to Pay $253,767. Receiver Norman R. Hamilton announced today that the Potomac Savings Bank will begin payment tomorrow of another 12 1/2 per cent to depositors who present proven claims at 1406 G street northwest. This action will bring total payments up to 621/2 per cent as the bank paid off 50 per cent when it reopened as branch of the Hamilton National The coming payment involves the distribution of $253,767. which will be shared and weloomed by hundreds of depositors. The report of the receiver, made a few days ago and covering the second quarter of 1935, revealed very sub-

Article Text

POTOMAC SAVINGS

REVIEW PETITIONED

Bank Receiver Asks Supreme Court Ruling on Share- holders' Liability.

The United States Supreme Court has been asked to review the decision of the District Court of Appeals that shareholders of the Potomac Savings Bank of Georgetown are not subject to double-assessment liability.

The petition for review has been filed by Norman R. Hamilton, receiver of the bank, against Henry W. Offutt and George W. Offutt, who, as trustees of an estate, were the record owners of shares of stock in the bank. The receiver filed suit to collect the as- sessment, but the District Supreme Court and the Court of Appeals up- held the contention of the sharehold- ers.

The bank was organized under the laws of Virginia, which, at the time of the levy, did not impose the assess- ment liability on shareholders. The contention of the receiver is that, while organized under Virginia law, the bank made no provision for con- ducting its banking business else- where than in the District, and that by establishing its business here, Dis- trict and Federal laws became applic- able. The shareholders contended that the general rule applies that the lia- bility is determined by the charter and laws of the State of incorporation.

Article Text

BANK COLLECTS $4,400,102.20 Norman R. Hamilton, receiver of the District National Bank, reports total cash collected from assets and stock assessment on December 31 at $4,400,102.20 and total remaining uncollected assets at $4,795,558.78. The bank has paid dividends of 50 per cent. The Potomac Savings Bank, which suspended operations on March 5, 1933, reports assets to be accounted for at $3,543,903.06 and total cash collected from assets and stock assessment at $1,616,721.08, on December 1. Dividends of 62.5 per cent has been paid to unsecured creditors. The Seventh Street Savings Bank had collected $1,026,439.44 at the end of the year, while total remaining uncollected assets amounted to $679,867.76. Dividends of 80 per cent have been paid. On December 31, the Northeast Savings Bank had collected $1,344,856.07 from assets and stock assessment leaving $368,881.71 in remaining uncollected assets. The bank has paid 85 per cent to unsecured creditors. Total cash collected from assets and stock assessment by the Washington Savings Bank amounted to $417,195.61 at the end of the year leaving uncollected assets of $223,706.73. Dividends of 80 per cent have been paid creditors. Claude H. Woodward, receiver of the Bank of Brightwood, reports $496,652.02 collected from assets and stock assessments by December 31. Total remaining uncollected assets amounted to $434,829.98. Dividends paid to unsecured creditors equal 55 per cent or $436,902.35.

Article Text

RECEIVERSHIPS CHANGE HANDS Norman R

Hamilton has been succeeded as receiver for the District National Bank by Justus S. Wardell. The final report issued by Hamilton yesterday estimates value of remaining assets at $2,314,598.19. More than $1,000,000 has been paid on a total RFC loan of $1,193,641.72. Further dividends to depositors are not likely until pending court actions are disposed of. Hamilton has also turned over to Wardell the receiverships of the Potomac Savings Bank, the Northeast Savings Bank, the Seventh Street Savings Bank and the Washington Savings Bank, all still in process of liquidation.

Article Text

NOLAN HELD SOLVENT William J

Nolan, former head of an automobile. concern, was adjudged personally solvent by a jury in Bankruptcy Court yesterday. Action to have him declared bankrupt was instituted February 16 by J. S. Wardell as receiver of the Potomac Savings Bank and the Munsey Trust Co.

Article Text

New 8 Pct

Dividend For Potomac Savings Depositors Announced 8,300 Will Get $162,000 Payment Beginning On Tuesday Justus S. Wardell, receiver for the Potomac Savings Bank, today announced an additional dividend of 8 per cent will be paid beginning Tuesday morning to 8,300 depositors. The payment, which comes just in time for Christmas shopping, will amount to about $162,000. It will bring the total payments to depositors of this bank up to 70 1/2 per cent of their total accounts in the bank when it closed in March, 1933. Post card notices are being mailed to depositors, who are asked by Receiver Wardell to wait until the day mentioned in the cards to call at the office. Checks are available at the receiver's office, 1406 G street N.W., but will be paid out only to depositors bringing in their post card notices. These cards are being mailed out in groups daily, so as to bring in the depositors by groups and prevent congestion in the office. Mr. Wardell also announced that many uncalled-for checks for a 5 per cent dividend to depositors in the Northeast Savings Bank are still available at the Northeast Branch of the Hamilton National Bank, at Eighth and H streets N.E. This dividend brings up to 100 per cent the total payments to depositors. The dividend amounts to about $52.000. Checks will remain at the Northeast location, however, only today, but beginning Monday those remaining will be available at the receiver's office, 1406 G street N.W. This dividend was declared some time ago and most of the checks have been distributed.

Article Text

MONEY EASIER Speaking before the Washington Building Congress at the Lafayette Hotel last night, Underwood reminded his hearers that there is now a definite opening in the money market. Member banks of the Fifth Reserve District increased their loans and discounts between the middle of October and the middle of November. and deposits in these institutions showed an increase during the same period. The United States Building and Loan League reported an increase in the volume of assets on the part of Washington building and loan associations. The Perpetual Building Association here leads the country in resources with $48,370,540. BANK PAYOFFS HELP Nearly $400,000 to be paid to depositors of closed Washington banks this week will give a further impetus to trade here. To day, the receiver O' the Potomac Savings Bank began payment of $162,000 to 8,300 depositors. Franklin National Bank began paying a dividend of $200,000, and there was a recent payoff of the Northeast Savings Bank.

Article Text

Closed Bank Depositors Slow to Claim Checks Depositors of the closed Washington Savings Bank are slow to claim the new dividend checks now available, it was announced yesterday by Receiver Justic S. Wardell. The checks, which are for 10.24 per cent of the deposits in the bank when it closed in 1933 are not available at the former office of the receiver, it was emphasized, but at his new office, 1614 K street N.W. Post cards notifying approximately 2,000 certificate holders have all been mailed out, and disbursement of funds. amounting to approximately $35,879 has been in progress since last Monday. Payment of the present dividend is for interest on the deposits in the bank when it closed, and brings up to a total of 110.24 per cent the amount made available. Receiverships of these other banks in charge of Receiver Wardell also are at the new K street location: Northeast Savings Bank, District National Bank. Potomac Savings Bank and the Seventh Street Savings Bank.

Article Text

Potomac Bank Assets To Be Sold April 15 Justus S. Wardell, receiver of the Potomac Savings Bank, yesterday announced a preliminary sale of assets of the closed bank to the highest bidder April 15 at the receiver's office, 1614 K street N.W. The sale is part of the procedure to complete liquidation of the remaining assets, and to provide further funds for another dividend for depositors. There was no indication, however, as to when such a dividend may be expected. Depositors so far have received dividends totaling 70 1/2 per cent.

Article Text

Potomac Savings Bank To Pay Depositors Last Dividend Payment of $126,660 To Bring Total to 81.77 Per Cent Final dividend in the closed Potomac Savings Bank, amounting to about $126,660. will be disbursed by Receiver Justus S. Wardell to 8,318 depositors, beginning Thursday. Mr. Wardell explained that depositors are expected to come only when thev have received the postal cards notifying them of the exact date their checks will be available. Postal cards now are being mailed out to depositors in groups, several each day. Checks will be available at the receiver's office. 1429 I street N.W. To obtain these checks it will be necessary for each depositor to bring his receiver's certificate. and to relinquish it upon receipt of the final dividend. This last dividend amounts to 6.27 per cent of the amount the depositor had in the bank when it closed its doors at Wisconsin avenue and M street N.W. in March, 1933. Depositors previously had received a total of 75.5 per cent of their money, so that with this last dividend the total received by them will amount to 81.77 per cent. The total amount finally received by depositors in dividends is to be $1,676,623.31. Depositors were asked by Mr. Wardell to come for their checks as soon as possible after notification. The receivership is to be closed out before the end of the year.

Article Text

Total Based upon reports from individual Christmas Club members and applying these reports to the entire distribution for 1941. Mr. Rawll says the estimated fund of $400.000.000 will be used by the recipients approximately as follows: Christmas purchases. 33.8 per cent: permanent savings, 24.5 per cent: year-end bills, 12.8 per cent: insurance premiums, 11.5 per cent: taxes. 11.1 per cent: education. travel and charity, 3.5 per cent: mortgage interest. 1.7 per cent; unclassified, 1.1 per cent. Potomac Bank Payments Start. Receiver Justus S. Wardell started payment today of a final dividend of $126.660 to 8.318 former depositors in the closed Potomac Savings Bank. Depositors are collecting their money at the receiver's office. 1429 I street N.W., as rapidly as they receive postal-card notice that the payments are ready. The checks will be delivered over a period of several days. The present dividend amounts to 6.27 per cent of the amount the depositors had in the savings bank when the doors closed in March, 1933. This payment brings the total amount paid to 81.77 per cent. the dividends amounting to $1.676.623.31. Patrons should obtain their money as soon as possible. as Mr. Wardell plans to wind up the receivership before the end of the present year. Bayly to Examine Accounts. James Parker Nolan, chairman of District No. 11. National Association of Securities Dealers. Inc., has announced appointment of Martin J. Bayly as field secretary. Mr. Bayly. a native of Baltimore, has spent 20 years in investment accounting work both for over-the-counter dealers and stock exchange members. Mr. Bayly will be the administrative employe in District 11. and his duties will include educational and examination work among members. The territory includes the District of Columbia. Maryland. North Carolina. Virginia and West Virginia. It is the first time the district has had a field secretary. Bankers Choose Detroit. The 1942 convention of the American Bankers Association will be held in Detroit October 4 to 8 President Henry W. Koeneke announced today. More than 100 members of Washington Chapter. American Institute of Banking. will attend the annual oyster supper tomorrow evening at the Hay-Adams House. John Warner, entertainment chairman, said today. Edward L. Hillyer, vice president and assistant trust officer of the Union Trust Co., was given a big surprise today when three Western Union messengers entered his office and sang with great vigor "Happy Birthday to You!" State and municipal financing for October aggregated $67.347.936. as compared with $182,492,835 in October. 1940. according to the Daily Bond Buyer. Busy Trading on Exchange. Trading was heavy on the Washington Stock Exchange today, opening with $1,000 and $1,500 transfers 1/4. in Capital Traction 5s at 105, off Washington Gas Light 5s appeared full in a $6,500 sale at 128 1/2, up a point. Washington Gas common opened with 30 shares selling at 183 and closed with 10 more moving at 1812 Capital Transit was very active 375 shares selling at 16, off half a point.