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cover a part of secured deposits paid in full. BY WILLIAM S. TARVER. Decrees holding the Secretary of War and the United States Board Fleet to Merchant Corp. Shipping liable the receiver of the insolvent Commercial almost $1,200,000 National representing Bank collateral for given by secure be ment the deposits, before bank to are expected large Govern- week to signed the end of the by Justice Oscar R. Luhring of District Court. The 2 claims are among 10 brought in local courts by the Commercial and District National Bank receivers and national bank receivers elsewhere to recover some $6,356,000 in Government deposits which were 1933 paid tutions in failed full when to reopen the financial after the insticrash. The accounts were in the names of the Secretary of War as trustee for Philippine Islands funds and for Panama Canal Zone revenues, the United States Shipping Board Merchant Fleet Corp., the Inland Waterways Corp. and the alien property custodian. Reclaimed 100 Cents on Dollar. Although general depositors received only a portion of their savings, the Government officials and agencies sold the ample collateral they had required the banks to give them and reimbursed themselves 100 cents on the dollar. The receivers, some of whom had consented to payment of the governmental accounts, now claim the banks had no banking to and, laws right the post under the the collateral, Federal therefore, pledged securities never ceased to be the property of the banks. Two claims, totaling $713,000, by the Commercial and District National Bank receivers already have been alclaims the to more two lowed, banks and amounting additional slightly by than $1,917,000 still are pending before the court. Depositors of the two defunct inof whom almost stitutions, have abandoned of hundreds their hope savings, of will recovering any more receive should rebe a substantial successful ceivers' legal conclusion, dividends battle brought a total the to since of more than $3,831,000 is involved. An additional $2,524,000 is claimed by the Bank of Pittsburgh, National Association, the Guardian National Bank of Commerce of Detroit and the Commercial National Bank of Philadelphia. Claim Interest From Sale Date. From all these claims, however, must be deducted dividends already paid to in case of Nato 75 cent. which tional by Bank the the banks amount general the District per creditors. per cent the case of the other the receivers are to Commercial. and 60 contend On they the in entitled hand, date of into considinterest eration the collateral, from deductions the taking in of conversion principal resulting from dividend payments. Thus, the two claims covered in the week of War Woodring $791,000 decrees expected against and about this Secretary $409,000 are against for the Merchant Fleet Corp., but deductions because of dividend payments will reduce them to $364,000 and $163,000, respectively, or a total balance of approximately $527,000. To this, however, must be added interest. Rhodes Initiated Contests. The battle on behalf of the general depositors against the preferred Government creditors was first taken up by Thomas E. Rhodes, who had an account it 27, closed February in the Commercial 1933. Through when he suit in to recover to mately Attorney District $1,500,000 Hugh Court Obear, improperly brought approxi- paid the the AttorMerchant General Fleet Corp., to the ney as successor Alien Property Custodian, and the controller of currency. Taken into the United States Court of on a motion to The pellate Rhodes Appeals court continued held his fight. had dismiss, apthe bank acted assets to but that the deposits properly collateral by in pledging the controller, secure given to secure Merand Alien was without todian chant Fleet deposits Property author- Cusity of law. then was had a whether The question the depositor right raised to suit first on controller to mand bring the the without making take such deaction. The Court of Appeals held he case was taken the The had. ultimately to Supreme Court, which affirmed the Court of Appeals. How much time will be required to of all the with any Lawyers be dispose estimated finally for cases assurance. cannot the receivers say, however, to be out of the year. they must Court hope in another Then District they wait for the appellate court the reach to cases act, ultimately with probability will that the Su- the preme Court.
