2066. Mount Vernon Savings Bank (Washington, DC)

Bank Information

Episode Type: Run → Suspension → Reopening
Bank Type: savings bank
Start Date: July 16, 1932
Location: Washington, District of Columbia (38.895, -77.036)

Metadata

Model: gpt-5-mini
Short Digest: 61c2d934

Response Measures

Accommodated withdrawals, Public signal of financial health, Capital injected, Partial suspension, Books examined

Other: Conservatorship followed bank holiday; later assets sold to Washington Mechanics Savings Bank in merger.

Description

A run/withdrawal episode driven by rumors occurred in July 1932. The bank was later closed/unlicensed during the March 1933 banking holiday period and placed in conservatorship/subject to Treasury action. It was reorganized/merged with Washington Mechanics Savings Bank and reopened in early March 1934, releasing 40% of deposits on reopening. OCR errors corrected: Mt. Vernon spelled as Mount Vernon consistently.

Events (3)

1. July 16, 1932 Run

Cause: Rumor Or Misinformation
Cause Details: Withdrawals precipitated by malicious and unfounded rumors about the Mount Vernon Savings Bank's condition; bank publicly offered a $500 reward and officers issued statements to reassure depositors.
Measures: Public statements assuring solvency; offered $500 reward for conviction of rumor mongers; urged depositors not to withdraw; some depositors reopened accounts.
Newspaper Excerpt: malicious and unfounded rumor has been spread throughout the city ... offered $500 reward 'for information and conviction of spreading ... rumors concerning the Mount Vernon Bank.'
Source: newspapers

2. March 1, 1933* Suspension

Cause: Government Action
Cause Details: Refused license/restricted after the March 1933 national banking holiday; placed in conservatorship/unlicensed by Treasury/Controller actions.
Newspaper Excerpt: The Mount Vernon Savings Bank ... was unlicensed ... in the hands of conservators. It was refused a license to reopen after the President's banking holiday last March
Source: newspapers

3. March 4, 1934 Reopening

Newspaper Excerpt: Deposits ... were three times as large as withdrawals yesterday, as the Mount Vernon Savings Bank reopened as headquarters of the Mechanics Bank at Ninth street and Massachusetts avenue.
Source: newspapers

Newspaper Articles (22)

1. July 17, 1932 Evening Star Washington, DC

Article from Evening Star, July 17, 1932

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REGAIN CONFIDENCE IN SAVINGS BANK Depositors Quit Line at Northeast Institution-New Accounts Opened. Following a number of withdrawals during the past two days at the North- H east Savings Bank, Eighth and streets, George F. Hoover, executive vice resident, said last night he had noted trend to re-establishment of confi- and dencé a in the soundness, strength safety of the bank when several people left the line and a number of new will accounts were opened. The bank Monbe ready for business as usual day morning, he announced. This bank is sound, safe, in a posi- to tion to pay everybody and intends "There do it," declared Mr. Hoover. is no reason whatever why people be unduly disturbed at rumors will be open as able to morning, and ness should We Monday usual be The for busi- bank take care of everybody. was open during the regular Saturday evening hours last night. Officers Are Unchanged. truckload of cash was delivered to A the bank yesterday from the Treasury Department. Just before the regular Mr. hour at noon yesterday depositclosing to assembled in ors no change has officers Hoover the that board explained of directors or been the made of the bank. He said the institution the full confidence of the Treashas ury Department and large downtown bankers. Northeast Savings Bank was The 16 years ago with a capitaliza- are Its total Sixty days ago, $1,000,000. tion founded of $100,000. resources Mr. Treas- Hooit was examined by in and ury ver said, Department found the to be excellent condition. Meantime, from the Mount Vernon and Bank, at Ninth street official Savings avenue, came an last night over the of W. Lee, president, to statement Massachusetts Frank leading signature offering reward "for information and conviction of spreading the $500 persons arrest damaging the Savings rumors person or concerning the Mount Vernon Bank. "Never in Better Condition." malicious and unfounded rumor has "A been spread througout the city, his statement. "and of the Government in the stability said some concerning particularly depart- of this which has uneasiness to some of our ments. institution. some naturally have Christ- deposi- caused those who bank. vacation savings in in to assure our tors, mas We wish and especially depositors the that particular. and the public at large, was the Mount Vernon Savings Bank in a better financial position never than at the present time. We are pre- our pared to meet every obligation and depositors need not feel the slightest funds concern for the safety of their held in their name in this bank. We strongly urge our depositors not their savings. in our bank than much to withdraw safer They put they away will are carried on the person. or the for be supposedly safekeeping about house. Vernon Savings Bank is and sound as the Rock raltar. as We have, can, and solid The Mount will of meet Gib- us All demands made upon have ask is that those we all served legitimate we can so well in the past institution. continue have confidence in our that to pledge our word and honor such We confidence will not be misplaced. Can Pay All Obligations. not listen to idle rumors. If in- in'Do is wanted concerning our stitution. formation its officers will gladly supply that Again we declare is on Mount request. Bank to it Vernon Savings pav the liquid. and in a position in full sound. all of its obligations on We demand trust this statement will reassure have those of our depositors who may rubecome disturbed over the malicious mors heretofore who have referred already to. withdrawn sugTo those and vacation savings, we bank, gest will be safe and where Christmas they they return them to the our available purpose when actually needed for acintended by the depositor when the count 'In closing, was large opened. we depositor desire to has say withdrawn that that not a single dollar from our bank except busineeded a in the ordinary conduct of ness. wish to take this opportunity to these to We our sincere appreciation and the express depositors for the support " given confidence displayed.

2. July 19, 1932 The Washington Times Washington, DC

Article from The Washington Times, July 19, 1932

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BANK RECLAIMS DEPOSITORS Frank W. Lee, president, reports that deposits yesterday in the Mt. Vernon Savings Bank exceeded withdrawals by $35,000. Many who withdrew their money Saturday reopened accounts yesterday, and more are returning today, showing confidence in the bank is fully restored, according to Robert T. Highfield, cashier. Rumors that large downtown banks are to take over some of the banks that closed last week are unconfirmed. Of the North Capitol Savings Bank, however, R. V. Fleming, president of Riggs National Bank, commented: "It is too soon to know the exact condition of the bank. This bank is not contemplating such action. The North Capitol Bank is in a good location and most probably will be absorbed by one of the strong downtown institutions."

3. July 23, 1932 New Journal and Guide Norfolk, VA

Article from New Journal and Guide, July 23, 1932

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$5,000 DEPOSIT HELPS BANK TO WEATHER STORM Prudential In D. C. Is Victim Of Store's Scare WASHINGTON, D. C.-While bank examiner kept watch ready at any minute close the institution, the Prudential Bank, 715 Florida Avenue, northwest, weathered twoday run on it last Friday and Saturday and resumed business as usual Monday morning. The run was stemmed after every resource and minute speakers were called into action to persuade depositors not to withdraw their funds. From every pulpit in the city Sunday an appeal was made against continuation of the run. Meanwhile officers and directors of the bank were conference working out plans for keeping the bank open. Deposits $5,000 At the most critical moment Saturday, Mortimer M. Harris, an attorney, climbed into chair and announced to the crowd in the bank that E. A. Clements would make a deposit of $5,000. Clements left the bank hurriedly. Finally he came back and brought with him a stack of bills totaling $5,000. He handed them to John R. Hawkins, president of the bank, with the declaration, "That's what think of Prudential!' The crowd burst into cheers. Some withdrew from the lines. The run began Friday following the closing of four white banks here. Collateral totaling more than $20,000 was hypothecated at other banks to meet the demands of depositors. Depositors Quieted Officers of the bank asked depositors to attend a meeting at Mt. Carmel Baptist Church Friday night. Pledges agreeing not to withdraw more than 10 per cent of their deposits in the next 30 days, signed that night and the next morning reached the figure of $101,000. When the bank reopened Saturday morning the run was continued. Officers and supporters of the institution appealed to the crowd not to wreck the institution by withdrawing all their funds. Speaker ,after speaker mounted chairs and addressed the crowd. Other officers and supporters sought signatures to pledges. The bank invoked the rule against member of the national staff and later financial secretary of Shaw University, was called to the secretaryship at Houston, Texas, succeeding Gilbert T. Stocks, who resigned. Mr. Craver is graduate of Shaw University and the University of Chicago. He served many years the student work of the National Council. the withdrawal of savings funds without 30 days' notice. Some who sought to withdraw their funds from checking accounts were dissuaded by officers from doing so. Other depositors added to their deposits. Cause of Run Ira L. Chorpening, chief national bank examiner, looked on as the depositors staged their run, prepared to close the bank if the tide ran against those who were struggling to keep the institution open. The refusal of a down town department store accept check on he bank was given by officers as the cause for the run on the Prudential. Other banks, all white, wtre having trouble simultaneously. The Comptroller of the Currency close the bank was given by officers as Raymond L. Schreiner, president, was arrested and charged with larceny in connection with an alleged shortage of $59,700 in the accounts. The next day the Comptroller of the Currency closed the North Capitol Savings Bank, in which there were large number of colored depositors, and the International Exchange Bank because of insolvency. The Departmental Bank voluntarily close its doors. At the same time the run was being made against the Prudential there were runs against the Northeast Savings Bank and the Mount Vernon Savings Bank. A truckload of cash was delivered to the Northeast Savings Bank by the Treasury Department. The run on it by the similarity of with the North Capitol Savings Bank, which is located in the same neighborhood. The Mount Vernon Savings Bank last Saturday night offered $500 reward "for information leading to the arrest and conviction of the person or persons spreading damaging rumors concerning the Mount Vernon Savings Bank. Industrial Bank Open the Associated Negro Press deadline is reached the Industrial State Bank of which W. H. P. Brown is president, is open and doing business as usual.

4. July 29, 1932 The Butler County Press Hamilton, OH

Article from The Butler County Press, July 29, 1932

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LABOR BANK By Open Challenge Halts Rumor Mongers Attack Washington, D. C. (ILNS)-When rumor mongers started reports to the effect that the Mt. Vernon Savings Bank, pioneer labor bank here, was not in tip-top shape and started withdrawal of Christmas savings and vacation fund deposits, President Frank Lee, Machinists' Union member, challenged the rumor starters at once and stopped their work almost before it was started. President Lee, solidly backed by the whole institution, took large display space in the Washington Post to assure depositors that the bank was "prepared to meet every obligation." At the same time he offered a $500 reward for apprehension and conviction of any person circulating a false report about the bank. The result of President Lee's prompt and vigorous action was that depositors flocked back and gave the bank one of its biggest days of business. Letters, wire and phone messages and verbal congratulations have been flooding President Lee. The bank "came through flying" under its own power, without the slightest assistance from any other source. "The Mt. Vernon Savings Bank is as sound and solid as the Rock of Gibraltar," said President Lee in his advertisement. The flurry followed closing of two or three small banks in Washington. The Mt. Vernon Savings Bank is rat() ed as one of the strongest in the country.

5. September 17, 1932 Evening Star Washington, DC

Article from Evening Star, September 17, 1932

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RECEIVERSHIP REQUESTED FOR APARTMENTS HERE Foreclosure of Potomac Park Property Also Urged by Petitioners in Court Action. Application for the appointment of a receiver for the Potomac Park Apartments, Twenty-first and C streets, owned by Frederic J. Haskin and his wife, Olive G. Haskin, was made yesterday in District Supreme Court by holders of notes secured by a second deed of trust on the property. Foreclosure of the trust also is requested. The petitioners are the National Mortgage & Investment Corporation, the International Bank. the Mount Vernon Savings Bank, Weaver Bros., Inc., and Isadore Freund. They tell the court that the second trust is for $253,965.32 and is subject to a first trust for $346,879. Interest and other payments are in arreas, it is claimed. The charge also is made that one of Mr. Haskin's organizations has become in arrears of rent to the extent of $11,000.

6. March 1, 1933 Evening Star Washington, DC

Article from Evening Star, March 1, 1933

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LOCAL BANKS ACT TO PROTECT FUNDS District National Limits Withdrawals-Others Invoke 60Day Clause on Savings. The District National Bank opened today on a 5 per cent withdrawal basis, following action taken by the directors early this morning, for the protection of depositors. President Joshua Evans, jr., announced. (The following notice was addressed today to the depositors in the bank: "Owing to heavy withdrawals of deposits during the last few days, and in order to safeguard all of our depositors, the board of directors has passed a resolution allowing depositors to withdraw 5 per cent of their balances in this bank at the close of business February 28, 1933, until further notice. All new deposits and new accounts opened March 1, 1933, and thereafter are subject to 100 per cent withdrawal at any time after actual realization cf funds by the bank." 60-Day Clause Invoked. The officials stressed the fact that all deposits made today and after this date can be withdrawn in full at any time. It was announced in the financial district that most of the local building and loan associations have invoked their time clauses on withdrawals, limiting the amount to $100. For larger amounts notice must be given in advance. Officials said the rule would be in force for the present. Several savings banks here invoked the 60-day clause on withdrawal of savings accounts. Some of these banks permit the withdrawal of 10 per cent up to $100. Above that amount, the 60day or two-month notice, is being required. Protective Measure. Among the local banks which have adopted this rule-the same plan which has been adopted extensively in other cities-are: United States Savings Bank, Chevy Chase Savings Bank, Security Savings & Commercial Bank, Park Savings Bank, Seventh Street Savings Bank, Washington Savings Bank, Anacostia Bank, Mount Vernon Savings Bank and the Northeast Savings Bank. (In an earlier edition of The Star the name of the Washington Mechanics' Savings Bank was included with those involking the 60-day clause. This was incorrect.) Officials said the action was taken merely as a protective measure, both for the banks and for the depósitors. The Commercial National Bank. which closed yesterday, has been placed in the hands of Robert C. Baldwin, a receiver of the office of the controller of the currency. Mr. Baldwin has taken over the receivership from J. L. Bailey, who took charge when the bank was closed. It was explained that Mr. Bailey will remain for a while in his capacity as a national Bank examiner to assist Mr. Baldwin. Has Considerable Experience. In the meantime, it was said at the Treasury Department, the new receiver probably will use a large part of the staff of the bank for his work. The new receiver. before Joining the office of the Controller of th è Currency, had considerable liquidating experience. Under the auspices of the Government he has been receiver for e bank at Lynn, Mass., since the latter part of 1931, and has been directing its liquidation. An official of the Treasury said in regard to Mr. Baldwin: "By reason of his ability in liquidating that bank, the Treasury Department saw fit to transfer him to the Commercial National Bank. We have every confidence that he will administer the affairs of the institution in a manner satisfactory to all concerned."

7. June 25, 1933 Evening Star Washington, DC

Article from Evening Star, June 25, 1933

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GETS GRAND JURY PARK SAVINGS BANK CASES TOMORROW Indictment to Be Sought of Former U. S. Treasury Official and Others. MOUNT VERNON BANK SHORTAGE IS REVEALED Stunz Believed Informed of Bank Examiners Visits and Enabled to Cover Up. Evidence in support of criminal charges arising out of the failure of the Park Savings Bank which has revealed a shortage of at least $1,700,000. will be laid before the District grand jury tomorrow along with recommendations for the indictment of four men. United States Attorney Leo A. Rover who will handle the entire case, has indicated that he expects report from the grand jury Wednesday, the last day of its term Mr. Rover revealed vesterday that he already has directed the presentation to the grand jurors of evidence bearing upon an alleged shortage of $5.626 the Mount Vernon Savings Bank This shortage according evidence gathered by the Department of Justice, resulted from two instances of larceny and one of check kiting. The grand jurors are also expected to report on these Wednesday charges Former Official Involved. Outstanding among those against in will be indictments whom sought connection with the collapse of the Park Savings Bank former Treasury Department official who resigned in May, shortly after agents of the Justice Department's Bureau of Inves stigation had begun their probe into the bank's financial status. believed the Government will attempt show that Robert Stunz former vice president of the bank. who killed himself last March regularif informed by some one when Federal bank examiners were about to visit his institution This information it is said, enabled Stunz successfully d to conceal growing shortage in the bank over period of several years. In return for the information it is al leged he accorded his informant irreg ular financial favors. Mr Rover emphasized, however that the bulk of the $1,700,000 shortage at the bank resulted from bad loans and not from any criminal act Connected With Embassy. It has been reported that the Government might seek prosecute man formerly connected with one of the local embassies, on the theory that he furnished Stunz with liquor and received in return special favors at the bank This man, however, is understood to have left the country and not believed an indictment will be returned against him The other three persons against whom indictments will be sought are said to include former employe at the bank and two customers of the institution The nature of their connection with the shortage has not been disclosed. but believed the Government will attempt to prove they had guilty knowledge of alleged ularities on the part of Stunz The Department Justice is said t to have discovered that he credited the accounts of some depositors with sums which were never deposited. and that promissory notes protecting loans were canceled alThe though the loans were not paid investigators believe that other persons connected with the bank may have had knowledge of these transactions. Probe Not Completed. he In announcing yesterday that Mr would present the case Monday Rover said he has not completed his investigation and that at later date he may seek an indictmentagainst a fifth individual who was formerly connected with the bank Witnesses to be called tomorrow will include Jorss, president of the bank: Mrs Emily Downey head bookkeeper, and E.C Sauer, an accountant of the Bu Investigation reau of After Stunz had taken his own life note in his handwriting exonerating other employes of the bank was found It is not known what use if any, will be made this note The evidence relating to the shortage at the Mount Vernon Savings Bank was presented to the grand jury Thursday Assistant United States Attor ney Charles Murray It expected that indictm ents will be sought against two or three employes of this bank and customer one The investiga tion according to Mur ray revealed three separate shortages kiting check the involving one The amounted to $2,345. while the other two were fixed at $2,181 25 and $1,100. Check Kiting Test Murray said the check kiting probe would serve test case to determine whether other similar transactions can be. essfully prosecuted He de scribed it as follows A depositor the bank had a friend who was employed there The depositor would persuade third party to write check aother bank although knew the third party did not have funds on deposit to cover the check The depositor would cash the check through his friend at the bank who is also said to have known that there not sufficient funds on deposit in the other bank cover On the following day how ever, the depositor would cash check drawn under similar and use the money derived from the check to build up balance sufficient to cover the first one It alleged this deprocedure was followed to 2,000 positor had received some entitled not was which he The failure the Commercial Na tional Bank, through which the Mount Vernon Bank cleared the dis covery of the alleged kiting Ordinarily the clearing house sent checks they before Bank the Commercial to the bank on which they were drawn When the Commercial Bank closed however the clearing house sent one of the checks directly to the home bank The depositor 18 said to have the checks during the time they were going through the Commercial Bank and when this delay was eliminated the alleged irregularity was discovered. At Issue With Committee. Frank J. Sobotka who chairman of one of the three working on the question of trying free de positors funds from the Park Savings Bank last night issued tak ing sharp issue with the committee of depositors headed by Joseph W. Thomp son. over the question of receivership Sobotka is strongly in favor of ceivership as the best next step, while the Depositors Committee opposed to receivership pending development of its own plan. as yet undisclosed. Sobotka said that despite the fact that & member of the Thompson comI

8. August 16, 1933 Evening Star Washington, DC

Article from Evening Star, August 16, 1933

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13,951 Licensed Banks Operating, With 2,870 Closed or Restricted. RECORDS ARE GIVEN OUT BY WALTER J. CUMMINGS Show State of Business as Closed August 12 for Member Institutions. (Copyright. 1933 by the Associated Press.) The American banking structure is virtually back on its feet. The records of Walter J. Cummings, of executive assistant to the Secretary liTreasury, today showed 13,951 censed the banks operating without restrictions and only 2,870 closed or operating inrestricted basis. These figures on clude a National banks and State memand non-members of the Federal mutual Reserve bers System, but exclude savings The institutions. record is as of the close of business August 12 for member institutions and as of July 26 for non-members. Held "Bank Opener." Cummings, brought to regaled Washington with Secretary Woodin and opener by inofficial title of 'bank 4.banks doing I said the that on August 12 there an were unrethat 740 961 stricted National banking business with State deposits memof $16,938,145,000 with deposits of $9,741,000 1 were bers non-membres on a of and $5,057,596,000 8.250 banks operating having 26 deposits full-time basis on July 31 deposits are as of December The there has been no assembled that 1932. condition as report of banks since time. next such condition report, based conThe National bank call by the troller on the as of June 30, will be made in about The two figures weeks. in Cummings' report were the from official records of taken of the currency for national from controller State member banks, and and Federal Reserve Board records for nonmembers. the inactive side, it was found On on August 12 there were yet closed 909 that operating on a restricted basis national or banks, having deposits institu- of $954,304,000; 95 State member and with deposits of $204,134,000. tions, non-member institutions, exclusive of 1.866 mutual savings banks, with deposits of $1,005,365,000 d The composite picture shows deposits while banks of $31,737,728,000. in a in total open of $2,163,803,000 was tied up closed or restricted banks The picture is even brighter, Cum- taken said, when cognizance is the mings of the many details entering into In of reopening an institution this task connection. he pointed out that of 909 national banks still closed or unlicensed, the 317 have received the official "O K. of the Treasury and are raising money provided in approved reorgani- rezation plans. This will involve the lease of $400,000,000 more in deposits, he said. S Cummings said every closed banking had t institution in the United States been examined by the Treasury since the banking holiday in March. 1 Table Prepared by Cummings. this table, prepared by Cummings, bankIn the composite statement of the ing is structure in the United States at the close of business August 12: Licensed banks (unrestricted Number Deposits 4,961 National banks $16,938,145,000 t bank State member banks 740 9,741,987,000 e Non-member (exclusive of mutual savings d banks) +8.250 5,057,596,000 e Total 13.951 $31,737,728,000 Number Unlicensed banks (closed or restricted *Deposits h 909 National banks $954,304,000 95 204,134,000 State member banks Non-member bank (exclusive of mubanks) tual savings 1.866 1,005,365,000 Total 2,870 $2,163,803,000 As of 26. 1933. December 31, 1932 tAs of July D. C. Average Low. Washington the percentage of banks In reopened since the bank holiday Nat is considerably below that for the tion. However, progress is being made, I with prospects that most of the remain- be ing restricted institutions soon will doing business again. Only one of the 13 unlicensed banks the has actually re-opened for business. Chevy Chase Savings 1 branch of the now a Bank, Riggs which purchase National is Bank. Negotiations for this were under way before the bank holiday Of the remaining 12 unlicensed banks eight are members of the proposed Hamilton National Bank merger, which is getting ready to open. No date has ) yet been fixed for the opening, however. The members of the merger are Federal-American National Bank & e Trust Co., the District National Bank, Potomac Savings Bank, Northeast Savings Bank, Woodridge-Langdon Savings and Commercial Bank, Washington Savings Bank, United States Savings Bank and Seventh Street Savings Bank. The other unlicensed banks in the city are the Franklin National Bank, the Mount Vernon Savings Bank, the Industrial Savings Bank and the Park Savings Bank. The Park Bank is in the hands of a receiver, for liquidation All the other unlicensed banks are in the hands of conservators. The Commercial National Bank went ) into the hands of a receiver late in , February, and is now being liquidated. e FRENOLL TARIFF ROAST

9. October 4, 1933 The Washington Times Washington, DC

Article from The Washington Times, October 4, 1933

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FRANKLIN BANK NEARLY READY TO REOPEN Treasury Speeds Up Case; Plan Calls for Payment, in Part, to. Many Depositors The local banking situation as it concerns closed institutions began to clear today with the announcement at the Treasury that considerable progress has been made in a plan to reopen the Franklin National Bank. This announcement, following the approval yesterday of a plan whereby the Mt. Vernon Savings Bank will release nearly $1,000,000 in frozen deposits through a sale of assets to the Washington Mechanics and Savings Bank, will leave but few other closed banks in the city. Shuman's Big Job So far has the work of reorganization progressed, that Maj. W. Irving Shuman, special representative of the Comptroller, who has engineered both the Hamilton merger, the Chevy Case sale and the Mt. Vernon bank agreement, in connection with his task of reorganizinz closed local banks, has resigned to join the new Federal Deposit Insurance Corporation. Of the Franklin reopening plan it was understood that it contemplates the payment of a substantial per cent of depositors' accounts with payment in full to come. Cooper Case Halted Only the United States Savings Bank, of which Col. Wade H. Cooper is president, and the Industrial Savings Bank, a colored institution, will remain closed after the Franklin plan is finally approved. The Treasury has already stated publicly that before January 1, all banks will either be reopened through some plan or placed in receivership. Colonel Cooper today in District Supreme Court was temporarily halted in his effort to force the Treasury approval of his plan when his suit was postponed until Monday.

10. October 13, 1933 The Washington Times Washington, DC

Article from The Washington Times, October 13, 1933

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CASE TO DECIDE KNOTTY LEGAL QUESTIONS Claims of Numerous Parties to Action Conflict; Federal Officers Involved Counsel for the many parties represented in litigation surrounding the Park Savings Bank, which, with shortages exceeding $2,000,000, is in the hands of a Treasury receiver, today in District Supreme Court had the trial date set for October 25. Justice Jesse C. Adkins is scheduled to hear the case but it is possible that it may be transferred to Justice Jennings Bailey. The Parks Savings case is con sidered the most important of local banking cases because of the unusual questions of law raised during the efforts of depositors to salvage their savings from the wreckage following the suicide last spring of Robert S. Stuntz, vice president. Treasury Power Tested A depositors' committee represented by Attorneys E. Hilton Jackson and William E. Richardson began the litigation when they challenged the right of the Treasury to place a conservator in the bank, which they claimed was an Alabama corporation. It was then discovered the bank's charter had expired some years previously, and then the Treasury placed a receiver in charge. Stockholders and directors then became involved when it was claimed that, in view of the expiration of the bank charter, the depositors were operating as a copartnership and the stockholders were liable for the return of $50,000 in stock dividends they had been paid. Meanwhile three other banks in the District which have been closed since the holiday, reported progress in their plans. Agreement Near It was reported that Franklin National Bank officials are about to come to an agreement with the Comptroller on the differences in their respective plans for reopening, and the Washington Mechanics and Savings and Mt. Vernon groups are encouraged in their effort to pay more than the original 35 per cent on deposits provided in the initial agreement merging the two. Attorneys for Col. Wade H. Cooper state that probably Monday they will ask the District Supreme Court for an early trial date on Col. Cooper's suit to compel the Treasury to relicense his United States Savings Bank.

11. October 22, 1933 Evening Star Washington, DC

Article from Evening Star, October 22, 1933

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These were declared Savings Bank. insolvent and placed in the hands of receivers in July. Each has declared a dividend. Only two banks have been turned over to receivers since January-the Commercial National Bank and the Park Savings Bank. The former has paid a dividend of 20 per cent, but the Park Savings Bank, where there is a shortage estimated at more than $2,000,000, is the center of an involved court battle, which will come to trial next Wednesday morning. The Commercial National appears clearly to be in line for help from the Deposit Liability Board, but the status of the Park Bank, where so little assets remain, virtually puts it in a class by itself. 12 in Conservators' Hands. In the third general class of closed banks here are 12 now in the hands of conservators. This includes seven institutions, whose prime assets were taken over by the new Hamilton National Bank merger, but whose remaining assets are in the hands of conservators. Controller of the Currency O'Connor plans to place these remaining assets in the hands of two receivers shortly. The new Hamilton National Bank is moving substantially forward. according to reports, and is not officially involved in any way by the liquidation of assets remaining in the hands of conservators. There is one link, however, to the advantage of the Hamilton Bank, in the "right of substitution" clause of the contract by which the conservators sold their prime assets to the Hamilton. Within six months after the execution of the contract, the Hamilton may substitute any of the assets it bought, for any of the assets remaining in the hands of conservators. So that, although the controller of the currency may place these remaining assets in the hands of two receivers, in place of the present conservators, the old tie of that "right of substitution" clause still would hold. It may complicate the business of attempting to get new R. F. C. loans on these remaining assets. It is understood, however, that the controller himself is interested in this subject, here in the National Capital, and will give attention to it, besides the study to be given by the local committee of the Deposit Liquidation Board. Another in Litigation. Another of the banks in the hands of a conservator. the United States Savings Bank, is in litigation, with trial in its case scheduled for November 6. Other conservatorship banks are the Mount Vernon Savings Bank, the absorption of which by the Washington Mechanics' Savings Bank, through a special merger agreement, is expected to be effected this week; the Franklin National Bank. which is trying to reopen on a plan of its own, and the Industrial Savings Bank. colored institution, which is working on a plan of reorganization to become a national bank. Part of the assets of the old Chevy Chase Savings Bank which since has become a branch of Riggs National Bank, are still in the hands of a conservator.

12. November 5, 1933 Evening Star Washington, DC

Article from Evening Star, November 5, 1933

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BANKS MAY COME INTO COURT AGAIN United States Savings and Parks Savings Are Still in Litigation. Progress was made last week in disposition of the unlicensed bank situation in the District of Columbia, with prospect that the two banks in litigation will come before the courts again t is week. The case of the United States Savings Bank, which has been hanging fire ever since this institution was dropped from the Hamilton National Bank merger, will come up for hearing Tuesday morning before Justice Jennings Bailev in District Supreme Court. Depositors of the Park Savings Bank. wh last week lost their fight for a court receiver to replace the Treasury Department receiver. plan to file an amended bill in an effort to collect as much as possible from the directors and stockholders. Two Receivers Named. Two receivers were appointed for eight unlicensed banks. one of whom has taken charge. with the other scheduled to arrive this week. Former Gov. Cary A. Hardee of Florida has already taken over the remaining assets of the Federal-American National Bank & Trust Co. and the old Chevy Chase Savings Bank. Norman R. Hamilton of Portsmouth. Va., is planning to arrive here next Wednesday to take charge of six other unlicensed banks, which are the District National Bank, the Northeast Savings Bank, the Eventh Street Savings Bank. Washington Savings Bank, Woodridge-Langdon Savings Bank and the Potomac Savings Bank. Meantime negotiations for a merger of the Franklin National Bank with the Washington Mechanics Savings and the Mount Vernon Savings Banks have been under way, without a complete agreement having been reached. It was understood last night that progress had been made in the negotiations. although final decision had not been made as to whether the Franklin would merge or try to reopen alone. The Mount Vernon-Mechanics merger is making rapid progress, officials said last night. 4 Banks Unlicensed. As the District of Columbia situation stands today, according to Controller of the Currency O'Connor, in a review of the unlicensed banks of the Nation last night. there were 13 unlicensed banks here at the close of the President's holiday in March: nine of these have been licensed, chartered or placed in liquidation, and four of these are still unlicensed. Of these four. two plans have been approved. one for the Mount Vernon Savings Bank to merge with the Washington Mechanics, and the other for the reopening of the Franklin National Bank. Officials of the Franklin bank have not yet given their full agreement, however, to the Treasury plan. One plan has been disapproved, according to the controller's tabulation. This is presumed to be the plan for the United States Savings Bank, whose president, Col. Wade H. Cooper, is fighting the Treasury in the courts to force adoption of the Cooper plan. And finally, one plan for license is under consideration, that of the Industrial Savings Bank, a colored institution. which hopes to reorganize into a national bank. The United States Bank long has been in the courts, since Col. Cooper made such a fight to keep it out of the 4 Hamilton National Bank merger that the Treasury voluntarily withdrew it (Continued on Page 2, Column 4.)

13. November 8, 1933 Evening Star Washington, DC

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NEW BANK MERGER CHEERS CAPITAL Plans for Franklin National Help Clear Situation Here Further, BY EDWARD C. STONE. The banking skies in Washington now are being cleared up with most satisfactory rapidity The announcement in The Star late yesterday that the Washington Mechanics Savings Bank was about to take over the Franklin National Bank aroused wide interest in the financial district today This is the second merger within a short time in which Ezra Gould, pres ident of the Washington Mec hanics Savings Bank has been the leading spirit Only a few days ago he announced that the Mount Vernon Savings Bank would be consolidated with his institution The merger of these two restricted banks with the Washington Mechanics will mean new institution with about $6,000,000 in deposits. The consolida tion will release $3,300,000 in deposits which are now frozen in the Mount Vernon and Franklin National Banks On completion of the merger, the Mount Vernon will release $80 .000. or 40 per cent of their deposits, and the Franklin National will release $2.500,000 which is between 56 and 75 per cent of that institution's deposits Gould to Head Merged Bank. The consolidated bank is to be known as the Mechanics Franklin Ezra Gould is to be president, John B. Cochran. former president of the Franklin Na tional chairman of the board Thomas Hickman, vice president in charge of the Franklin branch, while Clarence Burton. vice president and cashier of the Washington Mechanics, will hold the same positions in the new deal Frank W Lee. former president of the Mount Vernon will be vice president in the new bank in the office at Ninth street and Massachusetts avenue, which is to become the merged bank's headquarters. Settling of the Franklin's future leaves only two other restricted banks in Washington to be taken care of They are the United Savings Bank and the Industria Savings Bank ous efforts are being made to get both these institutions on their feet again Something must happen by the first of the year as President Roosevelt ruled that every time bank in the United States must either be back on full time or in receivership by January 1. That means that they will be defi nitely in or out of the financial picture Both wish few to reopen as individual units. Federal Rulings on New Issues, The Federal Trade Commission has ruled that it is allowable for under writers to send out circulars containing information on pro posed new offerings of securities prior to effective date of registration statement filed. providing they are marked to indicate that they are informative only The commission ruled that the Securities act definitely prohibits offers until the ation of the waiting period of 20 days. the time between the filing and the eff fective date of registra tion statement The rulings were made in response to numerous inquiries from underwriters The Trade Commission statement de clared further that "prospective purchasers whether they be dealers or the general public, should during this wait. ing period be educated up the nature of an issue which it expected that they will shortly be asked to buy, al ways reminding them that no determi nation to buy is requested of them until the expiration of the waiting period Towson Regins Institute Course Washington Chapter. American Institute of Banking. inaugurated new course on "Current Economic Problems' at the chapter rooms in the Bond Building last night Lectures will be given every Tuesday evening by Norman E Taxson, assistant treasurer and manager of the foreign department of the Washington Loan & Trust Co. The subject discussed in the opening talk was "The Banker- Is God. Man or Devil? The new course is open bank directors and officers holders of standard certificates in the Institu and others having 10 years experience in finance. Subsequent lectures will cover Government fiscal policies economic planning inflation and public works programs Chapter officials were gratified by the attendance at the first session 88 Cities Vote Bond Issues. New financing* approved by the voters of 88 municipalities in 23 States during October totaled only 5,458,715 as com pared with $25 132,750 during September according to The Daily Bond Buyer Among the larger items approved were $590.000 Cedar Rapids Iowa, School District $555.000 Cedar hurst and $370,000 Bath, N Y October totals of financing appro during previous years were $1,468,500 in 1932 $230,433,000 in 1931 and $4, 136.500 in 1930 During October the taxpayers in 38 communi in 14 States rejected proposals to issue bonds totaling $7,326,900 as compared with $7,756,316 in Septem. ber October totals for previous years were $1,986,500 in 1932 $4.058,294 in 1931, and $9,057,000 in 1930 Lively Day on D. C. Exchange. The holiday proved beneficial to the Washington Stock Exchange. as business showed marked improvement to day The Bonds were in better demand. opening sale was in Washington Gas 6s. series B $100 selling at 103. Wash ington Gas 5s. 1960 came out in $500 transfer at 1051/2 Potomac Electric Power Consolidated 5s moved in $1.000 transaction at 103 1/2 Washington Railway & Electric 4s came out on the board twice $1 .000 changing hands at 87 and $1.000 at 871/4. the closing price Lanston Monotype held the spotlight in the stock division Ten different sales were orded during the session every one made at The day turn over in this issue totaled 150 shares Potomac Electric Power 6 per cent preferred moved in two tiny sales, both at 111. Heard in Financial District An unusually large attendance is expected at the November meeting of the District of Columbia Life Under Association, which starts at the Willard at 6:15 this evening. C. B. Merriam R.F.C director. and chairman of the one Liquidation Board, Deposit speaker and life president M. A. Linton, will be the other A condensed statement of condition at the close of business October 25 as

14. November 12, 1933 Evening Star Washington, DC

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O'CONNOR WITNESS TOMORROW IN U.S SAVINGS BANK CASE Controller Called by Cooper in Effort to Force Reopening Plan. JURISDICTION OVER OFFICIAL IS ISSUE Charge of Arbitrary Use of Discretion Under Attack by Counsel of Treasury. Controller of the Currency J. F D'Connor is expected to take the witness stand tomorrow morning in the United States Savings Bank case béfore Justice Jennings Bailey in District Supreme Court The controller has been called as a witness by Col. Wade H. Cooper, president of the bank, who is attempting to force the Treasury Department to reopen the bank under the Cooper plan, which has been rejected by the Treasury Controller O'Connor testified once before in September during Col. Cooper's original suit, which resulted in withdrawal of the United States Savings Bank from the Hamilton merger The issue before the court this time to reopen the bank is set forth in an amended bill filed by Col. Cooper's counsel, W. Bissell Thomas and John W. Staggers. The Treasury DepartP ment, through counsel, George Barse and Charles E. Wainright, is stoutly opposing Col. Cooper's efforts to force the Treasury to use the Cooper plan. Question of Jurisdiction. The Treasury has raised the principle issue of whether the court has jurisdiction to compel the controller of the currency to take certain specified action. The question, Barse has insisted. narrows down to whether the controller has acted within his discretion or whether he has been arbitrary in the use of discretion Government agencies always have been vigilant in defending their executive discretion against attack. Justice Bailey during the two days which the trial has run, already has twice expressed some doubt as to whether he has jurisdiction He asked Treasury coursel whether any other courts had forced the controller to take such action as is asked in the present case. and Treasury counsel recalled there were none on record. Cooper's counsel has been digging deep into the status of the bank and endeavoring to show from testimony of several witnesses that the controller did act in an arbitrary manner in refusing to let Col. Cooper reopen on the plans he has submitted so far. Justice Bailey, before adjourning court Saturday noon, asked that counsel for both sides submit briefs by tomorrow on the question. Commercial Dividend. Meantime another important development in the bank situation here will be the payment tomorrow of the second dividend from the insolvent Commercial National Bank, of which Col Cooper also was president. This bank already has paid the first dividend of 20 per cent and tomorrow will be ready at 9 o'clock to begin paying out checks for the second dividend of 30 per cent The bank will be open daily from 9 to 5 o'clock. Progress is being made by the three member banks of the new MechanicsFranklin Savings Bank merger toward getting waivers from depositors of the two unlicensed banks and selling stock in the new enlarged institution. The Mount Vernon Savings Bank. which was unlicensed, is rapidly receiving from its depositors waivers for 60 per cent of their deposits in order that they may receive 40 per cent in cash when the new bank opens. Sale of stock is progressing rapidly, officials say. The unlicensed Franklin National Bank is the scene of great activity as preparations are made to transfer the prime and liquid assets of this institution to the new merger, in order to leave the remainder in the hands of three trustees. Examiners for the Treasury and the Reconstruction Finance Corporation are in the bank, and it is expected that a determination soon will be reached as to exactly what percentage the depositors will receive. It is expected to be somewhere between 65 and 75 per cent Ezra Gould, president of the Washington Mechanics Savings Bank, the open stitution, which stricted but has had a record of many years of successful operation without interruption, has been busy with many problems involving the consolidation of the three banks The new institution. of which he will be president and John B. Cochran of the Franklin Bank will be chairman of the board will have a capital stock of $300,000 and deposits of about $6,000,000. The Park Savings Bank case still is hanging fire in District Supreme Court, with the Depositors' Committee planning to file an amended bill designed to establish the liability of directors and stockholders in this sadly insolvent bank. where the shortage is now over $2,000,000. Negotiations are under way with Treasury officials concerning a proposed plan to reorganize the unlicensed Industrial Savings Bank.

15. February 13, 1934 Evening Star Washington, DC

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H.O.L. C. OUTLINES MORTGAGE POLICY To Refund All Eligible Funds Held by Receivers or Conservators. The District office of the Home Owners' Loan Corporation is in the process of refunding all eligible mortgages held in financial institutions in hands of receivers or conservators, in accordance with a policy announced last month by the Board of Directors of the Home Owners' Loan Corporation. In communications to those banks and financial houses as yet unopened in the District, Paul J. Frizzell, manager of the H. O. L. C. here, during the last week has requested each of them to furnish him with applications from every home owner in Washington whose mortgage is in such ownership. To Liquidate Assets. The action is being taken, Frizzell explained, to liquidate such assets as quickly as possible for the benefit of depositors in these institutions, and also to provide home owners whose mortgages are in such a category with permanent financing and remove from them the fear of having their mortgages called at maturity. It is estimated that more than 760 of such mortgages are held in closed banks here, having a total value in excess of $2,000,000. Frizzell's office has sent out communications to 19 banks either in the hands of conservators or receivers. He has asked them to either have the home owners whose mortgages they hold to file an application with the H.O.L.C., or that the banks furnish him with the names of the home owners so that his office may solicit the applications. Communciations Sent Out. The communication went out to the Franklin National Bank, Federal American National Bank & Trust Co., District National Bank, Potomac Savings Bank, Washington Savings Bank, Northeast Savings Bank, WoodridgeLangdon Saving & Commercial Bank, United States Savings Bank, Seventh Street Savings Bank, Mount Vernon Savings Bank, Industrial Savings Bank, Park Savings Bank, Chevy Chase Savings Bank, the Departmental Bank, Bank of Brightwood, International Exchange Bank, North Capitol Savings Bank, Continental Trust Co. and Commercial National Bank. Seven of the above named banks opened as members of the Hamilton National Bank merger, and the Chevy Chase Savings Bank is now a branch of Riggs National Bank.

16. March 1, 1934 Evening Star Washington, DC

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MT. VERNON BANK PLANS HASTENED Arrangements Being Made to Terminate Conservatorship Tomorrow. Arrangements were being made today to terminate the conservatorship of the Mount Vernon Savings Bank tomorrow morning, in order that final details may be worked out for opening the institution, at Massachusetts avenue and Ninth street, as headquarters of the new Mechanics-Franklin Savings Bank on Monday morning. This will free about $800,000 to about 30,000 depositors. Control to Directors. Conservator A. O. Wharton, who has been in charge of the institution since it was refused a license to reopen after the President's banking holiday last March, will turn the control of the institution back to its directors. This will enable the directors to sell the prime and liquid assets of the bank to the Washington Mechanics' Savings Bank, a going institution, about which the new merger centers. The depositors of the Mount Vernon will get 40 per cent of their deposits when the bank opens. Before checks can be drawn against this new account, however, depositors in the Mount Vernon must sign signature cards and get their pass books. Assets of the Mount Vernon remaining will be liquidated by Robert Highfield, a vice president of the Mount Vernon, for further payments to depositors later on. Frank W. Lee, president of the Mount Vernon Bank, will become a vice president of the new Washington-Mechanics Savings Bank. Franklin Pushes Plan. In the meantime the Franklin National Bank pushed forward in its campaign to get back from depositors a sufficient number of waivers and to sell sufficient new stock to make way for reopening of the Franklin Bank as part of the new merger. Receivership of the Potomac Savings Bank was being moved today from 1726 Pennsylvania avenue to the District National Bank Building at 1406 G street, where Norman R. Hamilton, receiver for six local banks, has his headquarters in the home of the old District National Bank.

17. March 4, 1934 Evening Star Washington, DC

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Both Stocks and Bonds Have Climbed Steadily From Depression Bottom. ADVANCES MOST RAPID IN LAST TWO MONTHS Black Urges Credit Banks for Loans to Aid Smaller Industries. BY EDWARD c. STONE. Stock Securities on the Washington progress Exchange have made marked when year ago at this time the since exact a "bottom of the depression was reached. at the securities list Electric show Glances Washington Railway & March preferred that was selling at 82 1/2 in was a year ago. It is now 90 changCapital Traction early in March. stock 1933. at ing closed hands the week yesterday at 25 1/2 cent It Potomac Electric Power 6 per year sold on this date last and has preferred at 10712 while it is now 109 been as high as 112 prePotomac Electric was moving 412 per around cent 106 two power at ferred this stock time last year. while issues, it is how- now 108. These not good examples months of broad as ever, are in the past 12 above par advances remained well first constantly they have since the depression got under way Bonds Also Are Higher. advanced Capital bonds also the last have 12 months 48 a materially during R first 5s sold at Ana Anacostia R They are now 5s were 65 901, year ago R guaranteed costia R. moved to 94 1/2 climbed having Capital since during Traction the 5s year. have 1933. They while were selling points at recent 52 in sale March on the exchange took the most place equally at 72 interesting January to look It is since 1958 the gains made Washingto Gas 5s. Washthis year. stepped up from Electric consolihave Railway & from 83 to 88 ington dated 4s have ascended consolida idated 5s 10212 have Electric months from climbed Potomac in two important into 104 of the most division this year creases One in in the Washington stock Gas 1934 Light at has been stock opened so the list shares. This is now 59' And include other 4512 and be expanded to have been cited to the show prices. might issues. Enough better cases trend and higher Yesterday's Market Quiet. was rather dull on Capital the exchange Business here vesterday hands at 26 advance its new Traction changed the present the Since high mark closed during with 2534 bid the for recent stock The week and 27 asked. of earnings under operations conglowing reports railway of talk Capital solidated street been a great deal Traction Present about there has the future holders of have not apstock. peared anxious to Linotype sell. appeared on at Mergenthaler two 10-share sales been the board in stock has recently is former market This active to take again. much 261/2. more leader, and is expected when business of dividends its old place the resumption Washington warrants bond division figured in In the Electr 4s Yesterday Railway transfer & at 89 held under $1,000 second business session was the Saturday being the "new been deal. resumed two after years Increased has abandoned just trading for about brought back the old schedule Favors Credit Banks. interBlack of Government he has The system credit banks which necessary mediate proposed is absolutely Eugene Black in of an- the a swer this time, Gov. Board members said of of Federal to Reserve question the by House Banking the subcommittee Committee details Currency any thought and Without asserted giving that he get out and the Governor Government that should he is working on there business that end asserted that market a plan The Governor to a financial and been small industries rehas never country for have complete can this we would not industries covery get finance ancial or paying that until the aid small without exorbitant mortgaging something loans. estimate of interest said he on had money made necessary no of He the amount such of system have of such banks. system, figures but of such indicated in finance few he days. should might The be the reserve backbone of course. a plan, he said. Gossip. Financial District vernon Opening of as the a unit Mount of the Bank Washing- will ings Bank Savings events Mechanics important week. ton the most this one of circles openus here receivership are Morrow financial is the Savings Bank tarried on work proceedings Potomac the District at now 1406 being National G street from Bank 1726 The past Pennsylvania headquarter in rters transfer avenue sferred during the Co., Transit Public week. Washington report Rapid revealed to the a gain in the Utilities of 313.18 deficit of The its January Commiss earnings in net $6,322.91 in compared like period a Westheir year heimer firm of of during the with Henry a Exchange ago. Capital westheime New proposed York in excl own of his week & Co. Stock to was egulate connection in the with Harmer the He company. Reeside visited the bill the local managed office by president Florida of which is C. GrahaBank is in visitors is Edwin National Returns Hamilton short visit. land of business before just broke. the boom report for doing like a that the arvelous the "good old Winter days

18. March 6, 1934 Evening Star Washington, DC

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REOPENED BANK'S DEPOSITS MOUNT Three Times as Large as Withdrawals on First Day of Operation. Deposits in the Washington Mechanics Savings Bank were three times as large as withdrawals yesterday, as the Mount Vernon Savings Bank reopened as headquarters of the Mechanics Bank at Ninth street and Massachusetts avenue. This was disclosed today by Clarence F. Burton, president of the enlarged Mechanics Bank, as the institution went into its second day of operation with substantial lines of depositors in the lobby. Surprised by Showing. President Burton and Vice President Frank W. Lee were not only gratified but surprised at the first day's showing. they said, because withdrawals particularly have been much smaller than they had anticipated. There were many large deposits, one being for $21,000, it was reported. The bank was profusely decorated with floral gifts from friends of the bank in the business and financial section. A handsome offering came from the District of Columbia Bankers' Association. Franklin Efforts Continue. The Franklin National Bank continued meanwhile with its efforts to get in sufficient waivers from depositors and to sell enough stock in the new merger to reopen as a part of the enlarged institution. Both the Mount Vernon and the Franklin have been closed for about a year, since the President's bank holiday. The Washington Mechanics' Savings Bank, with the reopening of the Mount Vernon as its headquarters, now has the downtown main office and four branches scattered throughout various business sections of the city.

19. March 12, 1934 The Washington Times Washington, DC

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BANK PAYMENTS MANY HER Approximately 38,000 Washingtonians and $1,000,000 were affected by developments in the closed-bank situation during the past week. While the North Capital Savings Bank, closed since before the banking holiday, will not pay its second 12 1/2 per cent dividend until tomorrow, the announcement that this was to be done was made Saturday by John S. Bryan, receiver. This development came close on the heels of the reopening of the closed Mt. Vernon Savings Bank as a unit of the unrestricted Washington Mechanics Savings Bank, headed by Clarence F. Burton, and the release of 40 per cent of deposits frozen since the bank holiday. The North Capital will begin paying off tomorrow about 8,000 persons. Approximately $120,000 is involved there. Earlier last week the Mt. Vernon began paying off, 30,000 estimated depositors being given access to more than $800,000. Sometime within the next two or three weeks the Franklin National Bank, also closed since the bank holiday. is scheduled to reopen as a part of the Washington Mechanics-Mt. Vernon combination. That will release approximately $1,200,000 and will affect some 10,000 persons. Mr. Burton, president of the Washington Mechanics, said today that every effort to expedite the opening of the Franklin National was being made.

20. April 1, 1934 Evening Star Washington, DC

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ATTACKSTREASURY ON BANK PROGRAM Col. Cooper's Counsel Charges Attempt to Defeat McLeod Bill. Attacking the Treasury Department's proposed 100 per cent assessment on stockholders of local banks in receivership, John W. Staggers, counsel for Col. Wade H. Cooper. president of the United States Savings Bank, last night declared the move to be a "gesture on the part of the controller of the currency to deteat the McLeod bill." This measure will be considered by a subcommittee of the House Committee on Banking and Currency Tuesday. A proposed amendment which would grant benefits to all banks which have borrowed from the Reconstruction Finance Corporation is pending before the subcommittee. This would bring most of the closed banks here within the scope of the measure. Under the bill depositors would be paid 100 cents on the dollar. The controller of the currency for some time has had under consideration the question of laying an assessment on local banks in receivership. Doubts Legality of Move. "I doubt the legality of this move by the controller," declared Staggers in his statement. "for the reason that the law governing receiverships specifically provides that before an assessment can or may be made. it is necessary for the Controller of the Currency to declare the banks insolvent." Referring to the seven banks which were merged into the Hamilton National Bank, Staggers declared "they were never declared insolvent by the controller until after he had taken charge of the assets and sold, transferred and conveyed to another corporation, the principal sources of earnings of the institutions taken over by him. While this transfer was being forced upon the officers, directors and stockholders of the seven institutions, they were led to believe, and some were actually promised. that the remaining assets would be placed in the hands of friendly trustees to be agreed upon between the controller's office and the banks and were to be liquidated in a slow and orderly manner. This pledge was made to other closed banks and was carried out in only one instancethat of the Mount Vernon Savings Bank. Controller Broke Faith. "Had this pledge been fully carried out, time would have proven there were sufficient remaining assets to have paid the depositors, in most cases, 100 per cent on their deferred deposits. The controller's office broke faith with them and immediately after the transferring of the prime assets, receivers were appointed to take charge of the remaining assets. and now the controller is attempting to extract by force $3,500,000 from the already suffering stockholders. "The Treasury Department records show that the liquidation of national banks has averaged 662/3 per cent over a long period of years and this record consists of liquidations of actual insolvent banks, due to heavy losses on assets on which there could be no future appreciation of value, and they were not liquidated in the midst of one of the world's greatest business depressions. "Under the present method of liqui-

21. July 9, 1934 Evening Star Washington, DC

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* Preliminary figure. subject to revision. The above statement, issued today by the controller of the currency, does not include three of the banks which failed to reopen at the close of the President's bank holiday in March, 1933. two of which have since reorganized by consolidation. The Franklin National Bank and the Mount Vernon Savings Bank were absorbed by the Washington Mechanics Savings Bank, whose name has since been changed to the City Bank of Washington. The Mount Vernon paid to its depositors 40 per cent when it reopened and the Franklin paid 65 per cent. In both cases the remaining assets are not in the hands of receivers, but in the hands of liquidating trusts, which are slowly liquidating these assets for the benefit of bank creditors. Efforts still are being made to reopen the Industrial Savings Bank.

22. July 31, 1934 Times Herald Washington, DC

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APPOINTED RECEIVERS Reveals Only Four of Survey Nine in District Served As Executives EUGENE KELLY By of the nine receivers Only five 13 closed banks in Washfor the ington have previously served in positions in banks, executive survey revealed today. While details of his past ex perience could not be ascertained, learned today that Robert was C. Baldwin, receiver for the Com mercial National Bank, spent of his life in the good deal manufacturing business in Ham ilton, Ohio. Mr. Baldwin refused to give information regarding his past experience to the office of Kenneth Hayes, who public relations counsel for nor, Comptroller of the Currency. was learned, however, that Mr. Baldwin was one time for the State National ceiver Bank at Lynn, Mass. friends he also has His say had as bond sales experience man. Jean Dinger, receiver for the International Exchange Bank. receiver for the Woodlynne National Bank and the Westmont National Bank, both in New Jer He previously affiliated the Department of Justice. with Publisher On Job Hamilton, receiver here, is wellknown publisher, of Portsmouth, Va. From 1913 to 1922 he was collector of customs at Norfolk and was for many years director bank there. He was also director of the Mutual Building Association in that city. Cary Hardee, receiver for the National Bank and Trust Company and the Chevy Chase Savings Bank, was former Governor of Florida. He lawyer and banker. In 1902 he organized the First National Bank of Live Oak, and was president of the institution from 1908 to 1928. He was also president of the Commercial Bank of Live Oak, Fla. Claude H. Woodward, receiver for the Bank of was president of the Mt Vernon Sav Bank from 1928 to 1932. ings (Continued Page Col.