Article Text
Suit Affects Other Banks. Other closed banks in the state have various smaller amounts of bonds pledged as collateral for postal savings deposits in an aggregate estimated at $500,000. The Woodlawn bank is being used as a test case, it being involved to a greater extent than any several other Illinois banks. O'Connell contends that funds of the postal system are private deposits and cannot be given a preferred status. He seeks not only to have the pledged bonds returned, but to make the deposits common claims to be paid at the same rate as those of ordinary depositors. Under the O'Connell theory, the government as such is not being sued and therefore cannot claim sovereign rights and refuse to be sued. Held $454,000 Postal Savings. O'Connell set forth in his petition yesterday that $454,000 in postal savings funds was on deposit in the Woodlawn bank when it closed June 22, 1932. The $300,000 in bonds was pledged to secure the deposit. The return of these securities to the bank would mean an immediate difference of about 10 per cent in returns to depositors. The suit asking return of the bonds to the bank is directed at Secretary of the Treasury Morgenthau, Attorney General Cummings, and Postmaster General Farley, trustees of the postal savings system, and William A. Julian, treasurer of the United States, who also is treasurer of the system.