Park Savings Bank (Washington, DC)

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COMMERCIAL BANK PLANS DISCUSSED Committee of Five to Work With Cooper in Perfecting Program. (From the 5:30 Edition of Yesterday's Star.) Three plans for the Commercial National Bank, now in receivership, were discussed this afternoon at a meeting of a committee of 20 depositors with Col. Wade H. Cooper, president of the institution. Col. Cooper was authorized to appoint a committee of five to work with him in perfecting a program. Meanwhile, suit was filed in District Supreme Court to test the right of the Park Savings Bank, now in the hands of a conservator, to levy on a special bailee account in settlement of a claim against a depositor. After the meeting of Commercial depositors at the National Press Club Col. Cooper said the committee would be appointed soon and would seek to arrive speedily at a single definite plan for the bank. Three-Point Plan Discussed. The plans discussed this afternoon included: 1. Reopening of the present Commercial National Bank, Fourteenth and G streets. 2. Organization of a new national bank, which would liquidate the affairs of the present bank. 3. Possible consolidation with other banks. The names of the other banks with which consolidation would be considered were not made public. Col. Cooper emphasized that whatever plan is arrived at will have to be approved by the Federal Reserve Board, the controller of the currency. the Reconstruction Finance Corporation, the stockholders and depositors. When the committee arrives at a plan, he said, it will be fully explained in 3. statement, which will be printed and sent to all depositors of the bank for approval. Hearing Date Set. The suit concerning the Park Savings Bank was filed by Harris Shapero, 1477 Girard street, a depositor. The suit says Shapero owed the bank $301.50 on a promisory note and that he had on deposit there $1,335.05. The deposits were in three accounts, checking, $600; savings, $200, and special bailee account, $535.05. Through Attorney Lewis H. Shapiro the plaintiff says Richard L. Hargraves, conservator of the bank, has seized the money in the special account to satisfy the note. He contends the note should have been set off against either the checking or savings account. Justice F. D. Letts set April 14 as the date for a hearing on the petition for an injunction to compel the bank to pay the money in the special account to Shapero without deducting the amount of the note.

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SALES OF STOCK BY BANK GROW (Continued from Local Page) have been considering for the future of the bank. Little can be learned about the future prospects of the Mount Vernon Savings Bank but it has not been regarded as a prospective merger member. The Chevy Chase Savings Bank has been taken over by the Riggs National Bank and thus removed as a prospective member. The Park Savings Bank, which is said to have been drained of about $1,600,000 before the banking holiday, it is predicted will be placed eventually in receivership. To date it has been managed by a conservator, as have the other "non-liquid" banks. More than $700,000 worth of the required $1,250,000 stock in the new Hamilton National has been subscribed to date, it was reported at a meeting of more than 200 stockholders of the Federal-American National Bank and Trust Company last night. Each of the participating banks has been assigned its quota of the stock of the new institution. Efforts are being pushed to close the subscription campaign by Saturday. The stock selling campaign, however, is to be continued until the needed amount is obtained, Capt. Chester Wells, chairman of the general subscription committee, stated today "Offset" Applies Depositors may purchase stock through money they have on deposit by assigning desired amounts of the money to be "freed" for that purpose. The "offset" principle used in cases of receivership also will apply to deposits in the unlicensed banks. This means that in cases of loans made to depositors the entire amount to their credit in the banks may be applied toward paying off the loan. The average depositor. however, will receive only 50 per cent of his savings immdeiately.

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Procedure Will Be Uniform Throughout Seven Member Institutions. STOCK-SELLING CAMPAIGN HELD ABOVE $1,100,000 Park Savings Movement Goes Forward With Naming of Directors' Committee. Depositors in member banks of the new Hamilton National Bank merger will receive interest on their interestbearing deposits up to March 5, it was learned today. Decision has been reached to make this date uniform throughout the seven banks which are members of the new proposed merger. Already clerks in the various banks have begun to compute this interest. No interest will be paid on any accounts in any of the Hamilton member banks between the date of March 5 and the opening date of the new Hamilton, it was explained. During the interim, it was pointed out, the banks have been on an enforced restricted basis, beginning with the President's bank holiday, and therefore no interest would accrue for that period. Regulations Received. Conservators of all unlicensed banks in the city were understood today to have received extensive regulations from the Treasury Department concerning the operation of off-sets. This is an important development to people who are both depositors and debtors to the same bank. Details of the off-set regulations were not made public, but conservators were making a careful study of the voluminous document and will now place these new rules and regulations into operation. Generally speaking, the off-set is a practice by which the bank credits a debtors with what he has on deposit. But there are said to be the proverbial "1,000 and 1" varieties of off-sets requiring many different technical decisions. The campaign to sell $1,250,000 worth of stock in the Hamilton merger proceeded today with every one of the seven member banks pushing the sale. Exact figures have not been made public today, but it was understood that the figure was somewhere over the $1,100,000 mark. The movement to re-establish a new bank to replace the Park Savings Bank went forward last night, with appointment of a committee of directors of the bank to be headed by Wade H. Atkinson. This committee was authorized to investigate all possibilities to do wl they can for the depositors. The c mittee includes, in addition to Dr. kinson, Charles W. Bolgiano, C. Murray, E. T. Goodman and N. Mo ford. The committee was appointe a meeting of the board of directors night. Third Committee Formed. This makes the third committee which is working on the future of the Park Savings Bank. The first was apa mass pointed by meeting at and Central the High School last Monday night second was announced yesterday by Frank J. Sabotka, former president of the Columbia Heights Business Men's Association. Mr. Sabotka feels that one of the most promising developments would be to place the bank in the hands of a receiver to get a definite settlement of claims and then to endeavor to set up a branch of the new Hamilton National Bank. Meantime, District Attorney Leo A. Rover continued study of the Department of Justice report into the condition of the Park Savings Bank, where the dead vice president left a shortage estimated at around $1,600,000. While Mr. Rover has made public no information from the report, it is understood that certain facts developed there points to the possibility of Stunz having had a confederate who may have tipped him off in advance of the national bank examiners' visit to the bank.

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PARK BANK SUIT BY U

S. SEEN An attempt to attach personal wealth of the directors of the closed Park Savings Bank may be made by the Treasury Department as well as by the depositors' committee of the institution in which was found a shortage of approximately $1,700,000. Government lawyers today pointed out that it was the duty of John F. Moran, receiver for the bank appointed by the Comptroller of the Currency, to make all legal efforts to obtain as much for the depositors as would the receiver whose appointment under jurisdiction of an equity court has been asked by the depositors' committee. The depositors' committee will hold a mass meeting Thursday night at 8 o'clock in Central High School. It was announced at the Federal-American Bank today that John Pool, the conservator, had moved his headquarters to the Fifteenth and H streets Northwest branch of the bank and will conduct liquidation there.

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DIRECTORS ASK BANK SUIT END Six pleadings filed in District Supreme Court yesterday by defendants in the Park Savings Bank suit revealed the inclination of all parties to place the law in the case squarely before the court. Declaring that the bank has operated as a corporation for the past four years and that no question has been raised before as to its corporate existence, the 22 directors of the bank asked dismissal of the suit. The payment of franchise and license fees to the State of Alabama, where the charter was issued, is a recognition of its corporate existence by that State, which has sole jurisdiction in the matter, it is claimed. The receiver, J. F. Moran, averred that he is the legally appointed receiver and stands ready to enforce liability against any persons determined by the court and the Comptroller, indicating his willingness to stand on the law. He asks that the parties in the suit be so realigned as to make the receiver a plaintiff.

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BANK RECEIVER REPLIES TO NOTE SUIT Park Savings Pledged Notes Belonging to Customers Without Consent Admission that the closed Park Savings Bank pledged $42,500 worth of notes belonging to customers without their consent to make up the required $50,000 collateral for a $25,000 loan from the Reconstruction Finance Corporation was made in an answer filed by J. H. Moran, receiver for the bank, to a suit in District Supreme Court today. The suit was originally brought by the R. E. Lee Chapter, United Daughters of the Confederacy, to recover a $4,000 note for an RFC loan. All funds borrowed from the latter were deposited in the National Metropolitan Bank, the answer states, and the present balance is aproximately $30,000.

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CUSTOMERS' PAPER USED BY PARKI BANK Receiver Admits Securities Put Up for Loan Not Institution's. The receiver for the Park Savings Bank admitted in District Supreme Court yesterday that the bank had pledged as security for a loan from the Reconstruction Finance Corporation securities it did not own and that this was done without the knowledge or consent of the real owners. The admission was contained in a formal answer to a suit filed against the bank by the Robert E. Lee Chapter, No. 644, United Daughters of the Confederacy. The suit contended the organization had left $4,000 in securities with the bank and that the institution had pledged them with the R. F. C. without the knowledge or consent of the plaintiff. The court was asked to impress a trust in the amount of $4,000 in favor of the plaintiff on any funds controlled by the bank. The answer of the receiver. filed through Attorney J. Bruce Kremer, read in part as follows: "The Park Savings Bank borrowed $25,000 from the R. F. C. and gave security in excess of $50,000. Approximately $42.500 of the collateral security so pledged was not owned by the bank, but by its customers and was pledged without their knowledge or consent." These transactions occurred before the bank failed with a resulting loss to its customers of approximately $1,700,000. The receiver was appointed after the bank had been closed. Four indictments have already been returned by the grand jury as the result of an investigation by that body of the bank's management.

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The telephone was kept buzzing this morning while Lanier P. McLachlen, president of the McLachlen Banking Corporation, and Karl W. Corby, partner in W. B. Hibbs & Co., were congratulating each other on their respective birthdays. both having arrived in the National Capital on December 5. The International Exchange Bank, Fifth and H streets, is making a dividend payment of 5 per cent to depositors. In March this year the bank, which is in receivership, paid a 16 2/3 per cent dividend, approximating $63,000. The latest payment totals about $20,000. The Park Savings Bank is paying a 5 per cent cash dividend to depositors who did not draw out this amount when the bank was on a restricted basis last March. The payment totals $150,000. During the past two days the lobby has been jammed with depositors, of whom there are 14,000 in all.

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PARK SAVINGS HOURS EXTENDED TO 5

30 P.M. Receiver Moran Arranges Time for Special Benefit of Government Worker. The Park Savings Bank will extend its closing hour until 5:30 p.m. tomorrow for the first time, for the benefit of depositors. Receiver John F. Moran kept the bank open until 3 p.m. yesterday afternoon, two hours after the Government dismissed its hordes, and beginning tomorrow, until further notice, the bank will be open daily until 5:30, especially for the benefit of Government workers who had found it difficult to do business at the bank when it closed at 3 p.m. Depositors are filing claims, and those who did not receive the 5 per cent cash distribution, which started shortly before the bank holiday, and was resumed last Monday, may obtain their share of this distribution. The period for filing claims lasts three months.

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PARK DEPOSITORS' TIME EXTENDED Claims May Be Filed Until 30 Days After Court Decision. Depositors and creditors of the Park Savings Bank have been given more time to file their claims against the institution, it was learned today. Controller of the Currency J.F.T. O'Connor has notified Receiver John F. Moran to extend the time for receipt of claims from March 4. where it is now fixed, to a day which will be 30 days after the Park Savings Bank case, now pending in District Supreme Court. is decided. The controller acted after a'petition had been filed in District Supreme Court by the Depositors' Committee asking the court to lift the limitation upon filing of claims. No decision was reached by Justice Jesse C. Adkins, who has the case under advisement, but the controller. desiring to satisfy any depositor or creditor who might consider his rights in jeopardy, changed the official final date for receipt of claims. Case Pending. The Depositors' Committee, through its attorneys, E. Hilton Jackson and William E. Richardson, had pointed out that the case of the Park Savings Bank was pending before the court and that some depositors had not filed claims with the Treasury Department's receiver because they had been advised the receiver had no authority to receive these claims. The Depositors' Committee said: "It is obviously unfair to the various depositors of the Park Savings Bank to endanger their future rights while this litigation is in its present condition to place such a limitation upon the filing of claims by them or to attempt to force them to admit the jurisdiction of the controller of the currency." The Depositors' Committee asked for an order from the court requiring the receiver to advance the date for receipt of claims until "such time as the court may hereafter permit said order to be continued." Acting Under Law. The controller, it was explained today, was acting under law when he had his receiver place the limitation on filing of claims within the period of "three consecutive months." The Depositors' Committee in the principal suit in equity is still trying to oust the Treasury Department receiver and to replace him with a receiver appointed by the court. The depositors also are attempting to collect the huge losses of more than $2,000,000 from the directors of the bank.

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PARK BANK OFFSET SOUGHT IN APPEAL Two Depositors Continue Fight to Get Credit on Their Loans. Fighting for the right of "offset" in an insolvent bank, L. M. Rice and Mrs. Estelle M. Dominy, depositors in the Park Savings Bank, yesterday appealed to the United States Court of Appeals from a decision by Justice Gordon in District Supreme Court dismissing their complaint against John F. Moran, receiver of the bank. Both Rice and Mrs. Dominy had borrowed from the bank. When their notes fell due Receiver Moran forced collection and the depositors paid their debts in full. The depositors' notes, however, had been turned over to the Chase National Bank on a loan made by the Park Bank from the Chase. When the interbank loan was paid off the notes were returned to the depositors, along with their collateral which had been put up as security. Certain other notes by other people also had gone through the interbank loan transaction, but the debtors had refused payment until later. When they did pay they were allowed an offset of their deposits in the bank against their note, thus reducing their net obligation to the bank. In the case of Rice and Mrs. Dominy the receiver denied offset and suit was brought. Justice Gordon ruled that the transaction in which the plaintiffs took back their collateral and canceled notes ended the matter and forfeited their right to offset. The case on appeal carries a set of facts believed to be similar to those in many other bank cases throughout the country. A final judicial determination of the issue will be awaited with interest by many bank depositors and attorneys. The plaintiffs are represented by John R. Reed and Charles V. Imlay, the receiver by J. Bruce Kreme, G. B. Springston and Herbert M. Bingham.

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The Park Savings, it will be recalled, was one of the most glaring instances of bank failures in Washington at the termination of the President's bank holiday. It was found AFTER the holiday, that the Park Savings Bank had been milked of about a million and a half dollars, JUST ABOUT HALF OF ITS TOTAL DEPOSITS. Although there is a mass of a litigation and although a lot of charges have been made no one has yet been able to discover anything about the missing million and a half. Because of that huge shortage it looked for a time as though the depositors in the institution would lose everything they had put up. The 20 per cent which is about to be paid (AND WE HOPE THAT WON'T BE ALL) is just about twice what some of the misled depositors thought they would get back as a total. The approaching pay off of this six hundred thousand dollars is a further justification, if any additional justification were needed, of the fight which Representative Clarence J. McLeod, of Mchigan, and The Washington Times made at the last session of Congress for legislation on behalf of the victimized bank depositors of the nation. The Park Savings Bank pay off, small as it is, is made possible as A RESULT OF THE LEGISLATION WHICH WAS ENACTED BECAUSE OF THAT FIGHT. Because of the provisions of the so-called McLeod-Steagall bill, the Reconstruction Finance Corporation was able to appraise the assets of the bank at a higher value than they had been held formerly. The bill authorized the Corporation to take cognizance of the likelihood of values of bank assets improving over a period of years as the recovery movement progressed. The Corporation did that in the case of the Park Savings Bank and the payment has resulted. This is not the only local bank which has benefited from the provisions of that law. Several other "dividends" have been made possible through its operation. We believe that the Reconstruction Finance Corporation could be even STILL MORE LIBERAL in its appraisals and stay well within the appraisal provisions of the McLeod bill. More than that, we believe that the manner in which the authorization provisions of that bill have been administered and the benefits which have resulted to the people through that administration should impress the new Congress with the desirability of making those provisions MANDATORY upon the Corporation and upon the receivers of the closed banks.

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Second Payment by Three Insolvent Banks Is Ready for 2,500. $75,000 AWAITS CALL AT NORTHEAST SAVING Park Savings Claimants Instructed in Method of Distribution, Starting Monday. More than $120,000 is waiting unclaimed at 1406 G street for more than 2,500 depositors in three insolvent Washington banks. This was disclosed today with the announcement that depositors in the Northeast Savings Bank, Seventh Street Savings Bank and Washington Savings Bank have failed to call for many of their second dividend checks. The largest amount remaining is to the account of creditors of the Northeast Savings Bank. Out of the second dividend of 25 per cent, amounting to $262,000, which was paid beginning October 22 to 6,500 depositors, there still remained at the receivership more than 1,500 checks totaling over $75,000. The Seventh Street Savings Bank, a of cent October 30 to which 30 per began paying second 2,337 dividend had depositors, totaling $315,000, still left today more than 800 checks totaling more than $38,500. $7,000 Still Unclaimed. Washington Savings Bank bea second dividend gan The payment amounting July to 24 to 1,700 depositors, $69,000, and there still remains at the G street receivership office more than 250 checks totaling $7,000. Norman R. Hamilton is receiver for five banks, three of which have paid a second dividend. All receivership business for these banks is conducted at the old office of the former District National Bank at 1406 G street. Instructions have been issued meanwhile to Park Savings Bank depositors concerning the method to be used in paying them the 20 per cent dividend to be available Monday at 9 a.m. is the first by The dividend declared bank the Park Savings since the holiday in the first weeks of March, 1933, and will mean the distribution of approximately $600,000 to claimants before Christmas. Bank Open 3 Days. John F. Moran, receiver, announced that for three days-Monday, Tuesday and Wednesday-the bank will be open from 9 a.m. to 8 p.m. After that the bank will be open until 5 p.m. daily except Saturday, when the doors will close at noon. To speed up payments the windows divided will be for will necessary be alphabetically. depositors to present It for their to them at ,the were receipts given claims, the will time then which the were filed. They be to sign the claims required receipt, and for the the of identification, receiver's on the check purpose dividend and payment certificate, indorsed with it, will be delivered. Moran announced that checks will not be delivered to who failed to their and only claimants receipts, those distance present depositors from living a considerable Washington will be able to receive their checks by mail. Anxious to Serve. Moran also said depositors who have not yet proved their claims will have to wait approximately two weeks to get their dividend. "We are anxious," the receiver said, the in and are way "to serve possible people keeping order the the quickest that bank all the three nights in have an their may open opportunity to get checks before Christmas."

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4,400 FAIL TO CALL FOR PARK DIVIDEND Half of Checks Distributed Those Who Call-Bank to Close at Night. About 4,400 checks for the 20 per cent dividend being paid by the Park Savings Bank still are uncalled for, it was announced today by John F. Moran, receiver of this insolvent institution. When payment of the dividend started Monday there were 8,800 checks available, amounting to $600,000. Moran said he could not estimate accurately the amount of money represented in the checks remaining. Tonight will be the last evening the bank will remain open until 8 o'clock for accommodation of depositors. Beginning tomorrow the closing hour will be 5 p.m. and on Saturday the doors will close at noon.

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1726 PENNSYLVANIA AVE. N.W. The Department Bank Bldg.

Two small offices. 2nd floor. $15 per month each, including light and heat. Inquire PARK SAVINGS BANK, J. F. Moran, receiver. Columbia 5000.

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OFFICES AND STUDIOS

OFFICE ROOMS FOR RENT 811 E S new Central location. reasonable rate MARLOW COAL CO AMERICAN BUILDING, 1317 F ST. $65.00 Suite : rooms EDMONDS BUILDING 917,15th ST $60.00 2 large rooms 100.00 Suite 4 rooms LOEW BUILDING 1110 F ST. $20.00 Single rooms WOOLWORTH BUILDING 1201 F ST. $80.00 Large room :4x32 feet SHANON & LUCHS CO., 1505 H St N.W. National 2345. 1726 PENNSYLVANIA AVE. N.W. The Department Bank Bldg. Two small offices. end floor $15 per month each. inc uding light and heat Inquire PARK SAVINGS BANK J F. Moran, receiver Columbia 5000

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OFFICES FOR RENT

602 F ST. N.W.-LARGE. AIRY: HEAT. light and janitor furnished; $20 per month. Metropolitan 8352. OFFICE MAILING ADDRESS. $5 MONTHly; also desk space; reasonable. 1132 14th st. n.w. 1017 K ST. N.W.-2 large office rooms, large windows, second floor. front. corner. Apply at 934 K st. n.w. Natl. 8682. 1726 PA. AVE. N.W.-FIRST FLOOR OF bank bldg.. suitable real estate. insurance. banking. etc. Apply JOHN F. MORAN. receiver. Park Savings Bank. 14th and Kenyon. Columbia 5000.

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Park Savings

Boxes Yield

Only Trash

A few bits of worthless jewelry and a few papers of no value—that was all found in 59 safety deposit boxes in the Park Savings Bank when they were opened on order of the receiver.

The boxes were opened after they had gone unclaimed four years since the bank was closed, and John F. Moran, receiver, believes that the renters had decided it was better to let the almost worthless property go than pay the rent.

The property will be sealed up and turned over to the Treasury Department to be held until claimed.