Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-01-10
Fidelity Case Comes Up in Court
Today.
RESOURCES AND TIE DEBTS
Strong Protest Against Continuing
the Business Further.
ARG U NTS TOD A Y

ago appointed l.. Cabell Williamson anu
L. H. Poole as receivers. Mr.. H. b. Moui-
ton, on behalf of certain holders of stock,
asked the court to allow them to continue
the business of the association under the
direction of the court and by a board of d.
rectors elected from their own number.
The motion was opposed by counsel for
certain other stockholders, but before coun-
sci in opposition were heard the report OF
the receivers was read by Mr.. Poole.
The receivers state that the Fidelity
Building, Loan and Investment Association
was Incorporated in Virginia July %. 1891.
and February y, 1891, its name was changed
to Columbia Building. Loan and Invest
ment Association, with its home office here.
At the time OF the incorporation there was
corporation known as the Fidelity Build
ing and Loan Association incorporated in
Citations always had the same officers, and
have always been closely connected. Upon
the organization of the Columbia Associa-
ton the weekly tnStallment stock of the
ferred, say the receivers, to the former as
ISOLATION in a way not clearly appearing in
the records and a large part of the ex-
penses OF the Building and Loan Associa-
ton was paid by the Columbia Association.
Expenses Limited.
The expenses OF the Columbia Associa-
ton. the receivers explain, while always
limited by the constitution. have been
Increased from time to time. BY the
earliest copy OF the constitution 1t was
limited ION the monthly plan) to l 1-2 per
cent OF the par value OF shares; by one
form OF the monthly installment stock GER
tificate to IL per cent per annum Of the
par value OF shares; by printed copy of
the weekly Regulations to IA per an
mum OF the par value OF shares, and by
another copy to the first months dues and
ii RIIf q
dates OF such changes do not appear from
the records. or from the amount of stock
issued under the several changes, the re-
ceiverS state that they are unable to give
the exact amount applicable to the expense
fund. but they charge that the amount
expended even under the highest percent
age allowed by the constitution and regu-
iations on account of the expense fund"
exceeds by many thousands of dollars the
amount applicable.
Receipts and Expenses.
The total amount paid by weekly and
morthly installment stockholders, the re-
ceivers find. was sos, 1912. and the total
amount expended on account Of the lex
pense fund.- was s24S.S0s.35. Total re-
eeipts from all sources. $372.9s7.S3. and
total amount expended on account Of Eek
pense fund.-" was S24S, S0S35.
The receivers say that they have. because
of the imperfect and incomplete condition
of the records, to ascertain the amount of
irStallment stock outstanding and in force,
or the amount due thereon, but the ascer-
tanned Indebtedness of the association, they
state, far exceeds the amount the receivers
can expect to recover from the assets turn
ed over to them, leaving nothing applicable
to the payment of liabilities on account OF
the inStallment stock.
The nominal assets, say the receivers,
consisting almost entirely of small loans,
amount to s57.76D.19 OF that amount $1I,-
SO7.9O is secured on real estate, the greater
part Of which lies beyond the courts juriS-
diction. and it is estimated that the re-
ceivers may collect 5000 There Is secured
by chattel trusts S4.316.S3, of which the re-
Secured by the associations stock is the
sum of $35, 1916, of which the receivers be-
leve little or none Is coliechbie Hence
the receivers say that they do not believe
that the assets turned over to them will
exceed $4,000. A large part Of the sum
will necessarily be consumed in collecting.
The liabilities as they now appear, the re-
ceivers say, exclusive Of the unascertained
amount due to installment stockholders, Is
S41, 311 93, and that amount, they say, Will
probably be further increased.
Protecting Provisions.
In conclusion, the receivers state that
the constitution Of the association provides
that the directors shall designate trust
company here to act as trustee Tor the
association, and that such trustee shall
have the custody OF all moneys belonging
to the loan fund, and such fund shall only
be disbursed upon checks or vouchers
signed by president, secretary and treas
urer, and countersigned by the manager
of the loan department. That provision OF
the constitution, say the receivers, has not
been observed, The funds OF the assOcia-
ton having been banked subject to the
joint check OF the vice president and sec
rotary. Other provisions provided for the
srnt nf q
have been, charge the receivers, violated,
that being particularly true in regard to
the loan fund.- from which the stock
holders were to be repaid. the separate
loan fund" required by the constitution
having, in fact, not been kept.
Continuance Opposed.
The report of the receivers having been
read, Mr.. H. w. Sohon stated that on be-
half of his clients he opposed any contin-
uance of the business of the association. He
asserted that the association was, at best,
a gigantic gambling scheme. in which in
nocent and poor people were drawn by
false statements. The court might as
said Mr.. -Sohon, give back to a
burglar the tools which he had used in
robberics. Whether or not, said Mr.. Sohon,
the published statements of the associa
ton were purposely made misleading or
were honestly believed in by the officers Of
theless that those officers should be held
no matter how highly they had
been held in the estimation OF
the people of the District.
Referring to the published scheme of the
association, Mr.. Sohon discussed 1T at
length, and said that no person Of intelli-
gence could be hoodwinked by it after the
scheme had been carefully considered
The published statements Of the associa-
ton as to the scheme under which it was
operated were not only misleading, but the
officers of the association. was shown by
the report of the receivers, had violated the
and had squandered the funds
of tho association. To allow such bust
ness to be continued, said Mr.. Sohon
would be as absurd as 1t would be imprac-
ticable. He therefore urged that the bust
ness be closed up at the earliest practic-
able day, and the deluded stockholders
given what little remained out Of the
wreck
Mr.. SiddOns Opposes the Motion.
The motion was also opposed by Mr.. F. L.
Siddons, who asked the court to CONSOLE
date the cases of the Columbia and Fidelity
Building and Loan Associations and make
Messrs. Williamson the receivers Of both.
After Mr.. Morling, the Maryland receiver,
had urged the granting the continuance,
Judge Cox took the papers, reserving his
decision. 90