Vashon Island news-record. [volume] (Vashon, Wash.) 1919-1954, 1932-06-16
PRESENTS PLAN FOR
RAPID LIQUIDATION OF
CLOSED STATE
FINANCIAL INSTITUTIONS.

Shareholders OF scnttlc's dcfunct
Puget Sound Savings g. Loan Associ-
alton and Home Savings a. Loan As
ISOLATION last night and presented to
them a plan for the rapid liquidation
Of closed state financial institutions.
L. B. schwcllcnbach, Democratic
candidate for governor, presented his
plan by which the state would pur-
chase the assets Of Savings and Loan
Associations, closed State Banks, and
solvent associations operating on n
notice basis. N. J. Knutson, president
of the Shareholders Association, an
nounccd that the executive committee
Of the association had already ap-
proved the plan. Approximately fifteen
hundred shareholders attended the
meeting and steps were taken to start
vigorous campaign throughout the
state to compel q special Legislative
session to present to voters at the
November election Schwellenbach's
plan for liquidation. Immediate &C.
ton will be taken for statewide Or
ganization Of shareholders and de-
positors Of the state financial institu-
lions.
Schwellenbach commended that the
return Of prosperity In Washington re.
quires the unfreezing Of the assets Of
insolyent savings and loan associ-
atoms, insolvent banks and other sav,
ings institutions. He declared thai
the failure Of dozens Of banks and as.
sociations In the state was due to thu
lack Of confidence created by thu
revelations Of dishonesty and officla
corruption In the Puget Sound anc
Home institutions. He proposes thai
the state, through the use OF Its credit
and at no expense to Its taxpayers
liquidate the valuable assets OF thes,
Institutions and bring about the i'm
mediate return to the shareholder
and dcposltors OF most Of the none!
to which they will be entitled through
the process of liquidation. Schwellen
bach set forth the plan as follows:
II propose that there be created, a
a result of special legislative session
and the submission Of the question a
the November election, q statewide
savings liquidating district. This dis
trict to be under the supervision ant
control Of three directors to be ap
pointed by the governor with the con
sent Of the state senate. This distric
to be empowered to issue and sci
l0-year bonds or debentures to rails
money for the purchase Of the goo,
assets Of savings and loan association.
savings banks and insolvent stat
banks. The purchase of these asset
to be made on an absolutely bushes
basis after careful appraisal Of thei
value. The bonds will have benin
them, first. the assets thus purchased
and second, the credit Of the Stat
of Warrington, through the sam
method as municipalities of the stat
guarantee the bonds Of local improve
ment districts.
1.-THE cost of operating distric
could be borne from the funds Of tn
district itself, The fund created b
the sale Of these bonds would be self
liquidating with the bonds retire
through the sale of the assets at
time when their sale can be mad
without a loss.
THE function of the state In thi
program will simply be to lend II
credit to enable the carrying of thes
assets until the termination of the de
preston and the restoration of norme
business conditions"
The shareholders of the Puge
Sound and Home institutions humble
forty-five thousand and have been OF
ganized into militant force sine
the closing of the institutions yea
ago. They hope to join with thel
depositors of closed state bank
throughout the state and the share
holders of all Of the savings and loa
associations that are operating on
notice basis. 1t is predicted that tn
organization may become a powerfl