Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-09-15
|R00SEVELT'S PLAN
| BR|CHTENS HOPES
| FOR CLOSED BANKS
Seeks to Open Every Institu-
ton Not HopeIessIy InsoI-
vent by January /.
D. c. Benefit EXPECTED
| IN 0'C0NN0R's DECISION
Controller to Allow Holding in
Portfolios of Home Owners
Loan Bonds.

The prospects for opening closed
banks in the District, along with those
in the rest of the country, frightened
considerably today following announce
ment of President Roosevelt's plans to
open up every closed bank not hope
lessly insolvent by January /.
The principal benefit to the banks
in the District is expected to be the
decision by Controller of the Currency
j. F. T. O'Connor that banks may hold
bonds Of the Home Owners Loan Cor
poration in their portfolios. The Re-
construction Finance Corporation pre-
viously had declared these bonds &C.
ceptable as collateral up to 80 per cent
of their value Bonds OF the corpora
ton issued recently are being quoted at
around 90.
Mortgage Exchange Possible.
Thus in the case of a bank which
holds large quantity of good but non
liquid real estate paper. the mortgages
bonds and either retained as liquid as
sets or pledged with the r. F. c. for
cash.
One specific case pointed out by q
prominent official is that of the United
States Savings Bank, plans for the
opening of which were presented yes
terday to the controller Of the cur
rency's Office That bank at the time
it closed had, among other assets, S744..
900 in real estate mortgages, but when
reorganization plans were first broached
to the Treasury only $4,000 OF these
mortgages were classed as acceptable"
assets.
That was before the R. F. c. had
of the value of the mortgage bonds Of
the Home Owners Loan Corporation
and, of course. before Q'Connor's rul-
ing that the bonds themselves might
be held in portfolio.
Today. it was said, a much higher
proportion Of the $744000 would be
available as acceptable" assets and
the problem of satisfying the Treasury
of the banks liquidity, on that score
alone, would be much easier.
Second Ruling Expected
A second ruling, holding that bonds
of the Farm Credit Administration
also may be held in portfolio by bank.
is expected from the controllers oflc
soon.
With these two agencies supportln
the efforts of the deposit insurance or
ganization and the r. F. c., and all
working to the goal of having the
greatest possible number OF banks In
operation by the first of the year,
President Roosevelt is confident that
there will be very few exceptions when
that times arrives.
If an institution is in such a condi-
ton that the public interest is best
served by a receivership, that. Of
course, Is a different matter. In .
number of cases one Of several banks
in a community may be found to be
badly impaired and in such instances
mergers will be arranged.
Directors Meet Tomorrow.
The board of directors of the new
Hamilton National Bank will meet at
noon tomorrow to decide the opening
date for the new bank.
President Edwin c. Graham OF the
new Hamilton returned from Rich
mond Yesterday from the regional Of
fees of the Reconstruction Finance
Corporation, bringing with him notes
in favor of the seven merging banks
on depositors of those banks.
The next formality after announcing
the opening date will be for conserva-
tors of the seven merging banks to list
all of the class A assets in each bank,
which are to be turned over to the new
Hamilton bank. This task will take
not less than a week.
Two Maryland banks were among
four which the controller Of currency
today announced had been licensed to
reopen. They are the Clear Spring Ma
tional Bank of Clear Spring and the
Patapsco National Bank in Ellicott City.
Others we're the Knox County Saw
ings Bank, Mount Vernon, Ohio, and
First National Bank. Scottsdale, Pa.