Evening star., 1933-11-10
Examinations Declared to
Show Substantial Bonds
and Real Estate.
HELD UNACCEPTABLE
AS ASSETS IN OPENING
Col. Wade H. Cooper Declares All
Closed Institutions Were Placed
on Same Basis.

Continuing its fight to force the
Treasury Department to reopen the
United States Savings Bank on the
basis of plan which the Treasury has
rejected, counsel for Col. Wade H.
Cooper, president of the bank. delved
deeply today into details of two ma
tional bank examiners reports.
From Deputy Controller of the Cur
rency F. G.. Await testimony had been
obtained yesterday that banks had all
been placed on a similar basis during
the bank holiday to determine whether
they should be licensed at the close Of
the holiday, but that after that time
banks in the hands of conservators were
order that they might be able to reopen
in condition to stay open.
Position Stated.
In reopening banks, Await testified,
I'VE can't treat bond depreciation as an
asset" In the case Of going banks,
however, Await said, these institutions
which had been relicensed we're permit
ted to carry bond depreciation as an
asset, providing all other factors in tie
bank were favorable.
LAS to bonds and real estate, we were
trying clean the closed banks" he
said, into the same shape as a new
bank opening. We were afraid. We did
not know what would happen. We had
to be sure If there was run on it,
that it could pay"
After this declaration Of the policy
Of rating the assets in all closed banks
of the country, w. Bissell Thomas,
counsel for Col. Cooper, conducted a
sharp questioning of two national bank
examiners, who had made two different
examinations Of the United States Saw
ingS Bank. The figures from these ex-
aminations showed substantial amounts
of bonds and real estate had been re-
jected as unacceptable assets for the
purpose of reopening the bank
The examiners placed on the stand
were William M. Taylor and r. o.
Bishop. Bishop is now an examiner
for the Federal Deposit Insurance
Corporation, although he formerly was
a national bank examiner.
Proposed Plan.
The plan which Col Cooper hopes to
force the Treasury to use in reopening
his bank would ask the depositors to
waive 35 per cent of their deposits in
order to receive IS per cent when the
bAA1h OPCUCO. IuC pei CCIL NdlNeQ
would be backed up by the remaining
assets in the bank together with the
promise on the part Of stockholders to
contribute all dividends and to pay in
Sl00 share If necessary at the end of
five years.
The Treasury objects to this plan,
declaring 1t provides for no contribu-
ton by the stockholders, but too much
OF sacrifice on the part Of depositors.
Examiner Taylor on the stand, read
ing from his report on the bank, told
that out Of a total of STA, 800 IN real
estate loans held by the bank he had
listed S584.911 as good, $4,000 as liquid,
S116,000 as slow and $4,000 as doubt
ful, with nothing lost. The banking
house Of the institution, at Fourteenth
and U streets, he said. he had listed
as acceptable at SIS ,000 1t had been
assessed at s129,950 and appraised by
experts here outside the Government
at $112,500.
Acceptable Assets.
Concerning bond depreciation, Tay-
lor testified that he had placed in the
acceptable column, as liquid, bonds in
the sum Of $372 2,74220, having written
of a depreciation of S111,595. The
face value of these bonds was more
than S4S3,0 ,000
Recalled to the stand this morning,
Taylor explained the Cooper plan not
only provided for waving the bank
back into solvency. but restoring its
capital structure. He said there are
roughly Sl,900.000 in acceptable first
class assets In the bank. On question:
ing, he said the new bank, under the SIS
per cent plan, would have 81 $50 900 in
deposits, and a capital Of $150,000.
After paying of $780, 900 roughly in
bills payable, he estimated there would
be roughly 100000 worth of accept
able assets to back up the IS per cent
Of deferred deposits.
Bishop. who made a later examina-
ton, testified the total assets in Octo-
Der were listed at $2,285 900, of which
81, l,404 600 had been placed in the ac-
ceptable column for purpose of re-
organizing the bank. The liabilities Of
the bank, he said, were shown to be
roughly $1,7Sl 900 to depcsitors and
S191 900 bills payable to other parties.
This made the liability in october
81, ,953 900.
Bishop also testified he had listed a
bond depreciation Of s188, 900 ON a book
value of $488,000. The banking house
he had also allowed at $1,000 with the
appraised value of $112,500.
Denct Declared Shown.
George P. BarSe, Treasury counsel,
in cross examination Of Bishop, brought
out that both bank examinations
showed deficit in the bank but that
there was only $4,000 difference be-
tween the two examinations. Taylor,
whose examination was made several
months ago, had found deficit Of
$390,000, while Bishop. who finished
his examination early in October, had
found deficit Of Sale, ,00O In charging
off depreciation of assets, Barse pointed
out that Bishop charged of S78 900
more than Taylor.
Robert M. Buck of the Washington
Daily News testified concerning inter-
views he had held with Mai. w. Irving
Shuman, former Treasury official,
handling local bank negotiations He
also testified concerning stories he had
written on the United States Savings
Bank.