Evening star., 1933-05-08
DISTRICT NATIONAL
ASKS DEPOS|T0RS
. TO HELP NEW BANK
5000 Receive Appeals for
Cooperation in Buying
New Stock.
RECEIVER is DECLARED
alternative OF PLAN
Committee Hopes to Make Avail.
able Immediately 80 to 60 Per
Cent of Unsecured Deposits.

Following the District National
Banks proposal for the organization
OF an entirely new bank, which was
mailed to all stockholders late Satur-
day, the bank today sent letter to
all depositors In the bank, about 5000,
requesting their cooperation in the
new move and urging them to apply
at least 10 per cent of their deposits
to the new stock which must be sold
In order to supply new capital.
The letter sent out today by the Re-
organization Committee Of which
Chester Wells Is chairman, expresses
the hope that the new stock will be
taken at once, as this will make avail
able Immediately so to so per cent Of
the unsecured deposits as Of February
%, 1888"
Capital Of $1,ooo,ooo.
To make these deposits available 1t
Is proposed to organize the new bank
with a capital of $500 900 in common
stock which is now being offered to the
stockholders, depositorS and the public,
and $500,000 to be subscribed by the
Reconstruction Finance Corporation.
The new bank would take over all the
prime assets of the present District
National at face or market value.
Chairman Wells states that in order
to carry out the plan it will be neces-
sary that subscriptions be made
promptly for the capital stock in the
new bank. The stockholders will be ex-
pected to subscribe for so per cent OF
their present holdings. However. not
all can do this and minors and trustees
will not be permitted to subscribe. For
those reasons, it is necessary to call
upon the depositors to help in making
the plan successful.
The Reorganization Committee makes
It plain TO the depositors in today's COM
munication that this is the only plan
by which any substantial amount OF
deposits can be Immediately liberated.
IF the plan is not perfected" the letter
says, "a receiver must be appointed who
will collect assets when and as he Is
able, and make distributions when col
lectionS ale made. But little could be
expected for number Of months, and
then only in small installments."
Depositors are requested to subscribe
for stock in the new organization in
amount to at least 10 per cent of their
respective deposits. The letter states
that the new bank will start with prime
interest-bearing assets of S4,222,092, in
addition to its capital stock Of $1,000.-
O0O All frozen, slow or doubtful as
sets" are to be retained by the present
bank, to be liquidated as favorable op-
portunities afford.
Reception Encouraging.
Chairman Wells said today that the
proposed plan of reorganization sent to
the stockholders Saturday had already
met with q most encouraging reception.
Up to noon today many stockholders
had already expressed a willingness to
take their full share Of the new stock.
The plan requires the sale Of 10000
shares Of common stock at $25 per
share. It will have par value OF
$40 and be sold at a premium OF rs
per cent. to total the required $500, 900.
District National officials hope that
some Of the other closed banks will
eventually join them in some kind Of
a merger. They see added strength IN
such move.
It is reported that the recent proposal
made to depositors in the Franklin Ma
tional Bank in an effort to reopen,
has aroused wide interest among the
customers Of this bank.
Other banks that have made special
reopening drives are the Potomac Saw
ings Bank, the Northeast Savings Bank
and the Industrial Savings Banks.
While others are working hard toward
the same end, they have not yet sent
out any definite proposals for the &C
ceptance Of their clients.