Evening star., 1933-11-12
O'CONNOR WITNESS
TOMORROW IN j. 5.
SAVINGS BANK CASE
Controller Called by Cooper
in Effort to Force Re-
opening Plan.
JURISDICTION OVER
OFFICIAL Is ISSUE
Charge of Arbitrary Use of Dis
cretion Under Attack by
Counsel of Treasury.

Controller of the Currency J. F. T.
OConnor is expected to take the wit
ness stand tomorrow morning in the
United States Savings Bank case be-
fore Justice Jennings Bailey in District
Supreme Court.
The controller has been called as a
dent of the bank, who is attempting to
force the Treasury Department to re-
open the bank under the Cooper plan,
which has been rejected by the
Treasury.
Controller O'Connor testified once be-
fore In September during Col. Coopers
original suit, which resulted in with
drawal of the United States Savings
Bank from the Hamilton merger.
The issue before the court this time
to reopen the sank is set forth In an
amended bill filed by Col. Cooper's
counsel, w. BiSsell Thomas and John
w. Staggers. The Treasury Depart
ment, through counsel, George P.
Barse and Charles E. wainwright, Is
stoutly opposing Col. Cooper's efforts to
force the Treasury to use the Cooper
plan.
Question Of Jurisdiction.
The Treasury has raised the princi-
pie issue of whether the court has iuris-
diction to compel the controller OF the
currency to take certain specified ac-
ton. The question, Barse has insisted,
narrows down to whether the controller
has acted within his discretion or
whether he has been arbitrary In the
use of discretion. Government agen-
cies always have been vigtlant in de-
Tending their executive discretion
against attack
Justice Bailey, during the two days
which the trial has run, already has
twice expressed some doubt as to
whether he has jurisdiction. He asked
Treasury counsel whether any other
courts had forced the controller to take
such action as Is asked In the present
case, and Treasury counsel recalled
there were none on record. Cooper's
counsel has been digging deep into the
status of the bank and endeavoring to
show from testimony of several wit
nesses that the controller did act in an
arbitrary manner in refusing to let
Col. Cooper reopen on the plans he has
submitted so far.
Justice Bailey, before adjournine
court Saturday noon. asked that coun-
sci for both sides submit briefs by to-
morrow on the question.
Commercial Dividend.
Meantime another important develop
ment in the bank situation here will be
the payment tomorrow of the second
dividend from the insolvent Commercial
National Bank, of which Col. Cooper
also was president This bank already
has paid the first dividend of 20 per
cent and tomorrow will be ready at 9
o'clock to begin paying out checks for
the second dividend of 80 per cent. The
bank will be open daily from 9 to
o'clock.
Progress is being made by the three
member banks Of the new Mechanics
Franklin Savings Bank merger toward
getting waivers from depositors of the
two unlicensed banks and selling stock
in the new enlarged institution. The
Mount Vernon Savings Bank, which
was unlicensed, is rapidly receiving
from its depositors waivers for so per
cent of their deposits in order that they
may receive 40 per cent in cash when
the new bank opens. Sale Of stock Is
progressing rapidly, officials say The
unlicensed Franklin National Bank is
the scene of great activity as prepara-
tions are made to transfer the prime
and liquid assets of this institution to
the new merger, in order to leave the
remainder in the hands of three trus-
tees. Examiners for the Treasury and
the Reconstruction Finance Corporation
are in the bank. and it is expected that
a determination soon will be reached
as to exactly what percentage the de-
positors will receive. It is expected to
be somewhere between IS and rs per
cent.
Ezra Gould, president Of the Wash.
ington Mechanics Savings Bank. the
open institution, which was never re-
stricted, but has had record of manv
years of successful operation withcS,
interruption, has been busy with many
problems involving the consolidation
Of the three banks. The new institu-
ton, Of which he will be president
and John B. Cochran of the Franklin
Bank will be chairman of the board,
will have a capital stock of 100000
and deposits of about $6,000 900.
The Park Savings Bank case still is
hanging fire in District Supreme Court,
with the Depositors' Committee plan
ming to file an amended bill designed
to establish the liability of directors
and stockholders In this sadly insolvent
bank, where the shortage is now over
81, 100000.
Negotiations are under way with
Treasury officials concerning a pro-
posed plan to reorganize the unlicensed
Industrial Savings Bank.