Evening star., 1933-03-28
BANKS INSTRUCTED
. ON R. F. c. AID PLAN
New Regulations for Obtain
ing Funds Drawn Up by
u. S. Agency.
BY EDWARD c. STONE.


their efforts TO get aid from the Re
construction Finance Corporation is
revealed in new set of regulations
setting forth the conditions under
which the organization will subscribe
to or make loans on preferred stocks
of national or State banks and trust
companies for capital purposes in the
establishment of new institutions, re-
organizations of existing banks, or to
enable them to continue in business.
With the list of instructions sent
but by the corporation to all its field
agencies was a suggested form of
articles of association for national
banking associations issuing preferred
stock" recommended in offering stock,
whether for organization or reorganlZa-
ton purposes.
Offerings of the stock for the cor
poration'S subscription or acceptance
as collateral are to be made through
the regional agencies, whose recon-
mendations will come to Washington
for final action.
Application blanks are to be dis
tributed to the agencies shortly, but in
view of the mounting requests for as
Sistance applicants may make their OF
fers in writing, in any form that Will
briefly but adequately supply the IN
formation required
Stock Issues Limited.
Institutions offering preferred stock
must, first of all. be authorized by law
to issue the stock This will limit offer
ings. for the most part to national
banking associations which obtain their
AUTHORITY directly from tie emergency
banking law approved by President
Roosevelt on March 9 and which pro-
Nides for the purchase Of stock by the
corporation upon request OF the Secre-
tary of the Treasury.
The ability of State banks and trust
Comuanies to offer preferred stock for
subscription will, Of course, depend up
on the laws of the respective States
ander which they are incorporated the
yegulatlons stated.
II no case will the corporation sub
scribe for or lend on the preferred stock
of any bank until it has been deter
mined that the sound value of the
assets is equal at least to the deposits
and other liabilities in or 10 be assumed
by reorganlzed bank.
The corporation will require "a rea-
sonable margin of protection" for its
stock purchases, such margin to be
represented by common stock or by
preferred stock to be subordinated to
that which it acquires.
otIleE SptCldl htSuldtlOliS.
In addition to the margin of pro-
lection required fCr preferred shares
taken by the corporation, the regula-
rions provide that the corporations
holdings be further insured by the fol-
lowing:
/ Substantial voting rights in all
matters concerning the issuing institu-
items.
,. Limitations on common stock divi-
dends
3 Compulsory regular application of
a substantial part OF net profits of the
Issuing institution to the retirement OF
preferred stock.
d Understandings from time to time
between the bank and the corporation
with respect to general policies.
5. An agreement to furnish to the
corporation periodical reports of the
banks operations and policies as may
be required by the corporation.
As long as any preferred stock of the
issuing institution remains outstanding,
dividend payments on common stock
are to be limited 10 an amount to
be agreed upon between the cor
poration and the institution.
From the profits OF each six months
operations. the issuing institutions. after
making the statutory transfers to sur
plus and reserves and payments on pre-
ferred and common shares, must set
aside in a preferred stock retirement
fund so pcr cent OF the remainder Of
such net profits, the r. F. c. regulations
state.
Building Loan Officers Named.
The stockholders of the Seat Pleas
art Building & Loan Association held
their annual meeting at the business
~r oF in,
ant on the 22nd instant, at which time
directors for the ensuing year were
elected as follows: William w. Bow
mon. jeremiah J. Crowley, Robert C.
Kraft, George s. Orton, George N.
Palmer, Eoward F. Robertson, Lansdale
G. Sasscer and John A. Schultz.
The secretary presented the audi
tor report for the last six months Of
1882 and a comparison Of statements
for 1882 with that OF 1881 and previous
years. Net assets increased $4,000
dung tho car. bringing tie total to
Sr9A.G66.z9, while gulp,us and undi-
V v,cj profits we're Increased S256212.
t. ing total surplus and undivided
. rus o Sl3 -47.E7. The stockholders
r, id paTr7cnt OF 8 per cent divi-
6 Is - a'l outstanding B" stock and
6 -" cent Gil al outstanding C stock.
= 2 :po"i-l meeting OF the board OF
u 100 III C4-.-t-S o. TIE dSSCClG ION
W reelected. as fellows: George n.
Pine, president; jeremiah j. Crowley,
vice president; EcWard T. Robertson,
secretary: Ccoree 2. Orton. treasurer,
ana L2nsdale C. Sasscer, attorney.
u. c. Exchange Session Lively.
TCday's session of the Washington
Stock Exchange was one of the most
active in long time The market
opened with $1,000 Potomac Electric
Consolidated IS selling at 1903. After
sold at the same price. while Washing
ton Railway q Electric 4s figured in
a $500 turnover at 81.
Washington Railway & Electric pre-
ferred stock figured III light turnover
a. 35. Lanston Monotype was again
more active, with sales totaling 45
shares. II opened at 1912, moved to
80, TO 39ls and closed at 40.
Mergenthaler Linotype was also in
the limehght again today. Forty shares
OF this folmer fayorite were in demand
AT 20. Both these type stocks are now
attracting considerably more interest
than has been the case for several
months.
:. During the session small sales in
washington Gas Light Is, series B, at
l02 u and 1925. 49,. ....-.....
Heard in Financial District.
Potomac Savings Bank officials an
nounce that over half of the 10000
shares Of new stock in connection with
the campaign to reopen the bank have
now been subscribed. The plan is to
raise S5O0,000 in new stock and change
from savings to q national bank
Several other local closed banks report
progress toward reopening. The Treasury
. regulations are most rigid and cannot
be met i'll a day or two. Before the
Treasury will grant a license to reopen
the bank must prove beyond question
that it will be able to carry on as a
"gOing institution
The Washington Ticker Club Chester
Lockwood, president. was scheduled to