Evening star., 1933-10-08
MORE SPEED NOTED
TOWARD REOPEN|NC
OF CLOSED BANKS
Millions in Fifth District Ex-
pected to Be Released Soon,
Controller Says.
REORGANIZATION PLANS
ALREADY ARE APPROVED
Future of All Restricted Institu-
tions Must Be Settled by
End of Year.
BY EDWARD C. STONE.


over the country going again an 100
per cent basis, according to latest re-
ports from j. F. T. O'Connor, con-
troller Of the currency. Huge sums in
frozen deposits are now being released,
or about to be released. the report adds
According to Controller O'Connor S
latest figures about sS93, 1886, 900 in de-
poSltS now tied up in 376 unlicensed
national banks will be freed as soon as
reorganization plans already approved
by the Treasury are carried out by the
banks involved. Added to this sum is
$31, Isl 900 in unrestricted accounts in
these same banks. this money having
been segregated from the other funds.
Up to and including September 80,
1888, Controller O'Connor says, there
were eight unlicensed national banks in
Maryland with plans already approved
for reorganization, these banks having
frozen deposits aggregating $5,974,000
and $364,000 in unrestricted deposits.
Funds in Virginia Banks.
Virginia now has five unlicensed ma
tional banks approved for reopening,
these institutions holding S5,072,0 900 in
frozen deposits and 1921 900 in unre-
strirted deposits. West Virginia, the
report says, has 10 national banks
which have had their plans for re-
opening already approved by the Treas
ury. These banks hold S8,994 900 in re-
stricted deposits and S1,355, 900 in un-
restricted deposits.
North Carolina, another State in the
Fifth Federal Reserve District, had
two closed national banks on September
80 whose plans for reorganization had
been approved by the controller. These
<ryo S,,et V.ryiv,
600 in tied-up funds and $685. 900 in un-
restricted balee accounts. As soon as
these banks can meet the requirements
which the Treasury already has ap-
proved they will resume complete bank
ing operations and permit their de-
positors to use at least SO per cent Of
these funds as they see fit.
Reports FROM different States show
that good deal of progress has re-
Gently been attained in the reopening
of State banks All the closed banks
will be placed in receivership at once.
Depositors will then receive partial pay
ments on their deposits as fast as live
assets" are disposed Of
Situation Improves in District.
The greater speed at which financial
institutions are now being reopened was
recently exemplified in Washington
when seven local banks reopened as a
single unit known as the Hamilton
National A few days later it was an
nounced that the Washington Me-
chanics Savings Bank had practically
Mount Vernon Savings Bank. Three
other banks are said to be moving more
rapidly toward reopening than was the
case a month ago.
Controller O'Connor and his assistants
have put new life into the banking
situation in the last month. This is
partly because the administration in
SistS that closed banks must not be left
In the balance after January 1. They
must be fully open or permanently
closed. -, Depositors are insisting that
don't get more than 10 or 20 cents on
a dollar. They want some kind of a
payment, anyway. Their clamor, as
well as their rights, must be respected.
The problem of reorganizing and re-
opening closed banks is far more diff
ficult than most people realize. A care
full examination must be made of the
assets and liabilities; the character of
assets must be analyzed to establish
liquidity; losses must be determined.
When these facts are found, the basis Is
surplus and undivided profits are wiped
out the stockholders must contribute
up to 100 per cent of their holdings
Efforts are made to revive the old
bank or establish a new bank; new
capital is furnished by stockholders,
depositors and in some instances by
the Reconstruction Finance Corpora
ton. This corporation operates in
three ways: First, by purchase of pre-
ferred stock in the new bank; secondly,
by loans to the new bank, and, thirdly,
by loans to conservators or receivers
upon application of the controller of
the currency where the bank must be
liquidated and this money made avail
able to depositors. Plans presented are
carefully analyzed. Not all plans are
fair and equitable.
Large Personnel Is Required.
The bank reorganization division of
the controllers Office has more than
100 people engaged in the work. most
Of them especially trained The con-
trollerS office receives on an average
$500 pieces of mail a day. This Office
also has more than 500 employees in
the field while the Reconstruction FL
nance Corporation and the Federal Re-
serve Banks have large forces con-
stantly at work on restricted banks to
aid them in any way possible.
The final decisions have to be made
in the controllers office. Every fact in
connection with each separate bank has
to be weighed 1t is very big job. The
yaluing of assets is sometimes most
difficult and new problems are con-
stantly arising.
In the last issue of the Bankers Mag
aIpe. Controller OConnor reviewed
what has been done by the Treasury
to reopen closed banks. After going
into technicalitifs most exhaustively, he
touched on ths often-heard assertion
that politics has much to do in some
eases with the obtaining of new char
tiers, when he said:
LET me say no discrimination has
been made between Republican dollars
and Democratic dollars in closed banks.
NV department has assumed that the
Republican depositor, although prob
ably much less in need of his money
than his Democratic friend. is just as
anxious to get his share of the remain
ing per cent now in closed national
banks.
"Of the many hundreds Of depositors,
creditors, stockholders and officers
with whom I have discussed plans of re-
opening, I have never inquired and do
not know the politics of any. Let me
eay definitely and positively that the
controller of the currency is inter-
eeted in your plans for reopentng your
bank and giving relief to the deposito1s
and not In your politics" .