Evening star., 1933-11-01
MT. VERNON BANK
MERGER MAYFREE
100000 DEPOSITS
Estimate 100000 Increase
Over Previous One, With
40oo to Patrons.
committee MAILS
FIRST AGREEMENTS
Negotiations for Franklin Joining
in Combination of Mechanics and
Mount Vernon Under Way.
Release Of 100000 to depositors Of

Release Of 100000 TO depositors Of
the Mount Vernon Savings Bank will
be made possible under the proposed
merger OF this institution with the
Washington Mechanics Savings Bank.
1t was learned today. This figure is an
increase of S100, 900 over the previous
estimates and will give the depositors,
When the consolidation is completed, 40
per cent Of their deposits.
Ihls was disclosed today when the
hrst agreements were mailed out to de-
positors by the Reorganization Commit
tee OF the Mount Vernon Bank headed
by Frank w. Lee, president of the in
stitution.
Meantime, negotiations were under
way looking toward a possible merger
of the Franklin National Bank with the
Mechanics and Mount Vernon. Official
information on these negotiations was
lacking, but it was learned that an i'm
portant conference was under way this
morning on the proposed merger.
Program Moving Forward.
The program for effecting the Mount
vernon-Mechanlcs merger is moving
forward rapidly with prospects that II
might be consummated before Christ
mas. The Reorganization Committee is
sending to each depositor of the Mount
Vernon Bank a letter and a blank form,
containing the agreement which the
oepoSltor Is asked to sign. The first OF
lneSe went into the mail today, but tt
was said that the clerical work involved
VIII take several days before all these
communications can be mailed.
An outstanding feature of the new
plan was the making of 40 per cent OF
deposits available. In order to get this.
the deposltor is asked to waive the other
81 per cent so the assets of the bank
representing the 60 per cent can be
trusted in the hands of three men,
previously announced. for liquidation.
IneSe trustees are E. c. Dawson.
ihomas E. Burke and Dr. E. Flavelle
hoSs, VINO Will be dollar-a-year men.
The depositor will receive from these
trustees a certificate of participation
representing his so per cent claim and
VIII receive dividends on this as the
assets are realized
Opportunity for Stock.
The depositors also are offered ths
opportunity of buying stock in the en-
larged Observation-Disclosures Bank,
put this is not compulsory.
| New stock is being sold at $50 per
share. $40 of which goes to Surplus
Ihls will give the enlarged bank an ad-
uitlonaI capital structure of capital
stock and surplus of 100000.
The participation of the Machinists'
Union. largest stockholder in the bank.
disclosed in the agreement which
SHOWS that the depositor has waived
oO per cent of its deposits in reliance
upon the following further considera-
t!on Ia That it is understood that
the stockholders of the old bank the
Mount Vernon Bank. owning a ma
lorlty OF its stock, voluntarily contribu-
TED, during the period 1880 to 1882 in
cluslve, the sum of approximately $780,
OOU 10 said bank to remove or charge
on deprecated or unacceptable assets:
(b) That the International Association
OF Machlnlsts, owning majority of the
Stock OF said old bank, will waive all
liabilities of said old bank upon a GER
tam long-tern lease for space in the
Machinlsts' Building. which lease. if car
rleo out, would, according to its terms.
require the payment by the old bank of
the sum OF approximately Sl4O 900:
tcl shareholders of said old bank will
subscribe additional capital in said
washington Mechanics Savings Bank to
the extent of at least the amount es-
tlmated by the controller, to be collect
aole from assessment liabilities to help
make the present reorganization plans
possible
Refunded Loan Priority.
| A refunded loan by the Reconstruc-
ton Finance Corporation to the Mount
vernon Bank has prior lien on the
assets to be turned over to the three
trustees. 1t is further provided that
the Washington Mechanics Savings
Bank has the right of substitution for
period of three months so that it NAV
exchange any of the loans and dis
counts purchased from the Mount
vernon for any unpledged assets heId
oy the three trustees. 1t is further pro-
Vlded that the Mechanics also has the
same right with respect to assets
pledged to the R. F. c. covering the
loan to the Mount Vernon.
sale OF stock in the enlarged Ma
chanlcs' Bank was reported today to be
| progressing rapidly as the new issue is
being offered Jointly by both partici-
pating institutions,
The depositorS agreements further
| provide that they are to be executed on
or before December Is. The plan be-
comes effective when depositors holding
rs per cent of the deposits sign. and
when two-thirds of the stockholders
agree. The stockholders have already
virtually pledged their two-thirds and
more