Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-11-21
Justice Bailey Questions Au-
thority to Override
Controller.
ATTORNEY FOR TREASURY
QUIZZED ON PREJUDICE
Judge Cites Power Only to Enioin.
Right to Rebuff Government on
Personal Motives Admitted.

WIN nnaI arguments competed
yesterday, Justice Jennings Bailey in
District Supreme Court now has under
consideration the long-fought case of
the United States Savings Bank.
Certain remarks by the court from
the bench on the question Of juriSdic-
ton OF the court aroused much in
terest.
Col. Cooper and his attorneys are
attempting to get from the court a
mandamus to force the Treasury De-
partment to approve the Cooper plan
/ to reopen the bank.
The Treasury Department rejected
| the Cooper plan as unfair to de-
positors, offering again a substitute
! plan, under which Col. Cooper and
other stockholders would have to re-
create the capital structure of the
bank before it could reopen.
Throughout the trial Justice Bailey
had raised the question as to whether
the court had jurisdiction. AS late as
yesterday morning he ss ID.
"Fhe court only has poeew 10 enioin
I oont know OF any case Fners the
coUrs mas substituted its decision for
| that Of an executive officer"
Authority Disputed.
| oulA1S bAC 0dy 4IGdSuIy COuIlSel
insisted long line of court decisions
had held that the controller of the
currency was sole authority to adjudge
a bank insolvent, and was the final
authority in the exercise of admins
tratiye discretion. Courts have refused
to overthrow such decisions of the
controller, it was commended by George
P. Barse, Treasury counsel.
Coopers counsel, w. Bissell Thomas
and John w. Staggers, contended that
| the controller had acted in an "arbi-
trary and capricious" manner In the
exercise OF his discretion, and that the
court did have jurisdiction to grant re-
lief-not only general relief, but specific,
to force the Treasury to approve the
| Cooper plan for reopening. Cooper
counsel were given until Wednesday to
furnish the court with authorities show
ing cases where courts have acted to
give relief similar to that sought by Col
Cooper.
During final argument by Mr.. Barse,
the court asked:
Suppose, however, it were shown
that he (the controller of the cur
rency) had acted capriciously and arbi-
trarily?"
| Affirms Right.
Mr.. Barse replied: 1.-The court would
have had authority to set aside the de.
ciSlcn made If he were satisfied that II
had been made in abuse of discretion
| capriciously, and SO forth, and would
have had authority to compel a recon
| Sideration: yes SIR
MIR. Barse,'' said the court. pursuing
the matter further, have you consid-
cred this question. II the court should
be satisfied that some of the considera-
tions leading the controller to his &C
ton were based upon reasons that he
had no right to consider, that it would
be an arbitrary action; and whether the
court would have the power to compel
him to review his action, without refer
ence to those considerations? Take an
extreme case, a question between a
Government officer and a petitioner
Suppose 1t should appear that the gov
ernmental official denied the relief
Chiefly by reason of his personal entnity.
would not the court have the power to
direct him to reconsider without ref
erence to that motive?"
You say. chiefly by reason of per-
sonality?" questioned Mr.. Barse.
Yes" responded the court.
L 90 not think there is any doubt
of it at ALL" said Mr. Barse
In other words" continued the
court, IF he bases his actions upon
considerations which show that his
actions are arbitrary, would not the
court have power to direct him to re-
consider his actions without reference
to those particular grounds upon which
he had acted before?"
Emphasizes Extreme Case"
'1 think, unquestionably so, sir" re-
Piled the Treasury attorney.
1 am just citing an extreme case in
order TO determine what power the
court might have If the facts justified
that action" said Justice Bailey.
Your honor emphasized" said Barse,
that that was the chief consideration
motlyating the decision. think il is
fairly well settled as a general PROPOSE
ton that where an officer or a court
decides matter, and decides it upon
valid grounds, the mere fact that the
officer might entertain or have per-
sonal ennlity will not enter into the
matter so far as overruling it is con-
cerned."
NO" said the court, Il mean where
that is the chief thing or one of the
grounds upon which he acted"
Il do not think" said Barse, there
Is any doubt about it at all. that this
court would nave the power to set aside
the decision and direct a reconsider
alton eliminating the factor that you
have mentioned; but think that is as
far as the court could CO."
In his final argument Barse insisted
| that there had been no prejudice
against COL Cooper, that his plan had
been rejected on its merits and that the
offer OF an alternative plan was still
| open If Col. Cooper and other stock
holders wished to take advantage of 1t.
Barse said the only reason the Treasury
could aScribe to Cooper for rejecting the
/ alternative was that Cooper was I'M
| willing to put up additional funds now
to re-create the capital structure.
Mr.. Thomas of Cooper's counsel con-
| tended that Cooper never was willing to
| concede that the capital structure had
| been impaired and would take no steps
to re-create it, as that would be an ad-
| mission that 1t had been impaired.
| Taking up the three different inter-
pretations of the status of the bank
| itself. Barse pointed out that two
national bank examiners on the stand
had allowed the bank more acceptable
assets than had william r. DeLash-
mutt, vice president of the bank, who
testified for Col. Cooper. DeLashmutt's
| later inclusion of additional value to
the bank building and Of bond depre-
citation In order to make a showing of
| solvency for the bank. Barse claimed,
| were not justified by the facts.
Justice Bailey insisted on considering
| testimony to the effect that subordi-
nate of the controller had said Cooper
would not be allowed to head the re-
opened bank because he had been presi-
dent of the insolvent. Commercial
Controller o'Connor had denied this
fact had preludlced him against Col.