Evening star., 1933-11-09
j, S. SAVINGS BANK
STATUS DISPUTED
IN DISTRICT court.
Treasury Declares Institution
InsoIvent and Cooper
Plan InequitabIe.
COL. COOPER MAINTAINS
PROPOSAL is WORKABLE
Judge Holds Bank Act Fails to
Consider General Interest
of Community.

OlStTlCJ supreme OOuIG GOAdy W AoaS x
the Treasury to reopen the bank under
the Cooper plan.
Through counsel. Col Cooper main-
tanned his plan was workable, based
on actual condition of the bank, but
the Treasury Department declared the
institution to be insolvent and the
Cooper plan inequitable to depositors.
Although Cooper's plan had guar
anteed that stockholders would pay
500 on the share at the end of five
years TO guarantee payment to de-
positors the Treasury Department
countered with the charge that Cooper
has resisted payment of anything at
present and was not offering to put
up any money now to restore capital
structure, which the Treasury claims
was impaired.
OF general interest not only to the
United States Savings clientele, but also
to the new Hamilton National Bank
merger was an expression by Justice
Jennings Bailey, before whom the orig
tnal protest of Cooper was heard, result
ing in the elimination of United States
Savings Bank from the merger.
Not Reorganization Plan.
Justice Bailey inquired as to whether
the Hamilton Bank plan didn't ignore
the rights of stockholders
In response, George p Barse, Treas
ury counsel, said this Hamilton plan
@may be said to ignore the rights OF
stockholders because it is not re-
organization plan"
Referring to the Hamilton plan again
and the banking law, the court said, u
have never found anything in the bank
net concerning the sale of assets which
considers the general interest OF the
community"
The Hamilton plan. Mr. Barse said,
was more advantageous because assets
were sold on dollar-for- dollar value,
and the depositor was not forced to
waive zone penny"
Justice Bailey then said he had ap-
proved the sale of assets from each of
the other members of the merger to
the Hamilton bank as there was no
opposition from the stockholders. II
there should have been opposition from
the stockholders. Justice Bailey said
@tf1at would have raised very serious
question"
Justice Bailey laid down the basis of
his consideration of the case.
If have any authority at all, said
the Judge, 1t is on the question OF
whether the action Of the controller
has been arbitrary"
Controller Has Jurisdiction
Treasury counsel was asked if any
court had ever forced the Treasury
TO adopt any certain plan for opening
the bank, and the answer was In the
negative. Treasury counsel claims the
controller of the currency is granted
exclusive jurisdiction in approving plans
10 reopen 9 bank In the interest OF
creditors and also In public interest.
Justice Bailey several times overruled
sion of testimony concerning the actual
status of the bank, the court explain
ing that he wanted to hear it and decide
himself whether it would have bearing
on the case.
Mr.. Barse went on to claim the Ham
ilton plan also gave the depositors the
benefit of stock assessments.
There would have been bank at the
site of the United States Bank, and de-
positors would have had part OF thell
money last September, he said, If tn
United States Bank had joined tht
merger.
MT. Barse In his opening statement tt
the court declared the bank to be IN
solvent. He said the Cooper plan re
uuired too great a sacrifice on the par
OF depoSitors and creditors, and pro
posed as an alternative that the stock
holders put up sufficient cash at tn
present time to restore the capital struc
ture of the bank. 1t would not be prop
er. he said, to compel the non-aSsentlni
creditors to contribute capital to thu
enterprise as proposed by Col. Cooper
Sole Judge of Solvency.
Mr.. Barse, referring to the bank act
said the controller of the currency no
only had the right to put the bank Il
the hands Of a conservator, but tina
he was the sole judge of its solvency
The controller in approving any plan U
reorganize. he said, was authorized b.
law to act on the basis of the best in
terest of the creditors of the bank an
also. "in the public interest" -.
Mr. Barse referred to a letter writ
ten Yesterday by Gibbs Lyons, deput
controller OF the currency, TO 20
Cooner's counsel, setting forth tn
nrincinaI objections of the Treasu1
To the Cooper plan. He presented
the court in argument the same figure
used in the Lyons letter.
On the other hand, Col. Cooper
counsel. w. Bissell Thomas, presente
testimony from William De Lashmut
vice president and cashier OF the pan
to attempt TO show the cooper pls
could be placed in effect. The cou
overruled objection by Barse 10 L
Lashmutts testimony. p
The Cooper plan, as developed Dy l
Lashmutt under questioning py 1hoina
would reopen the bank by deposlto
waving al per cent of their deposi
In order to receive IS per cent Wnt
the bank opened He claimed the
were sufficient good assets to reopen u
bank with a 81 10000 In value, repr
senting the unimpaired capital stru
ture Of $150000 and the deposit Ii
bility, IS per cent, $1,l50,O00.
Assets Of ssoo,ooo Cited.
In order to guarantee the deposito
eventual payment Of their remalnn
IS per cent, representing 100000,
Lashmutt estimated this was secur
by assets Of face value sonewhe
between $80o, 900 and 100000. VIII
pressed for an estimate OF how mul
these remaining assets would bring
cash eventually he declined to name
figure, but estimated they would
adequate to pay the depositors all
the IS per cent
The Cooper plan, in addition to Il
set-up, proposes TO trustee the prof
of the bank for the benefit of the trl
fund for depositors and guarantees
have the stockholders pay 500 a shs
for the benefit of depositors at the e
OF five-year period, II necessary.
The next witness, Mr.. Lyons, "
asked 10 recount a story Of negotiate
since the United States Bank
dropped from the Hamilton merger.
Maj. w. Irving Shuman, who was
charge Of the unlicensed bank sltuar