Evening star., 1933-09-24
TREASURY REJECTS
COOPER BANK PLAN
Alternative Proposed Requir-
ing U. S. Savings Stock
holders to Invest.

Charging that Col. Wade H. Cooper
and other stockholders of the unlicensed
United States Savings Bank had pro-
posed to rebuild the bank out of de-
positors' money without contributing
their own share toward a new capital
structure, the Treasury Department
yesterday disapproved the Cooper plan
and proposed an alternative, in which
stockholders would be required to in
vest
Col. Cooper and his attorneys, repre-
senting the stockholders of the bank.
took the alternative under Amusement.
They planned to decide before tomor-
row which one Of several courses Of
action to pursue. Cooper has threat
ened to go INTO court with a request
70 force the Treasury to allow his bank
to reopen. The United States Savings
Bank was dropped from the Hamilton
National Bank merger as result of
court action brought by C'l Cooper in
an effort to keep this bank out of the
merger.
Statement Made Public.
At the Treasury yesterday. Gibbs
Lyons, deputy controller of the cur
Tency, formally presented the Treas
ury's position 10 John w Staggers. at
torney for Col. Cooper and shareholders
OF the bank. Later Mr.. Lyons made
public formal statement, explaining
the Cooper plan, the Treasury's obiec-
1lons to it, and the alternative proposed
tor the Government.
The heart Of the Government oblec-
ton was voiced in one sentence out of
the comprehensive statement which
said
we do not consider that a depoSitor
or creditor should be required against
his VIII, to contribute either by waiver
or ntherWise to fund to restore the
capital structure of the bank and at
the same time permit the shareholders
to he relieved entirely from contem-
poraneou5 payment or contributions of
actual funds to restore value to the
capital stock
~TPXt of Statement.
The text Of the Treasury statement
signed by Mr.. Lyons, reads as follows:
ATTORNEYS for the shareholders of
the United States Savings Bank of
washington submitted to this Office for
approval, on Monday of this week. A
plan for the reorganization of the bank
under conditions whereby the deposltors
and creditors exclusive Of the deposi-
tors and creditors holding secured
claims or claims which are entitled by
law to payment IN full would be re-
quested to waive an amount sufficient to
eliminate from the bank all objection
able assets and restore the bank to
solvency and also re-cstabish the full
value of the capital structure of the
bank. According TO the papers submit
ted by counsel for the shareholders the
amount Of waiver required for this pur-
pose is estimated By them to be IS per
cent and the papers submitted would
indicate that they propose to invoke
the provisions of section 207 of the
bank conservation act to force non
asserting creditors to participate in the
waiver when - per cent in amount of
the creditors have executed same.
In consideration for the waivers the
depcsltorS and creditors would receive
participation certificates IN a trust fund
created by the transfer by the bank to
trustees Of the rejected or Objectionable
assets eliminated by the application of
such waivers and as additional con-
Slderatlon tho present capital stock Of
the bank would be subject to an agree
ment whereby all dividends upon said
stock. when. as and If declared. would
be paid TO tho trust fund for the bene-
fit of the waving creditors. with the
further proviso that if at the expira-
ton of an agreed period the trust fund
had not paid the creditors the amount
waived plus interest, the stock would
be subject to sale by the trustees and
the proceeds would be applied toward
the payment of the balances due the
UalVlng creditors.
Approval Required.
ITO invoke the provisions of section
POT of the bank conservation act and
bind non asserting depoSitors and
creditors. it is necessary that the plan
of reorganization be approved by the
CortrO1ler Of tho cur~e,o+ m f-di,p