Evening star., 1933-11-08
TWO BANKS IN NEW
MERGER MAY OPEN
BEFORE CHRISTMAS
Franklin, Mount Vernon and
Mechanics Savings Con-
soIidation Completed.
WILL FREE So, 800, 900
IN FROZEN DEPOSITS
Ezra Gould Will Head Organization.
Third Unit Involved Now
in Operation.


for business before Christmas as part
of the new bank merger just completed
with the Washington Mechanics Saw
ings Bank, 1t was predicted today.
The new merger is to be known as
tie Mechanics Franklin Savings Bank,
operating under Virginia charter, and
will have total deposits Of about So
100000. It win be Washington's largest
savings bank
The amount of frozen deposits to be
released from the two unlicensed bank
members of the merger total about So
100000. OF this the Franklin National
will make available $2,50000O in pay
ment of between 65 to rs per cent to
depositors. while the Mount Vernon
will free $500, 900. in payment of 40 per
cent to depositors.
Gould TO Head Merger.
The merger, which was completed
late yesterday, will be headed by Ezra
Gould, president of the Washington
Mechanics Savings Bank, which has
never been restricted. Other officers of
the merger will be John B. Cochran,
now president of Franklin National.
chairman of the board: Clarence F.
Burton OF Washington Mechanics, vice
i r..
man, vice president of Franklin, to be
vice president Of the merger In charge
OF the Franklin branch; Frank w. Lee,
president of Mount Vernon, to be a
vice president, located at the present
Mount Vernon building, which is to be
headquarters Of the merger; A. s. Of
Iutt OF Washington Mechanics Savings.
to be vice president, located at the
Eighth and G streets southeast branch.
AS the new merger is to have head
quarters at the Mount Vernon Bank
SITE at Ninth street and Massachusetts,
avenue, and six branches, more branch
managers Will be named later. The
branches viii include the four houses of
the Mechanics Bank and the two
Franklin Bank houses. They are To-
Gated at 3401 Connecticut avenue. the
present headquarters of the Mechanics
az Eighth and q streets southeast. 26O8
Georgia avenue, Ninth and East Capitol
streets and the two Franklin houses at
Tentn street and Pennsylvania avenue
and I'LL Connecticut avenue.
Depositors Signing Waivers.
Merger Of the unlicensed Mount ver-
non Savings Bank with the licensed.
washington Mechanics Savings Bank
was approved several weeks ago. and
e'4S INV olSulllk WalNGTS IOr
90 per cent of their deposits. in order
to receive in cash 40 per cent when the
Dank opens. The assets representing the
remaining so per cent will be placed
IN the hands OF three trustees for slow
liquidation.
The Franklin Bank enters the merger
unoer a waiver agreement by which the
depoitors will be asked to sign a new
agreement which will probably allow the
cepositors to receive more cash than
under the original plan.
lneSe waivers are to be prepared as
soon as possible and to become effective
must Designed by depositors holding rs
per cent OF the deposits of the bank.
ms Is expected to be accomplished
quickly, because the depositors ure-
yiously agreed to the extent of more
tnan 30 per cent Of the deposits under
the old plan.
Exactly how much the depositors will
receive Is to be decided. but it viii he
somewhere between 65 and rs per cent.
Ine remainder Is to be waived. an6
assets representing this remainder will
pe paced IN the hands of three trlls-
tees Tor slow and orderly liouidation
Inese trustees, whose names were dis
closed today for the first time are
Lindsay Rawley, president of the Rock
creek Ginger Ale Co. depositor In the
pank' william F. Kelly, attorney, who
= large oepositor and has taken a
prominent part IN the merger negotia-
tions, and Henry j. Sterzsr. A stock-
holder OF the bank, who was formerly
president of the American Acres.
sories Co. ~
New Stock Issue Planned.
Inese three trustees will take over
the slower assets of the bank for or
oeriy liquidation. The quick and lio,,,d
assets Of the bank will be used IN the
merger to back up the depositors'
liability. 00'so'S
In order to enable the enlarged Wash
ington Mechanics Savings Bank under
us new name to carry the greatly en-
a. ~ sSl oepoSi.s 70 be taken over from
.ne franklin Bank, it is necessary for a
new issue OF stock to be sold by the
: saao aiaan ond group: This will amount to
ASov,oVo, OF which half Is par value of
capital stock and the remainder sur-
plus. The stock viii sell for 500 share
$40 par value
The capital stock of the orioina,
Mechanics Savings Bant
Wlli thus be virtually tripled. The orig
mai capital stock was 500 00f re-.
oelng increased by 500 900 Of new stocI
oHered Jointly by the Mount Ver,srN
and Mechanics, and will be further ~.
:IeaSed by another 100000 CAPITAL
,sock nk 70 be offered by the Franklin
mus the capital stock Of the new
merger VIII be 100000, with a sub
Details of the agreement to be sent
TO depositors of the Franklin Rsnl
nave not been worked out pendinc
decision on the exact amount ~
be made available in cash Tbis .sS ~
Is expected to be larger, however. than
the 90 per cent which was offered
"a the previous depositors' agreement
Under the old agreement by which the
I, mad planned to reopen alone.
ne oeposltors agreed to waive 30 per
cent, 10 subscribe for preferred stock
"a an amount equal to 10 per cent and
rscelVe the remaining so per cent
when the bank opened.
Negotiations for the Franklin National
Sank joining the merger have % hesn
lnder way intensively for a few wesks
Segotiauons were conducted bv Mr.
Jould and Mr.. Burton from the Me-
names Bank, by Mr.. Cochran Mr.
iickman and William p. Kelly for fhe
rankin Bank, and by several officiais
~ sA'e
AS matter Of fact. It Is one NJ
nese now It can be told stories. that
NORMAL advances were made along
mes OF the three-bank merger several
nontns ago. but were resumed actively
President Gould today expressed ap-
'recianon Tor the spirit Of ali the
leeosators He especially paid tribute
2 :. oInclals OF the Treasury Department,
Pltnout whose efforts, he said the new
merger would not have been possible.