Evening star., 1933-09-03
Negotiations for Loan Vir-
tuaIIy Completed, Agents
Report From Richmond.
HAMILTON FACES FIGHT
IN COURT ON TUESDAY
Col. Wade H. Cooper Files Two
Suits in Effort to Prevent Taking
Over of U. S. Savings Bank.


rangements virtually were completed
last night for the actual transfer OF
S5,455,O0O in a refunded loan from the
Reconstruction Finance Corporation to
the eight member banks of the Hamll-
ton merger.
Reports from Richmond, Va, head
quarters for this Federal Reserve dis
trict and r. F. c. area indicated that
Warren F. Forster, credit expert Loaned
by the Government to the Hamilton
Bank, substantially had consummateo
the big task of transfer OF assets ana
funds.
ACCOMMODATING Forster at Richmond
we're conservatorS of the eight member
banks. They signed the necessary oo-
legations for the new leans, on oehail
of their banks, and with Mr. torster
completed the rearrangement OF COL
lateral behind the new loans.
In this shift of securities, deposltors
in the eight member banks will benent
through offsets to the extent OF about
81. 300, 900, it was explained. TINS Will
be accomplished, it is learned, by the
member banks recovering from the X
F. c. certain notes on which offsets can
be made to the extent Of more tnan
$1,300,000.
Not Debt of New Merger.
When a depositor gets an offset by
having funds from his deposit set on
against a loan, to pay his obligation TO
the hank he is realizing 100 cents on
the dollar out of his deposits. The rest
of the funds of depositor will be made
available in the Hamilton Bank at the
rate of so cents on the dollar, unless ne
has subscribed to stock, in which case
the cost of the stock is Subtracted from
the so per cent of his money made
available.
The loans totalling more than S.
600 900 to member banks of the merger
are in no sense obligations Of the new
Hamilton Bank merger, it was en-
phasized. The money has been loaned
to the eight member banks through
their conservators, and is not debt OF
the new merger bank to the R. F. c.
The court fight faced by the Hamil-
ton Bank has been precipitated by Col
Wade H Cooper, president OF the
United States Savings Bank, who OBJ
jects to this bank joining the merger.
Two separate actions are involved in
the matter. which probably will be heard
together Tuesday morning by Justice
Jennings Bailey in District Supreme
Court. In the first instance, Col. Cooper
protested against court approval Of the
proposed contract whereby the Hamilton
Bank would purchase assets and bills
receivable from the United States Sav-
ings Bank in the sum of $3.50, ,495 as a
step necessary to the merger. This
protest was made Friday morning when
Treasury and Hamilton Bank officials
went before Justice Jesse C. Adkins to
get court approval of the eight contracts
between eight copservators of the men,
Der banks and the Hamilton merger.
Asks for Injunction.
Col. Cooper yesterday asked the Dis
trict Supreme Court to issue tempo
rary Injunction to prevent the merger
of the United States Savings Bank with
the new Hamilton. Justice Adkins is
sued a rule calling on the defendants
to show cause next Tuesday morning
why the injunction should not be issued.
Eight officials of the Treasury and
the Hamilton Bank are made de-
request for an injunction filed by w.
Bissell Thomas and John w. Staggers,
attorneys for Cooper The defendants
are Secretary of the Treasury Woodin,
Controller of the Currency O'Connor,
Deputy Controller F. G. Await. EXecu-
tive Assistant to the Secretary Walter j.
Cummings, w. R. Milford and w. Irving
Shuman of the reorganization division
of the controllers office: Wilbur H.
Zepp, vice president and conservator of
the United States Savings Bank, who
has been appointed branch manager
and a director of the Hamilton, and
Edwin c. Graham, president Of the
Hamilton National Bank
Col Cooper charges the defendants
with conspiracy" to force the United
States Savings Bank into the merger
'at the expense of and loss to deposit
ors and stockholders of the savings
bank" He asks the court to restrain
the defendants from accomplishing the
merger.
Treasury officials violated the con-
servation act in refusing to license the
United States Savings Bank, Col
Cooper claims. declaring that exclusive
of its good will. the savings bank is
and at all times herein mentioned Is
believed to have been solvent and its
capital stock is believed to have been
unimpaired.
Cites Banks Strength.
Col Cooper. who said he owned So
per cent of the capital stock of the
savings bank, and is a substantial de-
positor,' reported the bank for years
had earned from Ao to 60 per cent an
nually on it's capital stock of 100000,
paid annual dividends of 80 per cent
and added to its surplus and undivided
profits approximately 100000. Its de-
posits, he said, have averaged about
S250O,0OO, but fell when other banks
lost during the period before the bank
holiday, TO approximately Sl,0oO,ooo.
The good win of the business OF the
bank he estimated at S50O,0O0. the
bank now has on hand cash in the
amount of about s250,0o0 and easily
convertible securities of a value OF
5000, 1000. Col. Cooper said, declaring
that the promoters of the Hamilton
Bank found this bank desirable and
profitable as a member of the merger.
Claiming he was prevented from
access to the records of the bank and
to lists of stockholders, Col Cooper
declared representatives Of the Treas
ury Department had said they would
not permit him to enter into any nego..
tiations with depositors looking toward
an agreement for a reopenlng OF the
bank alone Nevertheless, Col. Cooper
pointed out the bank was in a position
after the month OF May to arrange
to pay to depositors Immediately from
IS to IS per cent OF the amount OF
their deposits.
The Hamilton Bank plan will wreck
the Savings Bank. Col. Cooper charges
No charter organizing the proposed
Hamilton Bank has been granted or ap-
r. piled for, Col Cooper claims.
At the Treasury Department, 1t has
been said in the past that no plan pro-
posed by Col Cooper for reorganiza-
tion of the Savings Bank alone met
with approval, and plans proposed by
the Treasury for reorganization Of tht
bank outside of the merger were turned
down by Col. Cooper.