Evening star., 1933-05-09
BANK DEP0S|TORS
ANSWER PROPOSAL
Franklin National Officials
SWamped With Accept.
ances of Plan.

Officials Of the Franklin National
Bank were swamped today with replies
to the letters sent depositors asking
them to accept participating certificates
for 80 per cent of the amount they have
on deposit and to take an additional
10 per cent of their deposits in prefer
red stock in connection with the present
drive to reopen the bank.
The number of signed acceptances
had not been totaled today, but desks
we're flooded with papers signed by the
banks depositorS. 1t was said the clerks
would have to remain on duty tonight
to get all the subscriptions opened and
recorded. Bank officials are highly
optimistic over the reorganization prog
ress made during the past few days,
the belief being expressed that the
its identity.
The letter sent to about 1000 de-
positors stated the participating certifi-
Gates are to be secured by all the as
sets not taken into the reorganized bank
and are to be repaid out OF realization
of these assets and such part of the
net earnings of the reorganized bank as
shall be determined by the Board Of
Directors.
1t also is stated that the new pre-
ferred stock will be worcestershire and
the plan will become effective as soon
as rs per cent of the deposits have
been made available by the depositors.
District National officials also were
much pleased with the response from
both stockholders and depositors with
which their new plan has been accord
ed. Letters to the stockholders went
out late Saturday and to the depositors
yesterday. The number of subscriptions
received both by mail and telephone
has been most gratifying, it was said at
the bank.
The District National is working on
the so-called Spokane plan" which
has been used with success in several
other cities. Chairman Chester Wells
and the other members of the Reorganl-
zatlon Committee are hopeful that some
OF the other closed banks will wish to
Join in the move. The proposal calls
Tor an entirely new bank and the segre-
cation OF all frozen assets in the present
bank.
The addition of other banks to the
central bank naturally would strengthen
the new institution. The new bank
would buy the prime assets from the
other banks and permit them to take
care of their other assets as oppor-
tunlty might afford. If other banks do
not care to enter the new one, District
National officials believe they still will
be able to carry out their plans and get
their own bank back on its feet.
While some of the closed institutions
are agreeable to any kind of a merger
that will get them reopened others are
anxious to remain as unit banks Re-
ports show there are somewhere around
S28,G0O,000 in deposits in these closed
banks If they should be able to WORK
out plans and liberate an average of
half their deposits. about $4,000 900
would be freed by that action.
Meantime the Senate Banking Com
nlittee took steps to give full author
ity to the Treasury Department to re-
organize any OF the 10 savings banks in
the District which are in the hands of
cOnservatorS.
The committee approved a special
bill which would strike from one sec
tion of the banking conservation act
the definition National banking asso-
ciation' and insert in place of that
phrase the word bank"
Gives Conservator Power.
1t was explained this change will
enable the controller to authorize con-
servatorS to reorganize banks in the
District that are not national banks. 1t
was also explained that the original in
tent was to include the other banks in
the benefits of the bank conservation
act but that it was found, in trying out
the law, that the use of the definition
National banking association" mar
rowed its scope. The amending bill is
being sponsored by Senator Tydings,
Democrat, of Maryland. The Banking
and Currency Committee. which ap-
proved the bill. is presided over by
Senator Fletcher Democrat, of Florida.
Three of the 13 banks in the hands
of conservators in this city are National
banks. and 10 are savings banks.
John Poole. president and conserva-
tor of the Federal American National
Bank and Trust Co., was in brief con-
ference with Walter j. Cummings. ex-
ecutive assistant to the Secretary of the
Treasury. at the Treasury Department,
and planned to return for another con-
ference this afternoon.