Evening star., 1933-05-13
BANKS SEEN NEAR
COMPLETED PLAN
FOR MERGER Of SIX
FederaI-American Expected
to Join Consolidation to
Form One Institution.
FINAL ACTION FORECAST
SOME TIME DURING DAY
Proposal Under Consideration Be.
ieved in Accord With Treas
ury Requirements.

negotiations for setting up the new
central national bank, through virtual
merger OF six or more Of the Washing
ton banks which have been in the hand,
OF conservators since March IA. neared
the zero hour today, with prospects
that the most important developments
IN the situation SO far would be forth
coming before sundown.
A meeting of conseryators Of ths
banks expected TO merge into the big
new institution was under way in the
board room Of the Federal-American
National Bank g. Trust Co.
Out of this meeting, it was confidently
expected would come definite action
Exactly what the results NAV he todsv
II was impossible to predict, but in
financial circles close to the Situation
u was hoped that at least the nucleus
OF the big new bank would be launched
formally.
Probable Lineup.
Five banks thus far have yirtuallv
agreed to the merger, while the Fed.
eral-American, the largest of them all.
was SAID to be seriously considering the
proposal. ''
If the Federal-American Joins todav
the lineup probably would be as fol.
lows Feoeral-American District Ma.
tional. Woodbridge e-Langdon Savings 6s
Commercial Potomac Savings. United
states Savings and Washington Saw.
ings.
The Treasury Department, through
walter j. Cummings, executive assist
ant TO the secretary. and members Of
MS reorganization staff, has been tax
ing an active part in the negotiations.
put, 1t Is known, the individual banks
have been accorded much leeway in
taking voluntary action on their own
responsibility. 1t Is further understood.
however, the final set-up must be ap-
proved by the Treasury Department and
1t has been predicted the groundwork
SO far laid Is in accord with Treasury
Department principles.
Name UndertermineA
II the new bank succeeds in III or.
ganization soon, the hopes OF its pro-
ponents are that a large percentage Of
the deposits will be made available for
the depositors in the new bank. This.
it has been predicted in business circles,
would provide a big boon for business
here, for depositors who had been un.
able to meet many Of their obligations
would again begin paying bills ani
purchasing commodities.
The name Of the new central bani
has not yet been determined. ThS
name IN all probability will avoid the
use Of any words now appearing in tho
titles of any of the member banks. d
has been suggested the new bank b
called The Central National Bank
but the name of the institution and the
selection of its officer personnel will be
left for later decision.
Must Raise Money.
Among the outstanding things to be
done in the near future, if the new
bank IS organized. will be the sale
Of capital stock. because it must have
fresh money. Part of this new stock.
it is expected. will be solicited from the
depositors' funds now in the closed
banks, but the amount to be asked Of
each depositor will depend largely upon
the condition of his bank. and how
much capital stock his bank plans to
raise as part of the total stock of the
new institution. It is understood the
Reconstruction Finance Corporation
will subscribe to preferred stock in the
new bank.
While the general set-up of this new
financial institution has been referred
to as the Spokane Plan" it is in
reality a modification of the system
used by the Washington State city in
recognizing a bank. The Spokane
Plan" has been widely used throughout
the country. with various notifications
added to suit local conditions. In gen.
eral, 1t provides for the establishment
Of new institution which buys out
the old, taking over the prime assets Of
the old bank and thus freeing for early
use large percentage of the frozen de-
posits.