Evening star., 1933-03-14
1DD|STRCT BANKS
OPENF FOR BUSINESS
Deposits Flood TeIIers as
Institutions Get U. S.
Licenses.
Continued From First Page.)

tions. The conservator will try to work
them out of their present difficulties
and get them back on a solid basis.
Many of these banks are now rated
"as sound but not liquid" The conServ-
ators will attempt to ''unfreeze" their
assets. Many of these banks have done
business in the city for many years,
have served their communities we'll and
faithfully and in normal times have
caught with frozen assets, frozen SO
tight that their cash position became
severely hampered.
Reorganizations are predicted in some
instances. Others may enter into
mergers with other and perhaps larger
banks. These are problems that the
conservator will assist in working out
The Treasury. it is understood, has al
ready assigned an experienced bank Of
fetal to assist conservators in reor-
ganiZationS, where such moves are de-
sired and practical.
The emergency bank bill gives banks,
which do not have Government licenses,
power with the permission Of the
conservator and Treasury officials, to
put preferred } stock which may
be purchased by the Reconstruction
Finance Corporation. Later, II the
banks situation improves, the preferred
stock may be taken up and the bank
turned back to the common stockhold-
ers. This is the first time banks have
had an opportunity Of issuing preferred
stock and bankers feel that this right
may prove an extremely important fac
tor in clearing up the present situation.
Keeps Banks Open.
Bankers today called attention to
marked advantages in having con-
servator instead of a receiver. The
conservator keeps the bank open and
makes every effort to get it back on
its feet. The receiver closes the bank
up tight and winds up its affairs. The
expense of a conservator is also much
lighter, which works to the benefit of all
depositors.
At noon today 1t was reported in all
the banks that deposits were far exceed
ing Withdrawals. Lobbies were crowded
and in many cases extra receiving tell
ers had to be placed on duty. In some
banks it was impossible to keep up with
the new accounts. the applications being
left for later attention.
In one bank it was stated that 80
per cent of the customers in the lobby
were depositcrs. In several financial
institutions the officials received a
shower of flowers from customers and
business firms with which they have
had close banking relations for many
years. Congratulations were heaped
upon the officials and a remarkable feel
ing Of renewed confidence was every
where expressed.
While the local banks were operating
on a nearly 100 per cent basis, the
licenses which they received limited
their payments of gold and of gold Ger
tificates They were also under in
structions not to permit any large with
drawals that appeared to be for hoard
ing" purposes. They had to exercise no
such limitations, however, as customers
were much more anxious to put in
money than take it out. 1t was one of
the most amazing banking days that
the National Capital has ever wit
messed.
Deposits His Hoard.
One of the most interesting incidents
occurred in one of the city'S smaller
banks. 1t was related by the president
of the institution. He said a colored
man came to the bank two days ago
with $1,000 in gold certificates and
asked that they be changed into Fed
eral Reserve notes, since he had heard
the Government had called in gold
notes. Today he came back with the
$1,000 and an additional $500 and de-
posted it. He said he had been keep
ing his hoard in an old inner tube hid
den in his home.
Joshua Evans, jr., president of the
District National Bank, was at the
Treasury Department early today con-
cerning his institution. Mr.. Evans said
the District National Bank was oper-
ating by authority of the Secretary of
the Treasury under regulations Nos. l
to 10, inclusive. He did not care to go
into detail as to just what his bank
would do during the day nor how it
would interpret these regulations.
George w. Offutt, president of the
Potomac Savings Bank, while waiting
at the Treasury Department this morn
ing for conference with officials, said
his bank was operating on the holiday
basis and awaiting further instruc-
tions.
The Franklin National Bank will con-
tinue under Treasury regulations l to
19, Thomas P. Hickman, vice president,
said this morning, allowing no with
drawals, but accepting trust deposits
No information concerning the appoint
ment of conservator had been re-
ceived.
William H. c. Brown. president of
the Industrial Savings Bank, said his
bank would operate for the present on
the same basis as during the national
bank holiday.
Continue Restrictions.
Robert T. Highfeld. vice president
and cashier of the Mount Vernon Saw
ings Bank, said the banks officers would
issue statement later in the day.
Meanwhile, he said, the bank would
continue to operate on the same re-
stricted basis as last week.
The Northeast Savings Bank also
will continue under the emergency
Treasury regulations, according to
George F. Hoover. vice president.
Mr.. Poole said the Federal American
will continue to operate under Treasury
regulations issued under the presiden-
tial bank holiday proclamation but will
not receive trust deposits as authorized
by Secretary Woodin. Mr.. Poole char
acterized the present restricted opera
tion of the bank as "a breathing spell