Evening star., 1933-07-20
OUTLINES EFFORTS
TO REOPEN BANKS
Controller of Currency Dis
cusses Reorganization Be-
fore Young Democrats.

General principles under which the
Government is directing the reorgani-
cation of banks here in the District
of Columbia, and throughout the Ma
ton were outlined last night by Con-
troller of the Currency j. F. T. OCon-
mol.
While he did not go into any detail
concerning the local situation, ana
specifically left out the figures in
yolved in the District of Columbia the
controller explained the factors used
in formulating the reorganization pro-
gram" He spoke before the District
of Columbia division of the Young
Democratic Clubs of America.
The controllers views are OF par
ticular interest to the thousands Of un-
fortunate depositors of the IL I'M
licensed banks whose funds have been
tied up since the bank holiday.
Eight Have Joined Merger.
OF these II unlicensed banks, eight
have joined the proposed Hamilton Ma
tional Bank merger, one the Franklin
National Bank is trying TO reopen alone;
end the others are the Mount Vernon
Savings Bank, the Industrial Savings
Bank and the Park Savings Bank.
The factors taken into consideration
in reorganization program for these
and other unlicensed banks OF the
country were explained by Mr.. OCon-
nor, in part, as follows:
IN the first place, the reorganized
bank must have an adequate capital
structure dependent not only upon the
minimum requirements as provided by
law, but commensurate with the volume
of business and deposits which the
bank may reasonably expect to enjoy:
secondly, the assets to be retained by
the reorganized bank must not only be
sound, but must be of the character
responsive to ordinary banking de-
mands.
Assets Must Be Sound.
"Often there exists an honest differ
ence of opinion as to the value OF
particular asset and often 1t Is argued
that q certain asset, while Of little
present value, is Of potential value
under changed conditions. Neverthe-
less, it must be remembered that in re-
/ organizing banks we are dealing with
assets which must be responsive to the
present demands of business and COM
merce and we must see that these
assets are not only sound. but that
they conform to the requirements OF
law and are otherwise acceptable as
see that the reorganiZed bank when
opened, will have that degree Of liquid
| ity necessary to conduct its business
upon a sound and conservative basis,
and, therefore. that it has the necessary
cash or the ability to procure the same
to meet its ordinary demands; fourthly,
We must be satisfied that the reorgan-
lied bank, upon the basis of the re-
| organization as planned, will Justify its
existence by earning sufficient income
| to meet its expenses of operation, for
certainly banks earnings offer some
| indication as to the necessity for the
bank and the place that it occupies in
the community; and lastly We must see
| that the management of the bank Is
such that the continued existence of
the bank is insured after its reorganiza-
ton; consequently. directors and Off
GERS should be of unquestioned integrity
and ability"
Cites Accomplishments.
Reporting to the Nation on what
has been accomplished by the various
governmental agencies in giving re-
lief to depositors," the controller said
that on December 81, 1882, deposits in
| national banks amounted to $18,30l,-
$4,000. On April 4, 1888, the deposits
in unlicensed national banks amounted
to s1.865 100000. representing approx
mately 10 per cent of the aggregate
amount of deposits on December 81,
1882" he said. "On July 6, 1888, de-
| posits in unlicensed national banks.
exclusive Of banks in the District of
Columbia and the City of Detroit,
amounted to s1.058, ,9O2, ,Oo0 represent
ing slightly more than per cent of
deposits as of December 81, 1882"