Evening star., 1933-07-26
TW0-BANK MERGER
Terms DELAYED
Washington Mechanics and
Mount Vernon Consider
Spokane Plan.

Negotiations are under way between
the Washington Mechanics Savings
Bank and the Mount Vernon Savings
Bank for a merger under the Spokane
plan but no final agreement has been
reached. There is a possibility. how
ever, according 10 reliable indications
today, that it may not result in a
merger after all.
Several important obstacles, the ex-
act nature of which are not disclosed
in detail, remain to be surmounted
officials of the two banks. in negotia-
ton with each other and with the
Treasury Department, were said to have
reached what was described as an "ac-
cord in principle" but no final decision.
Examiners from the Treasury Depart
ment and from the Reconstruction
Finance Corporation are now examining
the assets of the Mount Vernon Savings
Bank. This institution has been on a
restricted basis since the bank holiday
and has not ye. been licensed to resume
operations.
Transfer Of Assets.
II the merger should be completed,
certain prime assets Of the Mount Yer
non Bank would be transferred to the
new bank. to make possible the pay
ment of first dividend to depositors
in the Mount Vernon. The exact
amount of this dividend has not been
made public. but it would be only the
first dividend, to be followed by others
of a size to be determined by the
ability Of the conservator of the Mount
Vernon to realize on the banks assets.
The Mount Vernon Bank was founded
by the International Association of
Machinists, which still owns a ma
jority of the stock. This association
has always taken a keen interest in
the welfare of the bank. and it is be-
lieved that it will go far in its efforts
to see that depositors in their bank
are reimbursed as far as possible.
The Washington Mechanics Bank,
which was licensed to operate at the
conclusion Of the bank holiday March
IA. and has been operating without
restrictions, has capital and surplus
of $25O,000 while the Mount Vernon
bank has capital and surplus Of about
$3.50, 900
Should the merger succeed. the Mount
Vernon Bank would sell stock in the
new merger to increase the capital
structure Of the merger. but the details
of this have not been disclosed. The
Mount Vernon is known to have loan
OF 100000 from the Reconstruction
Finance Corporation. and this loan
would be reorganiZed in order that the
prime assets Of the Mount Vernon could
be turned over to the merger to pro-
vide for the first credit or payment to
depositors.
Protection Arrangements.
It is understood that 100000 of
prime assets of the Mount Vernon must
be left in the hands of the conservator,
for protection of the conServator and
the controller during the conservator-
ship. but would be finally released in
clearing up the affairs of the merger.
and turned in for the benefit Of de-
positors.
The Mount Vernon Savings Bank is
to have deposits now total
ing about S2,500,000 According to its
last report to the controller of the cur
rency in December. 1882, its total re-
sources were $3,990.870
Frank w. Lee is president Of the
Mount Vernon Savings Bank, and has
been reported as being in line for a
vice presidency in the new merger, in
case it is completed. The Mount Yer
non conservator is A. c. Wharton. vice
president. The bank is located at
Ninth street and Massachusetts,
avenue
The Washington Mechanics Savings
Bank is headed by Ezra Gould. presi-
dent, and has banking houses at 3401
Connecticut avenue. Eighth and G
streets southeast. 1908 Georgia avenue
and Ninth and East Capitol streets.