Evening star., 1934-01-23
King Offers Measure to Re-
peal Dual Liability on
State Bank Stocks.
MECHANICS-FRANKLIN
COMBINE WOULD Benefit
Failure Of Passage Will Bring Re-
quest to Organize as Ma
tional Bank.

Chairman King Of the Senate District
Committee today introduced a bill to
repeal a section of law enacted last
March 4 which attempted to fix q
double liability on al State bank stocks
in the District of Columbia.
This bill would assure the non-asses-
sibility of new bank stock offered by
members of the proposed Mechanics
Franklin Savings Bank. In case the
bill, for any reason, should fail Of
enactment, it was learned today that
plans are under consideration fo1
changing the institution from q saw
ings bank to a national bank, In which
case the stock would be -asSessible
under the new banking law.
These developments today pointed to-
ward further clarification of the new
merger and opened the way for a
speedy conclusion of sale of stock by
the Mount Vernon Savings Bank and
beginning Of the stock sale by the
Franklin National Bank.
Given National Bank Status.
These two institutions. which failed
to receive licenses for operation at the
close Of the banking holiday, are be-
ing absorbed by the Washington Me-
chanics Savings Bank. and operating
bank which has never been restricted.
In explanation of the new bill in
troduced by Senator King, it was said
that the stock of the Washington
Mechanics Savings Bank which has
been offered for sale in connection with
the absorption of the Mount Vernon
Savings Bank, is worcestershire under
the laws Of Virginia. where the bank is
incorporated. The Federal law passed
on March 4. in the rush hours of the
close Of the last Congress. went through
when everyone was SO absorbed with
the banking crisis and Inauguration
that only few people realized its i'm
port. Generally speaking, this law
placed all banks in the District on the
same status as national banks, under
complete control of the controller of
the currency Subsequently in the new
bank act passed by the new admins
tration, Congress removed double liza
blhty from new issues Of national bank
! stock. but failed to repeal this provi-
sion applying to State banks in Wash
tngton which are under control of the
Treasury and subject 10 many Of the
laws regulating national banks.
Under the new bank act stock in the
Hamilton National Bank merger was
sold without double liability and is
non-assessable.
Aid in Opening Banks.
The bill offered by Senator King
WouIo correct a situation, would re-
/ move the discrimination against State
/ in HI osT,
1t on the same basis Of non -assessa bnitv
as new national bank stock. This would
! remove the discrimination against State
| bank stocks and would aid in opening
! the banks which have been closed.
increase OF the capital stock of the
! Washington Mechanics Savings Bank is
necessary in order to increase the capi-
| tai structure so that it will comnly
With the rule that banks should have
In thelr capital accounts about 81 for
| each $40 of deposits. The increased
deposits brought to the Mechanics by
/ the two banks being absorbed necessi-
tates the increase in capital structure of
| the enlarged bank
! There appears to be no objection to
repeal of this statute so far as new
issues are concerned. it was said TODAY.
and prompt action by Congress is
| hoped for.
II Tor any reason there should be
| any failure in enacting the King bill
1t was learned that the plan has been
prepared to >Sply for conversion OF
| the new bank into a national bank,
which. Of course. would have non-as-
sesSaole stock. However, before such
conversion could be asked the new
capital would have to be raised to meet
tne minimum requirements of the ma
tlonal banking laws. No difficulty is
anticipated in this respect as progress
OF stock sales was reported today as
very satisfactory"
| Discussing the progress of the
| larger bank. Clarence F. Burton. execu-
tive vice president of the Washington
Mechanics Bank, said
Many people are impatient at the
delay in opening the Mount Vernon
ana Franklin, but few realize the tre-
mendous amount of detail work in con-
nectlon with such a transaction. The
| Mount Vernon Savings Bank has about
10000 accounts, and each one has to
be handled and figured several times
with waiver, subscriptions and proofs
sent to each. The cooperation Of the
depositors is essential to quick COM
pletion and has been given in Z
whole-hearted manner. The officers
and employees of the Mount Vernon
have labored day and night to hurry
matters along and no effort will be
spared"