Evening star., 1934-01-14
Second Bank Consolidation
Virtually Assured by
Action.
WAIVER OF IS PER CENT
OF FUNDS TO BE ASKED
Ut. Vernon Savings Disposes Of All
Quota of Stock Required for
New Institution.

GlOQal Bank, amounting W duOuI o.
900 900. Controller of the Currency J.
F. 7. OCOnnOr late yesterday signed
the official plan for reopening the
Franklin Bank as member of the
Mechanics Franklin Savings Bank mer-
ger.
This vital action virtually assures the
formation of the second bank merger to
result out of the 13 District of Column
bia banks which were unlicensed at
the close of the Presidents banking
holiday in March. The first merger,
formed from seven unlicensed banks.
built up the new Hamilton National
Bank, which has been operating with
steadily increased success since 1t
opened in September and which now
has deposits of more than S9.0OO,OOO
This second merger is built around
the Washington Mechanics Bank,
which never was closed except during
the banking holiday along with every
bank in the country, and whlchs has
been operating always on a 100 per
cent basis. The first unit to join the
second merger was the Mount vernon
Savings Bank, which now has sold all
of its quota of stock in the new merger
and has also received from deposltors
the required IS per cent OF waivers
necessary toward reopening.
Forms Nearly Complete.
The Franklin National Bank, under
terms of the plan formally approved
now by the controller, will ask Its de-
positors to waive 35 per cent OF their
deposits in order to restore the bank
to solvency. Acceptable assets of the
Franklin Bank will be sold to the Me-
,chanics, in order to make available IS
per cent of the depositors' money
when the Franklin reopens as part
of the merger.
The necessary forms for this waiver
were virtually completed last night py
experts at the Treasury Department
and it is expected that they VIII oe
Tuesday to be printed. The bank will
then rush these in the mails to de-
positors. It will be necessary to re-
ceive waivers from depositors holding
rs per cent of the total deposits OF the
Franklin Bank before the plan can be.
come effective. Much of the success OF
the plan therefore will depend now
upon the depositors themselves and the
speed with which they return to the
bank the necessary waivers.
The Franklin Bank also will launch
O campaign to sell stock In the new
merger to build up the capital struc.
ture by 100000. It is believed that
this stock will sell for the same price,
sf which it was offered by the Mount
Vernon. $40 a share, half of which goes
to par value and half to surplus.
Lee to Be Vice President.
It is understood that John B. Coch-
ran president of the Franklin Bank, Is
to be chairman of the board OF the
merger, while Thomas P. Hickman,
vice president of the Franklin, will be
a vice president of the merger and Will
be in charge of the branch at the oio
Franklin location, at Tenth street ana
Pennsylvania avenue.
The Mount Vernon Savings Bank
brings to the merger Frank w. Lee.
president Of the Mount Vernon, who Is
to be q vice president Of the merger.
Deposttors of the Mount Vernon have
waived go per cent In order to receive
40 per cent when the bank opens.
This is expected to release about $780,
900 In deposits.
The two mergers thus provide for re-
opening 9 out of the 13 unlicensed
banks. One of the others, the Chevy
Chase Savings Bank, became a branch
of Riggs National Bank. The Indus
trial Savings Bank. colored institu-
ton, is now selling stock in plan TO
reopen alone as the Industrial Bank.
The Park Savings Bank where there
Is an estimated shortage Of about 81
$50 900 is still in litigation with a date
set yesterday, for January rs when
the District Supreme Court will hear
hv the Depositors' Committee in an
effort to establish the liability OF di-
rectors and to collect from them as
much as possible of the loss. The
equity and law suits in this bank had
been filed separately but have now
been set down for simultaneous hear
ing.
Conservat0r Remains.
The status of the United States
Savings Bank Is still very uncertain
Col. wade H. Cooper, president, has
appealed from an adverse decision OF
the District Supreme Court which had
denied him a writ of mandamus TO
force the Treasury to reopen the panK
on Cooper plan. which had been re-
jected by the Treasury Department
cooper reopened negotiations 70 geC
the bank open by itself, outside OF q
merger. and offered to advance certain
money to rebuild the surplus OF the
bank But these negotiations have not
vet reached a successful conclusion.
The bank still is in the hands OF its
conservator Wilbur H. Zepp, who Is
Treasury representative.
Meantime, Col. Cooper has been IN
dicted by the Federal grand jury on
charges of misapplying funds IN the
Commercial National Bank, OF wnlcn
he was president. and which now Is
In the hands Of a receiver. cooper
charges the indictment was frame
up'' on the part of Treasury officials.
what will happen to the United States
Savings Bank Is a question of vital
interest to more than $4,000 depositors,
but the prospect of reopening this
hank Is still uncertain.