Evening star., 1934-07-11
BANK GROUP PLANS
FIGHT ON LIABILITY
Potomac Savings Chartered
Under Virginia Law,
Holders Contend.
BY HAROLD B. ROGERS.

BY HAROLD B. ROGERS.
Certain stockholders Of the Potomac
Savings Bank are going to raise a
serious question against the right Of
the controller Of the currency 10 levy
a 100 per cent stock assessment
against them. because Of the fact
that the bank was chartered under
the laws Of the State Of Virginia,
which carries no double liability
This was disclosed today by Charles
v. Inlay, attorney. who has been
counsel IN bank cases before the
courts here Mr. Inlay predicted
there would be stout resistance from
certain stockholders Of the Potomac
Bank against the assessment.
The Potomac Savings Bank had its
charter from the State OF Virginia
and maintained a headquarters Office
In Alexandria, from which It officially
operated. with It's meetings Of Boards
Of Directors. Business was carried
on. however. at the banking house
in Georgetown. at the corner Of M
street and Wisconsin avenue. When
the bank failed TO reopen after the
Presidents bank holiday it was placed
In the hands Of conservator. later
ioining the Hamilton Bank merger,
10 which 1t sold its best assets. It's
remaining assets are now in the hands
Of a receiver Norman r. Hamilton,
for liquidation. On July 7 Controller
Of the Currency O'Connor levied an
assessment Of 100 per cent against
the So shareholders, owning stock OF
a par value OF $4,000 The bank
building now is operating as a sue
cessful branch Of the Hamilton Ma
tional Bank.
Refers to Recent Case.
In explaining one reason why stock
holders will protest the assessment,
Mr.. Inlay referred to recent case on
stock assessment growing out OF the
insolvent Departmental Bank here. in
which he was counsel for the Wash
ington Loan g. Trust Co, trustee for
the estate Of Benjamin Pickman
Mann, a stockholder in the Depart
mental Bank
The receiver of this bank sued for
stock assessment on two grounds
that the assessment was due under
the laws of the State of Arizona,
which carries double liability, and
that it was due under the general
statutes giving the controller author
ity over national banks and banks in
the District of Columbia. Justice
Bailey, in District Supreme Court,
held the assessment should be paid
under the double liability Of the State
of Arizona, where the bank was char
tered. But on the other count the
Justice decided the controller of the
currency could not collect the assess
ment against the stockholder in the
Departmental Bank under his general
authority under national banking
laws and Jurisdiction over banks here
in the District. In this action he sus-
tanned the demurrer by the defendant
on this point. The Government did
not appeal this issue. The decision OF
Justice Bailey upholding the right OF
the controller to levy the assessment
under Arizona law was upheld by the
Court of Appeals and the appellant
was denied writ of certiorari to
bring the case before the Supreme
Court Of the United States,
Chartered Elsewhere.
Two Of the other State banks
against whom the controller levied
assessments recently are chartered in
States where double assessment is pro-
vided by State law. The Seventh
Street Savings Bank is chartered in
West Virginia, and the Northeast
Savings Bank in Arizona.
The question of stockholders liabil-
ity in a bank chartered in another
State where no double liability ap-
pears in the State law is being fought
out in the courts in the case of the
Park Savings Bank where several ac-
tions already are before the judge,
and at least one other case is In prep
aration
The Farmers & Merchants Bank
Upper Marlboro Nd, has declared a
2 per cent dividend for stockholders
Of Record of July !.
1t is the second dividend which the
bank has paid since its organization
two years ago, Clarence Roberts is
president.
Credit Association Elects.
Louis NJ. Hewlett. secretary and as
Eistant treasurer of the Grifflth-Con
sumers Co., was elected president OF
the Washington Association of Credit
Men at its annual meeting today at
the Raleigh Hotel. Mr.. Hewlett has
played leading part in the assocla-
xr-Ny~ly cirHa N lion
and for many years served as a dl-
rector OF the association and as an
officer and trustee of its adjustment
bureau. He has Just completed two
terms as vice president His appoint
ment TO lead the association is con-
sidered recognition of the important
part he has played in its policies and
activities over a long period of time.
Earl A. Brown of ThompSon's Dairy
was named vice president Of the asSo-
citation. Mr. Brown also has been
active for many years in this organiza-
ton as director and also trustee of the
adjustment bureau and has been the
associations treasurer for the past
year.
Addison Boreu, il, Of the Otis Ele-
NhNO ~. StOt * II. AdA NdAN VA
the Pittsburgh Plate Glass Co, w.
Il. Little of The Evening Star News
paper Co. and r NJ. Harper Of the
Smoot Sand g. Gravel Co were elect
ed by vote of the membership to two
year terms as directors,
Present directors continuing for
another year are Henry P. AmeS OF
Murphy & Ames, Inc; Max Dinkln
Of L. S. Julien, Inc; Mrs. E. J. Hess
Of Z. B. Adams Co, Roy NJ, Mosher
of the Shade Shop Stuart S Ogllvie
of Second National Bank, Joseph
Reichgut Of Maloney Concrete Co,
Inc. and G. NJ. Zirkle Of wilkins
Rogers Milling Co
The secretary manager OF the aSSo-
citation. A. I. Birch. was reelected tc
this position and Will also act as
treasurer.
TaStet Honored.
Waldo J. Tastet the association
retiring president, who is treasurer Of
Fries. Bean e. Sharp Co. was paic
=. "