Evening star., 1934-07-23

william Y. Leahy and william j.
Hughes. jr.. attorneys. considered
also the grounds upon which the
committee proposed that the stock
holders might defeat the assessments
levied on them By the controller Of
the currency. Mr.. Leahy In q tele-
phone conversation with me repudi-
ated the entire contract and said that
he never read t and that he had
never given any opinion on the sub
jeet matter expressed in the letter or
in the contract and had not given
any study to the question Of whether
or not the stockholders could defeat
the assessment and that he would take
immediate steps TO withdraw his
name as a party 10 the contract.
AS q director and counsel for the
Hamilton National Bank. It ia my
opinion that the stockholders Of the
District National Bank cannot defend
against their assessment by an at
tack upon the contract entered into
between the Hamilton National Bank
and the conservator Of the District
National Bank through the ONCE Of
the controller Of the currency, by
which prime assets Of the District
National Bank were purchased by the
Hamilton National Bank. The con-
troller had the authority to make
the contract and contracts of this
character have been made all over
approved by courts and the instant
contract was also approved by jus
tice Of the Supreme Court Of the
District Of Columbia. For the assets
purchased the Hamilton National
Bank paid in cash the market value
Of all securities as OF the day of
transfer and the face value of all
notes. together with accumulated In
terest thereon.
IF an attack upon this contract was
successful II would be necessary for
those stockholders or the District
National Bank to return TO the Hamil-
ton National Bank the cash paid for
these assets. which. Of course, neither
the bank nor the stockholders are able
to do. as the sum involved runs into
the millions.
This attempt Of a self constituted
Stockholders committee, headed by q
former president of the District Ma
tional Bank, 70 attack the contract
with the Hamilton National Bank
should not command the attention or
respect of many of the stockholders
of the District National Bank. These
stockholders are stockholders In an
insolyent institution and they owe O
moral and legal obligation to the
creditors of the District National Bank
to see that they are paid to the fullest
extent. and that includes a double
liability upon the stock that these
stockholders have enjoyed In the Dis
trict National Bank for many years.
Transaction Legal.
"The only dividend representing SO
per cent OF their deposits that the
creditors Of the District National Bank
have received for period Of more
than a year since the District Ma
tional Bank closed came from the
cash made available by the Hamilton
National Bank for the purchase of
these assets. The transaction was
entirely legal, the District National
Bank is insolvent, the controller i. of
the currency is compelled under the
law to make an assessment and the
conduct Of few minority stockhold-
ers thus to escape their responsibility
to the needy creditors of the District
National Bank by attempting to at
tack the legality of the contract upon
the basis Of legal opinion Of Mr..
Leahy that he never gave will only
arouse the contempt of fair-minded
citizens. Dozens of the stockholders
of the District National Bank So
licited by this letter and contract are
stockholders In the Hamilton National
Bank and they. together with thou
sands of disinterested persons In the
District of Columbia. are pleased with
the phenomenal success that the
Hamilton National Bank has had in
the few short months Of its career