The Waterbury Democrat., 1934-03-13

whose deposits are too modest to take part in the mortgage purchase or Home Loan plan.
 Up to March 1, the receiver states, Al per cent of all savings accounts have been liquidated. Twenty per cent was by cash pay ment of dividends and the balance through compromise and Home Loan bond movement. The re- ceiver believes something should be done for the small depositor who desires to liquidate his deposit by obtaining a mortgage or an inter- est in a mortgage.
 The plan as described in the application to-day states that the receiver shall notify all depositors of the savings department that if they desire to hquidate their de- posit and accept in satisfactoin of it, at 85 per cent of it's face, an interest in mortgages held by the Merchants Trust Co, they will have the right to make application fr4m the date of the court order to May 18th when the books will be closed.
 The receiver will report to court the number of applications and the total amount of dollar value Of the deposit. Upon this report the court will instruct the receiver to assign to one of the banks, as trustee, first mortgages having q par value with accrued interest equal to the credit value of tho deposits sought to be assigned.
 The trustee is to hold the mort. gages, to be named by the court, and the activities of the trustee will be subject to the supervision of the court. Upon receiving and assignment of the mortgages the trustee will issue to each depositor participation certificate in the mortgage trust, requesting the credit value of his deposit.
 Such participating certificates shall be in registered form and as- signable at will by the holder and shall bear such interest as shall be declared by the trustee semi annually during the existence of the trust. The trust shall accept the assignment of the mortgages at fixed fee. for services rendered, to be determined by the court. At the end of each six months the trustee shall declare and pay to participating certificate holders such dividends from the cash 1t holds as the court shall approve.
 The application adds that the trustee shall proceed further with regard to the ultimate liquidation of the mortgages held by 1t, in addition to interest on participation certificates, make such payment on account of the principal sum as shall be in accord with the pro- cess of liquidation.
 Under this plan the Iernsitor will be assured of the liquidation of his deposit; he will have an interest in an income producing trust which, he does not now re- ceive from his deposits and will ultimately realize on the principal of the mortgages.
 An alternative would be for the trustee to pay all holders of cer- tificates interest at the rate oi I3 1-2 or 4 per cent per year with 8 declaration of dividend in the form of interest which the condition of the trust might jus- tify.
 In other words, if depositor has $500 on deposit in the Merchants Trust Co he can apply for a par ticipation certificate. The account discounted at 15 per cent, would then be worth $510 and he would be issued a certificate worth $510 When interest payments are de. clared by the mortgage trust he would draw three or four per cent or whatever rate is fixed by the trustee, on his $510. His deposit would then be the same as though it were in a savings bank. except that he cannot draw the full orooupf of his depoSit,