Evening star., 1935-07-10
BANKS RECEIVERS
FILE SUIT TO GET
S3,9D0,0DO FUNDS
Quasi-U. S. Agencies Are
Defendants Based on
Court Decision.
PREFERENTIAL PAYMENT
IS DECLARED ILLEGAL
Actions Back Up Individual De-
positors' Contention Of I'm.
just Division.

In an effort to recover approx
mately s3,500,000,. the receivers for
two Washington closed banks today
filed suit in District Supreme Court
against several quasi-governmental
agencies alleged to have improperly
received payment in full of their
deposits after the bank had been
closed.
The suits must follow a recent de-
cision by the Court of Appeals that
preferential payments to depositors
Of this sort are illegal in the absence
of statute expressly authorizing
such payment.
Suits had already been filed by in
dividual depositors to compel the
return of the money.
The present suit was filed by Rob-
ert c. Baldwin on behalf of the Com
mercial National Bank and Norman
r. Hamilton, receiver of the District
National Bank. They ask that the
defendant agencies be compelled to
return so per cent of the money paid
them and to account for any securi-
ties that may have been given them
when their accounts were opened.
All Depositors Paid Half.
Return of only half the money is
sought. since all depositors have been
paid so per cent dividends.
Those named as defendants include
the Inland Waterways Corp, the Mer-
chants Fleet Corp, Secretary of War
Dern. Arthur L. Flint, general pur-
chasing officer and chief of the Wash
1ngton Office Of the Panama Canal;
Attorney General Cummings, as sue
cessor to the alien property custodian:
Gen. Creed F. Cox, chief of the Bureau
of 1nsular Affairs, and c. F. Brown,
disbursing agent of Philippine revenue.
No early dividends can be expected
by depositors in the banks concerned,
on account of the suits, it was ex-
planned.
Meanwhile, Receiver HamiltonS
quarterly report today showed the
closed District National now has as
sets estimated at S2,153 944,34, includ-
ing an estimated s65O,000 from stock
assessments. Stockholders recently
lost court fight to prevent collection
OF this assessment.
Not Listed in Report.
The official report lists collections
from stock, assessment at nothing, be-
cause Of the court fight. The relative-
ly small amount already collected from
the 100000 assessment against
shareholders is listed under the item
shown as cash collected by receiver
and held as trustee for owners" $751;
69061. This, however, includes some
other trust funds.
Cash in hands of the receiver and
controller is listed at S553,642.37. but
the bank still owes some more on its
original loan of s817,287 from the Re-
construction Finance Corp.
This institution paid out so per
cent to its depositors in September,
1888.
Reports on the four other closed
banks under his jurisdiction were
made public today by Receiver Hamil-
ton.
r. F. c. Loan Not Shown.
The Potomac Savings Bank, from
which another dividend of 1912 per
cent was announced some time ago,
has borrowed from the r. F. C. to
make this possible, but the new loan
does not show on the report out to-
day. Checks are being written for the
new dividend, but no date has been
fixed yet for their distribution. 1t is
likely will be some time before they
are ready. The Potomac bank is
shown to have remaining assets esti-
mated at $871 ,595.79. 1t already has
paid so per cent dividends
The Washington Savings Bank,
which has paid out total dividends of
80 per cent, has estimated remaining
assets of $171.67997
The Seventh Street Savings Bank,
which has paid out dividends of 80 per
cent, is shown to have remaining
assets listed at $473,140.
The Northeast Savings Bank, which
has paid IS per cent dividends, one of
the highest in the city for closed
banks, has remaining assets of $685.
2l7O3,