Evening star., 1937-09-21
|W|THDRAWALSB BAN
lis DENIED BY HEAD
|OF FEDERAL LOAN
Statement by Somervi|Ie Is
Given to Clear Up
Disputed Points.
SAYS MORE DIRECTORS
ARE NOT TO BE ADDED
Present Board Is Approved by
F. H. L. B. B.-Election May
Be Held in January.

Charging that there had been many
confusing statements" concerning the
proposed reorganization of Fidelity
Building g. Loan Association into the
First Federal Savings g. Loan Associ-
alton, Harry P. Somerville, president
of the Federal denied thai members
of the institution would be unable to
withdraw their funds.
Somerville. from his Office in the
Willard Hotel, OF which he is manager,
made public comprehensive state
ment by the Federal Home Loan Bank
Board to clear up certain points which
have been in controversy between
two groups of shareholders.
The statement did not mention the
name Of George A. Sullivan, chairman
Of one shareholders committee, who
has been insisting that he or some
other representative of the sharehold-
ers be named a member of the board.
1t did not mention the name Of Mrs.
Mark c. Bulls, chairman of another
shareholders committee, which has
been fighting for reorganization, un-
der the present proposal.
May Select Directors.
But the statement made it plain that
there is no intention of adding any
more directors to the proposed First
Federal Savings e. Loan Association
at this time. 1t was pointed out,
however, that the entire group of
shareholders in First Federal will be
able to select directors of their own
choosing" at the first annual meeting
of the new institution. This is ex-
pected in January.
Meanwhile signed agreements from
shareholders buying shares in the
new First Federal at IS cents on the
dollar of their old Fidelity accounts
continued to pour into the office of
the receiver, James H. Nolan. Re-
turns must be in by September 80,
when it will be decided what TO do
about Fidelity.
The present Board Of Directors of
First Federal, it was emphasized by
the Home Loan Board, was approved
| by the F. H. L. B. B. as one com
bining experience and integrity"
These men consented to serve as
| civic duty, without the thought of
personal gain" said the F. H. L. B. B.
Harry P. Somerville became presi-
dent of the new association only
after this board had pointed out TO
him the opportunity and the obliga-
ton to perform this service to this
community.
Decision. Approved.
"This board has approved the de-
cision of the First Federal Board not
to accept the suggestion that repre-
sentatives of various groups of share
holders be added to their number at
this time. We agree that there is no
method available as yet for the share
holders as body to make such Sc
lectionS, and that certainly no one or
more groups should have a right to
name one or more directors to the
exclusion of other shareholders. AT
the first annual meeting of the First
Federal after the purchase of the
Fidelity assets, the entire group of
members will elect an entire Board of
Directors of their own choosing.
Contrary to statements that men,
bers would be unable to withdraw their
funds" the board declared, "or that
there would be restrictions on with
drawals, this board long ago satisfied
itself as to the ability of the First
Federal to operate normally and to
succeed as a going institution. The
| quickest way for it to freeze up any
inflow of new savings would Lc for it
to restrict Withdrawals. and this GER
tainly is not contemplated in any way.
AS a matter of fact, it seems the i'm
mediate objective of the First Federal,
should its proposal be put into effect,
will be to find quick, safe and profit
able investments for its large amount
Of surplus cash.
Plan Is Called Fair.
"The board knows of no other plan
of reorganization. 1t feels that under
the circumstances the present plan
is fair and just to the shareholders
of the Fidelity. 1t is not likely at
this late date that any other plan will
be offered that would be acceptable
to this board.
Should the present proposal be
ratified the Fidelity shareholders will
still own all of the Fidelity assets. but
instead of holding claims of uncertain
value against a receivership and hav-
ing to look to forced liquidation for
payment of those claims, they will
have insured share accounts of def
mite and positive value in going in
Stitution-a Federal savings and loan
association, one of more than 1900
such institutions, which have be-
come outstandingly successful in the
thrift and home-financing field since
their chartering was authorized by
Congress four years ago.
"The First Federal Savings &
Loan Association quite properly has
asked the Fidelity shareholders to de-
eide if they want what in effect is
reorganization or liquidation. Neither
the First Federal nor this board is at
all interested in insuring liquidating
| program. If they want liquidation,
with all that means, that is the proper
function of the receiver. If their de-
ciSion is reorganization, the Federal
Home Loan Bank Board will cooper
ate fully with the First Federal Savings
g. Loan Association, in accordance
with the plan submitted"