Evening star., 1937-08-04
FIDELITY HOLDERS |
BEGIN NEW PLAN
Shareholders Launch Move
to Bring Back Savings
and Loan Set-up.

Warned by James H. Nolan, re-
ceiver of the Fidelity Building & Loan
Association, that unless a proper
reorganization" or sale of the assets
of the association could be worked
out within a reasonable time it will be
necessary to liquidate, a shareholders
committee launched a new plan today
to attempt to bring back into the pic
ture the First Federal Savings e. Loan
Association.
The shareholders we're warned by
the receiver in lengthy letter sent
out today to all 10000 shareholders.
This letter, printed on four pages and
with two Enclosures, recited a long
drawn-out history of negotiations to
reorganize the Fidelity into the First
Federal Savings & Loan Association,
which recently came to an impasse.
The receiver Indicated however,
that the controller of the currency
stands ready, and likewise our re-
ceiver stands ready, to meet with and
discuss and in every way cooperate
with any representative group Of
shareholders at any time for the pur-
pose of trying to formulate and to
carry out a proper reorganization or
sale of the assets Of the association"
Cash Payment Obstacle.
One Of the principal points of diff
ference between the Federal Home
Loan Bank Board which was spon-
soring the formation of a new First
Federal on the one hand, and the
controller Of the currency on the
other, was said by the receivers letter
to be the question Of cash payment.
The plan of the Federal Home Loan
Bank Board, declared the letter, did
not contemplate that the new shares
would be convertible into cash imme-
dlately at the option Of the share
holders. but would be convertible into
cash only in accordance with the
charter provisions of the new Federal
Association" The controller of the
currency contended, the letter ex-
planned, that under court decisions
the necessary feature Of the sale of
assets of the Fidelity required that
the shareholders have the absolute
right of converting the stock imme-
diately into cash, to the extent by him
desired"
The letter further pointed out that
there was difference of opinion of
the nature Of letter to be sent to
shareholders concerning the organiza-
ton of the First Federal, and eventu-
ally the First Federal withdrew.
Committee Confers.
The Shareholders Committee. head
ed by George A. Sullivan, contractor,
conferred today with officials of the
Home Loan Bank Board with a view
to reorganization
The committee, it was announced
afterward, will first attempt to bring
back the First Federal organization
into negotiations. Failing that, how
ever, it was learned the committee
would not give up, but had two or
three other plans in mind, the nature
Of which they would not disclose at
the moment.
The Depositors' Committee, headed
by Sullivan and former Senator c. C.
Dill, conferred with T. D. Webb, vice
chairman of the Home Loan Board
The board, it was indicated, afterward
will be willing to continue negotiations
with view to reorganization of Fidel-
ity into a Federal savings and loar
association.
The First Federal, however, off1ciall,
is still out Of the picture. It wa.
withdrawn by a letter written by It.
president, Harry P. Somerville, man.
ager OF the Willard Hotel, sent to thu
Home Loan Bank Board.
The Sullivan Committee. IT is Under,
stood, will approach the First Fedora
with a view to seeing whether somt
members of its committee might bt
added to the board Of the first Fedora
as additional directors, to represent
the depositing shareholders. At pres.
ent the First Federal has only 7 mem.
bers on its board, but the charter
authorizes is members. Thus, ther'
are really vacancies for more mem.
bers on the board of the First Federal
Spelling Club to Meet.