Evening star., 1937-03-22
FIDELITY STUDIES
TO SPEED PLANS
FOR NEW SET-UP
inspection of Equipment Is
Made by Home Loan
Bank Examiner.
RECORDS FOR PROPOSED
FIRM WILL BE STARTED
Report Based on Figures at End
of Year Due to Be Brought
Up to Date.

Preparing to set up preliminary rec
ords for the proposed First Federal
Savings & Loan Association of Wash
ington, to take over the closed Fidelity
Building & Loan Association, John w.
Ballard of the Federal Home Loan
Bank Board staff today made a per-
sonal examination of bookkeeping ma
chimes at the Fidelity.
Ballard, who is chief examiner for
the Federal Home Loan Bank Board,
conferred for SINE time with the re-
Ceiver, James H. Nolan, who is in
charge of the Fidelity for the Office of
the controller of the currency. After
ward Ballard expressed the opinion
that two bookkeeping machines, which
originally cost about $4,000 each, can
be altered by small expenditure so
they can be used in setting up records
for the new association.
Ballard indicated one of the first
steps he will take will be to bring his
examination up to date. A report
which he made to the H L. B. B., on
the basis of which two Government
agencies agreed to go forward with
the reorganization plan, showed the
figures of the Fidelity as of December
81, 1886.
Gross Assets Listed.
At that time, it was learned today,
the gross assets of the Fidelity were
listed as about S4,700,0O0. A write
down of about Is per cent on the lia-
bilities of the institution was estimated
at about s65Oo00. including known
and estimated losses.
In this report, however, no investi
CATION was made concerning the case
of Fred B. Rhodes, former president
of the institution, who faces charges
of forgery and larceny. He is now
out on bond, pending new trial
April II on a charge of forgery. A
jury recently failed to agree in the
first case brought against him.
New management will be assured
when the Federal Savings and Loan
Association takes over the Fidelity,
it was learned authoritatively today
While detailed orders have not been
laid down in this particular case, it
is known that in such instances the
F. H. L. B. B. has required that
majority of the directors of the new
institution shall be persons who did
not serve as directors of the closed
institution.
About S1,O00,00 in Cash.
Among the assets listed as Of De-
cember 81 is about ST ,000,00 in cash.
The rest of the assets include princi-
pally first mortgage loans on real
estate in Washington and vicinity.
The order of procedure in the plan
to take over the Fidelity will be first
to set up the new Federal association,
which will make an offer to buy the
assets of the Fidelity at IS cents on
the dollar. When this offer is official
ly made, the receiver and the con-
troller will go to court to ask au-
thority to sell all the assets of the
old association to the new one.
When this is granted, the new as
sociation will take over the assets, and
when it opens it will make available
to the $4,000 shareholders 85 per cent
of their holdings. The shareholders
may take this IS per cent in cash,
or they may leave it to be invested
in the new association, which will be
a member of the Federal Home Loan
Bank system. All accounts will be
insured up to $4,000 each.