Evening star., 1937-03-21
ORGANIZING WORK
ON NEW FIDELITY
WILL Be PRESSED
Federal Home Loan Bank
Board Members and Con-
troIIer Confer.
5000 SHAREHOLDERS
MUST "PROVE CLAIMS"
Rush Expected to Put Group in
Position to Receive EX-
pected Benefits,
BY HAROLD B. ROGERS.


Two Government agencies will push
forward this week to set up the new
First Federal Savings e. Loan ASso-
citation of Washington, designed to
take over the closed Fidelity Building
& Loan Association and make avail
able to the $4,000 Fidelity share
holders IS per cent of their funds.
This developed last night as staff
members of the Federal Home Loan
Bank Board and the Office of the
controller Of the Treasury conferred
on steps to be taken tomorrow.
Meantime, it was learned that
more than 5000 of the $4,000 share
holders have not yet proven their
claims with the receiver of the in
stitution, and will have no rights to
the prospective 50 per cent until
they file such claims.
Announcement yesterday that the
new association is to be set up is
expected to result in a rush of these
dilatory shareholders tomorrow morn
Ing to file their claims and prepare
TO receive the benefits of the new
organization.
The proposed plan was explained
briefly IN an official statement made
public by William Prentiss. jr.. acting
controller of the currency. His as
slstants are expected to confer to-
morrow morning with F.. H. L. B
aides on plans for carrying out the
proposal
Agreement Explained.
Prentlss explained that agreement
had been reached between his Office
and the Home Lean Bank Board on
plan by which the affairs of the
Fidelity Building and Loan Associa-
tlon will be wound up and Federal
savings and Loan Association will be
organized to take over its assets,
The plan" PrentiSS said, provides
for the sale of the assets of the Fidel-
ity Building and Loan Association bv
the receiver thereof to the Federal Saw
ings and Loan Association, subject to
court approval as required by statute.
Under the plan, present shareholders
of the Fidelity Building and Loan As
sociation will receive share certificates
IN the Federal Savings and Loan As
soclation on the basis of IS per cent
OF their Fidelity holdings.
These new shares may be con-
verted into cash. in whole or in part.
or they may be left with the new as
sociation for investment. at the option
OF the holder, and if so left the Shares
will be insured up to $1,000 by the
Federal Savings and Loan Insurance
Corp.
Some time will be required for
completion of the details incident to
putting the plan into effect. but the
facilities of both the office of the
controller of the currency and of
the Federal Home Loan Bank Board
will be utilized to the utmost to ex-
pedlte the completion of the plan and
the submission of the same to the
court for approval at the earliest pos
Blble date"
Ample Funds to Be Available.
While ample funds will be available
under the plan for all who desire to
withdraw, it is believed by those IA
mlllar with setting up such institu-
tlons that the majority of the share
holders will leave their investments
IN the new institution, which is to be
set up along entirely different lines
from the old one
The new Federal Savings and Loan
Association will become a part of
the Federal Home Loan Bank Sys-
tenn and become member of the Fed
eral Home Loan Bank of Winston
Salem, N. c., which is l of the IL re-
gional banks of the system. The new
association will have substantial
amount of cash with which to start
and will be able also to borrow from
the Winston-S Salem bank on the mort
cages it holds.
In addition to this. as the need for
home financing develops here, the
new Federal association will be able
to obtain reasonable funds from the
Home Owners Loan Corp. by sale
of shares in the local. The H. o. L. C.
could subscribe for three times as
much as is subscribed here. but it
could not vote more than so shares
in the control of the institution,
Thus local control is assured
Assets Liquidating Value.
The assets in the hands of the re-
ceiver, James H. Nolan, are under
stood to have "liquidati value
which would be considerably less than
the IS per cent offered in setting up
the new institution. But under the
new Federal Savings and Loan Asso-
citation, a going concern, it is esti-
mated that these assets do have an
intrinsic value of IS per cent of their
book value.
In estimates as to the size OF the
new institution in dollars and CENTS
(See FIDELITY, Page B-3)