Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-03-04
SAVINGS II
Why Did 1t Happen;
What's SoIvoqobIe?
Continued From Page Al

Continued From Page A.
time. they say. there is no othe,
course open to them.
They try to dampen the ef'
fects Of their moves by periods
assurances. echoed by leader
Of the industry. that the actua
number Of associations af.
fected have been few compared
to the total in the State, anC
that shareholders savings art
generally safe.
"The vast majority of the as.
sociations have been and ART
continuing to be operated ir
compliance with the law ant
in a safe and sound manner,
Albert w. Ward, director of the
State Department of Assess.
ments and Taxation, has sale
q number of times. Mr.. Ware
is charged with enforcement Of
the new law.
These assurances are based
on fact. Only a small percent
age Of the States savings and
loan institutions are in trouble
Here are the figures:
There were, beginning this
year. 6,358 savings and loan
associations in the United
States, with 469 of them in
Maryland. according to indus
try sources. The Maryland
firms had total savings of SIS
billion.
,$1.2 Billion Insured
Eighty-three of these 469 as
sociations-less than one-fifth
are insured by the Federal
Savings and Loan Insurance
Corp. and arm of the United
States government which in
sures each account up to
$4,000. This Federally-insured
segment, however, has most of
the total savings, $1.2 billion.
leaving $500 million in unin-
Sured savings in the remaining
1856 associations, according to
the industry.
And Of these 1886 associations
with $500 million only nine
with between SIC million and
$18 million-have been forced
to shut their doors so far. Even
though more may go under in
the months ahead, State and
industry officials are still GER
tain that the great majority
of Maryland shareholders, as
depositors in savings and loan
associations are called, are not
in danger.
What caused the association
to become a target for State
action?
Thomas Finan, the Maryland
attorney general, and the aud
iting staff working under Mr..
Ward and Harry Wolf, jr., saw
ings and loan supervisor, list
these practices: They made
faulty loans on properties that
were over-appraised; they tied
up their shareholders money
in too few investments so that
the failure Of one would seri-
ously shake the associations
whole structure; they were in
solvent; they violated simple
business practices down to such
fundamentals as sound book
keeping, or they engaged in a
combination Of these practices.
Action Approved
A spokesman for the National
League Of Insured Savings AS
sociations said the State action
simply had to come"
We've seen it building up
for a long time" he said. eff
the State hadn't moved in
when it did - and that was
none too soon-thiS would have
grown into the largest bubble
you ever saw. Its collapse
would have had much more
serious consequences for many
more persons than currently
are affected" 49,.
Here is a rundown on each
of the associations whose doors
have been closed so far by
court action brought or insti-
gated by the State:
First Continental Savings &
Loan Association, Inc. of Chevy
Chase - About 1000 persons
had more than $3.7 million
here, according to the State.
The associations officials dis
pute this figure, saying it was
closer to So million when it
was placed in receivership
January 8.
According to the attorney
generals suit, First Continental
was ian unsafe and unsound
operation" But no charge of
insolvency was made, which is
one Of the principal rebuttals
Of First Continental. The as
ISOLATION, which also argues
that the States analysis Of the
firms lending policies is wrong
and that the 1861 State regula-
tory law is unconstitutional,
has begun a battle to go back
into business.
Prominent in First Continent
tails affairs is J. Kenneth Ed
lin, So, a Miami and Chicago
entrepreneur. He was convicted
81 years ago for mail fraud and
now faces Federal sentencing
again, having pleaded mo con-