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REJECTION OF CHECKS ON FLORIDA BANKS IS ENDED BY GOVERNMENT (Continued from Page 1) bank, Cornelia, $40,000 and $734,429.22; Bank of Lula, $15,000 and $14,273.90; Bank of Cassville, $15,000 and $65,453.27; Bank of Williamson, $25,000 and $178,812.11, and the Cornelia bank, Demarest, whose financial statement was not available. The four Florida banks reported closed were the Citizens Bank of Eustis, Bank of Mount Dora, Bank of Tavares and the Bank of Umatilla, each of which through notices posted on their doors announced that they were "closed temporarily for the protection of depositors." The Bank of Umatilla Tuesday instituted a suit against the Bankers Trust Company, applying for a receivership for the company and obtaining a temporary injunction to prevent officials of the company from altering in any manner the status of the chain of banks for which it acted as financing agent. Admit Conditions In its suit, the Umatilla bank alleged that the Bankers Trust Company had procured several hundred thousand dollars from the bank and distributed the money among various banks of Georgia and another bankers financing company in Florida. The bank alleged officials of the company had admitted their inability to pay, and charged the Bankers Trust Company with being insolvent. Atlanta creditors of the Bankers Trust Company intervened today and the federal court assumed jurisdiction of the case, Judge Samuel Sibley announcing he would appoint a receivership for the company. U. S. Intervention Resisted Florida creditors resisted federal intervention by endeavoring to show that the company conducted an insurance business, insuring the deposits of member banks and that it was not under federal jurisdiction. The Umatilla bank joined in seeking to forestall federal intervention. Atlanta creditors charged that the company had committed acts of bankruptcy when it "preferred certain clients over others when the bank was insolvent." They also cited the receivership granted in superior court. Judge Orville Park, of Macon, general counsel for the Georgia Bankers Association, testified that the company, being a trust company, was not amenable to the state banking department and could not conduct a banking business without an amendment to its charter. The trust company served as financial agent for 120 banks, Paul J. Baker, its treasurer, told the court, but did not receive deposits subject to check. Forty-one banks closed their doors yesterday after the receivership was sought for the Bankers Trust Company. Five banks closed on Tuesday and two on Monday. Federal Receivers Former Governor Hugh M. Dorsey and J. K. Ottley, of the Fourth National Bank, Atlanta, were designated as receivers for the Bankers Trust Company by Judge Samuel H. Sibley of the north Georgia district federal court here today. T. R. Bennett, director of the state banking department, declared that the designation of Mr. Dorsey and Mr. Ottley, who is president of the Fourth National Bank, as receivers had "added confidence to the situation. The two were designated as receivers by Judge Sibley after his decision in federal court to assume jurisdiction in the bankruptcy proceedings brought against the Bankers Trust Company by Atlanta creditors. The statement by Mr. Bennett declared the atmosphere was "clearing." "While several additional banks closed their doors today," he said, "the number is much less than was anticipated. One bank which closed yesterday wired this morning to disregard the notice as it found that it was able to carry on its business. Another reported as closed advised that it had effected a consolidation with a neighbor bank and is caring for all of its customers. Several others which advised the department that they would not be able to continue have assured us today that they would be able to do so. All Are Member Banks "Practically all of the banks which have suspended in the last five days were connected with the Bankers Trust Company, and the failure of the trust company occasioned their suspension. When it is known that the trust company affairs are being properly administered, the banks and their customers will have a new feeling of security. "I repeat what I said yesterday that there is nothing wrong with Georgia and her financial institutions. The present flurry is due entirely to causes originating outside the state and does not indicate any weakness on the part of Georgia banks. But for the difficulties of the Bankers Trust Company, not a bank in Georgia would have closed. "The trouble with the present situation is not with the banks, it is with the people. Calmness, a sense of proportion and a realization of the fact that the banks are all right, and that the present trouble was not occasioned by local conditions, and all will be well again. Agitators and hysterical people are doing incalculable harm. Let Georgia's sober common sense resume its sway and the flurry will soon be over and many of the banks will begin again to serve their communities." Palatka Bank Closes PALATKA, July 15.—(A.P.)—The State Bank of Palatka closed its doors today following information of bankruptcy proceedings filed by several Florida and Georgia banks against the Bankers Trust Company of Atlanta, of which the Palatka institution was a client.
