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[COMMITTEE PRINT]
FEDERAL RESERVE DIRECTORS: A STUDY OF
CORPORATE AND BANKING INFLUENCE
ST A F F R E P O R T FO R TH E
COMMITTEE ON BANKING, CURRENCY AND HOUSING
HOUSE OF R E PR E SE N T A T IV E S
94th Congress, Second Session
AU G U ST 1976
The report has not been officially adopted by the Committee on Banking, Currency and Housing
and may not therefore necessarily reflect the views of its members
Printed for the use of the Committee on Banking, Currency and Housing
U.S. GOVERNMENT PRINTING OFFICE
7 6 -0 6 6 O
W ASHIN G TO N : 1976
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. - Price $4.90
COMMITTEE ON BANKING, CURRENCY AND HOUSING
HENRY S. REUSS, Wisconsin, Chairman
LEONOR K. (MRS. JOHN B.) SULLIVAN, ALBERT W. JOHNSON, Pennsylvania
Missouri
J. WILLIAM STANTON, Ohio
THOMAS L. ASHLEY, Ohio
GARRY BROWN, Michigan
WILLIAM S. MOORHEAD, Pennsylvania
CHALMERS P. WYLIE, Ohio
ROBERT G. STEPHENS, Jr., Georgia
JOHN H. ROUSSELOT, California
FERNAND J. ST GERMAIN, Rhode Island
STEWART B. McKINNEY, Connecticut
HENRY B. GONZALEZ, Texas
JOHN B. CONLAN, Arizona
JOSEPH G. MINISH, New Jersey
GEORGE HANSEN, Idaho
FRANK ANNUNZIO, Illinois
RICHARD T. SCHULZE, Pennsylvania
THOMAS M. REES, California
WILLIS D. GRADISON, Jr., Ohio
JAMES M. HANLEY. New York
HENRY J. HYDE, Illinois
PARREN J. MITCHELL, Maryland
RICHARD KELLY, Florida
WALTER E. FA UNTROY,
CHARLES E. GRASSLEY, Iowa
District of Columbia
MILLICENT FENWICK, New Jersey
LINDY (MRS. HALE) BOGGS, Louisiana
RON PAUL, Texas
STEPHEN L. NEAL, North Carolina
JERRY M. PATTERSON, California
JAMES J. BLANCHARD, Michigan
CARROLL HUBBARD, Jr.. Kentucky
JOHN J. La FALCE, New York
GLADYS NOON SPELLMAN, Maryland
LES AuCOIN, Oregon
PAUL E. TSONGAS, Massachusetts
BUTLER DERRICK, South Carolina
PHILIP H. HAYES, Indiana
MARKW. HANNAFORD, California
DAVID W. EVANS, Indiana
CLIFFORD ALLEN, Tennessee
NORMAN E. D'AMOURS, New Hampyhire
STANLEY N. LUNDINE, New York
P a u l N e ls o n , Clerk and Staff Director
W illiam P . D ix o n , General Counsel
M ich ae l P . F l a h e r t y , Counsel
G r a s t y C r e w s II, Counsel
O r m a n S. F i n k , Minority Staff Director
G r a h a m T. N o r t h u p , Deputy Minority Staff Director
(H )
FOREWORD
A u g u s t 6, 1976.
I transmit herewith a staff study of the corporate, banking and trade as
sociation relationships of the directors of the 12 Federal Reserve Banks.
This Committee has observed for many years the influence of private
interests over the essentially public responsibilities of the Federal Reserve
System.
As the study makes clear, it is difficult to imagine a more narrowly-based
board of directors for a public agency than has been gathered together for the
twelve banks of the Federal Reserve System.
Only two segments of American society— banking and big business— have
any substantial representation on the boards, and often even these become
merged through interlocking directorates.
The lack of diversity on the boards raises serious questions about the
quality of economic intelligence and opinion which the district banks pre
sumably feed into the Federal Reserve System and its monetary policy ma
chinery. And the heavy links to the banking community raise doubts about the
ability of the district boards to view bank and bank holding company regulatory
issues with objectivity.
The Commission on Money and Credit raised some significant questions
on these points in its 1961 report:
The agency-clientele relationship, between a Government agency and the business
concerns it both serves and regulates, is almost always, almost inevitably, close; and the more
so after it has matured for decades. There are public advantages in this: regulation can be
knowledgeable, its inconveniences can be minimized, personal working relationships can be
easy. But the hazards of too close a relationship are also well known; conflicts of interest
tempt individuals on either side of the public-private line to consult private advantage too
far; organized interests among the regulated may first infiltrate and then paralyze their public
regulators; even legitimate transactions and contacts risk misconstruction; parties on both
sides come to take too parochial a view of the national interest. (Pp. 9 1 -9 2 , emphasis added.)
The potential for conflict of interest has markedly increased since 1961,
with the delegation of additional authority to the district Reserve Banks. The
1970 amendments to the Bank Holding Company Act, the Consumer Credit
Protection Act, the Equal Credit Opportunity Act and similar consumer
statutes, have given important new duties to the Federal Reserve System—
responsibilities which serve to highlight the shortcomings of the make-up of the
bank boards.
Despite these broadening roles, consumer and labor organizations have no
apparent representation anywhere in the system. In fact, many directors of the
Federal Reserve district banks are members of the United States Chamber of
Commerce, the National Association of Manufacturers, and local “ employers
associations” — groups with long histories of opposition to organized labor.
(in )
rv
Small farmers are absent. Small business is barely visible. No women appear on
the district boards and only six among the branches. Systemwide—including
district and branch boards—only thirteen members from minority groups
appear.
The study raises a substantial question about the Federal Reserve’s oftrepeated claim of “ independence” . One might ask, independent from what?
Surely not banking or big business, if we are to judge from the massive inter
locks revealed by this analysis of the district boards.
The big business and banking dominance of the Federal Reserve System
cited in this report can be traced, in part, to the original Federal Reserve
Act, which gave member commercial banks the right to select two-thirds of
the directors of each district bank. But the Board of Governors in Washington
must share the responsibility for this imbalance. They appoint the so-called
“ public” members of the boards of each district bank, appointments which
have largely reflected the same narrow interests of the bank-elected members.
The parochial nature of the boards affects the public interest across a wide
area, ranging from monetary policy to bank regulation. These are the directors,
for example, who initially select the presidents of the 12 district banks—
officials who serve on the Federal Open Market Committee, determining the
nation’s money supply and the level of economic activity. The selection of
these public officials, with such broad and essential policymaking powers,
should not be in the hands of boards of directors selected and dominated by
private banking and corporate interests.
The nation would be better served by making the Federal Reserve System
truly independent of big business and banking, freed of its built-in conflicts
of interest, and more open in its activities. For example:
• Voting membership on the Federal Open Market Committee should be
restricted to officers appointed by the President of the United States.
• The three Class A directors, who by law must be bankers, should be
prohibited from participating in decisions bearing directly or indirectly on
bank or bank holding company regulatory matters.
• The business/agriculture representation on the board, which the Federal
Reserve Act assigns to the three Class B directors of each bank, should be
broadened to include more small businessmen and family farmers, minority
businesses, cooperative enterprises, and community development entities.
• As this Committee proposed in the Federal Reserve Reform Act, which
passed the House in May, 1976, the “ public” category (Class C) should be
expanded from three to six members and women, minorities, agriculture,
conservation, labor, education and consumers should be given specific con
sideration thus preventing the present over-emphasis on representation by big
business and banking.
• The process for nomination and election of the board members should
be reformed to lessen domination by trade associations and other narrowlybased groups. Consideration should be given to limiting the role of the com
mercial banks to the nomination and election of Class A directors, with all
other board members selected by the Presidentially-appointed Board of
Governors.
• More information should be made available to the Congress and the
public about the day-to-day activities and decision-making of the district
banks, including the economic intelligence input to the Board of Governors
and the Federal Open Market Committee.
V
Until we have basic reforms, the Federal Reserve System will be handi
capped in carrying out its public responsibilities as an economic stabilization
and bank regulatory agency. The System’s mandate is too essential to the
nation's welfare to leave so much of the machinery under the control of narrow
private interests. Concentration of economic and financial power in the United
States has gone too far. We should celebrate our Bicentennial by reversing the
trend away from Thomas Jefferson.
H e n r y S. R e u s s , Chairman,
Banking,Currency and Housing Committee
of the U.S. House of Representatives.
TABLE OF CONTENTS
Foreword______________________________________ _____________________________________________
Federal Reserve Directors: A Study of Corporate and Banking Influence_____________
Public Policy Functions of the District Banks___________________________________________
How the Directors Are Selected___________________________________________________________
Who Is Selected?___________________________________________________________________________
Class A Directors— Of The Banks, By The Banks, For The Banks____________________
Class B— Does B Stand For Big?_________________________________________________________
Class C Directors— The Public Interest Re-defined_____________________________________
Secondary Interlocks_______________________________________________________________________
The Public Relations-Lobbying Factor__________________________ ________________________
Bank Politics and the Federal Reserve Directors________________________________________
Bank Domination and Bank Examination_______________________________________________
The Club System___________________________________________________________________________
Intra-Maral Selection_________________________________________________________________
Inter-Mural____________________________________________________________________________
The In-Bred Links____________________________________________________________________
Corporate Interlocks with Reserve Banks________________________________________________
How the Data Was Assembled________ ___________________________________________________
Page
m
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4
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58
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62
114
118
119
120
121
C harts
Chart 1 -A — Federal Reserve Bank of Boston___________________________________________
Chart 2 - A— Federal Reserve Bank of New Y o rk _______________________________________
Chart 3 - A— Federal Reserve Bank of Philadelphia_____________________________________
Chart 4 - A— Federal Reserve Bank of Cleveland________________________________________
Chart 5 - A— Federal Reserve Bank of Richmond_______________________________________
Chart 6 - A— Federal Reserve Bank of Atlanta___________________________________________
Chart 7 - A— Federal Reserve Bank of Chicago---------------------------------------------------------------Chart 8 - A— Federal Reserve Bank of St. Louis_________________________________________
Chart 9 - A— Federal Reserve Bank of Minneapolis______________________________________
Chart 1 0 -A— Federal Reserve Bank of Kansas C ity____________________________________
Chart 1 1 -A— Federal Reserve Bank of Dallas___________________________________________
Chart 1 2 -A— Federal Reserve Bank of San Francisco__________________________________
Chart 1 -B — Federal Reserve Bank of Boston___________________________________________
Chart 2 -B — Federal Reserve Bank of New Y o rk _______________________________________
Chart 3 -B — Federal Reserve Bank of Philadelphia_____________________________________
Chart 4 -B — Federal Reserve Bank of Cleveland___________ ____________________________
Chart 5 -B — Federal Reserve Bank of Richmond________________________________________
Chart 6 -B — Federal Reserve Bank of Atlanta___________________________________________
Chart 7 -B — Federal Reserve Bank of Chicago__________________________________________
Chart 8 -B — Federal Reserve Bank of St. Louis_________________________________________
Chart 9 -B — Federal Reserve Bank of Minneapolis______________________________________
Chart 10 -B — Federal Reserve Bank of Kansas C ity____________________________________
Chart 11 -B — Federal Reserve Bank of Dallas___________________________________________
Chart 1 2 -B— Federal Reserve Bank of San Francisco__________________________________
Chart 1 -C — Federal Reserve Bank of Boston___________________________________________
Chart 2 -C — Federal Reserve Bank of New Y o rk _______________________________________
Chart 3 -C — Federal Reserve Bank of Philadelphia--------------------------------------------------------Chart 4 -C — Federal Reserve Bank of Cleveland________________________________________
Chart 5 -C — Federal Reserve Bank of Richm ond-----------------------------------------------------------Chart 6 -C — Federal Reserve Bank of Atlanta___________________________________________
Chart 7 -C — Federal Reserve Bank of Chicago__________________________________________
Chart 8 -C — Federal Reserve Bank of St. Louis--------------------------------------------------------------Chart 9 -C — Federal Reserve Bank of Minneapolis______________________________________
(VII)
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VHI
Page
Chart 1 0 -C — Federal Reserve Bank of Kansas C ity ___________________________________
Chart 1 1 -C — Federal Reserve Bank of Dallas__________________________________________
Chart 1 2 -C — Federal Reserve Bank of San Francisco__________________________________
New York Federal Reserve Bank branch (Buffalo):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments__________________________________________________
Cleveland Federal Reserve Bank branch (Cincinnati) :
Bank-appointed directors_____________________________________________________________
Board of Governors appointments__________________________________________________
Cleveland Federal Reserve Bank branch (Pittsburgh):
Bank-appointed directors__________________________________________________ ___________
Board of Governors appointments_______________________ __________________________
Richmond Federal Bank branch (Baltimore):
Bank-appointed directors _____________________________________________________________
Board of Governors appointments__________________________________________________
Richmond Federal Reserve Bank branch (Charlotte)::
Bank-appointed directors____________________________________________________________
Board of Governors appointments__________________________________________________
Atlanta Federal Reserve Bank branch (Birmingham):
Bank-appointed directors____________________________________________________________
Board of Governors appointments__________________________________________________
Atlanta Federal Reserve Bank branch (Jacksonville):
Bank-appointed directors____________________________________________________________
Board of Governors appointments__________________________________________________
Atlanta Federal Reserve Bank branch (M iam i):
Bank-appointed directors____________________________________________________ - _______
Board of Governors appointments__________________________________________________
Atlanta Federal Reserve Bank branch (Nashville):
Bank-appointed directors______________________________________________ ______________
Board of Governors appointments__________________________________________________
Atlanta Federal Reserve Bank branch (New Orleans):
Bank-appointed directors_________________________ _____________________ - ___________
Board of Governors appointments____ ______________________________________ _______
Chicago Federal Reserve Bank branch (D etroit):
Bank-appointed directors____________________________________________________________
Board of Governors appointments__________________________________________________
St. Louis Federal Reserve Bank branch (Little R o c k ):
Bank-appointed directors____________________________________________________________
Board of Governors appointments_________________________________________ _________
St. Louis Federal Reserve Bank branch (Louisville):
Bank-appointed directors____________________________________________________________
Board of Governors appointments__________________________________________________
St. Louis Federal Reserve Bank branch (M em phis):
Bank-appointed directors______________________________________________________ ______
Board of Governors appointments------------------------------------------------------------------ ---------Minneapolis Federal Reserve Bank branch (Helena, M ontana):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments__________________________________________________
Kansas City Federal Reserve Bank branch (D enver):
Bank-appointed directors------------------------------------ ------------------------------------ ------------------Board of Governors appointments__________________________________________________
Kansas City Federal Reserve Bank branch (Oklahoma C ity ):
Bank-appointed directors____________________________________________________________
Board of Governors appointments________________________ ________ ________________
Kansas City Federal Reserve Bank branch (O m aha):
Bank-appointed directors----------------------------------------------------------------------------------------- Board of Governors appointments___________
Dallas Federal Reserve Bank branch (El Paso):
Bank-appointed directors.____________________
Board of Governors appointments_____ _ —
Dallas Federal Reserve Bank branch (H ouston):
Bank-appointed directors_____________________
Board of Governors appointments----------------
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Dallas Federal Reserve Bank branch (San Antonio):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments___________________________________________________
San Francisco Federal Reserve Bank branch (Los Angeles):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments___________________________________________________
San Francisco Federal Reserve Bank branch (Portland):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments___________________________________________________
San Francisco Federal Reserve Bank branch (Salt Lake C ity ):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments___________________________________________________
San Francisco Federal Bank branch (Seattle):
Bank-appointed directors_____________________________________________________________
Board of Governors appointments___________________________________________________
Page
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T ab u l a r C harts
Tabular
Tabular
Tabular
Tabular
Tabular
Tabular
Tabular
Chart
Chart
Chart
Chart
Chart
Chart
Chart
A— David Rockefeller____________________________________________________ ____ 49
B— William S. Sneath_____________ _______________________________ ___________ 50
C— Jack B. Jackson___________________________________________________________ 51
D — Maurice Granville____________________________________________________ ____ 52
E— Alan Pifer_____________________________________________________________ ____ 53
F— Robert H. K night____________________________________________________ ____ 54
G— Frank R. Milliken________________________________________________________ 55
I llustrations
Illustration 1. Interlocks of Southeast Banking Corporation of Florida at Atlanta Bank____
Illustration 2. Interlocks of Five of the 11Public11 Representatives at the Minneapolis Bank_
T ables
(Inserts follow page 120)
1.
2.
3.
4.
5.
6.
Federal
Federal
Federal
Federal
Federal
Federal
Reserve
Reserve
Reserve
Reserve
Reserve
Reserve
director
director
director
director
director
director
ties
ties
ties
ties
ties
ties
with
with
with
with
with
with
Fortune 1,000 list.
top 50 life insurance companies.
top 50 retailers.
top 50 transportation companies.
top 50 utility companies.
top 100 bank holding companies.
115
117
FEDERAL RESERVE DIRECTORS: A STUDY OF CORPORATE
AND BANKING INFLUENCE
There is much debate about the role of the twelve Federal Reserve Dis
trict Banks, their presidents, and boards of directors, in the overall operation
of the Federal Reserve System.
While the Board of Governors in Washington occupies the dominant
position in the Federal Reserve System, it is clear that the Federal Reserve
Act and subsequent delegations of authority from the Board have given the
district banks substantial powers, ranging from input on monetary policy to
regulation of much of the nation's banking and commerce.
Clearly, the American public has an interest in who runs the district banks
of the Federal Reserve System.1 This study is an attempt to provide a profile
of the governing bodies of these public entities— the directors who serve on the
twelve districts banks and the 25 bank branches scattered across the nation
from Boston to San Francisco.
Each of the district banks has a nine-member board of directors. In addi
tion, each of the 25 branches has its own board, ranging in size from five to
seven members. System wide, 269 directors sit on the boards— 108 at the
district bank level and 161 at the branch bank level.
P
u b l ic
P
o l ic y
F
u n c t io n s
of
the
D
is t r ic t
B
anks
The Federal Reserve district banks have a variety of public duties. In
addition to maintaining the check-clearing machinery and computer networks
for the banking industry, the district banks are assigned major responsibilities
in the examination and regulation of state member banks, and the Federal
Reserve Board of Governors has delegated vast powers to the district banks
in the administration of the Bank Holding Company Act. The same is true
of the Bank Merger Act. They are clearly the first line of “ contact” for banks
1
Structure of the System.— The Federal Reserve System consists of three major divisions. The
Board of Governors, seated in Washington, D.C., is comprised of seven members appointed by the
President with the advice and consent of the Senate. The Federal Open Market Committee— the
monetary policymaker— consists of the seven Governors and five of the twelve district bank presidents
or first vice-presidents, chosen by the boards of directors of the district banks in accordance with
Section 12A of the Federal Reserve Act. The third component consists of the twelve Federal Reserve
District Banks and their branches located in 37 cities across the country.
(1)
2
and bank holding companies which fall within the jurisdiction of the Federal
Reserve.2
The presidents of the district banks participate in the discussions of the
Federal Open Market Committee— the Federal Reserve’s and the nation’s
monetary policy-making entity. Four of the twelve district bank presidents
serve as voting members of the Federal Open Market Committee on a rotating
basis. The president of the New York Federal Reserve District Bank is a perma
nent voting member of the FOMC, and his bank operates the trading desk
which carries out the orders of the Open Market Committee.
In addition, the district banks are presumed to be a prime source of infor
mation on economic and banking conditions in their areas . . . information
which is supposed to affect the policy-making of the Board of Governors and
the Federal Open Market Committee.
How many of these duties and responsibilities actually fall to the boards
of directors?
It is clear that the boards of the district banks have a combination of
administrative, policy and advisory roles of varying importance and of varying
degrees of independence from the Washington-based Board of Governors.
The Federal Reserve Act gave the boards of the district banks
. . .the
duties usually appertaining to the office of directors of banking associa
tions . . . ” and directed that the district bank
. . keep itself informed of
the general character and amount of the loans and investments of its member
banks with a view to ascertaining whether undue use is being made of bank
credit for the speculative carrying of or trading in securities, real estate, or
commodities, or for any other purpose inconsistent with the maintenance of
sound credit conditions . . ” The chairman of the bank reports such findings
to the Board of Governors with his recommendations— a significant authority
in an era of “ problem” banks.
The directors have the authority to appoint and set the salaries of the chief
operating officers— the president and first vice-president of the district bank—
subject to final approval of the Board of Governors. All other officers and their
salaries are also set by the directors without final approval by the Board of
2
District banks are the principal fiscal agents of the U.S. government in their area. In this
capacity they hold Treasury checking accounts, perform fiscal services for Federal or Federally-spon
sored credit agencies, pay interest on government obligations, and handle government securities. For
the latter, the Banks receive applications from potential buyers, allot them among bidders, collect
payments from buyers, and redeem securities. The basic information flow of the Federal Reserve
System is from the district to the Board of Governors. Almost all applications for action requiring
approval within the System are received from and filed with the district bank. The paperwork on and
the analysis of these applications is performed by the staff of the district bank. In the Board’s regula
tions governing submission of applications, the following phrase reveals the scope of this power :
“ . . . makes such investigations as may be necessary and submits relevant facts, with its recommenda
tions, to the Board.” This obviously gives the banks tremendous power over the flow and selection of
information from the regulated banks to the Board of Governors and, indeed, to the Congress and the
people.
Specific powers over state member banks include the authority to : approve the establishment of
a domestic branch ; permit a bank to declare a dividend in excess of net profits for the calendar year;
approve or deny the six months notice of intention to withdraw from the Federal Reserve System ;
permit a state bank to reduce its capital stock ; determine the time for filing of reports from affiliates
of state member banks; and require reports on security devices and order improvements deemed
necessary.
Powers over all member banks (state and national) include the authority to : permit a member
bank to invest more than the excess of capital stock in a bank premise; permit a member bank to
accept commercial drafts in an aggregate at one time up to 100% of capital and surplus; extend the
time a bank must surrender its Federal Reserve stock and certificate of membership; extend the time
for submitting a report on the condition of a bank ; approve applications to terminate registration of
an individual who received credit secured with securities; and approve applications for membership
in the Federal Reserve System giving consideration to the history of the applicant bank and its man
agement, to its capital, assets, and future earnings, to the needs of the community, and to the con
sistency of the bank’s corporate powers with the Federal Reserve Act and the Federal Deposit Insur
ance Act.
3
Governors. They also have wide discretion in dismissing any of these officers,
who perform the day-to-day operations of the Federal Reserve district bank,
and who oversee the member banks in their district.3
Subject to the Board of Governor’s approval, the directors also set the
discount rate in their district.4
The role of the directors in monetary policy is less clear, but it is obvious
they do have advisory functions in this area.
The directors apparently do not instruct their presidents who vote in the
Federal Open Market Committee, but they can and do advise on policy. The
directors also hold joint meetings with the Board of Governors in Washington
and, in addition, have informal contact at other times.
Testifying on the Financial Reform Act of 1976, on March 18 of this year,
Federal Reserve Chairman Arthur Burns gave district boards of directors high
marks for their advisory role in Federal Reserve policy-making:
First, they make an important contribution to our economic intelligence system, through
a detailed knowledge of the state of business and consumer psychology and through a “ feel”
for prospective developments in their particular sphere of activity. This “ grass-roots’ ’ input
from directors serves as an important complement to the work of our economic research
staffs. Secondly, many of our directors bring to us important management skills and “ know
how” in their oversight responsibilities for efficient operation of Federal Reserve Banks. It is
important, therefore, to secure knowledgable, effective, and highly-motivated persons to
serve in such capacities.
Dr. Burns’ former colleague on the Board— Dr. Andrew Brimmer—
takes a similar view. This is the way he described the role of the district boards
in the June, 1972 issue of the Federal Reserve Bulletin:
The individuals who serve as directors of the Federal Reserve Banks and branches play a
unique role in helping to supervise the activities of the Nation’s central bank. They also share
the responsibility for assuring monetary and credit conditions that will foster high employ
ment and economic growth with reasonable price stability.
As the Burns-Brimmer statements indicate, the Reserve banks and their
boards of directors play an important and diverse public role in the activities
of the Federal Reserve System. Clearly the persons charged with performing
these public functions should represent the public interest to the maximum
degree possible.
3
The growing administrative role of the district banks and their directors was described by
Thomas Mayer, professor of economics at the University of California at Davis, in a paper submitted
for the “ Study of Financial Institutions and the Nation’s Economy’* prepared for the Banking,
Currency and Housing Committee :
“ Since Federal Reserve Banks are adopting a ‘management by objectives’ system this means that
a committee of directors has to undertake an elaborate evaluation of the president’s performance.
The criteria they use include his efficiency in controlling costs, his effectiveness in public relations
activities, and, at least in some cases, also his performance on the FOMC. Directors also pass on the
budget, and on the audit, etc. To illustrate the administrative functions of the directors by an
example, when one Federal Reserve Bank, on the basis of an outside consultant’s report, decided to
increase mechanization, and terminate the employment of more than ten per cent of its staff, the
directors advised the president on the best way to do this.”
* The discount rate is the payment member banks of the Federal Reserve System make when they
borrow from the Federal Reserve district bank. The directors also have the power to open the
discount window to non-member institutions within their area. Regulation of the use of such loans
and advances has an impact on the quality of banking in the District. The loans and advances are
secured by proper collateral, but the Federal Reserve bank has the discretion to determine “ eligible”
collateral. In unusual and exigent circumstances, the Federal Reserve bank can extend loans to
individuals, corporations, and non-member institutions.
4
How
the
D
ir e c t o r s
are
S elected
By law, each Reserve bank board has nine members, divided into three
categories as follows: The three Class A members are elected by, and are
representatives of, the stockholding member banks. The three Class B directors,
also elected by the member banks, are to be “ actively engaged in commerce,
agriculture, or some other industrial pursuit” at the time of their election.
No Class B director may be an officer, director, or employee of any bank;
however, there is no prohibition against owning bank stock. The three Class C
directors are appointed by the Board of Governors. Class C directors may
not be officers, directors, employees, or stockholders of any bank.
While the Federal Reserve Act clearly gives the member banks control
over the selection of two-thirds of the boards, the banking industry in some
districts has added an extra-legal nicety to assure conformity and a higher
degree of input by the hierarchy of the industry. Five of the districts channel
their nominations for both Class A and Class B directors through trade associ
ations—state banker organizations affiliated with the American Bankers
Association, the principal lobbjdng arm of the banking industry nationwide.
This survey did not reveal any instances in which the nominations of the
banking associations were rejected by the voting member banks.
In other districts, the nominations are solicited by ballot directly from
the voting member banks. There are indications that the presidents of some
of the Federal Reserve districts banks also have input in the nominating process.
The somewhat complex nominating process notwithstanding, the end
result is often a single name listed for each opening on the boards. While
there has been occasional competition for directorships, the idea of broad
democratic input on the part of the member banks in an “ election” is largely
a facade.
Rather the process appears to be a ratification of whatever nominating
process exists in each district—in some cases nominations by bank lobbying
organizations; in others, less formal bank nominations; and in others, a process
influenced by the System itself. Miraculously, the “ voting” commercial banks
scattered throughout each district agree on the names with rare dissents.
The Federal Reserve Act gives little instruction on the make-up of the
branch boards which currently number 25 nationwide. The Act provides for a
board of not more than seven and not less than three members with a “ majority
of one” to be selected by the Federal Reserve bank in that district and the
remainder by the Board of Governors in Washington.5
W ho
Is S e l e c t e d ?
How well has this complex selection process worked and how well has the
public interest been served?
Testifying before the Subcommittee on Financial Institutions Supervision,
Regulation and Insurance on January 21, i976, Federal Reserve Board Chair
man Arthur Burns obviously felt the system was working well:
5
The criteria for these appointments— as opposed to elections— are spelled out in Federal
Reserve System documents. The District Bank appointments must be well qualified and experienced
in banking or actively engaged in commerce, agriculture or some other industrial pursuit. The
remainder are appointed by the Board of Governors with only the proviso that they must be non
bankers who are representatives of the general public interest.
5
The 269 Reserve bank and branch directors who now serve the System are highly
qualified citizens drawn from many walks of life and all parts of the country. Some are
bankers, as contemplated by law; others are industrialists, merchants, farmers, attorneys,
university presidents, and professors. They are deeply interested in our country and its
economic welfare. They devote a great deal of time to the System, keeping the officials of
the Reserve Banks and the Board informed on a regular, systematic basis about actual and
prospective developments in their businesses, their industries, and their communities. . . .
Despite the Federal Reserve Board Chairman’s belief that pluralism is
alive and well on the district bank boards, even a cursory examination of the
directorships reveals a heavy domination by Corporate America and influence
by the financial industry which extends far beyond the statutory requirements.
In fact, in many areas, the list of Federal Reserve directors reads like a blueribbon list of “ Who’s Who in American Corporations.”
Charts and tables included in this report show that 37 of the 108 district
bank directors are either directors, officers or employees of corporations from
the Fortune 500 list of the leading U.S. Corporations— or thirty-four percent of
the district bank boards.
The banking and other financial links in the Federal Reserve are massive.
In fact, some 73 of the 108— almost 70 percent— are either now, or have been,
officers, directors, or employees of financial institutions.
In many cases, not only are the directors connected with commercial
banks, but they are also top officials in bank trade associations— the American
Bankers Association and various state banking associations. In most cases, these
trade groups are primarily lobbying organizations seeking to influence govern
mental policy and decisions affecting banking— including those of the Federal
Reserve System.
This survey of the 269 directors of the district bank and branch boards
indicates only minimal representation for small business and only a scattering
of input from the academic community. The agricultural community— where
it is represented at all— is recognized basically through agribusiness or corporate
farming operations. Women are ignored totally in the selection of district bank
directors and only six women are among the 161 branch directors. Minorities
are given little more than token representation.
C lass
A
D
ir e c t o r s —
Of
the
B
anks,
B
y
the
B
an k s, and
F
or th e
B
anks
The Federal Reserve Act requires that banks be represented on the
district boards. Class A directors are elected by the member banks in each dis
trict and they must be bankers while they serve on the boards.
While international giants, such as the Bank of America and the Chase
Manhattan Corporation, have their chief officers on the district boards as do
several big regional banks, the medium-sized and small banks have a sizeable
degree of representation. The diversity of bank size among the Class A directors
is intended to be in keeping with the Federal Reserve Act which requires that
they be “ representative of the stock-holding (Federal Reserve member) banks.”
For nominating and voting purposes, the member banks in each district are
divided into three categories by size with each category nominating and electing
one of the three Class A directors.
While the grouping brings some diversity among the banks, it apparently
still leaves lots of familiar banking faces on the boards of the district banks.
In six of the districts, for example, all three Class A directors either now or
in the near past have been officers, directors, or have held other leadership
6
positions within state and national banking associations. In each of the other
six districts, two of the three directors have present or past ties with bank
associations.
Systemwide, 30 of the 36 Class A directors either now or in the past have
been heavily involved in the politics of bank associations— most of which are
lobbying arms of the industry.
As a result, the attitudes of these directors may be as monolithic as the
positions taken by their bank trade associations on banking matters and the
diversity suggested by differing bank sizes may be less meaningful than it
appears.
Many of the bankers in this class are also directors of big corporations, oil
companies, tool making concerns, insurance firms, mortgage and financial
organizations, and large industrial concerns— nine sit on insurance company
boards and five serve on Fortune 500 companies.
Charts 1-A through 12-A which follow show the affiliations of the 36 Class
A directors:
Chart 1-A
District One
FEDERAL RESERVE BANK OF BOSTON
Class A Directors
_L_
JAMES F. ENGLISH, JR.
FRANCIS N. SOUTHWORTH
Concord National Bank,
Concord, N.H., Chairman and
President, $46 million,
Rank: 2,110.
-Manufacturers & Merchants Mutual
Insurance Company, Director.
-Phoenix Mutual Fire Insurance
Company, Director.
-The Capital Fire Insurance
Company, Director.
The Connecticut Bank and
Trust Company, Hartford,
Conn., Chairman,$1.4 billion,
Rank: 59,
The CBT Corporat1on ( one_
^ank_hjolding_c£in£any)_>£hairman_
and Dire^tor^l.8 billion/assets
-Connecticut General Insurance
Corp. and Subsidiaries,
Director.
-Emhart Corporation, Director.
-J. C. Pitman and Sons, Inc.,
Director.
-President, New Hampshire
Bankers Association, 1973-74.
-Member, Stockholders Advisory
Committee, Boston Federal
Reserve System, 1964.
-Connecticut Natural Gas
Corp. Director.
-Terry Corporation, Director.
-American Thread Company,
Director.
-Loctite Corporation,Director.
-Heublein,Inc., Director
-President, the Connecticut
Bankers Association.
-Federal Advisory Council
to the Federal Reserve
Board, Member, 1972-1974.
JOHN D. ROBINSON
Firstbank,N.A., Farmington,
Maine, President, $13.7
million.
Director, 1967-69.
-American Bankers Association,
State Vice-President, 1971.
-American Bankers Association,
Governing Council, 1972.
9
District Two
Chart 2 -A
FEDERAL RESERVE BANK OF NEW YORK
Class A Directors
DAVID ROCKEFELLER]
STUART MC CARTY
Ih a r r y
j . tawI
_________________ L-------- —--- ----jChas£ Man.ha.t_tari _Co^Po.ra.11.on,_
Ch£irman_,__(hpjLdi.nj* c_ompany
IPE.
inclading
jCha.se ^nha.t_tan jiank, N.A.j__
^^^S^b^l^ionVa^s^ts^^
Holding Company; Rankj^ 2,
-Chase Manhattan Bank, N.A.,
New York, New York, Chairman,
$33.8 billion, Rank: 3.
First-City National Bank of
Binghamton,N.Y., President,
$231 million, Rank: 395.
First National Bank of
Cortland, N. Y., President,
$53.5 million, Rank: 1,782.
-Miicoln. J^i^sJLbjmks^ Inc.*jL
and Vic^ej-P^es_id^en.t_ (J^an.k_ho^l_din.g_
company whic_h <>^s_ab<)ve_b^mk) .
^2_.6_b^1jl^ion^a s^s ts ; __
HoJLdi^ng^ ^ompan^ Rank^ 2_8^
-Cortland County Development
Corporation, Vice-President.
-Independent Bankers Assoc»
New York State, Director,
1975-1976.
-Crowley Foods, Inc., Director.
-Chase Manhattan Bank,
(Switzerland), Director.
-Chase International Investment
Corporation, Chairman, (whollyowned foreign financing subsidiary
of the Chase Manhattan Bank,N.A.)
-Systems Manufacturing Company,
Director.
-Security Mutual Life Insurance
Company,
Director.
-Chase Manhattan Bank Foundation,
Chairman.
-New York State Bankers Association,
Member, Government Relations
Committee, September, 1974 -
-Rockefeller Brothers Fund,
Trustee, Vice-Chairman and
Member of Executive Committee,
Chairman, nominating Committee.
-Comptroller of the Currency’s
Regional Advisory Commission for
the 2nd National Bank Region,
Member, 1968-1969.
-Rockefeller Family Fund, Trustee,
member of Executive Committee.
-Rockefeller Center, Inc.,
Director & Member, Finance Comm.
-New York State Bankers Assoc.
Treasurer and Member, Governing
Board of Directors, 1973.
-New York State Bankers Assoc,
Member at Large, Council of
Administration. ,1969.
-Comptroller of the Currency’s
Regional Advisory Commission,
Member, 1970-1971.
10
Chart 3 -A
District Three
FEDERAL RESERVE BANK OF PHILADELPHIA
Class A Directors
1----------------------- ;----------------------------- 1-------------------------------
THOMAS L. MILLER
Upper Dauphin National Bank,
Millersburg, Pa., President,
$26.8 million, Rank: 3,819
-Frederick Foundation,
Director.
-Dauphin County Bankers
Association, President,
1974.
WILLIAM B. EAGLESON
Gi£ard_C£m£any^ Chairman^ _
PresjLdent and £.12.0.^ _
_$3^5_M1 l^ion/ass etjs
Girard Bank, Bala Cynwyd, Pa.,
Chairman and President,
$2.95 billion, Rank: 27.
-General Accident, Fire & Life
Assurance Corporation, Member,
Advisory Committee.
-Penn Mutual Life Insurance
Company, Trustee.
-Camden Fire Insurance
Association, Director.
—Potomac Insurance Company,
Director.
—Pennsylvania General Insurance
Company, Director.
-Anchor Hocking Company,
Director.
-Weis Markets, Director.
-Thomas Emery's Sons, Inc.,
Director.
-The American Foundation,
Director.
i
JAMES PATCHELL
National Bank and Trust' Co.
of Gloucester County, Woodbury,
New Jersey, President and
Chief Executive Officer,
$134 million; Rank: 657.
-Morton Savings and Loan
Association, Director.
-Delaware County, Pennsylvania
Bankers Association, President.
-Gloucester County, New Jersey,
Bankers Association, President,
1967-1968.
-New Jersey Bankers Association,
President, 1974-1975.
11
District Four
Chart 4-A
FEDERAL RESERVE BANK OF CLEVELAND
Class A Directors
EDWARD W. BARKER
MERLE E. GILLIAND
First National Bank of
Middletown, Ohio., Chairman,
$101 million, Rank: 892.
-Butler County (Ohio)
Bankers Association,
Past Chairman.
-Sorg Paper Company,
Director.
-American Bankers Association,
Member, Executive Council,
1963-1965; and 1968-1970.
-Moon Equipment Company,
Director.
Corporation.,
a im a n _a n d _C h iejf E x e c u tiv e
Offic_e_r,_$2^. 9_ bijL li^ on M sse^ s^
j[T h i£ is^ a ^ on e^ b a n k h o l d i n g £om pan£.^
First National Bank of
Bellevue, Ohio, President,
$26 million, Rank: 3988.
^Pittsburgh National Bank, Chairman,
Chief Executive Officer, and Director,
$2.3 billion, Rank: 40.
-Ohio Bankers Association,
President, (1965-66).
-Star Tool & Die Company,
Director.
-Kissell Company, Director,
(Mortgage loan servicing subsidiary
of Pittsburgh National Bank).
-Zee Tool & Die Company,
Director.
-Bell Telephone of Pennsylvania,
Director.
-Magnode Products, Director.
-American Bankers Association:
Executive Council, 1968-1971;
Urban Affairs Committee, 1970 -
-Ohio Bankers Association:
President, 1968-69;
Council of Administration,
Past Chairman;
Chairman, Group One
Division, 1966-68;
Study Commission on
Restructuring of
Ohio Bankers
Association,
Chairman, 1971;
Trust Committee,
______ Member.
RICHARD P. RAISH
-Independent Bankers
Association of America,
Ohio Director, 1967-1972.
-American Bankers Association,
member, Executive Council,
1966-1968.
12
Chart 5 -A
District Five
FEDERAL RESERVE BANK OF RICHMOND
Class A Directors
PLATO P. PEARSON,JR.
JAMES A. HARDISON
J. OWEN COLE
Citizens National Bank,
Gastonia, North Carolina,
Ch. & Pres.,$107 million,
Rank: 827.
First Natfl Bk. of Anson
County,Wadesboro,N.C., Ch.
& President ,$19 million.
First Mary^and^Banc^orpj^,^
BaUimore,_ president,
$l^l_b^l^i^n^as^s et s^
-Wix Corporation, Director,
-Wade Manufacturing Co.,
Director.
-First National Bank of
Maryland, Chairman and
President, $943 million,
Rank: 102.
-Textiles•Inc., Director.
-Anson Savings & Loan Assoc.,
Director,
-Allied Financial Service,
Inc., Director.
-West Knitting Corporation,
Director*
- North Carolina Bankers
Association:
Resolutions Committee,
1972;
U. S. Savings Bond
Committee, 1972-4;
Structural Study
Committee, Member,
1974.
-Hornwood,Inc., Director.
-Z. V. Pate, Inc., Director,
-Pee Dee Oil Co., Inc., Pres.,
-North Carolina Bankers
Association:
Legislative Committee,
Member.
— State of Maryland,
Commission to Study
the Regulatory Structure
of Banking, Savings and
Loan, and Small Loan
Industries, Member.
13
Chart 6 - A
District Six
FEDERAL RESERVE BANK OF ATLANTA
Class A Directors
JOHN T. OLIVER,JR.
First National Bank of
Jasper,Ala..President,
$59 million, Rank: 1*602.
JACK P. KEITH
First Nat'l Bank of West
Point,Georgia.President,
$22.4 million.
SA1H I. YARNELL
t_an°g a_>
cmne s
s
_
^1 l^iot V a s^s^t
-Bankhead Mining Co.,
Inc., Director.
-Georgia Bankers Association:
President, 1965;
Chairman, Executive
Council, 1966;
Chairman, Insurance
Trust, 1959 to
present.
-American Bankers Association:
Executive Council,
Member, 1968-1970;
Committee for Strengthening
& Improving State Banking
Laws, Member, 1970-71.
-Independent Bankers Association:
Executive Council, Member.
-Comptroller of the Currency's
Regional Advisory Committee,
Member.
-American National Bank &
Trust Company, Chairman,
$383 million, Rank: 244.
-Volunteer State Life
Insurance Company,
Director.
-Skyland International
Corporation, Director.
-American Bankers Association:
Legislative Committee,
Commercial Lending
Division, Member;
Federal Legislative
Committee, former
member.
14
Chart 7-A
District Seven
FEDERAL RESERVE BANK OF CHICAGO
Class A Directors
I'
JAY J. DE LAY
i
JOHN F. SPIES
_________
A. ROBERT ABBOUD
I
Huron Valley National Bank,
Ann Arbor, Michigan, President,
$75.7million , Rank: 1198.
Iowa Trust and Savings Bank,
Emmetsburg, Iowa,President,
$ 14.6million .
-Downers Grove National Bank,
Director. $58.8 million,
Rank: 1589.
-Illinois Bankers Association,
President, DuPage County,
1961-62.
-Independent Bankers Association
of Iowa, Board Member, 1973.
-Comptroller of the Currency
Regional Advisory Board for
the Seventh Region,1970-72.
-American Bankers Association,
Executive Committee, Member,
1967-1969.
-Independent Bankers Association,
Treasurer, and member, Executive
Committee, 1973.
First National Bank of Chicago,
Chairman of the Board,
$14.2 billion, Rank: 9.
-Firs_t Chicago^ Corporation,_
Mrectcn:^ $lj) MlMori/^ssets^ _
This_is holding^ c.ompan^_ fo_r bank,
-Field Enterprises, Inc., Dir.
-Inland Steel Company, Director.
-Hart, Schaffner and Marx,
Director.
-American Bankers Association,
Commercial Lending Division,
Executive Committee Member.
15
District Eight
Chart 8-A
FEDERAL RESERVE BANK OF ST. LOUIS
Class A Directors
RAYMOND C. BURROUGHS
The City National Bank of
Murphysboro,Illinois, Pres.,
$35.7 million, Rank: 2780.
-Southern Illinois Local
Development Corporation,
Director,
■“Illinois Bankers Association:
Executive Committee
Member, 1971-1973;
Council of Administration,
Member since 1969.
(Group Ten):
Sec’y-Treas, 1968-1969;
Vice-President,1969-1970;
President, 1970-1971;
Chairman, Full Service
Banks,1972-1973.
-Association for Modern
Banking in 111'
:
Governme l
itions
Committee Member;
Legislative Committee
Member.
DONALD N. BRANDIN
WILLIAM E. WEIGEL
B°atmenT Baiicshares^ Inc.^
Ch^irm^n_a n.d^C^E^O^,__
$l_bil1 i on_/ass et_s._Holdin.g__
C^ompan^ Rank_^ 88^
-Association of Registered Bank
Holding Companies, Member.
-American Bankers Association,
Member.
The Boatmen’s National Bank
of St. Louis, Inc.,Ch. and
Pres.,$421 million,Rank:220.
(jLub.s_L
_Bjo a^m^nV_s
.
-Union National Bank, Dir.,
$150 million,Rank: 584.j[subs^
of_Boatmen^s^.
-Baltimore Bank & Trust Co.,
Director, $88 million,Rank:1019,
(SubSj_ of_B£atmen_^s^.
-Williams, Kurrus & Co.,
Director, Xsu^S-,-—of- —0--t—e--t—^ *
-Petrolite Corp., Director,
-Sigma International, Ltd.,
Director.
-William S. Barnickel
& Company, Director.
-Missouri Bankers Association,
Member.
First National Bank & Trust
Company, Centralia, Illinois,
Executive Vice-President,
$51.8 million, Rank: 1847.
-Hoyleton State & Savings Bank,
Vice-Pres. & Director, $7 million.
-Ashley State Bank, Vice-Pres. &
Director, $ 8 million.
♦-Illinois Bankers Association:
Past President, Group Nine;
Former Member-Bank Management
Committee, Council of Administration,
Installment Credit Committee,
Administration and Curriculum
Committee for School of Banking
at Southern Illinois University.
16
Chart 9-A
District Nine
FEDERAL RESERVE BANK OF MINNEAPOLIS
Class A Directors
CHARLES T. UNDLIN
WILLIAM E. RYAN |
= 1 _____________
JOHN S. ROUZIE
‘First Nat'l Bank of the Black
Hills, Rapid City, S. Dak.,
president, $ i88million,Rank:474.
Citizens State Bank, Ontonagon,
Michigan, President, $11 million.
First Nat'l Bk. of Bowman,
North Dakota, President,
$22 million.
-Black Hills Power & Light
Company, Director.
-600 Michigan Corporation, Dir.,
and President.
-Provident Life Insurance
Company, Director, and Member,
Executive Committee.
-Cardinal Drilling Co., Dir.
-Wyodak Resources Development
Company, Director-
-Leisure Facilities, Inc.,
Resident Agent.
-South Dakota Bankers Association,
Chairman» Interim Tax Study
Committee, 1973-74.
-Ontonagon-Gogebic County
Bankers Association, Former
Chairman.
-Michigan Bankers Association:
Chairman, Group 1,1961;
Legislative Committee
Member, 1962.
-Former Member, Bank Examination
Committee, Federal Reserve Bk.
(Advisory) 1970-71.
-Twin Buttes Investment Company,
President.
-Comptroller of the Currency
Advisory Committee, Member,
Minnesota office.
— North Dakota State Banking
Board, Former national
bank member.
17
Chart 10-A
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
CHART X
Class A Directors
,_______ C = ---------------------
JAMES M. KEMPER,JR.
PHILIP HAMM
CRAIG BACHMAN
... .
_________________
First Nat’1 Bk. & Trust
Co., El Dorado, Kansas,
Pres., $21.5 million.
(Owned J^_Exchangei JLnve£to>rs),_
^?xchange_Jnvestors, Inc.,
^e£r£t a ry-Tr£a suFeF, - The~
£ ^ s_bank, $2J> miI.li.on/£ss_et^s_^
-Augusta State Bank, Dir.,
$7 million.
-Benton State Bank, V.P.
& Dir.. $3.1 million.
-Midwest Radio Corporation,
Director.
-Kansas Bankers Association:
State Affairs Council,
1973-74;
Legislative Committee,
1971-72;
Former State Treasurer.
-American Bankers Association:
Vice-Pres. for Kansas-1973-4;
Communications Council
Member, 1973-74.
"
I
_______________________
First Nat'l Bk. of Centralia,
Kansas, President, $4 .6 million.
C^oramerc_e__Ba_ncshar^es^,_In.Cj_,
Karisa.s__Cit_^,_M_isso u.ri,_
^ha.ima.n_a nd_P i^esid ent_^_
b^ljLi£n/asse_t£,_
-Lohrauller- Bachman, Inc.,(ins .)
Vice President and Treasurer.
-Kansas Bankers Association:
Bank Management Comm.
1964-66;
State Legislative
Comm. 1966-71;
Federal Legislative
Committee, 1971-1975.
-American Bankers Association,
Federal Legislative Advisory
Committee, 1970-1971.
Holding. Company Rarik_^ 51_^
-Commerce Bank and Trust
Company, Chairman,
$539.9 million, Rank: 177.
This_is £art__of_ holding _
company.
-Mississippi River Corporation,
Director.
-Missouri Pacific Railroad,
Director(subs, of Miss. River
Corporation).
-Paul Mueller Company,
Director.
-Kansas City Life Insurance
Company, Director.
-Commerce Mortgage Co.,
Chairman, (S^absi^daary^
-W. S. Dickey Clay,Dir.
-Compac Services, Inc.,
Chairman, (Subsidiary^.
-Gas Service Company,
Kansas City, Director.
-CBI Insurance Company,
Chairman and Pres. X^Hbs._)
-Kemper Investment
Company, Director.
-Mid-America Financial
Corporation, Chairman
and Pres. (SubsJ
-Owens-Corning Fiberglas
Corporation, Director.
-Capital for Business,
Inc., Chairman, (Subs_.)__
-Tower Properties, Inc.,
Chairman.
- Member, American Bankers
Association, Missouri Bankers
Association, and Association
of Registered Bank Holding
Companies.
18
Chart 11-A
District Eleven
FEDERAL RESERVE BANK OF DALLAS
Class A Directors
GENE D. ADAMS
fhe First National Bank of
Seymour, Texas, President,
$9.8 million.
The Central National Bank of
San Angelo, Texas, Chairman of
the Board, $105.5 million,Rank:84:
-Member, Texas Bankers
Association, Independent
Bankers Association and
American Bankers
Association.
-First National Bk. of Kerrville,
Chairman.,$45.4 million,Rank:2159,
{ROBERT H. STEWART, III|
FRANK JUNELL
-Reagan St. Bank, Big Lake,
Chairman, $3.3 million.
-Coleman Bank (Coleman), Director,
$17 million. Part_oj£ _U._
Baricsha.res_^ _Inc.__
-First National Bank of Brownwood, Director, $43. 8 million,
Rank: 2246. Part_of^ tJ._S^_.
Bancshares^ Inc
-Texas Bankers Association:
Administrative Council
Member, 1967-69;
District Chairman(1971).
First International_Bancshares,
Dallas, Texas, Chairman/Board^
$6.356 billion/assets, Holding
Company R a n k : 1 3 .
4
-Comptroller of the Currency,
Regional Advisory Committee.
1971-1973.
-First National Bank in Dallas,
Director, $3.4 billion,Rank: 22.
(Part of holding company)
-Dallas Power & Light Company,
Director.
-National Chemsearch Corporation,
Director,
-Pepsico, Inc., Director,
-Continental Fidelity Life Ins.
Co., Director.
-Republic Financial Services,
Inc., Director.
-Gandyfs Dairies, Inc.,Dir.
-Southwestern Life Insurance Co.,
Director.
-Blackacres Royalties, Inc.,
Chairman.
-Galveston Radio, Inc.,
Director.
-Campbell Taggart,Inc.,
Director.
-Braniff Airways, Inc.,
Director.
19
D istrict Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Class A Directors
Chart 12-A
20
C la s s
B — D o e s B S t a n d f o r B ig ?
With the three Class A directors in each district bank assigned to commer
cial bankers by statute, it is clear that the interests of borrowers and the public
at large must depend on representation in the six Class B and C positions.
The Class B directors— who must not be officers, directors or employees of
any bank during the time they serve on the district boards—ostensibly repre
sent the borrowers and it is evident that many of the districts interpret this as
“ big” borrowers.
For example, Chart 1-B shows that Federal Reserve District One (Boston)
has its borrowers represented by the president o f Textron, Inc., of Providence,
Rhode Island ($2.1 billion in annual sales); the chairman of William Filene’s
Sons Company (a subsidiary o f Federated Department Stores which has $3.27
billion in annual sales); and the president of the Southern New England Tele
phone Company. The three are directors of at least six other major corporations.
Even more telling is the fact that all three are former directors of major
commercial banks— an extension of the influence of the banking industry
already represented through the Class A directors.
The New York Federal Reserve Bank, which covers all of New York
state and northern New Jersey, interprets the requirement of Class B repre
sentation as calling for the election of the chairman of Texaco; the president
of the Union Carbide Corporation; and the president of J. C. Penney Company,
Inc.— all multi-billion dollar corporations. (See Chart 2-B.) The hundreds of
more modest-sized businesses— and the thousands of truly small businesses—
apparently do not qualify for representation under the New York Federal
Reserve's reading of the intent on Class B directorships.
On the West Coast, the “ grass roots” input on Class B directors on the
San Francisco Federal Reserve Bank (see Chart 12-B) comes from a multi
million dollar contractor; the president of the Crown Zellerbach Corporation;
and the president of the Boeing Company.
Charts 1-B through 12-B which follow show the principal business pursuit
of each Class B director as well as his other connections:
22
Chart 1-B
District One
FEDERAL RESERVE BANK OF BOSTON
Class B Directors
-------------------- 1
—
r—
.......-------------------------------
G. WILLIAM MILLER
WESTON P. FIGGINS
Textron, Inc., Providence,
Rhode Island, Ch._& C.E.O.,
William Filene1s Sons Company,
Boston, Massachusetts, Chairman,
(Subsidiary of Federated
Department Stores, $3.27 billion/
sales.)
$2.11 billion/sales.
-American Research and
Development Corporat ion,
Director.
-Rhode Island Hospital Trust
National Bank, (former
director 1963 to 1970).
$708 million, Rank: 138.
Rhode_ Is land_ H£S£it a 1_ Thrust
Q pipo r5:tA0il» _ a_
_
lioWin^ jcompan^ ^ owns_
this bank.
The Southern New England
Telephone Company, New Haven,
Conn., President. $435 million/
sales.
-The Stanley Works, Director.
-Federated Department Stores,
Vice-President.
-Allied Chemical, Director
-The Kendall Company,
Director.
ALFRED W.
VAN SINDEREN,
-Associated Merchandising
Corporation, Director
-John Hancock Life Insurance
Company, Director.
-National Bank of Washington,
D.C., (former director,
1963-1965), $516 million,
Rank: 183.
-United Aircraft Corporation,
Director (Subsidiary of United
Technologies Corporation).
-Greater Hartford Corporation,
Director.
-First New Haven National Bank,
(former director 1965 to 1972;
member, executive committee
1970 to 1972.),$285 million,
Rank: 334.
Chart 2-B
District Two
FEDERAL RESERVE BANK OF NEW YORK
Class B Directors
jMAURICE F. GRANVILLE
Texaco, Inc., New York, N.Y.,
Chairman, $23.3 billion/sales.
-American Petroleum Institute,
Director.
WILLIAM S. SNEATH
iJACK B. JACKSONj
Union Carbide Corporation, N.Y.,
N.Y., President, $5.32 billion/
sales.
J. C. Penney Co., Inc., N.Y.,
N.Y.,President, $6.93 billion/
sales.
-Metropolitan Life Insurance
Company, Director, (from
May 21, 1975 on).
-Massachusetts Institute
of Technology,Governor.
-Manufacturers Hanover Trust
Company, on one of Regional
Advisory Boards, (1970-1973.)
-Morgan Guaranty’s International
Council, Member, (1971 to 1973.)
-Great American Reserve
Insurance Company, Director,
-Union Carbide Corporation,
Director.
24
Chart 3-B
District Three
FEDERAL RESERVE BANK OF PHILADELPHIA
Class B Directors
WILLIAM S. MASLAND
C. GRAHAM BERWIND, JR.
C. H. Masland & Sons, Carlisle,
Pa., Pres,, $114 million/sales.
Berwind Corporation, Phila.,Pa.,
Ch. & Pres.,$100 million/sales.
-Amber Realty Company, Director,
-Philadelphia Suburban Corp. ,
Dir.
-Masland Carpets of Canada,
Ltd., President and Director.
HAROLD A. SHAUB
Campbell Soup Co.,Camden,
New Jersey, Pres. & CEO,
$1.47 billion/sales.
-Penjerdel Corp., Director
-Yarway Corporation, Director,
-Scott Paper Co., Director,
(Mr, Berwind resigned
early in 1976).
-N. J. Bell Telephone Co.,
Dir.
-Campbell Soup Company,
Ltd., Director,
-Campbell Sales Company,
Director.
-Pepperidge Farms, Inc.,
Director.
25
Chart 4-B
District Four
FEDERAL RESERVE BANK OF CLEVELAND
Class B Directors
CHARLES Y. LAZARUS
F. & R. Lazarus Company,
Columbus, Ohio, Chairman
and Chief Executive
Officer,(Subsidiary of
Federated Department
Stores, $3.27 billion/
sales .)
-Federated Department Stores,
Vice-Pres. and Director.
-Associated Merchandising
Corporation, Director.
-Midland Mutual Life Insurance
Co., Director.
~Hunt_in^ton__Bancs hares^,_(Forme£Di re ct or0_,$1^46^ jbill ion/
assets^ Holding ^Company
Rankj_ _63_.
-Huntington National Bank,
(former director, April 1956
to September 3, 1971),
$694 million, Rank: 145.
DONALD E.NOBLE
j
RENE C. MC PHERSON
Rubbermaid, Inc., Wooster,
Ohio, Chairman and Chief
Executive Officer, $131
million/sales.
Dana Corporation, Toledo,
Ohio, Chairman and Chief
Executive Officer,
$1.08 billion/sales.
-Tappan Company, Director.
-Champion Spark Plug Company,
Director.
-Insilco Corporation,
Director.
-Thermo Electron Corporation,
Director.
-Hayes-Dana Ltd., Director.
-Spicer, S.A., Director.
-Turner Manufacturing Company,
Director.
-Floquet Monopole, Director.
-Equitable Life Mortgage &
Realty Investors, Trustee.
/Mr. McPherson resigned his Federal
Reserve Directorship early this
year to accept directorship on board
of Manufacturers Hanover Thrust
Company in New York C l t y J
26
Chart 5-B
District Five
FEDERAL RESERVE BANK OF RICHMOND
Class B Directors
27
Chart 6-B
District Six
FEDERAL RESERVE BANK OF ATLANTA
Class B Directors
ROBERT T. HORNBECK
Aluminum Company of America,
Alcoa,Tenn.,Tennessee Operations,
Manager,
ULYSSES V. GOODWYN
Southern Natural Resources,Inc.,
Birmingham,Ala.,Exec.Vice-Pres.,
Direr tor, $538 million/sales.
-Southern Natural Gas Company,
Executive Vice-President.
GEORGE W. JENKINS
Publix Supermarkets,Inc., Lakeland,
Fla.,Chairman,$1 billion/sales.
-Arkwright Boston Insurance, Member,
Southern Advisory Board.
-Florida Power Corporation,Director,
-Offshore Company, Director.
- other subsidiaries or joint
ventures of Southern Natural
Resources, Inc. Director.
-Peoples Bank of Lakeland, (former
director, 1961-1972), $$172 million,
Rank: 513.
-Pinellas Central Bank and Trust
Company, (former director,1954-1972),
$61.8 million, Rank: 1,493.
__
i_s_par_t of_m_uIti~bank holding __
company,__Sou thes^t_B ank i o ^ r po r^ation.
$3.249 billion/deposits, Holding
Company R.ankj_
-First National Bank of Miami,
(former director, 1966-1972).
$1.4 billion, Rank: 65. This_jL£
a.lso_j3ar_t of_Soujth^a^t_Ba^nking_Corp .
‘
28
Chart 7-B
District Seven
FEDERAL RESERVE BANK OF CHICAGO
Class B Directors
29
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Class B Directors
Chart 8-B
30
Chart 9-B
District Nine
FEDERAL RESERVE BANK OF MINNEAPOLIS
Class B Directors
WARREN B. JONES
Two Dot Land & Livestock
Gp., Harlowton, Montana,
$3 ,000 ,000 /assets.________
DONALD P. HELGESON
Jack Frost Inc., St. Cloud
Minn., Sec.-Treas.,$25 mill./
sales.
-Liberty Loan & Thrift Inc.,
Director.
-Cokato Biologies, Inc.,
Dir.
-Peneprime
Secretary.
International Inc.,
- J & D Enterprises,Partner,
(family real estate)
1 >
RUSSELL Q. CLEARY
G. Heileman Brewing Company,
LaCrosse, Wisconsin, Ch., Pres,
and C.E.O., $ ^ 5 million/sales.
-Protection Mutual Insurance
Co., Director.
31
Chart 10-B
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Class B Directors
|DONALD J .
HALL j
Hallmark Cards, Inc., Kansas
City, Mo., President.
-Business Menfs Assurance Co.,
Director,
-Commerce Bank and Trust
Company, (former director,
Jan. 14, 1958 to Dec. 18,
1973), $539.9 million,
Rank: 177. This_is- part_
of_ ^oi^^rjce_Ban^sh.ar^e,_Inc^,
$^•601. bi^lji.ori/a.ssets^ __
H^Wing_C^m£any_Rank:_51_._
ALAN R. SLEEPER
FRANK C. LOVE
Kerr-McGee Corporation,
Oklahoma City,Okla.,(former
President), currently director,
$1.55 billion/sales.
-Crowe, Dunlevy, Thweatt,
Swinford, Johnson and Burdick,
Of Counsel.
-Fidelity National Bank, N.A.
(former directorial former
member, Executive Committee)
$277 million, Rank: 340.
This is_part_ o_f_Mdel± t £ .
^homa_
$3^5_mjL11 i£n_Aa_sse.tjs.__
,
-First National Bank of
Lawrence, (former director,
May 8 , 1963 to December 18,
1973.) $42.6 million,Rank: 2304.
-Citizens Bank of Ada, Okla.,
(former director) $14.9 million.
Livestock & Ranching, Alden,
Kansas *
-Ark Manfacturing Co., Director.
-People’s Savings and Loan,(Sterling)
Director *
— Served two three-year
terms on Kansas State
Banking Board, 1963-69.
32
Chart 11-B
District Eleven
FEDERAL RESERVE BANK OF DALLAS
class
STEWART ORTON
Foley’s Inc., Houston, Texas
President, $100 million/assets,
(Division
of Federated Dept.
Stores,$3.27 billion/sales)
-Spring Branch Bank,(Director
from June 14, 1971 to
December 31, 1973)$99 million.
Rank: 904.
jb
Directors
33
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Chart 12-B
Class B Directors
—
CLAIR L. PECKj
C. L. Peck Contractor,
Los Angeles, Calif.,
Chairman of the Board.
$125 million/sales.
-Farmers Group Inc.
Director,
CHARLES R. DAHL
Crown Zellerbach Corporation,
San Francisco, Calif., Pres.
& C.E.O.,$ 1. 7 billion/sales.
-Pacific Gas & Electric,
Director.
-Amcap Fund, Inc., Dir.
-Crown Simpson Corp., Pres.
& Director.
-Di Giorgio Corporation,
Director,
The Boeing Company, President,
Seattle, Washington,$3.73 billion/
sales.
-Nordstrom, Inc., Director.
- St.Francisville Paper Co.,
Director . and President.
-Investment Company of
America, Director.
-Northr qp Corporation,
Director.
i______________________
MALCOLM T. STAMPER
34
C
lass
C
D
ir e c t o r s —
T
he
P u b l ic I n t e r e s t
R
e - d e f in e d
The public interest— as differentiated from the interests of the lenders
in Class A and the borrowers in Class B— is represented, according to the
Federal Reserve Act. bv the three Class C directors on each district board. The
Class C directors may not be “ officers, directors, employees or stockholders of
any bank.”
Through the years, officials of the Federal Reserve have consistently re
iterated the intent that this class of director should represent the “ public” .
In his analysis of the boards, published in 1972, former Federal Reserve
Board Governor Andrew Brimmer stated: “ The three Class C directors are
appointed by the Board of Governors as representatives of the public interest
as a whole.”
Testifying before the Financial Institutions Subcommittee on January 21,
1976, Federal Reserve Board Chairman Arthur Burns once again agreed that
the Class C directors be considered “ public” members.
The Act is clear. The intent is clear. The statements of the Federal Reserve
are clear. The end results, however, are less clear that the “ public” — as broadly
defined— has any substantial representation in the Class C directorships.
Some 29 of the 36 directors in the Class C categories at the 12 district
banks are executives or directors of corporations— most of them sizeable
institutions.
Not only are the corporate ties heavy throughout Class C, there is also a
substantial number of former directors of commercial banks serving under the
coloration of “ public” members. At least 16 are present or former directors
or officers of financial institutions.6
In at least one instance— in the New York Federal Reserve Bank (Chart
2 -C )— one of the Class C directors is a partner in a major New York law firm
which is counsel to First National City Corporation— the nation’s largest
multi-bank holding company. Polk’s World Bank Directory indicates that the
firm is also counsel to a number of foreign banks doing business in the United
States. Yet this director is one of the 36 public representatives on the Federal
Reserve banks.
The Class C directors do include six people from the academic world— one
working professor; the retired president of a west coast think tank; and four
university presidents. The Federal Reserve’s definition of “ public” does not
include representatives of labor, consumer organizations, or small farmers. And,
as previously noted, the “ public” , as defined by the Federal Reserve, does not
include women.
This survey reveals no substantive differences between the make-up of
the Class B and Class C directorships despite the clear intent of the Federal
Reserve Act. As can be seen in Charts 1-C through 12-C which follow, Class C
directors— like Class B directors— are, for the most part, corporate executives
and ex-bankers:
6
The chairman of the Federal Reserve district bank is chosen from the Class C directors by the
Board of Governors in Washington. The Federal Reserve Act specifies that the chairman shall be a
person of “ tested banking experience” . In the case of 6 of the 12 chairmen of the Federal Reserve
district banks, our research has uncovered no “ tested banking experience” in the directors’ bankgrounds.
36
Chart 1-C
District Oxie
FEDERAL RESERVE BANK OF BOSTON
Class C Directors
I __
KENNETH I. GUSCOTT
Ken Guscott Associates,
Boston, M a s s ., Qvmer & Pres.
(Management Consultant
tfirm.)
-KGA Development Group,
partner.
-KGA Personnel Services,
partner.
-KGA Publishing, Co-owner.
-Boston Edison Company,
Director.
-Boston Shipbuilding Co.,
Director.
-Unity Bank & Trust
(former director, June
to December, 1973).
-Boston Progressive Credit
Union (former director,
1957-1961).
-Provident Institute for
Savings,(former director
and incorporator,1971-73).
ROBERT M. SOLOW
Deputy Chairman
Institute Professor, Massachusetts
Institute of Technology, Cambridge,
Massachusetts.
LOUIS W. CABOT
Chairman
Cabot Corporation, Boston,
Massachusetts, Chairman,
$400 million/sales.
-Cabot, S.A.(Spain) Pres,
and Director.
-Cabot Argentine, S.A.I.yC.,
Chairman.
-Cabot Carbon, Ltd.(England)
Director.
-Cabot Carbon of Canada,Ltd.
Vice-Pres and Director.
-Cabot Engineering Co.,
Vice-President and Director.
-Cabot Colombiana S.A.,
(Columbia) Director.
-Distrigas Corporation,
Dir. (pt. of Cabot).
-Cabot Foundation, VicePresident and Director.
-Owens-Corning Fiberglas
Corp., Director.
-R.R. Donnelley & Sons,
Director.
-New England Telephone &
Telegraph Co., Director.
-Cabot France, S.A.,Dir.
-Colonial Fund, Inc.,
Advisory Bd. Member.
-Cabot Italiana, S.p.A.,
Director.
-Carnegie Corporation
of New York, Trustee.
-Cabot Gmbh.(Germany)
Advisory Committee.
-Penn Central Company and
its subsidiary,Penn Central
Transportation Company, now
in trustee ship,(Mr. Cabot
was on board of directors
of both in 1970).
-New England Merchants
National Bank of Boston,
(former director).
-Suffolk Franklin Savings
Bank, (former director).
37
District Two
Chart 2-C
FEDERAL RESERVE BANK OF NEW YORK
Class C Directors
a l An
pifer
I
ROBERT H. KNIGHT
Deputy Chairman
i
4-
Carnegie Corporation of New York,
N.Y., President, $320 million/assets.
Shearman & Sterling, Partner,
(law firm), New York, N . Y .
-American Ditchley Foundation,
Trustee
-Owens-Corning Fiberglas,
Director.
FRANK R. MILLIKEN
Chairman_____
-Pechiney Ugine Kuhlmann
Corporation, Director.
-Howmet Corporation,Dir.
(Subs, of Pechiney,Ugine
above).
-Howmet Turbines Components
Corporation, Director, (Subs.)
-Howmet Aluminum Corporation,
Director, (Subs.)
-United Technologies Corporation,
General Counsel to the board of
directors.
Kennecott Copper Corporation,
New York, N.Y., President,
$1.6 billion/sales.
(Shearman__ &_St_ejrlinj* ±s_counsel__
for Firs_t Nationj* l__Ci
C^orpo^rati^on,
$_5_7._8 b^illi.on/as_sets^ Iloj^din^
(tompan^ Rankj_ _ 1 0 _
-Peabody Coal Company, Dir.,
(subs. of Kennecott).
-Chase Brass & Copper, Dir.,
(subs.)
j_ Some
of the banks listing
Shearman and Sterling as their
counsel in Polk*s World Bank
Directory a re:
-The Bank of Nova Scotia
Trust Company of New York;
-The Canadian Bank of
Commerce Trust Co., (N.Y.);
-The Fuji Bank and Trust
Company, N.Y.C.
-Quebec Iron & Titanium
Corporation, Director.(subs.)
-Proctor & Gamble Company,
Director.
38
Chart 3-C
District Three
FEDERAL RESERVE BANK OF PHILADELPHIA
Class C Directors
______ r - .....- .......
JOHN R. COLEMAN
Chairman
Haverford College, Haverford,
Pa., President.
WERNER C. BROWN
Hercules, Inc., Wilmington,
Del., President,$1.3 billion/
sales.
-Delmarva Power and Light
Company, Director and Chairman,
Executive Committee.-Diamond State Telephone
Company, Director.
-Delaware Trust Company,
$373 million, Rank: 250,
(former director, elected
February, 1967, resigned
February, 1976).
JOHN W. ECKMAN
Deputy Chairman
Rorer-Amchem,Inc., Fort
Washington, Pa., Pres.,
$240 million/sales.
-William H. Rorer, Inc.,
President & Director.
-Amchem Products, Inc.,
Director.
-Haverford School,
Director.
-First Pennsylvania Bank,
director from 1970 to 1973,
$4.5 billion, Rank: 19.
^First Pennsylvania Corp.,
Director^~l973-^1974_^ _
$6.1 billion/assets^.
Chart 4-C
District Four
FEDERAL RESERVE BANK OF CLEVELAND
Class C Directors
ROBERT E. KIRBY
Deputy Chairman
Westinghouse Electric Corp.,
Pittsburgh,Pa., Ch. and C.E.O.,
$ 6 .47 billion/sales.
-Canadian Westinghouse,
Director,
HORACE A. SHEPARD
Chairman
TRW,Inc., Cleveland,Ohio,
Ch. and C.E.O., $2.49 billion/
sales.
-Standard Oil Co., Director,
(Ohio)
-Procter & Gamble, Director,
-Home Capital Funds, Director,
-Westinghouse Credit Corp.,Dir.
-Diamond Shamrock Corp., Dir.,
-Financial Fire & Casualty
Co., Director,
-Pickands Mather & Co., Dir.,
-Coral Ridge Properties,
Inc., Dir.,
-Thermo King Corp., Dir.,
(Subs, of Westinghouse)
-Deane & Deane, Inc., Dir.,
-Harris-Intertype Corporation,
Director.
-Addressograph Multigraph
Corporation, Director.
OTIS A. SINGLETARY
-University of Kentucky,
Lexington, President.
-Dana Corporation,
Director.
40
Chart 5-C
District Five
FEDERAL RESERVE BANK OF RICHMOND
41
Chart 6-C
D istric t Six
FEDERAL RESERVE BANK OF ATLANTA
Class C Directors
CLIFFORD M. KIRTLAND,JR.
Deputy Chairman
Cox Broadcasting Corporation,
Atlanta, President,
H. G. PATTILLO
Chairman
Pattillo Construction Co.,
Inc., Decatur, G a .,Chairman,
$100 million/sales.
-Scientific Atlanta Inc.,
Director.
-Peachtree Equity Securities,
Director -
-Stone Mountain Industrial
Park, Inc., Director.
-Rockdale Industries, Inc.,
Director.
-Life Insurance Company
of Georgia. D i r e ctor.
-DeKalb Apartments, Director.
-Cox Cable Communications,
Director.
-Pattilo Lumber Company, Dir.
-Ponce de Leon Industries,
Director.
-Gwinnett Industries, Director,
FRED ADAMS, JR.
-C & S Emory Bank, (former
director. Jan. 1, 1963 to
Jan. 31, 1968). $148
million. Rank: 596.
-First National Bank, (former
director, February 1, 1968
December 31, 1971.)
Cal-Maine Foods, Inc., Jackson,
Mississippi, President,
42
Chart 7-C
District Seven
FEDERAL RESERVE BANK OF CHICAGO
Class C Directors
43
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Class C Directors
Chart 8-C
44
Chart 9-C
District Nine
FEDERAL RESERVE BANK OF MINNEAPOLIS
Class C Directors
HOWARD R. !3WEARER
'Carleton College, Northfield,
Minnesota, President,
-Northfield National Bank,
(former director, July,
1970 to December, 1973).
$14.4 million. This_is
an_ aff ^ A a_te— °_f Z*-£,SJL Sank_
System^ Inc
$7^17_ b^il^liori/
iLsjLeJLsjL
Compa.ny
Rank: 12_.
STEPHEN F. KEATING
Chairman
------ i
---------Honeywell,Inc., Minneapolis,
Minn., Chairman, $2.6 billion/
sales.
General Mills, Inc., Minn.,
Minn., Chairman of the Board,
C.E.O., $2 .3 billion/sales.
-Dayton-Hudson Corporation,
Director*
-Prudential Insurance Co.,
Director,
-General Mills, Inc., Dir.
-Toro Inc., Director,
JAMES P. MC FARLAND
Deputy Chairman
-Toro, Inc., Director,
-PPG*industries, Director,
-First ^n.k__Syst_em,_In.c^,_
(form^r_dir^c^o^,_ Janiiary_17,
_1962_tc^ De^embjer_ 31^,1,9_75)_.__
$Z*A?_bil1 ion/a_sse_t _ HoWi^n^
C£m£a^y_Rank:__ 12_^
-Northwestern Bell Telephone
CompanyDirector.
-Shenandoah Oil Company, Director,
-First National Bank of Minneapolis
(former director, resigned end
of 1973). $1.2 billion,Rank:74.
This_ij3 part_oj£ First^ 13an.k_Sy_stem.
-Fir^sjt ]Bank__Sy_st^em,__l£.cj_(^.°^me^r__
^ I ^ t o r ^ £es^i_gn£d__end_of^ 1^97^3^)_
$7j_17_ billi.°n./£s^.ejtSj, H o W i n ^
C£m£any_Ra.nk:_JL2
45
Chart 10-C
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Class C Directors
ROBERT T. PERSON
Chairman
Public Service Co. of
Colorado, Denver, Colo.,
Ch. and Pres., $363 million/
revenue.
-Cheyenne Light, Fuel
and Power Co., Pres.
& Dir.
-Western Slope Gas,
Chairman.
-1480 Welton Inc.,
Pres. & Dir.
-Green & Clear Lakes
Company,Pres. & Dir.
-Fuelco, Pres. & Dir.
JOSEPH H. WILLIAMS
The Williams Companies,
Tulsa, Okla., President,
$993 million/sales.
-American Petroleum Institute,
Director.
-Parker Drilling Co.
Director.
-Home Federal Savings &
Loan Association, Tulsa,
j(former director, July,
1970 to July , 1971).
HAROLD W. ANDERSEN
Deputy Chairman
Omaha World-Herald Company,
Omaha, Nebraska. President.
Sunday circ: 277,000.
-Peter Kiewit Sons,Inc.,
Director.
46
Chart 11-C
District Eleven
FEDERAL RESERVE BANK OF DALLAS
Class C Directors
47
District Twelve
Chart 12-C
FEDERAL RESERVE BANK OF SAN FRANCISCO
Class C Directors
0. MEREDITH WILSON
Chairman
Center for Advanced Study in
the Behavioral Sciences, Stanford
California, Retired President.
-Northern States Power
Company, Direc tor.
-Systems Development
Corporation, Dir.
CORNELL C. MAIER
Kaiser Aluminum & Chemical
Corporation, Oakland, Calif.
Pres and C.E.O., $1.74 bill/
sales.
-Comalco Industries Pty. Ltd.,
Austrailia, Director.
-Anglesey Aluminum Metal,Ltd.,
Director.
-Kaiser Aetna, Director.
-Kaiser Industries Corporation.
Director.
-Kaiser Bauxite Co.,
Pres., C.E.O. & Dir.
-United International
Shipping Corp., Exec.
V.P. & Director.
JOSEPH F. ALIBRANDI
Deputy Chairman
Whittaker Corporation, Los
Angeles, Calif., Pres. & C.E.O.,
$778 million/sales.
48
Secondary I nterlocks
This study focused on only the direct links of the Federal Reserve directors
to the banking and corporate community and has not attempted to detail all
of the massive conflicts which could occur through secondary interlocks. Many
of the directors of the Federal Reserve Banks are chief operating officers and
chairmen of companies whose boards, in turn, have major links among other
industrial and financial giants.
For example, a Class C— “ public interest” director— on the Cleveland
Federal Reserve District Bank, Robert E. Kirby, is chairman and chief execu
tive officer of the Westinghouse Electric Corporation, which has interlocks
with such financial corporations as Pittsburgh National Bank; Citibank;
Citicorp; the New York Stock Exchange; Bank of America; Manufacturers
Hanover Trust Company; Hanover International Banking Corporation; Kuhn,
Loeb and Company; and CIT Financial Corporation.
Is Mr. Kirby’s assignment as a “ public” representative affected by the
fact that he regularly sits down with and reports to a board honeycombed with
directors who govern some of the bigger financial corporations? And do these
financial institutions use this relationship with Mr. Kirby to influence Federal
Reserve policies at the Cleveland Bank?
These “ secondary” interlocks are vividly demonstrated by the make-up
of the board of directors of the New York Federal Reserve bank. At least seven
of the nine directors of the New York Federal Reserve bank are chief executive
officers or chairmen of boards of companies interlocked with virtually every
facet of Corporate America and the financial community.
Tabular charts A through G depict the interlocks of the major business,
banking or law firms on which seven New York directors serve as major officers
or partners:
49
Tabular Chart A
David Rockefeller
Chairman of the Board
Chase Manhattan Corp.
Chase Manhattan Corp.
Officer & Director
Interlocks
Private Investment
Co. for America
Allied Chemical
Corporation (2)
Firestone Tire &
Rubber Company
General Motors I
Orion Multinational
Services Ltd.
Rockefeller Family
& Associates
American
Express Co. (2)
j Hewlett-Packard
-r
'SoutKern £eru
Copper Corp.
Exxon Corporation
Int'l Basic
Economy Corp.
Selected Risk
Investments S.A.
Continental Corp.
Equitable Life
Assurance Soc.U.S.
— | Cypress Woods
Corporation
— (Honeywell,Inc.
*“ Squibb Corporation
Eveleth Expansion
Company
_ Fidelity Union
Bancorporation
Federated Capital
Corporation______
Northwest Airlines,Inc
i
International
Nickel/Canada
R. H. Macy & Co.
Industrial Minera
Mexico S.A.
Pacific North
western Bell Co.
BeachviLime Ltd.
Utah IntT1 Inc.}
(2)
AT&T
FMC Corporation
Chrysler Corp.(2 )
ASARCO, Inc.
-
Federated Dept
Stores
International Minerals
& Chemical Corporation
— Burlington Industries
Olin Corporation
Northwestern Bell
Telephone Co.
_ Minnesota Mining
& Mfg. Co.
— Wachovia Corporation
General Electric
Mutual Benefit
Life Ins. Co.
of New Jersey (2)
Scott Paper Co.
Jefferson Pilot
Corporation
American Petroleum
Institute____ „_____
R. J. Reynolds Industries, Inc.
50
Tabular Chart B
{
asarco
J. C. Penney
■jreaif American
Reserve Insurance Co.
American Title
Insurance Co.
Chrysler
Corporation
Continental
Corporation
Continental
Insurance
Company
Security
Reinsurance
Corp., Ltd.
Canadian Pacific
Securities, LtzK,
Putnam Trust
Chase Manhattan Corp.
(Member, International
Advisory Board)_______
Toronto Dominion
Bank & Trust Co.
The Royal Bank
of Canada
National Reinsurance
Corporation
Sun Life Assurance
Company of Canada
Chemical Bank (Member
East Side Advisory
Board)
Sun Alliance &
London Assurance Group
Canadian Investment
Fund
51
Tabular Chart (
Wackenhut
Corporat-i nn
Chubb CorpTj
Rand
Corporation
52
Tabular Chart D
'Maurice F. Granville
Chairman of the Board
Texaco, Incorporated
.. — i
lexaeu ulricer &
~
Director Interlocks
Arabian American
Oil Company
Brown Brothers
Harriman & Co.
Brown Harriman &
International Bks.
American Express
American Express
Int’l Bkg. Corp.
Anaconda
Rockefeller
Foundation
]
Owens-Corning
Fiberglas
National City
Bk. (Cleveland)
Sun Life
j
Assurance Co. j
General
Reinsurance
General j
Electric j
53
Tabular Chart E
Alan Pi£er,President
Carnegie Corporation
of New York
Carnegie Corporation
Trustee Interlocks
Rockefeller
Center, Inc.
J. Henry Schroder
Trust Company
The Cabot
Corporation
Paul Revere Investors,
Inc.
Federal Reserve
Bank of Boston
Qualpeco, Inc.
Owens,Corning
Fiberglas
New England
Telephone Co.
Fisher Scientific
Company
Mellon National
Corporation
Equitable Life
Assurance Society
Twentieth Century
Fox Corporation
J. Henry Schroder
Banking Corporation
54
Tabular Chart F
55
Tabular Chart G
Goodyear Tire
and Rubber Co.
Rio Grande
Industries(2)
New York Stock
Exchange
Goodyear Canada
Inc.
Broadmoor
Hotel, Inc.
Continental
Can Company
Lykes-Youngstown
Corporation_____
1st Nat’l Bk.
of Colorado
Springs
Citicorp (2)
Getty Oil Company [
Chase Brass &
Copper Company
Norton Company
Merck & Company
iWards Foods,Inc.
Manitou & Pikes
Peak Railway Co,
Chubb Corporation
— pEngersoll Rand Co.
Stone & Webster
Eastern Airlines
jW. R. Grace & Co.(2)
Zions First
National Bank
—
Mountain States
Telephone &
Telegraph Co.
Deering Milliken
S. S. Kresge Co.
Pacific Tin
Consolidated
Corporation
{Bristol Myers
"Hotel Utah
Utah Portland
Cement Company
lAlex Brown & Sons
United Mutual
Savings Bank
Heber J. Grant Co.
Simplicity
Patterns
Denver & Rio Grande
and Western Railway(2)
1st Federal Savings
and Loan Association
Mountain Fu#l
Supply Company
United States
Trust Comp any
McGraw Hill, Inc.
- f :Cuhn, Loeb & Co.
Los Angeles and Salt
Lake Railroad
Westinghouse
J . C . Penney
— tuniroyal, IncT}
Great Atlantic &
Pacific Tea Co.
Montreal Trust
Company_______
56
The tabular charts clearly show that substantial segments of corporate/
banking power have a channel of communication and influence into the Federal
Reserve Bank of New York— easily the most important of the district banks,
with substantial roles in monetary policy and international operations of the
entire Federal Reserve System.
While these secondary links spread out through the twelve district banks
like an international cobweb, this study does not determine the extent to
which these links influence Federal Reserve directors. However, they are, at a
minimum, additional evidence of the dominance of big corporations and big
banking institutions in the backgrounds and the day-to-day lives of the great
majority of Federal Reserve directors.
T
he
P u b l ic
R
e l a t io n s - L o b b y in g
F
actor
The heavy domination of big corporate and banking names, and the
inclusion of trade association leaders among the Federal Reserve directors,
gives the System an unusual degree of political clout in their home areas as
well as on the national scene.
In many cases, these officials are dominant figures in their areas, and they
bring to the Federal Reserve boards the prestige and power associated with the
biggest of the big business community. When the Federal Reserve finds its
policies under attack, and when suggestions are made for structural change in
the system, the fact that these district boards are honey-combed with the
powerful does no damage to the Federal Reserve’s defense.
Writing for the FINE study, Dr. Mayer of the University of California
noted:
Another important function of the directors, one not set out in the law, is to generate
public support for the Federal Reserve. Directors and former directors defend the Federal
Reserve’s actions to their communities and they have occasionally been used for lobbying.
This gives the Fed political strength.
A 1975 study of the expense vouchers of Federal Reserve district banks
revealed relatively heavy expenditures for entertainment, dinners and other
functions, including joint meetings between the Federal Reserve district banks
and the commercial bankers associations. The same expense reports contain a
substantial number of outlays for dues and fees to various private organiza
tions— at least some of which apparently fall within the “ public relations”
area.7
At the national level, some of the activities of the Federal Reserve directors
are masked behind their corporate shields, and it is often difficult to distinguish
the lobbying generated by the Federal Reserve banks from that of the corporatebanking lobby.
Last year’s battle over proposals to require regular audits of Federal
Reserve activities by the General Accounting Office is a good illustration of the
manner in which the clout of the Federal Reserve directors is brought to bear
on legislative matters.
Throughout 1975, directors of Federal Reserve district banks flooded the
Congress with letters urging the defeat of the audit legislation. For example,
Malcolm T. Stamper told the Congress he was opposing the legislation “ in my
7
“ The F e d e ra l R e serve S ys te m : A c c o u n ta b ility o r W a s te ? ” , Staff Report of the Subcommittee
on Domestic Monetary Policy, Committee on Banking, Currency and Housing, U.S. House of Repre
sentatives, 94th Congress, 1st Session, July, 1975, 41 Pages.
57
capacity as president of the Boeing Company and as Chairman of the Seattle
Federal Reserve” branch. Since that time Mr. Stamper has been promoted.
He is now a class B director at the San Francisco Federal Reserve Bank.
Crown Zellerbach was another major corporation which lobbied against
the audit bill. Its president— Charles Dahl— is another Class B director on the
Federal Reserve Bank in San Francisco.
Similar letters opposing the audit bill came from Dresser Industries, an
energy industry manufacturing conglomerate, whose chairman was a Class C
director of the Federal Reserve District Bank of Dallas.
This was the pattern across the country, with the Federal Reserve calling
on its corporate-banking directors to lead the lobbying campaign. In some cases,
former directors were enlisted in the battle. At least one of these former di
rectors—from the Federal Reserve branch in El Paso, Texas— informed the
Banking Committee of attempts by the president of the Federal Reserve Bank
of Dallas to have him join the letter-writing campaign.
This type of lobbying activity is not limited to the audit proposals, but is
available to the Federal Reserve on a wide range of banking, regulatory and
legislative issues. In addition, these boards of prestigious businessmen serve
as an on-going public relations front for the entire System.
This kind of activity extends into big business lobbying groups, where
the Federal Reserve directors maintain heavy membership. One of these is the
Business Roundtable, a lobbying group that includes the biggest of the big
corporations in this country. Among its 164 corporate members are the big
three of the auto industry, the three largest banks in the country, seven of the
largest oil companies and the granddaddy of big utilities— AT&T. Forty of the
member companies contribute one of their top officers to a policy-making
committee.
Not surprisingly, this lobbying organization has participated with
Dr. Burns and the Federal Reserve System in efforts to stop a G.A.O. audit.
In 1973, the Business Roundtable— at the request of Dr. Burns— wired its
members and asked them to help repel the bill. When lobbying pressure mounted
against the new audit proposal in 1975, a study was conducted by the late
Wright Patman which revealed the close relationship between the private
lobbying organization and our supposedly “ public” Federal Reserve System.8
The study showed that 45 of the 164 member corporations are represented on
the board of directors of the Federal Reserve district banks and branches.
Eighteen of the corporations represented on the 40-member policy committee
of the Business Roundtable are also represented on the boards of the district
banks and branches.
Another big business organization— the United States Chamber of
Commerce— also has substantial interlocks with the Federal Reserve. The
Chamber— which often lobbies on banking and Federal Reserve legislation—
has a 52-member policy committee on banking, monetary and fiscal affairs.
Thirty-one of these members are officers or directors of banks and 8 have
director interlocks with the Federal Reserve System.
One of the members of the Chamber of Commerce’s board of directors—
Archie K. Davis, the retired chairman of the Wachovia Bank and Trust
8
See the remarks of Congressman W right Patman in the C o n g ressio na l Records of November 17,
1975, Page H 11296 ; February 11, 1976, Page H 946 and February 23, 1976, Page H 1227.
58
Company, N.A. of North Carloina— formerly served as president of the Ameri
can Bankers Association and as a director of the Charlotte branch of the
Federal Reserve Bank of Richmond.
Federal Reserve directors also crop up among the membership of such
lobbying organizations as the National Association of Manufacturers, the
American Petroleum Institute, the American Iron and Steel Institute, the
Highway Users Federation, the Transportation Association of America; and
the American Gas Association.
B
ank
P o l it ic s
and the
F
ederal
R
eserve
D
ir e c t o r s
While the Act limits the direct participation of bankers on the district
boards to the three Class A directors, the banking industry—in reality— creeps
in at all three levels.
Fourteen of the 72 Class B and Class C directors, for example, were bankers
at the time of their election to the Federal Reserve banks and had to resign
from their commercial bank directorships to qualify. At least five other
Class B and Class C directors had been commercial bank directors in prior
years.
The same is true of the branch boards. As mentioned earlier, these boards
are divided into two categories of varying sizes, with the board of directors
of the district banks appointing a majority and the Board of Governors in
Washington the remaining members. Federal Reserve policy calls for the Board
of Governors to name non-bankers to their positions, making these appointments
roughly equivalent to the Class B and Class C categories on the district banks.
Yet, fifteen of the sixty-eight branch directors named by the Board of
Governors were directors of commercial banks at the time of their appointment
and had to resign these directorships to qualify. Two other branch directors
had served on commercial bank boards in prior years.
Throughout the System— district and branch boards combined— one in
five of the seats intended to be populated by non-bankers and public members
ends up being filled by former bankers only recently removed from the narrow
confines of the industry.
Even more questionable than the limited range of views thus represented
is a suggestion of the revolving door approach that has long plagued Federal
regulatory agencies.
Resignations from commercial bank boards of directors to legitimize the
Federal Reserve appointment apparently are understood, in some cases, to be
only temporary, with the commercial bank position readily available again
when the Federal Reserve service is completed.
This is what happened, for example, on a recent appointment to the
Birmingham branch of the Atlanta Federal Reserve Bank. The following letter
from a commercial banker to a newly-appointed Federal Reserve official makes
the revolving door nature of the appointment all too clear.
T
he
F ir s t N
a t io n a l
B
ank
of
B ir m in g h a m ,
Birmingham, Ala., December 18, 1974M r. H a r o l d B . B l a c h , J r .,
Birmingham, Ala.
D e a r H a r o l d : I reported to the Executive Committee on December 17, 1974 your
letter of December 9, 1974 in which you advised of the necessity for you to resign from our
Branch Advisory Board because of your appointment as a director of the Birmingham
Branch of the Federal Reserve Bank of Atlanta. The Committee regretfully accepted the
resignation with the understanding that the same was to be effective January 1, 1975.
59
On behalf of the officers and the Board of Directors I wish to thank you for all of your
assistance and time and we certainly regret the loss of your membership, but feel that you
deserve the appointment which you have received and know that you will profit from the
same. When your term does expire, we ceitainly wish to know so that we will have the
opportunity to re-appoint you to the Board on which you served so well.
Sincerely,
R . H . W o o d r o w , Jr
Chairman of the Board and Chief Executive Officer.
Interestingly enough, the signer of the letter— R. H. Woodrow, Jr.—
accepted an appointment on the board of the Birmingham branch the following
year and now sits side by side on that board with his former colleague.
The case of Thomas I. Storrs reveals still another aspect of the revolving
door.
Mr. Storrs was an employee of the Richmond Federal Reserve Bank from
1934 to 1960. He served as vice-president in charge of research from 1956 to
1959 and then became vice-president in charge of the Charlotte branch later
in 1959.
In 1960— after 26 years as a Federal Reserve employee— Mr. Storrs
decided to move into the commercial banking industry, where today he serves
as chief executive officer of the North Carolina National Bank and president
of the holding company, NCNB Corporation, in Charlotte. Even after becoming
a banker, Mr. Storrs did not relinquish his ties with the Federal Reserve,
serving until January of this year as a member of the 12-person Federal Advi
sory Council to the Federal Reserve System— a group which confers with the
Board of Governors “ on economic and banking matters and (makes) recom
mendations regarding the affairs of the Federal Reserve System.” And it is
the board of directors of Mr. Stores’ former employer— the Richmond Federal
Reserve Bank— which so generously named him to the Federal Advisory
Council.
B
ank
D
o m in a t io n a n d
Bank E
x a m in a t io n
The inordinate input by special interests would be a troublesome problem
in any public agency, but the situation becomes more serious as the Federal
Reserve banks take on greater regulatory powers.
Particularly significant is the growing role of the district banks in the
regulation of bank holding companies. By law, the Federal Reserve was given
exclusive jurisdiction in the regulation of bank holding companies and, as prev
iously noted, much of this jurisdiction has been delegated by the Federal
Reserve Board in Washington to the various Federal Reserve banks.
Initially all applications under the Holding Company Act were sent to
the Board of Governors for approval. Beginning in 1974, however, the Board
delegated a considerable portion of its authority to the district banks. The
district banks receive all applications, process them initially, and in many
cases can approve or deny permission for formation of acquisitions, or changes in
60
holding companies9: In a recent response to a questionnaire from the House
Banking, Currency and Housing Committee, the Board of Governors dis
cussed the Federal Reserve’s procedures for reviewing holding company
operations. The response stated:
In practice, the Federal Reserve relies on the examination reports of the primary
regulators for detailed analysis of the condition of subsidiary banks of bank holding com
panies. There is no prescribed policy as to frequency of examination or inspection of parent
holding companies; however, usually the Reserve Banks try to inspect multi-bank holding
companies and large one-bank holding companies with non-banking activities at least once
every three years and more often if circumstances warrant. . . . Indeed certain holding com
panies are inspected annually. As a result of the adverse impact certain nonbank subsidiaries
have had on the parent holding companies and its banking subsidiaries, inspections may
include a review of some non-bank subsidiaries, principally mortgage companies.
The primary source of information on holding companies is included in an
annual report forwarded to the Board of Governors by the district bank. Other
information may be required, as the response to the questionnaire states:
Also, when believed desirable, the Reserve Bank may request reports to shareholders,
reports to the Securities and Exchange Commission, and periodic abbreviated balance
sheets and special reports. For those companies which are more expansion-oriented, addi
tional financial information is requested and analyzed in conjunction with regulatory ap
plications filed pursuant to Sections 3 and 4 of the Bank Holding Company Act. In problem
situations, meetings are held with officers and/or directors of the holding company and, if
applicable, subsidiary banks’ primary regulators may be contacted.
The district banks, it is clear, have a major role in overseeing the operations
of bank holding companies.
An example of the potential problems in regulating bank holding companies
is presented by the Hamilton National Bank failure.
Hamilton Bancshares, Inc. was formed in 1971 with Hamilton National
Bank in Chattanooga, Tennessee, as the lead bank. By 1975, the firm controlled
18 banks in Tennessee and Georgia, and operated several subsidiaries, the most
important of which was Hamilton Mortgage Company in Atlanta. The main
bank— Hamilton National— was declared insolvent in February 1976, and the
holding company and its subsidiaries declared bankruptcy shortly thereafter.
In five years, a bank which had survived the Depression and helped other
banks in Tennessee do likewise, went from a sound and well-managed institution
to a bankrupt operation.
' 9 These delegations are usually contingent on certain conditions but many of the terms used
in the restrictions are left undefined and considerable latitude for discretion is placed in the hands
of the district bank. Under the Bank Holding Company Act, the Federal Reserve banks may :
Extend the filing time for registration statements ;
Extend the time by which a bank holding company must divest itself of non-banking orga
nization in terests;
Extend the time in which a bank holding company must divest itself of its interests in a
non-banking organization acquired in satisfaction of a d e b t;
Require reports to determine whether a holding company is complying with the law ;
Request more information before allowing a bank holding company to complete a proposed
transaction ;
Permit an acquisition in less than the required 45 days if “ exigent circumstances” are
evident;
Permit de a o v o activities for a bank holding company and permit this in less than the
required 45 days ;
Approve the formation of a bank holding company ;
Approve the acquisition of additional shares in a bank ;
Approve the acquisition of a new bank if “ the applicant has a proven record of furnishing
its subsidiaries special services, management, capital funds and general guidance” ;
Grant a 90-day extension for filing an annual report plus an additional 90 days after t h a t ;
Approve retention of shares of bank stock acquired in a fiduciary capacity if it will divest
itself of such stock in two years ;
Permit the merger of two bank holding companies ;
Approve acquisition of a finance company or industrial bank ;
And, in towns of 5,000 or less population, allow a bank holding company to acquire an insur
ance brokerage.
61
The holding company was regulated by the Federal Reserve System,
primarily through the Atlanta Reserve bank. Even though the Board of Gover
nors in January, 1973 questioned the holding company's practice of removing
its subsidiary banks from membership in the Federal Reserve System and even
though the Atlanta Reserve bank knew that the two subsidiary banks
needed additional capital (the holding company said that it was correcting the
problem), the Atlanta bank approved two new acquisitions in May and June
1974.
In the fall of that year, the Comptroller of the Currency's staff 10discovered
a substantial number of bad loans from Hamilton's mortgage subsidiary on the
books of Hamilton National bank. Subsequent corrective actions apparently
failed and in 1976 Hamilton National Bank was sold to the First Tennessee
National Corporation— the largest bank holding company in the State.
In view of their systemwide responsibility concerning holding companies, it
is significant that the directors of the Federal Reserve district banks and their
branches have substantial ties to bank holding companies. Thirty-two of the 100
largest multi-bank holding companies have representation on district banks or
branches (either a current or former officer or director).
Seventy-nine directors have either current or prior service with bank
holding companies or their subsidiaries— 14 Class A, 6 Class B, 8 Class C,
and 51 branch directors. Seventy-one holding companies, controlling 687 banks,
are connected to the district banks and branches— some, several times, i.e.,
Southeast Banking Corporation of Florida; First Bank Systems, Inc. of Minne
apolis; Commerce Bancshares, Inc. of Kansas City; Fidelity Corporation of
Oklahoma; U.S. Bancshares, Inc. of Dallas; Austin Bancshares Corporation of
Texas; and the Bank of America. One director is connected with six bank
holding companies.
Among the holding companies represented on the boards of the district
banks by current or former officers or directors, six were on the “ problem list"
published by the New York Times on January 22 of this year. These firms are:
• Chase Manhattan Corporation, New York Federal Reserve District
Bank, (Class A Director— David Rockefeller);
• Security New York State Corporation, New York Federal Reserve
District Bank, (Buffalo Branch, Bank-appointed Director— J. Wallace Ely);
• Marine Midland Banks, New York Federal Reserve District Bank,
(Buffalo Branch, Bank-appointed Director— Daniel G. Ransom );
• First Pennsylvania Corporation, Philadelphia Federal Reserve District
Bank, (Class C Director— John W. Eckman); 11
• First & Merchants Corporation, Richmond Federal Reserve District
Bank, (Class C Director— E. Angus Powell); and
• Citizens and Southern National Bank, Atlanta Federal Reserve District
Bank (Class C Director— H. G. Pattillo).
The substantive role of the district banks in the supervision and regulation
of commercial banks, of course, is not limited to the holding companies. The
examination process for state member banks falls squarely under the jurisdiction
of the district banks . . . a fact that heightens the potential for conflicts of
interest in a banker-oriented board.
10 The Comptroller of the Currency is the supervisory agency for national banks. Six members
of the holding company were national banks.
11 In addition, the President and Chief Operating Officer of this problem bank holding company is
the Philadelphia Federal Reserve District Bank’s representative to the 12-member Federal Advisory
Council to the Federal Reserve System.
62
In their response to the FINE questionnaire of the Banking, Currency and
Housing Committee, the Federal Reserve reveals the latitude given the em
ployees and boards of the district banks in the examination process:
While questionable matters may be discussed with officials of the Reserve Bank, the
examiner exercises, within the general guidelines established by the Reserve Bank officials,
his discretion in determining the matters to be cited in the report of examination. Minor
problems corrected during the examination are detailed in the examiner’s work papers but
seldom appear in the report.
At another point in the same response, it was stated:
Although operating within the realm of the general policies and practices established by
the Board, examiners for the Reserve Banks have latitude in the methods and procedures
followed in conducting an examination. Procedures followed may vary in the banks ex
amined depending on such factors as size and volume of operations, number of branches,
quality of assets and overall general condition at the previous examination.
In view of the regulatory structure of the Federal Reserve System— and
the increasing delegations of authority to district banks in this area— it is
difficult, if not impossible, for the bank directors on the district and branch
boards to avoid real or potential conflict of interest situations. It is true that
internal regulations of the System prohibit a director from passing directly on
a regulatory or supervisory matter involving his own bank, but this does not
wipe out the fact that the directors do have ongoing policy-making, information
gathering, and administrative roles in the examination and supervisory process.12
It is highly questionable whether these roles can be separated— even with wellmeaning if haphazardly constructed internal protections—from the d ire cto r
present, future and past banking interests.
T
he
C
lub
System
While Corporate America has wide representation— through director inter
locks— with all twelve banks in the Federal Reserve System, analysis of each
district bank and cross-checking one district bank with the others reveals not
only the narrow pool of talent but the “ club” nature of the system.
This “ club” approach leads the Federal Reserve to consistently dip into
the same pools— the same companies, the same universities, the same bank
holding companies— to fill directorships. This is particularly true in connecttion with those positions where the Board of Governors and/or the district
banks have the right of appointment— the Class C directorships on the dis
trict boards and the various branch director positions.
The following charts detail the appointments to the 25 branches of the
district banks:
13 As noted earlier, when a “ significant” policy issue is raised in a merger or bank holding company
application, the district bank cannot make a final decision. Such requests automatically go to the
Board of Governors in Washington. Under a recent modification of its regulations, the Board of
Governors gave its Secretary the power to act in such cases c o n tin g e n t u po n th e d is tr ic t b a nk’s a ppro va l.
Thus, the district bank still retains considerable power in this area. Other authority delegated to
the Secretary, which requires d is tr ic t b a nk approval, includes permission : for a bank to create a
foreign bran ch; for a bank holding company to acquire a foreign company or a company which
finances exports ; for an Edge Act corporation to exceed size limits specified in regulations ; and for
a bank holding company to acquire voting shares of a foreign company. [Emphasis added.]
64
D istric t Two
FEDERAL RESERVE BANK OF NEW YORK
Buffalo Branch
Directors Appointed By Federal Reserve Bank
r
J. WALLACE ELY
DANIEL G. RANSOM
Security^New^York Sta.te_ _
Cor P or a.tion.,
hej[ter, _
N_.^Y.j_ C^ha.irman^ $938_
mij^l^on/as^et^s^ Holdi_n^
^ompany Rank_^ _90_.
The William Hengerer Co.,
Buffalo, New York, President,
(This is a division of
Associated Dry Goods.)
$1.3 billion/sales.
-Security Trust Company,
President, $431 million,
Rank:
214.
-Marine-Midland Bank-Western,
Buffalo, New York, Director,
$1.5 billion; Rank: 56.
o^Marjine MidLLand Banks^,_
$1JL bi 1_1 n /assets^ Holding _
Company Rankj^ 8^_
-Sybron Corporation, Director
-Richardson Corporation,Dir.
-Rochester Gas & Electric
Corporation, Director.
-Rochester Telephone
Corporation,Director.
-Neisner Brothers,
Director.
-Page Airways, Director.
-Goulds Pumps, Director.
-Association of Bank Holding
Companies, Member.
CHARLES
A. MARKS
AVERY H.
FONDA
Alden State Bank,
Alden, New York,
President,$16.9 mill
Liberty National Bank and
Trust Company, Buffalo,
N.Y., President,$505
million, Rank: 189.
-Kirch-Trumbull
Corporation, Director.
-United Bank Corporation
of New York, Vice-Chairman,
Director, and Member,_
Executive Committee,(controls
Liberty National Bank listed
above), $1.47 billion,
iTolding~Company KankT 6 2 .
-Neelandfs Dairy,
Director.
-Erie-Niagara Counties
Bankers Association,
various offices
(1947-1950),
-U.B.C.
Leasing of New
York, Inc., Director.
-MET Development Corporation,
Director.
-New York State Bankers
Association, Chairman,
Group One, 1972-1973.
-North Carolina Bankers
Association, President,
Group Ten, (1958-59).
65
District Two
FEDERAL RESERVE BANK OF NEW YORK
Buffalo Branch
Directors Appointed By Board of Governors
RUPERT
WARREN,Ch.
-Trico Products Corp.,
Buffalo,N .Y ., former
president,$73 million/
sales.
-Co-trustee of controlling
stock interest in Trico,Inc.
-Sole Trustee, various
Trico-related trusts.
-Julie R and Estelle L Foundation,
Vice-President and Director.
-W.B.E.N., Inc., Dir.
PAUL A. MILLER
-Rochester Institute of Tech
nology, Roch.,N.Y., President.
-Rochester Gas & Electric
Corp., director.
-Monroe Savings Banks,
Rochester, (former director).
DONALD R. NESBITT
-Silver Creek Farms, Albion,
New Yorkf0wner-Operator.
600,000 acres.
66
D istric t Four
FEDERAL RESERVE BANK OF CLEVELAND
Cincinnati Branch
Directors Appointed by Federal Reserve Bank
ROBERT A. KERR
LAWRENCE C. HAWKINSj
Winters National Corporation,
Dayton, Ohio, President,
$837.5 million/assets^
Holding Company Rank: 95.
University of Cinncinati,
Vice-President.
-Winters National Bank and
Trust Company, Chairman and
President, $576 million,
Rank: 172.
-American Diversified Enterprises,
Director.
-Elder-Beerman Stores, Inc.,
Director.
-Irving Trust Company, New York,
(former senior vice-president).
-Member, National Advisory Committee
on Banking Policies and Practices to
the Comptroller of the Currency.
-Avondale Community Dev.
Corp.,
Director.
67
D i s t r i c t F ou r
FEDERAL RESERVE BANK OF CLEVELAND
C i n c i n n a t i B ra n ch
68
District Four
FEDERAL RESERVE BANK OF CLEVELAND
Pittsburgh Branch
69
District Four
FEDERAL RESERVE BANK OF CLEVELAND
Pittsburgh Branch
Directors Appointed by Board of Governors
G. JACKSON TANKERSLEY
Chairman
Consolidated Natural Gas Co,,
Pittsburgh, Pa., President,
$861 million/revenue.
-Consolidated Natural Gas
Services Co., Pres. & Dir.
-Midland Ross Corporation,
Director,
ARNOLD R. WEBER
Carnegie-Mellon University,
Pitts.>Provost;
Graduate School
of Industrial Administration,
Dean.
-ALCOA, Director,
-Standard Shares, Inc., Dir.,
-Higbee Company,Director,
-Ticor Mortgage Insurance Co.,
Director,
-First Union Real Estate
Equity & Mortgage
Investments, Director.
-B.F. Goodrich, Director.
-Copperweld Corp.,Dir.
-Cleveland Trust Company,
(Director from Jan. 9, 1969
to March 1, 1974),$3.1 billion,
Rank: 25. Part of_Clevet.rust_,_
^4_b_i1 l^i^n/a s^sjets^._H^1 din g_
Company Itenkj_ 18.
-Owensboro National Bank,
(Director from 1958 to
1966).
70
D istric t Five
FEDERAL RESERVE BANK OF RICHMOND
Baltimore Branch
Directors Appointed by Federal Reserve Bank
|J. STEVENSON PECK|
Uni.on Tr_us_t Banco^r^,
.BaitjLmore.,_ChaIrmari
$8^6^9_mi ll_io_n_/as^se^t_s._
-Union Trust Company of
Maryland, Chairman,
$700 million, Rank:142.
ILACY I. RICE. JR.I
|J. PIERRE BERNARD!
Old National Bank of
Martinsburg, West
Virginia, President,
$39 million, Rank: 2,504.
Annapolis Banking and
Trust Company, Annapolis,
Maryland, Chairman of the
Board,$62 million, Rank: 1,482.
-Suburban National Bank
of Martinsburg, President,
$2.5 million.
-Mej:cantil_e_Bankshares Corp^,
multl.-b^n.k_hold in.g_.c£m£any^
Vice^Cliairman,$707 million/
jis sets^ _
-Union Tidewater Financial
Company, Chairman (Subs^
Uni.°n. TTrusJ^ B^ancorp.2,
-Union Home Loan Corporation,
Chairman, _(Siibs^._of_ Union
Trusty Bancorj)^
-Landmark Financial
Services, Chairman.
-Maryland Bankers Association:
Chairman, Budget Committee,
(1970);
Member, various committees.
-Rice Hannis, Rice,
(law firm) partner.
-Mr. Rice is listed
as "Counsel to"
Old National Bank.
-firm is listed
as "Counsel to"
Suburban.
-Annapolis Broadcasting
Corporation, Director.
-Maryland Bankers Association,
past President.
| CATHERINE B. D0EHLER~1
Chesapeake Financial
Corporation, Baltimore,
Senior Vice-President,
$1 million/net worth.
- Security Savings and
Loan, Vice-President
and Director.
-Mortgage Corporation
of American, VicePresident and Treasurer.
http://fraser.stlouisfed.org/
76-06(5 O - 76 - 6
Federal Reserve Bank of St. Louis
71
District Five
FEDERAL RESERVE BANK OF RICHMOND
Baltimore Branch
72
District Five
FEDERAL RESERVE BANK OF RICHMOND
C h arlo tte Branch
D ire cto rs Appointed by Federal Reserve Bank
------------------1----------
[THOMAS L. BENSON
W. B. APPLE, JR.
Conway N ational Bank,
C o n w a y ,S o .C a r.,P re s.,
$34 m illio n , Rank: 2 ,9 5 0 .
F ir s t N at’ l Bk. o f R e id s v i lle ,
N .C ., P re s. & Trust O f f i c e r ,
$32 m illi o n , Rank:3 ,1 2 1 .
-South Carolina
Bankers A s s o c ia tio n ,
Chairman, A sset
Management Committee.
-N orth Carolina Bankers
A s s o c ia tio n :
Executive Committee,
Group Five ( 1 9 6 6 );
A g ric u ltu re Committee,
Member, 1972;
Rockingham County
Key Banker, 1973;
O rganization and
Structure Committee,
member, 1974.
JOHN T. FIELDER
J. B. Ivey & Company,
C h a rlo tte , No. C a r ., Pres.
& D i r .,( d e p t , s to r e s )
$85 m i l l i o n /s a l e s .
WILLIAM W. BRUNER
F ir s t JBanks1hare^s__C£r£0£atioin_
of_S£u_th_Carolina >„Columbia, _
P rs jld e n t ,_ $ 5 5 2 mi 1 Li on. / as se t s_.
- F i r s t N ational Bank o f South
C a ro lin a , Columbia, P resid en t,
$480 m illi o n , Rank:
196.
-P alm etto S tate L ife In s .
Co. , D ir e c to r.
-Columbia Coca-Cola B o ttlin g
C o ., D ir e c to r.
- American Bankers A s s o c ia tio n :
Nominating Committee, 1957
and 1951;
Advisory Committee on Federal
L e g is la tio n , 1 9 6 6 -19 7 0 ;
Federal L e g is la tiv e Comm
i t t e e , 1970;
Urban A f f a ir s Committee,
1 9 7 1 -1 9 7 2 ;
Governing C ouncil, 1 9 7 2 -7 4 ;
Board o f D ir e cto rs, 1 9 7 2 -7 3 .
-South C arolin a Bankers A s s o c ia tio n
Group O f f i c e r , 1 9 5 3 -5 4 ;
E xecutive C o u n c il, 1 9 6 0 -1 9 6 2 ,
1 9 6 5 -1 9 7 2 ;
T reasu rer, 1 9 6 0 -1 9 6 2 ;
P re sid e n t, 1 9 7 0 -1 9 7 1 .
-C o m p trolle r o f the Currency’ s
R egional A dvisory Committee, S ixth
N ational Bank R egion, 1 9 6 7 -1 9 6 9 ,
Chairman, 1 9 69.
73
District Five
FEDERAL RESERVE BANK OF RICHMOND
Charlotte Branch
Directors Appointed by Board of Governors
ROBERT C. EDWARDS
Clemson University, Clemson,
South Carolina, President.
-Duke Power Company, Director.
-Dan River,Inc., Director.
-Bank of Abbeville, South
Carolina, (former director,
January 13, 1953 to August 5,
1960).
-Bankers Trust of South
Carolina,(former director,
August 5, 1960 to December 31,
1971). $485.4 million, Rank:195.
74
District Six
FEDERAL RESERVE BANK OF ATLANTA
Birmingham Branch
Directors Appointed by Federal Reserve Bank
CLARENCE L. TURNIPSEED
First National Bank, Brewton,
Alabama, President, $35 million,
Rank: 2,885.
JOHN MAPLES,JR.
Union Bank & Trust Co., Mont
gomery, Alabama, Exec. Vice-Pres.
$187 million, Rank: 425.
Rank: 101.
-Alabama Bankers Association,
Group Chairman*
-Al^bam<a Bancorp^
Direct o r 1.^5_billiony
a_ssejts^ Holding, Co^
Itenkj_ 44j_
-Royal Crown Cola Co.,
Director,
-Hardie-Tynes Mfg. Co.
Director.
-Goodall-Brown Dry
Goods, Director.
-Alabama Bankers
Association, Executive
Vice-President,1974-5.
75
District Six
FEDERAL RESERVE BANK OF ATLANTA
Birmingham Branch
Directors Appointed by Board of Governors
HAROLD B. BLACH, JR.
Chairman
WILLIAM H. MARTIN III
J
,
.,
FRANK P. SAMFORD, JR.
______
Martin Industries, Sheffield,
Ala., Exec. Vice President,
$ 25 million
I sales-
J. Blach & Sons, Inc.,Birmingham,
Alabama, President, $6 million/
assets.
-Cincinnati, New Orleans &
Texas Pacific R.R., Director.
-First Federal Savings & Loan,
Director,
Liberty National Life Ins.
Co., Birmingham, Alabama,
Chairman of the Board,
$1.08 billion/assets.
-Golden Flake,Inc., Director.
-Mid-South Co., Director,
-Associated Industries of
Alabama, Director.
-Martin Supply Company,
Director,
-Indian Springs Corporation,
Director,
-Central Bank of Alabama,
N.A. (Director,1969-1975)
$386 million, Rank: 242.
This jLs subsidiary_of_
Central ltencshares"of th e_
South >l_Inc_.. $1, 869 billion/
assets. Holding Cpm£ an^
Rank:J35_.
-Shoals National Bank,
(former director,
March 1975 to Dec. 8,
1975) $13.1 million.
-South Central Bell, Director.
-First National H*nk of
Birmingham, (former member,
Advisory Board of Southern
Area, resigned 12/31/74).
$949 million, Rank: 101.
Thi.s__i_s ^ubsWd^ary^of^ Alabama.
-Alabama Great Southern R.R.,
Director,
M n c£r£0£ation _^ $1^75 b i l l i o n /
-Saunders Leasing Company, Director
-The Southern Company, Director,
assets^ Hol_dinj^ CoinpanX
Rank: 44.
-Birmingham Trust National Bank,
(Director, 1962-1972), $622 million 9
Rank: 156. This_is[ subsid^ary^
ofJSouthern Banca tjdorajti^n^
•__ ll0.ldinj*
^ompan^ Rank^ _77jl
76
District Six
FEDERAL RESERVE BANK OF ATLANTA
Jacksonville (Fla) Branch
Directors Appointed by Federal Reserve Bank
MAC DONNELL TYRE
Sun First National Bank
of Orlando, Fla., Chairman,
$309 million, Rank: 314.
-Sun Bank of East Orlando,
N.A., Chairman and Director,
$32.5 million, Rank: 3,076.
-Sun Bank of St. Cloud,
Director, $18.9 million.
-Sup. Banks of_Florida,
$^1^70^2_bi^ljLio^n/a s^se^ts^._
H olding Company Rank^4_7.
-Gulf Life Holding
Company, Director.
-Florida Bankers Association,
Chairman, Banking Division,
1974;
Chairman, 1975 Convention.
-American Bankers Association:
Research and Planning
Executive Council,
Member, 1972-1974.
RICHARD A. COOPER
CHAUNCEY W. LEVER
Ellis First National Bank
of New Port Richey, Fla.,
Chairman, $75 million,
Rank: 1,208.
Farida National_Banlcs__of
£l£rida.,__Jacksonvi lie,^lorida^
i^hairaan^ _$l_!_54_7_b^lTi£n_,
Ho Id ing_ C^ompan_^ Rankj_ _54j_
-Ellis Security Bank, New
Port Richey, Chairman,
$46 million, Rank: 2,134.
-Florida First National Bank,
President, Director and Chief
Executive Officer,$327 million,
Rank: 294. (subs, of FNB above)
-Ellis First National Bank
of Hudson, Chairman,
$3.3 million.
-ELlis^ B.ank_in_g_ C°rpora_t^°ri,_
Director^ _$7J17_mi 1lion/ _
a.ss.eJLsj_ __Thi_s is a. mul.ti.-__
^an.k_h^l^i^g_c^mp^an.y__which_
In£ l^d es__abo^e_b ank s_amon g
£.thers^
-Ellis First National Bank
of Dade City, Director.
$22 million.
-Florida Bankers Association,
Chairman, Group One., 1960.
-Florida Bank at Lauderdale,
Director $18 million.
-Florida National Bank at
Lake Shore, Director.
-Citizens1 Bank of Bunnell,
Director,$9 million/deposits.
-Wesley Manor, Inc.,
Director.
-Florida Bankers Association:
Paperless Entries Payments
Committee, Member;
Economic Committee, former
Chairman.
JOHN T. CANNON,III
Barnett Bank of Cocoa, N.A.,
Cocoa, Florida, President,
$51 million, Rank: 1,865.
This_is subsidi_ary_of_ Barnett _
Banks o^f_Florid^a^ $2^21^ Jbi^lion,
Hol^din^ Company R^.rikj_ _32_^ __
-Florida Bankers Education
Foundation (Trustee 1969 to
present; Chairman, 1973).
-Florida Bankers Association:
Mortgage Credit Committee,
1967-1970, past chairman
and past member;
Credit Division, Chairman,
1971.
77
District Six
FEDERAL RESERVE BANK OF ATLANTA
Jacksonville (Fla) Branch
Directors Appointed by Board of Governors
EGBERT R. BEALL
Chairman
Beall’s Department Stores,
Bradenton,Florida,President,
(12-store chain).
-Westside National Bank,
(former director,
Resigned January 1,
1974.) $27.5 million.
n r r r : . .~.......\
GERT H. W. SCHMIDT
JAMES E. LYONS
TeLeVision 12 of Jacksonville,
Florida,President,$3 million/
sales.
Lyons Industrial Corporation,
Winter Haven, Fla., President,
$5 million/assets.’
-Florida Tractor Corporation,
Chairman*
--Southeast Tractor Corp, Chairman.
-Lyons Truck Rental System,
Chairman and President.
-Arlington Plaza, Inc.,
President.
-Lease Investors,
President.
Vice-
-Peninsular Life Ins., Co.,
Director,
-McMillen Corporation,
Director.
-Normandy Atlantic Bank,
(former director, April 1969
to December, 1971) $14 million.
-Bank of Orange Park,
(former director, 1962-1971)
$19.5 million, This is
subsidiary of Southeast
¥ankxng Cor*poratToii9
bTlTionTa'ss’etiT.-'
Holding Company Rank:21.
-Lyons Leaseway Corporation,
President, Chairman and
Director.
-American State Bank at
Orlando, Director and
Stockholder,
L__________________
78
District Six
FEDERAL RESERVE BANK OF ATLANTA
Miami Branch
D ire cto rs Appointed by Federal Reserve Bank
I
I MICHAEL J. FRANCO
C it£ Nati£naJ_Bjink _
C or p£rjat^on, _?£.e s_id_en t _
and Dir;e£t£rJ_ $5^5jmilli£n/_ _
a_sse ts^
-City National Bank of Miami,
Chairman and Director,
$268 million, Rank: 348.
This_is part_o.f holding
£ompan£._
-City National Bank of
Miami Beach, Director,
$99.8 million, Rank: 900.
This_is^ £art_of_ holding
c_om pa. .
-City National Bank of
Coral Gables, Director,
$42.9 million, Rank: 2282.
ThisjLs £aj:t_oJf ]iold_inj>
£°®pan£*
-City National Bank of
Hallandale, Director,
$50.7 million, Rank: 1898.
This_is^ £art_o_f ho_lding_
compa_n_^._
Dade County Bankers
Association, President,
1952.
-F lo r id a Bankers A s s o c ia tio n :
Vice-Chairman, Group IV,
1 9 5 4 -5 ;
Chairman, Group V, 1956;
Executive C ou n cil, Member,
1957.
-C o m ptroller o f the Currency,
Regional Advisory Committee,
Sixth N ational Bank Region,
1972.
HARRY HOOD BASSETT
Southeast^ Barikinj* t o r p o r a t io n , _
Miami,_FLoridax Chairman_,___
$3j_2__b il 1ion_/as s e_t is,_Holding__
Compan£ Rankj_ 21
-S ou th east F ir s t N ational
Bank o f Miami, Chairman,
$ 1 .3 5 b i l l i o n , Rank: 6 5 .
This_is_ £art_o_f h o ld in g £ompan^;.
-Maule In d u s tr ie s , I n c .,
D ir e c to r .
-Wometco E n te r p ris e s , I n c . ,
D ir e c to r .
-E aste rn A i r li n e s ,
D ir e c to r .
I n c .,
-American Bankers A s s o c ia tio n ,
Payments System P o lic y Committee,
Member.
-A s s o c ia tio n o f R egistered Bank
Holding Companies, V ic e -P re s id e n t,
D ir e c to r , and Member o f Executive
Committee.
-Member, Federal Advisory Council
to the Federal Reserve System,
December, 1970 to December, 1971,
and December, 1972 to December, 1973.
THOMAS F. FLEMING,Jr.1
1--------------
JEAN MCARTHUR DAVIS
^Frrst Banc£h£re:S_of_ F lo r id a ,
Inc^^ jBo^a_RaL
ton_L ^hairman,
^5 5^0_mi 1 l_i on / a e ^ t s^. _
McArthur D airy, I n c . ,
Miami, P re sid e n t,
$12 m i l l i o n /a s s e t s .
- F i r s t Bank and Trust Company
o f Boca Raton, Chairman,
$130 m illio n , Rank: 6 81.
T h is _ i£ anch£r_ba.nk of_
hoj^din^ c.°mpan^._
-T . G. Lee Foods, In c .
S e c re ta r y .
-U n iv e r s ity N ational Bank,
Chairman,
$33 m illi o n ,
Rank: 3016, This^is^ £ a r t _
£ f _ .hold.ing_c^£m£any_L
- S^ou.t_hea.s^ Jinking, _
£o r p£r a. t i. ° £ , _M_r. _ F 1 eming
founded and. was^ p r e s id e n t,
1 9 6 7 -19 6 9 .
-F i r s t N ational Bank o f
Miami, (former d ir e c to r ,
1966 to 1969) £a_rt_o_f
Southeast^
-M r. Fleming d ie d ,
e a rly
1976.
-McArthur Farms, I n c . ,
D ir e c to r .
-S o u th e a st F ir s t N ational
Bank o f Miami, D ir e c to r ,
$ 1 .3 5 b i l l i o n , Rank: 6 5 .
T h is _ is p a r t_ o £ Sou_th.eas_t
Ban.kin£ Corporation.
$3_i_2_b iJLlion/asse, t ^ •_
H oldin g Company Rankj^ 21_.
79
D istric t Six
FEDERAL RESERVE BANK OF ATLANTA
Miami Branch
Directors Appointed by Board of Governors
ALVARO LUIS CARTA
i
________ ______________________
Gulf & Western Americas
Corporation, Vero Beach,
Florida, President and
Director, $161 million/
assets.
-Hotels de la Costa, Inc.,
President and Director.
-Costa Sur Dominicana,
S. A., President and
Director.
-South Puerto Rico Sugar
Corporation, Director.
-Stofin, Inc., Director.
-International Raw Materials,
Ltd., Director and VicePresident.
-Gulf & Western Industries,
Inc., Vice-President.
-Abaco Farms, Ltd.,
President and Director.
-G. & W. Food Products
Company, President and
Chief Executive Officer.
-Farmers Produce, Inc.,
Director.
-Okeelanta Farms, Inc.,
President and Director.
-Indian River Citizens
Bank, (former director,
1973-1974) $51.7 million,
Rank: 1850.
80
District Six
FEDERAL RESERVE BANK OF ATLANTA
Nashville Branch
Directors. Appointed by Federal. Re„sjexYS.J&aak.
... i
T. SCOTT FILLEBROWN,JR.
First AmTenn_Corporation^
Nashvi 1.le,_Tenne s^se_e_^ __
President^, $1,482 biLLion/
assets, Holding Company
Rank: 61.
FRED R. LAWSON
T^ennes£ee_ Na^io_n^l_Ba_ncsnares^,__
Ma ryv ilLe,_Pr_e_sid_en.tj_ $7J2 mij^li°n_/_
assets_.__
First National Bank,
Sparta, President,
$29.9 million, Rank: 3371
-Blount National Bank of Maryville,
President, $69.7 million,Rank: 1311.
This is J?art_of_
£ompa_ny^._
-Sparta First Federal
Savings and Loan, Director.
-First American National
Bank, Vice-Chairman,
$1.0 billion, Rank: 83.
This_is_ part_of folding _
company.
-Merchants and Farmers Bank,
Director, $6.9 million. This_is^
_part_of ho_lding_ -corap_an^._
■Whitson Timber Company,
Director.
-Tipton Investment, Inc.,
Director.
-Tennessee Wholesale
Drug, Director.
-Cumberland Mineral Company,
Director.
-Betty Machine Company,
Director.
-Chilhowee, Inc., Director.
-Tennessee Bankers Association,
Federal Legislative Committe*. ~
Member.
-American Bankers Association:
Executive Council,
Member;
Bank Investments
Division, Chairman;
...i-.., . m
W. M. JOHNSON
-Tennessee Bankers Association,
Chairman, Federal Legislative
Committee.
-American Bankers Association,
Government Relations Committee,
Member.
-Association of Registered
Bank Holding Companies, Secretary.
— Tennessee Banking Board,
Vice-Chairman.
-Burley Stabilization Board,
Member.
-Tennessee Bankers Association,
Director for Middle Tennessee,
1972.
-American Bankers Association,
Tennessee Vice-President,
1969-1970.
JOHN W. ANDERSEN
F i r s t N a t io n a l Bank o f
S u lli v a n C ounty, K in g s p o r t ,
T e n n e sse e , P r e s id e n t and
C h ie f E x e c u tiv e O f f i c e r ,
$151 m i l l i o n , Rank: 580.
-U n it e d In te r -M o u n ta in
Telephone Company, D ir e c t o r .
- H . A . T . Company (R ea l
E s t a t e H old in g Company)
D ir e c t o r .
-T e n n e s s e e Bankers A s s o c i a t i o n :
S t a te L e g i s l a t i o n Com m ittee,
Member;
C orrespondent Bank C om m ittee,
Member.
81
District Six
FEDERAL RESERVE BANK OF ATLANTA
Nashville Branch
82
District Six
FEDERAL RESERVE BANK OF ATLANTA
New Orleans Branch
D ire cto rs Appointed by Federal Reserve Bank
MARTIN C. MILERl
IIi^em^a_C£r£0jra_tion^ _
New O rleans, _ L£uis 1.a n a _
Ch^irinan^ P resident and _
£hie_f Exec^t^ve O f f i c e r , _
$697_mi11ion7 a ss et s_. _
-The Hibernia N ational
Bank, Chairman, President
and Chief Executive
O f fi c e r , $$579 m illi o n ,
Rank:
171.
T h is _ i£ part__
£ f _ h £ l d^in.g _c£mpan.y^_ __
- A sso c ia tio n of R egistered
Bank Holding Companies,
Member.
I CHARLES W. MC
Louisiana N ational Bank,
Baton Rouge, L ou isian a,
Chairman and P re sid e n t,
$391 m illi o n , Rank: 236.
-J e ffe r s o n P ilo t
Corporation, D ir e c to r.
-J e ffe rso n -S ta n d a rd
L ife Insurance Company,
D ir e c to r .
-G u lf South Research
Corporation, D ir e c to r.
-L ou isian a Bankers A s s o c ia tio n ,
Chairman, L e g is la tiv e Comm.
1 968-1969 and 1973.
-American Bankers A s s o c ia tio n :
M arketing/Savings D iv is io n ,
V ic e -P re sid e n t, 1 9 68-69
and P re sid e n t, 1 9 6 9 -1 9 7 0 ;
Banking P o lic ie s and
P ra ctic e s Committee, Member;
Urban and Community A f fa ir s
Com m ittee,Executive Committee,
Member;
|r . B. LAMPTON |
coy]
American Bankers A s s o c ia tio n
(C on tinued ):
Marketing D iv is io n , Executive
Committee Member;
A d m in istrative Committee,
member of E xecutive Committee,
1 9 6 5 -1 9 6 8 ;
Bank Management, O rg an ization ,
and P ublic R elation s Committees,
former member.
F ir s t N ational Bank of
Jackson, M is s is s ip p i,
P resid en t, $619 m illio n ,
Rank: 158.
“ Pi.£S_t Capital £o^p or a.tjion^
Treats._&_Dir^,_$_714 miUi.on/_
assetSj_ _This_ is_h£ld_ing_ _
jcompan^ _for bank^ _
-E n tex , I n c ., D ir e cto r.
- M is s is s ip p i Bankers
A s s o c ia tio n , P resid en t,
1 9 7 4 -19 7 5 .
-American Bankers A s s o c ia tio n ,
S ta te Coordinator for Savings
Bond Committee sin ce 1972.
[wiLMORE W. WHITMORE-]
F ir s t N ation a l Bank of
Houma, L o u isia n a ,
P resid en t and Chief
E xecutive O f f i c e r ,
$103 m i lli o n , Rank: 8 6 7 .
- A l l i e d E n te r p r is e s , I n c . ,
D ir e c to r , S e c re ta r y T re a su re r.
-L o u is ia n a Bankers A s s o c ia tio n :
Federal A f f a i r s Committee,
Member, 1 9 7 5 -1 9 7 6 ;
L e g is la t iv e Com m ittee,1 9 7 4 -7 6 ;
Contact Banker fo r 1 9 7 5 -1 9 7 6
fo r
a Member o f C ongress.
-L o u is ia n a Bankers P o l i t i c a l
Education C o u n cil, South C entral
D i s t r i c t D ir e c to r ,1 9 7 5 -1 9 7 6 .
- L ouisian a Independent A s s o c ia tio n
o f Banks, D ire cto r 1 9 7 4 -1 9 7 6 , and
P re s id e n t, 1 9 7 3 -1 9 7 4 .
-C o m p trolle r o f the Currency
R egional A dvisory Committee for
the 8th Region, Member, 1 9 7 4 -7 6 .
83
District Six
FEDERAL RESERVE BANK OF ATLANTA
New Orleans Branch
Directors Appointed by Board of Governors
1 HETTIE D. EAVES
Avondale Shipyards, Inc.,
New Orleans, Louisiana,
Exec. Vice-Pres.,
(administration),
$235-250 million/sales
range. This is subs,
of the Ogden Corp.
-South Central Bell Telephone
Company, Birmingham, Alabama,
Director.
GEORGE C. CQRTRIGHt I
George C. Cortright Co.,
Rolling Fork, Mississippi,
Partner
$777,000/assets.
-First National Bank of
Vicksburg, (former
director, 1971 to February 10,
1976) $59 million, Rank: 1561.
84
District Seven
FEDERAL RESERVE BANK OF CHICAGO
Detroit Branchs
Director s Appointed by Federal Reserve Bank
ROBERT M. SURDAM
HAROLD A. ELGAS"
Na_ti^na.1_De^tr^°Corj3ora tion^ ^
^ eJLr^iJL>_.C]laiJH311>__$_7•3. b^i^lion/^
assets^ Holding C^ompany Rarik_: 11^
Gaylord State Bank, Gaylord,
Michigan, President, $39 million,
Rank: 2511.
-National Bank of Detroit,
Chairman, $5.9 billion, Rank: 17.
This_i£ ^ubsiLd^ar_y_o_f NDC.___
-Michigan Bankers Association:
President, 1970-71;
Executive Committee Member;
Legislative Committee
Member.
-International Bank of Detroit,
Director, ( Subsidiary of
Nat’l Bank of Detroit.
-Western American Bank (Europe)
Ltd, Director, (Affiliate of
Natfl Bank of Detroit).
-Bundy Corporation, Director.
-Burroughs Corporation, Director.
-Parke,Davis & Company,Director.
(subs, of Warner-Lambert).
-American Bankers Association,
Government Borrowing Committee,
Chairman.
JOSEPH B. FOSTER |
Mid-America^ FideliJ^y^
Ann Ar bo r_,_Ch.airmail,_
1_975_,. merged_with_ Ameri.can_
Bankc_°rp_^ Inc._^ Direc^to^r^
^2 7_0_m^ll^ian Aas s e^t£. __
-Ann Arbor Bank, President,
$205 million, Rank: 447.
Bank_i_s £ubs id i^ary_of^ _
M id-Ame ^ r a F id^e^lity^
-Michigan Bankers Association:
President, 1966-1967;
Executive Council Member,
1965 to present;
Legislative Committee Member,
1959 to present.
-American Bankers Association:
Executive Council Member,
1969-1971;
Government Relations Council
Member, 1971 to present.
— Conference of State Bank
Supervisors, State Representative
1971 to present.
CHARLES R. MONTGOMERY!
Michigan Consolidated Gas
Company, President and
Director, $397 million/
sales.
-American Natural Gas
Company, Director (Parent
of Michigan Consolidated).
-Michigan Consolidated Homes
Limited Dividend Housing
Corporation, Director.
85
District Seven
FEDERAL RESERVE BANK OF CHICAGO
Detroit Branch
Directors Appointed by Board of Governors
86
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Little Rock Branch
Directors Appointed by Federal Reserve Bank
_____ r
...
HERBERT H. MCADAMS, II
Union Nat'l Bk of Little
Rock, Ark.,Ch. and C .E .0.,
$185.5 million,Rank:485.
-Citizens Bank of Jonesboro,
President and Chairman,
$74 million,Rank: 1225.
-Home Federal Savings and
Loan Association, Chairman.
-Arkansas Bankers Assn.:
Chairman, Bank Mgt.
Seminar,1973-74;
Federal Government
Relations Committee,
Ex-Officio Member.
THOMAS G. VINSON
The Citizens Bank,
Batesville, Ark., Exec.
Vice-Pres. ,$25.8 million,
Rank: 3987.
-Bank of Evening Shade,
Director, $ 2.2 million.
-Arkansas Bankers Assn:
Chairman, Group II,
1960;
Executive Council
1963-1966;
Government Relations
Committee, 1972.
FIELD WASSON
The First National Bank,
Siloam Springs, Arkansas,
President, $21.9 million.
'Marion Wasson Ins. Agency,
Secretary.
-Northwest Arkansas Bankers
Association, Chairman, 1972.
-Arkansas Bankers Association,
Chairman, Group Three,1971.
87
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Little Rock Branch
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
89
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Louisville (Ky) Branch
Directors Appointed by Board of Governors
90
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Memphis Branch
Directors Appointed by Federal Reserve Bank
WILLIAM M. CAMPBELL
X
CHARLES S. YOUNGBLOOD
1st Columbus Nat'l Bk. ,
Columbus,Miss.,Pres. &
C -F,„ 0 .,$55 million,
Rank: 1725.
-Forrest City Broad
casting, Director,
-Mississippi Bankers
Association, Member,
Bank Management Committee
-Arkansas Bankers
Association,Pres.
1968.
-American Bankers
Assn:
V-P for Ark;
Small Business
Credit Comm.
1965-68;
Executive Comm.
Marketing/Savings
Div,1969-1971.
STALLINGS LIPFORD
t
i
!lst Nat 1 Bk. of
Eastern Ark.,Forrest
City,Ark., Ch & CEO,
$36.9 million,Rank;2702,
-Clearview Corp.,
Director,
WILLIAM W. MITCHELL
1st Nat’l Bk. of Memphis,
Tenn.,Ch. & C.E.O.,
$972.5 million,Rank: 96.
This_ij3 part_oj£ holding ___
^ompan^.__
i ..: ____________
First-Citizens Nat’l
Bk.,Dyersburg,Tenn.,
Pres., $31 million,
Rank: 3197.
-Rolling Acres,Partner.
- Fipt Tennessee^ Nat_* 1_
Corpora tion.,_Di.recjtor_
$1_^68_ b^il_li°^/assets^
HoWinj* Company Rank:48.
-First Memphis Realty
Trust, Director. This_
is_par_t _of_ho^ld.ing__co^.
-Tennessee Bankers
Association, Pres.1974.
-Tennessee Bankers Assn:
Executive Council
Member,1961-62;
Federal Legislative
Comm. Member, 1966-67
and 1974-1975;
-Independent Bankers of
Tennessee, Director, 1973-4.
91
District Eight
FEDERAL RESERVE BANK OF ST. LOUIS
Memphis Branch
92
District Nine
FEDERAL RESERVE BANK OF MINNEAPOLIS
Helena (Mont.) Branch
Directors Appointed by Federal Reserve Bank
r
JOHN REICHEL 1
First National Bank, Great
Falls, Montana, Pres, and
Trust Officer, $113.6 million,
Rank:
774. This^Ls affiliate
of_ Firs t_Bank Sys_tem_,_ I n c .
$7.17 bij^lion/a-ss^ejts^ _Holding_
Company Rank_: 12j_
-First National Bank in
Bozeman, Montana, (former
president). $55 million,
Rank:
1728. Affiliate of_
F i m Sank_S^s_tera,_I n Cj,
-Montana Bankers Association,
Agriculture Credit Conference,
Chairman, 1962.
I GEORGE H. SELQVEr I
Selover Buick-Jeep, Inc.,
Billings, Montana, Pres,
and G. M.
-First National Bank and
Trust Company, Director,
(Billings), $100.8 million,
Rank:
890. ^Par_t of_
^°^tjhLwesjt^ Baiico^rjpor^at^io^n^
$7^3_b i.1 li_on_/as^set
Hol^din^ C^ompa.n^_ Rank_: _10.^
1 DONALD OLSSON I
Ronan State Bank, Ronan,
Montana, President,
$13.7 million.
Oymed^ by
-Montana Bankers Association:
President,Group III, 1970;
Executive Committee,1971-2;
Legislative Committee,1974.
-Montana Independent Bankers
Association.
District Nine
FEDERAL RESERVE BANK OF MINNEAPOLIS
Helena (Mont) Branch
District Ten
FEDERAL.RESERVE BANK OF KANSAS CITY
Denver Branch
Directors Appointed by Federal Reserve Bank
i
DALE R. HINMAN
The G reeley N a tio n a l Bank,
G re ele y , C olorad o, Chairman,
& D i r . , $ 8 4 .5 m i lli o n ,R a n k :1 0 6 7 .
_(part_ £ f _ A f f i a t e d O
-A F Iilia te d _ B a n c s h a r e s , o f _
C o lo ra d o ^ Dir_t_a_nd_Vi^ce-P_re^s_^,
$^839^8_mi 1 l^i^n^ H oId ln £ __
C^°Tnpan^ Rankj_ 94_.
-Cache N a tio n a l Bank o f
G re e le y , D ir& V i c e - P r e s .,
$ 1 5 .3 m i l l i o n , P a r t _ o f _
A ffilijite d ^ _
-Farm ers N a tio n a l Bank o f
A u lt , Chairman, $ $ 1 3 .7 m i l l .
(Par t_of^ A f f_ ilia t ed )_._
-W est G reeley N a tio n a l Bank
ot u r e e ie y , u i r e c i u t ,
$ 9 ,0 6 2 m i l l i o n , J[Part of__
A ffilia te d }
-Wyoming Gas Company,
D ir e c t o r .
WILLIAM H. VERNON
-Colorado Bankers Association,
President.
-Wyoming Bankers Association,
Past President.
-American Bankers Association,
Past Vice-President for state
of Wyoming.
Santa Fe National Bank,
Santa Fe, N.Mex., Ch. and
C.E.O., $49 million, Rank:1971.
-K-B Industries, Director.
(Dallas)
-New Mexico Bankers
Association:
Executive Council
Member,1957-58;
Taxation Committee
Chairman,1973;
Various Committees
1955 to present.
-American Bankers Association,
State Vice President for New
Mexico, 1971 thru 1973.
-Comptroller of the Currency,
Member, National Advisory
Committee on Banking Policy
and Practices, 1974-76;
Past Chairman, Regional
Advisory Committee, 12th
National Bank Region.
FELIX BUCHENROTH, JR.j
The Jackson State B a n k , (Wyoming)
President, $ 37 million,Rank:2646.
-Grand Teton Lodge Company,
Director.
-Member, Wyoming Bankers Associationt
American Bankers Association, and
Independent Bankers Association.
95
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Denver Branch
Directors Appointed by Board of Governors
EDWARD R. LUCERO
Colorado Economic Development
Association, Denver, Colorado,
President and Chairman,
$500,000/assets.
MAURICE B. MITCHELL
_____ Chairman______
University of Denver, Colorado
Chancellor,
-TelePrompTer Corporation, Director
-Samsonite Corp., Director.
(Subsidiary of Beatrice
Foods).
-Outdoor Sports Industries, Director,
-Gale Industries, Director,
-First of Denver Mortgage Trust,
Trustee. REIT - $137 million/assets.
-Empire Savings and Loan, (former
director, resigned, 1971)
96
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Oklahoma City Branch
Directors Appointed by Federal Reserve Bank
X
HUGH C. JONES
The Bank of Woodward,
Oklahoma, Exec. VicePres., $ 32,9 million,
Rank: 3051,
-Oklahoma Bankers
Association, Member,
Bank Structure
Committee.
-American Bankers Association,
Member, Governing Council.
V. M. THOMPSON, JR.
Utica Nat’l Bk. & Trust
Co., Tulsa, Okla., Pres.,
$331 million, Rank: 671.
(This__ijs £.art_o_f HeJjnerjich __
A Z-aXnJ~
3. d^iver^f i.ed^ ^
hoJLdin£ comparr^ with_ _
s^al_es^ o^f__$5^8_.17^ mi]J_jion.)_
-Oklahoma Bankers Association:
Executive Council Member,
1954-55 and 1961-62;
Government Relations and
Research Committee,
Secretary, 1973-74.
J. A. MAURER
•Security National Bank &
Trust Co., Duncan, Okla,
Chairman,$ 75.5 mill ion,Rank:1218.
^Owne_d_b£ Se cu r^ity_C or p or at ion y_
a. £ne^bank_h^l^mg_c<om^any2_^
-Investors Trust Company,
Sec.-Treas. and Director
-Mack Oil Company,
President and Director.
-Jath Oil Company, President
and Director.
-Oklahoma Venture Corporation,
Director.
-Maurer Oil Company,
President & Director.
97
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Oklahoma City Branch
Directors Appointed by Board of Governors
HARLEY CUSTER1
.................. T "= J L
Oklahoma Livestock Marketing
Association, Secretary
and General Manager.
-Oklahoma Cattlemen's Association,
Director.
-National Livestock Credit
Corporation,Director.
-National Livestock Feeder
Service Corp., Director.
-National Livestock
Commission Co., Director.
JAMES G. HARLOW, Jr.
Chairman ,______
Oklahoma Gas & Electric,Oklahoma
City, Okla., President, $227 million/
sales.
-Massachusetts Mutual Life Insurance,
Director,
-Village Bank, former director,
$19.3 million.
-Fidelity Bank, N.A., former
director, $277 million, Rank: 340.
This_±s^ £art_oj[ holding company.
-^Fide_lit_^ Cor_pora±ion., _ ( rmer_ _
director), $315 million/a.s£e_ts^_
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Omaha (Nebraska) Branch
Directors Appointed by Federal Reserve Bank
F. PHILLIPS GILTNER
First National Bank of
Omaha, Nebraska, President,
$280 million , Rank:337.
jDart_of^ one^bank_holding_
c°mparr/_._
-Fir_s_t ^a^ional_of N^e^braska_^
Inc
Vice^P^es^ideiit^ S.e.£.*_
and treasurer ,_$.366^ m i ^ M o n ^
a ssetjs^ _
-Pamida, Inc., Director.
-Nebraska Bankers Association,
Executive Committee Member,
1973-75.
-American Bankers Aseociation,
Executive Comm, of the
Correspondent Bank Div,Member,
1972-1974.
-Comptroller of the Currency,
Regional Advisory Committee,
10th Nat11 Bk Region, 1971-1974.
GLENN YAUSSI
The NBC Co^, (holds Nat'l
Bk. of Commerce Trust &
Savings, Lincoln, Nebraska,
Ch.,$242 million,Rank: 383.
-Kearney Fi_rs_t Na^ional_Com£any_^
Chairman, (holds 1st Nat'l Bk.
in Kearney) $49 mill.,Rank: 1942.
-Grand Is^arid^verlaml Co^_, Ch_^
(holds Overland Nat'l Bk. of
Grand Island) $44 mill.,Rank: 2220.
-JTremont Firs_t Na_tiraap^Comjaany^
Chairman, (holds First Nat'l Bk.
of Fremont) $40 million,Rank: 2452.
-North Pla.t_te_Sta_te_C£m£anyj_
Chairman(holds North Platte State
Bank) $17 million/assets.
-Iremont, Fii:st_ .State^ Co_^, Chairman,
(holds First St. Bank of Fremont)
$13 million/assets.
-Lincoln Bank South, Chairman,
$9.9 million.
__________ I___
ROY G. DINSDALE
Farmers National Bank of
Central City, Nebraska,
Chairman,$ 9.4 million.
-biography lists Mr. Dinsdale
as "director of 10 banks and
several livestock and farming
and other corporations*1 — not
listed.
-Nebraska Bankers Association,
Member, Bank Study Committee.
99
District Ten
FEDERAL RESERVE BANK OF KANSAS CITY
Omaha (Nebraska) Branch
Directors Appointed by Board of Governors
EDWARD F. OWEN
DURWARD B. VARNER
Chairman
Paxton & Vierling Steel Company,
Omaha, Nebraska, President,
$5-9 million/sales.
University of Nebraska, Lincoln,
Nebraska, President.
-Missouri Valley Steel Company,
President.
-Beatrice Foods Company,Director.
-Owen Railway Supply Company,
President.
-Lincoln Telephone and Telegraph
Company, Director.
-Owen Land & Cattle Company,
President.
-Washington Natural Gas Co.,
Director,
-Southwest Bank of Omaha
(former director, 1961-1970)
$50.6 million, Rank:1907.
£art_of SouthWes_t Bancor£._
-North Side Bank, Omaha,
(former director, Jan.20-1972
to Dec. 31, 1972) $36 mill.,
Rank: 2742.
^ o w n e d J x Preferred. Mgt_._Corp
100
District Eleven
FEDERAL RESERVE BANK OF DALLAS
El Paso Branch
Directors Appointed by Federal Reserve Bank
l
C. J. KELLY
The First Nat'l Bk. of
Midland,Texas, Ch.,
$139 million,Rank:273.
-First Nat11 Bk. of
Brownwood,Director.
$43.8 million, Rank:2246.
Part_j)f JJ.J5._B an csha_res^,_
Inc.jj? Z4_mJLll:ion^asse tjs._
-First S&L Assoc. Midland,
Director.
-First Nat11 Globe
Data, Director.
— Was Assistant State
Bank Examiner until
accepting first position
with FNB of Midland.
WAYNE STEWART
i
1st Nat’l Bk in Alamo
gordo, N. Mex.,President,
$27.6 million,Rank:3687.
-Alamogordo Industrial
Development Corporation,
President.
-New Mexico Bankers Assn,
Member, and has served on
various committees.
~ T
(TOTED H. CSTTTIMl
1st Nat'l Bk. of Lea
County, Hobbs, New Mexico,
Pres. & Dir.,$76.6 mill,
Rank: 1183.
-Seminole State Bank,
Chairman,$29 mill.Rank:3472.
-Industrial Development
Corporation of Lea Co.,
Director.
-Permian Basin Capital
Corporation, Director.
-New Mexico Bankers Assn:
Investment Comm Member,
1972-73;
Taxation Comm. Member,
1970;
Resolutions Comm Member,
1971;
Chairman, Group 3,1968-69.
|a e n o l d b . PEINADO, JR.
New Mexico Bankers Association
(Continued)
Credit Union Committee
Member, 1964-65.
-Comptroller of the Currency
Regional Advisory Committee
12th Nat'l Bank Region,
1968“1970.
Peinado, Peinado &
Navarro, Consulting
Structural Engineers,
El Paso, Texas, Pres.
$20 million of structures
a year.
,-A.V.C. Development,
Partner.
101
District Eleven
FEDERAL RESERVE BANK OF DALLAS
El Paso Branch
102
District Eleven
FEDERAL RESERVE BANK OF DALLAS
Houston Branch
Directors Appointed by Federal Reserve Bank
I
PAGE K. STUBBLEFIELD
SETH W. DORBANDT
BOOKMAN PETERS
NAT S. ROGERS
I
Viet or i_a_Banksha r e£,I n c ._
Pres^ 5, Di_r ._$19_2 mil.lion/
as_sets._
-Victoria Bk & Trust Co.,
Victoria,President,
$175.9million,Rank: 507.
-American Bankers Association:
Executive Council,1969-70;
Marketing-Savings Division
Executive Comm. Mem.1968-70.
-1st Nat'l Bk. in Conroe,
Texas, Ch. and Pres.,
$ 5 5 million ,Rank: 1724.
-Dorbandt & Company
(Insurance), Partner.
-Member, Independent Bankers
Association.
(Pt^ ^f_h£Wing_com£any_).•
-Central Power & Light
Company,Director.
-Texas Bankers Assoc.,
various committee
assignments.
-Conroe Federal S&L
A ssn., Chairman.
-Guaranty Bond State Bank
Director, $31.9million,Rank:
-Gulf States Utilities
Company, Director,
-Texas Bankers Association:
Region VI Education
Comm. Member;
Administrative Coun.,
1968-70.
1st District Ch.1962-3;
Legislative Comm.
Member, 1967-69.
3148
The City N a t ’l Bk. of
Bryan, Texas, President,
$ 5 4 million > R a ^ . 2108.
-Texas Bankers Assn:
Education Comm.
Chairman,1972-73;
Nat'l Bk. Div.
Chairman,1971;
C o n f . Planning
Comm.Ch.,1971.
-American Bankers A s m ;
Member, Banking
Policies & Prac.
Comm.;
Faculty, ABA Nat'l
Commercial Lending
School,U. of Okla.
First_ £ity_Bancorp_of_ Texas,_
£r£S^
Di£.^_
JbiUipn^
assets^ Holding Company _
Rank^
$4^_5J7
15^_
-First City National Bank
of Houston, Texas, President.
$2.7 billion, Rank: 31. Pa_rt_
£.f_bo.l^ij^_cjom£any_:_
-American General Bond Fund,
Inc., Director.
-American General Convertible
Securities, Inc., Director.
-Cal-Maine Foods, Inc.,
Director.
-Standard Life Insurance
Company, Director.
-First National Bank, New
Albany, M i s s .,(former dir)
$34 million,Rank: 2936.
-Merchants & Planters Bank,
Tchula, Miaa.(former dir)
$6.9 million.
-Great Southern Life Insurance
Company, Director.
-Deposit Guaranty Bank &
Trust Company Jackson,
Miss, (former director)
$726 million,Rank? 133.
-Great Southern Corporation,
Director.
-Texas Bankers Association,
Member, Legislative Committee.
-W. E. Walker Stores, Inc.,
Director.
-American Bankers Association:
President, 1969-1970;
Board of Directors;
Chairman, Bankers Blanket
Bond Task Force.
103
District Eleven
FEDERAL RESERVE BANK OF DALLAS
Houston Branch
Directors Appointed by Board of Governors
---------------1---------------THOMAS J. BARLOW
Chairman
Anderson Clayton & Co.,
Houston, Texas, Pres. &
C.E.O., $ 800 million/
sales.
GENE M . WOODFIN
Marathon Manufacturing Company,
Houston, Texas,Pres.,Ch., &
C.E.O., $2 73 million/sales.
-Apco Oil Corporation, Director.
-Ranger Insurance
Companies, Director.
(Subs, of Anderson.)
-Susquehanna Corporation, Dir.
-Central & South West
Corporation, Director .
-Jim Walters Corporation,
Director.
-Pan American Insurance
Companies, Director,
(Subs, of Anderson).
-First National Bank of
Abilene, Texas (former
Director, Mar. 18,1969
to December 18, 1973)
$135.4 million,Rank: 648,
This__is^ part_o1 J^irs_t
Abilene ^aricsha.re_sJLIn.cJ_
-Jim Walters Investors, Trustee,
(REIT) $59 million/assets.
-Loeb, Rhoades & Co., General
Partner, April, 1959 to Aug. 1973;
Limited Partner, September,1973
to present.
-Studebaker-Worthington, Inc.,
Director.
ALVIN I. THOMAS
Prairie View A & M University,
Prairie View, Texas, President.
104
D is tr ic t
E le v e n
FEDERAL RESERVE BAM: OF DALLAS
D ir e c to r s
San A n t o n i o B r a n c h
A p p o in te d b y F e d e r a l R e s e r v e
Bank
105
District Eleven
FEDERAL RESERVE BANK OF DALLAS
San Antonio Branch
106
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Directors Appointed by Federal Reserve Bank
ROBERT A. BARLEY
LINUS E. SOUTHWICK
Valley National Bank,
Glendale, California,
President,$63.6 million,
Rank: 1435.
-1st Nat11 Bk. of
Friend, Nebraska,
Vice-President,
$9.7 million.
-Calif. Bankers Assn:
Pres., Group VII,
1952;
Dir.Group V,1961-63;
Comm, on Legis. &
Taxation, Mem,
1964-1972;
Director,1964-67.
-Western Independent
Bankers:
Exec. Council Mem.,
1964-69;
Vice-Pres., 1968.
-Independent Bankers Assn.
of Southern California:
Director,1959-1965;
Pres. - 1964.
-American Bankers Assn,
Member, Exec. Council,
1970-1972.
-Comptroller of the Currency,
Regional Advisory Committee
14th Nat’l Bank Region,
Member, 1967-1969.
United California Bank,
Los Angeles, Calif., Pres.
$7.3 billion, Rank: 14.
(Subs^ of_Western__
AaHc°.r£°£.aJLi£rii$18 bjAlion/^ _
assets^ Hold^n^ Compaq __
Rankj_ 18^
- United Calif. Bk. Int'l,
Director.(Subsidiary)__
-Sixth & Spring Corp. Dir.
(Subsidiary)_.
-United Calif. Bk. Realty
Corp. Dir., (Subs^diaryK
-United Calif. Overseas
Investment Corp.Dir. (SujbsJL)_
-Western Bancorp Data
Processing Co., Dir.(jtobsO
-American Bankers Association,
Executive Committee Member,
1974-75.
RAY&UlRN S. DEZEMBER
American National Bank
Bakersfield, California,
Ch. and Pres. $156 million,
Rank: 565.
-Bakersfield Ready Mix,
Inc., Chairman & Sec.
-Service Transport, Inc.
President.
-Comptroller of the Curr
Regional Advisory Council,
14th Nat'l Bank Region,
member, 1970-1972 and
Chairman, 1971.
W. GORDON FERGUSON
National Bank of Whittier,
Calif., President,$ 37.4 mill.,
Rank: 2656.
-California Bankers Assn.,
Director.
-Independent Bankers of
Southern California,
Director, 1970-1973.
-Comptroller of the Currency,
National Advisory Council,
Member.
107
District Twelve
FEDERAL RESERVE BANK OF SAW FRANCISCO
Los Angeles Branch
Directors Appointed by Board of Governors
ARMANDO M. RODRIGUEZ
East Los Angeles College,
Los Angeles, Calif., Pres.
http://fraser.stlouisfed.org/
76-066
O - of
76 St.
Federal Reserve
Bank
Louis
JOSEPH R. VAUGHAN
Chairman
Knudsen Corporation, Los
Angeles, California, Pres.,
$165 million/sales.________
HARVEY A._LPROCTOR
Southern California Gas Company,
Los Angeles, California, Chairman,
$789 million/sales.
Pacific Lighting Service Co.,
Ch. and Director.
-Pacific Lighting Exploration Company,
Director.
-Pacific Lighting Gas Development Co.,
Director.
-Pacific Lighting Alaska LNG Co.,
Pres, and Director.
-Pacific Lighting Corporation
(parent group) Group vice-president,
oil and gas. ______________________
108
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Portland Branch
Directors Appointed by Federal Reserve Bank
____________ I
FRANK L. SERVOSS
f JAMES H. S T A N A R D ]
Crater National Bank,
Medford, Oregon, Pres..
$31.7 million* Rank:3168.
1st Natfl Bk. of McMinnville,
Oregon, Exec. VIce-Pres.,
$22.5 million.
-Belt Valley Bk.,
Montana,(former
director, January,1949
to June, 1952.)
-Oregon Bankers Association:
Exec. Council Member and
Treas.,1957; continuous
and numerous committee
assignments since.
-Deer Lodge Bank And
Trust Co.,(former dir.
June, 1952-June, 1961)
-Blaine Bank of Montana,
(former director,July,
1961 - November, 1965.)
-Oregon Independent Bankers
Association, One of organizers
and original members of board,
serving 1956 thru 1961,
President, 1960.
-Western Independent Bankers:
Exec. Council,1955-1962;
Sec-Treas.1958-61.
-Comptroller of the Currency,
Regional Advisory Committee,
13th National Bank Region,
1973-1974.
— Legislative Advisory
Committee on Oregon Banking
Law Revision, 1971-1972.
KEN SMITH
Confederated Tribes of the
Warm Springs Reservation,
Warm Springs, Oregon, General
Manager._____________________
109
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Portland Branch
Directors Appointed by Board of Governors
110
D istric t Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Zionis JJt^h_B^ncorp£ra.t_ion,____
J?rj2 S ^ d e n t a n d J} ij^ e c t o r ^ _
S ^ a U _L a k e C i t y ^ V]0^5_m±ll/_
asset_s_^ _ H o ld in g _ C o m ]3 a n y _
R an k ;_ 100
- Z io n s F i r s t N a tio n a l Bank,
P r e s i d e n t , $ 6 2 1 .9 m i l l i o n ,
Rank: 1 5 7 .
-K e n n e c o tt
D ir e c to r .
-R io
C opper C o r p o r a tio n ,
G ran d e I n d u s t r i e s ,
D ir .
- D e n v e r a n d R i o G ra n d e a n d
W estern R a ilr a o d , D i r e c t o r .
-B r a d e n
C o p p e r C om p a n y , D i r .
- M o u n t a in F u e l S u p p l y C o . , D i r .
-B e n e fic ia l
C om pa n y,
L ife
In su ra n ce
D ir e c to r .
- H e b e r J . G r a n t C om p a n y ,
D ir e c to r .
U n iv e r s it y o f U ta h , S a lt
C i t y , U tah , P r e s id e n t .
- U t a h P o r t l a n d C em en t
C om p a n y , D i r e c t o r .
-U ta h P ow er & L ig h t ,
-E llis o n
R a n c h in g
C om p a n y ,
D ir e c to r .
-U ta h B a n k ers A s s o c i a t i o n ,
P r e s id e n t, 1 9 6 7 .
-R e g io n a l A d v is o r y
C o m p tr o lle r o f th e
1 9 6 6 -1 9 6 8 .
C o m m it t e e ,
C u rren cy,
— U ta h S t a t e B a n k
C o m m is s io n e r ,1 9 4 9 - 5 2 .
Lake
D ir e c to r .
I d a h o S t a t e B a n k , G le n n s
F e r r y , I d a h o , C h a ir m a n o f
th e B oa rd ,
$ 2 7 .9 m i l l i o n ,
Rank:
3636.
-I d a h o B ankers A s s o c i a t i o n ,
L e g i s l a t i v e C o m m it t e e m e m b e r ,
1968.
-M e m b e r , W e s t e r n I n d e p e n d e n t
B a n k e rs; In d e p e n d e n t B ankers
A s s o c i a t i o n ; an d t h e A m e r ic a n
B ankers A s s o c ia t io n .
Ill
District Twelve
FEDERAL RESERVE BANK OE SAN FRANCISCO
Salt Lake City Branch
Directors Appointed bv Board of Governors
112
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Seattle Branch
Directors Appointed by Federal Reserve Bank
kARRY S. GOODFELLOW
Old National Bank of
Washington, Spokane,
Wash., Ch. and C.E.O.,
$555 million,Rank: 176.
Part_of holding co_^
—Washington Bancshares^
Inc.7 Vice-Pres’._&J i
$^6_3l_mi 1li£n/ as_set s_.___
-Bancshares Mortgage
Co., Director.
-Washington Securities,
Inc., Director.
RUFUS C. SMITHI
-Washington Bankers Association:
Chairman, Lending Practices
Committee, 1962-63;
Treasurer, Group 3, 1970-71;
First Vice-Pres.,1972;
President, June 1973-74.
-American Bankers Association,
Vice-President for St. of
Washington,1970-72.
The First National Bank of
Enumclaw, Washington , Ch.
$ 30 million, Rank: 3345.
-Community Banks of Washington,
Trustee., 1970 thru 1975.
VACANCY
113
District Twelve
FEDERAL RESERVE BANK OF SAN FRANCISCO
Seattle Branch
Directors Appointed by Board of Governors
114
Intra-Mural Selection
The intramural nature of these branch appointments, for example, has
given one company— the Rochester Gas and Electric Corporation— two of the
seven positions on the Buffalo Branch of the New York Federal Reserve
Bank. This is the way it happened:
— In January, 1974, the Federal Reserve Bank of New York appointed
the chairman of the Security New York State Corporation to its Buffalo
Branch board. He is also a director of the Rochester Gas & Electric Corpora
tion. In January, 1975, the Board of Governors had an opening on the same
Buffalo board and filled it with the president of the Rochester Institute of
Technology. He also serves on the board of the Rochester Gas & Electric
Corporation.
The club ties were also tightened at Cleveland, with both the district
bank and the Board of Governors getting in on the act.
— In 1974, the Board of Governors appointed the chairman of the Westinghouse Electric Company to a Class C directorship at the Cleveland Federal
Reserve Bank. In 1976, the Cleveland bank appointed the chief executive
officer of the H. J. Heinz Company to its Pittsburgh branch. The chief executive
officer of H. J. Heinz is a director of Westinghouse Electric;
— At the same branch of the Cleveland bank, the Board of Governors
appointed, in January, 1975, the provost of the Carnegie Mellon University
in Pittsburgh. When a vacancy on the same board occurred later that year,
the Board of Governors, in August, appointed the president of the Cyclops
Corporation—who also serves as a trustee at Carnegie Mellon University.
One of the clearest examples of the intramural nature of the boards of the
district banks and branches occurs at the Federal Reserve Bank of Atlanta:
— In addition to the nine directors who serve on the Atlanta Reserve
Bank board, there are five branches of the Atlanta bank with 35 directors—
20 appointed by the Atlanta Bank and 15 appointed by the Board of G ov
ernors. Here, the combined process of election by the member banks, the
appointments by the district banks, and the appointments by the Board of
Governors produced five positions for emissaries from one holding company—
the Southeast Banking Corporation of Florida, ranked 21st in the top 100
multi-bank holding companies in the United States.
• At the Jacksonville branch of the Atlanta Bank, the Board of Governors
appointed a director in 1972 who then had to resign from the board of
the Bank of Orange Park— a subsidiary of Southeast;
• One of the Class B directors at the Atlanta Bank— elected by the mem
ber banks— resigned his directorship on the board of the Pinellas Cen
tral Bank and Trust Company— a subsidiary of Southeast—upon his
election to the board in 1973;
• And when the Federal Reserve System decided to establish a new branch
of the Atlanta Bank at Miami, Florida, the Atlanta Bank decided to
name to three of its four positions— the founder of Southeast, the
chairman of Southeast, and a director of a bank subsidiary of Southeast.
Illustration 1 shows the ties of this bank holding company to the Atlanta
Bank and its branches:
115
Illustration _1.
Interlocks of Southeast Banking Corporation of Florida at Atlanta Bank.
116
The Minneapolis Federal Reserve Bank rivals the Atlanta Bank for
domination by a multi-bank holding company—the First Bank Systems, Inc.—
the 12th largest multi-bank holding company in the United States.
In addition to the nine directors on the Minneapolis board, there is a five
member board at the Helena (Montana) branch. All of the Board of Governors’
appointments to Class C positions at the Minneapolis bank come from First
Bank Systems:
• The chairman of the Federal Reserve Bank of Minneapolis— who is
also chairman of Honeywell, Inc.—had to resign from the holding
company board when he was appointed in 1976;
• The deputy chairman of the Minneapolis Federal Reserve Bank—who
is the chairman of General Mills—had to resign from the board of not
only the holding company but from the board of one of its subsidiary
banks when he was appointed in 1974; and
• The third Class C director at the Minneapolis bank—who is also the
president of Carleton College in Northfield, Minnesota—had to resign
from the board of a subsidiary bank of FirstBank Systems when he was
chosen by the Board of Governors in 1974.
At the Helena branch, the Minneapolis Bank chose the president of two
banks affiliated with FirstBank Systems and the Board of Governors, in 1975,
chose as its appointment a Montana lawyer who served on the board of direc
tors of yet another affiliate of FirstBank Systems.
In addition to the FirstBank Systems ties of all three Class C directors,
there are additional tangles at the Minneapolis bank. The chairman of Honey
well— a Class C director— sits on the board of General Mills. The chairman of
General Mills— also a Class C director— sits with the chairman of Honeywell
on the board of Toro, Inc.
The story of Toro, FirstBank Systems and the Minneapolis Federal Reserve
Bank unfolds in other areas:
• The president of Toro— David Lilly— served on the board of directors
of the lead bank for FirstBank Systems from 1957 to 1968. He resigned
this position in 1969 to become a Class C director at the Minneapolis
bank. He served in this “ public” position until 1973, the last two years
as chairman of the Minneapolis Fed.
• When he completed his service at the Federal Reserve district bank, he
rejoined the FirstBank Systems and the bank as a director.
• Three years later, the Federal Reserve called again, this time with a
position in Washington as a member of the Board of Governors. To
qualify for this position, Mr. Lilly had to once again resubmit his
resignation from the now familiar FirstBank Systems.
Illustration 2 shows the interlocks of five of the “ public” representatives at
the Minneapolis bank:
117
Illustration 2 .
Interlocks of Five of the "Public" Representatives at the Minneapolis Bank.
118
Some of these same closety knit ties are evident at other banks and
branches:
—-At the Detroit Branch of the Chicago Federal Reserve Bank, the Board
of Governors in 1973 appointed the executive vice-president of the Chrysler
Corporation. He is also a director of the American Natural Gas Company and
its subsidiary— the Michigan Consolidated Gas Company. In 1976, the Chicago
bank appointed the president of the Michigan Consolidated Gas Company to
the Detroit board. He is also a director of the American Natural Gas Company.
— At the Louisville branch of the St. Louis Federal Reserve Bank, the
Board of Governors had two openings to fill in 1972. They appointed the presi
dent of Reliance Universal of Louisville to begin service in April, 1972, and
then, later that year—in October— appointed the chairman of the Porter Paint
Company to fill another seat on the board. Both men are directors of the same
trade association— the National Paint and Coatings Association.
— The douple dip approach was also at work at the Kansas City Federal
Reserve Bank. Here the member banks elected the president of Hallmark
Cards to be a Class B director. He then resigned his position as a director of
the Commerce Bank and Trust Company, a subsidiary of Commerce Bancshares,
Inc., the 51st largest multi-bank holding company in the United States. This
year—1976— the member banks elected the chairman of the holding comnany
to a Class A directorship.
The same “ club” process was apparent in other places in the Kansas City
bank. In 1972, the member banks elected the president of the Kerr McGee
Corporation to a Class B directorship. He then resigned his directorship on
the board of the Fidelity National Bank of Oklahoma City, a subsidiary of
the Fidelity Corporation of Oklahoma. In 1975, the Board of Governors
appointed to the Oklahoma City branch of the Kansas City bank, the president
of the Oklahoma Gas and Electric Company. This director then resigned
from the boards of Fidelity Bank and its holding company, the Fidelity Corpo
ration, to qualify.
— At the El Paso branch of the Dallas Federal Reserve Bank, the bank
appointed the director of the First National Bank in Brownwood in Texas— a
subsidiary of U.S. Bancshares— to its board in 1969. In 1975, the member
banks elected— as a Class A director at the Dallas bank— another director of
the First National Bank at Brownwood— also serving as a director of the
Coleman Bank— both subsidiaries of U.S. Bancshares.
Inter-Mural
There are a number of common ties between the directors of the different
Federal Reserve banks:
The common ties between the directors of the Boston and the New York
Federal Reserve Banks are good examples of the intermural nature of Federal
Reserve System selections.
• One Class B Director of the Boston Bank— Alfred W. Van Sinderen— sits
on the board of the United Aircraft Corporation, a subsidiary of United
Technologies Corporation. The counsel to the board of directors of United
Technologies Corporation— Robert H. Knight— is a Class C Director on
the New York Federal Reserve Bank.
• One Class C Director on the Boston Bank— Louis W. Cabot— sits on the
board of Owens Corning Fiberglas Corporation. Serving on that board is
the same Robert H. Knight.
119
• Boston’s Mr. Cabot also serves as a trustee of the Carnegie Corporation of
New York. The president of the Carnegie Corporation of New York is a
Class C director at the New York Federal Reserve Bank.
• The Federal Reserve Bank of Cleveland this year appointed to its Pitts
burgh branch a director of a New York subsidiary of Bank of America.
The chairman of the Bank of America is a Class A director of the San
Francisco Federal Reserve Bank.
• In April of 1970, the Federal Reserve Bank of San Francisco appointed to
its Salt Lake City branch the president of Zions Utah Bancorporation. He
also sits on the board of directors of Kennecott Copper. In 1973, the Board
of Governors appointed to a Class C directorship at the New York Federal
Reserve Bank, the president of Kennecott Copper.
The In-Bred Links
The Dana Tie: In 1972, the Board of Governors appointed the president
of the University of Kentucky— Otis Singletary— to a Class C directorship
on the Federal Reserve Bank of Cleveland. A year later, the member banks
elected the chairman of the Dana Corporation to a Class B directorship on
the Cleveland bank. While Dr. Singletary’s 1972 biography reflects no corporate
directorships, a check of the 1976 Standard & Poor’s Directory of Corporations
shows he has now joined his Federal Reserve colleague as a director of the
Dana Corporation.
Father-Son: In 1972, the Board of Governors appointed the president
of West Virginia University to serve on the board of the Baltimore branch of
the Federal Reserve Bank of Richmond. In 1975, they named his son to the
board of the Oklahoma City branch of the Federal Reserve Bank of Kansas
City.
The Whittaker Corporation Link: In 1973, the Board of Governors named
the president of the Whittaker Corporation in Los Angeles to a Class C director
ship at the Federal Reserve Bank of San Francisco. In 1974, J. Dewey Daane
left the Board of Governors in Washington after ten years of service. The 1976
Standard & Poor’s Directory shows that J. Dewey Daane now serves on the
board of the Whittaker Corporation.
The Union Carbide Addition: On January 1, 1973, the member banks
elected Jack B. Jackson, the president of the J. C. Penney Company, to serve
as a Class B director of the New York Federal Reserve Bank.
• In the biography Mr. Jackson submitted to the Board of Governors at
that time, he lists only one additional corporate directorship— on the board
of an insurance company in Dallas.
• In August, 1973, the member banks had to fill a vacancy on the New York
bank and elected the president of the Union Carbide Corporation to sit as
another Class B director on the board.
• On January 28, 1976, the New York bank submitted a list of revisions to
the biographical sketches for their directors. Included under Mr. Jackson’s
name was the note, “ Add: Director, Union Carbide Corporation” .
120
C
orporate
I nterlocks W
it h
R
eserve
B
anks
The Tables which follow illustrate the ties between giant corporations
and the Federal Reserve banks and their branches.13 It is clearly evident,
again, that the Federal Reserve System is dominated by a very small universe
of private institutions.
Though Table 1 includes both the first and second 500 largest industrial
corporations from the Fortune Magazine rankings, the first 500 predominate.
Tables 2 thorugh 5 indicate that life insurance companies are very evident
in Boston; utilities in the South, Midwest and the West Coast; retailing firms
in the Boston-New York-Cleveland corridor; and transportation, especially
railroads, is heavy in the West.
Table 6 suggests that multibank holding companies are especially prevalent
in the South and the Minneapolis bank— areas of the country where holding
company operations have developed rapidly. Twelve of the 35 problem banks
on the list published in January of this year were in the South.
Many of the companies on these tables, as mentioned earlier, have multiple
interlocks to the Federal Reserve System. FirstBank Systems; Southeast
Banking Corporation; Federated Department Stores; Westinghouse Electric
Corporation; Proctor & Gamble Company; Beatrice Foods Company; United
Aircraft Corporation; Alcoa; Honeywell, Inc.; Kennecott-Copper; OwensCorning Fiberglas Corporation; all have two or more director ties to district
or branch banks.
In summary, the Federal Reserve directors are apparently representatives
of a small elite group which dominates much of the economic life of this nation.
13 Six tables were developed using rankings from recognized sources :
a. F o rtu n e M a g a z in e ’s rankings of the first and second 500 largest industrial corporations ;
b. F o rtu n e M a g a z in e ’s rankings of the 50 largest utilities ; retailing firms ; life insurance
companies ; and transportation companies ;
c. The A m e ric a n B a n k e r rankings for the 100 largest multi-bank companies.
For these tables, a darkened square indicates that a director for the Bank or Branch also serves
or served as an officer, director, or employee of the firm listed in the left-hand column. In the case of
multi-interlocks with the same firm, the number of such interlocks appears in the center of the squares.
How
th e
D a ta
W a s A s s e m b le d
The primary source for the information on the backgrounds of the direc
tors of the Federal Reserve Banks and their branches was biographies obtained
from the Federal Reserve Board and various district banks. The biographies
were supplemented with material from a number of corporate/banking direc
tories.
To provide a single base period, the data collected is for the 267 directors
on the boards as of January 1, 1976.
In addition to the 1976 file of biographies obtained from the Federal
Reserve, the following sources were utilized:
Standard & Poor's Register/1976:
Volume One: Corporations
Volume Two: Directors and Executives
Martindale & Hubbell Law Directory,1976
“ Outside Director; Inside Counsel", 1974 Expanded Edition, Law Journal
Press
Who's Who in America,197Iy-75
Moody's Bank and Finance Manual,1975
Polk's World Bank Directory,1975
Directory of Corporate Affiliations, published by the National Register
Publishing Company
The bank deposit figures and rankings were obtained from the American
Banker Directory of all U.S. Banks With Deposits of $25,000,000 or more.
When a bank had deposits of less than $25 million, those figures came from
Moody's Bank and Finance Manual and Polk's Directory.
The multi-bank holding company asset figures and holding company
rankings were obtained from the American Banker list of the 100 largest MultiBank Holding Companies in the United States. The assets of one-bank holding
companies were obtained from Moody's Bank and Finance Manual. One-bank
holding companies and multi-bank holding companies not in the top 100 are
not ranked.
Sources on the duties and functions of the Federal Reserve Banks included:
Code of Federal Regulations, Title 12, 1975.
Federal Reserve System: Purpose and Functions, 1974, published by the
Federal Reserve System.
Federal Reserve Act, compiled by the Board of Governors in its legal
division, updated to December, 1975.
The study was originated by the late Representative Wright Patman.
It was continued and expanded under the direction of Chairman Henry S.
Reuss. Research was conducted by Margaret Rayhawk, Jeff Booth, Ray
Mollenhoff and J. C. (Jake) Lewis of the Committee staff.
(121)
o
TABLE 1
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 1,000 INDUSTRIAL CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com
(1) - EXXON
B E ll
(4) - TEXACO, INC.
I B
(5) - MOBIL OIL
CORP.
H I
(9) - IBM
(11) - CHRYSLER
CORP.
V
-
O
(15) - WESTERN
ELECTRIC CO.
o
o
(19) - WESTINGHOUSE
ELECTRIC CORP.
(22) - UNION CARBIDE
CORP.
E D
(27) - DOW CHEMICAL
CO.
iB
(28) - PROCTER &
GAMBLE CO.
□
o
(39) - BOEING CO.
H
(42) - BEATRICE FOODS
COMPANY
EM I
(43) - MONSANTO CO.
(46) - UNITED AIR
CRAFT CORP.
-
n
I lil
(48) - R.J. REYNOLDS
INDUSTRIES, INC.
1 3
(65) - A L C O A
im
(68) - HONEYWELL, INC.
n
(76) - TRW, INC.
(78) - INLAND STEEL
76-066
O -.76
(Face p. 120) No.
m
(83) - GULF & WESTERN
INDUSTRIES, INC.
(85) - ALLIED CHEMICAL
CORP.
i l l
1
□
(87) - STANDARD OIL
(OHIO)
(89) - TEXTRON, INC*
i n
1
n
jm
Branch
Seattle
City
Salt Lake
Branch
* f
10
h
j0 «
Branch
01
&
O
Portland
FRANCISCO
- SAN
XII
Branch
Houston
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Branch
Omaha
City
Oklahoma
Branch
Branch
CITY
X - KANSAS
Denver
Branch
(Helena
|lX - MINNEAPOLIS
Memphis Branch
------------------------------i
Louisville
Branch
VIII
Little Rock
Branch
- ST. LOUIS
Branch
Detroit
- CHICAGO
VII
New Orleans
Branch
Nashville
Branch
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
V - RICHMOND
Pittsburgh
Branch
Cincinnati
Branch
IV - CLEVELAND
- PHILADELPHIA
III
X. .
Buffalo
FIRM
YORK
FEDERAL RESERVE
DISTRICT
II - NEW
‘
N.
I - BOSTON
X.
Branch
pany/ and city of interlock(s) noted.
TABLE 1 continued.
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 1,000 INDUSTRIAL CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com
(94) - GENERAL MILLS
(102) - WARNERLAMBERT CO.
(104) - OGDEN CORP.
1111
m
(107) - AMERICAN
___CYANAMID CO.
(114) - KAISER ALUM. &
CHEMICAL CORP.
Q
(119) - KENNECOTT
COPPER
(129) - KERR-MCGEE
CORP.
(134) - BURROUGHS CORP.
(136) - CAMPBELL SOUP
CO.
■
n
mu
.
(146) - DRESSER
INDUSTRIES, INC.
(150) - STUDEBAKERWORTHINGTON, INC
(155) - JIM WALTERS
INVESTORS
*
(178) - SCOTT PAPER CO.
(186) - KAISER INDUSTRIES
m
:2M
(205) - WILLIAMS COM
PANIES
(211) - DIAMOND SHAM
ROCK CORP.
mi
n
.
(202) - PILLSBURY CO.
j
o
(«32) - UNITED STATES
GYPSUM CO.
(236) - NORTHROP
H
m
(216)" -WHITTAKER
CORP.
(227) - ANDERSON, CLAYTON
& CO.
l|||
f
n
(188) - DANA CORP.
m
m
n
IH
m
Branch
Seattle
City
Salt Lake
Branch
Branch
Portland
Los Angeles
Branch
in
-
(139) - H.J. HEINZ
(172) - EMERSON ELECTRIC
CO.
FRANCISCO
HI
El
LJ
(133) ^ H E R C U L E S , INC.
- SAN
mu
mu
HH
(113) - PPG INDUSTRIES,
INC.
(210) - HEUBLEIN, INC.
XII
Branch
Houston
Hi
m
(109) - CROWN ZELLERBACH
(209) - OSCAR MAYER &
CO.
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Branch
Omaha
Branch
Denver
HI
fill
(96) - B.F. GOODRICH
CO.
City
CITY
X - KANSAS
(90) - PEPSICO, INC.
Oklahoma
Branch
Branch
Helena
IX - MINNEAPOLIS
Branch
Memphis
-Louisville
Branch
Little Rock
Branch
- ST. LOUIS
VIII
Branch
•Detroit
- CHICAGO
VII
New Orleans
Branch
Nashville.
Branch
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
V - RICHMOND
Pittsburgh
Branch
Cincinnati
Branch
IV - CLEVELAND
- PHILADELPHIA
Ill
i
N.
Buffalo
FIRM
YORK
FEDERAL RESERVE
DISTRICT
II - NEW
'
NJ
I - BOSTON
\
Branch
pany, and city of interlock(s) noted.
TABLE 1 continued. .
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 1,000 INDUSTRIAL CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com
(238) - OWENS-CORNING
FIBERGLAS, CORP.
Mi
H
(249) - ABBOTT LABORA
TORIES
(274) - CYCLOPS CORP.
B
(276) - LONE STAR
INDUSTRIES
HI
B
El
1□
1EI
(321) - ADDRESSOGRAPHMULTIGRAPH CORP.
□
(333) - DI GIORGIO
CORP.
n
(335) - HARRIS CORP.
m
(341) - HART SCHAFFNER
& MARX
0
(343) - SYBRON
H
(368) - COOK INDUSTRIES,
INC.
*
(370) - R.R. DONNELLEY
& SONS CO.
I
□
m
(377) - DAN RIVER, INC.
n
(381) - CHAMPION SPARK
PLUG CO.
(392) - HOWMET
El
(400) - ANCHOR HOCKING
CORP.
(437) - EMHART CORP.
(449) - INLAND CONTAINER CORP.
0
□
n
Ml
j
Ellll
□
(458) - COPPERWELD:
CORP.
(511) - MARATHON MANU
FACTURING
□
(572) - TAPPAN
El
□
(579) - APCO OIL
(584) - RORER-AMCHEM
[j
(586)' - ILLINOIS TOOL
WORKS
(588) - ROYAL CROWN
COLA
(594) - MANHATTAN
INDUSTRIES
H
n
o
Branch
City
Salt Lake
Branch
Seattle
Branch
Portland
Los Angeles
Branch
FRANCISCO
B
H
(296) - SPERRY &
HUTCHINSON
(436) - INSILCO CORP.
- SAN
XII
Branch
Houston
-
(294) - CAMPBELL
TAGGART, INC.
(404) - CABOT CORP.
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Branch
Omaha
Branch
Denver
City
CITY
X - KANSAS
Oklahoma
Branch
Branch
iHelena
mu
(237) - CUMMINS ENGINE
CO . , INC.
(318) - STANLEY WORKS
IX - MINNEAPOLIS
Branch
Memphis
-Louisville
Branch
Little Rock
Branch
- ST. LOUIS
VIII
Branch
Detroit
- CHICAGO
VII
New Orleans
Branch
Nashville
Branch
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
|V - RICHMOND
i
Pittsburgh
Branch
Cincinnati
Branch
IV - CLEVELAND
YORK
IlII
X.
Buffalo
FIRM
Branch
FEDERAL RESERVE
DISTRICT
II - NEW
\
I - BOSTON
\
- PHILADELPHIA
pany, and city of interlock(s) noted.
TABLE 1 continued. .
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 1,000 INDUSTRIAL CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com
pany, and city of interlock(s) noted.
TABLE 2
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 50 LIFE-INSURANCE CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com-
(1) - PRUDENTIAL
m
(2) - METROPOLITAN
(5) - JOHN HANCOCK
MUTUAL
o
(7) - NORTHWESTERN
MUTUAL
(8) - CONNECTICUT
GENERAL LIFE
H
□
(10) - MASSACHUSETTS
MUTUAL
0
(17) - PENN MUTUAL
a
M
(23) - NATIONAL
LIFE
*
1
(24) - PHOENIX MUTUAL
P
(30) *- SOUTHWESTERN
LIFE
H
(■33) - JEFFERSON
STANDARD
H
(35) - LIBERTY NATIONAL
1
-
76-OGG O - 7fi
(Face p. 120) No.
(50) - KANSAS CITY
LIFE
m
m
1
Branch
City
Salt Lake
Branch
'Seattle
Branch
'Portland
Los_ Angelos
rBranch
FRANCISCO
XII - SAN
Branch
Houston
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Branch
Omaha
City
Oklahoma
Branch
CITY
X - KANSAS
.Deliver Branch
Branch
1Helena
Memphis Branch
1
IX - MINNEAPOLIS
■
-Louisville
Branch
Little Rock
Branch
- ST. LOUIS
Branch
■Detroit
VIII
VII
- CHICAGO
New Orleans
Branch
Nashville
Branch
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
V - RICHMOND
Pittsburgh
Branch
Cincinnati
Branch
Branch
IV - CLEVELAND
N.
Buffalo
FIRM
YORK
FEDERAL RESERVE
DISTRICT
II - NEW
'
I - BOSTON
X.
III - PHILADELPHIA,v
pany, and city of interlock(s) noted.
TABLE 3
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 50 RETAILING CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank of com
pany, and city of interlock(s) noted.
TABLE 4
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 50 TRANSPORTATION CONCERNS IN UNITED
STATES AS LISTED BY FORTUNE MAGAZINE, with rank' of com
76-066
0 -16
(Face p. 120) No.
pany, and city of interlock(s) noted.
76-OGG 0 - 1 0
(Kacc p. 120) No.
FIRM
(50) - GULF STATES
UTILITIES
N.
(37) - POTOMAC
ELECTRIC POWER
(40) - CONSOLIDATED
NATURAL GAS
(41) - PACIFIC LIGHTING
U
(14) - DUKE POWER
(24) - AMERICAN
NATURAL GAS
(47) - FLORIDA POWER
(3) - SOUTHERN CO.
(5) - PACIFIC GAS
& ELECTRIC
M
(32) - PEOPLES GAS
H
*
-
- ST. LOUIS
Branch
Branch
Denver
Branch
H
rm
Branch
Houston
FRANCISCO
Ei
0
:I
n
Branch
Seattle
Branch
Salt Lake City
Branch
Portland
Los Angeles
Branch
XII - SAN
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Omaha
City
CITY
X - KANSAS
Oklahoma
Branch
Branch
Helena
IX - MINNEAPOLIS
Memphis
Little Rock
Branch
1.......... ...
■Louisville
Branch
VIII
Branch
- CHICAGO
New Orleans
Branch
■Detroit
H
VII
Branch
Nashville
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
V - RICHMOND
Pittsburgh
Branch
Cincinnati
Branch
IV - CLEVELAND
III - PHILADELPHIA
Branch
YORK
■■■
FEDERAL RESERVE
DISTRICT
Buffalo
II - NEW
N.
N.
I - BOSTON
TABLE 5
FIRMS LISTED IN TOP 50 UTILITY CONCERNS IN UNITED STATEL
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
AS LISTED BY FORTUNE MAGAZINE, with rank of company, and
city of interlock(s) noted.
TA3LE 6 continued.
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 100 MULTI-BANK HOLDING COMPANY CON
CERNS IN UNITED STATES AS LISTED BY THE AMERICAN BANKER,
(1) - CITICORP
(2)
CHASE MANHATTEN
CORP.
-
(6) - WESTERN
BANCORP.
(8) - MARINE MIDLAND
BANKS, INC.
(10)
-
(11)
-
-
(15)
-
(18)
-
...
-
(24)
-
(28)
-
(32)
-
(38)
-
(42)
-
(44)
-
(47)
-
(48)
-
NORTHWEST BANCORP
M
SOUTHEAST
BANKING CORP.
■
IH
LINCOLN FIRST
BANKS, INC.
BARNETT BANKS
OF FLORIDA, INC.
CBT CORP.
0
j
FIRST fi. MERCHANTS
CORP.
■
“
■
■■
■
m2
.........
m
SUN BANKS OF
FLORIDA, INC.
FIRST TENN.
NAT. CORP.
o
i
FIRST AMTENN
CORP.
(62) - UNITED BANK
CORP. OF N.Y.
(63) - HUNTINGTON
BANCSHARES, INC.
n
\L
E3
0
H
Branch
Seattle
City
Salt Lake
Branch
i
Branch
Portland
Los. Angelos
Branch
FRANCISCO
XII - SAN
Branch
Houston
San Antonio
Branch
Branch
El Paso
XI - DALLAS
Branch
Omaha
Branch
Denver
...................
n
Eg]
ALABAMA
BANCORP.
City
CITY
X - KANSAS
lU
13121
FIRST CITY
BANCORP. OF TEX.
CITIZENS &
SOUTHERN N.B.
Oklahoma
Branch
Branch
:Helena
IX - MINNEAPOLIS
Branch
Memphis
Louisville
Branch
Little Rock
Branch
- ST. LOUIS
------ ------ -----
FIRST INTERNA
TIONAL BANCSHARES
(54) - FLORIDA NAT. BANKS
OF FLORIDA, INC.
-
VIII
El
NATIONAL
DETROIT CORP.
(51) - COMMERCE BANC
SHARES, INC.
(61)
Branch
------ -----
11
CLEVETRUST
CORP.
(21)
■Detroit
VII
------
(12) - FIRST BANK
SYSTEM, INC.
(13)
- CHICAGO
New Orleans
Branch
Nashville
Branch
Branch
Miami
Jacksonville
Branch
Birmingham
Branch
VI - ATLANTA
Charlotte
Branch
Baltimore
Branch
V - RICHMOND
Pittsburgh
Branch
Cincinnati
Branch
OS
i
n
IV - CLEVELAND
Buffalo
YORK
I - BOSTON
FIRM
Branch
FEDERAL RESERVE
DISTRICT
N.
II - NEW
\
III - PHILADELPHIA
with rank of company, and city of interlock(s) noted.
*
TABLE 6 continued.
INTERLOCKS OF FEDERAL RESERVE DISTRICT DIRECTORS WITH
FIRMS LISTED IN TOP 100 MULTI-BANK HOLDING COMPANY CON
CERNS IN UNITED STATES AS LISTED BY THE AMERICAN BANKER,
7G-0GG O - Ifi (l'ace p. 120} Nu.
10
with rank of company, and city of interlock(s) noted.
@FedFRASER