The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
D £ A [ D r a f t o f 8fcJW — 1 0 / 1 4 / 4 * ) F T L m r Mr. 0Sann*niJ t h i s r e f e r ® f u r t h e r t o your l e t t e r o f August , 1942, la which you request i n f o r m a t i o n ae to t h e reason f o r the B o a r d ' s a c t i o n i n d e c l i n i n g t o .grant t h e a p p l i c a t i o n o f F i r s t T r u s t and Savings Bank o f Pasadena f o r p e r m i s s i o n t o e s t a b l i s h branches a t Tsnple C i t y and Alhambra, California* I n acting, upon an a p p l i c a t i o n o f a &exb«r bank f o r p e r m i s s i o n t o e s t a b l i s h branches, t h e Board must a c t I n t h e p u b l i c in- t e r e s t and approve t h e a p p l i c a t i o n o n l y I f I t i s s a t i s f i e d by the app l i c a n t t h a t t h e e s t a b l i s h m e n t o f t h e tranche® s p o i l e d f o r would be I n the p u b l i c I n t e r e s t . I f t h e a p p l i c a n t bank l a a somber o f a h o l d i n g company grou? a t h e Board must t a k e I n t o c o n s i d e r a t i o n not o n l y t h e e f f e c t o f i t s a c t i o s on t h e bank i t s e l f but a l s o t h e e f f e c t on t h e group o f which t h e bank i s a member. We have b e l i e v e d t h a t | i s v i e w o f o u r a m o r o u s conference* w i t h you and o t h e r r e p r e s e n t a t i v e s o f Transaseerica C o r p o r a t i o n d u r i n g t h e past s e v e r a l y e a r s i t should be apparent t o you why t h e Board has sot bees s a t i s f i e d t h a t I t would be warranted i n t a k i n g any a c t i o n which would fast 1 t t s t n t h e f u r t h e r expansion o f T r a n a a a e r i c a Corporation. W i t h o u t r e f e r r i n g t o a l l o f t h e m a t t e r s t h a t have been d i s cussed f r o m t i n * t o t i m e r e l a t i n g t o ?rans«merica C o r p o r a t i o n , I t may be a p p r o p r i a t e t o m e n t i o n a few o f t h e more I m p o r t a n t ones* Yea t s l l l r e c a l l t h a t tfcs Bo<*rd was w i l l i n g t o g r a n t a gene r a l voting permit to Trans*merica Corporation r n l y a f t e r prolonged d i s c u s s i o n o f what r e q u i r e m e n t s s h o u l d be scace o f t h e C o r p o r a t i o n and what a c t i o n s h o u l d be t a k e n t o c o r r e c t u n s a t i s f a c t o r y e x i s t i n g i n the C o r p o r a t i o n a t t h a t time. t h a n t h e Comptroller o f tfar Currency f a i t sary f o r the l a r g e s t conditions t h s t i t w»e neces- bank i n t h e T r a x ^ & & « r i c a group to t a k e steps to e f f e c t o b v i o u s l y necessary corrections, i t was c l e a r t o us t h a t management o f Traneamericfc C o r p o r a t i o n ma© cot w l l l i C f the t o t a k e the necessary steps to e f f e c t such c o r r e c t i o n * i n Its? s u b s i d i a r y bank* I t waa e q u a l l y c l e a r t h a t T r a n a a a e r i c a C o r p o r a t i o n was not i n financial c o n d i t i o n t o r e a d e r the necessary a s s i s t a n c e t o t h i s r.*rber o f group. ite A f t e r prolonged e f f o r t s t o induce the management t o e f f e c t corrections, the f e d e r a l s u p e r v i s o r y agencies f i n a l l y agreed t o a program o f improvement over a p e r i o d o f y e a r s . Saretdlnf; t h i s urogram over a p e r i o d o f y e a r s waa accepted by t h e s u p e r v i s o r y authorities because i t was obvious t h a t the e l i m i n a t i o n s and o t h e r correctlone would not o r could not be made I n t h e i r e n t i r e t y e t the t l * e . t h e record c l e a r l y i n d i c a t e s t h a t teeny o f the u n s s t i s f a c t o r y a s s e t s and o t h e r s i t u a t i o n s i n t h e l a r g e s t bank i n t h s group r e s u l t e d from t h e p o l i c i e s and p r a c t i c e s o f t h e management d u r i n g I t s expaneloa program. rapid Since the beginning o f our n e g o t i a t i o n s w i t h respect t o t h e c o r r e c t i o n s i n t h i s bank, I t has been our view t h a t s u p e r v i s o r y agencies would be remlea i n t h e dieoharge o f their the responsibilities i f they a u t h o r i s e d t h e continued expansion o f t h e T r a n s f t t i e r i c * group w i t h o u t t h e C o r p o r a t i o n ' s being i n p o s i t i o n t o render w h e t e r e r of might be necessary t o any o f ?ts banks i n t i . * e s stress. P r i o r t o A p r i l 1941, as you Know, t h e C o m p t r o l l e r o f the Currency had placed r e s t r i c t i o n s upon f u r t h e r expansion of branch banking a c t i v i t i e s o f n a t i o n a l banks i n the Tr» nearer i c a group. In t h e l a t t e r p a r t o f A ^ r i l 1941, a p p l i c a t i o n was rede t o us f o r adm i s s i o n t o membership o f a S t a t e bask t h . t would r e s u l t fro® t h e a c q u i s i t i o n by your C o r p o r a t i o n o f the T e s t i s C i t y n a t i o n a l Bank, Temple C i t y , C a l i f o r n i a . F e e l i n g th*«t t h i s was a p l a n whereby T r a n e - amerlct; C o r p o r a t i o n could a v o i d the r e s t r i c t i o n s o f the C o m p t r o l l e r o f t h e Currency upon f u r t h e r expansion o f brsnch banking, t h e Board d e c l i n e d t o approve membership o f the proposed S t a t e bank. At t h a t t i £ « o u r views were a g a i n f u l l y e x p l a i n e d i n conferences w i t h your son k a r i o , end we understood t h a t p l a n s t o t a k e over t h e Temple C i t y K a t l o n a l Bank would be abandoned and t h a t T r a n a a x e r i c a would n o t a t t e m p t t o expand i t s c o n t r o l over ben^inf, Corporation facilities. Bowever, we l e a r n e d t h a t s h o r t l y t h e r e a f t e r Transsmerica C o r p o r a t i o n purchased most o f the s t o c k o f t h e Temple C i t y N a t i o n a l Bank. Sub- s e q u e n t l y , Transamerlca C o r p o r a t i o n o b t a i n e d c o n t r o l o f a m a j o r i t y o f t h e s t o c k o f t h e F i r s t T r u s t and Savings Bank o f Pasadena; end it a l s o has appeared i n c o n n e c t i o n w i t h an a p p l i c a t i o n f o r seirberg&ip o f a new S t a t e bank a t ^akewood V i l l a g e , C a l i f o r n i a , t h a t t h e T r a n s ameriea group was I n t e r e s t e d , d i r e c t l y o r i n d i r e c t l y , reepeets l a the organisation o f t h i s bask. i n several -4- Tb a l l t h e c i r c u m s t a n c e s , I t has appeared ( h a t t h e T r a n a a s e r l c a group I s i n t e n t on expansion o f i t s banking f a c i l i t i e s with- out u n d e r t a k i n g t o s a t i s f y t h e r e s p o n s i b l e f e d e r a l s u p e r v i s o r y aut h o r i t i e s t h a t such expansion o f t h e group i s j u s t i f i e d i n t h e p u b l i c Interest. The Board f e e l s t h a t you have been f u l l y advised o f t h e reason* f o r i t s p o s i t i o n , which i s concurred i n by the C o & p t e o l l e r o f t h e Currency and the FDIC, t h a t under e x i s t i n g circumstances each o f these agencies Should d e c l i n e p e r m i s s i o n f o r t h e a c q u i s i t i o n , d i r e c t l y o r i n d i r e c t l y , o f any a d d i t i o n a l banking o f f i c e s o r any s u b s t a n t i a l i n t e r e s t t h e r e i n by t h e T r a n s a s e r l c a group. Very t r u l y y o u r s , Chester M o r r i l l , Secretary* SXW/iag 10/14/4S
@FedFRASER