The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Movember 13, 1942, Dear A* Ft Thia i s i n reply t o your l e t t e r o f August 17, 1942, w i t h reference t o the action o f t h e Board o f Governors i n denying the a p p l i c a t i o n f o r the establishment o f branches a t Temple C i t y and Alhambra by the F i r s t Trust and Savings Bank o f Pasadena, which l a c o n t r o l l e d by Trsnsamerica Corporation through the ownership o f a m a j o r i t y o f the c a p i t a l *stock. l o u r l e t t e r mac acknowledged by Mr. Clayton under date o f August 2 1 r 1912, immediately a f t e r I had l e f t Washington f o r a few weeks* t r i p t o the Heat* Since r e t u r n i n g t o Washington, a great many pressing mattera, i n c l u d i n g war f i n a n c i n g , have taken up my e n t i r e tir*e* Consequently, I have only r e c e n t l y had an opportunity to consider w i t h Governor UcKee, t o whor; you r e f e r r e d i n your l e t t e r , and the o t h e r Members o f the Board and sorr.e o f I t s s t a f f c e r t a i n statement a and charges contained i n your l e t t e r , with which we cannot possibly agree* For eorce time p r i o r t o January, 1942, the Comptroller o f the Currency had repeatedly refused t o approve expansion i n the number o f branches o f important n a t i o n a l banks i n the Tranaaaerlca Corporation group* S h o r t l y before t h a t d a t e , Transanerica Corporation obtained c o n t r o l o f the F i r s t Trust and Savings Bank o f Pasadena* In January, 1942, t h a t bank wrote a l e t t e r t o the Pectoral Reserve Bank o f San Francisco, s t a t i n g , among other thlnge, t h a t i t had "under consideration t h e establishment o f several branch banks," Temple C i t y and Alhambra being mentioned s p e c i f i c a l l y . I n view o f previous dlacuaalona and understandings, the Board waa surprised t o l e a r n o f these plans f o r expansion* On Februa r y 1 4 , 1942, I t requested o f the Federal Reserve Bank t h a t the F i r s t Trust aad S&vinge Bank o f Pasadena be advleed, before i t took any f u r t h e r steps t o ooneuemate i t a plana, t h a t the Board had given c a r e f u l consideration t o t h e information submitted and t o other p e r t i n e n t information i n i t a f i l e s aad had reached the oonduaion t h a t i t should i\f. [ o v u u v ^ (0[u*UJtJb dAo j M r . A. P . G l a n n l n l Movoraber 1 3 , 1 9 4 2 . n o t approve t h e e s t a b l i s h m e n t o f t h e proposed branches on t h s b a s i s o f the information before i t * The Board a l s o c o n s i d e r e d i t d e s i r a b l e t o i n f o r m Transsmerica C o r p o r a t i o n d i r e c t l y o f t h e a c t i o n on t h e Pasadena a p p l i c a t i o n and t o express a g a i n t o i t s rnanageraent t h e B o a r d ' s v i e w s i n t h e r a t t e r o f e x p a n s i o n . A c c o r d i n g l y , on t h e came d a t e i t addressed a l e t t e r t o t h e C o r p o r a t i o n i n which i t was s t a t e d i •Should y o u r C o r p o r a t i o n hsve any p l a n s f o r t h e f u r t h e r expansion o f i t s i n t e r e s t s i n banks, e i t h e r d i r e c t l y o r i n d i r e c t l y , t h r o u g h t h e mechanism o f e x t e n d i n g l o s n s t o o t h e r * f o r t h e purpose o f a c q u i r i n g bank s t o c k , o r - i n any o t h e r wanner, you a r e r e q u e s t e d t o a d v i s e t h e Board t h r o u g h t h e F e d e r a l Reserve Bsnk o f Sen F r a n c i s c o b e f o r e any such p l a n s a r e consummated. "The Board 1 s* p o s i t i o n i n t h i s - o a t t e r i e i n accord w i t h t h e p o l i d y , upon which t h e r e i s unanimous a g r e e ment b y t h e B o a r d , t h e Co i p t r o l l e r o f t h e C u r r e n c y , and t h e Federal Deposit Insurance Corporation, t h a t the F e d e r a l bank s u p e r v i s o r y agencies s h o u l d , under e x i s t i n g circumstances, decline permission f o r the 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 sny s d d l t i o n s l b a n k i n g 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 Transsmerica C o r p o r a t i o n , Bank o f America N. T . & 5* A«, o r any o t h e r u n i t o f t h e T r s n s s a e r l c s group* " P l e a s e see t h a t a l l persons i n t h e T r a n s a n e r l c s group who may be concerned w i t h t h i s p o l i c y a r e a d v i s e d accordingly." N e v e r t h e l e s s , t h e F i r s t T r u s t and Savings Bank o f Pasadena t h e r e a f t e r c o n t i n u e d i t s p l a n s sad on F e b r u a r y 2 8 , 1 9 4 * , e n t e r e d i n t o a c o n t r a c t t o assume d e p o s i t s and t a k e o v e r a s s e t s o f t h e Temple C i t y R a t i o n a l Bank, w i t h a v i e w t o o p e r a t i n g a branch a t t h a t l o c a t i o n . On June 1 0 , 1 9 4 2 , t h e bsnk f i l e d a f o r m a l a p p l i c a t i o n f o r t h e e s t a b l i s h ment o f brsnches s t Temple C i t y and Alhambra. On J u l y 1 0 , 1942, t h e Board d e c l i n e d t h i s a p p l i c a t i o n and r e q u e s t e d t h a t t h e bsnk and T r a n s s m e r i c a C o r p o r a t i o n be a d v i s e d a c c o r d i n g l y . I t i s our understanding t h a t the p o s i t i o n o f the Comptroller o f t h e C u r r e n c y i n t h i s m a t t e r , r e f e r r e d t o above, remains t h e same* Ve a r e a d v i s e d t h a t t h e F e d e r a l D e p o s i t I n s u r a n c e C o r p o r a t i o n hsa Mr. A. P. Giannini 3- November 13, 1942. indicated i t a unwillingness under e x i s t i n g circumstances t o insure any newly organised State nonmember bank i n which Traneaaerica Corporation has a substantial i n t e r e s t or any bank i n the group which may withdraw from the Federal Reserve System. As f o r the Board9 a p o s i t i o n , u n t i l i t i a a a t i s f l e d t h a t the f i n a n c i a l p o l l c l c c pursued by Transamerica Corporation and i t s a f f i l i a t e d i n s t i t u t i o n s are cons i s t e n t with the public i n t e r e s t , i t w i l l consider aa unsound t h e i r e f f o r t s t o continue an expansion program by whatever means, including the organization of new State banks, the acquisition o f control of e x i s t i n g State banks, o r the conversion o f national banks to State banks, and the establishment o f branches thereof* I n addition, where the change or conversion from one j u r i s d i c t i o n t o another i s f o r the, purpose o f avoiding proper r e s t r i c t i o n s or requirements of other Governmental agencies, the Board does not propose to be used aa a means o f avoiding auch r e s t r i c t i o n s or requirements, considered by the Board to be j u s t i f i e d under e x i s t i n g circumstances. The foregoing w i l l i n d i c a t e some o f the more important considerations underlying the Board1 a poeitlon i n t h i s matter. I n view o f our previous discussions with representatives o f your organisations, i t i a f e l t unnecessary t o go I n t o f u r t h e r d e t a i l * However, aa you w e l l know, whenever you or any of your associates f e e l that you have a j u s t grievance to take up with the Board, or t h a t you have some a d d i t i o n a l information t o aesiat the Board i n I t s d e l i b e r a t i o n s , you are always welcome to c a l l i n person f o r a more complete and frank discussion than l a p r a c t i c a b l e through correspondence* Sincerely yours, M* S* Xccles, Chairman* Mr. A* P* G i a n n i n i , Chairman o f the Board, Tranaamerica Corporation, San Franciaoe, C a l i f o r n i a . LCtjf
