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COPY CUSHING & CUSEIMaA t t o r n e y s a t Law 1 Montgomery S t r e e t San F r a n c i s c o , C a l . Mayflower H o t e l W a s h i n g t o n , D. C. F e b r u a r y 1 4 , 1940 H o n o r a b l e P r e s t o n Delano C o m p t r o l l e r of the Currency W a s h i n g t o n , D. C . Dear S i r : ' T h i s has r e f e r e n c e t o y o u r comrrtunication t o t h e Bank: o f A m e r i c a N. T. & S. A. and i t s D i r e c t o r s d a t e d J a n u a r y 1 1 , 1940 i n w h i c h y o u announce a p r o c e e d i n g f o r t h e p u r p o s e s s p e c i f i e d i n y o u r c o m m u n i c a t i o n , on F e b r u a r y 14 b e f o r e H e n r y M. Bates as your special r e o r e s e n t a t i v e . We b e l i e v e y o u have been a d v i s e d by M r . E v e r a r d , t h e S e c r e t a r y o f t h e Bank, t h a t we a r e a u t h o r i z e d t o r e p r e s e n t t h e Bank and i t s D i r e c t o r s . 12 U . S . C . A . , S e c t i o n 484 p r o v i d e s t h a t "No bank s h a l l be s u b j e c t t o any v i s i t o r i a l powers o t h e r t h a n such as a r e a u t h o r i z e d by l a w * * * . " I n our o p i n i o n , the proposed proceeding i n v o l v e s t h e e x e r c i s e o f v i s i t o r i a l powers w h i c h a r e n o t a u t h o r i z e d by lav; and any d e c i s i o n o f y o u r r e p r e s e n t a t i v e w o u l d have no l e g a l v a l i d i t y and w o u l d b i n d n e i t h e r y o u n o r t h e Bank. One p u r p o s e o f t h e p r o c e e d i n g , as d e s c r i b e d i n y o u r caramunication, r e l a t e s t o the p o s s i b i l i t y o f a h e a r i n g b e f o r e t h e Board o f G o v e r n o r s o f t h e F e d e r a l Reserve System p u r s u a n t t o a s t a t u t e ( 1 2 U . S . C . A . , S e c t i o n 77) w h i c h p r o h i b i t s p u b l i c i t y o f any o r d e r o f t h e Board and f i n d i n g s o f f a c t UDon w h i c h i t i s based. The p u b l i c i t y t h a t has a l r e a d y been g i v e n -to y o u r n o t i c e o f t h e p r o p o s e d p r o c e e d i n g seems t o r u n c o u n t e r t o t h a t s t a t u t e . The Bank, o f c o u r s e , i s w i l l i n g t o g i v e you any i n f o n n a t i o n f o r w h i c h y o u may ask c o n c e r n i n g i t s b u s i n e s s o r a f f a i r s , b u t t h e Bank and i t s D i r e c t o r s v e r y r e s p e c t f u l l y d e c l i n e t o p a r t i c i p a t e i n t h i s proceeding. Yours v e r y respectfulLy, CUSHIImG 6c CUSHING By s / 0. K. Cushing COPY F e b r u a r y 16, 1940 0 . K . Cushing, Esq. Mayflower H o t s i , Washington, D.C. Dear Mr. Cushing: I A t h e C o m p t r o l l e r ' s absence I am acknowledging y o u r l e t t e r o f F e b r u a r y 1 4 , 1940 d e c l i n i n g on b e h a l f o f ' t h e Bank o f America N . T . & S.A. and i t s d i r e c t o r s t o p a r t i c i p a t e i n t h e p r o c e e d i n g b e f o r e Henry M. Bates as h i s r e p r e s e n t a t i v e , w h i c h was scheduled t o commence on F e b r u a r y 1 4 , 1S40 and w h i c h i s now under way. The reasons w h i c h you g i v e f o r n o t p a r t i c i p a t i n g a r e , b r i e f l y , f i r s t , t h a t the p r o c e e d i n g i n v o l v e s t h e e x e r c i s e o f v i s i t o r i a l powers n o t a u t h o r i z e d by l a w , and second, t h a t t h e p u b l i c i t y a l r e a d y g i v e n t h e p r o c e e d i n g r u n s counter t o law. As was p o i n t e d o u t i n the C o m p t r o l l e r ' s t e l e g r a m o f January £0, 1240 t o Mr. E v e r a r d , S e c r e t a r y o f the Board o f D i r e c t o r s o f t h e Bank, t h e purpose o f t h e p r o c e e d i n g was t o p r o v i d e the Bank and i t s d i r e c t o r s w i t h an o p p o r t u n i t y t o p r e s e n t b e f o r e a d i s i n t e r e s t e d t r i b u n a l any r e l e v a n t m a t t e r b e f o r e f i n a l a c t i o n i s taken by t h e C o m p t r o l l e r w i t h r e s p e c t t o s a n c t i o n s a u t h o r i z e d by l a w . I t seems obvious t h a t a p r o c e e d i n g o f t h i s c h a r a c t e r does n o t i n v o l v e i n any way t h e e x e r c i s e o f u n a u t h o r i z e d v i s i t o r i a l powers. The r e s p o n s i b i l i t y f o r d e c l i n i n g t o t a k e advantage o f t h e o p p o r t u n i t y t h u s o f f e r e d them i s one w h i c h must be borne by t h e Bank and i t s d i r e c t o r s . I am sure t h a t t h e C o m p t r o l l e r shares your r e g r e t w i t h r e f e r e n c e t o t h e p u b l i c i t y t h a t has been g i v e n i n t h e p r e s s t o t h e p r o c e e d i n g . However, I r e p e a t the assurance which was g i v e n you i n the C o m p t r o l l e r ' s o f f i c e t h a t no one connected w i t h t h e T r e a s u r y Department i s r e s p o n s i b l e i n any way f o r the p u b l i c i t y , and any i m p l i c a t i o n i n y o u r l e t t e r t o t h e c o n t r a r y i s i n f a c t w i t h o u t any f o u n d a t i o n whatsoever. Very s i n c e r e l y y o u r s , Deputy C o m p t r o l l e r o f t h e Currency NOT CC Cushing & C u s h i n g , 1 Montgomery S t . , San F r a n c i s c o , C a l i f o r n i a .
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