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EXHIBIT Feb. 1 4 , 1942 Transamerica Corporation, San Francisco, C a l i f o r n i a . Gentlemen: The Board has r e c e n t l y received through the Federal Reserve Bank of San Francisco a copy of a l e t t e r from a member bank, c o n t r o l o f which was r e c e n t l y acquired by your Corpor a t i o n , s t a t i n g t h a t the member bank has under consideration the establishment of several branch banks and t h a t the l e t t e r i s w r i t t e n f o r the purpose of securing the necessary approval from the Federal Reserve Board. The member bank's l e t t e r set f o r t h c e r t a i n f a c t s w i t h respect t o proposed branches at two l o c a t i o n s and stated t h a t the l e t t e r would be supplemented by such formal a p p l i c a t i o n s as Federal Reserve r e g u l a t i o n s may require. The Board gave c a r e f u l consideration t o the informat i o n submitted and t o other p e r t i n e n t information i n i t s f i l e s and reached the conclusion t h a t i t should not approve the establishment of the proposed branches on the basis o f the information now before i t . The Federal Reserve Bank of San Francisco was requested t o advise the member bank accordingly. Should your Corporation have any plans f o r the f u r t h e r expansion of 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 or i n d i r e c t l y , through the mechanism of extending loans t o others f o r the purpose of a c q u i r i n g bank stock, or i n any other manner, you are requested t o advise the Board through the Federal Reserve Bank of San Francisco before any such plans are consummated. The Board's p o s i t i o n i n t h i s matter i s i n accord w i t h the p o l i c y , ipon which there i s unanimous agreement by the Board, the Comptroller of the Currency, and the Federal I EXHIBIT I - Page 2 Traasaiaeri ca C o r p o r a t i o n -2- Deposit Insurance Corporation, t h a t the Federal hank superv i s o r y agencies should, under e x i s t i n g circumstances, dec l i n e permission f o r the a c q u i s i t i o n d i r e c t l y or i n d i r e c t l y of any a d d i t i o n a l banking o f f i c e s or 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 Transamerica Corporation, Bank of America N. T. & S. A . , or any other u n i t o f the Transamerica group. Please see t h a t a l l persons i n the Transamerica group who may be concerned w i t h t h i s p o l i c y are advised accordingly. Very t r u l y yours, (Signed) CHESTER MORRILL Chester M o r r i l l , Secretary. BMff:CE0:edn cc: Honorable Preston Delano, Comptroller of the Currency Honorable Leo T# Crowley, Chairman, F # 13. C# EXHIBIT I I copy-get TRMSAMERICA CORPORATION Montgomery Street at Columbus Avenue San Francisco, C a l i f o r n i a San Francisco, C a l i f o r n i a , March 17, 1942, Board of Governors of the Federal Reserve System, Washington, D. C. Gentlemen: We have c a r e f u l l y considered, and have reviewed the statutes i n connection w i t h , your l e t t e r of February 14th forwarded t o us by the Federal Reserve Bank of San Francisco i n a l e t t e r dated February 21, 1942* We note that i t i s desired that the Board of Governors be advised of any plans of t h i s corporation to expand i t s i n t e r e s t s i n banks i n any manner before such plans are consummated. We have always furnished any information requested respecting o\ar investments and have permitted the examinations and have r e g u l a r l y rendered the reports required by law, but we are unable t o f i n d any requirement of law or r e g u l a t i o n that information regarding our plans to acquire stock be communicated t o the Board of Governors before any such plans are consummated. I t does not seem t o us that i t would be p r a c t i c a l t o do so. The a c q u i s i t i o n of i n t e r e s t s i n banks, whether i t be by the purchase of stock or otherwise, appears to be a matter w i t h i n the r e s p o n s i b i l i t y and d i s c r e t i o n of the d i r e c t o r s and management of the corporation. I t i s believed t h a t the d i r e c t o r s and management could not properly surrender t h a t r e s p o n s i b i l i t y because t o do so would be t o f a i l i n t h e i r o b l i g a t i o n to stockholders to conduct the a f f a i r s of the corporation according to t h e i r best judgment. We note also the statement o f the Board of Governors t h a t " t h e Board's p o s i t i o n i n t h i s matter i s i n accord w i t h the p o l i c y upon which there i s unanimous agreement by the Board, the Comptroller of the Currency and the Federal Deposit Insurance Corporation, that the Federal bank superv i s o r y agencies should, 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 or i n d i r e c t l y of any a d d i t i o n a l banking o f f i c e s or any substantial i n t e r e s t t h e r e i n by Transamerica Corporation, Bank of America N. T. & S. A. or any other u n i t of the Transamerica group. n While t h i s corporation i s not i t s e l f engaged i n the banking business and therefore i s not d i r e c t l y concerned w i t h the establishment of add i t i o n a l banking o f f i c e s , i t cannot, on the basis of i t s present understandi n g of the s t a t u t e s , accept such a r u l i n g on behalf of i t s e l f or any bank EXHIBIT 711 - Pag© 3 Board o f Governors of the Federal Reserve System. -2- March 17, 1942. i n which i t owns any i n t e r e s t . We are one of a considerable number of bank h o l d i n g companies doing business subject t o laws enacted by Congress which were intended t o have uniform a p p l i c a t i o n . Our present d i s p o s i t i o n would be not t o object i f Congress should determine t o impose the death sentence on bank h o l d i n g companies, even though i t would be necessary t o us t o readjust our a f f a i r s i n accordance w i t h the law. We would even be w i l l i n g t o give consideration t o some general plan which would contemplate t h a t there would be no a d d i t i o n a l branches granted t o any bank f o r the duration of the war. I n the meantime, however, we believe t h a t we are e n t i t l e d t o aniare assured f a i r and i m p a r t i a l treatment, and we cannot acquiesce i n special treatment which appears t o be contrary t o the p o l i c y of the law as i t now e x i s t s . Federal s t a t u t e s provide t h a t n a t i o n a l banks and state member banks are e n t i t l e d t o e s t a b l i s h new branches when the law of the s t a t e grants the r i g h t , subject only t o the approval o f the p a r t i c u l a r supervisory agency t o which the a p p l i c a t i o n i s required t o be made and the statutes prescribe the matters t o be considered upon each such a p p l i c a t i o n . I t i s d i f f i c u l t t o understand upon what basis the Board of Governors or any group of Federal agencies can s t a t e i n advance of any a p p l i c a t i o n t h a t as t o c e r t a i n banks i t w i l l refuse t o e n t e r t a i n an a p p l i c a t i o n t o e s t a b l i s h branches. I t seems t o us t h a t the s t a t u t e s r e q u i r e the respective Federal agencies t o consider upon i t s m e r i t s any a p p l i c a t i o n made and there does not seem t o be any basis f o r the advance r e j e c t i o n of any a p p l i c a t i o n f o r branches by any bank f o r the sole reason t h a t t h i s corporation has an i n t e r e s t i n i t . Respectfully yours, (Signed) W. L . ANDREWS, W. L . Andrews, Vice President and Treasurer. COPr-get EXHIBIT I I I TRMSAMERICA CORPORATION Montgomery Street at Columbus Avenue San Francisco, C a l i f o r n i a August 8, 1942. Board o f Governors o f the Federal Reserve System, Washington, B. C. Gentlemen: We have received a l e t t e r dated J u l y 15, 1942, from the Federal Reserve Bank of San Francisco, i n which i t i s stated t h a t the Board o f Governors of the Federal Reserve System has determined t o deny the a p p l i c a t i o n o f the F i r s t Trust and Savings Bank of Pasadena t o e s t a b l i s h branches at Temple C i t y and Alhambra f o r the reason t h a t i t has come t o the conclusion t h a t circumstances do not j u s t i f y any change i n the p o l i c y r e f e r r e d t o i n i t s l e t t e r of February 14, 1942, t o Transamerica Corporation. I n t h a t l e t t e r the Board o f Governors stated that i n conjunction w i t h the Compt r o l l e r of the Currency and the Federal Deposit Insurance Corporat i o n i t had determined upon a p o l i c y t o decline permission f o r the a c q u i s i t i o n of any a d d i t i o n a l banking o f f i c e s by Transamerica Corp o r a t i o n or by any bank i n which Transamerica Corporation was i n terested. As we stated i n r e p l y t o the previous l e t t e r from the Board of Governors, there does not appear t o us t o be any proper basis i n law upon which the Board o f Governors can r e j e c t an a p p l i cation f o r branches by any bank f o r the sole reason t h a t t h i s corp o r a t i o n has an i n t e r e s t i n i t . This seems t o be p a r t i c u l a r l y t r u e i n the case of the F i r s t Trust and Savings Bank of Pasadena, i n which t h i s corporation owns but 60 per cent of the outstanding stock. We believe t h a t the reason assigned i s not a l a w f u l one as a basis f o r the r e j e c t i o n of an a p p l i c a t i o n and f o r t h a t reason i s capricious and d i s c r i m i n a t o r y and i s p r e j u d i c i a l not only t o the F i r s t Trust and Savings Bank of Pasadena but also t o the shareholders of t h a t bank, whether they be Transamerica Corporation or the owners o f the m i n o r i t y i n t e r e s t i n the bank. Yours very t r u l y , (Signed) W. L . ANDREWS W. L . Andrews, Yice President and Treasurer. EXHIBIT711-Pag©3 January 3, 1945 Mr. H. N. Mangels, T i c e President, Federal Reserve Bank of San Francisco, San Francisco 20 , C a l i f o r n i a . Dear Mr. Mangels: This i s i n response t o your l e t t e r o f December 5 , 1944 and t o your subsequent telegram of December 21, 1944, both having t o do w i t h a proposed purchase by F i r s t Trust and Savings Bank o f Pasadena o f the banking premises, f u r n i t u r e and f i x t u r e s o f F i r s t National Bank of Lamanda Park. I n your l e t t e r o f December 5 t h there was enclosed a l e t t e r from F i r s t Trust and Savings Bank o f Pasadena, dated December 1 , 1944, which stated t h a t the matter was being submitted f o r consideration, i n accordance w i t h A r t i c l e 8 of the Conditions of Membership, and t h a t the proposed purchase p r i c e was f36,794»59* Your wire of December 21, 1944, i n d i c a t e s a possible r e d u c t i o n i n the purchase p r i c e t o $20,500 of which $16,500 i s the purchase p r i c e of the land and b u i l d i n g . Under date o f February 14, 1942, F i r s t Trust and Savings Bank o f Pasadena, which was then seeking t o e s t a b l i s h a branch at Alhambra and t o acquire the assets of the Temple C i t y National Bank and e s t a b l i s h a branch at t h a t p o i n t , was advised t h a t the Board had concluded t h a t i t should not Approve the establishment of the proposed branches. At the same time the Board communicated w i t h Transamerica Corporation, since i t owned a l a r g e m a j o r i t y of the shares of both o f these banks, s t a t i n g i t s o p p o s i t i o n t o t h i s and any f u r t h e r expansion of Transamerica Corporation, under e x i s t i n g circumstances, and requesting t h a t Transamerica Corporation advise the Board before consummating any plans f o r the f u r t h e r expansion of i t s i n t e r e s t i n basks. Nevertheless, Transamerica Corporation, without any p r i o r c o n s u l t a t i o n w i t h the Board, subsequently acquired the F i r s t National Bank o f Lamanda Park. L a t e r , without having a perrait t o vote the stock of e i t h e r of these member banks, and without having applied t o the Board of Governors f o r such v o t i n g permit or otherwise advising the Board of the proposed a c t i o n , the Lamanda Park bank was taken over by the Pasadena bank by a sale of assets, excepting the b u i l d i n g and f i x t u r e s . EXHIBIT I V - Page 2 M r . H . N. Mangels - 2 - The sale now proposed involves a t r a n s f e r o f the b u i l d i n g and f i x t u r e s from F i r s t National Bank of Lamanda Park, i n l i q u i d a t i o n , almost w h o l l y owned by Transamerica Corporation, t o F i r s t Trust and Savings Bank of Pasadena, the stock o f which i s also a l most w h o l l y , i f not e n t i r e l y , owned by Transamerica Corporation. Moreover, since Transamerica Corporation has not obtained a v o t i n g permit t o vote the shares i t owns i n F i r s t Trust and Savings Bank o f Pasadena, the r e s u l t i s t h a t the stockholder of a l l or almost a l l of the Pasadena bank f s stock i s l e g a l l y d i s q u a l i f i e d t o take any a c t i o n as stockholder other than t o put the bank i n v o l u n t a r y l i q u i d a t i o n , although i t appears t h a t , notwithstanding the absence of any such v o t i n g p e r m i t , Transamerica Corporation undertook t o take a c t i o n as a stockholder o f F i r s t Trust and Savings Bank o f Pasadena apparently t o v a l i d a t e , under C a l i f o r n i a law, i t s purchase of the assets o f F i r s t National Bank o f Lamanda Park. I n these circumstances, the Board does not approve the t r a n s a c t i o n . The Board w i l l appreciate your advising F i r s t Trust and Savings Bank o f Pasadena and Transamerica Corporation of the Board*s conclusion, and copies of t h i s l e t t e r are enclosed f o r t h a t purpose. Very t r u l y yours, (Signed) S. R. Carpenter S. R. Carpenter, Assistant Secretary. JPD:CEC:msk cc: F i r s t Trust and Savings Bank of Pasadena) Inclosed w i t h o r i g i n a l Transamerica Corporation ) f o r t r a n s m i t t a l by F.R. Bank Mr. Neth L . Leachman, Special Counsel copy-get TELEGRAM EXHIBIT 1 BOARD OF GOVERNORS o f the FEDERAL RESERVE STSTM Leased ^ i x e Service WASHINGTON May 28, 1943. Day - San Francisco The Board has received r e p o r t s from various sources t h a t the management of Transamerica Corporation has authorized and i s sponsoring a campaign t o acquire 124,000 o f a t o t a l o f 250,000 shares o f Citizens N a t i o n a l Trust & Savings Bank o f Los Angeles. This campaign, as r e - ported, bears a marked resemblance t o previous campaigns conducted by the Corporation and p a r t i c u l a r l y to the campaign which r e s u l t e d f i n a l l y i n the Corporation a c q u i r i n g c o n t r o l o f F i r s t Trust & Savings Bank, Pasadena, C a l i f o r n i a . The management of the Corporation i s already aware of the Board 1 s p o s i t i o n w i t h respect t o the expansion p o l i c y pursued by the Corporation. I f the Los Angeles case should t u r n out as the Pasadena case d i d the Board sooner or l a t e r would be c a l l e d upon t o take some k i n d of a c t i o n i n t h a t case. Therefore, the Board i n f a i r n e s s t o a l l con- cerned wishes once more t o b r i n g t o the a t t e n t i o n of the Corporation the Board's opposition t o such expansion p o l i c y . I n a d d i t i o n , information received by the Board o f Governors i n d i c a t e s t h a t since J u l y 1941, the expansion p o l i c y pursued by the Corporation has extended i n t o the i n d u s t r i a l f i e l d . Since t h a t date i t has acquired a l l o f the stock o f Premier Insurance Company representing a d o l l a r investment of approximately #1,500,000; the c o n t r o l l i n g i n t e r e s t i n Axton Fisher Tobacco Company representing a d o l l a r investment of approximately $2,300,000; s u b s t a n t i a l l y a l l of Adel P r e c i s i o n Products COPY-get TELEGRAM im^^um EXHIBIT V - Page 2 BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM Leased Wire Service WASHINGTON Day (Page 2) Corporation representing a d o l l a r investment of approximately Si,350,000; s u b s t a n t i a l l y a l l of Aerco Corporation representing a d o l l a r investment of approximately #290,000; and a l l of Enterprise Engine and Foundry Company representing a d o l l a r investment of approximately $379,000, During t h i s same period d i r e c t and i n t e r - c o r p o r a t e indebtedness of Transamerica Corp o r a t i o n and i t s s u b s i d i a r i e s has continued u n l i q u i d a t e d i n s u b s t a n t i a l amounts. Permission o f the Board f o r the changes i n the character of Trans- america Corporation's assets brought about tiirough the above mentioned acq u i s i t i o n s was n e i t h e r sought nor given. The expansion p o l i c y pursued by the Corporation and the developments i n connection t h e r e w i t h which have been commented upon i n t h i s wire have raised the question i n the minds of the Board as t o whether the Corporation has v i o l a t e d the agreement which i t entered i n t o w i t h the Board on A p r i l 28, 1937, and p a r t i c u l a r l y paragraph 5 thereof reading as f o l l o w s : w ^hat the management o f the undersigned w i l l be, and the undersigned w i l l take such action w i t h i n i t s power as may be necessary t o cause the management of each of i t s subsidiaries t o be, conducted under sound p o l i c i e s governing i t s f i n a n c i a l and other operations, i n c l u d i n g s t a t e ments issued r e l a t i n g t h e r e t o ; t h a t the undersigned w i l l maintain a sound f i n a n c i a l c o n d i t i o n ; t h a t i t s net c a p i t a l and surplus funds s h a l l be adequate i n r e l a t i o n t o the character and condition of i t s assets and t o i t s l i a b i l i t i e s and other corporate r e s p o n s i b i l i t i e s ; and t h a t , except w i t h the permission o f the Board of Governors o f the Federal Reserve System, i t s h a l l not cause or p e m i t any change t o be made i n the general character of i t s business or investments'j* Therefore, the Board, before reaching a conclusion as t o the course of a c t i o n t o be pursued i n these circumstances, would be glad t o receive any expression of view which the Corporation may wish t o o f f e r on the question whether the Corporation has v i o l a t e d the terms of i t s agreement. TELEGRAM EXHIBIT V - Page 3 BOARD OF GOVERNORS o f the FEDERAL RESERVE SYSTEM Leased Wire Service WASHINGTON Day - (Page 3) Please convey the contents of t h i s wire t o Transamerica Corporation w i t h the statement t h a t the Board w i l l appreciate an e a r l y r e p l y through the Federal Reserve Bank o f San Francisco. Morrill. CC: Hon. Preston Delano Comptroller of the Currency Hon. Leo T# Crowley, Chairman, Federal Deposit Insurance Corporation SRC:gg Copy-vel EXHIBIT V I - Summary o f statement o f p o l i c y A p r i l 6, 1943, by Governor John K. McKee ( w i t h whom was Mr. J . P. B r e i b e l b i s , General Attorney) of the Board o f Governors o f the Federal Reserve System t o Mr. Charles W. C o l l i n s , Counsel f o r Transamerica Corporation and Bank of America, N. T . & S. A. I. 1. TRANSAMERICA CORPORATION That Transamerica Corporation agree t o cease t o acquire holdings o f stock i n a d d i t i o n a l banks except upon the recommendation and approval of the Board o f Governors o f the Federal Reserve System. 2. That w i t h i n a reasonable time Transamerica Corporation w i l l e l i m i n a t e or segregate i t s investments i n the r e c e n t l y acquired corporations; t h a t i n t h i s procedure due allowances s h a l l be made f o r questions o f t a x adjustment and the possible presence of a forced market which might involve the s a c r i f i c e of stockholder f s r i g h t s and i n t e r e s t s . 3. That Transamerica Corporation i n c o n t r a c t u a l procedure w i t h the appropriate parent bank, would be permitted t o dispose of each of i t s c o n t r o l l e d banks i n order t h a t such banks might be i n t e g r a t e d i n t o the branch banking systems i n Oregon, C a l i f o r n i a , and Nevada; t h a t i n a d d i t i o n the e x i s t i n g commitments of Transamerica Corporation t o acquire other banks would be permitted l i k e w i s e t o be so i n t e g r a t e d . (Note: I t appeared t h a t the question o f these commitments needed f u r t h e r discussion and c l a r i f i c a t i o n . Governor McKee said ordinary commitments would be recognized but i f there were undisclosed commitments o f large proportions he thought i t would be impossible f o r him t o convince the other two agencies t o agree t o l e t them i n , p a r t i c u l a r l y i f i t involved only a question o f o r a l comr mitments. These commitments should be l i s t e d i n the r e s o l u t i o n f o r purposes of indentification. (sic) Governor McKee said he expected t o have a very d i f f i c u l t time i n h i s attempt t o persuade the Treasury and Crowley t o agree t o the conversion of the Transamerica banks i n t o branches and the burden o f h i s e f f o r t s would be g r e a t l y increased i f he had t o d e a l , i n h i s discussion w i t h the other agencies, w i t h new and important banking s i t u a t i o n s w i t h which they were not now f a m i l i a r . ) 4. There w i l l be no necessity f o r negotiations w i t h the other bank h o l d i n g companies. TJpon the acceptance by Transamerica Corporation and Bank - 2 - EXHIBIT V I - page 2 o f America o f the p o l i c y h e r e i n enunciated by the Board, and upon i t s adoption by the Treasury and the Federal Deposit Insurance Corporation, the Board o f Governors a c t i n g i n i t s j u r i s d i c t i o n a l capacity over bank h o l d i n g companies, w i l l issue a p u b l i c freeze p o l i c y a p p l i c a b l e t o a l l bank h o l d i n g conq?anies, (sic) which p o l i c y w i l l be i n d e n t i c a V w i t h t h a t h e r e i n described. 5. That upon the agreement by Transamerica Corporation and Bank o f America t o the p o l i c y d e s i r e d by the Board o f Governors, t h e n c e f o r t h the Board would proceed t o attempt t o persuade the Treasury (Comptroller o f the Currency) and the Federal Deposit Insurance Corporation t o adopt i t , thus e s t a b l i s h i n g i t as a unanimous p o l i c y o f the t h r e e bank s u p e r v i s i n g agencies. II. 1. BAKE OF AMERICA NATIONAL TRIET AND SAVINGS ASSOCIATION While the Board o f Governors concedes the l e g a l r i g h t o f the Bank t o acquire the assets and t o assume the l i a b i l i t i e s o f e x i s t i n g banks s i t u a t e d i n t h e same place where the Bank has an o f f i c e , t h e Board d e s i r e s t h a t the Bank i n c l u d e a l l such procedures i n the freeze p o l i c y h e r e i n discussed; t h a t i s t o say, t h a t the Bank should adopt a r e s o l u t i o n i n which i t would agree not t o acquire the assets o r assume the l i a b i l i t i e s o f any o t h e r bank except upon the recommendation and approval o f the Comptroller of the Currency. 2. That as t o the question o f new branches by Bank o f America based upon a p p l i c a t i o n s h e r e t o f o r e c a t e g o r i c a l l y denied, the o f f i c e o f the Comptroller o f the Currency would be the d e c i d i n g f a c t o r . I I I . TERM OF POLICT The freeze p o l i c y hereinabove described i s not intended t o have any t e r m i n a t i o n but i s a continuous p o l i c y subject t o m o d i f i c a t i o n s or r e p e a l a t the d i s c r e t i o n o f the a p p r o p r i a t e s u p e r v i s i n g a u t h o r i t i e s . Copy-vl EXHIBIT711-Pag©3 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION A. P. Giannini Chairman o f the Board o f D i r e c t o r s San Francisco, C a l i f o r n i a A p r i l 13, 1943. Mr. Charles W. C o l l i n s , Attorney-at-Law, N a t i o n a l Press B u i l d i n g , Washington, D. C. Dear Charlie: Tour l e t t e r o f A p r i l 7, which a r r i v e d here on Saturday, the 10th, and your telegram o f A p r i l 12 are strong i n d i c a t i o n s o f the p r a c t i c a l i a p o s s i b i l i t y o f c a r r y i n g out the program which was agreed t o i n the f r i e n d l y conference w i t h c e r t a i n members o f the Board ©f Governors of the Federal Reserve System on February 18. A f t e r your f i r s t t a l k w i t h Gov. McKee f o l l o w i n g the conference you w i l l r e c a l l your report t o me t h a t i t was understood t h a t I had agreed t o c e r t a i n "freezing 1 1 proposals provided the same would be equally applicable t o other banks and holding companies; t h a t I was t o endeavor t o secure the commitment t o t h a t e f f e c t by corporations w i t h which I am associated; t h a t Chairman I c c l e s would undertake t o obtain l i k e commitments from other corporations concerned; and t h a t the Board would also endeavor t o obtain the cooperation of the other two banking agencies. Pursuant t o t h i s understanding and preliminary t o a formal commitment on the p a r t of Transamerica Corporation and Bank o f America, I expressed t o you my r e c o l l e c t i o n o f the elements o f our agreement. A f t e r going over them w i t h Gov* McKee and h i s counsel you r e p o r t i n a memorandum accompanying your l a s t l e t t e r and i n your telegram o f yesterday, c e r t a i n v i t a l changes i n the agreement. For instance, i t i s proposed t h a t Transamerica Corporation should agree t o cease a c q u i r i n g holdings of stock i n a d d i t i o n a l banks except upon the recommendation and approval of the Board o f Governors o f the Federal Reserve System. I t was d i s t i n c t l y understood t h a t upon the consummation of the program n e i t h e r Transamerica Corporation nor any other bank h o l d i n g company would acquire any EXHIBIT V I I - Page 2 Mr. Charles W* C o l l i n s - 2 - A p r i l 13, 1943 i n t e r e s t i n any other bank or banks without obtaining the p r i o r approval or consent of the Board o f Governors o f the Federal Reserve System* How a f u r t h e r r e s t r i c t i o n i s proposed t o the e f f e c t t h a t such a c q u i s i t i o n s must await the "recommendation* o f the Board o f Governors. Such a r e s t r i c t i o n i s obviously improper and was not agreed to* I r e c a l l s t a t i n g at the conference t h a t we were not e s p e c i a l l y f e a r f u l of the a n t i c i p a t e d e f f e c t s of a n t i - h o l d i n g company l e g i s l a t i o n and t h a t we assumed t h a t any such l e g i s l a t i o n would have reasonable regard f o r e x i s t i n g s i t u a t i o n s * I t appears t h a t Gov. McKee now assumes t h a t i t i s unnecessary t o secure commitments from other bank h o l d i n g companies such as i s desired from Transaiaerica Corporation and from Bank of America* I f such commitments are not necessary from other bank h o l d i n g companies and other banks, they are, of course, not necessary from Transamerica Corporation or Bank o f America. We have never sought and do not now seek any exceptional treatment. As I stated at the conference, we ask only t o be placed upon a plane o f e q u a l i t y w i t h o t h e r s . I t was w understanding t h a t any commitment o f Transaiaerica Corporation and the bank would be conditioned upon s i m i l a r commitments by others, and t h a t the Board was t o present the program t o the other supervisory agencies* Any l a w f u l d e c l a r a t i o n of p o l i c y by the Board or other supervisory a u t h o r i t y applicable t o a l l banks and h o l d i n g companies w i l l of course be respected by us i n the f u t u r e as a l l such expressions have been observed i n the past* I repeat, we have no especial i n t e r e s t i n a n t i - h o l d i n g conqpany l e g i s l a t i o n , and we would not t h i n k of surrendering our equal r i g h t s as American c i t i z e n s as an inducement t o the avoidance of l e g i s l a t i o n which may be thought by some t o be undesirable. What i s sauce f o r the goose i s sauce f o r the gander so f a r as we are concerned. Another p o i n t o f d i f f e r e n c e i s t h a t w h i l e i t i s conceded t h a t banks have a l e g a l r i g h t t o acquire assets and assume l i a b i l i t i e s o f other banks i n the place where the bank has an o f f i c e , i t i s now desired t o d i s c r i m i n a t e against Bank o f America i n t h i s respect by r e q u i r i n g i t t o agree f o r m a l l y t h a t i t w i l l not so exercise i t s charter power. I r e c a l l very d e f i n i t e l y t h a t there was no such agreement at the conference, and I t h i n k a l l who were there w i l l remeatoer t h a t the l e g a l r i g h t s of any e x i s t i n g bank or banks were not t o be c u r t a i l e d i n t h i s respect so long as there would be no r e s u l t i n g increase i n banking o f f i c e s of the purchasing bank i n the p a r t i c u l a r l o c a t i o n * This i s the exercise of a charter power which i s common t o a l l banks and which they may have occasion t o exercise at any time* We have not assented and w i l l never assent t o any attempt t o d i s c r i m i n a t e against Bank of America i n t h i s EXHIBIT 711 - Pag© 3 Mr. Charles W* C o l l i n s - 3 - A p r i l 13, 1943 r e s p e c t n o r w i l l we ever concede t h a t p u b l i c a u t h o r i t i e s may p r o p e r l y f a v o r t h e e x e r c i s e o f such a c h a r t e r power by c e r t a i n t y p e s o f u n i t o r b r a n c h banks o n l y . I am p e r f e c t l y w i l l i n g t o c a r r y o u t a l l o f t h e agreements t o w h i c h I expressed assent d u r i n g our F e b r u a r y c o n f e r e n c e , b u t a c h i e v e ment o f t h e purposes t h e r e expressed cannot be a t t a i n e d i f v i t a l changes a r e i n s i s t e d upon. I am m i n d f u l , t o o , t h a t t h e comflaents made by Hon. Leo T . Crowley, Chairman o f 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 Corporat i o n , and Hon• M a r r i n e r S. Eccl.es, Chairman o f t h e Board o f Governors o f t h e F e d e r a l Reserve System, c o n c e r n i n g T r a n s a m e r i c a C o r p o r a t i o n and Bank o f America a t r e c e n t h e a r i n g s b e f o r e t h e Banking and Currency Comm i t t e e s o f t h e Senate and t h e House o f R e p r e s e n t a t i v e s do n o t promote t h e s p i r i t o f a c c o r d w h i c h seemed t o p r e v a i l a t t h a t c o n f e r e n c e . Conseq u e n t l y , t h e s e appearances o n l y add t o t h e d i f f i c u l t y o f removing t h e elements w h i c h have engendered f r i c t i o n i n t h e p a s t . ?he i m p r e s s i o n s l e f t by them a r e so d i s t o r t e d and u n f a i r t h a t perhaps t h o r o u g h a i r i n g a l l a l o n g t h e l i n e would be a good t h i n g . A l t o g e t h e r , C h a r l i e , i t would appear, n o t w i t h s t a n d i n g my accustomed u r b a n i t y and t h e earnestness o f w d e s i r e s f o r c o n s t r u c t i v e c o o p e r a t i o n , t h a t as an emissary o f peace and harmony I am a d i s m a l failure. I am somewhat c h a g r i n e d t o have t o go b e f o r e our Board o f D i r e c t o r s today and confess t o them t h a t t h e e n t e r p r i s e upon w h i c h I v o l u n t a r i l y engaged w i t h g l o w i n g p r o s p e c t s o f success has come t o n a u g h t . I f t h e y w i l l a c t on my recommendation i t w i l l be t h a t e f f o r t s a t f u r t h e r u n d e r s t a n d i n g s be committed t o o t h e r hands. You a r e a u t h o r i z e d t o convey t h e s e s e n t i m e n t s t o Gov. McKee and t h e o t h e r gentlemen who were p r e s e n t a t t h e c o n f e r e n c e . Kind regards• Sincerely, (Signed) A. P. Giannini