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May 8 ,
MBfeQKAN UM FOR COi&ITTEE
1940.
(Copies d e l i v e r e d t o M r . W r i g h t , M r . Funsten, and
M r . West)
SUBJECT: Requirements o f t h e C o m p t r o l l e r o f t h e Currency Bank o f A m e r i c a N a t i o n a l T r u s t & Sayings Assn. I n R e l a t i o n t o C a r r y i n g V a l u e o f Bank Promises.
I n t h e discussions i n r e g a r d t o t h e p o l i c i e s f o l l o w e d by t h e
bank i n d e a l i n g w i t h i t s banking premises, t h e f o l l o w i n g charges had been
made by t h e examiners*
flMJM
A
Tfnn fifflUntn tmnlirlnr i m M ^ r 1 " i ™
»n t.h« ho^a of th« p^nk
Ql ftaftrtgfl H i T i &
A i » o r g f gag o f i \ a a g g g l ' r t r t
tfrefaggggpra*,
l i a n t o i m a i l t t h a n ttal a a U a i u a M w l r r t i n U a f i r s t i a f r t a a g f l
by a mamber o f t n a Transamerica f a m i l y o f organ! r a t i o n s .
I n t h e course o f a r g u i n g t h e m e r i t s o f t h i s c l a i m , i t became
obvious t h a t many elements had t o be considered i n d e t e m l n l n g t h e a c t u a l
p r i c e p a i d f o r banking premises. I t was a g r e e d , however, t h a t a w r i t e - u p .
wee j u s t i f i e d whenever i t could be shown thats
1.
The purchase p r i c e o f t h e shares o f t h e s e l l i n g bank were I n c r e a s e d
by t h e d i f f e r e n c e between t h e amount a t which t h e premises were c a r r i e d on t h e books o f t h e s e l l e r , and t h e amount agreed upon by
s p e c i f i c n e g o t i a t i o n s as being t h e f a i r v a l u e o f t h e premisee.
2.
The premises were c a r r e d on t h e books o f t h e s e l l e r a t a
amount, o b v i o u s l y f a r below t h e f a i r v a l u e .
5.
The premises were c a r r i e d on t h e books o f t h e s e l l e r below t h e i r
f a i r v a l u e because o f e x t r a o r d i n a r y unearned increment.
t ^ I ^
Charge B
l a g a t w l t t h g i r t f i l n frmfrlnr m a l m a a t a g Jttafci Q I i f t a frmft o r
QT Q f Qne Q f l t a
rtttfrlfis
Be l a &
a a a o c l a t e d nredacaanOVR. a
g r a a t i r T a l u s t a f i a l a a t l f l c f l waa a l a o a d on t a g l a n f l i ao aa t a aTQlfl
t m mbmU
toaafliallfla
a b a s i a r a a u i r g f l nn I m f l f l M M B l i a
I t was agreed t h a t t h e Committee should determine a f a i r v a l u e
l o r t h e l a n d and r e q u i r e t h e p r e s c r i b e d d e p r e c i a t i o n on t h e improvements.
Charge C
T f t a t l a a g f l n l r t a f i flgrmin a t t a a l o r g p g l a a l a a i L a t a a a I m m l nnd
ftfigwniaflU
t h g tv\\
BBTfiiiflig g r i a g a l a g l u a l a f i t a g fmfrt n f
rtarnftHnMnr
tna
rtrugtwt*
Tffti l a g l w i a f l aaa a a r r l a f l aa I h t x a l a g g f Stoi I f i a f l *
I t was agreed t h a t t h e p r i c e p a i d f o r t h e l a n d and p r e m i s e s , i n c l u d i n g t h e coat o f d e m o l i s h i n g , was t o be considered t h e p r i c e p a i d f o r t h e
land.
tetat
T h i s does n o t a p p l y t o cases i n which t h e bank demolished honking
premises b e i n g occupied by i t t o r e c o n s t r u c t a mew b u i l d i n g . I n each
Z-~mQll*diJM
i'OR CQ^lTTEBm
5/8/40
an i n s t a n c e , t h e Coiuaittee should determine what would he cons i d e r e d a f a i r v a l u e f o r the l a n d on which t o superimpose t h e
cost o f c o n s t r u c t i n g t h e new h u l l t i n g .
Charge p
T h a t i n c e r t a i n i n s t a n c e s , expenditures had hern c a p i t a l i z e d which
m a u d s ihaaU
ton
tttta
gftaaratfl to a a m l
manna*
I t was agreed t h a t t h e Committee determine which expenditures
may p r o p e r l y be c a p i t a l i z e d *
flam
g
Ttot ggrtalatantelrwuranlata tod b i n ifllfl to anhra of toe Tmgj a e r l c n flMailv o f o r g a n I r a t i o n s f o r an amount g r e a t e r man t n e l r
g a n r l a r , r m u e . aafi t f r a t a n f a a i a a f l i U i S f r i E m E x m a M t o t l t a t saaft
s r w g r t Y at tag iBarraart sale p r i s t *
The Committee was t o r e g a r d such a t r a n s a c t i o n as a w r i t e - u p
t o be charged a g a i n s t t h e u n a l l o c a t e d r e s e r v e o f $ 6 , 9 0 0 , 0 0 0 *
I n t h e d i s c u s s i o n s between t h e bank's r e p r e s e n t a t i v e s and those
a c t i n g as a committee, comprising t h e C o m p t r o l l e r , t h e Under S e c r e t a r y , t h e
Cuairman o f t h e F e d e r a l Deposit I n s u r a n c e C o r p o r a t i o n , und two members o f
t h e Board o f Governors, t h e f o r e g o i n g expresses b r i e f l y t h e R i d i n g p r i n c i p l e s f o r t h e Committee o f t h r e e *
I t w i l l be observed t h a t n o t h i n g i n
t h e C o m p t r o l l e r ' s r e q u i r e m e n t s d i r e c t s t h e Coamittee t o a p p r a i s e t h e
p r e s e n t vaifi« « r M f l l i j l c r i t i c i z e d i n t h e August 5 1 , 1 9 5 9 , r e p o r t o f
examination* On t h e c o n t r a r y , t h e burden o f t h e i n s t r u c t i o n s i s t o d»»
t e r m i n e t h e f a i r v a l u e o f t h e premises a t t f t f t l f l t g f
ftfiittlfiltlQfi»
after
talcing i n t o c o n s i d e r a t i o n any s p e c i a l c o n d i t i o n s which had t o be met i n
f i x i n g t h e p r i e e p a i d * Any unwarranted w r i t e - u p i s t o be e l i m i n a t e d and
t h e c a r r y i n g v a l u e o f t h e p r o p e r t y a d j u s t e d by t h e a p p r o p r i a t e d e p r e c i a t i o n *
(Signed)
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