View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

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)

Clark

{$** m *

m g a x s o* r u m b l e * s o m m * n m
8 , iaaart 6 , « » r c H
1939)

3,508,269.30

T h e a l a t a a * r e a u s a r o a a ead w i d e l y » a » t t e r < w i t f c v e * g & o m t t k a m r i a n t
toMc&aa
saeay a f t n a i n d i v i d u a l l o a s e , ao M M N l * a r t e l & a a l f i * * l a
t h e fere^afc r a p o r t a a f e * * x i n a t i o n .
T?..e a v a w a t a n
represents, ia the
a f e r a d i t 4ai*tndant upon tfc# sto«k af Yvansaaarlaa
Cvr$or*tioa.
l a the majority af eaaaa they are iosna «a4a l a pri&r
yaara
•snd **ny s w • ovitoat sro&le&s depeadan* # s t i r e l y an tfce m m w r i l j
•
ara
t a r r i e d i s an a t t a ^ t tor >aa MMI§iaMMtt ta af feet « NNMMNttf on j w r t i r i l y
afcargad o f f aasaia thr©u*h «eraat appreciation ia the value af Trenaaaarles
Carfare t i o u *taafc« T a a f a l l o w i n g i « *a aoaparativa ae&edule of U « t o t a l
aaawai of loans aeaar^d by l ' 4 s atoafet
COiiPAaATiy-'
Sate

af
•A»

MtsiMi

fli

g10C£ 0JT T f j k l ^ U X d A

Sbor**
Pledged

wOKH>kAT10fc

Sberee,

Sfa&rw1

Pledgai

>

©aa.31*29
Jos.10*30
m.23-31
A«**31-31
Her.51-32
«ov. 9-32
r.10-33
«*op. 1 3 - 3 3
Jnn.23-34
W.11-SJ
Oat. 7-35
Apr.27-34
Oat.14-34
Apr.20-37
A»«.31-37
Apr.26-3*
*ov.2l-3«
31-39

•A"

54,663,141.24
aO.tU.703.76
15.104,423.3$
ll.ulO,253.77
9,594,093.07
8,8*1,763.24
7,4aJ,55i.«9
5,110,770.65
3,9*4,154.79
3.^40,856.30
5,82«,*d7.£l#
4,a26,l40.94#
5,6^4,046.31
1,370,3*1.05
544,803.17
674,241.49
772,975,92

1,497,165
1,5^,31*
1,609,553
1,414,3*5
1,3*9.4*0
1,197,654
997.M5
904,394
77M95
93«,443#
i49#9^4
15M5*
101,01^
110,400
132,136

a
$17,^57,610.19
a
12,A94,757.4i
30,413*252.l4 a
10,271,027.94
9,524,571.37
7,916,201.29
8,155,-15.6«
4,936,943.43
4,634.967.39
4,4«9t74H.47
3,^50,531.21
3,575,540.49

aa
aa
aa
aa
aa

3 , 2 0 3 , 4 8 3 . 4 9 •JJ
aao
4,786,941.33
4,252,420.®2
aaa
4,037,044.77
2,735,293*3«

mm

Laeas aaaared by T r e n s a a e r l e a O o r p o r a t l o n atoak

453,650
361,6^0
863,937
516,025
658,342
804, ao4
7^,793
484,794
542,c4i
429,300
330,449
350,105
530,974
522,373
501,5-5
441,493

4a
do
141,161
U5,041
21*,552
252,549
192,410
234,449
257,161
131,330
264,437
232»5$9
195,9-5
aaa aaa
aaa

snly.

L o * a a aaaared by Y r a n s a a a r i a a C o r p o r a t i o n s t o c k and o t h e r c o l l a t e r a l .
D o l l a r watoaat r t f f a a e s i t a b a l a n c e a f l o a a * d e p e n d a n t a p o n T r » a a * * a r t e a
Corporation ataat.
*C*

Sfcwraa o f T y a s a a a ^ n e a C o r p o r a t i o n s t o c k k e i d a a a e U s t a r a l ,
wfcien a a p a r t i a a o f t h e l a * & l a d a p a o d o n t .

{*)

I n d i a * t e a t o t a l l a c a a w h i c h e r a a e a a r a d fey Y y a a a a f t e r i a o C o r p o r a t i o n
a t o a k e n d a t b a r a o i l a t a r a l , end m o t t h e fealftnaa o f i o a n 4 a ? a a 4 a » * y
u p o n T r e n a e a e r i . e e C o n ^ n U o K atoelc aa I n d i a * t e d a & a v a u n d e r * * * .




apes

{**)

S * « U f o r f i | « r i f t | tfe* fto?«*«soaajr o f tfeo io«®
Traa**
•marioo Corporatism a t o a k feaidl mm c & U « t * r * i aka&goti t o
tfco { O T ^ r l l o s }
UNI v a l u e o f t k o
teMMNHK
Cor»
p o r a t l d o a t a e k h * a to tfe* t o t a l v a l u e ©f a l l tis* e e l i « v a r » l
a#«*r!o<| tfe* l o a s a , i a e t e a d e f t
fora*ri?
ri^uria^
t h e oat i r e w c w i r f l b a l a s e a o f t & e itwta a * ftoyaodoot u w j b
colleter*!*

(*••)

i e e i a d e a propertii>o%te asxraat depeaJeat
TAC s t o e k
r * g © r * l e o o &f t h e a o l l a t e r e l ^ o a i t i e a *rttfe ?»*j>*et t o o t h e r
• * « u r i t l * » k e l d «o e o U t t e r e l .

(!)

I t l a « i g a i f i © 4 a t Waet, • e a t r * r y
fOiley la
PfeU®^ to' loasa m*im
T r a * © » » * r i * « O o r p o r ^ t l i w atoek #
B O T H t h e &«%£>*XP * f
afcar**
th» d o l l a r aoouat l a e r a e o e *
t h o s t o e k aasrket e x p o r t « o e « 4 « « « * i « m » t
6 u r i » $ 19 3^,
a c t i v i t y * * 4 a sooisiea %*rk«t * a l u e <mfeaa««aaeat f a r T t k d o a&ersoa C o r p o r a t l e a a t o a l u