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X-3287 UNITED STATES OF AMERICA BEFORE THE FEDERAL RESERVE BOARD At a d u l y c a l l e d meeting of the F e d e r a l Reserve Board h e l d a t i t s o f f i c e s i n t h e T r e a s u r y B u i l d i n g , C i t y of Washington, D i s t r i c t of Colunibia, on t h e 2 4 t h day of December, 1921. •PRESENT: W. -P. O. HARDING, Governor EDMUND ADOLPH C. MILLER, JOHN R. MITCHELL, D. R. CRISSINGER. , FEDERAL RESERVE BOARD - VS - MEMBERS. Report of F e d e r a l Reserve Board s t a t i n g i t s Findings as t o t h e F a c t s and Conclusion. WADE H. COOPER,CONTINENTAL TRUST C CMP ANY AND THE UNION SAVINC-S BANK P u r s u a n t t o the p r o v i s i o n s of an Act of Congress, approved October 15, 1914, e n t i t l e d "An Act t o supplement e x i s t i n g laws a g a i n s t u n l a w f u l r e s t r a i n t s and monopolies, and f o r o t h e r p u r p o s e s k n o w n a s t h e Clayton A c t , t h e F e d e r a l Reserve Board i s s u e d and served a c o m p l a i n t upon r e s p o n d e n t s . C o o p e r , C o n t i n e n t a l T r u s t Company and The Union Savings Bank, c h a r g i n g them and e a c h of them w i t h v i o l a t i o n of S e c t i o n 8 of s a i d Act* The r e s p o n d e n t s having e n t e r e d , ^t h e i r appearances b y t h e i r a t t o r n e y s M e s s r s . Douglass, Obear and Douglass,. and having f i l e d answers h e r e i n , t h i s p r o c e e d i n g d u l y came on t o be h e a r d "before t h e F e d e r a l Reserve Board on t h e 30 day of November, 1921, and evidence was i n t r o d u c e d i n support of t h e a l l e g a t i o n s of s a i d complaint and on b e h a l f of r e s p o n d e n t s , and d u l y reduced t o w r i t i n g . Now t h e F e d e r a l Reserve Board, having h e a r d argument of c o u n s e l f o r r e s p o n d e n t s and having d u l y c o n s i d e r e d t h e r e c o r d , which i s h e r e b y made a p a r t of t h i s r e p o r t , and being now f u l l y advised i n the p r e m i s e s , makes • t h i s i t s report, and s t a t e s i t s f i n d i n g s a s t o t h e f a c t s and i t s c o n c l u s i o n , as f o l l o w s : fc3 T " 1427 FINDINGS AS TO THE FACTS*• 1 . That Continental Trust Company i s a bank, banking a s s o c i a t i o n or t r u s t company organized and i t e r a t i n g under the laws of the United S t a t e s , t o w i t , the Code of Law f o r the D i s t r i c t of Columbia, i n t h e City of Washington, D i s t r i c t of Columbia, w i t h a c a p i t a l stock of $ 1 , 0 0 0 , 0 0 0 , and i s a member bank of the Federal Reserve System and i s a stockholder i n and member of t h e of t h e Federal Reserve Bank of Richmond, 2 . That the Union Savings Bank i s a bank, backing a s s o c i a t i o n , or t r u s t company organized under the. laws of the S t a t e of West V i r g i n i a and operating under the laws of the United S t a t e s , t o w i t , the Code of Laws f o r t h e D i s t r i c t of Columbia, i n the City of Washington, D i s t r i c t of Columbia^ with a c a p i t a l stock of $200,000. 3* That s a i d City of Washington, D i s t r i c t of Columbia* i s a c i t y , incorporated town or v i l l a g e of more than 200,000 i n h a b i t a n t s a s shown by t h e l a s t preceding decennial census of the United S t a t e s . (F. ft. Board Exh i b i t s Nos. 18 and 1 9 ) . U. That Wade H» Cooper i s a r e s i d e n t of the City of Washington, D i s t r i c t of Columbia. 5- That said Cooper was on November 30, 1921* s e r v i n g a s p r e s i d e n t aid d i r e c t o r of Continental Trust Company and had been c o n t i n u a l l y s e r v i n g a s such p r e s i d e n t and d i r e c t o r s i n c e about April 27, 1921. . S. That said Cooper was on November 30, 1921, s e r v i n g a s president and d i r e c t o r of t h e Union Savings Bank and had been c o n t i n u a l l y serving as such p r e s i d e n t and d i r e c t o r s i n c e about t h e year 1913. 7* *bat f o r some time p r i o r t o October 7, 19I0, said Cooper was s e r v i n g a s d i r e c t o r of the Continental Trust Company. 8 . That on or about October 7» 191&, t h e said Cooper f i l e d an a p p l i c a t i o n with t h e Federal Reserve Board, under the p r o v i s i o n s of an Act of Congress ^ p r o v e d May 15, 191c, known as the Kern Amendment t o t h e Qlayton Act, f o r t h e permission to serve on the d i r e c t o r a t e s of Continental Trust Company, *oe Union Savings Bank, respondents h e r e i n , and United S t a t e s Savings Bank, a l l of the City of Washington, D i s t r i c t of Columbia. (F. R. Board Exhibits Nos. 1 4 2 ) . 9 . That s a i d Board approved said ^ p l i c a t i o n as t o Continental Trust Company and United S t a t e s Savings Sank but disapproved i t a s t o Continental Trust Company and t h e Union Savings Bank on the ground t h a t s a i d l a t t e r two banks were i n s u b s t a n t i a l competition and t h a t said Board had no power under t h e law t o grant i t s permission t o serve on the d i r e c t o r a t e s of both sugh banks* 1 0 . That s h o r t l y t h e r e a f t e r said Cooper applied f o r and was granted a hearing before said Boerd a t which the said Cooper and Charles Warden, Vice President of Continental Trust Company, appeared and submitted evidence upon the question of s u b s t a n t i a l competition between Continental Trust Company X-32S? ; ^ 3 ~ and The Union Savings Bank and t h e a p p l i c a t i o n of s a i d Cooper f o r p e r m i s s i o n t o s e r v e t h e s e two banks was r e c o n s i d e r e d * 11* That upon r e c o n s i d e r a t i o n of t h e a p p l i c a t i o n of s a i d Cooper t o serve on t h e d i r e c t o r a t e s of C o n t i n e n t a l Trust Company and The Union Savi n g s Bank, and upon c o n s i d e r a t i o n of t h e f u r t h e r evidence p r e s e n t e d by s a i d Cooper and harden a t s a i d h e a r i n g , t h e F e d e r a l Reserve Board confirmed i t s former r u l i n g t h a t t h e s e two i n s t i t u t i o n s were i n s u b s t a n t i a l c o m p e t i t i o n . 12. That subsequently and on October 24, l $ l o , the F e d e r a l Reserve Board n o t i f i e d Cooper t h a t i t could not g r a n t him p e r m i s s i o n t o s e r v e on t h e d i r e c t o r a t e s of C o n t i n e n t a l Trust Company and The Union Savings Bank, and no such p e r m i s s i o n was g r a n t e d . (F. R. Board E x h i b i t No. 3 ) . 13* That s h o r t l y t h e r e a f t e r t h e s a i d Cooper r e s i g n e d a s d i r e c t o r of C o n t i n e n t a l T r u s t Company* (F* Re Board E x h i b i t No* . 14* That on or about February 1, 1917# Cooper a p p l i e d f o r and r e c e i v e d t h e Federal Reserve Board*s p e r m i s s i o n t o s e r v e on t h e d i r e c t o r a t e s of the F i r s t N a t i o n a l Bank of Hyatt s v i l l e , Maryland, The Union Savings Bank and United S t a t e s Savings Bank. (F% R. Board E x h i b i t s Nos. 6 and 7)* 15* That on or about A p r i l 27# 1921, Cooper became p r e s i d e n t and d i r e c t o r of C o n t i n e n t a l T r u s t Company w h i l e s t i l l s e r v i n g a s p r e s i d e n t and d i r e c t o r of t h e Union Savings Bank and United S t a t e s Savings Bank and w i t h out having o b t a i n e d t h e F e d e r a l Reserve B o a r d f s p e r m i s s i o n t o s e r v e a s d i r e c t o r or o f f i c e r of C o n t i n e n t a l Trust Company. l o . That on June 28, 1921, t h e Federal Reserve Board n o t i f i e d Cooper t h a t he was v i o l a t i n g S e c t i o n 8 of t h e Clayton Act i n s e r v i n g C o n t i n e n t a l T r u s t Company w i t h o u t having obtained t h e p e r m i s s i o n of t h e Federal Reserve Board t h e r e f o r . (F. R. Board E x h i b i t No. S). 17* That on June 29* 1921# Cooper e x p l a i n e d t o t h e F e d e r a l Reserve Board t h a t he had been e l e c t e d p r e s i d e n t and d i r e c t o r of the C o n t i n e n t a l Trust Company with t h e i d e a of c o n s o l i d a t i n g i t w i t h The Union Savings Bank and another i n s t i t u t i o n . (F. R. Board E x h i b i t No. 9) lc» That on or about August 4, 1921, and a f t e r some f u r t h e r c o r r e s p o n d ence between Cooper and t h e Federal Reserve Board, (F, R. Board E x h i b i t No.lO), Cooper f i l e d a new a p p l i c a t i o n f o r t h e B o a r d ' s p e r m i s s i o n t o serve C o n t i n e n t a l Trust Company, The Union Savings Bank and United S t a t e s Savings Bank* (F. R. Board E x h i b i t No. 11) 19* That upon c o n s i d e r a t i o n of s a i d a p p l i c a t i o n and t h e evidence and arguments submitted w i t h i t t h e Federal Reserve Board a g a i n reached the conc l u s i o n t h a t C o n t i n e n t a l Trust Company and The Union Savings Bank were i n s u b s t a n t i a l c o m p e t i t i o n and t h a t the Board had no power t o grant said a p p l i c a t i o n . - 4 - 1-3267 20. That on or about September JO, 1921, t h e F e d e r a l Reserve Board n o t i f i e d Cooper t h a t i t could not grant him p e r m i s s i o n t o s e r v e C o n t i n e n t a l T r u s t Company and The Union Savings Bank and f u r t h e r n o t i f i e d him t h a t u n l e s s he r e s i g n e d from one or t h e other of t h o s e i n s t i t u t i o n s by October 3, 1921# t h e Board would i n s t i t u t e p r o c e e d i n g s t o e n f o r c e t h e l a w . ( F , H. Board E x h i b i t No. 1 2 ) . 21. That Cooper did not r e s i g n from e i t h e r C o n t i n e n t a l Trust Company of The Union Savings Bank by October 3; 1921, b u t , on t h e c o n t r a r y , cont i n u e d t o s e r v e a s p r e s i d e n t and d i r e c t o r of both i n s t i t u t i o n s . 22. That C o n t i n e n t a l Trust Company i s l o c a t e d on t h e n o r t h w e s t corner of F o u r t e e n t h and H S t r e e t s , a t No, 801 f o u r t e e n t h S t r e e t , Northwest, i n t h e City of Washington, D i s t r i c t of Columbia. 23« That The Onion Savings Bank i s l o c a t e d a t No. ?10 F o u r t e e n t h S t r e e t , Northwest, on t h e west s i d e of Fourteenth S t r e e t , between G and H S t r e e t s , and between G S t r e e t and New York Avenue, i n t h e City of Washington, D i s t r i c t of Columbia. 24, That C o n t i n e n t a l Trust Company i s l o c a t e d n o r t h and s l i g h t l y e a s t of gmd approximately 1 ^ b l o c k s d i s t a n t from The Union Savings Bank. 25* That f o u r t e e n t h S t r e e t r u n s n o r t h and s o u t h and H S t r e e t and & S t r e e t run e a s t and west and New York Avenue r u n s n o r t h e a s t and southwest and New York Avenue i s t h e only s t r e e t t h a t i n t e r s e c t s F o u r t e e n t h S t r e e t between t h e i n t e r s e c t i o n of H S t r e e t s and F o u r t e e n t h S t r e e t and t h e i n t e r s e c t i o n of Cr S t r e e t and Fourteenth S t r e e t . 26, That s t r e e t c a r s run on Fourteenth S t r e e t from south of Street t o n o r t h of H, S t r e e t and on H S t r e e t west of F o u r t e e n t h S t r e e t and on New York Avenue n o r t h e a s t and southwest of Fourteenth S t r e e t , and on New York Avenue southwest o f , F o u r t e e n t h S t r e e t t u r n i n g n o r t h on ^Fourteenth S t r e e t , and on Fourteenth S t r e e t n o r t h of New York,Avenue t u r n i n g southwest on New York Ave, 27. That C o n t i n e n t a l Trust Company engages i n commercial banking busi n e s s , a d v e r t i s e s f o r , s o l i c i t s and a c c e p t s commercial a c c o u n t s and s a v i n g s accounts and makes l o a n s on r e a l e s t a t e and o t h e r c o l l a t e r a l , and does a t r u s t company b u s i n e s s , and t h a t i t s commercial a c c o u n t s c o n s t i t u t e a p proximately L75^ of t h e t o t a l of i t s commercial and savings d e p o s i t s 26, That The Union Savings Bank engages i n commercial banking b u s i n e s s , a d v e r t i s e s f o r , s o l i c i t s and a c c e p t s commercial accounts and savings accounts, and makes l o a n s on r e a l e s t a t e and o t h e r c o l l a t e r a l , and t h a t i t s s a v i n g s accounts c o n s t i t u t e approximately SC$ of t h e t o t a l of i t s commercial and s a v i n g s d e p o s i t s . 29, That C o n t i n e n t a l T r u s t Company and The Union Savings Bank a r e g e n e r a l l y ( e n g a g e d i n t h e same c h a r a c t e r of b u s i n e s s and a r e so s i t u a t e d t o appeal, and do i n f a c t appeal, t o the same customers or would-be customers. 1-32S7 - 5 - JO. That C o n t i n e n t a l T r u s t Company and The Union Savings Bank a r e i n s u b s t a n t i a l c o m p e t i t i o n w i t h each o t h e r . 31. That Cooper has, s i n c e on or about A p r i l 27, 1921, c a r r i e d on n e g o t i a t i o n s l o o k i n g toward t h e c o n s o l i d a t i o n of C o n t i n e n t a l T r u s t Company and The Union Savings Bank and United S t a t e s Savings Bank, but t h a t no agreement has been e n t e r e d i n t o w i t h r e s p e c t t o such c o n s o l i d a t i o n and t h a t c e r t a i n s t o c k h o l d e r s of The Union Savings Bank a r e opposed t o t h e c o n s o l i d a t i o n upon t h e b a s i s which h a s been proposed by Cooper. 32, That t h e f a c t of t h e encumbency of Cooper a s p r e s i d e n t of both C o n t i n e n t a l T r u s t Company and The Union Savings Bank and t h e p o s s i b i l i t y of t h e i r c o n s o l i d a t i o n t e n d s t o check the amount and degree of c o m p e t i t i o n which would o t h e r w i s e e x i s t between s a i d C o n t i n e n t a l T r u s t Company and' s a i d The Union Savings Bank. cpTn&vsipn, That t h e s e r v i c e of respondent Wade H. Cooper a t t h e same time a s p r e s i d e n t or d i r e c t o r of respondent C o n t i n e n t a l T r u s t Company and a s d i r e c t o r or p r e s i d e n t of respondent The Union Savings Bank, under • * t h e c o n d i t i o n s and c i r c u m s t a n c e s d e s c r i b e d i n t h e f o r e g o i n g f i n d i n g s c o n s t i t u t e s a v i o l a t i o n by each of paid r e s p o n d e n t s of S e c t i o n 6 of t h e Act of Congress approved October 15, i g i 4 , e n t i t l e d "An Act t o supplement e x i s t i n g laws a g a i n s t u n l a w f u l r e s t r a i n t s and monopolies, and f o r o t h e r p u r p o s e s , * known a s t h e Clayton Act, a s amended. By t h e Board Governor, Dated t h i s 2 4 t h day of December, 1921. ATTEST: Secretary. X-3287-a UNITED STATES OF AMERICA BEFORE THE FEDERAL RESERVE BOARD At a duly c a l l e d meeting of t h e F e d e r a l Reserve Board h e l d a t i t s o f f i c e s i n t h e Treasury B u i l d i n g , City of Washington, D i s t r i c t of Columbia, on t h e 24th day of December, 1^21. PRESENT: W. P . G. HARDING, Governor EDMUND PLATT, ADOLPH C. MILLER, JOHN TL MITCHELL, D- R. CRISSINGER. MEMBERS. FEDERAL RESERVE BOARD -VSWADE H. COOPER, CONTINENTAL TRUST COMPANY AND THE UNION SAVINGS BANK ORDER. The above e n t i t l e d proceeding having been heard by t h e Federal Reserve Board on t h e 30th day of November, 1921, on t h e complaint of t h e Board, the answers of respondents, the testimony and evidence and t h e arguments of Counsel f o r respondents, and t h e Board having made i t s r e p o r t s t a t i n g i t s f i n d i n g s as t o t h e f a c t s and i t s conclusion t h a t t h e respondents have v i o l a t e d S e c t i o n 8 of an Act of Congress, approved October 15, 191 e n t i t l e d "An Act t o supplement e x i s t i n g laws a g a i n s t unlawful r e s t r a i n t s and monopolies, and f o r e t h e r purposes, " known a s the Clayton Act i t i s now ORDERED AND DECREED That Wade H. Cooper, on or b e f o r e the 17th day of January, 1922, t e r m i n a t e h i s s e r v i c e i n any c a p a c i t y , whether a s o f f i c e r , d i r e c t o r and/or employee, w i t h e i t h e r Continental Trust Company or The Union Savings Bank, both of Washington, D. C., and w i t h i n the same time f i l e w i t h t h e Federal Reserve Board s a t i s f a c t o r y p r o o f , i n t h e form of sworn e x t r a c t s from the X-3?-S7-a - 2 - minutes of meetings of t h e d i r e c t o r s or s t o c k h o l d e r s of s a i d C o n t i n e n t a l Trust Company or s^id The Union Savings Bank, t h a t he h a s t e r m i n a t e d h i s s e r v i c e s w i t h e i t h e r said C o n t i n e n t a l Trust Company or s a i d The Union Savings Bank a s a f o r e s a i d ; and t h a t t h e r e a f t e r s a i d Cooper cease and d e s i s t from s e r v i n g a t t h e same time a s o f f i c e r , d i r e c t o r a n d / o r employee of s a i d C o n t i n e n t a l T r u s t Company and a s o f f i c e r , d i r e c t o r a n d / o r employee of s a i d The Union Savings Bank. 2, That s a i d C o n t i n e n t a l Trust Company, on or b e f o r e t h e 17th day of January,1922, r i d i t s e l f of Wade H, Cooper, a s i t s o f f i c e r , d i r e c t o r a n d / o r employee, and w i t h i n t h e same time f i l e with t h e F e d e r a l Reserve Board s a t i s f a c t o r y p r o o f , i n t h e form of sworn e x t r a c t s from t h e minutes of m e e t i n g s of i t s d i r e c t o r s or s t o c k h o l d e r s , t h a t i t h a s r i d i t s e l f of Wade H, Cooper a s a f o r e s a i d ; and t h a t t h e r e a f t e r s a i d C o n t i n e n t a l Trust Company s h a l l a t no time permit s a i d Cooper t o be or s e r v e as i t s o f f i c e r , d i r e c t o r a n d / o r employee; provided, however, t h a t if s a i d The Union Savings Bank s h a l l , on or b e f o r e t h e l j t h day of January, 1922, have r i d i t s e l f of s a i d Cooper a s i t s o f f i c e r , d i r e c t o r a n d / o r employee and s h a l l w i t h i n the same time have f i l e d w i t h t h e Federal Reserve Board s a t i s f a c t o r y proof t h e r eof a s h e r e i n a f t e r p r o v i d e d , then t h i s o r d e r s h a l l not be e f f e c t i v e as a g a i n s t s a i d C o n t i n e n t a l T r u s t Company w h i l e s a i d Cooper i s not and does not s e r v e a s o f f i c e r , d i r e c t o r a n d / o r employee of s a i d The Union Savings Bank 3* That s a i d f h e Union Savings Bank, on or b e f o r e t h e l ? t h day of January, 1922, r i d i t s e l f of Wade H, Cooper, a s i t s o f f i c e r , d i r e c t o r and/or employee, and w i t h i n t h e same time f i l e w i t h t h e Federal Reserve Board s a t i s f a c t o r y p r o o f , i n t h e form of sworn e x t r a c t s from t h e minutes of meeti n g s of i t s d i r e c t o r s or s t o c k h o l d e r s , t h a t i t h a s r i d i t s e l f of Wade H, Cooper a s a f o r e s a i d ; and t h a t t h e r e a f t e r s a i d The Union Savings Bank s h a l l a t no time p e r m i t s a i d Cooper t o be or serve a s i t s o f f i c e r , d i r e c t o r and/or employee; p r o v i d e d , however, t h a t if s a i d C o n t i n e n t a l T r u s t Company s h a l l , on or b e f o r e t h e l j t h day of January, 1922, have r i d i t s e l f of s a i d Cooper a s i t s o f f i c e r , d i r e c t o r a n d / o r employee* and s h a l l w i t h i n t h e same time have f i l e d w i t h t h e F e d e r a l Reserve Board s a t i s f a c t o r y proof t h e r e o f a s h e r e i n a f t e r p r o v i d e d , t h e n t h i s order s h a l l not be e f f e c t i v e a s a g a i n s t s a i d The Union Savings Bank w h i l e said Cooper i s not and does not serve as o f f i c e r , d i r e c t o r a n d / o r employee of s a i d C o n t i n e n t a l Trust Company, By t h e Board Dated t h i s 24th day of December, 1921% ATTEST: Secretary, — » Governor,
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