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Federal Reserve Bank of St. Louis
ee on .dranc1 liroup & i.; a.in
( ay 7 - Jul 1930)
Ban1 ing
a.nks
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END
KIND OF MATERIAL OR HUMBER
NAME
OR SUBJECT
421.11
Committee on Branch Group & Chain Banking
DATES (Inclusive )
May
PART HUMBER
4
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Federal Reserve Bank of St. Louis
SHEE T
7-
Jul 1930
l• o nn
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Off ice Cor resp ond enc e
FEl)ERAL Rf.SERVE
BOARD
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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FEDERAL RESERVE COMMITTEE ON
BRANCH, GROUP AND CHAIN BANKING
BANK SUSPENSIONS SINCE JANUARY 1, 1921
Report on a separate schedule each bank closed to the public either temporarily or permanently
by supervisory authorities or by the bank's board of directors on account of financial difficulties. This
form should not be used for merged or consolidated banks but should be used for those banks suspended on account of financial difficulties, even though they are subsequently taken over by other
institutions. In case a bank has suspended more than once a schedule should be made out for each
suspension.
Type of bank reported-check
appropriate one of the following
D
D
D
D
D
D
National bank
State bank
Name of State
Trust company
Stock savings bank
Mutual savings bank
Private bank
1. Name of ba,.lw.________________ Town or City ________County_ _ _ _ __
2. Date organize~------~~ate suspende'-'-_______ Population of town or city* ______
3. Federal reserve district._____________ Membcr or nonmember of F. R. Syste... ~ - - - - - -
4. Number of branches operated: In city of parent bann,__ _ _ _ _ _ _ _ _ _ _ __
Outside city of parent bank**-----------
5. Was this bank a member of a chain or group? If so give the name of the chain or group ___________
0
• Latest census figures or estimate as shown in bankers' directory.
Attach a list giving the name and location of each outside branch at time of suspension.
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Federal Reserve Bank of St. Louis
6. Condition figures, as of (date*) _ _ _ _ _ _ _ _ _ _ _ _ __
Loans and discounts:
On real estate ............. ............. ............ .
Other .............. .............. .............. .... .
Total loans and discounts .............. .............. .......... .
Real estate acquired in satisfaction of debts .............. .............. .... .
Investments .............. .............. .............. .............. .... .
All other resources ............. ............. ............. ............. .. .
Total resources ............. ............. ............. ........ .
Capital ............. ............. ............. ............. ............ .
Surplus and undivided profits .............. .............. .............. ... .
Deposits:
Due to banks** .............. .............. ......... .
Demand deposits, including U. S. Govt. deposits ........ .
Time deposits, including postal savings .............. .. .
Total deposits ............. ............. ............. ......... .
Borrowings from F. R. bank .............. .............. .............. .... .
Borrowings from other banks .............. .............. .............. ... .
All other liabilities ............. ............. ............. ............. .. .
Total liabilities ............. ............. ............. ........ .
7. Has this bank been reopened? _ _ __
If so give:
Date of reopening______ ______ ___
· ame under which reopcneu________ _______ ___
Loss to depositors on :
Amount of loss
Per cent of loss
to claims
Secured claims .............. .............. . • •
Preferred claims ............. ............. .. .
General claims .............. .............. .. .
Total ............. ............. ....... .
• Condition items should be as of date of suspension, if possible, otherwise as of the last call or examination prior to suspension.
•• Including certified and cashiers' checks, cash letters of credit and travellers' checks outstanding.
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Federal Reserve Bank of St. Louis
8. Has this bank been taken over by another bank? _____ If so give:
Name of bank by which taken over____________ ____________ ____
Date taken over_____________ __________
Loss to depositors on:
Amount of loss
Per cent of loss
to claims
Secured claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $,_________
Preferred claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General claims ........................... ... .
Total ........................... ....... .
--=-====-=
9. Is this bank still in process of liquidation? _____ If so give payments to date:
(Amounts in dollars)
Claims allowed
Payments from
guaranty fund
Dividends paid from
collections
Total payments
Per cent of payments
to claims allowed
Secured claims ....
Preferred claims ...
I
General claims ....
Total claims ....
-
I
10. Has this bank been finally liquidated?
If so give:
Date liquidation was completeU------ --------Collections:
From liquidation of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $,________
From assessments on shareholders ........................... .
Other collections (explain) ........................... ....... .
Total collections .......................... ............ .
Offsets to claims (loans paid, etc.). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments to depositors:
(Amounts in dollars)
Dividends paid from
collections
Claims allowed
Secured claims ....
---
Preferred claims ...
General claims ....
Total claims ... · I
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Federal Reserve Bank of St. Louis
-
I
Payments from
guaranty fund
Total payments
--
-
---
---
-
-
Per cent of payments
to claims allowed
--
--
---
-
-
S--- - - - - -
- -
-
-··
11. Causes of suspension:
Check in the appropriate column those of the following which apply, either as primary or contributing
causes, amplifying the indicated causes with such supplementary data as may be available.
Primary
cause
I
Contributing
cause
I
Decline in real estate values ....................................... .
Losses due to unforeseen agricultural or industrial disasters such as floods,
drouth, boll weevil, etc ........................................ .
Insufficient diversification ......................................... .
Incompetent management, i.e., poor credit judgment, laxity in collections,
lack of enterprise, etc ......................................... .
Defalcation ............................... '. ...................... .
Heavy withdrawals of deposits ..................................... .
Failure of affiliated institution (Name) .............................. .
Failure of correspondent (Name) ................................... .
Failure of large debtor (Name) ..................................... .
Other causes, (specify) ............................................ .
~
Did the slow, doubtful or worthless paper held by the bank represent largely one particular type of industry
or agriculture?______________
If so, state what industry or type of a g r i c u l t u r ~ - - - - - - - - - - - - - - - - - - - - -
What was the approximate date of the beginning of the difficulty which ultimately caused the suspension? _______________________________________
12. \Vere there any assessments, voluntary or otherwise, on the directors or stockholders either before or after the
bank suspended?_ _ _ _ _ _ _ __
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Federal Reserve Bank of St. Louis
If so, give dates and amounts of all assessments
•orDJ.
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-
131
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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SCITTDULE OF I iFORMATI ON O:N BANKS
OPERATING BRANCHES OUTSIDE OF
THE CITY OF THE !fli'....AD OFFICE
I. Organizatio n and history
1. Name of institution
------ ------ -----
Location of main office:
City ______ _____
State _ _ _ _ _ _ _ Population of city _ _ _ __
Member or non-member of Federal Reserve
2. Condition as of last call, Date
------ ----_ __
$._ _ _
Capital
Surplus and undivided profits
Loans and discounts
Investments
Demand deposits
Time deposits
3. Outline your corporate history, including dates of organization, incorporati on, important mP.rgers and the
beginning of branch banking.
4. Number of branches,Ju~ & 30, 1930 --~Juno 30, 1925____
In city of main office
----- --
In outside cities and towns
5.
What procedure have you followed in acquiring banks-exchange of stock, purchase of stock, or purchase
of assets?
6. How do you determine the price to be paid when you pur-
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Federal Reserve Bank of St. Louis
chase the stock or ass~ts of anothP.r ban_~? In the case
of 8Xchange of stock what mPthod is usPd to determine
the basis of exchangP betwePn thP stock of the bank
taken over and the stock of your bank?
- 2 -
7.
List all branche s outside of the city of the head office •
•
Location
6
W-d name of
branche s
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Federal Reserve Bank of St. Louis
Populat ion
of town
or city
Is corrmuni ty
residen tial,
commerc ial,
industr ial,
or
a.gricul tural?
Average
gross deposits
of branch
Local
loans
Year of
es tablishmen t
of
branch
Acquire d
by
merger,
or established
de novo
:Number
of independent
unit
banks in
sn.me
tov,n or
city
Number
of
branches
of other
banks in
srune
tovm or
city
- 3 8. List below the corporations other tha,n Commercial banks-i. e., securities com::;,anies, insurance, mortgage, safe
depo si t, real e state c o;,1pani es, etc. --wi th which your
bank is affiliated. Give the form of the affiliation
in each case--stock trusteed for bank stockholQers,
direct owners.1.ip, ovmership through or b;:, l1olding company, etc. State also their function and how t..liet were
acquired--exchange of stock, purchase of stock or purchase of assets.
Capital
and
surnlus
Name
Form of
affiliation
Function
Method of
acquisition
•
!
9. Describe tLe method of handling slow and doubtful assets
of banks acquired by you, and indicate what success you
have had in liquidating such assets.
10. Distribution of stock:
How many stockholders have you?
What proportion of your stock is held in tne city where
your main office is located?
What proportion is held in branc~ cities?
What proportion is held elsewhere?
Are these proportions underGoing any chD. nge?
Have you a policy of stock distriJution? If so, describe
it.
If all the stock of your bank is owned b~· some corporation, state its name and give the above distribution
of its own stock.
11. Economic background
1. Outline briefly the development of your brancl-i operations indicating v.hat considerations and conditions were most
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Federal Reserve Bank of St. Louis
- 4 influen tial. Has the developm ent been largely a
matter of choice with you, or has it been irrrpe11ed
b~r social and economic changes? If the latter,
please describe them as specific ally as possible .
2. Presuma bly many formerly indepcnd en t on torpriso s (stores,
factorie s, etc.) operatin g in your region have ~oen absorbed in recent years by larger compani es, with tho
result that the local banking connect ions have been disturbed. If so, can you give a represe ntative list of
such cases? Are your banks seriousl y affected by the
tendency ?
3.
Have you taken over any weak or unprofi table banks that
are now being operated as success ful branches ? If so,
to what do you attribut e the fact that they are now
successf ul?
4. Have you establis hed a~' branche s in commun ities vmich
would probably not support indepen dent unit banks?
Have such branche s been profitab le? What advanta ges
have such branche s that enable them to succeed where
the unit bank would not?
5.
Have you been operatin g any branches outside of metropolitan centers at a loss in the expecta tion that
community growth would make them profitab le? If so,
describe the conditio ns.
6. Describe the economic charact er of the territor y covered
by your organiz ation, indicati ng what diversif ication
of business is secured by your branche s.
I II.
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Federal Reserve Bank of St. Louis
Management and supervis ion
1. Has each branch its own advisors ; board consisti ng of
local people? Is each member of the advisory board
a s toclu'1.o lder?
•
- 52. How many of your branches have as managers thP- same men
who were in charge of them as independent unit banks?
To what extent do you shift managers from branch to
branch?
3. Has the growth of your branch operations been retarded by
difficulties encountP-red in developing a competent personnel? What difficulties have been encountered and how
have they been overcome?
4. To what extent do you decentralize management? Are all
branches controlled directly from the main office or
do you have intermediary district offices?
5. Are there definite, specific restrictions uuon thP
power
of the managers to make loans--both as to total funds
available and as to the credit of the individual borrower? To what extent does your main office or distr;ct supervisory office attempt to pass upon loans
be:oore they are madP at out-of-town branches? Approximately what proportion of the volume of loans made by
the branches is uassed unon by tho head office or district supervisor; office)
6. What methods are used in coordinating the activities of
the system as a whole?
7. Describe the method used in auditing the branches.
8. Do auditors or special inspectors inVPsti gnte loans from
a credit standpoint?
IV.
Policies and operations
1. Give the proportions of the bank 1 s totc1.l availe.ble funds
(capital, surplus, undivided profits, deposits, borrowed
money and notes in circulo.tion) on June 30, 1929·,.. &?ld on June 30,
1930, which were used in the following, and P:x-plain
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
whothe r t ~ese propor tions are repres0 ntative of your
policy anu 9ractic e:
June 30 I 1929
June 30,1930
Loans to customArs
%
%
Securi ties, accf'pt ances,
mortgagf'ls, etc.
%
%
Nf'lw York money mar~et
~70
%
Deposi tory banks
%
%
2. What essent ial changes , if any, have been made in the lending policie s of t~'le branch es since they were taken over?
How is this reflect ed in thPi~ loans and investm ents? Has
the ratio of aggrega te loans and discou nts (not investments) to deposi ts changed materi ally in any of your branches since they were ta;_cen over?
3. Has your bank with its branc:'les actuall y achieve d a diver-
sity of loans not possib le while it was a unit bank without branch es? Exolai n.
4. What changes have been nade in rates charged on loans by
banks taken over and conver ted into brnnch es1
5.
How do the rates charged on custom ers' loans by your branches compare with the rates of tho i 11depend ent bcn!cs in
the same commu nities?
If
differthe
why
and
not what factors determ ine tl1e ratP.s
ences?
6. Do all your branch es c:i.arge thf' s~.me int"'rP st ratAs?
size for loam,? If so.
what is it? Is this anv differe nt from the vractic e of
indepen dent unit ban.1cs in the sa~e commu nities?
7. Do your branch es have any
m1mmurn
8. Do all your branch es nay the same rate of intere st on
deposi ts? If not, what factors determ ine the rates and
why the differe nces?
•
- 79.
What changes have been made in rates paid on deposits by
the banks which were taken over and converte d into
branches ?
10. How do the rates paid on deposits by your branche s compare
with those of the independ ent banks in the same communities?
11. In case the credit demands on a particu lar branch are in
excess of the funds availab le, what assistan ce is rendered by the main office or other branches ? How is this
assistan ce rendered ?
12. Through the process of shifting funds from one branch to
another as the nee~s determin e, are you able to mePt all
the credit demands on the various branche s or do you
sometim es borrow from the Federal reserve bank or your
metropo litan correspo ndent?
13. What is the ratio of the bank's capital to deposits ?
14.
Is capital assigned for account ing or other purpose s to
branch offices? How do you determin e profit and loss
for each office?
15.
Have you a fixed rule as to the proporti on of deposits that
must be carried as cash in vault by your branches ? If it
varies for differen t branche s, give the reason therefo r.
For your entire system how much cash in vault is carried
in proport ion to deposits ?
16.
What, if any, economi es have been effected in the operatio n
of your branche s since they were converte d from indepen dent unit banks? Can you give specific evidence s of such
economi cs in:
Salaries and payroll
Forms, supulies and equipme nt
Adverti sing
Rent, etc.
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Federal Reserve Bank of St. Louis
•
- 8 -
17. Aside from operatin g economi es, if any, what specific
advan-cages have your branches over the independ ent
unit bl'.r.1:::s?
18. Has it betn y-our experien ce that the enlargem ent of your
cn;::,i 1,8 l fu.:1ds through the acguisi tion of bunks and their
conv~rs ion into branche s ~as tend8d to increase or decrease your rate of profit?
19. Do you handle persona l trust business ? What proporti on of
your gross profits is derived therefro m? Are trust
operatio ns carried on in eac~ bra~ch? What proport ion
of b::-anch office profits is Jeri 1red therefrom ? Describe
your supervis ion of trust operatio ns,
20, Do you sell securiti es? Are your branche s importan t outlets for the sale of securiti es? Do you origina te
issues, either directly or through an affiliat e?
21. Does your bank make loans secured by the stock of any
corpora tion with which your bank is affiliat ed, and
particu larly a corpora tion which itself is a large
stockho lder of your bank?
22. When an independ ent bank is ta.~en over and converte d into
a branch, how are correspo ndent relation s affected ? Are
the combined balance s which the parent bank and new
branch carried with correspo ndents before the merger
reduced? Do any of your branche s borrow directly from
correspo ndent banks? State what direct contacts , if
any, your branche s have with correspo ndent banks.
23. What effect, in your opinion, would the general develop -
ment of branch banking have upon correspo ndent relation ships as they have develope d under the independ ent unit
banking system?
24, If a member of the Federal ReservP System, how do your
relation s with your Federal reserve bank comnare with
those of independ ent unit banks doing about the same
volume of business ? Are all the currency requirem ~nts
of your branche s handled through the parent bank, or
do your branche s deal directly with the Federal reserve
bank? Do any of your branahe s ever borrow directly
from the Federal reserve bank, and if so, under what
circums tances?
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Federal Reserve Bank of St. Louis
•
•
- 925. What effect ~ould the general development of branch
banl-:ing have upon the Federal Reserve System?
26. Describe your method of clearing chec1cs, indi eating
particularl y how ~rour branches clear with one
another, and whether they deal dirP-ctly with the
F~deral reserve ban~ and corresponde nt banks.
27 . If you are a member of the Federal Reserve System
and operate in a state ~here branch banking is
permitted, do you work under serious competitive
c.icadvantag es compared ·ni th non-mPmber ba..'lks that
are fr-ee to extend their brc1nches? If so, indicate how serious the competition is.
V. Branches nnd the p 11blic
1. Is tnerc any general prejudice in your own region or
territory against either group banking or branch
banking?
2. What various types of ban..1dng service arc offered by
your branches? Do the branch~s of your banlc off@r
any services to the public in addition to those
offered when they were independent banks? Do they
render any service not offered by the independent
unit ban..1<5 in the same cormnunities? Whnt are they?
Do you expect in time to offer other services?
3. Are the lending policies of your bre.nches more libPral
or less liberal than those of the independent banks
in the same communities ?
4. Have any new independent competitive banJcs been opened
in the communities served by your branches since they
were established ?
5.
Do you think that small rural communities can be as
adequately served by unit banks as by branch banks?
If not, why?
6. In your opinion, can branches operate successfull y in
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Federal Reserve Bank of St. Louis
small communities where it appears unprofitabl e for
independent unit banks to operate?
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Federal Reserve Bank of St. Louis
- 10 -
7.
In your opinion , what territo rial limita tion should
t:1ere be on branch banking , if any? Should it be
limited to countie s or states, to reserve distric ts,
trade areas, or to other economic divisio ns?
8. Aside from the law, what are the chief barrie rs, if
any, to an econom ically sound develop ment of brm ch
b:mking¥ For exampl e, admini strativ e and person nel
problem s, advers e public opinion , etc?
:,;
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".No. 1a1
"Off ice Correspo
To
FEDERAL RESERVE
BOARD
Date
Subject: _ _
From _
July
9.
1930
fr .. Horbet t _
Th is summar,T co eri
natio:ia .l b '\rs to be prP
the Co-.nptroll r o
~p Curren cy. Simila r rP)orts to b
red b
he Commi tti::ie r by
pre
ed by tat b~nkin
de rtm n
roverin ~t te in titutto n, but to cover the etatP as a holP, i . e • •
not cubdividP.d i~ o FeiPr~ l r erve di r·cts.
ne se cum <>rie!': shoula cov r the period betin~ in 1q21.
rior to th t
time use merAl the tot 1 numb r of b ~~in o~er +:on . The 1~~0 etion c~ll d for
pnlemp nted, or !'A ,,e rs 1°26-19 29 , i th r art ... on for
b,t thi!:a form
ould "'
6386 or similar form.
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Federal Reserve Bank of St. Louis
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Office Corresponae nce
FE~ERAL RESERVE
To
BOARD
Date_ July 9. J.930
Subject:
From
•••
ollowing are som of the
the form that I have draft d:
1.
re should b
ue tion
that mey ari
in connection
2-8405
ith
reported a national bank organized for the purpo e of
"
,,
2. If a national bank uspends operation and subsequ nt to auch suspen ion arrangem nts are made to consolidate it ith anotbP.r national bank,
such a consolidation would b omitted. It mny b ,
under the reposed for
ho v r, that uch a us nded bank bould first be count d as r o AnAd and
ratP. clas of conrhap thAre should be as
th n as consolidated. Or
solidations, i.e., consolidations of banks previously cuspended i th going
national banks. Under the latter lternativ, it 1'10uld be n°cessary, of
course, to also report such consolidations under th head of 11 Increases, 11 1,.e.,
th oth r bonks.
usp nd d bank r opened through consolid~tion
3. It i quit li 1y that the Comptroll r will r port cPrt in national
banks as having gone into liquidation, wh tch the stat bo.nking department
ey report as having b n converted into state bank.
4. It
nece sary to accompany the form 1th rather detail diner if th instruction and illustr tions but it probably ould be
itself.
structions could be not don the form
may b
red her 0 from
th Beard's ann l reports ( e pae; 175 of the 1925 r port) exc pt in so
far ao the memorandum item is cone rn d. Thi item al o can be r p red
here for the last fe years but therA is som doubt as to ho comol te it
will be. It ill be not d, ho ev r, by refer nee to page 175 of the 1925
report that th r are quite an bpr of voluntary liquidations, al o a
f w "Other increas II and "Other d er o. es 11 which are not e. 1 ined but
which probv.bly r pr ent di crepanciea bPt en ctual changes in the
of nation 1 ban and changes reflectRd in th ab tr ct..
st t
5. The summary figure for national banks can be
6. I hav n ver inv tigat d to find out . ether th material outit uo 1bl
to
lining pag 175 of th 1925 report i in such ha e
uport the d nired summary.
to
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Federal Reserve Bank of St. Louis
•
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be that in order to reduce the emount of ork that has to
be done hore ~e aught to give the eder 1 r serve ngent th mat rial
pertaining to national banks, after it has been worked up here so th t
thy could cross-check it so far as thi is apoliceble 1th the tate
e can escape th nee sity of event lLv
ho
bank data. I do nots
reconciling the state banking department r~ports and the nation 1 bank
rPports with respect to such tran actions, for exampl, cs conv r ions
of state bankl:l into national bankn and vice verse.
7. It
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
may
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ly
, 19
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'::L EG RA M
FED ERA L RES ERV E SYS TEM
(LEASE O WIRE SERVIC E)
RECEI VED AT WASH INGTO N, D. C.
1?2d ea
Ridd le
Clev elan d 128p jul 8
Care Boa rd
ashn
Your tele gram seve nth gold enw eise rs
app aren tly nev er recd here
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
lett er may 28
~ug gest you send copy
Flem ing
l34p n
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
FEDE RAL RESE RVE BANK OF SAN FRANC ISCO
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ESE I VE BA. Tl( OF SAN FR.A . CISC O
July 5, 1950.
H. ddle,
Secre tary, Committee on Branc h, Group and Chain Banking,
c/o Feder al Reser ve Bond ,
lashin gton, D. C.
!r. J.
Dear r.
·ddle :
Your lette r of Juno 25th, enclo s:in memorandum
pro osed study of bank earni ngs, arriv ed just a~ I as prepa on the
rinP, to
leave for at ee- eeks vacat ion.
I am, there fore, turn:i n over to
Chief .EY.aminer Sarge nt your lette r an memorandum for is atten
tion.
:.ir. Sarge nt's staff is tempor ily disor ganiz ed, due
to the sudden
death of one of his depar tment heads and the aboence of anoth
er, so
there may be some delay in reply ing.
I am inclin ed to belie ve that this study shoul d be confined to the years 1925 tp 1929 :inclu sive, s those ye rs
·11 be more
compar blc with tl1ose with which banks will be confr onted durin
g the
next decade than ·th any other perio we can selec t at this
time.
The Feder al Ro erve Banks have no earni n fi
ble befor e 1914. Durin the first fivo ye s folio in t e es av ilestab lishment of the Syste ~, ~mk ere enjoy in, unusu al profi ts du
to risin g
rices groVlin out of the effec ts of tne orld ar. · rin
the follow ing five or six years , 1919 to 1925, they ere using a subst
ant
portio n of their previ ou earn· gs to absor b losse s ari in
flatio n of the value s of commodities and prope rties. ffilile out of dethat brui.ks accum ulated lar e profi ts durin g the high- inter tis true
est
t~ose pro~i ts, in the 1i ht of subse auent event s, ,ere some~ perio ds,
hat imagi nHry, s they did not take into con
eratio n unfor eseen losse s
ich
were be
accum ulated .
By 1923 or 1924, those banks hich h d been
badly affec ted and had eat erod the perio d of readj u tment
plete d he n-itin e off of extr ordin ary losse s. It is for had comthese
reaso ns that I ould be inclin ed to recommend that the perio
si~ be confi ned to the la.st five years , 192E to 19~9, both d of annly incl1 sive.
In re,ar d to th for of anal sis to be a
the opini on that our Committee canno t ad uce facts fro t ce, I run of
e ort o
earn·n gs and ex~ens s rende red semi-ann
ly by e ber nk., b cause
th.y do not sho on im~o rtant volume of losse s ~hie do not
the banks ' recor d
s havin bwen ch ,ed to Profi t an Loss. In a
rout number o in tance s, we can point to
subst ant·a 1 volume
asset s ropre sentin losse s or poten tial lo~se s hich h ve been of
pur
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I
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,
•
~r. J. H. Riddle - - 2
chased for value by directo rs and/or stockho lders, or purchase d by an
affiliat ed holaing company creat d principa ly for that nurpose . This
informa tion can be obtained in part from the reports o examina tion, but
to be accurate it shoul be furnishe d by the member banks because the
exam.in tion reports do not always show a complete record of these trans. ctions.
This raises another question and thu.t is in respect to
the volume of earnings that has been transfer reu from a jointly- ouned
affiliat e to the bank, which earnings h ve arisen out of transact ions
having nothing what~oever to do ·th the bank's operatio ns.
If you rnre to folio closely tho cani tal-stoc k trn.nsactlonJ of some of the lar est balk~ in the Unitud States w ich have
effected consolid ations ,ith readjust ment of capital structur es of the
bank and affiliat ed companies, you would probably ascertai n that a substantia l pronorti on of the premium paid 'or stock found its way from
the affiliat e to the bank in the guise of banking orofits .
It seems to me, therefo re, that we should leave out of our
computa tion the reports of those banks which, by reason of consoliu ation ·
or by reason of movement of profits betueen affiliat es and the bank, unles.
that informaM on can be obtained from the banks themsel ves. My om opinion
is that the bank3 would decline to furnish it.
iith these two factors , consolid ation and int rchrnain of
profits , I am frank to say it ould be necessa ry to elimin te most of the
largest banks in the T elfth Distric t and probably also the 1 gest banks
in many of the other Federal Roscrvc cities.
If you would care to give conside ration to this point,
I ould suggest the follo in as an outline of the informa tion to be requested :
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Federal Reserve Bank of St. Louis
fot profits transfer red to or from affili ted companies
Other profits
Gross profits
Gross e:>q>enses
Net profits and earnings
Unbankable assets ch rged off or removed by stockholders of affiliat ed company
7. Recovery on
ditto
8. .fat loss
1.
2.
3.
4.
5.
6.
d!
•
- . ....
r. J. H. Riddle - - 5
I believe that e can measure fairly ell the oo ortunity
for success of a bank by the ratio of gross operatin e,..--penses to gro s
operatin earnings, ithout taking into considera tion numerous other
compi"cat ing factors.
4
Yours very truly,
~r{)~
Deput Governor.
Co
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
to Dr. E. A. Goldenwe iser
E. L. Smead
• L. R. Rounds
• • J. Fleming.
Form HS
. TELEGRAM
•
FEDE RAL RESE RVE BOAR D
LEASED WIRE SERVICE
WASHI NGTON
2-0454
O PO
July 7, 1930 .
Havo you ny su gestions re r ing proposed rnhed le
for collecti ng info~ ntion on onnk sus ensions since 1921
sub:ni tteQ. to cert in rese r-ve b nks in Goldenw eiser' s letter
and copy i:ent you? :e hone to print nnd istribut e it very
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Federal Reserve Bank of St. Louis
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•
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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•
fEDER AL PESE RYE BANK OF
S
NFRA
June 50, 1950.
r. J. H. Riddle,
Secreta ry, Com ittee on Branch, Group an
Chain Banking ,
c/o Federal Rese ve Board,
ashingto n, D. C.
Dear
r. R"ddle:
If you have had occasion to review
the r cently publishe d book entitled "Economics
of Branch Banking ," by Bern rd 0strolen k, I
would ap reciate your informin u me whether you
think it
ould be of any value to me in connec-
tion mth our study of the subject.
Your very truly,
CIS
0
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Federal Reserve Bank of St. Louis
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t-,EDE R . .'\.L PESE RYE BA
'I(
OF SAN r"'RAN CISCO
June 27, 1950 •
• J. H. Riddle ,
Secret ary, Committee on Branch , Group and
Chain Bankin g,
c/o Federa l Reserve Board,
ashing ton, D. C.
Dear .~r. Riddlo :
I shall greatly a
reciate it if you
11 have sent to me two co ies of X-6608, Digest
......
of State Las Relatin g to the P rchase of Corpora te
~
prelim inary draft X-6555.
Yours very truly,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
un
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tru ly you r •
https://fraser.stlouisfed.org
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Federal Reserve Bank of St. Louis
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to:
la
.:une ... 5, l ~ , 0.
o co · s of
I ., enc10c in,
t'le ro s l t t ~, o" <.1n.-c e rnin
ing. Tnis .eJO
B nnc~, 1rou nnd ~hain
t1O£w of ro
line tno
number of
a
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rai
anc1
the :nvesti • tion nd the
1 owed.
e :itn
proced1 re to
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you
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and
line
al ng tnese
subj ct, tne CoJrnitte e 7Ould uppreci ate your
ing tne propos l o tl in d anc1 the various 'u
t ions,
e of
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Tory truly yours,
dle,
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PROPOSED ANALYSIS OF MEMBER :BANK EA.Ri.'ff~TGS AND EXPEi.TSES
'BY THE
COMMITTEE mr BRANCH, GROUP AND CHAIU B.AJJKING
One phase of the investigation of the Com:nittee on :Branch, Group
and Chain :Banking nust necessarily be devoted to the consideration of the
adequacy and success of the unit banking system.
At the heart of the dis-
cussion with respect to the cnanging nature of our banking structure is
the matter of wholesale bank suspensions, repeatedly cited as evidence of
.
,1the
.
.
the failure ofiunit
system in certain quarters.
Back of the failures
is, of course, the question of profits and losses.
The motivating force
of banks as of other business enterprises is profits and their success or
failure is measured by their ability of lack of ability to show satisfactory earnings.
This is especially true with respect to ban.ks, for a ba.nlter
who is not showing a fair rate of earnings is under the constant temptation to take greater and greater risks, thereby jeopardizing the safety
of his depositors' money.
It is very important, therefore, to know what type of ban.ks are
not justifying their economic existence, where they are located and why
they are in this position.
The problem is to approach these questions
statistically for a period of years.
Data should be available in such
form that they can be classified in various
significant trends in earnings.
Wa:;fS
in order to show a;ny
Such material could be classified by states
to indicate tendencies of success or failure in the different sections of
the country and in the various types of industrial and agricultural communities, and cross clossified to see if a degree of profitableness is associ~ted with size, either of the bank or of the CCl.Il1i!U.l1ity in which located.
The fund.Q.mentol ratio, by which we mey- measure the success of a.
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Federal Reserve Bank of St. Louis
- 2 -
bank, is the rate of yearly net profits to invested capital, but because of
variations in accounting practice in dealing with charge-offs and other
f~ctors, the book invested capital of one Dank is not alweys comparable with
that of another.
Tnis ratio, therefore, of net profits to invested c~pital
should probably be ~~ec~ed ag~inst such a ratio as the relation of net profits to lo~s and investments.
R-wing determined wh1t cb.ssifications of b;.1.nks o.re not justifying
their existence by re~sonable profits, it is desirable to know the opernting
conditions that '.lre n.ssociated vii th such a situation; tho.t is, whether the
condition is due to low gross eo.rnings or to high expenses ::i.nd losses,
whether the proportion of time to gross deposits is high in u.~profitable
b:ll11r...s, n.nd whether the ratio of capit'.11 funds to gross deposits is high or
low.
M"l.!lY of the Fedcr'.ll Reserve Banks have devoted consider'.lble time
~nd effort to developing answers to some of those questions for bn.nlcs in
their districts.
It is unfortunate, however, that there exists no bodJ, of
statistical cat/l on en.rnings covering the \7hole country for a period of
ye~rs that would permit grouping bn.nks in a variety of w1ys or that is
strictly comparable in the var1ou1 districts.
The Committee, therefore,
is trying to lcy out a worlroble plo.n for gnthering such a boey of d.D.to..
It is proposed to ~sk e1ch Feder'.11 Reserve B.'.:Ulk to present m~teri'.11 on
uniform t3,ble forms for ~1111Smber bo.nks in the district for eo.ch year,
1921 through 1929.
In working out the details and methods to be used in this inves--tig~tion the element of time and expense is, of course, a very import::i.nt
consider~tion.
Any plo.n Yihich promi.ses re:1sono.bly satisfa.ctory results v1ill
doubtless be a substantial undert.::iking.
On the other h::i.nd this is prob~bly
the most important of ::t.11 the Cammi ttee 1 s underto.kings ::i.nd if sufficiently
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Federal Reserve Bank of St. Louis
- 3 thorough and comprehensive promises to be the major contribution of the Committee.
Tr,o methods of procedure have been suggested nnd
'.1
series of tests
ha.ve been Iil'.1de in order to estim.'1.te the time Md expense involv.ed in e,'.1Ch
method.
To the extent that the Foder,'JJ. reserve b'.J.n.l{s could do the work
m.th their present staffs it y1ould not, of course, entail additional expense.
Method l
Aethod I, or the "n.ggregati ve method" comtemplntes the preparG.tion
of n. b.ble of ratios, indicated as Exhibit A, '17i th b".Ulks grouped ::iccording
to size of loans and investments, size of community or ::my other basis desired.
The ratios nre worked out for e~h group of bn.nks in the aggregate.
One table for each state or fraction of a stD.te within eo.ch district vrill
be required for e'\Ch of the nine yen.rs, 1921-1929, unless
should be decided upon.
'.1
shorter period
Exhibit AA describes the procedure and gives es-
timrites of the time and cost for preparing these r'1.tios for oll member b::mks
in the system for the nine yea:r period.
From these comput~tions it is sho,m
that on the ba.sis of one grouping of bo.nks this method nould cost the system
roughly $9,000, not counting the cost of assembling and analysing here in
U'1.shington the results from the tTTelve districts.
~i
Eve!""J
additionnl grouping,
for eXll.l'.IIPle on the ba.sis of the size of the cormruni ty in which the ba.nks
a.re loc1ted, uould involve an D.ddition'1.l cost of .'.lpproxiID.'.ltely $8,000.
Two
groupings D.t le'1.st would be desirable, (1) size of bnnk, ~d (2) size of community.
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Federal Reserve Bank of St. Louis
The total cost for ~1e system on the b~sis of the t~o cl~ssifications
- 4and the nine year period would be roughly $17,000.
If a third grouping
were found necessary the total cost would be roughly $25,000.
'.i:1he above test was made on the basis of condition figures for one
call date each yea:r.
If the average of the four or five calls should be
used, the cost would be about doubled.
On the other hand if the period
covered should be reduced to four or five years instead of nine, the cost
would be about halved.
This so-called "aggregative method" has its limitations.
Ratios
for broad groups based on the aggregates of dollar figures sometimqJgive
undue weight to non typical banks in each classification.
Furthermore it
does not permit the breaking down of groups for further analysis or the
making of further classific~tions without practically duplicating the
work each time.
Thus it would not leave as valuable a mass of da.t~ for
further studies of earnings as the second and more costly method which
proposes working out the ratios for each indivicl:ua.l bank.
Method 11
The second method, as shown in Exhibit B, provides for working out
the s::une ratios as in Method I but for each individU'.11 b~nk instead of for
groups of banks in the aggreg~te.
Exhibit BB describes the method used ~nd
gives the time required for working out ratios for individual banks.
It
also estimates the length of time required for mo.king these computations
for all member b'l!l.ks in e3.Ch of the nine years.
According to these esti-
m':\.tes tMs method would cost the system some $48,000 to get a classification of member bank ratios for the nine years, with b~s grouped according
to size.
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Federal Reserve Bank of St. Louis
However, the advantage of the individual bank method is the crea-
- 5tion of a body of fundamental d~ta out of which an indefinite number of
groupings can be worked out.
Each sepo.rn.te grouping would entn.il but a.
sm.::i.11 o.ddi tion'll cost, sey $2,500.
It should be noted that this test for time and cost ros ma.de on
the basis of 1ver~ging the condition figures for the five c~lls each year
inste~ of on the basis of one call.
By using the figures for one call in-
ste'.ld of the average the cost would be reduced roughly $7,000 for the nine
yen.r period.
The total cost on the basis of one grouping, therefore, would
be n.bo~t $41,000 instead of $48,000.
'Ihe choice between the ti.vo methods outlined above ho.s some of the
aspects of a dilemma..
Method I could probably be executed for n reasonable
cost in a reasonable length of time, but it might not afford the basis for
~s complete an analysis as might be desired.
Method II,on the other hand,
will cost considerably more and has the possibility of becoming
:l
somowh3.t
burdensome or unwieldy task.
These considerations s~est one of two compromise pla.ns; one is
a combin'ltion of Method I and Method II and the second is a territorial
limitation with the use of Method II.
Compromise
l
conteq,lates the use of Method I with either one
cl'.lssific:i.tion (size of bank) or two classifications (1) size of bank .'.md
(2) size of corrmmity, .
These group ratios would then be supplemented by
sho~ing the percentage of the number of banks in each size group that are
operating at a loss or at various rates of profit on invested c~pit:i.l.
This
would entail oorking out' one ratio for each bank and would cost the system
approximately $2,500 for the nine year period.
to the cost of Method I as sho,m above.
This plan, of course, would not
remove the objections raised to Method I above.
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Federal Reserve Bank of St. Louis
This v,ould bo in addition
- 6Compromise ..li proposes the use of Method II but would IDc'l...~e the comput~tion for n selected nur1ber of states, scy one state in e~ch district.
Tho twelve st~tes might be expected to afford o. fair cross section of tho
,1hole country and the cost of making the study would be about. ono-fo1.rrth of
the cost of ustng Method II for the member b1i.11lcs in every s tflte.
It is pos-
sibly easier to defend a complete analysis for a good s31IIplo th:ln it is to
defend a partio.l analysis of the whole.
Before adopting a definite program tho Committee would like to have
tho views of those Federal reserve banks which have nlrendy done some TTork
along these lines nnd :.u-e familiar with the problems involved.
The follow-
ing ~aestions will serve to specify some of the points on which opinions .:u-e
desired:
1. Which method or compromise plan would you suggest for
adoption? \Vlzy-?
2. What period of time would you suggest covcring--the full
nine years or a shorter period?• Would you suggest the
same study for a few pre-war years?
3. Would it be possible to make the same analysis of the nonmember banks in one or two s to. tes of your district through
the cooperation of the stnte banking department?
4. Do the estim.'.ltos of the cost for carrying out the two methods
appear substantially accurate? What criticism do you have of
the methods of procedure outlined?
5.
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Federal Reserve Bank of St. Louis
Will a grouping according to size (using loans and investments
ss a measure of size) be sufficient, or should other groupings
- 7be made, for example , according to popul~tion, ~ccording to
r~tio of time deposits to total deposits, etc.? Wha t groupings
do you consider essential to the present sttl,ey?
6. Is "loans and inves trnents II a satisfactory measure of size, or should
some other measure be used such as gross deposits, invested funds,
c~pital, or total rcsources7
7. Assuming that a grouping according to loans and investments is desirable, is the proposed umber of groups sufficient, and are the
group limits the most appropriate ones?
8. To what extent have analyses beenma.do by your bank for individual
member ban..1cs? To v,hn. t extent hP.ve group analyses boon made?
To wmt extent can you use for this study the information that
you have compiled in t he past?
9. In calculating the various ratios, loans and investments have been
used '.1S one bo.se, but some banks have used total available funds.
What are the relative merits of each base?
10. How important is it to use average condition figures, which, of
course, cost more to compile than the figures for one call date?
11. To what extent ,"Till changes in t.'1.e status of banks in the calendnr
year interfere with the compilations--chn.nges such as the absorption of a nonmember bank by a member bank?
12. Are the ratios provided for in this study sufficient in your
opinion? What additions or subtractions woald you suggest?
13. Are the condition and earnings reports for your district available at your ban...1':, and are they filed in such a wa;s as to rro.ke
it possible ,t o assemble them readily in the desired lla.Ilner?
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Federal Reserve Bank of St. Louis
EXHIBIT 11 A11
--
AGGREGATIVE ME'IlIOD, PAGE 1
F. R. District No.
Loans and
investments
Item
number*
1.
2.
-'7
Under $250,000
$25'.),000 to
$499,999
500,000 to
749,999
750,000 to
999,999
state
-~A=-----+--~B~ =~-C~-=-~l--== D::-:::-~-==E:-: :-::-~~~F:_,._J-_ G~-~1-......:H::. ..__~l-~IJ
K
L
M
EARNINGS Aiil'D EXPENSE FIGURES**. in ~~aw.s "'lud=sc.-;:;o=f::--d=o::..:l;;.:,l,.:::ar=s_ _~CO;:.;ND=I:..::T:.:I.::.ON~F:....:I:..:G~URE'--:-S_*,*..J.•......:::..in:.!......:t~h~o~u:.!'!.san!::!!.:d:!!:s~o~f.....:d~o~l:..::l:..!::ac!..r.e.s_
Int. and
'Interest
Total
Net
Loans
ca,i tal,
Time
Number
disc. on Other
Other
Jaicl on
'Ibtal
Net
expenses addition
and
surJlus, Demand
dcp.
Gross
of
loans and earnings earnings
gross expenses losses
and
to
invest- profits deposits includ.
banks
invest.
deposits
losses
profits
ments
and res.
(d)
Postal
(a)
1--- - - ~ - - - i j - - - - 'b)(#) (c)(#)
(#)
savings(fr)_......,(#1'-L)_ _
la+ lb le to li
2c to 2e 2a+ b+f+.e- ~ minus. 4 D+E+F
6
1 to 4. 14 to 17
20
- ___g}_--1 __1_.qL-...,;t=o-=2:::..2-1-_ __
28
1
207
11
11
2
85
127
86
176
119
14
27
53
827
1,224
4,516
5,682
306
444
1,530
2,342
318
453
1,717
1,938
76
66
400
1,012
192
15,542
1,314
93,774
739
34,661
525
32,480
17,389
108,ss5
4o,448
37,823
457
296
12
19
28
29
219
476
324
9,999,999
747
1,109
3,776
5,022
80
115
740
660
9. 10,000,000 to 14,999,999
10 1 c:- rvV\ 000 and over
1,622
78,233
91,497
3.
4.
5. 1,000,000 to 1,499,999
6. 1,500,000 to 2,499,999
7. 2,500,000 to 4,999,999
8.
5,000,000 to
- . is- '
Total
Year _ __
------
2o4
24
185
407
299
32
69
26
699
963
3,647
5,292
126
4,346
6,122
I
68
562
1, 02!3
903
150
1,061
2,517
2,444
220
2,009
4,535
2,506
370
3,118
7,113
4,972
128
262
869
390
2,261
11,771
3,027
17,784
63,427 11,007
83,229 13,869
4,661
6,335
23,721
31,094
6,463
10,686
35,981
48,34o
11,314
17,320
61,165
81,832
17
12
1,390
71,487
424
22,287
25,487
2, 874
tl.,J)3,398 210,489
6,892
501,906
19,143
673,552
26,149
1,288,362
19
84,393
24,492
1,520,726!246,08 8
580,781
803,435 11,501,715
96
.
5
378
3,214
7,173
4,865
2
9
11
6
9
9
2
'====~== =='=======::: ::::====== ==::::::::== =~===~=== ::::::::==== '===:::d'== =~!====== ===
~umbers and small letters refer to item numbers on earnings and expense and condition reports (of state bank members in this illustration) submitted
durin;; 1929; ca)i tal letters refer to column numbers on this work sheet. For national banks and for earlier years references must be amended as
necessar,.
**Earnings and expense fi~-urcs arc aggregates of the t~o semi-annual reports; condition figures are for a single call - March 27, 1929.
#Items I-M should each be checked individually; no other i terns need be checked.
(a)Prior to 1926, the words 11 loans and investments" should be omitted, separate figures not being available.
(b)Includ.in 6 rediscounts ancl overdrafts; excluding acceptances of other banks and bills of exchange or drafts sold with endorsement. Figures prior to
October 1928 call should 0e placed on this basis .
(c) Excluding reserves for interest and other expenses accrued and unpaid beginning September 1925. when such figures are available separately.
(d) Except United States de)OSi ts and due to banks , etc.
J.
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Federal Reserve Bank of St. Louis
EXHIBIT
11
.A" -- .AGGREGATIVE ME'lliOD, P.AGE 2
Federal Reserve District No.
I
N
Loans and
investments
Int. and
disc.
on
•
loans and
Item
investments
number* ➔
A+ C
\V
1.
2.
3.
4.
$250,000
$250,000 to $499,999
500,000 to
749,999
750,000 to
999,999
8.
1,000,000
1,500,000
2,500,000
5,000,000
9.
10.
10,000,000
15,000,000
5.
6.
7.
Other
earnings
::B
3.45
5.48
3.99
8. 64
1,499,999
2,499,999
4,999,999
9,999,999
90.33
90.60
83.61
88.38
9.67
9.40
16.39
11.62
to 14,999,999
and over
89.42
83.43
10.58
16. 57
84.03
15.97
to
to
to
to
Total
'
"'Numbers a nd small lett3rs r;.,3for to item
durin 5 1929; ca,ital lo~tors refer to
as necessary.
#Items V, W and X should each be chocked
sum of items T ~lus U; no other items
w.
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Federal Reserve Bank of St. Louis
earnings(#)
(- 100. 0)
100.0
100.0
100.0
100.0
Interest
paid on
deposits
Other
expenses
D+ C
E + C
s
Net
losses
F + C
T
Total
expenses
and
losses
O+R+S
I
u
Net
~ddi tion
to
nrofi ts
H+ C
w
V
X
PERCENTAGES OF GROSS DEPOSITS
Interest
Time
Demand
:paid on
dcposi ts deposits
deposits
(:/1:)
K · M
1
un+ M
(fr}
D:M
37.93
~8.81
2.86
39.20
37.93
39.29
36.98
36. 73
6.90
6. 39
5.67
16.36
82. 76
84.48
85. 50
92.28
17. 24
14.61
14.~
8.03
4o. 54
34.03
35. 39
49.16
59.46
64.43
63. 76
50.40
2. 97
2. 73
2.87
2.55
100.0
100.0
100.0
100.0
36.88
36.28
a3.88
1.22
38.45
37.01
38.02
34.11
9.19
5. 39
8. 86
17.81
84.52
78.68
80.76
93.14
15.48
21.41
19.24
6.86
41.20
36. 58
38. 78
38.00
57.12
61. 70
58.83
59.07
2.70
2. s6
2.50
2. 86
100.0
100.0
4o. 74
36. 96
28. 94
34.64
6.95
4.64
76.63
76.23
23. 37
23. 77
26.36
38.96
73.21
52.28
2.83
2.69
37.15
34. 74
5.62
77. 51
22.49
38.67
53.50
2.69
100.0
I
Year _ _
-----
p
I
Q._
R
PERCENTAGES OF GROSS EARNINGS
Total
+C
96.55
94.52
96.01
91.36
Under
I
0
State
I
numbers on earnin '°,s and expense and condition reports (of state bank members in this illustration) submitted
column numbers on this work sheet. For national banks and for earlier years references must be amended
individually; i t ern P should be checked against the sum of i terns N plus 0, and double checked against the
n0ed be checked.
EXHIBIT "A" -- AGGREGATIVE MElTHOD, PAGE 3
Federal Reserve District No._
NN
-
Loans and
.Lnvestments
~
Item
number*~
Int. and
disc. on
loans and
invest,
A+ I
00
Other
earnings
B+ I
pp
Total
earnin12:s
C+ I
State
y
I
TT
j
yy
7.7.
uu
z
PERCENTAGES OF LOANS .A.ll'D INVESTMENTS
PERCENTAGE OF
Interest
Total
Net
INVESTED CAPITAL
paid on
Other
Net
expenses
addition
Invested
Gross
Net addiGross
deexpenses
losses
and
to
capital
deposits
tion to
deposits
uosits
losses
urofi ts
(#)
(#)
profits(#'
(#)
D+ I
E + I
F + I
00 -+RR+~S~,--.cH~+-=I_ __,.___;;J;.___..+_I_ ___;;r=-!~+-=-1___-'H~+--=-J----1---=M_.:..=-·-=-J00
RR
7.41
6.44
6.37
6.08
• 27
.37
• 27
• 58
7.67
6.81
6.64
6.66
2.91
2,65
2. 61
2.91
2.68
2.45
2,45
5. 1,000,000 to 1,499,999
6. 1,500,000 to 2,499,999
7. 2,500,000 to 4,999,999
8. 5,000,000 to 9,999,999
6.35
6.24
• 68
.65
1.17
• 79
1.03
6.88
7.12
6.83
2. 59
2~50
2.41
2·.81
2~ 70
2,55
2. 71
2.33
2.90
2.66
2.06
9. 10,000,000 to 14,999,999
- 10. 15,000,000 and over
Total
6.03
6.36
6.oo
6.02
.75
1.19
88
I
Under $250,000
$250,000 to $499,999
500,000 to
749,999
750,000 to
999,999
5.95
Year
------
2~m
2,.66
.65
.37
.63
1.22
2.49
.4o
6.35
5.76
5.67
6.15
1.32
1.00
.96
5.94
5.42
5. 75
6.36
5,45
97 .88
97 .01
99.16
102.20
7. 35
5.69
6. 71
2.88
555
692
1.09
1.47
1.37
.47
19.21
17.02
17 .35
5.66
8.66
7.90
2.81
500
16.66
96.12
97.39
96.43
98.32
1.66
1. 71
11.28
102.60
5.49
16.15
98.85
14.75
10. 59
910
612
5.55
1.61
16.18
98. 75
9.95
610
.53
*Numbers and small letters refer to item numbers on earnings and cr~ense and condition reports (of state bank members in this illustration)submitted
during 1929; ca:pi tal letters ref er to column numbers on this work sheet. For national banks and for earlier years references must be amendc.d
as necessary.
#Ito3ms Y, z, yy and zz should each be checked individually; i tom PP should be checked against the sum of items NN plus 00, and double checked against
the sum of items TT plus UU; no other items need be checked •
• w.
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Federal Reserve Bank of St. Louis
s44
17.99
17.49
14.33
18. 56
551
572
556
590
I.
. EXHI:BI T "AA. 11
--
ESTI.
D TIME .AND COST OF THE .A.GGREG-
VE METHOD
This method contempla tes the calculati on of a series of ratios for groups of
banks as a whole, not for individua l banks. Under this method the condition and
earnings and expense reports of member banks in a given state are first assembled
into groups according to loans and investmen ts, populatio n or in a:ny other desired
manner. Then the condition and earnings and expense figures of the banks in each
group are combined and set down on the work sheet. Finally, on the basis of the
figures set down on the work sheet, the desired ratios are calculate d. Under this
method substanti ally the entire operation must be repeated every time the ratios
are to be worked out according to a new classific ation.
In the test made of this method, the earnings and expense and condition reports of the state bank members in one district (96 in number) were used. This
is somewhat roore than l per cent of the average number of member banks in the
country for the past 9-year period. The various steps under this me!,b.od of procedure, in the order in which taken, are shown below, together with/~~ii mated time
per 100 banks required to perform each operation . The time given is exclusive
of the time necessary to supervise the work.
In this test the condition reports for a single date were used, whereas in
tho individua .l bank method average condition figures were obtained. An a.djustmont for this differenc e is made at the end of the estimate.
Hours
Min.
l. Assemblin g for each member bank the earnings o.nd expense
roports for the two semi-o.nnual periods, and eliminati ng
those banks thnt did not submit reports for both periods
6
2. Adding items 1-4 of resources on the March 27, 1929 condition report of each bank and showing the total loans
o.nd investmen ts, thus obtained, on the condition report
4o
3. Checking operation 12
25
4.
5.
Entering the amount of loo.ns o.nd investmen ts on one semi'.UlilUQ.l earnings and expense report of each bank, from th~
conuition report
(Chocking not required, because the aggregate for ea.ch
group will be obtained in operation 6 and checked in
operation 9)
30
Sorting the condition reports into the 10 loan o.nd investment groups, o.nd eliminati ng those banks for which earnings and expense reports were not available for both
semi-annu al periods.
(This is checked by operation s 8 and 9)
15
6. Obtaining and transcrib ing the totals for the following
items from the condition reports of banks in each group!
(a) loans and investmen ts, (b) capital, surplus, profits,
and reserves, (c) dema.nd deposits, (d) time deposits, (e)
gross deposits, (f) due to b::mke, etc. (g) U.S. deposits
7, Chocking operation No. 6 except the item of loans and
investmen ts which is chocked by operation 9
1
25
1
3
8. Sorting the eo.rnings and expense reports into the ton
lon.n a.nd investmen t size groups
(Checked by oper~tion s 5 and 6)
18
9. Obt~ning and transcrib ing total loans and investmen ts
for each group from the figures tronsforr ed to this form
from condition reports n.nd the selected sub-total s of
items in sections land 2 of the earnings and expense reports
for en.ch group
(Chocking not required)
5
20
10. Cci.l~ula.ting tho ratios on the basis of the work sheets
2
25
11. Chocking operation 10 in so far as it is not solf-choc king
2
12. Total time consumed
13. The number of member bn.nks averaged about 9,500 during the
nine year period 1921-1929, or about 100 times as mn.ny as
used in the test. On this b~sis the total timo consumed in
obt~ining tho figures for the United States for one yeo.r
would be approximn .tely 1,453 hours, or a:,g ~s
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Federal Reserve Bank of St. Louis
14
208 d.i:zy s
EXHIBIT ".AA."
- 2 -
1 year,
14. This is appro ximat ely 2/3 of the time of l clerk for
.
to tabul1 .te the repor ts cover ing a singl e year' s opera tions
tely
.A.t an annua l sn.lo.ry of $1,50 0 this would be appro ximn.
15. To tabul ~te tho data for n. nine- year perio d would cost
n.:pproxi nn tcly
re 7
16. E.'.lch o.ddi tiona l group ing, it is estim ated, ,1ould requi
a
with
or
,
tions
opera
moro months cover ing a singl e year' s
1
years
9
For
$1,50 0 a yo'lr clerk , appro xim'lt ely $900.
opora tinns tho addit ional cost for each now group ing would
be about
tho
17. If avera ge condi tion figur es ucre to be obtai ned, on
bMis of 5 c-ill d~tos , as in the case of the indi via:u::i.l
b:m.c method, it is estim 1.ted th~t opera tions Nos. 2, 3,
6 and 7 would en.ch ta.kc about 5 times as long (requ iring
tho obtai ning of total s and then the calcu lation of
~vcr::i.gcs). In other words this would add about 3)0 ~s
to tho job, or 2/3 of the time of 1 clerk durin g a year
to tabula .to tho repor ts cover ing a singl e year' s opera tions
o.t o. cost of about $1,00 0 per year' s opera tions , or
for the 9-yea r perio d
gate
18. Usi!lf; ~ver~go condi tion figur es, there fore, the 3ggre
xia.ppro
method would cost, cover ing 9-yea r!i opera tions ,
m..,1.tcly
.And co.ch addit ional group ing, approxima. tely
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Federal Reserve Bank of St. Louis
$1,00 0
$9,00 0
$8,00 0
$9,00 0
$18,0 00
$14,0 00
.•
-
.,
EXHIBIT 11 :8 11
I1i"DIVIDUAL :S.AUK l'l!ETHOD
F.R.District No. ___ State _ _ _ _ _ City_____ ____
Population:
1920 _ _ _ __
1930
Loans and investName of
member bank _______ _______ ____ Year ___ ments group_ _ __
EARNHTGS .4.ND EXPENSE FIGURES
(Aggregates of the two semi-annual reports)
A. Interest and discount on loans and investments(a) •
:a. Other earnings • . • . . . . . . . . . . , . . .
Total earnings
C.
D. Interest paid on gross deposits • . • •
• • . • . • • • •
E. Other expenses
• •.
• • • •
F. Net losses. • • •
Total expenses and losses •••
G.
H. Net addition to profits • . • .
I.
J.
K.
L.
M.
N.
0.
P.
Q.
it.
T.
U.
NN.
oo.
PP.
QQ.
RR.
ss.
. . . . . . . . . . . . . .
. . . . . .
.. ..
. ..
. . . . . . . . . . . . . . .
• ...•
Total expenses and losses • • • • • • • • • • • • •
.•
uu. Net addition to profits • • • • • • • . • •
V. Capital, surplus, profits and reserves ••
W. Gross deposits • • • • . • • . • . . . •
TT.
OTHER PERCENT.AGES
x.
la+ lb
le to li
.. . ... . .
Demand deposits to gross deposits
Y. Tine deposits to gross deposits • • • • •
z. Interest on deposits to gross deposits
YY. Net profits to invested capital •••
zz. Gross deposits to invested capital, + 100.
..
.
Dollars
A+:B
I
Total expenses and losses • • • • • • • ••
Net addition to profits • • • • . • • • • .
PERCENTAGES OF LO.ANS .AND INVESTMENTS
Interest and discount on loans and investroonts
Other earnings • • • • . • • •
Total earnings ••
Interest paid on gross deposits • • • • • • • • • • • •
Other expenses • • • • • • • • • . • • • • • •
Net losses . .
I
I
I
PERCENTAGES OF GROSS EARNINGS
Interest and discount on loans and investments • • • •
• • •
0 ther earnings • • • • • . . . •
Total earnings • • • . • • • • . . • . . . • • •
••
Interest paid on gross deposits • • • • • .
•
.
•
•
•
•
•
•
•
•
.
Other expenses • • • • • . •
..
Item
number•
..
CONDITION FIGlffiES
(Average of December call for previous year and
Spring, June, Fall and December calls for current
year)
Loans and investments(b) • . • . . • . . . . . • .
Capital, sur~lus, profits and reserves(c) • • • . •
Demand de::'.)osi ts, exce 1t U.S. and due to banks, etc
•.•••
Time de?o::;its (including Postal savin.;s)
••.•
•
U.S.)
Gross deposits (bank, demand, time and
S. Net losses . .
I
2c to 2e
2a+b+f+g
5 minus 4
D+ E + F
6
I
1,532,909
26319Il
118961880
586,086
747,023
4881999
118221 108
zT+1 I12
'Ihousands
of dollars
l to 4
14 to 17
25,712
5,072
16,265
6,842
26,103
20
21
19 to 22
A+ C
l3 -;- C
( •
D-;E+
F +
Q, +
H-;-
100.0)
C
C
C
R+
s
C
A+ I
:a -;- I
C+ I
D+ I
E-;- I
F + I
Q,Q,+RR+SS
H+ I
J + I
M-;- I
K+ M
L-;- M
D-;-M
H+ J
11¥.-J+lOO
#
#
#
#
#
Per cent
80.81
19.19
100.00 #
30.90
39.38
2~~zs
9 .06
3.94
5.96
1.42
I.38 #
2. 28
2.91
1!90
I.09
.29
19.73 #
101. 52 #
62.30
26.21
2.25
1.47
5.15
#
#
#
#
#
*Numbers and small letters refer to item numbers on earnings and expense and condition reports (of state bank members in this illustration) submitted during 1929;
ca,ital letters refer to item numbers on this work sheet. For national banks and
for earlier years references must be amended as necessary.
#Items I-Mand V-ZZ should each be checked individually; item P should be checked
against the sum of items N plus 0, ·and double checked against the sum of items T
plus U; item PP should be similarly checked and double checked; no other items
need be checked.
(a)Prior to 1926, the words II loans and investments 11 should be omitted, separate figures not being available.
(b)Including rediscounts and overdrafts; excluding acceptances of other banks and
bills of exchange or drafts sold wi~~ endorsement. Figures prior to October 1928
call should be placed on this basis.
(c)Excluding reserves for interest and other cxpevses accrued and unpaid beginning
September 1925, when such figures are available separately.
w.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
EXHIEI T "BB 11
•
•
ESTIMATED TIME AND COST OF THE INDIVIDUAL B.A.L'TIC METHOD
This method con templates the calculation of the same ratios as in the "aggregati~en · method but for each member bank individuall y. After the data for each
bank have been compiled the work sheets for the banks in a given State would be
arranged according to average loans and investments , according to population, or
in any other desired m::mner. The median ratios would then be selected for each
group. As indicated on the work sheet, average condition figures would be obtained for en.ch bank directly, i.e., the 5 condition reports for a given bo.nk
would be assembled together, i terns 1 to 4 of resources ( for example) would be
added together for all 5 calls, and the sum divided by 5, giving the average
loans and investments for the year. Similarly the two semi-a.nnu.o.l e3.I'nings and
expense reports would be assembled together, and the items or subitems making
up the figures called for by the work sheet would be obtained directly by addition.
The various steps under this method of procedure, in the order in which
taken, are shown below, together with the estimated time per bank required to
perform each operation. This is exclusive of the time necessary to supervise tho
work.
l. Assembling the two semi-annual earnings and expense reports
n.nd the condition re~orts of a given bo.nk (eliminatin g any
bo.nk whose status during the year changed substn.ntial ly)
L
L--
Hours Minutes
2
2. Obt~ining from the earnings and expense reports the yearly
totals called for by the work sheet, and from the condition
reports the avor~ge condition figures called for by the work
sheet, nnd setting the results down directly on the work sheet.
14
3. Calculating the
22
4.
22 ratios.
Checking the average condition figures and the 7 ratios (V to ZZ)
that cannot bo checked against controlling items
5. Total
6
44
6. T::i.king Dn average of 9,500 member:. banks for single year ruid a round figure
of 45 minutes for each bank gives 7,125 hours to compile individu.o.l work shoots
for ru.l member banks covering a single year's operations, or approximate ly l,OOOdays
V
7. Grouping the banks in each State according to loans and investments
roquiros about 15 minutes per 100 banks, or for 9,500 banks approximate ly
4 d.ey's
8. Clipping together the individual working sheets for 15 or 20 brutlcs,
selecting the median ratio for this sub-group and thon the median for the
entire group of 100 banks requires about 10 minutes per ratio for oach
group of 100 banks, or about 950 minutes for each ratj,o for the total of
9,500 b:mks. For 22 ratios the time would be about 350 hours, or approxim.~toly
50
9. Chocking tho selection of the median ratios, about
bn.nk, or approximate ly
24 <bys
5 minutes
dn.ys
per
10. Estim~ted tot~l time consumed by one clerk in compiling the material
covering ~11 member bn.nks for a single year, approximate ly
1,075 days
or 3-1/ 2 years
11. Estimted cost at a.n average salary of $1,500 per year
$5,300
12. If condition figures were used for only a single call it is estimated
that this would reduce the time about 6 minutes per bank or about 135 d.9.ys.
In other words, using a single call ~~te the entire job covering one
yo3l' 1 s operations would require approximate ly
3 years
Estimated cost
$4,500
13. After tho individual work sheets had been compiled each additional
grouping and tho selection of median ratios would require approxim.').tely
Estimated cost (for one year's operations)
14. For 9 years' operations, the calculation of individual work sheets,
the grouping of banks ruid the selection of median ratios would cost,
using average loan and investment figures, ~pproximato ly
And OD.Ch additional grouping, approximate ly
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2 months
$250
$48,000
$2,500
Form
o. 181
Offi ce Corresponde
To
From
.r .
. r.
e
FEDERAL RE.SER VE
BOARD
I. dle
r
:1...
Subject: 1eQO rt on 1 o s of
on
ch
e '1 1
co ~.,e
t c
ct
i
11ltn
s. llor bwiK
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e
the "u stio
they •1ould
er hand oulo
1
0n Los
n tni
t ro
in• t
r
o
v r the 1 r er
ha,e t
througn th .. r 1 dger.,
bly fool reluctan t to do . _he
ve the Lr lo~
ell in
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
• 1 o•
•
•
•
0
i
•
l'OrDl
•o.
131
\
f'ET)ERAL RESERVE
Offi ce Corresponde
BOARD
To
Date
Subject:_
fmspqnsi ::,n
From
o ••
•
2-8406
il .
i
1
r
t
al so to h
e
re1u
1y
fic~lt
f
t
allo·,ea to ~ol
open by as e sment
nal f.Ur en or .
s
g perny
ber of
e
ere b
er. t rn
the re.,ul
lm
ry little
lly likely in stat
the nu.~b
·o
·
b
t
t
e
nts are not very
tion
te for
intennee
s.
ste th t it . · ht
b1e for the re erve
to offer their o~
ic
t
n
th b nk
su erintend ent in gettin
e
o
1nich the committe e
de ires .
o ld be o.
cooper tion hich ould ,t
be
o supe
n ent
no choose not to ccent
e o fer as accepte-1 the u 1 i ty of inform t actuo.11 be i p ov db
vin the yst~~ ' s
on people secure it .
b nk
1 o
de t
tin 11 likeli oou
ne o·nt
very
sp nsions tat a occurr din the
numb,..r of the
ne in,..uiry have not yet been settl d .
pe iod cov r 1 b
l r"'
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(P)
I
t
J
•
FEDERAL RESERVE BANK OF SANfRANCISCO
June 23, 1930.
l
Mr. J. H. Riddle,
Secretary, Committee on Branch, Group and Chain Banking,
c/o Federal Reserve Board,
vashington, D. c.
Dear ~fr. Riddle:
Mr. John Philip Wernette, instructor in economics,
Harvard University, called thi::, I!lorning and stated that he as
about to engage in a study of the development of branch ba.r1king
in California.
In the course of his discussion, he subnitted a
proposed questionnaire which he intends to send vo the four
large banks in California engage in operating branches beyond
the metropolitan limits of the city in which the head office 1~
situated.
I am merely passing this information on to you
in view of the Committee's intention to submit a questionnaire
to the California branch ban1·s.
Mr. ITernette told me he had recently called on
you, so no doubt you are familiar with his progrur.une.
Your::: very truly,
4~
De:·mty Governor.
Copy to :Cr. E. .A. Goldemmiser
r. E. L. Smead
Mr . L. R. Rounds
:T. 1, • J. Fleming.
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Federal Reserve Bank of St. Louis
June 25 , 19~0 •
.r . J . ,I . Riddle ,
Secretary , Co ittee on Branch , Group and Cha
c/o Federal Reserve Board,
· sh · gton , D. C.
Banking ,
Dear 1r . Ri dle :
Supple~en ting my letter of today , cont· ing comment~ on the
Sc ed:.tle of Infor~tio n on Banks Operating Branche~ Out ide of the City of
the Head Office , I de ire to subr.dt th following corrnnents regarding the
c-che ule of Informati on on Group Banldn Syst ms :
I. Organiz tion nnd hiatory , p agraph ll and 12 :
I ould ugge t insert · g aft er the name of a bcnk the
amount of p id-in ca.it 1 "tock and surplus .
III .
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Federal Reserve Bank of St. Louis
I suggest add. g the que~tion underline d :
T
hat extent are th local rectors and man
ent
determine policies and carry on operation s?
hand ho
ent
lie
_ --"---~
-=-=-=~:.....:;.:~-='--'.;.;...c.-----~=---=:;;......;;..... hole?
Comment: The proponent oft e Gr oup Syst m feature
th inde endence of ction hich the unit bank enjoys,
but e lmo from xper icnce that if the local m
er"
and dir ctors re given anyt :lng like the freedo they
are purported to have the holclfn~ corporati on ould
have an difficult ies ith, ch to contend .
P
gr ph 4:
I
sugg st
dding the que~tion underline d :
t changes of personnel in t he staff and dir ctor ates
of banks ere made hen they ere cquired by your
oup,
or rub~equen tly?
at i~ the usual policy as reg rds ret ntion of local staffs and dir ectorates ?
If you h~ ve
•
Hr. J. H. Riddle - - 2
acauired banks which formerly were in difficulties
were you obliged to retain the same managing officers so as to hold community good will?
Corrmwnt:
We have knOim numerous instance" where
banks in difficulties have been acquired by Group
and Branch organizations and the same incompetent
management retained. For public consumption, we
are continually being informed that these loc 1
units are left under community direction and w· 1
go right along as formerly. This, it seem~ to me,
leaves something for the new 01mers to reconcile.
Either they do not (and I am satisfied they do not)
grant freedom of action to local unit banks or
branches, or they give them a very strict supervision. A'.y omi e erience leads me to say that
the latter is the case, and it is one of the mo t
important points to be given consideration by
those who are engaged in studying this complex
subject.
0
III.
Management and supervision, paragraph 5:
I suggest adding the question underlined:
A:re all the members of the group audited by a
central auditing force? If so, to whom is the
auditing force responsible? Alfo, do auditors
or soecial insoectors invertigate loans from_J!
credit s~nndpoint?
IV•
Policies and operations, paragraph 6:
What changes have been made in rates charged on
loans by your banks since they entered your group?
1
'hat is the usual rate charged by your banks on
loans secured by government obligations? On good
customers' loans?
V.
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Federal Reserve Bank of St. Louis
Do you not think it advisable to make a further
classification calling for rates of interest on lo1J11s to
merchants and rates charged farmers and stock-raisers?
The volume of loans against government securities is inconsequential in agricultural commun ties.
Public relations.
I suggest inserting the following paragraph:
•
~r. J. H. Riddle - - 5
2 a.
Describ e your method of clcarinr ; checks,
indicati ng particu larly whether your units
clear with one anotherJ or whether checks
on other banks S2%J_our Group are collecte d
through the Federal Reserve Banks and/or
corresoo ndents .
·
Cowment:
This is a neTT question and is important because where banks have a common ownership and can effect settleme nt of checks
on the day of their receipt, it reduces the
collecti ng time from one-hal f to two-thi rds.
This is a great accommodation to co~.merce.
I think I recall having explaine d during the
February confernn ce in Washington that the
Branch banks in Californ ia were renderin g a
far more effectiv e check-c ollectio n service
than it was possible for the Federal Reserve
Bank of San Francisc o to render. I have noticed that durin~ the past five years the
volume of checks handled by the Federal Reserve Banks has very materia lly increase d,
sometimes as high as 59%, whereas in the
San Francisc o Distric t there has been practically no increase , and in Uinneapo lis District there has been an actual decline of 8%.
Yours very truly,
)
Copy to Dr. E. A. Gold.enueiser
'r . E. L. Smead
·r. L. R. Rounds
r•r. ,• J • Fleming
.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
FED ERA L RES ERV E BAN K OF SAN FRAN CISC O
June 23, 1950.
Mr. J. H. Riddle ,
Secre tary, Committee on Branch , Group and Chaini ng Banking,
c/o Feder al Reserv e Board,
ashin~ ton, D. C.
Dear rr. Riddle :
I have review ed m.th much inter~ st the mater ial contai
the Schedu le of Inform ation on Banks Opera t· g Branch es Outsid e of ned in
the City
of the Head Office , forwar ded to me in your letter of June l~th.
It goes ithout saying that the replie s will be biased
cases. This is quite appare nt from the chara cter of respon ses given in all
by repres ent tivcs of the variou s kinds of organ izatio ns who recen tly a'JPeared
before the Congressi onal Committee.
I suo- est theref ore, that the Fe eral Rese e Agents
be asked to review the questi onnai res and SU)
t eir omi comments before fo ..u-JiinotQ~ .
I presume that the Board members, ind.vi dually and collec tively ,
ill be reques ted at some future time, to presen t to the Congr assion
tee their o inions based upon a comprehensive study of these variou al Commits develo pments nn1 to make recommendations as to what mieht best be done,t hrough
legislative and admin istrati ve action , to influe nce cha.n~es in our bankin
g
m cliner y.
o doubt the schedu les which you have prepar ed Y7ill resent a comno
site picture of the inform ation that the Board members might reque st, so
that there
will be no occasi on for a duulic ation of effort at a later date.
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Federal Reserve Bank of St. Louis
The follou inn- sugge stions are made:
1.
Organ ization and histor y, paragr a h 8:
Inser t 11 Capit3 .l and Surplu s," in the list of affili ated
compa nies.
Paragr aph 10. Distri bution of stock:
Insert :
If all the stock of your bank is 01med by
some corpo ration , state its name and give
the forego ing descri ption of its stock
ovmer ship.
Comment: As you may lmow, all the stock, excep t
direct ors' qualif ying shares , of some of our branch
orGan ization s is owned by one corpo ration . It is
!r. J. H. Riddle - - 2
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
assumed, therefo re, that what is denired is a
stateme nt of the distrib ution of the stock of
the holding com any. For instanc e: All of the
stock of the Bank of Italy Nation al Trust and
Saving s Associ ation is 0V1ned by Transam erica
Cor oration ; all of the stock of the Bank of
America of Califo rnia is ovmed b the Trnnso.merica Corpor ation; all of the ~tock of the
.American Trust Company, San Franci sco, is
owned by Goldman, Sachs & Co.
II.
Economic backgro und:
Change paragra ph 5 to read as follous :
Have you
been operat in~,ou ts·de of metroo olitan centers any
branch es at a loss in the expect ation that community
growth would make them profita ble? If so, describ e
the con itions .
?
Comment: Some of our large branch banks
have establi shed numerous sma
branch es
ithin the metrop olitan area of the city.
:any of these br nches, of cour9e , cannot for some time
be expecte d to earn a profit . As far as
bankin service 1~ concern ed, it cannot be
sai" that these metrop olitan cities are obtaining any bankin service hich they would
not have had if the branch b ks did not exist. It is obviou s that these substa tions
make it a litt e mo e conven ient for th d positin g public , but the ordinar y unit b ks;
o the heaJ offices of branch organ· zations ,
eive adequa te banking facilit ies withou t the
necess ity for the substa tions.
III.
and ~unerv ision.
Insert a new paragra ph, as foLlows:
9.
Do audito rs or specia l inspec tors invest ·gate loans
from a credit standp oint?
Comment: In Group organiz ationN , t ey follou the
practic e of using bank examin ers both to make an
audit of the books and to apprias e the bank's assets. In Branch organiz tions, the cor.L'llon ~ractice is to use experie nced accoun tants to au ·t
,.
lr. J. H. Ridd le - - 5
the book s, t ..c.t i", to verif y accou nts and
check the cash, secu ritie s, etc, and independ ently to use expe rienc ed cred it men to
pass upon the qual ity of the bank '" asse ts.
A revie of the pr·ct ices in diffe rent banks
in thi respe ct will be infor ming .
IV.
Polic ·e., and oner etiop s, parag raph 15:
"Doe
each branc h carry its own cu tome rs' led er?"
I have neve r heard of an out-o f-tov branc h
not main tainin g its o'\711 depo s·t ledge rs, nor
heard of a head offic e main taini n dupl icate
depo sit ledge rs of an out-o f-tor m branc h accoun t. Obvi ously , such a proce dure muld be
extre mely incon venie nt and ould serv no
usefu l purpo se.
V.
. Branc hes and the publ ic, parag raph 4:
"Do you think brnnch bE!Ilks can furni sh cred it facilit ies to the sµicl l rura l communities here so
many unit banks have ~e a suspended?
l
I have sugee sted the subs titut ion of "suspended"
for "fail ed" becau se the latte r migh t be jnter prete d to mean "fail ed to ;ive cred it faci litie s."
There is one ques tion wh·ch you have inser ted in your
Group sched ule
which might also be incor porat ed in the Branch sched
ule, and that is in refer ence to the mak.ine of loans by the branc h bank , supp
orted , stock of the corpora tion ,hich owns or is affi li ted rr.i.th the branc h
bank . The quec tion migh t
take the follo ing form:
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Dooo your bank ma.l·e loans secur ed by tock of any co
pora tion with which our bank is affil iated nd part
icula rly a corpo ratio n whicl it elf is
rge stock holde r of your bank?
Comment:
I migh t state for the ben fit of the members of our Committee that it is quite a common prac
tice (not a good on, to be sure) for some of our
brcnc h banks to ffiakc subs tanti tl amount of loans
supp orted by tic secu ritie s of the corpo r tion hich
orms a ubst antia l porti on of tlo tock of the lendg bank .
rr. J. H. Riddle - - 4
III.
Manageme.!.1.:!_;_and Supervi sion
Inrert a new paragrap h as follows:
10.
To ,1hat extent does your main office or district supervis ory office attempt to pass upon
loans before they are made at out-of-t ovm
brunches ?
Cor.m8nt: Thie sbould bring out the point
whether borrowe rs at branche s far removed
from the home office suffer unneces sary
delays in obtainin g credit.
Yours very truly,
Copy to Dr. E. A. Goldenw eiser
Mr. E. L. Smead
Mr. L. R. Rounds
inr •
J. Flemjng
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
.~.
7
.
f
C
es o
•
ence
To
•
FEDERAL IU!.SERV!i;
BOARD
.L.'Q'....__Jun e
Subject :_Propos d
From
al.r_se
23,19
0
of member b nk
earnin sand expenses _
to
s o
bPr
ain
groupin
ccordin.g
ufficien t,
C
to popul tion,
etc.? i7h t grou ings do
pr s nt
~d?
z ) b~
esorve
rning
que t
.,..
th
ethod~ of m king
psnes, ·t m t be well
mong thers the ~ollo in~:
,
(using lo n
ther group
.
d
ment a
<>de, for e
s to total d osit
r essentia l o the
s lo ns and nvPatme nts
sati factory me ur~ of ize,or s oulc
some other mea
used such os gro s deposit , investPd fund , c Pit 1
1
otal r source •
• In the t sts that h~v been made, a number of the sub-item s rPportPd
telY in th
arni e pna e:xnA
re orts h ve been grouned toget er.
it be advi able, conside rin that it would ake more tim to do o, to
morA detaile cla
cnti
i the :e.!:fE~IZ tabul tion? Consid~ r in
the
c
'hP
orts for earlir>r ye r
Pin much 1 s
.
~nd investrr~ nt3 is de-
eir
the
rP the group li its
{ii
~at
nt
mad'3~ or n
To 'ffh
th
r
T
.,.....,. ..~-~ us
i
r .;JPfifE!::at.~~~"""',_~
compiled in the nast?
•
!n calcul ti
b se, but
ti on J n
of each b
ri
ve
d t
How importa nt is it
o com ile
/ (
• To wh t e:xten-t";ri 11 chAIJ ge
y r interfAr e wi h th compil tion
nonmember b nk by
IDP.mber
nk?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
, loa
the b s
il ble
v
ual
t
•
course
i~ th c 1 nder
abeor tion of
~
.
-
•
•
2
re th
nd
y filed in
~
r adil
e d sir d
11 .
criti~i m do the eder l r serve b nks hav o~ the ethod
rocedure outlin d, nd do th esti tes a~ ear substan illy accur te?
12 .
en do th F d ral r serv
the complete n lye?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
b ks
ould it be suf ic nt1 in so far
k tabu.1 ion for a bor r
ti
te th
s the poteriod?
the
could send
period is con-
bu.1 tions cover every st te in each distric t or o 1.
at ext~
re :rr.il r
ta v il ble for nonmemb r
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
0 r11tions Fil
FEDER AL RESER VE BANK OF SAN FRANC ISCO
.,
-Office Correspondence
•
l• Orlll .·o. 1 31
To_
FEIJERAL RESERVE
BOARD
Subject: ____
(~~,
From _ r. Horbett
and expen
tely fro
t
~ tional and
bo.nk b lances
1928 Bulle in,
June 20 ._ !93..Q
•ro
!i--8496
far w
hould
not report d
nvestments.
925, by both
until t'he last h
, the au:ount of intere t received on
nd
Inte
l.
se
•
termining ho
"nd in
m r b • ks.
e f llo ing point A.rm.u:t be kept
go in analyzing earning
Date_
==.:.;;;.;;:...:;...--=-:a;:_;;:=~,;_...=-,..;:;..----
August
y b mted from p g 587 of
rob bly not affect the de ired r tio~
tively
thi fac
bly.
notic
en rately from
ho
o ever, tri doe not
the propo ed analy is contemplate ob1/
. count o n ~ loans and inve tm n
•
2.
t
e
the
3.
~ni
- - - - - - - - d half
0
-
not
'8.
of
1926.
not ...,ubdi vided a
1926. The pro
of
econd half
does not c 11 for such a separation.
In
nk de
•
·
•
e
nt
en demand, time,
ropo sed an lysi ,
cle r t t by tis term
4. Loan and ·nve t nt. It mu. t
he present definition)i.e., including r discount and overd ft but ex
th
e or d
acceptance of other b ' and bill of exch
5.
e rm
do
d
po it
11
v ry careful to dofine it as tho
fferent
g inst item 20 of fol"II 105, i.e., exre e
o it onl
clu ive of offic rs nd certified check and ca.sh letterty...2.¼_r dit and tr v ller'
c.'-lec'rs hich e here very often classify
demand deposrts;A'which are reported as
a part of II due to bank 11
II
n to include without
e
clear hat by time deposit
question ostal aving d posit. It hould al o be made clear that cy
med po ·ts,
e enti e amount du to bank. dema d d pocit •
depo it
d po it
o hether gro
que tion
o
i
er the
d U. S. depo i t . Ho
r ly the total of demand and time epo i t , and this should
ould be used, or
y the Federal re erv bank in going over
b k pt in mind b h by our lve an
the propo ed ork heet •
6.
ouldn't it be
7. .::.I.::.;n~;:;..=.:=-_;.:;,:;....;;;=nk=-.,;;;;.de.;;.p.._o.;;...,"'"icc..t;,..;;..
the.tit i
sep r ely
half of 1926.
8.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Thee
ee
t
good ide
to get
good ide
ouldn 't i be
av il ble, i.e., b ginni
b
0f
oing nyth·n
hi
n e i
hi
m
item
"CCl)ll
to this item
t
•
- 2 -
)),t\f
r
UD
t ly i do
elude
ith
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
for the
in
t
l
ecuri ti
ect·on 2.
· i
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
FEDE RAL RESE RVE BANK
OF NEWY ORK
June 16, 1930.
Mr. J. H. Riddle , Secret ary
Committee on Branch , Group and Chain Banking
Federa l Reserv e Board
Washington, D. C.
Dear Mr. Riddle :
f
Your letter of June 6 was duly receive d
during my absence for a few days.
The minute s which were
enclose d for the meeting of the Execut ive Committee held on
May 25 seem to me to correc tly record the action s taken, and
no comments or sugges tions occur to me in connec tion therewith.
Very truly yours,
~
LAL
L. R. Rounds
Deputy Governor
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
to:
wie 16 , 1930 0
ro
illi
e e
nt ,
e Bank of
lllinoi •
ar
ica o,
r.
n
r
t
8
cy trul y yo r ,
• H.
ec et
Group
c• .
on Bra c ,
n .
SCh"RDUL.., u ,' INFORMATIO.i:
ON
GROUP :BANKING SYSTEMS
I.
Organization and history
V
1.
Na.me of holding company or controlling agency.
2.
Location of head office, state of incorporation, date of
incorporation and law under which organized.
3.
Describe fully the structure of your group, indicating
where the ultimate controlling authority lies and
through what channels this authority is exercised.
4.
General powers of the holding company or controlling agency,
(Submit as exhibit copy of charter, articles of incorporation, by-laws.)
5.
Capital structure:
Classes of stock, par value and book value of each
class, number of shares of each class authorized
and issued, voting power of each class, -SIP•t-.
.
-,M~·
of each class.
V
6. Stock distribution:
What proportion of the stock is held in the city where
the holding company or controlling agency is located?
In the cities and towns where the banks of the group
are located? In the state of the holding company or
Ci>n trol lin
~
7. Has
µ
i
VJv~V',lvv,~~
1
stock of the co?poration been issued for cash, ·either
by public offer or otherwise? If so ,(furnish prospectus of
offering.
'' l (l,(i{. A
I
M-
V
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
8.
any
What liability, if any, have the stockholders of the holding
co~o.ny for the debts of the company in excess of their
share ownership? If none, is there nny other provision
sa.fegu.:irding the double liability attaching to the shares
of bn.nks ovmed? H~s the protection offered bnnk creditors
by double li~bility been impaired by trnnsferring ownership
to the holding compr:my?
1 "
- 2 -
List~ officers and directors of the holding company :md
their principnl business affilio.tion s.
10.
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Federal Reserve Bank of St. Louis
Furnish st'1tement of the resources nnd lio.bili tics of tho
holding company.
- 3 -
11.
Loca tion
No.me of bru'lk
City
State
No. of
City
share s
issue d
Per cont
of issue d
share s
owned
A.t time
of acuisit ion
• •
C
~ *Exch ange
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Federal Reserve Bank of St. Louis
of
At prese nt
Price pn.id
per share , 1
if cash
Basis of exchang e, if not
cash
Totn.l
depo sits
Loans and
inves tmen ts
!a rabcr or
non-member
of F.R. at
time of
ac uisi tion
Member or
non-member
of F.R. at
pi:-esont
·ictho d of
acqu isitio n*
- 412.
List of other affiliated corporations, including securities companies, holding companies, insurance,
mortgage, safe deposit, real estate companies, investment trusts, eta •
•
.,,~,_.,,
.
\
Name
0.
0-~
I
Year
Ip~
Year of '
merger
of organiza- or a.ffil·1. P
iation
tion
,
I
~
'
1
.,-1
..
Method of
(Exchange
purchase
uurchase
acquisition Per cent
of stock,
of stock
held
of stock, \
of assets)
Form of affiliation*
Function
•
.
*For e~le, stock trusteed for bank stockholders, direct ownership, ownership by or through another
affiliate, etc.
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Federal Reserve Bank of St. Louis
/
- 5-
13. What methods have you used to determine the values upon which
exchange of stock or purchase has been made?
14.
I I.
Describe the method of handling slow and doubtful assets
of banks acquired by you, and indicate what success you
have had in liquidating such assets.
Economic background
1.
Outline briefly the development of your group, indicating
what consideratio ns and conditions were most influential .
Has the development been largely a matter of choice with
you, or has it been impelled by social and economic changes?
If the latter, please describe them as specificall y as
possible.
2.
Presumably many formerly independent enterprises (stores,
factories, etc.) operating in your region have been absorbed in recent years by larger companies, with the result
that the local banking connections have been disturbed. If
so, can you give a representat ive list of such cases? Are
your banks seriously affected by the tendency?
3. Have you taken over any weak or unprofitabl e banks thn.t are
now being operated successfull y? If so, to wh3.t do you
attribute t~e fact that they are now successful?
4.
Have you established any banks in communities which would
probably not support independent unit banks? Hrwe such
banks been profitable? What advantage hn.ve such b::i.nks
that enables the to succeed where the independent banks
would rrot?
5. H~ve you beon operating ony bsnks nt a loss in the expectation
that community growth would make them profit~ble?
describe the conditions.
If so,
6. Describe the economic character of ti1e territory covered by
your organizatio n, indic'.:tting wh~t di versificntio n of business is secured by your system.
✓
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Federal Reserve Bank of St. Louis
7.
According to your experience what is the mi.ninum condition under
which .~ .ail'! c::ui o~er'l.to profit~bl y, m~a ~ od
~
Populatio n of the community,
Volume of deposits
Vo 1 ume of loans ~~.,;;;.;;;-- -~:-:Volume of other business,
B.
Is there a need for any financial services which your form of
organizat ion has enabled you to supply, but which the independent b.o.nks because of their isolation and size could not?
If so, what are they?
III.
Mnno.gemen t and supervisi on
v
1.
To TThat extent does your holding company share in the management
of banks? Has it a staff devoted to supervisi ng them and to
coordinat ing their n.ctivitie s?
3.
~Vho.t proportio n of the present directors of the local b~s live
in the communit ies \'There the b3Jlks :ire loc.' \ted?
4.
Wh~t clvmges of personnel in the ,t~fs o.nd directora tes of b.:mks
were m.'l.do when they •,vore acqLured by your group, or subsequ.ent-1~?
\Vh::i.t is the usun.l policJ, .:'1.S eg.'\rds retention o ~ oc:i.l s tn.ffs .
. ~ 1 ,,__,,r,s..,~ ~ ~ z - - o , •
s?
md '·
5.
IV.
✓
Policies :md oper~tion s
l.
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Federal Reserve Bank of St. Louis
~~'l.t ::i.re you doing in general to attain uniformit y in the
activitie s, policies, ~d pr ctices of the b'.lllks in your group1
- 72.
What method, if any, is used to coordinate the lending policies
of the banks, so as to bring about some de 5Tee of uniformity?
3. Has a uniform policy for investments been worked out, or does
each bank make its own investments without advice or .directions
from the controlling agency?
4.
vVhat essential changes, if any, have been ma.de in the lending
policies of the banks since they were taken over? How is this
reflected in their loons 3nd investments? Has the ro.tio of
aggregate loans a.nd discOt1.nts (not investments) to deposits
chnnged ma.terially in s:ny of your banks since the~ were taken
over?
I
~
5. Has your group actu..'3.lly achieved a diversity of amrets not
Doa -
sible for the unit banks before their o.ssocia.tion in the rr ~. ?
Explain.
6. What chnnges have been mde in ro.tes charged on lo~s by your
b'l!lks since they entered your gToup?
charged by your bnnks
1
ate
7.
How do the r.'.'.l.tes ch..1,rged by members of your group compa.ro with
the r~tes of the independent unit b'l.rl.ks in the as.me communities?
8.
Do ,'111 your bn.nks ch1.rge the same interest ro.tes? If not, who.t
factors determine the ro.tes ~nd wey the differences?
Do your b'.1!lks have o.ny nn.nimum size for loa.ns?
If so, what is
it? Is this ~ny different from the pra.ctice of independent
1mi t banks in the same c ommuni ti es 7
V
v
Wha.t is the usu..,,
10.
Do o.11 your b::mks p.v the so.me rate of interest on deposits?
11.
What changes have been :rnn.de in rates po.id on deposits by the b3.!lks
which ha.ve entered your group? What is the usunl rate po.id by
your bn.nks on checking xcounts? On so.vings deposits? On time
12.
How do the rates p~id on deposits by members of your group compare with those of the independent b3.nks in the same comntWli ties?
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Federal Reserve Bank of St. Louis
If
not, who.t fnctors determine the rates and why the differences?
◄
-I
..'
- 8 -
In ca.se the +.Q~~--~~ credit demands on n tticul.'.1.r bank .'.\re
in exce$s of the funds avo.il::,ble, wh,"l.t
s stance is rendered
by the ~~~f'S
•
or by other b::1.:. ~s
Describe in some
det'.l.il the mechonism n.nd process by rthich this n.ssistn.nce is
rendered.
14.
'~
T~rough the process of shifting funds from one bank to another
as the needs determine a.re you able to meet all the credit
demands on the various banks without going outside your
group, or do you sometimes1'8MT""'-. the Federal reserve ba.nlt
or your metropolitan corr spondents?
---
i c t ne .31l L .:i.
tio of c oitul to u.
'.2ne .Jin L n:n? The r 1e
o.
!l t
it~
0
,on
our oa.K?
Do you mike up a daily or weekly surnnnry of the condition of
n,11 b::uiks in your group? :'R1en.se n.ttach a ·copy of the form
used for such SUl!JlllD,ry '8'!!~~_,,..._._--""'
I
!n,e you a fi ec rale ·
tlr t .nu t be c rried
ca
If i t VO • i s for C1 i ff
for .
,o
yo ll r entire
0 l
·- _.,,."
oroportion of 1..1.epo .,it
v ult by yo r b·u s?
s , •i 'If> tho re •on there / •• UC
car •i d ir nroportion
C!l. 'l
in
V
lt i
Whn.t, if n..~y, economies hn.ve been effected in the operation of
your
"iJ:').t :.-J .. since they vrere acquired? If possible, give
specific evidences of such economies in
Salo.ries and pcyroll,
Forms, supplies o.nd equipment,
.
I
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Ho "I do t
vO~tsofoertin teb1,c
1e .., .e in - ti t · o
inyou.r t'O,T)C0.,,1rr
·it
n o r t in
" r.
c n nt
Have you prepn.rod a combined profit and loss statomont for nll
your brulks? If so, please attach n copy.
•
- 9 -
How many of your banks do a perso
the banks as a whole, how impor
your system? Give fi
of tr~st
{
t business?
Taking
~:d!:aw•!!! l!ll:::iaS& in
•
t supervisi on
~
How many of your banks sel 1 securitie s? Are your ba..'1.ks importan t outlets f r the sale of securitie s?
nate issue
.
Do your banks lend on the stock of the other members of the
group as collater~ l or on the stock of the holding com:pn.ny?
Do you think such losns should be prohibite d?
When on independe nt bank enters your group, hR,w are correspondent relations affected? Do members as/ruJ.e close all
correspon dent accounts except with other members of the
group? Tnld.ng the group as a whole are bo.lo.nces carried by
the system VTith outside correspon dents gre~ter or less than
th~y would be if t:1ere were no group? ,z,ad:ioe:h e.e speCirt-
••
•
•
Who.t effect, in your opinion, v,ould the general devel?pme nt
of group banking ho.ve upon correspon dent relations hips as
they h::i.ve developed under the independe nt unit bo.nk:ing
system?
When o. member of the Federo.l Reserve System joins your group,
re its relntions with its Federal reserve bo.nk modified
in ony way? Who.t effect does membership in the group h:i.ve
upon borrowing or rediscoun ting with the Federal reserve
b::i.nk?
rout effect would the genero.l developme nt of group banldng have
upon the Federal Reserve System?
ib
0
part.icu
l
:)e bC
t
,
V.
(
et O of cle ring
et r your nit
cs on ot er o k~
n t O e ernl e
ica.tine
e nother ,
re col~~
orre -
.
Public rel~tions
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1.
Is there o.ny general prejudice in your territory ago.inst chnin,
group, or branch bn.nking.
)
•
- 10 -
2.
Do your banks offer any services to the public in addition to
those offered by them before they were ta.~en over? What are
they?
v-
3. Have <the credit policies of any of your banks
bseera0 !B8~0
with the result that certain
typos of borrowers find it more difficult to get credit? If so,
have you had an undue amount of protest from these quarters
with perhaps some propaba.:i1rlci against your z;u;::g,g,ee~•.fij& •
r&e:~oe-◄~"J"r,ffi!~
,
._,
v
4.
What in general is the size and type of commu.ni ty served by your
banks? In what size con:munities do the branches of your banks
,
operate?
I
[/
5.
If the law permitted, would the management prefer to organize
this grou.p into a branch banking system? If not, would your
banks organize branches in the smaller communities?
,!at ir. yo:.ir O'Jinion is t 1e .. 1u;or ca.1se of 1' 1lure o' so ... •ny J~11 •.., in
s;,·11 ruro.1 co .. 1... mitie•~
ill inucn•"11 ent unit uonKS be o. le to 01er· te ~J.::!::!e::.sf'ul l y in .o·t oft e~e co ..t uni tie int .e f'tt',re. If not ,
-10 ,0.1 t ir..
.ro
'•n ~-:: r. t.· '•ly ·urnU: d po it unci -::re it f cili. tiA s to r,.1c co 1...uni tie s or c· n thPY be r.10 !'e ~&ti L.'..l~ tori ly t·1 l'.'n ~·.ro
of by branch b· nicin" ::vst.,., .~?
I
(
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
H'ls the Comptroller of the Ourrency or the St'"'.te brmking dep~rtment been consulted at o;ny time With respect to the
form~tion of your group or its policies D.nd ,1.Ctivities?
Do you think that bn.nl{ holding companies such a.s yours should be
under the supervision of either the Comptroller of the Currency
or the St~te b::i.nking dep~rt~ent?
/
I
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2, 1
r.
•
•
t
•
•
•
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
• .,1 rK:
-."une 1 ... , 1 . 30 •
d si
It i
t l y co
on •it
s
r
oncro. tin •
· ai t ions
to secQre
7
• tr l
your ,
tt e or. r
n •
B n
• C•
ch
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
1.
of 1 a
10
t
o tio :
C
t
•
ti
In
po
t
•
•
r of
Inc
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•
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•
I
SCHEWLE OF Dl?OR:.1ATI OJ: OiI BAJ.TICS
OPERA.TEW BRA.:.;CBES OtJTSIDE OF
TP.E CI TY OF IEE HEAD OFFICE
l.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Organizat ion and history
l.
Hame of institutio n
----- ----- ----- --
Location of ma.in office:
City _ ______ ____
State_____ ____Populatio n of city _ _ __
Uerober or non-member of Federal Reserve
2.
Condition as of last call, Date
----- ----- $_ _ _ _ __
Capital
Surplus and uncli vided profits
Loans a.'1d discounts
Investmen ts
Demand deposits
Time deposits
3. Outline your corporate history, incl~ding dates of organizatio n, incorJora tion, important mergers and the
begin.'1ing of branch banking.
4.
.umber of branches, June l,
1930
In city of ma.in office
In outside cities
5.
Describe the method used to acquire banks--ex change of
stock, purchase of stock, or purchase of assets.
6. How is the price determine d when you purchase the stock
or assets of another bank? In the case of exchange of
stock what method is used to determine the basis of exchange between the stock of the bank taken over and the
stock of your bank?
- 2 -
7.
List all branches outside of the city of the head office.
-
Location
and name of
branches
Population
of town
or city
Is c orrrnuni ty
residential ,
commercial,
industrial,
or
agricul tu.ral?
Average
gross deposits
of branch
Local
loans
Year of
es tablishment
of
branch
Acquired
by
merger,
or established
de novo
Number
of independent
unit
banks in
sr.une
town or
city
Uumber
of
branches
of other
banks in
srune
town or
city
'
'1
.
.
.
Digitized
I for FRASER
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-
- 3B. Wh.:1t corpor.:1,";io11s other t:i.1".:i comme rcial banks --i.e.,
secur ities com1.Y-1.::1ies, insuro. :1ce, mortg"\.gc, sn.fe
depos it, real estn.te cor-:p'Ulies, etc.-- is you:::- b::mk
affili' l.ted with? Wl1::i.t is the form of the affili ation in e:,,c,. c1.se-- s tocl;: truste ed for bank stockholde rs, direct o,mers ~1ip, owner ship t..1.rough or by
holdin g compan y, or wh~t? Vllut is their functi on?
How were t:10se instit ution s :1Cqui red--ex chrulg e of
stock, purch-:i.se of stock or purcha se of assets ?
:1 .::i.me
Form of
.'l.ffi li c1. ti on
Functi on
Method of
3.cqui si tion
9. .Descr ibe the method of h':l.Ildling slow :md doubtf ul .1.sse ts
of b3.nks acquir ed by you, and indic-:i .to wh::i.t succes s you
h::i.ve h"\.d in liquiQ 'lting such assets .
10. Distri bution of stock:
Ho•., m-:my s tocb"'1 olders h..'l.ve you?
Wh'\t pro:i:io rtion of your s toe~: is hold in tho city rrhere
your m.'.lin office is loc~te d?
What propo rtion is held in br~nch cities ?
Whn.t propo rtion is hold olsowh cro?
Aro these propo rtions underg oing ::i.ey ch~go ?
H::ive you a policy of stock distrib ution? If oo, descri be it.
11.
Economic b~ckgr ound
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Federal Reserve Bank of St. Louis
in1. Outlin e briefl y the develo pment of your bro.nch oper~t ions
infludic.'lti ng wh1.t consid or'ltio ns an.d condit ions wore most
- 4entin.l. H'ls t :.e development been 11.rgely a rrntter of
choice \7i th you, or lns it been impelled by socin.l o.nd
economic chnnges? If t;1e l:itter, ple.'lse describe them
as specific'l.lly as possible.
2. Pres'UJD3.bly m'.1DY formerly independent enterprises (stores,
factories, etc.) operating in your region h-we been n.bsorbed in recent yen.rs by larger compD.nies, r,ith the
result that the local banking connections h~ve been disturbed. If so, C'l.!l you give a representative list of
such cases? Are your banks seriously nffccted by the
tendency? \VhD.t measures do you take to counteract it?
3. Have you tn.ken over
any weo.k or unprofitable banks thn.t n.re
now being operated as successful branches? If so, to
what do you attribute the fact thn.t they arc now successful?
4.
Have you established any branches in comm.mi ties which would
probably not support independent unit b~? Hn.ve such
branches been profi t.n.ble? Wh1.t advantages have such
branches that enable ~~cm to succeed where the unit
bank would not?
5. Have you been operating any branches at s loss in the expect'1tion th"1.t community growth rrould nnke them profi t.'.l.ble?
If so, describe the conditions.
,..
o. Describe the economic chn.racter of the territory covered by
your organiz~tion, indicating what divcrsific~tion of
business is secured by your branches.
III.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
lfanagement ::ind supervision
1. H3.s on.ch bra.Tl.ch its ovm advisory bo'.U'd consi'.Jti "'•·· of local
people?
holder?
Is O'l.Ch member of tho tldvisory ban.rd
'l
stock-
- 52. How many of your branches have as managers the same men who
were in change of them as independent unit banlr..s? To what
extent do you shift managers from branch to branch?
3.
Has the growth of your branch operations been retarded by
difficultie s encountered in developing a competent personnel? What difficultie s have been encountered and how
have they been overcome?
4. To what extent do you decentraliz e manageoi!r.t? .A.re all
branches controlled directly from the main ~ffice or do
you have intermediar y district offices?
5• .A.re there definite, specific restriction s upon the power
of the managers to make
available nnd as to the
rower? Please describe
the proportion of funds
the branch offices.
6.
fu1t methods are used in coordinatin g the 3.Cti~ities of the
system as a whole?
7.
Describe the method used in auditing the brnnches.
8. Yfh,'.lt measures
in order to
::1.minn. tion?
examin:1. tion
incren.ses?
lV.
loans--both as to total funds
credit of the individual borthe arrnngement fully, indicating
lent at the main office, and at
do you t::ike in your branches and head office
meet the requirement s of state or Federal exFrom your point of view, are the difficultie s of
increased or decreased ns the number of branches
Policies .n.nd oper3.tions
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1. Give the proportions of the bank's total disposable funds in
June 1929, and June 1930, which were used in the following,
:ind expl~in whether these proportions are represent:lt ive
of your policy and practice:
June 1929
June 1930
Lo~ns to customers
%
%
Securities, nccept::mces ,
mortg:iges, etc.
%
%
New York call money ma.rket
%
%
- 62.
Wh"l,t essential ch::mges, if ::my, h~ve been mn.de in the lending
policies of the brn,nches since they were t::\k:en over? How
is this reflected in their lo.'.1ns and investments? H-is the
r1,tio of :iggregnte loa.ns and discounts (not investments)
to deposits ch11nged.m.'.lteri.'.\lly in Cl:IJ.y of your branches since
Irv
•
thoy vmre t!lken over?
H1.s your bank ·.· rith its branches n.ct~lly .'.\Chieved 'l diversity
of '.ls sets not possible while it w::i.s ,'1 unit b'.l.!lk 1,1 i thou t
brn,nchos? Expl.'.1in.
4.
Wh1,t changes h11ve been made in r1.tes clvirgod on loai1s by bo.nks
ta.ken over a"'ld converted into branches?
5.
How do the rn.tes ch.'.1rged on customers' loans by your bro.nchos
comp-ire ,1i th tho r::i tes of tho independent b!li'"llts in the s 'Une
C 0Ire'1Ulli ti OS ?
6.
Do n.11 your br'.lnchos charge the s~me interest rn.tos? If not
r1h1,t factors determine tho rn.tos :md wh;v tho differences?
7.
Do your br~1chos hn,vo n,ny mim.mum size for loa.i."'ls? If so, r,h,.,_t
is it? Is this nny different from the pr'.lctico of indepondont
unit b~nJ.cs in the scune communities?
8.
Do n.11 your br'\nchcs pcy tho s'lI!le rato of interest on doposite?
If not tm.'.\t factors determine the rn.tos nnd why tho differences?
Wh'.l t c l1wgcs h-=tvo boen mti.do in ro.tos p-:i.id on deposits by t..ric b:-inks
•:,hich vrcro to.ken over n.nd converted in to brn.nc:h os?
10.
Hon do the rn.tes paid on do ,_)osi ts by your br'Ulchos comp1.re Tii th
those of tho independent bo...."llcs in tho S'.lIDO communities?
11.
In C.'.1SO the logitim1,te credit dom.'.lnds on n p1.rticular branch
are in excess of tho funds av.'.1il.'.\blo, v!h'\t 1.Ssistuce is
rendered by tho rm.in office or other branches? Describe
in some dct'lil tho mcch::mism 'l!ld process by v,:-iich this
~ssistrmcc is rendered.
12.
Through the process of shifting funds from ono bro.nch to
:1nothor n,s tho needs determine, ::ire you -ible to meet n.11
the credit demands on tho v:i.rious branches or do you
sometimes call on tho Federal reserve banl-.: or your
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 7metropolitan correspondents?
13. When money conditions are tight, what method do you follow of
rationing disposable funds among the several brCU1.chcs?
14. What is the ratio of the bo.n..~'s capital to deposits? Is this
~.\l
ratio l~rger or sm..~ller for your br.'.mch system than for
unit banks serving the same corrnlIUilities? Why ?
15. Does each brand1 carry its own customers• ledger? If so, is~
duplicate customers• ledger kept at the m~in office? Is the
condition of each branch shown dn.ily in :i sumnnry nnde up at
the min office? Please attach a copy of the form used for
summary of condition of all offices or branches.
16. Is capital assigned for accounting or other.purposes to branch
offices?
How do you determine profit and loss for each office?
17. How much cash in vault do your branches carry as a rule in proportion to their deposits? For your entire system how mu.ch
cash in vault is carried in proportion to deposits? How does
this COII4?:1re vri th unit banks in your cornmuni ty, or ,1ha t
,1ould have to be carried if your branches were unit b~:i.nks?
18. What, if any, economies have been effected in the operation of
your branches since they were converted from independent unit
banks? Can you give specific evidences of such economies in:
Salaries and peyroll
Forms, supplies and equipment
Advertising
Rent, etc.
19. Con you give any figures showing costs of operating bro.nches
as compe.red with independent unit banks oper".l.ting in the
same corrnmni ty 3.Ud doing about the same volume of business7
20. Aside from operating economies what specific advant~ges ho.ve
your branches over the independent unit bn.nks 7
21. Ho.s it been your experience that the enl.1.rgenent of your co.pi tal
through the acquisition of banks and their conversion into
br.~ches h".1s tended to increase your profits or diminish them?
22. Do you have personal trust business?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
What proportion of your
.•
'
- g -
gross profits is derived therefrom ? Is trust business
carried on in each branch? What proportio n of branch office
profits is derived therefrom ? Describe your supervisi on of
trust business.
23. Do you sell securitie s? Are your branches important outlets
for the sale of securitie s? Do you originate issues?
24. W'nen an independe nt bank is taken over and converted into a
branch how are correspon dent relations affected? Are the
combined balances which the two banks carried with correspondents before the merger reduced? Keeping in mind the
relations of thet':"Joi nstitution s with correspon dents before the merger and the combined institutio n after the
merger how are the following affected: (Give specific
examples if possible)
Reserves carried
Currency requireme nts
Borrowing and rediscoun ting
Clearing
25.What effect, in your opinion, would the general developme nt of
branch banking have upon correspon dent relations hipa· as they
have developed under the independe nt unit banking system?
26.If a member of the Federal Reserve System how do your relations
with your Federal reserve bank compare with those of an indcpenden t unit bank, or a number of independe nt unit banks,
doing about the same volume of business, particula rly with
ref crence to:
Reserves C'l.rried
Currency re qui roman ts
Borrowing and rediscoun ting
Clearing
27. What effect would tho general developme nt of branch b.:mking
have upon tho Federal Reserve Systom?
28. Describe your method of clearing checks, indicatin g po.rticularly how your branches clen.r with ono nnother, and
whether they deal directly •1i tl: the Federal Reserve B.:i.nk
::md correspon dent bci..~ks.
29.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If you are a member of tho Reserve System and operate in a
st'1.te where brru1ch banking is parmi tted, do you work under
serious competiti ve disadv,'ln. t'l{;os compared with non-member
.
- 9 banks that a.re free to extend their brn.nches?
how serious the competition is.
V.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If so, indicqte
Branches and the public
1. Is there o.ny general prejudice in your own comrrunity ago.inst
either group bo.nking or branch banking?
2. What various types of banking service aro offered by your brDnches·.
Do the brn.nches of your bank offer any services to the public
in n.ddi tion to those offered when they ,iero independent bo.nks?
Do they render any service not offered by the independent unit
b:mks in tho srune cormruni tics? Woo. t arc they? Do you oxpcc t
in time to offer other services?
3.
Have o.ny now independent compotitivo banks boon opened in tho
communities served by your brn.nches?
4.
Do you think branch bn.nks cn.n furnish credit fo.cili ties to the
small rural communities where so nnny unit ba.iucs have failed?
5. Wh'.).t in your opinion is tho solution to tho b.'.:mking problem in
tho smaller co:rmn.mitios whore it proves m1profitablc
dependent unit banlcs to operate?
for in-
6. In your opinion what territorial limitation should thero be
on branch banking, if any? Should it be limited to counties
or states, to reserve districts, or to other economic divisions?
7.
Aside from tho law what arc tho chief barriers, if any, to an
economically sound development of branch banking? For example,
administrative and personnel problems, ad.verso public opinion,
ctci
•
O~i BAmrn
OF
OD'TSIDE
BRA.liCHF,S
irn
OPERATi
SCHEWLE OF DlFO ..'.A I
:I:
TEE CITY OF lHE HEAD OFFICE
1.
Organiz ation and history
l.
lfome of institut ion ____ ____ ____ _____
Location of main office:
City ____ ____ ___
V
State.____ ____ _Populat ion of city _ _ __
Member or non-member of Federal Reserve
2.
Conditio n as of last call, Date ____ ____ ___
Capital
$_ _ _ _ __
Surplus and m1di vided profits
Loa~s a.."ld discoun ts
Investm ents
Demand deposits
TiL1e deposits
3. Outline your corpora te history , incltdin g dates of organizat ion, incorJo ration, i!!Iportant mer 0 ers and the
begin."ling of branch banking .
4.
Number of branche s, June l, 1930 _ _ _ _ __
,,
In city of main office _ _ _ _ __
In
5.
/
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
stock, purchas e of stock, or purchas e
• st ck
, n youlc h
In the case of exchange of
stock what method is used to determin e the basis of exchange between the stock of tho bank taken over and the
stock of your bank?
•
8.
v
corporations other than commercial bank;t-i.e.,
securities conrpn.nies, insurance, mortgag(/; safe
deposit, real est~te cor:rp::mies, etc.--Myour bank
J,-Q a:ffili .' 1ted,..effilt Wl.s.t i°"J the form of the affiliation in en.ch c~se--stock trusteed for bank stockholders, direct ownership, ownership ~~rough or by
holding company,
their function .
n.cquir d--exchange of
.
were ¥•- _ _
stock, purcrose o stock or purchn.s of assetsh.
Form of
affiliation
Name
Function
Method of
acquisition
9. Describe the method of ho.ndling slow and doubtful assets
of banks o.cquired by you, and indicate what success you
have had in liquid.sting such assets.
10. Distribution of stock:
How m..9.I1.Y stockholders have you?
Wh.~t proportion of your stock is held in tho city where
your nnin office is loc~ted?
What proportion is held in branch cities?
What proportion is hold elsewhere?
Are these proportions undergoing any change?
Ibvc you a policy of stock distributio? If
~
11.
{'
(_,{)~
_E_c_on_o_mi_·__c_b_n._c_k~gr......._o__un~d
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
~
I
1
l. Outline briefly the development of your bro.nch operations in~
dicating wh~t considerations aaid. conditions were most influ-
•
3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 9banks that :u-e free to extond their bro.nchos?
how serious the competition is.
V.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If so, indic~te
Branches and the public
(/V
l. Is there o.ny general prejudice in your own <:aim=~~ n.go.inst
oi thor group bo.nking or branch banking?
2. What various types of banking service aro offered by your brD.nches
Do the br~nches of your bank offer any services to tho public
in .1ddi ti 011 to thos o off ored when they ,1oro indoponden t b~s?
Do t hey rondor any service not offered by tho indcponde~t unit
b::i.nks in tho same communi tics? What arc they? Do you expect
in time to offer other services?
f.
Have o.ny new independent competitivo banks bec 1 opened i~
COIDiml.Ili tics served by your bro.nchos• ·
-~
4AU.
Do you think branch bo.nks can furnish credit fo.cili tics
small rural comnuni ti os whore so nnny unit ba..iks have
• Wh~t in your opinion is the solution to tho bonking problem in
tho sm'.lller com:nui.~ities whore i t ~ - ~ u:1profitable for independent unit banks to operate?
4- In your
opinion uhat territorial limitation should there bo
on branch banking, if av? Should it be limi tcd to counties
or states, to reserve districts, or to other economic divisions?
• Aside from tho law what arc t ho chi.cf barriers, if any, to an
economically sound development of branch banking? For example,
administrative and pcrsonnol problems, ad.verse public opinion,
etct
How ma.ey of your branches have as managers the same men who
were in change of them as independent unit banks? To what
extent do you shift managers from branch to branch?
V
3.
Has the growth of your branch operations been retarded by
difficulties encountered in developing a competent personnel? What difficulties have been encountered and how
have they been overcome?
4.
To what extent do you decentralize managen<r..t? Are all
branches controlled-directly from the main office or do
you have intermediary district offices?
5.
Are there definite, specific restrictions upon the power
of the managers to make loans--both as to total funds
available n.nd as to the credit of the individual borrower? Please describe the arrangement fully, indicating
the proportion of :funds lent at the mo.in office, and at
the branch offices.
6.
\Vh~t methods a.re used in coordinating the 3.Ctivities of the
system as a whole?
7. Describe
~
i•·
lV.
the method used in auditing the branches.
What me.3.sures
in order to
'.lminn.tion?
ex::unin.3, tion
incren.ses?
do you tn.ke in your branches ond head office
meet the requirements of state or Federal exFrom your point of view, are the difficulties of
incre~sed or decreased as the number of bronches
Policies nnd oper~tions
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1. Give the proportionsof the b3nk: 1 s tot
June 1929, .'.lnd June 1930, which were used in the following,
ond explain whether these proportions are represent'.ltive
of your policy and practice:
I
June
Lo'llls to customers
'\
929
'
June 1930
,\
%
%
Securities, accept:i.nces,
mortgriges, etc.
%
%
New York
%
%
money m-u-ket
I -
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
'
•
- 62.
Wh1.t essenti.'.11 changes, if ::my, h~ve beon m'.lde in the lending
policies of the branches since they were taken over? How
is this reflected in their lo.'.:l,ns .'1.nd investments? H'l.S the
r'ttio of ~gregf.l,te loons and discounts (not investments)
to deposits cho.ngedm~teri~lly in o.ey of your branches since
thoy were taken over?
3.
H1,s you.tfjuc ~ith its branches actU'.1lly ~chievcd '.1 diversity
of '.'ffll..,_,~ not :possible Vlhile it -,.,.'.l.S .' .).unit b::mk i7i thout
branc~vs ? Explain.
Wh'.:1.t cl:umgos h-'1.ve been IIDdc in r .1 .tcs cl1'1.rgod on loons by banks
taken over snd converted into brn.nchos?
✓
v
5.
How do the rotes clnrgcd on customers I loans by your branches
comp1-rc rri th tho r:i.tes of tho independent banks in the s1JJ1e
COilll:1Ul.1i ti OS?
6.
Do 0,ll your br'.1!lchos charge the s~me interest rates? If not
vrhl.'l,t factors determine tho rates 1'l'ld '7hy tho d.ifforcncos?
7.
Do your br~1ches h:wc any mn111ro.m size for lOCl.J."'ls? If so, vrh1.t
is it? Is this any different from the pr".l.ctice of independent
unit ba..7lcs in the st1IUe cormmnitics?
8.
Do all your br'"l.nchcs pey tho s~c rato of interest on deposits?
If not rm.'.l.t factors determine tho rates r.md why the differences?
9.
Wh.'.l.t chmgcs h1,vo boon m..'1dO in r ,'.:l.tos paid on deposits by t..'hc b::i.nks
'\"lhich woro to.ken over o.nd converted into branches?
10.
Horr do tho rates paid on dc,_)OSi ts by your brmchos compare ,vi th
those of tho independent bonks in tho &uno communities?
: l.
In
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C'\SO
tho
cJ.·o1i t d ma11.ds
..
0~1 '"!. P"'rti.C'...11.l' bro.i-ich
:funds 'lVO-il'l.blo, \'J ... t 1."'"' · st .... ;ce
f-"ic;0
or oth
u•'').'lC'.i<..
7
:t:'\7......,P!'....,
Through the process of shifting funds from ono br:::mch to
J.nothor 0,s the needs determine, arc you 'l.ble to meet all
the credit demands on thG various brnnchcs or do you
somct~~"...:hc Fcdaral reserve b,'.lll!c or your
----uJht
•
- 7metropolitan correspondents?
• W'nen money conditions ere tight, what method do you follo~ of
rationing disposable funds among the several bro.nches?
t,S-'J);.
\Vlnt is the ratio
~-au»
capital to de
·
its own customers 1 ledge?
ledge kept o. t the m'.lin., offi
a.nch f,1Wll doi
in
eo.se ttach a opy
of all offiees o branch s.
is 3.
Is the
at
or
16. Is capital assigned for accounting or other purposes to branch
offices?
How do you determine profit and loss for each office?
18. What, if any, economies rove been effected in the oper~tion of
your branches since they were converted from independent unit
banks? Cn.n you give specific evidences of such economies in:
Salaries and payroll
Forms, supplies and equipment
Advertising
Rent, etc.
v
19. Can you give o.n:y figures showing costs of operating branches
as compared wi. th independent unit banks oper'.lting in the
same co!IDllU.11i ty and doing about the some volume of business?
20. Aside from operating economies what specific advant~ges h~ve
your branches over the independent unit bn.nksZ
V
V
21. Has it been your experience that the enlnrge~ent of your capital -1Mt,,{
through the acquisition of banks and their conversion into
/ ..
branches hM tended to increllS~ you '\profi tf...
n:...~~ \~,.
22. Do you have personal trust business?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
What proportion of your
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
... •
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
,'hen an in...Leocn ent bnnk is t Ken ov r ~n
branc h
c
o-: are cor
suona nt
bined balan ce- ·~ic
1 tion& a fect e?
ny of your br nches borror-1
t
irect conta ct& , i
corre tryon ent banks .
into
re t 1e
t1e p rent 9 nk and ne, branc h
c rried 11 tn corre ~ on ent s befo e the
..,tate
vOn·, rte
.er
r reduc ed
irect lv fro ... corre .. rionu ent
any , your br nc
:io
nks?
sham vit1
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If
a
e er'l
me ber· of tie
·.-it1 yo1r
er.eve ....'yste..;1
e er l reserv e o'lr,c co
dent unit b'r.ks doin
bout tn
· re ·vit
o :vour · lation
t10Le of indepe n-
s dC voluce o.
ent., of you
eouir
&'!l t c c;irren cy
o~
br
n~ e..,
UwineE S?
·n lo
're
t rou h
the p· rent o nk or do your branc eE ue 1 u · rec tly ,· th tne
eueral
direct ly fro1,1 t
c · rcx
k
esenre
tnnces ?
p
:::)0
eu.er .. 1
orrow
ai y o 1' yo :u· br n .ne s ever
1
!3 n k , · nu. i f f.O ,
1
er v
t
•
·t
gross profits is derived therefrom? Is trust business
carried on in each branch? What proportion of branch office
profits is derived therefrom? Describe your supervision of
trust business.
23.
Do you sell securities?
Are your branches important outlet
for the sale of securities 7 Do you originate issues 11 -f>-~
J
ch how a
ined bal
which the two bank
ents bef
em
r
re a tions of
-:-,o in
tu
foe the mer
d th
o
me
ow are t
fol
i
if possible)
J
b~~
rresd the
nts betutor the
e specific
What effect, in your opinion, would the general development of
branch banking have up~n correspondent relationshipo · n.s they
have developed under the independent unit b3llking system?
ting.
~ a t effect would the general development of bro.nch b~king
hn.vo upon tho Federal Reserve Systom?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
..r- sv,,1/VU~~
)
Dcscri be your mothod of clearing checks, indicating pn.rticuln.rly how your branches clen.r vii th one nnoth<n, ::ind
whether they de:i.l directly ,i tr. tho Federal Rosorvo B3.Ilk
and correspondent b~'tr1ks.
If you are~ member of the Reserve System 3.Ild oper to in~
st"\.te where brDnch b:mking is pormi tted, do you work under
serious competitive disad~'mt".l.gos CO!JlP~rod with non-member
7
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
;
...
- 8 -
gross profits is derived therefrom? Is trust business
carried on in each branch? What proportion of branch office
profits is derived therefrom? Describe your supervision of
trust business.
23. Do you sell securities? Are your branches important outlets
for the sale of securities?
Do you originate issues?
0
~
id
r
'
Pl...,
/ ~ 24. W
hen an independent bank is taken over
converted i nto a
£,.,,r
branch how are correspondent r~lations affected? Are the
combined balances which the~ banlg. carried with correspondents before the merger reduced?~Keepi-ng in mind the
:r:.a~ons. ~f -met-:ro institutions with correspondents before the merger and the combined institution a.ftor the
merger no w are the following affected: (Give specific
example( i possibl~ ,Ale, ,
~✓ t/
tlJ J t ·
-.;~p..-,
C
~ r , ~ ,/4 ~l¼-J ,.
Roe (#\;99 81H tied:
1 ~ - - .~
Durre~ requh-e1ren-tg/
_,.,...,,-,,
I Borrowing and redi-1,c-ounting
1
,~..:....,,,,,,.•...Gl.ea»"ng
'tr~•---llL
25.What effect, in your opinion, would the general development of
branch banking have u:pon correspondent relationshipo · ns they
have developed under the independent unit banking system?
V
26.If a member of the Federal Reserve System how do your relations
with your Federal reserve banl{ compare with those of aft independent unit b ~ o.r. .a number o.f ~pendent unit bm'l~,
doin about the s~e volum51 of bu ·
r.i
•
•
,
n , r,
R<,eer,ee
. . eau: ene,
C,'tl
,.. u
>
ried:'
l"O eJ:tti r emonts-
~o :rrowi:i:.~
:;,i .. '1
z:,11li1sc~~
I!
would the general development of branch b.::inking
have upon tho Federal Reserve Systom?
28. Describe your method of clearing checks, indicating po.rticuln.rly how your br::mchcs clen.r with one nnother, .::ind
whether they dc:11 directly '"'Ti th the Federal Reserve ]o.nk
and correspondent bo..~ks.
29. If you are a member of the Reserve System and operato in
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
o.
st"l.te VThcre brnnch b.::inking is parmi tted, do you work under
serious competitive disadv:m t-:1ges competrcd with non-member
.'
SCHEWLE OF INFORN'iATION
ON
GROUP BA.'P...CING SYSTEMS
I.
Organization and history
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1.
Name of holding company or controlling agency.
2.
Location of head office, state of incorporation, date of
incorporation and law under which organized.
3.
Describe fully the structure of your group, indicating
where the ultimate controlling authority lies and
through what channels this authority is exercised.
4. General powers of the holding company or controlling agency,
(Submit as exhibit copy of charter, articles of incorporation, by-laws.)
5. Capital structure:
Classes of stock, par value and book value of each
class, number of shares of each class authorized
and issued, voting power of each class, the bid
price each month since the beginning of 1929 or
since organization, and the number of stockholders
of each class.
6. Stock distribution:
What proportion of the stock is held in the city where
the holding company or controlling agency is located?
In the cities and towns where the banks of the group
are located? In the state of the holding company or
controlling company? Elsewhere?
7. Has any stock of the corporation been issued for cash, either
by public offer or otherwise?
offering.
8.
If so, furnish prospectus of
What liability, if any, have the stockholders of the holding
comptlny for the debts of the company in excess of their
share ownership? If none, is there o.ny other provision
sc.fegu1rding the double liability attaching to the shares
of bo.n.ks ovr.ncd? H'.ls the protection offered bank creditors
by double li~bility been impaired by tra.nsferring ownership
to the holding company?
- 2 -
9.
List of officers and director s of the holding company nnd
their principn l busines s affiliat ions.
10.
Furnish st~teme nt of the resource s and liabilit ies of the
holding c ompa.ny.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 3 11.
- 3 -
List of b3Ilks controlled or affiliated.
Name of btu1k
No. of
shares
issued
Per cent
of issued
shares
owned
l3ook value
.A.t time
of acAt present
quisition
*Exchange of stock, purchase of stock or purchase of assets.
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Federal Reserve Bank of St. Louis
Price pa.id
per share,
if cash
l3asi s of exchange, if not
cash
Totn.l
deposits
Loans and
investments
Member or
non-member
of F.R. at
time of
acquisition
Member or
non-member
of F.R. at
pi:-esont
Location
City
State
Population
of city
Ho . of branches
if a
Outside
In city City
icthod of
acquisition*
- 4 12.
List of other affiliated corporations, including securities companies, holding companies, insurance,
mortgage, safe deposit, real estate companies, investment trusts, et~.
Na.me
Year
of organization
Year of
merger
or affiliation
Method of
(Exchange
purchase
uu.rchase
acquisition
of stock,
of stock,
of assets)
Per cent
of stock
held
Form of affiliation*
Function
I
*For example, stock trusteed for bank stockholders, direct ownership, ownership by or through another
affiliate, etc.
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Federal Reserve Bank of St. Louis
,
•
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/
- 5-
13. W'~at methods have you used to determine the values upon which
exchange of stock or purchase has been made?
14. Describe the method of hand.ling slow and doubtful assets
of banks acquired by you, and indicate what success you
have had in liquidating such assets.
II.
Economic background
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Federal Reserve Bank of St. Louis
l.
Outline briefly the development of your group, indicating
what considerations and conditions were most influential.
Has the development been largely a matter of choice with
you, or has it been impelled by social and economic changes?
If the latter, please describe them as specifically as
possible.
2.
Presumably many formerly independent enterprises (stores,
factories, etc.) operating in your region have been absorbed in recent years by larger companies, with the result
that the local banking connections have been disturbed. If
so, ca.n you give a representative list of such cases? Are
your banks seriously affected by the tendency? What
measures do you take to counteract it?
3. Have you taken over any we.'.3.k or unprofitable banks timt are
now being operated successfully? If so, to wh'.lt do you
attribute the fact that they are now successful?
4. Have you established any banks in communities which would
probably not support independent unit banks? H~ve such
banks been profitable? What advantage have such bnnks
that enables them to succeed where the independent ba.nks
would lWt?
5. H~ve you been operating ooy banks at n loss in the expectation
that community growth would make them profitable?
describe the conditions.
If so,
6. Describe the economic character of the territory covered by
your organization, indic~ting wh3.t di versification of business is secured by your system.
7.
According to your experience what is the mininum condition under
..
·
- 6 which a b:m..'lc
C:l!l
01'.)er'l.tc profi bbly, men.sured o.s to
Populatio n of the conminity ,
Volume of deposits.
Volume of loans and investmen ts,
Volume of other business, if any?
8.
II I •
IV.
Is there a need for any financial services which your form of
organizat ion has enabled you to supply, but which the independent bDnks because of their isolation and size could not?
If so, what are they?
Mnno.gemen t and super vi s ion
1.
To what extent does your holding company share in the management
of banks? Has it a sto.ff devoted to supervisi ng them and to
coordinat ing t.heir a.ctivi ties?
2.
To ,vh'1t extent n.re the local directors o.nd management free to
determine policies ond carry on operation s?
3.
What proportio n of the present directors of the loco.l b:mks live
in the c on:n:mmi ti es where the b3.Ilks :1re loc.1. ted?
4.
\Vh'.lt chn..~ges of personnel in the 1t~fs ond directorn tes of bonl{s
wore m"l.de when they were .'.1.Cq-uired by your group, or subsequen tly?
Wh.'.lt is the usun.l policy as reg[irds re ton tion of locn.1 s tn.ffs
md directoro .tes?
5.
Aro ~11 the members of the group audited by 0, contr~l auditing
force? If so, to ~hom is the auditing force responsib le?
6.
\V'n'.lt mo"l.sures do you toke. in your system M a whole in order to
meet tae requireme nts of st~te or Federal eX3.ID.in~tion? From
your point of view, are the difficult ies of ex.'l!nin:ition incre~sed or decre~sed ~s the size of your group increasesZ
Policies o.nd oper~tion s
1.
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Federal Reserve Bank of St. Louis
Wh~t :ire you doing in genero.l to o.tt~in uniformit y in the
:.:i.cti vi ties, policies, Md pr::ictices of the b::ulks in your group'l
41
•
- 72.
What method, if any, is used to coordinate the lending policies
of the banks, so as to bring about some det:ree of uniformity?
3. Has a uniform policy for investments been worked out, or does
each bank make its own investments ~ithout advice or directtons
from the controlling agency?
4.
1at esse~tial changes, if any, have been made in the lending
policies of the banks since they were t3.lcen over? How is this
reflected in. their loons snd investments ? H.::i.s the ro.tio of
aggregate loans o.nd discounts (not investments ) to deposits
cho.ngod m1.terinlly in any of your banks since they were taken
over?
5.
Hn,s your group :1.ctu,-:i.lly achieved o. diversity of assets not possible for the unit bo.nks before their o.ssociation in the group?
Expl'lin.
6.
What ch...,nges have been nn.de in ro.tes charged on lo:ms by your
b'l!lks since they entered your group? \fun.t is the usu...,1.l rn.te
cho.rged by your b.'.\l.iks on lo:ms secured by government oblig~tions ?
On good customers' lo~ns?
7.
Ho,.., do the r~tes ch.1.rgod by members of your group comp1.ro with
the r:ites of the independent unit b-mks in the ea.me communities ?
8.
Do 'lll your b~s ch,rge the same interest rates? If not, wh.'.lt
f~ctors determine the ro.tes ~nd wey the differences ?
9.
If so, what is
Do your b-::mks h.'l.ve :my minizm.un size for lo:ms?
independent
of
it? Is this ney different from the prnctice
unit b~"llcs in the same c ommuni ti es?
If
~ the srune rate of interest on deposits?
not, whn.t factors determine the rates and why the differences ?
10.
Do ::i.11 your b'lllks
11.
Wh~t chnnges have bee~ nnde in ro.tes paid on deposits by the b~~s
which h'.1.ve entered your group? Whnt is the usu.al r~te paid by
your banks on chec!.cing ~counts? On s:wings deposits? On time
deposits?
12.
How do the r~tes p1.id on deposits by members of your group comp3.re with those of the independent b:uu s in the so.me communities ?
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Federal Reserve Bank of St. Louis
'•
.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 8 -
13. In case the legitimate credit de:mnnd.s on a p~rticulo.r banlc 'l.re
in excess of the funds o.vn.il.').ble, what o,ssistance is rendered
by the group ~s o. whole or by other b:mks? Describe in some
det~il the mechanism Md process by TThich this o.ssistn.nce is
rendered.
14.
T~rough the process of shifting funds from one bank to another
as the needs determine are you able to meet all the credit
demands on the various ba.."'lks without going outside your
group, or do you sometimes call on the Federal reserve banlc
or your metropolitan correspondents?
15.
When money conditions are tight, what roothod do you follow of
rationing disposable funds among the several banks?
16. What is the ratio of the combined ban.ks' capital to deposits?
Is this ratio larger or smaller for your system than for
unit banks serving the same com.11lllli ties? Why?
17.
Do you make up a daily or weekly sU!IllllD.ry of the c ondi ti on of
~11 bonks in your group? Pleo.se attach o. copy of the form
used for such su.mnn.ry of condition.
18.
How much ca.sh in va.ul t do your ban.ks cn.rry llS a rule in proportion to their deposits? For your entire system how much
cash in vault is carried in proportion to deposits? How
does this comp.~re with wh.'),t the independent unit banks in
your community c.'l.rry, or with whn.t would h1ve to be C'lI'ried
if your banks were unit banks?
19. Who.t, if any, economies ho.ve been effected in the operation of
your o~::; .. since they \7ere acquired? If possible, give
specific evidences of such economies in
Salo.ries nnd peyroll,
Forms, supplies and equipment,
Advertising, etc.
3).
C'.l!l you give any figures showing costs of oper.~ ting your banks
o.s comp'l!'ed with independent unit banks operating in the same
comnuni ty n.nd doing a.bout the same volumo of business?
21.
R~ve you prepo.rod a combined profit and loss statement for all
your banks? If so, please attach a copy.
- 9 22.
How many of you.r banks do a. personal trust business? Taking
the banks as a whole, how important is trust business in
your system? Give figures to illustrate. What supervision
of trust business have you?
23. How
many of your banks sell securities? Axe your banks important outlets for the sale of securities? Do you originate issues?
24.
Do your banks lend on the stock of the ot~er members of the
group as collateral or on the stock of the holding company?
Do you think such loans should be prohibited?
25.
When n.n independent bank enters your group, hRw are correspondent relations affected? Do members as/ruJ:e close all
correspondent accounts except with other members of the
group? Trucing the group as a whole a.re balances carried by
the system vrith outside correspondents greater or less than
they would be if there were no group? Indicate as specifically as possible how the correspondent rel3.tionship is
affected by group ;1.s distinguished from unit brutld.ng in
the following p-u-ticu.lo.rs:
Reserves C.'.U'ried,
Currency requirements,
:Sorromng and rediscounting,
Cle'lI'ing.
26. Who.t effect, in your opinion, ~ould the general development
of group bonking have upon correspondent relationships o.s
they ho.ve developed under the independent unit banking
system?
V.
27.
When o. member of the Federal Reserve System joins your group,
are its relations with its Federal resorve bo.nk modified
in ony way? Who.t effect does membership in the group h::we
upon borrowing or rediscounting w.i. th the Federal reserve
b:mk?
28.
Wh'.lt effect would the general development of group banldng have
upon the Federal Reserve System?
Public relations
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Federal Reserve Bank of St. Louis
1.
Is there any general prejudice in your territory a.go.inst cha.in,
group, or branch brw.king.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 10 -
2.
Do your banks offer any services to the public in addition to
those offered by them before they were taken over? What are
they?
3.
Have the credit policies of any of your ban..~s become more cautious
than before they were taken over, with the result that certain
typos of borrowers find it more difficult to get credit? If so,
have you had an undue amou.'lt of protest from these quarters
with perhaps some propc\;an.da against your procedures in centralizing banking control?
4.
What in general is the size and type of community served by your
banks? In what size comnuni ties do the branches of your banks
operate?
5.
If the law permitted, would the management prefer to organize
this group into a branch banking system? If not, would your
banks organize branches in the smaller corrurunities?
6.
Do you think group brulks can furnish credit fo.cili ties to the
snnll rur~l communities where so m..-my unit bn.nks have fn.iled?
Or cnn bro.nch banking systems serve these communities better?
Or a combi~~tion of both?
7.
H:1s the Comptroller of the Currency or the St1.te bnnking dep~rtment been consulted at o;ny time with respect to the
formation of your group or its policies o.nd f.\Ctivities?
8.
Do you think thn.t bo.nk holding companies such o.s yours should be
under the supervision of either the Comptroller of the Currency
or the St~te b~ng department?
•
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I Il
FEDERA L H .ESEHV E BANI-i.
OF CT.EVELA ND
June 10, 1950 •
• J . H. Riddle ,
Secretary , Committee on Branch,
Group and Chain Banking,
Federal oserve Board,
aehin ton, D. C.
Dear Ar. Riddle:
I thank you for your letter of the 6th
·th hich
copy of minutes of tho Ex cutive Committee held
I have nos agestions to offer as I think the
procedur
of the committee thro
h the Executive Committee has
been excellent .
Vacation periods •ill very shortly be on us in so
far as it affects the officers of this bank and I hop
there
·11 not be any meetin s of the full committee until the fall .
ticularly busy ,ith reference to the
I have been
erection of a ne
branch building in Pitt burgh but I run sure
all the data that you will r quire ill be furnished you thro h
r . De Camp ' s office .
This is a large job and I am glad to
see that steps have been taken to give you some assistanc e in
the appointme nt of
n- . H
ond and ii~s Hammill .
Yours very
F. m
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Federal Reserve Bank of St. Louis
•
erELEG RAM
FEDER AL RES~R VE BOARD
VICE
ON
,'? ..
I
f"_"/-,,,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
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June 5, 1930.
r.
Dear
aac B. Ne ton,
nt ,
ederal ,eserve
ederal eserve Banlc of .. an rancisco ,
San Francisco, California.
r . Newton :
Int e study of b anch banking the Co ittee on Branch,
ow o ething of
ing thinks it de irable to
Group and Chain B
the d velopnent of branches as fr back as 1900 in order to ive
pparently
a fairly c plete statistical stor-3 oft is 1ove ent .
for year
:piled
co
been
ve
h
·ng
ban
branch
on
statistic
no reliable
e
kt
a
to
erefore,
t
pooed,
n
is
it
and
prior to 1919 or 1920,
Currency
e
oft
Comptroller
e
t
and
ent
epurt1
va ious tate banking
ct t earlier period .
for certain data. or electe
the
for
merely
asking
red
co ingly a si iple c edule
numbe of b anc e, loans an ·nvest 1ents and total re~ourc s of
each bank hich operate one or .o e branches in~· of those ears .
s
dred such b
here o.e prob bl not o e than t,o or three
a d t 1e compilation, in so f' r as the data
in t e nole count
is evail ble , ill ot be a bur enso. o one .
co, of this sche ule i enclo d id I sug est that
you re uest the a ropriate state b nkin depart ents to uUp ly
rt ... of states , hie are
t ion for t e state or
this info
included lt in your district . ~sea nte schedule is to be
d
ade out for eacl ban o eratin un er tatc la , ic
r c es in ney oft e years mentioned . ~ e data for n tional
banks vill be upulied byte Controller of the Cu rency .
0
a ·e·
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e secretary of t e Co i ttee vi 11 forw ru to you in
ys a su ply of thet.e sche ules for use in our district .
Very truly
innan,
Group an
C
c.
ours,
o mi ttee on B anch,
in Banking.
BANKS OPERATING ~R<\:iCHLS
•
To be re:_?orte d--each bank (includi ng trust compani es and
savings banks) which operated one or more ')ra...."'lch0s on
June 30 of any of the follo\'!in _; years: 1900, 1985, 1910,
1915.
To'.'ffi or
. Name of bank _ _ _ _ _ _ _ _ _ _ _ City _ _ _ _ _ _ _ _State
June 30
{or nearest date
availab le)
1900
1905
1910
1915
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Federal Reserve Bank of St. Louis
Branche s operated
Outside
Within the
city of
city of
parent bank
·oar en t bank
Total
Loans
and
investm ents
Total
resource s
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
J
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X-6608
DIGEST OF STAT"~ LAWS RELATHJG TO THE PURCHASE OF
CORPORATE STOCKS BY B.AlJKS .AHD TRUST COMP.AlTIES.
(Superse di~,g prelimin ary draft-X- 6553)
There is given below a digest of the State laws relating
to the power of banks and trust companies to invest in or purchase stocks in other corpora tions, includin g stocks in other
banks or trust compani es. This digest shows the status of
State legislat ion dealing vri th the purchase of corporat e stocks
by banks and trust companies as of March 1, 1930. It was prepared in the office of the Counsel to the Federal Reserve Board,
with the assistan ce of the Counsel to the various Federal reserve banks.
The digest does not cover permiss ion granted to banks and
trust companies to invest in or purchase stocks in mw.1icipal
or other public corpora tions, Federal reserve banks, joint
stock land banks, corpora tions engaged princip ally i11 foreign
banking operatio ns, safe deposit compani es, or similar institutio ns affiliat ed in some respects with the business of
banking .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
X-6608
- 2 -
SUMMARY OF LEGISLATION HT VARIOUS STATES
States Having Legislation Permitting Purchase Of Corporate Stocks.
By Commercial Banks
.Uabama (1)
Arizona
California. (2)
Connecticut ( 3)
Delaware (3)
Louisiana
Mew Jersey
North Carolina (3) i
· Pennsylvani a
Sou th Carolina
Ten...,essee
Texas (1)
Utah
Vermont (11)
Virginia
Total ••• 15
(1)
By Savings Banks
By Trust Companies
Alabama (1) (la)
Arizona
Arkansas
Colorado
Connecticut ( 3)
Delaware (3)
Florida ( 4)
Georgia (12)
Kansas (1)
touisiana
Maryland
Massachuse tts ( 6)
Missouri (3)
Montana
}!ebraska
New Hampshire (3)
Uew Jersey
Ue-r York (3)
Ohio ( 8)
Oklahoma. (9)
Pennsylvani a
Sou th Carolina (3)
Tem1essee
Texas (1)
Utah
Vermont (11)
Virginia
West Virginia (3)
l
t
i
I
:
..
Arizona
Connecticut (3)
Delaware (3)
Florida (4)
Louisiana
Maine (5)
Massachuse tts ( 7)
Ne'i1 Hampshire (3)
Uorth Carolina (3)
Ohio ( 8)
Rhode Island (10)
South Carolina
Tennessee
Utah
Vermont ( 11)
Virginia
.
►
Total. •• 28
Total. •• 16
Amount of stock in other banks limited.
(la) Only trust companies doing a banking business included.
(2)
Stock of only one trust company may be purchased.
(3)
Limitation placed on amount of stock may be purchased.
(4)
Apparent conflict in laws of this State.
purchase of corporate stocks.
(5)
Limited amount may be inv ested in stocks of Maine corporation s
other than banks.
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Federal Reserve Bank of St. Louis
Other provisions prohibit
X-6608
- 3 -
States Havi~g Legislation Permitting Purchase of Corporate Stocks (Continued)
(6)
.Amou.11t of stock i:1 another trust compa~1y limited.
( 7)
Investment and amou,,t of Lwcstment limited to stocks of certain
trust companies and national banks.
( 8)
Purchase of bank stocks pro hi bi ted.
(9)
Purchase of bank or trust company stocks prohibited.
(10) Stocks of banks and trust companies and certain steam railroads
may be purchased. Similar authority is granted to
savings departments of banks and trust companies.
(11) Stocks in certain banl{S only may be purchased.
(12) Only trust companies
11
operati:ng as investment bankers" L1cluded.
States Having Legislation Prohibiting Purchase
By Commercial Banks
Colorado
Florida (1)
Georgia
Idaho (a)
Ka~1sas
Mississippi (2)
;fontana
Uebraslr.a
Nevada
North Dakota
Oklahoma
Oregon
South Dakota
Washington
Wyoming
Total ••• 15
.•
Of
Corporate Stocks.
By Trust Companies
By Savi:1gs Banks
California
Florida (1)
Idabo (2)
Mississippi (2)
Nevada
Oregon
South Dakota
Washii1gton
Florida (1)
Georgia
Kansas
Mississip:ii (2)
Montana
Uebraska
lfovada
North Dakota
Oklahoma
South Dakota
Washington
Wisconsin (3)
Wyoming
.
..
:.
...
.
Total. •. 8
Total. •• 13
(1)
Apparent conflict in laws of this State. Other provisions authorize savings banks and trust companies to purchase COI;?orate
stocks.
(2)
Specific prohibition is against purchase of bank stock.
(3)
Specific prohibition is against Mutual Savings Banl.{s purchasing
stocks.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
X-6608
- 4 -
States Having Uo Legisla tion Specifi cally Applica ble to
Commerc ial Banlcs
Arkansa s
Illinois
Indiana
Iowa
Kentuck y
Maine
Marylan d
Massach usetts
: ichigan
;Jinneso ta
:,iissour i
rr ew HaJnpshi re
New i.!exico
Hew York
Ohio
Rhode Island
·17est Virginia
Wiscons in
Total. •• 18
(1)
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Federal Reserve Bank of St. Louis
Savings Banks
Trust Companies
Illinois
Iowa
India."'la
Kentuck y
Maine
Michigan
Minneso ta
New Mexico
?forth Carolina
North Dakota
Bhode Island
Wiscons in
Wyoming
.'
.'
•·
..
.'
...
.
Total. •• 13
Alabama
Arkansa s
Californ ia
Colorado
Idaho
Illinois
Indiana
Iowa
Kentucky
Maryland
Michigan
Minneso ta
Missour i
Nev, Jersey
New Mexico
New York
Oregon
Pennsyl vania (1)
Texas
West Virginia
Total •.• 20
General law permitti ng "corpor ations organize d for profit" to
purchas e corporat e stocks has been consider ed not to
apply to savings banlcs.
- 5 -
X-6608
ALABAMA.
Banks and trust co;:npa..--iies d.oi:1g a banking business - Purchase of
stocks permitted, but amount of stock in bank limited.
11
Corporations formed for tho purpose of carrying on the
busi~ess of banking cli1d trust cor4Panies doing a banking business, may••• buy and sell*** bonds, stocks,** *, 11
(Civil Code of .Alabama, sec. 6365; Combined Banking Laws of
Alabama, 1928, sec. 6355, p. 29).
* * * lfo bank shall subscribe for or own exceeding ten per
cent of the capital stock of any other bank, or invest or have
invested an amount exceeding in the aggregate 25 per cent of its
own paid in capital stock in the capital stock of a..~y other bank
or banks. Any bank acquiring capital stock in any other bank in
the usual course of business in nayment of an indebtedness owing
to it, must sell such portion of said stock as is in excess of the
amount i'Thich it is permitted to hold and own as herein provided
within one year from the time the same is acquired • .Any bank
failing to sell any such excess stock within the time heroin
directed, shall forfeit to the State an araount equal to the face
value of such excess stock held by it, which sum the superintendent shall sue to recover in the name of the State in any court
having jurisdiction, and the amount recovered shall be paid into
the State Treasury. 11 (Cii'il Code of Alabama, sec. 6355; Combined
Baaking Laws of Alabama, 1928, sec. 6355, p. 25.)
11
ARIZ0UA
Purchase of bank or trust company stocks permitted.
11
1-To bank, loan, or trust company or association, organized
under the larrs of the State of Arizona, may purchase, own, hold,
a.."'ld sell or otherwise dispose of any of the shares of the capital
stock of any other bank, loan, or trust co~any or association or
other corporation; unless, such purchase shall be authorized by the
executive committee or approved by the Board of Directors; and in
case the ;_JU.rchase is of stock in any other banking corporation the
approval of said purchase nn1st also be had from tho Superintendent
of Banks. 11 (Laws of 1922, ch. 31, sec. 20, P• 130; Banking Laws,
1922, sec. 20, p. 17.)
The term 11 bank 11 as used above includes savings banks.
1922, ch. 31, sec. l; Banking Lai:;s, 1922, sec. 1, P• 9.)
(La'."fs of
.ARK.Ai,1JSAS
Banks - no specific statutory ;provisioi.1s.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
There are no statutes in this State specifically authorizing
- 6 -
X-6608
(Arkai.1.sas, co:1tinued)
ba~1ks to :lmrchase the kinds of corporate stocks covered by this digest.
However, 11 no bank shall employ its .moneys, directly or indirectly, in
tra&c or commerce by buying and selling goods, chattels, wares and
m_,rcha:1dise, nor be the purchaser or holder of its own capital stock,
unless such sccuri ty or purchase shall be necessary to 9reve:1t loss upon a debt previously contracted in good faith; and stock so purchased
or acquired shall, within twelve months of its purchase, be sold or
disposed of at private sale; after the expiration of said t, ·clve months
any such stock shall not be considered as part of the assets of any
ba:1.k, Provided, that it rray hold a.nd sell all kinds of property that
may come into its possession as collateral security for loans or any
ordinary collection or debts, in the manner provided by law. Provided,
further, that any goods or chattels coming into its possession as
aforesaid shall be disposed of as soon as possible, and after tTielve
mo:1ths from the date of acquirement shall cease to be reckoned as a
part of its assets." (C. & M. Dig., sec. 695; :Banking Laws, 1929,
sec. 26, p. 18.)
Trust Ooinpanies - Purchase of stocks permitted.
Trust companies are authorized 11 to buy and sell all kinds of
* * * stocks, and other investment securities." (Act of April 13,
1903, sec. 2, p. 228, as amended by Acts of 1923, Act 627, sec. 10;
Ba;,1.king Laws, 1929, sec. 135 (9), p. 102.)
CALIFORNIA
:Banks - General power to purchase corporate stocks denied.
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Federal Reserve Bank of St. Louis
"No bank shall, except as otherwise provided in this
act, purchase or invest its capital or surplus or money of
its depositors, or any part of either, in the capital stock
of any corporation w1less the purchase or acquisition of
such capital stock shall be necessary to prevent loss to
the bank on an obligation owned or on a debt previously
contracted in good faith. Any capital stock so purchased
or acquired shall be sold by such bank within six mouths
thereafter if it can be sold for the amount of the claim
of such bank against it; and all capital stock thus purchased or acquired mu.st be sold for the best price obtainable by said bank within three years after such purchase
or acquisition unless the superintendent of banks shall
extend the time of its sale for a period not to exceed
tuo years. 11 (California :Ba11.k Act, 1929, sec. 37.)
- 7 -
X-6608
( C,D,li fornia, co~1 ti nued)
Exce1Jtion - Stock in one trust company.
11 .Any (com:.nercial) bank, with the previous ~'Tritten consei1t of the superinte.1dEmt of bn:1ks may 1urd1ase or other"1ise acquire and !1old the ,-,hole or any part of the capital
stock of not ,nore than one trust compn...,y orgc.nized a.'1.d existi:1g m1der the lrn•,s of this state, a..1d do1-1g business in the
sa:,1e county L1 '.'Thi ch the principal place of busi ,ess of such
bank is located; provided, however, that ;.1ot ,nore trum an
amount equal to twenty-five ~er centum of the capital and
surylus of any such bank mny be at any one time invested in
the ca~ital stop}3: of such trust company or such other corporation. 11 ( Cali fornin 3mk .Act, 1929, sec. 37.)
Sav1.1gs
o~ly i:.1 such
tnere is not
contemplated
and 145).
banks are authorized to malce i nves tmen ts of their ftu1ds
stocks as are enumerateci. in the Galifornia Bank Act, and
included in this enumeration the kinds of cori?orate stocks
by this digest. ( California Bank .Act, 1929, secs. 61,62
Trust compa,1ies - Investmel1t in corporate stocks prohibited.
Trust companies are not authorized to purchase corporate stocks
of the kinds co;1templated by this digest for the reason that investments
of their fui1as are made subject to the provisions governing the investment of funds by savings banks. The Calif..1rnia Bank .Act provici.es that
"every trust compai--iy shall invest its ca.pi tal and surplus "' * *, in
accordance with the laws relative to the investment*** of funds de(California Bank .Act, 1929, sec.
·oosited ,nth savings banks, * *
*·"
105.)
COLORADO
Banks may not purchase corporate stocks.
11 No
bank shall purchase its ovm stock, nor the stock
of any other corporation, except such as it may necessarily
acquire in the protection or satisfaction of previously existing loans made in good faith • .A11y stock so acquired
shall be sold by the bank within throe years, and sooner if
it can be done without impairing the bank 1 s investment in
the same." (Compiled Laws of Colorado, 1921, sec. 2683;
Ba:~dng Laws, 1928, sec. 33 p. 19).
Savings ba:.1ks are authorized to make certain investments, but
cor-porate stocks of the kinds contemplated by this digest a . :e i1ot included in the classes of authorized investroonts. ( Compiled La'\7S of
Colorado, sec. 2685; Banld.ng Laws, 1928, sec. 35, p. 20.)
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Federal Reserve Bank of St. Louis
( Colorado - Continued)
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X-6608
Trust Companies authorized to buy and sell stocks.
"All trust companies incorporated under the provisions
of this act are duly authorized:
*
"Seventh. To purchase, invest in and sell stocks * *
(Compiled Laws of Colorado, 1921, sec. 2765; Banking LaTis,
1928, sec. 128, p. ·3 6.)
*"
comn:;cTr CUT
Purchase of corporate stocks permitted up to certain amount.
:Banks and trust companies"*** may purchase and hold corporate securities of any description, provided the total amount at the
purchase price invested in corporate stocks shall at no time exceed
tv.renty-five per centum of its ·combined capital, surplus ai."1d undivided
profits and provided its investment in the stock of any one corporation
shall not exceed ten per centum of the stock of that corporation or exceed ten per centum of the percentage prescribed herein, whichever may
be the greater. * * * 11 (General Statutes of Conn., sec. 3955, as
amended by Laws of 1927, ch. 251; Banking Laws, 1929, sec. 3955, p. 9.)
Savings banks and ba:1lrn and trust companies maintaining savings
departments, may make limited investmentsof their savings deposits in
the stocks of certain banks located in the State of Connecticut and
certain cities in other States. (General Statutes of Conn., sec. 3928;
and sec. 3972 (27), as amended by Laws of 1929, ch. 279; Banking Laws,
1929, sec. 3928, p. 20; and sec. 3972 (27), p. 52.)
DELAWARE
Ban..~s and Trust Companies m9.y purchase stocks.
11
No bank or trust company shall invest more than twentyfive per centum of its total capital, surplus and undivided
profits in the stock, bonds or other obligations of any one
corporation or political entity or political division except
bonds or other obligations of the United States, of the State
of Delaware, or of any county, city, town or school district
in this State. 11 (Act of March 31, 1921, sec. 13; Banking
Laws, 1929, p. 26.)
The term 11 bank 11 as used in the above excerpt from the laws of
Delaware includes savings banks. (Act of March 13, 1921, sec. 1,
Banking Laws, 1929, sec. 1, p. 14.)
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-
9 -
X-6308
FLORIDA
Banks and Trust Comoa:.1i es may not purchase s tocl:s.
11 That
is shall be unla11ful for a.1y bai"'lk or trust
com:1a:1y organized u.;.1der the laws of this State and. doing
busL1ess in this State, to directly or L1directly invest
a:,.1y of the fund.s of said ba;:ik or trunt co,:1pa:1y in stock of
any incorporated coop any in this State or e 1 se•·•he re * * * 11
( Cm:;piled Ge:1eral Laws of Florida, 1930 Sup:::,., sec. 5084.)
SavL¥:s Bai1ks may purchase bank stocks.
"The ca.pi tal and deposits and the inco:,1e derived therefrom shall be invested o:1ly as follows:
11
4. I:1 the stock of any banl-c incor-porated under t he
authority of this State, or the stock of a.1y banl:i;.1g association incorporated 1.L'lder the authority of the United States
* '~ * 11
( Compiled General La1-:rs of Florida, 1927, sec. 5120;
Ba:11:::ing Laws, 1926, p. 30.)
Trust Co.npa:1ies :nay ourchase stocks.
11
ii:.vory trust compa.."'ly orga:1i zeu under a: d in pursuance
of this article shall have po•:rer:
(10) To purchase, i:w..,st in and sell stocks. * * *11 •
( Compiled General Laws of Flroida, 1930 Supp., soc. 6126 (10).
11
HOTE:
It will "oe observed that there is an apparent confli ct in the laws of this State a;1d it is understood
that .1one of the statutes above referred to have received judicial construction.
GEORGIA.
Ba-.1ks may not ~urchaso stocks.
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Federal Reserve Bank of St. Louis
11
No ba..'11: shall subscribe for, purchase, or hold stock
in any otner ba:1k * * * :1or in any other corporation 1.L"1loss tho same shall have been tra.isferred to it in satisfection of a debt previously contracted, or shall have "oeen
purchased at a sale under a l)o;-,er co:ntaiaecl in a note or
o thor i as trumc.1 t by TT!1i ch it TI as ·t)loc.god to the ba.nl~ or
u·.1der a judgmo:1t or ci.ecrac i.1 its favor, a;:1d all such stock
shall be disposQd of by t:10 bank \'Ji thin six mo·1t s, u:11<.,;ss
,• •
- 10 (Georgia - Continued)
--
X-6508
the Superintende~1t oi 3anks shall oxtend the time for good
cauae shown. (Ai..1enw:ients to Banki1-ie; Act of Georgia approved
A'l.l(,,"'1.l.St 25, 1927, sec. 10.)
The term 11 bank 11 as used in the la1s of Georfia includes savings ba1~cs. (Ba.±ing Act of Georgia, 1919, as amended 1925, Article
1, sec. 1.)
Trust CoJ10anies operating as investment ba;.1kers ma:, d.eal in stocks
and bonds.
11 Dealinr::
in Stocks and Eond.s. T:cust corrr,o.nies, operatin£ as Lwest.11e:1t ba:.-lkcrs, and maL1taini:::ig o.e Ja.rtmen ts for
the purchase ant sale of securities, r::iay purchase for resale
whole issues or pai·ts of issues of stocks, bonds and debentures
of industrial, railroad and public service corporatio.1s a;1d
other invcstme~1t s'3cu.ri ties, a1d may r0sell anci. deal i:1 the
same, u.;1der such regulations as may be ~roscri~ed by the
Su:,"JerL1tondc:1t of Ba.-i:.. s. 11 (Trust Co,npany Act of 1927, sec. 5A .)
IDAHO
Purchase of bank stocks Drohi bi ted.
11 lfo
bank shall * • • purchase any snares of
* a1y other ba.11.1< )7herever organizecl, or situated
* * * u:1lcss such*** rurchasc shall ie necessary
to l)revent loss U::_Jo:1 a debt previously co:1t::.-acted in
good faith; ancl stock so purchased * * * shall ;-1i thin
six months froi·.1 the elate of acquirerri:ut be sold or
clisposed. of at public or private sale; after the expiration of six months any such stock shall not be
co:.1sidered as a pa.rt of the assets of su.cil ba.'"lk. 11
(Larrs of 1925, ch. 133, sec. 29; Ba.lk Cod.e, 1925, sec.
29, p. 18.)
* *
Sa.vi.igs bruks are empo~ered to tlak:e certai. investments of their
fu:1ds, but they do 11ot have t e ·ooJer to Lwest in the kinds of corpo;•ate stocks conteawlate& by this digest. (La11s of 1925, ch. 230,
p. 446; Bank Cod.e, 1925, sec. 2 p. 50.)
The term 11 bank 11 as used in the Idaho la1-rs includes trust cor®a'1ies.
(LaYrn of 1925, ch. 133, sec. 2; Ba::1k Code, 1925, sec. 2 p. 5.)
ILLIUOIS
Jo ctatutory provisions.
Tl e statutes of Illi:1ois co:itain no prov1s10,1s authorizing or
prohibiting banks or trust compa~1ies to purchase corporate stocks.
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Federal Reserve Bank of St. Louis
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X-6608
IiIDIAl'ifA
Commercial banks or trust corrroa:1ies - 1To specific statutory provisions.
The statutes of Indiana contain no provisions specifically authorizing or prohibiting commercial banks or trust companies to purchase
corporate stocks.
Savings ban..l<:s not nerrnitted to ourchase corporate stocks contemplated
by this digest.
Savings banks may 11 invest the mo:1ey deposited therein" o:1ly in
such bonds, notes, etc., as are specifically enumerated, and there is
not included in this enumeration any corporate stocks of the kinds contemplated by this digest. (Acts of Extra Session of 1869, p. 104, sec.
19, as amended by Acts of 1875, p. 129, Acts of 1893, p. 273, Acts of
1903, P• 211 and Acts of 1917, p. 416.)
Investment in corporate stocks of the kinds contemplated by this digest
prohibited.
The laws of Iorya provide that banks and trust companies shall invest only in such stocks, bonds, and securities as are specifically enumerated therein, and there is not included in this enumeration any
stocks of the kinds contemplated by this digest. (Banking Laws, 1929,
ch. 413, secs. 9183, 9183-Cl; ch. 415, secs. 9269, 9271; ch. 416, sec.
9284; ch. 416-Al, sec. 12772.) The lavrs of Iowa also provide that 11 No
state bank, savings ban..k, or trust company shall make any loan or
discount on the security of the shares of its own capital stock, or be
the purchaser or holder of any shares, unless S.lch security or purchase
shall be necessary to preTent loss upon a debt previously contracted in
good faith, and stock so purchased or acquired shall be sold at public
or private sale, or otherwise disposed of, within one (1) year from the
ti me of its ,urchase or acquisition unless the time is extended by the
suuerintendent of ba.;-1king. 11 (Banking Laws, 1929,
ch. 413,
sec. 9184 . ).
KANSAS.
Banks may not purchase Corporate Stocks.
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Federal Reserve Bank of St. Louis
11 Ho
bank shall employ its moneys, directly or indirectly, in trade or comr~erce, by buying and selling
goods, chattels, wares and merchandise, and shall not
invest a:n.y of its funds in the stock of any other bank
or coruoration * * *. 11 (Session Laws of Ka:.1sas, 1927, p.
126; Banking Laws, 1929, sec. 11. p. 6.)
(Kansas~ Continued)
-
- 12 --
-
-
X-5608
The term 11 bank 11 as used in the above excerpt from the la,:s of
Ka;.1sas includes savi ·1gs banks. (Laws of 1897, ch. 47, sec. 36, as
amended by La'.7S of 1907, ch. 64, sec. l; Banking Laws, 1929, sec.
35, p. 14.)
Trust Companies authorized to pm·chase stocks.
11
The purposes for which trust compa:1ies may be formed
are:
* * * * * * * * * * * * * * * ** * * * * * * * * *
"Eighth, * * * to buy and sell all kinds of government, state, county, municipal and col1_)oration bonds,
and all kii.1ds of negotiable and nonnegotiable paper,
securities and stocks: Provided, that the total investment of any such trust company in bank stock shall at
no time exceed one-fourth its paid-up capital stock:
***Provided, that the total investment in bank stock
held by any trust company in excess of one-fourth of its
capital shall be disposed of within two years from the
passage of this act. 11 (Revised Statutes of Kansas,1923,
sec. 17 - 2002; Baak:ing Laws, 1929, sec. 2, p. 38 and 39.)
KE~JTUCKY
~To Statutory Provisions.
The laws of KentuclC'J contain no specific provisions ~ith reference
to the ~urchase of corporate stocks by banks or trust companies. F.ith
reference to banks, the law does provide that no bank shall erm;>loy its
moneys, directly or indirectly, in any enterprise or business except as
authorized by law; but the right to purchase corporate stocks does not
appear to be authorized by law. (Carroll's Kentucky Statutes, 1930,
secs. 579 and 582; Banking Laws, 1926, secs. 579 and 582.)
Trust companies are not aut~orized expressly to purchase coroorate
stocks, but tbe law does provide that "the capital stock of a trust company, and the funds in its possession, not held in a fiduciary capacity,
may be invested in such manner as the directors deem prudent and safe; *
* * 11
(Carroll's Kentucky Statutes, 1930, secs. 606 and 614; Banking
Laws, 1926, secs. 606 and 614.)
LOUISIANA
Purchase of any Corporate Stocks Permitted.
All banks and trust companies are empowered "to receive, hold, purchase, acquire and convey, bJ and u:1der their corporate name, such property, real and Jersonal, including bonds, stocks and securities of foe
United States, or of any of the United States, or of any corporation,
board or body, public or private thereof, as may be necessary, ~roper or
convenient to the objects of the association, and to exercise in relation thereto, all the direct and incidental rights of ownership. 11
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Federal Reserve Bank of St. Louis
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-
-
X-6608
(Louisiana - Continued)
(La',s of 1902, Act lTo. 45, sec. 1 (2), and sec. 7, as amended by .Act
Ho. 238 of 1910, and Act Ho. 179, as ame::ided; Banking Lavrs, 1928, sec.
1 (2) p. 26, sec. 7, p. 30, secs. 1 - 32, pp. 3-21.)
MAnl'E
"Trust and banking companies" - !fo snecific statutory provisions.
The laws of Me.ine do not co;.1tain any provisions expressly authorizing "trust and banking companies" to purchase corporate stocks, but the
la,,s clo give such companies the povrer "to hold and enjoy all such estate,
real, personal and mixed, as may be obtained by the investment of its
capital stock or any other moneys a:1d funds that may come into its
possession in the course of its bu.sinc~s and dealings, and the same sell,
grant ai1d dispose of: * * *". (Public Laws, 1923, ch. 144, sec. 61:
Banking Laws, 1927, sec. 61. p. 41.)
Savings banks may invest in stock of Maine corporations other than
banking corporations - .Amount of investment limited.
"Savings banks and institutions for savings may hereafter invest their funds as follows, and not othe~!ase:
********************** **
"(a) In the stock of any Maine corporation, other than a
banking corporation, actually conducting in this state t11e
busiaess for TThich such cor9oration was created, provided
such cor,oration has for a period of three years next preceding the investment ear::ied aad received an average net income equivalent to at least six per cent u,on the entire outstanding issue of the stock L.1 guestion. 11
11
(b) Tne aggregate of all investments made by any bank in
stock shall at no time exceed five per cent of its deposits,
and. not more than one per ce.1t of the d.eposi ts of such bank
shall be invested in the stock of any single corporation. No.
such bank shall hold by way of investment or as security for
loans, or both, more than one-fifth of the capital stock of any
cor·_,oration; but this limitation shall not apply to assets
acquired in good faith upon judgments for debts or in settlements to secure debts." (Public Laws, 1923, ch. 144, as amended,
sec. 27; Banking Laws, 1927, sec. 27, PP• 12 and 22.)
MARYLAND.
Purchase of Corporate Stocks permitted to Trust Companies.
Trust co.npanies are given the ·1ower 11 to exercise, by its directors,
duly authorized officers or agents, all such powers as shall be usual in
carrying on the business of banking. *****by purchasing, investing
in and selling stocks, * **and other securities * * *11 • (Bagby's Code,
.Article 11, sec. 46; Banking Laws, 1927, sec. 46 (9), p. 23.)
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Federal Reserve Bank of St. Louis
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X-6608
(Maryland - Co~1tinued)
Banks - no specific statutory provisions.
There do not appear to be any provisions in the la,:rs of Maryland
s:pecifically authorizing or prohibiting banks to purchase corporate
stocks.
MASSACHUSETTS.
Purchase of Corporate Stocks by Trust Companies permitted.
A trust company may 11 * * * * invest its moneys or credits,
~hether capital or general deposits, in the stocks, bonds or other evidences of indebtedness of corporations or of associations or trusts,**
*·" (General Laws, Ch. 172, sec. 33; Trust Company Pamphlet Laws, sec.
33, p. 21.)
Limitation upon Purchase of Stocks in other Trust Companies.
11
Uo trust company shall hold more than ten per cent of the
capital stock of any other trust company. 11 (General Laws, Ch. 172,
sec. 43; Trust Company Pamphlet La~s, sec. 43, p. 23.)
Saviw:;s Bai"lks may Purchase Certain Bank and Trust Company Stocks Amount limited.
Savings banks may invest their deposits and income derived therefrom -
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Federal Reserve Bank of St. Louis
"In the stock of a trust company incorporated under
the laws of and doing business within this commomrnal th,
or in the stock of a national banking association located
in the New England States and incorporated under the authority of the United States, which has paid dividends of not
less than four per cent therein in cash in each of the five
years next preceding the date of such investment and the
amou.~t of whose surplus is at least equal to fifty per cent
of its capital; but a savings bank shall not hold, both by
way of investment and as security for loans, more than
tr:enty-five per cent of the stock of any one such company
or association, nor shall it hold by way of investment stock
of such companies and associations having an aggregate
initial cost in excess of fifteen per cent of the deposits of
such savings bank, or stock of any one such company or
association having an initial cost in excess of one per cent
of the cleposi ts aforesaid. 11 (General Laws, ch. 168, sec. 54,
(7th), as amended by Acts of 1929, ch. 315, sec. 1; Savings
Banks Pamphlet Laws, sec. 54 (7th) p. 39.)
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X-6608
MICHIGAN
Purchas e prohibit ed. of kind.s of corpora te stocks contemp lated by this
digest.
The laws of ..uchigan provide that banks and trust companies may
only purchase certain specific ally enumera ted stocks, bonds and other
securit ies, and this enumera tion does not include any of the stocks
co:.itemplated by this digest. (Laws of 1929, Act Uo. 66, secs. 4
a;.1d 24; Laws of 1929, Act Uo. 67, secs. 19 and 24; Laws of 1919, Act
No. 94, sec. l).
MUH-l'ESOTA
Purchas e of kinds of corporat e stocks contemp lated by this digest not
permitte d.
The statutes of Minnesota. provide that ba;.1ks and trust companies
may o~ly ~urchase or invest in such stocks, bonds, etc., as are specifically enu:nera ted, and there is not included in this enumera tion any
of the stocks contemp lated by this digest. (G. S. 1923, secs. 7649, 7663,
7714, as amended by Larrs of 1927, ch. 368 and ch. 422, 7716, 7735,
7738, 7740 and 7810.)
MISSISSIPPI
Purchas e of bank stocks prohibi ted.
11
Uo part of the stock of any bank* ** shall be owned
by any bank under the nrovisio ns of this act. Any such
stock owned by any bank at the time this act takes effect
shall be disposed of ;ri thin t\1elve months after such time.
In cases where such stock is taken as collate ral and the
purchase thereof shall be necessa ry to prevent loss upon a
debt previou sly contract ed in good faith, then in such cases
such stock shall be sold by the bank within twelve months
from the time that it was required . A violatio n of this
section by any bank or banks under the provisio ns of this
act shall be constitu ted a breach of law and subject any
such bank or banks to liquida tion and forfeit of their
respecti ve charters • 11 (Laws of Mississ ip·~)i, 1922, Chap. 172,
sec. 49; Brown's 1925 Miss. and Federal Statutes pertaini ng
to Banks and Banking , P. 71. )
The term 11 bank 11 as used in the laws of Mississ ippi includes trust
compa..!ies and savings banks. (Laws of Mississ ippi 1914, chap. 124, sec.
66; Bro1m's 1925 Miss. and Federal Statutes pertaini ng to Banks and
Banking , p. 72.)
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Federal Reserve Bank of St. Louis
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X-6608
i,USSOURI
Purchase by Trust Companies of Corporate Stocks Limited:
A trust compa;.1y 11 shall not invest or ~<eep invested in the stock of
any private corporation an amount h1 excess of fifteen per centum of the
capital and surplus fund of such trust company; nor shall it purchase or
continue to hold stock of anot~er bB.!"lk or trust company if by such purchase or continued investment the total stock of such other bank or trust
compa:1y owned and held by it as collateral \vill exceed fifteen per centum
of the stock of such other bank or trust company: Provided, however,
that this limitation shall not apply*** to the o~nership by such trust
corrtr)cL.1y or its stockholders of a part or all of the capital stock of one
bank organized under the laws of the United States or of this State. 11
(Revised statutes of Missouri, 1919, sec. 11807, as amended by Laws of
1927, page 241.)
Tnere are no statutory provisions in this State governing the
purchase of corporate stocks by banks; and the Uissouri courts have
held that in the absence of express authority, one bank cannot purchase
the s ares of stock of anotiler bank.
:AOtTTAHA
Banks prohibited from purchasing stocks.
11
lTo commercial or savi:1gs bank shall purcHase or invest
its capital or Bu.rplus, or money of its depositors, or any part
of either, in the capital stock of any corporation, unless the
purchase or acquisition of such capital stock shall be necessary
to prevent loss to the bank on a debt previously contracted in
good faith. Any c_Si)i tal stock so purchased or acquired shall be
sold by such ba.."lk within six months thereafter, if it can be sold
for the amoir.1t of the claim of such bank against it; and all capital stock thus purchased or acquired must be sold for the best
price obtainable by said bank within one year after such purchase or acquisition. Every person or corporation violating a:rzy
provision of tr~s section shall forfeit to the state twice the
nominal amount of such stock. 11 (Laws of Montana, 1927, Chap. 89,
sec. 39; Bai'lking Laws, 1927, Sec. 39, p. 32.)
Trust Companies authorized to purchase stocks.
The la=s of :,!ontana authorize the organization of trust companies
which may i.1Vest in corporate stocks and other securities, and also
provide as follows: 11 * * * The board of directors of any such corpora ti on (trust company) is authorized to invest the capital and assets
of said corporation * * * in * * * stocks and bonds of corporations *
* *11 (Laws of ·l'iontana, 1927, Cap. 89, sec. 4 (c) (8) and sec. 26;
Banking La~s, 1927, sec. 4 (c) (8) ~1d sec. 26.)
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Federal Reserve Bank of St. Louis
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X-6508
("fontana - Conti:iued)
Investment Comoanies may purchase stocks.
The la,'IS of Uontana authorize the formation of investme:1.t
corrrJani ~s TTith the ~ower to receive deposits. These companies
are authorized to buy aad sell stocks as well as other securities.
(La\,S of '.fontana., 1927, Chap. 89 sec. 4 (d); Baiiking Laws, 1927,
sec. 4 (d).)
!JEBRASKA
B4nks - Purchase of Corporate stocks prohibited.
"Mo corporation transacting a banking business shall
**•be the purchaser or holder o f • • • the shares of
any corporation, u.,less such••* purchase shall be
:1.ecessary to preve:1t loss upon a debt previously contracted
in good faith; and such stock so uurchased or acquired
shall, "P.i thi:.i six :nonths from the time of its :purcl ase be
sold or disposed of at public or private sale; or in default
tbereof, a receiver may be appoL1ted to close up fac business of the banl;:: Provided, in no case shall the am01111t of
stock so held exceed ten ·,er ce:::1t of the paid-up capital of
such ba:.1k. 11 ( Comp. Stat. of i.Tcbraska, 1922, soc. 8006;
Bc:llting Laws, 1929, sec. SOOS, ::_:,. 12.)
SavL1gs banks are not permitted to urchase corporate stocks.
( Comp. Stat. of Mebraska, sec. 8016; Ba...k:ing Laws , 1929, s~c. 8016, p. 18.)
Trust Companies - Purchase of corporate stocks ·,ermi tted.
Tl·us t co:-:ipani os have the powor II to buy, hold and own and sell
* * * stocks, * * * and other i:.wostmcnt securi tics. 11 ( Comp. Stat.
of Nebraska, 1922, sec. 8008, as amended by Lavs of 1927, Act apt,roved
A-;ril 20, 1927.)
NEVADA
Purchase of coruorate stocks prohibited.
"No banl:: shall employ its 1no,1eys , directly or indirectly in trade or co,nmerce by buyin£ or selli
goods ,
chattel wares, or merchandise, and shall not invest any of
its fu.'"lds in the stock of a:1y bank or trust company or corporation, • *
(Revised Laws of 1912, sec. 13,
p. 195,
as amended, Laus of 1915, p. 32 ; Banking Lm· s, 19G7, sec. 13
*·"
p. ?. )
The word 11 bank 11 as used. in the ba:ucing law of Nevada includes
savbgs banks and trust cor.ipanies. (Revised Laws of 1912, sec. 75,
Ba.lking Lans, 1927, sec. 75, p. 23.)
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Federal Reserve Bank of St. Louis
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X-6508
:CT:81.i H.Al,1P$ HI RE •
Purchase of Cornorate Stocks ·n ermi tted.
Trust companies are authorized and Cffi')O'." ered 11 to negotiate,
purc:1ase and sell stocks, bonds a ~1d. ot:ner evic.e ~1 ces of de'ut; to do a
gene1-al banl:ing busi.1ess; a;.1d to co:;.1duct a savL1gs departme;.1t. t1
(::?ublic La,-s, ch. 265, sec. :::il; Banking La·rs, 1929, sec. 31, i?· 41.)
Limitation unon such T)urchase.
11
The total liabilities of a ·::,erson, firm or corporE•. ti on,
including in the liabi li tiei:i of a firm the liabilities of its
several members, for mo~1ey 'borrowed of the commercial de1_)artme;,1t
of a trust compa:..1y or ot~1er cor_)oratio~1 of a similar cha1·acter,
whether organized under the provisions of this chapter or otherwise, shall a.t :no timeexc~ed ten ;?er cent of its ca1?ital stock
actually J)aid i:1. and. surplus, nor shall~ such corporatio:.1 -::,urchase or hold, by "ray of investment, the stocks a::1d bonds of
a.ny cor1)oration to an amount in excess of said ten per ce::.1t. 11
(Public Lar.rs, ch. 265, sec. 37; Ba.nki.ng Laws, 1929, sec. 37,
1,. 42.)
Savinr..:s Bai1l.CS a;.1d SavL:igs De1Jartme~1ts of Banks a:1d Trust Comnanies.
Subject to certai:1 limi ta ti o;.1s, savL16 s ba:.1ks and. savL1gs
de)artme:.1 ts Jf ban}d!1g and trust co1apanies may invest i n the capital stock of banl::s, trust com:-Janies 8.!"1d certain other corporations,
Ho»rever, such L1ves trnen ts are limited, in the case of any o:ie cori)Orati 0:..1, to 5% of the cte:,osi ts of the :,urchasing savings banks or
sav::.:1gs d.epart;nents of bari'.'.:ing alld trust companies. (Public Lar,s,
ch. 260, sec. 16, ch. 232, secs. 1, 7, 8, 9, 12, 13, 14, 15; Banl~i~g L~7S, 1929, sec. 15, p. 7, secs. 1, 7, 8, 9, 12, 13, 14, 15 and
p:.) . 20, 23-29) •
Ba:1ks (other than savL1gs banks) a::icl Trust Companies authorized to ·o urchase Cor-•)orate Stocks.
Ba:1ks (other than savL1gs banks) 11 in addition to the pO"rer
and authority i10'\'1 conferred upon them, shall be authorized to
rn:rc11ase, invest in and sell stocks of corporations 11 • (Laws of
1927, ch. 12; 3a:1:.cL1G La,vs, 1928, sec, 10, p. 54.)
T1·ust cornpa...;ies are authorized 11 to ourchase, invest in
a;,1d sell stocks* * * a.'1d other securities; * * *,ti
(Laws of
1899, ch. 174, sec. 6 (10); Banking Lwvs, 1928, sec. 6 (10),
p. GS.)
Sa.vL1gs ba:i1ks may o:ily invest i;:i. certain s:9ecifically
enumerated. securities, and. there is not inch,ded in this enumeration
a:r1y of the cor-porate stocks conte~lated by this digest. (1a,-,s of
1925, ch. 129, sec. 1.)
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Federal Reserve Bank of St. Louis
X-5608
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m:w
MEXICO
Commercial banks a;.1d trust compa:1ies - 1To statutory provisions
There do not appear to be any provisions in the laws of
new ;,. Iexico expressly permitting or prohibiting commercial banks
and trust companies to purchase corporate stocks. Trust companies, however, are authorized 11 * * * to y)Urchase, invest in
and sell all kinds of • * * investment securities • 11 (Laws· of
1915, Ch. 67, sec. 60(7); Bank Code, 1929, sec. 60(7), p. 22);
and with re :::'erence to commercial banks, the laws of New Mexico
provide that 11 ***no bank shall at any time have invested more
mhan thirty per cent of its unimpaired capital and sur:plus in
the notes, bonds or other securities of a:1.y person, firm or
corporation* * •. 11 (Laws of 1929, ch. 131, sec. 9; Bank Code,
1929, sec. 36, p. 15.)
Savings banks may only invest their deposits in certain
specifically enumerated sccuri ties, and there is not included
in this em.1Jneration any of the corporate stocks contemplated
oy this digest. (Laws of 1929, ch. 66; Ba:1.k: Code, 1929, sec.
56, p. 20.)
NEW YOBK
Trust c;omoanies ;oermi tted to uurchase stocks
T1·ust coi1panies have the pow0r 11 To purchase, invest in
and sell stocks * * * and other socuri ties; • * * 11
(BankLig Law, soc. 185 ( 9 )· ) •
Limitation upon purchase of corporate stocks
A trust company "Shall not Lwcst or keep invested in the
stock of any private corporation an amount in excess of ten
per ceatum of the capital a:1d surplus of sucil trust company;
:.10r shall it purchase or continue to hold stock of another
mo:1eycd corporation if by such purchase or co:1tinued investment the total stock of such other moneyed corporation owned
and held by it as collateral will exceed ten per centum of the
11
stock of such other moneyed corporation, * *
(Banking
Law, soc. 190 (9) ).
*
Banks - l'To statutory provisions, but uurchaso generally of
cor:iorate stocks held prohibited.
Ba;:1ks proper a."1d savings banks are permitted to purchase
certain classes of corporate stocks, but none of these stocks
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Federal Reserve Bank of St. Louis
- 20 (£Tew York
X-6608
co;.1tinued)
is of the type contemplated by this digest.
secs. 106 and 239.)
( Ba~'lking Law,
The banking department of the State of :C.Tew York holds
have no authority to buy stocks other than those
ba:1ks
that
classes above referred to, and the courts in this State
have re;.1dered decisions to tho effect that banks can not
purchase stocks of other corporations for the purpose of
selling at a profit, can not 0ecome stockholders in a
railroad corporation, and can not purchase State stocks
to sell at a profit.
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Federal Reserve Bank of St. Louis
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X-6608
NORTH CAROLINA
Purchase of Corporate Stocks permitted, but amount of purchase limited.
No bank shall make any investment in the capital
stock of any other State or National bank, Provided, that
nothing herein shall be construed to prevent the subscribing to or purchasing of the capital stock of*** central
reserve banks, having a capital stock of more than one
million dollars; by banks doing business under this act,
upon such terms as may be agreed upon. To constitute
a central reserve bank as contemplate d by this act, at
least fifty per cent of the capital stock of such bank
shall be owned by other banlcs. (Ann. Code of North Carolina, 1927, sec. 220(c); Banking Laws, 1927, sec. 220 (c),
p. 20).
11
Limitations upon Purchase of Stoeks
The investment of any bank in the capital stock bf
such central reserve bank***, shall at no time exceed
ten per cent of the paid-in capital and permanent surplus
of the bank making same. No bank shall invest more than
fifty per cent of its permanent surplus in the stocks of
other corporation s, firms, partnership s, or companies, unless such stock is purchased to protect the bank from
loss. Any stocks owned or hereafter acquired in excess
of the limitations herein imposed shall be disposed of
at public or private sale within six months after the
date of acquiring the same, and if not so disposed of they
shall be charged to profit and loss account, and no longer carried on the 1::ooks as an asset. The limit of time
in which such stocks shall be disposed of or charged off
the books of the bank may be extended by the Corporation
Commission, if in its judgment it is for the rest interest
of the bank that such extension be granted. 11 (Ann. Code
of North Carolina, 1927, sec. 220(c); Banking Laws, 1927,
sec. 220(c) p. 20.
11
Corporation Commission may suspend Limitations on Amount may Purchase.
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Federal Reserve Bank of St. Louis
"The board of directors of any bank may, by resolution
duly passed at a meeting of the board, request the Corporation Commission to temporarily suspend the limitation on
loans and investments as same may apply to any particular
loan or investment, which said bank desires to make in
excess of the provisions of sections 220(b), 220(c) * * *
of this act. Upon receipt of a duly certified copy of such
resolution, the Corporation Commission may, in its discretion, suspend the limitation on loans and investments in
. ..
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X-6608
north Carolina continued.
"so far as it would a:-pply to the loan or investment
which such bank desires to make. 11 (Ann. Code of North
Carolina, 1927, sec. 220(e); Banking Laws, 1927, sec.
220 ( e) , p • 21. )
Purchase of Stock of Corporation Owning Land or Building used
by Bank.
A bank may invest 11 fifty per cent of its unimpaired capital
and permanent surplus in the stock or bonds of a corporation owning
the land, building or buildings occupied by such bank as its banking
home 11 and a bank may not be compelled 11 to surrender or dispose of
any investment in the stocks or bonds of a corporation owning the
lands or building occupied by such bank as its banking home, if such
stocks or bonds were lawfully acquired prior to the ratification of
this Act: Provided further, however, that the Corporation Commission
may, in its discretion, authorize banks located in cities having
a popuiation of more than five thousand according to the latest
United States census to invest an amount greater than fifty per cent
of its unimpaired capital and pennanent stll1'lus in the stocks or
bonds of a corporation owning the land, building or buildings occupied by such bank as its banking home. 11 (A:r;m, Code of North
Carolina, 1927, sec. 229(b); :Banking Lawe, 1927, sec. 220(b), P• 20)
Definition of term 11 bank 11 •
"The term •bank' when used in this act shall be construed to
mean any corporation, partnership, firm, or individual receiving,
soliciting, or accepting money or its equivalent on deposit as a
business: Provided, however, this definition shall not be
construed to include building and loan associations, Morris plan
com,anies, industrial banks or trust companies not receiving
money on deposit." (Ann. Code of North Carolina, 1927, Sec. 216(a):
Banlcing Laws, 1927, sec. 216(a), p. 3.)
NORTH DAKOTA.
Purchase of Corporate Stocks by Banks prohibited.
Uo bank shall••• employ or invest any of its
assets or funds in the stock of any corporation, bank,
partnership, firm or association, nor shall it invest
any of its assets in speculative margins of stocks,
bonds, • • •. 11 (Supplement to 1913 Comp. Laws of North
Dakota, sec. 5187; Banking Laws, 1929, p. 25.)
11
The above prohibition is expressly made applicable to savings
ba.'"lks. (Compiled Laws of Horth Dakota, 1913, sec. 5204; :Banking Laws,
1929, p. 67.)
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Federal Reserve Bank of St. Louis
...
X-6608
- 23 OHIO
Banks (other than savings banks) not permitted to purchase corporate stocks of kinds covered by this digest.
Banks, other than savings banks, are authorized to make
certain investments of their capital, surplus, undivided profits
and deposits in certain securities, stocks and bonds, but apparently they are not authorized to make investments in the kinds of
corporate stocks contemplated by this digest. (Throckmorton 1 s
Code of 1929, secs. 710-111, 710-llla, 710-121; Banking Laws, 1928,
secs. 710-111, 710-llla, 710-121.)
Savings banks - purchase of bank stocks forbidden, but
of comoanies 11 may be purchased.
II
stocks
A savings bank is empowered to invest its funds in
stocks of companies, upon which or the constituent companies
com_prisin6 the saue, dividends have been earned and paid for five
consecutive years next prior to the investment and stocl<s of companies taken on a refinancing plan involving an original investment,
which was legal at the time it was made; provided, every such investment shall be authorized by an affirmative vote of a 1najority
of the board of directors of such savings bank" but 11 110 purchase
or investment shall be in the stock of any other corporation organized or doing business under the provisions of this act or of
the national banking act of the United States • 11 (Act approved April
18, 1929, Laws of 1929, sec. 710-140 (b).)
11
Trust Companies - Purchase of banlc stocks prohibited, but other
corporate stocks may be purchased.
trust company may invest in*** stocks and
bonds of corporations when authorized by the affirrnative vote of the board of directors, or of the executiye committee of such trust company" but the prohibition
against savings banks purchasing bank stocl-cs is also
imposed upon trust companies. (Throckmorton 1 s Code of
1929, sec. 710-166; Banking Laws, 1928, sec. 710-166,
11 .A
p. 64.)
OKLAHOMA.
Jeanks - Purchase of any kind~f corporate stocks prohibited.
A ba11k "shall not invest any of its funds in the stock
of any other bank or corporation•* *, 11 (Oklahoma. Comp. Stat.,
1921, sec. 4123; Baiucing Laws, 1926, sec. 11, p. 15.) Tho Constitution of 01:lahoma also provides that 11 Uo trust company, or
bank or ba:.11.:in6 company shall own, hold or control in any manner
whatever, tho s tod~ of any other trust company or bank or banking
company! except sucl.1 stock as may be pledged in GOod faith to
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Federal Reserve Bank of St. Louis
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X--6608
Oklahoma continued.
secure bona fide indabtedness, acquired upon foreclosure, execution sale, or otherwise for the satisfaction of debt; and such stock
shall be disposed of in tho time and rno.nnor hcroinbofore provided. 11 (within twelve months from the date of acquisition). ( Cons ti tu ti on of Oklahoma., Article 9, sec. 41.)
Trust Companies - May purchase any kind of stocks, except in a
bank or in another trust com:oacy.
Trust companies are given the power 11 to bey and sell ill * *
all kinds of * * * stocks, and other investment securi ties 11 • ( Oklahoma. Comp. Stat. 1921, sec. 4194 (9); Banlring Laws, 1926, sec.
119 ( 9 ) , p • 64. )
In view of the above provision of the Oklahoma Constitution
prohibiting a trust company to 11 hold or control in any manner
whatever, the stock of aey other trust company or bank or banking compaey 11 , it would seem that the power given to trust companies to" buy and sell * • • all kinds of * * * stocks, and other
investment securi ties 11 , is restricted in so far as the provisions
of the Oklahoma Constitution are applicable.
ORIDGON
Purchase of corporate stocks prohibited.
Except for the authority to purchase certain classes of
corporate stocks not contemplated by this digest, the laws of Oregon provide that 11 Hereafter no bank or trust compaey shall in vest aey of its assets in the capital stock of aey other cor poration 11 • In case stock is purchased or acquired to save loss
on a preexisting debt, such stock must be sold 11 wi thin 12 months
of the date acquired or purchased, or within such further time
as may be granted by the superintendent of bruiks. 11 (Laws of
1925, ch. 207, sec. 81, p. 336; Banking Lo.ws, 1925, sec. 81,
p. 28.)
Savings banks and savings departments of banks or trust
companies are not authorized to invest funds in the kinds of
corporate stocl:s contemplated by this digest. (Laws of 1929,
ch. 380, sec. 31.)
PENNSYLVANIA
]anlrn (other than savings banlcs) a."'ld trust companies
permitted to purchase corporate stocks.
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Federal Reserve Bank of St. Louis
The laws of Pennsylvania provide:
That hereafter any corporation orgnnized for profit, created
by general or special laws, may purchase, hold, sell, assign,
transfer, mortgage, pledge, or otherwise dispose of, the shares
11
- 25 -
X-6608
Pennsylvania continued.
of the capital stock of*** any other corporation or corporations, public or private, of this or any other State and
while the owner of said stock may exercise all the rights, powers,
and privileges of ownership, including the right to vote thereon. 11
(Act of July 2, 1901, Public Laws, p. 603 (West's Penna. Statutes,
1920, sec. 5785), as amended "ey Acts of March 27, 1929, Public
Laws, p. 74, and April 18, 1929, Public Laws, p. 544.)
There are no statutory limitations in Pennsylvania upon the
right of State banks, other than savings banks, and. trust companies
to purchase stocks of other corporations, and it has been considered that
such institutions have the right, under the provisions of the Act of July
2, 1901, as amended, to purchase corporate stocks.
Savings banks, however, do not possess the right to invest their
funds in shares of stock of other corporations. Such banks, by the provisions of Section 17 of the Act of May 20, 1889, P.L. 246 (West's Penna.
Statutes, 1920, sec. 19770), are permitted to invest money derived from
deposits only as specified in the Act of May 20, 1889, and as there are
no provisions in this act or in amendments thereto (Act of June 28, 1923,
P.L. 884, and Act of April 26, 1929, P.L. 827) permitting such banks to
invest their funds in stocks of other corporations, it has been considered
that they are without this power.
RHODE ISLA?-m
Banks proper and trust companies - No statutory provisions.
The laws of Rhode Island do not contain any express authority
for banks proper and trust companies to purchase corporate stocks, but
a trust company is authorized 11 * * • to invest its capital stock and
moneys in its hands in such bonds, obligations, or property, real,
personal, or mixed, as it may deem prudent, • * *" (General Laws, 1923,
ch. 271, sec. 4; :Banking Laws, 1929, sec. 4, p. 16).
Savings banks and banks and trust C03?anies receiving savings deposits - purchase of steam railroad and bank stocks pennitted.
Deposits in savings banks and in the savings departments of
banks and trust companies, and in the case of savings banks, the
income derived from investroonts held, ma.y be invested subject to
detailed limitations in the capital stock of banks and trust com panies and certain steam railroad companies. (General Laws, 1923,
sec. 1, Clause IV, Clause VII, as amended by Laws of 1927, Ch.
1034, Clause XIV, Clause XV, as amended by Laws of 1925, Ch. 653;
Banking Laws, sec. 1, p. 22, Clause IV, P• 30, Clause VII, P• 37,
Clause XIV, p. 43, Clause XV, PP• 44-45.)
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Federal Reserve Bank of St. Louis
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X-6608
SOUTH CAROLINA
:Banking Corporations may deal in corporat.e stocks.
"Every banking corporation may*** deal in
***public and other securities, and stocks of other
corporations; ***may purchase and hold such***
personal property as may be conveyed to it to secure
debts to the corporation, or may l:e sold under execution to satisfy debts due in whole or in part to the
corporation, and as may be deemed necessary or convenient for the transaction of its 'business, and may sell
and dispose of the same at pleasure; • • "' , 11 (Code of
1922, sec. 3992; Banking Laws, 1928, sec. 62, p. 29.)
Trust companies authorized to purchase corporate stocks, 'but
amount limited.
Trust companies are authorized 11 to bey, underwrite, invest
in and sell all kinds**• of stocks or other investment securities." (Banking Laws, 1928, sec. 9 (10), p. 117.)
Limitation on amount may invest in any one corporation.
Shall not invest or keep invested in the stock of any one
private corporation an amount in excess of twenty-five per centum
(25%) of the capital and surplus fund of such trust company; nor
shall it purchase or continue to hold stock of another bank or
trust company if by sudl purchase or continued investment the total
stock of such other bank or trust company owned or held by it as
collateral will exceed twenty-five per centum (25%) of the stock of
such other bank or trust can·:ia.ny: Provided, however, That this
limitation shall not apFlY to the*** ownership by such trust
company, or its stockholders, of a part or all of the capital stock
of one bank organized under the laws of the United States or of
this State, nor to the ownership of a part or all of the capital
of one corporation, organized under the laws of this State, for the
principal purpose of receiving savings deposits. 11 (Banking Laws,
1928, sec. 12 (7), p. 122.)
11
SOUTH DAKOTA.
Eanks prohibited from Purchasing Corporate Stocks.
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Federal Reserve Bank of St. Louis
No bank shall employ its money, directly or indirectly,
in trade or commerce by buying or selling goods, chattels, wares
and merchandise, nor shall it invest any of its funds in the stock
of any other bank or corporation, nor make loans or discounts on
the security of the shares of its own capital stock, nor be the
purchaser or holder of any such shares unless such security or
purchase shall be necessary to prevent loss upon a debt previously
contracted in good faith; stocks so purchased or acquired shall,
within six months of the time of its purchase, be sold or disposed
of at public or private sale; and after the expiration of six
11
...
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- 27 -
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X-6608
South Dakota continued.
months any such stock shall not be considered as part of the assets
of such bank. 11 (Session Laws of South Dakota, 1919, ch. 125; Banking Laws, 1927, sec. 8983, p. 27~)
Trust Companies prohibited from Purchasing Corporate Stocks.
11 No trust company shall employ its money, directly or
indirectly, in trade or commerce, by beying or selling goods,
chattels, wares and merchandise, nor shall it invest any of its
funds in the stock of any other trust company or corporation, nor
malte any loans or discounts on the security of the shares of its
own capital stock, nor be the purchaser or holder of any shares
unless such security or purchase shall be necessary to prevent
loss upon a debt previously contracted in good faith; and stock
so purchased or acquired shall, within six months of the time
of its purchase, be sold or disposed of at public or private sale;
and after the expiration of six months any such stock shall not
be considered as a part of the assets of any trust company. 11
(South Do.kota Code, 1919, sec. 9050; Banking Laws, 1927, Sec.
9050, p. 68.)
TENNESSEE
All corporations authorized to deal in stocks.
The laws of the State of Tennessee provide: "That all private
corporations now existing or orgai ized by virtue of the laws of
Tennessee, and all private corpora.ti. ons hereafter to be orgll';',nized and
created according to law, for the transaction of any lawful business, or
to promote or conduct any legitimate object or purpose, shall have the
right, power, privilege and immunity to purchase, hold, own, sell,
transfer, assign, vote, mortgage, ple<lt,~, and othorwise deal in stock,
bonds, or evidence of indebtedness of other corporations in the same
manner and with all the rights, power, privileges and iimnunities of
¼ndividual mmers, except that this Act shall in no way be construed
to give corporations power to create unlawful monopolies, trusts or
combinations in restraint of trade. 11 (Act approved March 31, 1923).
TEXAS
Purchase of Corporate Stocks Permitted.
Banks (other than savings banks) and trust companies may purchase,
invest in, and sell stocks and other securities. (Rev. Stat., 1925,
.Articles 396, (9) and 1513; Banking Laws, 1929, Article 396 (9), p. 18,
and Article 1513, P• 76).
Limitation upon purchase of bank stocks.
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Federal Reserve Bank of St. Louis
It shall be u.'1l.awful for any State bank or bank and
trust company to own ~ore than ten per cent of the capital
11
- 28 -
X-6608
Texas continued.
stock of any other banking corporation, or to make a loan
secured by the stock of any other banking corporation, if
by the making of such loan the total stock of such other
banking corporation held by it as collateral will exceed,
in the aggregate, ten per cent of the capital stock of
such other banking corporation, unless the ownership or
the taking of a greater percentage of such capital stock
as collateral shall be necessary to prevent loss u.-pon a
debt previously contracted in good faith; and any such
excess so taken as collateral or owned by such bank shall
not be held as collateral nor owned by it for a longer
period than six months." (Rev. Stat. 1925, Article 513;
Banking Laws, 1925, Article 513, p. 44.)
Savings banks may only invest their deposits in certain
specifically enumerated securities, and there is not included in
this enumeration any of the corporate stocks contemplated by this
digest (Rev. Stat., 1925, Article 416; Banking Laws, 1929,
Article 416, p. 23.)
Purchase of corporate stocks permitted.
Any bank or loan, trust, and guaranty company
or association, organized under the laws of the State
of Utah, may purchase, own, hold, and sell or otherwise
dispose of any of the shares of the capital stock of
any other bank, loan, trust, and guaranty association
or other corporation; provided, such purchase shall be
authorized by the executive commit tee and approved by
the board of directors; and in case the purchase is of
stock in any other banking corporation the approval of
said purchase must also be had from the state bank com missioner; and provided, further, that nothing in this
section shall be so construed as to permit the establishment, maintenance, or control of any branch bank or loan,
trust, or guaranty company in the State. All acts or
parts of acts in conflict with this section are hereby
repealed to the extont of such conflict. 11 ( Compiled
Laws of 1917, sec. 986, p. 299; Banking Laws, 1927, sec.
986, p. 8).
11
The above excerpt from the laws of Utah is made ap~licable
to savings banks. (Compiled Laws of 1917, sec. 1016; Ea.iiking Laws,
1927, sec. 1016, p. 15.)
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- - -29-
-
-
X-6608
VERMONT
Purchase of bank or trust com;pany stocks permitted.
Banks of all kinds and trust companies are empowered to invest
their assets "In the stock of any national bank in the New
Englan~ States or the state of New York, or in the stock
of any banking association or trust company incorporated
under the authority of and located in such states, or in
the stock of any banlc incorporated under the authority of
and located in the Dominion of Canada; but a bank shall
not hold bank stock both by the wa:y of investment and as
security for loans in excess of ten per cent . of its assets,
nor, in arry one bank, more than five per cent of its
assets, or more than two hundred thousand dollars, or
more than ten per cent of the capital stock of e:ny one
bank, 11 (General Laws, sec. 5363, par. (a), subdivision
VI, as amended by Acts of 1929, Act No. 90, sec. 5.)
VIRGINIA
Purchase of corporate stocks permitted •
.All banks and th.Hit companies are empowered to purchase and
sell 11 all stocks and bonds. 11 (Acts of 1928, ch. 507, secs. 1 and 12;
Banking Laws, 1929, secs. 4149(1), 4149 (13), pp. 24 and 30).
WASHINGTON
Purchase of corporate stocks prohibited.
* * Nor shall any such corporation (bank or trust company)
subscribe for or purchase the stock of any other banking
house or trust company, or of any domestic or foreign corporation of any character, ***:Provided, That such bank
and/or trust company may purahase, acquire and hold shares
of stock in any other corporation which shares have been
previously pledged as security to any loan or discount made
in good faith and such purchase shall be necessary to prevent
loss upon a debt previously contracted in good faith and
stock so purchased or acquired shall be sold at public or
private sale or otherwise dispo·sed of within two years from the
time of its purchase or acquisition. (Laws 1929, sec. 5, P•
100; Banking Laws, 1929, sec. 46, p. 26.). The laws also
provide that corporations doing a trust business may not invest
trust funds in corporate stocks. (Laws of 1929, ch. 206;
:Banking Laws, 1929, sec. 77, p. 37.)
11 *
Savings banks are covered by the above excerpt from the laws
of Washington. (Laws of 1917, sec. 14, p. 275; :Banlcing Laws, 1929,
sec. 24, p. 11.)
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
lo, .
- 30 -
X-6608
WEST VIRGINIA
Trust companies may purchase stocks of business corporations, but
limited to 20 per cent of capital and surplus.
13ru1king institutions authorized to transact a trust business
are eI11!_)owered 11 to buy, hold, sell and deal in • * • the stocks or
bonds of any business corporation. 11 (Acts of 1929, ch. 23, sec. 4.)
Such institutions shall not invest 11 in the stock of any
corporation" an amount exc13eding twenty per centum of their capital
stock and surplus fund. 11 The corporation mentioned in this section shall
not bo construed to mean municipal corporations, districts or counties,
or corporations owning the building in which the banking institution is
located. 11 (Acts of 1929, ch. 23, sec. 21).
There do not ap9ear to be any provisions in the laws of the
State of West Virginia authorizing banking institutions organized as
conmercial or savings banks to purchase corporate stocks.
WISCONSIN
Mutual savings banks prohibited from uurchasing corporate stocks Uo statutory provisions covering other banking institutions.
The statutes of Wisconsin contain no provision with reference to tho purchase of corporate stock by banks and trust companies
except mutual savings banks. The provision with reference to mutual
savings banl:s provides that 11 * • * no mutual savings bank shall invest any part of its deposits in the stock of any corporation * * •. 11
(Uisconsin Stat. 1929, Sec. 222.13; Banking Laws, 1925, sec. 222.13,
p. 52).
WYOIHNG
Purchase of corporate stocks prohibited.
"Hereafter no State bank shall invest any of its assets
in the capital stock of any other corporation•*•, and except s-mh
as it may acquire or purchase to save a loss on a pre-existing debt,
and stocks so acquired or purchased shall be sold within twelve
months from the date acquired or purchased; provided, that a
further time may be granted by the State Examiner. 11 (Laws of
1925, ch. 15'7, sec. 32; Ba:1:h1gLu:rn, 1927, sec. 32, p. 18.)
The term 11 State bank" as used in the above excerpt from the laws
of Wyoming includes every individual, firm or corporation doing a banking
business, and a banking business is engaged in 11 where credits are
opened by the deposit or collection of money or currency or
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 31 -
X-6608
Wyoming continued.
negotiable paper subject to be paid or remitted upon draft, receipt,
check or order. 11 (Laws of 1925, ch. 157, secs. l, 5 and 10;
Eanking Laws, 1927, secs. l, 5, and 10, pp. 11, 12 and 13.)
The statutes of Wyoming contain no provisions authorizing tru.st
companies not doing a banking business to purchase corporate stocks.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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na com rci 1 enteror·s
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do
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rt ins 1 cted citi 0 s or coruu:r.iti s of your district,
n
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
nt
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yours ,
it tne on Br
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•
SCHEDULE FOR LISTING THE N.AM!JS OF .ACCOUNTS LOST OR GAINED
DURING T'rlE PAST FIVE YEARS TERO~GH CH.AJ.'l'G:I: 01' CONTROL OR
THROUGH MERGERS .AND CONSOLIDATIONS OF BUSINESS ENTERPRISES
Name of bank making report _____________________
Loans and investments _ _ _ _ _ _ __
Capital
Town or city
----------
Population _ _ _ _ _ __
Names of accounts lost by this bank during the past
five years through mergers or consolidations of
business enterprises which resulted in the
transferrin 6 of their bank accounts to other cities
Name of corporation
or firm whose
account was lost
or reduced
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Name of corporation
or firm wi tn ,1hj_ch
merged or interests
by which taken over
City to which
account was
transferred
,.
- 2 -
•
Nemes of accounts gained or materiall y enlarged during
tho past five years through change of control or
through mergers and consolida tions of ousiness enterprises which resulted in tho transferr ing of accounts
from banks in other cities to this bank
Name of new
or enlarged
account
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Name of company
absorbed or
taken over
Name of city
which lost
the account
,
.
J:Orll.l.. •
1
-
>. 131
Offi ce Corr espo n ence
To
Mr. Riddle
From _
Mr. Cmmninga
I/
FEDERAL RESERVE
BOARD
Date_ June 3
1930.
Subject:
.,,.
J-8'06
I am attachin g a modific ation of Schedule J., proposed for covering
bank changes in a selected group of cities, 1925-29 .
My modific ation of
your schedule
It would provide a
may
impress you as being too detailed .
separate sheet for each year, calling for data by class of bank, and in
general for more detail indicati ng the nature of changes affectin g the
number and clasaifi cation of banks in the city.
Of course the data entered
under "Active banks December 31 11 for 1925 would be identica l with data
entered under "Active banks January l" for 1926.
J.a
regards Schedule 1'13", I think tnat I should su gest using the
17
same schedule for the State as for the selected cities -- that is to say
for the SU.'ll!Darised data.
For reportin g individu al banks involved in mergers ,
I still feel that an individu al form for each case of merger is preferab le
to a listing of banlcs as proposed in Schedule B.
Finally , I should think
any inquiry of this sort should cover all States for at least two years, and
not simply one selected State in each distric t.
I mean that I should think
we should have a fairly complete record of individu al mergers for at least
two years.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e . city____ •
Bank changes during year specified.
: State: Non: Total :National:member:member
Year 1925
Active banks, January 1:
. ..
Nll.mber ••••••••••••••• •
Loans and investments •••
Capital alld surplus •••••
............ .
............ .
..........
Reso11rce1 ••••••••••••••• •••••
Marlmum resources in any one bank. ••••••••••••••• •••.•••
Number operating branches •..•••••••••••• ••..•••••...••• •
Number of branches:
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
. ....................... .
Total •••..••••••.•
Home city•••••..••..•.•• •••...•...••••• .•.••.•.•
°'1 ts ide .•••••••...••• .•.•..•.••.•.•• .•••.•.•..••
14a.x1DJU.m in one system••••••••••••••• ••••••••••••••• •
Change in number of banks during year:
Increase by-
Same for years
Primary organization •••••.•••••••.• ••••..••••..••• •
Resumption :following suspension.
.........
1926
1927
1928
1929
Con vera ion. • • • • • • • • . . • . • . • • • • • • • . . • • • • • • • . • . . .•
Decrease by-Sllapens ion •••••••...•••.• •••••••••••••• ••••••.•.•••
Conversion ••••••••••••••• ••••••••••••••• ••.••..••••
Merger:
Intra- clas a ••••••••••••••• •••••••••.••••• •••••••
Inter-cl&BI:
Of ational with State member.
Of National with nonmember ••••••••••.•••• ••••
Of State member with National ••••••••.•••••• •
Of State·member with nonmember •••••••••••••••
Of nonmember with National •.••••••••••••. ••••
Of nonmember with State member •••••••••••.•••
Increase or decrease by.Ad.miss ion to J. R. System. ••••••••••••••• •••••••••••
i thdrawal :from F. R. System••••••••••••••• •••••••••
Unclassified changes •.•••••••
............ .
-- _,..
+l
-1
-1
+1
Active banks December 31:
Number ••••••••••••••• ••••••••••••••• ••••••••••••••• •••
Loans and investments. • • • • • • • • . • . • • • • • • • • • • • • •
••
$
$
Reaol.lrces •••••••••••••• •••.•.•.•••..•• ••••••.••.••
$
$
$
Cap1 tal an.d aurpl us ••••••••••••••• ••••••••••••..
Maximum resources in any one bank. • • • • • • • • • •
. .••
Number operating branches ••••••••••••••• ••••••••••••••
Number of branches :
$
$
$
$
$
$
$
$
$
$
$
$
Total. ••••••••••••••• •••••.••••••••• ••••••••••••••• •
Home c1 ty ••••••••••••• • • • • • • • • • • · • • • · • • • • • • • · • •
Olltside ••••••.•••.•••• •••••••••••••• .•.••.•••••
Ma.ximim in one sys tam •.•.•.•..•...... .••••••.••..••
Net change during year:
N'11Dber of banks. • • • • • • • • • • • • • • • • • • • • • . • • •
Loans and investments. •
• • , •• •. •.
• ••
, • •• •. •
Capital an.d aurpl us •.••••• • • • • • • • • • · • • • . • •
• ••
· •••••
Reso-urces ••••••••••••••• ••• • ••••••••••••••• •• • •• •.
Maximum resources in any one bank••••••••••••••• ••••
Number operating branches ••••••••••••••• ••••••••••••••
Number o:f branches:
Total •.•.•.••••••• · • • • ••• • .• · •••• • • • ••• • • ••••• • • · •
Home ci t1••••••• • • • • • • • · • · • • · • • • • • • • • • • • • · • • • •
Ou.tslde •••••••••• •. • •••••••••••• •. • • • • • • • • • • • •
Maximum 111 one ya tem••••••••••••••• ••••••••••••••
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
$
$
$
$
$
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
etter sent to:
tl ta
Chicago
inneapo lis
Kansas City
leming
Rounds
Clerk
ay 28, 1930.
r•
ar
• L. cClure,
ederal Reserve
ent,
Federal Reserve ank of Kansas City,
Kansas City, 1ssour1 .
r.
cClure:
~he Committee on Branch, Group and Chain Benking
feels that
det iled analysis of bank failures during
the past decade is an essentia l part of its work and th t
this &.nalysis hould be more compreh ensive than the data
compiled at present ill permit. It is propose d, therefore, to submit to the Comptro ller of the Currency and
to the various state b
ing departm ents a schedule for
collecti ng informa tion on each bank suspens ion since
January 1, 1921. It is desirabl e to constru ct a schedule
1hich will secure 11 the necessa ry data and at the same
time be feasible and not unduly burdensome on those supplyi
the info
tion.
tentativ e schedule for this pu ose has been drawn
up, a copy of which is enclosed , but before adoptin g it
in final form we would a~preci ate any conments or suggestion s Which you may care to make. You appreci ate, of
course, ·the difficu lties of drawi up a schedule in terms
hich may fit the racords of the various banking departments and at the same time be su:ffici ently definite to
secure comparable da a. In vie of the i orta ~e of
your distric t in this study perhaps it ould be ell to
submit the schedule to some of the state collmiss i ners
of banking for their suggesti ons as to form and content .
Very truly yours,
Chairman, Co ittee on
Group and Ch in Banki
c.
ranch,
•
SUSPErSIONS SINCE JANU E.Y
l, 1921
•
epresents a bank closed to the public either temporarily or permanently by
supervisor; authorities or by the bank's board of directors on account of
financial difficulties. In case a bank has suspended more than once a
schedule should be made out for each suspension.)
~Pe of bank reported--check
appropriate one of the following
National bank
State commercial bank
Trust company doing commercial
banking
Stock savings bank
Private bank doing conmercial
banking
Name of State
..........................
l.
Name of bank
Town or
City
County
2.
Date
organized
Date
suspended
.Population of
town or city*
Iember r
of F.
omne.'Dber
. System
3.
Federal reserve district
4.
.~umber of branches oper2.ted:
5.
,as this bank a member of a chain or gro p? If so give the name of the chain or
group.___________..,;..._ _~ - - - - - - - - - - - - - - - - -
6.
k
In city
outside
Condition figures, as of (date**) _ _ _ _ _ _ __
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Loans and disco~nts:
....
Other
.. . . . . . . .. . ... ..
Total
. . . .. . .. .
......
Investments . . . . . . . . . .
On real estate ••
•
••
6._ _ _ __
Other resources
. ....... . ...
........ .... ... . . ..
and undivided profits . . . . . . . . . . . . . . .
~ota.l re sources
Capital
Surplus
Deposits:
J,.,<.t
J
-it
emand., .~
Total
Borrowings from
♦
ti.4 /In
♦
♦
♦
I•
•
•
+
:r.....
c-f . . . .
• R. bank.
Borrowings from other banks
•
♦
.. ..
.. . ... ......
. .. . ... . . ... .. .
"
-2-
Other li bilities • . . •
Total liabilities
7.
Secure
nd preferr d cl ims:
priori t,, of claim to p yment ,,,______
ount of deposits havin
8,
teed by state fund
ount of deposits
ar
ount of deposits
arant
d by deposit of collateral _ _ _ _ __
eopened banks:
Date of reopenin ______ ______
e under
to depositors;
Los
9.
hich reopened______ ______ ___
amount
r c nt
------
uspended banks taken over by other banks:
ich taken ov r
e of b n r by
----- ----- ----- --
Date t k~n over
----- ----- --
Loss to depositors;
10.
amount ,______
per cent______
Banks still in proce s of liquidation :
on:
Payment to dat
deposits and preferred claims;
ecure
ount
r cent
j'
deposits;
0
11.
Banks finally li
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
!dated:
Date liouidation
as cw leted
·----- ------
Collections :
Fro
ro
ro
conversion of
sets
ent
asse
aranty fund
Other collection
(explain) _ _ _ _ _ __
Tot l collections
Offs ts to cl
us
{loan pai , etc.)
Dividends to depositor:
ount
ecured depoitors nd
preferred cl imnnt
Other de o itors
Total
----
•
12.
-3-
•
1921 (Cont.)
causes of susnension: Check in the aupropriate column t ose of t~e following
·~mich a:pply, eithi>r rs primary or contributing causes, amplifying the indicated causes with such supplementary data R.s may be available.
Primary
cause
0ontri bu ting
cause
Slow, doubt ful or •. orthle ss -paper****
Failure of banking corresnondent
(.,Jame of failed corre ondent)
Failure of other large debtor
(Harne of failed debtor and connection
n. th bank, if any)
"Defalcation
Heavy withd rawals
Otner cause s ( specify)
•:ta.test census figures or estimate as snown in bankers' airectory.
** ttach a list giving tne na~e s.nd loc~tion of each outsi e branc •
***Condition ite. s should be as of date of suspension if possible, other.vise as of
the la st call prior to su snension.
****State ,hether this paper is largely from one particular tyue of industry and what
speci l circumstances account for this cond:tion of the bank's portfolio.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
. .. . ......... .. ....... -..
• C, ..
1.
of
2.
o · nh
ity ________ co·n y
n of
t
iy-
ot
at-
•
•
11
till
•
in
C
6,
or
'
.. .• .• .
...•
• • • • • • • •
l
• •
• • • • • • • • • • •
• •
• • • • • • • • • • •
... .. . . ..... . . .. .
..
... .
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Federal Reserve Bank of St. Louis
GROUP_ _ _ _ __
_ _ _ _ _ BANK SUSPENSIONS
Amounts in Thousands of Dollars
ASSETS
Date
Organized
Date
Suspended
Age at
Suspension
Yrs. Mos.
Date
Time
Elapsed
from
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Yrs.
Mos.
Member
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and Discounts
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LIABILITIES
Other
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Total
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Capital
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and
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Time
Deposits
Gross
Deposits
Borrowings
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Borrowings
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Number
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State of
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Number
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Amount
I-
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Assessments
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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TOTAL PAYMENTS
CLAIMS ALLOWED
COLLECTIONS
LOSS TO DEPOSITORS ON
GENERAL CLAIMS
Total
Offsets
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Claims
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General
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General
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CAUSES OF SUSPENSION
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General
Slow, Doubtful, or
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-'
ASSESSMENTS
Approximate
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Time
Difficulty
After
Before
Ran Before
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Suspension
Suspension
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Mos.
'
Number
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I
26, 1930
Dr.
•Out1ide• br ch
iller
Mr. S ead
ank 1yst
1.
1
I, J. f
to our conv raation of 1r1
r
rdi
th r l tiv
r 10 c
included in h 10-c 11 4 "outdd • branch
nd tb t
t
d o 1929 there were 252 bank1 t t
i o
in territory non-contiguoua to the
lo na
d inveat nt of $3,438,000,000,
•
c nt of total lo na
d inve1
nt of all ban I in
Included in th banka ope tin outlide branchtu at th
the Un
end of 1929 are the followin
1:
DI
Lo
of b nk
nt1
(In mill ion ■
tion
r of branch
Con- Bon-con-
nd
inv at
of doll ra)
In
t 11\lOUI ti OUI
Tot l h d
of ice terri- terriCi
Banlc of Italy
ric n
Securi t
of
rn
D
rancilco
Co.
"
st
nk Loa An
t.
a of C lif'.
"
789
229
491
329
90
8
t Co.
at Co.
ia
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Federal Reserve Bank of St. Louis
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225
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l•'Orlll NO. 1a1
Office Correspon
To
ili
FEDERAL RESERVE
BOARD
Subject:
From
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
15, 19
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Federal Reserve Bank of St. Louis
I II
FEDER AL RESER VE BANK
OF NEwY oRK
ay 8,130.
Mr. J. H. Riddle, ~ecreta. ry
Committee on Branch, Group
Federal eserve Board
ashingto n, D. c.
Dear
d Chain Banking
• Riddle :
Your let.t.er of ester
·s received
enclosin g copy of the minutes of the committ ee's meeting s
held on
arch 4 to 6 .
covers the ground of
It seems to me that this record
hnt ms done at that time,
d I
have no suggesti ons to off r.
Very truly your.s,
LAL
~
Deputy
ov rnor
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
II
OF CT...RVET... A..~
May 8, 1950.
Mr. J. H. Riddle , Secret ary,
Committee on Branch Group and
Chail-1 Bankin g,
Federa l Reserve Board,
1
ashing ton,
D. C.
Dear Mr. Riddle :
I acknowledge receip t of your letter of
the 7th enclosi ng copies of the minute s of the meeting held on ~arch 4th to 6th.
I might say, at this time, that I have
receive d a copy of a letter sent you by r. Clerk,
under date of April Both, in which referen ce is made
to a letter from you dated April 17th.
I do not
appear to have receive d a copy of the letter of April
17th.
Yours very truly,
F.m
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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