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Minutes for To: April 111 1961 Members of the Board From: Office of the Secretary Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement With respect to any of the entries in this set of minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If you were not present, Your initials will indicate only that you have seen the minutes. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System Oh Tuesday, April 11, 1961. PRESENT: Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Balderston, Vice Chairman Mills Robertson Shepardson King Sherman, Secretary Kenyon, Assistant Secretary Molony, Assistant to the Board Fauver, Assistant to the Board Hackley, General Counsel Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Hooff, Assistant General Counsel Leavitt, Assistant Director, Division of Examinations Mr. Achor, Review Examiner, Division of Examinations Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Items circulated to the Board. The following items, which had been circulated to the members of the Board and copies of which are ttached to these minutes under the respective item numbers indicated, were aPproved unanimously: Item No. Iutter to Chemical Bank New York Trust Company, t;:7 York, Nev York, approving an extension of 14.1e to establish a branch at Third Avenue and st Street. Letter to Chemical Bank New York Trust Company, 'lel,/ 11 c)rk, New York, approving an extension of ' tim e -I4reetto establish a branch at 501 East 79th tett ,,l er to the Presidents of all Federal Reserve ta tc-);:s regarding information to be furnished to the otZ1 on (1) leases entered into for the rental of ri space, including space used exclusively for (A al agency activities, (2) space within a Bank: a ecl. building leased to tenants, and (3) renewals „ —'uterminations of leases. 1 2 3 4/11/61 -2Item No. Letter to Bank of Belle Fourche, Belle Fourche, South. Dakota, approving the establishment of a branch at Spearfish, Lawrence County. Application of State Street Bank and Trust Company (Item No. 5). There had been distributed to the members of the Board copies of a memofrom the Division of Examinations dated April 5, 1961, regarding t4e application of State Street Bank and Trust Company, Boston, Maseachusetts, for permission to merge with Rockland-Atlas National 1341* of Boston and to operate branches at the present seven offices of the national bank. The Federal Reserve Bank of Boston and the Division cl Examinations both recommended approval. The reports of the Comptroller ot the Currency and the Federal Deposit Insurance Corporation on the e°111Petitive aspects of the proposed merger indicated that in the view of those agencies the transaction would not have an adverse effect on e°731Petition. The Department of Justice noted that the merger would ex hance the ability of the resulting bank to compete with Boston's z est institution, which had assets in excess of all other Boston banks eoMbined. However, other recent combinations in the area, together with the °Ila under consideration, would leave Boston in the position of 4°Ing four large banks with 79 offices and, contrastingly, four relatively small banks with only six offices. Thus, a high degree of barar4 --'ng concentration would be further enhanced. Such consolidations, the , %Justice Department stated, were indicative of the trend in the ° -I 2c ,JAy -3area that would place the smaller banks in increasingly disadvantageous competitive positions, and give rise to further consolidations with slltstantially adverse competitive results. The Department further stated that it seemed obvious that a combination of the two banks ProPosing to merge would eliminate very substantial competition in ec)nnilercial banking in the area, and that it would constitute a further Ste lp tuward oligopoly in banking in Boston. Thus, the proposed e°4solidation would have substantial adverse effects on competition 14 coMmercial banking in the important Boston area. In stating the basis for proposed approval of the merger, the of Examinations pointed out that there were nine commercial baro, • in Boston operating 87 offices in Suffolk County with aggregate clePosits of individuals, partnerships, and corporations exceeding $2.2 11"11°11. The merger would combine the third and fifth largest banks. The r esulting bank, with 18.7 per cent of area deposits of individuals, Partn erships -, and corporations, would rank second in size of the area be'llks, but it would be only about one-third the size of the largest bank 14 Boston. While the merger would eliminate the smallest of the five Boston commercial banks and competition between the two banks 1111kgved, the resulting bank could, because of its increased size, lero 4 capacity, and broader banking services, as well as strengthened rflazi agement, stimulate competition in Boston and the greater Boston 41e**()P°11-tan area as it would be able to compete on more effective terms 4/11/61 with the significantly larger First National Bank of Boston, with those banks now affiliated with Baystate Corporation and with the Shawmut gr°1-1P of banks, and with the mutual savings banks. The merger should result in intensified competition among the four large commercial banks that would exist after the merger had been consummated. There remain alternative banking outlets in the area, and the merger eh°104 not create an environment in which the small banks would find it 111°re difficult to operate. Question was raised whether the Board should proceed with eQnsideration of the matter today, with five members present, or Ilhether it should defer consideration of the proposal until a time hen more members of the Board were present. After discussion of the raet°rs involved, including the prospective schedule of attendance at meetings, it was decided to proceed with consideration of the Qase At the Board's request, Mr. Solomon made a statement which he efaced by saying that the Division of Examinations considered this ' 131 elose and difficult case. Continuing, he said that basically the diff, -culty arose out of consideration of the competitive factor because the other factors required by the statute to be considered appeared to be ba -s-,cally satisfactory or neutral. In this connection, he noted that in the application it was claimed that the resulting bank would be ).e through the merger to improve its management because it would 12 4 4/11/61 -5- the services of the president of the national bank. As to the competitive situation, this was complicated by the fact that there were several different ways of looking at the matter. One way would be to look at the city of Boston and its commercial banks. Here it was found that the large First National Bank of Boston overshadowed the whole Picture, having more deposits than all of the other banks combined, l'hether one looked at deposits of individuals, partnerships, and corporations or at total deposits. After First National, there were r°111" other fairly large banks and then four fairly small banks. (An ad-ditional outlying bank was established December 14, 1960.) The Pr°Posed merger would combine the third and fifth largest banks, and the resulting bank would definitely be second in size. However, the l'esillting bank would still be only about one-third the size of First 44ti°1141. As to banking offices, each of the banks proposing to merge nuy o perated seven offices and the application indicated that it was 40t t"r0Posed to close any of the offices. Thus, the resulting bank 17°124 have 14 offices, compared with 27 operated by First National and ' 32 °Perated by the National Shawmut Bank of Boston. If the merger was Q(Instlitmated, the resulting bank would have about 19 per cent of total 411°81ts of individuals, partnerships, and corporations. In addition, the lse was in the city of Boston a branch of Brown Brothers Harriman and COJth VE4V) Private bankers of New York City; it was not known exactly how kalvOf the deposits of this firm came from the Boston area. Further, VA,:bk) 4/11/61 -6- there were in Boston a large number of mutual savings banks having aggregate deposits of around $1.7 billion. There was always a question as to the weight that should be given to savings bank deposits in a Particular situation. Obviously, there was a certain amount of competition between them and the commercial banks, but not exactly the same kind of competition as among commercial banks themselves. A further complication, Mr. Solomon pointed out, was that the 113ston area had recently grown more on the outskirts than within the city Proper. In Massachusetts a bank can have branches only in the sa'rue county in which it is located. Thus, Boston banks could have bran ches in Suffolk County, but it was in the surrounding counties that 121°st of the recent growth had occurred. While First National Bank had ri° branches in those suburban areas, there were two large bank holding ecelPanies to be considered. Ett One time was legally affiliated with First National Bank but apparently 1.748 not at present. lia.8 The first was Baystate Corporation, which The second was Shawmut Corporation, which admittedly affiliated with the National Shawmut Bank of Boston. Baystate Q°11trolled seven banks with 80 offices in the surrounding counties and A00 n1 lion of deposits, while National Shawmut Bank and its e.rfiliated holding company banks in the surrounding areas had $570 4111/ion of deposits and 54 banking offices. If the deposits of its €1rfilleted institutions were counted, National Shawmut would be Qonsiderably larger than the bank resulting from the proposed merger. 4/11/61 -7Turning back to the commercial banking situation in the city of 33°ston proper, Mr. Solomon commented that the percentage of deposits °f State Street Bank and Trust Company, now standing at 14, would rise to 19 if the merger were consummated. This compared with about 52 National Shawmut Bank would have Per cent for First National Bank. 411°1-111c1 14 per cent of the total and the New England Merchants National 1341alcabout 10 per cent. The percentages of the remaining four banks were very small. With regard to the report on competitive factors submitted by the Department of Justice, Mr. Solomon commented that although it was a rather adverse report, it did not seem quite as vigorous as some of the reports that had been submitted by the Department. In summary, Mr. Solomon said that taking into account the mutual /lnge banks, which offered a certain degree of competition, and taking Int° account the holding company subsidiary banks operating in the 811burbs, it seemed to the Division of Examinations that a favorable l'ee°Mmendation could be justified. However, the Division recognized that this was not an open and shut case. Mr. Hackley said that in this case, as in all such cases, the b. --40 question was one of judgment as to whether, on balance, approval Ni°111(1 be in the public interest. This judgment must be made after Nleig'lling not only the competitive factor but also the several so-called bant, --lng factors mentioned in the statute. In his opinion, this case 4/11/61 -8- involved a close question of judgment. On competition in different ways. One could look at the effect On the one hand, it could be argued that the merger would to some extent intensify and increase competition. On the other hand, it would eliminate a significant amount of existing e°111Petition between the two banks involved, and it could well have an adverse effect on competition in the future, in light of the fact that there would be four large commercial banks having almost 95 per cent the total deposits of individuals, partnerships, and corporations held by the banks in the city of Boston. In that situation there was ba.S18 for a possible judgment that the merger would have a potentially eciverse effect in the future, as well as serving to eliminate existing e°111Petiti0n. Looking at the so-called banking factors, there seemed to be °IllY the suggestion that the merger might enable the resulting bank to obtain better management. To the Legal Division this seemed a 1"8.ther weak argument, particularly in view of the size of the applicant b44k. It was also suggested that the resulting bank would have a larger 3-eliding limit and therefore would be better able to compete for larger aec°1-Ints. However, he (Mr. Hackley) felt there was a serious question Ilhether the admittedly adverse effects on existing competition were Ilfriciently outweighed by the suggested benefits to warrant a conclusion the.. on balance the merger would be in the public interest. The views of the Department of Justice would be significant if bank mergers were Ilbiect to the Clayton Act because the merger would eliminate a 4/11/61 -9- substantial amount of existing competition. However, bank mergers are not subject to the Clayton Act. Whether the Justice Department would 131'°ceed under the Sherman Act if the merger were approved could not be Predicted, and probably this should not be a relevant consideration in l'°11111111g a judgment under the bank merger statute. Mr. Hooff commented that the small banks in Boston apparently /4°Illa. be no worse off if the merger were consummated than they were now. 48entially, the situation might be viewed in terms that there were at Preseat five substantiFil commercial banks in the city and that the Q°481Anzation of the merger would result in a reduction of this number t° f°11r. The question whether a reduction in number from five to four 81101-11c1 be allowed was a matter for the Board's determination in its disc retion. In reply to a question by Governor Shepardson, Mr. Solomon eqressed the view that the applicant bank haa a reasonable basis for linliting its lines of credit to 10 per cent of capital and surplus, ' 611:though under Massachusetts law loans up to 20 per cent of capital and .131us are permissible. 111 ' The applicant bank apparently felt that the Of 10 per cent contained in the National Bank Act was a prudent ren,s,r st't1 ement. In other words, it apparently felt that the limit of 10 1)e r cent in the Federal statute was a more sound standard than the Per cent found in the State law. Mr. Solomon doubted that anyone Q°11.1a-' quarrel too strongly with the right of the bank to follow this thm ,ory. 4/11/61 -10Mr. Hackley commented that the legislative history of the bank Inerger statute indicated that the bank supervisory agencies were entitled to consider the competition of mutual savings banks and other financial institutions. That was a relevant consideration in this case. However, the veight to be given to that consideration was a matter for the j114;1ent of the Board. Governor Mills said that he concurred in the favorable recomttlerldation of the Division of Examinations. cli4 not He went on to say that he find the same difficulties in the case that the Division of ce.141/lations, and apparently the Legal Division, had encountered in reaching about a conclusion. He felt that it was necessary to be cautious making statements concerning possible adverse competitive effects elIC12 having made such a statement, to stand on it as a consideration of slIch a nature as to disqualify further examination and analysis of an cation of this kind. When talking about competition, he did not thlnk that one could necessarily measure it in tangible terms. The ell-III-I-nation of an existing bank might at the same time permit competition 11131441'd into a larger area, and this, with equal weight and force of allent, might be in the public interest. ' a:t1011, In the case under consider- he thought that this was true. Governor Mills noted that there were two areas of competition to co nsider: the city of Boston and the greater Boston metropolitan " In the larger area, there were a number of separately incorporated al'ec -11satellite communities, constituting together an integral part of a single community. If attention, however, was focused on the city Or Boston proper, it would be found that the banks that were in clirect competition were those dealing largely on a wholesale basis in the downtown part of the city. The smaller banks that might be c°nsidered to be subject to an adverse competitive exposure were in a sense specialized banks, each serving a distinct clientele. Thus, the bahks actually in direct competition in the city were five in number. If this merger were approved, the effect would be to create relative eqUalitY, except for First National Bank, in an area where competition e°111d. be profitably enhanced in the public interest. Governor Mills also pointed out that State Street Bank and Trilst Company and the New England Merchants National Bank had historically c°11fifled a major part of their activities to the trust business. While e°41131ercial banking activities had not been incidental to the trust bilsilless, they had been subordinate to it, to a degree that would not be f°11ad to prevail generally. In a city the size of Boston proper, Governor Mills said, there ere reasons to believe that a merger of these two banks involved in the clIrrent application would be beneficial community-wise by providing a larger pool of resources for credit purposes. As to the greater 10st°a metropolitan area, comprising a population over 2 million, the barlk that would be created through the merger would be a relatively 4/11/61 -12- sraa1l bank to serve a community with the commercial, industrial, and Personal activities that abound throughout the area concerned. When the greater Boston area was considered, it was found that the proposed bellk would be in competition with substantial institutions representing the Shawmut Corporation and Baystate Corporation. Further, while there ight be no legal ties at present, there were ties of sentiment and 14terest between First National Bank and Baystate that in effect exerted espread competitive influence with which the merged institution 4 *4°4-141 have to contend. tions Also, Governor Mills pointed out, there were fringe considera that must enter into the judgment of the Board in coming to a decision. It 1445 savings important, for example, that there was a myriad of mutual bani„ . in the Boston area. In effect, they were in competition with areas. ec)rninercial banks to a greater degree than would be true in other This was recognized by the Board in the Springfield case in 1957, where keY Point in the decision that permitted Baystate to acquire a second be llk in Springfield was the fact that in a homogenous community, with savings banks. satellites around it, there were important mutual Under services 148.8eachusetts law, mutual savings banks are permitted to render bronA elsewhere, and -4er in character than permitted to such banks ' rendered by savings inlY of a broader character than the services ' celte and 1area. '‘uan associations, which also compete in the Boston It had eetried significant that neither of the banks proposing to merge JL• OIJA. , -13ever made any strong effort to attract time deposits; they had relinquished that field to the savings banks. Their judgment might be questioned, but theY had accepted the competition from the mutuals without making any sel'iolls endeavor to compete for time deposits. It also seemed significant that the majority stockholders of the two banks, on a composite basis, /4el'e mutual savings banks, which would indicate that the mutuals were 11°.t concerned about the effect of the merger. Governor Mills repeated that it was his belief that the application ecruld reasonably be approved. In his judgment, the factors involved liere not nearly as closely balanced as they apparently were in the judgment Or others. Coming back to general principles, he reiterated that he th011gbt it was necessary to be cautious, really aside from this particular ease/ about the kind of statements that the Board brought into its deeieicms. In the case of the application of Northwest Bancorporation to acquire shares of the First National Bank of Pipestone, Minnesota, the 130ard had expressed the judgment that savings and loan associations 811°1-ad not be taken into consideration in appraising competition in the ' rlg field. Actually, there were all shades of competition from were fillaacial intermediaries, and the mutual savings banks in Boston 11tely competitive. Personally, he would think that the savings 1051t associations also were competitive to the extent that they along with commercial banks, in attracting deposits and in re --. estate financing. 4/11/61 -14Governor Robertson said that he could not concur in the recommen- dati°n of the Division of Examinations. This application involved two sizable institutions that served exactly the same territory; they were competitive with each other in every respect. The merger would eliminate that competition without any question, and therefore it seemed necessary to look to the other factors mentioned in the statute to see if there vere favorable aspects. The only claim advanced with any vigor by the 4PPlicant was the need to obtain the president of the other institution to serve as president of the resulting bank, but this was not the only vaY that good management could be Obtained in an institution of this 812'e. To base a merger application primarily on a desire to have the 13rss1dent of the merging bank become executive officer of the resulting 1)44k seemed rather ridiculous, and he would discount that argument. As to the need for a larger loan limit, the limit of State Street Bank and trust Company had gotten as large as it was now by virtue of a previous flier ger within the past several years. Further, the applicant bank was 11c)t using the loan limit that it now had available. Under State law the limit was 20 per cent of capital and surplus, and the applicant had the right to use that limit, but it had voluntarily accepted the 10 iper cent limitation prescribed by Federal statute. If the bank had used a limitation of 15 per cent, it would have had a larger loan limit th4ri was proposed for use after the merger now under consideration. Aec°l'a.ingly, he would discount that argument completely so far as it • 4/11/61 -15- i-ght be a basis for offsetting what he considered to be the adverse effect on the public interest of diminishing competition. He did not see that the applicant had submitted any basis for approval of the Proposal except that, as aforesaid, it would like to accomplish the Merger and to have better management. The community involved was Undoubtedly the leading community in the whole of New England from the standpoint of finance, trade, and other measurements, and already the 111-11nber of banks was small as the result of mergers in the past. If °wn Brothers and Harriman were included, the total would be six, but ' 131 ill terms of commercial banks the merger would reduce the number to four. Moreover, additional mergers could be proposed on the basis of exactly the same reasoning as given in support of the present proposal. For the reasons he had stated, he did not feel that the proposed merger 1.1°111d be in the public interest. Governor Shepardson stated that he. had encountered a great deal f difficulty in resolving his views on this case. He had given eollsideration to the points raised by Governor Mills and to those raised by Governor Robertson, but it seemed to him there was a real ipr°hlem in trying to weigh the competitive aspects of the proposal. For example, there was the question of the extent to which the group °r larger Re 17,, -.118 banks and the group of smaller banks in Boston were competitive inclined to the view that there was not a great deal of competition betv een the two groups; the smaller banks would appear to be more in the 4/11/61 -16- n8.ture of specialized institutions than large city financial institutions. Then too, he was concerned about the reduction of alternative sources or banking facilities so far as the larger banks were concerned. It c°11-14 be argued either way; that is, that competition among the remaining bellks would be strengthened or that competition in the community would be 'reduced significantly by the elimination of a sizable and apparently Successful competitor. On the matter of the loan limit, he thought there was also a difficult question as to whether the applicant bank was f°11°/fing a prudent practice in failing to avail itself of the limit PrcEvided by State law and instead following the limit prescribed for lAti°nal banks. Further, there was the competition afforded by the olltlYing banks, particularly those representing Baystate Corporation ar4 Si..awmut Corporation, and this factor should be taken into account. These Points illustrated the complications that he found in this case In t rYing to arrive at a satisfactory answer. to At the moment it seemed that the principle of attrition was important, and that the reduction 43-In ' of 8.1ternative banking sources had to reach a stopping point at some place. This roposal would reduce alternative banking sources, and the number p existing banks was not large for a community the size of Boston. It 1418 his present thinking that in the longer run this further reduction be adverse to the public interest. Governor Robertson made the further statement at this point that the record seemed to indicate that the two banks proposing to merge -17not only been able to compete with each other but also had been able to compete with the larger institutions on a fair basis. Their earnings had increased in each of the past five years, and they were not low, as would be the case if the banks in question were severely hatidicapped in competing with the larger institutions. Governor King commented that he had been on occasion a borrower *oulbanks that could not or did not desire to handle the entire amount of the loan, and he had seen the ease with which it was possible to share 8. line of credit with other banks. From that viewpoint, he could not 41 much importance to the thought that the institutions in question " not be able to compete with the larger banks. and he thought they had been competing. 44a* appeared to be good institutions. They could compete, Both banks were quite sizable In fact, he was somewhat —prised that the applicant bank, in submitting its application, had allvanced as a reason for the merger a desire to improve its management. Me bank had other means to expand and to build its organization, but it pr °leased that it needed to strengthen its management through the Droposed merger. Governor King also said that although he realized no two cases Irere identical, he viewed this application as somewhat similar in general cha•racteristics to the application of the Citizens Fidelity Bank and "Company of Louisville, Kentucky, that the Board denied last year. '44 tJ4)1 -18He then stated that he would favor denying this application. He had he tIlea to find some way of supporting approval in his own mind, but e°414 not find a sufficient basis. approval. Governor Balderston stated that he would favor He said that he had included in his analysis the mutual savings banks, *Itch were somewhat akin to commercial banks in the services they rendered. and He had also included in his analysis Brown Brothers which liarriman because of its size and the nature of its operations, Maae him feel that it could properly be classified with the group of larger banks in Boston. He had further included in his analysis the two h°14 ing companies operating a substantial number of banking offices oiltside the city proper but within the greater Boston metropolitan area. Ther were it two considerations that troubled him, because he found difficult to reconcile them clearly in his mind and because he thought thel'e was was some inherent conflict in them, The first consideration that of dominance of market power. To him that was related to the baolUte size, and also the relative size, of the largest bank, or on aion the largest pair of banks. ' °ces held In this case the largest bank more than 50 per cent of total deposits of the Boston commercial bank, --°. ge In such a situation, he felt it behooved the Board to encoura e sense e°4115etition by strong rivals, rivals large enough in the absolut for banking business 44d Strong enough in the relative size to do battle ith the largest institution. That consideration inclined him toward * 4/11/61 -) -19- aPProval. On the other side was the consideration of providing adequate freedom of banking choice for depositors and borrowers. The limits of that freedom were narrowed, at least to some degree, whenever two banks Illerged. However, the degree of importance that he attached to the redUction of banking choices depended on the number of banks that were left. Here there would remain in the city five large banks, plus several smaller banks and the mutual savings banks. Accordingly, in this instance he would give somewhat less weight than usual to this Particular consideration. ' Further, this application did not seem to r4ise a question that frequently confronted the Board in such cases; that is, the nurturing and care of the smaller independent banks. As he saw it, the small independent banks would be affected adversely by the growth of the larger banks whether the latter be few or considerable i4 nUmber. In this case the ability of the small banks to survive apparently 1c31-11d not be substantially affected by the proposed merger, and he did not t°resee that the opportunity of starting new banks in the area would be jured by the merger. Consequently, he would support the recommendation the Division of Examinations. Mr. Hackley stated that in his previous comments he had been elpressing his personal difficulty in finding demonstrable reasons under the so-called banking factors to offset the reduction of competition that lias mathematically certain. However, that was not intended to be 4 recommendation by the Legal Division. Under the competitive factor, 4/11/61 -20- he vent on to say, the Board is required to consider the effect of the Proposed merger on competition, and there might be under that factor bc/th favorable and unfavorable considerations, as apparently there vere in this case. The elimination of competition between the two banks illvolved in the proposed merger could be mathematically demonstrated, elld therefore it was an adverse factor. The extent to which the merger Irlight enhance competition with the larger banks was more difficult to demonstrate mathematically, but it might be just as valid a consideration. 14 this case it appeared to come to a matter of disregarding the so-called ba4king factors and making a judgment as to whether the possible enhanceIllerit of potential competition that could not be mathematically demonstrated 41'e sufficient to offset the elimination of existing competition that e°1114 be mathematically demonstrated. After further discussion, Governor Shepardson stated that he lisheci to make an additional statement with regard to his position. He haa indicated previously that he found a great deal of difficulty in l'es°17ing this case. The discussion today, particularly the remarks or Governor Balderston and Mr. Hackley which were made subsequent to his , 'wn previous comments, had caused him to think further on the relative eight that should be given to the reduction of alternative banking 11(); ' ees as contrasted with the possible strengthening of competition in the area where the merger was to occur. Originally he had separated the la ' r'gel" group of banks from the other banks, with the feeling that the 4/11/61 -21- latter were not a significant competitive factor. However, in the deci 4 -8-‘011 made in the Baystate case in 1957 the competition of the mutual 8aviags banks was given considerable weight. He had not agreed with the 138-Y8tate decision, because it countenanced the elimination of a strong dependent bank in an area where there were few independent banks. Nevertheless, the competitive situation of the other banks in relationship to the largest bank in Boston could be related to the action that the Ikerd took in the Baystate case. Also, he had supported the majority vieW in the Firstamerica case in California in 1959 when the Board decided to permit an effort to build up a strong competitor to the cl°41111ant banking institution. Further, a factor involved in the Board's liecieion in 1960, with which he concurred, to approve the merger of the 1141‘ris Trust and Savings Bank and the Chicago National Bank, both of Clileago, was the prospective ability of the resulting bank to compete 171°Iie effectively with the two largest Chicago banks. the Having considered further aspects of the matter, Governor Shepardson said, he would vote to approve the current application. Accordingly, the application of State Street Bank and Trust C P8-11Y was approved, Governors Robertson and King dissenting for the l'e48°118 they hsci stated. A copy of the letter sent to the applicant 1344k Pursuant to this action is attached as Item No. 5. f r- 4/11/61 -22It was agreed that reference to this action would be included in the veekly K.3 statement scheduled for release this afternoon or tamorrow. The meeting then adjourned. Secl'etary , BOARDOF GOVERNORS 141g0t, . \-.)1 FEDERAL RESERVE SYSTEM 01 A* 441. 0t, ' t `t$ OF THE WASHINGTON 25, D. C. a 44 Item No. 1 4/11/61 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOAR,: * 4440* April 11, 1961 Board of Directors, Chemical Bank New York Trust Company, New York, New York. Gentlemen: Pursuant to your request submitted through the l'ederal Reserve Bank of New York, the Board of Governors 21' the Federal Reserve System extends to October 9, 1961, th time within which Chemical Bank New York Trust Company, Ne York, New York, may establish a branch on the southeast corner of Third Avenue and lust Street, New York, New York. Very truly yours, (Signed) Elizabelth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No. 2 4/11/61 AOORE98 OFFICiAL 1QRREBFON TO THE BOARD April 111 1961 Board of Directors, Chemical Bank New York Trust Company, 'New York, New York. G entlemen: Pursuant to your request submitted through the I, Reserve Bank of New York, the Board of Governors °f the Federal Reserve System extends to October 17, 1961, time within which Chemical Bank New York Trust Company, "ew York, New York, may establish a branch at 501 East 79th Street, New York, New Yor4. Very truly yours (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. ENCE Item No. BOARD OF GOVERNORS 3 4/11/61 OF THE FEDERAL RESERVE SYSTEM S-1789 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 11, 1961. 'Dear Sir: This supersedes the Board's letter of March 25, 1943 (S-62 of out'F.R.L.S. #3188), which requested information regarding rental space by the Reserve Banks. The Board now feels that tion concerning space in Bank-owned buildings rented to tenants six:0,111a, "4-1Q also be obtained. i.riform Accordingly, it is requested that in the future the Board be 41ca„,7d of (1) leases entered into for the rental of outside space, (2)"Lung space used exclusively for fiscal agency activities, and and (431* space within a Bank-owned building leased to tenants, Renewals ' erminations of leases should also be reported to the Board. In connection with space leased for Bank use, data submitted location, monthly or annual rental, number of square feet space or cubic feet of vault space, use of such space, and 01,;4ation of lease. Concerning space occupied by tenants in Bankace buildings, please show name of tenant, number of square feet of ) monthly or annual rental, and expiration of lease. ho " show Or a Very truly yours, Merritt Sh man, Secrear PRESIDENTS OF ALL FEDERAL RESERVE BANKS BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 4 4/11/61 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCt TO THE BOARD April 11, 1961 Board of Directors, Bank of Belle Fourche, Belle Fourche, South Dakota. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Minneapolis, the Board of Governors Of the Federal Reserve System approves the establishment of a branch at Spearfish, Lawrence County, South Dakota, by Bank of Belle Fourche, provided the branch is established within six months from the date of this letter. It is understood that no further dividends will be paid during 1961, and that cash dividends will not exceed W10,000 for the years 1962 through 1964, inclusive, and that salaries and fees paid to directors and inactive officers will not be increased during the years 1961 through 1964, inclusive. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 44.410,}44 W , 1 4kt 4 4eix 0* 41% g imt 441 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 5 4/11/61 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD gmai '4444o* April 11, 1961 karA `t Of Directors, Street Bank and Trust Company, 13°8t3r1) Massachusetts. Qeritlemen: -tate 0044, The Board of Governors of the Federal Reserve System, after bepo:'.eration of all the factors set forth in section 13(c) of the Federal thet1',t Insurance Act, as amended by the Act of May 13, 1960, and finding N:s,ation to be in the public interest, hereby consents to the merger 'Iltost- hQ-Atlas National Bank of Boston, Roston, Massachusetts, with and Street Bank and Trust Company, under the charter and the title orallch 4-atter bank. The Board of Governors also approves the operation of elty 0;%13 27 the resulting bank at the following locations, all within the Boston: 30 Congress Street 199 Washington Street 71 Suiper Street 691 Boylston Street 80 Newmarket Square 23/A3 Washington Street 300 Vestern Avenue iTe d This approval is given provided (1) the proposed merger is ',ace eter-allithirl six months from the date of this letter and substantially -ance with the Agreement and Plan of Consolidation, date .):4.141)° ''olderel' 20 1960 and (2) shares of stock acquired from dissenting share-. -'e dispo sed of within six months from the date of acquisition. ' Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
@FedFRASER