The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes for April 18, 1958
To:
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, if you
were prebent at the meeting, please initial in column A, below to indicate that you approve the minutes.
If you were not present, please initial in column B
below to indicate that you have seen the minutes.
Chm. Martin
Gov. Szymczak
Gov. Vardaman 1/
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
•
)5.144
4 14)._
1/ In accordance with Governor Shepardson's memorandum of March 8, 1957, these minutes are not being
sent to Governor Vardaman for initial.
120,
Minutes of the Board of Governors of the Federal Reserve System
on Friday, April 18, 1958. The Board met in the Board Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr,
Martin, Chairman 1/
Szymczak
Mills
Robertson
Shepardson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Carpenter, Secretary
Kenyon, Assistant Secretary
Thurston, Assistant to the Board
Riefler, Assistant to the Chairman
Thomas, Economic Adviser to the Board
Young, Director, Division of Research and
Statistics
Hackley, General Counsel
Molony, Special Assistant to the Board
Koch, Associate Adviser, Division of Research
and Statistics
Williams, Associate Adviser, Division of
Research and Statistics
Solomon, Assistant General Counsel
Hostrup„ Assistant Director, Division of
Examinations
Nelson, Assistant Director, Division of
Examinations
Solomon, Economist, Division of Research and
Statistics
Items circulated to the Board. The following items, which had
been circulated to the members of the Board and copies of which are
attached to
these minutes under the respective item numbers indicated,
1./ere
aP roved unanimously:
Item No.
Letter to Bankers Trust Company, New York,
411113
.( ving the establishment of a branch at
Third Avenue. (For transmittal through
'Ile Federal Reserve Bank of New York)
2://
Withdrew from meeting at point indicated in minutes.
1
12it
4/18/58
-2Item No,
Letter to The Chase Manhattan Bank, New York, approving the establishment of a branch in Bayamon,
Puerto Rico, in temporary quarters pending the
completion of permanent quarters. (For transmittal
through the
Federal Reserve Bank of New York and with
a Copy to
the Secretary of the Treasury of the Commonwealth of Puerto Rico)
2
Letter to The First Pennsylvania Banking and Trust
Company, Philadelphia, Pennsylvania, extending the
time within which it may establish a branch at 2510
Cheltenham Avenue. (For transmittal through the
Federal Reserve Bank of Philadelphia)
3
Letter to the Commonwealth Trust Company of Pittsburgh,
P
ittsburgh, Pennsylvania, extending the time within
which it may establish a branch on Banksville Road.
(For transmittal through the Federal Reserve Bank of
C
leveland)
4
Letter to the Federal Reserve Bank of Cleveland ap'
proving the modification of a condition imposed in
Connection with the establishment of a branch in
:
,1,andergrift, Pennsylvania, by Peoples Union Bank and
Trust Company, McKeesport, Pennsylvania, incident to its
sorption of the Vandergrift Savings & Trust Company.
5
Letter to the Federal Reserve Bank of Richmond approving
811 agreement between the International Finance Corporation
and the
Reserve Bank relating to the storage of certain
Microfilm records of the Corporation.
6
Letter to The Southwest Bank, Inglewood, California,
extending
the time within which it may establish a branch
(aar Rodeo Road
and La Cienega Boulevard in Los Angeles.
,vor transmittal through the Federal Reserve Bank of San
Fr
ancisco)
7
Letter to
the Comptroller of the Currency recommending
114favorably with respect to an application to organize a
1,atlonal bank at Columbus, Nebraska. (With a copy to the
ecieral Reserve Bank of Kansas City)
8
1
1211
4/18/58
-3Item No.
Letter to the Comptroller of the Currency recommending
unfavorably with respect to an application to organize
a national bank at Chesterton, Indiana. (With a copy
to the Federal Reserve Bank of Chicago)
9
Mr. Nelson withdrew from the meeting at this point.
Testimony on sm,fl business finance.
In accordance with the
understanding following discussion of a preliminary draft at the meeting
on April 161 1958, there had been sent to the members of the Board a
revised draft of statement on small business finance for use by Chairman
Martin in testifying before the Small Business Subcommittee of the Senate
Banking and Currency Committee on April 21, 1958.
The statement would
Outline the main principles for a Government small business financing
1311°gram in the light of findings of the Board's small business study.
The revised draft was discussed and agreement was reached on
certain changes of an editorial nature.
In addition, Chairman Martin
Iftlade the suggestion that the draft be reviewed for the purpose of
determining whether the statement could be sharpened up and shortened
somewhat.
Several suggestions in line with the Chairman's comment were
Illade at this meeting and it was understood that the staff would study
the draft further with these objectives in mind.
Mr. Young reported having been informed by Mr. Shay, the Board's
Legislative Counsel, that the Banking and Currency Committee staff had
14d1cated that there would be an interest in obtaining an expression of
Preference as among the legislative approaches to the small business
rillanoing problem contained in the several bills already introduced, as
1212
4/18/58
well as in obtaining a definite reaction to the Committee Print which
had been prepared by the Committee staff but not yet introduced.
Agreement was expressed with the view that matters of this kind
could be developed satisfactorily in oral testimony, if necessary, rather
than in the prepared statement.
Governor Shepardson then inquired whether the findings of the
Board,s small business financing study would not justify a more positive
reference in the statement concerning the existence of a gap in the
structure of financing facilities available to smal business in the
ea of longer-term debt and equity financing.
'
el
It was agreed that the statement could be cast along more positive
lines in this respect, with the understanding, however, that it would be
Illade clear that the question remained whether there was an economic gap;
that is, one that could be filled on a self-sustaining basis.
At the conclusion of the discussion, it was agreed that the
revised draft of statement would be reviewed further in the light of the
e°141111ents and suggestions which had been made and that the statement would
be presented in a final form satisfactory to Chairman Martin.
Testimony before Senate Finance Committee. There had been distributed to the members of the Board, with a memorandum from Mr. Young
dated April 171 1958, a draft of statement to be presented by Chairman
Martin in testifying before the Senate Finance Committee on April 221
1958=
The statement summarized economic developments over the past
selferal months and discussed the role of monetary policy in the light
or those developments. There had also been distributed to the Board a
i
4/1.8/58
-5-
draft of supplementary statement dealing with the current economic
problem which, it was suggested, might be used for briefing purposes,
as a supplement to the main statement if the occasion should arise, or
Possibly as an opening statement on the second day of testimony.
The draft of main statement was reviewed and the approach taken
therein was regarded as generally satisfactory.
Most of the suggestions,
therefore, related to editing and clarification.
Following the review, it was agreed that the statement would
be
edited on the basis of the comments which had been made and that it
'would then be presented in a final form satisfactory to Chairman Martin.
Consideration also was given to the supplementary statement and
there were likewise a number of suggestions of an editorial and technical
nature.
The principal comments of substance related to the portion of
the document dealing with recent price behavior, particularly the degree
emphasis which should be given to the effects of failure to adjust
Prices in a period of recession.
At the conclusion of the discussion, it was understood that the
suPplementary statement would be revised
to the extent indicated by the
comments which had been made but that it would be held in reserve and
not used
unless some need for it developed in the course of the hearings.
During the foregoing discussion Messrs. Hexter and O'Connell,
Assistant General Counsel, joined the meeting and at its conclusion
Messrs. Riefler, Thomas, Young, Molony, Koch, Williams, and Robert
Solomon withdrew.
12/,/,1
4/18/58
-6Amendments to Bank Holding Company Act.
Pursuant to the under-
standing at yesterday's meeting, further consideration was given to
amendments to the Bank Holding Company Act to be recommended by the
Board in connection with its forthcoming report to the Congress concerning its administration of the Act.
At Governor Robertson's request, additional consideration was
given to item 31 among those submitted with Mr. Hackley's memorandum of
March 31, 1958, relating to the extraterritorial effect of the Bank
li°1ding Company Act.
It was proposed to add a paragraph at the end of
section 2 of the Act which would state that except as otherwise provided
by the
Act, the application of the statute, including the application
Of section
6 to transactions by a bank as defined in section 2(c), would
not be affected by the fact that a particular transaction takes place
*1°11Y or partly outside the United States or the fact that a particular
c°111PanY is organized or operates outside the United States.
Of
At the end
section 4, there would be added a paragraph stating that the prohi-
bitions of that section would not apply to shares of any company which
is organized under the laws of a foreign country and does not do any
bilsiness within the United States, provided such shares are held or
acquired by a bank holding company which is principally engaged in the
banking business outside the United States.
Governor Robertson stated that even though he recognized the
151%°131am of enforcement, he had some doubt about the advisability of
12-15
4/18/58
-7-
recommending amendment of the Act in such a way as to limit its extraterritorial
effect.
He asked whether it might not be better for the
Department of Justice or affected parties to make any such recommendations than for the Board to take the initiative.
There followed a discussion during which reference was made,
anamg other things, to the problem of interpretation of the existing
statutory provisions, the possibility of suggesting to the Congress
the desirability of clarification rather than making a recommendation,
the
characteristics of the banking business in other countries, the
difficulties involved in applying the provisions of the Bank Holding
C°141PanY Act when extraterritorial considerations are present, and the
Possibility that inclusive provisions of the Act would lead to the
adoption of
reciprocal measures by foreign countries which would affect
adversely the foreign operations of United States financial institutions.
At the conclusion of the discussion, Governor Robertson indicated
that he did not
wish to press his questions further. Accordingly, it
was
agreed to include in the Board's report a recommendation for amendments
to the
Bank Holding Company Act such as suggested in Mr. Hackley's memo-
Discussion then turned to item 14 of those submitted with the
IlteM
orandum, having to do with the fact that section 3(a) of the Act
l'equires Board approval before a bank holding company may acquire bank
stocky either directly or indirectly, and also before a holding company
Or allY of its subsidiaries "other than a bank" may acquire directly or
4/18/58
-8-
indirectly "all or substantially all of the assets of a bank".
This,
it was pointed out, allows a bank in a holding company system to absorb
another bank without the prior approval of the Board, and it could be
argued that this seriously weakens the Act from the standpoint of
control of the expansion of bank holding companies. Therefore, it
would be recommended that absorption of an independent bank by a bank
in a holding company system, whether by merger or otherwise, be mane
sUbject to the provisions of section 3 of the Act.
Governor Robertson referred to the relationship of this recommendation to section 3(d), the so-called "Douglas amendment", which has
the effect of preventing a holding company from expanding outside its
home"
State by purchase of bank stock or acquisition of the assets of
additional banks.
However, by virtue of the exception in section 3(a)(3),
it a holding company owned one or more banks in a particular State on
blaY 9) 1958, it may absorb additional banks in that State through merger
4511. Purchase of assets to the extent permitted by State law or the National
1/ank Act, whichever is applicable.
Governor Robertson suggested that the amendment proposed by the
tart' would involve some inconsistency unless the Board were to go further
e'lld recommend repeal or change of the "Douglas amendment" since, if the
811€gested amendment were adopted, it would appear to permit a bank in a
h°1ding company system located outside the holding company's "home" State,
With
approval of the Board, to acquire another bank in that State through
/
4/18/58
-9-
merger or purchase of assets.
The Douglas amendment, however, would
not permit the Board to approve an application for such an acquisition.
After some discussion of the matter, in the course of which
Chairman Martin withdrew from the meeting, Governor Robertson said that
he would be willing to go along with the suggested amendment if the
discussion of it in the Board's submission to the Congress recognized
the inconsistency to which he had referred.
At the conclusion of the discussion, it was agreed to include
the suggested amendment to the Act in the Board's report, with the understanding that the comments concerning it in the report would point out
the inconsistency Governor Robertson had mentioned and would indicate
that the amendment was being recommended despite this apparent inconsistency because the Board saw no need for the Douglas amendment as
applied to mergers, which are subject to supervisory approval.
The Board then considered item 16 in M. Hackley's memorandum,
elating to the possibility of clarifying the standards required to
be considered by the Act in passing upon applications for approval of
the acquisition of bank stock. One approach, it was suggested, would
be to
introduce specific exceptions to the general standards, while
another would be to shift emphasis on the different aspects of the
standards.
Any such changes, of course, presented important questions
c)f Policy.
Mr. Hackley pointed out that specific recommendations had not
been made in this connection and that the problem involved difficult
121
4/18/58
-10-
questions.
An alternative, he said, would be not to make definite
recommendations but to bring the problem to the attention of the
Congress in the section of the Board's report dealing with difficulties
encountered in carrying out the purposes of the Bank Holding Company
Act.
The members of the Board, except Governor Shepardson, concurred
in the alternative approach, it being felt that the Board would be in
a better position to make any necessary recommendations after further
experience with the administration of the statute and that at the
Moment any action to modify the current standards preferably should
be initiated by the Congress.
Governor Shepardson felt that the Board
°Ilght to have the benefit of more adequate statutory guidance in
administering the law.
In expressing this view, he said that he was
not taking a position on the degree of severity with which holding
c°111PanY expansion should be restrained and that he was only concerned
a13°Ilt having clarification of the intent of the law.
Item 17 in Mr. Hackley's memorandum related to the question of
elarifYing the relationship of the Bank Holding Company Act to State
statutes.
Pursuant to a suggestion by Mr. Hackley, it was agreed after
discussion not to make any recommendation on this subject but to point
out the
problem in the section of the report dealing with difficulties
encountered in carrying out the purposes of the Act.
4/18/58
This concluded the discussion of the suggested amendments to
the Bank Holding Company Act submitted with Mr. Hackley's memorandum.
However, the memorandum also listed 18 other possible amendments which
had been received from various sources but which were not recommended
by the
staff.
The Board expressed agreement with the conclusion of the staff
c
oncerning this additional group of possible amendments.
Governor
Robertson
indicated that he saw some merit in one of them (X-12), which
would exempt from the provisions of section 4(c) an activity engaged in
by a bank holding compaisy if such activity is exempted when engaged in
by a sUbsidiary company.
However, he did not feel that such an amendment
need be recommended at this time.
The meeting then adjourned.
Secretary's Note: Pursuant to the recommendations
contained in memoranda from appropriate individuals
concerned, Governor Shepardson today approved on
behalf of the Board the following items affecting
the Board's staff:
%ointment
s
Thethonia D. Feild as Cafeteria Helper, Division of Aaministrative
on a half-time basis, with basic annual salary at the rate of
7ices,
A.71
13, effective the date she assumes her duties.
°Liange in status of appointment
Nina L. Marcey, Cafeteria Helper, Division of Administrative Services,
a half-time to a regular basis, with basic annual salary at the rate
Qf $2,600, effective April 20, 1958.
4/18/58
-.12-
Transfer
Catherine Gallagher, from the position of Cafeteria Helper, Division
of Administrative Services, to the position of Charwoman in that Division,
!tth no change in her basic annual salary at the rate of $3,050, effective
/ae date she assumes her new duties.
Transfer and salary increase
W. Lucius Thalley, from the position of Messenger, Division of Aaministrative Services, to the position of Clerk, Division of Bank Operations,
th an increase in his basic annual salary from $31285 to $3,385, effective
the date he assumes his new duties.
Salary increase
Gladys D. Bosben„ from $3,685 to $3,840 per annum, with a change in
tle from Draftsman to Draftsman-Illustrator, Division of Research and
Statist.cs„ effective April 20, 1958.
4.
Acee---_,EA,taTI_911 resignation
Charles E. Francis, Assistant Federal Reserve Examiner, Division of
'
l i4a1Iinations, effective April 5, 1958.
14,21
HOARD OF GOVERNORS
OF THE
Item No. 1
14-118/58
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
40040
April 18, 1958
Board of Directors,
Bankers Trust Company,
New York 15, New York.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
of the Federal Reserve System approves the establishment
2f a branch at 1148 Third Avenue, New York, New York, by
11eBankers Trust Company, provided the branch is estabtd within six months from the date of this letter, and
approval of the State authorities is in effect as of
the date of the establishment of the branch.
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
BOARD OF GOVERNORS
OF THE
,
0(''
Item No. 2
4/18/58
FEDERAL RESERVE SYSTEM
,A*
WASHINGTON 25. D. C.
ADDRESS OFFICiAL CORRESPONOENCE
a,;ittvesl,
TO THE BOARD
April 18, 1958
r.
Charles Cain, Jr-,
Lxecutive
Vice President,
The Chase
hanhattan Bank,
J41gnteen Pine Street,
11°11 Y°11c 15, New York.
pear
Cain:
Reference is made to your letter of April 2, 1958, requesting with respect to the authority granted in the Board's letter of
:11,1, ruarY 17, 1_958, to establish a branch in the municipality of Bayamon,
rto Rico, that your bank be authorized to establish a branch in
pg1°ParY quarters at the corner of hr. Veve and Larti Streets, Bayamon,
8_
completion of quarters at the peridanent location at the interon of Ifighway /1-2 and Camerio Avenue (State Hi,chuay a67), Bayamon.
noted that the premises at the permanent location are not expected
to
completed before DeceMber 1950 or perhaps January 1959.
The Board of Governors authorizes The Chase innJiattan Dank to
.
1,ia2y-Lish a branch in temporary quarters at the corner of Dr. Veve and
br
"
1 Streets, Bayamon, Puerto Rico, with the understanding that the
HirTch
be moved to the permanent location at the intersection of
trstjomerio Avenue (State Hi,:hway //267), as authorized by
theZ
ter of February :1 7, 1958, upon completion of the banking
cillarter3.
It is requested that you advise the Board of Governors in
is
through the Federal Reserve Bank of New York, when the branch
als7tablished
and opened for business in the temporary quarters and
when it is moved to the permanent location.
Very truly yours,
(Signed) S. R. Carpenter
J. R. Carpenter,
Secretary.
BOARD OF GOVERNORS
4.0
OF THE
FEDERAL RESERVE SYSTEM
Item No. 3
4/18/58
WASHINGTON 25. D. C.
ADDRESS OrrICIAL CORRESPONOENCE
TC3 THE BOARD.
April 181 1958
Board of Directors,
The First Pennsylvania Banking and Trust Company,
Philadelphia,- Pennsylvania.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of Philadelphia, the Board of Governors
of the Federal Reserve System extends to October 230 1958,
the time within which The First Pennsylvania Banking and
7rust Company
may establish a branch at 2510 Cheltenham
Avenue, Philadelphia, Pennsylvania, under the authorization
contained in the Board's letter dated October 23, 1957.
Very truly yours,
(Signed) S. R. Carpen e
S. R. Carpenter,
Secretary.
•
1224
110ARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
4
4118/58
WASHINGTON 25, D. C.
ADDRESS oFriciAt. coRaEseoNotNcE
TO THE BOARD
April 180 1958
Board of Directors,
Cotimonwealth Trust Conoany of Pittsburgh,
Pittsburgh, Pennsylvania.
Gentlemen:
Pursuant to your request submitted through the
Pederal Reserve Bank of Cleveland, the Board of Governors
oF the Federal Reserve System extends until July 1, 1958,
which the Commonwealth Trust Company of
under the authority granted in the Boardts
4.etter of October 3, 1957, establish a branch at 3095
Bankoville Road, Pittsburgh, Pennsylvania.
pet:11:g=
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
DCJARD OF GOVERNORS
OF THE
Item No. 5
FEDERAL [RESERVE SYSTEM
4/18/58
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 18, 1958
1'. Paul C.
1n.?deral
Stetzelberger, Vice President,
Reserve Bank of Cleveland,
v-Leveion,
la I., Ohio.
bear
Stetzelberger:
11r. 1
Reference is made to your letter of April 9, ..958, to
co lasters
n
reconending
a modification of a condition imposed in
syli.
iricet
.ion with the establishment of a branch at Vandergrift, Pennby the Peoples Union Dank and Trust Company, NcKe”port,
, incident to the purchase of assets and assumption of
toar3oillties of the Vandergrift Savings and Trust Company. The
()the;48.1,e;Pproval of the establishment of the branch provided, among
grift ;
"
1 -L3s, that investment securities acquired from the Vanderof th .,:ifIngs and Trust Company should not be placed upon the books
the
reoPles Union Dank and Trust Company in amounts in execs? of
to b:arket value. You state that the market value of the securities
arO - aecilared is about 70,000 less than the value at which they
and Zla
fod on the books of the Vandergrift Savings and Trust Company
(1110,
t"I't in order to obtain a tax advantage the member bank has r
,eeatly?;4 Permission to tske over the securities at book values and
-`13n a specific reserve of 075,000 to cover the depreciation.
The Proposal of the
member bank to establish a reserve
the
seeli.r.it4clit to cover the difference between the values at which ttnl
Trizat 64.es are carried
on the books of the Vandergrift Savings
4ccenf,"
1
,ParlY
and the market value at time of acquisition will
reso—w..."J-0,
provided such reserves are treated as specific valuation
,ves.
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 6
FEDERAL RESERVE SYSTEM
4/18/58
WASHINGTON 25, D. C.
A00/4ESS OFFICIAL CORRESPONOENCE
TO THE BOARO
:1958
April 18
14r. Edward A.
Wayne, First Vice President,
!ederal Reserve Bank of Richmond,
Aiebinond 13,
Virginia.
1/ear Mr. Wayne:
This is in response to your letter of April 7, 1958
'with
bet,. vhieh was enclosed a proposed agreement, dated April 2, 19580
Re:een the International Finance Corporation and the Federal
Bank of Richmond relating to the storage of certain micro-'
t0 records of the International Finance Corporation. This is
rnadnise you that the acceptance by your Bank of the proposal
a,„7 °7' the International Finance Corporation meets with the
vv.voval of the Board
of Governors.
are
Both the original and the copy of the proposed agreement
returned herewith.
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary
Enclosures
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 7
ii-A8/58
WASHINGTON 25, D. C.
ADORERS OffICIAL CORNIESPONOCNCIL
TO THE •OAPIO
*at,
'
4.040,
1,t
April 18, 1958
Board of Directors,
The Southwest Bank,
Inglewood, California.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of San Francisco, the Board of
Governors
extends to October 23, 1958, the time within
which The Southwest Bank, Inglewood, California, may,
l_lnder the authority granted in the Board's letter of
9etober 23, 1957, establish a branch in the vicinity of
ie intersection of Rodeo Road and La Cienega Boulevard,
440e Angeles, California. It is noted that construction
of the
building will start no later then May 15, 1958,
and completion by October 1, 1958, is anticipated.
V
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
BOARD OF
GOVERNORS
OF THE
Item No. 8
FEDERAL RESERVE SYSTEM
4/18/58
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 18, 1958
Comptroller of the Currency,
Treasury Dopartment,
Washington 25, D. C.
Attention Mr. G. W. Garwood,
Deputy Comptroller of the Currency.
iea
Comptroller:
dated
PebReference is made to a letter from your office
10, 1958, enclosing copies of an application to organize
onal bank at Columbus, Nebraska, and requesting a recommen-"".10n as to whether or not the application should be approved.
A report of investigation of the application made by an
exar,,t_
th-i-trer for the Federal Reserve Bank of Kansas City indicates
to„ the proposed capital structure of the bank would be adequate
• the first
few years of operation and that the proposed matingare experienced and capable bankers. However, the
ter?8 of these officers, who were formerly connected with an
ng bank, in attempting to organize another bank are open to
cila
tor41°n. 1:01e0ver, there does not appear to be sufficient need
i)rothe bank in the community at this time and the future earning
ets of the institution are not favorable. In view of these
illaj
_70rable factors, the Board of Governors does not feel justified
ream/mending approval of the application.
The Board's Division of Examinations will be glad to disatY aspects of this case with representatives of your office
4°11 so desire.
etts8
it
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
BOARD OF GOVERNORS
eivtltift,)
t51.0,;,: ki
OF THE
a
'1,4 ft
Item No. 9
4/18/58
FEDERAL RESERVE SYSTEM
.*
..,;*
WASHINGTON 25. D. C.
AC,ORESS OFFICIAL COFRRESPONOENCE
a ,64
4,t V.Ti• ,r, 't
*0,
TO THE. HOARD
April 18, 1958.
CoMptroller of the Currency,
Treas..—
LLuy Department,
Washington 25, D. C.
Attention Mr. W. M. Taylor,
Deputy Comptroller of the Currency.
near Mr.
Comptroller:
Reference is made to a letter from your office dated
C"dper 25, 1957, enclosing copies of an application to organize
Irt1.°ti0na1 bank at Chesterton, Indiana, and requesting a recommenn as to whether or not the application should be approved.
1
A report of investigation of the application made by an
examin
the,er for the Federal Reserve Bank of Chicago indicates that
thatvroposed capital structure of the bank would be adequate and
a competent and experienced managing officer has been selected.
a llever, same question exists as to the sponsorship of the bank ina/1(111°h as a majority of the organizers are nonresidents of Chesterton
number are interested in an enterprise which is promoting the
lec:Juction of a new shopping center in which the bank would be
On the basis of the information available, there does not
iii
7
ear to be sufficient need for the bank at this time and its earnGove Prospects are not very favorable. Accordingly, the Board of
rnors recommends disapproval of the application.
ellss
The Board's Division of Examinations will be glad to distf
aspects
of this case with representatives of your office
Y011 so
desire.
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
@FedFRASER