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Minutes for
To:
Members of the Board
From:
Office of the Secretary
August 16, 1963
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. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
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Federal Reserve Bank of St. Louis
2924
Minutes of the Board of Governors of the Federal Reserve
SYstem on Friday, August 16, 1963.
The Board met in the Board Room
at 10:00
a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Mitchell
Mr. Kenyon, Assistant Secretary
Mr. Young, Adviser to the Board and Director,
Division of International Finance
Mr. Fauver, Assistant to the Board
Mr. Noyes, Director, Division of Research
and Statistics
Mr. Brill, Adviser, Division of Research and
Statistics
Mr. Solomon, Associate Adviser, Division of
Research and Statistics
Mr. Sammons, Adviser, Division of International
Finance
Mr. Spencer, General Assistant, Office of the
Secretary
Mr. Axilrod, Senior Economist, Division of
Research and Statistics
Miss Dingle, Senior Economist, Division of
Research and Statistics
Mr. Keir, Senior Economist, Division of
Research and Statistics
Mx. Bernard, Economist, Division of Research
and Statistics
Mr. Gemmill, Economist, Division of International
Finance
Money market review.
There was distributed a table summarizing
inc'rietarY developments during the four-week period ending August 14, 1963.
Mr. Bernard reviewed recent developments in the Government
8eelarities market, Mr. Axilrod presented a report on bank credit, the
141°4-e'Y supply, and related matters, and Mr. Gemmill reported on foreign
eehange market developments.
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Federal Reserve Bank of St. Louis
272,5
8/16/63
-2All members of the staff except Messrs. Kenyon, Fauver, and
SPeacer then withdrew and the following entered the room:
Mr. Hackley, General Counsel
Mr. Farrell, Director, Division of Bank Operations
Mr. O'Connell, Assistant General Counsel
Mr. Shay, Assistant General Counsel
Mr. Hooff, Assistant General Counsel
Mr. Kiley, Assistant Director, Division of Bank Operations
Mr. Goodman, Assistant Director, Division of Examinations
Mr. Benner, Assistant Director, Division of Examinations
Mr. Smith, Assistant Director, Division of Examinations
Mr. Leavitt, Assistant Director, Division of Examinations
Mr. Thompson, Assistant Director, Division of Examinations
Miss Hart, Senior Attorney, Legal Division
Mr. Hricko, Senior Attorney, Legal Division
Mr. poundstone, Review Examiner, Division of Examinations
Mr. Sanford, Review Examiner, Division of Examinations
Mr. Smith, Review Examiner, Division of Examinations
Discount rates.
The establishment without change by the Federal
Reserve Banks of New York, Philadelphia, Chicago, and San Francisco on
St
15, 1963, of the rates on discounts and advances in their existing
ellsaules was approved unanimously, with the understanding that appropriate
8441-ce would be sent to those Banks.
Circulated or distributed items.
The following items, copies
(11-% \ghich are attached to these minutes under the respective item numbers
114icated, were approved unanimously:
Item No.
tette
tallk rs to Bank of America, New York, New York;
Nev ers International Financing Company, Inc.,
,°rk, New York; and Morgan Guaranty International
Y
Fitin,
per;:ee Corporation, New York, New York, granting
ssion to invest in shares of Malayan Industrial
-4-°Pment Finance Limited, Kuala Lumpur, Malaya.
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Federal Reserve Bank of St. Louis
1-3
8/16/63
-3Item No.
Letter to First Chicago International Banking
Corporation, New York, New York, approving an
amendment to the corporation's Articles of
Association.
Letter to First Chicago International Finance
orporation, Chicago, Illinois, approving an
'Inerdment to the corporation's Articles of
Ass
°elation.
5
Letter to Bank of Smithfield, Smithfield, Virginia,
Proving an investment in bank premises.
6
Letter to the Federal Deposit Insurance Corporation
s:garding the application of Merchants Trust &
01,vings Bank, Kenner, Louisiana, for continuation
deposit insurance after withdrawal from membership
In the Federal Reserve System.
7
Letter to Northshore National Bank, Houston, Texas,
2
nting its request for permission to maintain reduced
-zserves.
8
t,t
aer to
Community National Bank of Oak Cliff, Dallas,
granting its request for permission to maintain
eguced reserves.
atetter to Wells Fargo Bank, San Francisco, California,
9
10
i.1, 1°f°ving an extension of time to establish a branch
" balinas.
Lett
er to Depositors Trust Company, Augusta, Maine,
n
11
uving the establishment of a branch in Norridgewock.
tette
New r to Fair Lawn-Radburn Trust Company, Fair Lawn,
21 Jersey, approving the establishment of a branch at
-17 Saddle River Road.
Letter to
Boonton Trust Company, Boonton, New Jersey,
12
13
1%iving the establishment of a branch on Powerville
at-') Boonton Township, branch operations now conducted
,1
1_T4kins Place, Town of Boonton, to be discontinued
taneously with the establishment of the new branch.
tetter to
Wachovia Bank and Trust Company, Winstona '3-em, North Carolina, approving the establishment of
ranch at 3665 East Independence Boulevard, Charlotte.
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Federal Reserve Bank of St. Louis
14
Z2?
8/16/63
-4Item No.
Letter to Trust Company of Georgia, Atlanta,
0 '
a approving the establishment of a branch
Chattahoochee Avenue and Ellsworth Industrial
Ilsrive, N. w.
15
Order granting a motion by the applicant for an
extension of time within which to file a reply brief
3-11 the matter of the application of Denver U. S.
1,84corporation, Inc., Denver, Colorado, to become a
usAlk holding company.
16
Report on competitive factors (McKeesport-Hazelwood, PennsylThere had been distributed a draft of report to the Comptroller
or the Currency regarding the competitive factors involved in the proposed
ccInsolidation of Western Pennsylvania National Bank, McKeesport, McKeesport,
"
13 118Ylvania, and The Hazelwood Bank, Pittsburgh, Pennsylvania.
Governor Mills commented that since Allegheny County was the
41.1
"of primary concern in this report on competitive factors, rather
than the total area served by Western Pennsylvania National Bank, he
felt some emphasis in the first paragraph of the conclusion should be
€i'ven to that fact. There was general agreement with a change in language
eh-Istosted by Governor Mills.
Governor Mills went on to express concern about the practice of
1`.tirlEt percentage figures in the conclusion of competitive factor reports.
Alth°14g1 he was not too disturbed in this particular instance, it was his
e
4
417143
that their liberal use should be avoided in future reports, since
like the percentage of total deposits held by a bank were subject
t° change over a period of time.
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Federal Reserve Bank of St. Louis
Further, the use of such figures might
2728
8/16/63
-5-
be read to mean that the holding of a certain percentage of total area
Posits by a certain number of banks was regarded as evil.
He did not
believe that this point had been reached; there were too many differences
rr°101 community to community.
In further discussion, question was raised whether in this case
was the view that the over-all effect of the proposed transaction on
c°14etition would not be adverse.
that
Several members of the Board indicated
they felt such an expression would be warranted.
In this connection,
G°17ernor Mitchell commented that he would like to make the Board's position
clear and
unambiguous in each report on competitive factors, even though
It Illight require additional time to reach a decision and negative votes
111/4
'ht sometimes have to be included in the minutes.
In this particular
c4Se, he felt that the over-all effect on competition would not be adverse,
:" he would be prepared so to state in the conclusion of the report.
There followed suggestions as to how the second paragraph of the
c)lielusion might be worded, with the foregoing discussion in mind, and the
"'Igas then approved unanimously for transmittal to the Comptroller
the
conclusion reading as follows:
The Hazelwood Bank, a single-unit institution operating in
County, has primarily served its suburban community and
'
1?e immediate surrounding area, and it is not believed that a
significant amount of competition exists between it and Western
Pennsylvania National Bank, McKeesport.
Al
v . Consummation of this proposal will result in Western Pennsylanla National Bank, McKeesport, holding slightly over 8 per cent
°f the total county bank deposits in Allegheny County where two
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Federal Reserve Bank of St. Louis
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-6-
large Pittsburgh banks now hold about 74 per cent of the total
IPC county bank deposits. Since it is not believed any banks
in Allegheny County will feel significant adverse competitive
effects from the proposed consolidation, the over-all effect
on competition would not be adverse.
It was understood that the point raised by Governor Mitchell
be discussed further at the meeting on August 19, 1963, in connection with a request from the House Banking and Currency Committee
tc)r an analysis of competitive factor reports submitted by the Board
to the Comptroller of the Currency.
A..lication of Asb
Park and Ocean Grove Bank
Items 17 and 18 .
There had been distributed a proposed order and statement reflecting
the Board's approval on August 8, 1963, of the application of Asbury Park
8474 Ocean Grove Bank, Asbury Park, New Jersey, to merge with New Jersey
Nst Company
of Long Branch, Long Branch, New Jersey, under the charter
°t the applicant bank and with the title New Jersey Trust Company.
There being agreement with certain editorial changes suggested
by Governors
Mills and Shepardson, the issuance of the order and stateMent was
authorized.
Copies of the order and statement, as issued, are
attached hereto as Items 17 and 18.
Messrs. Shay and Hricko then withdrew from the meeting.
±ei.pplications of Virginia Commonwealth Corporation (Items 19-25).
At the meeting on July 26, 1963, applications of Virginia Commonwealth
P3rat10n, Richmond, Virginia, to acquire shares of Washington Trust
4111 Savings Bank, Bristol, Virginia, and The Peoples National Bank of
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Federal Reserve Bank of St. Louis
2'730
8/16/63
-7-
klaski, Pulaski, Virginia, were approved, Governor Robertson dissenting
on the application involving Washington Trust and Savings Bank, Bristol.
Governor Robertson had indicated, however, that he wished to reserve
the right to withdraw his dissent, depending in part on his view with
regard to the terms of an admonition by the Board that was to be given
to Virginia Commonwealth Corporation on a capital adequacy problem inv01v1ng its principal subsidiary, The Bank of Virginia, Richmond, Virginia.
Pursuant to the decision at the meeting on July 26, there had
been distributed under date of August 15, 1963, drafts of proposed orders
4nd statements reflecting approval of the two applications of Virginia
Commonwealth Corporation.
Also submitted was a draft of a proposed
letter to the corporation commenting upon the need for strengthening
the capital position of Bank of Virginia and indicating that the Board
'
li°41d be inclined, except under unusual circumstances, to disapprove
41313lic8.t1ons of Virginia Commonwealth to acquire additional banks unless
the capital and net earnings positions of Bank of Virginia showed subte'lltial improvement.
In discussion, Governor Robertson stated that he did not wish
to t,..„
"1-Lhdraw his dissent with respect to the application involving Washington
TrUst and Savings Bank, and that a dissenting statement would be prepared
for
release concurrently with the Board's order and statement in this
114tter. He also indicated that he would issue a concurring statement on
the lnk,
rulaski case.
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Federal Reserve Bank of St. Louis
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8/16/63
-8There being no suggestions for changes in the language of the
orders and statements as drafted, consideration was given to the proPosed letter concerning the capital and net earnings problems of Bank
Virginia.
Discussion of the letter centered around the question of the
extert to which the Board should go in the direction of indicating that
future applications for expansion of Virginia Commonwealth Corporation
nlight not be approved unless there was a substantial improvement in
the capital situation of Bank of Virginia.
Governor Mills and Shepardson expressed satisfaction with the
letter as drafted.
The former commented that he thought the draft
ealsried out the understanding at the meeting when the two holding company
4131i-cations were considered; namely, that there was to be a positive
declaration.
As to the sentence in the draft that stated that "this
advice should in no way be construed as indicating a pre-judgment on
the Part of the Board," he interpreted that as indicating that the Board's
Position should not be regarded as arbitrary and capricious.
Mr. O'Connell said the Legal Division viewed the language as
'
46 no more of a commitment as to future Board action than when, in
Q°11neotion with a given application, the Board might set forth the circum-s and say that under such circumstances it could not approve the
4IPPl1cati0n.
Later, the Board might find other circumstances present in
e°41-leeti0n with a subsequent application such as to cause it to vary its
j144;IT"t. The disclaimer of a pre-judgment in the letter to Virginia
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Federal Reserve Bank of St. Louis
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-9-
Commonwealth was considered appropriate because in considering another
NPPlication of the corporation unusual circumstances might be found that
'40Uld cause the Board to conclude that approval was justified.
Never-
theless, Virginia Commonwealth would be put on notice that unless the
caPital and net earnings of Bank of Virginia showed improvement, there
ras considerable doubt that the Board would approve further applications
ilftiving expansion of the holding company system.
Governor Mitchell pointed out that he had not been present when
the tvo Virginia Commonwealth applications were decided.
He went on to
indicate, however, that he would be hesitant to go further in the letter
than to advise the corporation that in considering any subsequent applion5
c4ti
the Board would give considerable weight to the capital position
841(1 net earnings of Bank of Virginia.
Governor Robertson expressed doubt that the Board, having approved
the Bristol application, was in a good position to say that it would not
411)11°Dve a further application involving expansion of the holding company.
Uncier the statute the Board, in approving the Bristol application, must
necessarily have concluded that the financial condition of the applicant
1418 sufficiently adequate to warrant the acquisition.
However, he thought
that the Board should be forthright in telling Virginia Commonwealth that
lt exPected the principal subsidiary bank of the holding company system
'
adequately capitalized, and that this should be accomplished before
--wier expansion of the holding company system was undertaken.
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Federal Reserve Bank of St. Louis
Governor
8/16/63
-10-
Robertson then
suggested a reformulation of the language of the letter
to Virginia Commonwealth that he felt would be appropriate, and Governors
Mills) Shepardson, and Balderston indicated that such language would be
agreeable
to them.
Governor Mitchell said that such language would not
Meet his objection, but that he was not disposed to pursue the matter
ruather.
In further discussion, Mr. Benner stated that President Wayne
(If the
Federal Reserve Bank of Richmond had discussed the capital problem
f Bank of Virginia with the president of the bank, who reportedly agreed
With the
System's analysis of the situation, concurred in the view that
the injection of $2 million of additional capital would not be sufficient
411c1 indicated that the bank would take into consideration not only its
Present but its future needs.
It was Mr. Benner's opinion that within
4 reasonable period of time the management of the bank was likely to
131.e13are a plan for substantial capital improvement and submit it to the
Reerve Bank.
The issuance of the proposed orders and statements in the Bristol
411CI
laski cases was then authorized; copies of the documents in the
iSSUed are attached as Items 19, 20, 22, and 23.
Robertson s
Item No.
A copy of Governor
dissenting statement on the Bristol application is attached
21, and a copy of his concurring statement on the Pulaski
4131)4.ication is
attached as Item No. 24.
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Federal Reserve Bank of St. Louis
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8/16/63
The letter to Virginia Commonwealth Corporation that had been
Under discussion was approved in the form attached as Item No. 25,
Governor Mitchell's reservations having been noted.
Messrs. Benner and Thompson, Miss Hart, and Messrs. Sanford
and Smith (Review Examiner) then withdrew from the meeting.
pposits of trustees in bankruptcy (Item No. 26).
In a tele-
gr.e.m dated June 5, 1963, the Federal Reserve Bank of San Francisco
raised the question whether deposits of a trustee in bankruptcy could
be regarded as falling within the definition of a "savings deposit" set
f°11th in Regulation Q, Payment of Interest on Deposits.
°r June 14,
A memorandum
1963, from the Legal Division discussed this question, and
"ter reviewing several alternatives, recommended that the Board take
4 Position based on the fact that savings deposits are limited by
Regillation Q to individuals and specific types of organizations, or
cle13°Bit8 in which the "entire beneficial interest" is held by individuals
Or
such organizations.
Since a trustee in bankruptcy holds funds for
the benefit of the bankrupt's creditors, a deposit made by such a trustee
e°111d not be classed as a savings deposit except in those instances in
which
all of the bankrupt's creditors were individuals or organizations
Or the
limited types specified in Regulation Q.
At the meeting on June 20, 1963, the question presented by the
Sat t‘,..
'cl-ancisco Reserve Bank and the recommendation of the Legal Division
e considered.
'
Ifel
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Federal Reserve Bank of St. Louis
It was understood that the Legal Division would draft
273%
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-12-
a Possible amendment to Regulation Q that would expressly permit deposits
Of a trustee in bankruptcy to be classified as savings deposits, and that
the Legal Division would obtain the views of the Federal Deposit Insurance
Corporation.
There had now been distributed memoranda from Mr. Hackley dated
AuglIst 12 and 14, 1963.
The memorandum of August 12 stated that the
General Counsel of the Federal Deposit Insurance Corporation had indicated
tIlet in his opinion the savings deposit regulations should not be amended
to cover deposits of trustees in bankruptcy, because any such expansion
c)f the
definition of savings deposits would inevitably invite suggestions
fOX
further
expansion.
He also expressed the view that the problem might
be substantially ameliorated by the fact that member and nonmember insured
banks were now permitted to pay interest up to a maximum rate of
4 per
Cent on time deposits with a maturity of 90 days or more. (The memol'arldlIn of August 14, to which was attached a copy of a letter from
,
Con
—Asei for the Federal Deposit Insurance Corporation, noted that this
letter COnhirnjed. the views of the legal staff of the Corporation as
N?orted in the memorandum of August 12.)
The memorandum of August 12 went on to describe the type of
nientzent that might be made to Regulation Q to cover deposits of trustees
111 bankruptcy if the Board should decide to amend the savings deposit
(leti„
—44-tion. It was pointed out, however, that the Board's Legal Division
yed that any such amendment would not only be inconsistent with the
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Federal Reserve Bank of St. Louis
2736
8/16/63
-13-
Underlyi
ng rationale of the definition of savings deposits but would
be likely to open the door for further expansion of the definition.
It was therefore recommended that the inquiry from the Federal
Reserve Bank of San Francisco be answered in the manner reflected in
4 draft
of letter attached to the Legal Division's memorandum.
The
Pr.°Posed letter stated that there was nothing in the legislative history
of the amendment (Public Law 88-16 of May 8, 1963) to the Bankruptcy
Act to indicate that its purpose was more than to eliminate the need
f°/' creditors consent for deposits in interest-bearing savings or time
dePosits.
In the absence of any evidence of intent to modify section 19
f the Federal Reserve Act and the Board's authority thereunder, it was
he °Pinion of the Board that the definition of savings deposits in
Regulation Q had not been affected by the amendment to the Bankruptcy
Act. The succeeding portion of the draft letter expressed the opinion
that a deposit by a trustee in bankruptcy might not be classified as
a saw-ng5
4
deposit under Regulation Q except in those rare instances in
4°1 all of the bankrupt's creditors were individuals or organizations
the types described in the regulatory definition of a savings deposit.
At the Board's request, Mr. Hackley reviewed the matter in some
c1"411) his remarks being based substantially on the information presented
- memoranda that had been distributed.
In the ensuing discussion, Governor Mills said that he had reread
the
Division's memorandum of June 14 on this question.
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Federal Reserve Bank of St. Louis
He believed
tf
293'
8/16/63
that the construction reached by the Legal Division was correct and
that the proposed letter to the San Francisco Reserve Bank should be
di
spatched.
Governor Robertson concurred, but Governor Mitchell said he
c°uld not agree.
The conclusion of the Legal Division was perhaps a
1°81cal nicety but in his opinion was not realistic.
Placed
Such a posture
banks at a disadvantage in competing for a type of business for
Which they ought
to be able to compete with savings and loan associations.
lie could not agree to restricting banks from being competitive by taking
such a position.
Governor Shepardson indicated that he would favor sending the
letter.
He noted that the Board had requested the staff to make a complete
l'eview of Regulation Q, and it seemed to him that it would be better for
the Board to hold its present position for the moment pending review of
the whole Regulation.
In further discussion, Governor Mitchell amplified his earlier
Ile1114rks by saying that he thought it would be reasonable to allow deposits
or tr
ustees in bankruptcy to be classified as savings deposits.
The man
in the
street would see no objection, it was something that the banks
I*1°1-11d like to be able to do, and he did not see why it should not be
While he agreed that Regulation Q should be reviewed in entirety,
that would take considerable time.
Mr. Hackley commented that a principal problem in reviewing
RegUl
atlon Q was in determining what policy the Board wished to follow.
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Federal Reserve Bank of St. Louis
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-15-
'Way of illustration, the Regulation could easily be simplified and
rilede workable administratively by limiting savings deposits to individuals.
Rowever, that would place banks at a competitive disadvantage with savings
and loans associations, so the Board might not favor such an approach.
The letter to the Federal Reserve Bank of San Francisco was then
11.U--1.
1 31TA in the form attached as Item No. 26, Governor Mitchell dissenting.
It was understood that a copy of the letter to the San Francisco Reserve
33411k 'would be sent to each Federal Reserve Bank and that an interpretation
based on the letter would he published in the Federal Reserve Bulletin
111c1 the Federal Register.
Virgin Islands banking survey.
A letter dated May 14, 1963,
rrom the Secretary of the Banking Board of the Virgin Islands stated
thatthe Banking Board had under consideration an application from a
Ca'n4dian bank, The Bank of Nova Scotia, for a license to establish a
branch in St. Thomas. In this connection, the Banking Board requested
the Board of
Governors to undertake a survey of the adequacy of banking
l'Eteilities in the Islands.
Subsequently, at a meeting on June 4, the
13°e
'rd of Governors approved this request, and the survey was subsequently
e°11daleted by a team of four persons composed of two members of the Board's
Statf
one representative of the Federal Reserve Bank of New York, and
One
representative of the Federal Reserve Bank of Philadelphia.
There now had been distributed a memorandum dated August 9 1963,
*°111 the Division of Examinations to which there was attached a report
r the
findings of the survey team.
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Federal Reserve Bank of St. Louis
2939
8/16/63
-16Following comments by Mr. Leavitt, who had acted as chairman of
the survey team, Governor Robertson Observed that the Banking Board of
th"irgin Islands had requested the survey to aid it in considering an
81PWAcation for the establishment of a branch by a Canadian bank.
In
141ng the report, he had experienced difficulty in seeing what conclusi°14 the Virgin Islands authorities would reach from the standpoint of the
bzarich application.
Mr. Leavitt stated that the survey team had made it clear to the
'
15.La Islands authorities that it did not propose to make any recommen(lEttion on whether or not the Canadian application should be approved.
It aPPeared, however, that the Canadian bank would engage primarily in
the financing of export and import business and, according to information
I'Lelling the survey team, probably would not be too interested in the
alc)rtgage loan business, which was the type of financing that would be
14(3
helpful in St. Thomas, to the extent that any additional banking
"les were needed.
Against this background, the Virgin Islands
j-ties could arrive at whatever conclusion they wished on the Cana41411°1
'
sPPlication.
Governor Robertson commented that he had no fault to find with
the „
celments in the survey report.
However, in any situation of this
--(vhere a bank of another country had an application pending, care
be exercised not to make a report that could be construed as
414;enly,4.
v'ing to protect American institutions from foreign competition.
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Federal Reserve Bank of St. Louis
2740
8/16/63
Mr. Leavitt replied that the tenor of the report was to advise
the Virgin Islands authorities that if banks wanted to make additional
raortgage lending facilities available in St. Thomas, that would probably
be beneficial
to the economy of the area.
On the other hand, the survey
team had refused to examine the files relating to the branch application.
The survey report would have contained the same conclusions whether or
not the application had been pending.
After further discussion, the transmission of the survey report
t° the Governor of the Virgin Islands, the Government Secretary, and the
8411king Board was authorized.
The meeting then adjourned.
Secretary's Notes: On August 14, 1963,
Governor Shepardson approved on behalf
of the Board the following items:
al313
Letter to the Federal Reserve Bank of Cleveland (attached Item No. 27)
as l'aving the designation of Mrs. E. Y. Roberts and Mrs. Marguerite Kantor
sPecial assistant examiners.
, Letter to the Federal Reserve Bank of Chicago (attached Item No. 28)
(tvPro •
vlhg the designation of Harold E. Madsen as special assistant examiner.
Pursuant to recommendations contained in
memoranda from appropriate individuals
concerned, Governor Shepardson approved
on behalf of the Board on August 15, 1963,
the following actions relating to the
Board's staff:
increases, effective August IEJ.) 1963
ateti fjorie J. Hollingshead, Secretary, Division of Research and
from $4,725 to 54,885 per annum.
h
Reed
Irvine, Chief, Asia, Africa, and Latin America Section,
On of International Finance, from $15,525 to $16,005 per annum.
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Federal Reserve Bank of St. Louis
2741._
8/16/63
-18effective August 18, 1963 (continued)
. June A. Stetter, Administrative Assistant, Division of Personnel
'
clralnistration, from $10,735 to $11,050 per annum.
Lee W. Joyner, Messenger, Division of Administrative Services,
fr
°al $3,350 to $3,455 per annum.
J. Frank Bell, Supervisor, Motor Transport Unit, Division of Adminis+
-rative Services, from $6,225 to $6,650 per annum.
,n
Donald B. Fitzhugh, Data Processing Planner, Division of Data
'
-rocessing, from $8,840 to $9,475 per annum.
Acivance of sick leave
r
Kathleen J. O'Connor, Disbursing Clerk, Office of the Controller,
of 26 days beginning August 12 (5-1/2 hours) and extending
r°1-Igh September 18, 1963 (2-1/2 hours).
a period
Acce„
1,,
k ance of resignation
Res_ _Rose C. Cassedy, Research Assistant (Data Processing), Division of
196rrch and Statistics, effective at the close of business August 21,
Pursuant to recommendations contained
in memoranda from appropriate individuals
concerned, Governor Shepardson today
approved on behalf of the Board the
following actions relating to the Board's
staff:
88'larY increase
Dor'
ls V. Bubb, from $5,885 to $6,280 per annum, with a change in
el,re- from Statistical Assistant to Analyst, Division of Bank Operations,
etive August 18, 1963.
Change in em loyment status
rrota lielen M. Lasko, Cafeteria Helper, Division of Administrative Services,
' when-actually-employed basis ($1.77 an hour) to a full-time basis,
with 8
basic annual salary at the rate of $3,245, effective August 18, 1963.
/
Assistant Secretary
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4‘:
2'1"
BOARD OF GOVERNORS
Item No. 1
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 162 1963
841Lnl of
America,
°road Street,
15, New York.
Geritiernen:
1963,
In accordance with the request contained in your letter of July 25,
basis'
ransmitted through the Federal Reserve Bank of New York, and on the
Your c(4 information furnished, the Board of Governors grants its consent for
lialaya01.13
(,,oration to purchase and hold 1,600 additional shares, par value
1(11alall. '?100 each, of Malayan Industrial Development Finance Limited ("MIDFL),
stock iumPur, Malaya, at a cost of approximately US$52,800, provided such
s acquired within one year from the date of this letter.
shall
The Board's consent is granted upon condition that your Corporation
tilthedisPose of its holdings of stock of MIDFL, as promptly as practicable,
event that MIDFL should at any time (1) engage in issuing, underwriting,
gen4 or d
istributing securities in the United States; (2) engage in the
ities t b usiness
of buying or selling goods, wares, merchandise, or commodexceptln the United
States or transact any business in the United States
,
(3) oth8tich as is incidental to its international or foreign business; or
'het° erwise conduct its
operations in a manner which, in the judgment of
1e,(3rpor
:
ri_d °f Governors, causes the continued holding of its stock by your
'Nerai7i°n to be inappropriate under the provisions of Section 25(a) of the
Reserve Act or regulations thereunder.
Very truly yours,
(signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No. 2
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Co411Iters
N
International Financing
raPanY Inc.,
York 15, New York.
Gentlemen:
41
1963
In accordance with the request contained in your letter of July 30,
bast; transmitted through the Federal Reserve Bank of New York, and on the
for
c°
0f information furnished, the Board of Governors grants its consent
rPoration to purchase and hold shares, par value Malayan $100 each, of
ndustrial Development Finance Limited ("MIDFL"), Kuala Lumpur, Malaya,
at aYari
a c
within
yeost of
approximately US$100,000, provided such stock is acquired
Year
from the date of this letter.
your Corporation
shall . The Board's consent is granted upon condition that
practicable,
as
promptly
illth,41sPose of its holdings of stock of MIDFL, as
underwriting,
issuing,
in
event
sellithat MIDFL should at any time (1) engage
in the
engage
(2)
States;
getiern
a °r distributing securities in the United
ities 1 b usiness of buying or selling goods, wares, merchandise, or commodcceptin the United States or transact any business in the United States
() otnsuch as is incidental to its international or foreign business; or
judgment of
,Ilek:rwise conduct its operations in a manner which, in the
by your
itsstock
of
holding
'orp -rd of Governors, causes the continued
of the
25(a)
Section
of
provisions
ora °n to be inappropriate under the
eclera,ti
Reserve Act or regulations thereunder.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No.
3
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16) 1963
l'14p11 Guaranty
International
23 ,,Inance
Corporation,
1,1
l
Street,
YeIric 8, New York.
Gent emen
1%3 .
In accordance with the request contained in your letter of July 31,
t
tra
)
basis
nsmitted through the Federal Reserve Bank of New York, and on the
cOf
information furnished, the Board of Governors grants its consent for
rPoration to purchase and hold 1,600 additional shares, par value
lialay
:
ktiaia ,11 $100 each, of Malayan Industrial Development Finance Limited ("MIDFL"),
:
:
t Inpur, Malaya, at a cost of approximately US$52,000, provided such stock
t8 aca
red within one year from the date of this letter.
'
S11
The Board's consent is granted upon condition that your Corporation
isPose of its holdings of stock of MIDFL, as promptly as practicable,
'
the
event that MIDFL should at any time (1) engage in issuing, underwriting,
getleragi or distributing securities in the United States; (2) engage in the
tties business of buying or selling goods, wares, merchandise, or commod,cept-11 the United States or transact any business in the United States
\3) othsuch as is incidental to its international or foreign business; or
the Bo erwise conduct its operations in a manner which, in the judgment of
:
t
.
i d of Governors, causes the continued holding of its stock by your
Ct,(3rpor
ederai`ic'n to be inappropriate under the provisions of Section 25(a) of the
'
Reserve Act or regulations thereunder.
d
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2745
BOARD OF GOVERNORS
Item No. 4
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Mr. Co W. Wilson, Secretary,
Pirst Chicago International Banking Corporation,
48 Wall
Street,
New York 5, New York.
Dear Mr.
Wilson:
This refers to your letter of July 11, 1963, to
Mr. j
Manager, Bank Examinations Department, Federal
Ringen,
Po
•
Rese
da rye Bank of New York, enclosing a certificate signed under
c.,s e of July 11, 1963, on behalf of The First National Bank of
sole stockholder of your Corporation, consenting to
the
1.,, amendment of the Articles of Association of your Corporation
Change the location of the Home Office from 48 Wall Street,
New York, New York, to 1290 Avenue of the Americas, New York,
siw York, and to provide that the Board of Directors shall con-st of not less than 5 nor more than 15 members.
In accordance with your request, and pursuant to the
Provi .
sIons of Section 211.3(d) of Regulation K, the Board of
vernors approves the amendment to your Articles of Associar
L10
4.
Please advise the Board of Governors in writing, through
e_
the,
deral
Reserve Bank of New York, when the change in location
ts
effected.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Item No.
BOARD OF GOVERNORS
3746
16/63
/
8
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Mr. C. W. Wilson, Secretary,
lqrst Chicago International Finance Corporation,
38 South Dearborn Street,
Chicago 90, Illinois.
13ear Mr. Wilson:
This refers to your letter of July 12, 1963, to
Mr. Leland Ross, Vice President, Federal Reserve Bank of
I(I1 ago, enclosing a certificate signed under date of July 11,
C
8 63, on behalf of The First National Bank of Chicago, sole
'
feTkholder of your Corporation, consenting to the amendment
ot
tts the Articles of Association of your Corporation to provide
nuat the Board of Directors shall consist of not less than 5
°r more than 15 members.
In accordance with your request, and pursuant to the
•
Ptovi-elons
of Section 211.3(d) of Regulation K, the Board of
0Znors approves the amendment to your Articles of Associat717
G
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2747
Item No. 6
BOARD OF GOVERNORS
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADOSCRO OPTIMAL 00111111111PONOCMCg
TO THR. SOAP*
August 16, 1963
Doard of Directors,
Dank of Smithfield,
E4nithfield, Virginia.
emen:
The Board of Governors of the Federal Reserve
Yat
3
of 214 approves, under the provisions of Section 24A
Tine Federal Reserve Act, an additional investment of
R
...u933 in bank premises by Bank of Smithfield, SmithVirginia, for the purpoLe of constructing drive.,
411
facilities.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2948
BOARD OF GOVERNORS
Item No.
OF THE
,
44
1$ tt
44
7
8/16/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
4
4
ADDRESS OFFICIAL CORRESPONDENCE
4
Ott
,
t 4411,
TO THE
aoAmo
August 16, 1963
jn
'' e_rea Deposit Insurance Corporation,
ngton 25, D. C.
Gentlemen:
%nee— Reference is made to Mr. Cocke's letter of July 24, 1963,
1414 fling the application of Merchants Trust & Savings Bank, Kenner,
tnemb84.ana l for continuance of deposit insurance after withdrawal from
ershiP in the Federal Reserve System.
Subject bank was accorded a problem rating following the
e)caminat
prq, ion as of the close of business January 24, 1958, and the
sillIc'em rating has been continued at each successive examination
Of ,
e that time. The problem rating has been assigned for reasons
aricicLP,Parent capital needs of the hank, unsatisfactory asset condition
barikclifficulties in retaining sound management. The earnings of the
1.0411 t re also considered small for the volume of business and net
088es have been excessive.
The most recent examination by the Federal Reserve Bank of
itlant
Aea a was conducted as of the close of business February 18, 1963.
Eldclipsult of this examination, the Reserve Bank urged the sale of
calAt!nal capital stock to provide a minimum of $400,000 in new
ttlat -4- funds. The examination report of the Reserve Bank stated
ekietl
!
,
1 view of the unsatisfactory condition of the bank, there
lieeer
'
: 4 Possibility that the bank's membership in the Federal
concii.
!
t 8Ystem might be forfeited for failure to comply with the
lc:ms of membership.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No.
OF THE
8/16/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADORES
OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
110ard of
Directors,
Northshore National Bank,
Rouston, Texas.
Gentlemen:
Pursuant to your request submitted through the
PQder
40t. a-L Reserve Bank of Dallas, the Board of Governors,
under the provisions of Section 19 of the Federal
tarrie Act, grants permission to the Northshore National
1,e0 it° maintain the same reserves against deposits as are
tIstred to be maintained by nonreserve city banks, effective
the date it opens for business.
kiss
Your attention is called to the fact that such peris subject to revocation by the Board of Governors.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2750
BOARD OF GOVERNORS
Item No.
OF THE
9
8/16/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
.3
,Oa-I'd of Directors,
T\4111111unity National Bank of Oak Cliff,
44allas, Texas.
Gentlemen:
through the
Pede„ , Pursuant to your request submitted
Governors,
Board
of
acti4 Reserve Bank of Dallas, the
Res g under the provisions of Section 19 of the Federal
Baniejve Act, grants permission to the Community National
rietr, .
c:f Oak Cliff to maintain the same reserves against
eilts as are required to be maintained by nonreserve
uanks, effective as of the date it opens for business.
OXI
Your attention is called to the fact that such peris subject to revocation by the Board of Governors.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2751
BOARD OF GOVERNORS
Item No. 10
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Board of Directors,
Wells Fargo Bunk,
6an Francisco, California.
Gentlemen:
The Board of Governors of the Federal
Reserve system extends to February 17, 1964, the
time within which Wells Fargo Bank may establish
a branch in the vicinity of East Laurel Drive and
Alvin Drive,(..:;alinas, California.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary. .
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Federal Reserve Bank of St. Louis
2752
BOARD OF GOVERNORS
Item No. 11
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Board of Directors,
Depositors Trust Company,
Augusta, Maine.
Gentlemen:
The Board of Governors of the Federal Reserve
SYstem approves the establishment by Depositors Trust
ComPanys Augusta, Maine, of a branch on Main Street near
he junction of Routes 2, 8,and 139, Norridgewock,
naine, provided the branch is established within one
Year from the date of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
letter to the Reserve Bank stated that the
oard also had approved a six-month
extension
(If the period allowed
to establish the branch;
nd that if
an extension should be requested,
°le procedure prescribed in the Board's letter
°r November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
2953
BOARD OF GOVERNORS
Item No. 12
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963
Board of Directors,
Fair Lawn-Radburn Trust Company,
Fair Lawn, New Jersey.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment of a
branch at 21-17 Saddle River Road, Fair Lawn,
New Jersey, by Fair Lawn-Radburn Trust Company,
provided the branch is established within one
year from the date of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.'
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
Of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
2754
BOARD OF GOVERNORS
Item No. 13
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, O. C.
ADORES OFFICtAL CORRESPONOENCE
TIZI THE BOARD
August 16, 1963
Board of Directors,
Boonton Trust Company,
Boonton, New Jersey.
Gentlemen:
The Board of Governors of the Federal Reserve
SYstem approves the establishment of a branch on
Powerville Road, immediately adjacent to the rear of
the present banking office, Boonton Township, New
j
.erseY, by Boonton Trust Company, provided the branch
ls established within one year from the date of this
lettnr.
It is understood that operation of the branch
at: Havkins Place, Town of Boonton, will be discontinued
simultaneollsly with the establishment of the branch on
Powerville Road Boonton
Township.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
letter to the Reserve Bank stated that the
-uoard also hnd approved a six-month extension
of the period allowed to establish the branch;
44d that if an extension should be reguested,
the procedure prescribed in the Board's letter
Of November 9 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
2755
BOARD OF GOVERNORS
Item No. 14
8/16/63
OF THE
wr 00k,4
0J+*
4 *
4'4
44
4..
00
FEDERAL RESERVE SYSTEM
*
4
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
Sz
TO THE BOARD
*o:11(M,S
'
14);100
August 16, 1963
Board of Directors,
W achovia Bank and Trust Company,
Winston-Salem, North
Carolina.
Gentlemen:
The Board of Governors of the Federal Reserve
Sys
B
ern approves the establishment of a branch by Wachovia
111c and Trust Company at 3665 East Independence Boulevard,
arlotte, North Carolina, provided the branch is established
within one year from the date of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(The
to
letter to the Reserve Bank stated that the
otaxd also hnn approved a six-month extension
he period allowed to establish the branch;
t
-7
,44 that if an extension should be requested,
oi
* Procedure prescribed in the Board's letter
November 9, 1962 (s-1846), should be followed.)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
275G
BOARD OF GOVERNORS
Item No. 15
OF THE
8/16/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C,
ADDRESS OFFICIAL CORRESPONDENCE
TO THE HOARD
August 16, 1963
Board of Directors,
Trust Company of Georgia,
Atlanta, Georgia.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by Trust Company of
Georgia, Atlanta, Georgia, of a branch at the corner of
Chattahoochee Avenue and Ellsworth Industrial Drive,
N04., Atlanta, Georgia, provided the branch is
established within one year from the date of
this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
aM that if an extension should be requested,
the procedure prescribed in the Board's letter
°f November 9, 1962 (S-1846), should be followed.)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2757
UNITED STATES OF AMERICA
Item NO. 16
8/16163
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
In the Matter of the Application of
!
)
,EIIIIER U. S. BANCORPORATION, INC.,
UENIrtir,
-"-a, COLORADO,
BHC-68
Ilursuant to
section 3 of the Bank
-log Company Act of 1956
ORDER GRANTING MOTION FOR EXTENSION OF TINE
WITHIN WHICH TO FILE REPLY BRIEF
In connection with the above application, there has been
fge,
t4 on behalf of Applicant a motion for the grant of an additional
15 44Ye beyond August 12, 1963, within which Applicant may file a
brie,
in opposition to the brief of Protesting Banks filed in support
'
Of th
"eir exceptions to the Hearing Examiner's Report and Recommended
beeision.
On the basis of the reasons set forth in Applicant's motion,
411C/ uPon Applicant's representation of no objection on the part of
t14111se1
time
for Protesting Banks to the granting of the extension of
Nuested,
is
of time
IT IS ORDERED that Applicant's motion for extension
atanted and that Applicant shall have until the close of business
Au,
cus
t 27, 1963, within which to file its brief in opposition.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2758
, -2-
IT IS FURTHER ORDERED that the extension of time herein
alanted shall be applicable to any statement that Applicant may
qs111 to file in respect to the Request for Oral Argument filed by
l'r°tes
according to
0 Banks on August 12, 1963, a copy of which,
PI:catesting Banks' transmittal letter to the Board, was served on
counsel for Applicant at
he time of service of Protesting Banks'
brif in support of their exceptions to the Hearing Examiner's
4Pot and Recommended Decision.
Dated at Uashington, D. C., this 16th day of August, 1963.
By order of the Board of Governors.
and
Voting for this action: Vice Chairman Balderston,
Mitchell.
Governors Mills, Robertson, Shepardson, and
Absent and not voting:
Chairman Martin and Governor King.
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
(StAL)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Item No. 17 „„„„.
ki74:19
8/16/63
UNITED SLITIL'S OF AAMICA
BEFORE THE BOARD OF GOVERNORS OF TiE FT2RAL RESEHVE SYSTEU
TTASHLNOTON, D. C.
Itl
the
Matter of the Application of
ASBURY PARK
AND OCEAN GRTIT: BANK
tor
aPdroval of
merger with
:011k2Sey Trust Company of
tIg
Branch
i
9•••
OFtO-Y.?. A7'7.10VING HERGFR OF BANKS
There has come before the Board of Governors, pursuant to the
iIç
l'tger Act of 1960 (12 U.S.C. 1828(c)), an application by Asbury
-a" and
Ocean Grove Bank, Asbury T'ark, New Jersey, a State member bank
°t the
Federal Reserve System, for the Bnardts prior ap)roval of the
4
teN" ct that bank and New Jersey Trust Company of
B-ranch, Long
New Jersey, under the charter of the former and -Pith the title
7
1 1141 jerseY Trust Company.
As an incident to the merger, the three
of New
Jersey Trust Company of Long Branch would become branches
4burior Park and Ocean Grove Bank.
Notice of the proposed merger, in
tePt)roved by the Board, has been published pursuant to said Act.
Upon consideration of all relevant material in the light of
the
et
-8 set forth in said Act, including reports furnished by the
)4Dti
lier of the Currency, the Federal Deposit Insurance Corporation,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2760
IlcItlIsDepartmert of Justice on the competitive factors involved in
the
Proposed merger,
IT IS TIEUBY GRIMED, for the reasons set forth in the Board's
State eni
of this date, that said application be and hereby is approved,
rOlti A
that said merger shall not be consummated (a) within seven
ealerici
al" days after the date of th5.s. Order or (b) later than three
after said date.
Dated at Washington, D. C., this 16th day of August, 1963.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, She2ardson, and
Absent and not voting: Governors Robertson and Tang.
(Signed) Kenneth A. Kenyon
(814L)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Kenneth A. Kenyon,
Assistant Secretary.
Item No. 18
8/16/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY ASBURY PARK AND OCEAN GROVE BANK
FOR PRIOR APPROVAL OF MERGER WITH
NEW JERSEY TRUST COMPANY OF LONG BRANCH
STATEMENT
Asbury Park and Ocean Grove Bank, Asbury Park, New Jersey
("AsblrY Bank"), with deposits of $36 million/,` has applied, pursuant
to the Bank Merger Act of 1960 (12 U.S.C. 1823(c)), for the Board's
Pr ior
a pproval of the merger of that bank and New Jersey Trust Company
Of 7.
-°11g Branch, Long Branch, New Jersey ("Jersey Trust"), with dePosits
13J- $16.6 million? under the charter of the applicant bank and
th tl-"e
title New Jersey Trust Company.
The proposal contemplates
that the
three existing offices of Jersey Trust would become branches
c3f the resulting
bank, increasing the number of its offices from four
.
to
seven
Under the Act, the Board is required to consider, as to each
°f the bawts
involved, (1) its financial history and condition, (2) the
clecitjacY of its capital structure, (3) its future earnings prospects,
(4) the general character of its management, (5) whether its corporate
11°Iltss are consistent with the purposes of 12 U.S.C., Ch. 16 (the
il°8it figures as of March 31, 1963.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2762
-2-
?ede
ral Deposit Insurance Act), (6) the convenience and needs of the
eclnaktInitY to be served, and (7) the effect of the transaction on
e°111Pe ti
---on (including any tendency toward monopoly).
The Board may
approve the trrnsPction unless, after considering all these factors,
ricts the transaction to be in the public interest.
.LItilla_factors.
- Both banks have satisfactory financial
1
hist°ries
dating back from the difficult financial period of the 1930's.
Each
bank has an adequate capital structure, and this would be true
So
for the resulting
bank.
Asbury Bank has a good earnings record and its future earnings
Prospects are
favorable. Jersey Trust's earnings are somewhat below
the
average of banks of comparable size in the Second Federal Reserve
1istric t•
Future earnings prospects of the resulting ban% would appear
to be
enhanced
b y an increased lending capacity and economies of operationa
that Ilould be expected to result from the merger.
Asbury Bank's management is capable and it has a progressive
Policy of
jersey
trainirig junior officers for executive positions.
Trust is regarded as competent.
Management
Joining of these two staffs
14°41,z1 add
a measure of depth in experienced executives not now enjoyed
bY the
banks individually.
No inconsistency with the purposes of 12 U.S.C., Ch. 16 is
'eated.
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Federal Reserve Bank of St. Louis
2963
-3Convenience and needs of the communities. - Monmouth County,
j,
wrseY, where both institutions are located, lies in the eastcntral part of
the State. Its 1960 population of 334,401 reflects
an i
ncrease of 40 per cent since 1950. In the past, its economy has
bQell largely dependent upon sumaer resort activity in the coastal
atea and diversified farming in the interior.
While these two activities,
Partictli --arlY the former, continue to be important, a substantial change
ha
Occurred in the county's economy due to the influx of permanent resid
, commerce, and industry. Industries now include the manufacture
Of r
ugs, textiles, clothing, clay products, and chemical and electronic
e(414
9rnent, with an estimated working force of 120,000.
Contributing to the recent growth and development of Monmouth
count3r
been the general population movement to the suburbs and the
area
8
417
reasonable accessibility to the metropolitan areas of Newark,
Jer,,
'
eY, and New York City.
Asbury Park is about 55 miles south of downtown New York City
is the
leading shore resort on the northern New Jersey coast.
Oflf
Its
17,365 reflects only nominal growth due to lack of space
f°t etParision within the city limits.
However, its numerous hotels,
1c)tels' and boarding houses cater to a summer population of approximately
100,000.
The town is also the local mercantile center for the area, hayflumber
of branches of nationally-known stores.
A branch of Asbury Bank is maintained at Ocean Grove which is
ted
a°uth of Asbury Park.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Ocean Grove, in Neptune Township, is also
2764
rily a resort community showing wide fluctuation in population
(141-ing
the summer months.
Two other branches of Asbury Ban% are
irkated 4_
1-11 nearby Neptune and Ocean Townships, both primarily residential
area
The seaside city of Long Branch, the site of Jersey Trust's
°Ifice, is located about 5-1/2 miles north of Asbury Park; it had
a 1960
Population of 26,223. Jersey Trust also maintains branches in
the
adjoining boroughs of West Long Branch and Deal. The region served
Jer
seY Trust also caters to the summer resort business; however, the
area
includes those sections of Monmouth County experiencing increasing
industrial growth.
The proposed merger wouls.1 place the resulting bank in a better
1)(18iticln to serve the credit needs generated by this industrial expaniort.
The lending limit of the resulting bank would be increased from
$253)a°C) to S400,000. During the past year both banks part;cipated
tth
°ther banks in 23
loans totaling approximately $4.5 million; most
of
"loans necessitated participation due to the banks' lending
11lit
The proposed merger would ma_:e available an expanded consumer
er"it
-Partment to serve more completely the needs of individuals and
teial enterprises in the area; prov4_de greater mortgage loan
da tions to building contractors; and allow the establishment of
1)ctra
te trust department under the guidance of specialists in the field.
Com-petition
apar
3
- The main offices of the two banks are 5-1/2 miles
11-"" offices of three competing banks between them, including
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Federal Reserve Bank of St. Louis
2765
-5cee of the second and third largest banks in the county.
The
rieqest branches of the two banks are two miles apart and competiti441 between
them is limited, since they act primarily as paying and
4ceiving stations.
The banks have no common borrowers, and common
dept)sitors are limited to one of the local utilities and large supermazitets which operate units near each bank.
Asbury Bank currently ranks fourth in size with respect to
4C dePosits,
and Jersey Trust ranks seventh. The resulting institu404
140Uld still rank fourth and would remain substantially smaller
t1144 the third ranking bank. It does not appear that there would be
allY ad
verse competitive effects on smaller banks in the area.
In addition to competition between commercial banks in the
e°411tY,
the three largest commercial banks in the State, all of Newark,
tle/1 j
"seY, actively solicit banking and mortgage business, not only in
the
°ervice area of Asbury Bank, but throughout the county.
Competition is also provided by a number of nonbanking
trSttt
utimle including five savings and loan associations which operate
teven
Offices within or near the service areas of the two banks.
Summary and conclusion. - The merger will permit the resulting
b'artlz .
/1th its substantially higher lending limit, expanded services and
%I/14e
nt facilities to employ its funds more fully and profitably in
the 1
°eal market.
It will place the resulting bank in a better position to
ibute to the developing economy of this rapidly expanding area.
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Federal Reserve Bank of St. Louis
2766
-5In both Asbury Park and Long Branch, strong and effective
local
it
Competition will remain, while in the county a variety of bank-
end other financial institutions provide a wide and highly
c141Petitive range of services.
Accordingly, the Board finds that the proposed merger would
be irt
the public interest.
114:148 c
16, 1963.
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Federal Reserve Bank of St. Louis
2967
UNITED STATES OF A1ERICA
Item No. 19
8/16/63
RESERVE SYSTEM
BEFORE THE BOARD OF GOVERNORS OF TUE FEDERAL
WASHINGTON, D, C.
In the
Matter of the Application of
171kINIA COMMONWEALTH CORPORATICN
fvc,.a.P.Proval of the acquisition of
a1 1 1-113 shares of Washington Trust
—4 Savings Bank, Bristol, Virginia
ORDER APPROVING APPLICATION
UNDER BANK HOLDING COMPANY ACT
Governors, pursuant to
There has come before the Board of
1956 (12 U.S.C. 1842)
4et1°n 3(a)(2) of the Bank Holding Company Act of
Regulation Y
and section 222.4(a)(2) of the Federal Reserve
(12
Corporation,
222.4(a)(2)), an application by Virginia Commonwealth
Rich
Inond, Virginia, for the Board ss prior approval of the acquisition
Of
'nore
I4ust
of Washington
than 80 per cent of the outstanding voting shares
and
Savings Bank, Bristol, Virginia.
of the application
As required by section 3(b) of the Act, notice
Virginia, who
11' iverl to the Commissioner of Banking of the State of
t'hessed no objection to approval thereof.
t
In addition, notice of receip
t e
Register on April 11,
h application was published in the Federal
19r,
for submission of comments
(2/1
- P. R. 3562), providing an opportunity
atld v.
time for filing such
lews regarding the proposed acquisition. The
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2768
-2have
e°tnnlents and views has expired and no such comments and views
been received.
IT IS HEREBY ORDERED, for the reasons set forth in the
11%dis Statement of this date, that said application be and hereby
Is approved, provided that the acquisition so approved shall not
be consummated (a) within seven calendar days after the date of
this
Order or (b) later than three months after said date.
August, 1963.
Dated at Washington, D. C., this 19th day of
By order of the Board of Governors.
and
Voting for this action: Chairman Martin,
son.
Shepard
and
Mills,
ton,
Governors Balders
Voting against this action:
Absent and not voting:
Governor Robertson.
Governors King and Mitchell.
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
(SEAL)
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Federal Reserve Bank of St. Louis
2769
Item No. 20
8/16/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY VIRGINIA COMMONWEALTH CORPORATION, RICHMOND,
VIRGINIA, FOR APPROVAL OF ACQUISITION OF SHARES OF
WASHINGTON TRUST AND SAVINGS BANK, BRISTOL, VIRGINIA
STATEIMNT
Virg4mia Commonwealth Corporation ("Commonwealth", or
"414/1:•cant"), Richmond, Virginia, a registered bank holding company,
has
ii
ed an application pursuant to section 3(a)(2) of the Bank HoldC°MPany Act of 1956 ("the Act"), for the Board's approval of the
4e(141siti0n of more than 80 per cent of the outstanding voting shares
f
ashington Trust and Savings Bank, Bristol, Virginia ("Bank").
Section 3(r'. of the Act requires the Board to take into
%rtaideration the following five factors with respect to the proposed
4441-sition:
(1) the financial history and condition of the holding
4111)a11Y. and
bank concerned; (2) their prospects; (3) the character of
theil‘inanagement; (4) the convenience, needs, and welfare of the corn414litles and the area concerned; and (5) whether the effect of the
4441.sition would be to expand the size or extent of Applicant's system
Leyond
ts Consistent with adequate and sound banking, the public
tlItet
St, and the preservation of competition in the field of banking.
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Federal Reserve Bank of St. Louis
2770
-2-
General background. - Four bank holding companies control
24.3 per
cent of all deposits of banks in the State of Virginia.1/
°f these,
Commonwealth ranked second with $193.9 million, or 5.1 per
Cent, Two banks in the State each had more deposits than Commonwealth,
Ilhich ranked fourth among banking organizations.
Offices of Commonwealth's subsidiary banks are widely
dis tributed in the State.
The Bank of Virginia, the leading subsidiary,
lith $159.6 million of deposits, has 24 offices.
These offices are
4cateuA in the east-central portion of the State in the Richmond MetroP°1itan area, in Petersburg, and in Dinwiddie some 35 miles to the
sollthwest of Petersburg; in Norfolk, Portsmouth, and Newport News in
the s
outheast; and in Roanoke in the west-central section. Additional
subsidiary banks are located in Occoquan in the northeast, in Salem
(near
Roanoke), and in Newport News.
Approval of the application now
befo
re the Board, and of a concurrent application involving The Peoples
Natio ,
nal. Bank of Pulaski, Pulaski, Virginia, will give Applicant repres tar.
-10n. in the southwestern section of the State.
None of Applicant's
8nbsid4
'
arlea is the dominant bank in the area which it serves.
Banking factors. - The history of Applicant is brief.
—,
Qom—'""nwealth became a bank holding company through an exchange of its
of
figure is adjusted to include deposits of The Farmers Bank
Virg4 n1a, which mei:s-ed with The Bank of Virginia, a
slabs ddie,
given on
iarY of Ap-qicant, pursuant to approval by the Board
stated
herein
figures
1963. Unless otherwise indicated, deposit
aze
Incorporated,
Bankshares,
14as is of December 28, 1962. United Virginia
included.
°rmed January 10, 1963, and the deposits of its banks are
il
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Federal Reserve Bank of St. Louis
2771
-3-
stock for stock in five subsidiary banks, which took place on December 21,
1962, pursuant to approval by the Board given in an Order of October 25,
1962. One of the five, The Bank of Henrico, Sandston, Virginia, has since
been merged with The Bank of Virginia; pursuant to approval of the
//43srcl granted in an Order of June 17, 1963.
Because of the short
kriod of time which has elapsed since its formation, Commonwealth
has 11°t as yet been able to put into operation most of the advantages
'Itch it urged as favoring the holding company system of bank operation.
Rovever, a beginning has been made in supervising generally the securities Portfolios of the other subsidiary banks and in extending to them
fac
ilities of the data processing center of The Bank of Virginia.
Studies are also under way in connection with such matters as accountPractices, loan policies, and the establishment of retirement and
ttinga benefit programs on a uniform basis.
The financial condition of Applicant is, of course, largely
4ffeoted by the condition of the subsidiary banks, particularly that of
Thel3a„,
"-c. of Virginia, by far the largest in the group. That Bank's
4et e
arnings have been lower than those of the average member bank in
it
04
8
group in the Fifth Federal Reserve District.
Its capital
klaiti°11, even after the addition of $2 million capital, now proposed,
'continue to reelect a need for additional strengthening.
In other
teen
- , the condition of Applant and its subsidiaries is
hcmci7az
sstia
factory, and theil: prcznccts are fav.Drable.
Marxgement of Appli-
"nt, uhizil is to a considerable extent the same as thot of The Bank of
V4ainia, is consideredsatisfactory.
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Federal Reserve Bank of St. Louis
2772
-4-
Bank, which has two offices, both in Bristol, and $8.4 million
Q1E dePosits, was chartered in 1906 as a savings and thrift institution.
e recent years, it has engaged in a general banking business,
but as
of December 28, 1962, its percentage of consumer loans to total
4an.,
was still above, and of commercial loans below, that of al/ other
bard.
"4s competing in its area or in Virginia generally.
Its capital
Pusition is strong, and its earnings have been good, and the Board
rtelndes that its prospects would be satisfactory either as a member
o
PPlicant's system, or as an independent bank.
In addition, the
ces which Commonwealth should be able to provide as it further
devel°Ps and strengthens its operating techniques could, in certain
1Pects s improve the prospects of a small bank which has, evidently,
laeksd certain facilities appropriate to the numerous and diversified
businesses operating in the Bristol area.
Bank's management is competent, but all four officers at the
tOp
eecutive level are over sixty years of age. Complicating the
104...ra
nge problem of recruiting successors to these four men is the
t
hat control
of Bank is held by the estate of the former president,
-(34nder of the Bank, and trustees of the estate have indicated a
Pte
'
ence for shifting its chief asset, stock of the Bank, into a
4rit.
v with
te
a broader market.
4ttip.d
Until the question of future control
it may be more than normally difficult to obtain personnel
ePabl.
4— °f rising to top executive rank. Accordingly, the Board cant].tides
that the greater likelihood of Applicant's easing the problem
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Federal Reserve Bank of St. Louis
2773
-5of
although
management succession is a consideration that affords some
40t substantial support for approval of the application.
Convenience and needs of communities. - Applicant's nearest
subsidiary to Bank is located in Salem, some 148 miles northeast of
418t01.
office
In view of Bank's size, and the distance between its
slid the offices of Commonwealth's remaining subsidiaries, the Board
CO
ncludes that the proposed acquisition would have no effect on corn'14t1.ties other than Bristol and the surrounding area.
The city of
lkidjoistol, with a population of 17,144 is located on the State line
fling Bristol, Tennessee, which is roughly the same size, so that
he two form virtually a single community.
The community is a com-
tereial and manufacturing center serving a considerable area in western
available
Virginia and eastern Tennessee, with abundant electric power
c)ra the Tennessee Valley Authority, and an ample labor supply.
The
plant,
largest industrial plant is the Sperry-Farragut guided missile
but others manufacture products including calculating and adding
!nocturnes,
steel, apmining cars, stainless steel tubing, structural
Parel, thread, and foods and confections.
The surrounding area is a
from
Pt°sPerous agricultural region with primary cash income derived
livestock and burley tobacco.
szliecent counties.
Coal is mined and gas produced in
of
The two Bristols and the neighboring cities
known
QAPort and Johnson City, Tennessee, form an industrial complex
235,000.
4a the "Tr -Cities" area, with a population of approximately
sPects for continued growth in the area are considered good.
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Federal Reserve Bank of St. Louis
2774
-6-
Five banks now function in Bank's primary service areal/
The Pirst National Exchange Bank of Virgin!a, Rornoke, Virginia,
with deposits of $178.4 mi11ion2/ has three Bristol offiLzs as does
Pirst National Bank of Sullivan County, Kingsport, Tennessee,
1 deposits of $60.7 million. Tr -City Bank and Trust Company,
"
810
uatlillle, Tennessee, with deposits of $5.7 million has two, and
Pattn"'s Exchange Bank, Abingdon, Virginia, with deposits of $11.1 milhas one office in Bristol.
A proposed merger between Farmers
4change
Bank and Virginia National Bank, No7folk, Virginia, if ap131 '1?eci, will introduce into the area the resources of a bank with
bp'
.8 million of deposits.
Applicant argues that the various services and facilities
‘'4-0.ed members of its system will enable Bank better to serve the
Nwe
nience and needs of the Bristol area. While the range of service. 0_
tfered by Bank would be expanded under Applicant's control,
ty 0
banks of substantial size already have offices in the community,
444 it does not appear to the Board that banking needs are going un,
te!
°r that community convenience would be significantly improved by
it114.°ducing some additional services into two more banking offices
thete.
from which are drawn roughly 86 per cent of the Bank's
4'ts, and which includes the two Bristols and the surrounding area
'11.1
' aPProximately five miles.
ticluding December 23, V62 deposits of banks which have since merged.
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Federal Reserve Bank of St. Louis
2775
-7-
Applicant
In connection with benefits to the area which
states will follow upon the proposed acquisition, Applicant appears
to make a two-pronged assertion (3) that, when credit needs of large
customers in an area which is experiencing growth, such as that including the two Bristols, cannot be met by an independent local bank, these
customers suffer inconvenience in having to go elsewhere, and this inconvenience can be reduced through greater ease in arranging participations
and
if the bank is permitted to enter a holding company system;
(2) that, similarly, credit needs of a number of large businesses in
Virginia are greater than any Virginia bank or banking system can
aecommodate, and economic growth of the State would be facilitated by
emergence of larger banking complexes.
The facts in the application
bef
ore the Board, however, demonstrate that no substantial volume of
large credits is being handled as yet by the smaller banks in Applicant's group as a result of affiliation with the group.
Ihe ther
Accordingly,
on the local or the State level, it would be purely con-
lly
jectural to suppose that entrance into the system will substantia
e343and the extent to which Bank actually will serve larger credit requirements through intra-system participations.
ley.,
largest
moreover, Commonwealth remains smaller than the three
batik;
4113 organizations in Virginia.
('
On the State-wide
In view of Bank's size the pro-
Applicant's ability
acquisition will not significantly increase
to serve the larger credit needs of Virginia businesses.
fourth factor
For these reasons, the Board concludes that the
111/Plies little support for approval of the application.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2776
a.
Competitive effect, - Here again, the proposed transaction
tleed be
considered only in the context of the Bristol area.
No sig-
'-ant competition exists between Bank and any offices of present
subsidi
-axles of Applicant, nor will the addition of Bank's resources
to h
"cse of Applicant significantly strengthen its system in relation
to oth
er leading Virginia banking organizations. While it can be
4ssircied that most of Bank's correspondent banking business would flow
t° it8
sister subsidiaries in Applicant's system, The Bank of Virginias
t01/11'
lch the lion's share would probably fall, holds only 5.7 per cent
nterbank deposits held by all Virginia banks and cannot be considered
4 d°41inant, or
even a very strong, factor in the correspondent banking
1)iettre in the
State. For this reason, even the addition of all Bank's
1)43il1ess of this kind would not adversely affect competition for
tespondent banking.
fifth
Turning to the local area, at June 30, 1962, Bank held a
of the
offices, but only 15.9 per cent of deposits of offices
oted 4 _
its primary service area. While its growth has been satisfam.
.7) it has not vigorously taken advantage of the opportunities
c)Peti
to it in a
developing region0 The stimulus of some of the
iltti
offered by Applicant's system, together with an infusion
Of
4dequately
trained younger management personnel, should somewhat
4kr
ease competition with the larger and more energetic banks with
'llzhes
already located there. There is no basis to conclude that
°f APPlicant would adversely affect the ability of the remaining
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2777
Small bank in the area , Tri- City Bank and Trust Company, to maintain
its present competitive position.
Control of Bank will not give
APPlicant a commanding position in the area, nor will it significantly
advance Applicant toward a similar position in the State.
Conclusions. - The financial history and condition of
APPlicant and of Bank are consistent with approval of the application
Ilow before the Board.
Prospects for Bank's growth are, possibly,
somewhat better as a member of Applicant's system, although they
Would remain satisfactory outside it.
As discussed, some weight is
lent for approval by the prospective remedial effect Applicant's
48sistance will have in regard to the management succession problem
at Eanl%
Th,, convenience, needs, and welfare of the community princi-
11411Y concerned will not be significantly affected by the acquisition.
Under the fifth factor, the extent of Applicant's system will be somel'het increased, although its size only minimally so, but the Board does
a°t find that either size or extent will be incon sistent with
"equa te and sound banking or the public interest, and concludes that
(3Trie improvement in banking competition in the Bristol area may reSuit from consummation of the proposed acquisition.
On the basis of all the relevant facts as contained in the
ee()rd before the Board, then, and in the light of the factors set forth
.
in
is
Qection 3(c) of the Act and the underlying purposes of the Act, it
the
be consistent
card's judgment that the proposed acquisition would
th the
therefore be
public interest and that the application should
apr,
vrO‘Ted.
44gust
1.933.
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Federal Reserve Bank of St. Louis
2778
DISSENTING STATEMENT OF GOVERNOR ROBERTSON
Item No. 21
8/16/63
Bank holding companies should not be authorized by this
Board to acquire additional banks unless, upon review of each of the
factors specified by Congress, the Board has determined that approval
isWarranted in the public interest.
Although there are cases in which
°Ile adverse factor may be outweighed by favorable factors, the instant
""al would not seem to present such a case.
Section 3 of the Bank Holding Company Act requires the Board,
h
n
considering an application for approval of bank holding company
elaanaion, to take into consideration the financial condition of the
41cling company and its constituent banks.
In this case the principal
"" xn the Virginia Commonwealth holding system has a capital structure
that
as noted in the majority opinion, is inadequate in view of the
tiatura of its assets, deposit liabilities, and other responsibilities.
°Pinion, it is substantially inadequate and should be corrected
befc're the present company is permitted to expand, save for exceptionally
cora,.
velling circumstances. For some time to come, all the resources of
t4 holding
company should be utilized to raise the capital structure
Of
that bank to a more satisfactory level. If this is done, the
11044
48 company will not be in a position to come to the aid of its
%ape
r banks should the occasion arise.
In support of its instant application, the holding company has
t
hat, as a result of the improved management and services that
result from holding company control, the Bristol Bank should grow
more rapid
rate.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
If this be true, then it is likely that its
2799
-2-
Posit liabilities and other responsibilities will expand more rapidly
than its capitalization can be increased through retained earnings.
In
81101 case, an increase of its capital would be effected by the sale of
additional stock to existing stockholders of the bank.
The stockholders
Will be (to a very large extent) the Virginia Commonwealth Corporation.
view of the pressing need of its largest unit for additional capital,
availit Seems hardly likely that the holding company will have funds
15ib1e for expansion of the capital cushion of the Bristol Bank or of
anY of
the
its other smaller banks.
In fact, the reverse may be more likely;
may exist a temptation to siphon off from the smaller banks'
capital
el8iVe amounts of their earnings in order to provide funds for
Bank
ileeds of the larger bank. Accordingly, acquisition of the Bristol
by $.,
'ue Virginia Commonwealth Corporation before the financial condition
Of it8
seem
present units has been satisfactorily provided for does not
War.tanted, especially in the absence of anything to indicate that the
ilublic will benefit from the change of ownership, or that exceptional
Atobierns
exist for which there appears to be no other suitable remedy.
I 14()11d deny the application.
44%tist 19,
1963.
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Federal Reserve Bank of St. Louis
2780
Item No. 22
8/16/63
UNITIX STATES OF APPERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
41.
In the Matter of the Application of
zuacaNIA COMMONWEALTH CORPORATION
approval of the acquisition of
3°ttrIg shares of The Peoples National
ank W1 Pulaski, Pulaski, Virginia
i
We
••
ORDER APPROVING APPLICATION
UNDER BANK HOLDING COMPANY ACT
There has come before the Board of Governors, pursuant
to section 3(a)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1842)
11(1 section 222.4(a)(2) of the Federal Reserve Regulation Y
(12 CFR 222.4(a)(2)) an application by Virginia Commonwealth Corporatio4
) Richmond, Virginia, for the Board's prior approval of the
4eIllisition of 80 per cent or more of the outstanding voting shares
c) Ihe Peoples National Bank of Pulaski, Pulaski, Virginia.
As required by section 3(b) of the Act, notice of the
13131icati0n was given to the Comptroller of the Currency, who advised
the ,
"oard his office does not oppose the proposed acquisition. In
41ditin
—14, notice of receipt of the application was published in the
PQ.de
tal Register on May 11, 1963 (28 F. R. 4777), providing an
°Pporh,
--n4tY
for submission of comments and views regarding the
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2781.
IMPLY
Pl.°Posed acquisition. The time for filing such comments and views
has e
ItPired and no such comments and views have been filed with
the Board.
IT IS HEREBY ORDERED, for the reasons set forth in the
18 Statement of this date, that said application be and hereby
"
134
not be
4411Proved, provided that the acquisition so approved shall
e°48uroZated (a) within seven calendar days after the date of this
Order
Or (b) later than three months after said date.
August, 1963.
Dated at Washington, D. C., this 19th day of
By order of the Board of Governors.
Voting for this action: Chairman Nartin, and
Governors Balderston, Mills, Robertson, and
Shepardson.
Absent and not voting:
Governors King and Mitchell.
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
(stAt
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Federal Reserve Bank of St. Louis
2782
BOARD OF GOVERNORS
Item No. 23
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
CORPORATION, RICHMOND
APPLICATION BY VIRGINIA COMMONWEALTH
N OF SHARES OF
VIRGINIA, FOR APPROVAL OF ACQUISITIO
KI, VIRGINIA
PULAS
KI,
PULAS
THE PEOPLES NATIONAL BANK OF
STATEMENT
("Commonwealth", or
Virginia Commonwealth Corporation
holding company,
i'APPlicant"), Richmond, Virginia, a registered bank
the Bank
has filed an application pursuant to section 3(a)(2) of
bold.ng Company Act of 1956 ("the Act"), for the Board's approval
outstanding voting
Of the acquisition of 30 per cent or more of the
ki, Pulaski, Virginia
shares of The Peoples National Bank of Pulas
bank").
to take into
Section 3(c) of the Act requires the Board
respect to the proposed
'ueration the following five factors with
COrls4A
ecluisition:
tion of the holding
(1) the financial history and condi
the character of
c°11113411Y and bank concerned; (2) their prospects; (3)
thei
of the
r management; (4) the convenience, needs, and welfare
whether the effect of the
nities and the area concerned; and (5)
t of Applicant's
equisition would be to expand the size or exten
adequate and sound banking, the
Yst m beyond limits consistent with
the field
Public interest, and the preservation of competition in
Of
banking.
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Federal Reserve Bank of St. Louis
2783
-2-
The general background with regard to the banking structure
the
State of Virginia and Applicant's place in that structure,
114e l as
the first three, or "banking" factors in respect to
APP1*lCant,
are discussed in the Board's Statement in the matter of
the
aPPlication of Virginia Commonwealth Corporation for approval of
the
acquisition of voting shares of Washington Trust and Savings
tetik
,ristol, Virginia, issued as of today's date, and that dis2 .
N84
&°t1 is hereby incorporated by reference as part of the present
Statement.
In sum, the Board found those factors satisfactory in
1.4Pe
et to Commonwealth, which is the fourth banking organization in
littattlia 4-Ln
respect to size, although the capital position of its
4ad4
'
11g bank, The Bank of Virginia, continues to reflect a need for
ther
strengthening.
Bankim, factors as related to Bank. - Bank, an institution
1/
1144 $5.0
million of deposits:- was chartered in 1902.
qfiee is
located in the county seat of Pulaski County.
Its single
It offers
t44t elleral banking services, including a limited trust department
(4/q'ation, and its growth, while slow, has been steady. It has a
4tteria c
apital position, and its earnings have been satisfactory.
11Q1
' it not
for the management problem discussed below, its prospects
15tlici be favorable, whether alone or as part of Applicant's system,
11111i4 of this problem, however, the Board concludes that while Bank's
:
11 Pects could continue favorable as a member of the Commonwealth
'44111Y its prospects as an independent institution are more doubtful.
t)f Uni
tiar
otherwise indicated, deposit figures herein stated are as
e" 18, 1963.
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Federal Reserve Bank of St. Louis
-3-
2784
Bank,
the former president of
After the sudden death of:
find a
unsuccessful attempts to
in 1960, the Board of Directors made
n over sixty, has been in
successor. The next senior officer, the
ies of chief executive.
Poor health and remains unable to assume the dut
is actively engaged in
As a result, the chairman of the Board, who
r business, has been
what should be full-time employment in anothe
two or three
can spend no more than
eting as president, although he
developwho showed promise of
hours daily in the bank. A junior officer
of this year
erial resigned in March
ing into successor management mat
ent will be unable
tO
k. The acting presid
accept a post with another ban
situation has
, and the immediate
te continue in this role indefinitely
r from
loan of a junior office
°n1Y been tentatively resolved by the
lication
ation that if the app
of Applicant's banks, with the expect
ate for the top
for training as candid
18 approved, he will remain
right
ied, he retains the
executive post. If the application were den
concludes that, in view
to return to his former position. The Board
management,
need for strengthening
of
Bank's relatively small size and
the application.
this factor supports approval of
case of
communities. - As in the
Convenience and needs of
ings Bank,
hington Trust and Sav
the application with respect to the Was
ation of Bank and
referred to above, the distance between the loc
ginia, about
ated in Salem, Vir
loc
y,
A
iar
sid
sub
t
res
PPlicant's nea
small
Bank's relatively
52 miles northeast of Pulaski, together with
nion
will not, in the opi
size, is such that the proposed acquisition
other than Pulaski and
Of the Board, have any effect on communities
the surrounding area.
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Federal Reserve Bank of St. Louis
2785
10,500,
The town of Pulaski, with a population of about
and most of the county population of some 27,250, is located in a
est
fertile valley that lies between mountainous areas to the northw
and
southeast.
y in the
Diversified manufacturing, centered chiefl
millwork,
c°141tY seat, includes hosiery, chemicals, furniture,
Plastic fabrics, iron castings, and clothing.
lead the list of agricultural products.
Livestock and dairying
A part of the Radford Arsenal
4 located in the county, and there are prospects for continued industrial growth.
.
Only three banks function in Pulaski County
Bank's leading
c°mPetitor, The Pulaski National Bank, is nearly twice its size.
Bank
office some
f Dublin, with $2.1 million of deposits, has its single
eight miles from the town of Pulaski.
Five banks located in neighbor-
million,
Counties, ranging in deposit size from $2.5 million to $10.6
appear to offer limited competition to the three Pulaski County banks.
bank with
1144ki s lending limit is $37,500, and that of the largest
Ilhich it competes is $75,000.
Although Bank has not, apparently,
hand, ,
extent, access
'ea loans beyond its lending limit to any great
Applicant's subsidiary
t° intra-system participations with others of
a slightly more convenient
batiks will make it possible for Bank to offer
alt
have
ernattve source for larger amounts of credit for which there
been
services
Some instances of demand in the area. Some additional
and Some
apparently be offered
improvement in existing services will
Applicant.
the community as a result of affiliation of Bank with
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Federal Reserve Bank of St. Louis
2786
-5Competitive effect. - Reference is made to the discussion
qteasons for the lack of State-wide competitive effects from the
Pt°Posed acquisition in the Statement of the Board cited above.
841e Conclusion obtains in the situation discussed herein.
The
In the
4ea1.
contelit, Bank's primary service area is Pulaski County, from
2/
which 87
per cent of the amount of its IPC- deposits come and
141lee 70.8 per cent of the amount of its commercial and industrial,
e°11suiller) and farm loans are made.
On March 18, 1963, Bank held about
29
Per cent of both IPC deposits and total deposits of the three
'which are located in that area.
In view of Bank's size, both
4lati
ve and absolute, and the vigor of its chief competitors,
bqh (lc
— which have been growing at a faster rate, the Board concludes
that A
4PPlicant's entry into the area through the proposed acquisitiA)ri v .
1111) if
anything, stimulate competition in the area.
Nor will
- 04 Bank to the Commonwealth system, any more than in the
tilae
Of Washington Trust and Savings Bank, significantly advance
APPli,
-ant toward a commanding position among banking organizations
the state,
Conclusions. - The financial history and condition of
411Plieartt and
of Bank are consistent with approval of the application
11c44 bef°1'e the Board. Mile prospects for Bank's growth outside
kAplicant's system would be satisfactory were it not for the managewhich has plagued Bank since the death of its former
4t
in 1960, the difficulty of solving the problem without
f individuals,
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Federal Reserve Bank of St. Louis
partnerships, and corporations.
2787
-6-
Outside assistance, lends support
or approval of the application.
Convenience, needs, and welfare of the local community--the only
00111111unity affected to any degree--will be slightly improved by
entrance
of Bank into the Commonwealth family.
While the extent
of APPlicant's system will be increased, the Board does not find
that the resulting size or extent of that system will be inconistent with adequate and sound banking or with the public interest,
and
Concludes that the effect on competition in the town and the
e°11ntY of Pulaski will, if anything, be beneficial.
On the basis of all the relevant facts as contained in
the record before the Board, and in the light of the factors set
forth in
section 3(c) of the Act and the underlying purposes of
the Act, it is the Board's judgment that the proposed acquisition
(3111(1 be consistent with the public interest and that the applieation should therefore be approved.
Atigu`lt 19
1963.
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Federal Reserve Bank of St. Louis
2788
Item No. 24
8/16/63
CONCURRING STATEMENT OF GOVERNOR ROBERTSON
The management problem in this case places the application
ri
exceptional category where the remedy offered by holding company
shiP is appropriate and outweighs factors which would otherwise
-.4e an adverse conclusion.
19
1963.
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Federal Reserve Bank of St. Louis
2789
BOARD OF GOVERNORS
Item No. 25
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE HOARD
August 19, 1963.
4tGISTERED - RETURN
RECEIPT RE UESTED
1/81firginia Commonwealth Corporation,
East Main Street,
Rzchmond 14, Virginia.
Gentleme
n:
The Board has approved your applications, pursuant to
sectio
(12 n 3(a)(2) of the Bank Holding Company Act of 1956
'S.C. 1842) and section 222.4(a)(2) of Federal Reserve
Of
Y (12 CFR 222.4(a)(2)), for the Board's prior approval
shar-ue acquisition of 80 per cent or more of the outstanding voting
kw es
, Of Washington Trust and Savings Bank, Bristol, Virginia,
(1)z The People's National Bank of Pulaski, Pulaski, Virginia.
accom
Enclosed are the Board's Orders of this date, the
Also PanYing Statements, and the press release on this action.
ir*tit ?nclosed are copies of Governor Robertson's Dissenting Statematteln the Bristol matter, and Concurring Statement in the Pulaski
The Board wishes to emphasize that due to the continuing
tleed f
°r strengthening of the capital position of The Bank of Virginia,
the
toard ading Bank in your system, which need was discussed in the
dect i s letters to that Bank of May 24, 1963 and June 17, 1963, the
closse“)ns on these two applications were particularly difficult and
strilc-f.°11es• While the proposed addition of $2,000,000 to the capital
does:
lire of The Bank of Virginia is a constructive step, the Board
atl ati-°t believe this sufficient to bring the capita/ of that Bank to
correequate. level. Further, in the Board's judgment there is a
eam
P°11ding need for improvement in respect to the Bank's net
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Federal Reserve Bank of St. Louis
BOARD
SYSTEM
OF GOVERNORS OF THE FEDERAL RESERVE
VItginia Commonwealth Corporation
-2-
In view of the Board's responsibility under the Bank
Hold*lng Company Act, you can appreciate that the capital and net
,11ta
71ngs
positions of the principal bank in a holding company
Ttem are matters of considerable significance in weighing the
ntihrits of any proposed expansion. Accordingly, you are advised
v4 at the Board would be reluctant to permit further expansion of
c'i'lqinia Commonwealth Corporation's system unless and until the
etal and net earnings positions of The Bank of Virginia have
uwn substantial improvement.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
letosures
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Federal Reserve Bank of St. Louis
2790
2791
Item No. 26
8/16/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 16, 1963.
l '•lialter F. Scott, General Counsel,
s deral Reserve Bank of San Francisco,
!
'11 Francisco 20, California.
ilee'r Mr. Scott:
This refers to your telegram of June 5, 1963,.requesting
aI °Pinion as to whether the Board's authority under section 19 of
t
tie Pederal Reserve Act to define "savings deposits" and the definicie°11 of that term, as contained in Regulation Q, which limits savings
)Osits to individuals and certain types of organizations, are
exli,
ed by Public Law 88-16 of May 8, 1963, which amended section 47
ot
Bankruptcy Act (11 U.S.C. 75(a)(2)) so as to authorize trustees
ankrUptcy to "deposit all money received by them in designated
algsitories initially in demand deposits; and subsequently, if
ear"clrized by the court, in interest-bearing savings deposits, time
tificates of deposit, or time deposits-open account;".
Prior to this amendment to the Bankruptcy Act, trustees in
ballk„
coPtoY were required by judicial decisions to obtain creditors'
le,r4t to make other than demand deposits. There is nothing in the
variative history of this amendment to indicate that its purpose
delx3M°re than to eliminate the need for creditors' consent for
or asIts in interest-bearing savings or time deposits. In the absence
Aet tlY evidence of intent to modify section 19 of the Federal Reserve
111(1 the Board's authority thereunder, it is the opinion of the
;
goa,
,that the definition of savings deposits in Regulation Q has not
been
affected by this amendment to the Bankruptcy Act.
Under section 217.1(e)(1)(i) of Regulation Q, a "savings
must be (1) a deposit to the credit of one or more individuals
tain types of organizations or (2) a deposit as to which the
el
:
:e beneficial interest" is held 'by individuals or such organizatior
A trustee in bankruptcy holds the assets of the bankrupt
s
:
estai
e for the benefit of the bankrupt's creditors. Accordingly, it
'
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Federal Reserve Bank of St. Louis
2'I'9"
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
111'. Walter F. Scott
-2-
i'!3.,:the Board's opinion that a deposit by a trustee in bankruptcy may
be classified as a savings deposit under Regulation Q except in
ine rare instances in which all of the bankrupt's creditors are
Viduals or organizations of the types described in the regulatory
111tion of a "savings deposit".
It would be permissible, of course, for funds of a trustee
bL
,
ruptcy to be classified as time deposits under Regulation Q.
0-8 connection, it may be noted that, as a result of the action
tak"
„
en by the Board of Governors and the Federal Deposit Insurance
cot
ec;ration on July 17, 1963, member and nonmember insured banks
ot d now pay interest at a rate up to 4 per cent on a time deposit
4 trustee in bankruptcy having a maturity of not less than 90 days.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2'793
Item No. 27
8/16/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, O. C.
ADDRESS arrsciAL CORRESPONDENCE
TO THE BOARD
August 15, 1963
Paul C. Stetzelberger, Vice President,
"deral Reserve Bank of Cleveland,
Cl
eveland 1, Ohio.
Dear Mr.
Stetzelberger:
In accordance with the request contained in Mr. Quast's
lette
Rob r of August 6, 1963, the Board approves the designation of Mrs. E. Y.
.ci_erta as a special assistant examiner for the Federal Reserve Bank of
bland for the purpose of participating in examinations of State member
aliks
The Board also approves the designation of Mrs. Marguerite
4atIto
-r as a special assistant examiner for your bank for the purpose of
Partic.
T,
except The Cleveland
tuv. xpating in examinations of State member banks
Company, Cleveland, Ohio.
The authorizations heretofore given your bank to designate
employees as special assistant examiners are hereby canceled.
d't'r priate notations have been made on our records of the names to be
eleted.
thes
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2994
BOARD OF GOVERNORS
Item No. 28
8/16/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS arrtciAL CORRESPONDENCE
TO THE BOARD
•.*.
*.•Mt•
August 15, 1963
Leland Ross, Vice President,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Ross:
In accordance with the request contained in your letter
August 9, 1963, the Board approves the designation of Harold E.
Mads
0, en as a special assistant examiner for the Federal Reserve Bank
L
Chicago.
Of
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
@FedFRASER