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Minutes for
To:
Members of the Board
From:
Office of the Secretary
January 24, 1962
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.
Chm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
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Federal Reserve Bank of St. Louis
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Minutes of the Board of Governors of the Federal Reserve System on
Wednesday, January 24, 1962.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
King
Mitchell
Mr. Sherman, Secretary
Mr. Kenyon, Assistant Secretary
Miss Carmichael, Assistant Secretary
Mr. Fauver, Assistant to the Board
Mr. Hexter, Assistant General Counsel
Mr. Hooff, Assistant General Counsel
Mr. Conkling, Assistant Director, Division of
Bank Operations
Mr. Benner, Assistant Director, Division of
Examinations
Mr. Sprecher, Assistant Director, Division of
Personnel Administration
Mr. McClintock, Supervisory Review Examiner,
Division of Examinations
Discount rates.
The establishment without change by the Federal
Reserve Banks of Boston and Atlanta on January 22, 1962, of the rates on
iiiscounts and advances in their existing schedules was approved unanimously,
Illth the understanding that appropriate advice would be sent to those Banks.
Items circulated to the Board.
The following items, which had
been circulated to the Board and copies of which are attached to these
knutes under the respective item numbers indicated, were approved
UrIalliraously:
Item No.
Letter to the Comptroller of the Currency recomending unfavorably with respect to an application
° organize a national bank at Flushing, New York.
Z
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-2Item No.
Letter to The Fulton County National Bank of
McConnellsburg, McConnellsburg, Pennsylvania,
approving its application for fiduciary powers.
2
Letter to The Central National Bank of Carthage,
Carthage, Missouri, approving its application
for fiduciary powers.
3
Letter to The Vienna Trust Company, Vienna,
LI-
Virginia, approving an investment in bank
Premises.
Letter to the Federal Reserve Bank of Dallas
aUthorizing it to waive the assessment of
Penalties incurred by Winters State Bank,
Winters, Texas, because of deficiencies in
its required reserves.
5
Letter to the Federal Deposit Insurance Corporation regarding the application of Farmers &
Merchants Bank, Marianna, Arkansas, for continuation
deposit insurance after withdrawal from membership
111 the Federal Reserve System.
6
Letter to Bay City Bank & Trust Company, Bay City,
Texas, waiving the requirement of six months' notice
°f withdrawal from membership in the Federal Reserve
System.
7
Letter to the Federal Deposit Insurance Corporation
regarding the application of Bay City Bank & Trust
Company, Bay City, Texas, for continuation of deposit
Insurance after withdrawal from membership in the
Pderal Reserve System.
8
Letter to the Federal Reserve Bank of Cleveland
aPProving the appointment as Federal Reserve Agent's
RePresentatives of Robert P. Schafer at the Cincinnati
Branch and Walter L. Bedel at the Pittsburgh Branch.
9
Of
Fetter to the Federal Reserve Bank of St. Louis approving
the appointment of Dean E. Mayfield as Federal Reserve
Agent's Representative at the Little Rock Branch.
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-3Item No.
Letter to Depositors Trust Company, Augusta, Maine,
approving the establishment of a branch in Skowhegan.
11
Letter to Union Trust Company of Ellsworth, Ellsworth,
Maine, approving the establishment of a branch at
Outer High Street.
12
Letter to The Connecticut Bank and Trust Company,
Hartford, Connecticut, approving the establishment
of a branch in the Elmwood section of West Hartford.
13
Letter to The Chase Manhattan Bank, New York, New
York, approving the establishment of a branch at
9313 Third Avenue, Borough of Brooklyn.
Letter to The Central Trust Company, Cincinnati,
Ohio, approving the establishment of a branch at
3300 Central Parkway, provided that branch operations
conducted at 3129 Spring Grove Avenue are discontinued
simultaneously with the establishment of the new branch.
15
Letter to Bank of Lansing, Lansing, Michigan, approving
the establishment of a branch near South Logan Street
and Holmes Road.
Letter to Union Bank and Trust Company, Grand Rapids,
.Michigan, approving the establishment of a branch at
4530-28th Street, S. E.
17
Letter to Farmers Bank and Trust Company, Blytheville,
Alltansas, approving the establishment of a branch at
106 North Broadway Street.
18
Messrs. Young, Adviser to the Board and Director, Division of
International Finance, Furth, Adviser, Division of International Finance,
and Veret, Attorney, Legal Division, entered the room and Messrs. Conkling
arid Sprecher withdrew from the meeting.
Report on competitive factors (Portland-Brunswick, Maine).
There
had been distributed to the Board a draft of report to the Comptroller of
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the Currency on the competitive factors involved in the proposed merger
Of The First National Bank of Brunswick, Brunswick, Maine, with and
into First National Bank of Portland, Portland, Maine.
As drafted,
the conclusion read as follows:
There appears to be some competition between The First
National Bank of Brunswick and First National Bank of Portland
which would be eliminated by the proposed merger. Approval of
the merger would probably intensify competition in the
Brunswick area.
Governor Mitchell raised the question whether the Board's reports
"competitive factors should not present a net judgment; that is,
'whether the Board should not come to a conclusion one way or the other
rather than to indicate in one sentence that some competition would be
eliminated and in the next that competition would be intensified.
This question led to a general discussion of the problem
involved in evaluating a situation where a proposed transaction would
reduce the number of competing units but where there was at the same
time an indication that the remaining units would compete against each
Other more vigorously.
or
Although it was recognized that the balancing
these considerations might often be difficult, there appeared to be
general agreement with the view that to the extent possible it would
be desirable to arrive at a judgment as to which of these factors
served the greater weight.
Relating this discussion to the instant
ease, several suggestions were made as to the manner in which the conell-lei-on might most appropriately be stated in the light of the facts
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available to the Board.
The report was then approved unanimously in
a form in which the conclusion read as follows:
Although some competition between The First National
Bank of Brunswick and First National Bank of Portland would
be eliminated by the proposed merger, general competition
in the Brunswick area probably would be intensified sufficiently
to outweigh the reduction in the number of banks.
Application of Columbus Junction State Bank (Items 19 and 20).
PUrsuant to the decision by the Board on January 18, 1962, to approve
the application of Columbus Junction State Bank, Columbus Junction,
Ioya, to purchase the assets and assume the liabilities of The Louisa
County National Bank of Columbus Junction, Iowa, there had been
clistributed drafts of an order and statement reflecting that decision.
Agreement having been expressed with a rearrangement of the
Material contained in the summary and conclusion of the statement for
the Purpose of emphasizing factors considered to lend most support to
the decision, the issuance of the order and statement was authorized
sUbject to this rearrangement being made.
Copies of the documents
i8sIled pursuant to this authorization are attached as Items 19 and 20.
Application of Citizens Central Bank (Items 21 and 22).
There
haa been
distributed memoranda from the Division of Examinations and the
Legal Division dated January 18 and January 22, 1962, respectively,
'
l egarding an application by The Citizens Central Bank, Arcade, New York,
to merge with Bank of Delevan, Delevan, New York, under the charter and
title of the applicant, and to operate a branch at the present location
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of Bank of Delevan.
The application had been made to remedy a
situation requiring expeditious action, arising from a "check-kiting"
incident that had depleted the Delevan bank's capital structure of
about $300,000 by an amount estimated at in excess of $200,000.
In its memorandum the Division of Examinations concurred in
the recommendation of the Federal Reserve Bank of New York that the
aPPlication be approved.
The Comptroller of the Currency, the Federal
Deposit Insurance Corporation, and the Justice Department, in reports
to the Board, had expressed the view that the proposed merger would not
have a substantial adverse effect on competition and, in any event, that
the emergency situation must be recognized.
Attached to the Legal Division's memorandum were drafts of an
order and statement that might be used in the event of Board approval
CT the application.
In discussion of the matter, Governor Mills expressed concern
4bout the wording of certain portions of the proposed statement.
While
1344k of Delevan, as a result of the check-kiting incident, had suffered
4 substantial impairment of its capital, the bank was not insolvent.
14Z/ever, it seemed to him that the tone of the proposed statement, as
e emPlified by certain language to which he referred, almost suggested
that Bank of Delevan was insolvent and that its problems would be transMitted to the resulting bank.
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-7After certain changes in the wording of the statement had been
suggested in the light of Governor Mills' comments, the Board approved
unanimously the application of Citizens Central Bank and authorized the
issuance of an order and statement in form reflecting the changes in the
statement that had been agreed upon.
Copies of the order and statement,
as issued, are attached as Items 21 and 22.
Mr. Thomas, Adviser to the Board, entered the room at this point
anR1 Messrs. McClintock and Veret withdrew from the meeting.
Proposed amendment to Bretton Woods Agreements Act.
There had
teen distributed under date of January 23, 1962, with a covering
OeMorandum from Mr. Young, a draft of letter to the Bureau of the
BUdget replying to a request for the Board's views on a draft bill "To
aMend the Bretton Woods Agreements Act to authorize the United States
to Participate in loans to the International Monetary Fund to strengthen
the international monetary system."
The draft letter would indicate that
the Board favored the proposed legislation.
As pointed out in the memorandum, the proposed bill had been
discUssed and approved by the National Advisory Council on International
14°neta17 and Financial Problems, the membership of which included the
Chairman of the Board of Governors, ex officio.
After Mr. Young had commented on the proposed bill, Chairman
Martin stated that it involved a situation that had concerned him for
time.
He realized it was difficult for the other members of the
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Board to express a view on matters acted upon by the National Advisory
Council that may have involved both political and economic elements.
One possibility, in this instance, might be to reply to the Bureau of
the Budget along the lines that the National Advisory Council, of
Ighich the Chairman of the Board was a member, had recommended the
adoption of the proposed bill and the Board of Governors had no comments
to offer.
Such a reply would put the complete responsibility on the
Chairman rather than on the Board.
Governor Mills stated that he, too, was concerned about this
Problem.
Under the present arrangements, the Chairman of the Board,
48 a member of the National Advisory Council, was called upon to indicate his personal approval or disapproval of some contemplated action.
Then, at a subsequent date, the legislative implementation of the
Council's decision would come before the Board for consideration.
MUs, the Chairman of the Board, as a member of the Council, might be
Placed in an embarrassing position if the other members of the Board
shotad be disinclined to comment favorably on the legislation recommended
hY the Council.
Insofar as the present draft bill was concerned, he
1/ould favor it wholeheartedly.
However, if there was advance notice
that a matter was coming before the Council and if the subject was one
that could be discussed outside that group, he wondered whether it would
be Practicable to have some informal discussion by the Board of the
Particular proposal.
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Chairman Martin responded that he did not think it would be
Practicable to follow such a procedure in view of the many matters
that were constantly being considered by the Council, some of which
were in process of formulation and negotiation over an extended period
Of time before any action was taken and some of which never developed
beyond the realm of ideas.
Thus, in the early stages of discussion
by the Council, it was not always apparent whether any proposed legislation would result.
After commenting on the long history of the present proposal,
Chairman Martin said he did not know what procedure the other members
°f the Board might wish to follow in this instance.
He thought it would
be unfortunate if the Board were to repudiate the position taken by the
Chairman as a member of the National Advisory Council.
He would be glad,
ct course, to have the Board indicate that it was favorable to the proPosed legislation.
On the other hand, he could understand that there
raight be some doubt, in the circumstances, as to how the members of the
13°8-rd might want to express themselves.
There followed references to draft legislation some time ago
that had presented a similar problem, and to the type of reply that the
oard had made on occasions in the past when the Budget Bureau had
leTlested views on legislative proposals reflecting recommendations of
'
the National Advisory Council.
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Commenting on the current proposal, Governor Mitchell said he
did not feel well informed.
He had seen news accounts regarding it but
had received no other briefing on the subject.
If, however, the Board
Should decide to indicate that it would favor the proposed legislation,
he suggested that it might be appropriate for the Board's letter to
mention reasons for that position.
As the letter was drafted, the
Board was merely saying "aye" to the proposal.
Mr. Young said the International Finance Division would endeavor
to take steps in the future to keep members of the Board better informed
On the progress of matters of this kind, to the extent that the circumstances surrounding the proposal might permit.
He added that the
Division could furnish each member of the Board with a copy of the
8Pecial report on the present proposal that had been prepared by the
National Advisory Council.
After further discussion, it was agreed that the International
'inance Division would have this document distributed to the members of
the Board, together with alternative drafts of reply to the Budget Bureau,
°Ile of which would be prepared in the light of the approach suggested by
GoVernor Mitchell.
Governor Robertson commented, as a matter of general procedure,
that he thought the Board should not feel compelled to submit views to
the Budget Bureau on matters outside the scope of its responsibilities.
Ile believed the Board should act with discretion on such matters.
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Should not place the Chairman, as a member of the National Advisory
Council, in an embarrassing position, certainly, unless a clear
difference of opinion was involved on a matter within the scope of
the Board's responsibilities.
Messrs. Young and Furth then withdrew from the meeting.
Interest payable on savings deposits in New York State.
Pursuant
to Board action on January 10, 1962, a letter was sent to the Federal
Reserve Bank of New York responding to a question as to the maximum
sate of interest that could be paid by national banks located in New
'
York State during the first 12 months of a savings deposit in the light
c't section 24 of the Federal Reserve Act, which prohibits a national
bank from paying a rate of interest on time and savings deposits higher
than that permitted for "State banks or trust companies" under the law
the State in which the national bank is located.
The Board had in
the past construed this provision as meaning that a national bank could
not Pay more than the maximum rate fixed for any class of State bank,
but that by the same token a national bank could pay as high a rate as
that fixed for any class of State bank, including mutual savings banks.
The question as to the maximum rate of interest national banks
cailla pay in the State of New York arose in view of a State regulation
1141ch permitted State commercial banks to pay
4 per
cent only for the
1)ersiod beginning after the end of the first year of a savings deposit
a.na limited them to a maximum of 3-1/2 per cent for the first year.
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However, by regulation, State mutual savings banks were permitted to
Pay dividends at a maximum rate of 3-3/4 per cent for the first year,
thus providing a differential in favor of savings banks.
In its letter of January 10, 1962, to the Federal Reserve Bank
Of
New York the Board stated that a national bank located in New York
State could pay interest on savings deposits at a rate not in excess
Of that permitted by the State regulation for mutual savings banks,
"e-, 3-3/4 per cent during the first year of a savings deposit; that
a national bank could pay only up to 3-1/2 per cent currently but could
credit an additional 1/4 per cent for the year after the funds had
reMained on deposit for a year.
In effect, this meant that State
OUtual savings banks and national banks could both pay up to the same
ximum rate--3-3/4 per cent--for the first year of a savings deposit.
After the first year, national banks would be limited to the 4 per cent
Mutmum prescribed by the Board, while mutual savings banks were subject
t° no limitation under the State regulation.
Thus, savings banks would
have no immediate operative competitive advantage over national banks
in soliciting new savings deposits.
In a letter dated January 17, 1962, which had been distributed
to members of the Board, Mr. Oren Root, Superintendent of Banks for New
.c)11k, urged the Board to take whatever action it might legally take in
(11%1er to limit national banks to the same maximum rate as that fixed for
State commercial banks.
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-13At Chairman Martin's request, Mr. Hooff reviewed the background
of the problem and suggested that the Board might wish to consider any
one of several courses of action, including the following: (1) rescind
its interpretation permitting member banks to pay an additional interest
for the year after savings deposits had remained on deposit for any 12
months; (2) reverse the interpretation with respect to New York State
°11.11r; (3) amend Regulation Q so as to fix the maximum rate payable on
savings deposits as the (a) maximum prescribed by the Board, or (b) the
maximum prescribed under State law for State commercial banks, whichever
Vas less.
There ensued a general discussion of the effect on the situation
in New York State of the position stated in the Board's January 10 letter.
It was brought out that the Board's position, which had not been publicized
to date, not only had a bearing upon the competitive relationship between
national banks and mutual savings banks but also the relationship between
Ilational banks and State member commercial banks.
With respect to the
latter, there would, of course, be no problem unless national banks
should decide to announce a 3-3/4 per cent effective rate of interest
tor the first year of a savings deposit rather than the 3-1/2 per cent
rate permitted commercial banks by New York State regulations.
The discussion brought out that no problem appeared actually to
eXist in New York State at the present time.
So far as was known, no
rultional bank had announced its intent to pay a rate of interest on
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savings deposits higher than the rate permitted by State regulation to
be paid by State commercial banks.
It was suggested that perhaps the
national banks had, in fact, assumed that they were prevented from
Paying a higher rate.
Thus, Mr. Root's apprehension appeared to stem
from a situation that might develop rather than any existing problem.
It was also brought out that Mr. Root's concern apparently had to do
more with the position of national banks vis-a-vis mutual savings banks
than the position of national banks vis-a-vis State commercial banks.
The foregoing point was clarified by comments made by Governor
Balderston regarding a telephone conversation that he had had with Mr.
Root at the Board's request following the January 10 decision.
From
Mr. Root's statements, he gathered that Mr. Root was rather obviously
under pressure from the mutual savings banks.
Mr. Root did not refer
to the distinction between national banks and State commercial banks;
neither was this point apparently of as much concern to First Vice
resident Treiber of the New York Reserve Bank as the competitive
Position of the mutuals.
In a further comment on his conversation with Mr. Root, Governor
laalderston said he had made it clear that in the view of the Board a
Westion of interpretation of the statute rather than an exercise of the
13441rd's discretion was involved.
He had told Mr. Root that while the
l 'Qlard. would be glad to hear him on the subject, a trip to Washington for
that Purpose might be futile because the Board could not change the law.
That
point was made definite, and Mr. Root said that he understood.
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-15Governor Robertson suggested that the question seemed to him
to come down to whether the New York State Banking Board would want to
increase the maximum permissible rate of interest for mutual savings
banks in order to give such banks the competitive advantage over
commercial banks that the State Superintendent seemed to think they
should have.
He thought the Board might reply to Mr. Root that the
question had been considered carefully but the Board had come to the
conclusion that any alleviating action should be taken by the New York
State Banking Board.
Chairman Martin pointed out that Mr. Root in his January 17
letter had indicated his willingness to discuss the problem with the
Board.
Accordingly, Chairman Martin inquired whether it might not be
sPPropriate to invite Mr. Root to come to Washington to talk with
members of the Board.
After further discussion, agreement was expressed
with such a procedure, and it was understood that Governor Balderston
14.°Uld call Mr. Root and invite him to meet with the Board for discussion
at
lunch on January 30.
Governor Mitchell said he would suggest that the Board's attitude
be friendly but firm; and Governor Robertson said he felt that the Board
should not indicate uncertainty as to its position.
Governor King said
he understood the Board's primary responsibility to be to member banks.
It did not appear that there was any particular question at present on
the Part of the member banks.
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This could develop, but thus far the
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Problem had to do principally with the mutual savings banks, and they
were not members.
He questioned whether it was necessary for the Board
to give answers until specific questions were raised by or on behalf of
member banks.
Mr. Hooff brought out that there had as yet been no discussions
with the Comptroller of the Currency.
Section 24 of the Federal Reserve
Act pertains solely to national banks, and conceivably the Comptroller
could take a position of questioning any interpretation by the Board so
far as it related to section 24.
The meeting then adjourned.
Secretary's Notes: On January 23, 1962,
Governor Shepardson approved on behalf of
the Board the following items:
Memorandum from the Division of Administrative Services recommending that leave without pay be granted to Elsie E. Anderson, Charwoman
1/1 that Division, for a period not to exceed 30 days, beginning with four
hours on January 22, 1962.
Letter to the Federal Reserve Bank of Atlanta (attached Item No. 23)
Proving the appointment of Robert Shealy Willingham, Jr., as assistant
eXaminer.
Governor Shepardson noted on behalf of the Board
on January 23, 1962, a memorandum from the Division
of Administrative Services dated January 19, 1962,
stating that the name of Lettie Reddick, Charwoman
in that Division, would be removed from the Board's
payroll records effective February 1, 1962, her
application for disability retirement having been
approved. Ityas noted that the disability annuity
would be retroactive to October 25, 1961.
Secret
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44,0
BOARD OF GOVERNORS
OF THE
Item No. 1
1/24/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCIC
TO THE BOARD
January 24, 1962
Comptroller of the Currency,
Treasury Department,
Washington 25, D. C.
Attention:
Mr. Hollis S. Haggard,
Deputy Comptroller of the Currency.
Dear Mr. Comptroller:
Reference is made to a letter from your office
dated April 13, 1960, enclosing copies of an application to
organize a national bank at Flushing, Queens County, New York,
and requesting a recommendation as to whether or not the
application should be approved.
A report of investigation of the application made
bY an examiner for the Federal Reserve Bank of New York indicates that capital would be adequate. Management of the proPosed bank is not considered acceptable as the proposed
at
executive officer does not appear to be qualified and
g
leasin
from
tially
substan
t
benefi
may
least one director
ts
prospec
s
earning
Future
bank.
d
quarters to the propose
are marginal and there has been no demonstrated need for
Accordingly, the
additional banking facilities in Flushing.
Board of Governors does not feel justified in recommending
favorable consideration of the application.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 2
1/24/62
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 24, 1962
Board of Directors,
The Fulton County National Bank of McConnellsburg,
McConnellsburg, Pennsylvania.
Gentlemen:
The Board of Governors of the Federal Reserve System
has given consideration to your application for fiduciary
Powers and grants The Fulton County National Bank of
McConnellsburg authority to act, when not in contravention of
State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee,
receiver, committee of estates of lunatics, or in any other
fiduciary capacity in which State banks, trust companies, or
other corporations which come into competition with national
banks are perillitted to act under the laws of the State of
Pennsylvania. The exercise of such rights shall be subject to
the provisions of Section 11(k) of the Federal Reserve Act and
Regulation F of the Board of Governors of the Federal Reserve
System.
A formal certificate indicating the fiduciary powers
that your bank is now authorized to exercise will be forwarded
in due course.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 3
1/24/62
ADOSIESS arricim. CORRESPONDENCE
TO THE BOARD
January 24, 1962
80ard of Directors,
Central National Bank of Carthage,
varthage, Missouri.
Gentlemen:
The Board of Governors of the Federal Reserve System has
given
t
consideration to your supplemental application for fiduciary
and grants you authority to act, when not in contravention
()r otate or local law, as registrar of stocks and bonds, guardian
or ?states, assignee, receiver, committee of estates of lunatics,
eo„,411 any other fiduciary capacity in which State banks, trust
41T5nies„ or other corporations which come into competition with
al banks are permitted to act under the laws of the State of
The exercise of such rights shall be subject to the
4-‘%1118c)urti
716e4
P oo-Q-Loris of Section 11(k) of the Federal Reserve Act and Regulation
4- the Board of Governors of the Federal Reserve System.
In addition to the fiduciary powers herein authorized,
the
WAS
granted aathority, on June 3, 1915, to act as trustee,
uank
elx:_
ceutor and administrator,
A formal certificate indicating the fiduciary powers that
YOlir
tw, 'Dank is now authorized to exercise will be forwarded in due
rse
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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BOARD OF GOVERNORS
OF THE
Item No. 4
FEDERAL RESERVE SYSTEM
1/24/62
WASHINGTON 25. D. C.
ADDRESS OPPICIAL CORRESPONDENCE
TO THE SOAR°
January 24, 1962
Board of Directors,
The vienra Trust Company,
Vienna, Vire.niar,
Gentlemen:
The Board of Governors of the Federal Reserve
System approve, urder the provisf.ons of Section 24A of
the Federal Reserve Act, an investment of $450,000 in
bank premises by The Vienna Trust Compamy, Vienna,
Virginia, for the purpose of construction of bank premises
for the bank's branch at tbLe intersection of Maple
Avenue and Berry Street in Vienna, larginia.
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
OF THE
Item No.
FEDERAL RESERVE SYSTEM
5
1/24/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO TN.E. BOARD
tzt.5%
,
ti4407
,,
‘"
January 24, 1962
Watrous H. Irons, President,
rederal Reserve Bank of Dallas,
Station K,
Dallas 2, Texas.
bear Mr. Irons:
This refers to your letter of January 11, and to Mr. Murff's
tele
Al gram of January 16, 1962, regarding penalties of $135.54 and
L?3.78 incurred by the Winters State Bank, Winters, Texas, on
i7,41eiencies of 15.9 and 12.2 per cent, respectively, in its required
;serves for the computation periods ended December 27, 1961 and
'
4411arY 10, 1962.
It is noted that the President of the bank stated that in
ition to the usual Christmas rush, there was some saddening inzo Position in his family and personnel problems at his bank; as
:
4 as the matter of deficient reserves came to his attention, he
15017411ged to remit funds to restore his reserves but a substantial
1,?tion of his funds was in the form of unavailable exchange which
nOt finally placed to his credit until January 9; his bank is
1i run institution; and that it has a remarkably good reserve
e.
ele°11nt record, with no penalty assessed against it during the past
'
even years,
theIn the circumstances, and in view of your recommendation,
or 64°0ard authorizes your Bank to waive assessment of the penalties
:
4 135.54 and $103.78 for the periods ended December 27, 1961 and
IlarY 10, 1962.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No. 6
FEDERAL RESERVE SYSTEM
1/24/62
WASHINGTON 25, D. C.
ADDRESS
arricum. CORRESPONDENCE
TO THE BOARD
January 240 1962
The Honorable Erie Cooke, Sr., Chairman,
Federal Deposit Insurance Corporation,
Washington 25, D. C.
Dear Mr. Cocket
Reference is made to your
1961, concerning the application of
Marianna, Arkansas, for continuance
after withdrawal from membership in
8Yetek.
letter of December 29,
Farmers & Merchants Bank,
of deposit insurance
the Federal Reserve
No corrective programs which the Board of Governors
believes should be incorporated as conditions to the contin,
1:1_ance of deposit insurance have been urged upon or agreed to
IV' the bank.
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
OF THE
Item No. 7
FEDERAL RESERVE SYSTEM
1/24/62
r,
WASHINGTON 25. D. C.
ADDRESS OPFICIAL CORRESPONDENCE
TO THE BOARD
\‘,40410F,
'
4401.4
'
January 24, 1.962
Board of Directors,
Bay City Bank & Trust Company,
Bay City, Texas.
Gentlemen:
The Federal Reserve Bank of Dallas has forwarded
to the Board of Governors your letter dated December 14,
1961, together with the accompanying resolution dated
December 13, 1961, signifying your intention to withdraw
from membership in the Federal Reserve System and requesting
watver of the six months' notice of such withdrawal.
In accordance with your request, the Board of
Governors waives the requirement of six months' notice of
2
1.1thdrawal. Upon surrender to the Federal Reserve Bank of
uallas of the Federal Reserve Bank stock issued to your
institution, such stock will be canceled and appropriate
efund will be made thereon. Under the provisions of
8ecti0n 10(c) of the Board's Regulation HI your institution
111AY accomplish termination of its membership at any time
Ilithin eight months from the date the notice of intention
t45/ withdraw from membership was given.
It is requested that the certificate of membership
be returned to the Federal Reserve Bank of Dallas.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
Awe
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 8
1/24/62
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 24, 1962
The Honorable Erie Cocke, Sr., Chairman,
Federal Deposit Insurance Corporation,
Washington 25, D. C.
Dear Mr. Cocke:
Reference is made to your letter of January 9,
1962, concerning the application of Bay City Bank &
deposit
Trust Company, Bay City, Texas, for continuance of
Federal
the
in
ip
membersh
from
wal
withdra
insurance after
Reserve System.
No corrective programs which the Board of
Governors believes should be incorporated as conditions
to the continuance of deposit insurance have been urged
Upon or agreed to by the bank.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
265
BOARD OF GOVERNORS
OF THE
Item No. 9
FEDERAL RESERVE SYSTEM
1/24/62
WASHINGTON 25, D. C.
ADDRCEBB
orricIAL
CORRE•PONOBNCL
TO Tilt BOARD
January 24, 1962
Joseph B. Hall, Chairman,
tir•ederal
of Cleveland,
Reserve Bank
Cleveland 1, Ohio.
44r Mr. Hall:
of
In accordance with the reauest contained in your letter
as
ments
pe,cLrY 10, 1962, the Board of Governors approves the appoint
at
Schafer
th'Ieral Reserve Agent's Representatives of Mr. Robert P.
B e Cincinnati Branch and of Mr. Walter L. Bedel at the Pittsburgh
ranch of the Federal Reserve Bank of Cleveland.
This approval is given with the understanding that Messrs.
6eQ-Ler and Bedel will be solely responsible to the Federal Reserve
and the Board of Governors for the proper performance of their
Federal
Remles, except that, during the absence or disability of the
be erve Agent or a vacancy in that office, their responsibility will
'
to the Assistant Federal Reserve Agent and the Board of Governors.
Sehno
as
When not engaged in the performance of their duties
?ede
ntatives, Messrs. Schafer and Bedel
inay ral Reserve Agent's Represe
Reserve Agent and the Vice
Federal
the
pr ) with the approval of
roelident in charge of their respective Branches, perform such work
their duties as
? et e Branches as will not be inconsistent with
ral Reserve Agent's Representatives.
Bedel are fully
It will be appreciated if Messrs. Schafer and
the
etarrIted of the importance of their responsibilities as members of
of
ance
mainten
of the Federal Reserve Agent and the need for
these
e
1.e Pendence from the operations of the Bank in the discharge of
QPonsibilities.
the approval by the
It is noted from your letter that, with
tokr,
and Bedel,
Schafer
of Governors of the appointments of Messrs.
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Federal Reserve Bank of St. Louis
206
kr,jail
2
the
to
usual Oath of Office forms will be executed and forwarded to the
ard together with advice of the effective dates of their appointments.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVEFNORS
0****
e W
0t ,
0
OF THE
.
i
4
FEDERAL RESERVE SYST7M
WASHINGTON 25. D. C.
Item No. 10
1/24/62
*DORIES. OIFICIAL 0011011019PONOCNOIL
TO THIL BOAR:,
444*
January 24, 1962
Plerre B. McBride, Chairman,
i)Et7811. Reserve Bank of St. Touis,
St.vi 8°4 442)
Louis 661 Missouri.
nskr !dlr.
McBride:
Jarkar
In accordance with the request contained in your letter of
D Y 11, 1962, the Board of Governors approves the appointment of
14ittieari If'. Mayfield as Federal Reserve Agent's Representative at the
'
0 Rock Branch to succeel Mr. Howard J. Jensen,
This approval is given with the undarstanding that
kid „Meld will be solely responsible to the Federal Reserve Agent
Board of Governors for the proper performance of his duties
ItegT, that, during the absence or disability of the Federal Reserve
r a vacancy in that office, his responsibility will be to the
a-rit Federal Reserve Agent and the Board of Governors.
e,,,nte
When not engaged in the performance of his duties as Federal
thei e Agent's Representative, Mr. Mayfield may, with the approval of
4cit:deral Reserve Agent and the Vice President in charge of the Little
11:•
1 th!:alleil, perform such wo7k for the Branch as will not be inconsistent
Ll'a duties as Federal Reserve Agent's Representative.
th
It will be appreciated if Mr. Mayfield is fui4informed of
ts
1111
c!1(440
rtance of his responsibilities as a member of the staff of the
wle 0,- Reserve Agent and the need for maintenance of independence from
l'erations of the Bank in the discharge of these responsibilities.
llokrd
It is noted from ycur letter that, with the approval by the
°f Governors of Mr. Mayfield's appointment, the usual Oath of
tor"
m4
,
f017fts will be executed to be effective February 1, 1962, and
med to thus Board.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e—tr CD
4.0(3
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 11
1/24/62
ADDRESS orriciAL CORRESPONDENCE
TO THE MOARD
48.tatst
January 24, 1962
Board of Directors,
Depositors Trust Company,
Augusta, Maine.
Gentlemen:
The Board of Governors of the. Federal Reserve
System approves the establishment of a branch by Depositors
Trust Company in the vicinity of the intersection of
Madison Avenue and Beech Street, Skowhegan, Somerset
County, Maine, 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.
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No. 12
1/24/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS
arriasAL
CORRESPONDENCE
TO THE •OAND
January 24, 1962
Board of Directors,
Union Trust Company of Ellsworth,
Ellsworth, Mains.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by Union Trust Company
of Ellsworth, Ellsworth, Maine, of a branch in a shopping
center at Outer High Street, Ellsworth, Maine, 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.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ri"
BOARD OF GOVERNORS
OF THE
Item No. 13
1/24/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS orrIcIAL CORRESPONDENCE
TO TelE BOARD
January 24, 1962
Board of Directors,
The Connecticut Bank and Trust Company,
Hartford, Connecticut.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishmert by
The Connecticut Bank and Trust Company, Hartford,
Connecticut, of-: a'branch at 1159-1159a and 11611163 New Britain Avenue, in the Elmwood section
of West Hartford, Connecticut, 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.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
FEDERAL RU3ERVE SYSTEM
Item No. 14
1/24/62
WASHINGTON 25. D. C.
ADDRESS
orriciAL
CORRESPONDENCE
TO THE BOARD
January 240 1962
Board of Directors,
The Chase Manhattan Bank
1414314 York, New York.
Gentlemen:
The Board of Governors of the Federal Reserve
81ratem approvss the establishment by The Chase Manhattan
Bank, New York, New Yurk, of a branch at 9313 Third
Avenue, Borough of Brooklyn, Rings County, New York,
Provided the branch is established within six months.
from the date of this letterr,
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
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 15
1/24/62
AOONI011 orrecam. CORRICIMPONDIENCIL
TO MC SIOARD
January 24, 1962
Board of Directors,
The Central Trust Company,
Cincinnati, Ohio.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of a branch at 3300
Central Parkway, Cincinnati, Ohio, by The Central Trust
Company, provided the branch is established within one
Year from the date of this letter, and provided further
that branch operations now conducted at 3129 Spring Grove
Avenue are discontinued simultaneously with the establishment of the above branch,
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
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 16
1/24/62
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 24, 1962
Board of Directors,
Bank of Lansing,
Lansing, Michigan.
Gentlemen'
The Board of Governors of the Federal Reserve
System approves the establishment of a branch by Bank
of Lansing, Lansing, Michigan, near the northwest corner
of South Logan Street and Holmes Road, Lansing, Michigan,
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.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item lib. 17
1/24/62
FEDERAL RESERVE SYETEM
WASHINGTON 25. D. C.
ADDRESS
orriciAL
CORRESPONDENCE
TO THE BOARD
January 240 1962
Board of Directors
Union Bank and Trus
s+, Company,
Grand Rapids, Michigan.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of Chicago, the Board of Governors
of the Federal Reserve System approves the establishment
Of a branch at 1530-28th Street, S.E., Grand Rapids,
. 1_1chigan, by Union Bank and Trust Company, provided the
uranch is established within one year from the date of
this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
0 -1
BOARD OF GOVERNORS
0011****
4 wool,
OF THE
Item No. 18
1/24/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
4,4
ADORCE113 OFFICIAL CORRESPONDENCE
44
TO THE BOARD
January 240 1962
Board of Directors,
Farmers Bank and Trust Company,
Blytheville, Arkansas.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment by Farmers
Bank and Trust Company, Blytheville, Arkansas, of a
branch at 106 North Broadway Street, Blytheville,
Arkansas, provided the branch is established within
six months from the date of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- I
,f 0
Item No, 19
1/24/62
UNITED STATES OF ATIERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
VASHINGTON, D. C.
.101,
Arlo
NO
OS
the Matte'
, of the Application of
L111111111S JUNCTION STATE BANK,
'4)1,1iMBUS JUNCTION, IOWA,
0,
:il,4'aPProval of acquisition of assets of
c4 Louisa County National Bank of
°1141tus Junction, Iowa
•••
ORDER APPROVING APPLICATION UNDER
SECTION 18(c) OF FEDEPAL DEPOSIT INSURANCE ACT
There has come before the Board of Governors, pursuant to
ec'tion 18(o) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)),
4Plication by Columbus Junction State Bank, Columbus Junction, Iowa,
f°14 he
Board's prior approval of the acquisition by Columbus Junction
Stat
e Bank of the assets of The Louisa County National Bank of Columbus
-", Iowa,
and the assumption of the liabilities of the latter Bank.
Pursuant to said section 18(c), notice of the proposed acquisition
Of assets and assumption of liabilities, in form approved by the
tn
-arri
of Governors, has been published and reports on the competitive
°I's involved in the proposed transaction have been furnished by the
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2Cr4Ptroller cf the Currency, the Federal Deposit insurance Corporation,
arid the Department of Justice and have been considered by .he Board,
IT Is
ORDERED, for the reasonc set forth in the Board's
of this date, that said application be and hereby is granted,
41/li the proposed acquisition of assets and assumption of liabilities
he al14, herel)y are approved, provided that said acquisition and assumpticm
-2Pall not be consummated (a) sooner than seven calendar days after
the date of this Order or (b) later than three months after said date.
Dated at Uashingtcn D. C., this 2itth day of Janux:y, l962°
By order of the Board of Governors.
Voting for this action: Unanimous, with all members present.
(Signed) Merritt Sherman
1110111.M....M11111.1.
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVLRNORS
Item No. 20
1/24/62
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION DY COLUMBUS JUNCTION STATE BANK
FOR APPROVAL OF THE ACQUISITION OF THE ASSETS OF
TIE LOUISA COUNTY NATIONAL BANK OF COLUMBUS JUNCTION, IOWA
STATEMENT
Columbus Junction State Bank, Columbus Junction, Iowa
("State Bank"), with total deposits of $3.5 million, has applied,
P11.1"3uant to section 18(c) of the Federal Deposit Insurance Act, for
the Boardts approval of the acquisition by State Bank of the assets
The Louisa County National Bank of Columbus Junction, Iowa ("National
118.1/k")3 with total deposits of $1.6 million, and its assumption of the
cl Pocit liabilities of National Bank. State Bank) which operates no
brn.,
'"ches, would maintain its present office and National Bank's only
°frice Tflould be
closed,
Under the law, the Board is required to consider (1) the
itat,
--"c al history and condition of each of the banks involved, (2) the
aecr
.
''acY of its capital structure, (3) its future earnings prospects,
(4)
the general character of its management, (5) whether its corporate
are consistent with the purposes of the Federal Deposit Inatiretc
e Act, (6) the convenience and needs of the community to be
eci, and (7) the effect of the transaction on competition (including
te nckency toward monopoly), The Board may not approve the
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
vt,
qanse.ction unless, after considering all these factors, it finds the
t47azI8acti0n to be in the public interest.
For convenience, the first five of these factors may be contopther as 'thanking factor5r
The sixth and seventh factors
consid,x-ed separately.
t9ankra factofs, - The financial history and condition of
"ate, Bank are considered satisfactory.
Its capital structure is
13tr°11g; its management is competent; and its earnings have been and
1.1
'
116. continue to be favorable, especially with the use of the additi°11a1 loanable funds that would be acquired from National Bank,
National Bank's condition shows a strong capital account,
151t a low earnings record due to its small volume of loans and relativelY large investment in government securities. Prospects for imenent are limited by a very conservative and nonaggressive
Pl
rnallaSeraent policy which has failed to respond to competition from
State Bank; and low earnings, resulting in inability to attract the
t°P4nel necessary to improve management, adds to National Bank's difficliltttis. Consummation of the proposal would provide a solution for
the
problems of management and lending policy: and thereby assure
14°Ise serviceable banking facilities for the community. There is no
elria
-11ce that the corporate powers of the banks are or would be inconZi
at nt with the Federal Deposit Insurance Act.
Consideration of the banking factors, therefore, lends substall .
tlal support to this application.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
r.;;
eCgi
_3_
Convenincye and needs of the commilnity to he served, -
Columbus
kaction is a town of about 1;000 ponulatian located in the agricultural
Nion of southeastern Iowa, The immediat3 trade area includes an additi°1-Lal 3.560 persons°
National Bark has done little to meet the borrow
feeds e the area, as is indicated, by its cmall volume of loans (only
'
173°l p
cent of total assets) and its apparent failure actively to
trtl)ete with State Bank.
In fact, there is evidence that this small com-
ity may well be more soundly and adequately served by the resulting
bk
alone; particularly as the major banking need seems to originate
l'rttil the adjacent farm areas with access to other towns and other banks.
FinallY, it is indicated that the resulting bank's progressive management
Utilize the additional loanable funds which it would acquire to
lq)and its operations.
large extent serve the same
CompetitionG - Both banks to a
'
41 ea; from 90 to 95 per cent of their deposits and loans originate in
the Same area and the banks have 150 common customers. The evidence
1141tc.tes, however, that there is no strong competitive situation bet
'
l"
le
the two banks. Both have for years charged the same rates on loans
aria services and have paid the same interest on time deposits. National
atkl
8
small loan portfolio suggests that it has functioned largely as
clePository for its customers' funds.
14111 over half of each bank's loans either are made to farmers
ar
e secured by farm real estate. This business, derived from outside
the ,
'
0vn of Columbus Junction, has access to 10 other banking institution .
8 in six other towns located from 9 to 21 miles from Columbus
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Junction.
Among these are two much larger banks in Muscatine, Iowa, a
larger community 21 miles from Colugibus Junction. These facilities,
easdAY rea3hed from the farm areas from which the Columbus Junction
b
draw their major buslmess, appear to provide more vigorous
c°11.Petitio1 to State Bank than does Natioaal Bank. The positive beneIts to the cerimmity would more than offset such existing competition
ae
'would ba elimlnated by this proposed aoquisition.
Summary and :;onclusion. - Although only one rather than two
b°11/c9 will exist in Colum'ous Juaction after the acquisition, the small
crrulknity as well as the larger surrounding farm area apparently will be
quately served by the remaining State Bank and the numerous banks in
°tF*r nearby communities. Competition betreen the enLirged State Bank
441 two la/ger banks 21 miles distant may well he enhanced as a result
the acquisition.
Moreover, the proposed acquisition of National Bank by State
would solve National Bank's problem of obtaining competent manageThe more aggressive State Bank would obtain additional loanable
NV1A
which National Bank has been unable or unwilling to utilize effec-
tivel
-Y, and therefore earnings prospects should be improved and the needs
the
community better met.
For these reasons the Board finds that the proposed acquisition
or a
sets and assumption of liabilities would be in the public interest.
tj
raiar
y
24
P
1962
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Federal Reserve Bank of St. Louis
Item No. 21
1/24/62
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
In the matter of the application of
'HE CITIZENS CENTRAL BANK,
AlICALE, NET,
'YORK,
aPproval of merger with
ank of Dele.van, Delevan, New York
41.
4.•
4.•
1.0
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to
4ction 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)),
44 application by The Citizens Central Bank, Arcade, New York, for
the Board's prior approval of the merger of the Bank of Delevan,
1)elevan, New York, with and into The Citizens Central Bank under the
el -ter and title of the latter.
Notice of proposed merger, in form approved by the Board
ot G
°7ernors, has been published, and the reports on the competitive
t4t°1's involved in the proposed transaction have been furnished by
the 0
°N3tro11er of the Currency, the Federal Deposit Insurance
C°I.P°ration, and the Department of Justice, pursuant to the provisions
°t 8ecti0n 18(c) prescribing ten calendar days as the period for such
-e and the furnishing of such reports when an emergency exists
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
?<wk.
-2l'equirihg expeditious action. The reports so furnished to the Board
have been considered by it.
IT IS ORDERED, for the reasons set forth in the Boardts State-.
Dlent of this date, that said merger be and hereby is approved, provided
that said merger shall be consummated not later than three months after
the date of this Order.
Dated zvt, Vashington„ D. C., this 24th day of January, 1962.
By order of the Board of Governors.
Voting for this actionl Chairman Martin; and
Governors Balderston, Mills, Robertson, King,
and Mitchell.
Absent and not voting:
Governor Shepardson.
(Signed) Merritt Sherman
Merritt Sherman
Secretary
(841)
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Federal Reserve Bank of St. Louis
e:vc,.)1
BOARD OF GOV2RNORS
Item No, 22
1/24/62
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION OF THE CITIZENS CENTRAL BANK
FOR APPROVAL TO 41411Gii] WITH
BANK OF DELEVAN
STATEMENT
The Citizens Central Bank, .Arcade, New York ("Arcade Bank"),
Illth total deposits of $12.7 million, has applied, pursuant to sec-
t4II 18(c) of the Federal Deposit Insurance Act, for the Boardts ap.
1)117a1 of the merger of that bank and the Bank of Delevan, Delevan,
11e14 12.
4*()rk ("Delevan Bank"), with total deposits of $3.4 million. Under
the
Flell of Merger, the banks would merge under the charter and title
41'eede; and the single office of Delevan would become a branch of
ArtnA
"e) the total banking offices of which would be thereby increased
3 to 4,
The application was made to remedy a situation, requiring
e Pedif.
-lous action, arising from a "check-kiting" incident that
ceted Delevan Bankts capital structure of atout 8300,000 by an
4r'c'kInt
estimated in excess of $200,000.
Therefore, as indicated in
tilS to
erdts Order of approval of this date, action on the application
b _en
u expedited.
Under the law, the Board is required to consider (1) the
nrsilal history and condition cf each of the banks involved, (2) the
decna,
'gc;Nr of its capital structure, (3) its future earnings prospects,
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Federal Reserve Bank of St. Louis
(4) the general character of its management, (5) whether its corporate
Pcliers ave consistent with the purposes of the Federal Deposit Insurance Act, (6) the convenience and needs of the community to be served,
and (7) the effect of the transadtion on competition (including any
terincy toward monopoly). The Board may not approve the transaction
after considering all these factors, it finds the transaction
t° b= in the public interest.
For convenience, the first five of these factors may be
e°nsf.dered together as 'banking factors". The sixth and seventh
factors are considered separately°
Bankinr Factors- - The financial history and condition of
0,•••••N.P
••••••••••....••/•
Al c'ade Dank are satisfactory, although its earnings are only fair because
'
laqe proportion of its deposits are time deposits. Arcade Bank's
caPital structure is adequate, and its management is considered to be
com
Petent. These attributes would appear to hold true generally for
the continuing bank, which would operate under Arcade's managements and
the caPital of which would seem reasonably adequate in the circumstances.
televan Bank has had a favorable growth in deposits and, until the recent
adversity, its condition and earnings were regarded as fairly satisfactory.
The,.
-e is no evidence that the corporate powers of the banks are or would
be
'consistent with the Federal Deposit Insurance Act,
Consideration of the banking factors and the special circum-
tancee strongly support approval of the merger°
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Federal Reserve Bank of St. Louis
Convenience and needs of the communities to be served. ---
4Cade (population:
1,930) is located about
45
miles southeast of
1311110 and six miles northeast of Delevan, in a growing area with
4 Population of about 13,000, chiefly agricultural but with several
sTlall local industries. 4plicant is the only financial institution
in the to-qn and handles almost all of the local banking business.
Ahr.
vtalcant:s present two branches, one at Silver Springs (population:
700) and one at Rushford (population:
1,000), are, respectively,
251n:lies northeast and 16 miles southeast of the town of Delevan and
el'e the only banking offices in these essentially rural communities.
Delevan (population:
(It s°rIle 3,000 persons.
800) is in an agricultural trade area
Delevan Bank is the only banking office in
the community; and the bank's increase of 172 per cent in deposits and
207 Per cent in loans during the past 10 years indicates a need for
lititing facilities in the area.
Arc ,
While having little impact in the
area, the proposed merger not only would assure continuance of
bant,
lng facilities in Delevan but also would provide the Delevan area
'
with
an office of a substantially larger and more competently managed
titution
Competition. - Significant competition appears to exist
betVeen
Arcade Bank and Delevan Bank. Applicant is by far the largest
c)f the 7 banks with facilities located from 12 to 25 miles from either
,
ArQ
'le or Delevan. The proposed merger would enhance the competitive
PcIsition of the applicant in the Arcade-Delevan area.
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Federal Reserve Bank of St. Louis
However, it
-411°11-1d not have a materially adverse competitive effect on other banks
inthe larger area, in view of the distances between their offices and
those of the continuing bank.,
Summary and conclusion. - The proposed merger will permit contixuance of a banking office clearly essential to a small rural cornAny adverse effects of the merger on other competing banks
11°111d appear to be negligible.
Fcr these reasons the Board finds that the proposed merger
'
4010.d be in the public intevest.
January 24,
1962
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Federal Reserve Bank of St. Louis
.Kei:7J0
BOARD OF GOVERNORS
0114**,4
tftiao
OF THE
c44:
Item No. 23
1/24/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
X K
ADDRESS OFFICIAL CORRESPONDENCE
t
'
°
ifitt:1160
4004**
TO THE HOARD
January 24, 1962
Mr, J. E. Denmark, Vice President,
Federal Reserve Bank of Atlanta,
Atlanta 3, Georgia.
Dear Mr. Denmark:
In accordance with the request contained
in your letter of January 11, 1962, the Board
approves the appointment of Robert Shealy
Willingham, Jr., as an assistant examiner for the
Federal Reserve Bank of Atlanta, effective
January 29, 1962.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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