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9161 Minutes for To: Members of the Board From: Office of the Secretary July 18, 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 vith respect to any of the entries in this set of nanutes 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 Secretary's Office. Otherwise, please initial below. 4elow. If you were present at the meeting, your Allatials will indicate approval of the minutes. If You were not present, your initials will indicate °n1Y that you have seen the minutes. Chm. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell 2711 Minutes of the Board of Governors of the Federal Reserve SYstem on Wednesday, July 18, 1962. The Board met in the Board Rooln at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman 21 Balderston, Vice Chairman ... ] Robertson] King Mitchell Sherman, Secretary Kenyon, Assistant Secretary Molony, Assistant to the Board Cardon, Legislative Counsel Fauver, Assistant to the Board Noyes, Director, Division of Research and Statistics Mr. Hexter, Assistant General Counsel Mr. Koch, Adviser, Division of Research and Statistics Mr. Dembitz, Associate Adviser, Division of Research and Statistics 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 Mrs. Semia, Technical Assistant, Office of the Secretary Mr. Bakke, Senior Attorney, Legal Division Mr. Potter, Senior Attorney, Legal Division Mr. Eckert, Chief, Banking Section, Division of Research and Statistics Mr. Partee, Chief, Capital Markets Section, Division of Research and Statistics Mrs. Ulrey, Economist, Division of Research and Statistics Mr. Mr. Mr. Mr. Mr. Mr. with ew from meeting at point indicated in minutes. 1000,0 ' 7/18/62 -213pplications of Boston Overseas Financial Corporation. There had been distributed a memorandum dated July 16, 1962, from the Division of axallii.nations in connection with the request of Boston Overseas Itillancial Corporation (an Edge financing corporation), Boston, Massachusetts, for permission (1) to exercise conversion privileges t° acquire stock in connection with the purchase of convertible debentures of International Factors Limited, London, England, and (2) to purchase and hold stock of International Factors A. G., a S'ifiss holding company in process of organization that would hold t°ck in factoring companies in various European countries. In l'esPonse to the Board's request for comments, the Comptroller of the CIIIIsencY's letter of June 6, 1962, stated in part: "This application 111V01yes the effectuation of the program upon which I commented in ttl i letter of February 26, 1962. I believe those comments to be of c°4t1nued significance at this time. 84?I'l)eation should be denied." I know of no reason why the In the earlier letter, which the e()/111Dtroller of the Currency had written in connection with a 111‘°13°sed. investment of Boston Overseas in the stock of a Netherlands r4c4. Act was °ring corporation, he expressed the view that the Edge "designed to foster our exports" and questioned whether the factoring purpose. activities of Boston Overseas were in conformance with that Ile believed the issue of the basic objective of the Edge Act with the 1)easticIllar1y pertinent in view of present efforts to deal 114tion's balance of payments problem. 7/18/62 -3Attached to the memorandum from the Division of Examinations draft of letter approving the requests of Boston Overseas ?illarloial Corporation. Governor Mitchell commented that the proposed international factoring program had raised a question in his mind, as it apparently 44 in the Comptroller's, from the standpoint of public interest. It appeared that the program might facilitate imports to the United SiLtes or encourage trade within Europe in such a way as to compete with United States exporters, thus tending to worsen the already cielleate balance of payments situation of the United States. It was cliffielllt to understand precisely what the factoring program would Illvelve, and in his View the presentation of the applications was cleridient in that it did not seem to cover the public interest aspect 811friciently. This related to the fundamental question whether the basi_ "Purpose of regulating Edge Act institutions was to stimulate -44e throughout the world generally, or whether it was primarily to "Imulate United States international trade. During the ensuing discussion it was observed that the Wer-a11 review being made of Regulation K (Corporations Doing ?ore.; .14(1 Banking or Other Foreign Financing under the Federal Reserve Act) or as expected to go into the appropriate scope of operations PA- "Ee institutions and agreement corporations. Comment was to the effect that the proposals before the Board were part eV a'f " 414, 7/18/62 -4- Of a factoring program that the applicant organization had had Underway for about two years. Agreement was expressed that the (111estions Governor Mitchell had raised were worthy of consideration. Hc4rever, pending a more clear-cut decision thereon, on the basis Of the review of Regulation K now in progress, it might not be desirable for the Board to depart from the approach it had taken 1113 t° now toward applications such as here presented. After further discussion it was agreed that the staff 1?°111.11 ask Boston Overseas Financial Corporation for a supplemental tatement of its views on the relationship of the international re.etOririg program to United States foreign trade policy, the matter then to be considered further by the Board. In further reference to the applications of Boston Overseas ?illancial Corporation, Mr. Hexter raised the following question. 1r the Board approved, it would authorize Boston Overseas to invest 250,000 in stock of a new Swiss holding company "provided the Mares to he • • . are acquired within one year." However, with respect conversion of $300,000 of debentures of International Factors Lu +lu , "eQ into stock of that organization, the proposed Board letter Prescribe no limit on the period within which such conversion take place; apparently, it could be accomplished at any time vithin the five-year life of the debentures. Mr. Hexter recalled that .,.. Lhe Board ordinarily required Edge corporations to acquire -5Stock Within a year of approval of the acquisition. Here, however, the Board would in effect be saying that acquisitions for cash must be effected within one year, but acquisitions of stock by other 131'°cedures,such as conversion of debentures, need not have a time Mr. Goodman stated that Boston Overseas considered the 1o55 ibility of conversion of debentures into stock a prime feature °rite investment in International Factors Limited. A reason for c0 5 4 idering that feature important related to the question, the ellrer to which was not yet known, of the future profitability of ' --c"donal Factors. If operations proved profitable, Boston 'seas wanted to be assured of being able to maintain its relative °Irell 11°81.bi-(3n in the ownership of International Factors. In these cil'ellinstances, Mr. Goodman felt that an exception to the usual orie_ ear provision would be warranted. After discussion, it was the consensus that the Board might deviate from its usual one-year time limit if the circumstances Or 1)articular application seemed to justify doing so. Chairman Martin then withdrew. R rt on competitive factors(York-Harrisburg, Pennsylvania). had been distributed a draft of report to the Comptroller of the xrre, of "cY on the competitive factors involved in the proposed merger • C. tlzens Trust Company of Harrisburg, Harrisburg, Pennsylvania, 7/18/62 -6- 'with and into National Bank & Trust Company of Central Pennsylvania, York) Pennsylvania. During discussion it was agreed that the conclusion of the c Egit report should be replaced with certain comments appearing ' el8eWhere in the document, after which the report was approved 1148"1111-mously for transmission to the Comptroller. The conclusion °li the report, as approved, read as follows: The proposal would eliminate substantial existing and potential competition between the participants, and Would concentrate further the banking resources in the Harrisburg area in a few large banks. Advice of receipt of holdine company applications. There had beell distributed a memorandum from the Legal Division and the 1.-41-810n of Examinations dated July 17, 1962, inquiring about the ecitu-e to be followed in notifying supervisory authorities of the receipt of bank holding company applications, a subject the 33°41scl had discussed at its meeting on June 25, 1962. It had been cleelcied at the June meeting that both the interested State bank • 111)e— 1-vlsor or the and the Comptroller of the Currency would be notified receipt of all applications, even when such notification l as not required. Accordingly, on July 5, 1962, the Board notified ' the, °mPtroller of the Currency (as well as the Superintendent of ' la`414 Of Montana) of receipt of applications from Montana Shares, 'Porated, Great Falls, Montana, to acquire the majority of the I/18/62 _7_ 14)ting Shares of two Montana State banks. The letter to the Comptroller Of the Currency stated that "The Board would, of course, welcome any contents that you might wish to submit." Subsequently, an attorney itithe Comptroller's Office telephoned to say that he was sure the C°r1113troller would wish to submit views, and he asked that a copy of each application be furnished to the Comptroller's Office. Therefore, the memorandum continued, there was a question 46 to vhether the Board intended or wished to invite comments from the 8 upervisory agencies that were not required to be notified of the receipt of applications, or whether it wished only to inform th ba._ the that such applications had been received. If comments were to wilted, it was suggested that applications for acquisition of Shares of State banks could be made available in the Board's (3trices for inspection by representatives of the Comptroller of the ellIst'encY. bant, State Applications for acquisition of the shares of national might be made available for reference by representatives of banking authorities at the offices of the Federal Reserve y or, if those offices were not readily accessible, arrangements taight be made to lend a copy of the application to the State ellthprity. Governor Robertson stated that in his view the notice of IleceiPt of an application given to those authorities who were not recn,$ ' 4 1'ed by law to make a recommendation should be sent merely as ' 7/18/62 43- a. matter of information. He suggested that hereafter no invitation for comments be included in such letters of notification. There was general agreement with the position stated by er(zrerrlor Robertson. ..§11.1a2y of bank margin c lls (Item No. 1). There had been distributed a memorandum dated July 16, 1962, from Mx. Noyes rethe informal survey, authorized by the Board on June 20, 1962, of the incidence of margin calls on stock-secured loans 18sUed by banks in the period of rapidly declining market prices May. 11), few, It was understood that the survey would cover a relative- .Large banks, and that it would be conducted through the leral Reserve Banks. The survey proposal resulted in part from e. desire to cooperate with the Securities and Exchange Commission, 14110, ,t was conducting an investigation of the market break. Pursuant to the Board's authorization, the staff devised a questionnaire ealling for a listing of the number and dollar volume of loans °II which calls were issued, the regulatory status and collateral 84ch loans, the ultimate disposition of the calls, and the llitiber and dollar magnitude of cases where collateral appeared to have .een 1, sold as a result of the call. The questionnaire also ,,kled a number of broader questions regarding bank policies aill1 Practices relating to the establishment and uniformity of initial wklantenance margins. 7/18/62 Several New York and Chicago banks had been approached as to the feasibility of this or alternative survey procedures, with discouraging results. The general response was that no formal records of margin calls and their disposition were kept after the letters were corrected; even the bank's loan cards did not ordinarily 811(3/ that a call had been made except by inference (a paydown in In the usual the loan, deposit of additional collateral, etc.). Pl'°cedure, the margin clerk notified the responsible lending officer When a valuation of collateral indicated that the maintenance margin Pe(2 on the loan had been broken. It was the responsibility of the loan officer to take whatever action was deemed necessary, after Which the loan card was returned to the file. Usually there was a hotation of the margin deficiency and the action taken by the 1°941 officer, but that was destroyed or sent to the general files When the loan was again in order. So far as the bank was concerned, the Problem had been dealt with, and there was no reason to maintain l'ecord of actions taken. There seemed to be no alternative records that would give elrell a rough indication of the incidence of calls. Records of the celltral trading desk were incomplete; they showed sales of collateral hr°1-Igh the bank, but not sales by the customer's broker. Official c°1srespondence also would not be very helpful, because most calls 4P.Darently were handled informally by telephone. In the absence of -10a record of "internal calls" sent to loan officers and maintained by the margin clerk, the only possible source of information would be a review of the loan cards themselves. However, even the bUrdensome task of reviewing all security loan cards would not 13r°vide fully dependable data, since there usnany would be no NUcation whether a change in loan status was requested by the bank (114 initiated by the customer for investment reasons. An alternative procedure, the memorandum suggested, might be to request a subjective review of margin call experience during the latter part of May, based on the recollection of lending officers 41ad whatever statistics might be readily available. The banks might be asked for an estimate of the number and dollar volunir. of calls lselled, the proportion of those that were on regulated and on unregulated loans, and some rough percentage breakdown as to disposition. The staff of the Securities and Exchange Commission was e of the problems encountered, and tended to favor the alternative ' 412Ll 41 ach on the ground that some indications of experience were better than none. Though little research value would attach to such a subjective and the validity of any findings would be questionable, that the only feasible way to proceed with the project. The merits that some information on bank experience would be obtained e virtually nothing but rumors existed, and that something could ' 1?hel be .nr -4- ovided in cooperation with the investigation made by the Securities anti 4 change Commission. 7/18/62 -11During discussion of the situation, it was observed that the Sectlxities and Exchange Commission considered the dearth of information Ola maxgin calls by banks a gap in its investigation, and it would like to have that gap filled to whatever extent was possible. Governor Robertson stated that he doubted the usefulness or information obtained from a survey crippled by the limitations that had been found to exist. Yet such a survey could be productive Of ideas, especially an idea as to whether or not the Board Should l'eqUest banks to keep margin call records in the future. In the discussion that ensued, members of the Board indicated that heY found it difficult to believe that the records of banks, 138.1'tieularly the larger banks in the money centers, were as uninforas the memorandum indicated. There was a suggestion that it light be desirable to have the situation reviewed by experienced eclIaLining personnel. In the circumstances, however, there was gerieral agreement that any survey apparently would have to be of the ,, Jamited and subjective character that had been presented as an 41tertlative. As Governor Robertson had mentioned, such a survey lig/It shed light on whether additional record-keeping should be l'equested in the future. Question was raised whether it was contemplated that the ltrai ted survey would be conducted by the Reserve Banks on an interview 15481a) to which Mr. Partee responded that he hoped the procedure of 411)01.tr,i) f 7/18/62 -12Visits to the banks concerned would be followed. The Reserve Bank representative presumably would talk first with the vice president in charge of the banking department, who probably w°1-11d bring in the officer in charge of security loans, and perhaps the margin clerk. Since internal procedures varied from bank to be4k) however, some flexibility would be necessary. Governor Robertson suggested that the Federal Reserve riel:)resentative be accompanied by an examiner. After further discussion it was agreed that a survey of such ' kill( should be made, partly to obtain what information was available 841(1 Partly to help the Board form a judgment as to whether banks elicrilicl be requested to keep additional records in the future. Secretary's Note: A telegram was sent to the Federal Reserve Banks on July 19, 1962, asking that the survey be made. A copy of the telegram is attached as Item No. 1. Messrs. Koch, Dembitz, and Paxtee and Mrs. Ulrey then withdrew.. Application of Marine Corporation (Items 2 and 3). Mr. Bakke referred to the application of The Marine Corporation, Milwaukee, Wise °nein, for approval of the acquisition of shares of the Beloit SI4Lte Bank, Beloit, Wisconsin. Since the proposed subsidiary was a bank,the Board notified the Commissioner of Banks of the State (3t Ilisconsin of receipt of the application, as required by law, and 7/18/62 -13- the Commissioner had recommended that the application be denied. Therefore the Board must hold a hearing and must inform the 4141loant "forthwith" of the Commissioner's recommendation. The Iledera1 Reserve Bank of Chicago had indicated that the board room e't the Bank would be available on August 14 and 15, and Chicago 14414 appear to be a convenient location in relation to the e°Iumlnities involved. The Bank Holding Company Act required that the date for the hearing be set not more than thirty days from the dEtte on which the Board informed the applicant of the State 8141erv1sor's recommendation. In view of the requirement for 11111)1ishing notice of the hearing in the Federal Register, Mr. Bakke re mmended that the Board's order for the hearing be issued as soon 48 Possible. After discussion, it was understood that The Marine Corporation 11°124 be informed promptly of the receipt of the adverse recomnleridlltion of the Wisconsin Commissioner of Banks. A copy of the letter sent to The Marine Corporation for that purpose on July 18, 1962 , ) Is attached as Item No. 2. The Board also authorized the issuance of an order for a 134blic hearing on the application of The Marine Corporation to be hela at the Federal Reserve Bank of Chicago commencing August 14, 1962, the staff was authorized to proceed with the necessary arrangements r°1' the hearing, including arrangements for a hearing examiner. 7/18/62 Secretary's Note: The order, a copy of which is attached as Item No. 3, was issued on July 19, 1962, and on the same date a letter was sent to The Marine Corporation notifying it of the time and place of the hearing. Mr. Charles W. Schneider was subsequently selected by the Civil Service Commission to serve as Hearing Examiner for the purpose of conducting the hearing. Messrs. Thompson and Bakke then withdrew. Testimony by Chairman Martin. a (trait There had been distributed of statement to be made by Chairman Martin tomorrow, July 19, bet Ore Subcommittee No. 1 of the House Banking and Currency Committee 8* 1771, relating to foreign branches of national banks, H. R. 8874, l'e14ting to bank service corporations, and H. R. 7796, relating to l e41 estate loans by national banks. ' With respect to H. R. 8874, which would authorize member banks or the Federal Reserve System to invest in bank service corporations, clverrlor Robertson suggested condensation of the statement through illc°rPoration by reference of suggestions regarding the proposed legislation that the Board had made in reporting on the bill by letter to year. the House Banking and Currency Committee earlier this Re al So suggested, however, that the statement might be strengthened thro,s_ ggn inclusion of some of the findings of the Board's recent survey on t he extent of automation of bank record-keeping. General agreement with these suggestions was expressed. 7/18/62 -15H. R. 7796 would amend section 24 of the Federal Reserve Act t allow national banks, if their time and savings deposits "greater than their capital and surplus, to make real estate loans UP to 70 per cent, rather than 60 per cent, of such deposits. The bill would also amPnd section 24 to increase from 9 months to 18 months the maximum permissible maturity of construction loans bY national banks on residential and farm buildings. No question was raised, from the standpoint of taking a te.v°rable position in the statement, with regard to the provisions r the bill relating to construction loans. However, there was a Illther extended discussion of the position that should be expressed illthe statement with regard to real estate loans. t00,1 1 e1 ' It was under- that the proposed liberalization would be of interest to only ative4r few banks whose real estate loans were heavy in tion to their time and savings deposits. ' l'ele Question was raised I'lhether this type of situation afforded sufficient basis for legislation, and also as to the desirability of such legislation *°41 the standpoint of banking and bank supervision. The Secretary from the minutes of the Board meeting on July 13, 1961, when the Mai°rity of the Board, with Governor Mills dissenting for l'ecte°11s indicated, agreed on a report to the House Banking and C11111sencY Committee expressing no objection to the bill. 7/18/62 -16At the conclusion of the discussion, it was the consensus tbat, despite such reservations as might be entertained, the testimony on the bill should be in terms of adhering to the 15°8ition expressed in the Board's 1961 letter report. it 'Was However, felt that it would be advisable to call attention in the statement to the increase in time and savings deposits in the Panyear, which might have reduced such need as previously existed to, proposed legislation. With respect to S. 1771, which would authorize the Board to 13°114114 foreign branches of national banks to exercise, in addition to ."wers otherwise authorized to national banks, such further Pc4rer8 "as may be usual in connection with the transaction of the bloliness of bpnking in the places where such foreign branches shall tIlialsact business," there was some discussion regarding the extent to 'glitch foreign branches of national banks were currently handlea1313eci and of the administrative burden that might be involved for the Board in formulating regulations. It was noted, however, that ctich legislation had at one time been part of the proposed Financial institutions Act, at the Board's recommendation, and that the Board 1144 e ndorsed the present bill by letter report. The conclusion that the statement to be presented tomorrow should recommend 1.41.°1bably with respect to the bill. 7/18/62 -17At the conclusion of the discussion it was agreed that the statement would be revised along the lines agreed upon, and that it vould be presented in a final form satisfactory to the Chairman. Governor Robertson withdrew at this point, as did all of the oembers of the staff except Messrs. Sherman, Kenyon, and Smith. ..port of examination of Chicago Reserve Bank. The report ()t the examination of the Federal Reserve Bank of Chicago made by the B°ard's examining staff as of March 23, 1962, had been circulated to the Board, along with the usual accompanying memoranda. Mr. Smith commented on the information disclosed by the eXami nation, and there appeared to be no matters requiring action °Ilthe part of the Board at this time. The meeting then adjourned. Secretary's Note: Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Robertson, acting in the absence of Governor Shepardson, today approved on behalf of the Board the following actions relating to the Board's staff: Thomas F. Bryant as Cafeteria Laborer in the Division of A $3 l istrative Services, with basic annual salary at the rate of "s°5) effective the date of entrance upon duty. 441 James H. Lowden as Cafeteria Laborer in the Division of or 4istrative Services, with basic annual salary at the rate J 185, effective the date of entrance upon duty. ' 7/18/62 -18- 88-11creasesDivision of Research and Statistics , 1.1 .T Loretta Brockway, from $4,250 to $4,510 per annum, with a change it1e from Statistical Clerk to Statistical Assistant, effective 22) 1962. Division of Administrative Services 4 Quincy W. Barnes, from $3,710 to $3,827 per annum, with a change tlititle from Mail Clerk to Operator (Mimeograph), effective the °tate of assuming his new duties. titi Henry Edmonds, from $3,815 to $3,827 per annum, with a change in ass'44 from Cafeteria Laborer to Window Washer, effective the date of 1411ing his new duties. tit Abraham Rose, from $3,815 to $3,920 per annum, with a change in hi le from Messenger to Mail Clerk, effective the date of assuming ' 8 new duties. Acting in the absence of Governor Shepardson, Governor Robertson today noted on behalf of the Board a memorandum advising of the death of M. Elva Morse, Statistical Assistant, Division of Research and Statistics, on July 11, 1962. Secretary TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item No. 1 7/18/62 July 19, 1902 T°Tik PliE3IDLNTS OF ALL FEDERAL RESERVE BADIKS Board has requested informal survey through Reserve Banks of margin eab ' (:q.)erience during the latter part of Aay at a number of large banks in each Nieral Reserve District. Board is aware of lack of detailed records in this area suggests initial approach in survey be by personal interview. it is th°lIght that the presence of an examiner as well as research personnel might be 441'41 in exploring methods for obtaining desired information. Member banks to be approached would be expected to rely on whatever records are readily avail.. 44 48 well as on recollections of margin clerks and loan officers responsible tc/I‘ 18sUing Board will appreciate your arranging for such a survey of calst leaSt five banks in your District with a view to forwarding reports to reach 11°at'ci not later than Monday morning, July 30. To assist in providing information that may be assembled uniformly to to 11 Districts, it is suggested that individuals conducting interviews seek °btain following information from each bank approached: 1. Approximate number and dollar amount of loans on which margin calls were issued in the two weeks from May 21 to June 1, 1962. 2. Number of such calls that were settled through sale of collateral by customer or by bank, and approximate dollar amount of collateral sold. 3. About how many of the calls issued were on loans subject to Regulation U margin requirements? 4. Of these, how many were calls issued against AT&T subscription accounts, on which the initial margin required by regulation was only 25 per cent? 5. For comparative purposes, what were approximate numbers and amounts of calls bank was issuing per week before the stock market break, for example, in February and March of this year? t(iktriu Questions that your staff may have in connection with survey may be P with Mr. Partee of the Board's Research Division. SHERMAN ) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 2 7/18/62 WASHINGTON 25, D. C. ADORES'S OFFICIAL CORRESPONDENCE TO THE HOARD July 18, 1962 r14 : 111 1.4!! RE El? REQUESTED Eliot G. Fitch, President, Marine Corporation, East Wisconsin Avenue, "-Li-Waukee, Wisconsin. he Re: Application of The Marine Corporation, Milwaukee, Wisconsin, pursuant to section 3(a)(2) of the Bank Holding Company Act of 1956 for prior the Beloit approval of acquisition of shareJ State Bank, Beloit, Wisconsin. Dear Mr. Fitch:. ht of Syst As you are aware, section 3(h) of the Bank Holding Company 1956 requires the Board of Governors of the Federal Reserve tie,eal to notify the appropriate Federal or State supervisory authorithai °f the receipt of an application by a bank holding company under It . 4ct for approval of the acquisition of bank shares or assets. stjs further provided that the Board shall allow the said Federal or tioe authorities 30 days within which to submit views or recommenda: eic on the application, and that if within this period an expres41113,cr views unfavorable to the proposal is received, a hearing ti be held. This is to advise you that on July 16, 1962, the Board of ztiit:aors received a letter from the Commissioner of Banks of the : ilbo cif Wisconsin expressing the view that your application in the ree'?-captioned matter should be denied. Since this letter was ilea lred by the Board within the statutory 30-day period, a public - ""ng in connection with this application is mandatory. BOAPO OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Eliot G. Fitch As required by the statute in question, the Board will 141 three days, notify you of the date for commencement of such /11 ,""•11-11g, which, under the statute, must be not less than ten, nor .14.ire than —I .5k) days after the date of this letter. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. trif;f.) UNITED STATES OF AMERICA Item. No. 3 7/18/62 BEllaT2 THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEli WASHINGTON, D. C. 111•1 Itithe Matter of the Application of DCCELT NO. BHC-65 14-ARINE CORPORATION '1141aUkee, Wisconsin, 1314.811ant to 8 section 3(a)(2) of the ank licadi nr7 Company Act of 1956. 4.• ••• 0.• ORDER FOR PUBLIC HEARING On June 20, 1962, there was published in the Federal Register (27 2;P.. 5C28) a notice of recei9t by the Board of Governors of an P1)11cc't1011 filed pursuant to section 3(a) of the Dank Holding Company I'Le'f 1956 (12 U.S.C. 1342(a)), by The i:arine Corporation, Niluaukee, ilse°flsila, for the Board's prior approval of the acquisition by applie llt of 80 per cent or more of the voting shares of the Beloit State Dcaoit, wlsoonsin. Pursuant to section 3(b) of the said Act (12 U.S.C. 1842(b)), te B is required to notify the appropriate Federal or State superauthority of the filing of the application; to allow 30 days c)1 ' Le submission of views and recommendations by such authority; 44 if ) within such 30-day period, the said authority disapproves the ation in urit-ing, to schedule a hearing on the application. -2Notice of receipt of the subject application was duly given to tu_ Al'e' Commissioner of Banks for the State of Wisconsin, and 30 days allowe'4 for the submission of his views and recommendations. The Board has received, within the statutory 30-day period, a letter from the Commissioner of Banks for the State of Wisconsin, • reco— 'fending that the application be denied. Accordingly, IT IS HEREBY ORDERED, That, pursucnt to section 3(h) of the I/al* Holding Company Act of 1956 (12 U.S.C. 1842(b)) and sectiori 222.4,f ( ) of the Board's Regulation Y (12 CFR Fart 222.4(f)), a Plalai„ hearing with respect to this application be held commencing 4uglIst 14, 1962, at 10 a,m., at the Federal Reserve Bank, Chicago, 11440, Le, before a duly designated hearing examiner, such hearing ' to be conducted in accordance with the Board's Rules of Practice for Porma, Hearings (12 CFR Part 263). IT IS FURTHER ORDERED, That the following matters will be he 8 ubjeot of consideration at said hearing, without prejudice to the qe2ign ti a -°n of additional related matters and questions upon further exazin atl°n: (1) the financial history and condition of the company atld the banks concerned; (2) the prospects of said company and banks; (3) the , e naracter of their management; (4) the convenience, needs, 'we ark 'fare of the communities and area concerned; and (5) whether or 11 Qi't the effect of such acquisition would be to expand the size eXt e-- of the bank holding company system involved beyond limits sate nt with adequate and sound banking, the public interest, 441 th e Preservation of competition in the field of banking. IT IS FURTHER ORDERED, That any person desiring to give estimony ,n 1 these proceedings should file with the Secretary, Board ()t Gcerriors of the Federal Reserve System, Washington 25, D. O., °II or before August 6, 1962, a written request containing a statement ti_ re of the petitionerls interest in the proceedings, a sumor the matters concerning which petitioner wishes to give tetini°1171 and the names and identity of witnesses who will be °fIel'eclo e Such requests will be presented to the designated hearing —11e'r for his determination, and persons submitting them will be -led of his decision. Dated at Washington, D. C., this 18th day of July, 1962. BY order of the Board of Governors. (Signed) Merritt Sherman Merritt Sherman, Secretary. (sAL)
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