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Minutes for

To:

Members of the Board

From:

Office of the Secretary

June 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
141.th respect to any of the entries in this set of
!alnutes in the record of policy actions required to
De 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

V

ele Secretary's Office. Otherwise, please initial
4 °'
11. If you were present at the meeting, your
4.nitials will indicate approval of the minutes. If
You were not present, your initials will indicate
(3114 that you have seen the minutes.

Chin. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell

Minutes of the Board of Governors of the Federal Reserve System
on

Monday, June 18, 1962.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

The Board met in the Board Room at 10:00 a.m.

Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Cardon, Legislative Counsel
Fauver, Assistant to the Board
Hackley, General Counsel
Noyes, Director, Division of Research
and Statistics
Farrell, Director, Division of Bank
Operations
Solomon, Director, Division of
Examinations
O'Connell, Assistant General Counsel
Thompson, Assistant Director, Division
of Examinations
Stephenson, Special Assistant, Division
of Examinations
Bakke, Senior Attorney, Legal Division
Young, Senior Attorney, Legal Division
McClintock, Supervisory Review Examiner,
Division of Examinations
Smith, Review Examiner, Division of
Examinations

.cjrculated or distributed items.

The following items, which

hari
— be
en circulated or distributed to the Board and copies of which are
a.
tte'ehed under the respective item numbers indicated, were approved
r1111101-1Sly:
'
1.111e

Item No.
tette f
1 4 -0 The Merchants and Farmers Bank,
;
Sttlith,
toVirginia, approving its request
131.;?".111 ownership of formerly occupied bank
-tses for a period of six months.
'

1

6/18/62

-2Item No.

letter to Wells Fargo Bank, San Francisco,

2

a-l-ifornia,

approving the establishment of
!branch in the vicinity of Rosemont Plaza,
ac
ramento County.
Letter to the Bureau of the Budget recomwending
'. /131"oval of enrolled bill H. R. 10162, "To amend
t e Bretton Woods Agreements Act to authorize
T"e United. States to participate in loans to the
:
11ternat10nal Monetary Fund to strengthen the
Inte
rnational monetary system."

3

Application of Hillsboro Bank and Savings Company (Items 4 and 5).
1114411ant to the decision reached at the meeting on June

h

8,

1962, there

'een distributed drafts of an order and a statement reflecting

.41)re'val of the application of The Hillsboro Bank and Savings Company,
eb°ro, Ohio, to acquire the assets and assume the liabilities of
Thee.
44.
'"lzens Bank and Savings Company of Leesburg, Leesburg, Ohio, and,
illcident thereto, to establish a branch at the location of the Leesburg
bezlits
No Objection being indicated, the issuance of the order and
1:#c4Ment was authorized.
a.thed as Items 4 and

5,

Copies of the order and statement are
respectively.

AUlication of Marine Midland Corporation.

There had been

cli8tl'iblited to the Board a memorandum from the Division of Examinations
clated T__
`lune 15, 1962, presenting a procedural question with respect to
the ,
gPPlication of Marine Midland Corporation to acquire the voting
Share
8 of Security National Bank of Long Island, Huntington, New York.

6/18/62

-3-

The memorandum noted that on May

4,

1962, the Comptroller of the Currency

/ras advised regarding this application in accordance with the applicable
13rWisions of the Bank Holding Company Act.

The Comptroller's letter to

the Board recommending disapproval of the application was dated June

1962, and

was received at the Board's offices on June

8.

5,

Therefore,

since the letter was not received until after the expiration of the

3°`claY period allowed under the Holding Company Act, it was not legally
necessary for a hearing to be held on the application.

Question was

sed, in the circumstances, as to the Board's preference among three
11°88ible courses of action:

(1) a formal hearing before a hearing

/611111er; (2) an oral presentation before the Board; and (3) consideration
bY the Board on the basis of memoranda prepared by the staff.

It was

the Division recommendation that an oral presentation be held.
In commenting on the matter, Mr. Solomon noted that in a letter
clated January 22, 1962, the Comptroller had expressed adverse views on

the Marine Midland proposal along with certain other New York State
11034111g company and merger applications that were then pending.

At

that time the Marine Midland application had not yet been received by
the
Board.

When it was received, the Comptroller's recommendation was

l'cillested, but such recommendation was not received until after the
ation of the 30-day period provided by law.
'
el)il

Therefore, a hearing

- not legally required and the Board was faced with a procedural
1°n.
'

If that decision Should be to hold an oral presentation, as

6/18/62
Ibecommended by the Division of Examinations, there would be a question
Of timing
because the application had not yet been acted upon by the
New York State Banking Department.

If the action at the State level

811°Iald be unfavorable, that would end the matter.

The advantage in

l'eaching a procedural decision at this time, as far as the Board was
concerned, would be to avoid further delay by affording the applicant
0PPortunity to begin making preparations if the New York State
decision should be favorable.
Mr. Hackley reported that Counsel for Marine Midland had called
414 vithin the past few days and expressed a desire that there be some
of public proceeding on this application.
44 Or

Counsel indicated that

presentation before the Board would be satisfactory from his

talld,Point.

He also indicated that a letter requesting a public

Plic)ceeding would be written; that letter had not as yet been received,
bit
there would seem to be no reason for the Board to defer a procedural
decision for that reason.

The anticipated letter probably would also

l'41se the question of exclusion from a public oral presentation of
certain information regarding the management of Security National Bank.
The
Board some time ago, in reply to an inquiry from Marine Midland,
441 indicated that it would consider the exclusion of confidential
14-torMation in such regard from any public record.
Mr. Hackley said he would agree with the Division of Examinations
that
an oral presentation would be desirable in this case, and preferable
to a
formal hearing before a hearing examiner.

4 .7',!•

6/18/62

-5There followed questions by Governor Mills relating to the

advisability of announcing an oral presentation before the New York
&tate authorities had reached a decision, his concern being that such

action on the part of the Board might be interpreted as anticipating a
ravorable decision on the part of the State, to the possible detriment
c't relations between the Board and the State authorities.
After discussion of this point, Chairman Martin suggested that

the Board's staff might indicate informally to Counsel for Marine
ilidiand that it would be the staff's recommendation to the Board that
all or

presentation be held if the State should act favorably on the

'Cation.
Governor

This might serve to avoid the problem envisaged by

Mills, yet it would alert Marine Midland to begin preparing

re'r an oral presentation and reduce the time that would need to be
81lien if an oral presentation should later be ordered.

Similar advice

e°41d be given to parties claiming to represent an independent committee
el' stockholders of Security National Bank who had repeated their request

.a
rel'

hearing in a telegram dated June 15, 1962.
Governor Robertson then raised certain questions regarding the

sulTi .
clency of an oral presentation in the circumstances of this case.
Alth°1-1* the Comptroller's letter had not been received quite within
,
the 1
on
'day limit, he asked whether it would seem desirable to stand
that
technicality in light of the provisions of the Bank Holding
Compa
117 Act that required a hearing if the appropriate Federal or State

21 C4CA

6/18/62

-6-

aulervisory authority--in this case the Comptroller—recommended
unfavorably on an application.

It could not be contended in this

instance that the Comptroller's failure to respond within the 30-day
limit would contribute to undue delay because the New York Statd
authorities had not yet acted on the application.

Governor Robertson

inquired whether the Legal Division felt that an oral presentation would
constitute compliance with the statutory requirement for a hearing.
Mr. Hatkley replied to the effect that the statute was not
sPeciric, merely requiring a hearing under certain conditions.

Possibly

641 °ral presentation might be regarded as complying with the statute.
R°Ireirer) the Administrative Procedure Act provides that in the case of
a.lkY hearing required by statute, certain procedures shall be followed.
case of this kind it would be preferable, in his opinion, to take

the Position that no hearing was required by statute, in which event
the Provisions of the Administrative Procedure Act would not be
NNI4cable.
In further discussion, Governor Mills commented that if an oral
formal
1)liesentation would accomplish essentially the same purposes as a
hear
ing before a hearing examiner, while avoiding the delay that would

,
be i
47aved in a forms] hearing, he found it difficult to believe that
the
Com ptroller would take exception.

It appeared to the Governor

that 4.
oral
'he spirit of the statute would be observed by ordering an

D''esentation.

-•

6/18/62
Governor Robertson then commented that personally he would
Prefer an oral presentation to a formal hearing, with the consumption

°r

time that the latter would involve.

However, he thought it was not

v°rth while to avoid a formal hearing if, by so doing, the Board would
be

likely to run into criticism on the ground that it had complied with

the statute merely because the Comptroller's letter was not filed
vithin the 30-day limit.
Mr. Hackley pointed out that if this was regarded as a case
"there

the statute required a hearing, the Board had already violated

the statute, which makes it mandatory upon the Board to follow a certain
13r(3eedure when an adverse recomuendation is received from the Comptroller
or the State authority, as the case may be, within the 30-day limit.
14 such event, the Board must forthwith give the applicant notice.
11, 'within three days, the Board must set the date for commencement
or n
hearing, and actually commence the hearing not less than 10 nor
raolie than 30 days after the notice to the applicant.
Following additional discussion of the circumstances of the
ea.8e/ Governor Robertson said that if the Legal Division and the Board
Ifel'e satisfied that the Board would not unnecessarily be running the
riat
Of criticism for failure to abide by the statute, he would go
4-1°11g with an oral presentation.

However, he raised the question

Vilether it would not be desirable for the Board to take action today
stat;
41-g that before any decision was reached by the Board on the

a t.4‘.. !f,
•

6/18/62

-8-

412dcation, there would be an oral presentation at which interested
Parties would be given an opportunity to express themselves.
tot

This would

indicate what decision might be reached by the State, but it would

/311re notice to everyone concerned that there would be an oral presentation
b

f

the Board took any action on the application.
Chairman Martin commented that in considering such a procedure,

the Points raised previously by Governor Mills also should be taken
114° account.

He was inclined to question whether there was any

e°11113e111ng reason for taking formal action with regard to an oral
Presentation at this time.

An indication could be given to Marine

Miciland informally by the staff that would be sufficient to suggest to
Maxine that it should be prepared for an oral presentation, but the
Boav

need not commit itself in advance of the State action on the

matter.
The Chairman asked Governor Mills whether such a procedure
°lila meet his point, and the latter replied in the affirmative.
1ng1y, Governor Robertson's reservations having been noted, it
Vas
-2gl'2S1 to proceed in such manner.
lir. Stephenson then withdrew.
There
ttplication of First Wisconsin Bankshares (Item No. 6).:

had been
txam.

Division of
distributed to the Board a memorandum from the

Illations dated June 15, 1962, presenting a procedural question with
ret,
.vQct to the application of First Wisconsin Bankshares Corporation,

6/18/62

-9-

Milwaukee, Wisconsin, to

acquire 80 per cent or more of the shares of

Merichazts & Savings Bank, Janesville, Wisconsin.

This application was

Illed with the Board on April 2, 1962, and notice of its receipt was
transmitted
to the Wisconsin Commissioner of Banks on April 5, 1962.
In a letter dated May 25, 1962, the Commissioner recommended denial of

the aPPlication. Since the Commissioner exceeded the 30 days allowed
bY statute for filing his reply, no hearing was legally required on the
aPPlication.

As among a formal hearing before a hearing examiner, an

oral presentation before the Board, and consideration of the matter by
the Board solely on the basis of memoranda from the staff, the Division
c)t i.xarainations recommended that an oral presentation be ordered.
In commenting on the matter, Mr. Solomon noted that if the
Boerd.
oral

should decide to follow the Division recommendation and hold an

presentation, no question of timing would be involved because

there

was no

provision in Wisconsin law for action by the State on an

etPlaication of this kind.
Governor Robertson noted that the statements of the proponents
anclthe State Commissioner regarding this application seemed to indicate
a di
sParity of understanding as to the facts, which would suggest a

torlaze

1 hearing before a hearing examiner. Unless the right of crosse%ami
ning witnesses was afforded, he did not see how the Board could
obtain
a satisfactory record on which to base its findings on the
aPPlication.

4)

6/18/62

-10Mr. Solomon replied that although sharp differences of opinion

e)zisted, he did not believe that they went to the facts of the case,
but

rather that they related to interpretation of the facts.

cir
cumstances

In the

he did not feel that the Board would be appreciably

better off if it held a formal hearing instead of an oral presentation.
In essence, matters of judgment and opinion based on the facts were
il1v°1ved, and he thought an oral presentation would serve to get at
the issues as well as a formal hearing.
Mr. Hackley said he had assumed, like Mr. Solomon, that the
Maln issues in this case revolved around interpretation of the facts
rather than the facts themselves. In the past a forma.] hearing had
be
favored in cases where the facts appeared to be in dispute or
here a number of objections by banks or others had been filed.
After further discussion, the Chairman turned to the members
°Irthe Board, and Governor Mills expressed agreement with the staff
Illendation on procedure.
"
11

He felt that an oral presentation would

"
lice to sift out all of the information that the Board would need,
ciliarly since the Board had examined the Wisconsin banking
aitAlation so thoroughly in previous cases.
Governor Shepardson commented that his preference would be for
art 0,,
‘"L'I-

presentation if the Legal Division was satisfied that the Board

not be running afoul of statutory requirements by not ordering
a

formal hearing.

t

6/18/62

-11Mr. Hackley responded to a question from the Chair by saying

that he
did not think the Board would run afoul of statutory requirements
bY ordering an
oral presentation.

He thought there was even less

cillestion on this point than in the Marine Midland case, just discussed
hY the Board.

He added that even in circumstances where a hearing was

recillired by statute, conceivably an oral presentation might be held to
e°34V-1-Ywith the statute.

However, if a hearing was regarded as required

bY statute, that would mean that the provisions of the Administrative
?r(Deeclure Act relating to statutory hearings would be applicable.
In response to a question from Governor Robertson, Mr. O'Connell
8a44 that in the case of a statutory hearing, as opposed to the usual
olse*J- Presentation, the principal procedural distinctions would relate
to the receipt of evidence.

An opportunity would be afforded for

erts-examination of witnesses by counsel for the applicant and objectors.
A-180
1 Provision would be made for the submission of certain briefs
Withjfl

specified periods of time.
Mr. Hackley noted that if there was a statutory hearing, the

-would be compelled to consider the application solely on the

basie.

Of the hearing record.

In the case of an oral presentation, the

t1'84script of the presentation was regarded as merely one part of the
elatire

record.
At the conclusion of additional discussion, it was agreed to

order

an oral presentation before the Board on a date mutually convenient

6/18/62

-12-

to the Board and the applicant, and the staff was authorized to work
out the
necessary arrangements.

A copy of the order subsequently

ismmd pursuant to this action is attached as Item No.

6.

Messrs. O'Connell, Thompson, Bakke, and Smith then withdrew.
Application of Asbury Park and Ocean Grave Bank.

On May 25,

1962) the Board heard an oral presentation on the application of
48b1117 Park and Ocean Grove Bank, Asbury Park, New Jersey, to merge
1thThe Central Jersey Bank and Trust Company of Freehold, Freehold,
144 Jersey.

menicTandum

There had been distributed, under date of June

6, 1962,

from the Division of Examinations discussing the material

811bIllitted at the oral presentation.

The Division continued to recommend

ciente' of the application.
Following comments by Mx. McClintock, Governor Balderston
111(1 red how much importance the Division of Examinations attached to
the a
rgument, that a complementary arrangement was involved in the
tlerEer,
Mr. Solomon replied that the Division did not consider this
arirh,
--uLtunt too persuasive.

The principal argument along those lines

a4lialleed by the banks seeking to merge was that an increased lending
11Mit Would
be desirable. However, the actual degree of benefit to
the
Q4'ea from an increased lending limit seemed open to question. In
the
el"T of the Board's staff, the increased limit would not greatly
ethaz
ce the present ability of the constituent banks to serve the

7" 4

6/18/62

-13-

Park area.

Admittedly, there might be a number of additional

ellEmers that
the resulting bank could serve without participation of
lOans) but that seemed a relatively slight advantage to the public
itterest compared with the reduction of competition that would result
trcm the
merger.
Governor Balderston then inquired as to the staff views regarding

the

aPPropriate area of competition to be considered in this case.
Mr. Solomon replied that in any case where there was heavy

king

concentration in a particular area, that could be watered dawn

157' enlarging the area of competition.

It seemed to the Division of

Z%allirlatlons
•
that the enlarged area of competition suggested by the
8.PPlican4.

banks was not reasonable.

The area within a two-mile radius

or

48131-117 Park was used by the other Federal banking agencies and by
the
Partment of Justice in submitting their reports on competitive
tactc)rs to the Board.
11'4° the picture.

Outside that area, other banks began to come

Even so, there was still a heavy concentration

Irithin the six-mile radius suggested by the applicant banks.
The Chairman then turned to the members of the Board for their
and Governor Mills said he concurred in the recommendation of
the t.
TLSion

tho%t

or the

of Examinations that the application be denied.

He

there was clear evidence that approval, in the circumstances

ease, would be contrary to the principles of the Bank Merger Act.

h he ,
u3.d mentioned previously, he felt the Board should be careful not

e

6/18/62

-14-

t° Inat too much emphasis on benefits alleged from an expanded lending
eal3acitY•
Ca 8.0

Safety of deposits was the first consideration, with lending

a weak second, especially in an area like the one under

&Lscalssion where there were already banks of substantial size.

In

altlost any case, one would find some company or industry that had
°1111

0wn local credit facilities.

One or two accounts could be important

t° a bank, but they were not usually as important to success and growth
°ne was sometimes led to believe.

It was the ability of the bank to

clar deposits out of the whole trade area that counted more heavily.
Other members of the Board also having indicated that they
c°1Ielaxred with the recommendation of the Division of Examinations,

the aPPlication was denied by unanimous vote, with the understanding
that t
,
it_
e Legal Division would draft an order and statement for the
1)°41"cl's consideration.
Messrs. Young and McClintock then withdrew and Mr. Harris,

e°°rElinator of Defense Planning, entered the room.
New Orleans Branch building _project.

Mr. Farrell reported on

a.
PcItential problem that had arisen in connection with the New Orleans
s-41 building project. The Board had received a letter from
00/10.,,
c'essman Boggs of Louisiana transmitting, with a request for
cont,4,
''qeration, a letter from the owner of premises abutting the proposed
new
'
ranch building who complained that the Reserve Bank claimed the

itht to come into his property and demolish one wall of his building

c

•

6/18/62

-15-

tO the height of three stories, which would present him with a serious
The Congressman's letter had been forwarded to President Bryan

131.°blem•

°I* the Federal Reserve Bank of Atlanta, and in turn to the New Orleans
131Mr1ch and the attorney representing it in connection with the building
isls°ject, with the result that there had been a suggestion from the
3tt°111eY for a conference between Congressman Boggs and the parties at
interest.

However, the Congressman's office had advised that he was

Ilot inclined
toward such a meeting.
Mr. Farrell then described further the situation that gave rise
to the problem, the legal rights apparently available to the Reserve
11411kUnder Louisiana law, and the possibility of some compromise
scaUtions

He expressed some apprehension that if the Reserve Bank

stcl°d firmly on its legal rights, adverse consequences from a public
l'elations Standpoint might result.
After some discussion of the problem described by Mr. Farrell,
Che.i
Illan Martin expressed the view that there would seem to be little
11°111t in the Board's taking a position on the matter, at least at this
time.
He suggested that President Bryan be asked informally to do
Vhatertrwp.

was possible to work the matter out in some way that would be

tively satisfactory to the parties concerned, with the understanding
that,
Lille matter could be brought back to the Board, if necessary, should
ric)

reasonable solution be found.
It was agreed to proceed in the manner suggested by the Chairman.

'21

6/18/6e

-16The meeting then recessed and the Board reconvened at 2:30 p.m.

.41th Chairman Martin and Governors Balderston, Mills, Robertson, and
NTardson present.

In addition, Professor Dan McGill of the Wharton

8°1001 of Finance, University of Pennsylvania, was present.
Retirement System.

It was reported to the Secretary that,

r°11°Idng preliminary comments by Professor McGill as to the nature of
the Retirement
System of the Federal Reserve Banks, the Board (a)
Professor McGill to make further study and inform the Board
°t various phases of the Retirement System, and (b) agreed that
Mx.
''LL-Iton, Chairman of the Conference of Presidents of the Federal
leserye Banks, should be informed that the Board would defer acting on
1114ti°ns that had been presented by a memorandum accompanying a letter
tr°1"r. Fulton dated May 31, 1962, in which Mr. Raton had requested
44 inf°rmal expression of the Board's views prior to the meeting of the
Nstees

1962
14.013

Of the Retirement System to be held on Wednesday, June 20,

In taking this action, it was understood that Governor Mills
initiate arrangements for Professor McGill to meet with the

44.11;utal,-

and representatives of the Retirement Committee.
Secretary's Note: Subsequently, the
Secretary was informed that the Board
met with Mr. Fulton on June 19, 1962, to
apprise him of the arrangements made by
the Board for a study of the Retirement
System by Professor McGill and also to
inform him of reasons why the Board would
defer responding to the request contained
in his letter of May 31, 1962.

21 9f
6/18/62

-17The meeting then adjourned.
Secretary's Note: Pursuant to the recommendation contained in a memorandum from
the Division of Research and Statistics,
Governor Shepardson today approved on
behalf of the Board acceptance of the
resignation of Marjorie Hollingshead,
Secretary in that Division, effective
at the close of business June 20, 1962.

w440

Secr6ta

2200

BOARD OF GOVERNORS
OF THE

Item No. 1

FEDERAL RESERVE SYSTEM

6/18/62

WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
'TO THE BOARD

June 18, 1962.

Hoard of Directors,
The Merchants and Farmers Bank,
Smithfield, Virginia.
G
entlemen:
The Board of Governors of the Federal Reserve
%tem grants permission to The Merchants and Farmers Bank
to retain its ownership of formerly occupied bank premises
for a period of six months from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon

Kenneth A. Kenyon,
Assistant Secretary.

2201
BOARD OF GOVERNORS
OF THE

Item No. 2
6/18/62

FEDERAL RESERVE SYSTEM
WASHINGTON 25, 0. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 18, 1962.

Board of Directors,
Wells Fargo Bank,
San Francisco, California.
Gentlemen:
The Board of Governors of the Federal Reserve System
aPProves the establishment of a branch by Wells Fargo Bank
in the vicinity of Rosemont Plaza on Middle Jackson Road
)low known as Kiefer Road), between Manlove and Mayhew Roads,
(
:acramento County, California, provided the branch is esablished within one year from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item No.

FEDERAL RESERVE SYSTEM

6/18/62

WASHINGTON

4A

itkg11:,

OFFICE OF THE CHAIRMAN

0o4q40)

June 18, 1962.

Ph41,
--Allip S. Hughes, Assistant Director
for
b
Legislative Reference,
cutive Office of the President,
o,itireau of the Budget,
"hington 25, D. C.
Attentioa Mrs. Garziglia.
ear Mr. Hughes;
communication
This is to advise, in response to your
of jun
that
recommends
Governors
the 1, e 15, 1962, that the Board of
amend
"To
10162,
the uresident approve the enrolled bill, H. R.
States
United
to -retton Woods Agreements Act to authorize the
Fund to
Monetary
International
the
Par
to
,
st
ticipate in loans
'engthen the international monetary system."
Sincerely yours,

(Signed) Wm. McC. Martin, Jr.
Wm. McC. Martin, Jr.

3

UNITED STATES OF AMERICA

Item No.
6/18/62

BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.

Oft

the Matter
matter of the Application of
IIIEHILLSBORO BANK AND SAVINGS COMPANY
for
N approval of acquisition of assets of
Cltizens Bank and Savings Company o
•`8131,1r0.

ORDER APPROVING ACQUISITION OF BANK'S ASSETS
There has come before the Board of Governors, pursuant to
the sank Merger
Act of 1960 (12 U.S.C. 1828(c)), an application by
The Hillsboro
Bank and Savings Company, Hillsboro, Ohio, a member bank
the
Federal Reserve System, for the Board's prior consent to its
a.clilisiti°11 of the assets and assumption of the liabilities of The
4tizens Bank
and Savings Company of Leesburg, Leesburg, Ohio, and,
4 - incident thereto, The Hillsboro Bank and Savings Company has
P11:11ieci
) under section 9 of the Federal Reserve Act, for the Board's
Prior
the
aPProval of
the establishment of a branch by that bank at

1c'eatio

4

of The Citizens Bank and Savings Company of Leesburg.
proposed
Pursuant to the Bank Merger Act, notice of the

approved
altiOn of assets and assumption of liabilities, in form

4

'III '
1111
•

the

Board of Governors, has been published, and reports on the

earriPetitive factors involved in the proposed transaction have been
sued by the Comptroller of the Currency, the Federal Deposit Insuran
oe Corporation, and the Department of Justice and have been conby the
Board.
IT IS ORDERED, for the reasons set forth in the Boardts
State
nient of this date, that said applications be, and hereby are
4Pirce4_
'
ed, provided that the capital stock of The Hillsboro Bank and
41,14
C°MPaRY is increased as required by law before the date of the
establi ,
4-snment of said branch, and provided further that said acquisition
ot
sets and assumption of liabilities and establishment of said branch
zhaii
not be consummated (a) sooner than seven calendar days after the
date or
this Order
or (b) later than three months after said date.

Dated at Washington, D. C., this 18th day of June, 1962.
BY order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, Robertson, and Shepardson.
Absent and not voting: Governors King and Mitchell.

(Signed) Merritt Sherman

Merritt Sherman,
Secretary.

(stAL)

BOARD OF GOVERNORS
OF THE

Item No. 5
6/18/62

FEDERAL RESERVE SYSTEM

APPLICATION OF THE HILLSBORO BANK AND SAVINGS COMPANY
FOR APPROVAL OF ACQUISITION OF THE ASSETS
OF THE CITIZENS BANK AND SAVINGS COMPANY OF LEES BURG

STATEMENT
The Hillsboro Bank and Savings Company, Hillsboro, Ohio

boro Bank")
011.)
*.

/1)ber 31,

with deposits of approximately $2.8 million as

1961, has applied, pursuant to the Bank Merger Act of

960 (1
2 U.S.C. 1828(c)), for the Board's prior approval of its acquisitiot or
the assets and assumption of the liabilities of The Citizens
Banat
and
savings Company of Leesburg, Leesburg, Ohio ("Leesburg Bank"),
th de
,
Aa„, fj°3its of approximately $2.25 million as of December 31, 1961.
-.1
incident to the foregoing, Hillsboro Bank has made application,
tizider
secti°n 9
of the Federal Reserve Act, for the Board's prior approval
t°r the
establishment of a branch at the location of Leesburg Bank.
(1)

Under the Bank Merger Act, the Board is required to consider

the p.
'
Inancial history and condition of each of the banks involved,
(2) the „,
'
4equaoY of its capital structure, (3) its future earnings prostS
(4) the
general character of its management, (5) whether its
°I‘P°t'ate
powers are consistent with the purposes of 12 U.S.C., Ch. 16
e
(th 4:ederal
Deposit Insurance Act), (6) the convenience and needs of

:
th c()nit'lurlities to be served, and (7) the effect of the transaction on
..rtipetiition

(including any tendency toward monopoly). The Board may not

-.2-.
approve
tt

the transaction unless, after considering all of these factors,

nus the transaction to be in the public interest.
Banking factors. - The capital structure and financial condition

(Itboth banks
are satisfactory, although in the event the transaction
C°1181111Mated,

the resulting bank must increase its capital as required

briall Prior to the
establishment of the proposed Leesburg branch.
1117°P°3ed

The

transaction would have the effect of adding management strength

allci a basis for improved earning power to what has been the operation of
the
Leesburg Bank, whose earnings have been below the average of similar
84e banks in the Fourth Federal Reserve District. There is no indication
that
t• he Powers exercised by the banks involved are or would be incon34tarit with
the purposes of 12 U.S.C., Ch. 16.
Convenience and needs of the communities. - Hillsboro, Ohio
„
(11°PullOfl about
5,500), the seat of Highland County, is situated in
aolithweatern Ohio aoout

55

miles northeast of Cincinnati in a predomi-

t tlY agricultural area, although some small industries provide employ• At
t• or a substantial number of people. Leesburg, Ohio (population
, is located 11 miles north of Hillsboro and is the shopping

°Irel' 90)•

for People in the immediate area.
4.rvice
1

°11
4kt.s

Although as a result of the proposed transaction no new

8 Would

be offered by the continuing institution, the general

of Hillsboro Bank would be increased from $25,000 to $40,000.
erease would provide more adequate accommodations for certain

97
.
1E7

Ss concerns in Hillsboro and for many cattle feeders in the areas
LiltetA

, the present customers of Leesburg Bank would benefit by the
creased
Bank's
lending limit of the resulting institution (Leesburg
Presero,
limit is $15,000). In addition, the proposed transaction would

"suit•n
with
1- Providing the residents of Leesburg and the nearby area
ba uc,
ir
"g facility under the management of Hillsboro Bank which could

•
thelr
tAto

credit needs more adequately than has Leesburg Bank.

between the
Competition. — There is only limited competition
banks

8

Leesburg
Involved. There may be some slight competition between

44d tqo larger banks in Washington Courthouse, situated 16 miles
4c1rith or
Leesburg. Hillsboro Bank's chief competition is with two
lrger b nk 4
a --s
Hillsboro; in the event the proposed transaction is
colisurnma
ted, the three banks in Hillsboro mould be approximately the
sarae et
ze* There is also limited competition between the Hillsboro Bank
b
azzi a
ank in Lynchburg, Ohio (12 miles northwest of Hillsboro).
Leesbur

4 bank located at Greenfield, Ohio, nine miles east of

g (deposits about

$4.4

million), and a branch of a Wilmington,

bank
nine
(deposits about $11.3 million) located in New Vienna,
we
kiles
st of Leesburg, are in competition with Leesburg Bank. To some
e,
Aterrt,
the establishment of a branch of Hillsboro Bank in Leesburg,
,
.41 'tell
q Leesburg Bank, would tend to stimulate this competition.
The acquisition of the assets of Leesburg Bank by Hillsboro Bank
ri ot,

service area of
adversely affect any of the banks in the

th
1.N1ting bank, and in certain sections of the service area of the
e°rtinb.
-ang institution competition should be stimulated.
Summary and conclusion. - The proposed acquisition would

eli,,4

'kulate little
competition, since competition between the two banks
irtvolv
ed is nominal. The proposed acquisition should not adversely
"feet

any of the banks that compete in the service area of the resultand in certain sections of such service area competition should

,.
be sti
mulateu The banking factors support approval of the proposed
he(Msiti°n, and customers of both Hillsboro Bank and Leesburg Bank would

‘.11efit

fr

the increased lending limit of the continuing institution.

C4stomers in
Leesburg would be provided with a banking facility that

coladaerve their credit needs more adequately than is being done at
'esent time.
the Pl
Accordingly, the Board finds the proposed transaction to be
41the
Public interest.

"1 1962.

,

UNITED STATES OF AMERICA

Item No.

6

6/18/62

BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
.4

.
4.
411.

the

----------------

Matter of the Application of

Z

.RST WISCONSIN
BANKSHARES CORPORATION,
Ilaukee, Wisconsin

14 silent to
Section 3 of the
'4111c
Holding Company Act of 1956
„,.

ORDER FOR

PUBLIC

PROCEEDING

The Board of Governors has pending before it an application
tiled

"-ir First Wisconsin Bankshares Corporation, Milwaukee, Wisconsin,

Parau
ant to section 3(a)(2) of the Bank Holding Company Act of 1956,

N. pri
°r aPproval of the Bnard of the acquisition by. Applicant of
N3 1,
'
er cent or more of the voting shares of Merchants 8c Savings Bank,
Jatesv
ills, Wisconsin. Notice of the Board's receipt of this application
1.1ae Pub]i
--shed in the Federal Register affording interested persons an
°4°rtuni+-"J to submit written views and comments regarding the application.
It now appears to the Board to be in the interest of the
DUblic
'as well as the Applicant, to afford further opportunity for the
cl§ress
of views and opinions by interested persons in a public proteecti„
4'g before
the Board. Accordingly,

IT?

-2IT IS HEREBY ORDERED, that a public proceeding before the
Board be

held commencing at 10 a.m. on August 7, 1962, at the offices

Of the B
oof Governors, Washington, D. C.
IT IS FURTHER ORDERED, that any person desiring to express
orall
Y a view or opinion on the application before the Board should
with the
Secretary of the Board, 20th and Constitution Avenue,
3

Washington 25, D. C., on or before July 24, 1962, a written
relative thereto, setting forth therein a general statement

Of the

nature of the views he wishes to express. Persons submitting
etIch re
quests will
be notified of the Board's decision thereon.
Dated at Washington, D. C., this 20th day of June, 1962.
BY order of the Board of Governors.

(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

(sEAL)

f