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Minutes for To: Members of the Board From: Office of the Secretary June 19, 1961 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 °n1Y that you have seen the minutes. Ohm. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King 201 Minutes of the Board of Governors of the Federal Reserve System on 14caldaY, June 19, 1961. PRESENT: Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman Mills Robertson Shepardson Sherman, Secretary Kenyon, Assistant Secretary Thomas, Adviser to the Board Young, Adviser to the Board and Director, Division of International Finance Mr. Molony, Assistant to the Board Mr. Landry, Assistant to the Secretary Mr. Petersen, Special Assistant, Office of the Secretary Mr. Mr. Mr. Mr. Messrs. Noyes, Holland, Robinson, Williams, Eckert, Sigel, Solomon, Kalachek, Manookian, and Trueblood, and Miss Dingle of the Division of Research and Statistics Messrs. Furth, Hersey, Katz, Irvine, Wood, Emery, Gemmill, and Maroni of the Division of International Finance Economic review. The staffs of the Divisions of International --ce and Research and Statistics presented a review of foreign and clomes • tic economic and financial developments, at the conclusion of which embers of the staff except Messrs. Sherman, Kenyon, Molony, Noyes, Lariarv v, and Eckert withdrew and the following entered the room: Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Hexter, Assistant General Counsel Hooff, Assistant General Counsel Hostrup, Assistant Director, Division of Examinations Mr. Smith, Assistant Director, Division of Examinations Mr. Troup, Supervisory Review Examiner, Division of Examinations Mr. Mr. Mr. Mr. Mr. t:71 4,(;f7 6/19/61 -2Items circulated to the Board. The following items, which had been circulated to the Board and copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Letter to Wells Fargo Bank American Trust 41,5r, San Francisco, California, approving n"` Ttz extension of time to establish a branch in "e Roseville Square Shopping Center, Roseville. Letter to Wells Fargo Bank American Trust Company, c r1 Francisco, California, approving an extension S ; time to establish a branch in the vicinity of "e Civic Center on North First Street, San Jose. 1 2 Governor Shepardson observed that there may have been involved in both of these applications the factor of pre-emption of territory, and Mr. S010trion commented that the Division of Examinations was reviewing branch 6931dcations carefully with this point in mind. Limited voting permit for Western Bancorporation (Item No. 3). Under date of June 9, 1961, copies of a memorandum from the Division of eoLinations had been distributed regarding an application by Western }lazeo rPoration (formerly Firstamerica Corporation), Los Angeles, California, a limited permit to vote its stock of Southern Arizona Bank and Trust a.nC°rl lr, Tucson, Arizona, at the special meeting of shareholders to be held on June 22 1961, or any adjournments thereof, for purposes specified in the memorandum. The recommendation of the Division of Examinations was tlItIt the limited voting permit be issued. 6/19/61 Reference also was made in the memorandum to the fact that Firstanierica had filed an application for a general voting permit covering its stock of Southern Arizona Bank and Trust Company with the San Francisco Reserve Bank in July 1958. (Prior to that time an application also had been filed by Firstamerica's predecessor, Transwaerica Corporation.) ik4lever, the application was held by the Bank, pursuant to a Board swgesti°11) in view of the then pending investigation of the Clayton Act asPects of the acquisition by Transamerica of control of Southern. At its meet. ing on April 13, 1960, when the Board decided that there was no 'violation of the Clayton Act involved in the acquisition referred to, it Ilas decided not to request the Reserve Bank to send the application to the toard, s offices because of pending legislation relating to bank mergers. At it_ meeting on January 9, 1961, when a limited permit was again granted, the 104,uard decided to defer any request to the San Francisco Bank to transmit the , ebeneral voting permit application pending a further recommendation on thai. 'Point by the Division of Examinations. It was now the suggestion of the D. lvlsion, as expressed in its memorandum, that the Board might wish to st the Reserve Bank to forward the application, with supplementary 111-tcm--,11-0.tion relating to Western Bancorporation's financial condition and clebt status. In the course of a discussion as to the disposition of the general 8 Permit application being held by the San Francisco Reserve Bank, it 6/19/61 -4- was mentioned that the Justice Department, which has concurrent jurisdiction Illth the Board under the Clayton Act, presumably was still considering the P°ssibility of a violation of the Act with respect to acquisition of Southern Arizona Bank and Trust Company by the predecessor to Western Bancorporation. liczrever, it was not apparent that at this stage the Justice Department's Position would be jeopardized by the granting of the general voting permit e'lcation. At the time the application originally was filed, the study of --lng in Arizona was in process and there was some apprehension that the 81)Mioant bank holding coutpany might vote its shares in favor of merger of 8(3uthern Arizona with another bank controlled by the holding company. Under Present law, however, any merger would have to be approved by a Federal bank 81/Pervisory agency, and thus both the Board and the Department of Justice l'I°111(1. be put on notice. Thereupon, the application by Western Bancorporation for a limited .vtting permit was approved unanimously, with the understanding that the ?edLeral Reserve Bank of San Francisco would be requested to forward the laPlication for a general voting permit covering Southern Arizona Bank and 1111"11st Company after it had been supplemented to include current information l'elating to the financial condition and debt status of Western Bancorporation. A Q0„ lq of the telegram authorizing the Federal Reserve Agent at the Federal Resey.- -ve Bank of San Francisco to issue the limited voting permit is attached CtZ f 6/19/61 -5Mr. Hostrup withdrew from the meeting at this point. b_pplication of Citizens Commercial & Savings Bank (Item No. 4). Mr. Scacmon reported that pursuant to the understanding at the Board meeting on j4111e 16, 1961, he informed the Federal Reserve Bank of Chicago of the possi- bility that the Board would disapprove the application by Citizens Commercial Savings Bank, Flint, Michigan, to consolidate with The Old Corunna State 131921k, Corunna, Michigan, and inquired whether the Reserve Bank would like to Otter any further comments or information. The Reserve Bank indicated that alth°ugh it would stand by its favorable recommendation, it could understand the reasons for a difference of opinion on this question. The Bank had n°t111118 new to submit in the way of additional information. Chairman Martin inquired whether any of the members of the Board had vle/78 on the application different from those they had expressed previously, slidthere was no such indication. Accordingly, the application was denied, e*rernor Mills dissenting for the reasons he had stated at the June 16 nleeting. A copy of the letter transmitting this decision to the applicant bWt is attached as Item No. 4. Messrs. Hooff and Troup then withdrew from the meeting. 22guest from Justice Department. Two alternative drafts of reply to the Department of Justice's letter of June 6, 1961, requesting names of banks included in the 1955 business loan survey had been distributed under (late °f June 161 1961, pursuant to the understanding at the meeting on that 6/19/61 date. -6- One draft would furnish, as requested, the names of those 22 banks, °Ilt Of 43 listed by Justice, that had participated in the survey, but would urge) for reasons stated, that in communicating with banks in the course of its investigations the Department avoid reference, directly or indirectly, to Reserve surveys or statistical reports. The other draft would de line e to comply with the request. After noting that there appeared to be a division of opinion among the )3°8-1'cl members on the manner of responding to the request of the Justice DepartMerit) Chairman Martin suggested that the matter be deferred until such time as additional Board members were present or until there was an opportunity t0 discuss the matter informally with Assistant Attorney General Loevinger. No objection being indicated, it was understood that the procedure slIggested by the Chairman would be followed. Messrs. Noyes, Hexter, and Eckert then withdrew from the meeting. itport of examination of Federal Reserve Bank of Cleveland. The covering the examination of the Federal Reserve Bank of Cleveland 4941e as of January 27, 1961, had been circulated to the Board along with the usual accompanying memoranda. In the course of his comments on matters disclosed by the examination, Smith noted that two minor changes had been made, with the concurrence of the 0 hie Federal Reserve Examiner, in the text of the report of examination. These , enanges, which related to coin operations in the Cash Department at 6/19/61 -7- the head office, were intended to improve the accuracy of the pertinent P°1-tions of the report and avoid possible misinterpretations. In response to a question from Governor Mills on this point, Mr. 861cmon and others explained the nature of the procedures in the Coin 1)1vision that had occasioned the comments in the examination report, along Iiith the reasons why the changes in the text of the report seemed desirable. In a related discussion, pertaining to the content of reports of examination in general, Messrs. Solomon and Smith assured the Board that the reports l'relle intended to be inclusive and to set forth all matters deemed to warrant e°1111erit. with The effort being made was to phrase the comments in the reports such clarity as to avoid the possibility of conveying erroneous iqressions. At the conclusion of Mr. Smith's comments on the examination of the Cl4wo --anu Bank, it was agreed that there were no matters appearing to require 4etion on the part of the Board. The meeting then adjourned. Secretary, BOARD OF GOVERNORS 4004,0*** :4, 0/ Q©le 444 OF THE FEDERAL RESERVE SYSTEM 4 WASHINGTON 25, D. C. Item No. 1 6/19/61 444 °. ADDRESS OFFICIAL CORRESPONDENCE 4A0NJT TO THE BOARD 4.440.4.4 June 19, 1961 Board of Directors, Wells Fargo Bank American Trust Company, San Francisco 20, California. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors of the Federal Reserve System extends until January 5, 1962, the time Within which Wells Fargo Bank American Trust Company may establish a branch in the Roseville Square Shopping Center, Roseville, Placer County, California, under the authorization contained in the Board's letter of October 6, 1960. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 01 BOARD OF GOVERNORS OF THE Item No. 2 6/19/61 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OrriCIAL CORRESPONDENCE TO THE BOARD June 191 1961 Board of Directors, Wells Fargo Bank American Trust Company, San. Francisco 20, California. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors Of the Federal Reserve System extends until January 8) 1962, the time within which Wells Fargo Bank American Trust Company may establish a branch in the vicinity of the Civic Center on North First Street, San Jose, California, under the authorization contained in the Board's letter of July 8, 1960. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. Item No. 3 6/19/61 TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON June 191 1961 WHITMAN - SAN FRANCISCO KECEA A. Western Bancorporation, Los Angeles, California B. Southern Arizona Bank and Trust Company, Tucson, Arizona C. None. D. At any time prior to September 1, 1961, at a special meeting of shareholders of such bank, or any adjournments thereof, to (1) amend the Articles of Incorporation of the bank to (a) increase the number of directors to not less than fifteen nor more than twenty-five; (b) increase the capital stock of such bank and take all action necessary in connection therewith; (c) increase the highest amount of indebtedness or liability to which the bank shall at any time subject itself over and above the amounts due depositors, from $1,666,666 to $2,900,000; and (2) to act thereat Upon such other matters of a routine nature as may properly come before such special meeting, provided all actions taken with respect to (1)(b), (1)(c), and (2) are in accordance with plans satisfactory to the Federal Reserve Bank of Dallas STOP Please forward a copy of permit issued by your Bank to the Dallas Reserve Bank. (Signed) Elizabeth L. Carmichael CARMCWU1 Definition of KECEA! voting permit, The Board authorizes the issuance of a limited Revised Statutes the of 5144 section of provisions the under affiliate named company holding the to of the United States, organization to below after the letter "A", entitling such bank(s) named vote the stock which it owns or controls of the ) stated condition(s the to subject "B", letter below after the hereunder below after the letter "C". The permit authorized stated after is limited to the period of time and the purposes the instrucwith accordance in proceed Please "D". the letter (S-960. 1947, 10, March of letter Board's http://fraser.stlouisfed.org/ tions contained in the Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 4 6/3.9/61. WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD June 21, 1961 Board of Directors, Citizens Commercial & Savings Bank, Flint, Michigan. G entlemen: Reference is made to your request submitted through the Fed „.-sral Reserve Bank of Chicago for consent under section 18(c) 01 the Federal Deposit Insurance Act, to consolidate with Old °runna State Bank, Corunna, Michigan, and for approval to operate a branch at the present location of Old Corunna State Bank. The proposed consolidation would increase the already high de egre of concentration of banking facilities and resources in the Flint trade area and could materially impair the future camPetitive capacity of other banks in that area. While it. is api,2arently contemplated that the continuing bank would offer a :°msyhat broader range of banking service in Corunna, it does not that Corunna or the Corunna-Owosso area is now being served t. tir qu Section 18(c) of the Federal Deposit Insurance Act prov -des., that the Board of Governors shall not approve a merger unless, -ter considering all of the factors stated in the section, the reard finds the transaction to be in the public interest. For the t04!°ns stated above, the Board does not find the proposed merger be in thethe public interest and accordingly, the application is denied Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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