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Minutes for
To:
Members of the Board
From:
Office of the Secretary
June 25, 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
mlnutes 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
ithe Secretary's Office. Otherwise, please initial
jelow. 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.
Chin. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
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Federal Reserve Bank of St. Louis
er,,
Minutes of the Board of Governors of the Federal Reserve
S
em on Monday, June 25, 1962.
The Board met in the Board Room at
10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
King
Mitchell
Sherman, Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank
Operations
Mr. Solomon, Director, Division of
Examinations
Mr. Johnson, Director, Division of
Personnel Administration
Mr. Hexter, Assistant General Counsel
Mr. Leavitt, Assistant Director, Division
of Examinations
Mr. Thompson, Assistant Director,
Division of Examinations
Mr. Sprecher, Assistant Director, Division
of Personnel Administration
Mrs. Semia, Technical Assistant,
Office of the Secretary
Mr. Morgan, Editorial Specialist,
Board Members' Offices
Mr. Young, Senior Attorney,
Legal Division
Mr.
Mr.
Mr.
Mr.
Mr.
Circulated items.
The following items, which had been circulated
to tb
"e Board and copies of which are attached to these minutes under the
resh" •
etive item numbers indicated, were approved unanimously:
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Federal Reserve Bank of St. Louis
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-2Item No.
lt,etter to The Elyria Savings & Trust Company,
1Yria, Ohio, approving the establishment of
a branch in
North Ridgeville, branch operations
4°14 conducted at another address in North
ri dgeville to be discontinued simultaneously
/11th the establishment of the new branch.
1
rplegram to the Federal Reserve Bank of San
,rpaticisco interposing no objection to the sale
)%a portion of the Bank's parking lot to the
0
(
Y and County of San Francisco.
2
Report on competitive factors (Lancaster-Mount Joy, Pennsylvania).
There had been distributed a draft of report to the Comptroller of the
eltrrencY on the competitive factors involved in the proposed merger of
First National Bank and Trust Co. of Mount Joy, Mount Joy, Pennsylv8.414, into The Lancaster County National Bank, Lancaster, Pennsylvania.
After a discussion during which certain changes in wording
r the
conclusion of the report were agreed upon, the report was
e 1172.1Z1 unanimously for transmission to the Comptroller of the Currency.
"&
The conclusion of the report as approved read as follows:
Moderate competition existing between Lancaster Bank
and Mount Joy Bank would be eliminated by consummation of
the proposed merger. A change in the nature and degree of
competition might occur in the Mount Joy area through the
introduction of the larger bank. While the number of
alternative banking offices would not be reduced, the
entrance of Lancaster National Bank into Mount Joy might
!dyersely affect the competitive position of the substantlally smaller remaining bank.
Whitney Holding Corporation (Items
3 and 4). There had been
tlistzlhuted a memorandum dated June 221 1962, from the Legal Division
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ta connection with a petition filed with the Board on June 131 19621
°II behalf of three banks in Louisiana for reconsideration of the Board's
()rder of May 30 19621 in the matter of Whitney Holding Corporation. The
Petition,
filed by Edward L. Merrigan, a Washington lawyer, requested
the Board (1) to revoke its order of May 3, 1962, permitting Whitney
lielding Corporation to become a bank holding company, and (2) to
”
8‘EtrIt a rehearing herein and after reconsideration by appropriate order
dertY the application of the Whitney Holding Corporation."
On June 91
1962) the same benks began a suit in the United States District Court
the District of Columbia to enjoin the Comptroller of the Currency
tr°14 issuing a certificate "authorizing the establishment of new
1111c/1 bank facilities ... in the name of Whitney National Bank or
'
131
°therwise in Jefferson Parish."
The memorandum from the Legal Division noted that section 9
°I' the
Bank Holding Company Act provides that "Any party aggrieved by
ell Order of the Board under this Act may obtain a review of such order
14 the United States Court of Appeals .. ." within sixty days after the
elltr7 of the Board's order.
The complaint in the suit against the
ec)riltroller of the Currency indicated that the plaintiff banks intended,
it the Board failed to grant the relief requested, to apply for review
or the Board's order in the United States Court of Appeals for the Fifth
Circuit, in New Orleans.
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After reviewing circumstances relating to the formation of
IlhitneY Holding Corporation, the memorandum presented legal considerations,
Illeluding a Supreme Court decision, that made it doubtful that the
1/(3erd had power to revoke its approval of the Whitney application, that
4PProval in effect having constituted a license to such Corporation.
Rowever, time had not permitted adequate study of the question of the
13(1)allt e authority to revoke its approval under the circumstances here
/)resented, and in any event it was the view of the Legal Division that
the Petition for reconsideration should be denied by the Board on its
merits. The arguments advanced by the banks for reversal of the Board's
ee*Qier decision approving the formation of the holding company were as
follows:
1. ". . the Board has approved a program specifically
designed to evade the letter and spirit of the applicable
Pederal and State Banking laws."
2. Authorization of such bank holding company systems
14ou1d "unnecessarily place into the hands of Federallybanks a powerful and unfair competitive advantage
over State banks .. ."
3. The Whitney Plan involved a "violation of the intent
trld spirit, if not the letter", of section 6(a) of the Bank
.4 olding Company Act, which forbids a holding company bank to
4riVeSt in the capital stock of the holding company or another
atibsidiary, or to make any loan to the holding company.
taelk
- of these arguments was analyzed in the memorandum, and the Legal
t1vj8
10n rejected each as constituting justification for reconsideration
Ot the
Board's decision.
Moreover, although Whitney Holding Corporation's
41.ication had received considerable publicity in New Orleans and elsewhere,
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the petitioners made no presentation of their views at any point in
the Whitney
proceedings.
They first communicated with the Board more
than a month after the issuance of the Board's order of approval, and
/leeks after the Whitney organization had carried out most of its plan.
The Legal Division concluded, on the merits of the petition,
that
no new facts or arguments had been presented that would justify
the Board's revoking the order and reopening the case, especially in
viel of the unwarranted failure by the petitioners to present their
4:ND.Ments until long after the Board's action. Accordingly, the
blvision recommended that the Board refuse to revoke the order or to
llt a rehearing.
gre
'
A draft of letter reflecting that recommendation,
44areseed to Mr. Merrigan, Counsel for the petitioners, was attached
to the memorandum.
Counsel for the petitioners had requested disclosure to him
Or actliPtroller of the Currency Gidney's letter of October 11, 1961,
l'eccIllimenaing approval of the Whitney application.
The Legal Division
Ileectraended that that request be granted, in accordance with the practice
th -pk
e -oard, whenever a public proceeding was ordered in a merger or
ng company matter, to make available for public inspection not only
the ,
giTlication but also all communications filed with the Board by other
Ove
-"went agencies pursuant to statutory provisions.
Discussion indicated agreement by the members of the Board
Itith t
he Legal Division's recommendation for denial of the petition for
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Consideration.
However, Governor Mills raised a question as to
making Comptroller Gidney's letter available, to which Mr. Hexter
responded that, incidental to the right of the petitioners to appeal,
they should be given an opportunity to see pertinent documents. The
Legal Division was of the view that to refuse the request for the letter
v°11-14 unjustifiably impede the recourse to which the petitioners were
entitled.
Governor King, recalling that subsequent to the oral presentationl
had
regarding the Whitney application Comptroller of the Currency Saxon
,
vtatten to the Board about the case, suggested reasons why that letter
418° might be made available to Counsel for the petitioners, and no
Ohjecti
-on to that suggestion was expressed by the Board.
During further discussion certain changes in the letter to
*0 Merrigan were suggested, one of which was that reference be made
tO
th fact
reconsiderathat, although the Board denied the petition for
ti°11 of the Whitney application, the petitioning banks still had access
,.
,
to j
approved unanimously.
u4leial review. With these changes the letter was
'
A Q0,_
v/ of the letter, as sent, is attached as Item No. 3.
Secretary's Note: Subsequent to the
meeting, Mr. Hexter informed Mr. Merrigan
by telephone of the Board's denial of
Gidney's
the petition and that Comptroller
At
inspection.
letter was available for
of
photostat
Mr. Merrigan's request, a
lieu of
Mr. Gidney's letter was sent in
inspection of the original.
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Comptroller Saxon's letter of February 271
1962, was reviewed and was found not to
contain any expression of views bearing
on the merits of the Whitney application.
Also, since the letter had not been
requested specifically, the Board's staff
had reservations about furnishing it to
Counsel for the petitioners. Upon being
informed of these facts, Governor King
agreed that Comptroller Saxon's letter
should not be sent.
Mr. Hexter then referred to a letter dated June 210 19621 that
11841 bean received from Mr. Jeansonne, Louisiana State Bank Commissioner,
l'Llleating that a "rehearing" be granted on the application of Whitney
11°1cling Corporation.
Mr. Jeansonne enclosed an opinion of the Louisiana
State Attorney General which, after reviewing various provisions of
44 and a bill pending in the State legislature, concluded that "It
18 the opinion of this office, therefore, that a bank holding company
1441r
Ill:It circumvent the branch bank laws of our State by the acquisition
ore' controlling interest in a subsidiary which is located in a parish
(Ither than the domicile of the parent company."
Mr. Hexter read a draft of reply to Commissioner Jeansonne
that
oUld inform him of the Board's denial of the three banks' petition
tor
-consideration and point out the opportunities that had been made
'
414LilRble for filing protests while the Whitney proceedings were in
131‘c3€1t88. Mr. Hexter stated that in the Whitney case the State Bank
C°41111-ssiorxer had had full information about the proposal, but that
sitUation had not prevailed in F3l 1 holding company cases. It had been
the
Practice to inform the State bank supervisors of the receipt of any
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11°1(113:1€ company application that involved State banks; when national
haul% were involved, the Board informed the Comptroller of the Currency
but did
not ustmlly inform the State bank supervisor.
Mr. Hexter suggested that the Board adopt the practice of informing
State bank supervisors promptly of the filing of all holding company applications involving banks in their States.
Mr. Rexter's suggestion.
Agreement was expressed with
It was also understood that the Comptroller of
he Currency would be informed of the receipt of applications involving
State banks.
The proposed letter to Commissioner Jeansonne was then approved
11r14tallaously.
A copy of the letter is attached as Item No. 4.
Conflicts of interest (Item No. 5).
At its meeting on June 14,
1962) the Board considered a memorandum dated June 5, 1962/ from the
Divisi°11 of Personnel Administration regarding a memorandum from the
President dated February 9, 1962. The President's memorandum directed
that _,
°J-1 Government departments and agencies take administrative steps
to ov
ersee the activities of advisers and consultants employed by the
Cove,
,L11flent in order to insure that the public interest was protected from
itDr
oPer conduct. Specifically, departments and agencies were asked to
l'ecIllire each consultant or adviser to supply a statement of his private
ettao
YMent and financial interests, although precise amounts of invest'v ent 11.„
-ev- not be disclosed. To carry out that request, the Personnel
1°4 proposed that each of the Board's consultants be sent a pamphlet
k'Y Of the
President's memorandum and be requested to fill out a
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Federal Reserve Bank of St. Louis
2292
4
6/25/62
-9devised by the Division and attached to its memorandum.
The Division memorandum also recommended that, whereas heretofore
several of the Board's consultants had been employed on open-ended
aPPointments, by the first of 1963 each consultant be informed that
aPpointment was being extended only through the ensuing calendar
Year and that renewal, if necessary, would be on a year-to-year basis.
At the June 14, 1962, meeting the Board agreed to consider
that
the President's request applied only to its consultants, since
it had "advisers" on its permanent staff and the President's request was
eratood not to contemplate full-time employees.
However, during the
(113ella8i0n questions arose as to the scope of the term "consultant."
In
rtieular, the Board was concerned about the status of academicians who
'
ipa
Illight be
invited to participate in one or two-day seminars, and it was
raerrtionel that the Treasury Department frequently conferred with a fairly
141‘ge group in such a conference.
Action on the proposal for requiring
ConElt
atants to provide the data specified accordingly was deferred pending
by the Division of Personnel Administration as to the interpretation r3f the term "consultant" by other Government agencies.
There had been distributed a memorandum dated June 20, 1962,
NA the Division
it
inquiry.
of Personnel Administration, reporting the findings
The Treasury Department, as a matter of administrative
discretion,
excluded from the coverage of the President's directive
14dividuals
or committees that presented views to the Department in a
l'ePresentative rather than an employee capacity.
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Federal Reserve Bank of St. Louis
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JUstice„ which had assisted the President in the preparation of his
February
9, 1962, memorandum, indicated that such one-time arrangements
se the Board's seminars were not intended to fall within the conflicts
°t interest memorandum, and therefore it would not be necessary to
l'equest a disclosure of financial interests from participants.
After discussion, the Board approved unanimously the recommendati°ns of the Division of Personnel Administration that the President's
neniorandurn be sent to the Board's consultants and that they be asked
to furnish the information called for by the questionnaire devised by
the Division. Copies of the letter sent by the Division to the Board's
e°rIsilltents, and the questionnaire that accompanied it, are attached
8.8
Item No
r.
The Board also approved unanimously the Division's
l'"oloomendation that engagement of consultants henceforth not extend
Yo
the end of the calendar year for which they were appointed.
Messrs. Johnson, Sprecher„ and Young then withdrew, and Messrs.
8144% Assistant General Counsel, and Hill, Attorney, Legal Division
elltered the room.
Application of First Bancorporation of Florida.
There had
been distributed a memorandum dated May 18, 1962, from the Division
Of t,
'ftinations in connection with the application of First Bancorporation
or pi
,
°rida
Inc., Orlando, Florida, for approval to become a bank hold-
eclarParlY through the acquisition of 51 per cent or more of the voting
813'Eiss of each of the following banks:
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Federal Reserve Bank of St. Louis
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-11The Barnett National Bank of Jacksonville,
Jacksonville, Florida;
The First National Bank of Miami, Miami, Florida;
The First National Bank at Orlando, Orlando,
Florida;
The Exchange National Bank of Tampa, Tampa,
Florida.
It was also proposed that First National Bank, Orlando, retain
affiliate relationships with three small banks presently affiliated with
it) and Exchange National, in Tampa, retain such relationship with one
814411 affiliated bank.
The Comptroller of the Currency had indicated no objection to
aPProval of the application; the Federal Reserve Bank of Atlanta
I
llmended approval; however, the Division of Examinations recommended
derlial. The May 18 Examinations memorandum presented and analyzed in
detail the factors relating to the application, especially with
nce to the factors cited for consideration by the Bank Holding
I
C°121ParlY Act, and the reasoning that led to that Division's recommendation
rOr
denial.
There had also been distributed a memorandum dated June 15,
4
) Jal which the Legal Division commented on the conclusions reached
1962
by
the Division of Examinations. If the Board agreed with those
c°11c1
usions, it would mean that, in the Board's judgment, both substantial
vorable
e4Bes
in the
elements and substantial unfavorable elements existed
In view of the discretion vested in the Board by the Bank Holding
Act, that would justify the Board in deciding either to grant
°lit° deny the application, depending upon the relative weights to which
the 1104rd decided the elements were entitled.
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-12The Legal Division also expressed the opinion that the formation
(I the proposed holding company would not tend "substantially to lessen
c)111Fetiti0n, or .
. to create a monopoly" and consequently would not
violate section 7 of the Clayton Antitrust Act. That view seemingly was
in h.-4-mony with the view of the Department of Justice, as quoted in the
4aminations Division's memorandum.
At the Board's request, Mr. Thompson summarized the facts
of the
case.
As to the first three factors, financial condition and
4114°1'7 of the institutions involved, their prospects, and the character
°f their management, no adverse circumstances were apparent.
As to the
t°1114th factor, convenience, needs, and welfare of the communities, he
(*served that the proposed subsidiary banks were located in the strategic
cities of Jacksonville, Miami, Tampa, and Orlando. They were large and
8°4411 institutions that had done an excellent job in providing the usual
ieee associated with commercial banking and in keeping up with the
Ileecia for improvement in services.
The applicant claimed that it would
1511°vicie a vehicle for expanding those services and add new ones,
d aily in industrial counseling, as well as provide a larger loan
and make possible the provision of additional capital.
However,
1411. T
h°mPson observed that the proposed subsidiary banks were already
vela
capitalized, and State, community, and business authorities were
earem
Y making efforts to attract industries to the State. The applicant
41311 .1
4 8° contended that the holding company would enable the subsidiary
'
'
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banks to participate loans, but the Division of Examinations noted
that
while the banks had been understood to be on friendly terms, no
one of the proposed subsidiaries had participated loans with any other
dul'ing a twelve-month period. There appeared to be no great need for
1)articipations that could not be supplied by correspondents.
In total,
it 'was not believed that the fourth factor lent strong support for
aPProval of the application.
As to the fifth factor, the effect of the size and extent of
the Proposed holding company operation upon adequate and sound banking,
the Public interest, and the preservation of competition, Mr. Thompson
"Pressed the view of the Division of Examinations that the present
4PP4cation showed many of the elements that were present in the
ItIPPlioation of the Morgan New York State Corporation case, which the
13°ard denied by order dated May 4, 1962. The proposed subsidiaries
I'lere four of the ten largest banks in Florida, a State that, because
°It the special character of its banking laws, had a lower ratio of
bariL-4
--411g offices to population than the national average. The benefits
by the applicant did not seem impressive, and it appeared that
"
441
11INI°val of the application would substantially upset the banking
"ee in Florida.
-
One complaint had been received, from a member
or the Atlantic National group.
Mr. Thompson presented detailed comparisons
or the deposits held by the applicant's proposed group, the Atlantic
Ilaticllal group, and the Florida National group (not a registered bank
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He also cited percentages of deposits held by the
holding company).
Proposed subsidiaries in their cities, counties, and the State of
llorida.
On balance, it was believed that the adverse circumstances
respect to the fifth statutory factor outweighed any possible
favorable elements under the fourth factor.
Mr. Solomon then commented that the outstanding feature
the application was that it contemplated gathering together the
top institutions of the State, which had 26 per cent of the State's
deposit. To him, that was more significant than the total concentration
Ilthin the State.
banks would have
State*
Under the proposed holding company organization, the
35 per cent of the correspondent bank business of the
It was quite understandable that a bank of the Atlantic National
11011P had complained; that group would probably- bear the brunt of the
'
celnIzletitive disequilibrium that appeared probable if the application
or
First Florida were approved.
The comparison the Division of Examinations had drawn between
the
Pirst Florida application and that of Morgan New York State Corporation
v48 discussed. It was true that in the Florida application there was
40
giant such as Morgan Guaranty Trust Company; yet the applications
similar in that each sought to create a network relationship of
lEtre
Yanks that had been serving their communities well as units.
Governor Mitchell asked if there was any other holding company
that ad
4-- only large banks as subsidiaries, to which Mr. Solomon replied
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that First Wisconsin Bankshares Corporation of Milwaukee, Wisconsin,
Va8 pradbly the nearest approach to that situation, although it did
110t include the element of linking the largest and most strategically
Placed cities in the State, as did the Florida application.
Marine
Midland, in New York State, was another possible comparison, but it
f°11med the more usual holding company pattern of a big lender in a
big city, with satellites.
The members of the Board then presented their views, beginning
vit
hGovernor Mills, who read the following statement:
This application has been submitted under the provisions of
the Bank Holding Company Act of 1956 and must be considered in
accordance with the letter and the spirit of that act. The
five factors required to be weighed as against approval or
disapproval of the application, in my opinion, are weighted on
the side of approval.
The first three statutory factors (the financial history and
condition of the company or companies and the banks concerned;
their prospects; the character of their management) required to
be evaluated with respect to the application stand in each
case on the side of approval. The specifications set out
in the fourth factor (the convenience, needs: and welfare of
the communities and the area concerned) likewise stand on the
aide of approval of the application, in that the effect of its
consummation should redound to the benefit of the communities
and the area concerned.
The balancing factor in consideration of the application is
the fifth factor (whether or not the effect of such acquisition
or merger or consolidation would be to expand the size or extent of
the bank holding company system involved beyond limits consistent
with adequate and sound banking, the public interest, and the
preservation of competition in the field of banking), the elements
Of which likewise are weighted in favor of approval of the
of the
application. It is noted that when imputing the terms
of
the
is
Division
Clayton Act to the application, the Legal
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opinion that consummation of the proposal would not violate
section 7 of that act. The fifth factor of section 3(c) of the
Bank Holding Company Act of 1956 in general terms expresses a
rationale bearing close comparison to that expressed in the
Clayton Act. It is my belief that approval of the application
would not be in conflict with the legislative intent, going back
over many years, to protect the economy against the existence
of organizations whose activities tend toward monopoly or to
lessened competition.
The application of First Bancorporation of Florida does not
represent a proposal whose consummation would be injurious to the
banking structure and financial welfare of the State of Florida.
The proposed bank holding company would not create a financial
organization of overwhelming size as regards the State of Florida,
Which is the focal point of analysis. The State of Florida
ls now served by a large number of commercial banksIthe most
Important groupings of which are represented by the Florida
National group and the Atlantic Trust group. The creation of
First Bancorporation of Florida would not add a third grouping
of commercial banks which, either alone or in conjunction with
the two other groupings, would concentrate commercial banking
resources in the State to an extent that would adversely affect
competition or reduce the availability of alternative sources
of banking facilities in a way that might impair the usefulness
of such services to any of the localities concerned. The State
of Florida is presently served by a large number of independent
banks of a size fully capable of providing for the great bulk
?f the banking requirements originating out of the communities
in which they are located. If it were not for the fact that
the laws of the State of Florida prohibit branch banking, it
ls conceivable that the State would be served by a fewer number
Of, but larger size, banks capable of offering a more coordinated
range of services than is now the case under the State's existing
banking structure.
It is reasonable to consider the application of the First
1?8.t1corporation of Florida in the light of coordinating and
integrating the activities of a group of banks to the end of
supplying a broader range of banking services than is now
available in the independent status of the various banks that
would be a part of the proposed bank holding company. First
Bancorporation of Florida would not, as in the case of the
Morgan New York State Corporation, represent an overwhelming
control over banking resources that would be inimical to the
existence of a wide choice of alternative banking facilities
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in the State or to fostering the possibility of arrangements
between important customers with the subsidiary banks of the
bank holding company that could prove to be detrimental to the
banking needs of smaller but equally creditworthy applicants
for banking services.
The creation of First Bancorporation of Florida would not
alter the status of the many independent commercial banks that
would continue in existence and whose facilities are generally
Of a size to meet fully the banking needs of the communities
which they serve. Although these independent banks in some
cases may depend somewhat on the commercial banks which would
become a part of the proposed holding company, it is quite unlikely
that they would be foreclosed from obtaining overloans for their
customers or other correspondent banking services in consequence
of the creation of the holding company, in that alternative sources
for such services would remain available from other commercial
banking organizations both within and without the State of Florida.
For that matter, the competition for interbank deposits is such
as to suggest that the subsidiary banks of the proposed holding
company would continue to seek to retain and to foster their
existing correspondent bank relations. Moreover, although corresPondent bank deposits swell the totals of deposits of the various
banks that would be a part of First Bancorporation of Florida
and are, therefore, an important source of their lending resources,
that type of deposit does not have the same competitive importance
to the banks in question as would be true of the kinds of deposits
that originate out of the localities in which the individual banks
are situated and competition for which is the lifeblood of the
banks in question. In other words, any possible dioinution in
competition for interbank deposits that would flow out of the
creation of the proposed bank holding company would be a minimal
consideration as regards any adverse competitive effect. The
fact that the creation of the First Bancorporation of Florida
would also comprehend the attachment of various subsidiary and
affiliate banks to the principal banks composing the holding
company suggests that over a period of time the growth of these
subsidiary and affiliate banks might indirectly add to the size
of the principal banks composing the bank holding company and in
that way produce a farflung commercial banking organization that
11.11ght, in the light of size, exert an unfavorable competitive
Influence on the commercial banking structure of the State of
are
111°rida. Inasmuch, however, as the independent banks that
future
in
the
operate
now operating and which will continue to
can be expected to grow at the same or at a faster rate than the
subsidiary and affiliate banks, there is little prospect of the
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development of an unfavorable commercial banking competitive
Climate arising from this source.
. Everything considered, therefore, the application of the
First Bancorporation of Florida should be approved.
Governor Robertson stated that he would vote to disapprove
tle
aPPlication; the analysis in the Division of Examination's memo-
randum was in accordance with his thinking.
Governor Shepardson expressed concurrence with the reasons
Governor Mills had presented for approval.
Governor King expressed agreement with the view of the staff
that the First Florida application presented a closer case than had
the Morgan New York State Corporation case. To him, a significant
difference was that to arrive at an adverse conclusion regarding the
?1°Ilicla application, it was necessary to go farther into the future to
;iciPate adverse consequences. The Florida application, involving
"
four large banks plus four small affiliates, represented only about
2 pe
r cent of the offices of the State. The competing Florida National
(tic)14P of banks, which was not an institution but in the nature of an
1
llt°111441 partnership, had 29 offices, or 9.2 per cent of the banking
°ttlees in the State. Thus, it would seem that the people sponsoring
Fir
Florida would find it hard to understand that their application must
be A
kenied as presenting a situation worse than the one made an operative
'
f4ct by
the Florida National group. At the present time Governor King
leAt, ,
toward approval of the First Florida application, although he
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Federal Reserve Bank of St. Louis
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reserved the right to change his position if further discussion or
an °ral presentation should refocus the facts.
Governor Mitchell observed that from his reading of the record
the First Florida application was transparently an attempt to form a
eartel. Since the banks involved were well run and self-sufficient,
'14Y should they organize?
The only plausible reasons seemed to be
1°84 Participation and correspondent relationships; yet if the competition
'that business was so intense, there must be underlying reasons.
f°1
That was why he had raised the question about other holding companies
that had only large banks as sUbsidiaries.
In his view, a pattern was
cleveloPing in which large banks were being tied to holding companies,
'with detriment to smaller banks. This application did not seem to
G°Irerzlor Mitchell to have much to recommend it. The record stated that
the banks could do certain things as a group that they could not do
11.1°I1ey but
those advantages seemed extremely amorphous.
If one went
°Ile Step beyond the language used, the application seemed to be an
811°10(0' for monopolizing the Florida market. It seemed to him that
11131)rcsval of the application would eliminate competition, present and
1)1)tellti8ll and Governor Mitchell could not believe that would be in the
1141311e interest in a country dedicated to what competition could do
it. He mentioned the reference that had been made to the number of
bartiting offices in the State that the applicant and present groups would
have
However, it did not seem to him that in a unit banking State the
111141ber of offices involved was as important as in a State where branch
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Federal Reserve Bank of St. Louis
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'banking was permitted.
In summary, like Governor Robertson, he considered
that the staff recommendation of denial was good and he would endorse it.
Governor Balderston referred to the comments, quoted in the
E48zinations memorandum, made by the president of the largest bank in
the Atlantic National group regarding the application, that "by exercising
the full
measure of its influence, and by using its public image of great
814e, the First Bancorporation could clearly aggravate the existing competitive dominance in Miami and Orlando and could substantially upset the
"isting competitive balance in Jacksonville and Tampa."
In Governor
1411derston's view, Florida had serious banking defects stemming largely
*°111 its statutes prohibiting branch banking.
The State had only half
48111841Y banking offices in relation to population as did the country
44
Of
In
whole.
The effort to fill those voids had led to the establishment
infant banks that were subject to a high mortality rate.
These
clefects in Florida's banking structure were particularly unfortunate in
tile light of Florida's real estate history. The present proposal would
4(4 correct these defects; there was no indication that needed new and
stl'°14; banks would be created.
He noted that First Florida had submitted
lt8 ease to the Department of Justice before it had made its application
to the Board, a point on which the Comptroller of the Currency had raised
the
qUestion of propriety. That approach to Justice did not redound to
the A
'lscredit of the applicant, in Governor Balderston's opinion; the
ell'eluastances surrounding the Firstamerica-California Bank application,
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Federal Reserve Bank of St. Louis
6/25/62
'which, shortly after the Board's approval, the Department of Justice
br°11ght antitrust proceedings, had probably prompted the applicant to
make that overture.
However, the advice given the applicant by the
tePartment of Justice appeared irrelevant to the decision that the
must make under the Bank Holding Company Act. In the absence
cl substantial banking advantages other than the usual head office
techIlical assistance argument, he was convinced that the holding company
v(3144 make rougher the road for sound banking and that responsibility
vould be
less definite.
Now, the president of each unit bank was
kla°141, and it was also known that his actions and decisions were not
lakie for him.
Governor Balderston would vote to deny the application.
Chairman Martin stated that, although Governor Mills had made
IperSUaSiVe
case for approval, the negative side seemed to be the one
cliscretion, in the absence of a stronger case for an affirmative vote.
ccluld see why the banks involved would want to affiliate, but he could
See
n.° clear advantages to the public interest. In arriving at that
Colleltision, he had been swayed by possibilities that might not materialize.
licn"er, he foresaw a tendency in the coming months to pull banks together
tIblot
igh holding companies. The First Florida application had been subMitted by first-class people, as had the Morgan application, and Chairman
kaltin commended their initiative and intelligence in proposing such
€1'.1113ings of banks.
Yet the fact remained that the constituent banks
be giving up their independence. Further, looking ahead to other
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Federal Reserve Bank of St. Louis
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-22-
aloladcations that might be presented to the Board, one could not overthe possibility that the holding company facade might be used for
PUrPoses inimical to the public interest, as had been the case in the
2016.
In Chairman Martin's opinion, the holding company form of organiza-
ti°n presented more serious problems and contained greater danger to the
PUblic interest than did branch banking.
On balance, Chairman Martin
441 concluded that this application should be denied, largely for the
reasons developed in the staff memorandum.
It seemed undesirable to
hrow the country open to cartelization of banking, to use Governor
Mitchel,,S
characterization, unless there appeared to be positive and
direct benefits to the public in doing so. The 1956 bank holding
COml,
-wanY legislation was intended to curtail rather than expand such
e°11113anies, but State laws against branch banking seemed to have put the
legislation in the position of being used for holding company operations
Illther than curtailing them.
Since it appeared that a majority of the Board would vote to
dellY the application of First Bancorporation of Florida, there ensued
CliSCUSSiOn
of whether or not an oral presentation should be held before
the lloard voted on the application.
In the event of judicial review, the
11°411 might be in a somewhat stronger position if the record included
811ell a presentation.
Good public relations also might argue for having
41 presentation, especially since the proponents of the Florida
44°11'
knew that there had been an oral presentation in connection
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Federal Reserve Bank of St. Louis
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-23with the Morgan case.
Also, it appeared that the present disposition
°f the Board was for denial of the application by a vote of four to
three, and the closeness of that vote might add some weight to the
desirability of an oral presentation.
In regard to the point last made, Governor King observed that
he had called attention to his lack of conviction for his inclination
tol
d approval of the application.
Subsequently, he had heard and
haia been much persuaded by the reasoning of others on the side of denial.
Therefore, Governor King said he would wish to change his position to
°Ile favoring denial of the application.
Furthermore, he would not favor
h4ving an oral presentation by the applicant since, in his opinion, such
a Presentation would not serve a useful purpose.
Chairman Martin commented that his inclination toward denial
Igls strong enough that he doubted that it would be changed by anything
that might be offered at an oral presentation.
Moreover, the applicants
Ilere entitled to seek judicial review. He also expressed the view that
to o
bier an oral presentation or hearing at this stage would be undesirable,
14
\rlew of the
fact that the application had been in the Board's offices
aitic„„
last November and the detailed staff memorandum of May 18 had been
l'eviel4ed and discussed by the Board with the results indicated. For
that
reason, he would not favor an oral presentation or hearing.
an oral
Governor Mills also expressed himself against having
131‘eaer1tation, and commented that in his view the public would be well
serve,
if judicial review was sought by the applicant, because that review
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Federal Reserve Bank of St. Louis
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.
- "
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_214_
'°4 clarify the Board's responsibilities. The Board's discussion of
this case had given him some concern in that the reasoning offered in
8111:Tort of a negative decision would suggest to him that the Board was)
illeffect, making law rather than administering it.
Governor Robertson commented that he considered the record as
it stood strong enough for judicial review; he did not think it would
galrl any strength through an oral presentation.
Mr. Hackley expressed the opinion that if the Board's statement
814"rting its disapproval of the application was sufficiently compreilensive, it would not make too much difference whether or not there was
oral presentation.
He added that it had been learned that the United
States Court of Appeals in St. Louis had upheld the Board's denial, by
°Ilder dated March 23) 19610 of the application of Northwest Bancorporation,
111411eaP01i5, Minnesota, to acquire control of The First National Bank of
l'113eStone, Pipestone, Minnesota. The Legal Division assumed that the
clecision of the Court of Appeals was based on the ground that the Board
41341 discretion under the Bank Holding Company Act which, unless exercised
in an unreasonable way, would be upheld by the courts.
After further discussion, during which it was agreed that no oral
131'eserltation would be held in connection with the case, the application
Ot 114
'rat Bancorporation of Florida was denied by majority vote, Governors
Mills
and Shepardson dissenting.
It was understood that the Legal Division
Voul,
`' Prepare for the Board's consideration an order and statement reflecthat decision.
Mr. Thompson then withdrew.
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Federal Reserve Bank of St. Louis
6/25/62
-25-.25Directors Day program, 1962. There had been distributed a
Memorandum dated April
6,
1962, from Mr. Fauver, reviewing reactions
to the Directors Day program held March 14-15, 1962, and making
814WAstions for improvements in future programs.
Mr. Fauver referred to suggestions that had been made that
ili the future there be a "dress rehearsal" to promote smooth conduct
°f the program, particularly in connection with any staff presentations
1/41ch tended to run beyond the times allotted for them. He also-noted
a.
atIggeStiOtt
that a longer time be ellowed for conferences among the
eotors and individual members of the Board, since discussion in
fte4ler units than the full meeting seemed to invite freer comments.
c11-8Play of System publications, a first-time feature of the 1962
1*°€reln, had been *well received, Mr. Fauver said, and he suggested
t44"t
a
somewhat smaller display in the reception room opposite the
elltliatice to the Board Members' corridor could be arranged as a continuing
Pl'esentation on the ground that it would be of interest to persons and
(..:111138 visiting that part of the building.
In the ensuing discussion, it was understood that the several
sun,
-- iRstions for modification of the Directors Day program would be
b°1*ntilt in mind in making plans for 1963, and approval was given to the
151‘el/exation of a display of System publications in the reception room
841i0
Ining the Oval.
Mr. Morgan then withdrew.
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Federal Reserve Bank of St. Louis
6/25/62
Branch deposit data (Item No.
Ciraft
6).
There had been distributed
of telegram to the Presidents of all Federal Reserve Banks reading
es rollows:
'
"Question has been raised as to whether report of member
bank deposits by branches referred to in Board letter of June 5,
1962, is a mandatory report. Such report is required by the
Board pursuant to Section 11(a) of the Federal Reserve Act,
and any member bank inquiring as to the necessity for supplying
information should be informed accordingly."
It was brought out in discussion that the question mentioned
Reserve
14 the
telegram had been raised by President Swan of the Federal
BkIllt of San Francisco last week, and that Mr. Swan had furnished the
1 With a copy of a letter sent by Comptroller of the Currency Saxon
"
11°
furnishing
on jUne 51 1962, to sll national banks stating to them that the
of the branch deposit data requested by the Board as of June 30, 1962,
144 a matter for the discretion of the banks concerned.
Governor Mills stated that he would approve the telegram,
134t hp,.
- -inquired whether the use of section 11(a) of the Federal Reserve
4et 118 authority to require the branch deposit data might be contested.
(11Elt section provided that the Board of Governors shall be authorized
Ettici ettpowered • • ."To examine at its discretion the accounts, books
and.
to
lie
affairs of each Federal reserve bank and of each member bank and
.
4. c1uare such statements and reports as it may deem necessary. .. •"
had considered that the primary purpose of that language related
to th
e bank examination function, and the proposed telegram would extend
the
aUthority to require information not intimately connected with
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Federal Reserve Bank of St. Louis
6/25/62
-27-
examinations.
Thus, while the information requested would be useful
and the Board should have it, Governor Mills wondered whether there
'
night be successful challenge of the Board's use of section 11(a) in
obtaining
Mr. Hackley responded that, while the first part of the language
ill question related to the examination function, the latter part was in
1311°ala terms and, in the opinion of the Legal Division, was not limited
to the
examination function.
Comment was made that it was section 11(a) that gave the Board
II°Iier to call for reports of condition of member banks.
During further discussion the view was expressed that the
13csard should rely on the position of the Legal Division that the Board
114e on sound ground in citing section 11(a) as the authority for requiring
b an
ch deposit reports.
it
In response to a question as to enforcement,
vas indicated that if any member bank should refuse to make the report,
its 1,
xederal Reserve Bank could send an examiner to obtain the information.
The telegram to the Federal Reserve Bank Presidents was then
"
e:1
.
3.13
-r
unanimously, with the understanding that a copy would be sent
to the Comptroller of the Currency, in view of his June
Ilationa1 banks.
is at
A copy of the transmittal letter to the Comptroller
as Item No.
6.
Secretary's Note: The Chairman of
the Federal Deposit Insurance
Corporation also was furnished
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Federal Reserve Bank of St. Louis
5 letter to all
21f"
6/25/62
-28with a copy of the telegram because
of the interest of that Corporation
in collection of branch deposit data,
as evidenced by its call for reports
of such figures from nonmember insured
banks as of June 30, 1962.
Mr. Hexter then withdrew.
Application of Union Trust Company of Maryland (Items 7, 8, and 9).
11111111ant to the decision reached by majority vote at the meeting on
juxle 13, 1962, there had been distributed a proposed order and statement
tienacting
the Board's approval of the application of Union Trust Company
MarYland, Baltimore, Maryland, to merge with Farmers and Merchants'
Barlk) Salisbury, Maryland, and to operate the two offices of Farmers
444 Merchant5' Bank as branches.
After a discussion during which a minor change in the wording
or the statement was agreed upon, the issuance of the order and statement
l'148 authorized subject to such change being made.
Copies of the order and
t4tealent, as issued, are attached as Items 7 and 8. A copy of a dissenting
8t4tement by Governor Robertson is attached as Item No. 9.
Application of Peoples Bank and Trust Company (Items 10, 11,
ItPdioN
Pursuant to the decision reached by majority vote at the
Meetillg on June 13, 1962, there had been distributed a proposed order and
st4tament reflecting the Board's approval of the application of The
l'e°131es Bank and Trust Company, Grand Haven, Michigan, to consolidate
With
Spring Lake State Bank, Spring Lake, Michigan, and to operate
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Federal Reserve Bank of St. Louis
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the office of the Spring Lake bank as a branch.
A dissenting statement
by Governor Robertson also had been distributed.
After discussion, the issuance of the order and statement was
alatlorized.
Copies of the order and statement are attached as Items
10 and. 11.
A copy of the dissenting statement by Governor Robertson
is attached as Item No. 12.
Messrs. Shay and Hill then withdrew.
Continental Bank matter (Item No. 13).
Mr. Hackley referred
to the motion filed with the Board by Continental Bank and Trust Company,
Salt Lake City, Utah, on May 31, 1962, to produce certain documents.
Under the Board's Rules of Practice for Formal Hearings, Counsel for the
113"ivas allowed ten days for any answer or objection, and such a reply
1448 Made within the time allowed.
In such a situation, the Board's
"of Practice precluded the moving party from making any further
Rill
l'e131-Y except with the Board's permission.
A letter dated June 22, 1962,
asking such permission had been received from Mr. Barron K. Grier,
C°448e1 for continental.
If the permission was granted, Mr. Grier
N)ected to file the reply on or before June 290 1962.
Mr. Hackley
l'"oltmended that the requested permission be granted, in view of the
illat°rY of the case and the need to show complete fairness.
After discussion, Mr. Hackley's recommendation was approved,
Crc'vernor Robertson not participating. A copy of the letter sent to
m
Mr. kz
rier granting the Board's permission is attached as Item No. 13.
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Federal Reserve Bank of St. Louis
f 47:
6/25/62
-30Travel by Mr. Maroni. Governor Shepardson referred to the
tentative agreement in March 1962 that Mr. Maroni, Economist
the Division of International Finance, represent the Board at the
Seventh Operational Meeting of the Center for Latin American Monetary
Studies
to be held in Mexico City September 3-14, 1962. The Division
of International Finance, in a memorandum dated June 20, 1962, hwi now
l'e
mended that Mr. Maroni attend the meeting and also that he visit
GLiatemaial El Salvador, and Honduras, in order to acquire a first-hand
44Nuaintance with central bank officials and economic conditions and
151\:)blenis in those countries as well as Mexico.
About one month's travel
'
l/(3111d. be necessary, beginning about August 17, 1962,
Governor Shepardson's recommendation that the proposed travel
be authorized was approved unanimously.
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board
the following items:
Memorandum from the Division of Personnel Administration
the appointment of Norma Jean Hicks as Clerk-Stenographer
etrOlat Division, with basic annual salary at the rate of $4,040,
ective the date of entrance upon duty.
C
,44Uendlrig
Memorandum recommending that Fredrick L. Frost, Messenger,
per, Members Offices, be placed on a leave without pay basis for the
sel;Lod beginning 1:00 p.m., June 18, 1962, through July 31, 1962, with
clo, ation from the Board at the end of that period effective as of the
'
e of business July 31.
Bo
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Federal Reserve Bank of St. Louis
6/25/62
-31-
Memoranda from appropriate individuals concerned recommending
me
ritorious salary increases for the following persons on the Board's
stwff, effective July 8, 1962:
Division
Basic annual salary
To
From
Office of the Secretary
ettY Jane Abbott, Records Clerk
Elizabeth Jones, Technical Assistant
Jeanne K. Semia, Technical Assistant
$ 4,250
8,080
8,080
$
4,355
8,340
8,340
Research and Statistics
O. Cassedy, Research Assistant (Data Processing) 6,765
10,635
:
ank de Leeuw, Economist
„0
G'41e L. Finn, Economist
8,080
'elliard Freedman, Economist
10,635
Rob
O'Rourke, Secretary
6,600
C. Strader, Survey Statistician (Economics)
onalie
il
via.le Thompson, Economist
11,415
1 C. Wing, Technical Editor, Economics
8,080
6,930
10,895
8,340
10,895
4,840
6,765
11,675
8,340
International Finance
Paul
Reed kiekker, Economist
J. Irvine, Chief, Asia, Africa,
'ud Latin American Section
Ri
'ard H. Kaufman, Economist
12,470
13,730
12,730
140055
7,560
7,820
9,475
7,560
9/735
7,820
6,600
6,765
6,600
4,250 1/
6,765
4,355
Bank Operations
Mary 1.
Durkan, Technical Assistant
our Golodner, Technical Assistant
Examinations
"a B. Friedman Assistant Federal Reserve
lner
pti-e
J4KJ• Harris, Assistant Review Examiner
Marconi, Stenographer
ncludes progress increase approved by Board on June 21, 1962, also
ef
fective July 8, 1962.
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Federal Reserve Bank of St. Louis
)
6/25/62
2
effective July
and t•t1
8L 1962 continued
Division
Basic annual salary
From
To
Personnel Administration
Charles W. Wood, Personnel Assistant
7,560
$ 7,820
3,395
4,345
3,500
4,510
3,500
3,605
10,895
11,155
Administrative Services
vineent
R. Creamer, Laborer
t,
Albert A. Portnoy, Supervisor.-IflspeCtOr
"libert L. Stephens, Laborer
Office of the Controller
John
alec, Assistant to the Controller
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No. 1
FEDERAL RESERVE SYSTEM
6/25/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONOENCE
TO THE BOARD
oi:kk
tantoo
June 25, 1962
Board of Directors,
le Elyria Savings & Trust Company,
!
4LYria, Ohio,
Ge
ttlemen:
The Board of Governors of the Federal Reserve System
appr
oves the establishment of a branch by The Elyria Savings &
111.1n
El Q4 Company, Elyria, Ohio, on the south side of ClevelandIN Y,ria. Road east of the intersection of Avon Lake Road, North
;Vgeville, Ohio, provided the branch is established within one
!!' from the date of this letter, and provided further that
.4t,uch operations now conducted at 7077 Avon-Belden Road, North
!fWItille, are discontinued simultaneously with the establishof the above branch.
Z
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
TELEGRAM
SERVICE
LEASED WIRE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
Item No. 2
6/25/62
June 25) 1962.
Swan - San Francisco
Board will interpose no objection to sale of a portion
Of the Bank's parking lot to the City and County of
San Francisco in connection with the widening of
Clay Street, as described in your letter of
June 12) 1962.
The suggested procedure for recording proceeds of
sale appears to be appropriate.
(Signed) Merritt Sherman
SHERMAN
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
400**,1,4
OF THE
:r
*
*
1'434
%
Itt
CIIi
P
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 25,
1962
Edward L. Merrigan, Esquire,
425 - 13th Street, N. W.,
Washington 4, D.
C.
DearMr. Merrigan:
With your letter dated June 13, 1962, you filed with the
13°ard of Governors, on behalf of three banks located in Louisiana,
a Petition for Reconsideration by the Board of its Order of May 3,
1962 (1962 Federal Reserve Bulletin 560), under the Bank Holding
„
C.c)r,f1PanY Act of 1956, permitting Whitney Holding Corporation to become
oank holding company by acquiring substantially all of the voting
(3ek of a bank in New Orleans, Louisiana, and .a bLL.
Jefferson
0 rish, Louisiana. The Petition requested that the Board revoke its
j
der Of May 3, 1962 and "grant a rehearing herein and after reconration by appropriate Order deny the application of the Whitney
°1(ling Corporation."
A Notice of Receipt of the Application on Behalf of Whitney
Roiai
3,014:-4-ng Corporation was published in the Federal Register on July 28,
-I3W (26 Federal Register 6792), which provided an opportunity for
ta,
Illission of comments and views regarding the proposed acquisitions.
2'
el
.
) Pursuant to Order published in the Federal Register on December
1961 (26 Federal Register 12312), a public proceeding with respect
17
1, said Application was held before the Board on January 17, 1962 to
blr°.
\tricle a further opportunity for the expression of views and opinions
el
,- nterested persons. The banks represented by you did not submit or
piffess any comments, views, or opinions. Most of the actions contemtiu"sed by the Whitney Reorganization Program, including the acquisi:
cr )118 of stock approved by the Board in its Order of May 3, 1962, were
14;(11P1eted, according to information received by the Board, during
a 1962, and, as indicated above, your clients' Petition for Reconaj
.
ration was submitted to the Board with your letter dated June 13,
194
Subparagraph (6) of section 262.2(f) of the Rules of Procedure
Board of Governors (12 Code of Federal Regulations 262.2(f)(6)),
ating to "Bank Holding Company and Merger Applications", reads as
tollows:
Of All,
rel "e
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Federal Reserve Bank of St. Louis
3
6/25/62
WASHINGTON 25, D. C.
SMOO
*A
Item No.
FEDERAL RESERVE SYSTEM
I
BOARD
OF
GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
Edward L. lierrigan, Esquire
"After action by the Board on an application the
Board will not grant any request for reconsideration
Of its action, unless the request presents relevant
facts that, for good cause shown,' were not previously
Presented to the Board, or unless it otherwise appears
to the Board that reconsideration would be appropriate."
The Board has considered the reasons advanced in the Petition
for Reconsideration. To a considerable extent, these are based upon
!
Ilegations that the Whitney Reorganization Program was not in conzormity with applicable provisions of Federal statutes. It is also
!lleged that the Board's action "will unnecessarily place into the
44nds of federally chartered banks a powerful and unfair competitive
46.vantage over State banks...." In the judgment of the Board, those
e rguments are without substantial merit. In addition, they relate
i
A4fgely to an alleged violation of provisions of the National Bank
) which is administered by the Comptroller of t]., ...rrency, an
°fficial of the United States Treasury Department.
In its consideration of the Petition, the Board has also
t€tken- into consideration the fact that the Petitioners had,ample
213Portu1ity to present relevant facts, views, and arguments to the
ard during the pendency of the Whitney Holding Corporation proceed,
1 4g and failed to make any presentation until after the proceeding
'11'14d terminated, the Board's Order of approval had been issued, and
°st of the steps in the Reorganization Program had been completed.
T
Revr.
For the foregoing reasons, the Petition for Reconsideration,
and Rehearing is denied.
As you are aware, section 9 of the Bank Holding Company Act
(12
1848) relates to judicial review of orders of the Board
°art: Governors under that Act. Section 9 confers a right to such review
th Any party aggrieved by an order of the Board under this Act". In
04 event your clients should seek judicial review of the Board's
er in the Whitney matter, the question whether they fall within the
qUoted
description and therefore are entitled to a judicial review is,
c
ourse,
a question for determination by the United States Court of
°
A;,
'veals having jurisdiction.
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Federal Reserve Bank of St. Louis
BOARD OF UDVERNORS OF THE FEDERAL RESERV
Edward 146
YSTEM
Merrigan, Esquire
In your letter to the Board dated June 18, 1962, you
requ sted access to the letter of October 11, 1961 from Comptroller
Currency Ray M. Gidney to the Board of Governors, expressing
1,14
!views and recommendations of the Comptroller on the Whitney
Corporation's application, pursuant to section 3(b) of the
t,4. ,IT..olding Company Act (12 U.S.C. 1842(b)). The Board has granted
request, and the Comptroller's letter will be made available
'
c)r Your inspection at your convenience.
Very truly yours,
n$
Merrit
Secretary.
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
4
6/25/62
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 25, 1962.
LheateHonorable
J. W. Jeansonne,
Bank
.0laton RougeCommissioner,
4, Louisiana.
hal* lir• Jeansonne:
Thank you for your letter of June 21, 1962, with which you
4..d an opinion of the Attorney General of Louisiana relating to
°8e
oellpecri„
"lone of bank holding companies in that State.
As you know, a Petition for Reconsideration of the Applicatiori
hoicii°f Whitney Holding Corporation for permission to become a bank
Lailisi?g company was submitted to the Board on behalf of three banks in
l'etijana• After consideration of the argumentspresented in that
4-c'n and related papers, the Board today denied the Petition.
You will recall that, when the Whitney application was receiv„
anci ''.3
1 the Board provided an opportunity for submission of comments
19621/lewe regarding the proposed acquisitions. Later, on January 17,
turtci a Public proceeding was held before the Board to provide a
interer oPPortunity for the expression of views and opinions by
1.962 ested persons. The Board's Order of approval was entered May 3,
Pro,
r,' and the various steps contemplated by the Whitney Reorganization
'
tion 414 were completed during that month. The Petition for Reconsiderawas submitted to the Board on June 13, 1962.
The Board welcomes the expression of views by State bank
,scrs on matters that relate to banking in their respective
illris,iii
,ione. In the interest of equitable treatment of all persons
conce;:et
40and expeditious action on applications submitted to the Board,
ge_,
1-1-4-1. if such views and comments can be furnished the Board
Particular matter is pending before it rather than after
zoard action has been taken.
Sincerely yours,
(signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
911(
)
"
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 5
6/25/62
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARO
June 25, 1962.
To.
Consultants to the Board of Governors
The President of the United States has issued the attached
Inertia,
'irandum of February 9, 1962, entitled "Preventing Conflicts of
ulterest on
whi
the Part of Advisers and Consultants to the Government,"
to eh supplements his message to Congress of April 27, 1961, relating
19,the conflicts of interest statutes. The memorandum of February 95
1„?2) discusses the applicable statutes and sets forth the responsitdes of consultants and employing agencies in this regard.
In view of the President's reference in his memorandum
to It YNJ
a, ulsclosure of Financial Interests," the Board of Governors will
Cate your completing the attached statement and returning it
Division of Personnel Administration, using the enclosed
itz-addressed envelope° You are assured that this information
"4-11. be held in strict confidence.
DIVISION OF PERSONNEL ADMINISTRATION.
Attachments.
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Federal Reserve Bank of St. Louis
Confidential
F.R. 718
Cqn 1 ;~
Statement of Private Employment and Financial Interests
In accordance with the President's memorandum of February 9, 1962, entitled
"Preventing Conflicts of Interest on the Part of Advisers and Consultants to the Government,"
and with special reference to tho section concerni ng "Disclosure of Financial Interests, 11
the following information is requested :
1.
Please indicate the names of all companies, firms, research organizations, educational
institutions, if any, etc., in which you are presently serving as an employee, officer,
member, director, or consultant .*
2.
Please indicate the names of any companies in whir,h you have any other financial interest.a (such as the ownership of securities or other interests which have a significant
financial value)•*
Should yoar situation with r espect to "l" and "2" above change at any time during
the period of your service as a consultant with the Board of Governors, please advise the
Board .
*Amounts of remuneration or investment are not required.
{signature ) - - - - - - - - - - - - - - - - Consultant
(date)
False or fraudulent statements r.iay be cause for administrative action or possible
action under applicable criminal statutes.
NOTEt
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Federal Reserve Bank of St. Louis
Item No. 6
6/25/62
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
June 25, 1962.
11he Honorable James J. Saxon,
.',ODIPtroller of the Currency)
wa
shington 25, D. C.
bear Mr.
Saxon:
Because of a question raised as to the report that the
Board
called for from member banks as of June 30, 1962,
ring
figures
of deposits by cities for branches outside the
he
office city of the parent bank, the Board has today disatched
fl
a wire to the Presidents of all Federal Reserve Banks as
%lows:
"Question has been raised as to whether report of
member bank deposits by branches referred to in Board
letter of June 5, 1962, is ft mandatory report. Such
report is required by the Board pursuant to Section
. -(a) of the Federal Reserve Act, and any member bank
.inquiring as to the necessity for supplying information
should be informed accordingly."
1
For your convenient reference, there is enclosed a copy
of the
1.962 Board's letter to all Reserve Bank Presidents dated June 5,
s outlining the requirements for this report.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
Item No. 7
6/25/62
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
la%
•••
Ill the Matter of the Application of
1)tON TRUST COMPANY OF MARYLAND
for
parmaPnroval of merger with
—4erS and
Merchants' Bank
ORDER APPROVING MERGER OF BANKS
There hps come before the Board of Governors, pursuant to
the Bank Merger
Act of 1960 (12 U.S.C. 1828(c)), an application by
1111i°11 Trust
Company of Maryland, Baltimore, Maryland, a member bank
Ot
the Federal Reserve System, for the Board's prior approval of the
of Farmers and Merchants' Bank, Salisbury, Maryland, also a
ternher
bank of the Federal Reserve System, with and into Union Trust
COrnp
-.' of Maryland, under the charter and title of the latter, the
oft&
ces of
Farmers and Merchants' Bank to be operated as branches of
lir4.011
Trust Company of Maryland. Notice of the proposed merger, in
tOrra
aPProved by the Board, has been published pursuant to said Act.
the
the
Upon consideration of all relevant material in the light of
factors set forth in said Act, including reports furnished by
CciliPtroller of the Currency, the Federal Deposit Insurance
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Federal Reserve Bank of St. Louis
Corporation
and the Department of Justice on the competitive factors
end
oltred in the proposed merger,
IT IS HEREBY ORDERED, for the reasons set forth in the
lloardt s
Statement of this date, that said application be and hereby
is aPproved, provided that said merger shall not be consummated
(a) so
oner than seven calendar days after the date of this Order or
N later than three months after said date.
Dated at Washington, D. C., this 25th day of June, 1962.
BY order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, Shepardson, and King.
Voting against this action:
Absent and not voting:
Governor Robertson.
Governor Mitchell.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
Item No. 8
6/25/62
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY UNION TRUST COMPANY OF MARYLAND
FOR APPROVAL OF MERGER WITH FARMERS AND MERCHANTS' BANK
STATEMENT
Union Trust Company of Maryland, Baltimore, Maryland
hnion
Trust"), with deposits of about $245 million, has applied,
P14%uant to the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), for
the
Board!s prior approval of the merger of that bank with Farmers
arid
Nerchantql Bank, Salisbury, Maryland ("Falmers Bank"), with
CleiCle8.lts of
about $17 minion. Under the Agreement of Merger the
babi,
would merge under the charter and title of Union Trust, and
the
Agreement and application contemplate that the two offices of
Pattie
r8 Bank would become branches of Union Trust, increasing from 33
t0 35
the offices operated by that bank.
Under the Act, the Board is required to consider (1) the
,41,e
4c1a1
history and condition of each of the banks involved, (2) the
quaeY Of its capital structure, (3) its future earnings prospects,
(4) th
e general character of its management, (5) whether its corporate
Po,4yers
Pede
are consistent with the purposes of 12 U.S.C., Ch. 16 (the
ral DePosit Insurance Act), (6) the convenience and needs of the
1411ty to be
served, and (7) the effect of the transaction on
c4r113et,'
lt-°n (including any tendency toward monopoly).
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Federal Reserve Bank of St. Louis
oir
-2-
Banking factors. - The capital structure and financial condition
qb0th banks are satisfactory.
The same would be true of the resulting
bank
'Aich would be under the competent management of Union Trust, The
"g8 prospects of Union Trust are favorable, and consummation of the
-1°actlon would have the effect of adding management strength and a
inproved earning power to what has been the operation of Farmers
13atik.
No inconsistency with the purposes of 12 U.S.C., Ch. 16 is indicated.
Convenience and needs of the communities. - Baltimore,
d
an
(\population
about 940,000), the largest city in the Fifth
Peder
al
Reserve District, is a commercial and industrial center, a
laior
seaport, and one of the major eastern financial centers.
The
ore m
etropolitan area comprises Anne Arundel, Baltimore, Carroll,
arici tio
ward Counties and Baltimore City, and has an aggregate population
ot
ir
4I'oximately 1.75 million.
}3altaji,• °re
-
o
ve4.
Union Trust's offices are located either
City, or within 20 miles of the city limits.
The two offices of Farmers Bank are in Salisbury (population
Onm
the seat of Wicomico County (population about 50,000).
:
8 4813147 and Illicomico County are in the geographical center of the
ri"tirri Shore
peninsula and thus separated from the rest of the
State
by
the Chesapeake Bay. The population of the Farmers Bank's
t,rade
allea, which includes all the southern portion of the Eastern
Shore ,
'le a
pproximately 225,000. Salisbury is supported by several
b5tt
proce844-iaJ- industries, by truck farming, and by poultry production and
sing, and also
serves as the largest retail and wholesale distribution
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Federal Reserve Bank of St. Louis
-3.
.
,
in the area. Nearly 80 per cent of the 24 per cent increase in
th
Population of Licomico County during the past ten years is concent174ted in and around Salisbury. The growth and economic prospects of
the
- area are favorable and will be enhanced by completion of construeti0
11 of the bridge-tunnel, which will connect "Norfolk, Virginia, with
the s
outhern tip of the Eastern Si-lorc, and by the re-location of U.S.
11°13-te 50 through the Salisbury business district, which was previously
.13 rPasoed..
Approval of the proposed merger would have virtually no effect
°Ilthp
- convenience and needs of the Baltimore metropolitan area. However,
t4. Q
Lelisburv area, Farmers Bank has been unable to handle credit
re .
cl_gaze
ments of the size requested by some local industries; and it may
be ex,
due to the expandtinc,; industrialization, that requests for
as a
bc:fond the capacity of Farmers Dank will increase. Union Trust,
result of the merger, would be in a position to meet such credit
2.917Detition. - The primary service areas of Union Trust and
the
Bank are entirely separate. Salisbury is about 100 miles from
ricarest office of Union Trust, uhich has no offices on the Eastern
Zlore
17"insula. Each bank generates only minor business in the service
Of the
that
otber.
Union Trust is the third largest bank in the State, a position
11°111d not be altered by consummatjon of the merger.
Union Trust
beeorae a
ccmpetitor in Salisbury of Haryland National Bank, the
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Federal Reserve Bank of St. Louis
-4—
largest
bank in the State, which operates 61 banking offices with
denoe..,
"
1-Ls of about $550 million. By consummation of the transaction,
Uni0
r1 Trust would be able to compete more strongly with Maryland National
4.11c in servicing all sizes of business accounts and by offering a more
c°111131ete line of banking services, including a large trust department.
The
Proposed merger would also bring Union Trust into competition with
4lisburY National Bank (deposits about 19 million), but the effects
0 +1,
""e latter bank should not be of serious consequence. The six small
bani—
located in Wicomico County outside of Salisbury serve principally
the
,
-eus of their immediate communities, and the proposed merger should
4ot s .
erlously affect their competitive positions.
Summary and conclusion. - The Salisbury, Maryland, area is
experi
eneing substantial industrial growth and increasing business
Ye
The proposed merger would provide the business concerns and
reeid
ents of this area with another bank possessing capable, experienced
tilanagernent which could service all sizes of business accounts and offer
rrl°re
trust
complete
line of banking services, including those of a strong
de
partment. The service areas of the two banks involved overlap
°111 slightlY and the elimination of the competition between them would
lIckbe si
gnificant.
Competition would be increased in the Salisbury
el.'Irice area, since Union Trust would become a competitor in that area
QIIIarYlandl s largest bank. The proposed merger should have no serious
l''lect 04
the small banks located in the service area of Salisbury.
Accordingly, the Board finds the proposed merger to be in the
kOlc
interest,
4114 25)
1962.
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Federal Reserve Bank of St. Louis
Item No. 9
6/25/62
DISSENTING STATEMENT OF GOVERNOR ROBERTSON
This proposed merger involves two banks between which there
Pra
ctically no competition. Furthermore, one can easily appreciate
taed .
°sire of the large Baltimore bank to expand into the economically
inviti
-ng Salisbury area, and to do so by merging with a sound, well°Perate-,
moderate-sized bank, rather than by a de novo branch, even
"he expense of a sizeable premium (the stockholders of the Salisbury
Will be exchanging stock worth 366 per share for stock of the
l'esulting bank worth $8
9)•
On the other hand, it is difficult to find any public benefits
tloWiri
from the merger. The existing Farmers and Merchants! Bank the d
eP°sits of which increased in excess of 50 per cent over the past
tell years
is meeting the public needs, competing effectively with
claler banks
in the area, and prospering.
this
There is nothing to indicate
cannot continue. The application cites six instances during 1960
1^Thich Farmers
and Merchants! Bank participated credits with other
institutions because the particular loans or the borrowers! total borrowillga
would have exceeded the bank's loan limit. However, this occurs
e\ren alriong
banks with the largest volume of banking funds and the
111VIest loan
limitations. The elimination of Farmers and Merchants!
113
'
4k and
the substitution therefor of a branch of a Baltimore bank of
laqer size
does not mean that the public will necessarily be served
better
barik.
arld
than, or even as well as, it is by the locally owned and operated
Five banks at present have over 43 per cent of the offices
over &,„
)
Y per cent of the deposits of all commercial banks in Maryland.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4
4)4(1,..,1)4Th
-.2-
ese have their main offices in Baltimore.
Consummation of
the
Proposed merger would add to the aggregate deposit of these five
bank,
over 29 per cent of the commercial bank deposits of Wicomico
collrit3r) and increase the total commercial bank deposits of the County
held bY Baltimore banks from 14 per cent to over 43 per cent. The
Salislz)urY National Bank, only slightly larger than Farmers and
liet'ellants t, would be left as the only local bank in the town.
There has been a trend toward the concentration of Maryland
resources in a few large banks - a trend to which this Board
45 irected the attention of another federal banking agency in a
eIc)8elY comparable merger case.
The approval of the proposed merger
l'el)l'esents one more step in that direction - a step which I do not
belie7e is in the public interest.
The approval is surely not justified
b:"Ille fact that another agency of the federal government has recently
"zed the largest Baltimore bank to establish (by merger) branches
"
ill Salisbury.
One misstep does not call for another - that is the way
13r'4111e.h subtle and twisting roads toward oligopoly are traversed.
would disapprove the application.
j1/41e 25)
1962.
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Federal Reserve Bank of St. Louis
Item No. 10
6/25/62
UNITED STATES OF AMERICA
31EFORB THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
Illthe
Matter of the Application of
14"OPLES BANK AND TRUST COMPANY
itth°r aPProval
of consolidation with
e SPring Lake State Bank
a.
ORDER APPROVING CONSOLIDATION OF BANKS
the
There has come before the Board of Governors, pursuant to
D._
Merger Act of 1960 (12 U.S.C. 1828(c)), an application by The
?e°Pie
8
ot
aa•rik
and Trust Company, Grand Haven, Michigan, a member bank
e the Pederal Reserve System, for the Board's prior approval of the
T°113°11-datio
„
f
The Spring Lake State Bank, Spring Lake, Michigan, with
ePe°Ples Bank and Trust Company, under the charter and title of the
'Atter
1 'he one office of The Spring Lake State Bank to be operated as a
bratich ot
nler
The Peoples Bank and Trust Company. Notice of the proposed
f°rm approved by the Board, has been published pursuant to
e2erl
—341 Act.
UP0n consideration of all relevant materials in the light
the
tactors
the cern
set forth in said Act, including reports furnished by
Ptr0ller of the Currency, the Federal Deposit Insurance
e(IrPc)rati
-°1.1) and the Department of Justice on the competitive factors
volved
1/1 the proposed
consolidation,
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Federal Reserve Bank of St. Louis
-2IT IS HEREBY ORDERED, for the reasons set forth in the Board's
Statftent of this date, that said application be, and hereby is approved,
Pl‘Wided that said consolidation shall not be consummated (a) sooner
that
8"en
calendar days after the date of this Order or (b) later than
th e
e months after said date.
Dated at Washington, D. C., this 25th day of June, 1962.
By
order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, Shepardson, and King.
Voting against this action: Governor Robertson.
Absent and not voting: Governor Mitchell.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(StAL)
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Federal Reserve Bank of St. Louis
Item No. 11
6/25/62
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY THE PEOPLES BANK AND TRUST COMPANY
FOR APPROVAL OF CONSOLIDATION WITH THE SPRING LAKE STATE BANK
STATaIENT
The Peoples Bank and Trust Company, Grand Haven, Michigan
(hPeoro
'es"), with deposits of approximately $12.3 million, has applied,
811arit to the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), for the
'
1411
clis prior approval of the consolidation of that bank and The Spring
'
kal
State Bank, Spring Lake, Michigan ("Spring Lake Bank"), with deposits
of
,Ppr
oximately $5.1 million.
Under the Consolidation Agreement, the
8 would consolidate under the charter and title of Peoples, and the
4gree
ment and application contemplate that the office of Spring Lake
krat
w°111d become a branch of Peoples, increasing from 1 to 2 the
c)ttiees operated by that bank.
Under the Act, the Board is required to consider (1) the
44A
-11eial history and condition of each of the banks involved, (2) the
4414acY of its capital structure, (3) its future earnings prospects,
(4)
the general character of its management, (5) whether its corporate
13°Irel‘8 are consistent with the purposes of 12 U.S.C., Ch. 16 (Federal
121Pc)8it Insurance Act), (6) the convenience and needs of the community
be
served, and (7) the effect of the transaction on competition
(tticlud.
lng any tendency toward monopoly). The Board may not approve
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Federal Reserve Bank of St. Louis
-2the,
Q78nsaction unless, after considering all these factors, it finds
the transaction to be in the public interest.
The first five of these factors may be considered together
4"lbanking factors". The sixth and seventh factors are considered
er
3
arately
Banking factors. - The capital structure and financial
Nidi •
tl°n of both banks are good, and the capital structure of the
teela •
ting bank will be satisfactory. The future earnings prospects
0e p
e°131
"are
good, and consummation of the transaction would have
the
e'-fect of providing a basis for improved earnings relative to
thos..
Of Spring Lake Bank. The managing officers of both banks are
° etent and
they will serve as the management of the resulting bank.
There
18 no indication that the powers exercised by the banks involved
are 0
r Would be inconsistent with the purposes of 12 U.S.C., Ch. 16.
Convenience and needs of the communities. - Grand Haven
4)0p
Illation about 11,000) is situated on the shore of Lake Michigan
470
es south across the mouth of the Grand River from Spring Lake
(kPul
-8'ion about 2,000). Grand Haven and Spring Lake are 31 miles
west of
-- Grand Rapids and halfway between Muskegon to the north and
N
841d to the south. Grand Haven is servod chiefly by the applicant and
ktlk
tY First Bank and Trust Company ("Security First"). Spring Lake
18 the only bank in Spring Lake.
the re .
Consummation of the transaction would benefit principally
81-dents of Spring Lake.
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Federal Reserve Bank of St. Louis
The resulting bank would offer services
VO
_3that have not been available to these residents from a banking facility
ilitheir immediate locality, such as a trust department, a secondary
Prtgage market, and a higher lending limit.
Competition. - Spring Lake is considered to be within the
service area of both Peoples and Security First.
Because Peoples
alread,7 offers residents of Spring Lake the banking services which
11041,4
be more convenient if the proposal were consummated, that bank
iaable to
compete effectively in Spring Lake with the Spring Lake
13erik
which is unable to compote effectively with Peoples in Grand
Raven
' It is unlikely that more industry will be located in the
"raally residential area of Spring Lake,
Because of this and the
Ilr°a13cet1ve growth of the environs south of Grand Haven--an area which
SAri
Lake Bank cannot service--it is probable that such competition
as s„
FirIng Lake Bank has been able to offer Peoples will progressively
Besides Peoples, Spring Lake Bank, and Security First, the
r1ear
,
8.ti
other banks are the three in Muskegon, about 11 or 12 miles north
°fSPring Lake and Grand Haven.
The smallest of these three would be
larger than the resulting bank, and there appears to be relatively
little ov
erlapping of the service areas of the Muskegon banks and
he
banks in Grand Haven and Spring Lake. The bank most likely to
be
a'ffected competitively is Security First, the other bank in Grand
Raven.
However, Security First will have about $1.7 million more in
de
posits of
individuals, partnerships, and corporations ("IPC deposits"),
ark'
abon+
bank,
—.21.9 million more in outstanding loans than the resulting
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1-4.1
-4Summary and conclusion. - Spring Lake Bank's prospects are
lted
1...4),Y
its geographical position and competition from larger banks
Ileavb
Y. The benefits that would flow from the proposal would more than
qtset
the diminution in competition. The resulting bank would be able
to
°I*I
'er expanded services to residents of Spring Lake and to compete
ort
effectively with Security First and other financial institutions
ill the general area.
Accordingly, the Board finds the proposed transaction to be
th(1
Public interesto
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Federal Reserve Bank of St. Louis
Item No. 12
6/25/62
DISSENTING STATEMENT OF GOVERNOR ROBERTSON
From the record in this case, it is obvious that considerable
e°fl1Petition exists between The Peoples Bank and Trust Company and
SPring Lake State Bank.
The trade area of Peoples Bank includes the
tracls Prea of Spring Lake Bank, end the two banks serve the same basic
Peoples Bank has around
t4e8
of ctstomers in =It the same manner.
78°
Posits and 375 loans totaling, respectively, about $735,000 and
°Irer $1 million, that originate in the Spring Lake area.
8
Similarly,
ng Lake Bank has some 330 chposits and well over 100 loans totaling,
l'esNctively,
around $262,000 and more than $492,000, that originate
ill the
Grand Haven area. The deposits of Peoples Bank originating in
the
-ng Lake area are equivalent to over 16 per cent of Spring Lake
s total IFC deposits, and the loans made by Peoples Bank originatIn the Spring Lake area are equivalent to over 39 per cent of
5 r4
'ng Lake Bank's total loans.
Since competition between the two banks would be eliminated
bY
%neva:nation of the proposed consolidation, obviously the application
°lad not
be approved in the absence of offsetting public benefits.
e they?
,
Spring Lake Bank is a sound and well managed institution. It
"
11 had a
satisfactory growth over the past ten years, and there is no
lie4aori
to believe that it cannot continue its profitable operation.
The b
ank is serving its community well. While Spring Lake Bank does
rlot e
el'e18(1 trust powers, it has not been established that the bank
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Federal Reserve Bank of St. Louis
-2-
IQ not do so if it were necessary to meet the needs of its custoziers;
tIlat services are available at other banking institutions in nearby
Gram
— /laver
" These other institutions also are readily accessible to
t10Se melabers of the public who, for any other reason, prefer or find
It
eessary to do business with the larger banks.
'
Although consummation of the transaction might aid Peoples
Nwt
ln competing with Security- First Bank and Trust Company, the record
",the Board does not convince me that there would ensue from the
Dtepo
".1 such benefits to the public as would offset the reduction in
c°11113eti+A
-,
on that would necessarily follow from the elimination of one
th
e three competing banks in the Grand Haven - Spring Lake area.
Th
—ore, in my judgment the application should be denied.
5 1962.
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
,4*****,
OF THE
0*44,01" COP:44
* •
"Nt,
0.1
111
FEDERAL RESERVE SYSTEM
6 4
4
Item NO. 13
6/25/62
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
at,
TO THE BOARD
June 25, 1962.
Mr. Barron K. Grier,
Miller & Chevalier,
?-PO]. Connecticut Avenue,
Washington 6, D. C.
In the Matter of
Continental Bank & Trust Company
Dear Mr. Grier:
In response to your letter of June 22, 1962, the Board
has
be
ata granted permission, pursuant to section 263.8(b) of the Board's
u s of Practice, for the filing by you, not later than close of
Iiesiness June 29, 1962, a reply to "Statement of Board Counsel in
,41,48Ponse to Demand for Particulars" and a reply to Board Counsel's
morandum in Reply to Respondents Motion to Produce".
Very truly yours,
•
Merritt Sheni
Secretary%
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Federal Reserve Bank of St. Louis
@FedFRASER