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Minutes for
To:
Members of the Board
From:
Office of the Secretary
March 20, 1962
Attached is a copy of the minutes of the
Board of Governors of the Federal Reserve System on
the above date.
It is not proposed to include a statement
With respect to any of the entries in this set of
minutes in the record of policy actions required to
be maintained pursuant to section 10 of the Federal
Reserve Act.
Should you have any question with regard to
the minutes, it will be appreciated if you will advise
the Secretary's Office. Otherwise, please initial
below. If you were present at the meeting, your
initials will indicate approval of the minutes. If
You were not present, your initials will indicate
only that you have seen the minutes.
Chm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
4
• ••"••
b
Minutes of the Board of Governors of the Federal Reserve System
on Tuesday, March 20, 1962.
PRESENT: Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
King
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director) Division of Bank
Operations
Mr. Solomon, Director, Division of Examinations
Mr. O'Connell, Assistant General Counsel
Mr. Shay, Assistant General Counsel
Mr. Kiley, Assistant Director, Division of
Bank Operations
Mr. Goodman, Assistant Director, Division of
Examinations
Mr. Benner, Assistant Director, Division of
Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mrs. Semia, Technical Assistant, Office of the
Secretary
Mr. Potter, Senior Attorney, Legal Division
Mr. Veret, Attorney, Legal Division
Mr.
Mr.
Mr.
Mr.
Mr.
Discount rates. The establishment without change by the Federal
RA_se4.-ve
Banks of Boston and Atlanta on March 19, 1962, of the rates on
-01-Ints and advances in their existing schedules was approved unanimously,
with
the understanding that appropriate advice would be sent to those Banks.
Items circulated or distributed to the Board. The following items,
had been circulated or distributed to the Board and copies of which
al'e attached to these minutes under the respective item numbers indicated,
a2Pred unanimously:
3/20/62
-2Item No.
Letter to The First Pennsylvania Banking and Trust
Company, Philadelphia, Pennsylvania, transmitting a
Preliminary permit authorizing First Pennsylvania
Overseas Finance Corporation to exercise powers
incidental and preliminary to its organization under
section 25(a) of the Federal Reserve Act.
1
Letter to the Presidents of all Federal Reserve Banks
regarding amendment of a uniform paragraph in noncash
0Psrating circulars and letters to provide for a
un-form service charge for transmitting noncash
collection messages.
2
Telegram to the Federal Reserve Bank of San Francisco
regarding a request for the 1958 report of examination
2r Bank of Belmont Shore (now Coast Bank), Long Beach,
1411fornial for use in litigation.
'
3
Letter to Bank of Slidell, Slidell, Louisiana, approving
ue establishment of a branch at Broad Street and
ronchartrain Boulevard.
4
Report on competitive factors (Kansas City, Kansas) (Item No. 5).
At its meeting on March 16, 1962, the Board considered an inquiry from
the Comptroller of the Currency as to whether, in view of a letter dated
ipe cember
The
5, 1961,
written to the Board by Mr. Henry G. Blanchard, President,
Commercial National Bank, Kansas City, Kansas, the Board intended to
allbmit an amended report on the competitive factors involved in the proposed
e°118c1idation of Security National Bank of Kansas City and Riverview State
11411k, both of Kansas City, Kansas.
The Comptroller of the Currency had
3elledUled a hearing on the application on March 21, 1962.
A proposed draft of reply to the Comptroller of the Currency
4ee014Panied a memorandum dated March 14, 1962, from the Division of
3/20/62
-3-
Examinations. During discussion at the Board's March 16 meeting,
revisions of the draft letter were suggested, and a revised draft was
distributed with a memorandum dated March 19 from the Division of
xaminations. The only change of substance in the revised draft was
in the last paragraph.
That paragraph pointed out that through the use
of cumulative voting, stockholders now owning control of Riverview State
Bank could elect several members of the board of directors of Commercial
National Bank, and subsequent to the proposed consolidation of Security
National Bank and Riverview State Bank the same situation could exist.
The only apparent effect upon the existing situation would be that after
the consolidation Commercial would be subject to the competitive capacity
a significantly larger bank.
In discussion at this meeting Governor Robertson suggested a
'
l evision of the last paragraph of the letter, for reasons which he stated,
after which Governor Mills expressed a preference for a brief reply to
the Comptroller of the Currency rather than the relatively long draft
that had been prepared. This could be accomplished by omitting the
Citation of certain material relating to shareholdings in the banks
Concerned.
Other members of the Board expressed concurrence with that
Ngestion, the general view being that the reply could consist of the
Illi
ductory paragraph of the draft and the last paragraph revised as
lIggeeted by Governor Robertson.
13
vs(' unanimously.
Accordingly, a letter in that form was
A copy is attached as Item No.
5.
3/20/62
_)J _
Mr. Goodman then withdrew from the meeting.
Report on competitive factors (West Chester-Avondale, Pennsylvania).
There had been distributed a draft of report to the Comptroller of the
Currency on the competitive factors involved in the proposed consolidation
of The National Bank of Avondale, Avondale, Pennsylvania, and National
Bank of Chester County and Trust Company, West Chester, West Chester,
Pennsylvania.
During discussion, a change suggested by Governor Mills in the
vording of the conclusion of the report was agreed upon, after which the
report was approved unanimously for transmittal to the Comptroller of the
Currency.
The conclusion in the report so approved read as follows:
At present, competition between The National Bank of
Avondale, Avondale, Pennsylvania, and National Bank of
Chester County and Trust Company, West Chester, West Chester,
Pennsylvania, is negligible. However, there would be some
competition between the subject banks following establishment
of West Chester National's branch in Kennett Square. If the
Proposed consolidation is approved, West Chester National's
service area would be enlarged and the resulting bank would
hold 45 per cent of the area's commercial bank IPC deposits.
Consummation of this proposal probably would not have serious
consequences on the other two commercial banks in the continuing institution's service area, and would augment the resulting
bank's capacity to compete in a more extended regional trade
territory served by a variety of banking and other types of
financial institutions.
Application of Union Trust Company of Maryland (Items 6 and 7).
Pilrellant to the unanimous decision by the Board on March 14, 1962, to
4P1)11tve the application of Union Trust Company of Maryland, Baltimore,
l'4171and, to merge with The Kingsville Bank, Kingsville, Maryland, there
3/20/62
-5-
had been distributed drafts of an order and a statement reflecting
that decision.
During discussion at this meeting, Mr. Shay indicated that he
would like to make minor editorial changes in the statement and, with
the understanding that he would do so, the issuance of the order and
statement was authorized.
Copies of the documents issued pursuant to
this authorization are attached as Items 6 and 7.
Application of First Trust Company of Albany (Items 8 and 9).
Pursuant to the unanimous decision by the Board on March 14, 1962, to
aPProve the application of First Trust Company of Albany, Albany,
New York,
to merge with The Broadalbin Bank, Broadalbin, New York,
there had been distributed drafts of an order and a statement reflecting
that decision.
Mr. Shay stated that he would like to make minor editorial
changes in the statement, and it was understood that he would do so.
The
Issuance of the order and statement was thereupon authorized.
Copies
c)f the documents issued pursuant to this authorization are attached as
Messrs. O'Connell, Shay, Benner, Potter, and Veret then withdrew
fr^
-M the meeting and Mr. Molony„ Assistant to the Board, entered the room.
"Articles of Association" of Federal Reserve Banks (Item No. 10).
A Xem
orandum dated March 19, 1962, from Mr. Hackley had been distributed
Connection with a request known (from Reserve Bank sources) to have
3/20/62
-6-
been sent by the Comptroller of the Currency to several Federal Reserve
Banks, and presumably to all of them, requesting a current copy of each
Bank's Articles of Association.
The memorandum noted that the Federal
Reserve Act contained no reference to Articles of Association of the
Reserve Banks.
Section 4 required each Reserve Bank, upon its organization,
to file its organization certificate with the Comptroller and provided
that thereupon the Reserve Bank should become a body corporate and should
have the corporate powers set forth in the fourth paragraph of section
The
4.
law also provided that no Reserve Bank should transact any business
until it received authorization from the Comptroller to commence business.
The letter sent by the Comptroller of the Currency to the Reserve Banks
stated that his files contained these organization certificates and
authorizations to commence business.
The Board's records did not indicate
that any Federal Reserve Bank had ever voluntarily adopted Articles of
4880oiation.
In any event, there was clearly no requirement for the
f'14
-4-ng of any such articles with the Comptroller of the Currency.
Attached
to the memorandum was a draft of wire that Mr. Hackley suggested might be
ellt to the Reserve Bank Presidents for their guidance.
A preliminary
1411% already had been sent to the Reserve Banks suggesting that replies
to the Comptroller's letter be deferred pending receipt of a further
tlegram from the Board.
There was a discussion that centered upon the terms in which it
°Illd be appropriate to advise the Reserve Banks concerning a reply to
3/20/62
-7-
the Comptroller. Question was raised as to whether it might be advisable
for the Board's staff to give the necessary information to the Comptroller's
staff informally, but the consensus was that, since the Comptroller had
written to the Reserve Banks, it would seem preferable for the Banks to
reply to him. Suggestions were made for revisions in the telegram to the
Reserve Bank Presidents, after which a telegram was approved unanimously
in the folii attached as Item No. 10.
Costs of bank examination. Governor Shepardson stated that, in
connection with the Board's consideration of what reply it should make
to the Comptroller of the Currency's letter of March 16, 1962 again
ti ging that the Board contribute to meeting the cost of national bank
exazinations„ it seemed to him important to have comparative infoimation
On the cost of examinations of State and national banks.
Chairman Cocke
°f the Federal Deposit Insurance Corporation had indicated that the
G°rPoration had current information and that he would send a copy to
Governor Shepardson.
If it developed that the Corporation's information
/4°111d. serve the purpose, it would be distributed to the Board. If not,
Governor Shepardson felt that the staff should be instructed to develop
e°111Parative information.
Use of Board's computer.
Governor Shepardson referred to the
act that the Board's computer was used to process data from reports of
e°ndition and earnings and dividend reports for the Federal Deposit
ance Corporation and the Comptroller of the Currency as well as
,
3/20/62
-8-
for the Board.
He stated that Chairman Cooke of the Federal Deposit
Insurance Corporation had inquired whether there was any likelihood
that the Board would find it necessary to discontinue providing service
On its computer in the foreseeable future. The Corporation's new
building was under construction, and in allocating space it would be
he1pful to know if it would be necessary for the Corporation to make
Doom for its own computer installation. Governor Shepardson had
indicated that it seemed reasonably certain that the service on the
111°Iard's computer could be continued for at least several more years.
Building space. Governor Shepardson stated that he expected
to present to the Board within the near future a report on present and
Projected building space needs for the Board and its staff.
The meeting then adjourned.
Secretary's Notes: On March 19, 1962,
Governor Shepardson approved on behalf
of the Board a letter to the Federal
Reserve Bank of San Francisco (attached
Item No. 11) approving the appointment
of Charles L. Buckley as assistant
examiner.
Governor Shepardson today approved on
behalf of the Board the following items:
Item .ky Letter to the Federal Reserve Bank of Philadelphia (attached
approving the designation of nine persons as special
z›-421)
1
Qlstant examiners.
the
Memoranda from appropriate individuals concerned recommending
following actions relating to the Board's staff:
3/20/62
_9_
AER11121tm
John H. Wood as Economist in the Division of Research and Statistics,
Idth basic annual salary at the rate of $9,2151 effective the date of
entrance upon duty.
.....t1-try increase with change in title
Marjorie J. Hollingshead, from $4,250 to $41510 per annum, with a
,
change in title from Clerk-Stenographer to Secretary in the Division of
aeeearch and Statistics, effective April 1, 1962.
BOARD OF GOVERNORS
otatt4,,,
44.tate sob *o
OF THE
4r
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 1
3/20/62
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
March 20, 1962
Mi. William L. Day, Chairman of the Board,
The First Pennsylvania Banking and Trust Company,
15th & Chestnut Streets,
Philadelphia 1, Pennsylvania.
Dear Mr. Day:
The Board of Governors has approved the Articles of
Association and the Organization Certificate, dated February 13,
1962, of First Pennsylvania Overseas Finance Corporation, and
there is enclosed a preliminary permit authorizing that Corporation to exercise such of the powers conferred by Section 25(a)
Of the Federal Reserve Act as are incidental and preliminary to
its organization. As you are aware, the Corporation may not
exercise any of the other powers conferred by Section 25(a)
Until it has received a final permit from the Board authorizing
it generally to commence business. The steps which must be
taken prior to issuance of a final permit are enumerated in
Section 211.3(c) of the Board's Regulation K.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
Enclosure.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
March 20, 1962
Preliminar7 Permit
IT IS HEREBY CERTIFIED that the Board of Governors of the Federa
l
erve
System, pursuant to authority- vested in it by Section 25(a) of
the p
ederal Reserve Act, as amended, has this day approved the
Articles
()t Aaeociation and Organization Certificate, dated
February.13, 1962,
Of pi
RST PENNSYLVANIA OVERSE
AS FINANCE CORPORATION duly filed with said
la14
"of Governors, and that FIRST PENNSY
LVANIA OVER=S FINANCE CORPORA18 authorized to exercise such of
the powers conferred upon it by
8"Secti0n 25(a) as are incidental and preliminary to its organiz
ation
Periclitig the issuance by the
Board of Governors of the Federal Reserve
htexil c)f a final permit generally to commence busines
s in accordance
he
Provisions of said Section 25(a) and the rules and regulations
°t the
Board of Govern
ors of the Federal Reserve System issued pursuant
thereto.
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEK
BY
(44)
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 2
3/20/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
March 20, 1962.
uear sir:
The Board of Governors concurs in the approval by the
Coal*erence
of Presidents at its meeting on March 5, 1962, of the
0171eiclIIfl1endation contained in the Joint Report of the Subcommittee
kt
:
°11ections and the Subcommittee of Counsel on Collections,
gr
January 26, 1962, regarding amendment of the uniform paracir
al3n entitled "Telegraphic advice" in the noncash operating
ktriculars and letters of Federal Reserve Banks, with certain
sen°1
'changes requested by the Conference of Presidents and subth4llentlY agreed to by such Subcommittees. It is understood that
reacianlended paragraph, to become effective April 1, 1962, will
as follows:
instructed to do so
forwarding banks,
this Bank will request telegraphic advice of payment
.°1
'nonpayment of noncash items and will transmit by
'!legraph any information received. A service charge
will be made against the forwarding bank's
a.
for each telegram transmitted over the leased
i
wlre Pertaining to payment, nonpayment or tracing of
ternS, and in connection with receiving or transmitting
other information or instructions, Charges for
:1!legram5 transmitted
over commercial wire facilities
be made at commercial wire rates against the
.k
?rwarding bank's account; telegrams to such banks
14111 be
sent 'collect'
Very truly your
Merritt S erman
Secretary.
PRESIDENTS OF ALL FEDERAL RESERVE BANKS.
TELEGRAM
LEASED WIRE SERVICE
Item No.
3
3/20/62
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
March 20, 1962.
OtKane - San Francisco
Rs Your telegram March 14 requesting to be advised whether your Bank
Should furnish to Attorney Baker a copy of Board's
1958 report of
examination of Bank of Belmont Shore, Long Beach, for use in defendant's
behalf in pending case of Nicholson v. Wade. You also ask whether
response should be made to duly served subpoena duces tecum demanding
this report. Board will not rake the 1958 report of examination or
any
Other report of examination of Bank of Belmont Shore available to Baker
tcl' use in subject litigation. Should Baker effect service of subpoena
claces tecum on appropriate personnel of your Bank calling for production
Of the report of examination requested, or of any other report of examination, the person subpoenaed should follow the procedures set forth
1-4 section 261.5(a)
and (h) of the.Board's Rules Regarding Information,
Subraittals, and Requests. Board is advised that
the FDIC has wired
its refusal to comply with similar request
for copy of 1958 FDIC report
Of examination of Bank.
(Signed) Merritt Sherman
Sherman
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
WASHINGTON 25, D. C.
ADDRESS
4
3/20/62
arrIctAt., CORRESPONDENCE
TO THE BOARD
March 20, 1962
130ard of Directors
Bank of Slidell,
Slidell Louisiana.
Gentlemen:
Pursuant to your request submitted through the Federal
neserve Bank of Atlanta y the Board of Governors of the Federal
erve System approves the establishment of a branch by the Bank
'
80 Slidell,
. at the corner of Broad Street and Ponchartrain
Slidell, Louisiana, which may be operated in temporary
'illitlrters at the corner of Fremaux Avenue and Second Street in
pending completion of permanent branch quarters.
r,
Approval is given to the establishment of the branch
a; (1ed (1) the branch is established within one
year from the
ot this letter, and (2) the temporary branch will be disconued simultaneously with the establishment of the permanent
eh.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
96BOARD OF GOVERNORS
40****4
eap VI Copp,i.,
OF THE
tfir -----",---- *t•''',
,
*
g*
r*
ti
Item No. 5
3/20/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
4
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
i,c;`'
t
*4t411 Rta
'
-4440:01
March 20, 1962
BY MESSENGER
Comptroller of the Currency,
Treasury Department,
Washington 25, D. C.
Dear Mr. Comptroller:
This refers to your letter of February 23, 1962,
concerning letter dated December 5, 1961, written by
Mr. Henry G. Blanchard, President, The Commercial National
Bank, Kansas City, Kansas, relative to the proposed consolidation of Security National Bank and Riverview State Bank,
both of Kansas City, Kansas, and your letter of March 1, 1962,
concerning a public hearing in this proposed consolidation.
At present, the Riverview and Security banks are
controlled by persons holding a strong minority position in
the Commercial Bank. The merger would consolidate this
existing community of ownership, with its attendant concentration of banking power. The other smaller banks would have to
Lace competition, not only from two larger banks, but from
two larger banks that are interrelated.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
UNITED STATES OF AilERICA
Item No.
6
3/20/62
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
the Matter of the Application of
TRUST CCMPANY OF MARYLAND
ri.,2r approval of merger with
Kingsville
Bank
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to
ection 18,c,
) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)),
411 ab
-Mcation by Union Trust Company of Maryland, Baltimore, Maryland,
niernber bank of the Federal Reserve System, for the Board's prior ap131'oval of the merger of The Kingsville Bank, Kingsville, Maryland, with
aild into
Union Trust Company of Maryland, under the charter and title
Ot tho latter.
Pursuant to said section 18(c), notice of the proposed merger,
1411
,
-°1*Tri
approved by the Board of Governors, has been published, and
/i°Port,
on the competitive factors involved in the proposed transaction
have h
ueen furnished by the Comptroller of the Currency, the Federal
t)eP°3it T
-nsurance Corporation, and the Department of Justice and have
be rl c
°nsidered by the Board.
-2-
IT IS ORDERED, for the reasons set forth in the Board's
Statement of this date, that said merger be, and hereby is, approved,
151%)1/1ded that said merger shall not be consummated (a) sooner than
8even calendar days after the date of this Order or (b) later than
three months after said date.
Dated at Washington, D. C., this 20th day of March, 1962.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and Governors
Balderston, Mills, Robertson, Shepardson, and King.
Absent and not voting:
Governor Mitchell.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(stAL)
BOARD OF GOVERNCRS
Item No. 7
3/20/62
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY UNION TRUST CCMPANY OF MARYLAND
FOR PRIOR APPROVAL OF MERGER WITH THE KINGSVILLE BANK
STATEMENT
Union Trust Company of Maryland, Baltimore, Maryland ("Union
4118"), with deposits of $245 million, has applied, pursuant to
8"ti°11 18(c) of the Federal Deposit Insurance Act, for the Board's
151/41* aPProval of the merger of that bank and The Kingsville Bank,
ItirlOville, Maryland, with deposits of $8.5 million.
Under the Agree..
Ment of Merger, the banks would merge under the charter and title of
tjni°n Trust; and the two offices of The Kingsville Bank would become
4811ellea of Union Trust, the total banking offices of which would be
thereby increased from 31 to 33.
Under the law, the Board is required to consider (1) the
financial history and condition of each of the banks involved, (2) the
adellilaoY of its capital structure, (3) its future earnings prospects,
th
e general character of its management, (5) whether its corporate
are consistent with the purposes of the Federal Deposit Insure.
icA
e''Ct3
(6) the convenience and needs of the community to be served,
4111:1 (71 the
effect of the transaction on competition (including any
tende,
110,7 toward monopoly). The Board may not approve the transaction
'
-2-less, after considering all these factors, it finds the transaction
to be in the public interest.
Banking factors, - Concerning the first five factors to be
corksidered; both Union Trust and The Kingsville Bank have good financial
histories
Both are in good condition; they are adequately capitalized;
the future earnings prospects for both are satisfactory; and each has
certiPetent management. The same would hold true for the resulting bank.
'Mere is no evidence that the corporate powers of the banks are or would
be inconsistent with the purposes of the Federal Deposit Insurance Act.
Convenience and needs of the communities. - The City of
8Ellt1m0re, a major seaport and commercial, industrial, and financial
certer, has a population of 940,000, reflecting a decline of about
10°0 since 1950. The Baltimore metropolitan area (i.e., The Standard
Metrr,
-Politan Statistical Area, as defined by the Bureau of the Census),
which is comprised of Mine Arundel, Baltimore, Carroll and Howard Counties
814 the City of Baltimore, has a population of 1,725,000, an increase
or 322,000 since 1950. Of this increase, 222,000 was in Baltimore
C°1/11tY) the population of which increased 82 per cent. Congestion in
the City of
Baltimore has resulted in both industrial and residential
4velopment
that
in the four counties surrounding the city, and it appears
this trend will continue.
Union Trust, with its head office in Baltimore and presently
Op
eratin
-g 30 branches, has pending applications for the establishment
°r t
more branches. All of the bank's presently established offices
_3_
are located in the City of Baltimore (19 offices), Baltimore County (11
offices)) and Anne Arundel County (1 office).
None of the bank's
Out-of-city offices is farther than ten miles from the Baltimore city
limits except two, which are located 15 to 20 miles away at Reistertown
and Glyndon,
Kingsville) with about 2,000 population, is located 16 miles
northeast
of downtown Baltimore on U. S. Highway 1. The Kingsville
8ank t 3 only branch is at Perry Hall, 12 miles northeast of Baltimore
the same highway. The Perry Hall area, which is unincorporated) has
4
Population of about 26,000.
Kingsville and Perry Hall) both in
Baltimore County, are mostly residential, with some farming in the
general area, and many of their residents are employed in Baltimore.
C°118istent with the trend in Baltimore County, Kingsville and Perry
Ball have had a substantial growth in population since 1950. The
'rest alternate banking office to The Kingsville Bank or its branch
riee
1'8 the Overlea branch of Union Trust, located about four miles northeast
Of Baltimore on U. S. Highway 1. Maryland National Bank) the largest
ban', ,
J-n the State) with deposits of almost $430 million and operating
39 Of
in the Baltimore metropolitan area, has been granted perto establish a branch at Perry Hall.
If the merger is approved, the complete range of trust and
ba
"Lug services offered by Union Trust would become available in the
S1r1leperry Hall area. Another beneficial effect of the merger
-4in that area would be the substitution of the resulting bank's basic
lcan limit of $2.3 million for the $57,500 basic lean limit of The
Kingsville Bank.
Cc;mpeti-::ion. - The service areas of Union Trust's Overlea
0,
....00s..........•••••••••••••••••••40.0...01.1•10
branch (deposits $2.4 million) and of the two offices of The Kingsville
Bank do not overlap and there are now no other banking offices along
Us S. Highway 1 from Baltimore to a point 11 miles beyond Kingsville,
are there other banking offices within the service areas of these
offices or between the respective service areas.
The few common loan and deposit relationships that exist between Union Trust and The Kingsville Bank, indicate only a minor amount
q competition.
The Overlea branch of Union Trust and the Perry Hall
44nch of Kingsville Bank represent alternate banking offices for some
viduals and businesses.
Following the merger, Union Trust would continue to rank third
in 8"4'.
el based on deposits, among the 13 commercial banks in the Baltimore
letl
'
°Politan area; and Union Trust would continue to be second only to
Mary
land National Bank in number of banking offices in the metropolitan
area,
The competitive relationships between Union Trust and other
qe banks in the Baltimore metropolitan area would change very little
a
4
result of the merger. The authorized branch of Maryland National
tank
at Perry Hall will compete with an office of the third largest
bahle
in the area, instead of with a small local bank. This should
iliteM,Sify
competition. There are no small banks in The Kingsville
Benkis service areas to be affected by the proposed merger.
Smmary and conclusjon. - If approved, the merger will promore complete banking se,:vices to the rapidly graving service areas
Of The Kin3Tville Bank, Little, if any, competition w'll be eliminated
practically none of censcquonce e:.ists between the two banks in\rclved. Won Trust will be in a better position to compete more
effectively in the Kingsville-Perry Hall area with one of the two largest
banks in the Baltimore metropolitan area.
Accordingly, the Bo3rd fjads that the proposed merger would be
the 'public interest.
eh
1962
Item No. 8
3/20/62
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
UNITED STATES OF AMERICA
WASHINGTON, D. C.
Lithe Matter of the Application of
TRUST COMPANY OF ALBANY
&approval of merger with
“IeBroadalbin Bank
41.
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to
section 18/.
(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c))„
allaPPlication by First Trust Company of Albany, Albany, New York, a
tilttber bank of the Federal Reserve System, for the Board's prior apP1'°11sal of the merger of The Broadalbin Bank, Broadalbin, New York,
With
and into First Trust Company of Albany, under the charter and
title of the latter
Pursuant to said section 18(c)„ notice of the proposed merger,
to
aPproved by the Board of Governors, has been published, and
'
l ePort
-- on the competitive factors involved in the proposed transaction
11.\re beon
furnished by the Comptroller of the Currency, the Federal
tlettsi
t Insurance Corporation, and the Department of Justice and have
-g c^
vnsidered by the Board.
-2IT IS ORDERED, for the reasons set forth in the Boards
Statement of this date, that said merger be, and hereby is, approved,
Provided that said merger shall not be consummated (a) sooner than
8"en calendar days after the date of this Order or (b) later than
three months after said date.
Dated at Washington, D. C., this 20th day of March, 1962.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and Governors
Balderston, Mills, Robertson, Shepardson, and King.
Absent and not voting: Governor Mitchell.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(sEAL)
BOARD OF GOVERNORS
Item No. 9
3/20/62
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY FIRST TRUST COMPANY OF ALBANY
FOR PRIOR APPROVAL OF MERGER WITH THE BRCADALBIN BANK
STATEMENT
First Trust Company of Albany, Albany, New York ("First
Trust")3
with seven banking offices and deposits of $83.8 million, has
al4)43d, pursuant to section 18(c) of the Federal Deposit Insurance Act,
f(21? the Boardis prior approval of the merger of that bank and The
1311()adalbin Bank, Broadalbin, New York, with deposits of $2.8 million.
IlldLer the Plan of
Merger the banks would merge under the charter and
tit)* of First Trust; and the single office of The Broadalbin Bank would
mie a branch of First Trust.
Under the law, the Board is required to consider (1) the
tirlan .
3.3.1 history and condition of each of the banks involved, (2) the
4(10(111a
cY of its capital structure, (3) its future earnings prospects,
(4) th
e general character of its management, (5) whether its corporate
Pt/k
440c,
a are consistent with the purposes of the Federal Deposit Insur-
Act)(6) the convenience and needs of the community to be served,
411c1 (7\
the effect of the transaction on competition (including any
ceride
toward monopoly). The Board may not approve the transaction
kles,0
') after considering all these factors, it finds the transaction
to be i
n the public interest.
-2Banking factors. - Consideration of the five so-called "banking
factors" shows that First Trust has a satisfactory financial history,
Its condition is good, its capital is adequate, and it has favorable
earnings prospects and competent management.
The Broadalbin Bank has
adequate capital, but its earnings prospects are uncertain and strengthened management is needed to maintain its present satisfactory condition.
This,the bank feels, it cannot afford. The merger would solve this
Pl%°bleril by making available the management services of First Trust.
The earnings prospects of the resulting bank would be satisfactory,
its condition would be sound, and its capital adequate.
There is no
Lence that the corporate powers of the banks are or would be incon"
sistent with the purposes of the Federal Deposit Insurance Act.
Consideration of the banking factors, therefore, lends support
to the application.
Convenience and needs of the community to be served. - Albany,
With a
YO
population of about 130,000, is the capital of the State of New
_
4nd the center of a trade area with over 600,000 persons. It is a
distl'ibution center for the surrounding industrial and agricultural area,
d the local manufacturing is expanding and well diversified. In ad-
dila°
n to six offices of First Trust, Albany County is served by four
(the%
4 commercial banks operating 22 offices, and by two branches of
cut'cf-county banks.
The village of Broadalbin is
35 miles northwest of Albany. It
has a Population of about 1,400, is located in Fulton County, and serves
a trade area of about 3,500 people.
Broadalbin is primarily a summer
resort community with little industry. The Broadalbin Bank is the only
bank in
the village.
The merger, if approved, would have no effect on the Albany
area aside from increasing slightly First Trust's loan limit.
The
illage of Broadalbin, however, would benefit, not only from improved
bank
management„ but also frcm conveniently available, expanded, and
111°re efficient banking services, such as a higher lending limit, special
ch"kirig accounts, commercial and travelers' letters of credit, postal
IlIcrleY orders, automatic savings accounts, FHA modernization loans, and
trizs,
'and bank wire services.
Competition. - The two largest banks in the area served by
?irst
Trust
t3
hold, in the aggregate, 84 per cent of the commercial bank
in Albany County. These banks would continue to provide strong
eciVetition for First Trust, the third largest bank in the County, which
1101,4,„
"about 12 per cent of the commercial deposits of the area.
There is little overlap of service areas. Moreover, First
and The Broadalbin Bank have only a small number of common de13.°sito
I's and borrowers involving only a small volume of dollars. Competitiont
et4een the two banks is negligible. Except for The Broadalbin Bank,
n0
Other bank
has an office closer than ten miles to Broadalbin; and none
-4°f the offices of these other banks solicit business, other than savings
deposits, in the Broadalbin area.
Summary and conclusion. - The banking factors are favorable to
approval of the merger. The need for ilr.proved management at The Broadalbin
13ank would be fulfilled by consumation of the merger, whereas there is
tiO evidence that this need mi:.ht be otherwise resolved. The Broadalbin
al
'
ea Would be supplied with more varied and improved banking. services.
Ot
herwise, the effects of the merger would not be significant in any area
8'.1nre!e. by the merging institutions.
Accordingly, the Board finds that the pr000sed merger would
be in the public interest.
larch 20, 1962
TELEGRAM
LEASED WIRE SERVICE
Item No. 10
3/20/62
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
March 20, 1962
4'esidents
all Federal Reserve Banks
Referring to Board's wire March 19, 1962, regarding
letters sent by Comptroller of the Currency to Federal Reserve
anics requesting copies of Articles of Association.
Board under-
stands that no Reserve Bank has ever adopted Articles of Association,
which are not provided for by law. Statute provides that, upon filing
of °rganization certificate with Comptroller, each Federal Reserve Bank
shall become body corporate with corporate powers stated in statute.
It '
1 8 suggested that you may wish to include advice along these lines
in a
nY response made to Comptroller's letter.
Sherman
BOARD OF GOVERNORS
00**114.4
OF THE
tt eat7
.
*4
iø
FEDERAL RESERVE SYSTEM
Item No. 11
3/20/62
WASHINGTON 25, D. C.
ADORESS OFFICIAL CORRESPONDENCE
TO THE BOARD
March 19, 1962
CONFIDENTIAL (FR)
Mr. H. E. Hemmings, First Vice President,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Hemmings:
In accordance with the request contained in your
letter of March 12, 1962, the Board approves the appointment
of Charles L. Buckley as an assistant examiner for the
Federal Reserve Bank of San Francisco. Please advise the
effective date of the appointment.
It is noted that Mr. Buckley is indebted to
Somerville National Bank, Somerville, Massachusetts, Federal
Reserve District No. 1, but that he will not participate in
any examinations of that bank.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael:
Assistant Secretary.
•
BOARD OF GOVERNORS
OF THE
Item No. 12
3/20/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE EIOARD
March 20, 1962
CONFIDENTIAL
QD1/
Mr. Joseph R. Campbell, Vice President,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pennsylvania.
Dear Mr. Campbell:
In accordance with the request contained in your
letter of March 14, 1962, the Board approves the designation
of the following employees as special assistant examiners
for the Federal Reserve Bank of Philadelphia for the purpose
of participating in examinations of State member banks:
Arthur B. Lecates
Roy Guerra
Thomas D. Miller
Philip S. Boyer
Joseph F. Aliano, Jr.
Eugene R. Pomendale
Robert L. Sharpe
Francis Finnegan
The Board also approves the designation of Bernard E.
Beck as a special assistant examiner for the Federal Reserve
Bank of Philadelphia for the purpose of participating in examinations of State member banks except First Pennsylvania
Banking and Trust Company, Philadelphia, Pennsylvania.
Appropriate notations have been made on our records
of the names to be deleted from the list of special assistant
examiners.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elimbeth L. Carmichael,
A3sistant Secretary.
@FedFRASER