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Minutes for
To:
October 19, 1960
Members of the Board
From: Office of the Secretary
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.
Chin. Martin
Gov. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
101.0
t
Minutes of the Board of Governors of the Federal Reserve System on
Wednesday, October 19, 1960.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Szymczak
Mills
Robertson
Shepardson
Sherman, Secretary
Hackley, General Counsel
Solomon, Director, Division of Examinations
Hooff, Assistant General Counsel
Hostrup, Assistant Director, Division of
Examinations
Mr. Rudy, Special Assistant, Legal Division
Mr. Landry, Assistant to the Secretary
Mr. Leavitt, Supervisory Review Examiner, Division
of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Item circulated to the Board.
The following item, which had been
circulated to the Board and a copy of which is attached to these minutes
as Item No. 1, was approved unanimously:
Letter to Southwest Bank of St. Louis, St. Louis,
Missouri, consenting to the retirement of its outstanding preferred stock.
Application of Marine Corporation
(Items 2 and 3).
Pursuant to
the understanding reached at the meeting of the Board on September 30,
1960,
there had been distributed a memorandum dated October 13, 1960, from Mr.
R114 attaching a Notice of Tentative Decision, Tentative Statement, and
ess release indicating Board approval of the application by The Marine
'
Pl
C°rPoration, Milwaukee, Wisconsin, to acquire
6o per cent or more of the
Irc3ting shares of Oak Creek Marine National Bank, Oak Creek, Wisconsin.
31b
sequent1
y, a revised draft of pages
3, 4, and 5 of the Tentative Statement
10/19/60
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had also been distributed to the Board in the light of certain suggestions
made by Governor Mills.
Following an observation by Mr. Hackley that one further change
in wording of the Tentative Statement would be desirable, unanimous
aPproval was given to the issuance of a Notice of Tentative Decision and
Tentative Statement in the form attached as Items 2 and
3, respectively.
Messrs. Hostrup and Rudy then withdrew from the meeting.
Report on competitive factors
(Louisville and Middletown, Kentucky).
CoPies had been distributed of a draft of report to the Comptroller of the
Currency
on the competitive factors involved in a proposed merger of
Liberty National Bank and Trust Company of Louisville, Louisville, Kentucky,
With Bank of Middletown, Middletown, Kentucky.
This report concluded as
follows:
Constituent banks appear no more than nominally competitive.
Bank of Middletown evidently enjoys relative freedom from competition, by reason of geographical removal from competitive service
areas, and such competition as it faces would originate from the
solicitation of large accounts in its area by the major Louisville
banks. Liberty National is one of such major banks, but enjoys no
dominant position over other Louisville banks in soliciting such
business. The effects of the proposed transaction on competition
do not appear adverse.
The report was approved unanimously.
The meeting then adjourned.
Secretary's Notes: Governor Shepardson today
approved on behalf of the Board a memorandum dated
October 13, 1960, from Mt. Koch, Adviser, Division
of Research and Statistics, recommending the appointment of Vita Rose Monaco as Statistical Clerk in that
Division, with basic annual salary at the rate of
$4,145, effective the date of entrance upon duty.
3940
1 19/60
3Pursuant to the request contained in a memorandum
dated October 14, 1960, from Mr. Brill, Associate
Adviser, Division of Research and Statistics,
Governor Shepardson today granted permission for
him to review, for the American University, a
doctoral dissertation in the field of corporate
finance.
Secretary
BOARD OF GOVERNORS
OF THE
t 1/4
;
1 400
Item No. 1
10/19/60
FEDERAL RESERVE SYSTEM
4
4.
*
WASHINGTON 25, O. C.
ADDRESS OFFICIAL CORRESPONDENCE
'C'kftat
titti000,,5*
TO THE BOARD
October 191 1960
Board of Directors,
Southwest Bank of St. Louis,
St. Louis, Missouri.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of St. Louis, the Board of Governors
of the Federal Reserve System hereby gives its consent,
'under the provisions of Section 9 of the Federal Reserve
Act) to the retirement of $220,000 outstanding preferred
stock of Southwest Bank of St. Louis, St. Louis, Missouri.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
3942
Item NO. 2
10/19/60
BOARD OF GOVERNORS
OF THE
Fv,DERAL 1- ESERVE SYSTEM
NOTICE OF TENTATIVT, MCISION ON APPLICATION FOR PRIOR
APPROVAL OF ACQUISITION BY A BANK HOLDING COMPANY
OF VOTING SHARES OF A BANK
Notice is hereby given that, pursuant to sect:Ion 3(a)
°I' the Bank Holding Company Act of 1956, The Marine Corporation,
Milwaukeel wisconsin, a bank holding company, has applied for
the Board's prior approval of the acquisition of 60 per cent or
111°re of the 20,000 vcting shares of Oak Creek plarine National Bank,
°O. Creek, Wisconsin.
Information relied upon by the Board in
tilaking its tentative decision is summarized in the Board's
Tentative Statement of this date, which is attached hereto and
ad
a part hereof, and which is available for inspection at the
Otti
ce or the Board's Secretary, at all Federal Reserve Banks,
atd a
the Office of the Federal Register.
The record in this proceeding to date consists of the
4P1° ication, the Board's letter to the Comptroller of the
rICY inviting his views and recommendations on the application,
the 'reply of the Comptroller, this Uotice of Tentative Decision,
44d the facts set forth in the Board's Tentative Statement.
41')(
-2For tne reasons sat forth in the Tentative Statement,
the Board proposes to grant the application.
Notice is further given that any interested person may,
not later than fifteen (15) days after the publication of this
n°tice in the Federal Register, file with the Board in writing
allY comments upon or objections to the Board's proposed action.
Communications should be addressed to the Secretary, Board of
Governors of the Federal Reserve System, Washington 25, D. C.
Following expiration of the said 15-day period, the
Board's Tentative Decision will be made final by order to that
effect, unless for good cause shown other action is deemed
aPPropriate by the Board.
Dated at Washington, D. C., this 19th day of October 1960.
By order of the Board of Governors.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
sThAL
3944
Item No. 3
10/19/60
BOARD OF GOVERNORS
OF THE
FEDTRAL RESERVE SYSTEM
APPLICATION BY THE MARINE CORPORATION, MILWAUKEE, WISCONSIN,
FOR PRIOR APPROVAL OF ACQUISITION OF VOTING SHARES OF THE
OAK CREEK MARINE NATIONAL BANK, OAK CREEK, WISCONSIN
TENTATIVE STATEMENT
The Marine Corporation, Milwaukee, Wisconsin ("Marine"), a
bank holding company, has applied, pursuant to section 3(a)(2)
Of the Bank Holding Company Act of 1956 ("the Act"), for the
rd'8
8c/a
prior approval of the acquisition of 60 per cent or more
ct the 20,000 voting shares of
p , opos,-C n
uank, to be called the
U111- Lr7?.ek iarinc ilet)onal 3ank, Oak Creek, Wisconsin ("Bank").
Views and recommendations of the Comptroller of the
'211 .17L.Sz. — As required by section 3(h) of the Act, the Board
r°1'Ilarded notice of the application to the office of the Comptroller
or the Currency.
The Comptroller responded by recommending approval
the transaction.
Statutory factors. — Section 3(c) of the Act requires
the
Board to take into consideration the following five factors:
(1) the
financial history and condition of the holding company and
ban,
4
concerned; (2) their prospects; (3) the character of their
-2-
management; (4)
the convenience, needs, and welfare o2 tue
communities and area concerned; and
(5) whether
or not the effect
or the acquisition 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
ct competition in the field of banking.
Discussion. - Marine now has four subsidiary banks in
Milwaukee County, one in adjacent Waukesha County, and one in the
citY of Green Bay. Its principal subsidiary is Marine National
Exchange Bank, the third largest bank in Milwaukee County.
The city of Oak Creek has a population of about
9,300.
Its area of about 29.5 square miles occupies the southeastern
Pc3rti0n of Milwaukee County, and is bounded on the north by the
south
citiesof Ailwaukee, Cudahy, and South Milwaukee, and on the
bY the Milwaukee County line.
The application includes a
"Comprehensive City Plan" report dated February
5, 1959, which
contains a statement that retail trade and service establishments
are widely scattered, and a greater central focus, functional
al'rangenlentynd chopper con eni-nces n-ed to he ,,evelo, d.
Mine points out tnat the urban development of the area has been
ec3r4Paratively slow, due primarily to financial and other hindrances
11111°h have been cleared away in the last two years.
hp
The
°mPrehensive City Plan" report estimates that the population
'
q Oak Creek will be about 19,000 in 1965.
_3—
The site of the Bank would be approximately 10-1/2 miles
tr°111 downtotm Milwaukee, and would be located at the approximate
c'graphic center of the city of Oak Creek in a shopping center
Ilhich is to be constructed on a 60-acre tract. Other developments
newly designated downtown area of Oak Creek include a City
411 end Administration Building, a high school (on both of which
()ristruction is
expected to be started in 1960), and an apartment
1)17°Ject nou under construction or planned for the near future which
consist of a total of 1,600 apartments. The plant of the largest
elliP10Yer in the city is within one-half mile of the proposed bank site.
The financial history and condition, prospects, and manage4t1t cf both irarine and Bank are satisfactory.
A consideration of the factor "convenience, needs, and
treit
are of the communities and area concerned" lends rather strong
rt for approval of the application. This conclusjoa is based upon
(1) th
-e
fact that there is now no bank in the city and that the tuo
144:11,,
8
'
nearest the proposed bank site are 3-1/2 miles distant in South
a -ee; (2) the existing population of the city and the anticipated
01t- thereof; (3) the potential for increased industry; and (4) the
rathe
r extensive municipal and private construction under way and in
the
Planning stage in the immediate vicinity of the proposed bank site.
An additional judgment roquirPd of the Board by section 3(c)
th
e Act is whether the effects c Le proposed acquisition would be
to e,
4'zParld the size or extent of :.arinol holding company system
-4c
beyond limits consistent with adequate and sound banking, the publi
interest, and the preservation of banking competition.
of commercial
Marine now controls four of the 46 offices
banks in Alwaukee County.
The total deposits of such banks amount to
on
A,661 million, of which Marine's banking offices hold '21.5 milli
or about 13 per cent. 'Aarinels acquisition of Bank would not appear
to involve an undue concentration of banking resources.
control a large
Marine and two other bank holding companies
Proportion of the deposits held by all commercial banks in Milwaukee
County.
g factor in
However, this is not regarded as a controllin
of
this case in view of the situation in the primary service area
, and
8ank and the considerations with respect to "convenience, needs
welfare" mentioned above.
derived prinIt is probable that Bank's business would be
eiPally from Oak Creek.
The two existing banks most likely to be
affected by the establishment and operation of Bank would be the two
barlks in South Milwaukee.
One of these, South Milwaukee Marine Bank,
than
i8 a subsidiary of Marine and, according to Marine, holds less
ns
0,000 of deposits of individuals, partnerships, and corporatio
Bank.
(IPC) deri'ed from the anticipated primary service area of
The
Other bank in South - ilwaukee, the Home State Bank, is not a subsidiary
its would not
()t any bank holding company, and having no time depos
competition of
be competing with Bank for such deposits. The main
Q.
Home State for demand IPC deoosits would continue to be South Milwaukee
liarine Bank, and as between those two banks the competitive situation
would not be clanged by the proposed acquisition.
Accordingly, Bank's
acquisition by Marine would not, in the Board's judgment, have any
material adverse effect upon Home State Bank or other banks.
The Board concludes that the proposed acquisition would not
exPand the size or extent of Marine's holding company system beyond
linlits consistent with adequate and sound banking, the public
interest, and
the preservation of competition in the field of banking.
Conclusion. - Viewing the relevant facts in the light of the
eneral purposes of the Act and the factors enumerated in section 3(c),
it is the judgment of the Board that the proposed acquisition would
be consistent with the statutory objectives and the public interest
and that the application should be approved.
October 19, 1960.
@FedFRASER