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Minutes for October 24, 1958

To:

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, if you were present
at the meeting, please initial in column A below to
indicate that you approve the minutes. If you were
not present, please initial in column B below to
Indicate that you have seen the minutes.

A
Chin. Martin
Gov. Szymczak
Gov. Vardaman 1/
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson

1/




In accordance with Governor Shepardson's memorandum of March 8, 1957, these minutes are not
being sent to Governor Vardaman for initial.

3039
Minutes of the Board of Governors of the Federal Reserve System on
Friday, October 24, 1958.
PRESENT:

Mr.
Mr.
Mr.
Mr.

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

Balderston, Vice Chairman
Szymczak
Robertson
Shepardson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant Secretary
Riefler, Assistant to the Chairman
Thomas, Economic Adviser to the Board
Young, Director, Division of Research and
Statistics
Hackley, General Counsel
Masters, Director, Division of Examinations
Farrell, Associate Director, Division of Bank
Operations
Daniels, Assistant Director, Division of Bank

Operations
Mr. Solomon, Assistant General Counsel
Mr. Hostrup, Assistant Director, Division of
Examinations
Union Trust Company of Maryland (Item No. 1).

Prior to the

meeting there had been distributed a memorandum dated October 20, 1958,
from the Division of Examinations presenting a request of Union Trust
C°111PanY of Maryland, Baltimore, Maryland, for consent, under the
Provisions of Section 18(c) of the Federal Deposit Insurance Act, to
the absorption of Reisterstown-Glyndon Bank, Reisterstown, Maryland,
alld for approval of the establishment of branches in Reisterstown and
GlYridon.

The Federal Reserve Bank of Richmond had recommended approval

r the
request as had the Division of Examinations.

Mr. Masters reviewed

the application briefly and explained that there were no unusual circumstan
ces concerning this request.




10/24/58

-2-

Thereupon the Board unanimously approved the application and a
letter to Union Trust Company in the form attached to these minutes as
Item No. 1.
Views of the New York Clearing House Association concerning
a2rtain Edge Act corporations (Item No. 2).

In conformity with the

Board's discussion on October 20, 1958, there had been distributed a
draft of reply to a letter of August 18, 1958, from the Federal Reserve
13ank of New York, which had transmitted a memorandum of the Bank Examinations
DePartment analyzing and drawing certain tentative conclusions with respect
t° a letter dated May 29, 1958, from the Clearing House Committee of the
New York Clearing House Association relating to the location and activities
in New York City of Edge Act corporations owned by out-of-State banks.
The New York Bank's letter inquired whether the Board desired preliminary
discussions between representatives of the Bank and the Board and also as
to the desirability of asking the Clearing House Committee to amplify its
vies in order that the issues might be delineated and clarified.
The proposed reply indicated that preliminary discussion between
the New York Bank and the Board could be held if New York felt this
neceeserY.

However, the Board would have no objection if New York con-

cluded that the subject could be more effectively and profitably discussed
with the Board
following conversations between that Bank and the Clearing
licalee Committee.

It pointed out that no views or conclusions should be

e3cPressed on behalf of the Federal Reserve until the matter had been further
atuclied by the Board.




_3_

10/24/58

After brief discussion, a letter to the New York Reserve Bank
in the form attached to these minutes as Item No. 2 was approved
unanimously.
Letter to Department of Justice re First Bank Stock Corporation
niatflL3.

Prior to this meeting there had been distributed

a memorandum from Mr. Solomon dated October 20, 1958, recommending that
the Department
of Justice be asked whether in view of certain developments
the petition of First Bank Stock Corporation filed with the Eighth Circuit
°spurt of Appeals (St. Louis) on October 2, 1958, might be subject to
dismissal on the grounds of mootness and that it might be appropriate to
file such a motion before certifying the record in this case.

A draft of

Proposed letter to the Department of Justice had been circulated with Mr.
Solomon's memorandum.
In commenting on the memorandum, Mr. Solomon explained that when
the matter was first before the Board, First Bank Stock Corporation had
"IIPPlied for permission to acquire stock in a bank that had not yet been.
°I‘ganized.

Meanwhile, the bank was chartered on October 3, 1958, and

Dank Stock Corporation had asserted that it proposed to file with
the Board a new or amended application for permission to acquire the stock
°t this bank from the Minnesota Mining and Manufacturing Company, which
aettlellY organized the bank. It was the change from a "not yet organized
barik" to an
"existing bank" that the Legal Division felt rendered moot
the °riginal application and therefore the petition of the First Bank
Stock Corporation.




3Q42
10/24/58
Mr. Hackley noted that the Board's letter to the Department of
Justice was no more than a procedural suggestion; final decision would
be up to that Department.
Thereupon the Board unanimously approved the letter to the
Department of Justice in the form attached to these minutes as Item No. 3.
Application of The Marine Corporation, Milwaukee, Wisconsin
Item No. 4).

On October 3, 1958, the Board issued a Notice of Tentative

Decision
which, if finalized, would approve the application of The Marine
Corporation, Milwaukee, Wisconsin, filed pursuant to section 3(a) of the
13enk Holding Company Act of 1956, for prior approval of the acquisition
by that Corporation of at least 80 per cent of the outstanding voting
Shares of Marine National Exchange Bank of Milwaukee; Holton State Bank,
Milvaukee; Cudahy State Bank, Cudahy, Wisconsin; and South Milwaukee
Bank, South Milwaukee.

The Notice provided an opportunity before issuance

°f the Board's
final order for persons to make objections or comments on
the facts stated and the reasons indicated in the Tentative Statement.
Mr. Hackley said that the time for filing objections and comments
eXPir

e- on October 23, and that no objections or comments had been

received.

He therefore recommended that the Board issue its final order

in the form circulated prior to this meeting.

This form was exactly like

the Tentative
Decision except, of course, for the elimination of the
vora 9,
uentative" and the addition of material reciting the procedure
t°11wed and pointing out that no comments had been received.




He also

10/24/58

-5-

Stated that it was the understanding of the Legal Division that the
order would show the position of individual Board members as indicated
by their vote on the final order.

In a general discussion of the

Procedure to be followed in such matters, Governor Balderston noted that
the decision on the substantive issues in most cases of this kind would
take place well before the issuance of the final order.

However, the

members of the Board present and voting on the final order might be
different from those voting on the tentative decision.
Mr. Hackley added that he felt it especially important that the
Position of the members of the Board be recorded as of the day of issuance
Of the
final order because it was entirely possible that positions taken
on the tentative order might be changed by comments received as a result
Of publication of the tentative decision.

This was, in fact, one of the

basic Purposes for disseminating the tentative conclusions of the Board.
Governor Robertson raised the question whether if there were no
dissenting views and no known objections to a particular decision, the
final order could simply show its issuance "by the Board" rather than
listing the individual members who voted for it.

This was discussed,

bIlt there was agreement that the difficulty of being certain as to
views of an absent member

made it desirable to show those acting on

the final order.
Along this same line, Governor Shepardson commented that cases
48 simple and straightforward as the one now before the Board presented




3044
10/24/58

-6-

little difficulty.

On the other hand, where the Board was divided on

a specific case and where the results might depend upon attendance at
a particular meeting, he thought it desirable that final action be
deferred until all Board members could be present, or at least until
those acting on the tentative decision were present.

There was general

agreement
with this view.
Mr. Hackley then raised another procedural question.

It had been

Proposed originally when the procedure for tentative decision was agreed
Upon that
tentative dissents as well as the tentative majority view
woUld be released.

It was now the view of the Legal Division that this

would not be desirable
and that dissenting opinions should be made public
Only at the final stage.

Again, the principal reason was related to the

fact that
the initial step was tentative and that views and comments
received

might cause Board members to alter their positions.

Mr. Hackley

reeommended, therefore, that positions of individual Board members not
be indicated
in tentative decisions.
this
suggestion.

There was general concurrence with

Thereupon the Board unanimously approved a final order approving
the

aPPlication of The Marine Corporation, Milwaukee, Wisconsin, for prior

allPraval of action to become a bank holding company under section

3 of

the Bank Holding Company Act of 1956 in the form attached to these minutes
48 Item No.

4. It was understood that the voting record would relate to

the members present at this meeting, and also that the order would be
l'leased to the press and published in the Federal Register.




301 r
10/24/58

-7-

During the foregoing discussion Mr. Molony, Special Assistant
to the Board, entered the meeting, as did Messrs. Hexter, Assistant
General

Counsel, and Davis, Assistant Counsel, and Miss Hart, Assistant

Counsel.
Application of BancOhio Corporation (Item No. 5).

A memorandum

from the Legal Division distributed under date of October 20, 1958,
Presented for Board consideration a draft of Notice of Tentative Decision
that the Board proposed to approve an application from BancOhio Corporation,
C°11116bus, Ohio, for authority to acquire up to 100 per cent of the outvoting shares of capital stock of The Kenton Savings Bank,
lent011, Ohio.

The Notice would be accompanied by a tentative statement

setting forth the factors considered by the Board in this matter.

It

would point out that the Superintendent of Banks for the State of Ohio
in
terposed no objection to the application and that the Board's view was

that the proposed transaction would not expand BancOhio's system beyond
limits consistent with adequate and sound banking, the public interest,
°r the preservation of competition in the field of banking.

It would

also point out that the financial history and condition, prospects, and
Inallagement of both BancOhio and The Kenton Savings Bank were satisfactory.
issuance of a
Thereupon the Board unanimously approved the
Tentative Decision and Tentative Statement in the form attached to these
IllinlItes as Item No. 5.

It was understood that the Tentative Decision and

Tentative Statement would be released to the press in the regular manner
eIncl that notice would be published in the Federal Register.




10/24/58

-8-

Applications of Union Bond & Mortgage Company, Port Angeles,
Washington (Items

6 and 7). There had been distributed memoranda from

the Division of Examinations dated October 10 and the Legal Division
dated October 20 relating to applications under section

3 of the Bank

11°1ding Company Act for the Board's prior approval of the acquisition
by Union Bond & Mortgage Company of 30 shares of capital stock of Forks
State Bank, Forks, Washington, and 10 shares of Bank of Sequin, Sequin,
Washington.

applications.
Both Divisions recommended approval of the

In the view of the Legal Division, disapproval might be subject to
reversal in the event of judicial review as action "arbitrary, capricious,
or unsupported by substantial evidence."
these appliThe Legal Division pointed out that the issues in
cations were so clear that it might be reasonable to dispense with
tentative decisions and to issue final orders and statements.

On the

Other hand, if this were done, question would arise as to where to draw
the line
not be so clear.
in making exceptions in future cases that might
would not now favor
Governor Robertson commented that, while he
nce the Board
kiPPing the tentative decision, after further experie
always
'night consider whether the tentative decision procedure was
necessary.

possibility of dropping the
Governor Shepardson agreed that the
not be foreclosed,
tentative decision stage in a given matter should
little apparent purpose.
e8PeciallY since in a case like this it served




3047
10/24/58

-9-

Bond were
Mr. Hackley observed that cases like the Union
exceedingly rare, and he preferred to follow the established procedure
until there was more evidence of cases that would warrant exceptions
to the rule.
e of Tentative Decision
Mr. Hexter expressed the view that a Notic
would help offset possible Congressional criticism of the way in which
such applications were handled.

To have a hard and fast rule, he said,

position of deciding
Would spare the Board from frequently being in the

When to, and when not to, publish such tentative decisions.
unanimously approved the
Following further discussion, the Board
ments on
185u8.noe of Notices of Tentative Decisions and Tentative State
the form attached
the aPplications of Union Bond & Mortgage Company in
to these minutes as Items

the Tentative
6 and 7. It was understood that

sed to the press in the
Decisions and Tentative Statements would be relea
the Federal Register.
regular manner and that notice would be published in
of Oregon.
Reply to wire of Robert D. Holmes, Governor

On

October 22, 1958, the Board received a wire from Robert D. Holmes,
and
Gcvernor of the State of Oregon, commenting on recent credit
that in his view blanket
111°IletarY actions of the System and pointing out
burden on the building
liestrictions on
credit constituted a particular
fluctuations in the
homes and schools and were causing "disastrous
ee°n°mY of the Pacific Northwest".

of a
There followed a discussion

dl'aft reply, during which it was understood that a new draft would be
session.
sUbmitted for Board consideration at the afternoon




30/1S
10/24/58

-10-

At this point all of the members of the staff except Mr. Sherman
withdrew, and Chairman Hall and First Vice President Koppang of the Kansas
City Bank entered the room.
Denver Branch building (Item No. Q. Chairman Hall reviewed
recent discussions relating to the proposed purchase of a new site for
the Denver Branch known as the "Post Office" site, concluding his remarks
'with the statement that the directors of the Kansas City- Bank and of the
Denver Branch had voted to drop negotiations for that site, purchase of
which had been authorized by the Board of Governors on April

4,

1958,

ana August 29, 1958, at a total cost not to exceed 45785,000, including
350100 real estate fee.

Chairman Hall stated his personal view that

the Proposed Post Office site would have been better for the branch than
anY other location considered but that the conditions under which it
securing
might be
purchased would have resulted in a delay of a year in
title and
this
might involve the Bank in a lawsuit. In his judgment,
15/'ecluded the Bank's entering into a contract to purchase that property.
Pol.* this and other reasons, the directors of the Bank did not feel that
there should be further negotiations for the site and, as indicated,
they had
voted to drop such negotiations.
appeared
Chairman Hall went on to outline reasons why it now
that

the Bank might be able to acquire at an acceptable price lots

44j°14ing. the present Denver Branch property on Arapahoe Street and on
17tIi
Street with the view either to erecting a new building or making an




3049
10/24/58

-11-

addition to the present building.

The directors had voted, subject to

the approval of the Board of Governors, to secure 90-day options on six
lots adjoining the present property on Arapahoe Street running to 18th
Street and on seven lots adjoining the present property on 17th Street
running to Lawrence Street, each such option to be obtained at a cost
not i

excess of $1,000.

These options would be Obtained with a view

to securing from the Bank's architects within the 90-day option period,

at no expense
be
to the Bank, an idea of what kind of building might
de
veloped on the property.
that
There followed a general discussion of the various sites
had been
reasons why the
considered for the Denver Branch and of the
directors
of the Kansas City Bank and the Denver Branch had concluded

that it was best to proceed to secure options on the lots adjoining the
Present property and to permit lapse of the existing authorization of the
B°4rd of Governors for purchase of the property opposite the Denver Post
Office.
At the conclusion of the discussion, the Board approved unani111°481Y the request of the Kansas City Bank as presented by Chairman Hall
or a
90-day options
uthority to pay, not to exceed $2,0001 for the two
secure from its
ibed, with the understanding that the Bank would
'
clesel
a'rehitects within the 90-day period a general proposal as to possible
118e or the property. In giving this authorization, it was understood
that
the existing authorization for purchase of the property opposite

the

Denver Post Office was cancelled. Pursuant to this authorization a




10/24/58

-12-

telegram attached as Item No. 8 was sent to the Kansas City Bank under
date of October 28, 1958.
Chairman Hall, Mr. Koppang, and Mr. Sherman then withdrew, and
the Board went into executive session.
Following the executive session Messrs. Kenyon, Riefler, Young,
and Molony were ca)led into the meeting.
Actions taken in executive session.

Governor Balderston stated

that during the executive session the Board approved the following items,
copies of which are attached to these minutes under the respective numbers
indicated:
Item No.
Letter to the Federal Reserve Bank of Philadelphia
aPProving the payment of salaries to three officers
the respective rates fixed by the Board of
Directors
and approving the appointment of Mr.
CaMpbell as officer in charge of the bank examination function.

9

Letter to the United Nations Economic Commission for
Latin America advising that Mr. Sammons had been
aUthorized to attend a conference
to be held in Rio de
Janeiro,
Brazil, from November 24 to December 4, 1958.

10

Discount rates.

There was a discussion of the action taken by

the Board yesterday in approving, effective today, the establishment of
discount rates of 2-1/2 per cent by the Federal Reserve Banks of PhilatlelPhia, Richmond, St. Louis, Minneapolis, and Dallas during which
Governor Balderston reiterated the views he expressed by telephone at
Yesterday's
meeting.




3051
10/24/58

-13-

Further discussion related to the meeting dates of the directors
at those Reserve Banks where action had not yet been taken to establish
2-1/2 per cent rates, and it was noted that arrangements were being made
at some of those Banks to meet next week even though such meetings were
not regularly scheduled.

The suggestion was made that additional infor-

mation be obtained on the meeting plans of the respective Banks in order
that the Board might give further consideration to procedural questions.
In this connection the thought was expressed that there would be
administrative advantages in an arrangement under which directors'
ineetings at all of the Reserve Banks would be held on the same dates.
Contract with National Bureau of Economic Research.

Governor

ShePardson presented a memorandum from Mr. Young dated October 15, 1958,
recommending that the Board contract with the National Bureau of Economic
Research whereby, at a cost of $6,000,the Bureau would supply the Board,
beginning in January 1959, statistical information useful in the analysis
Of cYclical movements in the economy.

Since the terms of the contract

17°11.1d provide that additional statistical material, if desired, would
result in extra cost, the tentative 1959 budget of the Division of
Research and Statistics provided a figure of *7,500.

Permission to

enter into the contract was requested at this time so that the service

'night be instituted at the beginning of the calendar year 1959. In a
Inemorandum dated October 20, 1958, the Controller interposed no objection.
Following comments by Governor Shepardson and Mr. Young concerning

the nature and prospective use of the material, the Board authorized




30
10/24/58

-14-

execution of the contract with the National Bureau of Economic
Research.
The meeting then recessed and reconvened at 2:00 p.m. with
Governors Balderston,Szymczak, Robertson, and Shepardson present.
Chairman Mitchell of the Federal Reserve Bank of Atlanta also was
Present along with Messrs. Sherman, Kenyon, Fauver, Riefler, Molony,
Farrel', and Daniels of the Board's staff.
New Orleans building site

(Item No. 11).

Prior to the meeting

there had been distributed a memorandum from the Division of Bank
OPerations dated October 21 reviewing a request of the Federal
Reserve Bank of Atlanta for authorization to purchase a site at a
cost not to exceed $1,000,000 for relocation of the New Orleans Branch.
A letter of
October 17, 1958, from Atlanta indicated that the Bank did

not expect to pay more than the appraised value of $900,000 and might
obtain the property for less, but it requested authority to bid up to
$1,000,000 at a public auction which would probably be held before the
erld of October.

The proposed site was owned by the City of New Orleans

and covered a total land area of approximately 64,000 square feet, about
the same size as the new Houston site and somewhat smiler than the
1311fra10 and San Antonio Branch sites.

Directors of both the New Orleans

I/ranch and the Atlanta Bank were unanimously in favor of the purchase of

the site, and Governor Vardaman who had inspected the property recently
haa also indicated he favored the proposal.




3.05:ez
10/24/58

-15-

At Governor Balderston's request, Chairman Mitchell reviewed
the circumstances surrounding the request for authorization to buy
the property.

Following Chairman Mitchell's presentation, Governor

Balderston inquired of Mr. Farrell whether sufficient funds were
available under existing Congressional authority to construct a branch
building if the site were purchased.

To this Mr. Farrell responded that

be did not think there was any question but that as of this moment there
waS sufficient leeway under existing Congressional authority to build
the building.

It depended entirely on how the remaining $3.1 million

Of unallocated funds would be spent, and this sum was available for the
Denver, New Orleans, and Oklahoma City projects.
Governor Robertson indicated that he would not object to the
request for authority to purchase the land in question, but he hoped it
Inight be possible to acquire only that portion of the property which the
Branch would need for its own use.

Specifically, he questioned the wisdom

Of buying, or at least of holding, that part of the land on which a
6- story office building now stands, and if it were acquired as part of
the immediate transaction he hoped steps would be taken to dispose of the
bUilaing promptly.

He said he was fearful of a white elephant in the

existing structure.
At the conclusion of the discussion, the Board unanimously
allthorized the Bank to purchase the proposed New Orleans Branch site at
a cost not to exceed $1,000,000, as set forth in the telegram attached
t° 4hese minutes as Item No. U.




3O5
10

24 58

-

-

Messrs. Mitchell, Farrell, and Daniels left the meeting at this
P°int and Messrs. Thomas and Molony re-entered.
Reply to wire of Robert D. Holmes

Governor of Oregon (Item NO. 12

A redraft of the proposed reply to the October 22 wire of Governor Holmes
of Oregon was presented to the Board for consideration.

Following brief

discussion, the sending of the wire attached to these minutes as Item
22 was unanimously approved.

Thereupon the meeting adjourned.




Secretary's Notes: On October 22, 1958, Governor
Shepardson approved on behalf of the Board a
letter to the Federal Reserve Bank of Boston
(attached Item NO. 13) approving the appointment
of William Carleton Butler as examiner.
On October 23, 1958, Governor Shepardson approved
on behalf of the Board a letter to the Federal
Reserve Bank of Richmond (attached Item NO. 14)
approving the designation of Thomas W. Gaulding
as special assistant examiner.

BOARD OF GOVERNORS
OF THE

444.004**11.1
4° 9945)1
rt°44

FEDERAL RESERVE SYSTEM

bc,
*
1'}

Item No. 1
10/214/58

WASHINGTON 25, D. C.

0

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

4,tatst°
004***
October 214 1958

Board of Directors,
Union Trust Company of Maryland,
Baltimore 3, Maryland.
Gentlemen:
Pursuant to your request submitted through the Federal Reserve
Bank of Richmond, the Board of Governors hereby gives its written consent,
Inder the provisions of Section 18(c) of the Federal Deposit Insurance Act,
.r,
t0 the absorption by the purchase of assets of the Reisterstown-Glyndon
1.:!ank,
Bank, Reisterstown, Maryland, by the Union Trust Company of Maryland,
Maryland, and approves the establishment by the latter bank of
a branch in Reisterstown, Maryland, and a branch in'Glyndon, Maryland. This
aPProval is given provided:
(1) the absorption is effected substantially in accordance with the
copy of agreement between the two banks submitted with your request,
(2) formal approval of the appropriate State authorities is obtained,
(3) the absorption and the establishment of the branches are effected
within six months from the date of this letter,
(4) the banking houses acquired from the Reisterstown-Glyndon Bank are
not placed upon the books of the Union Trust Company of Maryland
in amounts in excess of their depreciated value for Federal income
tax purposes, and
(5) securities acquired from the Reisterstown-Glyndon Bank will not
be placed on the books of the Union Trust Company of Maryland in
excess of the market value thereof as of the date of consummation
of the absorption.




Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE
vr)f,

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

Item No, 2
10/211/58

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

t,40404.3,*

October 24, 1958.

Mr. William F. Treiber,
First Vice President,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Mr. Treiber:
With your letter of August 18, 1958, you transmitted a
nienlorandum prepared by the Bank Examinations Department analyzing
!nd drawing certain tentative conclusions with respect to the repreZentations contained in a letter dated May 29, 1_958, from the Clearing
Committee of the New York Clearing House Association relating
the location and activities in New York City of Edge Act corporaticrls
owned by out-of-State banks.
The Board agrees that it would be desirable to ask the
Clea 4
r-Lng House Committee to amplify its views in order that the issues
m
-4W be delineated and clarified.
Your letter raises the question whether there should first
be Pre iminary discussion between representatives of your Bank and of
Board. If this intermediate step seems desirable to you, the Board
ola be glad to arrange a meeting on a mutually convenient date. If,
uae other hand, you conclude that the subject could be more effectiveProfitably discussed with the Board following initial conversaIkons between representatives of your Bank and the Committee, the Board
have no objection. This would be with the understanding, of course,
that
ilazi Participation in any such meetings would be limited to the Reserve
elf
,
k rIci the Committee. Obviously, no views or conclusions should be
zressed on behalf of the Federal Reserve until the matter has been
red by the Board in the light of the available information and the
commendations of your Bank.




Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

305
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 3

10/24/58

WASHINGTON 25, D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

October

24, 1958

BY ttEss_ENGE11

Mr. George Cochran Doub,
Assistant Attorney General,
Civil Division,
IkPartment of Justice,
Washington 25, D.
C.
Attention

Sam Slade, Esq., Chief,
Appellate Section, Room 3706

Re: First Bank Stock Corporation v. Board of Governors
of the Federal Reserve Systerl, No. 16098, U. S.
COurt of Appeals for the Eighth Circuit

Dear Mr. Doub:
This is with further reference to the above matter which
Frederic Solomon of the Board's staff discussed with Mr. Slade
!
I/4 Mr• Slade's associate, Mr. John Laughlin, on October 31 1958.
itt that
time Mt. Solomon handed Mr. Slade copies of the following:
(1) Letter of October 1, 1958, from Counsel to
the First Bank Stock Corporation to the Board's General
Counsel enclosing copy of the petition for review in
this case.
(2) The Board's Statement and Order in this matter,
together with a Dissenting Statement.
(3) Blank form of application, prescribed by this
Board for acquisition of bank stock by a bank holding company.

(4) Copy of this Board's Regulation Y, including the
Bank Holding Company Act in the Appendix.
Subsequent to that time Mt. Slade was supplied with a copy
t
.
%
uw letter of October 2, 1958, from Mt. Robert C. Tucker, Clerk of the
01.4:ted States Court of Appeals for the Eighth Circuit, enclosing a copy
the petition for review.
Ot




BOARD

OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Mr. George Cochran Doub

-2-

As indicated by the Statement mentioned in item (2)
above, and explained in the discussion with Mr. Slade on October 31
the aPplication
by First Bank Stock Corporation was to acquire stock
14 a bank which had not yet been organized.
As Mr. Slade was also
advised, it is understood that the following circumstances have
developed
since the Board's issuance of that Statement and Order:
(a) The bank here in question was chartered on October 3, 1958; (b)
all shares of the bank except directors' qualifying shares have been
acquired by Minnesota Mining and Manufacturing Company, which inPlcates that it is prepared to continue its ownership of the stock
but would prefer
to transfer that ownership to First Bank Stock
Corporation; and
(c) First Bank Stock Corporation asserts that it
.c!
LII°es not own or control any shares of the bank but that it proposes
J4_01 file with the Board a new or amended application
for permission
`'14) acquire the stock from Minnesota Mining and Manufacturing Company.
In view of these facts, which it is believed could be
Enlitably presented to the Circuit Court of Appeals by affidavit or
Elirailar exhibit, it appears that the question presented
by the petition
Or review in
this case may well have become moot and ceased to be
4 Justiciable
controversy, and that it might be appropriate to file
,!th
4
the Court a suggestion of mootness before filing the record.
..!4c Board would propose, therefor
e, that this possible procedure be
c illored further by the members
of the staffs of your Department
14
34d the Board of Governors,
and that it be followed unless found to
e inappropriate or inadvisable.




Very truly yours,

(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

305,/14p,

3059
UNTIED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Item Noo

L.

10/24/58

WASHINGTON, D. C.

' In the Matter of the Application of
' THE MARINE CORPORATION
' for prior approval of action to become
' a bank holding company under section 3
' of the Bank Holding Company Act of 1956

ORDER APPROVING APPLICATION FOR PRIOR
APPROVAL UNDER SECTION 3(a)(1)
In the matter of the application of The Marine Corporation,
Milwaukee, Wisconsin, for prior approval of action to become a bank
holding company under section 3 of the Bank Holding Company Act of 1956.
There having come before the Board of Governors, pursuant to
section 3(a)(1) of the Bank Holding Company Act of 1956 (12 USC 1842)
and section
4(a)(1) of the Board's Regulation T(12 CFR 222.4(a)(1)),
an application on behalf of The Marine Corporation, a Wisconsin corporation with its principal office in Milwaukee, for the Board's prior
approval of action whereby Applicant would become a bank holding comPanY through the acquisition of at least 80 per cent of the outstanding
voting shares of Marine National Exchange Bank of Milwaukee, Holton
State Bank, Milwaukee, Cudahy State Bank, Cudahy, Wisconsin, and South
Milwaukee Bank, South Milwaukee; a Notice of Tentative Decision, referring
t° a Tentative Statement, on said application having been published in




30
-2-

the Federal Register on October

8, the said Notice having provided

Persons an opportunity, before issuance of the Board's final order,
to make objections or comments upon the facts stated and the reasons
indicated in the Tentative Statement and the time for filing such
objections and comments having expired,
IT IS HEREBY ORDERED, for the reasons set forth in the Board's
Statement of this date that the application of The Marine Corporation
Pursuant to section 3(a)(1) of the Bank Holding Company Act of 1956,
shall be and hereby is, approved.
This 24th day of October, 1958.
By order of the Board of Governors.
Voting for this action: Vice Chairman Balderston and
Governors Szymczak, Robertson, and Shepardson.
Absent and not voting: Chairman Martin and Governors
Vardaman and Mills.

(signed) Merritt Sherman
Merritt She/man:
Secretary.

(SEAL)
Washington, D. C.
October 24, 1958.




30G1
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

APPLICATION BY THE MARINE CORPORATION, MILWAUKEE, WISCONSIN,
FOR PRIOR APPROVAL OF ACTION TO BECOME A BANK HOLDING COMPANY

STATEMENT
General nature of the proposal. - The Marine Corporation,
Milwaukee, Wisconsin ("Marine"), has submitted an application to the
Board pursuant to section 3(a)(1) of the Bank Holding Company Act

of 1956 (lithe Act"), for the Board's prior approval of action that
would result in that company becoming a bank holding company under

the Act.

The action that would cause it to become a bank holding

Company would be the proposed acquisition by Marine of at
least
80 per cent of the outstanding voting shares of the following four
existing banks in Milwaukee, Wisconsin, and MilWaukee Countyt

Marine

National Exchange Bank of Milwaukee ("National"), Holton State Bank,
Milwaukee ("Holton"), Cudahy State Bank, Cudahy, Wisconsin ("Cudahy"),
and South Milwaukee Bank, South Milwaukee
("South").
Views and recommendations of bank supervisory authorities. Of the banks the stock of which would be acquired by the Applicant,
°Ils is a national bank and three are State banks.

Accordingly, pursuant

t° section 3(h) of the Act, the Board gave notice of the application

t° the Comptroller of the Currency and the Commissioner of Banks for
the State of Wisconsin and requested their views and recommendations




3062

With respect to the application.

The Comptroller of the Currency

recommended approval of the application and the Wisconsin Commissioner
Of Banks expressed no objection to the application.
In his letter to the Board of April 15, 1958, the
Comptroller of the Currency stated, in part, as followss
"Careful study and consideration have been given to this
proposal in the light of the factors enumerated in section 3(c) of the Bank Holding Company Acts (1) the
financial history and condition of the company or companies
and the banks concerned; (2) their prospects; (3) the
character of their management; (4) the convenience, needs,
and welfare of the communities and the area concerned; and
(5) whether or not the effect of such 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 of
competition in the field of banking. On the basis of this
study we recommend that the Board approve the application."
In his letter to the Board dated April 21, 1958, the
C°mmissioner of Banks for the State of Wisconsin stated, in part, as
follows:
"As you are aware, Section 221.569 Wisconsin Statutes,
Permits the holding of a majority of the stock of a
Wisconsin state bank by a holding company and, therefore,
I find no legal prohibition against formation and operation of The Marine Corporation as a bank holding company.
"With respect to the points covered In Section 3(c) of
the ... bank holding company act, I wish to advise that
I am not aware of anything of an adverse nature with
respect to points 1, 2, 3 and 4 of that section. As
for point 5 it appears that the resources of the proposed system of banks contemplated by the application
would be in nominal ratio to the total bank resources
of Milwaukee County. The combined resources of the
banks which would be owned by the holding company now
rank third in relation to the individual resources of
First Wisconsin National Bank and of Marshall and
Ilsley Bank, Milwaukee.
"In my analysis of this matter I do not find a basis
for valid objection to the application."



‘306:3,
Statutory factors. - Section 3(c) of the Bank Holding
Company Act providesg
"(c) In determining whether or not to approve any
acquisition or merger or consolidation under this section,
the Board shall take into consideration the following
factors g (1) the financial history and condition of the
company or companies and the banks concerned; (2) their
prospects; (3) the character of their management; ()4) the
convenience, needs, and welfare of the communities and
the area concerned; and (5) 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."
Financial history and condition, prospects, and character
of management. - Marine was organized recently for the specific purpose of becoming a bank holding company, and therefore it has only
nominal assets; and, if it becomes a bank holding company, its principal earning assets at the outset and presumably for the foreseeable
future would be its shares of subsidiary banks.

The directors of

Marine are directors and/or officers of the proposed subsidiary banks.
Consequently, the financial condition, prospects, and management of
144rine will largely depend upon and parallel those of the proposed
subsidiary banks.
On the basis of the information before it, the Board finds
that the condition and prospects of the proposed subsidiary banks are
good and their management competent, and that the prospects and management of Marine would
likewise be favorable.

As indicated in previous

decisions of the Board under the Bank Holding Company Act, these




306
-4findings are consistent with approval of the application but do not
Provide substantial affirmative support for such approval.
Convenience, needs

and welfare of communities and area

concerned. - In view of the locations of the four banks that would be
subsidiaries of the proposed holding company, the communities and areas
most directly concerned in this case would be the cities of Milwaukee,
Cudahy, South Milwaukee and Oak Creek, in particular, and the County
of Milwaukee, in general.
National, with deposits of $159 million, is the largest of the
proposed subsidiary banks and is the third largest bank in the City of
Milwaukee.

That city, according to the 1950 census, had a population

of 637,392.

The city's trade area includes 45 per cent of the popu-

lation of the State.
Holton is also located in the City of Milwaukee about two
miles north of National in a section of the city said to be an important

commercial and industrial area and with a population in 1957 of

about' 25,000.
Cudahy is located in the City of Cudahy about eight miles
south of the downtown business section of Milwaukee.

As of 1950, it

had a Population of 12,182 and its present population is estimated to
be about 16,300.

The city has a number of sizeable industrial plants

and is growing rapidly as a residential area.
South is located in South Milwaukee, Wisconsin, about ten
Iniles from the downtown section of the City of Milwaukee.
it had a population of 12,855.




As of 1950,

South Milwaukee and the adjoining City

30G.5

of Oak Creek, the primary service area of South, together are
estimated to have a present population of about 249300.

The two

cities are expanding rapidly as a residential section and a number
Of diversified industrial concerns have located in this area.
All of the proposed subsidiary banks are located in
Milwaukee County, one of the
leading industrial areas of the country,
which has a presently estimated population of about 977,600.
The proposed plan would neither increase nor lessen the
nUmber of banking offices serving the areas concerned.
The control of National and the three smaller banks by
the

proposed holding company would conceivably increase their joint

and several
ability to serve the communities and areas concerned
through the benefits that might be expected to flow from an association of the three smaller banks with National which,
with its greater
resources, technical skills, and experience and
depth of management,
11°uld presumably be able to improve or broaden
the banking services
'
l endered by the smaller banks.
It is possible that, through their closer association with
Iletional, the three smaller banks would be better able than at present to meeixthe credit needs of larger businesses
in their respective
local

areas. However, there is no evidence that requests for loans
bev
-.70nd their present legal lending limits have not been or could not

be satisfactorily
handled by the three smaller banks through particiPati°ns with correspondent banks; and, in view of the relatively short




3068
-6distance from the locations of such banks to the locations of the
larger downtown banks of the city, it seems unlikely that an increase
in their ability to handle large loans and accounts is necessary to
the needs and welfare of their respective communities.
In the circumstances, the Board concludes that consummation
Of the proposed transaction would not be inconsistent with the needs
and welfare of the areas concerned and should contribute to some
extent to the convenience of those areas.
Effect upon adequate and sound banking_ the public interest,
reservation of competition. - It does not appear that the size
Or extent of the proposed bank holding company would adversely affect
the

adequaCy or soundness of banking in the areas concerned.

The four

Proposed subsidiary banks are in good condition and under capable
management, and
the proposed association of those banks under the
common control of the Applicant would not appear to reduce the effectiveness of any of such banks.
In the downtown section of Milwaukee, National presently is
ia active competition with five other commercial banks, two of which
are larger than National.

The largest of these two banks, a subsidiary

Of a bank holding company, has 13 offices in the City of Milwaukee.
4ch of the three smaller proposed subsidiary banks primarily serves
48 Particular local area and is not in substantial competition with
the other two or with National.

There are no other banking offices

(3cated within the section of the city which comprises Holton's pri1114rY service area.




Cudahy is the only bank within the limits of the

R;)
City of Cudahy. In the area primarily served by South (South
Milwaukee and the adjoining City of Oak Creek), there is only one
Other banking office; and there is no evidence that South's proposed
association with Marine or National would increase its conpetitive
Position to such an extent as would prevent the other bank in that
area from participating in the future growth of banking resources
in the area.
The City of Milwaukee has 19 commercial banks with a total
32 offices and deposits aggregating 31,342.2 million of which
Ai n
Pu32.3 million represent deposits of individuals, partnerships,
and corporations ("IPC"). If this application should be approved,
Marine would control 2 of the 32 commercial banking offices in the
eity (6.25 per
cent), and $169.1 million of the total deposits
(12.6 per cent) of such offices.

Its two subsidiary banks in the

eitT would control $127.4 million of the city's IPC deposits
(12.3 per cent).
The County of Milwaukee has

43 commercial banking offices

with deposits
aggregating 31,495.2 million of which $1,163.6 million
teePresent IPC deposits.

Approval of the proposed transaction would

"
'Ilse Marine to have 4 of the total commercial banking offices in the
Cipilqr (9.3 per cent) and to control $189.7 million of the total
deposit

of such offices (12.7 per cent) of which $145 million repre-

erit 1PC deposits (12.5 per cent).
Ill'elPc)sed

The combined WC deposits for the

14 subsidiary banks would be $33.5 million less than those




3069

-8held by the second largest bank in the City of Milwaukee and
$315.7 million less than those of the largest bank in that city.
On the basis of the facts, the Board concludes that any
actual or potential competition among the four proposed subsidiary
banks, assuming it would be eliminated by the proposed transaction,
is not substantial; that the proposed transaction would not afford
the four proposed subsidiary banks or the holding company an undue
competitive advantage over other banks either in their respective
areas or the over-all area concerned; that it would preserve adequate

freedom of choice by residents of those areas among banking facilities
not under common control; and that it would not cause the Applicant
to control an unduly large proportion of the offices or deposits of
commercial banks in the City or County of Milwaukee.

In the cir-

cumstances, formation of the proposed holding company would not, in
the Board's opinion, be inconsistent with adequate and sound banking,
the public interest, or the preservation of competition in the field
of banking.
Conclusion. - The above views were incorporated in a
Tentative
Statement issued in connection with a Notice of Tentative
Decision in this case published in the Federal Register on October 8,

1958 (23 F. R. 7786) affording interested persons an opportunity to
submit comments on or objections to the Board's proposed action, and
n° such comments or objections were received within the period specified for their submission.
In the light of the facts stated and for the reasons
indicated, it is the Board's judgment that approval of the application




would be in accordance with factors stated in section 3(c) of the
Act and with the purposes of the Act, and that, accordingly, the
application should be approved. It is so ordered.




3070
Item No. 5
BOARD OF GOVERNORS

lo/24/58

OF THE
kLIZRAL RESERVE SYSTEM
NOTICE OF TENTATIVE DECISION 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 section 3(a) of the
Bank Holding Company Act of 1956 ("the Act"), BancOhio Corporation,
Columbus, Ohio ("Applicant"), has applied for the Board's prior
aPProval of action whereby Applicant would acquire up to 100 per cent
Of the 3,000 outstanding voting shares of capital stock of The Kenton
Savings Bank, Kenton, Ohio.

The application, which is on file at the

offices of the Board, the views and recommendations of the Superintendent
Of Banks for the State of Ohio, requested in accordance with section 3(h)
of the Act, and other facts relied upon by the Board as the basis of
its tentative decision, are set forth or summarized in the Board's
Tentative
Statement of this date, which Tentative Statement is attached
hereto and made a part hereof, and is on file with the Federal Register
kvision and available at the office of the Board's Secretary and at
the several Federal Reserve Banks.
The record in this proceeding to date consists of the application, the view's and recommendations of the Superintendent of Banks
for the State of Ohio, this Notice of Tentative Decision and the facts
set forth in the Board's Tentative Statement on this date.




3071
-2-

For the reasons set forth in the said Tentative Statement,
the Board proposes to grant the said application.
Notice is further given that any interested person may,
not later than fifteen (15) days after the publication of this
notice in the Federal Register, file with the Board in writing, any
comments on or objections to the Board's proposed action, stating
the nature of his interest, the reasons for such comment or objection, and the issues of fact or law, if any, raised by said application which he desires to controvert.
be addressed:

Any such statement should

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 and is so ordered.
Dated at Washington, D. C., this 24-th day of October, 1958.
By the Board of Governors.

(sirned) M3rritt Sherman
Merritt Sherman,
Secretary.

(stAL




(1P-'):)
ft..'

cilkJ

BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY BANCOHIO CORPORATION, COLUMBUS, OHIO,
FOR PRIOR APPROVAL OF ACQUISITION OF VOTING SHARES
OF THE KENTON SAVINGS BANK, KENTON, OHIO
TENTATIVE STATEMENT
BancOhio Corporation, Columbus, Ohio (hereafter referred to
as "BancOhion)„ a bank holding companys, has applied, pursuant to
section 3(a)(2) of the Bank Holding Company Act of 1956 ("the Act"),
for the Board's prior approval of the acquisition of up to 100 per
cent of the 3,000 outstanding voting shares of The Kenton Savings
Bank (hereafter referred to as "Kenton"), a commercial bank located
in Kenton, Ohio.
Views and recommendations of Superintendent of Banks. As required by section 3(b) of the Act, the Board gave notice of the
a
pplication to the Superintendent of Banks for the State of Ohio.

The

Superintendent interposed no objection to the application.
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 bank conoerned; (2) their prospects; (3) the character of their management;
(4) the convenience, needs, and welfare of the communities and the
area concerned; and (5) whether or not the effect of the acquisition
*would be to expand the size or extent of the bank holding company
sYstem involved beyond limits consistent with adequate and sound




e

307:.
-2banking, the public interest, and the preservation of competition
In the field of banking.
Discussion. - It appears that the financial history and
condition, the prospects, and the management of both BancOhio and
Kenton are satisfactory.
The city of Kenton (population of about 8,700) is the
county seat of Hardin County and is served by three commercial banks,
including Kenton. With deposits of about $5 million, Kenton is the
largest bank in the city and the county. It operates two branches,
one about 9-1/2 miles north and one about 9-1/2 miles south of the
City.

There is no evidence that control of Kenton by BancOhio would

be inconsistent with the convenience, needs,and welfare of the area
concerned.

On the other hand, it seems probable that acquisition of

control of Kenton by BancOhio would be followed by a broadening of
banking services and thus contribute to the convenience and welfare
of the area involved.
BancOhio now controls 21 commercial banks with a total of
47 banking offices and deposits in excess of $608 million.

The

banks are located in 19 Ohio counties, principally in the central
and south-central parts of the State.

Banc0hio9 s principal bank is

located in Columbus, the State capital, and it has two other banks
in the same county; otherwise, no county contains more than one of
BancOhiols subsidiary banks.
Control of Kenton by BancOhio would bring within the holding
e°mPany system the largest bank in a county in which BancOhio is not
tlaW operating. It would cause BancOhio to control (a) the largest of



3074

three banking offices in the city of Kenton and about 43 per cent of
the total deposits held by such offices, and (b) three of the ten
banking offices in Hardin County and about 25 per cent of their
deposits.
In the counties in which it would be operating after the
Proposed acquisition, the holding company would control about 26 per
cent of commercial banking offices and 44.6 per cent of their total
dePosits„ as compared with its present control of 24.5 per cent of
offices

and 44.3 per cent of such deposits in the same counties.
The proposed acquisition would not reduce the number of

competing banking offices in the area or otherwise eliminate any
substantial banking competition. It does not appear that any of
BancOhiois present subsidiaries competes appreciably in the city of
Kenton or in Hardin County.

The nearest present subsidiary of

BancOhio is more than 20 miles distant from the nearest branch of
Kenton.

The history of BancOhio suggests that the transaction would

not be likely to result in its domination of banking in the area
c
oncerned.
In the circumstances, it is the Board's opinion that the
Proposed transaction would not expand BancOhiogs system beyond limits
consistent with adequate and sound banking, the public interest, or
the preservation of competition in the field of banking.
Conclusion. - For the reasons indicated, it is the Board's
Oudgment that the application should be approved.




3075
BOARD OF GOVERNORS
OF THE

Item No.

6

10/24/58
FEDERAL RESERVE SYSTEM

NOTICE OF TENTATIVE DECISION 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 section 3(a) of
the Bank Holding Company Act of 1956 ("the Act"), Union Bond & Mortgage
Company, Port Angeles, Washington ("Applicant"), has applied for the
Board's prior approval of the acquisition of voting shares of Forks
State Bank, Forks, Washington.

The application, which is on file

at the offices of the Board, the views and recommendations of the
Supervisor of Banking for the State of Washington

requested in ac-

cordance with section 3(b) of the Act, and other facts relied upon
by the Board as the basis of its tentative decision, are set forth
or

summarized in the Board's Tentative Statement of this date, which

Tentative Statement is attached hereto and made a part hereof, and
is on file with the Federal Register Division and available at the
°face of the Board's Secretary and at the several Federal Reserve
Banks,
The record in this proceeding to date consists of the
aPPlication, the views and recommendations of the Supervisor of
Banking for the State of Washington, this Notice of Tentative Decision
and the facts set forth in the Board's Tentative Statement of this
date,




3071;

-2-

For the reasons set forth in the said Tentative Statement,
the Board proposes to grant the said application.
Notice is further given that any interested person may,
not later than fifteen (15) days after the publication of this
notice in the Federal Register, file with the Board in writing, any
comments on or objections to the Board's proposed action, stating
the nature of his interest, the reasons for such comment or objection,
and the issues of fact or law, if any, raised by said application
which he desires to controvert.
dressed:

Any such statement should be ad-

Secretary, Board of Governors of the Federal Reserve

System, Washington 25, D. C.
Following expiration of the said 15-day period, the
Boardts tentative decision will be made final by order to that effect,
unless for good cause shown other action is deemed appropriate by the
Board and is so ordered.
Dated at Washington, D. C., this 24th day of October, 1958.
By the Board of Governors.

(SEAL)




(Signed) Merritt Sherman
-Merritt Sherman,
Secretary.

307`
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

APPLICATION BY UNION BOND & MORTGAGE COMPANY, PORT ANGELES,
WASHINGTON, FOR PRIOR APPROVAL OF ACQUISITION OF VOTING
SHARES OF FORKS STATE BANK, FORKS, WASHINGTON

TENTATIVE STATEMENT

Union Bond & Mortgage Company, Port Angeles, Washington
(hereafter referred to as "Union") has applied, pursuant to
section 3(a)(2) of the Bank Holding Company Act of 1956 (the "Act"),
for the Board's prior approval of the acquisition of direct ownership of 30 shares of the capital stock of Forks State Bank, Forks,
Washington ("Forks").
As required by section 3(h) of the Act, the Board gave
notice of this application to the Supervisor of Banking for the State
of Washington and requested his views and recommendations.

In his

letter to the Board, the State Supervisor of Banking stated in part:
"Union Bond & Mortgage Company has for many
Years held a substantial stock interest in Forks
State Bank with the knowledge and approval of this
division.

I will therefore interpose no objection

to the acquiring by Union Bond & Mortgage Company
of thirty additional shares."
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 the bank concerned;




r

-2(2) their prospects; (3) the character of their management;
(4) the convenience, needs, and welfare of the communities and the
area concerned; and (5) whether or not the effect of 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 of competition
in the field of banking.
Union now owns 23.5 per cent of the outstanding shares of
Forks.

In addition, it owns more than 25 per cent of the stock of

each of two other banks and 24.5 per cent of the stock of a fourth
bank.

The proposed acquisition of additional stock of Forks would

cause Union to own exactly 25 per cent of the outstanding shares of
that bank. It further appears that the proposed acquisition of 30
additional shares would not affect control of the bank.
With respect to the first three statutory factors, it
appears that the financial history and condition, prospects, and
management of both Union and Forks are satisfactory. In the circumstances of this case, the proposed acquisition would in no way
affect the convenience, needs, and welfare of the communities and

the area concerned, nor would the acquisition result in any expansion of the size or extent of Union's *stem of banks.
On the basis of the facts and in the light of the statutory
tactors, it is the judgment of the Board that the application should
be

approved.




BOARD OF GOVERNORS

Item No. 7

10/24/58
OF THE
FEDERAL RESERVE SYSTEM

NOTICE OF TENTATIVE DECISION 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 section 3(a) of
the Bank Holding Company Act of 1956 ("the Act"), Union Bond &
Mortgage Company, Port Angeles, Washington ("Applicant"), has
applied for the Board's prior approval of the acquisition of voting
shares of Bank of Sequin, Sequim, Washington.

The application,

Which is on file at the offices of the Board, the views and recomInendations of the Supervisor of Banking for the State of Washington,
requested in accordance with section 3(b) of the Act, and other
facts relied upon by the Board as the basis of its tentative
decision, are set forth or summarized in the Board's Tentative
Statement of
this date, which Tentative Statement is attached hereto
and made a part hereof, and is on file with the Federal Register
Division and available at the office of the Board's Secretary and
at the
several Federal Reserve Banks.
The record in this proceeding to date consists of the
aPplication, the views and recommendations of the Supervisor of
8a4king for the State of Washington, this Notice of Tentative
Decision and the facts set forth in the Board's Tentative Statement
of this
date.




3080

-2-

For the reasons set forth in the said Tentative Statement,
the Board proposes to grant the said application.
Notice is further given that any interested person may,
not later than fifteen (15) days after the publication of this
notice in the Federal Register, file with the Board in writing,
any comments on or objections to the Board's proposed action, stating the nature of his interest, the reasons for such comment or
objection, and the issues of fact or law, if any, raised by said
application which he desires to controvert.
should be addressedg

Any such statement

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 and is so ordered.
Dated at Washington, D. C., this 24tiday of October, 1958.
By the Board of Governors.

(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

(SEAL)




3081
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY UNION BOND & MORTGAGE COMPANY, PORT ANGELES,
WASHINGTON, FOR PRIOR APPROVAL OF ACQUISITION OF VOTING
SHARES OF BANK OF SEQUIM, SEQUIM, WASHINGTON

TENTATIVE STATEMENT
Union Bond & Mortgage Company, Port Angeles, Washington
(hereafter referred to as "Union") has applied, pursuant to section 3(a)(2) of the Bank Holding Company Act of 1956 (the "Act"),
for the Board's prior approval of the acquisition of direct ownership of 10 shares of the capital stock of Bank of Sequim, Sequim,
Washington ("Sequim").
As required by section 3(h) of the Act, the Board gave
notice of this application to the Supervisor of Banking for the
State of Washington and requested his views and recommendations.

In his letter to the Board, the State Supervisor of Banking stated
in Part:
"Union Bond & Mortgage Company has for many
Years held a substantial stock interest in the
Bank of Sequim with the knowledge and approval of
this division.

I will therefore interpose no

objection to the acquiring by Union Bond &
Mortgage Company of 10 additional shares."




308?,
-2-

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 the bank concerned;
(2) their prospects; (3) the character of their management; ()4) the
convenience, needs, and welfare of the communities and the area
concerned; and (5) whether or not the effect of 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 of competition
in the field of banking.
Union now owns 24.5 per cent of the outstanding shares of
Sequim.

In addition, it owns more than 25 per cent of the stock of

each of two other banks and 23.5 per cent of the stock of a fourth
bank.

The proposed acquisition of additional stock of Sequim would

cause Union to own exactly 25 per cent of the outstanding shares of
that bank.

It further appears that the proposed acquisition of

10 additional shares would not affect control of the bank.
With respect to the first three statutory factors, it
appears that the financial history and condition, prospects, and
management of both Union and Sequim are satisfactory-. In the
circumstances of this case, the proposed acquisition would in no
way affect the convenience, needs, and welfare of the communities




3083
and the area concerned nor would the acquisition result in any
expansion of the size or extent of Union's system of banks.
On the basis of the facts and in the light of the
statutory factors, it is the judgment of the Board that the
application should be approved.




3084
TELEGRAM
LEASED WIRE SERVICE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON

Item No. 8
10/24/58

October 28, 1958

KOPPANG - KANSAS CITY
Retel October 27, 1958 requesting authority to spend up
to $2,000 in option money to obtain options on lots adjoining
Present Denver Branch property as described in your telegram.
This wire will confirm action taken by the Board on October 24,

1958, in authorizing expenditure of up to $2,000 for purpose
stated following oral presentation and request for such authority
by Chairman Hall and yourself.

This action was taken with the

understanding that authorizations of April
4, 1958 and

August

1958 for the acquisition of a new site for the Denver Branch
oPPosite the Denver Post Office are cancelled as a result of
decision by directors of your Bank to drop negotiations for
acquisition of that site.




(Signed) Merritt Sherman
SIIERMAN

29,

BOARD OF GOVERNORS

00111:104.„
4,44 co col";

OF THE

1!4

Item No. 9
10/24/58

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

44
ADDRESS OFFICIAL CORRESPONDENCE
TO .THE SOARD

t,ktiti•

October 24, 1958

9.212E
12.221JE
4
1 .1
Ur. Karl R. Bopp, President,
Federal Reserve Bank of Philadelphia,
Ph
iladelphia 1, Pennsylvania.
Dear Mr.
BoPP:
The Board of Governors approves the appointment of Mr. Joseph
Campbell as the officer in charge of the Bank Examination Department
z the Federal
Reserve Bank of Philadelphia, with the title of Vice
t"'Zsident, effective November 1, 1958, in accordance with the action
issr by the Board of Directors as reported in your letter of October 16,
The
tOThe

Board of Governors also approves the payment of salaries
lie
officers of the Federal Reserve Bank of Philadelphia
.01, the
icatedperiod November 1, 1958 through December 31, 1958, at the rates
Ind
.

Name
Joseph R. Campbell
Zell G. Fenner
Joseph M. Case




Title
S
Vice President
Assistant Vice President
Chief Examiner

Annual
Salary
$15,000
13,000
12,000

Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item No. 10
10/24/58

FEDERAL RESERVE SYSTEM
WASHINI3TON

OFFICE OF THE VICE CHAIRMAN

October 24, 1958

AIR MAIL
Dr. Raul Prebisch, Director,
United Nations Economic Commission
for Latin America,
Santiago, Chile.
Dear Dr. Prebisch:
The Board of Governors of the Federal Reserve
System is happy to accept the invitation contained in your
letter of September 25 to Chairman Martin to send an
Observer to the Second Session of the Central Banks
Working Group to be held in Rio de Janeiro, November 24
to December 4, 1958.
The observer for the Board at this meeting will
be Mr. Robert L. Sammons, Associate Adviser, Division of
International Finance. Mr. Sammons is also in charge of
the Latin American Section of that Division. I presume
You will be sending Mr. Sammons further details regarding
the place of the meeting, time of the opening session and
similar matters.




Very truly yours,
(Signed) C. Canby Balderston
C. Canby Balderston.

3(N.4":1

GRAM
TELE
WIRE
LEASED

SERVICE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON

Item No. la
58
10/24/

October 24, 1958

Bryan - Atlanta

no
Reurlet October 17, 1958, Board will interpose
objection to your Bank's purchase of proposed new site for
New Orleans Branch at a cost not to exceed $1,000,000. It is
auction,
Understood that the property will be bid for at aipublic
and may be secured for considerably less than the maximum
he
rein authorized.
(Signed) Merritt Sherman




Sherman

3088
Item No. 12
10/24/58

TELEGRAM
Board of Governors
of the
Federal Reserve System
Washington

October 24, 1958

The Honorable Robert D. Holmes
Governor of Oregon
Salem, Oregon.
Your wire has beenbrovjhttto attention each member of
Board, which appreciates receiving expression of your views with
respect to credit matters. Supplies of funds available for
primarily
mortgages and for capital expenditures are determined
by the volume of savings of the public.

Board has no authority

to direct such funds into particular channels nor does it
Except for •
administer Federal Government mortgage programs.
by
stock market credit, authority given Federal Reserve System
the volume
Congress is limited to general measures which affect
Of credit extended by commercial banks. In the use of its
with fostering
authority the Board is continuously concerned
a healthy and growing economy in which all will share.




(Signed) C. Canby Balderston
C. Canby Balderston, Vice Chairman,
Board of Governors of the Federal Reserve System.

BOARD OF GOVERNORS
OF THE

Item No. 13
10/24/58

FEDERAL RESERVE SYSTEM
WASHINGTON 25, 0, C.
AuoREss

OFFICIAL CORRESPONDENCE
TO THE BOARD

. Avg
:A:
*04
tuare*

October 22, 1958

Mr. Benjamin F. Groot, Vice President,
Federal Reserve Bank of Boston,
Boston 61 Massachusetts.
Dear Mr. Groot:
your
In accordance with the request contained in
appointletter of October 17, 1958, the Board approves the
ment of William Carleton Butler as an examiner for the
Federal Reserve Bank of Boston. Please advise as to the
date upon which the appointment is made effective.




Very truly yours
(Signed) Kenneth A. Kenyon

Kenneth A. Kenyon,
Assistant Secretary.

3090

BOARD OF GOVERNORS
4

OF THE

(IV
"":e2t1

h 4
h

FEDERAL RESERVE SYSTEM
1.4 *

WASHINGTON 25, a C.
ADDRESS

_

t -d)

Item No. 14
10/24/58
orrictAL caszREspoNoENcE
TO THE HOARD

*4N(V10,"

October 23, 1958

Hr. N. L. Armistead, Vice President,
Federal Reserve Bank of Richmond,
Richmond 13, Virginia.
Dear Mr. Armistead:
In accordance with the request contained in
your letter of October 21, 1958, the Board approves the
designation of Thomas W. Gaulding as a spe6ia1 assistant
examiner for the Federal Reserve Bank of Richmond to
Participate in the examinations of State member banks
only.




Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.