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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.