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509
Minutes for September 22, 1966
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, please initial
below. If you were present at the meeting, your
Initials will indicate approval of the minutes. If
You were not present, your initials will indicate
only that you have seen the minutes.
Chm. Martin
Gov. Robertson
Gov. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
Gov. Brimmer
Minutes of the Board of Governors of the Federal Reserve
System on Thursday, September 22, 1966.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Robertson, Vice Chairman
Shepardson
Maisel
Br inuner
Sherman, Secretary
Kenyon, Assistant Secretary
Bakke, Assistant Secretary
Fauver, Assistant to the Board
Solomon, Director, Division of Examinations
Hexter, Associate General Counsel
O'Connell, Assistant General Counsel
Shay, Assistant General Counsel
Sammons, Associate Director, Division of
International Finance
Mr. Daniels, Assistant Director, Division of
Bank Operations
Mr. Goodman, Assistant Director, Division of
Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mr. Morgan, Staff Assistant, Board Members' Offices
Mr. Forrestal, Senior Attorney, Legal Division
Messrs. Egertson and Maguire, Supervisory Review
Examiners, and Mr. Poundstone, Review Examiner,
Division of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Approved letters.
The following letters, copies of which are
attached under the respective item numbers indicated, were approved
una nimously following consideration of background material that had been
Made available to the members of the Board:
Item No.
Letter to Manufacturers Hanover Trust Company,
v
- c)ric, New York, approving the establishment
of "
, a branch at 111 Broad Street, Borough of
riart
hattan.
1
9/22/66
-2Item No.
Letter to the Federal Reserve Bank of Minneapolis
waiving assessment of penalties incurred by Northwestern National Bank, Hopkins, Minnesota, because
of deficiencies in its required reserves.
2
Proposed establishment of Chinese American Bank (Item No. 3).
There had been distributed a memorandum from the Division of Examinations
dated September 16, 1966, summarizing information supplied by the Federal
Reserve Bank of New York with respect to a proposal by the Bank of China
(Taiwan), a commercial bank wholly owned by the Government of the Republic
Of China, to establish a State-chartered bank in New York City, to be
called
"The Chinese American Bank."
Bank of China would own all of the
stock except directors' qualifying shares.
The Banking Department of the State of New York had solicited
the comments of the New York Reserve Bank and of the Board with respect
to this proposal, reporting that the Comptroller of the Currency had
elcPrassed opposition on the grounds that the two branches of American
banks
Of
operating in Taiwan--First National City Bank, New York, and Bank
America National Trust and Savings Association, San Francisco--were
tic't permitted to receive local deposits, whereas it was contemplated that
The Chinese American Bank would exercise such authority in New York.
The
1j*S. Department of State had concurred with the Comptroller's views regardin
the desirability of reciprocity, but had indicated that from a policy
sta ndpoint it saw no objection to the proposal.
9/22/66
-3The New York Reserve Bank proposed to advise the State Banking
Department that, while it was not disposed to object to Bank of China's
Proposal, it might be well to remind The Chinese American Bank of possible problems that could arise through subjecting an instrumentality
of a foreign government to State banking laws, regulations, and supervisory policies.
Attached to the Division's memorandum was a draft of letter to
the New York Reserve Bank suggesting that in the interest of reciprocity
the Chinese authorities should be induced to grant broadened deposit
Powers to the two American branches operating in Taiwan if The Chinese
American Bank desired full charter powers in the State of New York, and
that the State Banking Department might wish to defer granting a charter
43 The Chinese American Bank until this matter of reciprocity was satisfaet°rily resolved.
In comments supplementing the memorandum, Mr. Goodman commented
that, .
in the alternative, the Board might wish either to offer no comment
atall or merely to express concurrence in the New York Reserve Bank's
lew
8*
He noted that while the American branches in Taiwan still had
no 1ucal deposit authority, the Chinese Government had agreed to place
substantial time deposits with each branch as a gesture in the direction
°f moderating the discriminatory treatment.
Governor Robertson suggested that the Board offer no comments
Co
cerning the proposal, on the grounds that it would be inappropriate
9/22/66
-4-
for the Board to assume the posture of seeking to intervene on behalf
of foreign branches of American banks with respect to the regulation of
their activities by host governments.
Governor Maisel expressed a view that the more fundamental question seemed to be the propriety of a foreign government operating a
commercial bank in the United States, a subject in which the Board had
a legitimate interest in light of its bank supervisory responsibilities.
Governor Robertson observed that the question was essentially
°ne of foreign relations.
In this particular instance the Department
of State had indicated no objection from a policy standpoint, and he
felt the Board should accept that determination as conclusive with respect
to the question cited by Governor Maisel.
Governor Shepardson observed that even so the Board had a superl'is°rY interest, and therefore perhaps it would be appropriate for the
Boardto offer comments to the Department of State for its consideration
in evaluating proposals of this nature.
Governor Maisel agreed that it would seem desirable to establish
a framework for Governmental consideration of such matters, perhaps
through
the National Advisory Council on International Monetary and
inancial Policies, particularly since the State Department had a limited
Staff to deal with matters of this sort.
Governor Shepardson then alluded to the possibility of awkward
Problems arising from subjecting a foreign government's banking institution
;.k
9/22/66
-5-
to State supervisory requirements and raised the question whether it
might be desirable to establish such organizations under national
c
harters.
Mr. Shay commented that the Joint Economic Committee of the
Congress had made such a recommendation in connection with a study of
foreign banking in the United States conducted earlier this year, and
Senator Javits had recently introduced a bill (S. 3765) to carry out
that recommendation.
Governor Shepardson noted that he was familiar with the Javits
bill.
While this was not the time to pursue the matter in detail, he
wished to point out a potential conflict involved between the traditional
jurisdiction of the Board over foreign banking activities and the authoritY Proposed to be given the Comptroller of the Currency in that legislation.
For the sake of consistency, it would seem that Federal regulatory
authority over foreign banking in the United States should be vested in
the Board, since it already had jurisdiction over the activities of
Anierican banks, both State-chartered and national, doing business abroad.
Returning to the instant question, Chairman Martin observed that,
While the Department of State had certain responsibilities concerning
the foreign relations aspects of banking matters, the Department's
facilities were limited.
He raised the question whether the Board should
l'emain silent concerning the discriminatory treatment of American banks
°Perating abroad, as in the present case.
He noted that there appeared
C1
)
‘
9/22/66
-6-
to be sentiment in some quarters that the Board had not been pursuing
With sufficient vigor attempts to assist in resolving problems encountered by American banks in their foreign activities arising out of local
discriminatory restrictions, and he thought something could be said for
citing the reciprocity question for consideration of the New York Banking
De partment in this case.
In his opinion, the time to raise the matter of
discrimination against our banking institutions abroad was when a proP°sal to begin or expand banking operations in the United States emanated
fromthe country imposing or condoning such discrimination.
Thus, the
matter of discrimination against American banks in Taiwan might be an
a ppropriate factor to bring to the attention of the State authorities
in this case for such consideration as they wished to give it.
Governor Brimmer expressed agreement with Chairman Martin's
temarks.
He believed situations of this sort should be reviewed more
sYstematically with an eye toward taking advantage of opportunities to
"courage reciprocity, and he hoped that a philosophy along such lines
e°111d be implemented more vigorously in the future.
It was understood that the staff would revise the draft letter
to take into account the foregoing consensus, and transmittal of such
letter was authorized.
A copy of the letter transmitted is attached as
iterri)* 3Messrs. Sammons, Goodman, Forrestal, and Poundstone then withdrew
frcml the meeting.
9/22/66
-7Public Bank matter (Items 4-6).
In continuation of reports
made at previous meetings concerning the status of negotiations for the
acquis
on of assets and assumption of liabilities of Public Bank by
Bank of the Commonwealth, both of Detroit, Michigan, Mr. Leavitt commented
On recent developments.
He stated that earlier this week staff members
of the Board and of the Federal Deposit Insurance Corporation met with
the Michigan Commissioner of Banking and counsel for Bank of the Commonwealth.
At that time it was agreed that the State Commissioner and the
Federal Deposit Insurance Corporation would furnish the Board with letters
advising that the proposed merger was necessary in order to prevent the
Probable failure of Public Bank, thereby laying the foundation for immediate approval of the transaction by the Board and waiver of the statutory
waiting period before consummation could be accomplished.
Mr. Shay added that following the meeting a member of the Corpotati°n's staff had advised him that, although the Corporation was prepared
to transmit such a letter, it was felt the State Commissioner's letter
811°41d be received first.
Mr. Leavitt continued by saying that the State Commissioner's
letter had been received yesterday.
Upon communicating this advice to
the Corporation's staff, he and Mr. Shay were advised that in light of
"
e .tain recent developments it was not now clear that emergency action
"the merger was necessary.
to L
It was indicated that Public Bank appeared
ue receiving sufficient new deposit business to enable daily clearings
9/22/66
-8-
to be met, and that the need for further borrowing from the Chicago
Reserve Bank might diminish.
Mr. Leavitt had inquired whether the Corporation would be
disposed to favor action by the Board under the provisions of the Bank
Merger Act accelerating the time for receipt of competitive factor
reports from other interested agencies to 10 days and permitting consummation 5 days after approval, but no definitive response had been
received.
In a subsequent telephone conversation with the Michigan
Co mmissioner of Banking, that official had expressed the view that
Public Bank's condition was precarious and, while he would not object
strongly to the so-called "10-day" procedure, he would prefer to see
immediate consummation of the merger permitted under the "failing bank"
au
thority in the Act.
He had also reported that discussions with the
directors
of Public Bank indicated that they know of no active interest
by banks, other than Bank of the Commonwealth, in effecting a merger.
Therefore,
short
he believed the present proposal represented the only recourse
Of closing the bank.
Other facts reported by the State Coumissioner were that:
Stock
With
(1)
of Public Bank had recently been traded at $5 per share, contrasted
a previous price of $2.50 per share, suggesting speculative activity;
(2) the City of Detroit had a sizable unsecured deposit with the bank,
which was a matter of concern to him in view of the bank's condition.
Bee,
cwse of the deterioration in the bank's condition, on June 28 the
4 ,t
9/22/66
-9-
Commissioner had ordered the directors of Public Bank to levy an assessment of $12.44 per share on the bank's stock, to be paid August 28, but
Payment of that levy had been extended to November 28 due to an intervening action by the Federal Deposit Insurance Corporation under section 8(a)
of the Federal Deposit Insurance Act to terminate the bank's insured
status because of continuing unsafe or unsound practices in conducting
its affairs.
The Commissioner had asked Public Bank to mail a proxy
statement
to its shareholders today to inform them of the assessment,
but because of printing delays it probably would not be sent until next
Monday at the earliest.
Mr. Leavitt also indicated that most of the $6.4 million currently
°Iltatanding in advances from the Chicago Reserve Bank to Public Bank would
fall due for repayment or extension tomorrow, and President Scanlon of
the Chicago Reserve Bank had indicated concern about further renewal of
this borrowing if emergency circumstances no longer existed.
In concluding his remarks, Mr. Leavitt stated that the Division of
4aminations had intended to recommend approval of the proposed merger
under the "failing bank" provisions of the Bank Merger Act at today's
'meeting, but such action was not now being recommended because of failure
to receive the anticipated letter from the Federal Deposit Insurance
Co
qoration that would support a finding of "probable failure."
Mr. Shay summarized the alternatives available under the provisions
Of the
Bank Merger Act.
If immediate consummation of a merger was found
9/22/66
-10-
necessary to prevent a probable bank failure, the Board could forego
requests for competitive factor reports from the other banking agencies
and the Department of Justice, and waive imposition of a waiting period
following
approval.
Under the so-called 10-day procedure, which could be
invoked in cases not involving probable failure but where expedited action
was indicated because of emergency circumstances, the usual 30-day period
for submission of competitive factor reports was reduced to 10 days, and
consummation could be allowed 5 days after approval (rather than imposing
a 30-day waiting period).
One way of resolving the dilemma faced by the
toard in the present instance would be to commence action on the applicatic)n under the 10-day provision of the Act; if the situation were to
change for the worse in the meantime, it would still be possible to revert
to immediate approval under the "failing bank" provision.
In this connection, Mr. Shay noted that one fact militating
against immediate action was the status of the record in this case, which
left a great deal to be desired; it consisted largely of oral and sometimes
conflicting representations. Furthermore, the vacillation of staff
Of the Federal Deposit Insurance Corporation created a climate of uncertaintY as to whether the failing bank doctrine was applicable.
In response to a question by Governor Robertson, Mr. Shay indicated that the FDIC staff's present thinking was apparently that it was
not
clear that a failing bank situation existed, and that perhaps the
Pl.chlem faced by the bank might be resolved in some manner other than
thro
ugh the contemplated merger.
9/22/66
-11Governor Robertson then inquired what the Corporation was
expecting in the way of Board action, and Mr. Shay responded that the
10'day procedure appeared to have current favor among the Corporation's
Staff involved in the case, although no official indication to that
effect had been received.
Governor Robertson expressed concern that the merger application
filed by Bank of the Commonwealth was in an extremely curtailed form, and
did not appear to contain sufficient factual material to allow assessment
Of the
situation.
Governor Brimmer reviewed the background of Board consideration
nf the case to date, noting that throughout the period of Federal Reserve
involvement the Board had been urging that all necessary steps be taken
t°14ard expediting the merger.
For this reason, the abbreviated applica-
ti°u did not particularly concern him, but he was surprised about the
apparent shift of position by the Federal Deposit Insurance Corporation.
Governor Maisel suggested that the proper procedure at this stage
14°41d seem to be for the Board to ask Chairman Randall and Director
She
for the Corporation's decision on the course to be followed.
Governor Robertson reiterated his concern that the Board was in a
diff.
'cult position with respect to action on the proposed merger because
ually all of the information in its possession was second-hand, having
°tile from the Michigan Commissioner and the Federal Deposit Insurance
Cor
poration.
He felt it important that a copy of the most recent exami-
liatinn report of Public Bank be made available.
9/22/66
-12Chairman Martin inquired about President Scanlon's views, and
Mr. Sherman reported that in a telephone call this morning (one of
Several recent calls) Mr. Scanlon expressed dismay at the way the merger
negotiations had dragged on, since it had been at the Corporation's
request, based upon allegation of an emergency situation, that Reserve
Bank credit had initially been extended to Public Bank.
During subse-
quent discussions by Mr. Scanlon with the Corporation and with Bank of
the Commonwealth, representations of a continuing emergency condition
had been made, upon which further extensions of credit had been based.
Nov,
however, in view of the apparent shift in the Corporation's position,
Mr. Scanlon was concerned about continuing to allow Public Bank, a nonII/ember institution, access to the discount window.
Governor Shepardson stated that he, too, was disturbed by the
Corporation's apparent shift of position, in light of earlier conversati°ns with him in which Chairman Randall had urged that the Board be
Prepared to act on a merger application as expeditiously as possible.
Ile felt that some specific statement from the Board of the Corporation
Wa8
needed for the record.
Chairman Martin concurred in that suggestion, particularly in
viet,
" of the borrowing maturity tomorrow.
Shepa
He proposed that Governor
be requested to discuss the matter on behalf of the Board
th Chairman
Randall or Director Sherrill of the Corporation and ask
fOr d
written statement of the Corporation's recommendation, along with
°PY of the examination report of Public Bank.
35
9/22/66
-13It was understood that Governor Shepardson would proceed as
indicated, and that he would also maintain close liaison with President
Scanlon.
Secretary's Note: Subsequent to this meeting
a copy of the latest report of examination of
Public Bank was obtained from the Federal
Deposit Insurance Corporation, after which
Governors Shepardson and Robertson met with
Chairman Randall and Director Sherrill. A
letter relating to the condition of Public
Bank was then received over the signature of
Chairman Randall. In the light of all of the
information thus obtained, in addition to that
previously received, the available members of
the Board (Chairman Martin and Governors
Robertson, Shepardson, Daane, and Maisel)
approved unanimously the application of Bank
of the Commonwealth to acquire the assets and
assume the liabilities of Public Bank, this
action being deemed necessary in order to
prevent the probable failure of Public Bank.
The Board authorized the issuance of an order
and statement reflecting the decision to
approve the application; copies of the order
and statement as issued on September 23 are
attached as Items 4 and 5, respectively. A
copy of the letter sent to Bank of the Commonwealth is attached as Item No. 6.
Messrs. O'Connell, Shay, Leavitt, Egertson, and Maguire then
withdrew from the meeting.
Appointment of director at Pittsburgh Branch.
In view of the
tesignation on July 1, 1966, of Dr. G. L. Bach as a director of the
tt
his
burgh Branch of the Federal Reserve Bank of Cleveland, incident to
acceptance of a position at Stanford University, it was agreed to
asee
rtain through the Chairman of the Cleveland Reserve Bank whether
9/22/66
-14-
Prank Barker Chase, President of Kaufmann's Department Stores, Pittsburgh,
Pennsylvania, would accept appointment, if tendered, as a director of
the Pittsburgh Branch for the unexpired portion of Dr. Bach's term ending
December 31, 1966, and for a further three-year term beginning January 1,
1967) with the understanding that if it were found that he would accept,
the appointment would be made.
If it developed that Mr. Chase could not accept the appointment,
it was understood that similar inquiry would be made with respect to the
alie nability of Richard Michael Cyert, Dean, Carnegie Institute of Tech11/31°gY, Pittsburgh, Pennsylvania.
Call for condition reports.
Under the procedure prescribed by
statute, the close of business on Tuesday, September 20, 1966, had been
selected as the date for the third call for reports of condition to be
illade by insured banks within the calendar year 1966.
be announced on Friday, September 23.
Was
The call was to
Accordingly, the usual telegram
sent to all Federal Reserve Banks on September 21, 1966, requesting
that
_
a
call be made upon member State banks on September. 23 for reports
Of condition as of the close of business September 20.
The sending of the telegram was ratified by unanimous vote.
The meeting then adjourned.
Secretary's Notes: Governor Shepardson
today approved on behalf of the Board
the following items:
356
9/22/66
-15-
Letter to the Federal Reserve Bank of New York (copy attached as
Item No. 7) approving the appointment of Richard S. Bishop as assistant
examiner.
Letter to the Federal Reserve Bank of Minneapolis (copy attached
as Item
regarding arrangements for the assignment of Arthur I.
Lee) Department Head, Fiscal Agency Department, to the Board's Division
0f Bank Operations for a period of approximately three months beginning
October 1, 1966.
Memoranda recommending the following actions relating to the Board's
staff:
AZZalatElta.t.
.
Maria Cecilia DeNardo as Clerk, Division of Administrative Services,
with basic annual salary at the rate of $4,269, effective the date of
entrance
upon duty.
Salar
increase
Ralph C. Bryant, Economist, Division of International Finance, from
$1°,927 to $12,873 per annum, effective September 25, 1966.
Acce
-----21,Ence of relisnation
Frederick C. McGrady, Budget and Planning Assistant, Office of the
Controller, effective the close of business September 26, 1966.
With the approval of the available members of
the Board (Governors Robertson and Shepardson),
a wire was sent to the Federal Reserve Bank of
San Francisco on September 23, 1966, advising
that the Board had approved an application by
Wells Fargo Bank, San Francisco, California,
for permission to operate a limited banking
facility on the University of California
campus at Davis, California, from 10:00 a.m.
to 5:00 p.m. on September 25, 1966. A copy
of the confirming letter to Wells Fargo Bank
is attached as Item No. 9.
BOARD OF GOVERNORS
Item No. 1
9/22/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADDRESS
orraciAL
CORRIE•PONDIENCE
TO THE SOARD
September 22, 1966
Board of Directors,
Manufacturers Hanover Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal
approves the establishment by
System
Reserve
Trust Company, New York,
Hanover
Manufacturers
New York, of a branch at 111 Broad Street,
Borough of Manhattan, New York, New York, provided
the branch is established within two years from
the date of this letter.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
BOARD OF GOVERNORS
Item No. 2
9/22/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September 22, 1966
Mr. Hugh D. Galusha, Jr., President,
Federal Reserve Bank of Minneapolis,
Minneapolis, Minnesota.
55440
Dear Mr. Galusha:
This refers to your letter of September 1, 1966,
iregarding deficiencies in reserves of the Northwestern National
computation
link, Hopkins, Minnesota, in the first 16 reserve
$3,200.92.
total
would
Periods during 1966, for which penalties
has
It is noted that since January the member bank
Balances
Demand
in
madvertently included its reserve account
!
line From Banks when submitting reports for reserve purposes;
that the error, which arose from a revision by the bank of its
°ffice statement, was discovered in reconciling its report of
; that the
bet deposits with its June 30 report of condition
reserves;
its
ng
ank previously had a good record of maintaini
nt.
inadverte
were
and that your Bank is satisfied the mistakes
your Bank
In the circumstances, the Board authorizes
the 16
for
$3,200.92
to waive assessment of penalties totaling
1966.
17,
reserve computation periods ending August
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 3
9/22/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September 22, 1966.
Mr. Fred W. Piderit, Jr., Vice President,
Federal
Reserve Bank of New York,
New York, New York. 10045
Dear Mx. Piderit:
This refers to your letter of August 26, 1966, advising
that you
had been informed by the Banking Department of the State
(If New York. that an organization certificate has been filed for the
!
hartering of a new bank under the name "The Chinese American Bank"
o
cn be located at 225 Park Row, New York, New York. All of the stock
,f the bank, except for directors' qualifying shares, would be owned
°Y Bank of China, Taipei, Taiwan, Republic of China.
It is noted that the Banking Department stated that, in
co
nnection with its investigation, it would be pleased to consider
ilY comments regarding the application you would care to make, and
..!lat the Banking Department had suggested to you informally that
'
Ile Board of Governors also may wish to comment on the proposal.
T
You state that you propose to inform the Superintendent
Banks of the State of New York that you are disposed to interno objection to the establishment of the proposed bank and
the
th t You would also suggest that if the application is to be approved
the Superintendent of Banks remind "The Chinese American Bank" of
1:e possibility of international friction and of embarrassing probc44:18 that could arise in the operation of the bank through the inl ence of governing State laws and regulations and policies of
cal supervisory authorities.
From the information contained in your letter, it would
pp
rear that the Taiwan branches of First National City Bank, New
and Bank of America National Trust and Savings Association,
1.1 Francisco, are not permitted to receive local deposits except
po the case of certain United States Government funds and the prootisled deposits of the Government of the Republic of China. On the
er hand, "The Chinese American Bank" would be free to receive
4
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
356
Mr. Fred W. Piderit, Jr.
-2-
local deposits in New York. This raises a question as to approPriate reciprocity. In these circumstances, the Superintendent of
Banksmay wish to consider this question as one of the factors inived in determining whether to grant a charter to the proposed
The Chinese American Bank". It will be appreciated if you will
inform the Banking Department of the State of New York of the Board's
views in this respect.
r
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
t
OhOCJA'
Item No. 4
9/22/66
UNITED STLTES OF AHERICL
BEFORE THE BOARD OF GOVERNORS OF THE FEDEaLL RESE-ME SYSTEM
WASHINGTON, D. C.
in the Matter of the Application of
BLit:: OF THE COMOMEALTH
'-°'• approval of acquisition of
"sets of Public Bonk
ORDER APPROVING ACQUISITION OF B/UX'S ASSETS
There has come before the Board of Governors, pursuant to
the Bank Herger Act, as amended (12 U.S.C. 1020(c), Public Law 09-356),
Q
n application by Bank of the Commonwealth, Detroit, Hichigan, a
Ci:ete member bank of the Federal Reserve System, for the Board's
Prior approval of that bank's acquisition of assets and assumption
deposit liabilities of Pb1ic Bonk, Detroit, lachigan, and, as
4'41
.
-ncldent thereto, Bank of the Commonwealth has applied, under
3ection 9 of the Federal Reserve Act, for the Board's prior approval
132 the establishment by that bank of branches at the locations of
Che 11 offices of Public Bonk.
Published notice of the proposed acquisition of assets
and
the
"sumption of deposit liabilities and requests for reports on
competitive factors involved therein have been dispensed with
a uthorized by said Bank Merger Act.
-2-
Upon consideration of all relevant material in the light
Of the provision of said Act,
IT IS HEREBY ORDERED, for the reasons set forth in the
8°4rd'5 Statement of this date, that said applications be and hereby
a e approved and that said acquisition of assets and assumption of
4P08it liabilities and establishment of branches may be consummated
immedia tely, but not later than three months after the date of this
Order.
Dated at Washington, D. C., this 23rd day of September, 1966.
By order of the Board of Governors.
Voting for this action: Chairman aartin, and Governors
Robertson, Shepardson, Daane, and Maisel.
Absent and not voting:
Governors Mitchell
and Brimmer.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 5
9/22/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION OF BANK OF THE COTITIONUEI'MTH
FOR APPROVAL OF ACQUISITION OF
ASSETS OF PUBLIC BANK
STATEMENT
Bank of the Commonwealth, Detroit, Michigan ("Commonwealth"),
'" total deposits of approximately $592 million, has applied pur344
"to the Bank Merger Act, as amended (12 U.S.C. 1828(c), Public
41739-356), for the Board's prior approval of its acquisition of
a
8sQ.ts and assumption of deposit liabilities of Public Bank, Detroit,
lf
14chiCan ("Public"), which has total deposits of about $108 million.
gn incident to the transaction, the 11 offices of Public 'would
boc^
yme branches of Commonwealth, increasing the number of its offices
to
Si,
The application was made to remedy a situation found by
he IltIard, on the basis of the information before it, including
unications from the Commissioner of Banking for the State of
Can and the Federal Deposit Insurance Corporation, to require
that
the Board act immediately pursuant to the provisions of Public
Lati t,,
-356, 89th Congress (Feb. 21, 1966) in order to safeguard
%oRi
--tors of Public, a nonmember insured State bank.
/
Posit figures are as of June 30, 1966.
The anticompetitive effects attributable to effectuation
of the transaction would be clearly outweighed in the public interest
by the considerations supporting and requiring the aforementioned
findi-ng.
From the record in the case, it was the Board's judgment
that any disposition of the application other than permitted by the
lloardis Order would have been inconsistent with the best interest
Of
the depositors of Public.
Lccordingly, the Board concludes that the proposed trans-
action
should be approved on a basis that would not delay consum-
mation of the
proposal.
ePtember 23, 1966.
Item No. 6
9/22/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September 23, 1966.
RE
GISTERED - RETURN
RECEIPT
RE UESTED
Bank of the Commonwealth,
719 Griswold Street,
D
etroit, Michigan. 48226
Ge
ntlemen:
application, under
The Board of Governors has approved the
, Public Law 89-356),
1828(c)
U.S.C.
(12
t le Bank Merger Act, as amended
)
14)r the Board's prior consent to the acquisition of assets of Public
;
liabilities .
...!nk, Detroit, Michigan, and the assumption of deposit
"r that bank by Bank of the Commonwealth, Detroit, Michigan.
the accompanying
Enclosed are the Board's Order of this date,
Statement, and the press release on this action.
capital position
As you are aware, Bank of the Commonwealth's
is not
acquisition will place
entirely satisfactory, and this proposed
:n additional burden on the bank's capital structure. The Board
increasing
tnderatands the directorate will propose a program for
the capital
4c/tal capital funds in early 1968. The Board urges that
Lncrease program be accelerated if conditions permit.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
tnelosure
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPO
TO THE BOARD
September 22, 1966
Mr. Fred W. Piderit, Jr., Vice President,
Federal Reserve Bank of New York,
New York, New York. 10045
Dear Mr. Piderit:
In accordance with the request contained in
Your letter of September 20, 1966, the Board approves
the appointment of Richard S. Bishop as an assistant
examiner for the Federal Reserve Bank of New York.
Please advise the effective date of the appointment.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
DENG(
gook/
BOARD OF GOVERNORS
Item No. 8
9/22/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS orrociAL CORRESPONDENCE
TO THE SOAR()
September 22, 1966
Mr. Hugh D. Galusha, Jr., President,
Federal Reserve Bank of Minneapolis,
Minneapolis, Minnesota. 55440.
Dear Mr. Galusha:
In accordance with the tentative arrangements made with
Cashier John MacDonald by the Board's Division of Bank Operations,
i
o t is understood that your Bank will make available for a period
nf approximately three months, beginning October 1, 1966, the
;ervices of Mr. Arthur I. Lee, Department Head, Fiscal Agency
aePartment of your Bank. While in Washington, Mr. Lee will be
signed to the Operations Analysis Section of the Board's Division
'
t Bank Operations, but it is also hoped he will have an opportunity
become generally familiar with the work of the Division as a
"nole and to visit other divisions of the Board.
It is understood that the Federal Reserve Bank of
hin,
-eaPolis will absorb all of Mr. Lee's salary and travel expenses
-4 connection with the assignment.
The Board of Governors appreciates the cooperation of
r Bank in making the services of Mr. Lee available during this
Period.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman
Secretary.
Item No. 9
9/22/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 2051
ADDRESS
orricsm. CORNCIIIPONDENCIL
TO THC SOAR!)
September 23, 1966
Board of Directors,
Wells Fargo Bank,
San Francisco, California.
Gentlemen:
, The Board of Governors of the Federal
a limited
Reserve System approves the operation of
University
on
banking facility at 550 Oxford Circle
, on
of California Campus at Davis, California
M. to
A.
Sunday, September 25, 1966, from 10:00
5:00 P. M.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
@FedFRASER