Full text of The Northwestern Banker : December 9, 1968, No. 1133
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I *■ V Advocate Broader Bank Taxation Bill Rep. Bertrum L. Podell (D., N. Y.) has been urged to broaden the scope o f legislation he plans to Fe-introduce next year to make national banks subject to state and local sales and use taxes. At an informal hearing in New York last week conducted by Rep. Podell, New York State Superintendent of Banks Frank Wille advocated that the mea sure be expanded to make na tional banks subject to “ all forms of state and local tax ation” other than the kinds that are specifically forbidden from being assessed under the Na tional Bank Act. “ Many other forms of state and local excise taxes exist today and others may be im posed in the future,” Wille said. “ Any revision enacted by the Congress at the 1969 s e s sion should resolve this prob lem for the future and not be limited merely to the context of sales and use taxes.” Supt. Wille also said Con gress should make it clear “ such nondiscriminatory taxes” apply to national banks in any https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I state or locality in which they operate —not only the state in which they have a principal office. “ Many banks, both state and national, lend to borrowers out side the state in which they are domiciled, and it appears under the Supreme Court’ s re cent decision (in the Massachu setts sales tax case) that these other states and their localities would also be prohibited from imposing even a nondiscrimina tory tax on national banks domiciled elsewhere, while such a tax could be imposed on state banks chartered by other states,” he continued. The New York official as sailed the 1968 Supreme Court decision in the Massachusetts case, which held that national banks are exempt from state and local sales and use taxes be cause of their “ Federal instru mentality” status. He said such an exemption is “ unconscionable now and likely to become even more un fair in the future.” For example, he reasoned, national banks cannot perform any more ser vices or functions for the Fed eral government than state banks belonging to the Federal Re serve System, which are subject to state and local sales and use taxes. One of the consequences of Congress not acting quickly to remove this inequity, he warned, is that there may be “ an in creasing number of conversions by commercial banks from state to national charter.” Rep. Podell, who figures the national bank exemption costs states about $50 million annual ly, called the hearing to lay the groundwork for convincing the House Banking Committee , which failed to act on his bill this year, to consider the leg is lation after Congress recon venes in January. He also is surveying state tax commis sioners in all 50 states on the matter. A spokesman for Rep. Podell said the response from the states so far has been “ quite prolific in favor of the b ill.” In addition, this spokesman said that House Banking Com mittee Chairman Wright Patman (Continued on Page 4) has moved into its new bank build ing. The new building includes an enclosed bookkeeping room, two private o ffice s , lobby officer area, employee lounge and meeting room. W e're here to help you g e t w h a t you w a n t MINNEAPOLIS: Gerald L. Knips, president, chairman and director of the First Hennepin State Bank, has resigned, effective January 1, to join the o fficia l staff in the liaison division of First Bank System here. James E. Dorsey, Jr., v ice pres ident at the bank, has been e le c ted to replace Mr. Knips in all three cap acities. IOW A-DES M OINES NATIONAL BANK Jerry Nelson Member Federal Deposit Insurance Corporation ------------------There are so many ways we can “help you That's why over half the banks in Iowa are — MNB correspondents Joe Phemetton Vice President & M L f K g iS ^ H g|K MERCHANTS NATIONAL BANK ■ C e d a r Rapids, Iow a 52401 S iK X p y l Member FD IC The M l service bank for the banks of Iowa S lA Wh * IOWA NEWS the bank building to be used as a parking lot. APLINGTON: Lee W. Davidson, president of the Swea City State Bank; Wayne O. Hopkins, president of the Citizens State Bank, Webb; and E. W. Y ouell, Jr., president o f the Manson State Bank, have pur chased controlling interest in the State Savings Bank here. WEBSTER CITY: W. G. Stewart, former v ice president and cashier of the First National Bank in Humboldt, has been named vice president of the First State Bank here. He had been associated with the Humboldt bank for over 14 years. FORT DODGE: Application of the Union Trust and Savings Bank to establish a facility at Duncombe has been approved by the Federal Deposit Insurance Corporation. WHITTEMORE: Open house was held Friday, December 6, at the Farmers State Bank, in its new building. MINNESOTA NEWS HAMPTON: Ivan D. Davis of Hamp ton has purchased the interest of Mr. and Mrs. W. S. Norton in the Hampton State Bank. Mr. Davis, who has been elected v ice pres ident, will take over the active management o f the bank on Janu ary 1. No other personnel changes are anticipated. ONAWA: The Onawa State Bank has purchased property adjoining CLARA CITY: An application to change the location of the Citizens State Bank of Clara City from 10 Center Street to 17 Main Street here has been approved by the Federal Reserve. DEEP RIVER: The First National Bank of Deer River recently ce le brated its 60th anniversary. LAKEFIELD: The First State Bank me Security National Bank personal service to every correspondent. Personally! SECURITY https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis NATIONAL Sioux City, Iowa BANK MINNEAPOLIS: William J. Bing ham, Jr., has been named v ice president for manpower planning, training and compensation at First Bank System. Frank E. Porter has been named secretary and corporate counsel. Mr. Bingham . has been vice president and personnel di rector for the National Bank of Detroit, Mich. Mr. Porter is former counsel for General Mills subsid iaries. 4 V- r 'à JT 4 MINNEAPOLIS: Earl S. Sanford has been elected vice president of Kidder, Peabody and Company,Inc. Mr. Sanford has been resident man ager o f the firm’ s Minneapolis of fice sin ce 1963 and will continue in that position. MINNEAPOLIS: Kenneth R. John son, vice president of the First National Bank of Minneapolis, has been named head of the estate division in the bank’ s trust depart ment, succeeding Lee A. Short, v ice president and trust officer, who becom es a senior consultant in the trust department until his retirement in March. MINNEAPOLIS: The following Min neapolis banks are following the lead o f New York’ s Chase Man hattan Bank, N .A ., in increasing their prime interest rates for large corporate borrowers from 6*4% to 6%%: First National Bank, North western National Bank, Midland National Bank and National City Bank. National City, which had the lowest prime rate in the coun try at 6%, will increase its rate by y2 of i%. NEW ULM: Application of the Farm ers and Merchants State Bank of New Ulm to change its location from 200 North Minnesota Street to 322 North Minnesota Street here has been approved by the Federal Reserve. S T . PAUL: Walter V. Dorle, pres ident of the Northwestern State Bank, has been elected president y £ v W y y. 'C f f L IN C O L N 4* of the St. Paul Chamber of Com merce for 1969- SOUTH DAKOTA NEWS ir * HURON: The 1968 South Dakota Bankers A ssociation Bank Person nel Seminar will be held on Wednesday, December 11, at the Plains Hotel here. Registration will begin at 8 a.m., with official opening of the conference at 9 a.m. ILLINOIS NEWS MARION: Grand opening was held recently at the drive-up, walk-in facilities of the Bank of Marion. * PARK RIDGE: Three workshops on supervisory training, federal in come taxation and EDP systems analysis will be held concurrently at the Bank Administration Insti tute’ s headquarters here today through December 11. Day-long workshops will be conducted today and tomorrow, with a morning session only on December 11. f t % SANDWICH: Construction has be gun on the new bank building of the Sandwich State Bank at 100 West Church Street. TOLONO: Application of The C iti zens Bank of Tolono to withdraw from membership in the Federal Reserve System has been approved. * * r * NATIONAL NEWS MONTREAL, CANADA: J. Leonard Walker, senior executive v ice pres ident of the Bank of Montreal, has been elected president of the bank. Marcel Vincent, chairman and ch ief executive officer of Bell Telephone Company of Canada, has been named to the bank’ s board of di rectors. The bank has substan tially completed its planned pur chase of up to 10% of the outstand ing shares of the Royal Trust Com pany. NEW YORK: Donald B. Riefler and Frank Sandstrom have been e le c ted senior v ice presidents of •••Professionals in Livestock Loans Morgan Guaranty Trust Company. Mr. Riefler heads the bank’ s port folio department, and Mr. Sandstrom is a member of the credit com mittee. Both were formerly vice presidents. ............. Call m U m Everett P. Brown for NEW YORK: Secretary of the Treasury Henry H. Fowler has an nounced his plans to become a general partner of the New York investment banking firm of Gold man, Sachs and Company on Janu ary 1. ST. LOUIS: John B. Mitchell, 51, president of First National Bank, died recently after an illness of three months. Mr. Mitchell joine*d the bank in 1955 and had been serving as president and a member of the board of directors sin ce 1962. SPRINGFIELD, OHIO: Consolida tion of assets and operations of the Guardian Bank of Springfield and the New C arlisle National Bank has been recommended by directors of both institutions, su bject to the approval of stock holders of both banks and approval of various state and federal agen cie s . The combined facility will provide two offices in Springfield and five o ffice s located in more populous areas of Clark County. Personal Attention to All Your Correspondent Needs CALL 402 AREA CODE 341-8765 M«mb«r Ftdtrai Deposit Insurance Corporation activity of a bank simply by de fining it as a branch. In the first bank service case appealed to the high court, attor neys for the First National Bank of Plant City contend that the U. S. Fifth Circuit Court of Appeals, in ruling that such messenger ser v ices were illegal, depended heavily on a “ distorted and errone- DO YOU Want to buy, sell or trade bank equipment or fixtures? NORTH DAKOTA NEWS MINOT: Application of the Ameri can State Bank to exercise trust powers has been approved by the FDIC. Messenger Service Ruling 'Disruptive 9 Court Told. . . The U. S. Supreme Court has been told that if an appeals court decision that a national bank’ s armored car messenger service constitutes illegal branch banking is allowed to stand, each state could prohibit any off-premises Let Mighty Mite NORTHWESTERN BANKER WANT ADS Do the job for you! For Decisive Action R ely on N B C for all your correspondent needs. YOUR STATE BANKERS ASSOCIATION OFFICIAL SAFE, VAULT AND TIMELOCK EXPERTS s F. E. DAVENPORT & CO OMAHA https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Member FD IC National Bank of Com m erce Main Bank 13th St O Sts. / Patio O ffice lOth St O Sts. / Lincoln, Nebraska Um bestMes fatth^äif $mm timft COMMERCE TRUST SANK 4 f 4 BURGLAR ALARMS o * Banks. Hildnp Cameras Telephone 515 / 2 6 2 -4 2 0 9 2905 Delaware Ave. D es Moines. Iowa ous extension” of the decision in the 1966 Utah branch banking ca se. The appeals court decision to adopt state law in deciding what activities a national bank may conduct away from the premises will be “ profoundly disruptive” of the operations of national banks throughout the country, the bank contends. banks that announced quarter-point rises in their prime rate to 6)4% shortly after the Chase announce ment. Most major banks in the North western Banker area have also raised their prime rates to 6)4%. On September 24 Chase Manhat tan lowered its prime rate to 6% from 6)4%, but most other major banks —led by First National City Bank of New York —cut their rates by only a quarter of a point to 6%%. The disparity in the prime rate structure continued until Novem ber 12 when Chase Manhattan an nounced a point increase to bring it in line with the other major banks. Bank Taxation (Continued from Page 1) Banks Raise Prime Rate. . . Chase Manhattan Bank, N .A ., New York, which led a move to ward a lower prime interest rate for large corporate borrowers in September, now has led a move in the opposite direction. Chase, one of the nation’ s largest banks, announced last week it had raised its prime lend ing rate to 6y2% from 61/4%»effective immediately. Chemical Bank New York Trust Company, Irving Trust Company, Morgan Guaranty Trust Company and Manufacturers Hanover Trust Company were among New York CENTRAL NATIONAL BANK (D ., T ex .) is backing the measure now. Another front on which the na tional bank state and local sales and use tax issue is still alive is the Supreme Court, which in the wake of the Massachusetts d e ci sion is being asked by New York State to review the “ substantial unresolved issu e ” of whether Con gress has the power under the U .S. Constitution to give national banks immunity from certain state taxes if they do not perform as “ Federal instrumentalities.” The Supreme Court has yet to decide whether it will review this appeal. AND TRUST M e m b e r F ed era l D e p o s i t In s u r a n c e C o r p o r a ti o n COMPANY WANT ADS Rates 25 cents per word per insertion. Minimum: 12 words. NORTHWESTERN BANKER 306 15th St., D es Moines, Iowa POSITION AVAILABLE Experienced banker for second man position in $6 million bank in northwest Iowa. E xcellent oppor tunity. Good pay. Contact P.O. Box 57, Sioux City, Iowa 51102. POSITION WANTED Experienced installment lending officer desires opportunity in bank in central or western states. Write for resume to F ile LJS, in care of NORTHWESTERN BANKER, 306 15th St., Des Moines, Iowa 50309. PRESIDENT For new bank. Progressive midwest city of 20,000 population. Candi date must be able to run bank and get new accounts. Salary open. Send resume, in confidence, to P rofiles, In c., 1200 First National Bank Bldg., Omaha, Nebr. 68102. Telephone 348—9182. FOR SALE Loan application forms for the modern agricultural banker. Sam ples on request. Farm Business Council, Inc., P.O. Box F, Urbana, Illinois 61801. LISTENERS WANTED La Salle National Bank, Chicago, offers brief, con cise, informative and interesting stock market reports every hour on the half hour be ginning at 9:30 a.m. as reported by Ed Cooper direct from the board room of Hornblower and Weeks— Hemphill, Noyes. These reports can keep you and your customers abreast of the changing market. Tune in WGN radio, 720 on your dial—a 50,000 watt, clear channel station serving the midwest. The Stock Market Report Show is just another service from La Salle National Bank. For a complete line of services, write or phone La Salle National Bank, 135 South La Salle Street, Chicago, Illinois 60690. (Area Code 312) STate 2-5200. No. 1133 Northwestern Banker is published five times monthly by the Northwestern Banker Company, 306 Fifteenth Street, Des Moines, Iowa 50309. Subscriptions 50tf per copy, $6 per year. Second class postage paid at Des Moines, Iowa. Address all mail subscriptions, changes of address (Form 3579), manuscripts, mail items to above address. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 * -f * c *r <