frsbog_mim_v38_0201.pdf

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FEDER L RESERVE BO RD

WASHINGTON

CI L CORRESPONDENCE TO

THE FEDER L RESERV E BO RD

X-7431

May 9, 19 53 .

SUBJECT: Proposed Re vi sion

of

Federal Reserve

Board Forms 94 , 94 a a nd 9413.

Dear

S i r :

I n t h e Board ' s l e t te r of May 1 , 1 93 3 (X-7426), relating

t o t h e

admin is t r a t ion

of the

provis ions

of the

Clayton Antitrust

A c t , a procedure was out l ined f o r t h e handling of app l ica t ions

which

was

designed

t o

bring about

a

more complete presentation

of the r e l ev an t f ac t s . I n this connection consideration i s

being given

t o t h e

a d v i s a b i l i t y

of

revising Federal Reserve

Board Forms 94, 94a and 94b so that they wil l ca ll f o r t h e

necessary information more specif ically

and in

more deta i l ,

and

t h u s f a c i l i t a t e a proper presentation and prevent unnecessary

correspondence

an d

delay.

There i s inclosed , f o r your information, a copy of a

recommendation

and the

accompanying statement

of

facts submitted

b y t h e Federal Reserve Agent a t Dal las i n connection with a

r ecen t app l ica t ion ,

a s

well

a s a

copy

of a

le t te r addressed

t o

t h e p res iden t of on e of th e banks involved i n t h e ap p l i ca t io n .

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X-7431

- 2 -

I t i s f e l t th at th ese contain sev era l fe at ur es which might

well

b e

adopted

i n a

rev is ion

of the

Board's printed forms.

The Board would appreciate your suggestions f o r t h e

improvement o f t he printed forms and any comments which you

may

d es i r e

t o

make regarding

t h e

procedure

t o be

followed

i n assembling and p resen t ing t h e re levan t f ac t s .

Very truly yours,

Chester Morrill,

Secretary.

Inclosures .

TO ALL T . R . AGENTS EXCEPT DALLAS.

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X-7431-a

RECOMMENDATION ON CLA.YTON ACT APPLICATION

(Name

of

Applicant)

FOE

PERMISSION

OF THE

FEDERAL

EE

SERVE BOARD

TO

SEEVE

AS •

DIRECTOR, (Bank

No. 1)

DIRECTOR, (Bank No. 2)

The distance between the two banks i s approximately s i x miles,

t h e (Bank No. 1) being lo ca te d i n t h e southern part of the City of

(_ ) i

while

t h e

(Bank

No. 2) i s

located

i n t h e

center

of the

down-torm financial and r e t a i l shopping se ct i on. Prior to the

extension

o f t h e

corporate l imits

o f the

City

of ( ) ,

about

s i x

years

a g o , t h e

v i l l a g e

of ( ) , i n

which

t h e

(Bank

No. 1)

i s

loca ted ,

was an

inc orp ora te d town. With

t h e

growth

of ( )

certain suburbs were taken into

t h e

City

of ( ) . The

pr incipal

business

o f the

(Bank

No. 1) i s

t h a t

of

re ta i l merchants

i n ( ) ,

accounts

of

employes

o f the

indust r ia l p lan ts located ad jacen t

to the

( )

ship channel, truck growers,

and

small farmers.

I t i s

the ref ore ent i r el y di ff er en t from that handled

b y t h e

(Bank

No. 2 ) .

The

distance between

t h e

banks

and

d i f f e r e n c e

i n

c l a s s

o f c u s -

tomers served would eliminate t h e question of t he ir being na tur al

competi tors .

The att ach ed statement of facts shows that Mr. ( ) h as

been a d i rec to r o f the (Bank No . 1 ) f o r eight years, owning, however,

only a small number of shares of stock i n that bank. He ha s regu la r -

l y attended meetings of the Board of Directors o f the (Bank No. 1)

and

served

o n t h e

discount

and

examining commit tees. This co nt ac t

enables

him to be in

very close touch with

t h e

a f f a i r s

of the

i n s t i t u t i o n .

M r. ( )

does

n o t

unduly rid e ei th er bank through borrow-

ings , d i rec t o r i n d i r e c t , and he does not own enough stock i n ei ther

t o permit an y domination or cont ro l of the management.

I t i s the re f o re f e l t tha t h i s service would b e e n t i r e l y com-

pa t ib l e wi th t h e pub l i c i n t e res t and favorab le ac t ion on the a p p l i -

ca t ion

i s

recommended.

(Signed)

C. C.

Walsh

Federal Reserve Agent

Federal Reserve Bank

of

Dallas

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204

X-7431-b

Statement of f a c t s i n r e app l ica t ion of

(Name of Applicant)

f o r

permission

of the

Federal Reserve Board,

under

t h e

provis ions

of the

Clayton

A c t , t o

serve

a s

DIRECTOR, (Bank No. 1)

DIRECTOR, (Bank Ho. 2)

Character

of

management

of the

banks in vo lved

i n t h e

app l ica t ion

( a ) (Bank No. 1)

(b ) (Bank No. 2)

The

charac ter

of

management

of

both banks

i s

f i r s t c l a s s ,

and

t h e i r a f f a i r s

a r e

capably handled.

The Managing Director of th e ( ) Branch, Federal R e-

serve Bank of Dallas, makes t h e following comment: We have

a

high regard

f o r t h e

management

of

both

of

these banking

i n s t i t u t i o n s .

We

th ink

i t

s a f e

and

e f f i c i e n t .

Character

of the

service rendered

by th e

applicant

(a) The appl icant was e lec ted a d i r e c t o r o f t he (Bank No . 2)

on

February

14 , 1933 , and has

attended

one

di rec tors ' meet ing

s ince

h i s

e lec t ion .

He has

been

a

d i r e c t o r

of the

(Bank

No. 1)

s ince Apr i l

6 ,

1925 , and has been absent a t only one directors ' meeting during

t h e pas t tw o yea rs . He ha s served on t he discount and examining

committees o f t he (Bank No . 1 ) .

( b )

There

i s no

evidence that

he

dominates

t h e

banks with which

h e i s

connected.

( c ) A t t he present time Mr. ( ) i s d i rec t ly indeb ted t o

t h e (Bank No . 1 ) fo r $3,130. He i s no t a frequent borrower and

h a s never been directly o r ind i rec t ly indeb ted t o t h e (Bank No . 2 ) .

(d) The

appl icant

n a s

e lec ted

a

d i r e c t o r

o f t h e

(Bank

No. 2) on

February

14 , 1933 , and has

attended

one

meeting

o f t he

d i rec to rs

of

t h a t i n s t i t u t i o n s i n c e

h i s

e lec t ion .

He ha s

been absent

a t

only

one

meeting

o f t he

d i r e c t o r s

of the

(Bank

No. 1)

during

t h e

pas t tw o years .

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X-74S1-T3

L

—2—

3 . Condition o f t he banks in vo lved

( a ) (Bank Ho. 1)

This hank

was

last examined

on

November

10 , 193 2. The

examiner makes

t h e

following comment;

The

l i t t l e bank

i s

ahout paying expenses,

h u t

ent i re ly solvent

an d i t i s b e -

l ieved

t h e

general character

o f i t s

as se t s

a r e

sound.

(Bank

No. 3)

This bank was last examined on August 30 , 193 2. The

examiner makes

t h e

following comment:

A

conservatively

managed bank.

The

c l a s s i f i c a t i o n

of i t s

assets does

n o t

show excessive

ra t ios sub jec t

t o

c r i t i c i s m .

Net

deprec ia t ion

i n

bonds

and

s e c u r i t i e s

of

$331,622,

i s

amply provided

f o r

with

t h e

bank's

la rge surplus , undivided prof i t s

and

reserve accounts .

(b )

Since th ere

i s no

common ownership

of

stock

o f

e i ther

bank, i t i s n o t believed their condition would b e a f f e c t e d by

a n in t er lo ckin g di re c t or a t e . Only one other d i rec tor of

either bank

i s a

d i rec to r

of

another bank.

4 . general banking s i tu at io n

(a) The local banks i n ( ) compete f o r a l l c la s ses of

bus ines s , b u t based on the information developed t h e competi-

(b ) t i o n between them i s f r i e n d l y and no t d e s t ru c t i v e o r une th ica l .

(c) The

banks affected

a r e n o t

under common ownership,

o r

control .

( d )

There

a r e

f i v e d i r e c t o r s

of the

(Bank

Mo. 1) two of

whom

(inc luding

t h e

app l ican t )

a r e

d i r e c t o r s

i n

other banks.

There

a r e

twenty-s ix d i rec tors

of the

(Bank

Mo. 2 ) , two

of

whom (including applicant)

a r e

d i r e c t o r s

i n

other banks.

( e ) There a r e f i f t e en banks i n t h e City of ( ) .

( f ) Mone of them a r e i n a chain or group banking system.

(g) The app l ica t ion has no t resulted from a s i t u a t i o n i n

which

one

bank

h a s

a s s i s t e d

i n t h e

r e c a p i t a l i z a t i o n

o r r e -

organiza t ion

of

another bank.

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0 6

X-7431-b

- 3 -

5. The

management

of

neither bank needs strengthening

i n

man-power

or

f i n a n c i a l l y .

6 . M r. ( ) owns 10 shares , or 2 pe r cent of t he cap i ta l s tock of

t h e

(Bank

Ho. 1 ) , and 50

shares ,

o r l / 2 o f 1 p e r

cen t ,

of t he

capi ta l

s tock

of the

(Bank

No. 2 ) .

7 . The reasons why M r. ( ) des i r es t o serve a s a d i r e c t o r of the

(Bank

No. 1) an d

(Bank

Ho. 2) a re

s t a t ed

i n h i s

l e t t e r

t o

Assis tan t

Federal Reserve Agent Hall, dated April

1 4 ,

a t tached .

(Hote:

The

le t te r f rom

t h e

ap p l i can t , r e f e r r ed

to in Ho. 7

above,

i s n o t

inc losed ,

but i t was i n

response

t o t h e

a t tached le t te r

addressed to one of the banks involved b y t h e o f f i c e of the Federal

Reserve Agent.)

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2 7

X-7431-c

FEDERAL RESERVE BAHK

OF

DALLAS

February 17, 1933

Mr. ( ) ,

President

(Bank

No. 1)

( »)

Texas,

Dear M r. ( _):

Your letter

of

February

15 ,

addressed

t o ou r ( )

Branch,

h a s

been refer red

t o

t h i s o f f i c e

by

Cashier

( ) f o r

a t t e n t i o n .

I n

compliance with your request

I am

p leased

t o

enclose

form

9 4 ,

Application

f o r

permission

o f the

Federal Reserve Board

t o serve under t h e provis ions of the Clayton An ti t r us t A c t , a n d

copy of Regulation L , Ser ies of 1930, to which I direct your a t -

t en t ion t o Section I I , paragraph ( 3 ) .

The

Federal Reserve Board

h a s

recently announced that

i t

does

n o t

consider

a n

app l i ca t ion

of

this kind complete, unless

i t i s

accompanied

by a

statement

o f the

a p p l i c a n t ' s

own

reasons

why he

be l i eves

t h e

gran t ing

o f t h e

application would

n o t b e

incom-

pat ib le wi th t h e pub l i c i n t e re s t . Thi s i s espec ia l ly app l i cab le t o

cases wherein t h e applicant wishes t o serve a s a d i r e c t o r of two or

more banks located i n t h e same city and competing f o r t h e same

general classes

of

busine ss . At ten t ion

i s

inv i t ed , t he re fo re ,

t o

paragraph

8 of the

ap pl ic at io n form which reads

a s

fol lows:

The appl ican t i s inv i t ed t o g ive , on a separate

sheet o r in a l e t t e r a t t ached here to , an y other informa-

tion which will tend t o prove that t h e issuance of the

permit applied f o r would no t be incompatible with t h e

publ ic in teres t .%

There

a r e

also enclosed forms

94a

which should

b e

f i l l e d

out by each o f the banks t h e applicant desires t o serve , an d accompanied

by a

copy

of the

repo r t

of

condit ion

o f the

bank

a s

shown

o n t h e

cal l

of December 31 , 193 2. The following information from each o f t h e banks

should also b e furn ished :

1 .

Length

of

time

t h e

appl ican t

h a s

been

a

d i rec to r

o f t h e

bank

2 . Amount of stoc k held i n t h e bank by applicant

3 . Record o f h i s at tendance a t d i r e c t o r s

1

meetings

f o r t h e p a s t tw o years

4 .

Reasons

why the

bank desires

t h e

appl ican t

t o

serve

a s a

member

o f i t s

Board

o f

Directors

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X-7431-C

—2**

5 .

Whether

the two

banks

a r e

considered natura l

com-

p e t i t o r s f o r a n y c l a s s of business

6 . I f

natura l compet i tors

f o r a n y

c l a s s

of

bus iness ,

would t h e a p p l i c a n t ' s s e r v i c e a s a d i r e c t o r of both

i n s t i t u t i o n s t e n d t o lessen such competition

7 .

dumber

of

d i r e c t o r s

i n

bank

who axe

a l s o d i r e c t o r s

i n other banks

8 .

Would

t h e

a p p l i c a n t ' s s e r v i c e

a s a

d i r e c t o r

of

both

i n s t i t u t i o n s b e incompatible with t h e p u b l i c i n t e r e s t ,

a s

def ined

i n t h e

Federal Reserve Board's Regulation

L ,

S e r i e s

o f 1930 ,

Sect ion

4 ,

paragraph

D ,

page

4

9 . H a s t h e applicant ever served a s a member of your

Executive, Discount ,

o r

Examining committees

I

1 0 . Would t h e genera l banking s i tua t ion i n be

s t rengthened

b y t h e

appl icant cont inuing

t o

serve

a s a d i r e c t o r o f t h e i n s t i t u t i o n

11. Any

o the r r e l evan t f ac t s ,

o r

op in ions ,

t h e

bank

d e s i r e s

t o

submit.

Upon receipt

o f t h e

appl ica t ion, proper ly executed

forms a n d suppor t ing data , t h e f i l e w i l l b e t r a n s m i t t e d t o t h e

Federal Reserve Board f o r i t s cons ide ra t ion .

Yours very truly,

(Signed) Ohas.

C.

Hall

Assistant Federal Reserve Agent

Documents

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