official said there should be legislation to restrain expansion in the banking field beyond reasonable limits and also to restrain expansions into nonbanking fields and he indicated that he approved the definition of bank holding companies contained in my bill, which is similar to that in the Banking Act of 1933. The Federal Reserve Board went on record as unanimously approving the concept of bank holding legislation although one member of the Board disagreed with the others as to the proper approach. The majority of the Federal Reserve Board agreed with the theory of my bill, which is that bank holding companies are not undesirable in themselves and that they have served useful purposes, but there are certain abuses which should be dealt with. The Board and I also are in agreement that Federal regulation should be held to the minimum necessary to deal with actual needs and specific situations which cannot be adequately dealt with by the States. After studying the statement prepared by the Federal Reserve Board, dated June 8, and the summary presented to this committee on June 12, I decided that I could properly accept and incorporate in my bill practically all of the suggestions made by the Board as to amendments which would bring it into conformity with the Board's ideas. I therefore sent a letter to members of the committee indicating my intention to proposed these changes in S. 76. The substantive changes which these amendments would make in my bill are as follows: 1. The bill as amended vests authority in the Board of Governors of the Federal Reserve System to administer the act. 2. A new section 8 of the bill gives the Federal Reserve Board authority to obtain all necessary information through reports and examinations for the effective administration of the act. 3. The bill as amended is applicable to bank holding companies which control any bank. S. 76 now applies to bank holding companies which control insured banks. 4. The amendments delete the exemption now accorded to mutual savings banks. 5. Under the amendments mergers or consolidations of two or more bank holding companies are subject to regulation under the act. 6. The present section 4 of the bill is deleted by the amendments. That section limits the kind and quality of investment securities in which funds of a bank holding company may be invested. 7. The amendments further strengthen the rights of the States by adding a provision to prohibit the acquisition by any bank holding company of bank stocks in any State if in the same circumstances the acquisition of such stocks would be prohibited by the laws of that State. It is my hope that with these changes my bill will be acceptable to all the banking groups which endorsed the bill I sponsored in 1950 as well as the Government agencies concerned. Mine is a moderate approach, which should not be objectionable to any holding company group which does not intend to engage in the objectionable practices at which this legislation is aimed, namely, domination or monopolization of the commercial banking resources of a geographical region or tying unrelated types of business to banking operations in a way which is detrimental to the banking function. It may not go as far as is desired by some individual bankers who are opposed to the whole idea of holding companies and who want to see existing groups broken up, but I would remind them that there is little prospect of obtaining action on more extreme legislation any time in the near future and they would be better off backing a bill to deal with gross abuses, which can be passed, than to insist on something they cannot get. The CHAIRMAN. Unfortunately, we will have to recess now until 10 o'clock tomorrow morning. I want to apologize to you gentlemen, but it has worked out like that. If you want to come over to the floor of the Senate this afternoon, you can hear the debate on the rubber bill. I imagine many of you are interested in that. (Whereupon, at 12 o'clock noon, the committee recessed until 10 a. m., Wednesday, July 22, 1953.) BANK HOLDING LEGISLATION WEDNESDAY, JULY 22, 1953 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met, pursuant to recess, at 10:10 a. m., in room 301, Senate Office Building, Senator Homer E. Capehart, chairman, presiding. Present: Senator Capehart. The CHAIRMAN. The committee will please come to order. As you gentlemen possibly know, the Senate met at 10 o'clock this morning, and, under the Reorganization Act, committees cannot meet while the Senate is in session, excepting by unanimous consent of all Members of the Senate. Senator Morse is objecting and has objected to the meeting of any committees today. I asked unanimous consent that this committee meet and hear you gentlemen, and he objected to the request. He is objecting to unanimous-consent requests of all committees, so there will be no committee meetings today, no hearings, and the Senate will possibly be in session from 10 a. m. to 8, 9, or 10 o'clock tonight. Under the circumstances, since it is going to be impossible to report any bill or get any action on legislation pertaining to this subject this year, in all fairness to you gentlemen and in all fairness. to the proponents as well as the opponents of this legislation, I think that in the best interests of all we will recess these hearings until the early part of next year. At that time we will hold hearings and will give you gentlemen an opportunity to be heard. Even though we might be able to continue these hearings, and close them, by working catch-as-catch-can when we could get permission from the Senate to sit, I think it would be very unsatisfactory. In my opinion it would be very unfair to you gentlemen, and also would be very unfair to the proponents of the legislation. We would have a hearing that would spread out over possibly several days and maybe several weeks. The fact that we are recessing these hearings does not mean that we have lost interest in them. It does not mean that we will not again hold hearings and consider the legislation before us the early part of next year. I do not want anyone to interpret it in that light, because this matter as you gentlemen all know, has been kicking around here for many, many years. I think we ought to resolve the matter one way or the other. I am not saying which way. I have tried in the hearings to date to be fair with all witnesses and all sides, and I shall continue to do so. When the record is made we will be governed entirely by the facts and by the record and by no other reasons. I believe that both the oppo nents and the proponents of this legislation will agree that inasmuch as the House has not taken any action, there will be no opportunity for either the Senate or the House, to consider this legislation at this session. Therefore, I think in the best interests of everybody we ought to recess. I have spoken to a number of the individual members of this committee I have not spoken to all of them because I have not been able to get to them, but those that I have spoken with have been in hearty accord with the decision that I have made, namely to recess the hearings. Let me say this, if anybody wants to place anything in the record at this time it will be printed. We will print the testimony we had yesterday, and print any statements that anyone cares to insert at this time. The record that we made here some 2 months ago, or 6 weeks ago, and the testimony yesterday, and any further statements anybody wishes to place in the record today, will be made a part of the final record. We are not adjourning these hearings, we are simply recessing them subject to the further call of the chairman. In all fairness I think I should say to you gentlemen now that the hearings will be resumed again in January. Is there anybody that would like to object to that procedure? I see nothing else to do. If we do not do that, it means that you gentlemen will have to go sightseeing here today, and then, if the Senate should convene at 10 or 11 o'clock tomorrow you will have the same thing again. In any event we would be unable to hold hearings in the afternoon, because Senator Morse says he is going to object to that. We know the Senate is going to be in session every afternoon, which would mean we would be limited to 10 to 12 tomorrow and Friday, and we just cannot possibly get finished. I do not want anybody to misunderstand what we are doing now and conclude that we have lost interest in this matter, nor that this action means that either the proponents or the opponents have won a victory. They have not. Neither the proponents nor opponents have won any victory as a result of this decision. It is just brought about by a series of circumstances and events over which I have no control and over which the committee has no control. If any of these prepared statements that you have, you would like to have made a part of the record, you may do so. We will give you an opportunity to come back again and be heard in person, either with the same statement or with new statements. I mean you gentlemen may put anything you want in the record at this time. You be the judge of that, and let me say this: We will hold the record open until next Monday to give you an opportunity to have anything you desire placed in the record. That goes for the proponents of the legislation as well as the opponents. In other words, we will hold this record open until 6 o'clock next Monday, so that you can place anything you care to, any statement you care to, in the record. That means anybody, either for the bills or against the bills. When we resume hearings we will invite you back to appear in person, either with the same statement that you placed in the record at this time or with new statements. Are there any questions? Mr. JENKINS. E. O. Jenkins, First Bank Stock Corp. Would it be sufficient, Senator, any time up to the closing on Monday evening to hand what we wish to go into the record to the clerk? The CHAIRMAN. Hand it to the chief clerk, Mr. Dixon, and he will see it is printed in the record. That will be up to 6 o'clock on Monday. Both proponents and opponents will be given an opportunity, when we again resume hearings, to be heard and testify. I see nothing else to do, and I wish that no one would interpret this as in any way a victory for anybody. It just is not. It is simply that we have delayed this matter until the first of next year. I see nothing else to do. Thank you very, very much. Let me say this, that maybe between now and January, you gentlemen can all get together and reconcile your differences. I hope you can. (Whereupon, at 10: 20 a. m., the committee recessed subject to call of the Chair.) (The following was later received for the record :) Hon. HOMER E. CAPEHART, NORTHWEST BANCORPORATION, Chairman, Senate Committee on Banking and Currency, Senate Office Building, Washington, D. C. DEAR SENATOR CAPEHART: In view of the unexpected recess of the hearings on proposed bank holding company legislation, resulting from causes beyond the committee's control, and in view of your offer to receive statements for the record if filed by Monday, July 27, I have been asked by the companies listed below (most of whom were represented at the hearings and prepared to testify, in addition to Northwest Bancorporation, Shawmut Association, and Trust Company of Georgia, whose testimony is already in the record) to advise you that they do not intend to file further statements at this time, but will await the opportunity to file such statements and make personal appearance in opposition to the bills now before the committee so as to respond to the inquiries of the committee when the hearings are resumed. The companies above referred to are as follows: BancOhio Corp., Columbus, Ohio Baystate Corp., Boston, Mass. The Citizens and Southern Holding Co., Atlanta, Ga. First Bank Stock Corp., Minneapolis, Minn. First Security Corp., Ogden, Utah General Contract Corp., St. Louis, Mo. Marine Bancorporation, Seattle, Wash. Marine Midland Corp., Buffalo, N. Y. New Hampshire Bankshares, Inc., Nashua, N. H. Transamerica Corp., San Francisco, Calif. Trustees, First National Bank of Louisville, Louisville, Ky. Wisconsin Bank Shares Corp., Milwaukee, Wis. I would appreciate it if you would make this letter a part of the printed record. Respectfully yours, X J. CAMERON THOMSON. |