STATEMENT OF THE CHAIRMAN

There were 85 Senate bills, 8 House bills, 2 House joint resolutions, 7 Senate resolutions, and 9 nominations referred to the committee. Of these, 24 bills and resolutions and 9 nominations were reported to the Senate. The Senate acted favorably on the 24 measures and 9 nominations which were reported by the committee.

The recorded activities of the committee are covered in the summary which follows. The summary includes an account of all bills and resolutions acted upon by the committee either through hearings or reports.

A. WILLIS ROBERTSON.

V

SUMMARY OF ACTIVITIES

Bills and resolutions reported by Senate Banking and Currency Committee, 86th

SPECIAL REPORTS OF SENATE BANKING AND CURRENCY COMMITTEE FOR THE 1ST SESSION, 86TH CONGRESS

"Section-by-Section Analysis of the Provisions of S. 57" (committee print). "Report on Review of Voluntary Agreements Program-Mercury Industry," submitted by the Attorney General, February 18, 1959 (committee print). "Report on Review of Voluntary Agreements Program-Book and Magazine Paper," submitted by the Attorney General, May 29, 1959 (committee print). "List of Publications 83d to 85th Congresses, June 1, 1959" (committee print). "Section-by-Section Summary of the Provisions of S. 57, as Agreed to in Conference" (committee print).

BANKING LEGISLATION

BANK MERGERS

[S. 1062]

To amend the Federal Deposit Insurance Act to provide safeguards against mergers and consolidations of banks which might lessen competition unduly or tend unduly to create a monopoly in the field of banking

HISTORY OF LEGISLATION

S. 1062 was introduced on February 16, 1959, by Senator Robertson (for himself, Senator Fulbright, and Senator Capehart). Public hearings were held on March 18 and 19, 1959. It was reported to the Senate by Senator Robertson on April 17, 1959, with an amendment (S. Rept. No. 196). S. 1062 was passed by the Senate on May 14, 1959, with a further amendment. It was referred to the Committee on Banking and Currency of the House of Representatives on May 18, 1959.

DIGEST OF BILL

S. 1062 would amend section 18(c) of the Federal Deposit Insurance Act to require that all asset acquisitions by insured banks through mergers, consolidations, or assumption of liabilities must have the prior written consent of (1) the Comptroller of the Currency if the acquiring or resulting bank is a national bank or a district bank; (2) the Board of Governors of the Federal Reserve System if the acquiring or resulting bank is a State member bank; or (3) the Federal Deposit Insurance Corporation if the acquiring or resulting bank is a nonmember insured State bank.

In granting or withholding consent to such transactions, the Federal agency involved would be required to consider the banking factors enumerated in section 6 of the Federal Deposit Insurance Act-the financial history and condition of the bank, the adequacy of its capital structure, its future earnings prospects, the general character of its management, the convenience and needs of the community to be served by the bank, and whether or not its corporate powers are consistent with the purposes of that act. In addition to these banking factors, the bill would require the banking agency to consider whether the effect of the merger might be to lessen competition unduly or to tend unduly to create a monopoly. In the interest of achieving uniform application of the standards, the banking agency having jurisdiction would be required to consult with the other two banking agencies on the competitive and monopolistic aspects of each acquisition. The original bill authorized, but did not require, the banking agencies to request the views of the Attorney General on the competitive and monopolistic aspects of the acquisition. The committee amended this provision so as to require the banking agency considering the application to obtain a report from the Attorney General on the

competitive factors. The Attorney General would be required to furnish this report within 30 days, except that in case of emergency the period could be shortened to 10 days, and except that the agency might act without obtaining a report from the Attorney General, if it finds this necessary to prevent the probable failure of one of the merging banks.

The Senate further amended the bill as reported so as to require the banking agencies to submit to Congress a semiannual report with respect to mergers approved by it, giving among other things information about the reports submitted by the Attorney General.

S. 1062 as introduced was the same as section 23 of title III of the Financial Institutions Act of 1957 (S. 1451, 85th Cong.).

MEMBER BANK RESERVE REQUIREMENTS

[S. 1120]

[Public Law 86-114, approved July 28, 1959]

To amend the National Bank Act and the Federal Reserve Act with respect to the reserves required to be maintained by member banks of the Federal Reserve System against deposits and to eliminate the classification "central reserve city"

HISTORY OF LEGISLATION

S. 1120 was introduced on February 19, 1959, by Senator Robertson (for himself, Senator Fulbright, and Senator Capehart). Public hearings were held on March 23 and 24, 1959. The bill was reported to the Senate by Senator Robertson on April 17, 1959, with amendments (S. Rept. No. 195). It was passed by the Senate, with a further amendment, on May 13, 1959. Hearings were held on a comparable bill, H.R. 5237, by Subcommittee No. 2 of the Committee on Banking and Currency of the House of Representatives on April 7, 8, and 9, 1959. Representative Spence reported S. 1120, with an amendment, to the House on May 28, 1959 (H. Rept. No. 403). S. 1120 was passed by the House on July 1, 1959. On July 2, 1959, the Senate asked for a conference and appointed conferees. On July 7, 1959, the House agreed to a conference and appointed conferees. Following the meeting of the conference committee, a report was filed on July 13, 1959 (H. Rept. No. 651). On July 14, 1959, the House agreed to the conference report. The Senate agreed to the conference report on July 15, 1959. The report was approved by the President on July 28, 1959, becoming Public Law 86-114.

DIGEST OF STATUTE

Under the Federal Reserve Act banks which are members of the Federal Reserve System, including national banks, have been required to maintain with the appropriate Federal Reserve banks certain reserves, based upon the deposits in the member banks. The proportion of reserves to deposits varies according to whether the deposit is a time deposit or a demand deposit and also according to the classification of the bank as a central reserve city bank, as a reserve city bank, or as a country bank.

Up to 1933 the reserve requirements were specified in the law. Under temporary legislation in 1933, which was made permanent in 1935, the Federal Reserve Board was given authority to vary member

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