Colonel WOZENCRAFT. This chart states that—

33,000 shares of Oceanic Trading Co., Inc. (10 cents par), common stock out of 138,436.1 shares outstanding, and with December 31, 1944, book value of approximately $168,500, holds voting control of subsidiaries with assets of over $359,000,000.

The chart names Morris Plan Corp. of America, more than a score of banks in more than a dozen States, a number of fire and casualty insurance companies, finance companies, an oil company, and manufacturers of refrigerators, abrasives, electric heaters, office machines and equipment, et cetera, located in various States. Enlarged copies of this chart, which are more easily legible, can be obtained from the Virginia Bankers Association, Richmond, Va.

Mr. BALLINGER. May I ask you a question, Colonel?
Colonel WOZENCRAFT. Of course.

Mr. BALLINGER. Who owns this top holding company on the chart? Colonel WOZENCRAFT. You will find all of the information, sir, on the chart, if you will refer to it.

Mr. BALLINGER. But who are these people? Do you know? The chart does not explain that, as I see it.

Colonel WOZENCRAFT. Ellery C. Huntington appeared before the Banking and Currency Committee of the Senate at the time when there were hearings on S. 829, during the last session of Congress. I think, sir, that more complete information than I can give you can be obtained from that testimony.

Mr. BALLINGER. And the same as to Mr. David M. Milton?

Colonel WOZENCRAFT. I do not remember whether Mr. Milton was present at those hearings, or whether information concerning him was put in the record. I have no information as to that.

Mr. BALLINGER. The printing on the chart is so fine, here. Does this mean that Ellery C. Huntington and David M. Milton are the principal stockholders of the Oceanic Trading Co.?

Colonel WOZENCRAFT. As I understand the language, sir, the chart states that these two gentlemen own 33,000 shares of Oceanic Trading Co. stock, which, according to the chart, and I am quoting from it, "holds voting control of subsidiaries with assets of over $359,000,000.” I have no information about it except what appears from this chart published in the American Banker.

Mr. BALLINGER. These are American citizens, of course, are they not? Colonel WOZENCRAFT. I am quite confident that they are.

I think, sir, that the matter of this corporation was gone into quite fully by the Virginia Bankers Association in connection with some legislation which was before the Virginia State Legislature a year or two ago; and I think that you would prefer to get from the Virginia Bankers Association the information which they developed at that time. I really have no information except that which was put into the record at the hearing before the Senate committee, and this chart; and I am confining my statement about this holding company to what appears in the chart published in the American Banker.

Mr. BALLINGER. It will probably have also the history of the company, how it originated, and maneuvered.

Colonel WOZENCRAFT. I would assume, sir, that they would have rather full information about it, but I really do not know.

Mr. BALLINGER. I think we ought to obtain that, Mr. Chairman, and try to get it in as part of the record, to see how this was put together. Colonel WOZENCRAFT. By comparison, of course, this is a relatively small bank holding company. I would like to direct your attention now to a very big one-Transamerica Corp. with aggregate resources reported at $7,385,000,000 at the beginning of 1948 (American Banker for September 8, 1948). I would like to submit for the record the annual report of Transamerica Corp. for 1947.

Mr. BALLINGER. May we make it part of the record, Mr. Chairman? Mr. STEVENSON. It will be made part of the record. It is so ordered. (The annual report of Transamerica Corp. for 1947 is as follows:)

ANNUAL REPORT OF THE TRANSAMERICA CORPORATION FOR 1947

TRANSAMERICA CORPORATION

[Incorporated under the laws of Delaware]

Montgomery Street at Columbus Avenue, San Francisco 11, California

Board of directors.-A. P. Giannini, Chairman, Judge Russ Avery, P. A. Bricca, Jas. F. Cavagnaro, Geo. J. DeMartini, L. M. Giannini, Gordon Gray, William N. Lagomarsino, Sam H. Husbands, A. P. Jacobs, E. D. Woodruff.

Officers.-A. P. Giannini, Chairman of the Board; Sam H. Husbands, Executive Vice President; Jas. F. Cavagnaro, Senior Vice President; W. L. Andrews, Vice President and Treasurer; A. Fenton, Vice President; G. M. McClerkin, Vice President; A. L. Elliott Ponsford, Secretary and Assistant Treasurer; J. A. Smith, Assistant Secretary and Assistant Treasurer; W. J. Wells, Assistant Secretary and Assistant Treasurer; J. Franceschi, Assistant Secretary; P. Gaulette, Assistant Secretary; Albert E. Heston, Assistant Secretary; Malcolm P. McLellan, Assistant Secretary.

Executive committee-P. A. Bricca, Geo. J. DeMartini, L. M. Giannini, A. P. Jacobs, E. D. Woodruff.

Transfer agents.-City Bank Farmers Trust Company, New York; Bank of America N. T. & S. A., San Francisco.

Registrars.-The Chase National Bank of the City of New York; Crocker First National Bank of San Francisco.

ANNUAL REPORT TO STOCKHOLDERS, 1947

TO THE SHAREHOLDERS:

SAN FRANCISCO, CALIFORNIA, March 9, 1948.

Transamerica Corporation's diversified activities followed the trend of changing conditions in 1947, a year characterized by prolonged postwar uncertainties, and operating results on the whole were good. Transamerica's banks loaned more money and increased their revenues from that expanded volume. Their investments in U. S. Government securities declined. With higher operating costs, more interest on rising savings deposits and lowered income from security investments, combined net earnings of our banks tapered off moderately.

Our three insurance companies wrote considerably more business than in 1946. They absorbed the initial cost of writing this insurance and, as the policies become seasoned, future earnings will be benefited by income from further premiums and amounts now carried in premium reserves. Property sales by our real estate subsidiary were considerably less and, in consequence, profits were lower than in the preceding year. Oil development made favorable progress in domestic operations, while preliminary Philippine explorations remained incon

clusive. Our property finance company consolidated the rapid growth of the preceding year and reported increased profit. In the industrial field, combined operating profits advanced.

NET PROFIT AND DIVIDENDS

Consolidated net profit of Transamerica Corporation for 1947 was $13,768,431.74, or $1.38 a share on the 9,933,748 shares of stock outstanding at the end of the year. The 1946 net profit was $15,574,556.48, or $1.57 a share. Neither year's profit included our equity in undistributed earnings of Bank of America N. T. & S. A., The National City Bank of New York, or any other corporation of which Transamerica owns less than a majority interest.

Your corporation paid $7,947,759 in cash dividends during 1947, or 80 cents a share, the same as was paid in 1946. Two semiannual dividends of 40 cents a share were paid, each consisting of the usual dividend of 25 cents and a special dividend of 15 cents.

*

There was little change in the general distribution of assets and liabilities of Transamerica Corporation during the year. At December 31, 1947, the corporation carried investments in domestic subsidiaries on its books at $67,066,481; the adjusted book net asset value of these subsidiaries aggregated $115,951,423, indicating additional book value of $48,884,942.

Other security investments had a carrying value of $60,470,133. However, the aggregate market value at quoted prices of those investments at the end of the year was $95,508,074, reflecting appreciation of $35,037,941.

At the 1947 year end, Transamerica Corporation owned a majority interest in 44 domestic banks which operated 127 banking offices in California, Oregon, Nevada, Arizona, and Washington. Its investment in these 44 banks aggregated $23,856,026. However, its equity in the total capital funds of the banks amounted to $47,142,227.

Notwithstanding the decline in War Loan deposits that began in 1946 and continued through 1947, total deposits of the Transamerica banks registered an increase for the year, rising from $1,219,705,647 to $1,225,178,432. Investments in Government securities declined from $627,537,708 to $566,278,675, as the banks revised their bond investments to meet a rising demand for loans. With higher prices for inventories, increased costs and expanding operations, business sought more bank credit than formerly with the result that, at the close of 1947, the Transamerica banks had loans of $338,335,633, an increase of $65,060,974 over the total of $273,274,659 a year earlier. Net profits for the 44 controlled banks amounted to $7,455,034 in comparison with $8,239,512 for 1946.

During 1947, the Transamercia banks established six additional branches: three were opened by The First National Bank of Portland, and one each by Central Bank, Oakland, First National Bank of Nevada and First National Bank of Arizona. The First National Bank of Portland's total deposits climbed to $518,449,427, a gain of $7,049,197, notwithstanding a decline of $7,315,249 in Government deposits. First National Bank of Nevada reported an exceptional expansion in its loan volume. Loans and discounts of $33,635,427 at December 31, 1947 were 36 percent above the preceding year's total. First National Bank of Arizona also had an outstanding increase in loans. In order to place it in a better position to serve the banking needs of rapidly growing Arizona, it has recently increased its capital funds by $1,375,000 through the sale and issuance of 55,000 additional shares of capital stock.

Deposits of Banca d'America e d'Italia grew rapidly, partly because of the inflation of currency in Italy, and partly because of advantages of the bank's American ownership and its reputation for sound and aggressive management. It rose to seventh in size among all nongovernment Italian banks, and is developing faster than most leading banks in that country while maintaining a high liquidity. Deposits, which tended to level off in the latter part of the year, were 61 per cent greater at December 31, 1947, than at the close of 1946; in the same period, loans increased 56 per cent.

NONAFFILIATED BANKS

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, in which the Transamerica group has a 22.54 per cent stock interest, continues to hold its position as the world's largest bank. Its total resources of $5,845,817,669 at the end of 1947 were $80,292,477 higher than at the end of 1946. Deposits of $5,467,199,162 exceeded the previous year end total by $51,349,447. Loans rose $770,236,226 to $2,492,979, 739 for the year.

From the earnings standpoint, the bank experienced its best year to date. Net profits available for dividends were $39,590,534, equaling $4.64 a share on 8,531,710 shares outstanding, compared with $28,962,744, or $3.39 a share in 1946. In addition to regular semiannual payments of $1.00, an extra dividend of 25 cents a share was paid in December 1947, making $2.25 for the year, which compares with $2.00 a share paid in 1946. Dividend distributions totaled $19,196,348 in 1947, against $17,063,043 the year before.

At the end of 1947, total capital funds were $261,690,893, an increase of $20,394,186 for the year. The net unallocated "Reserve for Possible Loan Losses," provided from earnings and applicable against any loan losses that may develop in future years, increased from $31,115,509 to $37,046,609 during 1947.

THE NATIONAL CITY BANK OF NEW YORK and the City Bank Farmers Trust Company reported combined earnings, before reserve adjustments of $22,493,382 or $3.63 a share, compared with $22,788,344 or $3.67 a share in 1946. Dividends declared in 1947 amounted to $9,920,000, or $1.60 a share, the same as in 1946.

After adjustments to reserves and transfer of $10,000,000 to surplus, the undivided profits of the two institutions increased $1,099,907 during 1947 and totaled $38,731,541 at December 31, 1947. The capital, surplus and undivided profits of the two banks aggregated $298,731,541 at the end of 1947, compared with $287,631,634 a year earlier.

CITIZENS NATIONAL TRUST & SAVINGS BANK OF LOS ANGELES reported increases in deposits and loans for the year. Deposits rose to $349,146,810 from $344,752,495 and loans advanced to $61,430,942 from $55,409,904. Net income for the year amounted to $1,142,552, or $4.57 a share. For 1946, the bank reported net income of $1,905,075, or $7.62 a share, with large recoveries from loans charged off in prior years contributing materially to the total. Transamerica Corporation and subsidiaries have a 23.57 per cent stock interest in this bank.

REAL ESTATE, OIL INTERESTS, AND PROPERTY FINANCING

Under these activities are included two important wholly-owned subsidiaries: Capital Company and Allied Building Credits, Inc. The carrying value of these investments by Transamerica Corporation totaled $25,119,637; their adjusted book net worth at December 31, 1947, was $31,916,549; this amount does not take into consideration the enhancement in value of Capital Company's real estate holdings and its oil, gas, and mineral interests.

CAPITAL COMPANY further reduced its holdings of city and farm real estate by selling 30 properties during the year. The dollar value of sales aggregated $991,800, compared with $7,471,280 for 1946. The company added to its holdings of Bank of America N. T. & S. A. stock by the acquisition of 35,000 additional shares from Transamerica Corporation. It has also acquired approximately $7,800,000 of mortgage loans developed by Allied Building Credits, Inc.

Net property income, including management fees, for the year totaled $1,305,933. Real estate sales produced net profit of $441,819. Oil and gas production and development forged ahead steadily. From expanded production and higher prices, gross income from oil, gas, and mineral operations advanced to $712,262 in 1947, from $496,689 in 1946.

The company's net profit for 1947 was $1,143,586. The preceding year's net was $2,308,787, which included $1,917,155 more profit from sales of real estate.

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