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because they say we don't need another bank here," or the bank around the corner is objecting because they think you are bad people.

They are never given an opportunity to meet those objections.

I think maybe you are doing it. But it was not done under prior Comptrollers.

Mr. Saxon. Mr. Chairman, primarily these are people in the same community-a group of citizens organizing under law and submitting an application.

By and large they are known to each other, and known well in business and banking circles.

They know sooner or later this matter is going to be disposed of. They don't want to get into an acrimonious fight which will carry over for years and affect their relationships.

They protest many of these violently, with the utmost strength. But they would rather not expose this for the matter of making this community living. These are considerations which are of some importance, and which I feel we must honor in these people.

We find that in 99 percent-more than that—99 percent of the cases, while the disposition back and forth in these matters, hearing this one, that one, reading the reams of material—when the decision is finally made, in all but rare cases, that is the—it is over, that is the way the ball bounces, and they go ahead.

But I would hesitate to impose any procedure, administrative or otherwise on these people, which could have results, damaging results, which otherwise don't occur.

We don't see this in most of the communities of the country, where a charter application has been disposed of.

In Maryland, the District of Columbia, wherever it is. They say, “That is it, we made a struggle.”

Now, there was a good suggestion made to us, to one of my associates, by Mr. Patman, that we give-as we do in all merger cases now, in charter cases, we announce all these, including the names of the organizers, the amount of capital—that we also include the reasons, some discussion.

I think this is a good suggestion. We are considering this now.

I don't think we start on the basis here that everything is necessarily perfect in government or in business.

I have worked in large corporations. It is a good thing there is one chief executive officer to organize these things. There has to be one person who defines the line. And it may not be the most sophisticated procedure—but it works effectively.

And similarly in Government-I would be the last to claim that this is the most perfect setup. But we are working at it constantly to im

And the problems we face, and the new ones are arriving each day.

I think the essential question is to insure-I think I have been working at it very hard, and we have a highly efficient, highly competent, hard driving staff that moves matters to the best of their ability, and with maximum expedition.

And this is one of the great weaknesses of Government, which has not been touched on here at all.

Take this Nebraska case. It is a little bank holding company in Nebraska, which was pending in the Federal Reserve Board for a

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year, 1 solid year—or the First Florida case, which is more than 8 months.

Now, in both those cases there was ultimate rejection. What has happened? Business people, existing business people, in the interests of furthering their business as they saw fit, sought to propose certain new avenues for their expansion, for their growth.

When they are turned down, they suffer what they regard as a serious penalty.

If that is disposed of promptly, they can take an alternative course, if they see fit.

But if they are turned down, and additionally this turn down comes after a period of 8 months or a year or a year and a half or 2 years, they have not only suffered the initial penalty of a denial, but also potentially the serious penalty of having been denied in the intervening course the choice of an alternative.

And I think this is bad Government-this is Government at its worst.

One of the most formidable problems is that of expediting applications—however difficult the question is for an agency, whether it is ours or any other—the most effective and expeditious disposition of the matter that is before it consistent with adequate consideration, intensive consideration.

Delay in itself—and this is one of the most adhorred aspects of Government to me, is the great delay, the dilatory machinery involved here.

And I find this almost universally acclaimed throughout the country--this office, in its efforts to move the material. However tough they are, to decide them. And may I just add that the cases don't get easier merely by deferring decision. They get tougher.

But this is a recognition of the right of the business people, particularly those regulated, to know as promptly as possible what the answer is, so they can move, and not sit in an uncertain state indefinitely:

I think it is definitely detrimental to business.

Mr. MULTER. I think what you have just said points up the necessity of this committee doing something with reference to mergers, because as of now you call on the Department of Justice for an advisory opinion, they give it to you--they don't like what you want to do, you then go ahead and approve the merger, and they then taka the matter to the court.

While I wouldn't take away the right of the Department of Justice to bring its antitrust suits, I think this is an industry that requires these things to be resolved if possible in advance, and to keep them out of court, if possible.

Certainly we ought not to be finding ourselves in a position where after you have considered all the opinions and you do something, and a merger is accomplished, then anti-trust takes the matter to court and may then cause a dissolution of exactly what you caused to be merged.

I think we ought to have some recommendations as to how we can handle that kind of a situation.

I think the banking industry is one industry we ought to try to keep out of the courts to the utmost.


I think it is one that is so dependent on public confidence, the less we have of banks in the courts the better, whether it be between banks or between the various agencies of Government and the banks.

How do we handle that?

Mr. ST GERMAIN. Mr. Chairman—what the chairman has just said about keeping the banking industry out of courts I think is a bit in conflict with what he was proposing earlier, upon the original applications and confrontations and an open proceeding, which essentially, as the Comptroller pointed out, would make him no longer an administrator, but a member of the judiciary, because he would then be engaging in judicial proceedings.

So that I certainly feel that-and this idea of, well, if we put it into the courts, then these people will be reluctant to come before him-put it on a judicial system, the people would be more reluctant to state their objections openly, where they would be disposed to the public.

And on the other hand the gentleman says, well, were we to do this, very few people—excuse me.

On the one hand were this procedure to be followed, a great many people would not come in.

On the other hand, it is stated these people should be allowed to come in.

I certainly in my own humble opinion feel that we should retain the present system, and not go to a judicial system in deciding on charters or branches or mergers-stay out of the courts, as the chairman just said, as much as possible.

I also compliment the gentleman, the Comptroller, on what he has just said about handling matters expeditiously.

The constant hue and cry against Government today is the redtape. And I think that we could sum up what he has said by saying that justice delayed is justice denied.

By handling these matters as expeditiously as possible, all parties are being given a fairer decision.

Mr. HANNA. Mr. Chairman, if the gentleman would yield, I would like to clear up two points.

No. 1, I thought that the chairman's suggestion included the possibility which I think can be set aside from the discussion that you had about the opposing banks.

The suggestion that the supervisors of the States be made a party to the applications of the Federal charters, and that you be made a party to the applications for the State charters, as a real means for getting direct communications on these matters.

And I think that the argument that prevails insofar as opposing banks are concerned does not prevail in that particular suggestion.

And I wondered what your direct testimony was about that.

Mr. MULTER. Before you answer that, may Ï emphasize that I am not suggesting that they be mandatorily made a part of it—that it would be their choice.

The Comptroller's choice, if he wants to join a State proceeding, or the State supervisory authorities' choice if they want to join a proceeding before the Comptroller or one of the other agencies.

Mr. HANNA. If I understand your suggestion it makes two things possible,


First of all, it gives a direct communication of what is going on. And secondly, it gives a choice of being present or not being present.

And I would add to this one other suggestion-insofar as using this matter of appeals as a dilatory factor. We might use something that has been used in other quasi-judicial determinations because I don't think you can get away from the fact that when you have a hearing, or a determination like this, it is a quasi-judicial function.

That you could grant or make the determination as you desire subject to review if the courts demand that on the basis of their finding it was not appropriate. So, therefore, the man that goes in with the appeal has to do it on the strength of his case, rather than on a purely dilatory approach. And we have run those safeguards into other laws. So, I would suggest that we consider it in view of these two approaches.

First of all, to make the party applicable only in the two instances of yourself in the State and the State on the Federal, for the two


One, to give the direct communication of what is going on, and two, to give the choice of whether they wish it or not.

Mr. Saxon. I don't understand, Mr. Hanna, what legally you intend to signify by use of the term “party” and the use of the term “proceeding."

Mr. HANNA. Well, let's say where you have a hearing—and I understand that in your previous testimony we went through this, and you indicated to me, as I recalled the testimony–we have three steps.

The first step, insofar as your consideration of Federal charters is concerned-your first step was to send the fieldman into the local area, and he made his investigation and a recommendation, which then went to the area office.

Then I thought your testimony to me was that not infrequently a hearing was held, when it got to the area office.

Mr. Saxon. That is correct.

Mr. HANNA. Now that is what I was thinking of in terms of maybe the technical idea of party in the sense of a pure judicial proceeding is maybe not appropriate.

But the result would be the same. In other words, he would get a notice, because he would be considered as a person who would have a right to appear-a right to appear-and that he would be notified if he wished to exercise that right and would then appear.

Mr. Saxon. This is in effect what happens today, in the States with which we reciprocally exchange information. There is notification, opportunity to present views on the part of the Commissioner or any other party affected.

This is not generally accepted by commissioners, who seldom appear on cases, on the grounds that these are private parties involved here in conflict, which is the essential question here--two competing groups of private citizens seeking a facility or some other grant.

The problem here is a conflict between public and private authorityto what extent public power should be granted to private parties.

I find in my experience here that the bank commissioners generallyI would be most reluctant to appear in any State proceeding.

I would seriously question the appropriateness of this-any more for example, the state authorities here quite properly appear before Congress ters affecting commercial banking legislation.


In the history of the Office, I don't know a case where a Federal Comptroller of the Currency has appeared before any State legislative body, although certainly many of the proposals before the State legislative bodies concern the national banks.

But I just cannot conceive of this Office going down to appear in a proceeding before the State banking commissioner in Texas or in New York.

This is a matter committed by law to the authority and discretion of these people.

I have to assume, and do, that this is being exercised in good faith, and with maximum capacity. I may take different judgments on the ultimate decision made as many of you might in similar circumstances. But these are human judgments.

Mr. MULTER. May I interrupt you to say that the last joint banking hearings in the State of New York, Joint Committee of the Assembly and the State Senate of the State of New York-one of their recommendations was in connection with what they should do-on their State level-to invite before that committee the Federal authorities, such as the Comptroller of the Currency and the like, to give their views on these very problems we are talking about, as they affect State laws, before they made a determination of what provisions they should make. They come in here and give us their opinions.

Mr. Saxon. Yes, that is true.

The basic question, though, is the so-called intrusion of the Federal power or reflection of that in any area.

On the whole, I would like to make one comment. On the whole, I think this structure works quite well-in view of the fact that we are here dealing—this is a decisionmaking office, that is not a policy office, it is a decisionmaking office.

On the whole, in view of the fact that several thousands of matters appear before our office and are handled in the course of a year's time, I think things go quite well indeed.

We are constantly improving the machinery, or trying to improve it.

But I think we tend, if I may express a frank comment on thisI thing we tend here to maximize, some of the testimony last week, in my opinion, clearly tended to maximize the differences and difficulties. On the whole, the thing works quite well, in my opinion, quite well. Mr. MULTER. What is all the shooting for? Mr. Saxon. Well, that is a good question.

And as I analyze that and look at it-after all, by no means all of the State suprevisors were here at all before this committee. I think this tends, unfortunately, to give an erroneous and inaccurate impression that the disposition of the public business in this area is generally fraught with such disharmony—I don't think this is the case.

Obviously, there are going to be conflicts in any decisionmaking process.

If it were not so, you could have a clerk to do the job, if they were self-resolving.

I think on the whole things work quite well.

Now, there are issues here. The big problems we have faced have not been in this area. It has been attempting to modernize this structure so the banks have the tools to do the job in the national interest,

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