Chapter VIII BANKS Requests for the names of top stockholders and amounts J. P. Morgan & Co., reporting somewhat along the lines of holdings went from Senator Metcalf to the 50 largest of Chase Manhattan, but not in as much detail on an indibanks in 1970 based on assets. Twenty-four of the 50 de- vidual account basis, disclosed that 4,871,000 or 27 percent clined to provide any of the information requested, mostly of the 18,267,207 shares of the company were held by due to reasons of confidentiality. Frequently cited as the top 30 stockholders. These 30 stockholders consisted authority for not supplying the information were the of 17 nominees of 10 commercial banks, the nominees of National Banking Act (12 U.S.C. 484), and regulations of three insurance companies, a nominee of the Stock Clearthe Comptroller of the Currency (Ruling 7.6725), which ing Corporation (Cede & Company), two insurance limit the disclosure of bank records by banks to anyone companies, a stock exchange member firm, and five nomother than the Comptroller of the Currency except as inees of Morgan Guaranty Trust Company of New York, authorized by law. a wholly owned subsidiary of J. P. Morgan & Co., Inc. Nevertheless, nine banks did provide the information Charter New York Corporation indicated that the two requested, including three of the 10 largest banks in the largest holders of its shares were a nominee for a national United States which also happen to be three of the six-securities exchange (almost certainly Cede and Comlargest banks in New York City. Thus it would appear pany), with 300,433 or 4.1 percent of the total of 7,210,028 that there was, to say the least, considerable divergence of shares outstanding, and a bank nominee with 250,000 interpretation as to what barriers, real or imaginary, exist shares, about 3.4 percent. No other entity owned as much in providing the information requested. It may also be of as 100,000 shares or 1.4 percent of the total. interest to note that two of the nine fully reporting banks Wells Fargo of San Francisco reported along the same are in Dallas, Texas, where the county requires banks to pattern as Chase Manhattan. It indicated that the top file a certified list of shareholders which then becomes a 30 stockholders held 3,049,946 or 32.6 percent of the total matter of public record. of 9,287,040 outstanding shares, with the following breakdown: PARTIAL RESPONSES Eleven of the banks provided very limited information, Percent of information they believed might be helpful without at the Number of total stock shares same time being specific as to particular holdings. Thus outstanding the Bank of America, the largest bank in the United States, indicated that no shareholder held more than 6 percent of 21 bank nominees... 2, 399, 861 25. 8 4 insurance companies. the 69,003,590 outstanding shares, with the largest block 282, 625 3. O New York Stock Exchange (Cede of shares, 3,855,576, or 5.6 percent of the outstanding and Co.)-- 168, 400 1. 8 shares held by a trustee in trust for the employees of the 2 individuals. 123, 951 1. 3 bank. 1 corporation 39, 200 .4 Chase Manhattan, the third largest bank, did not name 1 stockbroker. 35, 509 . 3 the 30 top hd ers of its stock, but did indic the amount held by type of holder, e.g., bank nominees, insurance Franklin New York Corporation reported two major companies, brokers. From the data it supplied the follow- holders of voting securities, Loews Corporation with 20.2 ing information can be gleaned: of the total of 31,881,747 percent of the outstanding voting securities, and Sol Kitcommon shares outstanding, 6,508,219, or 20.0 percent tay, a director of the corporation, with 1.7 percent of the were held by the top 30 holders as follows: outstanding voting securities. In July 1972 Loews sold most of its holdings to Fasco International Holding, S.A., controlled by the Italian financier, Michele Sindora. As Percent of of Dec. 31, 1972, Fasco International owned about 18.3 Number of total stock percent of Franklin New York Corporation's voting stock. shares outstanding No other person is believed to control or hold power to vote 5 percent or more of the outstanding voting securities 22 bank nominees.. 4, 839, 047 15. 1 3 insurance companies.. of the corporation. 463, 790 1. 3 2 investment bankers and brokers. 428, 251 1. 3 First Pennsylvania reported the same kind of informa1 individual (David Rockefeller)- 337, 500 1.0 tion as Chase Manhattan and Wells Fargo. The 30 largest 1 nominee (unspecified). 245, 703 .7 stockholders accounted for 3,859,298 or 31.5 percent of the 1 corporation. 193, 928 .6 12,241,922 shares of voting common stock outstanding. This is broken down into the following categories: 29-553 O - 74 - 9 than 10 percent of the total. Jefferson-Pilot Corporation Percent of held 11.25 percent of the outstanding common stock of the Number of total stock NCNB Corporation. shares outstanding The National Bank of North America, of New York, N.Y., is 98 percent owned by the C.I.T. Financial Corpo11 nominees for bank fiduciary ration. accounts. 1, 713, 731 14.0 6 individuals FAILURE TO RESPOND 783, 628 6.4 3 brokers... 339, 760 2.8 2 nominees for mutual funds. 241, 958 Six banks did not reply to Senator Metcalf's letter. 2. O 2 insurance companies. 228, 226 1.9 They were: I nominee for Central Certificate Service (Cede and Company). 148, 593 1. 2 Marine Midland 2 nominees for pension trusts 116, 852 1.0 First National Boston Corporation 1 nominee for a corporation. 112, 398 1 State teachers pension fund. Lincoln First Banks of Rochester, New York 97, 700 .8 I custodian for foreign accounts. 76, 452 Bank of California, San Francisco .6 Valley National Bank of Arizona National Bank of Commerce of Seattle Wachovia Corporation of Winston-Salem reported only that the bank's employees' profit-sharing, plan is the We turn now to the tabulations and summaries of the largest stockholder with 3 percent of the voting stock, and responses from the nine banks which provided all, or that no individual shareholder approached this per- virtually all, of the information requested by Senator centage. Metcalf, arranged in order of assets of the banks in 1971. Manufacturers National Bank of Detroit disclosed Two banks, First National City Corporation and Chemical solely that the 30 largest stockholders consisted of 15 New York Corporation, both included their treasury nominees, 10 individual holders, three institutional hold- holdings among the top 30. Since such stock is not voting ers and two brokers. No identities were disclosed. stock it was excluded from the tabulations; thus for these The NCNB Corporation (North Carolina National two companies 29 rather than 30 top holders are disclosed. Bank) of Charlotte disclosed one stockholder with more New York banks: Salkeld & Co... Cudd & Co.-. Gerlach & Co.. Sigler & Co... STEGGE & Co.. (Schmidt & Co.. O'Neill & Co... Atwell & Co.-- (C. A. England & Co. Cummings & Co.... & Co. Rich & Co. (Touchstone & Co. (Myers & Co.... Johnson & Co.- SEMP & Co. Gale & Co.- (F. J. Haffner & Co. A. A. Welsh & Co. nance & Realty Corp. dianapolis). Pine & Co.---- Continental Insurance. Hico. Garden Street Co.... TRAL & Co. Brown Brothers, Harriman & Co.--- Treasurer of the State of Texas State Permanent School Fund. |