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Hon. John D. Dingell

Nonetheless, the SEC's own survey demonstrates

that customer confusion is not solely, and perhaps not even primarily, a product of bank sales of mutual funds. That survey revealed that there was a higher level of confusion on the FDIC insurance issue for sales at brokerage houses than for sales at banks. Accordingly, it may well be that

no individual bank's or brokerage house's efforts, no matter how extensive or detailed, can totally eradicate customer

confusion.

As mentioned, Mellon and Dreyfus do not regard any level of customer confusion on the insurance issue as

acceptable.

However, we do not believe that a suspension of sales would be an appropriate response. Indeed, it would harm the vast majority of Mellon Bank customers who would not be confused, but would be denied access to the Dreyfus funds. It could also harm existing fund shareholders because Dreyfus could be required to liquidate assets at potentially unfavorable prices to deal with redemptions. Indeed, we question whether suspension of sales would even help potential customers who are confused. If they cannot purchase fund shares from Mellon, they will purchase shares of another (or the same) fund elsewhere; and if they would be confused on the insurance issue despite Mellon's extensive disclosures and other procedures, they will almost

125_LANO1\82565.1

Hon. John D. Dingell

certainly be confused when they purchase the shares from another financial institution.

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Finally, as stated before, we believe the best way

to address customer confusion is through an aggressive disclosure program such as we presented at the Hearing.

Very truly yours,

Inkl. Colomb

Frank V. Cahouet
Mellon Bank Corporation

Howard Stem

Howard Stein

The Dreyfus Corporation

cc: The Honorable Dan Schaefer

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Disclosure and Information-Sharing Agreement

InvestNet

Investments sold by InvestNet (including The Laurel Funds and The Boston Company Family of Funds):

• ARE NOT INSURED BY THE FDIC OR BY ANY OTHER GOVERNMENT AGENCY;

• Are not obligations of the FDIC or any other government agency;

• Are not deposits or other obligations of Mellon Bank or any other bank;

• Are not endorsed or guaranteed by Mellon Bank or any other bank;

• Are subject to investment risks, including possible loss of the principal amount invested;

• May fluctuate in value, so that when they are sold they may be worth more or less than when they were purchased.

An investment's past performance should not be considered an indication of its future results.

InvestNet is a brokerage subsidiary of Mellon Bank Corporation. It is a member of NASD. InvestNet is not a bank and is separate from any affiliated bank. InvestNet is solely responsible for its contractual obligations.

The Laurel Funds pay Mellon Bank, N.A. or its affiliate to be their investment adviser. Mellon Bank, N.A. or an affiliate may be paid for performing other services for The Laurel Funds, such as custodian, transfer agent or fund accountant services. The Laurel Funds are distributed by a third party funds distributor that is not an affiliate of Mellon Bank.

The Boston Company Family of Funds pays Boston Safe Deposit and Trust Company or an affiliate of Boston Safe to be its investment adviser and custodian. The Boston Company Family of Funds is distributed by a third party funds distributor that is not an affiliate of Boston Safe Deposit and Trust Company.

Mellon companies are paid to provide mutual fund services to many other mutual funds. A mutual fund's prospectus discloses the companies providing such services to it, and the fees it pays for those services.

Mutual funds purchased through InvestNet (including shares of The Laurel Funds and the Boston Company Family of Funds) may be subject to fees and expenses when they are purchased, during the time that they are held or when they are sold. These fees and expenses are described in detail in each fund's prospectus. Sales charges may make some mutual funds inappropriate as a short term investment.

You should read the prospectus of any mutual fund before you invest in it.

Investnet charges fees and commissions for its services, as described in InvestNet's Fee Schedule and Commission Schedule.
You authorize InvestNet, its affiliates (including the Mellon Banks and Boston Safe Deposit and Trust Company), The Laurel
Funds and The Boston Company Family of Funds to share information about you and your accounts with any of these
organizations. This includes all information that these organizations have or may obtain about you or your account relationships.
I/We have read these disclosures and understand them. I/We acknowledge receipt of a copy of these disclosures.

Signature X Signature X

Date

Date

Note: Please sign, date and submit this form, along with your completed new account application, to InvestNet.

InvestNet Corporation

Member NASD

Member The Chicago Stock Exchange

TR-0074 Rev. (3/94) LC. (3/94) PD 3/94

Original - InvestNet
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Pursuant to Rules X and XI of the Rules of the U.S. House of Representatives, and our continuing oversight of securities and exchanges, we are investigating the facts and circumstances surrounding the proposed merger between the Dreyfus Corporation (Dreyfus) and Mellon Bank Corporation (MBC) whereby Dreyfus will be acquired by Mellon Bank, N.A. (Mellon Bank) as a separate operating subsidiary.

As a starting point, we have reviewed the copy of the Notice of the transaction and supporting documentation that was delivered by MBC to the Committee on Energy and Commerce on January 3, 1994, as well as the responses of MBC and Dreyfus, the Securities and Exchange Commission (SEC), and the Comptroller of the Currency (OCC), responding to the December 10, 1993 GonzalezDingell letter. In order to assist the Subcommittee in its investigation and in preparation for upcoming hearings, your cooperation is requested in providing the following responses by the close of business on Friday, February 25, 1994.

1. The Subcommittee understands that part of the MellonDreyfus proposed merger is subject to approval by the Federal Reserve Board (Board).

a.

Please explain in detail any applications that the
Board is considering as part of the proposed
transaction. Does the Board plan to obtain public
comment prior to making its decision?

b. Please discuss the Board's views on the advisability of
banks engaging directly in the mutual fund business.
Are there adequate bank controls and compliance

The Honorable Alan Greenspan
Page 2

2.

3.

systems? What types of firewalls or other protections
are needed? Please advise the Subcommittee whether
there are alternative approaches to structuring the
Mellon-Dreyfus merger that would better address the (1)
safety and soundness and (2) investor protection
concerns raised by the proposed merger.

The OCC letter of January 12, 1994 states (p. 2, fn. 2) that
"[t]he OCC will carefully consider the consequences of the
structure of the proposed transaction for the capital
position of both Mellon and Dreyfus." As you know, MBC has
stated that "a principal reason" for structuring the
transaction along the lines proposed is so that Mellon Bank
can consolidate Dreyfus' capital with its own capital base.
Dreyfus Service Corporation (DSC) is registered with
the SEC, the NASD and all fifty states as a broker-
dealer, and as such, is subject to necessary and
appropriate financial responsibility standards
including the applicable net capital requirements under
section 15 (c)(3) of the Exchange Act. We are concerned

that the capital of the Dreyfus broker-dealer
subsidiary will be consolidated with that of Mellon
Bank, potentially harming the subsidiary's compliance
with its financial responsibility requirements under
the federal securities laws.

Both the Board (in your Section 20 orders) and the Federal Deposit Insurance Corporation (FDIC) (in 12 C.F.R. section 337.4(b)(3)) have adopted measures to ensure the adequate capitalization of securities subsidiaries and prevent the double-leveraging of securities subsidiaries' capital. Both provide that the parent entity's investment in a securities subsidiary will not be counted toward satisfaction of the parent entity's capital requirement. Please explain the rationale for your position. What would be the consequences of the failure of the OCC to make similar provision for ensuring the separate capitalization of national bank subsidiaries? What capital conditions should the OCC require in connection with the proposed transaction?

Please comment on the OCC's statement (p. 6) that "[b]ecause establishment of operating subsidiaries is part of the business of banking, it is not proscribed by 12 U.S.C. section 24 (7) provisions on purchasing corporate stock." Please explain how you distinguish between "incidental" activities and those "closely related to banking," which are subject to the requirements of the Bank Holding Company Act.

a. Please provide the Subcommittee with a list or chart comparing those activities that the OCC has deemed

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