this manner is still under consideration and suggest that April 27 meeting be adjourned for a reasonable time to permit, if possible, the resolution of the questions involved in the merger plan.

JOSEPH J. WILLIAMS, Jr.,

Acting Chairman.

Mr. MULTER. I will not make a part of the record, but I will assume there will be filed with our committee for the use of the members the report of the Committee on Government Operations of the House with reference to the operations of the Board. That takes in not only the Long Beach case, but any number of other cases which they inquired about during the course of their hearings.

I do this so that the Board can submit to this committee any comments that they may think are relevant with reference to the report of that committee, so that we may have the whole thing before us, and have your views as well as the report and recommendations of the House Committee on Government Operations, when we get to considering these bills in executive session.

Anything you submit to us in that connection we will make a part of the record, if you desire it to be made a part of the record, or we will file it along with the report, as you may prefer.

Now, I think it would be appropriate to make a part of the record at this time the analysis of insurance settlement cases for calendar years 1934 through 1962, which you were requested to submit to the full committee during the last hearings, and which you have submitted. I think it should be part of these hearings, also.

If there is no objection, we will make that a part of the record here.

(The information referred to follows:)

Mr. MULTER. Now, I have taken more than my 5 minutes on this round.

Mr. MCMURRAY. May I make just one comment, Mr. Chairman? I would like to say, to supplement what Mr. Wilfand stated, that since I have become Chairman of the Board I have expedited this case in every way I can. Rather than obstacles, I have lubricated the operation. We extended the date. The date originally was set, I believe, 120 days from the turnback-in April. And we only extended it at the request of Mr. Gregory for various reasons, among which was his own illness, and finally because of the State of California.

So we have done everything we can to expedite it.

I am a little bit irritated to hear that anybody would even suggest that this Board has put obstacles in the way of solving this problem. It is a very complicated case. The Board has very important responsibilities in connection with it. And we do not intend to do anything other than follow the law and our responsibilities in

it.

Just to assume that because legitimate questions are raised with respect to which we expect answers means we are putting obstacles in the way-if the Government operates other than this way, then God help us.

Mr. MULTER. Do you have any questions?

Mr. BOLTON. I have no further questions at this time, Mr. Chairman. Mr. MULTER. Does any other member wish to address any further questions at this time?

Mr. WILSON. Just one more, Mr. Chairman, if I may.

In the event we get all the obstacles in the State straightened out, and if an application is filed with the State savings and loan commissioner for the merger, your Board, in making its final determination on approval of anything, will be interested primarily in what is best for the depositors of the association, won't they?

Mr. MCMURRAY. We operate under the doctrine of parens patriae. We have to look at what is in the best interests of the shareholders. This is our responsibility, and we will carry out that responsibility. Mr. WILSON. In other words, if the merger appears to be better for the shareholders than the liquidation, you will probably recommend merger provided it meets all the requirements that have been set forth?

Mr. MCMURRAY. That is right-provided it meets all the requirements, and is in accordance with what we feel is in accordance with the law under which we operate.

There are some questions, I will be perfectly glad to discuss them publicly if you want me to. I just think it would be better to solve some problems privately. There are some fundamental questions we have raised with them, and we hope that they will cooperate.

Mr. WILSON. You wouldn't have any objection if I wrote a letter and asked you some further questions?

Mr. MCMURRAY. No, sir. I have worked as a staff member of the Senate committees and the House committees for years. I think that Congressmen should write and get answers. And I think every member of this committee knows that he will get an answer quickly.

Mr. WILSON. This bulletin that came out, signed by Mr. Caulsen, about ex parte communications-what does that mean?

Mr. MCMURRAY. The ex parte regulation does not affect this. It only affects hearing cases, where a hearing has been scheduled. It specifically provides that in connection with other kinds of cases, like regulations and so on, there is no ex parte requirement. So you can feel perfectly free to ask us any questions.

Mr. WILSON. It sounded as if there was some prohibition against anybody calling and inquiring about a case.

Mr. MCMURRAY. No, sir.

On the other hand, we have a responsbility, and when we are in the midst of a case we ought to be allowed to pursue the solution of that case fairly freely. And then if we make an improper decision, then, of course, it is Congress responsibility to bring us before them and ask questions and find out whether we have followed our responsibilities or not.

But I think that we three members of this Board are acting in the interest of the public. We certainly have no ax to grind. I have done everything that I can. I have gone I have spent endless hours trying to learn something about this Long Beach case. I would have to delay it another 2 years if I knew all the answers in connection with this question, and possible questions that could arise.

But I submit that I know the major questions that are involved. And Mr. Gregory knows full well what some of the problems are. We hope that constructively we can solve it.

Mr. WILSON. Thank you very much.

Mr. MULTER. There have been any number of Members of Congress in touch with your Board in connection with this specific case, as: well as with other cases, is that not so?

Mr. WILLIAMS. That is correct. And the ex parte regulation that we have only relates to matters such as permissions to organize, and branch applications which we have set for public hearing. We take the position that if we call a public hearing, that everything should come out into the open at the public hearing, and there should be no ex parte communications.

But that only relates to such things. Anything else we welcome. calls. We have had several calls about the Long Beach case. Mr. MULTER. From many Members?

Mr. WILLIAMS. Correct.

Mr. MULTER. You have probably had more Members call about that case than any other case in your office.

Mr. WILLIAMS. Since I have been on the Board, I have spent about half of my time on the Long Beach case, Mr. Chairman.

Mr. MULTER. I think this committee is interested in that and other cases, not so much because of any injustice that we might think may have been caused by the handling or mishandling of a particular case, but we are also concerned about what should be done on the overall picture to prevent these things from happening again if they can be prevented.

This line of inquiry is intended to find out whether or not there is anything that needs correction in the law to make it a better law, to make it more readily understandable to everybody who is concerned with it, both on your Board and outside the Board.

Incidentally, with reference to your suggestion about informal coordination, Mr. Chairman, I think it would be well to have the record show that when the newspapers were full of all the controversies between the various agencies that had jurisdiction over the matter of banks and banking institutions and savings and loan associations, I, on my own, called for an informal meeting of the heads of the various agencies. We had that informal discussion. The very purpose for calling it, announced in advance was that we would try to work out standards or criteria that we could then announce-have all of the agencies announce that these are the criteria and standards that would be followed in connection with these matters of applications for the merging of banks.

Despite the announced intention of the meeting, when we got together, there wasn't a single agency head who agreed that there was anything that we could do informally by way of setting up standards which they could all then announce, without in any way giving up their right of judgment and discretion.

I was convinced as a result of that, that if there is ever to be a set of standards and criteria, that all of the agencies will enunciate, so that everybody in the industry and the public will know precisely where they can go, and how they can go, this Congress will have to do it as a matter of legislation. I don't think it will ever be informally agreed upon by the various agencies. That is one of the reasons why I asked that each of those witnesses who come here, whether they be representing industry or trade associations or the departments of Government, give us their suggestions as to how we can improve the basic statute in order to get better administration-without pointing a finger at anybody-because of these differences of opinion. I am talking about the overall banking system. I think it is the duty of the Congress, as our chairman has announced at the beginning of this session, to do this kind of a job, study and investigate it, and come up with the proper legislation if the need for any should be demonstrated.

I notice it is now 5 minutes to 12. If it is agreeable, we would like to reconvene again at 2 o'clock today and try to finish up with the members of the Board, so as to complete their testimony on this phase of it, so we don't have to bring them back again.

Mr. McMurray, I think you wanted to say something.

Mr. MCMURRAY. I just wanted to say, sir, that I commend you on your last statement. I want to say the Federal Home Loan Bank Board wants to cooperate in every way we can. As you know, we have discussed possible legislation, some of which is in the Budget Bureau. And I think that certain legislation would be very helpful to us. And one of the cases that has contributed to our understanding of some of the problems has been the Long Beach case. And we hope to profit by the difficulties in that experience.

Mr. MULTER. If there is nothing else at the moment, the committee will stand in recess until 2 o'clock.

(Whereupon, at 12 m., the subcommittee recessed, to reconvene at 2 p.m., the same day.)