# Appendix — United States v. Phillipsburg National Bank & Trust Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0211%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1970 - **Citation:** 399 U.S. 350 ## Text _———— Dee — Sakis ROS UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY UNITED STATES OF AMERICA, CIVIL ACTION No. 56-68 Plaintiff, v. THE PHILLIPSBURG NATIONAL BANK AND TRUST COMPANY and THE SECOND NATIONAL BANK OF PHILLIPSBURG, Defendants. WILLIAM B. CAMP, Comptroller of the Currency, |-17-68 2-13-68 2-27-68 3-11-68 | 2-24-68 10-1 5-69 10-15-69 10-21-69 10-21-69 INTERVENOR. RELEVANT DOCKET ENTRIES Complaint filed 1-16-68. Answer filed 2-9-68. Order granting leave to William B. Camp. Comptroller of the Currency to intervene filed 3-21-68. Answer of intervenor, William B. Camp, Comptroller of the Currency, filed 3-8-68. Transcript of trial in XI volumes filed | 2-23-68. Opinion, filed 10-14-69 (Shaw) (In favor of defendants and intervenor) Ordered stay continued until further order of the Court (Shaw). (10-14-69) Hearing on plaintiffs motion to re-open the record und to amend the final findings of fact and conclusions of 1aw. Ordered motion granted. (Shaw) (10-20-69) Order continuing the statutory stay for a period of forty days from the date of judgment, etc., filed 10-20-69 (Shaw). Dl IG Gin eR Le ha ie. ainda 2 10-21-69 Plaintiffs motion to re-open the record and to amend the final findings of fact and conclusions of law, filed 10-20-69. 10-21-69 Judgment of dismissal of action, without costs, filed 10-20-69 (Shaw). 12-4-69 Notice of appeal, filed 11-28-69. 12-4-69 Amended Notice of Appeal to The Supreme Court of U.S., filed 12-2-69. 12-17-09 Plaintiff's Designation and Certification of Record on Appeal and certificate of service filed. 1-5-70 Order amending opinion filed on Oct. 14, 1969, filed 1-2-70 (Shaw). UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY (CAPTION OMITTED IN PRINTING) COMPLAINT The United States of America, plaintiff, by its attorneys, acting under the direction of the Attorney General of the United States, brings this civil action to obtain equitable relief against the defendants named herein and complains and alleges as follows: I JURISDICTION AND VENUE |. This complaint is filed and this action is instituted under Section 15 of the Act of Congress of October 15, 1914, c. 323, 38 Stat. 736, as amended (15 U.S.C. § 25), commonly known as the Clayton Act, in order to prevent and restrain violation by the defendants, as hereinafter alleged, of Section 7 of the Clayton Act, 38 Stat. 731, as amended by the Act of Congress of December 29, 1950, c. 1184, 64 Stat. 1125 (15 US.C. § 18). 2. Each of the defendants has its principal place of business, transacts business, and is found within the District of New Jersey. II THE DEFENDANTS 3. The Phillipsburg National Bank and Trust Company, hereinatter referred to as “Phillipsburg National,” is made a defendant herein. Phillipsburg National is a banking association Organized and existing under the laws of the United States of America, with its principal place of business in Phillipsburg, New Jersey. 4. The Second National Bank of Phillipsburg, hereinafter referred to as “Second National,” is made a defendant herein. Second National is a banking association organized and existing under the laws of the United States of America, with its principal place of business in Phillipsburg, New Jersey. ee ere ene See ee ee a Ill DEFINITIONS 5. As used herein, the term ‘‘Phillipsburg-Easton” means the cities of Phillipsburg, New Jersey, and Easton, Pennsylvania, and their environs. IV TRADE AND COMMERCE 6. Commercial banks fill an essential and unique role in the Nation’s economy. Their principal functions are the acceptance of deposits for safekeeping and convenience in making payments by check, the granting of loans or advances of funds to individuals and business firms, and the creation through demand deposits of net additions to the supply of money. Most money payments in the United States are made through checks drawn against demand deposits, and the creation and holding of such deposits is a function peculiar to commercial banks and one which makes them to a great extent the administrators of the Nation’s check payment system. Through the making of loans to individuals and businesses, commercial banks supply a significant part of the credit requirements of the Nation’s economy. Commercial banks also accept time deposits from various types of depositors and provide a wide variety of other financial services, including personal and corporate trust accounts, the collection of drafts, bills, and other commercial instruments, the acceptance of bills of exchange, the issuance of letters of credit, the sale of cashier's checks, and drafts on correspondent banks, the purchase or sale of securities for customers, the sale of foreign exchange, and the renting of safety deposit boxes. This combination of services is unduplicated by other financial institutions. 7. Commercial banks, because of the importance of bank credit to business and other borrowers and_ the close relationship of banks with many such borrowers, and because of their holdings of stock in trust accounts, have an important influence on competition in all branches of industry and commerce served by the banking system. 5 8. Phillipsburg National is the largest of the three commercial banks located in the city of Phillipsburg, and it is third largest of the six banks headquartered in Phillipsburg-Easton. As of September 20, !966, Phillipsburg National had total assets of $21,529,000, total deposits of $19,983,000, and loans and discounts of $12,342,000. Phillipsburg National presently operates three banking offices, all located within the city of Phillipsburg or environs. 9. Second National is the second largest bank located in the city of Phillipsburg, and the fifth largest bank in Phillipsburg-Easton. As of September 20, 1966, Second National had total assets of $15,867,000, total deposits of $14,498,000, and loans and discounts of $9,478,000. It operates two offices, both located within the city of Phillipsburg. 10. Commercial banking in Phillipsburg-Easton is heavily concentrated. As of September 20, 1966, the two largest banks headquartered there accounted for approximately 56% of total deposits of commercial banking offices in Phillipsburg-Easton, and the three largest banks accounted for approximately 69.4% of such deposits. Phillipsburg National held about 13.5% of the total deposits in all commercial banking offices there, and Second National held about 9.9% of such deposits. 1]. If the merger were consummated, the two largest banks would account for approximately 65% of total deposits held by commercial banking offices there, and the three largest would account for approximately 79% of such deposits. Phillipsburg National would become the second largest bank in Phillipsburg-Easton, increasing its share of total deposits from 13.5% to 23.4%, and it would operate five of the 16 commercial banking offices located there. 12. Phillipsburg National and Second National are each substantial competitors in commercial banking in the City of Phillipsburg and in Phillipsburg-Easton. The main offices of Phillipsburg National and Second National are located across the street from each other, as are their respective branches in northeast Phillipsburg. Both defendant banks derive the predominant share of their business from the same area, namely Phillipsburg-Easton. The defendant banks directly compete in this area with each other and with other commercial banks having offices in Phillipsburg-Easton, in offering and performing commercial banking services. inane 4 ey ‘ RPA A RAL IPE EEE TL ———— 13. Customers of Phillipsburg National and Second National have regularly utilized interstate communications, including the mails, telephone and telegraph, to carry on their business with, apply for, and obtain the services provided by these banks. Phillipsburg National and Second National have regularly utijized interstate communications, including the mails, telephone and telegraph, to conduct business with customers, and with other banks located in states other than New Jersey. Phillipsburg National and Second National are each engaged in interstate commerce. V OFFENSE CHARGED 14. Defendants’ Phillipsburg National and Second National have entered into an agreement, approved by their respective Boards of Directors on April 14 and April 17, 1967, which, if carried out, will result in a merger of Second National with and into Phillipsburg National under the charter of Phillipsburg National and with the title of Phillipsburg National. The Comptroller of the Currency granted approval of the proposed merger of the defendants on December 18, 1967. 15. The effect of the merger of Phillipsburg National and Second National, pursuant to the agreement described in paragraph 14 above, may be substantially to lessen competition or to tend to create a monopoly in violation of Section 7 of the Clayton Act. 16. The offense alleged in this complaint will be carried out and will continue unless the relief hereinafter prayed for is granted. VI EFFECTS 17. The offense alleged in this complaint, if carried out and continued, will have the following effects, among others: (a) competition between the defendants will be permanently eliminated; (b) competition generally in commercial banking in 7 Phillipsburg and Phillipsburg-Easton will be substantially lessened and a tendency to monopoly created: and (c) concentration in commercial banking in Phillipsburg and Phillipsburg-Easton will be substantially increased. PRAYER WHEREFORE, plaintiff prays: 1. That the aforesaid merger of Phillipsburg National and Second National pursuant to the Agreement described in paragraph 14 of this complaint be adjudged unlawful, in violation of Section 7 of the Clayton Act. 2. That the defendants Phillipsburg National and Second National and all persons acting on their behalf be enjoined from carrying Out the aforesaid agreement of merger or any similar plan or agreement, the effect of which would be to merge, consolidate, or in any other way combine the businesses of, said defendants. 3. That the plaintiff have such other and further relief as the Court may deem just and proper. 4. That plaintiff recover the costs of this action. RAMSEY CLARK Attorney General DONALD F. TURNER Assistant Attorney General BADDIA J. RASHID Attorney, Department of Justice CHARLES L. WHITTINGHILL Attorney, Department of Justice United States Attorney ROBERT C. WEINBAUM Attorney, Department of Justice Rae —- . 2B LP DIE LE ADDL EER IEP Pe AION |: ; g 4 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY (CAPTION OMITTED IN PRINTING) ANSWER The Phillipsburg National Bank and Trust Company and The Second National Bank of Phillipsburg, jointly, by way of answer to the Complaint herein say that: 1. As used herein, the term Trading Area means all of Warren County, New Jersey, the northwestern portion of Hunterdon County, New Jersey, (Alexandria Township, Bethlehem Township, Bloomsbury Borough, Clinton Town, Clinton Township, Flemington Borough, Franklin Township, Frenchtown Borough, Glen Gardner Borough, Hampton Borough, High Bridge Borough, Holland Township, Kingwood Township, Lebanon Borough, Milford Borough, Raritan Township and Union Township), all of Northampton County, Pennsylvania, all of Lehigh County, Pennsylvania, and that portion of Bucks County, Pennsylvania within 15 miles of the Town of Phillipsburg, New Jersey. 2. Defendants admit that plaintiff purports to file the complaint and institute this action under the Clayton Act, but they assert that these proceedings are governed by 12 U.S.C. § 1828, the Bank Merger Act, as amended; except as admitted hereby, defendants deny the averments of paragraph 1. 3. Defendants admit the averments of paragraph 2. 4. Defendants admit the averments of paragraph 3. 5. Defendants admit the averments of paragraph 4. 6. Defendants admit that as used in the complaint, the term ‘‘Phillipsburg-Easton’’ purports to mean_ the municipalities of Phillipsburg, New Jersey and _ Easton, Pennsylvania, and their environs, but assert that the area as described by plaintiff is vague and inadequate for a proper consideration of this matter and further assert that the pertinent geographic area in which to view this matter is the Trading Area described herein. 7. Defendants admit that large commercial banks, in general, provide the services iisted in paragraph 6. They deny that the averments of paragraph 6 necessarily have a relevance to or properly delineate the scope, nature and emphasis of their own particular activities or areas of competition. Except as admitted hereby defendants are without knowledge or information sufficient to form a belief as to the truth of the 9 averments of paragraph 6 and leave plaintiff to its proofs thereof as to these two defendants. 8. Defendants deny that the averments of paragraph 7 have a relevance to or properly delineate the scope, nature and emphasis of their own particular activities, or relationship. Except as denied hereby, defendants are without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 7 and leave plaintiff to its proofs thereof as to these two defendants. 9. The defendants admit the averments of paragraph 8 in respect to the assets, deposits, loans and discounts and offices of Phillipsburg National. Defendants are without knowledge of the precise boundaries of the geographic area described as the “environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank, and assert that the Trading Area is the proper geographic area in which to make such a determination, wherefor except as admitted hereby defendants are without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 8 and leave plaintiff to its proofs thereof. 10. Defendants admit the averments of paragraph 9 in respect to the assets, deposits, loans and discounts and offices of Second National. Defendants are without knowledge of the precise boundaries of the geographic area described as the “environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank, and assert that the Trading Area is the proper geographic area in which to make such a determination, wherefor except as admitted hereby defendants are without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 9 and leave plaintiff to its proofs thereof. ll. Defendants deny that commercial banking in Phillipsburg-Easton is heavily concentrated. Defendants are without knowledge of the precise boundaries of the seographic area described as the ““environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank. and assert that the Trading Area is the proper geographic area in which to make such a determination, wherefor except as denied hereby defendants ae without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 10 and kave plaintiff to its proofs thereof. So RRO ict ARAN Lean a * © Peet ee SS ASS fo te See — 12. Defendants are without knowledge of the precise boundaries of the geographic area described as the “environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank, and assert that the Trading Area is the proper geographic area in which to make such q determination, wherefor defendants are’ without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 11 and leave plaintiff to its proofs thereof. 13. Defendants deny the averment of paragraph 12 that they are each substantial competitors in commercial banking in the Town of Phillipsburg and in Phillipsburg-Easton. They admit that their respective main offices are separated by a street but deny that their respective branches are separated merely by a street or are both located in northeast Phillipsburg, and assert that they serve different areas. They admit that they derive the dominant share of their business from the same area but deny that said area js Phillipsburg-Easton, and assert that said area is more properly described as the Trading Area. They admit that they compete with other commercial banks having offices in Phillipsburg-Easton, but assert that they also compete with commercial banks and other financial institutions throughout the Trading Area and beyond, Except as admitted hereby, defendants deny the averments of paragraph 12. 14, Defendants admit the averments of paragraph 13, 15. Defendants admit the averments of paragraph 14 but deny that said merger is an offense. 16. Defendants deny the averments of paragraph 15. 17. Defendants deny the averments of paragraph 16. 18. Defendants admit that the contemplated merger will eliminate such insignificant competition as exists between them, but deny that said merger is an offense. Except as admitted hereby, defendants deny the averments of paragraph 17. 19. In further denial of plaintiff’s general averments as to the product market within which defendants compete, defendants assert that they are in competition with many individuals, firms and corporations for the many services they furnish. Such areas of competition, in addition to commercial banks, include, among others: (a) for time deposits consisting of 71% of the Phillipsburg National Bar’.’s total deposits and 77% of the Second 10 National total deposits the banks compete with the stock market, building and loans, Savings institutions, bond market, U. §. security and savings bond market, insurance companies, mutual funds, pension funds, credit unions and other banks throughout the country where banking by mail is on the increase. (b) for commercial or demand deposits which constitute 29% and 23% respectively of the two banks’ deposits they must compete with banks throughout the Trading Area as well as with the metropolitan banks of Philadelphia and New York. Here, too, banking by mail increases the competition. (c) for real estate loans which constitute 56% and 76% respectively of the two banks’ Joan portfolio they must compete with insurance companies, savings institutions and building and loans in various parts of New Jersey and Pennsylvania. (d) for consumer installment loans which constitute 24% and 10% respectively of their loans they must compete with finance companies, credit unions, small loan companies, diner’s clubs, department store credit accounts, travel-on-credit arrangements and hosts of appliance and motor vehicle finance companies associated with or aligned with national corporate manufacturers of autos, TVs, radios and appliances, (e) for single payment loans to individuals which constitute respectively 10% and 6% of the banks’ loans they must compete with finance companies, credit unions, policy loans by insurance companies and others, (f) for commercial and industrial loans which are but 8% and 3% respectively of total loans they must compete with msurance companies, larger metropolitan banks, the bond market and others, (g) for check cashing services they must compete with practically all trading outlets in the Trading Area. (h) for checking accounts they must compete with savings banks in New Jersey which are permitted to conduct such business. FIRST SEPARATE DEFENSE The Complaint fails to state a claim upon which relief can be granted, OE Pte SEP: 4 SECOND SEPARATE DEFENSE The proposed merger will not in any section of the country substantially lessen competition or tend to create a monopoly, THIRD SEPARATE DEFENSE As and for an affirmative defense, defendants allege that the Bank Merger Act of 1966, 80 Stat. 7, 12 U.S.C., §1828 (c), is an affirmative defense to this action. Said act provides an affirmative defense for defendant banks in this case because any anticompetitive effects of this merger (the existence or substantiality of which defendants deny) are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. 12 U.S.C. §1828(c) (5) (B). The factors supporting this defense include among others: (a) automation of the bank’s services can be undertaken thus allowing for more prompt and efficient service to the community. (b) personnel can be procured to fill gaps presently existing thus improving the managerial resources of the bank. (c) an experienced, full-time trust officer can be hired to undertake development of the bank’s lagging trust business, (d) the increased lending capacity of the merged bank will enable the making of larger loans and _ will stimulate competition in the development of commercial and industrial business, particularly among small business corporations. (e) the resulting bank with stronger personnel and more modern facilities will be able to compete more effectively in the Trading Area and beyond. (f) the resulting bank will be able to extend its services in the Trading Area and beyond. (g) the resulting bank will continue to maintain all of the five offices presently operated by the two banks so that the public will have access to the services they now enjoy and, in addition, any customer will be able to transact business at any of the five offices. (h) the resulting bank will have a better capital structure thus guaranteeing further the safety of customer deposits. (i) the resulting bank will be able to procure capital more readily. 13 (j) the increased fiscal strength of the resulting bank will enable it to provide better, more varied services to the area. (k) the resulting bank will be able to engage in new grvices which are constantly being introduced in modern banking. FOURTH SEPARATE DEFENSE Phillipsburg-Easton is not the proper geographic area within which to determine the effects of the proposed merger on competition. The proper geographic area within which to make such a determination is the Trading Area. MEYNER AND WILEY Attorneys for The Phillipsburg National Bank and Trust Company By ROBERT B. MEYNER CARPENTER, BENNETT & MORRISSEY and ALFRED W. SEISS Attorneys for The Second National Bank of Phillipsburg By SYLVESTER C. SMITH, JR. Dated: February 9, 1968 EINE PR ETS IN CRANE HE BBTV PID BT . —e UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY (CAPTION OMITTED IN PRINTING) ANSWER Intervenor, William B. Camp, Comptroller of the Currency, by his attorney, answering the Complaint herein, alleges as follows: I. The Intervenor admits that the plaintiff purports to bring this suit under Section 15, of the Act of Congress of October 15, 1914, chapter 323, 38 Stat. 736, as amended (15 U.S.C. sectign 25) and in respect to all other allegations of paragraph “1” the Intervenor alleges and avers, that the standards to be applied by the Court in this case, are those set forth in the Act of Congress of February 21, 1966, PLL. 89-356, 80 Stat. 7, amending section (c) of the Federal Deposit Insurance Act (12 U.S.C. 1828) (C). Il. Admits paragraphs “2, 3 and 4” of the Complaint. Ill. Admits paragraph ‘“S” of the Complaint as to plaintiff's use of the term ‘“Phillipsburg-Easton” in the Complaint, but the Intervenor denies that the applicable geographic area is as defined by plaintiff. IV. Intervenor admits the allegations of paragraph “6” of the Complaint, to the effect that banks fill an essential role in the nations economy and that many Commercial banks perform the functions outlined in said paragraph “6”, but deny all other allegations contained in said paragraph and deny any implications contained therein that banks are not in competition with other financial institutions. V. Admits the allegations contained in paragraph “7” except that the Intervenor denies the implication that Commercial banks as financial institutions, are the controlling influence, in the economic life of a Community, Industry and Commerce, that create competition within the purview of the Clayton Act. VI. The Intervenor admits the averments of paragraph 8 in respect to the assets, deposits, loans and discounts and offices of Phillipsburg National. However, it denies that “Phillipsburg-Easton” is the applicable geographic area to be considered in this matter. VII. The Intervenor admits the averments of paragraph 9 in respect to the assets, deposits, loans and discounts and Offices 15 of Second National. However, it denies that “Phillipsburg-Easton” is the applicable geographic area to be considered in this matter. VIII. Intervenor denies that commercial banking in Phillipsburg-Easton is heavily concentrated. Intervenor is without knowledge of the precise boundaries of the geographic area described as the ‘‘environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank, and asserts that the | “Phillipsburg-Easton” area is not the proper geographical area in which to make such a determination. Except as denied hereby, Intervenor is without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 10. IX. Intervenor is without knowledge of the precise boundaries of the geographic area described as the “environs” of Phillipsburg-Easton or of the methods used by plaintiff in asserting the size of a bank, and asserts that the “Phillipsburg-Easton” area is not the proper geographical area to be considered in this matter. Intervenor, therefore, is without knowledge or information sufficient to form a belief as to the truth of the averments of paragraph 11. X. Intervenor denies the averments of paragraph 12 that the defendants are substantial competitors in commercial banking in the City of Phillipsburg and in Phillipsburg-Easton. It admits that the main offices of the defendants are separated by a street but denies that their branches are separated merely by a street or are located in northeast Phillipsburg, and asserts that they serve different areas. Intervenor admits that they derive the dominant share of their business from the same area but denies that the “Phillipsburg-Easton” area is a proper geographical area to be considered in this matter. It admits that the defendants compete with other commercial banks having offices in Phillipsburg-Easton, as well as with other financial institutions. Xll. Intervenor admits the averments of paragraph 13. XII. Intervenor admits the averments of paragraph 14 but denies that said proposed merger is an offense. XIV. Intervenor denies the averments of paragraphs 15 and 16. XV. Intervenor admits that the contemplated merger will tliminate such insignificant competition as exists between the defendants, but denies that said merger is an offense. Except — as admitted hereby, Intervenor denies the averments of paragraph 17. XVI. Intervenor alleges that the Bank Merger Act of 1966, 80 Stat. 7, 12 U.S.C., §1828 (c), is an affirmative defense to this action. Said act provides an affirmative defense in this case because any anticompetitive effects of this merger (the existence or substantiality of which is denied) are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. 12 U.S.C. §1828(c) (5) (B). PHILIP L. ROACHE, JR. Attorney, Comptroller of the Currency Dated: Feb. 21, 1968 P, 2 ; ’ St : ‘ S 2 » on UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY 17 Civil Action No. 56-68 UNITED STATES OF AMERICA, Plaintiff, v. THE PHILLIPSBURG NATIONAL BANK & TRUST COMPANY and THE SECOND NATIONAL BANK OF PHILLIPSBURG. Defendants, and WILLIAM B. CAMP, Comptroller of the Currency, Intervenor. Newark, New Jersey, September 11, 1968. Before: The Honorable ROBERT SHAW. U. S. im B Appearances: UNITED STATES ATTORNEY, By: KENNETH P. ZAUBER. Esq., Assistant U. § Attorney. U.S. DEPARTMENT OF JUSTICE. Antitrust Division, By: ROBERT C. WEINBAUM. Esq., and EUGENE T. AUSTIN, Esq. MEYNER & WILEY, Esqs., * Attorneys for Phillipsburg National Bank & Trust Co.. By: Robert B. Meyner, Esq., and THOMAS D. HOGAN, Esq. CARPENTER, BENNETT & MORRISSEY, Esgs., Attorneys for Second National Bank, By: SYLVESTER C. SMITH, JR., Fsq., and MICHAEL S. WATERS. Esq. PHILLIP L. ROACHE, JR.. Esq., Attorney for the Comptroller of the Currency. Spee... TRANSCRIPT OF OFFICIAL NOTES OF TESTIMONY ASHLEY B. CARRICK,C. S. R, and FRANCIS H. BREMER,C.S. R. Official Court Reporter P.O. Box 397 Newark, N. J. Newark, N. J. September 11, 1968 |fol. 84) ROBERT LEUPO, sworn. DIRECT EXAMINATION BY MR. WEINBAUM: Q Mr. Leupo, what is your occupation? A 1 am an executive vice-president of the Phillipsburg Trust Company and National Association. Q Can you give us your business and professional background? A | am an accountant with a background of cost accounting, a background of public accounting, a background of auditing and banking. fol. 85] Q How long have you been in banking? A Eleven years. Q And when did you join’ the Phillipsburg Trust Company? A In May of 1957. * * * * {fol. 86] Q How long has your head office been on Memorial Highway” A Since 1959. Q Where was it prior to that time? A On South Main Street, in Phillipsburg. Q And by South Main Street in Phillipsburg can | fol. 87] you describe for the Court a little bit more about that area? A Well. South Main Street at that time was the naten PE IN GA LG Se POOP 2D 19 commercial street in Phillipsburg. The bank was located approximately two blocks--three blocks away from the other banks in the area. That is about the best description. * * Kk * (fol. 88] Qo Which of the three banks in Phillipsburg was the first to establish a branch. Mr. Leupo? A The Phillipsburg Trust Company, National Association. Q And when was that? A In 1961. Q Have the other local banks established branches since that time? A They have. Q Mr. Leupo, could you please describe for the Court the various services available at your bank” A Yes. We have the services of demand accounts, which are checking accounts, Savings accounts, we have mortgage wrvices, granting mortgage loans. we have personal loans. we have safe deposit boxes. Q Approximately how many demand deposit accounts would you estimate you have? A Approximately 2800. Q And what is the passbook savings rate that you are presently paying? A 4 per cent. Q Were you paying this rate as of the end of the year 1967? A No. we weren't. Q What rate were you paying at that time? A 3-4 per cent. fol. 89]. Q > And when did your rate £0 up to the present rate? A Effective July 1, 1968. Q For how long was your bank Paying the 3-2 per cent "te On passbook savings, Mr. Leupo, can you tell us that? A No, I can’t, not the exact years. Q Do you offer time deposits, Mr. Leupo? A Yes, we do. Q And can you explain a little bit about your rate on ime deposits? A We offer time deposits, and certificate deposits at 5 per “mt, and the 5-% per cent rate, comparable to law. Rta: Se PSs eect | aa 20 regulations by Federal Reserve, and also the Comptroller's Department. Q You do offer certain certificates of deposit at 5-% per cent? A 5 and 5-2 per cent. Q What determines, Mr. Leupo, what interest rate your bank will pay on a certificate of deposit? A What determines it? Q_ Yes. MR. MEYNER: If your Honor please, it seems to me we are really prolonging the record here. It is well established by the Federal authorities as to what [fol. 90]it is. The Court can take judicial notice of it. Or you can put it in the record. I see no point in asking this man that. The 5 per cent up toa certain amount, and the 5-’% per cent over another amount. THE COURT: Counsel, this is governed by regulations. MR. WEINBAUM: Your Honor, I would like to establish whether or not there is discretion on the part of his bank on the rate that they may wish to accept deposits at, and what rate they will pay in certain instances. And I believe that there might be some flexibility on the part of the bank. THE COURT: All right. Go ahead. Objection overruled. MR. WEINBAUM: Thank you, your Honor. Q Mr. Leupo, do you pay the maximum rate on a C.D. in all instances? A Yes. Q_ And how about on your time deposits, is there a sirigle rate that you pretty much adhere to? A The single rate is in accord with our savings rate, time savings rate. Q_ The time and savings rate is identical? A Yes. Q_ The 4 per cent. {fol. 91] A’ Yes. Q_ So that you offer no time and savings deposit between the 4 per cent and the 5 per cent. A No, we don’t. Q Could you please describe for us, or tell us whether you have any school savings plans? A No, we don’t. Q Would you please explain in a little more detail the type of mortgage lending that you do? A Primarily residential. Q_ Primarily residential? A Primarily residential. Q Do you do any VA lending? A No. THE COURT: Counsel, I didn’t hear that question. MR. WEINBAUM: Any Veterans Administration mortgages. THE WITNESS: No. Q Do you do any FHA lending? A No. We have them—-—let me clarify this. We do have them, but we have not put them on in a number of years. So we have not followed the policy of lending to the VA or the FHA. Q Do you do any commercial and industrial lending? {fol. 92] A Yes. Q And what are your rates in those situations? A Comparable rate by law that it may be at the time. Maybe 6, maybe 7, maybe 8. Q. This varies? A That is correct. Q What are the factors upon which the rate depends, for instance? A The money situation, the demand and money situation. Q Any other factors that the bank takes into consideration in the rate it sets? A The other factor naturally would be the customer. the relations with the customer. Do you do any installment lending? Yes. Do you lend money on automobiles? Yes. Appliances. Yes. Do you do any direct lending as opposed to indirect lending? A Yes. Q Do you also do indirect lending? A Yes. | Q Can you explain for us, please, what the [fol. _ %3)difference is between the direct and the indirect lending, very briefly? A My opinion of the direct and indirect would be a two-party and a three-party transaction. The direct would be between the bank and the customer. The indirect would be 21 OProroro é * 4 & 3 2 os e 4 2 Re rt a i 22 dealt through a dealer, where we are discounting paper for a dealer, which would be a three-party transaction. Q Can you tell us, Mr. Leupo, whether in the installment lending field you would do a greater proportion of direct or the indirect? . A The direct. Q_ Is there any particular lending, Mr. Leupo, which your bank emphasizes more than any other? No, there isn’t. Do you offer trust services? Yes, we do. Can you describe the trust services which are offered? Estate, executors, guardianships, also trustees. Do you have a full-time trust officer at your bank? Yes. Excuse me. Would you clarify that, full-time- Do you have a person who devotes substantially all of his time to the trust business? A No, we don’t. {fol. 94] Q Who in your bank is in charge of trust business? A lam. Q Mr. Leupo, do many of your customers use several of your banking services? A Yes, they do. Q Why is this so? A Because of convenience. Q Are your customers, as opposed to non-customers, given any sort of preferential treatment when it comes to banking services? A None. Q The non-customer and customer, would they be treated in a similar fashion, with similar consideration? A Yes. THE COURT: You mean in every instance of a banking transaction? Do you mean that there are no_ instances whatsoever in any banking transaction where you would fail to give any preference to a customer? THE WITNESS: Oh, no. THE COURT: | didn’t think you meant that. O>O>rO>O> x * K * 23 {fol. 97} Q Can you state for us, Mr. Leupo, whether, in your opinion, the services of your bank and the services of the other two banks in Phillipsburg are substantially identical. A Yes, they are. Q And can you state for us whether you believe that the rates at which your services are offered to the public and at which the services of the other two banks are offered to the public are substantially identical. A | would say they were, yes. * eK * {fol. 99] Q How long have you been at National Bank, Mr. Leupo? A Since February, 1958. Q And prior to that time what was the status of your bank? A_ A State-chartered bank, the State of New Jersey. Q Were you a member of the Federal Reserve System? A Yes. Q What in your opinion were the advantages to you of becoming a national bank? A Broader consideration of our assets. THE COURT: Mr. Leupo, I am not too sure what that means. | would appreciate your telling me in a little bit more detail. THE WITNESS: We found through experience that consideration of the position of our mortgage folio, the position of our loans on our mortgages in comparison with being risk and non-risk assets have a better consideration by the Comptroller's Department than over the State-chartered system. We feel that our assets are in such good shape that this is One point [fol. 100] of consideration for the evaluation of the bank. THE COURT: May I interrupt you at this point, counsel? MR. WEINBAUM: Surely. THE COURT: How is this relevant? MR. WEINBAUM: We wanted to show, your Honor, that a more liberal evaluation of assets might enable the bank to do the various things that it might not have been able to do as a State bank. That is all. * * * * 24 {fol. 102} Q Could you describe some of the shopping areas in Phillipsburg for us, Mr. Leupo, Phillipsburg and the immediately surrounding area? A We have a shopping center. We have a large commercial store and we have various food chain stores. THE COURT: This is in Phillipsburg? THE WITNESS: This is in the area. THE COURT: When you say “in the area” how large an area are you speaking of? THE WITNESS: The outlying townships. THE COURT: What townships are those, Mr. Leupo? THE WITNESS: Lopatcong, Pohatcong and Alpha Borough have these shopping areas. Q This commercial store you mentioned, which one is that in? A Pohatcong Township. Q What is the name of that store? {fol. 103] A Falk’s Department Store. Q Is there a central or downtown business district of Phillipsburg? A Yes, there is. Q Can you describe the bridges, Mr. Leupo, which link the City of Easton and the City of Phillipsburg? A Well, the free bridge links downtown Easton with the downtown section of Phillipsburg. Q. And the toll bridge? A And the toll bridge links the highway bypassing Easton with the highway circling through Phillipsburg. Q Does the toll bridge highway circling through Phillipsburg run through the central part of town? A No, it doesn't. Q Can you describe MR. MEYNER: The central part of which town? Q The central part of the business district of Phillipsburg, excuse me. (Question rephrased at direction of Court.) Q Mr. Leupo, through the toll bridge, the toll bridge road, can you state whether or not the road on the - Phillipsburg side of the river runs through the central, the south Main Street business district of Phillipsburg? A No, it doesn’t. {fol. 104] Q Where does that road lead? A It leads through Phillipsburg to the highway. 25 Q Does it go into the city, into the city proper? A No, it doesn’t. Q Mr. Leupo, in a small town such as Phillipsburg do you feel that the role of a local bank is an important one? A Yes, I do. Q Do you have an opinion as to whether the people in the City of Phillipsburg itself would tend to bank locally as opposed to traveling outside of town to do their banking? * eK fol. 105] THE COURT: It does seem to me that there is no dispute about the fact that the City of Phillipsburg and the Town of Easton—whatever it may be~are in such close proximity that facilities are interchangeably used by the residents of those areas. I don’t think there is any dispute about that. MR. WEINBAUM: We think there is some dispute about it. THE COURT: Well, you Suggested in your opening that you regarded the Phillipsburg and Easton area and environs as the geographic area to be considered. | thought implicit in that was the argument that close proximity of these towns to each other, the easy access from one to the other, made the facilities of either equally available to the residents of both. MR. WEINBAUM: Your Honor, our position is that Phillipsburg itself is an appropriate market, but that for various considerations which we attempt to bring out through our witnesses—but that the Phillipsburg-Easton area because of iis proximity and perhaps not because of the same circumstances | fol. 106] applicable to Phillipsburg alone as a market might also be a relevant and appropriate geographic market. THE COURT: You are correct as far as your argument is concerned. I recall now that you did make reference to the fact that Phillipsburg could be considered alone as the tkevamt geographic area. but you also urged that if that narrow limitation was not placed upon the geographic area it sould not go beyond Easton and its environs. Am I correct? MR. WEINBAUM: Phillipsburg-Easton environs would be he largest appropriate market. That is correct, but we do el, your Honor, that it is necessary to show to the extent that We are able to that Phillipsburg alone is a banking market ind totally Bieuc.s te kd | XY ‘4 a — 26 THE COURT: My mind will be open to your argument, but I will say to you that my tentative conclusion now is that you narrowed the geographic area to such an extent, considering the population of Phillipsburg, that it would be most difficult to reach a conclusion on any rational basis that Phillipsburg alone would be a relevant geographic area to the issues in this case, but I told you my mind is open. You may try your own case. MR. WEINBAUM: I might only add on this question, [fol, 107) your Honor, that there is a state boundary running between the two cities and at some point during the presentation of our case that consideration will be explored, THE COURT: I don’t know how the mere fact of a State boundary would be significant. The circumstances which would cause people to cross those boundaries and the inducements to cross might be significant, but just the mere division by a State line at the moment I cannot see to be of any particular significance. Go ahead. I am sorry. MR. WEINBAUM: That is all right. BY MR. WEINBAUM: Q Mr. Leupo, are you generally familiar with the areas in which your bank conducts its banking business? A tam. Q What would you consider to be the primary geographic area which is served by your bank? A Phillipsburg, Lopatcong, Pohatcong and the Borough of Alpha primarily. Q And how would you characterize the amount of business which you derive from the area that you have just described? A Through relationships, through activities, by advertisement, and other means of relations, public relations. {fol. 108] Q What I meant, Mr. Leupo, was that in testifying that this is what you regard as the primary geographic area can you tell the Court in quantitative terms of some sort how much business you would derive from people residing within this area? MR. MEYNER: I object on the ground that it is too general in the absence of some showing that hie made the investigation. THE COURT: I will overrule the objection, but so that there is no question about what he refers to in his answer | 27 suggest that you reframe the question and specify the areas, and if he can have him state the percentage of business that the bank receives from each area, if he can. Q Mr. Leupo, can you give any estimate of the amount of your business which you derive from the City of Phillipsburg, Lopatcong Township, Pohatcong Township and the Borough of Alpha, all together collectively from these areas? A lam not in a position to give you an answer. Q Can you state for us, Mr. Leupo, whether the amount of business you derive from this area would be a substantial. moderate or small percentage of your total banking business? MR. MEYNER: Objection. (fol. 109} THE COURT: Sustained. The previous answer was he didn’t know, so how can you, if you do not know, with any reasonable degree of certainty in terms of percentages, how can you then convert that lack of understanding into terms of moderate, et cetera? MR. WEINBAUM: I think that even though a witness cannot put a percentage figure on it he could be in a position to know if it was de minimus business that he derived from the area or whether it was a substantial amount of business. THE COURT: He has already testified that the primary business of the bank is derived from this area, so how could he come back now with a de minimus? MR. WEINBAUM: We will go on. THE COURT: I am sorry. Maybe I don’t follow you. MR. WEINBAUM: He has testified that this is his primary area, and we thought that he would be able to define this with a little more particularity for the Court in terms of some quantity, perhaps not in terms of percentages, but in terms of- THE COURT: Counsel, he said he doesn’t know. Am I correct? fol. 110] MR. WEINBAUM: He said he couldn’t—I think he said he couldn’t estimate a percentage. I don’t know that interms of amount he would - THE COURT: (To witness) Counsel is not asking you for any exact figures. He is asking you for an approximation. Can you answer the question? MR. WATERS: We would like to renew our objection to speculation. We had this very same problem once before when Mr. Weinbaum took the deposition of a bank official, Mr. Rhimer of the Girard Trust, and he had the officer speculate PII WI se pe eM AT eee wove 28 to some extent on where he had his deposits, and when we got his books it turned out that he had five times as much in the outlying areas as he thought he did. I think to speculate on the basis of what he has and where he has it is a serious mistake, and we found that out. THE COURT: | don’t want him to speculate. I wil instruct him not to guess or answer on the basis of conjecture or speculation. If he does not know with any reasonable degree of certainty then his answer should be “I don’t know.” Mr. Leupo, to what extend do you know? THE WITNESS: To the extent of my association of eleven years with the bank, and being associated with—being the mortgage officer and the loan officer [fol. 111] I would truly say that it is in that area we do have the majority of our business, from interviewing people and having mortgage closings and the extent of opening new accounts. Does that answer it? THE COURT: I think that) is) approximately my understanding of his previous testimony. BY MR. WEINBAUM: Q You regard this as the primary geographic area served by your bank? A Yes. Q Mr. Leupo, do you solicit business by means of advertising? A Yes. Q And could you tell us lew you advertise, in what media, and so forth? A In the local paper and the normal local publiciations of associations and fraternal organizations. That is the extent of it. What papers do you advertise in? The Easton Express. Any others? And occasionally in the Phillipsburg Free Press. Do you do any personal solicitation of business? Now? We have in the past but at present we do not. [fol. 112] Q > As of the end of the year 1967 were you personally soliciting business? A No. Q Do you advertise in any other areas of Warren County? rPOPrOFO 29 No. ° Can you explain for us, Mr. Leupo, why it is that you don’t choose to advertise elsewhere in Warren County? A Well, the prime purpose would be we know the economic conditions of this area that we are doing business in, and we try to concentrate on that area. We also feel as if we are obligated to serve our own immediate customers. THE COURT: If you don’t mind. counsel, I would like to ask a Question. Tell me, Mr. Leupo, if my understanding of what you just stated is correct. | gathered from what you stated that you confine your services to the area where you say the source of your primary business is because it is within your means to service that area. THE WITNESS: Yes. THE COURT: And you service that area because you think it better to service the immediate area that you have the means to serve? fol. 113] THE WITNESS: Yes. THE COURT: And it would follow that you do not attempt to go beyond that area because your bank does not have the means? THE WITNESS: No. I think we would attempt to go in an outlying area. It is pretty tough to explain. THE COURT: Perhaps | can put it this way, having a limited capacity for service - THE WITNESS: Right. THE COURT: Are you giving preference to the immediate areas in which your bank is located over those lying beyond? THE WITNESS: Yes THE COURT: Is that the answer? THE WITNESS: Yes. THE COURT: All right. fol. 114) Q = Mr, Leupo, can you describe, to the best of your ability, the amount of business you derived from Hackettstown, New Jersey? MR. MEYNER: | object on the ground that there is no point~he hasn't investigated. He hasn't gone through his files. MR. WEINBAUM: Your Honor, this town is quite a distance away. THE COURT: Wait. We are going to settle this quickly. Do jou know with any reasonable degree of accuracy the 4 | i oa ae Mn ISS > . nee BH.) Oe - ge, > 30 approximate amount of business, if any, that you did in Hackettstown? THE WITNESS: No. THE COURT: He doesn’t know. Q Do you believe your bank, Mr. Leupo, has any sort of substantial competitive influence in the Hackettstown area? MR. MEYNER: Object MR. ROACHE: Objection. THE COURT: Sustained. MR. WEINBAUM: Your Honor,—— THE COURT: He doesn’t even know whether his bank does business in Hackettstown. MR. WEINBAUM: Your Honor, but I think he would have an opinion as to whether he is in competition [fol. 115] with those banks up there. THE COURT: You mean in the sense —— MR. WEINBAUM: In the sense of whether he considers them one of his principal rivals. This, I think, is important, your Honor. THE COURT: It might be, if it weren’t for the fact that he stated that his bank does not seek business beyond the limited area described. So how can you have competition within an area where you don’t seek the business, and you prefer not to service it, if it came to you? MR. WEINBAUM: We will withdraw the question, your Honor. * * *k * [fol. 115] Q Mr. Leupo, the Court directed a question to you which, in substance, inquired whether it was because of your resources, limited resources, which kept you from soliciting business at distances from Phillipsburg. And I believe you indicated that, no, it was not. | wondered if you could explain what, if any, other factors come into your decision with regard to doing business at great distances [fol. 116] from Phillipsburg? MR. ROACHE: Objection. | don’t know what he means by great distances. THE COURT: Overruled. I don’t know— MR. WEINBAUM: Out of town. THE COURT: Outside of Phillipsburg? MR. WEINBAUM: Yes, sir. 31 THE COURT: Anywhere outside of Phillipsburg? MR. WEINBAUM: Yes, sir. THE COURT: You may answer. A | would say our present position to loan or service the area would predicate our position to do it. I would say that we would go out of the area if we had the resources to do it. | would also say that we would go out of the area if we had the resources to do it. I would also say that we would go out of the area, limited, so that the scope of the area could be watched by our bank. Q What do you mean by that last statement? A Well, what I am driving at, possibly, would be the point that we know whether there is a strike in our own immediate area which would reflect the repayment of our mortgages, Our loans, or reflect the deposits of our bank. Where if we were out of an area that we could not continue to watch it, we would possibly feel that we would not extend loans or credit into that area, couldn’t watch it. * * * * \fol. 119] Q How far away is Blairstown from Phillipsburg, Mr. Leupo? A | would say approximately 25 miles. Q Do you know whether you do any business up there? A We have an occasional mortgage. Q Any other business? A No. Q How far away is Flemington, New Jersey, approximately? A I would say in the same area, approximately 25 miles. Q To your knowledge, do you do any business down there? A No, we don’t. Q How far away is Hope, New Jersey, from Phillipsburg, approximately? . A Twenty miles possibly. Q Do you know if you have any business up in the Hope area? fol. 120] A Only in the mortgage field. Q Do you know whether or not the amount of mortgage business up there would be substantial? A No, it would not be substantial. * * kK & HAE ONG EA DABLER ALES DN NEG: See. | & OME Ao >? 32 [fol 121] THE COURT: In fact, counsel, this testimony we ure getting now fits into the pattern of the previous part of the witness’ testimony, that his bank services Phillipsburg primarily, and that is coupled with his further testimony that the bank did not seek business outside to any extent outside Phillipsburg. Q_ Mr. Leupo, do you know whether or not you derive any business from Allentown? A Yes, we do. Q And do you know whether or not the amount of business that you derive from Allentown would be substantial? A Not. Q_ What about Bethlehem, do you derive any business from Bethlehem? A We do derive business from Bethlehem. Q And would you know whether or not the business that you derive from Bethlehem would be substantial? MR. MEYNER: I object to the word “substantial” because we don’t know what it means. It is general. The man said he did business in Allentown. He says he has business in Bethlehem. If he knows what it is, all right. He has been under subpoena. He has had a chance to look it up. If he were [ fol. 122] adequately prepared by counsel—but now to state it is substantial or not substantial without denoting what it is, doesn’t seem to me— THE COURT: How do I evaluate his answer, counsel, without knowing what he has in mind when he characterized the business as substantial or not substantial? MR. WEINBAUM: I think these words have some meaning, your Honor, on whether or not a bank is dependent on a particular area for any important share of its business, and | would like to make one comment addressed to what Governor Meyner just said about preparation. It was pointed out this morning that it is a tremendous burden on all of the banks that we are Calling on in this case, whether the defendants’ witnesses or ours, to ascertain with any minute particularity, your Honor, the portions of business derived here or there, and it was pointed out this morning by the Governor that we are doing our best to frame some sort of a definition for the Court, and we are trying to do the best we can absent an accountant’s audit which I say— THE COURT: I can appreciate the difficulties you would have there, and it may or may not be that he doesn’t care to go into percentages. However, as [fol. 123] I pointed out 4 moment ago | am going to have a little trouble when I get into 33 the matter of what he considers substantial. | don’t have factual information. | know when | have to write an opinion the opinion requires me to resolve the issue of whether there is substantial evidence or not. I can’t just say that in my opinion there was substantial evidence in my findings of fact. | must refer to what the evidence was which caused me to reach the conclusion that it was substantial. What I do think is there is testimony. His testimony has significance in this respect, it appears from what he said that the bank does some business in Blairstown in the form of mortgages, also on Hope and also it seems that some business comes to the bank from Allentown, which would tend to enlarge the geographic area of the customers seeking the services of the Phillipsburg Bank. MR. WEINBAUM: It is our contention that every place that a bank derives its customers from doesn’t enlarge the geographic market. That is our very point. THE COURT: Not in and of itself. MR. WEINBAUM: No. THE COURT: It must be taken together with all [fol. 124] the other factors. MR. WEINBAUM: That is right. THE COURT: And among others is the capacity to render the service. MR. WEINBAUM: We do think, if the witness is able to indicate the amount of business he feels he gets from an area without putting a percentage label on it that this is helpful to the Court. THE COURT: How could you do that without giving some approximation? MR. WEINBAUM: I think you can give an approximation by any number of word descriptions. very little, or a lot. this type of thing. I think we have to, your Honor. look to some sort of characterization apart from percentages. THE COURT: I am not pinning you down to percentages, but | am trying to get some evidence that I can translate into reasonable inferences, and of course the description of sub- stantial and not substantial is a completely subjective one, and it also furnishes very little guidance to the Court in the matter of geographic area when the witness states that the preference is not to do business outside of the Phillipsburg area and that it is not sought there. 4 . dat Sn AlE ne ing CSR Oe Mr. Leupo, yesterday during your testimony we asked you on page 121 of the transcript, “Do you know whether or not you derive any business from Allentown?” and you indicated “Yes, we do.” Mr. Leupo, do you know what type or types of business you derive from Allentown? A Mortgage business. Q Will you approximate for the Court the number of mortgages that you derive from Allentown. A We have three mortgages. Q And can you approximate the dollar amount of these three mortgages? PEELE LTT EY SI EEN | 43 38 A No, I can’t. Q Can you state how these mortgages were obtained? A These three mortgages in particular were obtained by customers of the bank that moved into the Allentown area. Q To the best of your knowledge, do you derive any other types of business from Allentown? A_ The only other type would be the common savings or checking accounts that these customers are associated with. Q_ Which customers? A The mortgage customers. Q Mr. Leupo, yesterday you indicated also at [fol. 153} page 121 of the transcript in response to a question, “Do you derive any business from Bethlehem?’’, you indicated we do derive business from Bethlehem. Can you, if you know, tell us what type or types of business you derive from Bethlehem. MR. MEYNER: I object to the question. I think it js proper to ask if he knows, to ask if he knows first. MR. WEINBAUM: I have asked that. THE COURT: Do you know what type of business you service from Bethlehem? THE WITNESS: Yes. THE COURT: Go ahead. Answer the question. Q_ Will you please tell us what type of business you derive from Bethlehem, Mr. Leupo. A | do know we derive mortgage business from Bethlehem. Q_ Do you know approximately the number of mortgages you derive from Bethlehem? A Approximately five mortgages. Q Do you know the circumstances by which you obtained or granted these mortgages in Bethlehem? A Yes. On closing mortgages I know of them. I have control of the mortgage funds. Q Mr. Leupo, do you know if you do any other types of business in Bethlehem in addition to the mortgage [fol. 154] business? A Only in the association that these people who have mortgages with us have checking accounts. Q Mr. Leupo, do you do any business in Bucks County, Pennsylvania? A We have one mortgage in Bucks County. ** * * 39 {fol. 156} Q Can you approximate how much mortgage business you derive from the Easton area? A Approximately 150 mortgages. Q How many total mortgages are on your books, approximately? A 550. ** * * iio. 157) Q Do you do any business, Mr. Leupo, in Washington, New Jersey? A Yes, we do. Q Can you tell us what type of business you do in Washington? A We have mortgage business, we have checking accounts and savings accounts. Q How far is Washington from Phillipsburg? MR. MEYNER: It is conceded that it is twelve miles. It is in the record. MR. WEINBAUM: I don’t know that the record does show it, your Honor. A Approximately twelve, fifteen miles. Q Can you approximate for us, Mr. Leupo, the amount of your total mortgage business that you have in Washington, that is, the number of mortgages you would have in Washington? [fol. 158] A Approximately ten. Q And can you approximate the dollar amount of mortgage business you have there? A No, I can’t. Q Can you tell us approximately how many demand deposit accounts you have in Washington? A No, I can’t. Q Can you approximate the total number of Savings accounts you have in Washington? A No, I can’t. Q Do you do any business in Belvedere? A Yes. Q And approximately how far is Belvedere from Phillipsburg? A Say, ten to fifteen miles. Q Can you tell us what type or types of business you do in Belvedere? SUM OM tartan: Sal | “NE Nahe RR Trine pate RES eS aetna oks Sie SRP g v4 bag " - f PROT SEN OF NS A TS HD Ea RAS ide Sp Sag eT a CORRS Datecan. “ 40 A Mortgage business, checking accounts and savings accounts. Q Can you approximate for us how much mortgage business you do in Belvedere? A Yes, we have three mortgages in Belvedere. Q Is this mortgage business which your bank originated? A Yes. Q Can you tell us the circumstances of obtaining these mortgages? {fol. 159] A Yes. We also have a _ director in Washington—from Washington, New Jersey, which is in business, and the entrance of those mortgages was through our director. Q What other types of business did you say you got from Belvedere? A We have mortgage business, and checking accounts and savings accounts. Q And can you give us any idea of the number of checking accounts you have in Belvedere? A_ No, I can’t. Q Can you give us any idea of the number of savings accounts? A No, I can’t. Q Do you know who any of your checking or savings accounts customers are up there? A Well, we do have the County Freeholders, which originates out of the Belvedere area. This is the only one | could give you a definite description of. Q Is that a checking account or savings account? A Savings account. Q Do you do any commercial and industrial lending to your knowledge in Washington or Belvedere? A Yes. Q Do you do any commercial and industrial lending in Washington? [fol. 160] A In Washington, yes. Q Do you do any in Belvedere? A No. Q Can you tell us approximately how many commercial and industrial loans you have in Washington? A Just one, to my knowledge. ** * * - (fol. 161] CROSS-EXAMINATION BY MR. MEYNER: 4] xx * * (fol. 162] Q Do you know why the Phillipsburg Trust Company moved their main office from South Main Street to the Memorial Parkway? A Yes, for a more desirable location. Q And isn’t it true that the South Main Street section where Phillipsburg Trust Company and the Second National Bank and the Phillipsburg National Bank ,llave their main offices is a deteriorating section of Phillipsburg? A Deteriorating and a congested area for the bank to service, yes. Q And there is a change in the general tenor of business in that area too, is there not? A Yes, sir. Q And most of the business—a great deal of the business that was formally on South Main Street has now gone out to where your bank’s main office is located. A You are referring to the banking business or [fol. 163] commercial business? I’m talking about business generally. I would say yes. Yes it has. The Motor Club moved out. Yes. The supermarkets moved out there. Yes. The Hillcrest Shopping Center is out there, the liquor store is out there, the restaurants are out there, the automobile companies are out there. A | answered yes. Q So that there has been a movement away from the downtown section of Phillipsburg and it has moved out to Route 22 or Memorial Parkway, hasn’t it? A Yes. Q And your directors decided you would move with the trend. A Yes, sir. Q Has it been a satisfactory move? A It certainly has. Q How long has Mr. Mamana been connected with your bank? OProroro Nex Sera SPR CE eR ON PR i 42 A I can’t give you an exact year. Q_ Roughly, five, ten, fifteen years? A Fifteen years. [fol. 164] Q And where does he live? A He lives in Easton. Q. And he is an Easton broker? A Yes. Q_ And he was an officer of your company at one time, was he not? A Yes, sir. Q He had offices in your main bank, both when it was downtown and now at the Memorial Parkway. A He had offices in our bank? Not to my knowledge. Q He had a desk, or he spent a good deal of time in the bank. A Yes. Q_ And he was a producer of considerable business for the bank, was he not? A Yes, sir. Q And he was going into the Easton-Bethlehem Township, Bethlehem area. A Yes, sir. Q_ And he did get you business from that area. A He did. Q_ Now you have a Washington director, do you not? A Yes. Q_ And is he getting you some business from that area? {fol. 165] A He is. Q Have you had a chance to thumb through your checking accounts and your savings accounts in preparation for this trial? A No. Q Have you been able to go through the mortgage records in preparation for the trial? A Yes, sir. Q And have you had a chance to talk with your tellers and your people in the bank? In reference to this? Yes. No, I have not. Have you discussed this with your directors? Yes. rOPrO> 43 Q And on the basis of preparing yourself for the trial and on the basis of looking over the mortgage records and on the basis of your knowledge of the areas in which you do business, what would you say is the area in which this bank does business? A I would say a radius of 25 miles at this time. * * * (fol. 169] Q You have had a number of withdrawals from your bank, either a time or a — a withdrawal from time or demand deposits in favor of the Regelsville branch of the Girard Trust? A Yes. Q And wasn’t there quite a drive on their part to get deposits from your area? {fol. 170} A Yes, sir, Q And you saw withdrawals from your bank? A I saw withdrawals and I have acknowledged _ their advertising, yes. Q They did advertise extensively? A Yes, sir. Q Which of the two advertising media do you use more often? | believe you said the local Phillipsburg paper which comes Out weekly and the Easton Express. A The Easton Express. Q Which is a daily? A Yes. Q And which covers pretty much this twenty-five-mile area you described? A Yes. Q When you answered the plaintiff's attorney about the area he described—Phillipsburg and a few municipalities, Easton and a few municipalities—you said that the majority of your business came from there, did you not? A Yes, to my knowledge. Q And by “majority” you mean in excess of fifty percent? A Yes. Q And you are not willing to specify any more than in excess of fifty-one percent? fol. 171] A Tam notina position to. 44 Q Do you know that two directors of your bank, one a director and vice-president, and another a director, have been borrowing regularly over the years at the Phillipsburg National Bank & Trust Company? A 1 know that they have borrowed, I have no knowledge whether it’s regular or irregular. | know that they have borrowed. Q If you knew that they borrowed in excess of what you said was your limit, would this alter your statement that there wasn’t much demand for commercial and industrial loans? A May | hear that again, please? THE COURT: Read it back. (Question read.) A | would have to say yes. * * *K Q Isn't it true that you went from a State bank to a national bank because you felt that the requirements of capital and surplus were less with the national banking outfit than the State banking outfit? A. That is one of the reasons, yes. [fol. 172] Q = And isn’t it true that over the years you have tried to avoid paying cash dividends so that you could build up your capital structure? A Yes, sir. Q On direct examination you indicated that there was practically little difference in the amount you paid on deposits and the amount of interest you got on loans, is that not correct? A I don’t recall that. Q Is there very much difference between the rate—is there any difference on the rate paid on a time deposit as between your bank and the two banks involved in this litigation? A There isn’t any difference. Q Is there any substantial difference in the mortgage loan rate? A Not to my knowledge, there is no difference. Q Is there any real difference in commercial and industrial loan rates? A Not to my knowledge, there isn’t. Q So with respect to this area there is little direct competition? 45 MR. WEINBAUM: We object, your Honor. THE COURT: Overruled. A In regard to the rate area, no. (fol. 173] Q We are talking about time deposits, mortgage loans, and commercial and industrial loans; little or no competition? A Right. Q You are familiar with the bridges between Easton and Phillipsburg? Yes, sir. There are two of them? Yes, sir. One a free bridge and one a toll bridge? Yes, sir. And there is an excessive amount of traffic on both, is there not? A There is. Q And even the toll bridge has an advantageous rate for the local people? A It does. Q Two and a half cents a ride if you buy a book for a dollar? A Yes. Q And where would you say the shopping areas are now moving? At one time they were Easton downtown and some of Phillipsburg downtown. Where are the shopping areas now? A I would say that the shopping areas are in the outlying (fol. 174] areas of both vicinities. Q And the Lopatcong branch of the Phillipsburg National, and the outer edge of Phillipsburg of the Second National branch, are the areas where that kind of business has been moving, is that not correct? A Yes, sir. Q You have a director by the name of Falk, a vice-president? A Yes, sir. OProro>r * ke Kk Q Is it true that the labor population is quite mobile, that is, that they move greater distances as years go on? A Yes, er | 46 Q Do you have customers who work at the Riegel [fo), 175] Paper Company in Milford? A Yes, we do. Q Do you have customers who work at the American Can Company in Washington? Yes, we do. Do you have some who work at Celanese in Belvedere? This I don’t know. Do you have some that work at Bethlehem Steel? Yes, we do. Your stockholders are limited, are they not, the stockholders of your corporation are limited? A In number, or what? Q_ Yes, in number. A Yes. Q And one stockholder controls in excess of fifty-one percent, does he not? A Yes, he does. QOPrOrO> * * * * {| fol. 176] CROSS-EXAMINATION BY MR. ROACHE: xk * eK [fol. 180] Q Do you give loans to college students? A_ Yes, sir. Q You give not many loans? Do you know the number approximately? A We have given out about forty. We have approximately forty loans. * * * * [fol. 181] Q When you advertise in the Express, do you not try to find out where it is circulated? A 1 know where it is circulated, in the Phillipsburg and Easton area. * KOK X 47 (fol. 182] CROSS-EXAMINATION BY MR. MEYNER: Q Isn't it true that of those industrial and commercial loans we were talking about, a number of them were participation with the Phillipsburg National Bank & Trust Company and the Second National Bank? A Yes, sir. Q And it was business you were requested to participate in because it affected the local community? A Yes. Q Something like People’s Water or Pohatcong sewer job? A Yes. Q And isn’t it true that your management presently has the policy of let’s not encourage any trust business? A Yes sir. * * * * REDIRECT EXAMINATION (fol. 182]BY MR. WEINBAUM * * * * (fol. 183] Q You indicated in response to a question on cross-examination that you considered—made reference to a radius of 25 miles. A Yes. Q And this was the basis for what? (fol. 184] A This was our area, our immediate area that we were interested in under the present circumstances, the situation, the economy. Q And how do you arrive at this 25 mile figure, Mr. Leupo, in determining that this is your area? MR. MEYNER: If your Honor please, I asked this witness to base it on having reviewed his mortgages and having reviewed his deposits and his general knowledge, and he gave the answer on that basis. THE COURT: I will overrule the objection. | will see what he says. (Question read back at direction of Court.) & od te ee *y Me a a 4 E | = * & : d ‘4 + 4 2 ; 48 A We arrived at that area because this is the designated area of service projected by my Board, and which they are immediately interested in. THE COURT: I take it your present policy is not to service beyond that area. THE WITNESS: Your Honor, this is the present policy. We would not if the circumstances provided—we would give consideration, but the present policy is to service that area. THE COURT: Is that policy dictated by lack of capacity to service beyond that area? THE WITNESS: No. That policy is dictated for [fol. 185]the purpose of the knowledge of that area, a 25 mile radius. To explain myself, we know what industry is doing in that area, whether cutting back or laying off or possibly having strikes. We know what the point of risk may be. We know what the economy is in that area, and if we extend it beyond that area then we have to make provisions for a wider scope. THE COURT: And planning for a wider scope, any planning for a wider scope, as | understand it, was not adopted. THE WITNESS: It was never adopted. Q I would like to pursue this a bit further, Mr. Leupo. You have indicated you do not solicit throughout this 25-mile area. A Only through the medium of advertisements in the local paper. Q Do you know whether or not your advertising reaches the—saturates the Lehigh County area? A 1 don’t know it for a fact, but I assume it would. It has a large circulation. Q Do you anticipate, Mr. Leupo, at some time more actively soliciting business in this 25-mile radius, personally soliciting business, than you do now? MR. MEYNER: I object. That was not the question. {fol. 186] THE COURT: The difficulty I find with the question is it seeks an opinion from him as to what his anticipation is. | presume the bank is operated by a Board of Directors and in the absence of any policy or planning | don't know what value the answer would have. MR. WEINBAUM: He is on the Board. THE COURT: That is all right. If there is any planning for more activity in the area I will permit it, but when you ask 49 whether he anticipates I don’t know how much value the answer would have. Q Is there any plan, Mr. Leupo, made to more actively solicit business within this 25-mile radius? A The only plan that is being considered would be upon the growth of the bank the bank would be in a position to reach out into a greater area. THE COURT: Mr. Leupo, I developed the thought on the basis of your testimony yesterday that you don’t—that the bank had all the business that it could handle. Now if I am incorrect on that— THE WITNESS: At this time. THE COURT: At this time. THE WITNESS: Yes. THE COURT: Has the bank engaged in any planning of any nature whatsoever to improve its financial [fol. 187] condition so that it could service to a greater extent within the Phillipsburg-Easton area and environs and beyond that? Maybe I'll put it in a simpler form. As far as the present policy is concerned, are you satisfied with the situation that presently exists? THE WITNESS: That presently exists, yes. THE COURT: And there is no indication at the present time upon the part of management of the bank to change that situation. THE WITNESS: No, there is not. Q By your answer that you have all the business you can handle, are you interested in developing business further? A Of course, yes. The answer is yes. Q Can you state whether or not in your Opinion the linancial resources of your bank are adequate to grow further? A My Board feels as if they are, yes. Q Do you feel that the area is growing? A Ido. Q Do you feel that—can you state whether you feel that ismall bank such as yours will or will not be able to share in wch growth? Mr. MEYNER: I object, your Honor. lol. 188] THE COURT: Overruled, AI feel as if they can share, yes. * kk * ope nigt Ccombeen dina AS GREW PBA Ce VINE he RB ATOR a [fol. 192] Q Mr. Leupo, did you base your answer concerning the 25-mile radius, called your area, on the fact that you, as testified earlier, you derived certain business from Allentown, certain business from Bethlehem, certain busines from Washington, certain business from. Belvedere? A Did I derive my opinion from my existing business? Q_ Yes. A No. I didn’t derive my opinion from that. I derived it from the opinion that we know this 25-mile radius and we have had experience in there, and in order to be acquainted with it—it was a compromise. [fol. 193} Q Mr. Leupo, can you explain for us why your board has said, ““Let’s not encourage trust business”? A Well, I think one of the prime factors is the existing trust business we have today, and the return of profit from what we have. And in order to encourage it, we would have to elevate our Trust Department and go to a larger expense, which we are trying to curtail at this point. I think this is the prime part of it. Our Trust Department today is servicing possibly the desires of our immediate customers. We have not gone outside and solicited trust business. Q At some point do you believe that the board would consider hiring a trust officer? MR. ROACHE: Objection. THE COURT: Sustained. Q In your opinion, Mr. Leupo, if it is shown to your satisfaction that there is a demand for trust business in the area, do you think that you would give consideration to hiring a trust officer? A When you say me, you are referring to the board, am! correct? MR. WEINBAUM: Yes. MR. MEYNER: I object. MR. WEINBAUM: He is a member of the board. THE COURT: It is a hypothetical question. You are asking him to assume something. {fol. 194] All right. I think you have covered it, bui I am not going to restrict you. MR. WEINBAUM: We will withdraw the question. THE COURT: Would you state again, Mr. Leupo, what reasons, if any, there are, of your own personal knowledge, why your bank does not want to expand its activities in trusts? 51 THE WITNESS: The most obvious reason at this time is that we do not have a Trust Department to the extent of advertising for additional business. Our Trust Department today is in a position to handle the trust work that we have. THE COURT: Then am I correct in my assumption that the reason for not expanding is the lack of facilities available rather than the absence of availability of trust accounts? THE WITNESS: Correct. Yes, I would say, to this extent, that we have not had requests for a sizeable or large trust work that would necessitate increasing our trust department. THE COURT: I don’t know whether you understood my question. | gathered from your testimony a moment ago—and please do not hesitate to correct me if my recollection is faulty-I gathered from your testimony a moment ago that the trust services you [fol. 195] render were considered as in the nature of an accommodation to customers rather than as business for the bank. THE WITNESS: Presently, yes. THE COURT: Is that true? THE WITNESS: True. THE COURT: I think counsel was trying to find out what you might do in the future. And I pose this question: Is it true that the present policy of the bank is not to set up a Trust Department, because it does not desire to handle trust accounts that may be available within the area that you service, except as an accommodation for customers? THE WITNESS: Correct. THE COURT: Is that correct? THE WITNESS: That is correct, at this point. MR. WEINBAUM: One further clarification, your Honor. Q Mr. Leupo, has your bank had requests for trust services which you haven’t been able to accommodate? A No. MR. WEINBAUM: We have no further questions, your Honor. RECROSS EXAMINATION BY MR. MEYNER: Q It is the present policy of your bank to do business ARTA A CaN ite Aen Dinbeo 25 LC tee aks a Bal pha ba a STN age ae a He BPS eM Biitsinc:; BL er ARG, — 52 within a twenty-five-mile radius of your bank? {fol. 196] A’ Yes, sir. x* eK * [fol. 197] EARLE J. LEWIS, sworn. DIRECT EXAMINATION BY MR. WEINBAUM: Q Mr. Lewis, will you please state your address and occupation? A My home address? Q_ Yes. A 119 Mine Hill Road, Hackettstown, New Jersey. And | am with the bank, Peoples National Bank of Hackettstown. Hackettstown, New Jersey. Q_ And what is your capacity at the bank? A_ I am executive vice-president and cashier. Q Where is Hackettstown located, Mr. Lewis, in relation to Phillipsburg, New Jersey? A Hackettstown is twenty-three miles east on Route 24 and 46, on the edge of—the eastern section of Warren County and the western section, you might as well say, of Morris County, on the boundary line. S ** * * [fol. 199]Q Can you briefly describe the various services offered by your bank, please? A We have a full service bank. We have mortgages, a trust department, commercial accounts, savings, travelers’ checks, business loans, consumer credit department, safe deposit boxes. x** Kk * Q And can you tell us what rate you pay on your passbook savings? {fol. 200] A Four percent. 53 Q How long have you _ been paying four percent, approximately? A I think on the first of January of 1964. I am not sure of that. I believe it was 1964. Q Do you do any tuition financing? A Very little. We do a little, but very little. * * * * Q Mr. Lewis, for purposes of this case, the government has defined Phillipsburg and the environs to include the City of Phillipsburg, Pohatcong, Lopatcong, and Greenwich Township, and Alpha Burough. To the best of your knowledge, Mr. Lewis, does your bank do any demand deposit business in the Phillipsburg and environs area? A Yes. Q Do you know approximately how many accounts of this type you have in this area? A No. Q Do you know anything about the demand deposit business which you do in this area, if you do any? MR. MEYNER: Objection. He already said he doesn’t know (fol. 201) MR. ROACHE: Objection. MR. WEINBAUM: Do you know anything at all? I asked him about the number, your Honor. THE COURT: Read the question. (Question read.) THE COURT: He just said— MR. WEINBAUM: The question before that. A We do have accounts here. * * * * THE WITNESS: I believe the primary section of Phillipsburg would be-—let’s Say around six miles, according to the chart which they have established. MR. WEINBAUM: Your Honor, we— THE COURT: Wait a minute. Let the witness finish. | don’t think he has finished. THE WITNESS: And in this particular section [fol. 202] of—our activity in this section, including our loans, including our mortgages, including commercial savings, I would f debt ase ae ed a NE Cae. an ee SATS tes 4s'2 » * a WS et fe 54 definitely say that we have less than one percent of our total number of accounts. And our total number of accounts approximately is 15,000—Christmas Club, loans, commercial accounts and savings accounts. We have a very small portion in this section. Q. Fifteen thousand dollars? A Fifteen thousand accounts. Q Is this your total number of accounts of all categories? | om OF Q I would like to pursue further some of the various kinds of business, Mr. Lewis? A Right. Q To the best of your knowledge, does your bank have any loans from Phillipsburg and the environs? A Yes. Q Can you tell us what types of loans? A We have one mortgage in this section. We have a few consumer credit loans in this section. Q Do you have any commercial and industrial loans in this section? A Not industrial loans, no. Q Commercial loans? A_ No. [fol. 203] Q Do you have any dealers in this Phillipsburg and environs area? A No, no we don’t. Q Do you advertise, Mr. Lewis? A We do advertise, yes. Q Where do you advertise, what mediums do you advertise in? A We use the Hackettstown Gazette. Once in a while Washington Star. They are our main sources of advertising plus billboards. Q You advertise on the radio? A We have advertised on the radio. We are not now advertising on the radio. Q What radio station or stations have you advertised on? A One out of Washington, New Jersey. Q Mr. Lewis, turning for a moment to Easton, we have defined the Easton area to encompass the City of Easton, the Townships of Forks, Williams and Palmer and the Boroughs of Wilson, West Easton, Glendon, Stockertown and Tatamay. | 55 would like to ask you whether to the best of your knowledge your bank does any business in that area. A This would be the Easton area? Q Yes, as we have defined it. A To my knowledge, no. We may have—which all banks [fol. 204] do, a few scattered accounts, a very few. Q Would this apply to the various types of business your bank does? A Yes it would ** * * (fol. 206] Q Getting back to Allentown, Mr. Lewis, can you state for us to the best of your knowledge whether you do any business in Allentown? A No. Q Mr. Lewis, approximately how far is Washington, New Jersey, from Hackettstown? A Twelve miles. Q Can you state whether or not your bank does any business in Washington? A Some, yes. Q Can you tell us what types of business you do there? A We have savings, commercial, Christmas clubs, mortgages. Q Do you know approximately how many savings accounts you would have in Washington? A No. Q How many Christmas clubs? A No. Q Do you have any idea of how many commercial loans you would have there? [fol. 207] A No, I don’t. Q Do you know who your commercial accounts are in Washington? A Not offhand. Q Can you tell us approximately how many mortgages you have in Washington? A Very few, very few. Q Would you know the approximate dollar amount of such mortgages? A No, I wouldn’t. 56 Q Mr. Lewis, to the best of your knowledge, does your bank do any business in Bloomsbury, New Jersey? A_ Not to my knowledge. Q_ To the best of your knowledge, does your bank do any business in Milford, New Jersey? A_ Not to my knowledge. Q_ To the best of your knowledge, does your bank do any business in Flemington, New Jersey? A_ Not to my knowledge. Q_ To the best of your knowledge, does your bank do any business in Regelsville, Pennsylvania? A No. Q_ To the best of your knowledge, does your bank do any business in Nazareth, Pennsylvania? A No. {fol. 208] Q To the best of your knowledge, does your bank do any business in Bangor, Pennsylvania? A_ No. Q_ To the best of your knowledge, does your bank do any business in Slatington, Pennsylvania? A_ No. Q_ To the best of your knowledge, does your bank do any business in Coopersburg, Pennsylvania? A No. Q_ How about New Tripoli, Pennsylvania? A_ No. Q To the best of your knowledge, do you do any business up in Blairstown, New Jersey? A Yes. Q Can you tell us what kind of business you do up there, if you know. A Savings, commercial, mortgages. Q Do you know how many mortgages you have up in Blairstown? A I couldn’t say without a survey, no. Q Do you say commercial and industrial loans up there? A No, no. Q Do you know how many savings accounts you have in Blairstown? A No, I wouldn’t. [fol. 209] Q Do you know how many mortgages up there? A No, I don’t know. a 57 Q Do you know any of your mortgage customers up there? A Personally? Q Do you know who any of them are? A Not without taking a survey, no. Q Now, do you do any business in Belvedere? A We may have a few savings accounts and checking accounts, but very little. Q Do you have any lending activity in Belvedere, to your knowledge? A Not to my knowledge now. There may be consumer credit loans over there. We go out quite a distance. LORIE LIS ELOLY BALE LENIN oe AIT | eee * (fol. 211] CROSS-EXAMINATION BY MR. MEYNER: eee * \fol. 212] Q Have you made any detailed study of your mortgages? Have you gone through a list of your mortgages prior to your coming here? A No, not just prior to coming here. : Q In preparation for your answers, have you gone through your list of mortgages? A No. Q Have you gone through a list of your demand and time deposits? A No. I didn’t take a fine survey, no. Q Did you go through your automobile loans? A Not before I came in here, not recently. Q You have better than a million dollars in automobile loans, do you not? A In automobile loans alone we have a million dollars, yes. Q On installment credit you have about 400,000? A On installment credit on total we have the best part of two million. That includes all our installment paper of all Sorts. fol. 213] Q You have concentrated in this area? You have made an endeavor to build up your installment loans? ash $8 STAY Lb GR EGE LEB Y Av nha TURAN 6 ho cnt 58 A Oh yes, yes. Q And you have never determined to go beyond a few miles from Hackettstown? A We are seeking new business. Q_ Have you gone to Washington and sent a man out there trying to get new business? A We have not recently, no. Q_ Have you sent anybody to Phillipsburg or Easton? A_ No, we have not recently, no. Q Isn't it true that many of your customers for installment loans do go to Phillipsburg or Easton or Bethlehem and Allentown and then come back and want to borrow so they can purchase an automobile or some appliance? * * * * [fol. 214] THE WITNESS: This happens. There are a few cases of this, yes. * * * * Q_ And Hackettstown presently has a growth development that is shared in by all of Warren County, all of the Lehigh Valley area, isn’t that so—well let’s say all of Warren County. A Yes, yes. Q_ In other words, the people are moving out [fol. 215] towards the Delaware. A Yes, yes. ; Q_ That is the only area they can grow to. A Yes. Q_ And isn’t it true that just across the river, across the Musconetcong on the road to Phillipsburg a new plant is being established? Yes. What is the name of the plant? I can’t tell you. I am sorry. Was it U.S. Radium? I am not sure. I think it is. I’m not sure. And it is a prospective substantial employer. Yes, yes, definitely. And you have seen industry in Hackettstown grow? Yes. POPFOSFOFOS Q And Township? A Yes. 59 What. . : Yes. Is a development out in Mansfield Q So as ington, oa ice farms are now becoming populated. A Yes. {fol. 216] travel Route 24 from Phillipsburg to Washington tof the farm space is now being occupied by A Yes. Q Would institution hnd the same is true from Phillipsburg—from A No, itlipsburg, is it not? Q That number Of Mprise you to know that an Easton financial A That : mortgages in Hackettstown? Q That) not surprise me. mortgages 'd Savings from Newark have a substantial institUtlOnS os in your town? your knowle V surprise me. A And ‘ston institution has as many as three m.. nN field? Do you find that savings and loan A Newa the mortgage field in Warren County, to They A Yes. astitutions are from as far away as what Q Insur: | A I don in New York City. Q But Wing out there and putting out mortgage A Yes. Q And y. savings banKipanies too? A Yes. about that. Q And now the savings and loans, Hackettstov A Yes. ings institutions, that is the {fol. 217] Q Your n what the ithe Sense them from Easton are moving towards S never chosen to try to develop business describes as the Phillipsburg-Easton area. send people there to try to get business? Ta ast BIRD re SI BPR 60 A I can answer no and I can answer yes, so I will leave jt unanswered. * * * * {fol. 218] Q Well, to your knowledge, have you ever sent a person from your bank to Easton or Phillipsburg to try to get— A Not in Pennsylvania. It wouldn't be in Pennsylvania, definitely. Q There is a great growth of industrial enterprises in the Warren County area—Celanese, and Hoffman-LaRoche in Belvedere, and M. & M. Candy Company is increasing its employment in its new plant that is to be located on the Musconetcong, American Can in Washington—many of those large corporations have moved in. Have you found from some of the manufacturing outfits that they are desirous of giving you trust business with reference to pension funds or pension plans? A Yes. Q Would you say there is a need to service this in the Warren County area generally? A Yes, I would. Q There is a potential for that kind of business? A Yes, there is. Q And would you say that there is a real need to develop trust business in that entire area? A Yes. Q And is there competition for this business from outside areas? {fol. 219] A I would say yes. I would say yes. * * * * {fol. 221] Q There are people in the area where you are doing business who are seeking the dollar that is being saved, are there not? A Yes. Q Who are they? Are they savings institutions? A I am going to make this statement. Maybe it isn’t the right thing. We have in our section strong competition to the east of us. We have it. And we have had it for a long while. There are savings and loans and there are savings banks. 61 Howard Savings is one, Morris County Savings is one. Morris County Savings is a very, very strong competitor of the Peoples National Bank and the Hackettstown National in that section. Q Trying to get the savings dollar? A Yes. Q How about mutual funds? A Mutual funds, that is another source that takes money out of our banks. Q And how about insurance companies? A To a certain extent, yes. I wouldn’t say insurance as much as | would the other items. Q How about credit unions? A I can’t disagree with you. Q How about the stock market? A Well, I think that is a national thing all through the (fol. 222] country. It does take some out, there is no question about it. . Q You see it in your bank, don’t you? A That’s right. Q And you see it on the extension of credit side, too, other people that are seeking to make loans? A Yes, true. Q Especially in the automobile loans which are rather heavy. There are financing companies working out arangements with dealers, are there not? A There could be. This I don’t know. I couldn’t answer. Q Did you ever hear of the General Motors Acceptance Corporation? A Oh, yes. Q Have you ever encountered them? AI have. Q Aren’t they competition? A They are. CROSS-EXAMINATION BY MR. ROACHE: * * * * ifol. 223] Q Why do people travel distances to come into Hackettstown to buy automobiles? Ditties stisinccitsnniaies stains Paar Sota aie a lads Aaa ab hiih 62 {fol. 224] A_ I think to answer that—I think you will fing that throughout the nation. I don’t think it is only Hackettstown. | think it is Easton, Phillipsburg, every place. They will shop for cars. Q They go all through the. community, Easton, Allentown, Phiilipsburg? A Whether it is New York or Los Angeles, people like to shop. Where they get the best deal, this is it. I think this js just an ordinary thing that we have in our economy of our country here today. Q_ And in the purchase not only of automobiles but in large consumer items people will travel distances? A I think you are right. In some cases, they will shop. * * * * REDIRECT EXAMINATION BY MR. WEINBAUM: * * * * {fol. 225] Q Do you personally solicit in the Phillipsburg area? A Not for some time. We did at one time, but not for some time. Q_ How long has it been since you have? A When we first established our consumer credit department, back in 1945, we did solicit the County, yes. Q And when did you terminate that solicitation, approximately? A_ Id say a couple of years later, probably. Q And did you at that time also start soliciting in Pennsylvania? A No. Q_ Why didn’t you solicit in Pennsylvania? A Well, our policy of the bank is not to go into Pennsylvania. Q_ Why is that? A The laws are different and we just don’t move over. | think that is one of the reasons, the laws are different and we just never established going into Pennsylvania with a loan. *x* * kK * [fol. 248] CLARK C. BOWERS, sworn. — BY MR. AUSTIN: BOFrOFOrOro 0 ae FOPFroO > [fol. ‘ 63 Sena DIRECT EXAMINATION Would you please give your address, Mr. Bowers? Home or business? & Home address. ; 38 North Lincoln Avenue, Washington, New Jersey. i And what is your occupation, sir? Attorney and banker. With what bank are you affiliated? Washington Trust Company of Washington, New Jersey. How long have you been with the Washington Trust pany? Forty-two years. How long have you served in your present position? Since about 1930. And that position is— President. **e* * 251] Q What are the rates—what rate of interest do you pay on passbook savings? A Q A Q A Q Four percent. And what rate do you pay on time deposits? It is only four percent for both. Do you offer certificates of deposit or CD’s? We have not yet. To the best of your knowledge do the other banks [ fol. 252] throughout Warren County, New Jersey, pay four percent on passbook savings? A [fol. I believe so. I am not quite sure. **£ * * 253] Q Do many of your customers use more than one banking service offered by your bank? A Beg your pardon? Do many of your customers purchase more than one service from your bank at the same time? A [fol. Oh, they do, certainly. 254] Q Do you regard this as a valuable feature of your banking business? ea ee Nereky Beiticiisin: CAE i RR Ba Raia sis snad- ou baa acaba ag alibi! Fwalle 64 A Ido. Q_ Do you actually encourage your customers to purchase more than one of your banking services? A Certainly, yes. * * * * Q_ To the best of your knowledge, does Washington Trust derive any business from Phillipsburg and environs? A It does. Q_ What types of business do you derive from that area? [fol. 255] A Automobile loans, appliance loans, personal loans, collateral loans, and demand notes, and mortgages. Q_ Do you know the approximate number of mortgages that you have in the Phillipsburg area? A Twenty-three. Q Do you know the approximate dollar value of those twenty-three mortgages? A About $23,000. That's strictly a mortgage—strictly mortgages, not notes secured by mortgages. It would be far higher, if it were a note given to secure a mortgage. *_* * * Q Do you know approximately how many notes you have that would fit that description? A_ I believe there is only one. And that was probably a quarter of a million dollars. That’s an approximate figure. But it was participated in by the Philadelphia National Bank. x*** * [fol. 256] Q Thank you. Do you know the approximate number of mortgages you have on your books at Washington Trust? A I'm sorry, I do not have that. | have the total— the dollar value, but not the number. Q_ What then is the total dollar value of the mortgages? A About $4 million. Q. And that is as of this date or- A Current. Q Current. Thank you. Do you know the approximate number of consumer installment loans that you derive from Phillipsburg and environs? 65 I do. ; What is the number, total number of consumer installment loans you have in the area? A If you would subdivide the question | could give it to you in automobiles, appliances, and personal loans, rather than asa gross, without me adding it up here. Q What then is the total number of automobile installment loans you have from the Phillipsburg area? A Inthe Phillipsburg area we have 63 of about $85,500. Q That is the total dollar value of those automobile loans? (fol. 257] A In the Phillipsburg-Stewartsville vicinity. Q What would be the total number of appliance loans you have in that area? A We only have about eight of $3,100. Q What would be the total number of personal loans you have in that area? A We have 40 of about $23,000. Q Do you know the approximate number of automobile loans you have on your books in Washington Trust? A About 450. Q And what would be the total dollar value of those? A $928,000, in round figures. Q Do you know the approximate number of appliance loans you have on your books? A 250. Q And do you know the approximate dollar value? A $62,000. Q Do you know the approximate total number of personal loans you have on your books? A 375. Q Do you know the approximate total dollar value of those loans? A $371,000. Q Do you know the approximate number of checking [ fol. 258] or demand accounts you have from the Phillipsburg area? A Ido not. Q Do you know the approximate total number of time and savings deposits accounts you have in the area? A lam sorry, I do not, no. Q Do you have any commercial or industrial loans in the Phillipsburg area? A The one that I just spoke about, the large corporation in RATAN Tepes roa SRAr RRA we PPRACLT I 66 which we have 10 per cent participation is, I believe, the only one. Q May I ask, in reference to that, Judge Bowers, did Washington Trust originate that loan or simply participate with its correspondent bank? A No, we instituted the loan. That is, the party applied to our bank for the loan. The Philadelphia Bank was requested by us to participate because it exceeded the 10 per cent of our capital and surplus. Q What is your current lending limit? A $125,000. Q And how Jo you compute that lending limit, Judge Bowers? A The capital and surplus, 10 per cent of the capital and surplus of the institution. * * * * {fol. 261] Q What types of business glo you have from the City of Easton alone? A Mortgage. Q_ Do you know the approximate number of mortgages you have there? A We have one mortgage in Easton of $25,000. Q Do you get any other type of business out of the City of Easton? A Yes, sir. Q_ What types would it he, sir? A We have loaned money on a taxicab business in Easton, Diamond Taxicab. Q And what was the dollar value of that loan, approximately? A Probably $10,000. I am not sure. That was guaranteed, of course, by an endorsement, also. Although we do have liens on all the taxicabs there. Q Do you derive any other types of business out of the City of Easton? A Not to any extent. Q Do you derive any business out of any of the townships or boroughs I just named that surround the City of Easton? A Yes, we have two mortgages at Windgap, Pennsylvania-| believe that is in Northampton County, in which Easton is [fol 262] situated: | believe so. And we have one mortgage in Mt. 67 Bethel; and two in Pen Argyl, and one in Nazareth, Pennsylvania. And they are in Northampton County, or immediately next to it. Q Do you know the total dollar value of those? A Ido. The two in Windgap are $36,900. The one in Mt. Bethel, $16,000. Pen Argyl, two of them, $30,400. The one in Easton, $25,000. And one in Nazareth, $16,000. A total of $124,300. Q To the best of your knowledge, sir, do you get any business from Hackettstown, New J ersey? A Yes, sir. Q What types of business do you get from that city? A Various loans, automobiles, appliances, personal loans, time deposits—or time collateral loans, mortgages. Q Do you know the approximate number of mortgages you have in Hackettstown? A That’s one thing | Overlooked, not the number of mortgages in any case. Q Do you know the approximate total dollar value of the mortgages you have there? A I can’t give you that. (Examining papers.) Excuse me. We do have 21 mortgages to Hackettstown, 21 mortgages, Q Sir, do you know the approximate total dollar [fol. 263} value of the mortgages? A (Negative response.) Q Do you know the approximate number of Savings accounts you have from Hackettstown? A No, 1 do not. Q Do you know the approximate number of demand accounts? A No, sir; 1 haven’t that information. Q Do you know the approximate number of automobile loans you have in Hackettstown? A Yes, sir. Q What is that number, please? A $161,000; 103 of them. Q Do you know the approximate number of appliance loans you have in Hackettstown? A We have eight amounting to—excuse me. We have ten, $2600. Q Do you know the approximate number of personal loans you have in Hackettstown? A Forty-four, $32,000, total. That takes in Hackettstown, Port Murray, Port Colden and Great Meadows, in that vicinity. eine | a a a 68 Q Approximately how far is Hackettstown from Washington? A Ten miles. * em {fol. 268] Q Could you give an approximation, Judge Bowers, of the amount of your total business derived from Washington Borough? x KK * {fol. 269] A Automobiles, we have 188 loans, totaling $554,400. Now, this is in addition to what I have testified to before. Appliance loans, we have 172, amounting to $36,800, Personal loans we have 135, totaling $240,000. And miscellaneous small loans, 25 of $19,000. And time and notes, collateral loans, $2,281,000. And I’m sorry, I could have given you the grand totals, too. | see they are here. {fol. 270] Q Judge Bowers, am I to understand that those figures are for Washington Borough or for Washington Borough and the township combined? A Washington Borough and the immediate vicinity deducting what I have testified before, although I can give you our Straight totals including them all, if you wish. ‘ xem {fol. 272] Q Do you recall any instances over the past five years where because of your lending limit you have been unable to adequately provide for the credit needs of a customer or prospective customer in the Washington area? A Because of what? Q_ Because of your lending limit for individual loans. {fol. 273] A No. We have at least participation with other—our correspondent banks. We have no trouble. They are always glad to cooperate with us. x** *K * [ fol. 274] CROSS-EXAMINATION BY MR. ROACHE: 69 + (fol. 275) Q When did your bank first give a rate of interest of 4 per cent, when did you first £0 up to 4 per cent? A | would say within two years. Q Are you sure of that, are you sure it wasn’t longer? A If you have a definite date, | don’t recall when it was, Q I don’t have a definite date, but | thought it was four or five years ago. A I doubt it. I believe two years would be nearer. Q At that time what was the Phillipsburg National Bank charging as a rate of interest, if you know? A It occurs to me that they were always less than what we paid; but what it was, I don’t know. Q Did this enable you to get business from Phillipsburg, because of the higher rate of interest? A I wouldn’t say so. I don’t know. Certainly they never complained and we never were glorified by it, anyway. (fol. 276] Q Who never complained, Phillipsburg National Bank? A No, they are not the complaining type. And they didn’t, anyway. *** & Q Do you think you could do a better job with a full-time trust officer? A Certainly. Q Do you think there is trust business in the area to be had, ifyou could devote more time to this? A I would believe 80, though I don’t particularly lead that line, that is, | don’t—if | wasn’t in there, I wouldn’t care for my bank to be in the trust business. Q So you don’t concentrate on this business. A Not at all. But business is available, I will agree with that. *kK* & CROSS-EXAMINATION BY MR. MEYNER: * KX kK * BLADE RE SE NEHY a a email SCRA es 70 {fol. 277] Q And what would you say is the radius from your main office in Washington by which you consider your trading area? A_ I would say maybe 20 miles. We have a lot of loans within that period, and we have them all over the State of New Jersey in the mortgage department, that we sometimes retain and sometimes pass them on to the Seamen’s National Bank in New York. [fol. 278] Q In other words, as a matter of policy, you would like to do your business within 20 miles, or 25 miles. A Well, yes, because it is less investigation, we know the people. But that doesn’t prohibit seeking business elsewhere, only we would be more cautious, for we wouldn’t know the people, that’s all. Q But within an area of 20, 25 miles, you try to confine your business. A Well, yes, but we are open for business elsewhere. Q_ Even beyond that. A Yes, we are, certainly. Q And you do have a large commercial loan in the Phillipsburg area? A We do, a participating loan. Q You have lived in this area of Washington, or the Lehigh Valley area, for most of your life, have you not? A Ihave. Q_ Will you tell us something about the shopping pattern. A Well, in Washington, from a grocery standpoint we are well taken care of. But for merchandise of women’s clothing, men’s clothing. | would say that it could be improved. And sol believe many people—I know my family—go to Allentown a great deal, and to the suburban-—the great stores of New York, out in Short Hills. {fol. 279] Q Do you or your family go to Allentown, Hess Brothers? A Oh, yes, we do quite a bit of business with them, both! and my wife. Q And, as a matter of fact, where in this area of Warren, Lehigh and Northampton Counties do you buy your suits? A Well, I bought a couple over at Hess” just recently, Governor. Q_ And do you have a credit card there? A Oh, yes. -* _— Q And do quite a few people in Washington have credit cards there? A I believe so. Yes, sir; | would say they do. ** * * (fol. 284] Q Would it surprise you that Valley Federal Savings & Loan has forty mortgages in Washington Township? A No. | would take your word for it, Governor, because | see it on the records as I look over things a little. | know they do a lot of business up in our way. Q You are still the kind of practicing lawyer that does some searching around? A It’sa nice little vacation at times to go over there. Q Are efforts being made by other banks and financial institutions to get the depositor’s dollar? A Sir? Q Do you think that there are other people who want to get the dollar that you want for a deposit? A There is no question about it. Yes, sir. Q How about the activity of mutual funds? A I would say there are at least three agents in Washington or vicinity that are seeking to sell mutual funds. Q And have you seen—do some of your customers subscribe to these mutual funds? A They do. Q How about insurance? A They are competitors. Insurance companies, you refer [fol. 285] to? Q Yes. A Yes. They are competitors. Q And there is a concentration in your area? A There are a few, really, the Prudential and Northwestern, I believe. Q And how about savings and loans, that is for the depositors, too? A Well, the Washington Building & Loan Association | know is after the dollars. They have sought an investment from me which I gave them, too. Q Asa matter of fact, you have one of the more successful building and loans there, don’t you? A Yes. I think it is a sound institution. 4 j two or three of those, and maybe not. 2ry few. Didn’t encourage them. ds, you limit your business to the type of loan? ve did and do. are of the fact that much of that business Sine BN RN LSD tM BB MSR OLN AE le ale a Ha re aE VALS en oe ee) 74 in Federal Home Administration loans has gone to other sections of Washington or Northampton or Lehigh Counties? A_ I understand that it has, yes, sir. | understand that it has, Q_ In preparation for your appearance here I gather that you did some homework and thumbed through the loans of various types, is that correct? A I had it done. Q You had someone in the bank do it for you? A_ I got a recapitulation on it, yes. Q_ Who was in charge of that? A Well, there is an assistant treasurer, Mrs. Flynn, who did it, and the assistant secretary, Mr. Cunningham, and Mr. Rudd, the treasurer and secretary of our bank. . Q_ Mr. Rudd would be in charge of getting it? A He is the one whom | directed to have it done. Q And you did not choose to try to go through your demand or time deposits in order to get a similar breakdown? A lamsorry. I entirely overlooked that. Q But you do have depositors within this twenty or twenty-five-mile area? {fol. 290} A Oh, there is no doubt about it. Certainly we have depositors from Phillipsburg, certainly. Q_ And from these other areas? A Oh, yes, we do, all around there, quite some distance away. I was up near Columbia the other day and asked a woman for directions about things I am interested in up there, and she said, “I am a depositor in your bank” and that must be twenty miles away. Q Columbia is just opposite Portland, Pennsylvania? A Yes. I had no knowledge of it, but she said she wasa depositor there in the bank. You do permit banking by mail, do you not? Yes, sir. Have you found that that is on the increase? I can’t answer the question. I don’t know. You are not familiar with that detail, but you do have it? Yes, sir. And if someone from Pennsylvania comes to this automobile dealer who is a director of yours and he wants to give you that paper you finance that paper? A Wedo. MR. MEYNER: That is all I have. OPrOPrOPrO 75 REDIRECT EXAMINATION BY MR. AUSTIN: **k * * (fol. 293] Q_ I believe you testified, also, Judge Bowers, that you regard your trading area as encompassing a 20-mile radius of Washington, New Jersey. To what extent, if any, was that statement based on the breakdown of the geographic origins of your business that you gave me on direct examination? A Well, the Hope vicinity there must be 20 miles away, and certainly the Hunterdon County area would be 15 to 20 miles, and Nazareth certainly would be 20 miles from my bank, and Pen Argyl, and we have—I see a list of three-quarters of a million in mortgages spread all over New Jersey, down in Ocean County even. Q Do you happen to know whether you have any accounts, be they demand deposits, time or Savings deposits, or loans originating out of New York City? A We have some trust business originating out of New York City. Mr. Harold Sloan, a brother of Alfred P., to make it known who they are, we had some trust business that he set up for his grandchildren and son. Q Do you have any business Originating out of Newark, New Jersey? A Yes. Q What type of business would that be, sir? (fol. 294] A That’s quite a tragic affair, if you want me to say. There was a man on your—Prince Street, | think, was involved in difficulties here, and he ran a liquor store there, a package store on Prince Street. He came out to Start a market in Washington, New Jersey, and he wanted to borrow some-—say, $25,000, and wanted to give us the mortgage on the building on Prince Street there, which we didn’t take. And after this trouble down here—we took a mortgage, however, on his home in the Oranges, which is a very nice home, it’s a good mortgage, we still get it. But then the poor fellow was murdered here on the street, | understand, since then. So that is the story. * ee * fol. 198] TROY E. RHOADES, sworn. Recs | et ae , 5 ( % 4 4 A ” FY x 1 3 i rs & = 53 76 DIRECT EXAMINATION BY MR. AUSTIN: Would you please state your address, Mr. Rhoades? 147 North Main Street, Nazareth. And what is your occupation? I am employed by the Nazareth National Bank. In what capacity? I am president. How long have you worked in connection with banking’ Forty-four years. {fol. 301] Q Approximately how far is Nazareth National Bank from the City of Easton? A Ten miles. QQ Doyou have any branch offices? A One. Q_ Where is it located? A_ It is located six miles from our main office in the direction of Easton, in Forks. Q_ Approximately how far is the Forks branch, your branch office, from the City of Easton? A Four or five miles. Q_ What is the date of the establishment of your branch office? A December, 1964. Q_ Would you please describe the various services offered by the Nazareth National Bank, including the Forks branch? A Well, I would say we were a full service bank. We offer all types of banking services, checking accounts, savings accounts, loans, Christmas Club, travelers’ checks, safe deposit boxes. We buy and sell securities. I have a Trust Department. Q_ Do you also offer mortgages for mortgage loans? A Oh, yes. Q Would you please state the interest rate on passbook savings at Nazareth National? A Four percent. POPPA SO rN * * * * {fol. 302] Q How long, approximately, has Nazareth National paid four percent on passbook savings? A_ Two years, approximately. Q What is the current rate of interest being paid on passbook savings by the banks in Easton? 77 A To my knowledge four percent. Q And approximately how long have they been paying that rate of interest on passbook savings? A Several months. **¥* * (fol. 303} Q What is or what was, rather, the size of your Trust Department measured by total trust assets as of the year end 1967? A You mean corporate or individual? Q Total. A About ten million of each, ten million individual trust and ten million corporate. * * * * fol. 304] Q Do many of your customers purchase more than one of your banking services at a time, Mr. Rhoades? A Oh, definitely. Q Do you regard this as a valuable feature of your banking business? A Indeed. Q Do you actively encourage your customers to purchase additional services? Oh, yes. Do you do any advertising for the bank, Mr. Rhoades? Oh, yes. Through what media do you advertise? Well, primarily in local newspapers. In which ones? They are weekly papers, the Nazareth Item, and the [ fol. 305] Nazareth Key. We are on the radio, too. Q What is the name of the station? A WEEX. Q Do you ever advertise in any Easton paper? A We advertise our Forks branch very infrequently, perhaps once every two months, more or less in the form of institutional advertising, nothing specific. Q Do you currently advertise your interest rate on either passbook savings or on certificates of deposit in Easton papers? A To my knowledge, we have only done it once, and that Was very recently, within the last months. That is the only time that it has ever been done. FOrFroro> | Ta ha Da ON ORD tS TALKS HT. s anes PARE aaa A ARE OE MAES Peele & me ae Bo a a tel Alcan a Q At the time you went to four percent on passbook savings, what was the rate of interest being paid on passbook savings by other Easton banks? A. Three percent. * * * * [fol. 307] Q Mr. Rhoades, the plaintiff, the Department of Justice, has described for the purpose of this litigation Phillipsburg and environs as encompassing the City of Phillipsburg, Lopatcong Township, Greenwich Township, Pohatcong Township and Alpha Borough. To the best of your knowledge, does Nazareth National, either the main office or the Forks branch, derive any business from the area just described? A To my knowledge, none {fol. 308] Q How do you account for this fact, Mr. Rhoades? A Well, they are not in our area. They are not in our trading area. Q Are there any restrictions on your doing business in Phillipsburg and environs? A Well, insofar as it affects our trust department, yes, definitely so. I’m sure there is a statute there to prohibit us from doing business without a license. | am almost sure of that statement. Q Mr. Rhoades, what is your conception of the term “service area”? A 1 would consider the service area to be the area immediately surrounding the main office and our branch that we serve—that we have deposits, that we make loans to, advertising, and so forth. Q What then is the service area of your Forks branch office? A It would be almost entirely Forks Township, which includes Stockertown and Tatamy, the Boroughs of Stockertown and Tatamy. They are adjacent to Forks Township. Actually, Forks surrounds it. They are boroughs in the Township. Q Do you know approximately what percentage of the branch’s total business comes from that area? A No, I would not. 79 ** * *& {fol. 310] Q What do you regard as the service area of the (fol. 311] main office of Nazareth National? A You are speaking of the main office. Q Yes, sir. A Not the branch. Q Correct, sir. A It is difficult to say. Of course, you can’t pinpoint it, because it is like fingers going out. That’s true of every bank. | would suspect that our service area would be probably a radius of five miles north, east, south and west. Q And what townships or boroughs— A Well, that w [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0211%3A01. Public record. Not legal advice.