OCR Text |
Show UjjA' .pnrtment olio is Order DUtah of University City e'1112 . UNIVERSITY OF UTAH LIBRARIES . DEU2.1 W7J SERIALS ORDER SALT LAKE CITY, UTAH VOLUME 17, NUMBER 231 li.N. Human Rights Declaration Parallels ABA Activities UNITED NATIONS, N.Y., Dec. 11 The objectives and purposes of the Universal Declaration of Human Rights have substantially paralleled actions of the American Bar Association for the past quarter century, a conference on the 25th anniversary of the declaration was told here today. Colorado Supreme Court Justice n James K. Groves, who headed a ABA delegation to the conference, said scores of ABA sections and committees continue to strive to establish and implement portions of the declaration in areas where such principles are not practiced . The Universal Declaration of Human Rights was adopted on Dec. 10, 1948, by the U.N. General Assembly with no dissenting votes. The declaration is considered an expression by the world in simple language of the inalter- able rights of all human beings. In effect, it declares there is a point at which the intrusion of the state into the affairs of an individual constitutes a deprivation of human rights. Groves read excerpts from the ABA standards on electronic surveillance and noted that these permit surveillance under certain conditions under court order. He asked his audience to note how the ABAs policy on the controversial practice' parallels Article 12 of the universal declaration. Groves, who is chairman of the g ABA's House of Delegates, told a conference session to discuss human rights science and that many ABA Utah Supreme Court Decisions -- d k veillance. Groves cited this set of criminal justice standards one of 17 approved by the ABA as an example of how the Association works to promote respect for human rights in this country. Certainly we in the ABA have been inspired by the Universal Declar- ation of Human Rights," he empha- d d, - No-Fau- lt 2Vfc-to- -3 Hearings Delayed The House Subcommittee on Commerce and Finance has postponed auto insurance hearings on legislation until the second session, no-fau- e, lt beginning January 21. In the meantime, the Senate Judiciary Committee is planning hearings for this month and next year on S. 945. the National Motor Vehicle Insurance Act. reported by the Senate Commerce Committee. No-Fau- mid-year- .) g sec- tions and committees are currently engaged in examining the many aspects of this subject. Among those he mentioned were the ABAs Section of International Law, Section of Individual Rights and Responsibilities, and the Section of Criminal Justice, which is charged with implementing the Association's standards relating to electronic sur- In a world of multinational corporpermits direct participation in U.S. a financial markts with resulting benemultinational banks have ations, sized. is from to role as seen fits in lower costs and saving of time.. growing play, No U.S. This article reads: k In dealing with their corporate custhe expanded scope of foreign-banshall be subjected to arbitrary interin inside this country recent tomers, moreover, foreign banks are at operations ference with his privacy, family, home 1965 a competitive disadvantage if they Between and 1972, assets years. or correspondence, nor to attacks offer those firms banking sercannot foreign-banof and branches agencies upon his honor and reputation. Everythree-fol- d in in overseas as well as home marU.S. the vices to increased one has the right to the protection of consideration becomes inThis This billion. kets. not about does $13 growth the law against such interference or with eight-folthe creasingly important as foreign manucompare expansion attacks." and American of banks' branches overseas trading firms expand facturing The conference was sponsored by in the continentbeachhead their but it has an created $75 billion), (to the Conference of NonGovernmental American market. sized force in new the leading important Organizations in Consultative Status American New York is the most important financial centers. With The United Nations Economic of foreign banking, because it center About 150 foreign banks now operand Social Council. is the leading financial center for both ate in the U.S., with their activities domestic and international trade,' and repreranging in size from because it has obvious locational adsentative offices, through agencies and subsidiaries with regular banking vantages for financing trade with charters. (In fact, some Subsidiaries Europe. California is next in importnow rank among the 100 or 200 largest ance, because of its advantages for American banks.) These institutions financing Pacific trade as well as the behave come to the United States large size of the states economy. (Foreign-bank affiliates iij California accause they realize that they must operate inside the worlds largest market if counted for almost 6 percent of the they are to offer a competitive range of state's $43 billion total business loans international-bankinWith the easing of bankat services to their customers. ing laws in other states, centers such as Chicago, Boston and Seattle can be The U.S. is a major trading nation and, despite the turmoil of the past expected to attract more foreign banks in the future. several years, the dollar is still the ' principal currency used in internationSee details page 4. Types of Activities al finance. A New York, San Francisco, The most common type of operation or Los Angeles office, for example, for a foreign bank is the representative office, but it also has the most limited functions. It cannot make loans or accept deposits. Basically, the representative office attempts to develop business which will be handled by the parent bank abroad. About 80 foreign banks hve representatives in New .York City, and another 20 have representatives in either San Francisco or Los. Angeles. A few offices also are located in Chicago, Dallas and Houston. To make loans in the U.S., a foreign bank must establish an agency or a Lot or a domestically-charterebranch commercial-bansubsidiary. The ac- tual powers of an agency or branch vary from state to state, but the prinBROKER THINK TANK cipal difference is that a branch can OUTLINES RECESSIONS and an agency cannot accept accept NEW YORK Ve market policy think tank of the New domestically-ownedeposits. York Stock Exchange ember wire house of Blyth Eastman Under New York banking law, a Dillon is cautioning against three possible types of recession: branch of a foreign bank not only can 1 ( ) Mini recession an oil shortfall of up to one million barrels accept deposits, both domestic and foreign-ownebut it also can makethe per day for a full year out of total domestic consumption of 17 of loans permitted to dosame types million would entail a slowing of real gross national product limits are determLoan banks. mestic growth by about 1 per cent. ined by the size of the foreign head That would lower their previous growth projection to a office, rather than by the size of the per cent rate. This would flatten over-al- l corporate profits in domestic branch or agency. Most loans 1974 no profit gain. Also, this calculation takes in a slower are associated with the financing of foreign-tradbut many agencies and growth rate for domestic company foreign operations. also branches seek domestic business (2) Recession an oil shortfall of two million barrels a day loans and accepting deposin making throughout 1974 would slow the real gross national product Some New York its. City branches of growth by about 3 per cent and reduce GNP growth to zero. banks actively solicit consforeign Corporate profits would fall 10 to 15 per cent below 1973. The zero umer-type deposits and make installGNP growth would probably entail tvyo consecutive down quarment loans, while under California ters qualifying it as a recession. offices are banking law, foreign-ban(3) Major recession an oil shortfall of three million barrels permitted only to accept foreign-ownedaily for 1974 from the domestic needs of 17 million would bring deposits. Thus California offic- ' es operate like agencies in New York, on a major recession, the worst in the d War II exand work primarily in foreign-trad- e perience aided by a pronounced economic slump abroad. financing. Subsidiaries of foreign banks are The Blyth Eastman Dillion market policy think tank hopes able to conduct a. full domestic-bankinfor an Arab settlement of its oil embargo within 90 days and, business in the states where they therefore, believes of the three possible recessions, No. 1 is the are chartered. (All foreign con trolled ' most likely. banks presently have state charters, because Federal law requires that all But, it believes the present best approachtoward the market should be an attitude of caution. In its collapse from the Sep--. directors of Federally chartered banks tember-Octobbe U.S. citizens.) At present, subsidimarket discounted the has a level, high probably aries are chartered in New York, Caligreat deal of uncertainty. fornia and Illinois. In California, where Like other market analysts, this one also hopes for the best. It state-wid- e branch banking is permitadds: Needless to say, any dramatic announcement such as a d ted, five of the eleven lifting of the (Arab) embargo would cause a strong sustained subsidiaries have developed branch upward movement in the market. networks and compete actively for consumer business, whereas the other h An six conduct a wholesale banking busimarket letter service suggests that bucking ness with a strong international emthe trend and picking up depressed quality stocks should prove phasis. In Illinois, where branching is rewarding somewhere down the road. forbidden to all banks, each subsidiary But as a cover, it also adds: Buy at your own risk.. Tfyat is permitted only a single office which means caveat emptor buyer beware. these institutions generally chons? to one-ma- n policy-makin- technology 150 Foreign Banks Now Operate In The U.S. d ' ' k lt d post-Worl- Novembers Mortgage Rates Up, Pace Slows WASHINGTON (UPI) - g -- Mort- gage interest rates for new and used homes increased for the sixth straight month to an average 8.36 and 8.56 per cent in November, the Federal Home Loan Bank Board has reported. Despite the higher average rates, FHLBB Chairman Thomas R. Bomar said the rate of increase slowed in November compared to the record highs in October and September. er . foreign-control-lc- ever-bullis- A DEPT. WEDNESDAY, DECEMBER 19, 1973 k five-ma- A locate in the financial district of Chicago. Regulatory Differences Where foreign banks maintain only branches or agencies, they are subject only to state law. Foreign banks thus can operate branches or agencies in more than one state, which means that they have a form of interstate banking open to them which is unavail able to domestic banks. (States can stop entry, of course, and at the moment, nine states forbid all foreign-ban- k offices.) In addition, they are not covered by the Act, which prevents domestic banks from Glass-Steaga- ll engaging in investment banking, Thus, foreign banks can participate in both commercial- - and investmentbanking functions. When foreign banks maintain subsidiaries, they are subject to regulation by the Federal .Reserve System under the Bank Holding Compov. Act. This act prohibits the acquisition or formation of subsidiaries in more than one state. Subsidiaries corr quently do not have the interstate branching powers available to foreign branches and agencies, and because of this limitation, they tend to concentrate in the largest financial centers. The Bank Holding Company Act brings both the banking and nonbaiil. ing subsidiaries of foreign banks under regulation. For example, the Federa Reserve Board, applying the principle.-o- f the Act, recently required an Italian bank to divest itseli of a interest in a U.S. investment-banking operation before being to buy into a Chicago compermitted mercial bank. The Federal government does not possess statutory authority to govern all aspects of foreign-ban- k activities in this country. As a result, Federal efforts to negotiate with foreign governments to reduce barriers against U.S. banks sometimes are impeded because the Federal government can not guarantee uniform regulations in all states. Many state banking superintendents are aware of this problem, and therefore attempt to keep national objectives in view when processing applications from foreign banking institutions. Last month, Congressman Patman introduced legislation to authorize Federal regulation in this area, which would require foreign banks to apply to the Treasury Department for permission to establish new offices or continue present operations. Under the provisions of the Patman bill all foreign banking operations in the U.S. would be conducted through subsidiaries, rather than through a combination of branches, agencies and subsidiaries in a sense, paralleling the type of system under which U.S. banks operate in most foreign countries. Onlj two types of subsidiaries would be permitted any foreign bank under the Patman proposal: up to five federally-chartereGlass-Steaga- ll one-thir- d d international-bankin- sub- g sidiaries, and one domestic bank. Bank holding compan ies could also be formed. The Federal Reserve System has been conducting its own study of the foreign-bankin- g situation, in an attempt to develop a coordinated policy which would reconcile national and international needs with the interests of the individual states. The System became involved in this study partly because of its responsibilities under the Bank Holding Company Act, but alsc because of the growing importance of foreign banking for domestic financial activity and monetary' policy. While further efforts are made to develop a national policy in this very complex field, multinational banking will continue to exert a growing influence on the domestic economy. state-chartere- d Robert Johnston I |