not own shares of the converting Federal association 'no approval of such conversion by the Federal Home Loan Bank Board, or the Federal Home Loan Bank Administration shall be required. * * *' It is significant that the Bill adopted by Congress omitted the requirement for Federal Home Loan Bank approval, even in a case where the Home Owners' Loan Corporation owns stock of the converting association. Instead, Congress inserted a provision that the converting association must repurchase the total amount invested in its shares by the Secretary of the Treasury, and if upon the effective date of conversion the Home Owners' Loan Corporation still holds of record shares of the association, its approval of the conversion has been obtained. The final Bill, therefore, eliminated the approval by plaintiff Board in all cases of Federal to State conversions.
Parenthetically, it should be noted that the proponents of the Bill agreed that if a Federal chartered association converts to a stock type of company, which is possible in Ohio and California, and one other State, the permission of the Federal authorities -- that is, approval of the Board -- is necessary, as provided in paragraph 3 of Section 5(i) relating to a conversion upon an equitable basis. But all the proponents of the Bill insisted that in the case of a conversion from a Federal to a State charter upon a mutual basis, no approval of the Board should be required. Hearings, pp. 7, 8, 43, 81.
Mr. Fahey, at that time Chairman of plaintiff Board, appeared before the Committee and strongly insisted that the Bill as drawn was defective in that it did not require Board approval or approval of the Federal Savings and Loan Insurance Corporation, which corporation is controlled and operated by plaintiff Board. Congress apparently did not agree with him and did not require such approval, though other changes which he suggested be incorporated in the Bill were made. Thus he suggested that the Bill provide for a 'two way street' and to authorize Federal to State conversions only where the law of the State authorizes its savings and loan associations, or similar institutions, to convert to Federal charter. His suggestion was embodied in proviso 1 of the second paragraph of Section 5(i). He also suggested that the vote for the conversion be held at a special meeting instead of at a legal meeting, which suggestion was likewise adopted by Congress which also adopted his suggestions with reference to the notice of the meeting. Mr. Fahey also insisted that in order to approve a conversion, Congress should require in favor of it a vote of 51% of the members entitled to vote, instead of 51% of all the votes cast at the meeting. This would have made it more difficult for a Federal association to convert to a State charter. Congress did not adopt this suggestion. It is significant that two of the suggestions of Mr. Fahey, namely, the required majority vote of shareholders and Board approval, which would have hampered and retarded Federal to State conversions, were not adopted by Congress, although it did at the same time adopt other of his suggestions. The omission of Board approval was intentional on the part of Congress and we do not think that the Act should be construed as requiring Board approval in any case coming within its provisions.
Mr. Fahey, as Chairman of the Board, presented to the Congressional Committee considering this legislation a theoretical case practically on all fours with the case at bar as a reason for adopting regulations requiring Board approval. He made the following statement (Hearings, p. 58):
'Fifth. In my judgment the bill does not include necessary protection for the interests of the Federal Savings and Loan Insurance Corporation. Under the bill, it would be possible in a jurisdiction which had no State supervisory law, or a weak supervisory law, for a Federal association which had gotten into a shaky financial condition through excessive lending or other unsound practices, and which had been requested by the Federal Home Loan Bank Administration to correct these practices, to convert to a State charter. It would thus free itself from the necessity of complying with any supervisory recommendations designed to remedy the situation and maintain the association's soundness. At the same time the Federal Savings and Loan Insurance Corporation would have no option but to continue the insurance under these radically different conditions. I would strongly recommend, therefore, that the bill be amended so as to remove the possibility of developments of this character.'
The factual situation in this case was therefore one of the possible developments which Mr. Fahey urged upon Congress to provide for by an amendment to the Bill. Congress apparently weighed its purpose of providing for the free conversion from a Federal to State charter against the possible attempt in some particular case of escaping Federal jurisdiction and decided in favor of the free conversion, without interference by the Federal Home Loan Bank Board. Nor did it provide for suspension of the right to convert during the pendency of hearings before the Board. We think our conclusion in this case follows the policy of Congress, as expressed in paragraph 2 of Section 5(i) of the Act.
Thus Congress deliberately refrained from giving the Board a power of approval of Federal to State conversion. 'We cannot supply what Congress has studiously omitted.' F.T.C. v. Simplicity Pattern Co., 360 U.S. 55, 67, 79 S. Ct. 1005, 1012, 3 L. Ed. 2d 1079.
For the reasons given above, we must conclude that this Court has jurisdiction of the subject matter and of the parties to this controversy; that the defendant ceased to exist as a Federal savings and loan association on January 2, 1959, at which time it converted to a State charter; that its conversion on January 2, 1959 to a State charter under the name of Greater Delaware Valley Savings and Loan Association was legal and proper; and that the actions of the Secretary of Banking and of the Secretary of the Commonwealth of Pennsylvania in causing a Certificate of Conversion to issue, were, in all respects, legal and proper.
Accordingly, plaintiff's motion for summary judgment will be denied; the separate motions to dismiss filed by defendant and the intervenors will be denied; and the separate motions for summary judgment filed by the defendant and the intervenors will be granted.