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PR609
Minutes for __April 14_19,65
To:
Members of the Board
From:
Office of the Secretary
Attached is a copy of the minutes of the
Board of Governors of the Federal Reserve System on
the above date.
It is not proposed to include a statement
with respect to any of the entries in this set of
minutes in the record of policy actions required to
be maintained pursuant to section 10 of the Federal
Reserve Act.
Should you have any question with regard to
the minutes, it will be appreciated if you will advise
the Secretary's Office. Otherwise, please initial
below. If you were present at the meeting, your
initials will indicate approval of the minutes. If
you were not present, your initials will indicate
only that you have seen the minutes.
Chm. Martin
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Deane
Minutes of the Board of Governors of the Federal Reserve
System on Thursday, April 1, 1965.
The Board met in the Board Room
at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman 1/
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Solomon, Director, Division of
Examinations
Mr. Daniels, Assistant Director, Division
of Bank Operations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mrs. Semia, Technical Assistant, Office of
the Secretary
Messrs. Egertson and McClintock, Supervisory
Review Examiners, Division of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Discount rates.
The establishment without change by the
Federal Reserve Bank of Atlanta on March 31, 1965, of the rates on
discounts and advances in its existing schedule was approved unanimously, with the understanding that appropriate advice would be sent
to that Bank.
Circulated or distributed items.
The following items, copies
of which are attached to these minutes under the respective item numbers indicated, were approved unanimously:
Item No.
Letter to United California Bank, Los Angeles,
California, approving an extension of time to
establish a branch near the Mission Valley Center,
San Diego.
1/ Joined meeting at point indicated in minutes.
1
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4/1/65
Item No.
Letter to Manufacturers and Traders Trust Company,
Buffalo, New York, approving an investment in
bank premises.
2
Letter to Wilmington Trust Company, Wilmington,
Delaware, approving an additional investment in
bank premises.
3
Letter to St. Michaels Bank, St. Michaels, Maryland,
approving an investment in bank premises.
4
Letter to the Federal Reserve Bank of Richmond
waiving the assessment of a penalty incurred by
The Peoples National Bank of Rocky Mount, Rocky
Mount, Virginia, because of a deficiency in its
required reserves.
5
Letter to the Federal Reserve Bank of Atlanta
approving the appointment of Walter J. Manning
as Federal Reserve Agent's Representative at the
New Orleans Branch.
6
Report on competitive factors (Alexandria-Arlington, Virginia).
There had been distributed a draft of report to the Comptroller of the
Currency on the competitive factors involved in the proposed merger of
Shirlington Trust Company, Incorporated, Arlington, Virginia, into First
and Citizens National Bank of Alexandria, Alexandria, Virginia.
Governor Mitchell expressed the view that the conclusion of the
report did not adequately reflect the trend toward concentration of
banking in northern Virginia in subsidiaries of three bank holding companies.
The people in that area had access, he noted, to banks in
Washington, D. C., but those banks were precluded from establishing
branches in Virginia.
4/1/65
-3After discussion during which agreement was reached on changes
in language that were suggested to meet the point raised by Governor
Mitchell, the report was approved unanimously for transmittal to the
Comptroller.
The conclusion of the report, as transmitted, read as
follows:
The proposed merger of Shirlington Trust Company,
Incorporated, Arlington, into First and Citizens National
Bank of Alexandria, a subsidiary of United Virginia
Bankshares, Incorporated, Richmond, Virginia, a registered bank holding company, would eliminate existing and
potential competition. Numerous alternatives, including
Washington, D. C., banks, would remain available for area
residents.
United Virginia Bankshares, Incorporated, presently
controls two Northern Virginia banks, which operate 15
offices and hold 19.2 per cent of Northern Virginia's
area deposits. If the proposed transaction is consummated, this holding company would control 18 banking
offices and 21.6 per cent of area deposits. Three holding companies (one exempt from the provisions of the
Bank Holding Company Act of 1956), which have banks in
Northern Virginia, together hold about 71 per cent of
the area deposits, which would be increased to about 73
per cent if this instant merger is approved.
Civil rights.
There had been distributed a memorandum dated
March 10, 1965, from Mr. Hackley regarding the question of applicability
to the Federal Reserve Banks of Title VI of the Civil Rights Act of
1964.
At today's meeting there was a preliminary discussion of some
of the aspects of the subject, with reference made to implications
that might be involved in regard to functions such as the discount
window and check collection services.
Reference also was made to the
4/1/65
-4-
question awaiting decision by the Treasury Department relating to
applicability of the Act to banks maintaining tax and loan accounts.
Chairman Martin joined the meeting during the discussion, at
the conclusion of which it was understood that the Board would consider
the matter more comprehensively at another meeting.
All members of the staff except Mr. Sherman then withdrew from
the meeting.
Request for technical assistance (Item No. 7).
Chairman Martin
referred to a letter from the Vice President of the Central Bank of
Chile dated March 11, 1965, requesting technical assistance in the field
of consumer credit control, a memorandum dated March 29, 1965, from
Mr. Irvine, Associate Adviser, Division of International Finance, suggesting that Mr. Fauver, Assistant to the Board, and Mr. Maroni, Senior
Economist, Division of International Finance, be considered for this
mission, and a proposed reply to the Central Bank of Chile submitted
with Mr. Irvine's memorandum.
After discussion the proposed reply was approved unanimously
for transmittal to the Vice President of the Central Bank of Chile.
copy of the letter is attached as Item No. 7.
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board
memoranda recommending the following
actions relating to the Board's staff:
A
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4/1/65
Appointment
Margaret Joan McLean as Clearing Assistant, Office of the Secretary,
with basic annual salary at the rate of $5,000, effective the date of
entrance upon duty.
Transfer
Don
Examiner
Division
the rate
Edgar Kline, from the position of Assistant Federal Reserve
(field staff) to the position of Assistant Review Examiner,
of Examinations, with no change in basic annual salary at
of $7,955, effective upon assuming his new duties.
,
/
A
Secretary
Item No. 1
4/1/65
BOARD OF GOVERNORS
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ADDRESS arriciAL CORRESPONDENCE
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TO THE BOARD
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April 1, 1965
Board of Directors,
United California Bank,
Los Angeles, California.
Gentlemen:
The Board of Governors has approved an
extension until April 1, 1966, of the time within
which United California Bank may establish a branch
in the vicinity of the Mission Valley Center at
Mission Center Road and U.S. Highway 80, San Diego,
California. The establishment of this branch was
authorized in a letter dated April 1, 1963.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 2
4/1/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ACIOR•111111 OFFICIAL CORRE•PONOCNCC
TO THC •OARO
April 1, 1965
Board of Directors,
Manufacturers and Traders Trust
Company,
Buffalo, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves, under the provisions of
Section 24A of the Federal Reserve Act, an investment in bank premises by Manufacturers and Traders
Trust Company of not to exceed $14,363,398, which
amount represents $11,500,000 for construction of
a main office; $300,000 for new quarters for
subject's Dunkirk branch; and $2,563,398 for other
various branch facilities and unforeseen contingencies.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(1'62
Item No. 3
4/1/65
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, O. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO INC BOARD
April 1, 1965
Board of Directors,
Wilmington Trust Company,
Wilmington, Delaware.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves, under the provisions of Section 24A
of the Federal Reserve Act, investments not exceeding
in the aggregate $400,000 in bank premises by Wilmington
Trust Company, Wilmington, Delaware, for the purposes
of constructing, improving, repairing and maintaining
banking offices during the year 1965.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Item No. 4
4/1/65
BOARD OF GOVERNORS
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FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
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ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 1, 1965
Board of Directors,
St. Michaels Bank,
St. Michaels, Maryland.
Gentlemen:
Pursuant to the provisions of Section
24A of the Federal Reserve Act, the Board of
Governors of the Federal Reserve System approves
an investment of not to exceed $35,000 by St.
Michaels Bank, St. Michaels, Maryland, in bank
premises for the purpose of remodeling the bank
building.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 5
4/1/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
AODBI
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GCHIRCIPONOCHOIC
TO THE OCIAND
April 1, 1965
Mr. Edward A. Wayne, President,
Federal Reserve Bank of Richmond,
Richmond, Virginia. 23213
Dear Mr. Wayne:
This refers to your letter of March 19, 1965, regarding
a penalty of $208.93 incurred by The Peoples National Bank of Rocky
Mount, Rocky Mount, Virginia, on an average daily deficiency of
$90,786 in its required reserves for the biweekly computation period
ended March 3, 1965.
It is noted that (1) the deficiency resulted from oversight
due to the hospitalization of the person who ordinarily prepares the
reserve reports and handles the reserve position, and to the extra
workload due to the simultaneous absence of four other employees;
(2) the bank has had only one other deficiency in its required reserves since 1960; and (3) steps apparently have been taken to
obviate further deficiencies.
In the circumstances, the Board authorizes your Bank to
waive the assessment of the penalty of $208.93 for the period ended
March 3, 1965.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 6
4/1/65
BOARD OF GOVERNORS
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ADDRESS
orrociAL
CORRESPONDENCE
TO THE BOARD
April 1, 1965
Mr. Jack Tarver,
Federal Reserve Agent,
Federal Reserve Bank of Atlanta,
Atlanta, Georgia 30303.
Dear Mr. Tarver:
As requested in Mr. Ray's letter of March 22, 1965, the
Board of Governors approves the appointment of Mr. Walter J. Manning
as Federal Reserve Agent's Representative at the New Orleans Branch
to succeed Mr. Nicholas J. Bandi.
This approval is given with the understanding that Mr. Manning
will be solely responsible to the Federal Reserve Agent and the Board of
Governors for the proper performance of his duties, except that, during
the absence or disability of the Federal Reserve Agent or a vacancy in
that office, his responsibility will be to the Assistant Federal Reserve
Agent and the Board of Governors.
When not engaged in the performance of his duties as Federal
Reserve Agent's Representative, Mr. Manning may, with the approval of
the Federal Reserve Agent and the Vice President in charge of the
New Orleans Branch, perform such work for the Branch as will not be
inconsistent with the duties as Federal Reserve Agent's Representative.
It will be appreciated if Mr. Manning is fully informed of
the importance of his responsibilities as a member of the staff of
the Federal Reserve Agent and the need for maintenance of independence
from the operations of the Bank in the discharge of these responsibilities.
Please have Mr. Manning execute the usual Oath of Office
which should then be forwarded to the Board of Governors along with
notification of the effective date of his appointment.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Item No. 7
4/1/65
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OFFICE Or THE CHAIRMAN
April 1, 1965.
AIR MAIL
Mr. Carlos Massad,
Vice President,
Central Bank of Chile,
Santiago, Chile.
Dear Mr. Massad:
This is in reply to your letter of March 11, which
was somewhat delayed in reaching me. You may be assured that
we will be very pleased to try to provide you with appropriate
technical assistance in the field of consumer credit control.
As you perhaps know, the Federal Reserve had extenwith the control of consumer credit during
experience
sive
World War II and later during the Korean conflict. Several
of the men who held responsible positions in the administration
of the consumer credit controls are still with us. We will
try to make one of them available to you.
While this man will be very knowledgeable in the
area of consumer credit controls as they were applied in this
country, we do not have anyone who combines this specialized
experience with knowledge of the Chilean economic situation
and problems and a good command of Spanish. It might be
advisable to have the consumer credit expert accompanied by
an economist with a good understanding of the Chilean economy
and with general knowledge of the experience of other countries
with direct control of credit. Such a team might prove to be
more effective than a single man working alone who would
inevitably require some time to orient himself in a completely
unfamiliar environment.
I understand that the AID mission in Santiago has
been informed of your interest in this matter and that there
is some possibility that they may be willing to bear part of
the costs out of their technical assistance program. Normally
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
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the Federal Reserve provides advisers to other central banks
without asking for any reimbursement for their salaries, but
we usually ask the requesting bank to pay the costs of transportation and reasonable day-to-day living expenses of the men
involved.
We have been in touch with AID with respect to this
request, and their Santiago office will contact you to discuss
the relevant details. If you and they agree that this be
handled as AID technical assistance, we will make the necessary
arrangements with them.
It is a pleasure to be able to be of service to you.
Sincerely yours,
Wm. McC. Martin, Jr.
@FedFRASER