The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes for To: April 11, 1960. 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. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King C/C46 Minutes of the Board of Governors of the Federal Reserve System on Monday, April 11, 1960. PEbSENT: Mr. Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman 1/ Balderston, Vice Chairman Szymczak Mills Robertson Shepardson Sherman, Secretary Thomas, Adviser to the Board Young, Adviser to the Board Shay, Legislative Counsel Molony, Assistant to the Board Fauver, Assistant to the Board Noyes, Director, Division of Research and Statistics Mr. Marget, Director, Division of International Finance Mr. Garfield, Adviser, Division of Research and Statistics Adviser, Division of Research and Koch, Mr. Statistics Mr. Robinson, Adviser, Division of Research and Statistics Miss Burr, Associate Adviser, Division of Research and Statistics Mr. Dembitz, Associate Adviser, Division of Research and Statistics Mr. Williams, Associate Adviser, Division of Research and Statistics Mr. Hersey, Associate Adviser, Division of International Finance Mr. Landry, Assistant to the Secretary Mr. Knipe, Consultant to the Chairman Mr. Mr. Mr. Mr. Mr. Mr. Mr. Messrs. Eckert, Keir, Altmann, Fisher, Peret, and Wernick, and Misses Dingle and Stockwell of the Division of Research and Statistics Messrs. Irvine, Katz, Wood, Gemmill, Maroni, and Reynolds of the Division of International Finance. 1/ Withdrew and reentered the meeting at points indicated in minutes. -1276 4/11/60 -2Economic review. The staffs of the Divisions of International Finance and Research and Statistics presented a review of international and domestic conditions and developments. Following this presentation all of the members of the staff with the exception of Messrs. Sherman, Young, Shay, Molony, Noyes, and Landry Withdrew, and Messrs. Hackley, General Counsel; Farrell, Director, Division Of Bank Operations; Solomon, Director, Division of Examinations; and Kiley, Assistant Director, Division of Bank Operations, entered the room. Item circulated to the Board. The following item, which had been circulated to the members of the Board and a copy of which is attached to these minutes as Item No. 1, was approved unanimously: Letter to the Duquesne City Bank, Duquesne, Pennsylvania, approving an investment in bank premises. Receipt of gifts by officers and employees of Federal Reserve Banks (Item No. 2). There had been distributed a memorandum from the Division of Bank Operations dated April 6, 1960, attaching a draft letter to all Federal Reserve Banks regarding receipt of gifts by officers and emPloyees, pursuant to the understanding reached at the Board meeting on F ebruary 19, 1960. The memorandum indicated the possibility of action on bills now in the Judiciary Committees of both Houses of Congress, which bills prescribe restrictions against conflicts of interests and contain identical provisions with respect to the receipt of gifts. In view of these pending bills and the view that there appeared to be no need for -41 430‘44F''''0 I' 1 4/11/60 -3- corrective action at the Federal Reserve Banks, it was suggested that the Board might wish to consider postponing sending the draft letter attached to the memorandum which indicated that in the light of the Policies now in effect at all Reserve Banks in this regard the Board believed no further action was needed concerning policies with respect to the receipt of gifts and other offerings. Mr. Thomas, Adviser to the Board, entered the room at this point. Asked by Chairman Martin to comment on the memorandum of April 6, Mr. Farrell replied that when the Board had last considered the question of the giving and receiving of gifts by the Federal Reserve Banks or their employees at its meeting on February 19, 1960, there was a feeling expressed by the Board members against completely prohibiting the Federal Reserve Banks from the giving and receiving of gifts. The problem was to draw a policy which, if not a complete prohibition, would not relax the Present rules at the Federal Reserve Banks of Boston and Chicago whose r4les approximated complete prohibition. of April As pointed out in the memorandum 6, replies to the Board's letter of September 29, 1959, showed that each Federal Reserve Bank (1) has a policy prohibiting the receipt bY officers and employees of (a) any gift or other offering of more than 4°Illinal value, and (b) any offering that might be considered by reasonable Persons as influencing the performance of Bank business; and (2) is fully allare of the necessity to avoid any acts that could be considered as being ill conflict with the public interest. Consequently, the Division of 4/11/6o Bank Operations saw little need for action at this time although there was the possibility the Board would wish to have something placed in the Federal Reserve Loose-Leaf Service on this matter. Governor Robertson questioned the advisability of sending to the Reserve Banks a letter of the type attached to the memorandum of April 6, Which merely stated that no action was called for, and he suggested that nothing be done on this question for this reason. Noting that the comments of the Reserve Bank Presidents had been solicited by the Board on this issue, Governor Mills suggested that a letter to the Presidents of the type attached to the memorandum of April 6 would complete the record on this subject since the letter would indicate that, as the situation was now viewed, it was under control and required no positive action by the Banks or the Board. A discussion ensued with respect to the possibility of legislation by Congress on this question at the current session. During this dis- cussion, Governor Shepardson inquired whether the bills in the Judiciary Committees of the House and the Senate, if passed, would require changes in the Board's instructions to the Reserve Banks regarding the giving and receiving of gifts. to th4_ Mr. Farrell replied that he did not know the answer question, but that the draft bill would be more restrictive than anYthing the Reserve Banks currently have in effect in this area. Governor ShePardson said that even if new legislation were passed and the Board would as a result be force,1 to change its instructions to the Reserve I2"4/11/6o -5- Banks on this subject, it would be desirable to send the letter attached to the memorandum of April 6. Following further discussion revolving around the question as to haw the Board's record on this matter would appear if the letter were not sent, unanimous approval was given to a letter in the form of attached Item No. 2. Messrs. Farrell and Kiley then withdrew from the meeting. Monday Treasury bill auction. Chairman Martin, who had withdrawn from and reentered the meeting during the economic review, reported a telephone call from Mr. Rouse, Manager of the System Open Market Account, whO said that bill rates were continuing to back up rapidly with the Prospect that the average rate on today's auction on the new 91-day bills might be as high as 3-3/4 per cent with the auction average on the new six-month issue at about 4 per cent. At the Chairman's request, Mr. Thomas and Mr. Keir, who had just entered the room, commented on developments in the money market this mc)rning; and a general discussion of the subject followed. The meeting then adjourned. Secretary's Note: Pursuant to the recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson today approved on behalf of the Board the following actions affecting the Board's staff: 12S() 4/11/6o -6- a22.14,1IEtnI James T. Fegan as Supply Clerk, Division of Administrative Services, with basic annual salary at the rate of $3,255, effective the date he assumes his duties. .§2.11iFy_increases effective April 17, 1.1 1 !_and title 1960 Basic ammo salary To From Division Office of the Secretary Zoe Gratsias, Secretary $4,940 $5,090 8,570 8,810 5,730 5,880 4,34o 5,130 4,490 5,280 4,490 3,685 4,640 3,780 6,435 6 585 Legal Janet Hart istant Counsel Examinations Francis D. Dargo, Assistant Federal Reserve Examiner Shirley V. Register, Special Assistant Federal Reserve Examiner James R. Smith, Assistant Federal Reserve Examiner Administrative Services Ruth Anna Brown, Telegraph Operator Lola A. Buckley, Telephone Operator Office of the Controller BarrY G. Felix, Budget and Planning Assistant ok.4 Sec BOARD OF GOVERNORS OF THE Item No. 1 4/11/60 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD * .19,1t,',tt.4 44 t, 0ti ti** April 11, 1960. Board of Directors, Duquesne City Bank, Duquesne, Pennsylvania. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Cleveland, the Board of Governors of the Federal Reserve System approves, under the provisions of Section 24A of the Federal Reserve Act, an additional investment of $97,755.85 in bank premises by Duquesne City Bank, Duquesne, Pennsylvania, for remodeling purposes. It is understood that this program is very largely completed and will result in a total investment in banking premises of $150,659.65. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. to-!, .4.0c) c4 4 BOARD OF GOVERNORS 440 3-1735 OF THE 444A9CP C04:4, Item No. 2 4/11/60 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. 441a ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 11, 1960, TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS Dear Sir: This refers to policies and practices respecting the rece4 -Lpt of gifts by officers and employees of the Federal Reserve Banks. You will recall that in a letter dated September 16, 1958, Chairman Martin called attention to the fact that in the 85th Congress 1,30th Houses, by Concurrent Resolution, endorsed a Code of Ethics for 'i3'overnment Service. This letter suggested that this Code of Ethics be r°ught to the attention of the directors, officers, and employees of Your Bank. Item 5 of this Code of Ethics provides that no person in ',re Government service should ever accept, for himself or his family, favors or benefits under circumstances which might be construed by reasonable.„ persons as influencing the performance of his Governmental uuties. „ The replies to the Board's letter of September 29, 1959, and Other mormation in regard to this matter, show that all of the 12 ueral Reserve Banks-- (1) Have a policy which prohibits the receipt by officers and employees of (a) any gift or other offering of more than nominal value, and (b) any offering that might be considered by reasonable persons as influencing the performance of Bank business. (2) Are fully aware of the necessity to avoid any acts that could be considered as being in conflict with the public interest. In the light of these circumstances the Board believes that filrther action is presently needed concerning policies with respect con,L.!le receipt of gifts and other offerings. Appropriate steps should plo'llnue to be taken from time to time to remind the officers and emes of your Bank of their obligations in this connection. Very truly A \< Merritt S Secret -
@FedFRASER