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9161 Minutes for To: Members of the Board From: Office of the Secretary April 13, 1962 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. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell Minutes of the Board of Governors of the Federal Reserve System on Friday, April 13, 1962. The Board met in the Board Roam at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Balderston, Vice Chairman Mills Robertson Shepardson King Mitchell Sherman, Secretary Kenyon, Assistant Secretary Thomas, Adviser to the Board Molony, Assistant to the Board Fauver, Assistant to the Board Cardon, Legislative Counsel Spencer, General Assistant, Office of the Secretary Mr. Yager, Chief, Government Finance Section, Division of Research and Statistics Mr. Axilrod, Economist, Division of Research and Statistics Mr. Mr. Mr. Mr. Mr. Mr. Mr. Money market review. Mr. Yager commented on recent develop- nients in the Government securities market, and in this connection distributed copies of a chart and table showing yield relationships in the Government securities market for selected dates in 1962. 14r. Axilrod then described developments with respect to bank reserves, the money supply, and related matters. Following these reports, Messrs. Thomas, Molony, Cardon, Yager, e. Axilrod withdrew from the meeting and the following entered the r()oin Mr. Mr. Mr. Mr. Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Hexter, Assistant General Counsel Furth, Adviser, Division of International Finance -2- V13/62 Mr. Conkling, Assistant Director, Division of Bank Operations Mr. Veenstra, Technical Assistant, Division of Bank Operations Mr. Lyon, Review Examiner, Division of Examinations Discount rates. The establishment without change by the Federal Reserve Banks of New York, Cleveland, Richmond, Chicago, St. Louis, Minneapolis, Kansas City, and Dallas on April 12, 1962, of the rates on discounts and advances in their existing schedules 11 aulEmal unanimously, with the understanding that appropriate " 4dvice would be sent to those Banks. Circulated or distributed items. The following items, which had been circulated or distributed to the members of the Board and Copies of which are attached to these minutes under the respective iteln numbers indicated, were approved unanimously: Item No. Letter to American National Bank of Fort ilUderdale, Fort Lauderdale, Florida, approving 8 application for fiduciary powers. 1 Ibi?tter to Peoples National Bank of Miami Shores, 1,14111i Shores, Florida, approving its application fiduciary powers. 2 Tela— -_Gram to the Federal Reserve Bank of New York llorizing renewal of a gold loan to Indonesia. ' -4 Let ter to the Secretary of the Federal Advisory 00411 t 1,4211 suggesting topics for discussion at the °—"e°111-ing joint meeting of the Board and the Council. 3 Lette the r to the Comptroller of the Currency proposing adoption of a report form to expand the collection or; ePosit information from bank branches. (With a 'WI-Oar letter to the Chairman of the Federal Deposit to Itlfance Corporation.) (Both letters prepared pursuant "e understanding at the meeting on February 27, 1962.) 14- 5 4/13/62 Application of First Oklahoma Bancorporation. Mr. Hexter reported that pursuant to the decision at the meeting on April 9, 1962) to hold a public hearing in the matter of the application of First Oklahoma Bancorporation, Inc., Oklahoma City, Oklahoma, for 4PProval of the acquisition of voting shares of The First National Bank and Trust Company of Oklahoma City, Oklahoma City, Oklahoma, and The Idabel National Bank, Idabel, Oklahoma, arrangements had been made to conduct the hearing on June 50 1962, in the Federal 13411ding, Oklahoma City. It was anticipated that Mr. Charles W. Schneider, Hearing Examiner with the National Labor Relations Board, 14°4Ia serve as the Hearing Examiner, and that Mr. O'Connell, Assistant General Counsel for the Board, would serve as Board Counsel, assisted by Leedy, General Counsel and Secretary, Federal Reserve Bank c/t Kansas City, and perhaps another member of the Board's legal s ' taff1962 An order relating to this matter had been issued on April 12, Pursuant to the authorization given at the April 9 meeting. The meeting then adjourned. Secretary's Notes: Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson approved on behalf of the Board on April 120 1962, the following actions relating to the Board's staff: -4- 4/13/62 841arY increases with change in title Marjorie M. Gray, from $4,075 to $4,250 per annum, with a ,F,1?ange in title from Digital Computer Programmer Trainee to Digital Computer Programming Assistant in the Division of Research and Statistics, effective April 15, 1962. Dorothy E. Swink, from $4,46o to $4,675 per annum, with a hange in title from Statistical Clerk to Statistical Assistant in : he Division of Research and Statistics, effective April 15, 1962. Acceptance of resignation Joyce Kohan, Secretary, Division of Research and Statistics, effective at the close of business April 10, 1962. Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson approved today on behalf of the Board the following actions relating to the Board's staff: -S-941.1-IZincreasesi effective April 15, 1962 Legal Division Cora Lee Hatch, Legal File Clerk, from $5,335 to $5,655 per annum. Division of Examinations Robert F. Achor, Review Examiner, from $10,255 to $10,635 per annum. John N. Lyon, Review Examiner, from $10,255 to $10,635 per annum. atItiumJohn M. Poundstone, Review Examiner, from $10,255 to $10,635 per e Jeannette Somlyo, Stenographer, from $4,075 to $4,250 per annum. Richard N. Thompson, Review Examiner, from $10,255 to $10,635 per _5_ 4/13/62 APPointment of consultant Ralph S. Woodruff, as Consultant in the Division of Research and Statistics, effective until December 31, 1962, on a temporary contractual basis with compensation at the -c), nQ rate -F. + hour) worked Y.1 r.Vv for each eight hours ($6.76 per ' o for the Board. Establishment of and appointment to temporary position Temporary summer position established in the Special udies and Operations Section of the Division of International Finance, and T. Paul Schultz appointed as Research Assistant, Ifith basic annual salary at the rate of $5,3551 effective the otate of entrance upon duty. Establin---___211E2Lof sensitive positions All positions in the Stenographic Section of the Office the Secretary declared sensitive; overexpenditure in 1962 :"4QLget of the Division of Personnel Administration authorized 'o cover the estimated cost of full field investigations. Governor Shepardson also approved today on behalf of the Board the following letters: Letter to Mr. Francis, Acting Chairman, Committee on Bank Public Relations of the Conference of Presidents, Federal Reserve of St. Louis, advising that the Board would be pleased to have ' t Molony continue as an Associate Member of the Subcommittee on 614k and Public Relations. Department of Justice (attached Item No. 6) rega..A. Letter to the 'ling United States v. Wegematic Corporation. ' • .41 , 0 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 1 4/13/62 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD 3, 3 44. 6"Z Board of Directors, American National Bank of Fort Lauderdale, Port Lauderdale, Florida. G entlemen: The Board of Governors of the Federal Reserve System given consideration to your application for fiduciary powers and grants American National Bank of Fort Lauderdale authority to etl when not in contravention of State or local law, as trustee, ! 'x,,ecutorl o administrator, registrar of stocks and bonds, guardian 0-L. estates, assignee, receiver, committee of estates of lunatics, ! c in any other fiduciary capacity in which State banks, trust ' n IVanies„ or other corporations which come into competition with pltional banks are permitted to act under the laws of the State of pr°rids. The exercise of such rights shall be subject to the n of Section 11(k) of the Federal Reserve Act and Regu= -Lat i5i0 5 ion P of the Board of Governors of the Federal Reserve System. has thatA formal certificate indicating the fiduciary powers Your bank is now authorized to exercise will be forwarded -de course. Very truly yours, Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No. 2 ' 4/13/62 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 131 1962 Board of Directors, Peoples National Bank of Miami Shores, Miami Shores, Florida. Gentlemen: Reserve System The Board of Governors of the Federal has given consideration to your application for fiduciary powers authority to and grants Peoples National Bank of Miami Shores as trustee, law, local act, when not in contravention of State or guardian bonds, executor, administrator, registrar of stocks and lunatics, of estates Of estates, assignee, receiver, committee of banks, trust °r in any other fiduciary capacity in which State with competition into Companies, or other corporations which come State the of laws national banks are permitted to act under the the Of Florida. The exercise of such rights shall be subject to Reguand Act rProvisions of Section 11(k) of the Federal Reserve System. lation F of the Board of Governors of the Federal Reserve fiduciary powers A formal certificate indicating the that your bank is now authorized to exercise will be forwarded in due course. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. Item No. 3 TELEGRAM 4/13/62 LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON April 13, 1962 LANG - NEW YORK Your wire April 12. Board approves a renewal of the outstanding loan on gold of $111950,000 by your Bank to the Bank of Indonesia "the following terms and conditions and with the understanding that no further renewal will be requested or granted: (a) To be made up to 98 per cent of the value of gold bars set aside in your vaults under pledge to you; (b) To mature in three months with option to repay at any time before maturity, repayments to be made in multiples of $1 million; and (c) To bear interest at the discount rate of your Bank in effect on the date on which such renewal is made. It is understood that the usual participation will be offered to the other Federal Reserve Banks. (Signed) Merritt Sherman SHERMAN 3 ,BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 4 4/13/62 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 13, 1962 Mr. Herbert V. Prochnow, Secretary, Federal Advisory Council, 0/0 The First National Bank of Chicago, Chicago 90) Illinois. Dear Mr. Prochnow: The Board suggests the following topics for inclusion on the agenda for the meeting of the Federal Advisory Council to be held on April 30, 1962, and for discussion at the joint meeting of the Council and the Board on May 1: 1. What are the observations of the Council regarding the performance of the economy in recent months, the sentiment of the business community, and the general outlook for the remainder of the year? Have the Council's estimates of aver-all business activity for the year been revised appreciably since the date of the Council's meeting in February? How does the Council appraise the effects of the steel wage settlement and the subsequent increase in steel prices? 2. Does the Council see indications of current or Prospective improvement in the unemployment situation? 3. What interpretation does the Council place on developments in the housing and construction area? 4. What are the prospects for loan demand at banks during the next several months, including the demand for real estate and consumer loans? 5. The Board would welcome comments as to recent developments resulting from the increased maximum Permissible rates of interest on time and savings deposits, including the effects of higher interest rates Mr. Herbert V. Prochnaw -2- on portfolio management. Are there recent developments of significance in connection with negotiable certificates of deposit or longer-term savings instruments? 6, What are the views of the Council regarding the Impact of current monetary and credit policy? Would the Council be inclined to place relatively more weight on domestic considerations or on international considerations? Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 5 4/13/62 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE \k(tft, TO THE BOARD April 13, 1962 The Honorable James J, Saxon, ,Comptroller of the Currency) ,:e.!sury Department, .-suington 25, D. C. tear Mr Saxon: For some time the Board has felt handicapped in acting aPPlications to merge or consolidate banks, to form or add to 13enich l'actia°1cling companies, and to establish branches, by the lack of krea,Y available, current, and reliable banking data for geographic smaller than counties. At present, comparative regional bankg fiorhNttres are limited to a considerable extent by those available tea 01,e biennial deposits by counties program. These data are often or relate to areas too broad to serve the purposes of current axial the Vis of competitive factors in some of the applications on which oard is required to act. The Board is in the process of expanding the amount of staff. members and outside professional consultants will spend ture—tuamental research on the economic aspects of the banking strucconipre d the markets for the many types of bank services. More thts:',,e"i'Ve and current branch data are particularly important in and their availability should be expanded if these efforts e 0 be fruitful. Reporting forms and reporting procedures that DNII-I-Lginated many years ago and were generally satisfactory under °us conditions do not serve many of today's needs. tine Board asked the Federal Serve With these problems in mind, the cleterv,,Banks to survey the branch systems in their Districts to ' cil s whether reliable deposits data for individual branches cktsf !ITIoraLthe head office city are available from bank records. A report of the results of this survey is attached for your "Ito 4civiser-l''°n. Mr. Chapman Fleming of your Office has been kept regarding this survey and its results. T (I kt,of As you will note from the attached summary memorandum, eitY branch deposits data are generally available from bank : :1,ecord Most banks expressed the feeling that the branch deposit representative of the Irlotzt-rt-- available from their records would be ra of ,A this survey, eposits native to the branch area. Previous to The Honorable James J. Saxon -2- Pt Tosals to expand reporting of branch deposits were rejected on reebelisf that such data were not readily available from bank :ords and might be extremely difficult and burdensome for banks report. This survey indicates that these fears were not well gr°11nded. The Board recognizes that th'e reporting burden on banks c4brranches would be somewhat increased but feels that expansion biatinch reporting is essential to the discharge of its responsibaro.:'", and that on this basis the burden will be accepted by the IQz eurveyg community. Relatively few bankers participating in the rep tlads adverse comments on the possibility of an expanded branch rwti. ort44-" ,g program. There were, however, indications that advance ;7 cf the report date and that submission as of the end of a ncrt" or period would minimize the reporting burden. keep Since the managements of many of these branch systems touch with the supervisory authorities with regard to plans %rap gge, to establish branches, or to form or expand holding cr al l”, it is hoped that they will readily understand the need for on which to base supervisory decision on these matters. thel, Modern data processing techniques will keep at a minimum rec..,ularderx of editing and tabulating these reports when they are branch 4 The attached form would serve the Board's needs for occur' 4 ePosits data if collected annually; other alternatives may You and the details may be worked out by the respective The form i/Ictilirl collected provides for the collection of the same items as biennially, i.e., demand and time deposits of Nsc :rill:ale, partnerships, and corporations, and total deposits. Pcrate-rrerls would be reported by cities and, for branches in unincor- areas, by counties0 coope ra+ The Board hopes that your Office will be willing to ti-1,2 in an undertaking to collect more meaningful branch deposit 7.f,!ntsu-i'7 are now available. It would appreciate receiving your comle respect to the proposed project and also with respect to (3-1- the report formin place of the regular depositsie fOrm in June of 1962. Very truly yours, (Signed) Merritt Sherman Attachments. Merritt Sherman, Secretary. t6'(17.1 BOARD OF GOVERNORS OF THE 0 *0 FEDERAL RESERVE SYSTEM 4/13/62 Item No. 6 WASHINGTON 25, D. C. 0 0 ADDRESS 0FricuAL DORRESPONOCHOC TO THE HOARD April 16, 1962 Mr. William H. Orrick, Jr., Assistant Attorney General, Civil Division, S. Department of Justice, ni4shington 25, D. C. WHO:RM 77-51-2529 Re: tear Mr. Orrick: United States v. Wegematic Corporation, Civ. 154-1 This will acknowledge receipt of your letter dated 411-1 43 1962, with enclosures, regarding the above litigation. You are advised that the Board has no comments or ons regarding the financial statements submitted in support 3r°1100sal to settle the case on the basis of financial inability to ) The Board has no additional information as to the finances egsmatic Corporation. 8liggeSti or a Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary.
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