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Minutes for To: April 141 1961 Members of the Board Prom: 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 _Lt• Minutes of the Board of Governors of the Federal Reserve System on '1.daY, April 14, 1961. PRESENT: 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 2/ Robertson Shepardson King Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Thomas, Adviser to the Board Young, Adviser to the Board and Director, Division of International Finance Molony, Assistant to the Board Fauver, Assistant to the Board Holland, Adviser, Division of Research and Statistics Koch, Adviser, Division of Research and Statistics Knipe, Consultant to the Chairman Eckert, Chief, Banking Section, Division of Research and Statistics Goldstein, Economist, Division of Research and Statistics Petersen, Special Assistant, Office of the Secretary Mr. Stone, Manager, Securities Department, Federal Reserve Bank of New York Money market review. Mr. Stone presented a review of developments the Government securities market, following which there was a discussion bEteed. °a his comments and certain charts that he distributed. While the discussion was in process, Chairman Martin entered with G4A. .aeY, Comptroller of the Currency, Mr. Cocke, Chairman of the ' 1. Xttered at point indicated in minutes; did not attend afternoon 1131?!sion at 3:00 p.m. -4-q not attend afternoon session at 3:00 p.m. i#44, 4/14/61 -2Deposit Insurance Corporation, and Mr. Wolcott, director of the eorPoration. Accordingly, the money market review was suspended and the inenthers of the staff withdrew. At the conclusion of the discussion with Messrs. Gidney, Cocke, 414 Wolcott, the meeting recessed and reconvened at 12:45 p.m. with all cst the members of the Board except Governor Mills present, along with Ilessr8- Sherman, Kenyon, Hackley, General Counsel, and O'Connell, Assistant General Counsel. ApIlication of New York Holding Corporation (Item No. 1). On 114111 10/ 1961, the Board ordered a hearing on April 25, 1961, regarding the 4PPlication of the New York Holding Corporation to become a bank 41"cling company by acquiring shares of Bankers Trust Company, New York eitY, and The County Trust Company, White Plains, New York. Subsequently, the New York State Banking Board denied a similar application filed under State statutes. Mr. Hackley reported that shortly before noon today Counsel for Skrike re Trust Company requested by telephone that in light of the action Qt the State authorities the hearing ordered by the Board be postponed 14cletinitely. The request also was made that the Board stay any further (111E3ideration of the application in order that the applicant might explore P°seibi -e steps to obtain a reversal of the decision of the State Banking It was understood that the oral request would .be confirmed by teleram. 4/14/61 -3Mr. Hackley stated that the Legal Division saw no objection to c°441°1Ying with the request of the applicant, which would involve publishing illthe Federal Register a notice indicating that at the request of the 41icant the hearing had been postponed until further notice and the toardt s consideration of the application was being stayed pending tInther request by the applicant. This would also involve cancellation or prehearing conference scheduled for Monday, April 17. Mr. O'Connell stated that the Hearing Examiner was prepared to 84418e the parties at interest of the postponement of the prehearing c°11terence. He then read the suggested language of a proposed order that would indicate the Board's compliance with the request of the all)14cant, as reported previously by Mr. Hackley. Governor Robertson noted that possible action through the courts to . e , -e4 a reversal of the decision of the State Banking Board might c°11tillue in process for a substantial period of time. He asked, there- 'Whether any harm would be seen in holding the application to the Board of Governors in abeyance for such a period. Mr. Hackley replied that he could not see any objection as long thp -Matter was being held in abeyance at the request of the applicant. lthe ci -,rcumstances, no violation of the provisions of the Administrative °ceallre Act would appear to be involved. 4/14/61 Question was raised whether a public announcement by the Board of " th °tice to be published in the Federal Register would seem desirable, — Ilas agreed that a press statement should be issued. Accordingly) unanimous approval was given to the publication in the xederal Register of an Order in the form attached as Item No. 1, with the understanding that an appropriate press statement announcing the 18814141ce of the Order would be released today. LIEkllcation of Dauphin Deposit Trust Company. to the Reference was made °4u1 presentation before the Board yesterday by representatives °t ba --qhin Deposit Trust Company, Harrisburg, Pennsylvania, requesting reom- . ' Italtieration of the application of that bank for permission to merge '4u40 Curtin Trust Company, also of Harrisburg. the It was noted that 8 uhstantive discussion of this application by the Board was held on kbrIatim. 2, 1961, at which time all of the members of the Board had w ssed their vie s. Although the action to deny the application was telten the following day, following a check with the Federal Reserve Bank or phil ' edelphia, and at that time Governor King was not present, he had —4eatea - on February 2 that he would favor approval. be Ilea. lqere Question was raised whether reconsideration of the matter should in abeyance by the Board until all of the members of the Board re8ent. en Dina Question also was raised regarding a request that had e by Counsel for Dauphin Deposit at the conclusion of yesterday's • T f tk) 4/14/61 -5- Presentation, the substance of which was that there be made available to C°1111sel. for Dauphin Deposit, in the event the Board did not change its ectio , - on the application, roughly the same information that would have bee ll available to the applicant in a bank holding company case, including the record of votes. It was understood that the Legal Division was pre- kring for the Board's consideration a memorandum dealing with this request. In discussion, Governor Robertson expressed the view that the la()4rd'e procedures in advising of its decisions on bank merger cases 4°144 be changed to conform generally to the procedures followed in 1101ding company cases, and Governor King agreed. However, it was understood that consideration of the request of 00114,, 'el for Dauphin Deposit and of any change in procedures relative to nlerger cases would await the availability of the memorandum being kePar ed. by the Legal Division. With further reference to the procedure followed by the Board in 44tters such as bank merger cases, Governor Robertson suggested that the also consider a procedure whereby reconsideration of a case would bell-flitted to those members of the Board who had participated in the orleltal decision, thus avoiding the possibility of a change in decision beeatIse of a change in the composition of the Board. 4/14/61 -6Governor Balderston commented that a procedure such as suggested Governor Robertson would appear to suggest that reconsideration of the 1)444in Deposit case be postponed until after the return of the Chairman r:t1)111his forthcoming trip to Europe. Governor Robertson replied that this would be the effect of such a Procedure, except in instances where the position of an absent member Otthe Board would not have any effect on the decision. In other words, reooas ideration of a case would be delayed under such a procedure only Illthoee instances where the vote of an absent member of the Board would ELNtt the result. Governor King expressed agreement with the suggestion of Governor Robertson. He added that he would also suggest that an effort be made, 41' as practicable, to have the maximum possible number of Board 'leraber8 Present to participate in decisions on important cases. He real& 4ea that it would not be advisable to delay Board business 141te1Y as a general rule, but he felt that to the extent possible the th CiMIAfl. number of Board members should be present to participate in 1)111)ort,,, '446 cases or where the question was a close one. He also suggeEtea that whenever possible a reasonable period of time be allowed l'()r th e —ftbers of the Board to review the file on such cases prior to oheiae ration of them by the Board. 1 i 34,) 4/14/61 -7Chairman Martin noted that over the years it had been the general 1)ractice of the Board to follow procedures such as those referred to by C"rnor King. He continued to feel that this was a good policy to t°1344/ in handling controversial issues, although under certain circumkeee it was sometimes necessary to deviate from the general rule. Discount rates. Itel The establishment without change by the Federal e Banks of New York, Cleveland, Richmond, Atlanta, Chicago, St. LI°1118, and Dallas on April 13, 1961, of the rates on discounts and 841118a/ce8 in their existing schedules was approved unanimously, with the 4114er8tanding that appropriate advice would be sent to those Banks. Items circulated to the Board. The following items, which had been „. ' lreulated to the members of the Board and copies of which are tte.ch ed to these minutes under the respective item numbers indicated, ee a ...P..Z2.y.221. unanimously: Item No. Letter a41, .to the Federal Reserve Bank of New York ski °/11 4 -11€ the continuation of the payment of exce4e8 of 12 employees for a period not to 1X months from April 1, 1961, at rates be : Ellel1 4'he minimum of the grade in which each ' 431) is classified. Ie'tter the Federal Reserve Bank of MineapolsbC a revision in the salary structure app Helena and 8 arleh. employees at the head office 2 ._ 3 " j$4 11.1.21. 4/14/6.1. -8The meeting then recessed and reconvened at 3:00 p.m. with G'7"Tnors Balderston, Robertson, Shepardson, and King present, along l'rlth Messrs. Kenyon, Thomas, Fauver, Koch, Eckert, and Stone. Money market review. There was a further discussion of develop- in the Government securities market on the basis of the material t4t had been distributed this morning by Mr. Stone, following which Eckert reviewed banking developments. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behaJf of the Board the following items: 140. 1 ) Letter to the Federal Reserve Bank of Kansas City (attached Item e%izz- qvproving the designation of 60 persons as special assistant Na Memoranda from appropriate individuals concerned recommending the "4114g actions relating to the Board's staff: sea increase tervic IvlarY E• Sanders, General Assistant, Division of Administrative 8) frOM $6,710 to $6,930 per annum, effective April 16, 1961. Pe ber zion to work additional period e m aternity leave J• Auerbach, Research Assistant, Division of International e/ to work through May 26, 1961, before beginning maternity leave. , ( 1 Secretary J.i "4' Item No. 1 4/14/61 BOARD OF GOVERNCRS OF THE FEDERAL RESERVE SYSTEN ORDER POSTPONING HEARING By order dated March 101 1961, and published in the Picieral Register on lierch 16, 1961 (26 Federal Register 2239), the 10 ' °ard Of Governors of the Federal Reserve System gave 110tice of an application made to the Board pursuant to sec- t. 1°4 3(a) of the Dank Holding Company Act of 1956 (12 U.S.C. 1842\ by New York Holding Corporation, Irhito Plains, New York, 13 the Board's prior approval of the acquisition by applicant Of all the outstanding shares of stock (except for directors' cillalifYing shares) of Bankers Trust Company, New York, New York, "4/ The County Trust Company, iihite Plains, New York. In connecti(T".,, vilth such application, the Board of Governors ordered the heidi ng of a public hearing commencing April 25, 1961, at the Or:4 ecs of the Federal Reserve Bank of New York, New York City. On April 14, 1961, the applicant requested that the he. ordered by the Board be indefinitely postponed and that aQtio, — L'Y the Board on the application filed be stayed. , -2- TT IS HEREBY ORDERED, That, pursuant to the request t aPPilcant, the hearing ordered for April 251 1961, be postuntil further notice and subject to further order, and thm.. Board action on the said anplication be stayed pending t.),rther request by the applicant in this regard. (Signed) rerritt Sherman iierritt Sherman, Secretary. (sza I/ated April 14, 1961 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, O. C. Item No. 2 4/14/61 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD *„41.VIS% -40o*** April 14, 1961 2atilaliTIAL (FR) , 1, 11". Walter H. Rozell, Jr., vlce President, Federal Reserve Bank of New York, 4e4 York 45, New York. Dear Mr. Rozell: In view of the circumstances described in your letter of Max.ch 31, 1961, the Board of Governors approves the continuation Of the payment of salaries of 12 employees, for a period not to exceed aix months from April 1? at rates below the minimum of the ra'cle in which each such job is classified. Very truly yours, (Signed) Merritt Sherman Merritt Sherman Secretary. BOARD OF GOVERNORS etocotak. OF THE Item No. 3 FEDERAL RESERVE SYSTEM 0,14 WASHINGTON 25, D. C. 4/14/61 ' ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 14, 1961 -C°11FIDENT ------___111 , FR Mr. Frederick L. Deming, President, Federal Reserve Bank of Minneapolis, Minneapolis 2, Minnesota. 1)ear Mr. Deming: Reference is made to your letter of March 22, 1961, in which Y s:!' Bank requests the approval of upward adjustments in the single - 'IV structure applicable to Head Office and Helena Branch employees. The Board approves the following minimum and maximum salaries for the respective grades, effective the beginning of the first pay '' 10(1 subsequent to the date of this letter: Grade 1 2 Minimum Salary $ 2,400 Maximum Salary $ 2,920 3,280 3,720 3 2,520 4 5 6 7 8 9 lo 2,760 3,120 4,200 3,540 4,000 4,500 5,040 5,600 4,760 5,400 6,060 6,800 7,560 11 12 13 6,230 6,920 7,660 8,410 9,340 14 15 16 8,470 9i350 10,290 10,340 11,430 12,610 13,870 The Board approves the payment of salaries to the employees, an officers, within the limits specified for the grades in which ass,_ the positions of the respective employees are classified. It is 'led that all employees whose salaries are below the minimum of other , * Mr. Deming - 2 their respective grades as a result of the structure increase will be brought within the appropriate range as soon as practicable and not later than July 1, 1961, The Board notes that, while no specific provision for a salary structure increase was made in the 1961 budget, you anticipate total salaries paid during the year will not exceed budget provisions. It will be appreciated if you will advise the Board's Division of Personnel Administration the exact date the revised structure becomes effective. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 4 4/14/61 WASHINGTON 25. D. C. AOORKS8 OFFICIAL CORRIESPONOIENCC TO MC SOAR° April 17, 1961 Lo F. Mills, Vice President, el'al Reserve Bank of Kansas City, —'isas City 6, Missouri. Dear Mr. Mills: In accordance with the request contained in your letter of 12, 1961, the Board approves the designation of the following rt'1/4e,,'1.0Yees of your Bank as special assistant examiners for the Federal ex")erve Bank of Kansas City for the purpose of participating in the alllination of Commerce Trust Company, Kansas City, Missouri: April Ancll ' ells) Stanley 13rldran, Dave nCble Willard Robert Gordon Ch. G. S. `d,c)cicrell, Paul E. an, P. E. ` nolein111bertso n, W. E. `4-1rtis, E. J. C0 417 ,' elIrirl, ski, H. R. 1-;a-LPine, Perry Jerry ;:islers James 1/. , Cecil ,4°11IcS 3 William 4 441-4, W. M. Iller hes, Grady '111. 3 W H jo11113°n3 kairn - C.) Carl Lahm, Ronald LaRose, Sylvester Liggett, Robert Mathews, F. J. McArthur, James I. McKee, Hugh Nash, Michael Neville, William Novak, Frank J. Parsons, - John F. Patterson, Charles Pope, Joseph M. Rhodes, Fred C. Rogers, Guy Searle, Joseph Slover, Don Smith, Lewis Spurlock, John B. Stanley, Billy R. Swanson, Estus A. Terrell, Birney Tindall, Keith Trimble, Harry B. Tuggle, Jesse E. Walker, Laurence Wangler, Arthur Werner, Darrell White, Donald I. Whitsitt, W. E. Wilson, James Wisneiswski, Chester Woolworth, Richard Burns, Dorothy Dawson, Patricia A. Haines, Mary Helen Hirsch, Catherine Johnson, Aileen Lynn, Mary Norris, Dorothy M. Polfer, Edaa It is noted that these designations will be terminated on YOL Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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