The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
9
Minutes for
To:
Members of the Board
From:
Office of the Secretary
April 20, 1966
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. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
Gov. Brimmer
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
10•
Minutes of the Board of Governors of the Federal Reserve
System on Wednesday, April 20, 1966.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Robertson, Vice Chairman
Shepardson
Maisel
Brimmer
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Cardon, Legislative Counsel
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Solomon, Director, Division of Examinations
Kakalec, Controller
Hexter, Associate General Counsel
O'Connell, Assistant General Counsel
Shay, Assistant General Counsel
Hersey, Adviser, Division of International
Finance
Mr. Daniels, Assistant Director, Division of
Bank Operations
Mr. Kiley, Assistant Director, Division of Bank
Operations
Mr. Leavitt, Assistant Director, Division of
Examinations
Miss Wolcott, Technical Assistant, Office of
the Secretary
Miss Hart, Mrs. Heller, and Messrs. Forrestal
and Via of the Legal Division
Messrs. Gemmill and Grimwood of the Division of
International Finance
Messrs. McIntosh and Ring of the Division of
Bank Operations
Messrs. Egertson, Guth, and Poundstone of the
Division of Examinations
Approved letters.
The following letters were approved unanimously
after consideration of background information that had been made available to the Board.
Copies of the letters are attached under the respec-
tive item numbers indicated.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
137()
4/20/66
-2Item No.
Letter to Genesee Merchants Bank & Trust
Company, Flint, Michigan, approving the
establishment of a branch at East First and
Harrison Streets.
1
Letter to Nevada Bank of Commerce, Reno,
Nevada, approving the establishment of a
branch at Liberty and South Virginia Streets.
2
Letter to United California Bank, Los Angeles,
California, approving the establishment of a
branch near Newport Beach.
3
Letter to Chase International Investment
Corporation, New York, New York, granting
consent to Arcturus Investment & Development, Ltd., Montreal, Canada to hold shares
of Hogares Regiomontanos, S.A. de C.V.,
Ilexico, already acquired, and to purchase
additional shares.
4
Letter to the Federal Deposit Insurance CorPoration regarding the application of State
and Savings Bank, Monticello, Indiana, for
continuation of deposit insurance after withdorawal from membership in the Federal Reserve
°Ystem.
5
Letter to Mellon Bank International, Pittsburgh,
pien nsylvania, approving an amendment to its
Articles of Association.
6
Letters to Manufacturers Hanover International
Finance Corporation and Manufacturers Hanover
International Banking Corporation, New York,
e4 York, approving amendments to their
sPective Articles of Association.
7-8
etter to the Federal Reserve Bank of New York
;i- egarding the applicability of section 32 of the
liking Act of 1933 to circumstances in which a
:
_ember bank director would become a stockholder
:nd creditor of a corporation that would be
_!Pected to become primarily engaged in business
ut the kinds covered under the statute.
9
7
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
PN-11
4/20/66
-3Report on competitive factors.
There had been distributed a
draft of report to the Comptroller of the Currency on the competitive
factors involved in the proposed merger of The Bank of Lunenburg,
Kenbridge, Virginia, into The Fidelity National Bank, Lynchburg,
Virginia.
Discussion centered upon the fact that the Division of Examinations and the Richmond Federal Reserve Bank had arrived at somewhat
d ifferent conclusions regarding the effect upon competition in the
area served by the Kenbridge bank.
It developed that qualitative
judgments were principally involved, and a suggestion was made for
deletion of a statement in the draft that the proposed merger would
aPPear to have adverse competitive aspects.
Unanimous approval then was given to the transmittal of the
report to the Comptroller in a form in which the conclusion read as
follows:
Consummation of the proposed merger would eliminate
existing competition between Lunenburg Bank and the
Blackstone branch of The Fidelity National Bank of
Lynchburg, eliminate one of two locally headquartered
banks in the area, and increase significantly the area
deposits held by Fidelity.
Currency of $2 denomination (Item No. 10).
In a letter dated
Pebruary 28, 1966, addressed to Chairman Martin, the Secretary of the
Treasury asked for the reaction of the Board to the alternative proP°sals of abandoning the $2 denomination of United States notes or the
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1;72
4/20/66
-4-
issuance of $2 Federal Reserve notes.
The question was raised because
of the elimination from the 1967 Federal budget of funds for the printing of United States notes.
The Secretary indicated that the statutory
requirement that $322 million of United States notes remain outstanding
could be fulfilled through use of the $100 denomination, thus effecting
a reduction in the annual budget expenditure now arising from the use
Of $2 and $5 denominations.
Subsequently a letter dated March 8, 1966, was sent by the
Board to the Presidents of the Federal Reserve Banks asking for their
views on the alternative proposals.
A summary of their comments had
been circulated to the Board in a memorandum dated April 11, 1966, from
the
Division of Bank Operations, to which was attached a draft of reply
to Secretary Fowler.
The reply would express the view that, with a
few exceptions, the public would not be significantly inconvenienced
by the elimination of $2 bills, and it would state that neither the
Board nor the Reserve Banks favored the printing of $2 Federal Reserve
4°tes at this time.
It would express the view that, if the $2 bill
/las discontinued, the Reserve Banks and the Treasury should stop
Paying out the notes at the same time, on an agreed-upon date, and
the then existing stocks destroyed.
Various aspects of the matter were discussed in the light of
the
.
circulated material and supplementary remarks by members of the
8taff, following which the letter to the Secretary of the Treasury
was
.t4.2.2.E2yd unanimously.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
A copy is attached as Item No. 10.
1_373
4/20/66
-5Suggested amendments to Bank Holding Company Act (Items 11-13).
There had been distributed a memorandum from the Legal Division dated
April 12, 1966, relating to a request from the Chairman of the Senate
Committee on Banking and Currency for the Board's views with respect
to certain amendments to the Bank Holding Company Act suggested by a
representative of Johnston, Lemon & Co., Washington, D. C.
A draft
of reply to Chairman Robertson was attached.
The discussion at this meeting dealt primarily with a suggested
amendment that would charge the Board with responsibility to consider
competition of nonbank financial institutions in connection with applicati°ns under the Bank Holding Company Act.
The proposed reply would
express agreement with the view that it was appropriate for information
0/1 the competition of such institutions to be considered.
It would
indicate that the Board regarded such competition as relevant to the
factor of convenience, needs, and welfare of the communities and the
area concerned and to the question whether the effect of a proposed
acquisition would be to expand the size or extent of the holding comPanY system beyond limits consistent with the public interest.
The
rePlY would then state that in the circumstances it appeared to the
hoard that an amendment to the Holding Company Act along the lines
auggested would not effect a significant change in the Act or in the
4'ard'5 procedures and would serve no useful purpose.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
:1374.
4/20/66
-6Board members recalled that the question of the extent to
Which competition of nonbank financial institutions should be considered in connection with holding company applications had been
brought up for discussion recently in relation to an application
then under consideration, and it had been their understanding that
a memorandum on the subject would be submitted by the staff.
Gov-
ernor Brimmer, in particular, indicated that he felt in need of such
a memorandum to obtain clarification of the practices that the Board
had been following in considering competition of nonbank financial
institutions, both in connection with holding company and bank merger
aPplications.
Further comments by members of the Board suggested
that, despite whatever theories may have governed consideration of
nonbank competition thus far, it might be desirable to reexamine
them against the background of the latitude available under existing
st
atutes.
As a result of the discussion, it was understood that a
ille mnrandum of the kind suggested by the Board members' comments
Would be prepared, that the reply to Chairman Robertson would be
deferred pending the availability of such a memorandum, and that
Governor Brimmer would also contact the Banking Markets Section to
Obtain staff views on the economic aspects of the question.
There had also been distributed a memorandum dated April 13,
1966, from Mr. Cardon relating to a request from the Chairman of the
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4/20/66
-7-
Senate Banking and Currency Committee for the Board's position on suggested amendments to S. 2353, a bill to amend the Bank Holding Company
Act, to guard against token divestitures and solve certain technical
Problems relating to trusts.
The amendments, drafted by Board staff
in consultation with the Committee staff, defined trusts that would
be covered by definition of "company" as amended by the bill; dealt
with the problem of enforcing the bill's divesture requirements; and
continued general rules that banks not be considered holding companies
solely because they were the legal owners of bank stocks held in a
fiduciary capacity, that banks not be required to obtain Board approval
before acquiring bank stocks in a fiduciary capacity, and that banks
need not divest bank stocks held in a fiduciary capacity.
Following discussion of the amendments in the light of the
distributed material and supplementary remarks by members of the
staff, a letter to Chairman Robertson recommending that the amendmerits be adopted was approved unanimously.
A copy is attached as
There had also been distributed a memorandum from Mr. Cardon
dated April 13, 1966, regarding a request from Chairman Robertson
for comment on a proposal advanced by the American Industrial Bankers
Association to exclude industrial savings banks from the definition
Of "bank" in the Bank Holding Company Act.
The draft of reply submitted with the memorandum would express
the belief that the definition should be amended so as to cover only
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
137f
4/20/66
-8-
an institution that received deposits subject to check, thereby limiting coverage to commercial banks and excluding not only industrial
banks but other savings banks that accepted funds from the public payable on demand.
The reply would note that the Board had heretofore
interpreted the Act as covering industrial banks that accepted funds
frft the public that were in actual practice repaid on demand.
The
reply would express the view that this was the correct legal interPretation of the present statute, but it would also express the view
that there was no reason on policy grounds to cover such institutions
It would point out that adoption of an amendment along the lines now
su ggested would obviate the need for another amendment, incorporated
in S. 2353, to exempt nondeposit trust companies from the definition
Of
In his memorandum Mr. Cardon expressed the opinion that as a
matter of policy the coverage of the Holding Company Act should be
restricted to commercial banks.
He brought out that in recommending
an a
mendment to exclude nondeposit trust companies the Board had argued
that there
Objectives
was no need to cover such companies in order to achieve the
of the Holding Company Act, since the Act was designed
Principally to restrain undue concentration of control of commercial
bariking resources and to prevent abuse by a holding company of its
c°4trol of commercial banks for the benefit of its nonbanking subaidiaries.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4/20/66
-9In discussion of the matter, Vice Chairman Robertson referred
to the aforementioned comment on the objectives of the Holding Company
Act and expressed agreement that this reflected the purpose of the
statute at the time it was enacted.
Therefore, he thought that the
Proposed redefinition of "bank" was appropriate.
There appeared to be
general agreement with this statement by the Vice Chairman.
The discussion then turned to the phraseology of the proposed
definition, and one staff suggestion was that "bank" might be defined
as including any institution that accepted deposits payable on demand
and subject to check.
At this point Mr. Hackley stated that he was strongly in
favor of the proposed redefinition.
He noted that there had always
been difficulty in reconciling the fact that savings and loan associations were not covered by the present definition, whereas the Board had
held that industrial banks were covered if they received funds payable
in practice on demand. The proposed amendment would make it clear that
the Holding Company Act was concerned only with commercial banks that
teceived deposits subject to check.
Vice Chairman Robertson commented that the Board agreed with
the idea.
Mk. Hexter raised the question whether the proposed letter
Illight be read as implying a position adverse to legislation regulating
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1378
4/20/66
-10-
savings and loan holding companies or companies that owned or controlled
a number of industrial banks.
Mr. Hackley commented that the letter would seem to him to
indicate
that it was appropriate for Congress to pass separate legislation regulating specifically not only savings and loan holding companies
but also holding companies of industrial banks.
However, it had always
been his feeling, and he thought it was clear from the legislative
history, that Congress did not intend to give the Board such broad
jurisdiction in the Bank Holding Company Act.
Vice Chairman Robertson suggested that the letter to Chairman
Robertson be rephrased slightly so as to make clear the view that holdCompanies of financial institutions other than banks should be
covered by separate legislation and avoid any possible implication of
the kind Mr. Hexter had mentioned.
Unanimous approval then was given to the proposed letter to
Ch airman Robertson with the understanding that if would be modified
in* certain respects in light of the foregoing discussion.
Attached
as Item No. 12 is a copy of the letter subsequently sent to Chairman
Robertson pursuant to this action.
There had likewise been distributed a draft of reply to a
letterr dated March 24, 1966, from J. Henry Schroder Banking Corporati
New York, New York, indicating opposition to H.R. 7371 and
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4/20/66
-11-
support of S. 2353, bills to amend the Bank Holding Company Act, on
the grounds of the treatment that the bills would accord to the provisions of section 6 of the Act.
The bank also proposed broadening
the terms of the new section 2(h) of the Holding Company Act, in the
form in which the Act would be amended by S. 2353.
During discussion of various aspects of the matter it was
Pointed out that the correspondent's concern related to the effects
of
Passage of legislation including a "one-bank" holding company
definition, and that the prospects for such legislation appeared
remote.
The proposed reply was then approved unanimously.
A copy
is attached as Item No. 13.
Export-Import Bank program.
There had been distributed a
memorandum from the Legal Division dated April 19, 1966, commenting
On an April 13 letter from the Export-Import Bank of Washington requesting that certain obligations carrying the guarantee of the Bank be
declared eligible as collateral security for advances by Reserve Banks
to
ember banks under the provisions of section 13 of the Federal
Reserve Act.
Three categories of transactions in which such obliga-
ti°ns might be acquired by banks were described in an attached proPosed reply.
Prior to discussion of the distributed material, Vice ChairMan
Robertson referred to a recent meeting in Chairman Martin's office
at which representatives of the Bank described and requested comments
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1380
4/20/66
-12-
°I1 a program currently under consideration that involved setting up
an Export-Import Bank rediscount facility.
The Vice Chairman caused
to be distributed copies of a memorandum that had been left by the
Export-Import Bank representatives, along with copies of a draft
memorandum of staff comments thereon.
He suggested that these papers
be studied by the members of the Board with a view to their consideration at tomorrow's meeting.
Mr. Forrestal then reviewed the question before the Board as
a result of the April 13 letter, along with the reply proposed to be
given.
Governor Brimmer observed that this was part of a package of
Pr oposed measures resulting from a high-level Government study of the
Problem of financing U.S. exports.
sidered in that broader setting.
Thus, the program should be con-
Vice Chairman Robertson commented
41°4g the same lines.
Accordingly, it was agreed after additional discussion that
the April 19 memorandum and the other distributed material would be
e amined by the Board members in the light of the overall objectives
Of
the export financing program and that the subject would be con-
sidered further at tomorrow's Board meeting.
Application of Harter Bank & Trust Company (Items 14-15).
The e had
been distributed drafts of an order and statement reflecting
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1 NI
4/20/66
-13-
the Board's approval on April 11, 1966, of the application of The
Harter Bank & Trust Company, Canton, Ohio, to merge with The Waynesburg
Bank,
Waynesburg, Ohio.
The issuance of the order and statement was authorized.
Copies
of the documents, as issued, are attached as Items 14 and 15.
Work measurement program (Item No. 16).
Pursuant to action
taken at
the meeting on March 30, 1966, a letter was sent to the
Presidents of all Federal Reserve Banks, except St. Louis and Dallas,
inviting the Banks to participate in a work-measurement program to
be developed by Booz, Allen, and Hamilton, Inc., along the lines of
the survey conducted by that firm at the Federal Reserve Bank of
Dallas.
The contemplated program would be conducted either at the
St. Louis Bank alone or in conjunction with one or more other Reserve
Banks.
A letter dated April 11, 1966, had now been received from
?resident Bopp of the Federal Reserve Bank of Philadelphia advising
that the Bank's Board of Directors had considered the proposal.
Be-
fore reaching a decision, however, they requested the views of the
Board of Governors on two items of principle:
(1) action should not
be taken until the directors and top management had had an opportunity
to discuss the matter with the specific individuals from Booz, Allen,
and Hamilton who would conduct or direct the program at the Philadelphia
ilank, and (2) the Bank should not retain this consulting firm without
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1382
4/20/66
-14-
having an opportunity for discussion with at least one other consulting organization.
A draft of reply had been distributed with a cover-
ing memorandum dated April 15, 1966, from the Division of Bank Operations.
Comments at this meeting emphasized the desirability of developing a set of measurements that would provide a reliable basis for interBank comparisons.
While it was agreed that a position should not be
taken that every Reserve Bank must participate in the program, nevert
heless the hope was expressed that such Banks as chose to participate
'would find the results sufficiently valuable that other Reserve Banks
14cluld want to join in the program later.
The feeling also was expressed
that an indication should be given in the reply to President Bopp that
the potential benefits of such a program were great enough to give a
sense of urgency to the whole undertaking.
The letter to President Bopp was then approved unanimously in
he form attached as Item No. 16, with the understanding that copies
14°uld be sent to the other Reserve Bank Presidents for their information.
New national bank in San Francisco.
Mr. O'Connell reported
circumstances under which a meeting had been held at the Federal Deposit
ti S u
rance Corporation with parties interested in the organization of a
nel/ national
bank in San Francisco, California, in effect as a replace-
for the defunct San Francisco National Bank.
In this connection
he r
eferred to questions that had been raised by Counsel for the Federal
Res
r"kre Bank of San Francisco concerning the fact that the Reserve Bank
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4/20/66
-15-
not invited to participate, and particularly to the fact that
Re serve Bank Counsel was considering the possibility of advising
President Swan to address letters of protest to certain parties,
including the Chairman of the Corporation.
He understood that Chair-
man Randall intended to be in touch with the Vice Chairman of the
)30ard to explain the Corporation's position.
It was understood, after discussion, that Mr. O'Connell
vould suggest to the Federal Reserve Bank that it not proceed with
he writing of such letters until after the situation had been
reviewed by President Swan with the Vice Chairman of the Board.
The meeting then adjourned.
Secretary's Notes: At its meeting on
April 13, 1966, the Board considered a
request from the Bureau of the Budget
for any proposals for State legislation
that it might be desirable to submit for
consideration by the Committee of State
Officials on Suggested State Legislation
of the Council of State Governments. The
Board agreed that it would be appropriate
to call attention to questions that had
been raised from time to time regarding
the relationship between maximum rates of
interest on time and savings deposits, as
prescribed by the Board, and laws of individual States on the same general subject.
Attached as Item No. 17 is a copy of the
letter sent to the Bureau of the Budget
on April 19, 1966, pursuant to the understanding at the April 13 meeting.
On April 19, 1966, a letter was sent to
First National City Bank, New York, New
York, acknowledging receipt of notice of
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1384
4/20/66
-16its intent to establish an additional
branch in Hong Kong, to be located in the
Kwun Tong District. The letter noted that
no additional capital investment was expected
to be required from New York.
On April 19, 1966, Governor Shepardson
approved on behalf of the Board a memorandum from the Division of Research and
Statistics dated April 14, 1966, recommending the establishment of an additional
position of Research Assistant or Statistical Assistant in the National Income,
Labor Force, and Trade Section.
Governor Shepardson today approved on
behalf of the Board the following items:
1,,
Memorandum from the Division of Bank Operations dated April 18,
,'66, recommending the establishment of two summer analyst positions
In the Operations Analysis Section, with the understanding that the
grcle of each position would depend on the qualifications of the
a
pplicant.
Memorandum from the Legal Division recommending the appointment
Howard B. Cloth as Attorney in that Division, with basic annual
salary a t the rate of $6,269, effective the date of entrance upon duty.
Of
Under date of April 20, 1966, a letter
was sent by Vice Chairman Robertson to
Mr. Ellis, Chairman of the Presidents'
Conference Committee on Inter-Bank
Electronic Communications, advising of
the designation of the following members
of the Board's staff as associate members
of the Subcommittees indicated:
Lawrence H. Byrne, Jr.
Subcommittee on Federal Reserve Bank
Inter-Bank Information Systems
Joseph E. Kelleher
Subcommittee on Federal Reserve Bank
Inter-Bank Information Systems
(for Wire Transfer Responsibility)
John N. Kiley, Jr.
Subcommittee on Improving the Payments
Mechanism
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1A PA
Secretary
1 38f
Item No. 1
4/20/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ENCE
CORRESPOND
ADDRESS OFFICIAL
TO THE BOARD
April 20, 1966
Board of Directors,
any,
Genesee Merchants Bank & Trust Comp
Flint, Michigan.
Gentlemen:
Federal Reserve
The Board of Governors of the
by Genesee Merchants
System approves the establishment
, of a branch at
Bank & Trust Company, Flint, Michigan
and Harrison
et
the intersection of East First Stre
the branch is estabStreet, Flint, Michigan, provided
date of this letter.
lished within one year from the
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
Of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1386
BOARD OF GOVERNORS
Item No. 2
4/20/66
OF THE
TEM
FEDERAL RESERVE SYS
WASHINGTON, D. C. 20551
CNCIC
001111(SPONO
ACIONICIIII OFFICIAL
TO THC ISOAPID
'April 20, 1966
Board of Directors,
Nevada Bank of Commerce,
Reno, Nevada.
Gentlemen:
Federal Reserve
The Board of Governors of the
by Nevada Bank of
System approves the establishment
ch on the northwest
Commerce, Reno, Nevada, of a bran
Streets, Reno,
corner of Liberty and South Virginia
blished within one
Nevada, •provided the branch is esta
year from the date of this letter.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1387
Item No. 3
4/20/66
BOARD OF GOVERNORS
or THE
FEDERAL RESERVE SYSTEM
WASHINGTON, 0. C. 20551
ADDRESS 0113121Al. CORAILISPONDENCE
TO THE •OAND
April 20, 1966
Board of Directors,
United California Bank,
Los Angeles, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by United California
Bank, Los Angeles, California, of a branch on the northwest cornet of the intersection of MacArthur Boulevard
and Birch Street in an unincorporated area near Newport
Beach, Orange County, California, provided the branch is
established within one year from the date of this letter.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch,
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I 38S
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 4
4/20/66
WASHINGTON, O. C. 20551
NCC
COOPICIPONOE
AOONICOO OrrICM.
TO THIC OCIANO
April 20, 196C.
Chase International
Investment Corporation,
I Chase Manhattan Plaza,
New York, New York. 10005
Gentlemen:
28, 1966,
As requested in a letter dated March
turus"),
("Arc
Ltd.
from Arcturus Investment & Development,
nt
conse
s
grant
Montreal, Canada, the Board of Governors
gate
aggre
,
stock
al
for Arcturus to hold 250 shares of capit
nos,
monta
Regio
es
Par value US$500 equivalent, of Hogar
t 10,
S.A. de C.V. ("Hogares"), which were acquired on Augus
for
nt
conse
s
1965, at tio cost. The Board also grant
ely 3,000 additional
Arcturus to purchase and hold approximat
ely US$6,000,
ximat
Shares of Hogares, at a cost of appro
year from the
one
n
Provided such stock is acquired withi
date of this letter.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1389
BOARD OF GOVERNORS
Item No, 5
4/20/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 20, 1966
Honorable K. A. Randall, Chairman,
Federal Deposit Insurance Corporation,
Washington, D. C. 20429
Dear Mr. Randall:
Reference is made to your letter of April 5, 1966,
oncerning the application of State and Savings Bank,
Monticello, Indiana, for continuance of deposit insurance
after withdrawal from membership in the Federal Reserve
System,
There have been no corrective programs urged upon
the bank, or agreed to by it, which have not been fully
consumnated, and there are no programs that the Board would
advise be incorporated as 'conditions of admitting the bank to
Federal
zembership in the Corporation as a nonmember of the
Reserve System.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1 90
Item No. 6
4/20/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRSSS orrictAL CORRESPONDSHCC
TO THE BOARD
April 20, 1966
Mellon Bank International,
Mellon Square,
Pittsburgh 30, Pennsylvania.
Gentlemen:
Reference is made to your letter dated March 30, 1966,
transmitted through the Federal Reserve Bank of Cleveland, enclosing a certified copy of the minutes of a special meeting of
the shareholders of your Corporation on March 28, 1966, at which
a resolution was adopted amending Article Third of your Articles
Of Association so as to read:
"Third. The home office of this Corporation shall be
located in the United States at 84 William Street, New
• York, New York. 10038."
In accordance with your request, the Board of Governors
approves the amendment to Article Third of your Articles of
Association. Please advise the Board of Governors the date your
home office is removed to 84 William Street, New York.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1391
BOARD OF GOVERNORS
Item No. 7
4/20/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 20, 1966
Manufacturers Hanover International
Finance Corporation,
44 Wall Street,
New York 15, New York.
Gentlemen:
Reference is made to your letter dated March 29, 1966,
enclosing a consent signed under date of March 7, 1966, on behalf
of Manufacturers Hanover Trust Company, sole shareholder of your
C°rPoration, consenting to the amendment of Article FIFTHcf your
Articles of Association so as to read:
"FIFTH. The Board of Directors shall consist of a
minimum of 5 and a maximum of 9 members. The number
of members within such maximum and minimum limits shall
be fixed from time to time by the Board of Directors in
the by-laws of the Corporation. The first meeting of
the shareholders for the election of directors shall be
at 44 Wall Street, New York 5, N. Y. on the 5th day of
March, 1962, or at such other place and time as a
majority of the undersigned shareholders may direct."
As requested, the Board of Governors approves the amendment to Article FIFTH of your Articles of Association.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1392
Item No. 8
4/20/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 20, 1966
Manufacturers Hanover International
Banking Corporation,
44 Wall
Street,
New York 15, New York.
G
entlemen:
Reference is made to your letter dated March 25, 1966,
e
nclosing a copy of a consent signed under date of March 7, 1966,
Ott behalf of Manufacturers Hanover Trust Company, sole shareholder
°f your Corporation, consenting to the amendment of Article FIFTH
°f your Articles of Association so as to read:
"FIFTH. The Board of Directors shall consist of a
minimum of 5 and a maximum of 9 members. The number
of members within such maximum and minimum limits
shall be fixed from time to time by the Board of
Directors in the by-laws of the Corporation. The
first meeting of the shareholders for the election
of directors shall be at 44 Wall Street, New York 5,
N. Y., on the 5th day. of March, 1962, or at such
other place and time as a majority of the undersigned
shareholders may direct."
As requested, the Board of Governors approves the amendment to Article FIFTH of your Articles of Association.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 9
4/20/66'
WASHINGTON, D. C. 20531
AOCHICES arricsm. COMPHISPONOENCE
TO THE •OAND
April 20, 1966
Mr John J. Clarke, Vice President
and General Counsel,
Federal Reserve Bank of New York,
New York, New York. 10045
Dear Mr. Clarke:
This refers to your letter of April 12, 1966, enclosing
;COPY of a letter of April 11 from Milbank, Tweed, Hadley & McCloy,
sqs-, attorneys for William K. Whiteford, who is a director of two
!ember banks, Mellon National Bank & Trust Company of Pittsburgh,
rtrnsYlvania, and Corpus Christi Bank & Trust Company of Corpus
y lsti, Texas. The question raised by this correspondence is
thersection 32 of the Banking Act of 1933 would prohibit Mr.
Whiteford from continuing his services with the banks if he were
to
be a nonvoting shareholder and creditor of a new corporation
that would be
expected to become primarily engaged in business of
the kinds
covered under the statute.
From the above correspondence, it appears that the
corporation in question would be organized with an initial capital
$800,000, $400,000 of which would be debt and the
Other half
ofner
common stock. The stock initially issued would consist
2,00
0
,
2
ea,,,
shares of voting stock and 18,000 of nonvoting stock,
w/j" share issued at $10 per share for a total $400,000. Mr.
Whiteford
and one other person would each contribute approximately
of the debt capital and each also for $90,000 would acquire
mr0e00 shares of the nonvoting common stock. Thus, it appears that
Whiteford and this other person together would own all of the
a„ v nonvoting shares for a total stock investment of $180,000,
that their total debt contribution would be $220,000.
It is understood further that not less than three other
indiv.A
acn,..luuals would contribute the balance of the debt capital and would
pe;:lre 22,000 shares of voting common stock for $220,000. These
of,.°fle would be the corporation's only directors and its chief
klcers.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Mr. John J. Clarke
-2-
1394
s
It is stated in the letter from Mr. Whiteford's attorney
proposed
that he will
the
of
employee
or
not be an officer, director,
corporation. Furthermore, in your letter you indicated that his
ttorneys
:
exercise
have advised you that he is not to become or to
corporation,
the
of
functions of an officer, director, or employee
over the
control
any
Ind that he would not be involved in or exercise
'4Y-to-day operations of the corporation.
not
On the basis of the foregoing correspondence, it does
would
ion
corporat
proposed
eIlP:er that Mr. Whiteford's interests in the
business
in
al
individu
an
uch that he would be primarily engaged as
Of
the kinds covered under the statute, or as an officer, director, or
employee of any organization or a partner or employee of any partnership
'° engaged in such business.
Z
from the
Accordingly, the Board is of the view that,
information presented, Mr. Whiteford's effectuation of his proposed
for him to
interests
o
in the corporation would not make it unlawful
It is
banks.
member
1tinue his directorship with either of the
1.
no.
in your
d
expresse
that
'ed that this conclusion is in harmony with
'etter.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No. 10
4/20/66
Or 'MC
FEDERAL RESERVE SYSTEM
A%
P;
WA•HINOTON
orrice
OF THE VICE CHAIRMAN
CIOWT'
April 21, 1966
The Honorable Henry H. Fowler,
Secretary
of the Treasury,
Washington, D. C. 20220
Dear Joe:
28, 1966,
This is in reply to your letter of February
ing
abandon
of
requeating our views on the alternative proposals
the 6
Reserve
Federal
92 denomination note or the issuance of a $2
note.
Reserve
It is the feeling Of the Board and the Federal
be
Ea nks that,
not
would
with a few exceptions, the public
31 8nificantly inconvenienced by the elimination of $2 bills.
:
1t„
re is evidence of general circulation only in the areas
irrved by the Federal Reserve Bank of Boston and by the Seattle
the
ranoh of the Federal Reserve Bank of San Francisco. In
,
8ton area some employers use $2 bills in making up payrolls,
from
in the Seattle zone the circulation apparently results
freely
tes
circula
which
re influence of the Canadian $2 bill,
Just across the border.
:r
the
would not favor
. The Board and the Federal Reserve. Banks
time.
this
at
note
Reserve
Printing of a $2 Federal
ed, the use of
If the $2 United States note is abandon
ry requirement that
0 a
$10
$32,„
denomination notes to meet the statuto
ding would be
c:1 4 million United States notes remain outstan
t sirable. We feel strongly that if the $2 bill is discontinued,
paying out such
!Reserve Banks and the Treasury should stop
40
between the
Tr'es at the same time, on a. date to be agreed upon
existing stocks should be
6.e48urY and the Board, and the then
-stroyed.
from the Federal
Copies of the comments received
Ite.„
if desired.
staff,
your
crve Banks will be supplied
Sincerely,
(Signed) J. L. Robertson
J. L. Robertson
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Item No. 11
4/20/66
13 OAR0 OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
orrice
OF THE VICE CHAIRMAN
April 20, 1966
The Honorable A. Willis Robertson,
Chairman, Committee on Banking
and Currency,
United States Senate,
Washington, D.C. 20510
Dear Mr. Chairman:
This is in response to your letter of
April 12, 1966, regarding amendments to S. 2353
to guard against "token" divestitures and to solve
certain technical problems relating to trusts.
The Board recommends that the amendments be adopted.
Sincerely yours,
J. L. Robertson
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
13(47
t
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 12
4/20/66
WASHINGTON
OFFICE OF THE VICE CHAIRMAN
April 20, 1966
The Honorable A. Willis Robertson,
Chairman, Committee on Banking
and Currency,
United States Senate,
Washington,
D. C. 20510
Dear Mr. Chairman:
You have asked for a report on a proposal, advanced by the American
Industrial
Bankers Association, to exclude industrial savings banks from the
deft
beD nition of "bank" in the Bank Holding Company Act of 1956. The Board
eves that the definition should be amended to cover only "an.institution
'
that
receives deposits payable on demand," thereby limiting coverage to
noTmercial banks (i.e., banks that offer checking accounts), and excluding
the °n1Y industrial banks but other savings banks that accept funds from
Public that are paid on demand.
The Board has interpreted the present Act as covering industrial
ba ,.
paid
nk° that accept "funds from the public that are, in actual practice, rePresenton demand." We believe this is the correct legal interpretation of the
statute, but we see no reason in policy to cover such institutions
und.
hole
d, this Act and we believe there are at least four situations in which
cha,s'ng companies that own two or more industrial banks will be forced to
is "ge their operations or divest their industrial banks unless the statute
amended.
Adoption of such an amendment would obviate the need for another
from ent now incorporated in S. 2353, to exempt nondeposit trust companies
tdge the definition of "bank," but it would still be advisable to exempt
that c°rPorations and agreement corporations. Accordingly, we suggest
,S. 2353 be amended by striking lines 6 through 14 on page 3 and insertlieu thereof the following:
"(c) 'Bank' means any institution that accepts deposits
payable on demand, but shall not include any organization operatlng under section 25 or section 25(a) of the Federal Reserve Act,
c.t3jr any organization that does not do business within the
nited States. 'District bank' means any bank organized or
°Perating under the Code of Law for the District of Columbia."
Sincerely yours,
J. L. Robertson
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1398
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 13
4/20/66
WASHINGTON, D. C. 20551
ADOPICIIIII OrrIOIAL COMPIE•PONOCNCIC
TO THE •OARO
April 20, 1966
Mr. Gerald F. Beal, Chairman,
J. Henry Schroder Banking Corporation,
57
Broadway,
New York, New York. 10015
Dear Mr. Beal:
This acknowledges your letter of March 24, 1966, advising
°f your support of S. 2353 and opposition to H. R. 7371, in relation
to the treatment each of these bills accords to the provisions of
section 6 of the Bank Holding Company Act of 1956 ("the Act"). In
a
ddition, your letter recommends a change in section 6 of S. 2353,
for the purpose of providing, in section 2(h) of the Act, that the
Prohibitions of section 4 shall not apply to shares of a company
at is organized under the laws of a foreign country and does not
0 any business within the United States, if such shares are held
'
acquired by a bank holding company that is principally engaged
-In business outside the United States, whether or not said bank
°1ding company is principally engaged in the banking business
outside the United States.
1
Your suggestion for a change in the proposed subsection 2(h)
appears to be based, in part, upon your interpretation of the effect
of said
subsection, which you state "would be to require Schroders
Limited to divest itself of holdings which would not be required of
a domestic bank holding company under Section 4 of the Act."
This interpretation of the effect of section 6 of S. 2353
doesT
not accord with the Board's understanding of these provisions.
4 t is the Board's position that, under the Act as amended by S. 2353,
:
domestic bank holding company would be required, no less than a
_oreign bank holding company, to divest itself of shares in a foreign
'omPany doing no business in the United States.
;
The purpose of the proviso to the proposed new section 2(h)
of the Bank Holding Company Act appears to be to enable a bank
hoid4
1g company (whether organized in this country or abroad) to ret "
(1) 111 shares in a nonbanking company that is organized under the laws
a foreign country and does no business within the United States,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Mr. Gerald F. Beal
-2-
1399
provided the bank holding company's principal business is that of
banking abroad. Under your suggestion that the word "banking" be
omitted from the last line of section 6 of S. 2353, a bank holding
company that was not principally engaged in banking abroad could
control one or more banks in the United States and also have unlimited
nonbanking interests in foreign companies. To permit this would frustrate extensively one of the two chief objectives of the Bank Holding
Company Act, namely, to prevent holding companies from combining
banking and nonbanking businesses. Under the proposed section 2(h),
however, the retention of certain nonbanking interests would be permitted, but only if the bank holding company's principal activity is
banking abroad, and the nonbanking interests consist of shares of a
foreign company doing no business within the United States. By thus
restricting the circumstances in which retention of nonbanking interests
would be permitted, it is believed that the extraterritorial effect of
the Act would be suitably limited without unduly undermining the major
Objectives of the statute. In somewhat similar fashion, the Act provides, in section 4(c)(8), for an exception from divestment for shares
of a foreign company engaged principally in the banking business
outside the United States.
permitting
Your letter questions also the rationale for
Certain nonbanking interests to be retained by holding companies that
are banks but not by holding companies that are not banks. The different treatment to be accorded to these two types of holding companies
iS based upon the belief that bank operations are conducted in accordance
With more restrictive and protective practices and norms, or are subject
are operations
t° more rigid statutory and supervisory controls, than
by such norms
afforded
of nonbank corporations, and that the safeguards
, under the
treatment
and regulation warrant a somewhat less confining
itet, for bank holding companies that are banks.
unable to agree
For the foregoing reasons, the Board is
in section 6
proposal
the
favors
14ith your recommendation. Rather, it
0,f S. 2353, under which a bank holding company, whether foreign or
.10mestic, would be required to divest as provided in section 4 of the
(
the laws of a
let, except that shares of a company organized under
States could
United
the
within
-c/reign country that does no business
:
ly engaged
principal
company
holding
e acquired and retained by a bank
States.
United
ln the banking business outside the
will be received
Any further comments you may wish to submit
tion.
With interest and accorded full considera
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1400
Item No. 14
4/20/66
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
Oft
In the
Matter of the Application of
1
14E HARTER
RANK & TRUST COMPANY
ler a
The 14pproval of merger with
-aYnesburg Bank
1
1
1
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to the
1/`4111:
"erger Act, as amended (12 U.S.C. 1828(c), Public Law 89-356), an
alnaicati
--on by The Harter Bank & Trust Company, Canton, Ohio, a State
Ittertibe
bank of the Federal Reserve System, for the Board's prior
ov
app
al of the merger of that bank and The Waynesburg Bank, Waynesburg,
Ohio
under the charter and title of The Harter Bank & Trust Company.
AS
mg i
ncident to the merger, the sole office of The Waynesburg Bank
Vota
1
become a branch of the resulting bank.
Notice of the proposed merger,
approved by the Board, has been published pursuant to said Act.
Upon consideration of all relevant material in the light of
the f_
qctors set forth in said Act, including reports furnished by the
c°n1Ptr0,Jer
of the Currency, the Federal Deposit Insurance Corporation,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1401
-2-
the
4nd the Attorney General on the competitive factors involved in
PtoPosed merger,
IT IS HEREBY ORDERED, for the reasons set forth in the
44tdts Statement of this date, that said application be and hereby
aPProved, provided that said merger shall not be consummated
(1.0 before the thirtieth calendar day following the date of this Order or
(1)) later than three months after said date.
1966.
Dated at Washington, D. C., this 20th day of April,
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Shepardson, Mitchell, Daane, Maisel,
and Brimmer.
Absent and not voting:
Governor Robertson.
(signed) -- Merritt Sherman
Merritt Sherman,
Secretary.
(SEAL)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4M
Item No. 15
4/20/66
BOARD OF GOVERUORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY THE HARTER BANK & TRUST COMPANY
VW APPROVAL OF MERGER WITH '
THE WAYNESBURG BANK
STATEMENT
The Harter Bank & Trust Company, Canton, Ohio ("Harter Bank"),
with
total deposits of about $110 million, has applied, pursuant to the
441k Merger Act, as amended (12 U.S.C. 1323(c)
Public Law 89-356), for
the
Waynesburg
Board's prior approval of the merger of that bank with The
Batik
Waynesburg, Ohio ("Waynesburg Bank"), which has total deposits of
1/
name of
415°Ilt $4 million.—
The banks would merge under the charter and
ilarte-r
Bank, which is a member of the Federal Reserve System. As an
illeident to the merger, the sole office of Waynesburg Bank would become a
bran 1,
c" of Harter Bank, increasing the number of its offices to 10.
a
Competition. - The head office of Harter Bank is in Cantons
city .
wxth an estimated population of 113,000, which is located in Stark
ec/IlritY
about 60 miles southeast of Cleveland. The bank operates three
b"
ra,.
ches in Canton and five branches in various suburbs of Canton. The
sole
°ffice of Waynesburg Bank is in Waynesburg, a town with an estimated
P°Pul .
allon of 1,230, which is located in Stark County about 15 miles
aouth
east of Canton near the border of Carroll County.
-Cures are as of December 31, 1965.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2County,
Harter Bank competes to some extent throughout Stark
arid a
to work in
considerable number of Waynesburg residents commute
Canto
n and thus have an option of banking there.
However, competition
‘ween the two banks is quite moderate, and there is no evidence of
significant potential competition between them.
The relevant market area for the resulting bank is Stark
C°untY and the northwest portion of Carroll County. In this area, 18
bankS
ts of
°Perate 46 offices which hold total IPC deposits (deposi
about $442 million and
41(4\7i-duals, partnerships and corporations) of
total loans
of approximately $232 million.
Harter Bank, with about
loans, is
2 Per cent of the IPC deposits and about 24 per cent of the
the lar,est
less than 1 per cent
bank in the area. Waynesburg Bank, with
each of
h
the area IPC deposits and loans, ranks, respectively, sixteent
and se
venteenth in these categories.
The second largest bank, First
t44tional Bank of Canton, holds about 21 per cent each of the IPC deposits
4 1°ans held by all banking offices in the area.
urg,
A single office bank, located three miles west of Waynesb
and a
east
branch of Filst National Bank of Canton, located five miles
oz
dYnesburg, are the chief competitors of Waynesburg Bank. There is
no e_vi.
dence that either of these offices would be adversely affected by
the merger.
not be
The effect of the proposed merger on competition would
sianiz.
41cantly adverse.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-3-
1404
Financial and managerial resources and future prospects.
Wayne
sburg Bank has satisfactory financial resources, and its prospects
are reasonably satisfactory.
The bank's stock is closely held, and its
chief executive officer is well past the normal retirement age.
The
15441411g factors, as they relate to Harter Bank, are satisfactory and
14°414 not be adversely affected by the proposed merger. Under the
capable and progressive management of Harter Bank, the present office
o
IlaYnesburg Bank would become a more significant force in the Waynesburg
eCOnottiy.
appears that
Convenience and needs of the communities. - It
11`er
Bank would more adequately serve the banking needs of the Waynesburg
%tal .
Y. Waynesburg Bank has a relatively low ratio of loans to deposits.
About 67
per cent of its loan portfolio is in real estate loans, and a
sizabi.
- portion of its loans are to borrowers who reside outside the
Ilahlesh
-t-73 area.
unsatisfied demand
There is evidence that there is an
credit,
alfiesourg for personal instalment loans and for business
.
4c:taw,
discounting. There
/ for inventory financing and instalment paper
Itre
"0 other banking offices in Waynesburg. As previously indicated, a
st40.1
the
bank
of
is located three miles west of Waynesburg, and a branch
sec
east of
ond largest bank in Stark County is situated five miles
the
communit,
,.
Harter Bank
The replacement of Waynesburg Bank by an office of
1401jtid
ulake full-service banking conveniently available to the community
NYtlesburg.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1405
-4not be
The banking convenience and needs of Canton would
alnlreciably affected by the proposed merger.
the Board, the
nay and conc1usp. - In the judgment of
the
""ed merger would benefit the banking convenience and needs of
Waytiesburg area, and would not result in any significantly adverse
cons
equences for banking competition.
Accordingly, the application is approved.
kkil 20,
1966.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1406
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 16
4/20/66
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
April 20, 1966
Mr. Karl R. Bopp, President,
Federal Reserve Bank of Philadelphia,
Philadelphia, Pennsylvania. 19101.
Dear Mr. BoPP:
In your letter of April 11, 1966, concerning the possibility of engaging Booz, Allen, and Hamilton, Inc., to develop a
Clerical work-measurement program at your Bank and other Reserve
Banks, you said that your Directors would like to have the Board's
views with respect to the following points which you advanced as
items of principle:
(1)
Your Bank should not act until opportunity has
been provided for the Board of Directors and top
management to engage in discussion with the specific
individuals from Booz, Allen, and Hamilton who would
conduct or direct the project in this Bank.
(2)
Your Bank should not retain the above consulting
firm without having an opportunity to have similar
discussion with at least one other consulting
organization.
The Board agrees completely with your thought that your
Bank should not make a decision in this matter until there has
been an opportunity for you to discuss the proposal with the
representatives from the consulting firm who would direct the
Project at your Bank. As a matter of fact, this procedure was
followed by Presidents Irons and Francis before a decision was
made at the Dallas and St. Louis Reserve Banks. The Board also
understands that, following receipt of its letter of April 1,
1966, President Ellis has made arrangements to discuss with
csoz-Allen representatives their proposal as it would specifically
apply to the Boston Bank. The Board would be happy to have
Nr- Farrell of its staff make arrangements for any discussions
You may desire.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Hr. Karl R. Bopp
-2-
1407
When discussing the proposal in the Booz-Allen letter
of February 24, 1966, to President Francis, the Board considered
the possible desirability of suggesting that other consulting
firms be invited to submit work-measurement proposals. For the
reasons set forth below, the Board decided that such a procedure
Ifte unnecessary, and would not be in the best interests of the
System as a whole:
(1) The Booz-Allen proposal was deemed to be an
extension of part of the work previously done
at the Federal Reserve Bank of Dallas. Before
entering into the original contract the Dallas
Bank considered, and submitted to the Board for
review, proposals submitted by two other
nationally recognized firms, and the Board is
of the opinion that any requirements for competitive bidding were met by this procedure. From
the standpoint of performance the Board has no
reason to believe, on the basis of information
received from the Bureau of the Budget and other
sources, that any other consulting firm would be
superior to Booz, Allen, and Hamilton, Inc.
(2)
An extension of the program begun at Dallas would
assure that the work at other Banks would be
directed by the same individuals who have had
Federal Reserve Bank experience and have demonstrated that they could develop a completely
satisfactory work-measurement program without
disturbing the morale of Reserve Bank employees.
(3)
The possibilities for inter-Bank comparisons of
Effectiveness Ratings (Which the Board considers
important) would be minimized if various consultants were employed. The Board understands that
there are several procedures that may be used to
determine work standards, ranging from some based
on rather limited sampling techniques to others
using more sophisticated predetermined standards
based on a wide range of data, and that each
consulting firm has its own unique system. The
Board is fearful that, if varying systems were
used in determining such standards, any differences
in Effectiveness Ratings at one Reserve Bank as
against another would always be open to the suspicion that such differences were due to variations
in work measurement techniques rather than in
performance.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Ilk. Karl R. Bopp
-3-
The Board noted the statement in your letter that your
Bank did not have a present feeling of urgency in the workmeasurement project. While the Board recognizes that an undertaking of this kind is of sufficient importance to warrant a
Bank's giving careful consideration to the matter before deciding
whether or not to participate, it also believes that the potential
benefits from such a program are great enough to give a sense of
urgency to the whole undertaking.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 17
4/20/66
WASHINGTON, O. C. 20551
ADDRESS OffICIAL CORRESPONDENCE
TO THE ',GARD
April 19, 1966.
I**. William D.
Carey,
Executive Assistant Director,
t&resu of the Budget,
"as
hington, D. C.
20503
hat' lir.
Carey:
This refers to your letter of February 10, 1966, inquiring
vhethe
that it would
desi r the Board has any proposals for State legislation
by .
consideration
for
Budget
the
rie to present through the Bureau of
the r
the
of
Legislation
State
Suggested
co„ "ommittee of State Officials on
'
fleil of State Governments.
reFrom time to time, the Board is presented with questions
gardi,
prescribes
which
Q,
Regulation
talo -g the relationship between its
s4aum rates of interest that may be paid by member banks on time and
individual States that relate
to tlIgs deposits, and laws in some of the
describes some of
le same general subject. The enclosed memorandum
ilthe
egu
in the Board's
made
been
have
problems that have arisen when changes
The
System.
Reserve
Federal
difc!'stion covering member banks of the
State
the
because
partly
least
IIII:culties experienced have resulted at
action.
legislative
by
s referred to can be adjusted only
State limitations or
Without in any way suggesting what the
Commitements appropriately should be, the Board suggests that the
tee
of
Council
sta2f State Officials on Suggested State Legislation of the
having
States
sta'te Governments might wish to consider whether, in the
authority might be given
to aut°rY or regulatory provisions of this type,
oorw continuing State official or supervisory body to review and, if
without
Ilaw 4dered desirable, to make adjustments in State requirements,
probthe
consider
le 41g to wait for the legislative body to convene to
are
made.
provisions
'
441 tha may arise when changes in Federal regulatory
t
Very truly yours,
Merritt Shprman
Secret4y.
the',
'Sure.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
141.()
Statement for Submission to
_Committee of State Officials on Su--ested State Legislatioaa
Council of State Governments
Interest on Deposits
The maximum amount of interest that a member bank of the
Federal Reserve System may pay on time and savings deposits is prescribed by the Board of Governors of the Federal Reserve System in
it8
Regulation Q (12 CFR 217) issued pursuant to authority of
8ection 19 of the Federal Reserve Act (12 U.S.C. 371b).
Under this authority, the Board has varied the maximum
Permissible rates from time to time in line with changes in nationide banking and financial conditions.
4ard's
These readjustments in the
regulation have brought to light two problems growing out of
Provisions of State law.
1.
Maximum rates of interest authorized to be paid by
Stare banks on time and savings deposits are fixed in some States by
State law at levels lower than those authorized by the Board.
In such
"es) of course, State law controls, and banks in those States may
tot Pay interest at a rate higher than that prescribed by State statute.
Ihe esult is that the banks subject to the State law are placed at
4 c
,
'mPetitive disadvantage with respect to market instruments and with
48Pect to banks in other States that are allowed to pay interest at
a rate
as high as that permitted by the Board.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2-
1411
2. It is the Board's understanding that in at least one State
aw requires
that interest on public deposits be paid at the highest
Prescribed by the appropriate Federal bank supervisory agencies,
l.e
"‘aa Board of Governors of the Federal Reserve System for State
member banks and the Federal Deposit Insurance Corporation for insured
Illumt,er banks. In some situations State banks have not found it feasible
to
Pay interest on time deposits at the maximum rate of 5-1/2 per cent
cl4re---.),
nri
sums of
allowed by Regulation Q. This has resulted in relatively large
Public moneys being withdrawn from banks in those States where
u h le
gal provisions are operative, with resultant loss of funds from
hos*
uanks and from the communities which they serve, and with some
ritc)Ilveaience to State officials.
1141rd of
A 4dera1Governors of the
Reserve System
-P41 lgt 1966
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
@FedFRASER