Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, April 27, 1954, Volume 41, Part 2

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665
Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, April 27, 1954.

The Board met in the

Board Room at 10:00 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Szymczak, Acting Chairman
Evans
Vardaman
Robertson
Mr. Sherman, Assistant Secretary
Mr. Kenyon, Assistant Secretary
Mr. Thurston, Assistant to the Board

There was presented a memorandum dated April 27, 1954, from the
Division of Bank Operations submitting a computation, by Federal Reserve
Banks, of the rates of interest on Federal Reserve notes outstanding,
not covered by gold certificates pledged with the respective Federal Recent of the Fedserve Agents, which would absorb approximately 90 per
the first quarter of
eral Reserve Banks' net earnings after dividends for
1954.

The memorandum recommended that the Board establish the rates of

telegram to the Presidents of
interest indicated, and approve an attached
the Federal Reserve Banks which would request the Banks to credit the insymbol of the Treasurer's
terest payment stated thereinto the appropriate
General Account on April 28, 1954.

The total payment to the Treasury for

the first quarter of 1954 was in the amount of

77,870,137.35.

Approved unanimously.
to the members
Prior to this meeting there had been circulated
of the Board a draft of letter to the Comptroller of the Currency,
Treasury Department, Washington 25, D. C., (Attention:




Mr. W. M. Taylor,

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4/27/54

Deputy Comptroller of the Currency), reading as follows:
Reference is made to a letter from your office dated
March 23, 1954, enclosing photostatic copies of an application to convert the Farmers and Merchants Bank,
Columbia, Tennessee, into a national banking association
and requesting a recommendation as to whether or not the
application should be approved.
The Farmers and Merchants Bank has been a member of
the Federal Reserve System since October, 1952, and on the
basis of a report of examination as of April 11, 1953, and
information received from the Federal Reserve Bank of Atlanta, favorable findings are indicated with respect to all
of the factors usually considered in connection with the
issuance of charters for national banking associations.
While the bank's capital structure in relation to the vo1ume
of risk assets is somewhat weak, no specific requirement has
been made for an increase in capital. After careful consideration, the Board of Governors recommends that the application to convert into a national banking association be
approved.
The Board's Division of Examinations will be glad to
discuss any aspects of this case with representatives of
your office, if you so desire.
With reference to the last sentence of the second paragraph of
the above letter, Governor Vardaman suggested that in the future some
appropriate phrase, such as "in all the circumstances", be substituted
for the phrase, "after careful consideration", since he felt it should
go without saying that each case had been carefully considered by the
Board.

Governor Robertson, to whom Governor Vardaman had mentioned the

matter before this meeting, said that he had brought this suggestion to
the attention of the staff of the Division of Examinations.




Thereupon, the letter to the
Comptroller of the Currency was
approved unanimously in the form
set forth above.

667
4/27/54

-3The following requests for travel authorization were presented:

Mr. Thomas, Economic Adviser to the Board. To travel to New
York, New York, during the period May 12-15, 1954, to attend the
closing sessions of the Fourth Meeting of Technicians of Central
Banks of the American Continent.
Mr. Leonard, Director, Division of Bank Operations. To travel
to Minneapolis, Minnesota, on May 2 and 3, 1954, to discuss, at
the Federal Reserve Bank of Minneapolis, certain matters in connection with the Bank's building program, and then to proceed to
Chicago, Illinois, in accordance with the authorization given by the
Board at the meeting on March 31, 1954.
Messrs. Allen, Director, and Sprecher, Assistant Director, Division
of Personnel Administration. To travel to Richmond, Virginia, during
the period May 2-5, 1954, to attend the Conference of Personnel Officers
of the Federal Reserve Banks, to be held at the Federal Reserve Bank of
Richmond.
Approved unanimously.
The meeting then adjourned.

During the day the following addi-

members except
tional actions were taken by the Board with all of the
Chairman Martin present:
Minutes of actions taken by the Board of Governors of the Federal Reserve System on April 26, 1954, were approved unanimously.
Letter to the Board of Directors, American Trust Company, Charlotte,
North Carolina, reading as follows:
Pursuant to your request submitted through the Federal
of the FedReserve Bank of Richmond, the Board of Governors
ment
of
a branch
the
establish
approves
eral Reserve System
,
South
and
Boulevard
Road
Marsh
at the intersection of
Trust
American
Company,
by
CharCharlotte, North Carolina,
is
the
branch
provided
established
lotte, North Carolina,
within one year of the date of this letter.




Approved unanimously, for
transmittal through the Federal
Reserve Bank of Richmond.

668
4/27/54
Letter to The National Bank of Athens, Athens, Georgia, reading
as follows:
The Board of Governors of the Federal Reserve System
has given consideration to your supplemental application
for fiduciary powers and grants you authority to act,
as guardian
when not in contravention of State or local law,
es of
estat
of
of estates, assignee, receiver, committee
State
which
in
lunatics or in any other fiduciary capacity
come
which
ns
ratio
banks, trust companies, or other corpo
to act
into competition with national banks are permitted
of
ise
exerc
The
under the laws of the State of Georgia.
to
ed
grant
ofore
these powers, in addition to those heret
of
trar
regis
and
act as trustee, executor, administrator
the
of
sions
provi
stocks and bonds, shall be subject to the
Govof
Board
the
of
Federal Reserve Act and the regulations
ernors of the Federal Reserve System.
powers
A formal certificate indicating the fiduciary
to
rized
autho
which The National Bank of Athens is now
e.
cours
exercise will be forwarded to you in due
Approved unanimously, for
transmittal through the Federal
Reserve Bank of Atlanta.
Commercial & Savings
Letter to the Board of Directors, Citizens
Bank, Flint, Michigan, reading as follows:
gh the Federal
Pursuant to your request submitted throu
of the Fednors
Gover
Reserve Bank of Chicago, the Board of
a branch
of
ent
lishm
estab
eral Reserve System approves the
on
Sites
trial
Indus
ay
on Lots 18 and 19 of the Dort Highw
t,
,
ley
Stree
Flint
Kears
and
Dort Highway between Court Street
ded
provi
Bank,
gs
&
Savin
Michigan, by Citizens Commercial
new capital funds are Pro(1) not less than $1,000,000 in
n stock prior to the establishvided from the sale of commo
branch is established within
ment of the branch, and (2) the
letter.
ten months from the date of this
cation for establishment of
appli
the
with
In connection
that the question of strengthenthis branch, it has been noted
been discussed with your
ing the capital of the bank has
given that $1,000,000 of
were
ances
assur
representatives and
While this proposal will
ded.
provi
be
additional capital would




669
4/27/54

-5-

improve the bank's capital position, the Board feels that
continuing efforts should be made to bring about further
improvement through the conservation of earnings or the
sale of additional stock.
Approved unanimously, for
transmittal through the Federal
Reserve Bank of Chicago.
Letter to Mr. Pondrom, Vice President, Federal Reserve Bank
of Dallas, reading as follows:
This refers to your letter of March 22 with which you
enclosed application for permission to exercise full trust
powers submitted on behalf of The First National Bank of
Artesia, Artesia, New Mexico.
A similar application for trust powers by this lank was
declined to
submitted by you on November 5, 1953. The Board
of the
view
grant the authority requested at that time in
funds
to
l
capita
unsatisfactory relationship of the bank's
as
disclosed
the volume and nature of its banking activities
by the examination of the bank made as of July 30, 1953. It
time capital
is noted from your recent letter that since that
dia
stock
of
t
paymen
by
0
sed
*50,00
stock has been increa
,
amount
like
a
ed
increas
been
has
s
vidend and that surplu
You
t.
accoun
profits
ed
undivid
the
from
er
also by a transf
increased about
further state that capital accounts have been
they reflect
se
otherwi
that
but
gs
t
earnin
curren
$20,000 from
the previous
time
the
at
ion
situat
the
from
change
no material
view
of your
the
is
It
n.
eratio
consid
under
application was
in
l
ement
capita
improv
te
a
defini
that
,
heless
board, nevert
a
with
coupled
defifact,
this
that
and
d
ratios has resulte
the fiduciary authority
nite need in the community served for
for favorable action
on
endati
recomm
the
requested, supports
ation.
applic
pending
accompanying the
oller of the
We understand from the Office of the Comptr
al Bank of
Nation
First
The
of
ation
examin
Currency that the
was started
1953,
30,
July
made
that
Artesia next subsequent to
n
of this
eratio
that
consid
view
our
on April 7, 1954. It is
of the
a
study
to
on
additi
in
e,
new application should involv
the
of
,
review
regard
this
information furnished by you in
disclosed by the current
condition of the applicant bank as
holding the application
examination. For this reason, we are
of examination
in abeyance until such time as the April 7 report
is available to us.
Approved unanimously.




670
-6-

4/27/54

Telegram to Mr. Brawner, Chairman, Federal Reserve Bank of
San Francisco, authorizing him to issue a limited voting permit, under
the provisions of section 5144 of the Revised Statutes of the United
States, to Transamerica Corporation, San Francisco, California, entitling such organization to vote the stock which it owns or controls
of First National Bank in Corcoran, Corcoran, California; The First
National Bank of Crows Landing, Crows Landing, California; The First
National Bank of Fairfield, Fairfield, California; The First National
Bank of Oakdale, Oakdale, California; The First National Bank of San
Jacinto, San Jacinto, California; First National Bank in Turlock,
Turlock, California, and The First National Bank of Weed, Weed, California, at Rny time prior to August 1, 1954, to act upon proposals
(1) to increase the capital stock of such banks, and (2) to amend the
articles of association of such banks to conform to articles recommended
by the Comptroller of the Currency, provided that all action taken shall
of the
be in accordance with plans satisfactory to the Comptroller
Currency.




Approved unanimously.

fttt.
Assis ;

cretary