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Minutes for To: Members of the Board From: Office of the Secretary April 3, 1963 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 tbe 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. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell 1 I 3!-•; Minutes of the Board of Governors of the Federal Reserve System on Wednesday, April 3, 1963. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Mills Robertson Shepardson Mitchell Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Fauver, Assistant to the Board Hackley, General Counsel Solomon, Director, Division of Examinations Shay, Assistant General Counsel Goodman, Assistant Director, Division of Examinations Leavitt, Assistant Director, Division of Examinations Mattras, General Assistant, Office of the Secretary Items circulated or distributed to the Board. The following items, copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Letter to Rochester State Bank, Rochester, Illinois, waiving the requirement of sixmonths' notice of withdrawal from membership in the Federal Reserve System. 1 Letter to First National City Bank, New York, New York, granting permission to establish an additional branch in Bogota, Colombia. 2 Mr. Goodman then withdrew from the meeting. Report on competitive factors (Washington, D. C.). There had been distributed a draft of report to the Comptroller of the Currency -2- 4/3/63 on the competitive factors involved in the proposed consolidation of The Riggs National Bank of Washington, D. C., Washington, D. C., and Bank of Commerce, Incorporated, Washington, D. C. There followed a discussion with respect to information (on the extent to which the two banks shared loans with each other) which Riggs National Bank, when requested by the Federal Reserve Bank Of Richmond, declined to provide. Riggs offered the explanation that the Office of the Comptroller had instructed it not to give any additional Information directly to the Reserve Bank on the ground that such data Should be obtained by a written request to the Comptroller's Office. The Board concluded that the report should remain as drafted with regard to this matter, except for the omission of a sentence stating that pressure of time did not permit seeking this information from the Comptroller's Office. The report was then approved unanimously for transmission to the Comptroller of the Currency with the understanding that the conclusion would be revised to reflect a change of wording suggested by Governor Robertson. The conclusion of the report, as transmitted, read as follows: The proposed consolidation of The Riggs National Bank of Washington, D. C., and Bank of Commerce, Incorporated, would eliminate competition existing between the two institutions. While the proposal would not drastically alter Riggs' current position in the area, it would remove a $44 million institution from the banking scene of the Washington metropolitan area and add its resources to those of the largest bank headquartered in the area. 4/3/63 -3Report on competitive factors (Frederick-Walkersville, Maryland). There had been distributed a draft of report to the Comptroller of the Currency on the competitive factors involved in the proposed merger of Walkersville Bank, Walkersville, Maryland, into Farmers and MechanicsCitizens National Bank of Frederick, Frederick, Maryland. The report was approved unanimously for transmission to the Comptroller of the Currency, the conclusion reading as follows: The proposed merger would result in eliminating the competition presently existing between the largest bank in Frederick County and a small bank situated within its general service area. In addition, it would result in eliminating an alternative banking source for persons residing in the Walkersville-FrederickLibertytown area. While this merger would not add substantially to the resulting bank's present resources, it would tend to strengthen further Farmers National's already dominant position in the area. Messrs. Shay and Leavitt then withdrew and the following entered the room: Mr. Young, Adviser to the Board and Director, Division of International Finance, and Mr. Noyes, Director, Division of Research and Statistics. Governor Mitchell reported informally on a meeting yesterday at the Department of the Treasury at which a group of economists presented views on various aspects of the U. S. balance of payments problem. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board the following items: 4/3/63 -4- Memorandum from Jerome W. Shay, Assistant General Counsel, dated April 1, 1963, requesting permission to serve as a member of the Committee on Regulations appointed by the Commissioners of the District of Columbia under the child placement and adoption laws of the District of Columbia, as a representative of Family and Child Services of Washington. Memorandum from the Division of Research and Statistics dated April 2, 1963, recommending the appointment of Professor John Kareken, presently on leave from the University of Minnesota, as Consultant in that Division on a full-time basis from about May 1 to September 1, 1963, and part-time thereafter, with compensation at the rate of $70 for each day worked for the Board. Memorandum from the Division of Personnel Administration dated April 2, 1963, recommending the payment of an additional $3 to the Board's physician for each pre-employment physical examination to cover the cost of a hemoglobin test, effective immediately, thus increasing the total cost of each regular pre-employment physical examination from $10 to $13, and the cost of such examinations for cafeteria employees from $25 to $28. BOARD OF GOVERNORS Item No. 1 4/3/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. orriciAL ADDRESS CORRESPONDENCE TO THE BOARD April 3, 1963 Board of Directors, Rochester State Bank, Rochester, Illinois. Gentlemen: The Federal Reserve Bank of Chicago has forwarded to the Board of Governors Cashier Bell's letter dated March 20, 1963, together with the accompanying resolution dated March 5, 1963, signifying your intention to withdraw from membership in the Federal Reserve System and requesting waiver of the six months' notice of such withdrawal. The Board of Governors waives the requirement of six months' notice of withdrawal. Accordingly, under the provisions of Section 208.10(c) of the Board's Regulation H, your institution may accomplish termination of its membership at any time Within eight months from the date that notice of intention to withdraw from membership was given. Upon surrender to the Federal Reserve Bank of Chicago of the Federal Reserve Bank stock issued to your institution, such stock will be canceled and appropriate refund will be made thereon. It is requested that the certificate of membership be returned to the Federal Reserve Bank of Chicago. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS ..... of Gopi • Item No. 2 4/3/63 OF THE FEDERAL RESERVE SYSTEM :0 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD April 3, 1963 First National City Bank, 399 Park Avenue, New York 22, New York. Gentlemen: The Board of Governors of the Federal Reserve First National City Bank, New York, authorizes System pursuant to the provisions of Section 25 of the Federal Reserve Act, to establish a branch in the Hotel Tequendama, Bogota, Colombia; and to operate and maintain such branch subject to the provisions of such Section. Unless the branch is actually established and opened for business on or before April 1, 1964, all rights granted hereby shall be deemed to have been abandoned and the authority hereby granted will automatically terminate on that date. Please advise the Board of Governors, in writing, through the Federal Reserve Bank of New York, when the branch is opened for business. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, 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.)
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