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, Minutes of actions taken by the Board of Governors of the Federal Reserve System on Thursday, April 7, 1955. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Szymczak Mills Robertson Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary Mr. Sloan, Director, Division of Examinations Mr. Solomon, Assistant General Counsel The following matters, which had been circulated to the members of the Board, were presented for consideration and the action taken in each instance was as indicated: Memoranda from appropriate individuals concerned recommending that the basic annual salaries of the following employees be increased 14 the amounts indicated: Effective April 10 1955 4ame and title Division Basic annual salary From To Board Members' Offices kth E. Morris, Secretary to Mr. Fauver RenrY Tidwell, Messenger $4,420 434, 52+5 3,070 3,150 5,245 5,370 3,175 3,255 Research and Statistics thel L. Evans, Statistical Assistant Vivian C. Howard, Clerk 4/7/55 -2iirses effective April 10, 1955 (continued) LiatIf_and title Division Basic annual salary From To Research and Statistics 4)3,030 $3,110 4,830 4,955 3,255 3,335 3,110 3,190 7,240 7,hh0 3,785 3,910 10,000 10,200 3,110 3,190 John P. Donovan, 4,330 14. 455 Assistant Federal Ileserve Examiner P,obert C. Griffin, 340 3,535 5,096 5,314.5 2,910 2,990 2,910 2,990 Constance L. McKeague, 'Clerk Dorothy EL Reeves, Secretary International Finance A. Patricia Brown, Clerk...Stenographer Jacquelyn Haas, Clerk Yves Moroni, Economist Mary F. Miller, St atiatical Assistant Floyd L. Whittington, Chief, Far Eastern Section Gladys W. Willard, Clerk Examinations Assistant Federal Reserve Examiner Administrative Services Joseph W. Wright, Photographer (Offset) R4dolph Reece, Laborer Abner Thompson, Mail Clerk 4/7/55 -3ses eLifec- sala Name and title 9.55 (continued) Division Basic annual salary From To Office of Defense Loans Dorothy Mae Drayer, Clerk-Stenographer Effective Aril 24 $3,175 0,255 3,815 3,895 1955 Administrative Services Bruce M. Unger, Sergeant, Guard Force Approved unanimously. from Mr. Bethea, Director, Divi1sion of Memorandum dated April 4, 1955, Administrative Services, recommending that the temporary (twoapp ointment of Raymond Eason, Cafeteria Laborer in that Division, be e extended for one additional day, that is through March 31, 1955• Approved unanimously. liarik 0 Letter to Mr. Angney, Assistant Vice President, Federal Reserve f Boston, reading as follows: In accordance with the request contained in your letter of April 1, 1955, the Board of Governors approves the payment of salaryto Mr. Franklin P. Hall, Industrial ?onomist, for a further period to September 1, 1955, at his present rate of $6,500 per annum. Approved unanimously. 43f T cle ,r to Mr. Stetzelberger, Vice President, Federal Reserve Bank Clevel]j_ reading as follows: In accordance with the request contained in your letter of April 1, 1955, the Board approves the designaion of the following as special assistant examiners for ,576 4/7/55 the Federal Reserve Bank of Cleveland: J. P. Rupert C. R. Moore A. M. Hill Approved unanimously. Letter to Mr. Diercks, Vice President, Federal Reserve Bank of Chicago, reading as follows: In accordance with the request contained in your letter of March 29, 1955, the Board approves the appointment of James S. Bicknell, as an assistant examiner for the Federal Reserve Bank of Chicago. Please advise as to the date upon which the appointment is made effective. It is noted that Mr. Bicknell is indebted to The Rosebush State Bank, Rosebush, Michigan, a nonmember bank, in the amount of 4,600, secured by a mortgage on his residence in which he has a very substantial equity, with obligation to terminate on October 6, 1955. It is assumed that he will not be authorized to participate in any examination of The Rosebush State Bank, Rosebush, Michigan, until his indebtedness to the bank has been liquidated or otherwise eliminated. Approved unanimously. aS - ter to The Keene National Bank, Keene, New Hampshire, reading folloWse 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, when not in contravention of State or local law, as assignee, receiver or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State of New Hampshire. The exercise of these powers, in addition to those heretofore granted to act as trustee, executor, administrator, and registrar of stocks and bonds, shall be 4/7/55 -5- subject to the provisions of the Federal Reserve Act and the regulations of the Board of Governors of the Federal Reserve System. A formal certificate indicating the fiduciary Powers which The Keene National Bank is now authorized to exercise will be forwarded to you in due course. Approved unanimously, for transmittal through the Federal Reserve Bank of Boston. Letter to the Board of Directors, The Peoples Bank of Dayton, Da Yton, Ohio, reading as follows: Pursuant to your request submitted through the Federal Reserve Bank of Cleveland, the Board of Governors of the Federal Reserve System approves the establishment of a branch in the vicinity of 3550 South Dixie Drive, Moraine Township, Montgomery County, Ohio, by The Peoples Bank of Dayton, provided (a) that prior to the establishment of the branch the capital structure of the bank is increased by not less than .$250,000 through the sale of additional common stock and (b) the branch is established by September 7, 1955. Approved unanimously, for transmittal through the Federal Reserve Bank of Cleveland. Letter to the Board of Directors, Metairie Savings Bank & Trust C°14PanY, Metairie, Louisiana, reading as follows: Pursuant to your request submitted through the Federal Reserve Bank of Atlanta, the Board of Governors of the Federal Reserve System approves the est ablishment of a branch by the Metairie Savings Bank Trust Company, Metairie, Louisiana, in the Azalea Gardens Shopping Center on Jefferson Highway above Shrewsbury Road, provided the existing branch on J efferson Highway near Harlem Street is simultane°uslY discontinued and the change in location is ac20mplished within one year from the date of this letter. It is understood the branch will occupy leased Premises to be constructed at the new address by a corporation organized by the directors. 4/7/55 -6Approved unanimously, for transmittal through the Federal Reserve Bank of Atlanta. Letter to the Comptroller of the Currency, Treasury Department, Washington, D. C., (Attention: Mr. L. A. Jennings, Deputy Comptroller Of the Currency), reading as follows: Reference is made to a letter from your office dated November 3, 1954, enclosing photostatic copies of an application to organize a national bank at Morgantown, Pennsylvania, and requesting a recommendation as to whether or not the application should be approved. A report of investigation of the application made by an examiner for the Federal Reserve Bank of Philadelphia discloses that the organization committee would agree to Provide more capital for the bank, inasmuch as the original proposal of 4;75,000 appeared to be inadequate. Our informant feels that at least 450,000 of capital funds should be required if a bank is to be organized in Morgantown. The prospects for profitable operations of the bank are poor at the present time and it appears that considerable time will elapse before there is sufficient growth and expansion of business in the area to justify the establishment of an independent bank. For that reason, it appears that the application is premature. Moreover, the proposed directors and active management of the bank appear to lack the desired experience needed to operate the bank successfully. In view of these unfavorable factors, the Board of Governors does not feel justified in recommending approval of the application. . 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. Approved unanimously. washin Letters to the Comptroller of the Currency, Treasury Department, the n gtOn, D. C., (Attention: Mr. W. M. Taylor, Deputy Comptroller of .,urrency), reading as follows: Reference is made to the letter from your office dated January 5, 1955, enclosing photostatic copies of an application to organize a national bank in Washington, D. C. under the title of "Republic National Bank of WashIngton" and requesting a recommendation as to whether or not the application should be approved. 4/7/55 -7- On the basis of information contained in a report of investigation of the application made by an examiner for the Federal Reserve Bank of Richmond, it appears that the proposed capital structure of the bank may be adequate for the volume and type of business available in the area in which the bank is to be located, but would not place it in a position to compete very successfully with the larger institutions in the city. It is questionable whether sufficient business is available to permit profitable operation; whether the management is sufficiently experienced to operate the bank satisfactorily; and whether a need exists for the additional banking facilities in the area. In view of these unfavorable factors, the Board of Governors has concluded that it would not be justified in recommending approval of the application. The Board's Division of Examinations will be glad to discuss this case with representatives of your office if you so desire. Reference is made to a letter from your office dated January 17, 1955, enclosing photostatic copies of an application to organize a national bank at Baileys Cross Roads, Virginia, and requesting a recommendation as to whether or not the application should be approved. The report of investigation of the application, made by an examiner for the Federal Reserve Bank of Richmond and covering the factors usually considered in connection with such applications, indicatesthat the proposed capital of the bank would be adequate but that sufficient provision has not been made to take care of losses from operations during the first two years. It appears that the bank might have difficulty in attractng sufficient business to assure profitable operations; that the capabilities of the management to supervise the Operations properly are open to question, and that the Present banking facilities appear to be serving the le13it1mate needs of the trade area. In view of these unravorable factors, the Board of Governors does not feel Justified in recommending approval of the application. 4/7/55 -8- 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. Approved unanimously. Letter for the signature of Mr. Vest, General Counsel, to Mr. Johns, Pl'esident, Federal Reserve Bank of St. Louis, reading as follows: This refers to your letter of March 31, 1955, in which you state that the Presidents' Conference has referred to its Personnel Committee the matter of working out and suggesting to the Board of Governors some revision of previous Board letters relating to separation ,allowances in involuntary termination cases, and that it is desirable that Mr. Solomon be one of a Subcommittee of Counsel being created to provide legal assistance to the Personnel Subcommittee studying this matter. It is entirely agreeable to us that Mr. Solomon serve in the capacity indicated, and he will be very glad to be of any assistance that he can. He will, of course, await further advices as to when he will be needed and what will be desired of him. Approved unanimously. At the meeting on April 5, 1955, consideration was given to a al'aft of letter to the Presidents of all Federal Reserve Banks dealing with the practice on the part of some member banks of listing the names Of honorary directors or members of advisory boards along with the names c)f dulY elected directors in advertising material under a single caption in a manner which did not distinguish between the elected directors and the others. The draft of letter suggested that banks following such a Pr4Ct1ce be requested to identify clearly the elected directors, if they ered. publication of combined lists to be desirable. Since it ap- Peared that no means of enforcement would be available against banks which 4/7/55 -9- ignored the Board's request, some of the members of the Board questioned whether the letter should be sent, and the matter was deferred for further consideration when Governor Robertson was present. Governor Robertson said that while he realized there was no legal authority to enforce such a request on the part of the Board, it was nis °Pinion that if the letter were sent and the views of the Board were made kn°wn, few banks would refuse to comply. This was particularly true, he felt, because of the fact that the Office of the Comptroller of the Currency had sent a letter to the District Chief National Bank Examiners Stating views similar to those which would be contained in the proposed letter from the Board. that Experience had shown, Governor Robertson said, whenever a bank supervisory agency made a request that was justifi- able and proper, the subject banks complied. In response to an inquiry as to whether an S-letter to all Federal Reserve Boats the irxg a Banks was needed inasmuch as the problem had come to the attention from the St. Louis area, Governor Robertson said that. practice ee in question was not confined to that area, that it was growand that the Board's position should be made known before there was further spread of the practice. Martin, In reply to a question by Chairman Governor Robertson said that he would have no reluctance about Seadin g the proposed letter simply because certain banks could choose to ill°re the request without fear of legal action. Following further discussion, unanimous approval was given to 582 4/7/55 -10the letter to the Presidents of all Federal Reserve Banks in the form submitted to the Board, which was as follows: It has been brought to the attention of the Board Of Governors that some banks having an Advisory Board or Honorary Directors make a practice of listing the names of such Honorary Directors or members of Advisory Boards with the names of duly elected directors in advertising material under a single caption such as "Directors and Members of Advisory Board" without distinguishing between members of the respective bodies. It is understood that Honorary Directors and members of Advisory Boards have no managerial powers, do not vote at directors' meetings and have no function Other than to offer their advice to the officers of the bank and the Board of Directors. Because of the difference in their functions and their status the Board of Governors feels that the names of the members of Advisory Boards or Honorary Directors should not be listed under a single inclusive caption in advertising material with names of duly elected directors without clearly indicating the exact status of each person listed. It is felt that the Public should be able readily to ascertain the individuals duly elected by the shareholders as directors and charged with responsibility as such. To indicate that the status of such directors is the same as that of members of Advisory Boards or persons serving in an honorary capacity would appear to misrepresent the facts. It is realized that Advisory Boards usually serve in relation to designated branches and that publication Of combined lists as referred to herein is relatively luonusual. If such lists are published by State member s, however, it is suggested that the position of the. - iq —oard be brought to the attention of the publish_!lig bank and that it be requested to clearly identify e elected directors if publication of combined lists is onsidered desirable. Minutes of actions taken by the Board of Governors of the Federal V7/55 Reserve System on Aloril 6, 1955, were approved unanimously. The meeting then adjourned. Assistaa:bWCretary
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