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Minutes for Aup:ust 11, 1958 To: Members of the Board ?rom: Office of the Secretary Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement vith respect to any of the entries in this set of ! Inutes in the record of policy actions required to ue 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, if you vere present at the meeting, please initial in col.1. I;mn A below to indicate that you approve the minutes. tt you were not present, please initial in column B 'elow to indicate that you have seen the minutes. A Chm. Martin Gov. Szymczak Gov. Vardaman Gov. Mills Gov, Robertson GoV, Balderston OW. Shepardson 04,4 2290 Minutes of the Board of Governors of the Federal Reserve System on Monday, August 11, 1958. PRESENT: Mr. Mr. Mr. Mr. The Board met in the Board Room at 2:30 p.m. Martin, Chairman 1/ Balderston, Vice Chairman Vardaman Shepardson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Discount rates. Kenyon, Assistant Secretary Fauver, Assistant Secretary Riefler, Assistant to the Chairman Leonard, Director, Division of Bank Operations Masters, Director, Division of Examinations Shay, Legislative Counsel Noyes, Adviser, Division of Research and Statistics Solomon, Assistant General Counsel Nelson, Assistant Director, Division of Examinations Unanimous approval was given to telegrams to the roll owing Federal Reserve Banks approving the establishment without change by those Banks on August 7, 1958, of the rates on discounts and advances in their existing schedules: New York Philadelphia Cleveland Chicago Items circulated to the Board. St. Louis Kansas City Dallas The following items, which had been circulated to the members of the Board and copies of which are attached to these minutes under the respective item numbers indicated, were approved 4n imously: al1 Item No. Letter , New m- t'o The First National Bank of Las Cruces, Las Cruces, 4 xico, approving its application for fiduciary powers. (For ? ransmittal through the Federal Reserve Bank of Dallas) ' 1 ntsred at point indicated in minutes. 1 229 8/11/58 -2Item No. Letter to the Presidents of all Federal Reserve Banks Concerning the treatment of substantial or significant recoveries and charge-offs in the reports of examination °f State member banks. Letter to the Presidents of all Federal Reserve Banks etting forth factors to be considered in interpreting : 1933 arising under section 32 of the Banking Act of 2 3 Pranch applications incident to proposed mergers involving Marine banks (Items 4 and 5). As requested by the Board in its Ineeting on July 22, 1958, revised and amplified memoranda relating to the 13r°13°sed mergers hereinafter mentioned had been prepared by the Division °f 4aminations and circulated to the members of the Board prior to the Meeting. At Governor Balderston's request, Mr. Masters reviewed the ircumstances surrounding each of the proposed mergers and reiterated the Divisi "Ws recommendation that the Board approve the establishment of brat Ch es :incident thereto. In the case of the merger of the Nyack Bank arid Trust Company, Nyack, New York, with State Bank of Pearl River, Pearl 4ilier, New York, to form the Marine Midland Trust Company of Rockland C°1111tY, Nyack, New York, the Division did not feel that the merger would have de leterious effect on competition because there would still remain 7 ecqmercial banks serving Rockland County, with the newly formed Marine Midla nd Trust Company having only 4 of 21 banking offices and about 21 per cent °f the County's commercial bank deposits. The largest bank in that 2292 8/11/58 County, the Rockland National Bank of Suffern, New York, has about 34 per cent of the deposits and 7 of the 21 banking offices. He pointed out that Rockland County is situated in the Third Banking District of the State of New York and upon completion of the proposed merger Marine Midland Corporation would control only 2 per cent of commercial bank clePosits and 2 per cent of the offices of commercial banks in this District. °n the basis of these figures and all other indications, the Division reco mmended approval of the application to establish branches in those Places where the State Bank of Pearl River now operates offices incident to the merger of that bank with and into the Nyack Bank and Trust Company. Mr. Masters then reviewed the circumstances surrounding the proposed Illerger of The Citizens National Bank of Waverly, Waverly, New York, into the Marine Midland Trust Company of Southern New York, Elmira, New York, and the establishment of a branch by the continuing bank at the present loca • tl°fl of the national bank. He pointed out that in this instance the flier er would mark the movement of Marine Midland into a new county adjoining 4 c°11ntY in which it was presently operating. With regard to the c°111Petitive situation, he said that The Citizens National Bank was the only b4nk in Waverly and did not compete for business outside its local area. At the Present time, there were 7 banking offices throughout Tioga County. The merger would be in the Seventh Banking District of the State of New Yorlp '‘ where, as of June 30, 1956, Marine Midland Trust Company held 25 per ent of the commercial bank deposits and operated 19 per cent of the 2293 8/11/58 —4— commercial banking offices. After the proposed merger, Marine Nidland would have 20 per cent of the offices and about 26 per cent of the deposits in the District. On the basis of these facts, it did not appear to the Division that competition would be materially affected. The co ntrolling factor from the Divisionss point of view was that because of dissension among board members and disagreement between the board and exeelltive management of the national bank, it appeared that the st°ckholders and the community would benefit from the association with a larger and more stable institution. In response to a question about the applicability of the New York State holding company freeze law to these mergers, Mr. Masters pointed °Ilt that each of the mergers was being consummated within a single banking district. Thereupon the Board agreed unanimously to approval of the branches Incident to the proposed mergers and to the sending of letters to the elicant banks in the form attached to these minutes as Items 4 and 5. At this point, Miss Stockwell, Economist in the Division of Research and Statistics, entered the meeting. Small Business Investment Act of 1958 (Item No. 6),. On Friday, 8, 1958, the Board had received a request from the Bureau of the Biadge t for its views on enrolled bill S. 3651, the "Small Business Invp -s wnent Act of 1958." A proposed draft of reply had been circulated to the embers of the Board prior to the meeting expressing the view that ' 22 8/11/58 S -5- 3651 represented a reasonable approach to the problem of providing creditworthy small businesses with the equity and long-term debt capital that they needed to Prosper and grow. The draft also commented that the Board favored repeal of Section 13b of the Federal Reserve Act, as Provided in Title VI of the enrolled bill. Mr. Noyes indicated there were minor editorial changes which the Staff Would like to see made, and agreement was reached on those changes. Mr. Shay commented that this product of Congress followed as much Of the original outline of the legislative approach as one could reasonably eXPect. A principal change would provide the $250,000,000 initial funds fropr, appropriated monies rather than from debt transactions. The enrolled ' bill 3 he said, also contained somewhat more emphasis on the use of State " d elopment corporations than had originally been contemplated. Following the discussion, the Board unanimously approved the Sending of a letter to the Bureau of the Budget in the form attached to these minutes as Item No. 6. At this point Messrs. Shay and Noyes and Miss Stockwell left the ineeti Establishment of branches b Or The Michi.an Bank Detroit Michi an. 0 the meeting there had been circulated to the Board a request of The Illichigan Bank, Detroit, Michigan, for permission to establish two intown branches, one at the southwest corner of Eight Mile Road, West, and Jarries c ouzens Highway and the other at or near the intersection of Eight 2295 8/11/58 -6- Road, East, and Kelly Road. The State authorities had approved the branches provided the basic capital stock of the bank was increased to 443000,000 through the sale of at least $1,000,000 of new stock, which ht be in the form of preferred stock, and the declaration of a common stock dividend of not less than $1,000,000. The Reserve Bank had recommended approval of the requests provided the Board of Governors e°11sidered preferred stock to be a proper substitute for common stock for e34)ansionary purposes in this instance. The Division of Examinations had sleo recommended approval with the understanding that the capital would be increased under the conditions prescribed by the State authorities. While the file was in circulation, Governor Robertson had attached a. me torandum indicating that he would deny the applications: "1. Until capital adequacy has been achieved through issuance of new common stock; 2. Until condition of membership No. 3 has been complied with in spirit; and . 3. Until a clear case has been made for the need for additional banking facilities in the areas. (It would seem from the file that there is very little need, if any, for a dditional branch facilities in the two areas.)" At the request of Governor Balderston, Mr. Masters commented on each °f the points which had been raised by Governor Robertson. With regard to the matter of additional capital, Mr. Masters pointed °Ilt that the bank was prepared to increase its capital and had chosen the Illediurn Of Preferred stock because it was reluctant to dilute control, which 'Pl48 11°w held rather narrowly. With the addition of $1,000,000 in new e41)4411 whether in the form of preferred or common stock, there would seem 2296 8/11/58 be to be no basis for denial of the application on the grounds of insufficient caPital. He recognized, however, that as a general practice the Board did riot consider preferred stock to be a proper substitute for common stock. It wae questionable whether this was the kind of a case that would justify an exception to the general rule, he said. On the question of a violation of the condition of membership l'elative to the investment of certain pension trust funds in stock of The Michigan Bank, Mr. Masters pointed out that Counsel for the Federal Reserve Bank of Chicago felt The Michigan Bank held a rather strong position in this matter since the particular investment made was not by the specific tr118t fund mentioned in the bank's condition of membership. In any event, he added, it was doubtful in the Division's view whether the current app lications should be turned down on that score while the matter was still in a stage of discussion between the System and the member bank. Finally, as to the need for the branches, there seemed to be a -1/4anstrably stronger need in these particular instances than in several other cases that had recently come before the Board and in which approval had been granted. Both of these proposed branches were to be located in laree regional shopping centers, one of which would have over 100 retail and the other some 72 outlets. Both would have large suburban ctcPartmerit store outlets as a part of the shopping center. Mr. Nelson adderl ' that in each case there were six other branch banks located within a t, -9°-mile radius of the proposed sites. 2297 8/11/58 In opening the discussion, Governor Vardaman said that while he did not concur in the other reasons for objecting to approval stated by Governor Robertson, he did have considerable reservation about the issuance of preferred stock for expansionary purposes as proposed in this instance. He felt that if the Federal Reserve System did not have the righ L to pass on the basis for increasing a bank's capital, an effort °Ilght to be made to obtain such authority. In response to a question from Governor Shepardson as to whether the wYstem could insist on the use of common stock in this instance, "4sters replied he did not believe that the Board would have such rity and that its only alternative would be to deny the applications. On this point, Mr. Solomon expressed the view that the Board had no allthor. lty to control the issuance of preferred stock as such, but he felt that the Board in looking at the matter of the adequacy of a bank's caPital structure could look at the distribution between preferred and c°1/1Tri°11 stock and indicate what it believed was, and was not, adequate aPital in this sense. revolved around Governor Balderston commented that his concern 11814 an indirect approach to do what the System should have full authority t° do d lrectly. He reminded the Board that the so-called friendly suit invol virlg the Old Kent Bank and Trust Company was an outgrowth of this same kind O• f situation. He felt that approaching the matter indirectly left the 229 8/11/58 _9_ Board in an unfavorable position and one that could easily be misunderstood bY the public. Governor Balderston also stated that Governor Mills, before leaving on vacation had indicated that he would be inclined to favor the recOflunendation of the Division of Examinations. Governor Vardaman then proposed that the matter be referred back to the Federal Reserve Bank of Chicago for further consideration of the nlethod by which the bank proposed to increase its capital structure and illth an indication that the Board was reluctant to approve the applications in the -ight of the proposed use of preferred stock. He thought it might be desirable to suggest that the Reserve Bank confer with the State *14)e15ory authorities and the subject bank. At this point Chairman Martin entered the meeting and Governor BalA_ ston reviewed for him the discussion with regard to the applications f IT% —41 Michigan Bank and also the suggestion which had been made for refer-2 glng the matter back to the Federal Reserve Bank to obtain additional \flew. on the method of financing proposed for increasing the bank's capital ' atrileture, following which the Chairman indicated that the proposed Procedure was acceptable to him. Thereupon it was unanimously agreed to follow such a procedure, with the ,. ' olderstanding that an appropriate letter would be sent to the Federal -4've Bank of Chicago. 229 , 8/11/58 -10Governor Balderston also reviewed the other actions taken at this Meeting for Chairman Martin, who indicated that he concurred in each of the actions taken. Appointment of defense liaison officer. In accordance with the understanding reached at the Board meeting on Wednesday, August 6, Governor Shepardson reported the results of his study to find an appropriate Inember of the Board's staff to be appointed as liaison officer for permanent that at High Point. Of the It now appeared quite clear, he said, that the function Board's representative would be essentially liaison and that it be logical to name Mr. Gordon Grimwood as the Board's liaison l'ePresentative. It was felt that he could carry out this responsibility and maintain his assignment at the Damage Assessment Center. While Presently on leave, it was indicated that Mr. Grimwood would return before the Presently indicated date for activation of the permanent cadre. Governor Shepardson's suggestion was unanimously approved, with the, "nderstanding that the appropriate defense planning authorities would he notified. Thereupon the meeting adjourned. Secretary's Note: On August 8, 1958, Governor Shepardson approved on behalf of the Board the following items: roaao Memoranda from appropriate individuals concerned recommending the wing items affecting the Board's staff: 8/11/58 A -11- intment: .Louis W. Zidek as Assistant Federal Reserve Examiner, Division of ',xananations, with basic annual salary at the rate of $7,030, effective Ole date he assumes his duties. Sal ---Aty increases, effect Name and title 1958: Division Basic annual salary From To Research and Statistics Sel C. Cassedy, Research Assistant Change in title from Statistical Assistant) 1:garet V. Hastings, Research Assistant nica F. Jones, Statistical Assistant vc)rnelia J. Motheral, Research Assistant v (change in title from Statistical Assistant) ,Inofred Racz, Statistical Assistant tarbara E. Schriver, Statistical Assistant Na !lilange in title from Statistical Clerk) -rtie C. Strader, Research Assistant A \criange in title from Statistical Assistant) M. Van Eckhardt, Statistical Assistant ma\change in title from Statistical Clerk-lypist) 17 F. Weaver, Statistical Assistant $5,090 05,280 4,340 5,240 5,090 4,980 5,430 5,280 5,240 3,850 5,430 4,040 4,640 4,980 4,040 4,190 5,390 5,580 6,435 4,640 6,585 4,790 f4Aret K. Ball, Supervisor, Call Report Unit 5,390 E \hange in title from Statistical Assistant) Zstri ve Bryan, Supervisor, Member Bank Statement Unit 5,390 er W. Conover, Supervisor, Reserve Bank Statement 5,390 p U 5,580 („e E. Randour, Statistical Assistant lia,:"ange in title from Statistical Clerk) . (4" Louise Roberts, Statistical Assistant change in title from Statistical Clerk) 4,940 5,090 4,940 5,090 y International Finance IlereAret R. Garber, Economist 'Catherine P. Hichborn, Secretary Bank Operations 5,580 5,580 nit *earl 2301. 8/11/58 Sala NaMe -12- increases, effective August 10, 1958 (continued) title Basic annual salary From TO Division Examinations Susan Kirby, Clerk-Stenographer John T. McClintock, Review Examiner $3,755 $3,850 8,810 9,050 5,240 5,430 4,340 4,490 3,495 3,590 5,730 5,880 Personnel Administration 14. Callie Wickline, Nurse Administrative Services Rita D. Brinley, Secretary Eleanor 3. Caroglanian, Clerk Controller T. Oros, Disbursing Assistant 0, Memorandum dated August 6, 1958, from Er. Young, Director, Division cle4esearch and Statistics, recommending that a position of Statistical , c-Tlipist in the Administration Section be abolished and that a the -44r position be established in the Government Finance Section, with res. und erstanding that the new position, with clear-cut duties and Assl?°nsibilities, would be allocated to Grade FR-5 as a Statistical -ant r tiola Letter to the Federal Reserve Bank of Atlanta approving the designaLI' three persons as special assistant examiners, a copy of which is atta ° cned as Item No. 7. ssistant Secretary 2302 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. I 8/11/58 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE tweA„t, TO THE BOARD 44440" August 11, 1958 Board of Directors, he First National Bank of Las Cruces, Las Cruces, New Mexico. T G entlemen: The Board of Governors of the Federal Reserve SYstem has given consideration to your application for ft.c!liciary powers and grants you authority to act, when riot in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of ?states of lunatics, or in any other fiduciary capacity It-,11 which State banks, trust companies or other corpora-. Imhs which come into competition with national banks „lire Permitted to act under the laws of the State of New Mexico, the exercise of all such rights to be subject to the A provisions of Section 11(k) of the Federal Reserve ltot and Regulation F of the Board of Governors of the Federal Reserve System. 1 A formal certificate indicating the fiduciary P°14ers which The First National Bank of Las Cruces is now au thorized to exercise will be forwarded to you in due CC/Ur/3e. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 9,9n BOARD OF GOVERNORS Item No. 2 8/11/58 OF THE FEDERAL RESERVE SYSTEM S-1664 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 11, 1958. bear sir: examination of State nlemberb It has been observed in reports of or si anks that variations exist in the manner in which substantial enificant recoveries and charge-offs are listed for purposes of tA: 4 and 4(a). Reference is made to the "liemorandum with Respect sed Pages of Report e F-amination Form ?.R. /410," enclosed _ . 11..tlinite u The Doarals letter of August 31, 19149 (S-1120, F.R.L.S. 0614). aptt' ,/sagraph below supersedes the third paragraph under the section N)e,t;” "Page 4-(a)" in the memorandum regarding the listing of exatia-i'lal or significant recoveries or charge-offs since the last ati°n in preparing page 4(a). Ncove„, In those instances where substantial or significant sirice .-Les or charge-offs have been made on the books of the bank '411cth eldlle last examination, it would seem desirable to detail all 's all:,-anCes in the reports of examination. In this connection, it ellargested that all substantial or significant recoveries or °fes since the last examination be listed on the appropriate ' PE4:es the% On supplemental pages, regardless of whether the practice \Orr° 'teSerVO Bank is to show operations for the last calendar year r the first six months of the current year) in the last column (Ir b k-a.e3 4 and 4(a), or to complete these pages to date of examination. Your cooperation in this matter will be appreciated. Very truly yours, / P . 7 •/ • , Kenneth A. Kenyon, Ausistant Secretary. ' 01DENISOF ALL FEDERAL RESERVE BANKS 2pn,q BOARD OF GOVERNORS Item Noo 3 OF THE 8/11/58 s-1665 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 11, 1958. Dear sir: Under date of January 27, 1948, following the decision in the A Triew the 4B,..„ --,laYerweather case by the Supreme Court of the United States, Board-4rd requested the Reserve Banks to review cases in which the was - or a Reserve Bank had tPken the nosition that an organization ero,„!1,0t affected by section 32 of the 2anking Act of 1933 on the ktrqud that the extent to which it was engaged in any business of the erica!, d3scribed in section 32 was not sufficient to make it "primarily aa elc!" in such business. The Board's letter was not in such form tret ue Placed in the Federal Reserve Loose-Leaf Service, and thereeaces las not been readily available for use in connection with new lett,„whioh arise from time to time. Accordingly, the portion of the reVi:84 d escribing the factors to be taken into consideration (slightly lejd to bring it up to date) is repeated below; and this letter Illforme Placed in the Loose-Leaf Service, It should be noted that the ati°n described below is not applicable to cases involving intrusts. bri BY way of background, attention is invited to the following ef e ract from the opinion of the Supreme Court in the Agnewxts 'weather case: 1174% -" the firm is substantial, the f. underwriting business of a fi in a pr,i„. inn is engaged in the underwriting business ', arY way though by any quantitative test underwriting rria I not be its chief or principal activity. 4Secti 32 is directed to the probability or likelihood, on eu the experience of the 1920's that a bank director irj en'erested in the underwriting business may use his influwill' in the bank to involve it or its customers in securities ocr eh hi3 underwriting house has in its portfolio or has ciolnitted itself to take. That likelihood or probability es not depend on whether the firm's underwriting business -2- C' 144,r SO per cent of its total business. It might, of e;cis-z; whatever the proportion of the underwriting ousiness, But Congress did not go the whole way; it drew he line vthere the need was thought to be the greatest. P,Ind the line ne between sub5tantial and unsubstantial seems us to be the one indicated by the words 'primarily engaced " exceeds Depending upon the circumstances, it would seem that an °rganiz ion might be primarily or substantially engaged in abusin'ss Of th at' siabste kind covered by section 32 when the amount of such business is the flantial in relation to the firm's total business (as measured by subs'i°11ar volume of each, or by scue other reliable criterion), or : a bEi in relation to the total amount of such business of all Lxci ( ination, or (if the organization is not operating in a center) substantial in relation to the total amount of usiness o.f' the firms and organizations in the community in which it Factors other than these may also show that an organizati-n°Pc,erating ,alls within the statute, and it is important that all pertinent should be taken into consideration. °btain , In considering a case of this kind, it would be desirable to zial, i he information described below and transmit it to the Board, if cases ", bY the Board is desired. Of course, t'i:ere will undoubtedly be l'ilnere the amount of business described in section 32 is so small arge that your Bank will decide to dispose of the Inquiry witht ro; , -erring it to the Board; and in such cases it may be that it will 110t br the al-1 necessary to obtain all the information described below, because 11111els r will be clearly apparent without the necessity of going into " aetail eacth of The following information should be obtained, if possible, for the last preceding four calendar years: kinds described in -on ,(1) the dollar volume of business of the organization; -)2 engaged in by the firm or (2) the percentage ratio of such dollar volume to the of the firm's total business; Vole .a (3) the gross income of the firm from the kinds of busit° th escribcd in section 32 and the percentage ratio of such income e total gross income of the firm; "th, (h) the number of issues involved in the firm's business - ind covered by section 32, ' Il s"(5) whether the firm has a separate department for busithe kind covered by section 32; 2305 2306 -3- S-1665 (6) whether or not the firm holds itself out as being ged in any business of a kind covered by section 321 and whether cr not its advertisements or reports, if any, refer to or emphasize an!' silch business; if .1t) (7) whether there is more than one office of the firm, and the number and location of the other offices; (8) if the firm is located or operating in a community °tiler than a large financial center, the percentage ratio of the doll volume of business of the kinds described in section 32 to the "liar volume of all such business engaged in by all firms in the s'EllInity, to the extent that such info/nation may be available; and 1,, (9) if the firm is one of the larger firms in the country, , it v10 : be desirable to ascertain the rank of the firm in the field ofb11 :lness tion covered by section 32 as indicated by any reliable publica'and also the percentage ratio of the dollar volume of the firm's $ecti 32 business to the total of all section 32 business engaged in "-L1 the firms in the country. 111th respect to item (9), it should be noted that section 32 other 3 not only to underwriting and distributing, but also to certain i ctivities. However, reliable comparative figures often are C only for underwriting and distributing, and especially in 4ul ea,E;e a larger firm those figures alone can be informative and may 'flat such a firm is subject to section 32. Partie„ In addition to these factors, there will, of course, in ..Lar cases be other factors which may have a bearing upon the ' N-Isid di rel,°ration of the question, and all such factors should be ts ted as fully as practicable. This may be true particularly in Elce „ organizations which engage in the practice of acquiring blocks ofpr' ,71 14)uslY issued securities and selling them for their awn account (aec41 "417 distributions). Very truly yours, Kenneth A. Kenyon, Assistant Secretary, p D,XT3 OF ALL FEDERAL RESERVE BANKS 2307 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 4 8/11/58 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 11, 1958 Board of Directors, Yack Bank and Trust Cmpany„ NYack, New York. Ge ntlemen: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors approves the est ablishment of branches at lb East Central Avenue, Pearl River, New York; 102 North Middletown Road, Pearl River, New York; and at the Southeast corner of Moison Road and Erie Street, Blauvelt, New York, b yY Marine Midland Trust Company of Rockland County, Nyack, New °I‘k. This consent is given provided a0 the merger of State Bank of Pearl River, New York, Pearl River, New York, with and into Nyack Bank and Trust Company, Nyack, New York, to form Marine Midland Trust Company of Rockland County, Nyack, New York, is effected substantially in accordance with the terms of the Plan of Merger dated June 24, 1958; b. shares of stock acquired from dissenting shareholders are disposed of within six months after date of acquisition; C. the branches are established within six months from the date of this letter; and d, that formal approval of the State authorities is obtained. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 2308 BOARD OF GOVERNORS ,oiltato,4 Wcgov*o„ OF THE FEDERAL RESERVE SYSTEM * 4;4 '414 WASHINGTON 25, D. C. Item No. 5 8/i1/58 ADDRESS OFFICIAL CORRESPONOENCE TO THE BOARD August 11, 1958 Board of Directors, Marine Nidland Trust Company of Southern New York, Elmira, New York. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors pproves the establishment of a branch at 245 Broad Street, qaverly, New York, by Marine hidland Trust Company of Southern eW York, Elmira, New York. This consent is given provided: a. the merger with The Citizens National Bank of Waverly, Waverly, New York, is effected substantially in accordance with the plan of merger dated June 10, 1958; b. shares of stock acquired from dissenting shareholders are disposed of within six months after date of acquisition; C. the branch is established wi,hin six months from the date of this letter; and d. that formal approval of the State authorities is obtained. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Ass Lstant Secretary. ,4,33,4 23O BOARD OF GOVERNORS 444tt r„ 4 1,;144 OF THE vò 0, ft FEDERAL RESERVE SYSTEM g* Item No. 6 8/11/58 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD WVP: 0i -* August 11, 1958. Mr. Phillip S. Hughes, Assistant Director for Legislative Reference, Bureau of the Budget, Washington 25, D. C. bear Mr. Hughes: This is in reply to your request of August 8, 1958, for !he views of the Board of Governors on enrolled bill S. 3651, the 8mall Business Investment Act of 1958." The Federal Reserve System has long been concerned that ,uexi8,d4G financing sources may not be adequate to provide creditnrthy small businesses with the equity and long-term debt capital they need to prosper and grow. The bill, S. 3651, that has beer passed by the Congress appears to the Board to represent a ,!en t'esirable approach to the problem of facilitating the flow of such fu4ds to small business. The "Small Business Investment Act of 19580 attempts to Prt ) vide for maximum participation by private financing sources. T , :_encourages the further development of the kind of private fi"cing sources that are already active in this field and have t-one considerable pioneer work. It sets up safeguards designed assure that funds will be advanced to small business on a sound basis. It permits the granting of funds for research -Lig counseling. the The Board of Governors favors repeal of Section 13b of eaeral Reserve Act, as provided in Title VI of the enrolled While we recognize that any program designed to facilime:7 the flow of capital to small business must be frankly experiL at the start, the Board of Governors feels that S. 3651 thj tesents a reasonable approach to the problem, and recommends it be approved. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 231( BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No, 7 8/11/58 ADORERS OFTICIAL CORRESPONDENCE TO THE BOARD August 8, 1958 Mr. George W. Sheffer, Jr., Chief Examiner, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Dear Nr. Sheffer: In accordance with the request contained in your letter of August 6, 1958, the Board approves the designation of: Nicholas J. Band! Edgar L. Pecot Earl J. Pennison as special assistant examiners for the Federal Reserve Bank of Atlanta, with authority to participate in examinations of State member banks only. Very truly yours, (Signed) Kenneth A. any= Kenneth A. Kenyon, Assistant Secretary.
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