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9
Minutes for August 15, 1966
To:
Members of the Board
From:
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
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
016N-7
Minutes of the Board of Governors of the Federal Reserve
System on Monday, August 15, 1966.
The Board met in the Board Room
at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Robertson, Vice Chairman
Shepardson
Mitchell
Daane
Brimmer
Sherman, Secretary
Kenyon, Assistant Secretary
Bakke, Assistant Secretary
Holland, Adviser to the Board
Molony, Assistant to the Board
Fauver, Assistant to the Board
Brill, Director, Division of Research and
Statistics
Mr. Solomon, Director, Division of Examinations
Mr. O'Connell, Assistant General Counsel
Mr. Goodman, Assistant Director, Division of
Examinations
Assistant Director, Division of
Leavitt,
Mr.
Examinations
Mr. Smith, Assistant Director, Division of
Examinations
Messrs. Forrestal and Via, Senior Attorneys,
Legal Division
Mr. Dahl, Chief, Special Studies and Operations
Section, Division of International Finance
Messrs. Egertson, Supervisory Review Examiner,
and Poundstone, Review Examiner, Division
of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Approved letters.
The following letters, copies of which are
attached under the respective item numbers indicated, were approved
unanimously following consideration of background information that had
been made available to the members of the Board and explanatory comments
by the
staff:
2974
8/15/66
-2Item No.
Letter to First Chicago International Finance
Corporation, Chicago, Illinois, granting consent
for an investment in BOECC (Holdings) Ltd.,
London, England.
1
Letter to the Chairman of the House Committee
on Banking and Currency reporting favorably
O
R. 16503, a bill to amend the Bank
H°1ding Company Act to repeal certain exemptions and to extend its coverage to one-bank
holding companies.
2
Letter to the Federal Reserve Bank of Atlanta
r
egarding administration of the discount window.
3
Direct verification (Items 4 and 5).
At the meeting on August 12,
1966, the Board considered a draft of letter to the Federal Reserve Banks
r garding a proposal for direct verification of a percentage of assets
and liabilities, under stated circumstances, during examinations of State
member banks.
Pursuant to comments made during that discussion, the
staff was requested to prepare an appropriate revision for the Board's
consideration at a subsequent meeting.
There had now been distributed a revised draft of letter in which
the Reserve Banks would be advised that:
(1) direct verification on a
samPle basis should be undertaken at each examination in instances where
a State member bank was found not to have reasonably adequate internal
controls
or audit procedures; (2) State supervisory authorities should
° informed of these plans, with a view to securing their cooperation
and assistance; (3) efforts to encourage State member banks to institute
8/15/66
-3-
their own programs of direct verification should be continued and intensified; and (4) sight posting of incoming items from cash letters and
local clearings should be made a routine part of each examination, unless
the internal controls and audit coverage of the bank were such as to make
the practice unnecessary.
Mr. Solomon commented that it was contemplated that the draft
letter, in such form as the Board might ultimately approve, would be
tr ansmitted to the Presidents of all Reserve Banks for their information,
and that the Chairman of the Conference of Presidents would be requested,
In a companion letter, to schedule the subject for consideration at the
September 12 meeting of the Conference, following which the Board would
d iscuss the subject with the Presidents.
He added that although at the
Board discussion of the direct verification proposal on August 12 it had
been suggested that the National Association of Supervisors of State
Banks be informed of the contemplated examining procedure and the views
c)
State supervisors invited, action along such lines would appear to
be
Premature at this time.
the
Notification might better be deferred until
matter had been discussed with the Presidents.
Governor Brilluuer noted that the revised draft letter took the
P°sition that direct verification should be a mandatory part of examinations where State member banks' internal controls or audit procedures
were not satisfactory.
Previously the proposal had been cast in terms
f offering this service at a member bank's option.
In light of this,
8/15/66
-4-
he thought perhaps the draft letter should include reference to the considerations that had led to the change in the Board's position.
Discussion of this point developed an explanation that the Presidents had been kept generally aware of developments since the direct
verification procedure was first proposed.
Additionally, they would
receive, as attachments to the draft letter, copies of a letter regarding the experience of the Dallas Bank in furthering the direct verification program and of the Comptroller of the Currency's recent instructions
to all regional administrators of national banks.
Therefore, it would
seem that the Presidents would be adequately prepared for discussion with
the Board following the September 12 meeting of the Presidents' Conference.
Further discussion developed certain suggestions for editorial
changes in the revised draft letter, which was thereupon approved unani111°11sly in a form incorporating those suggestions, with the understanding
that a letter would also be sent to the Chairman of the Conference of
Presidents requesting consideration of the subject at the September 12
meeting of the Conference.
Copies of the letter to the Chairman of the
Pre sidents' Conference and of the draft letter, in the form approved,
are attached as Items 4 and 5, respectively.
Application of Central State Bank (Items 6 and 7).
There had
been distributed drafts of an order and statement reflecting the Board's
a pproval on August 8, 1966, of the application of Central State Bank,
Elkader, Iowa, for permission to acquire the assets and assume the liab ilities of Volga State Bank, Volga, Iowa.
2977
8/15/66
Following adoption of an editorial change in the statement,
issuance of the order and statement was authorized.
Copies of the docu-
ments, as issued, are attached as Items 6 and 7.
Request for access to FOMC records.
Reference was made to a
letter dated August 12, 1966, from Chairman Patman of the House Committee
Om
Banking and Currency requesting that that Committee and its staff be
given access to the minutes and other records of the Federal Open Market
C°mmittee.
Attached were copies of an exchange of correspondence between
Chairman Patman and Chairman Moss of the Subcommittee on Government Information and Foreign Operations (House Committee on Government Operations),
regarding the question of the applicability of the disclosure provisions
°f P- L. 89-487 (the so-called "Freedom of Information" law) to Open
Market Committee records.
In his August 12 letter to the Board, Chairman
ila trflan stated that "While I know that the law does not become effective
until July
4, 1967, the intent of Congress to remove the present shrouds
Of
secrecy from the operations of the Federal Open Market Committee is
clear-
the
Therefore, I hope that you will immediately make available .
minutes and other records of the .
. Committee."
It was understood, after a preliminary discussion, that a draft
Of
rePly to Chairman Patman's letter would be prepared on the basis of
suggestions made by members of the Board, for consideration at a subsequent meeting of the Board.
The meeting then adjourned.
4),A,
4.0k
8/15/66
-6Secretary's Notes: There had been received
at the Board's offices an agreement executed
under date of August 5, 1966, by First Foreign
Investment Corporation, Miami, Florida, in
accordance with the requirements of section 25
of the Federal Reserve Act. Accordingly, pursuant to the procedure contemplated by Board
action on July 19, 1966, there was sent today
to The First National Bank of Miami, Miami,
Florida, a letter (copy attached as Item
No. 8) granting permission to that bank to
invest in stock of First Foreign Investment
Corporation and granting permission to the
latter corporation to invest in stock of
Miami Holdings Limited (title changed from
First National Holdings Limited), a Bahamian
corporation.
Governor Shepardson today approved on behalf
of the Board memoranda recommending the following actions relating to the Board's staff:
Salar
increases
Gena Gander, Employment Technician, Division of Personnel Administrat
--lon, from $7,942 to $8,479 per annum, with a change in title to
rer sonnel Technician, effective August 15, 1966.
Sudelle Rice, Employee Development Technician, Division of
sonnel Administration, from $7,729 to $8,218 per annum, with a
hange in title to Personnel Technician, effective August 15, 1966.
Per
Transfers
0, Ruth H. Goodyear, from the position of Secretary to the position
Personnel Assistant in the Division of Personnel Administration, with
change in basic annual salary at the rate of $8,368, effective August 15,
1966
4
. Glenn L. Hogle, from the position of Personnel Technician to the
to
isltion of Personnel Specialist in the Division of Personnel Administra, with an increase in basic annual salary from $8,218 to $9,221,
'-cfective August 15, 1966.
Po . Charles W. Wood, from the position of Personnel Assistant to the
t.sltion of Personnel Specialist in the Division of Personnel Administra2,:°n, with an increase in basic annual salary from $11,685 to $12,873,
zfective
August 15, 1966.
v.4
8/15/66
-7-
Jeanette E. Devlin, Personnel Records Technician, Division of
versonnel Administration title changed to Personnel Assistant, with
,
no change in basic annual salary at the rate of $7,253, effective
August 15, 1966.
Joseph H. Hoyle, Employee Relations Technician, Division of
Personnel Administration, title changed to Personnel Assistant, with
no change in basic annual salary at the rate of $8,948, effective
August 15,
1966.
Margaret H. Wolverton, Personnel Assistant, Division of Personnel
Ad
nistration, title changed to Personnel Specialist, with no change
ln
1966basic annual salary at the rate of $10,481, effective August 15,
25, SO
BOARD OF GOVERNORS
Item No. 1
8/15/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20531
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 15, 1966.
First Chicago International
Finance Corporation,
38 South Dearborn Street,
Chicago, Illinois. 60690
Gentlemen:
As requested in your letter of July 22, 1966, the Board
of Governors grants consent for your Corporation ("FCIFC"), to
Purchase and hold 22,058 common shares, 13,127 preferred shares,
and to exercise convertibility rights to acquire 8,935 additional
common shares to which you may become entitled as holder of convertible loan stock of BOECC (Holdings) Ltd., London, England, at
a total cost of approximately $222,000.
The Board also approves the acquisition of shares of
EOECC, within the terms of the above consent, in excess of 10 per
cent of FCIFC's capital and surplus.
Please advise the Board of Governors as provided in
Section 211.8(d) of Regulation K of any share acquisitions made
under the above consent. •
The foregoing consent is given with the understanding
that the investment now being approved, combined with other foreign loans and investments of your Corporation, will not cause
the total of such loans and investments to exceed the guidelines
established under the voluntary foreign credit restraint effort
now in effect and that due consideration is being given to the
Priorities contained therein; especially as stated in paragraph 3
of Guideline (4), it is expected that the outstanding amount of
nonexport credits to developed countries in Continental Western
Europe would not be increased during 1966 but rather would be reduced to the extent needed to meet bona fide requests for priority
credits within the overall ceiling.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
2981
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 2
8/15/66
WASHINGTON
OFFICE OF THE VICE CHAIRMAN
RESt-.'
•••••••
August 15, 1966
The Honorable Wright Patman,
Chairman,
Committee on Banking and Currency,
House of Representatives,
20515
Washington, D. C.
Dear Mr. Chairman:
This is in reply to your letter of August 1, 1966,
in which you asked for a report on H.R. 16503, a bill to
amend the Bank Holding Company Act of 1956 to repeal the
exemption for labor, agricultural, and horticultural
oneorganizations and to extend coverage under the Act to
bank holding companies.
As you will recall, the Board of Governors has
repeatedly recommended legislation incorporating both of
tions
these changes, and the House adopted these recommenda
year
this
Senate
the
in passing H.R. 7371 last year but
Congress
rejected them. Presumably, this means that the 89th
16503.
H.R.
in
embodied
changes
will not act on the two
Nevertheless, the Board continues to believe that these
recommendations are sound in principle, and we are hopeful
that in time they will be enacted. Accordingly, the Board
supports H.R. 16503.
Sincerely,
(Signed) J. L. Robertson
J. L. Robertson
2982
BOARD OF GOVERNORS
Item No. 3
8/15/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
orriciAL
CORRESPONDENCE
TO THE BOARD
August 15, 1966
Mr. Harold T. Patterson, President,
Pederal Reserve Bank of Atlanta,
A tlanta, Georgia 30303.
Dear Mr. Patterson:
The Board has just received an excerpt from the report
°f the recently concluded examination of the Federal Reserve Bank of
Atlanta relevant to the administration of the discount window. From
this it appears that the pattern of borrowing in the Atlanta District
may not be consistent with Regulation A, and the present stance of
monetary policy. The examination report notes that the documentation
!-11 the files of the Discount Department is insufficient and that
borrowing banks may not have been communicated with in a timely fashion.
The Board has your letter of August 9, 1966, and understands
that the entire matter was to be reviewed by the Executive Committee
°f your Board. It would be appreciated, therefore, if you would inform
_Lille Board as promptly as possible regarding the Executive Committee's
u iscussion of the matters referred to with particular reference to the
"nclusions reached and actions planned or taken.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
29S1
BOARD OF GOVERNORS
Item No. 4
8/15/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDREBB OFfICIAL CORRESPONDENCE
TO THE BOARD
August 17, 1966
Edward A. Wayne, Chairman,
Conference of President
s,
Federal Reserve Bank of Richmond,
Richmond,
Virginia. 23213
Dear Mx. Wayne:
The Board would appreciate your having placed on the agenda
for
consideration at the forthcoming meeting of the Conference of
!
residents the enclosed draft of letter to all Federal Reserve
Banks
egarding the subject of direct verification of assets and liabiliti
es
n connection with examinations of State member banks.
l
You will recall that in the Board's letter of June 11, 1965,
(Si
- 0tan
th
F.R.L.S. 3595) the Reserve Banks were requested to encourage
:"e use of direct verification programs. In that connectio
n there is
'
tnclosed, in addition to the proposed letter to be sent by
the Board
o 411 Reserve Banks, a copy of a letter from President Irons of the
Fed
e eral Reserve Bank of Dallas dated July 14, 1966, regarding the
AlitPerience of that Bank in furtherin
g the direct verification program.
:Ica° enclosed for your convenient reference is a copy of a memorandum
i
Of nstructions issued under date of July 21, 1966, by the Comptroller
the Currency to all regional administrators of national banks.
In addition to asking the Conference of Presidents to review
this ,
dis Letter at its meeting on September 12, the Board would like to
with the Conference this subject at an appropriate time, probableu"
Y during the afternoon of September 13.
For your information, the Board also has in mind addressing
an an
st_FPropriate letter to the National Association of Supervisors of
di'Le Banks at the time that its letter to all Reserve Banks is
thatibtd for inclusion in the loose-leaf service, the substance of
i_
communication being to solicit the assistance of the Supervisors
" the
program of direct verification.
2984
Mr• Edward A. Wayne
Because of the length of time between now and the date for
meeting of the Conference of Presidents, and also because of the
.1ength of the enclosures, a copy of this letter with attachments is
.eing sent direct to each Reserve Bank President for his information
7:!I. with the comment that the Chairman of the Conference has been
4 ked to have the matter placed on the agenda for the forthcoming
laeeting..
the
1
Sincerely yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Etitl° ure
)85
Item No. 5
8/15/66
8/15/66
PROPOSED LETTER TO ALL FEDERAL RESERVE BANKS ON DIRECT VERIFICATION
Dear Sir:
In the Board's letter of June 11, 1965, (5-1960, F.R.L.S.
3595), the Reserve Banks were requested to develop certain informati°n about direct verification by State member banks, to discuss the
lack of such program when appropriate, and to encourage the use of
direct verification programs.
Direct verification of assets and liabilities is clearly
desirable, and it is now believed that the System should undertake
direct verification at each examination in instances where the State
Ilember bank does not have satisfactory internal controls and audit
Programs.
To accomplish this objective the Reserve Banks are
requested to
inform all State member banks that the Federal Reserve
8Yatem will, during each examination and at its expense, verify
irectly a percentage of the assets and liabilities of the bank
unless internal control and audit programs are considered reasonably
adequate.
The Reserve Bank should inform State bank supervisory
aut
horities of these plans for direct verification, and every effort
hould be made to obtain the cooperation and assistance of the State
banking departments.
Efforts to encourage State member banks to institute their
13141 Programs of direct verification as referred to in the Board's
letter of June 11, 1965 should be continued and intensified.
-2
29S6
For your information there are enclosed a copy of a letter
from President Irons of the Federal Reserve Bank of Dallas dated
July 14, 1966 commenting about that Bank's experience with direct
verification, and a copy of instructions to all Regional Administrators from the Comptroller of the Currency, dated July 21, 1966,
regarding the applicability of audit and verification procedures.
A letter dated June 22, 1962, from Mr. Frederic Solomon
to Vice Presidents in Charge of Examinations, included a memorandum
"titled "Examination Procedures Useful in Investigating Possible
irregularities in Small Banks.'!
Among other practices mentioned in
the memorandum is that of sight posting. This is considered so
effective a method of uncovering irregularities in deposit accounts
that the practice of sight posting incoming items from cash letters
and local clearings is to be made a routine part of each examination
"less the internal controls and audit coverage of the bank are
such as to make this practice unnecessary.
Very truly yours,
Merritt Sherman,
Secretary.
Enclosures: 2
2987
Item No. 6
8/15/66
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
In the
Matter of the Application of
411TRAL STATE BANK
aPProval of acquisition of assets of'
State Bank
ORDER APPROVING ACQUISITION OF BANK'S ASSETS
There has come before the Board of Governors, pursuant to the
Ilerger Act, as amended (12 U.S.C. 1828(c), Public Law 89-356), an
1t •1
by Central State Bank, Elkader, Iowa, a State member bank
°f the
rederal Reserve System, for the Board's prior approval of its
4echa.
sition of assets and assumption of deposit liabilities of Volga
Stat
tank, Volga, Iowa, and, as an incident thereto, Central State
ra; ,
nas applied, under section 9 of the Federal Reserve Act, for the
130
ardt S
prior approval of the establishment by that bank of a branch
4t
the location of the sole office of Volga State Bank. Notice of the
h0
11°sed acquisition of assets and assumption of deposit liabilities,
t
()tm approved by the Board, has been published pursuant to said Act.
Upon consideration of all relevant material in the light
Ot
the
the
factors set forth in said Act, including reports furnished by
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
2and the
Attorney General on the competitive factors involved in the
Proposed transaction,
IT IS HEREBY ORDERED, for the reasons set forth in the
lIctrd ls Statement of this date, that said applications be and hereby
Qe aPproved, provided that said acquisition of assets and assumption
fdaPosit liabilities and establishment of the branch shall not be
tclIsummated
(a) before the thirtieth calendar day following the date
°Z this Order, or (b) later than three months after said date.
Dated at Washington, D. C., this 15th day of August, 1966.
By order of the Board of Governors.
Voting for this action: Governors Robertson,
Shepardson, Mitchell, Daane, and Brimmer.
Absent and not voting:
Governor Maisel.
Chairman Martin and
(signed)
Merrit'z Sherman
Merritt Sherman,
Secretary.
2989
Item No. 7
8/15/66
APPLICATION BY CENTRAL STATE BA=
FOR APPROVAL OF ACQUISITION OF ASSETS OF
VOLGA STATE BANK
STATEMENT
The Central State Bank, Elkader, Iowa ("Central Bank"),
/1-th total deposits of about $6.9 million, has applied, pursuant to
the
Bank Merger Act, as amended (12 U.S.C. 1828(c), Public Law 89-356),
fc'r the
Board's prior approval of its acquisition of the assets and
assumption of the liabilities of Volga State Bank, Volga, Iowa
1/
(701ga Bank"), which has total deposits of $640,000.—
As an
incident to the transaction, the sole office of Volga Bank would
become a
branch of Central Bank, increasing the number of its offices
to three.
Competition. - The head office of Central Bank is in
Rikader, a
town with a population of about 1,600, which is the seat of
CieYton
County.
The bank operates a branch about seven miles north of
44ader at St. Olaf, a community with a population of less than 200.
The
431e office of Volga Bank is in Volga, a community with a population
'
Of about
°-- AO, which is about 12 miles southwest of Elkader.
The relevant area for considering the competitive effects
Of th
e Proposal consists of the central and southern portions of Clayton
COL
Lnt
Y and a narrow portion of eastern Fayette County. In this area,
igur S are as of April 5, 1966.
2990
-2eight offices of six banks compete in varying degrees with Central
8ank, or with both Central Bank and Volga Bank.
The total of 11
effices, operated by eight banks, altogether hold deposits of about
$23 million and total loans of approximately $10 million.
Central
Ilank, with about 27 per cent of the deposits and about 24 per cent
Of the
loans, is the largest bank in the area.
Volga Bank, with
about 3 per cent of the deposits and about 1 per cent of the loans,
i8
the smallest bank in the area.
The second, third, and fourth
largest banks hold approximately 23 per cent, 14 per cent, and
13 per cent, respectively, of area deposits.
The banking offices in the relevant area, because of
their size and their location in an agricultural region, tend to
4411 the preponderance of their business from the communities in
Ilhich they are situated.
It does not appear that any of these
Offices would be adversely affected by the proposed transaction,
11hich would
not materially alter the structure of banking competition in the
area.
There is some competition between Central Bank and
6a Bank,
This competition is facilitated by the location of
41zadp
-r as the nearest trading center to Volga, and by the fact that
'1 number of
Volga residents commute to work in Elkader.
The extent
Of the competition
is limited by the size and nonaggressive policies
Of
v0lga
Bank.
Further, as discussed hereinafter under the banking
21391
-3-
factors, it is unlikely that Volga Bank, if it remains an independent
in
stitution, will become a more effective competitive force because
its location limits its earnings prospects and growth potential.
The effect of the proposed transaction on competition
would not be adversz.
Financial and managerial resources and future prospects. The financial condition of Volga Bank is satisfactory and its capital
Position is relatively strong.
However, the bank's earnings record
is below
average, partly as a result of its operating policies and
partly because of the economy of the Volga community.
In recent
Years Volga has experienced a marked decline in population relative
to the over-all experience for Clayton County.
The community is not
a trading
or marketing center, and its prospects for growth appear
limited.
These circumstances restrict the opportunity for Volga
Bank to grow and, in turn, make it improbable that a capable
successor can be found for the bank's chief operating officer, who
iS Jell past the normal retirement age.
The prospects for Volga
8ank are not favorable.
The banking factors, as they relate to Central Bank, are
satisfactory and would not be adversely affected by the proposed
acquisition of Volga
Bank.
Convenience and needs of the communities. - The banking
c"venience and needs of Elkader and St. Olaf would not be appreciably
affected by the proposed acquisition.
The principal effect would be
2992
-4in
Volga, where a small unit bank would be replaced by a branch office
Of a larger and more progressive
institution.
The resulting benefit
from these features for the
banking convenience and needs of the
e°111munity may be offset to some extent by local restrictions on
branch bank
operations.
Under State law, branch offices are confined
to accepting
deposits and paying checks, and are required to refer
loan aPplications to the head office.
However, in view of the prospects
for Volga Bank and for the community it serves, and in the light of the
bank,
s management succession problem, there is a considerable question
as t° how long Volga Bank can realistically be expected to continue as
4 Unit
the
bank.
Thus, the proposal would have the advantage of assuring
continuance
of a banking facility for the Volga community.
_Summary and conclusion. - In the judgment of the Board, the
Pl'°110sed transaction would benefit the banking convenience and needs
Of
the Volga area, and would not result in any significantly adverse
%sequences for banking competition.
Accordingly, the Board concludes that the application
Should be
approved,
Autust 15,
1966.
BOARD OF GOVERNORS
Item No. 8
8/15/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 15, 1966
The First National Bank of Miami,
100 South Biscayne Boulevard,
Miami, Florida.
Gentlemen
:
This refers to the application of your bank dated June 6,
1966, for permission of the Board of Governors under the provisions
Of Section 25 of the Federal Reserve Act, to purchase and hold stock
of First Foreign Investment Corporation, Miami, Florida ("First
ti.oreignu). Reference is also made to the agreement dated August 5,
1966, executed by First Foreign in accordance with the requirements
of Section 25 of the Federal Reserve Act, by which such corporation
agrees to restrict its operations and conduct its business in the
manner set forth therein.
After consideration of the application and agreement, the
Board
of Governors of the Federal Reserve System approves the application
and grants permission to The First National Bank of Miami, Miami,
Florida, subject to the provisions of Section 25 of the Federal Reserve Act, to purchase and hold stock in First Foreign in the amount
of a
pproximately $300,000. Please advise the Board of Governors,
through the Federal Reserve Bank of Atlanta, the date First Foreign
commences
business.
The Board of Governors also grants consent for First Foreian
to purchase and hold approximately 30 per cent of the capital
:
:
t 3ck of Miami Holdings Limited, a Bahamian corporation, at a cost
'
0 a pproximately US$300,000, provided such shares are acquired within
ne Year from the date of this letter. The Board also approves the
Purchase and holding of such shares in excess of 10 per cent of
rirst Foreign's capital and surplus.
ited
The foregoing consent for investment in Miami Holdings Limis given with the understanding that the investment, combined with
BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
2994
The First National Bank of Miami
-2-
1oreign loans and investments of The First National Bank of Miami,
will not cause the total of such loans and investments to exceed
the guidelines established under the voluntary foreign credit restraint effort now in effect and that due consideration is being
given to the priorities contained therein.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
@FedFRASER