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Minutes for To: Members of the Board From: Office of the Secretary August 21, 1959. 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, if you were present at the meeting, please initial in column A below to indicate that you approve the minutes. If you were not present, please initial in column B below to indicate that you have seen the minutes. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System On Friday) August 21) 1959. PRESENT: Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman Balderston, Vice Chairman Mills King Kenyon, Assistant Secretary Fauver, Assistant Secretary Riefler, Assistant to the Chairman Hackley, General Counsel Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Furth, Associate Adviser, Division of International Finance Mr. Sprecher, Assistant Director, Division of Personnel Administration Mr. Nelson, Assistant Director, Division of Examinations Mr. Daniels, Assistant Director, Division of Bank Operations Mr. Mr. Mr. Mr. Mr. Mr. Mr. Discount rates. The establishment without change by the Federal Reserve Banks of New York, Philadelphia, Chicago, St. Louis, and Dallas °II August 20, 1959, of the rates on discounts and advances in their existing schedules was approved unanimously, with the understanding that appropriate advice would be sent to those Banks. The telegram from the New York Bank advised that the directors had established without change until the close of business on August 21, 1959, the rates on industrial advances and commitments under section 13b c)f the Federal Reserve Act. Accordingly, it was understood that the //c)ard's reply would approve termination of such rates as of the close or business August 21, 1959. Items circulated or distributed to the Board. The following items, l'hich had been circulated or distributed to the members of the Board and 8/21/59 2- copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Letter to The Union and New Haven Trust Company, New Haven, Connecticut, granting an extension of time within which to establish a branch at George Street and College Street Extension. 1 Letter to the Federal Reserve Bank of Boston interPreting the applicability of the "carrying" provisions of Regulation U in circumstances described by the Bank. 2 Letter to the Clark State Bank, Clark, New Jersey, 3 aPproving its application for membership in the Federal Reserve System. Letter to The Montgomery National Bank, Montgomery, 4 West Virginia, approving its application for fiduciary Powers. Letter to the Citizens State Bank, Tupelo, Mississippi, aPProving the continued operation of an in-town branch for an additional period of one year. Letter to First Security Corporation, Salt Lake City, Utah, granting an extension of time within which to comply with the provisions of section 4(a)(2) of the Bank Holding Company Act. 6 Letter to the Comptroller of the Currency recommending favorably with respect to an application of Big Rapids Savings Bank, Big Rapids, Michigan, to convert to a national bank provided arrangements are made for a caPital structure satisfactory to the Comptroller's Office. 7 f 8 etter to the Legislative Reference Service of the ibrary of Congress regarding the educational activities of the Board. 8/21/59 -3- Interpretation of "carrying". With reference to discussion at the Board meeting yesterday, Chairman Martin reported that he had attempted to get in touch with Mr. Livingston, President of the Federal Advisory Council, for the purpose of obtaining his views regarding the selection of representative bankers who would meet with the Board on Thursday, September 3, for consideration of problems relating to the interpretation of the "carrying" provisions of Regulation U. However, it appeared that Mr. Livingston would not be available until after Labor Day, and Mr. Brace, Vice President of the Council, was out of the country at the present time. Accordingly, Chairman Martin suggested that the Secretary's Office be authorized to contact the Secretary of the Federal Advisory Council with a view to working out representation at the meeting. There was agreement with the Chairman's procedural suggestion, it being understood also that the Secretary's Office would be in touch with the New York Clearing House for the purpose of arranging for representation of that organization. Mr. Nelson then withdrew from the meeting. Tax exemption for foreign central banks (Item No. 9). The /311reall of the Budget had requested the Board's views on a draft bill sUbmitted by the Treasury which would grant an exemption from taxation to foreign central banks on income derived from obligations of the United States provided such obligations were held in connection with 8/21/59 -4- the normal functions of a central bank and not for commercial banking Purposes. A memorandum from the Division of International Finance dated August 17, 1959, which had been circulated to the Board, pointed out that such legislation had been suggested for many years by the Federal Reserve Bank of New York in order to eliminate two instances Of tax discrimination, first, discrimination against central banks not considered "parts" of a foreign government, and second, discrimi_ nation against income derived from Government securities as distinguished from income derived from bankers' acceptances and time deposits. The fiscal effect of the proposed legislation appeared to be negligible since many central banks were already fully tax exempt, either as Parts" of a foreign government or under tax treaties, and since central banks not enjoying such exemptions tended to concentrate their dollar investments in bankers' acceptances and time deposits rather than in Government securities. Submitted with the memorandum was a draft of letter to the Budget Bureau recommending favorable consideration of the proposed legislation. In discussing the matter, Mr. Furth pointed out, among other things, that a possible connection existed between the draft legislation crld problems under Regulation Q, Payment of Interest on Deposits, with l egard to foreign-owned time deposits. ' He saw little reason, however, t° encourage the holding of funds by foreign central banks in the form -5- 8/21/59 of time deposits through an exemption from taxation on income from such deposits and not on income from Government obligations. After further discussion, unanimous approval was given to the Proposed letter to the Budget Bureau, a copy of which is attached as Item o.9. Mr. Furth then withdrew from the meeting. Site for Denver Branch building (Item No. 10). In a letter dated August 12, 1959, President Leedy of the Federal Reserve Bank of Kansas City requested approval of action taken on that date by the Bank's Board of Directors authorizing the payment to certain real estate agents of the amount of $25,000 in full settlement for services rendered in connection with efforts to purchase a site for a new Denver Branch building opposite the Denver Post Office. Bank In 1958, the Board of Governors authorized the Kansas City exceed to acquire this site for the Denver Branch at a total cost not to $785,000, including a $35,000 real estate fee. Before the project was terminated, the real estate agents had succeeded in obtaining options or contracts of purchase covering all of the tracts in this site for a total sum within the authorized purchase price. Under some of the contracts, however, deeds were not to be delivered until the expiration °f a year, and the Reserve Bank's directors believed the delay in getting title would subject the Bank to greater hazards than it should assume. # -6- 8/21/59 The Reserve Bank had been attempting to effect a settlement with the real estate agents, who contended they had earned $35,000 even though the purchase was not consummated. However, they had now agreed to accept $25,000 in full payment for their services and the Reserve Bank considered this to be a fair settlement. The Division of Bank Operations recommended that the Board interpose no objection to the Proposed payment. In commenting on the matter, Mr. Farrell noted that under the original agreement the fee to the agents was to be $35,000 if they delivered the complete tract. Whether or not they actually did so involved certain questions, but without doubt the agents did a lot Of work in assembling the parcels. Mr. Farrell saw little reason to interpose a judgment that $25,000 would not be a reasonable compromise settlement. Mr. Hackley commented that, as a legal matter, the Kansas City Bank appeared to feel that the agents did not complete delivery so as to be entitled to a fee of $35,000. Assuming that they did not complete delivery, the question was whether their services were so complicated as to warrant a payment of $25,000, and this was a matter of judgment. In response to a question, Mr. Hackley said that he saw no reason to clisaPprove the $25,000 payment. 8/21/59 -7- Thereupon, unanimous approval was given to the telegram to the Kansas City Reserve Bank of which a copy is attached as Item No. 10. Messrs. Hackley, Farrell, Solomon, and Daniels then withdrew from the meeting. Visit of bankers from India. Upon consideration of information contained in a memorandum from Mr. Fauver dated August 17, 1959, which had been circulated to the Board, approval was given to (1) a visit to the Board's offices on October 15, 1959, by a group of bankers from India touring the United States under the auspices of the International Cooperation Administration; (2) a luncheon in the staff dining room for this group; and (3) letters of advice to the Federal Reserve Banks in cities where the group was scheduled to visit. Influenza inoculation program. There had been distributed to the Board copies of a memorandum from the Division of Personnel Administration dated August 17, 1959, recommending (1) that the Division be authorized to make arrangements to provide influenza vaccine for Board employees on a voluntary basis, with the shots aaministered by the Board's physician and the Board's nurse and with the understanding that each employee would pay for the cost of the vaccine; (2) that the Board pay the cost of the physician's services 14 connection with this program, expected to be approximately $100; and (3) that the program be approved on a continuing annual basis. 8/21/59 -8- The memorandum noted that no provision had been made in the 1959 budget for the cost of the program this year. After discussion, the recommendations contained in the memorandum from the Division of Personnel Administration were approved unanimously. Abolishment of Office of Defense Loans. A memorandum from the Division of Personnel Administration dated August 13, 1959, copies of Which had been sent to the members of the Board, noted that Gardner L. Boothe, II, Administrator of the Office of Defense Loans, intended to relinquish his duties on September 23, 1959, prior to effecting retirement on March 1, 1960. It was recommended (1) that a notice along the lines of an attached draft be distributed to Board employees and to the Federal Reserve Banks after the date on which Mr. Boothe intended to relinquish his duties, (2) that substantially the same notice be Published in the October issue of the Federal Reserve Milletin, with deletion of the listing of the Office of Defense Loans in that and all subsequent issues; and (3) that a personal services budget for the Office of Defense Loans be continued through March 1, 1960, in order to provide a vehicle for the payment of salary to Mr. Boothe while on terminal leave. The proposed notice referred to in the memorandum 140Uld state that as of September 24, 1959, the Office of Defense Loans had been discontinued and its activities transferred to the Division °I' Bank Operations. 8/21/59 After discussion, it was agreed unanimously to discontinue the Office of Defense Loans as of September 24, 1959, and to transfer its activities to the Division of Bank Operations. The other recommendations In the memorandum from the Division of Personnel Administration also were approved unanimously. Inclusion of Hawaii in Twelfth District (Item No. 11). Mr. Kenyon recalled on July 31, 1959, the Board authorized the Secretary's Office, upon being advised that the President of the United States had signed a proclamation admitting Hawaii to Statehood, to send a telegram to the Federal Reserve Banks advising of the inclusion of the State of Hawaii in the Twelfth Federal Reserve District. The telegram would also advise of technical amendments to several Board regulations occasioned by the admission of Hawaii to Statehood. It was understood that the President would sign a proclamation admitting Hawaii to Statehood this afternoon, and the Secretary's Office therefore proposed to send the telegram previously authorized by the Board. Secretary's Note: The President signed the proclamation admitting Hawaii to Statehood at approximately 4:00 p.m. today. Accordingly, the telegram of which a copy is attached as Item No. 11 was sent to the Federal Reserve Banks. The meeting then adjourned. 8/21/59 -10Secretary's Note: Pursuant to the recommendation contained in a memorandum dated August 21, 1959, from the Division of Administrative Services, Governor Balderston, acting in the absence of Governor Shepardson, today approved on behalf of the Board an increase in the basic annual salary of Constance H. Richardson, Charwoman in that Division, from $3,530 to $3,625, effective August 23, 1959. Assistant Secretary./ BOARD OF GOVERNORS Item No. 1 8/21/59 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 21, 1959 Board of Directors, The Union and New Haven Trust Company, New Haven 2, Connecticut. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Boston, the Board of Governors extends until October 1, 1959, the time within which The Union and New Haven Trust Company, under authority granted in the Board's letter of July 2, 1958, may establish a branch at the southeast corner of George Street and College Street Extension, New Haven, Connecticut. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 2 8/21/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE HOARD August 21, 1959 Mr. Laurence H. Stone, Secretary and Assistant Counsel, Federal Reserve Bank of Boston, Boston 61 Massachusetts. Dear Mr. Stone: This is in reply to your letter dated July 10, 1959, requesting a ruling from the Board of Governors interpreting the Board's Regulation U under the following state of facts. A borrower from a bank pledged General Motors stock collateral for a loan for the purpose of constructing a perrhal residence. It is assumed that the loan was made before 1fle 15, 1959. The borrower has owned the stock for a number 2 of Years, and at certain times during that period, the stock "as been owned free of any lien for a continuous period of as Tuch as one year. At the time when the loan was made, however, the stock had been encumbered within the previous year. The borrower now finds that he requires additional funds to , complete his residence and has asked that the bank make a urther loan against the same collateral. The bank asks whether, 4.11 view of the amended section 221.3(b)(1) of Regulation U, this ;1_1rther loan would be a loan for the purpose of "carrying" the '(:)ck, and subject to the regulation. l The question implicit in the bank's request is whether a bo rrower must have owned stock free of any lien for a continuous of at least one year immediately previous to making a loan before a presumption will arise that the loan is not for the purIse of "carrying" that stock. It is the opinion of the Board : whtt the requisite presumption will arise in respect to shares at ch a borrower has held for a longer period if the borrower has ZeZY---L___timej_____p_mtheast owned the stock for a continuous period case,28 much as one year, free of any lien, and that if this is the the remilation does not require that no lien against the have existed within the year immediately preceding of the loan. It should be pointed out that this interP etation does not affect the question whether the loan is for Mr. Laurence H. Stone the Purpose purpose of carrying any other stock which the borrower may not have owned, free of lien, for the necessary period. Nor, of course, does the interpretation apply to a loan for the purpose of reducing or retiring indebtedness incurred to purchase stock. It is assumed that the borrower about whom your member bank inquired owns no other stock which fails to meet the one-year , 6e8t of the regulation. On this assumption, the member bank need not treat an increase in a loan under the circumstances described above as a loan for the purpose of "carrying" stock. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. Item No. 3 BOARD OF GOVERNORS 8/21/59 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 211 1959 °rganization Committee, Crilark State Bank, 'Jlark, New Jersey. Geritlemen: The Board of Governors of the Federal Reserve System approves the application made on behalf of Clark State Bank, Clark, New Jersey, for 1,1„. stock in the Federal Reserve Bank of New York, effective if and s ?I'?, the bank opens for business under appropriate State authorization, DDJect to the numbered conditions hereinafter set forth: ' 1. Such bank at all times shall conduct its business and exercise its powers with due regard to the safety of its depositors, and, except with the permission of the Board of Governors of the Federal Reserve System, such bank shall not cause or permit any change to be made in the general character of its business or in the scope of the corporate powers exercised by it at the time of admission to membership. 2. The net capital and surplus funds of such bank shall be adequate in relation to the character and condition of its assets and to its deposit liabilities and other corporate responsibilities. 3. At the time of admission to membership, such bank shall have paid-in and unimpaired capital stock of not less than 4;250,000, and other capital funds of not less than 250,000. In connection with the foregoing conditions of membership, 13artic ular attention is called to the provisions of the Board's thrrption H regarding membership of State banking institutions in thereederal Reserve System, with especial reference to Section 7 °f. A copy of the regulation is enclosed. BOARD Clark State Bank OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM -2 If at any time a change in or amendment to the bank's charter 18 made, the bank should advise the Federal Reserve Bank, furnishing )131-es of any documents involved, in order that it may be determined Whether such change affects in any way the bank's status as a member of the Federal Reserve System. Acceptance of the conditions of membership contained in this letter should be evidenced by a resolution adopted by the Board of irectors and spread upon its minutes, and a certified copy of such feselution, together with advice of compliance with the condition to be )1niolied with prior to admission to membership, should be filed with the '..lederal Reserve Bank. Arrangements will thereupon be made to accept aYment for an appropriate amount of Federal Reserve Bank stock, to !accept the deposit of the required reserve balance, and to issue the ' 4PPropriate amount of Federal Reserve Bank stock to the bank. 9 The time within which admission to membership in the Federal Rese , to ye oystem in the manner described may be accomplished is limited 8?,"X months from the date of this letter, unless the bank applies to the and obtains an extension of time. When the Board is advised pr.t all of the requirements have been complied with and that the approla,t,e amount of Federal Reserve Bank stock has been issued to the bank, l'21.16eard will forward to the bank a formal certificate of membership ' 41 the Federal Reserve System. The Board of Governors sincerely hopes that you will find nienlbe Ba,, ,r8hip in the System beneficial and your relations with the Reserve to "Pleasant. The officers of the Federal Reserve Bank will be glad kearaist you in establishing your relationships with the Federal ba,,jlie System and at any time to discuss with representatives of your means for making the services of the System most useful to you. Very truly yours, (signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. Item No. 1. BOARD OF GOVERNORS /21/59 8 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 211 1959 Board of Directors, The Montgomery National Bank, Montgomery, West Virginia. Gentlemen: The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary powers and grants The Montgomery National Bank authority to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, 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 West Virginia. The exercise of such rights shall be subject to the provisions of Section 11(k) of the Federal Reserve Act and Regulation F of the Board of Governors of the Federal Reserve System. A formal certificate indicating the fiduciary powers that your bank is now authorized to exercise will be forwarded In due course. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 5 FEDERAL RESERVE SYSTEM 8/21/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 21, 1959 Board of Directors, Citizens State Bank, Tupelo, Mississippi. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of St. Louis, the Board of Governors of the Federal Reserve System approves an extension of time for one year to August 21, 1960, for the continued operation of a branch by Citizens State Bank, Tupelo, Mississippi, in the old bank premises located about the middle of the block on the north side of Main Street between Front and Spring Streets in Tupelo, Mississippi. It is understood that the board of directors of the bank has agreed by resolution to close the branch at the end of the extended period and to make no request for further extension. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS eotd40,z)v OF THE 1.;.% Item No. FEDERAL RESERVE SYSTEM 8/21/59 WASHINGTON 25, D. C. rts4 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD *4 Z :p : W.V0v August 21, 1959 George S. Eccles, President, First Security Corporation, 79 South Main Street, Salt Lake City, Utah. Dear Mr. Eccles: This refers to First Security Corporation Ts application for an extension, from September 1, 1959, to October 1, 1959, of (a) the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956, and (b) the period of time Specified in section 1101(e)(2)(B) of the Internal Revenue Code of 1954 (as amended by section 10(a) of the Act). In accordance with the aforementioned provisions Of the Act and the Internal Revenue Code, the Board has granted an extension to October 1, 1959. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 6 BOARD OF GOVERNORS OF THE Item No. 7 FEDERAL RESERVE SYSTEM 8/21/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 21, 1959 Coriptroller of the Currency, T reasury Department, Itshington 251 D. C. Attention: Mr. W. M. Taylor, Deputy Comptroller of the Currency 1)earlir. Comptroller: Reference is made to a letter from your office dated July 24, Savings Bank, 1,04'', enclosing copies of an application of Big Rapids Rapids, Michigan, to convert into a national banking association requesting a recommendation as to whether or not the application should be approved. 19,0 field investigation of the application has not been made, 1)14 the Federal Reserve Bank of Chicago has furnished us with a report July 20, c t:the application based upon the examination of the bank as of i -1)9, and other data available. The Big Rapids Savings Blnk has been a member of the Federal , RetL'erve System since October 9, 1913. In 1934 it was necessary to rer!tect a reorganization which involved the collection of a stock assessand a waiver of 60 per cent of deposits of which 78.4 per cent hay N e been repaid. The present capital structure of the bank is reed as somewhat weak in relation to volume of risk assets and it slInderstood that the management of the bank would probably give con: to the sale of additional stock. Ehile the earnings of the t,nk have been somewhat below average and the management is reported quite aggressiveness, the applicant has served the community support. local good have to sfactorily for many years and appears Rae,Board of Governors recommends approval of the application of Big prP'ds Savings Bank to convert into a national banking association ed arrangements are made for a capital structure satisfactory to Your office. • BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Comptrol er of the Currency The Boardts Division of Dcaminations will be glad to discuss any aspects of this case with representatives of your office if You so desire. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 8 FEDERAL RESERVE SYSTEM 8/21159 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 21, 1959 Mr. Charles A. Quattlebaum, Specialist in Education, Legislative Reference Service, The Library of Congress, Washington 251 D. C. Dear Mr. Quattlebaum: There is enclosed information on educational activities of the Board of Governors of the Federal Reserve System as requested in Mr. Elsbree's letter of June 9 to Chairman Martin. If you need additional details on, or Clarification of, any point, Mr. Clarke Fauver, Assistant Secretary, will be glad to be of assistance. Sincerely yours, (Signed) Kenneth A. Kenyon Kenneth Kenyon, Assistant Secretary. Enclosure. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 9 8/21/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD August 211 3.959 Er. Phillip S. Hughes, Assistant Director for Legislative Reference, Elxecutixe Office of the President, Bureau of the Budget, Washington 25, D. C. Dear Nr, Hughes: In response to your memorandum of August 10, 1959, recommends the Board of Governors of the Federal Reserve System ion legislat favorable consideration of the draft of proposed grant to which would amend the Internal Revenue Code of 1954 on interest exemption from income tax to foreign central banks United the derived from bonds or other obligations issued by on with connecti States, provided such obligations are held in al commerci the normal functions of a central bank and not for banking purposes. This recommendation is based on the reasons set proposed forth by the Acting Secretary of the Treasury in his letter to the Speaker of the House of Representatives. : Very truly yours (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item. No. 10 8/21/59 August 21, 1959 Leedy - Kansas City Reurlat August 12 Board will interpose no objection to payment of $251000 to Vesora. Knowles and Fulenwider in full settlement for services rendered in connection with proposed purchase of "Post Office" site for Denver Branch. (Signed) Kenneth A. Kenyon Kenyon, TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item No. 11 8/21/59 August 21, 1959 Presidents, all Federal Reserve Banks Board has taken the following action: "In view of the admission Of Hawaii to Statehood, as a result of the issuance of the President's the provisions of proclamation of August 21, 1959, in accordance with the Act of March 18, 1959 (73 Stat. 4), and, acting pursuant to section 17 of that Act, the Board of Governors of the Federal Reserve System has readjusted the Federal Reserve Districts so as to include the State of Hawaii in the Twelfth Federal Reserve District, effective August 21, 1959. Within the Twelfth District the State of Hawaii will be included in the zone served by the Head Office." Since the admission of Hawaii to Statehood has rendered inappropriate certain language in the Board's Regulations E, G, H, I, J, L, and U, the Board has also acted to amend those regulations in the following respects, effective on the above date. Regulation E, section II, paragraph 2, is amended by eliminating therefrom the words "continental United States" and substituting therefor the words "States of the United States and the District of Columbia". Regulation G is amended by eliminating from footnote 1 thereof the words "Hawaii" and "Puerto Rico" and by substituting for the words "continental United States" the words "States of the United States and the District of Columbia". The "Designations of Federal Reserve Districts for banks in territories, dependencies, etc." issued pursuant to footnote 1 of Regulation 0 is further amended by deleting the paragraph referring to Hawaii. #)}J 'Lot, Regulation H is amended by eliminating from footnote 1 thereof the words "continental United States" and substituting therefor the words "States of the United States and the District of Columbia". Regulation is amended by eliminating from footnote 1 thereof the words "continental United States" and substituting therefor the words "States of the United States and the District of Columbia". Regulation J is amended by eliminating from footnote 1 thereof the words "Hawaii" and "Puerto Rico" and by substituting for the words "continental United States" the words "States of the United States and the District of Columbia". The "Designations of Federal Reserve Districts for banks in territories, dependencies, etc." issued pursuant to footnote 1 of Regulation J is further amended by deleting the paragraph referring to Hawaii. Regulation L is amended by eliminating from footnote 3(b) thereof the words "the Philippine Islands" and "Hawaii,". Regulation U, section 221.2(i) is amended by eliminating therefrom the number "49". %les of amendments being sent to you by mail. Kenyon (Signed) Kenneth A. Kenyon
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