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Minutes for
To:
Members of the Board
From:
Office of the Secretary
August
3, 1961
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. Mills
Gov. Robertson
Gov. Balderston
Gov, Shepardson
Gov. King
Minutes of the Board of Governors of the Federal Reserve System
on Thursday, August
PRESENT:
3,
Mr.
Mr.
Mr.
Mr.
1961.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Mills
Shepardson
Mr. Kenyon, Assistant Secretary
Miss Carmichael, Assistant Secretary
Mr. Thomas, Adviser to the Board
Mr. Shay, Legislative Counsel
Mr. Molony, Assistant to the Board
Mr. Hackley, General Counsel
Mr. Noyes, Director, Division of Research
and Statistics
Mr. Solomon, Director, Division of Examinations
Mr. Hooff, Assistant General Counsel
Mr. Benner, Assistant Director, Division of
Examinations
Mr. Sprecher, Assistant Director, Division
of Personnel Administration
Mr. Young, Assistant Counsel
Mr. Thompson, Supervisory Review Examiner,
Division of Examinations
Items circulated to the Board.
The following items, which had
been circulated to the
Board and copies of which are attached to these
minutes under the respective item numbers indicated, were approved
unanimously:
Item No.
Letter to Chemical Bank New York Trust Company,
New York, New York,
approving an extension of
time in which to
establish a branch at 1900
Ralph Avenue, Brooklyn.
Letter to Farmers and Merchants' Bank, Salisbur
y,
Maryland, approving an investment in bank premises.
1
2
'IC
8/3/61
Item No.
Letter to the President of Miami National Bank,
Miami, Florida, reaffirming the previous disapproval of the bank's trust power applications. 1/
3
Letter to the Federal Reserve Bank of Atlanta
approving certain adjustments in the employees'
salary structures at the head office and branches.
11.
Letter to Bankers Trust Company, New York, New
York, approving the establishment of a branch at
2 Lafayette Street, Borough of Manhattan.
5
Letter to Chemical Bank New York Trust Company,
New York, New York, approving the establishment
of a branch at 277 Park Avenue to replace an
existing branch at 300 Park Avenue.
6
Letter to The Commercial Bank and Savings Company,
Fostoria, Ohio, approving the establishment of a
branch in the Village of Bascom, Seneca County.
7
Letter to Wachovia Bank and Trust Company, WinstonSalem, North Carolina, approving the establishment
of a branch at Park Road and Montford Drive,
Charlotte.
8
Letter to United Bank of Farmington, Farmington,
Missouri, approving the establishment of a branch
at Washington and Liberty Streets.
9
Letter to United California Bank, Los Angeles,
California, approving the establishment of a
branch in the vicinity of Olympic Boulevard and
Purdue Avenue.
10
1/ In discussion of this item, Governor Mills raised the question
whether it seemed necessary to send any letter. Mr. Solomon
stated that the thought was to avoid any possibility of a charge
by the individual that he had written to the Board and received
no acknowledgment. Governor Mills expressed some apprehension,
however, that the sending of a reply might serve to keep the case
alive and lead to further correspondence.
2;
8/3/61
-3Mr. Sprecher then withdrew from the meeting.
Report on competitive factors
Pennsylvania).
(Kennett Square-West Grove,
A draft of report to the Comptroller of the Currency
on the competitive factors involved in the proposed consolidation of
National Bank and Trust Company of Kennett Square, Kennett Square,
Pennsylvania, and National Bank and Trust Company of West Grove, West
Grove, Pennsylvania, had been distributed under date of July 31, 1961.
The report concluded as follows:
The proposed consolidation of National Bank and Trust
Company of Kennett Square, Kennett Square, Pennsylvania, and
National Bank and Trust Company of West Grove, West Grove,
Pennsylvania, would eliminate only a small amount of competition. It seems probable that the consolidated bank would
stimulate competition in the southern Chester County area.
After a brief discussion, during which Governor Balderston
commented on the competitive situation in the area concerned, the
report was approved unanimously for transmittal to the Comptroller.
Report on competitive factors
(Orrick, Missouri).. A draft of
report to the Federal Deposit Insurance Corporation on the competitive
factors involved in the proposed merger of Citizens Exchange Bank,
Orrick, Missouri, with The Bank of Orrick, Orrick, Missouri, had been
distributed una er date of July 28, 1961.
The report concluded as
follows:
Combining Citizens Exchange Bank and The Bank of Orrick
would eliminate little competition as there is little competition between two banks which have common ownership and
management. The continuing bank would be able to compete
more effectively with the larger banks in Excelsior Springs,
Richmond, and Kansas City.
2658
8/3/61
There being no objection, the report was approved unanimously
for transmittal to the Corporation.
Messrs. Hooff and Benner then withdrew from the meeting.
Request of Marine Corporation
(Items 11 and 12).
There had
been distributed to the members of the Board a memorandum from the
Legal Division dated August 2, 1961, regarding a "petition for
rehearing" received from The Marine Corporation, Milwaukee, Wisconsin,
in connection with the Board's denial on June 29, 1961, of the
Corporation's application to acquire stock of Wisconsin State Bank,
Milwaukee, Wisconsin.
The memorandum pointed out that since no hearing
had been held in the case, the petition should be regarded as a
petition
for "reconsideration" rather than "rehearing."
It was requested by the applicant (i) that the petition be
granted or denied on or before August 28, the last date on which an
appeal could be taken from the Board's order of June 29, or, in the
alternative, that the Board stay the effectiveness of the June 29 order
until a determination had been made on the petition for rehearing; (2)
that if the petition should be granted, the Board stay the effective
date of the June 29 order; and (3) that a hearing before the Board be
permitted and that counsel for Marine be allowed to present oral argument.
It was noted in the memorandum from the Legal Division that
no new material or arguments had been presented by Marine Corporation
8/3/61
-5-
and that the Board could, if it so desired, deny the petition for
reconsideration on those grounds.
However, in view of the Board's
recent decision to follow the practice of affording a merger or holding
company applicant an opportunity to present further views in any case
in which a majority of the Board was not prepared to approve the
application, it was the opinion of the Legal Division that it would
be logical to afford
Marine Corporation an opportunity to present oral
views before the Board.
With regard to the request for a stay of the effective date
of the Board's order of June 29, 1961, it was noted the 60-day appeal
period allowed by the statute ran from the date of entry of that order
and could not be extended by the Board.
However, if the Board should
grant the petition for reconsideration, this would obviously mean that
the order of June 29 would be subject to review.
Following reconsider-
ation, the Board would make a further determination of the matter by
the issuance of a new order either affirming or reversing its original
order.
In the event that the new order should affirm the June 29
order, it was the view of the Legal Division that Marine Corporation
would have
6o
days from the date of the new order in which to seek
judicial review.
Accordingly, it would seem unnecessary, even if
legally feasible, to stay the effective date of the Board's June 29
order.
Determination as to whether the appeal period would begin to
run from the date of the new order would be for the courts to determine.
8/3/61
-6-
In any event, however, Marine Corporation could save its right of
judicial review by noting an appeal prior to August 28, even though
the Board might not be in a position to make a further determination by
that date.
Attached to the memorandum was a draft of a proposed order
granting Marine Corporation's petition for reconsideration, granting
the Corporation permission to present its views before the Board, and
denying the request that the Board stay the effective date of its
June 29 order.
At the Board's request, Mr. Hackley reviewed the facts of the
case, his comments being based substantially on the August 2 memorandum.
He suggested that not only from a public relations standpoint but also
for legal reasons it would appear desirable to afford Marine Corporation an opportunity for oral presentation of its views
In the
event of litigation, which was anticipated unless the Board's June 29
order should be reversed, the granting of such an opportunity would
prevent the Board from being charged with having acted arbitrarily by
not permitting the applicant to present its views.
A discussion followed as to a possible date for oral presentation,
and it was agreed that either August
9 or 17 would be satisfactory to
the Board.
Secretary's Note: Following the meeting, it
was agreed with Marine Corporation that the
oral presentation would be made on August 9,
1961.
<
8/3/61
-7The issuance of an order in the form attached as Item No. 11
was then approved unanimously, along with a letter to The Marine
Corporation in the form attached as Item No. 12.
Mr. Thompson then withdrew from the meeting.
Report on S. 2301 (Item No. 13).
There had been distributed
a draft of letter to Chairman Robertson of the Senate Banking and
Currency Committee replying to a request for the Board's views on
S. 2301, a bill "To amend section 2 of the Federal Deposit Insurance
Act with respect to the membership of the Board of Directors of the
Federal Deposit Insurance Corporation."
The proposed reply would state
that the Board had no objection to that provision of the bill that
would in effect forbid a member of the Board of Directors of the Federal
Deposit Insurance Corporation from being a member of the Board of
Governors of the Federal Reserve System or from holding any office
or position in the Federal Reserve System.
It would also indicate why
the Board would prefer not to comment on whether it would be desirable,
as provided by the bill, to discontinue the service of the Comptroller
Of the Currency as a member
of the Corporation's Board of Directors.
Under dates of May 5 and June 14, 1961, respectively, the Board sent
similar replies on similar bills to the House and Senate Banking and
Currency Committees.
After a brief discussion, the letter was approved unanimously.
A cop—
y is attached as Item No. 13.
clag'f'4)
AdTPLIA
8/3/61
-8Report on S. 2302 (Item No. 14).
There had been distributed
to the members of the Board
a draft of letter to Chairman Robertson of
the Senate Committee on Banking and Currency replying to a request for
the Board's views on S. 2302, a bill "To amend section 9 of the Federal
Reserve Act, section 18(d) of the Federal Deposit Insurance Act, and
section 5155 of the Revised Statutes."
This bill would give the
Federal Deposit Insurance Corporation final authority over the establishment of branches by national banks and would transfer from the Board of
Governors to the Corporation the authority to approve the establishment
of branches by State
member banks.
The proposed reply would express the view that the legislation
was unnecessary and that consideration of applications to establish
branch banks should be the function of the Federal agency having
responsibility for examination and supervision of the applicants.
On
May 19 and June 14, 1961, respectively, similar replies were sent by
the Board to the House and Senate Banking and Currency Committees with
respect to similar bills.
After a brief discussion, the letter was approved unanimously.
A copy is attached as
Item No. 14.
Taxation of mutual savings banks and savings and loan associations(Item No. 15).
A draft of letter to Chairman Mills of the
House Ways and Means Committee in reply to a request for the Board's
views on the Treasury Department's recent report on the taxation of
gAra
8/3761
-9-
mutual savings banks and savings and loan associations had been
distributed to the members of the Board.
The letter would state that
the Treasury report appeared to summarize accurately the various
considerations bearing on the problem.
It would also refer to the
Board's comments of March 30, 1961, on H.R. 2899 and H.R. 2900, bills
to repeal the provision of the Internal Revenue Code permitting savings
and loan associations and mutual savings banks to accumulate taxdeductible bad debt reserves as long as the sum of such reserves,
surplus, and undivided profits does not exceed 12 per cent of deposits
or shares.
In the March 30 letter the Board expressed the view that
there was a serious question whether existing arrangements with respect
to taxation were equitable as among various types of financial institutions, and also that the size of tax-free bad debt allowances should
be determined in the same way for the other institutions as for commercial
banks.
The proposed letter would state that the Board was still of
the view that determination of the maximum amount of tax-free additions
to reserves for savings and loan associations and for mutual savings
banks should be decided administratively by the Secretary of the
Treasury, as in the case of commercial banks.
In discussion, Governor Mills suggested, for reasons which he
stated, that the final paragraph of the proposed letter be changed to
express the opinion that, subject to expressly defined statutory
authority, determination of the maximum amount of tax-free additions
2664
8/3/61
-10-
to reserves should be decided administratively by the Secretary of the
Treasury.
He also suggested deletion of the reference to a transitional
Period for equalizing the tax position of the several types of financial
nstitutions.
It was his thought that this would be implicit if
discretionary authority were given to the Treasury by statute.
The letter was then approved unanimously in a form reflecting
the changes suggested by Governor Mills.
A copy of the letter, as sent)
is attached as Item No. 15. It was understood that the Board would not
object to the letter being made public by the Committee.
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board a
letter to the Federal Reserve Bank of
New York (attached Item No. 16) approving
the reappointment of John F. Allen as
assistant examiner.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 1
8/3/61
WASHINGTON 25. D. C.
ADDRESS
orrociAL
CORRESPONDENCE
TO THE BOARD
August 3, 1961
Board of Directors,
Chemical Bank New York Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal Reserve
System extends to February 16, 1962, the time within
which Chemical Bank New York Trust Company, New York,
New York, may establish a branch at 1900 Ralph Avenue,
Brooklyn, New York.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
'4664;
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 2
8/3/61
Al:MRCSS arricIAL CORREMPONOCNCE
TO THE 1110ARD
August 3, 1961
Board of Directors,
Farmers and Merchants' Bank,
Salisbury, Maryland.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of Richmond, the Board of Governors
of the Federal Reserve System approves, under the provisions
of Section 24A of the Federal Reserve Act, an additional
investment by Farmers and Merchants' Bank, Salisbury,
Maryland, of $102,085.47 in bank premises.
This approval includes $62,000 estimated cost of
the new building and $10,000 additional cost of land which
is to be acquired by exchange of the present drive-in office
plus $10,000 cash. This approval also includes $45,085.47
presently capitalized as "remodeling costs," less $15,000
representing that portion of remodeling costs which is
chargeable to furniture and fixtures.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
''('('''
I It
BOARD OF GOVERNORS
OF THE
ati QUK„
ce"
:
•
•
n
FEDERAL RESERVE SYSTEM
-
y.0 Jj Jia4,.
Item NO.
3
8/3/61
WASHINGTON 25. D. C.
▪
4 V.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 3, 1961.
Mr. Lou Poller, President,
Miami National Bank,
Miami, Florida.
Dear Mr. Poller:
The Board of Governors has considered your letter
of July 5, 1961, regarding the trust power applications of
the Miami National Bank disapproved by the Board in its
letter of June 29, 1961. After a careful review of your
letter in the light of all the information available to
the Board, the Board has found no reason to alter its
earlier decisions in this matter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
tottOttgr*
044
%*
OF THE
60144
FEDERAL RESERVE SYSTEM
I
WASHINGTON 25, D. C.
Item No. 4
8/3/61
I4.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
**!Nttast„,
0044**-
August 3, 1961
CONFIDENTIAL (FR)
Mr. Harold T. Patterson,
First Vice President
and General Counsel,
Federal Reserve Bank
of Atlanta.
Atlanta 3, Georgia.
Dear Mr. Patterson:
Reference is made to your letter of July 18, 1961, in which
Your Bank requests approval of upward adjustments in the salary
structures applicable to the employees of your Bank and its branches.
The Board approves the following minimum and maximum salaries
for the respective grades of the following structures, effective
September 1, 1961.
Atlanta-Birmingham
New Orleans
Grade
Maximum
Minimum
Minimum
Maximum
1
$ 2,820
$ 2,820
$ 2,400
$ 2,400
2
3,0602,400
3,060
2,400
3
3,300
3,300
2,460
2,460
4
3,660
3,660
2,700
2,700
5
3,060
3,160
4,240
4,135
6
4,900
3,640
3,540
7
4,025
4,150
5,590
8
'4,660
6,280
fI :08
4
9
5,180
6,980
6,770
10
7,715
5,725
7,470
11
8,200
6,300
8,480
!:,50017!
12
8,960
6,870
9,260
13
7,515
10,125
;
;
:
,56
9,775
14
10,615
8,150
7,865
10,990 .
15
8,860
11,520
11,940
8,535
16
.9,610
9,250
12,950
12,490
2669
CONFIDENTIAL (FR)
Mr. Harold T. Patterson
The Board also approves increases to $2,400 in the minimum
range for Grades 1 and 2 at Jacksonville, and for Grades 1, 2, and
3 at Nashville, without change in the maximum range of these grades.
Payment of salaries may be made to the employees, other
than officers, within the limits specified for the grades in which
the positions of the respective employees are classified. It is
understood that all employees whose salaries are below the $2,400
minimum will be brought to that amount by September 3, and that
salaries of other employees below the minimum of their grades as
a result of the structure increase will be brought within the
appropriate ranges by December 1, 1961.
The Board understands that provision will be made in the
1962 budget to cover the cost of increases arising from these
changes in salary structures.
Very truly yours
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
5
8/3/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 3, 1961
Board of Directors,
Bankers Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment of a
branch by Bankers Trust Company, New York, New
York, at 2 Lafayette Street, Borough of Manhattans
New York, provided the branch is established
within nine months from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
140
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No.
6
8/3/61
ADDRESS orriciAL CORRESPONDENCE
TO THE BOARD
August 3, 1961
Board of Directors,
Chemical Bank New York Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment of a
branch by Chemical Bank New York Trust Company,
New York, New York, at 277 Park Avenue, Borough
of Manhattan, New York, New York, provided the
branch is established within two years from the
date of this letter. It is understood that
operations of the branch at 300 Park Avenue in
Manhattan will be discontinued simultaneously
with the opening of the branch at 277 Park Avenue.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
t3,417
FEDERAL RESERVE SYSTEM
t,
04)
ccv,
WASHINGTON 25, O. C.
Item No.
7
8/3/61
811ft' C,1
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
/
tt, vas1P,44
4**
August
3, 1961
Board of Directors,
The Commercial Bank and Savings Company,
Fostoria, Ohio.
Gentlemen:
Pursuant to your request submitted through the
Federal deserve Bank of Cleveland, the Board of Governors
approves the establishment of a branch in the Village of
Bascom, Seneca County, Ohio, by The Commercial Bank and
Savings Company, Fostoria, Ohio. This approval is given
provided the branch is established within six months from
the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
•
BOARD OF GOVERNORS
;
4
,400;74,
"
101 Q03 ,
OF THE
Item No.
FEDERAL RESERVE SYSTEM
*./
ttO
•
‘-—
WASHINGTON 25. D. C.
A*
8
8/3/61
4,j1
712.
'
‘49P)
woopcss orriciAL
4
0°
4
CORRESPONDENCE
TO THE BOARD
>ft,
4 a4,
411. Mat **
444***
August 3, 1961
Board of Directors,
W.kchovia Bank and Trust Company,
Winston-Salem, North Carolina.
Gentlemen:
Pursuant to your request sublititted through
the Federal Reserve Bank of Richmond, the Board of
Governors approves the establishment by Wachovia Bank
and Trust Company, IEnston-8a1em, North Carolina, of a
branch at the intersection of Park Road and Montford
Drive, Charlotte, North Carolina, provided the branch
is established within 12 months from the date of this
letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
dr (;
ec-2
"
7(1
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
9
8/3/61
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 31 1961
Board of Directors,
United Bank of Farmington,
Farmington, Missouri.
Gentlemen:
Pursuant to your request submitted through
the Federal Reserve Bank of St. Louis, the Board of
Governors of the Federal Reserve System approves the
establishment by United Bank of Farmington, Farmington,
Missouri, of a branch at the southeastern corner of
the intersection of Washington and Liberty Streets,
Farmington, Missouri, provided the branch is established
within nine months from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
40
OF THE
0.4
Item No. 10
8/3/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
40?ol V19,14:
0,4
0,444.tasto..00
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 3, 1961
Board of Directors,
United California Bank,
Los Angeles, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of an in-town branch
in the West Is Angeles Fashion Center in the vicinity
of the intersection of Olympic Boulevard and Purdue
Avenue, by United California Bank, provided the branch
is established within one year from the date of this
letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon.
Assistant Secretary.
Item No. 11
8/3/61
UNITED STATLS OF fiMERIC!
BEFORE THE BOIRD OF GOVERNORS OF THE FEDER"L RESLRVE SYSTEM
--------------
In the Matter of the Application of
THE M4RINE CORPOR'TION
tor prior approval of acquisition of
voting shares of Wisconsin State Bank,
hilwaukee, Wisconsin.
fte
ORDER GR1NTING PETITION FOR RECONSIDERATION
Whereas, the Board of Governors on June 29, 1961, entered
an Order denying the application of The Marine Corporation ("Marine")
Pursuant to the Bank Holding Company Act of 1956 for prior approval
°I' the acquisition of stock of Wisconsin State Bahk, Milwaukee,
TAseonsin;
Whereas, on July 250 1961, Marine filed with the Board a
"Petition for Rehearing" in this matter, which Petition, in the absence
Of any previous hearing, is herein regarded as a "Petition for
Reconsideration";
Whereas, in connection with such Petition, Marine has requected that the Board stay the effective date of its Order of
'
lune 29, 19610 and, further, that counsel for Marine be granted
the Privilege of presenting oral argument before the Board;
-2-
IT IS HEREBY ORDERED, (1) that the Petition for Reconsideration is granted; (2) that Marine may present its views before
the Board of Governors in a non-public proceeding at the Offices
of the Board in Washington, D. C., on August 9, 1961, at 10 am;
°Ild (3) that Marines request that the Board stay the effective
date of its Order of June 29, 1961) is denied.
Dated at Washington, D. C., this 3rd day of August 1961,
By order of the Board of Governors.
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
(SEAL)
BOARD OF GOVERNORS
OF THE
Item No. 12
8/3/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 3, 1961.
Mr. Eliot G. Fitch, President,
The Marine Corporation,
633 North Water Street,
Milwaukee 1, Wisconsin.
Dear Mr. Fitch:
The Board of Governors has granted your Corporation's
Petition for Rehearing in the matter of the application of The
Marine Corporation for acquisition of stock of Wisconsin State
Bank, Milwaukee, Wisconsin, which was denied by the Board's
Order of June 29, 1961. A copy of the Board's Order granting
the Petition is enclosed. Since no hearing was held on this
application, the Petition is regarded as a Petition for Reconsideration.
As indicated in the enclosed Order, opportunity will
be afforded representatives of your Corporation to present oral
views before the Board on August 9, 1961, commencing at 10 a.m.
It is requested that the presentation be limited to one hour.
Arrangements will be made for the presence of a court reporter
in order to provide a transcript of the proceeding. The proceeding will not be open to the public.
The Board believes that it would not be appropriate to
grant The Marine Corporation's request for a stay of the effective date of the Board's Order of June 29, 1961. It is the
Board's opinion that, following reconsideration of this matter,
the further order of the Board determining the matter will be
subject to judicial review within 60 days from the date of its
entry.
In accordance with your request, every effort will be
made by the Board to determine the matter prior to August 28,
1961, but you will understand that a determination prior to that
date may not be practicable.
Enclosure
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
tc,
7
,
.
,
4,7
,
001
BOARD OF GOVERNORS
OF THE
ti '4
tr ''
1:7Z
r
*
,
V
Item No. 13
8/3/61
FEDERAL RESERVE SYSTEM
WASHINGTON
•;
i q5.iI
.d
Q.
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,
4
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OS its
01.ri.1
44,4442.
'
OFFICE OF THE CHAIRMAN
,}13***
August
3, 1961
The Honorable A. Innis Robertson,
Chairman,
Committee on Banking and Currency,
United States Senate,
Ilashinton 25, D. C.
Dear Mr. Chairman:
This is in response to your request of July 26, 1961, for
a report on the bill, S. 2301, "To amend section 2 of the Federal
Deposit Insurance Corporation Act with respect to the membership
of the Board of Directors of the Federal Denosit Insurance
Corporation."
The Board would have 110 objection to that provision or the
bill that would in effect forbid a member of the Board of Directors
Of the Federal Deposit Insurance Corooration from being a member of
the Board of Governors of the Federal Reserve System or from holdinL7,
any ofrice or position in the 'Federal Reserve System. The question
whether it would be desirable, as nrovided by the bill, to clsconidnue
the service or the Comntroller of the Currency as a member of the
Corporation's Board of Directors in one with respect to which the
Cornoration and the Comntroller have intimate knowlede based unon
their day-to-day workirv! exnerience. Howevo-, because this Board
of Governors does not possess such knowledge, it prefers not to comment on this provision of the bill.
Sincerely yours,
(Signed) Wm. McC. Martin, Jr.
UM. VcC. Nartin, Jr.
BOARD OF GOVERNORS
OF THE
Item No. 14
8/3/61
FEDERAL RESERVE SYSTEM
WASHINGTON
OFFICE OF THE CHAIRMAN
August 3, 1961
The Honorable A. Willis Robertson,
Chairman,
Committee on Banking and Currency,
United States Senate,
Washington 25, D. C.
Dear !Er. Chairman:
This is in response to your request of (hay 26, 1261,
for a report on the bill, S. 2302, ',To amend section 9 of the
Federal Reserve Act, section 18(d) of the Federal Deposit Insurance
Act, and section 5155 of the Revised Statutes."
The effect of this legislation would be to require State
member banks to secure the approval of the rederal Deposit Insurance
Corporation rather than the -Board of Governors, as under existing
law, for the establishment of branches, and to require national banks
not only to secure the approval of the Comptroller oi7 the Currency
but that of the FDIC as well for the establishment of domestic
branches. As to foroign branches of national banks, the bill ii lit
be regarded as requiring the annroval of the 11)IC in addition to the
approval of the i3oard.
In the absence of any sound reason for this legislation,
the Board does not rocoituaend its favorable consideration. In the
Board's view the legislation is unnecessary, and consideration of
branch aoolications should be the function of the Federal agency
Which has res7onsibility for examination and supervision of applicants. Intercharme of ronorts of examination and related data
among sunervisory a:wncies, while useful, cannot be an adequate
substitute for information derived from continuing bank examination
and supervisory contacts with the banks concorned.
Sincerelj yours,
(Signed) Wm. MeC. Martin, Jr.
Wm. McC. nartin, Jr.
_
67
(
BOARD OF GOVERNORS
9
J'Asr
OF THE
"e•
Item No. 15
8/3/61
FEDERAL RESERVE SYSTEM
WAS
OFFICE OF THE CHAIRMAN
August 3, 1961.
The Honorable Wilbur D. Mills,
Chairman, Committee on Ways and Means,
House of Representatives,
Washington 25, D. C.
Dear Mr. Chairman:
This is in reply to your letter of July 28, 1961,
requesting the Board's comments on a report from the Treasury
Department on the taxation of mutual savings banks and savings
and loan associations.
The report appears to summarize accurately the various
considerations bearing on the problem, both with respect to
taxation and national housing policy.
In response to your request for the Board's comments
on H. R. 2899 and H. R. 2900, we indicated in our letter of
March 30, 1961, that we felt there was serious question as to
whether the existing arrangements with respect to taxation are
Wholly equitable as among various types of financial institutions.
Certainly, there is little logic in a uniform bad debt reserve of
12 per cent of deposits (or share accounts), regardless of the
nature and extent of the risk assets held by an individual
institution.
The Board is of the view that, subject to expressly
defined statutory authority, determination of the maximum amount
of tax-free additions to reserves should be decided administratively by the Secretary of the Treasury. This would permit
allowance for technical considerations related to the varying
needs and experience of different types of financial institutions.
Sincerely yours,
'
(Signed) Wm. McC. Martin, Jr.
McC. Martin, Jr.
BOARD OF GOVERNORS
OF THE
'
C',0 CO Co&Z
Item No. 16
8/3/61
FEDERAL RESERVE SYSTEM
VW„9/
WASHINGTON 25, D. C.
Fl
ADDRESS. OFFICIAL CORRESPONDENCE
TO THE BOARD
2,tamiX ,t4
August 4, 1961
Mr. John F. Pierce, Chief Examiner,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Mr. Pierce:
In accordance with the request contained in your
letter of August 1, 1961, the Board approves the reappointment of John F. Allen as an assistant examiner for the
Federal Reserve Bank of New York, effective August 21, 1961.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary..
@FedFRASER