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Minutes for
To:
August 30, 1960
Members of the Board
From: Office of the Secretary
Attached is a copy of the minutes of the
ors of the Federal Reserve System on
Govern
of
Board
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
t,
indicate approval of the minutes. If you were not presen
the
seen
have
your initials will indicate only that you
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 Tuesday, August 30, 1960.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Balderston, Vice Chairman
Szymczak
Mills
Robertson
Shepardson
King
Mr. Kenyon, Assistant Secretary
Mr. Hackley, General Counsel
Mr. Masters, Associate Director, Division of
Examinations
Mr. Daniels, Assistant Director, Division of
Bank Operations
Mr. Hostrup, Assistant Director, Division of
Examinations
Mr. Sprecher, Assistant Director Division of
Personnel Administration
Mr. Rudy, Special Assistant, Legal Division
Mr. Landry, Assistant to the Secretary
Miss Hart, Assistant Counsel
Discount rates.
The establishment without change by the Federal
Reserve Bank of Atlanta on August 29, 1960, of the rates on discounts
4nd advances in its existing schedule was approved unanimously, with the
Understanding that appropriate advice would be sent to that Bank.
Items circulated to the Board.
The following items, which had
been circulated to the Board and copies of which are attached to these
tinutes under the respective item numbers indicated, were approved
Unanimously:
Item No.
Latter to The Vienna Trust Company, Vienna, Virginia,
4PProving the establishment of a branch at Maple Avenue
44qd Berry Street.
'
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8/30/60
Item No.
Letter to the Comptroller of the Currency recommending
favorably with respect to the application of Merchants
Trust Company, Muncie, Indiana, to convert into a
national banking association.
2
Letter to the Traverse City State Bank, Traverse City,
Michigan, approving the establishment of a branch in
1Cingsley.
3
Letter to the Arkansas Trust Company, Hot Springs,
Arkansas, approving the establishment of a branch at
3015 Central Avenue.
4
Letter to the Normandy State Bank, Normandy, Missouri,
vaiving the requirement of six monthst notice of withdrawal from membership in the Federal Reserve System.
5
Letter to the Security Bank, Myrtle Point, Oregon,
1/aiving the requirement of six months* notice of withfirawal from membership in the Federal Reserve System.
6
Application of Northwest Bancorporation.
Copies had been
distributed of two memoranda from the Division of Examinations (August 10,
1960) regarding
1960) and a memorandum from the Legal Division (August 25,
s, Minnesota, for prior
eU4 application of Northwest Bancorporation, Minneapoli
aPProval of the acquisition of 80 per cent or more of the voting shares of
The First National Bank of Pipestone, Pipestone, Minnesota. It was noted
that the Federal Reserve Bank of Minneapolis and the Comptroller of the
currency had recommended approval.
The Division of Examinations likewise
lacommended favorably, end the Legal Division expressed the opinion that
'
court.
approval of the application probably would be sustained by a reviewing
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8/30/60
The material from the Division of Examinations pointed out,
among other things, that The First National Bank of Pipestone had
Operated continuously since 1889 and as of March 15, 1960, had deposits
Of $7.6 million, loans of $4.8 million, and capital accounts of $1.4
million.
The Minneapolis Reserve Bank reported that various businessmen
in Pipestone and bankers from surrounding towns referred to First as
having been a dominant factor in community growth.
The applicant,
N orthwest Bancorporation, now had no affiliated banks in either the primary
or secondary service areas of First.
Acquisition of that bank by Northwest
%mould increase the assets of the latter by less than one-half of one per
cent, and local competition would continue to be provided by The Pipestone
National Bank, a subsidiary of First Bank Stock Corporation with total
clePosits of $3.2 million as of December 31, 1959, as well as by a savings
end loan association and a number of other lending institutions serving
the surrounding area, which is predominantly agricultural in nature.
According to the Reserve Bank, which had interviewed all bankers in the
area, no strong Objections were raised to the proposed acquisition; it was
common knowledge that disposition of the controlling stock of First by the
Peldman family was a possibility.
At the request of the Board, Mr. Hostrup summarized the foregoing
and other factors relevant to consideration of the application.
He con-
cluded by commenting that, following the proposed acquisition, Northwest
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8/30/60
Bancorporation would control about 32 per cent of the deposits of
individuals, partnerships, and corporations in the primary and secondary
service areas of First National, but that it would not occupy a dominant
Position.
In his view, the point at issue in this case appeared to be
Yhether, in the circumstances involved, the Bank Holding Company Act
l'equired the Board to stand between a willing, almost anxious, seller
and a willing buyer.
Mr. Hackley expressed the view that, as indicated in the memorandual of the Legal Division, approval of the application would probably be
sUstained by a reviewing court as a. reasonable exercise of the Board's
discretion.
The case, he pointed out, could give rise to the question
11°1'7 far the Board might go, consistent with the provisions of the statute,
in restraining expansion of this large bank holding company, the question
being further complicated by the existence of a second large holding
c01711Pany in the same area.
In other words, there was the question whether
the dominance of these two companies in the general area constituted a
relevant factor on the basis of which the Board might turn down an application
Of this kind, even though otherwise the case might seem to be one where the
ractors were more or less neutral.
This was a philosophical question--one
elating to the objectives of the statute.
'
If the Board should deny a case
°D this kind on the basis of the dominance of the two large holding companies,
then as to these companies the Board would seem to be adopting, in effect,
the position that it would thereafter disapprove any further expansion unless
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in a particular case there were offsetting factors providing an affirmative
reason for approval.
This would differ from the policy of the Board in
other cases, although the difference might be reconciled by saying that
the mere existence of the two large companies was an overwhelmingly adverse
factor that would justify disapproval in the absence of offsetting affirmative
factors.
Mr. Hackley also referred to the agreement, contingent upon Board
aPProval of the application by Northwest, whereby Union Investment Company,
a wholly-owned subsidiary, would purchase an unincorporated insurance agency
°lined by various officers of the Pipestone bank.
It was the opinion of the
Legal Division, he said, that the proposal would not change the factors that
the Board considered in making its favorable determination on July 21, 1959,
Permitting Northwest to retain shares of Union.
Mr. Hostrup referred to certain additional information regarding
the primary and secondary service areas of First National that had been
developed by the Division of Examinations pursuant to a suggestion by
Qovernor Mills.
These data, not yet distributed to the Board, indicated,
'
Within approximately a 50-mile radius of Pipestone, the percentages of
(lePosits of individuals, partnerships, and corporations now controlled by
Northwest Bancorporation and First Bank Stock Corporation, along with the
Percentages that would obtain if the proposed transaction should be conalthamated.
0
1'
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Governor Mills stated that regardless of the decision reached
by the Board on this application, the record should include expanded
tnformation of the nature referred to by Mr. Hostrup.
Also, the
resources controlled by Northwest Bancorporation in the Pipestone trade
area and in the State of Minnesota should be detailed.
The same sort of
information likewise should be provided for First Bank Stock Corporation,
and all such information should be taken account of in the Boardes decision.
He agreed with a point raised by Mr. Hackley that care should be exercised
not to overemphasize the dominance of the two leading bank holding companies
Minnesota and in the entire area they serve.
This should not be a cardinal
factor in reaching a decision on an application submitted by either company.
Re felt with equal conviction, however, that the dominant position of these
two bank holding companies was relevant to reaching a decision on applications
aWbmitted by either company.
Governor Mills then stated that, based on the available information,
he vould be opposed to approval of the present application. He noted that
the circumstances surrounding the application differed somewhat from those
that Obtained in the application made by Northwest Bancorporation in 1958 to
acquire control of The First National Bank at Eveleth, Eveleth, Minnesota,
decided favorably by the Board on January 20, 1959. As he recalled that
application, the decision was recognized as a close one.
In that case the
argument likewise was advanced by the applicant, rather persuasively, that
3311
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8/30/60
the national bank was handicapped by elderly management whose replacement
'Would be difficult.
vas different.
However, the situation in the two communities involved
Eveleth is located in the northern part of Minnesota, fairly
close to Duluth in the iron range area, and there would appear to be different
area characteristics in terms of population and economic activity.
Further,
Northwest Bancorporation and First Bank Stock Corporation were already
strongly entrenched in that area, and it did not appear that addition of the
Eveleth bank to the holdings of Northwest Bancorporation would upset the
existing competitive situation.
Moreover, there were two independent banks,
controlled by the same interests, that provided competition in the immediate
area.
In Pipestone, on the other hand, First Bank Stock owned the smaller
°f the two banks and Northwest Bancorporation was proposing to acquire
the larger national bank, so that the two holding companies would have
complete control of the banking resources in the community and would dominate
the surrounding area.
In that general area, there were quite a number of
small independent banks, more than in the Eveleth area.
Should the Board
approve the present application, over a period of time the dominance of
northwest and First Bank Stock could prove detrimental and adverse to the
galaxy of smaller banks.
It was then agreed that the application of Northwest Bancorporation
VoUld be considered further at tomorrow's meeting following submission to
the Board by the Division of Examinations of additional information along the
lines Governor Mills had suggested.
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8/30/60
In a discussion that followed, which included comments by Mr.
Raokley on distinctions between the bank merger and bank holding company
legislation, Governor Balderston suggested that the staff provide the
Board with a summary of the factors involved in the cases decided by the
Board under the new bank merger legislation.
Mr. Fauver, Assistant to the Board, entered the room during the
roregoing discussion.
Applications by Brenton Companies, Inc. (Items 7 and 8).
Under
date of August 25, 1960, copies had been distributed of a proposed Notice
°f Tentative Decision approving applications by Brenton Companies, Inc.,
Des Moines, Iowa, for acquisition of 25 per cent of the voting shares of
the following banks:
Brenton State Bank, Dallas Center, Iowa
Jefferson State Bank, Jefferson, Iowa
The First National Bank of Perry, Perry,
Iowa
The Poweshiek County National Bank of
Grinnell, Grinnell, Iowa
There had also been distributed a draft of Tentative Statement.
The Notice of Tentative Decision and the Tentative Statement were
designed to carry out the position indicated by the Board on August 19,
1960.
Following discussion, unanimous approval was given to the Notice
°f Tentative Decision and the Tentative Statement, subject to minor
editorial changes, with the understanding that the Notice would be published
8/30/60
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in the Federal Register and that both documents would be released to the
Press this afternoon.
Itema7 and
Copies of the documents, as issued, are attached as
8.
Messrs. Hostrup and Rudy and Miss Hart then withdrew from the
Meeting and Mr. Shay, Legislative Counsel, entered the room.
Advertising of space in Reserve Bank building.
At the request of
Governor Balderston there had been placed on the agenda for consideration
the question of advertising the availability of space in the head office
bUilding of the Federal Reserve Bank of Chicago.
Governor Balderston referred to the view of the Board, as expressed
in its outstanding letter to the Reserve Banks, to the effect that it would
be preferable for each Bank to do its own leasing, but that if local conditions
required, a Bank involved would be permitted to engage the services of an
agent.
He noted that President Allen of the Chicago Reserve Bank had
°1-iginally raised the question in connection with renting space in that Bank,
kma that Scribner & Company, which had been engaged by the Reserve Bank as
agent, now
to advertise the availability of space in the building
through issuance of a brochure.
Mr. Daniels noted that the advertising brochure prepared by Scribner
CoMpany had been submitted to the Reserve Bank for consideration, and that
6 Copy had been sent by the latter to the Board.
,p0;=1
40‘71,
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8/30/60
The brochure was then circulated among the members of the Board
for inspection.
Following discussion it was agreed, at the suggestion of Governor
Mills, that the matter would be held in abeyance until Mr. Daniels had
ascertained from General Services Administration its practices with regard
to the advertisement of rental space in Federal buildings.
Mr. Daniels then withdrew from the meeting.
Action affecting Board Plan of Retirement System (Item No. 9).
There had been circulated to the Board a memorandum from the Division of
Personnel Administration dated August 17, 1960, recommending that the Board
take no action to prevent the incorporation of the benefits of Public Law
86-622, approved July 12, 1960, into the Board Plan of the Retirement System
°f the Federal Reserve Banks.
The memorandum explained the effect of the
recent amendment to the Civil Service Retirement Act substantially as follows:
The Civil Service Retirement Act provides for limiting the
annuities of retirees to a maximum of 80 per cent of their high
five-year average salary. Employees with high five-year average
salaries exceeding $5,000 attain this 80 per cent figure after
approximately 42 years of service. Where the annuity would be
more than 80 per cent, it is automatically reduced to that figure
at the time of retirement.
A recent amendment to the Civil Service Retirement Act (Public
Law 86-622) provides that the excess contributions deducted and
withheld from the basic salary of an employee after his years of
service have placed him at the point where his retirement annuity
would equal the maximum 80 per cent of his high five-year average
salary are to be considered as voluntary contributions. Three per
cent interest compounded annually is to be paid on these excess
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8/30/60
retirement contributions (voluntary contribution account)
from the date of deduction to the date of retirement or
death in active service. The voluntary contribution account
is used to purchase an additional annuity at retirement and
is payable in a lump sum on death in active service. After
retirement the account is reduced by the annuity purchased
thereby and any balance may be paid in a lump sum upon the
retiree's death. The new benefits are available only to
employees who separate from service after the effective date
Of the amendment.
As to the other provisions of Public Law 86-622, only one of them
had relevance from the standpoint of the Board Plan, and in that case the
Possibility of any applicable situation actually arising seemed remote.
Following comments by Mr. pprecher based on the information contained
in the memorandum from the Division of Personnel Administration, unanimous
!12111:2n1
was given to a letter to the Secretary of the Retirement System of
the Federal Reserve Banks indicating that the Board interposed no Objection
to increasing the benefits of the Board Plan in order that they might conform
'with the benefits provided by Public Law 86-622.
A copy of the letter is
attached as Item No. 9.
Information requested by Congressman Patman (Item No. 10).
There had
been distributed to the members of the Board copies of a proposed letter to
the Federal Reserve Banks requesting information that would be needed in
l'esponding to a letter from Congressman Patman dated August 20, 1960, asking
for "a list of the officers and employees of each of the Federal Reserve banks
410 have received training at one or more of the banking schools conducted by
;
4-
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8/30/60
the American Institute of Banking."
Of
The listing was requested in terms
titles and job classifications rather than names.
Mr. Shay commented that clarification of Mr. Patmants question had
been sought, following which a member of Mr. Patmants staff indicated that
The request should be construed broadly to include not only courses given
by local chapters of the American Institute of Banking but also training
such as graduate school work of the Rutgers type.
The proposed letter to
the Reserve Banks therefore would ask each Bank to furnish the Board a
listing by present title and position classification of all current officers
and employees who during any period of their Reserve Bank service have taken
courses conducted by local chapters of the American Institute of Banking or
have attended a school of banking sponsored, conducted, or approved by
bankerst associations.
In discussion of the matter, reference was made to the various types
°f educational opportunities provided by the Board and the Federal Reserve
8snks for officers and employees, and to the growing trend in branches of
the Government and in private industry toward providing such opportunities.
Also, certain tentative suggestions were made for possible rephrasing of the
letter to the Reserve Banks for the purpose of Obtaining additional information,
such as data on the number of officers and employees attending various schools
each year or a breakdown according to schools attended.
At the conclusion of
the discussion, however, it was the consensus that the transmittal of
8/30/60
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information to Mr. Patman according to the terms of his request would be
aPpropriate and that the letter to the Reserve Banks should be phrased
accordingly.
Therefore, unanimous approval was given to the letter to
the Presidents of all Federal Reserve Banks of which a copy is attached
as Item No. 10.
The meeting then adjourned.
Secretary's Notes: Pursuant to recommendations
contained in memoranda from appropriate individuals
concerned, Governor Shepardson approved on behalf
of the Board an August 29, 1960, the following items
relating to the Boards staff:
APpointments
Suzanne C. Davis as Statistical Clerk in the Division of Research and
Statistics, with basic annual salary at the rate of $3,865, effective the
date of entrance upon duty.
Robert M. Steinberg as Economist in the Division of Research and
Statistics, with basic annual salary at the rate of $6,435, effective
September 6, 1960.
Sal ry increases, effective September
4, 1960
Division
Name and title
Basic annual salary
To
From
Office of the Secretary
Alldrey Lynn Allen, Records Clerk
$ 4,145
$ 4,250
4,345
4,180
7,560
4,510
4,285
7,820
9,215
9,475
Research and Statistics
Charlotte Hanovega, Statistical Assistant
Joanne Jessup, Clerk-Typist
Paul F. McGouldrick, Economist
Elizabeth A. Ulrey, Economist
rc31
8/30/60
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Salary increases, effective September 4, 1960 (continued)
Name and title
Division
Basic annual salary
From
To
Examinations
Andrew-N. Thompson, Supervisory Review Examiner
14,380
$14,705
5,500
4,18o
5,665
4,285
3,815
3,920
Administrative Services
Leroy H. Cooley, Telegraph Operator
Gladys H. Garber, Mailing List Clerk and
Flexowriter Operator
Dorothy L. Mosher, Charwoman
Transfer
Shirley Register Sherman, from the position of Special Assistant Federal
Reserve Examiner in the Division of Examinations to the position of Secretary
III the Office of the Secretary, with no change in her basic annual salary at
the rate of s4,814o, effective the date she assumes her new duties.
Governor Shepardson also approved on behalf of
the Board on August 29, 1960, a letter to the
Federal Reserve Bank of Richmond (attached Item
No. ll) approving the designation of Frank T.
Brizzolara as special assistant examiner.
Pursuant to recommendations contained in memoranda
from appropriate individuals concerned, Governor
Shepardson today approved on behalf of the Board
the following items relating to the Board's staff:
LV229intments
Grace R. MacVean as Reservations Clerk in the Division of Administrative
Services, with basic annual salary at the rate of $5,005, effective the date
°D entrance upon duty.
Edwin G. White as Analyst in the Division of Bank Operations, with basic
allnual salary at the rate of $6,930, effective the date of entrance upon duty.
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8/30/60
Leave without pay
Robert B. Bangs, Senior Economist, Division of Research and Statistics;
additional leave 'without pay from September 8 through September 30, 1960, in
order to complete his 'work with the Congressional Joint Committee on Internal
Revenue Taxation.
Stephen F. Taylor, Economist, Division of Research and Statistics;
additional leave without pay from September 1 through September 16, 1960, to
complete his assignment as a member of an operational mission for the International Bank for Reconstruction and Development to the Government of Malaya.
Governor Shepardson also approved today on behalf of
the Board a letter to the Federal Reserve Bank of
Cleveland (attached Item No. 12) approving the appointment of David Eugene Bricker as assistant examiner.
Assistan7Secretid.y
t
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 1
8/30/60
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 301 1960
Board of Directors,
Vienna Trust Company,
Vienna, Virginia.
Gentlemen:
Pursuant to your request submitted through the
Bank of Richmond, the Board of Governors
Reserve
Federal
of the Federal Reserve System approves the establishment
by The Vienna Trust Company, Vienna, Virginia, of a branch
at the intersection of Maple Avenue and Berry Street,
Vienna, Virginia, provided the branch is established
within twelve months from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 2
8/30/60
ADDRESS orriciAL CORRESPONDENCE
TO THE BOARD
August 30, 1960
Comptroller of the Currency,
Treasury Department,
Washington 25, D. C.
Attention Mr. C. C. Fleming,
Deputy Comptroller of the Currency.
Dear Mr. Comptroller:
Reference is made to a letter from your office dated
August 9, 1960, regarding the application of Merchants Trust
Company, Muncie, Indiana, to convert into a national banking
association and requesting a recommendation as to whether or
not the application should be approved.
A field investigation of the application has not been
made, but the Federal Reserve Bank of Chicago has furnished UB
with a report on the application based upon the examination of
the bank as of June 13, 1960, and other data available.
The Merchants Trust Company has been a member of the
Federal Reserve System since 1934. The financial history of
the bank, its capital structure, earnings prospects, and general
Character of management are regarded as favorable. The subject
bank has provided satisfactory service to the community for a
number of years and it appears that its continued existence is
justified. Accordingly, the Board of Governors recommends
favorable consideration of the application of the bank to convert
into a national banking association.
The Board's Division of Examinations will be glad to
discuss any aspects of this case with representatives of your
Office if you so desire.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
3
8/30/60
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 30, 1960
Board of Directors,
Traverse City State Bank,
Traverse City, Michigan.
Gentlemen:
Pursuant to your request submitted through the
ors
Federal Reserve Bank of Chicago, the Board of Govern
t
ishmen
establ
the
es
of the Federal Reserve System approv
City
se
Traver
by
of a branch in Kingsley, Michigan,
branch
State Bank, Traverse City, Michigan, provided the
this
of
date
the
from
is established within six months
letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No, 4
FEDERAL RESERVE SYSTEM
8/30/60
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONOENCE
TO THE BOARD
August 30, 1960
Board of Directors,
Arkansas Trust Company,
Hot Springs, Arkansas.
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 of
a branch by Arkansas Trust Company) Hot Springs) Arkansas,
at 3015 Central Avenue, in an unincorporated area immediately
outside the southern corporate limits of Hot Springs, Arkansas,
provided the branch is established within six months from the
date of this letter.
In its letter of May 27, 1960, the Board granted
approval, under the provision of Section 24A of the Federal
Reserve Act, of an investment of ;;;771,100) by Arkansas Trust
Company for the purpose of constructing a new banking house.
This approval referred solely to your main office building and,
should the establishment of the proposed facility require an
investment of the funds of the Arkansas Trust Company in banking
premises, such investment would require the approval of the Board.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
W001,4'0
FEDERAL RESERVE SYSTEM
sl.
a4
'
.3
4
WASHINGTON 25, D. C.
Item No. 5
8/30/60
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
0
4 q44
."
'ttt,4 Witt oti'
444.3*°
August 30, 1960
Board of Directors,
Normandy State Bank,
Normandy, Missouri.
Gentlemen:
The Federal Reserve Bank of St. Louis has forwarded
to the Board of Governors your letter, together with the accompavirg resolution dated August 11, 1960, signifying your
intention to withdraw from membership in the Federal Reserve
System and requesting waiver of the six months' notice of
such withdrawal.
In accordance with your request, the Board of
Governors waives the requirement of six months' notice of
Withdrawal, Upon surrender to the Federal Reserve Bank of
St. Louis of the Federal Reserve Bank stock issued to your
institution, such stock will be canceled and appropriate refund
will be made thereon. Under the provisions of Section 10(c) of
the Board's Regulation H, your institution may accomplish
termination of its membership at any time within eight months
from the date the notice of intention to withdraw from membership was given.
It is requested that the certificate of membership
be returned to the Federal Reserve Bank of St. Louis.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 6
8/30/60
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 30, 1960
Board of Directors,
Security Bank,
Myrtle Point, Oregon.
Gentlemen:
The Federal Reserve Bank of San Francisco has forwarded
to the Board of Governors your letter dated August 13, 1960,
together with the accompanying resolution signifying your intention
to withdraw from membership in the Federal Reserve System and
requesting waiver of the six months' notice of such withdrawal.
In accordance with your request, the Board of Governors
Waives the requirement of six months' notice of withdrawal. Upon
surrender to the Federal Reserve Bank of San Francisco of the
Federal Reserve Bank stock issued to your institution, such stock
will be canceled and appropriate refund will be made thereon. Under
the provisions of Section 10(c) of the Board's Regulation H, your
institution may accomplish termination of its membership at any
time within eight months from the date the notice of intention to
withdraw from membership was given.
It is requested that the certificate of membership be
returned to the Federal Reserve Bank of San Francisco.
Attention is invited to the fact that if your bank is
desirous of continuing deposit insurance after withdrawal from
membership in the Federal Reserve System, it will be necessary that
application be made to the Federal Deposit Insurance Corporation.
Very truly yours,
(signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
‘13..(4(
Item No.
8/30/60
BOARD OF GOURNCRS
OF THE
FED7RAL RESE1LV2 SYSTEM
NOTICE OF TENTATIVE D'XISION ON APPLICATIONS FOR PRIOR
APPROTAI OF ACQUISITION BY A BANK HOLDING COMPANY
OF VOTING SHARES OF FOUR BANKS
Notice is hereby 4von that, pursuant to section 3(a)
of tue Bank holding Coml)any Axt of 1956, Brenton Companies, Inc.,
1)0s Noines, Iowa, a bank holding company, filed with the Board,
Prior to July 1, 1960, applications for the Board's prior
approval of the acquisition of the voting control of 25 per cent
ot the voting shares of the following four banks:
Brenton State Bank, Dallas Center, Iol,T;?
Jefferson State Bank, JeZferson, Iowa
The First National Bank of Perry, Perry, Iowa
Po-,?oshiek County National Bank of Grinnell,
Grinnell, Ioua
Information relied upon by the Board in making its tentative
clQeision is summarized in the Board's Tentative Statement of
this date, wilich is attached hereto and made a part hereof, 'and
Tili°11. is available for inspection at the Office of the Board's
Secretary, at all Federal Reserve Banks, and at the Office of
the Federal Register.
7
tyir)
f
_2—
The record in this procceding to date consists of the
applications, the Board's letters to the Comptroller of the
Currency inviting his views and recomidendations on the two
national bank applications, the replies of the Comptroller,
tn? :Joardts letters to the Superintendent of Banking
for the State of Iowa inviting his views and recommendations
on the two State bank ao)lications, the relies of the
LAlperintendent, this ilotice of Tentative Decision, and the
facts set forth in the Board's Tentative Statement.
For the reasons set forth in the Tentative Statement,
the Board proposes to grant the applications.
Notice is further given that any interested person
may, not lat:r than fifteen (15) days after the publication
of this notice in the Federal ftegister, file with the Board
in writing any comments upon or oi2jections to the Board's
Proposed action.
Communications should be addressed to the
Secretary, Board of Governors of the Federal Tescn-ve System,
Washington 25, D. C.
3328
_3_
Following expiration of the said 15-day period, the Boards
Tentative Decision will be made final by order to that effect, unless
kr good cause shown other action is deemed appropriate by the Board.
Dated at Washington, D. C., this 30th day of August 1960.
By order of the Board of Governors.
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
(sEAL)
? 4r)(1
Po(
Item No. 8
8/30/60
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATIONS BY BRENTON COMPANIES, INC.,
FOR PRIOR APPROVAL OF ACQUISITION OF VOTING SHARES OF FOUR BANKS
Ti]NTTIVE STAT'
Brenton Companies, Inc., Des Moines, Iowa ("Applicant"), a
ballkholding company, has applied, pursuant to section 3(a)(2) of the
1)`11Ilt Rolding Company Act of 1956 ("the Act"), for the Board's prior
ePProval of the acquisition of 25 per cent of the voting shares of
the followinp, four banks:
Brenton State Bank, Dallas Center, Iowa
Jefferson State Bank, Jefferson, Iowa
The First National Bank of Perry, Perry, Iowa
Poweshick County National Bank of Grinnell,
Grinnell, Iowa
Views and recommendations of the Comptroller of the Currency
.
t of Banking. - As required by section 3(b) of the Act,
1.--1.2211.n.L212.gay
the
Board forwarded notice of the applications concerning the two
atio
nal banks to the Comptroller of the Currency and notice of the
41151ications concerning the two State banks to the Superintendent of
king for the State of Iowa J
The Comptroller responded by recom-
N40,
'
4J-11g approval of each of the national bank applications.
The
3330
-2Superintendent of Banking responded by recommending favorable action
concerning each of the State bank applications.
Statutory factors. - Section 3(c) of the Act requires the
Board in each instance to take into consideration the following
rive factors: (1) the financial history and condition of the
holding company and bank concerned; (2) their prospects; (3) the
character of their management; (4) the convenience, needs, and
/lelfare of the communities and area concerned; and (5) whether or
n°t the effect of the acquisition would be to expand the size or
extent of the bank holding company system involved beyond limits
c°rIsistent with adequate and sound banking, the public interest, and
the Preservation of competition in the field of banking.
Discussion. - The proposal to acquire the voting control
Of
25 per cent of the voting shares of each of the four banks here
involved was prompted by an interpretation of the Board in December
1959 (Federal Reserve Bulletin, December 1959, p. 1475) to the effect
that
Brenton Companies was in violation of section 4(a)(2) of the
Act in that it was "furnishing services to or performing services
the four banks named, such activity not being permissible since
he holding company owned or controlled less than 25 per cent of the
1 411g
"
shares of each bank receiving the services.
It appears that, while the Applicant itself now owns or
controls less than 25 per cent of the stock of each of the four banks,
a
trialority of the stock of each of the banks has been owned since
_3_
before the passage of the Bank Holding Company Act by the Applicant and
individual stockholders who are members of the Brenton family and who
lac) cNn a majority of the stock of the Applicant. It is contemplated
that the proposed acquisition by Applicant of additional stock of the
bankewill be accomplished by means of a voting trust agreement to
be
executed by the Applicant and one of the major individual stock-
holders.
A Memorandum of Agreement as to each of the banks provides
that the Applicant shall continue to provide management services in
the same manner and upon the same terms as heretofore.
The financial history and condition, prospects, and
Illar%gement of both Applicant and each of the four banks are satisfactory.
Each of the four banks is located in a small farming
ecllIniunity with the business of the bank originating in the rural area
°I' the town of its domicile and the surrounding agricultural area
Ilithin a radius varying from 5 to 20 miles.
There is a nonsubsidiary
t" in the primary service area of each of the four banks, except
that of the Brenton State Bank, Dallas Center, Iowa, In addition,
the
a
Primary service area of each of the four banks is surrounded by
Nriter of banks which, while not having offices in that area, and
eseritly not serving the area to any material extent, are, however,
located geographically that they are potential competitors.
Since the proposed acquisitions would not seem to result in
411Y substantial change in the operation of the banks involved, it does
appear that the proposed acquisitions would have any material
frect on the convenience, needs, and welfare of the communities and
Digitized41'48
for FRASER
concerned.
3332
-14Similarly, it does not appear that the acquisitions proposed
14°11d have any significant effect upon banking competition or that they
l'IoUld expand the size or extent of banking resources under Applicant's
control beyond limits consistent with adequate and sound banking, the
Public interest, and the preservation of competition in the field of
banking,
Conclusion. - Viewing the relevant facts in the light of
the general purposes of the Act and the factors enumerated in sec-
ti011 3(c), it is the judgment of the Board that the proposed acquisiticMs would be consistent with the statutory objectives and the public
interest and that the apPlications Should be approved.
Allgust 30, 1960
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
444
9
8/30/60
ADDRESS OFFICIAL COARESPOHOENCE
TO THE BOAR°
%*.trast
1444,4**
August 30, 1960
Mrs, Valerie R. Frank, Secretary,
Retirement System of the
Federal Reserve Banks,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Dirs. Frank:
The Board of Governors interposes no objection to
increasing the benefits of the Board Plan in order that they
may conform with the benefits under Public Law 86-622 which
amends the Civil Service Retirement Act to provide for the
disposition of contributions in the case of annuitants whose
length of service exceeds the amount necessary to provide
the maximum annuity allowable under such Act, and for other
purposes.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 10
8/30/60
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 30, 1960.
Dear Sir:
In a letter to Chairman Martin dated August 20, 1960,
Representative Patman made the following request:
"It would be appreciated if you would furnish a list
of the officers and employees of each of the Federal Reserve
banks who have received training at one or more of the banking schools conducted by the American Institute of Banking.
"It is not necessary to give the names of the individuals
who have received such training but only their titles and job
classifications."
In response to our request for clarification, a member of Mr.
atmanis staff replied that the inquiry should be considered broadly as
vering not only courses given by local chapters of the American
,stitute of Banking, but also training such as graduate school work of
'Qe Rutgers type.
r
It will be appreciated, therefore, if you will forward to the
Board a listing, by title and position classification, of all current
cers and employees who during any period of their Reserve Bank
,ervice have taken courses conducted by local chapters of the American
e-Lllstitute of Banking or have attended a school of banking sponsored,
jnducted, or approved by banking associations. The present title of
cue employee should be used, regardless of his title at the time the
4!'r8es were taken or the schools were attended. If an employee has
:7-Ken AIB courses and also attended a school of banking, his title
'nould be included only once.
It is noted that Mr. Patman has not requested a separate
reakdown of those who have attended schools of banking, or the name
°f the school attended.
Very truly yours,
,THE PRESIDENTS OF ALL
(t:)
BANKS
Digitized for'r'DERAL
FRASER RESERVE
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 11
8/30/60
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 29, 1960
Mi. N. L. Armistead, Vice President,
Federal Reserve Bank of Richmond,
Richmond 13, Virginia.
Dear Mi. Armistead:
In accordance with the request contained in
your letter of August 24, 1960, the Board approves the
designation of Frank T. Brizzolara as a special assistant
examiner for the Federal Reserve Bank of Richmond for
the purpose of participating in examinations of State
member banks only.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
3(
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 12
8/30/60
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
August 30, 1960
Mr. Paul C. Stetzelberger, Vice President,
Federal Reserve Bank of Cleveland,
Cleveland 1, Ohio.
Dear Mr. Stetzelberger:
In accordance with the request contained in
your letter of August 23, 1960, the Board approves the
appointment of David Eugene Bricker as an assistant
examiner for the Federal Reserve Bank of Cleveland.
Please advise as to the effective date of the appointment.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
@FedFRASER