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)09 Minutes for To: December 35, 1962 Members of the Board Prom: Office of the Secretary Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement with respect to any of the entries in this set of minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If You were not present, your initials will indicate 0n1Y that you have seen the minutes. Chin. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Minutes of the Board of Governors of the Federal Reserve System On Wednesday, December 19, 1962. The Board met in the Board Room at 9:30 a. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Mills Robertson Shepardson King Mitchell Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Molony, Assistant to the Board Fauver, Assistant to the Board Hackley, General Counsel Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Johnson, Director, Division of Personnel Administration Connell, Controller O'Connell, Assistant General Counsel Kiley, Assistant Director, Division of Bank Operations Smith, Assistant Director, Division of Examinations Mr. Leavitt, Assistant Director, Division of Examinations Mr. Stephenson, Special Assistant, Division of Examinations Mrs. Semia, Technical Assistant, Office of the Secretary Mr. Bakke, Senior Attorney, Legal Division Miss Hart, Senior Attorney, Legal Division Mr. Potter, Senior Attorney, Legal Division Mr. Entriken, Attorney, Legal Division Mr. Smith, Senior Economist, Division of Research and Statistics Mr. Veenstra, Technical Assistant, Division of Bank Operations Mr. Egertson, Review Examiner, Division of Examinations Mr. Lyon, Review Examiner, Division of Examinations Mr. Smith, Review Examiner, Division of Examinations http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 Circulated items. -2The following items, copies of which are at tached to these minutes under the respective item numbers indicated, were a roved unanimously: Item No. Lett er to The Farmers Savings and Trust Company, aansfil ed, Ohio, approving the establishment of branch at Park Avenue West and Brookwood Way. 1 erter to the Federal Reserve Bank of Chicago W aiving the assessment of a penalty incurred by lientral National Bank and Trust Company, Des -°ines, Iowa, because of a deficiency in its (equired reserves. 2 Lett_ er to First State Bank of Marlin, Marlin, Texas, 7 14 ving the requirement of six months' notice of ,lthdrawal from membership in the Federal Reserve 'Ystem Let f_ -er to the Federal Deposit Insurance Corporation ae garding the application of First State Bank of Marlin, Texas, for continuation of deposit p4lirance after withdrawal from membership in the eral Reserve System. Letter to Robert Lee State Bank, Robert Lee, Texas, wai17, Igitiv1;ng the requirement of six months' notice of urawal from membership in the Federal Reserve SYstem. Lette Rou r to Riverside National Bank of Houston, recist°n) Texas, granting permission to maintain uced reserves. Lette cal. r to United California Bank, Los Angeles, Qstlfornia, approving an extension of time to conducted lion blish a branch at 5th Street and Wilshire v,rd› Santa Monica, operations now --Tu-L Third Street to be discontinued simultaneously lth th _ "e establishment of the new branch. t-i'e http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 4 5 6 7 12/19/62 -3- Assessment on Federal Reserve Banks for first half of 1963. Copies of a memorandum from Mr. Bass, Assistant Controller, dated December 18, 1962, had been distributed recommending that an assessment Of .00288 of the total paid-in capital and surplus of the Federal Reserve Banks as of December 31, 1962, be levied upon the Banks to defray the expenses of the Board for the first half of 1963. Based on estimated capital and surplus of $1,406,289,000, the rate indicated 14ould produce $4,050,112. There being no objection, the proposed assessment was approved una nimously. Wisconsin bank holding company applications. As a preface to the Board's consideration of several holding company applications on the dgehda for this meeting involving institutions in Wisconsin, Solomon outlined the general features of the banking structure of that State, without specific reference to the particular cases to be t considered. There were six bank holding companies operating in the State, with a seventh seeking formation, but among these the three Predominant organizations, First Wisconsin Bankshares Corporation, The Ilatine built Corporation, and Marshall & Ilsley Bank Stock Corporation, were around three key banks in Milwaukee. After citing the percentage °f total deposits within the State controlled by these three bank holdin -g companies, he drew comparisons in terms of the control of dsPo --s in the counties in which their subsidiary banks were located, Of - their relative spread of subsidiaries over the State, and of their http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -4- recent rate of growth. He then reviewed the facts that had formed the background for the Board's denial earlier this year of the applications Of Morgan New York State Corporation and First Bancorporation of 11(3ride, Inc., and its approval of the application of United Virginia 111:shares, Inc., and compared those situations with the background of ' 4 the a pplications presently to be considered by the Board. The applications on the agenda for this meeting, involving two Of the three bank holding companies that had been the primary subject Of Mr• Solomon's remarks, were as follows: By First Wisconsin Bankshares Corporation, Milwaukee, to acquire 80 per cent or more of the voting shares of Merchants & Savings Bank, Janesville, Wisconsin; By First Wisconsin Bankshares Corporation to acquire 80 per cent or more of shares of American Bank and Trust Company, Racine, Wisconsin; By The Marine Corporation, Milwaukee, to acquire 80 per cent or more of shares of The Beloit State Bank, Beloit, Wisconsin. In addition to the memoranda hereinafter referred to in connection "I each of these three applications, there had been distributed a blera°tanduin dated November 15, 1962, from the Banking Markets Unit of the j, lvision of Research and Statistics summarizing the chief economic lderations surrounding the three proposed holding company acquisitions 48 a grOtip Governor Mitchell asked if Mr. Solomon's remarks were intended to c °nveY a suggestion that the three applications should be denied bee 'use the holding companies were already large enough, and if 'olomon's attitude toward an application would be different if the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -5- applicant were Marshall & Ilsley or Marine Corporation rather than First Wisconsin Bankshares, which was by far the largest of the three holding companies. Mr. Solomon replied that his remarks were not meant to suggest denial solely on the grounds of size; the nature of the proposed acquisition would be of significance. If applications contemplated acquisitions of new banks, a different situation would be presented. 11°wever, the present applications proposed acquisitions of existing banks °f relatively large size in their respective communities, and therefore 4117°Ived complex considerations. His attitude toward the Janesville application, for example, might have been different to some extent if the applicant were not the largest of the Wisconsin bank holding companies, but that fact did not mean that other considerations were excluded in appraising the situation. Governor Mitchell, after observing that Mr. Solomon's remarks had dwelt on the relative size of the holding company systems and had used the State as the community to be studied, asked if it was known what Proportion of the three large holding company systems' deposits and loans came that from outside the State. Mr. Solomon responded that it was probable the key banks of each of the three holding companies had a substantial amount of out-of-State business. Governor Mitchell commented that he was somewhat troubled because, 48 he read the material on the applications, there was implicit in it the idea that there was already enough banking concentration in Wisconsin. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -6- If that was to be used as a criterion, in his view one had to be concerned with the amount of out-of-State deposit and loan activity engaged in by the holding company groups. He would not object to a line being drawn to indicate a point beyond which further holding company expansion should not take place, but it was not clear to him Just where a recognizable line could be drawn. Mr. Solomon replied that, although it would be difficult to draw a precise line, a general line might be emerging from the decisions of the Board. He noted that he had compared the applications f Morgan New York State Corporation and First Bancorporation of Elorida on one side with the application of United Virginia Bankshares °n the other side; it might be assumed that a line would fall somewhere between the types of situations involved in those cases. Governor Mitchell remarked that he did not believe sufficient anal Ytical work to draw a line had yet been done. He then posed a series of questions, to which Mr. Solomon responded, regarding the 1111Plications of the latter's reference to a proposal to acquire a 4c4ai ant bank in a significant community as a possible criterion for dis approval. The tenor of Mr. Solomon's remarks was that holding e°mPanies, like large banks seeking to merge, must recognize the Ptcsblems involved if they proposed to acquire leading banks in significant c ommunities. Where such applications were denied by the Board, the 11°ard's action would in itself communicate a message. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis On the other 12/19/62 -7- hand, it would involve an oversimplification to say to a holding company that it could not, under any circumstances, acquire additional existing banks. Governor Shepardson observed that one feature that seemed to be common to the three applications was the question of ability to take care of the needs of large business concerns in the communities. He asked if he was correct in his impression that the Division of 4aminations discounted the validity of that argument entirely. Mr. Snlnmon responded that while the Division did not discount the argument etitirelY, it did discount it rather heavily because there was no indication that the businesses in the respective communities were failing to obtain credit accomodation or were experiencing substantial ino0 nvenience. If there was any complaint, it was the complaint of the lccal banks that business was being bid away from them; the customers were not suffering. Governor Shepardson stated that the point he had in mind was not whether the customers were being served, but whether, if the local banks were too small to take care of the business of the larger local industries, they were justified in expecting to increase in size sufficiently to handle the business of whatever industrial or business concerns might be delaiciled in the community. Mr. O'Connell commented that almost that exact point had been raised during the oral presentation regarding the Janesville application. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -8- Re was not sure it had been established that facilities existing in Janesville could not handle all local business. If a conclusion could be drawn, it might be that Janesville banks could handle all business arising from their community either alone or on a correspondent basis. Governor Robertson added that it might also be concluded that a local bank would not necessarily become larger because it was owned bY' a holding company. Governor Balderston remarked that it was a debatable question hether a community like Wisconsin should be able to take care of all the 1, uanking business within its confines or whether the larger accounts Should flow to a financial center such as New York. A banker in St. Paul, kr14. -843ta, had told him of strenuous efforts that had been made to keep that citY's banking business at home through agreements to participate in 411Y loan that was too large for one of the local banks. The arrange- reportedly had not worked because the local banks preferred to see business go outside the area rather than share it. However, once a holding company entered the area, it was said, the business in fact 814Yed at home. It had been suggested to him that the adverse decisions °f this Board were in reality building up New York as the financial °aPital of the country. Governor Robertson commented that it was his impression that tics would show that the relative position of New York as a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -9- financial center had been going down rather than up in the past ten Years. Governor Mills stated that he believed it important to realize that Milwaukee and its satellite communities were really tributary to Chicago, the financial center of the area. There was no significant financial movement northward; rather, Chicago was the magnet. Many Wisconsin industries had outgrown their communities and were doing a 'national business, and it was to be expected that their banking business would be handled by the largest banks. It seemed clear that the banks proposed to be acquired in the applications before the Board were taking care of the financial needs of the general public in the respective communities. about However, there had been considerable discussion the financing of a relatively few larger concerns that did not have access to sufficient credit locally because of the relatively size of the local banks. This raised the question whether large cedit facilities were the acme of importance of banking or whether services on a local basis to the home community did not outrank the need 8 of a few large firms that could obtain credit accommodation elsewhere . Governor Mitchell observed that a number of large Wisconsin firm 8 serving the entire United States with their products were located smaller communities where local banking facilities were insufficient to 8 erve their needs. The fact that a holding company entered such a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -10- comnumity did not mean that a local bank would be handling the financing of the large industries; it simply meant that a different set of outside interests would be used. He agreed with Governor Mills that the first °b ligation of a local bank was to serve local businesses rather than large firms with widespread markets. Application of First Wisconsin Bankshares (Janesville). In connection with the application of First Wisconsin Bankshares C°rPoration to acquire 80 per cent or more of the voting shares of Merchants & Savings Bank, Janesville, Wisconsin, there had been distributed memoranda dated July 17 and September 7, 1962, from the biviaion of Examinations and a memorandum dated September 26, 1962, ftft the Legal Division. The Division of Examinations memoranda ana lyzed the application in detail, especially from the point of view Of the factors cited for consideration by the Bank Holding Company Act The Federal Reserve Bank of Chicago had recommended approval of the aPPlication, the Wisconsin Commissioner of Banks had commented dverselY, and the Division of Examinations, after balancing all c°nsiderations, recommended that the application be denied. The Legal slon's memorandum took the position that a decision for either dero 'al or approval would probably be sustained upon judicial review 48 being a reasonable exercise of the Board's discretion. An oral Pl'ea entation with respect to the application was made before the Boar application on d °n August 7, 1962. The Board considered the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -11- September 28, 1962, but, after extended discussion, deferred a decision on it. At the Board's request, Mr. Smith (Review Examiner) summarized the circumstances surrounding the application, basing his comments Primarily on the detailed analysis contained in the memoranda of the 4vision of Examinations. Chairman Martin then called for the views of the members of the Board, beginning with Governor Mills, who stated that he concurred ill the recommendation of the Division of Examinations, for the reasons 8110m4rized by Mr. Solomon in terms of the broader considerations involved and by Mr. Smith in terms of the individual situation. Governor Robertson stated that he also concurred. Governor Shepardson expressed concern about all three of the aPPlications because of the point he had raised earlier in the disc488i°n. While bank customers in the three communities apparently were being ind served adequately, to him there was a real question whether ustrial concerns that grew beyond the capacity of their local banks Should be forced to go outside the State to obtain financing. 110t doubt He did that they could get the necessary service elsewhere, but he /las troubled by the basic question whether the financing needs of large industries should continue to flow to New York and Chicago, or whether it was more desirable to build up other financial centers around the lintrY so that the credit needs of most industries could be satisfied http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -12- closer to home. He did not believe that the Board had explored this question sufficiently. As to the case under consideration, in his view there were adverse factors on a strictly local basis that could be cited to justify denial. However, he was not prepared to accept the general argument that inclusion in a holding company system did not increase the ability of a local bank to extend credit, particularly if he holding company system had larger resources. There was still a question in his mind as to the best way to meet the financing needs of the large industries in a State as they developed. But in the absence enough facts to justify taking a firm position on the basis of the question he had raised, he would concur in the Division's recommendation this particular case. Governor King commented, with respect to the question raised by Coyernor Shepardson, that a business with which he was familiar had deliberately sought financing outside its own community because tee°urse to local financing would open the company's private affairs to imeal knowledge. As to the Janesville application, he concurred with he W-vision's recommendation for denial. Governor Mitchell stated that he would want to make it clear in the , poard's statement that denial of the application would not necessarily Preclude First Wisconsin Bankshares or any other Wisconsin holding company from expanding if it avoided the dominant bank in a community. He was 40t ure that there was any point to State-wide banking systems in a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -13- State like Wisconsin, but there was much to be said, in his opinion, for developing the holding companies in the general Milwaukee area, and he would be sympathetic to proposals that would integrate the banking resources in that area to some degree. Subject to the reservation that he would not want the language of the statement supporting the decision t0 indicate that Wisconsin holding companies were necessarily precluded from further expansion in any circumstances, he would support the recommendation for denial in this case. Governor Balderston said that he concurred in the recommendation Of the Division in this case, although he shared the concern expressed bY Governor Mitchell. Chairman Martin also expressed concurrence with the Division recommendation. The application of First Wisconsin Bankshares Corporation to acquire 80 per cent or more of the voting shares of Merchants & Savings Eank, Janesville, Wisconsin, was thereupon denied by unanimous vote. It w as understood that the Legal Division would prepare an order and tatement for the Board's consideration reflecting this decision. Aulication of First Wisconsin Bankshares (Racine). In e°11nection with the application of First Wisconsin Bankshares Corporation, hijWaukee, to acquire 80 per cent or more of the outstanding shares of ra,m0 n stock of American Bank and Trust Company, Racine, Wisconsin, there had been distributed memoranda dated November 30, 1962, from the Division http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -14- Of Examinations and December 10, 1962, from the Legal Division. The 1)ivision of Examinations' memorandum set forth a comprehensive study of the proposed acquisition and appraised the circumstances of the case in the light of the factors required to be considered under the Bank Holding Company Act. The Wisconsin Commissioner of Banks had not °PPosed the acquisition, and the Federal Reserve Bank of Chicago recommended approval. However, the Division of Examinations recommended denial) stating that it felt that unfavorable elements with respect to the fifth factor required to be considered by the Bank Holding Company Act, and particularly the concentration of deposits in the three large Wisconsin-based holding companies, with First Wisconsin Bankshares holding the major portion thereof, was such that a further increase in the position of that holding company resulting from the acquisition of 4 leading bank in a leading city of the State, coupled with the P°tential of American Bank to increase and entrench its position in t'elation to smaller banks in the area, outweighed favorable considerations under the fourth factor. The Legal Division's memorandum stated that, while a decision () either approval or denial could be justified from a legal point of it was perhaps fair to say that it would be more difficult to Illake a leg-1 a argument supporting approval, in view of growing holding e°411/snY concentration, than in the recent Virginia cases or in the earlier stages of holding company development in Wisconsin. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -15- At the Board's suggestion, Mr. Egertson outlined the principal Points developed in the Division of Examinations' memorandum dated November 30, 1962, after which he responded to several questions posed by Governor Mitchell relating to correspondent relationships of American Bank and Trust Company and the service of one of the bank's di rectors as a director also of the largest bank in Racine. Mr. 4etre0n also responded to questions regarding American Bank's loan P°rtfolio and its management situation. Governor Balderston observed that the Wisconsin Commissioner Of offered no objection to the Racine application, although he had r— ecommended denial of the Janesville application, and asked what rilight have been the reason for differentiating. Response was made that it l'Iss understood that the Commissioner did not believe that approval Of the Racine application would have any material effect on the e°1'petitive situation in the City of Racine. Therefore, he was not (14)"ing it although he did oppose State-wide expansion by large bank 11°1(1'n 1, companies. In further discussion, Governor Mills commented that a question Of 6tography was involved. Racine was so close to Milwaukee as to be dlmo at e suburb, and approval of the application would extend the circle Of influence of First Wisconsin Bankshares and its central Milwaukee flubsidiarY to an adjacent community in a manner inconsistent with the Position the Board had taken in resisting applications by First http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -16- Wisconsin Bankshares to acquire existing banks in the Milwaukee area. Governor Mitchell noted that it looked as if First Wisconsin Bankshares would gain an extremely strong position in Racine if it were to acquire American Bank. The correspondent relation for both American Bank and the largest bank in Racine ran to First Wisconsin National, Milwaukee. Chairman Martin then called upon the members of the Board for NIressions of their positions, in response to which all indicated c"currence with the recommendation of the Division of Examinations. The application of First Wisconsin Bankshares Corporation to acquire 80 per cent or more of the outstanding shares of American Dank and Trust Company, Racine, Wisconsin, was thereupon denied by unanimous vote. It was understood that the Legal Division would Pare an order and statement for the Board's consideration reflecting that decision. Aulication of Marine Corporation (Beloit). In connection with the application of The Marine Corporation, Milwaukee, to acquire 80 per cent or more of the outstanding shares of common stock of The Beloit State Bank, Beloit, Wisconsin, there had been distributed a memorandum '°m the Division of Examinations dated December 7, 1962, in which the fl background of the application was explored. The conclusions of the Division with respect to the factors required to be considered under http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis d 12/19/62 -17- the Bank Holding Company Act were that the financial history and condition and the prospects of both the applicant and its proposed subsidiary were satisfactory. The Beloit bank's management was e°nsidered satisfactory, and although it might meet future management requirements more readily through association with the holding company, there was no reason to believe the bank could not continue to solve its management problems itself. The Division considered that the fourth statutory factor, convenience, needs, and welfare of the area colleerned, lent some, but not strong support for approval. As to the fifth factor, relating to banking concentration, the Division concluded that Pub]. 1) the unfavorable elements with respect to competition, the interest, and concentration, when considering all holding Corn Psuies in Wisconsin; (2) the fact that Marine Corporation would be acquiring by far the largest bank in the City of Beloit and in Rock coulitY, further increasing the sizable holding company concentration the State; (3) the fact that the State Commissioner of Banks was of the . Pinion that there would be no marked advantage to management or rvice of the bank through affiliation with the holding company and rec.. ummended disapproval; and (4) the fact that the Federal Reserve -- of Chicago felt that approval would further increase the Beloit bard. "4 dominant position in the local banking field and increase its colliPetitive advantage over other banks in the city and county without any °f uzfsetting beneficial effect on competition in general; all tended http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -18- toward disapproval and outweighed favorable elements found under the °ther four factors. the Therefore, the Division recommended denial of application. The State Commissioner of Banks had written to the Board on julY 13, 1962, recommending denial, and the Board was required by the Bank Holding Company Act to hold a public hearing. A hearing was held 0t1 August 14-15, 1962, the first day's testimony being taken in Chicago and the second day's in Beloit. the The Hearing Examiner recommended that application be approved. There had also been distributed a memorandum dated December 14, 1962, in which the Legal Division stated that it had reviewed the bivision of Examinations' December 7 memorandum and was of the opinion that a decision by the Board either to approve or to deny the pplication could be sustained upon judicial review, although a denial w°1ald , on balance, probably be more easily supported. The memorandum also d iscussed legal points relating to the material on which the Board, s decision must be based in view of the mandatory public hearing. slab tance, in reaching its decision, the Board must confine itself to he evidence developed at the hearing. In response to Chairman Martin's request for staff comments, /J-,y0,11 summarized the principal circumstances bearing upon the ' - 10n, as set forth in detail in the Division of Examinations' Mew, 'ftandum of December 7, 1962. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -19- Mr. Solomon observed that the Division of Examinations had exPerienced some difficulty in reconciling the views of the Federal Reserve Bank of Chicago on the two applications that had just been considered and the one now before the Board. It was possible that °Ile consideration influencing the Bank's adverse viewpoint in the Beloit case was the fact that, in addition to being the largest bank in Beloit, The Beloit State Bank had long been considered one of the fineSt and most aggressive banks in the Chicago District. The Chicago Reserve Bank had considered it almost an ideal bank, and therefore the Reserve Bank had perhaps given little weight to the arguments offered by Proponents of the application that the bank's management and services were inadequate. Governor Balderston then posed a series of questions, to which the staff responded, relating to the relative growth of holding company bank has subsidiaries and competing independent banks in Wisconsin. The 1.s for his questions was material tending to indicate that sub- 'urY banks of First Wisconsin Bankshares had shown less deposit gl.°I4th percentagewise, and in some cases dollarwise, than competing bank,,' in the same communities. In the ensuing discussion comment was 1114de that , whereas First Wisconsin Bankshares had not expanded rapidly in /- /14"-;ent years, in fact had divested itself of a number of banks at time, and its subsidiaries may have exhibited less growth than their rivals, that situation might not continue because First Wisconsin http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tN 12/19/62 -20- B ankshares was now under the pressure of aggressive expansion of both Marine Corporation and Marshall & Ilsley. the Further comments related to question of a valid measure of growth, along with community and PsYc hological factors that might influence the shifting of banking business from one type of institution to another. The members of the Board then stated their views in regard to the application of Marine Corporation, beginning with Governor Mills, Who c oncurred in the recommendation for denial. A factor influencing his °Pinion was the holding company per se, including its growth and arlibitions; it seemed to him that this was a proper point to draw a line. In aLLY such case, however, he presumed that the Board appraised the Current situation; that five or ten years later, with the evolution of banki . ng in the State of Wisconsin, it might take a completely different Posit_A ' - °n in regard to a comparable application. Governors Robertson and Shepardson also indicated concurrence With the Division of Examinations' recommendation. Governor King stated that his thinking turned upon the type of holdiug company involved. Marine Corporation was not dominated by a real -1-1Y large bank. First Wisconsin Bankshares' largest bank had $682 Milli°n in deposits, whereas Marine's largest bank had only $178 million. 10tal d eposits of Marine's banks were about $320 million, which meant that almost half of the company's total deposit resources were outside c) its principal bank. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Although the Milwaukee subsidiaries of the 12/19/62 -21- two holding companies were distinctly unequal, their subsidiaries elsewhere were of approximately the same size. Altogether, he liked Marine's type of system better than that of the other two large Wisconsin bank holding companies. As to the recommendations that the 47ision of Examinations had made, they were consistent--a consideration that he considered important. He could also see a thread of consistency in the Federal Reserve Bank's recommendations on the three applications and in those of the State Commissioner of Banks. However, the Hearing Examiner had no problem of trying to be consistent with other tee°rnmendations because he was dealing with only one application, as to which he had recommended approval. With complete respect for all Of the recommendations that had been made, Governor King favored a pproval of the Beloit application. if In his view, the judgment process, tied too strongly to a desire to be consistent, could result in injustice. Governors Mitchell and Balderston and Chairman Martin indicated that they concurred with the Division of Examinations' recommendation for denial. Thereupon, the application of The Marine Corporation, Milwaukee, Wiscn -nain, to acquire 80 per cent or more of the shares of The Beloit Stat e Bank, Beloit, Wisconsin, was denied, Governor King dissenting. It wft_ understood that the Legal Division would prepare for the Board's Cori aideration drafts of an order and statement reflecting this decision. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -22- Mr. Guth, Review Examiner, Division of Examinations, entered the room at this point and Mr. Smith (Research and Statistics) withdrew. A2p1ication of Valley Bancorporation. There had been distr ibuted a memorandum dated November 26, 1962, from the Division of examinations regarding the application of Valley Bancorporation, APPleton, Wisconsin, to become a bank holding company by acquiring 8° Per cent or more of the outstanding voting shares of Appleton State Bank, Appleton; Bank of Black Creek, Black Creek; and Northern State Bank Appleton (a proposed new bank), all in Wisconsin. The memorandum Presented a detailed analysis of the proposed holding company system and the place it would occupy in Wisconsin's banking structure. After its study of that situation and of the bearing upon the proposal of the fact. --ors cited for consideration by the Bank Holding Company Act, the Iftvision of Examinations recommended approval of the application. The Federal Reserve Bank of Chicago likewise had recommended approval, and the w isconsin Commissioner of Banks had indicated that he had no °bjection to the proposal. There had also been distributed a memorandum dated December 5, 1969 . in which the Legal Division stated that it had no comment on the aPPlication except that a decision to deny would appear to be substantially more difficult to support upon judicial review than a dee& ion to approve, particularly in the light of previous decisions Of the Board. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -23- At the Board's request, Mr. Stephenson discussed the salient Points involved in the application. The Chairman then turned to the members of the Board for their vie s, and Governor Mills stated that he concurred in the favorable recftmendation of the Division of Examinations. He felt particularly that in the area involved, which was rather heavily populated and had a number of communities, there were ample alternative sources of ced it. Also, affiliation with the proposed holding company °qanization might place the subsidiary banks in a position of being better able to compete with stronger banks in the area. Governor Robertson stated that he concurred in the recommendation (14 the ground that there would be no substantial difference between hay ing the subsidiary banks in a holding company organization and having the operate on a basis whereby they were theoretically independent, but /lere actually closely related. The other members of the Board also indicated concurrence in the billisthn's favorable recommendation. Thereupon, the application of Valley Bancorporation to become a ba II., holding company by acquiring stock of the three banks previously l'eferred to was approved unanimously. It was understood that the Legal TAvision would prepare for the Board's consideration drafts of an °1*der and statement reflecting this decision. All of the members of the staff except Messrs. Sherman, Kenyon, nY, Fauver, Farrell, Johnson, Connell, and Kiley then withdrew http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -24- from the meeting and Mr. Sprecher, Assistant Director, Division of Personnel Administration, entered the room. Reserve Bank budgets for first half of 1963 (Items 8-10). There had been distributed to the Board a memorandum from the Division °f Bank Operations dated December 11, 1962, summarizing the proposed budgets of the Federal Reserve Banks for the first half of 1963. Under the Procedure approved by the Board earlier this year, the budgets had been submitted by the Reserve Banks for the first time on a half-year basis. In addition, they had been submitted on the basis of total e Penses for functions or departments rather than objects of e)cPenditure, with explanations of substantial changes expected in the bud get period as compared with actual experience in the same half of the Preceding year. The document presented by the Division of Bank Op erations included memoranda summarizing the Division's review and anal Ysis of the budget of each Reserve Bank. The Reserve Banks had budgeted total expenses of $104.2 million fc't the first six months of 1963, which was $7.4 million (7.6 per cent) 111°re than actual expenses for the first six months of 1962. However, the increase was only $6.1 million (6.2 per cent) over the current elPense rate (expenses for the third quarter of 1962 multiplied by ' 470. 1 At the two Reserve Banks where the rates of increase for the half of 1963 were highest (Richmond and Philadelphia), the main reas ( In was the acquisition of electronic equipment. The Division of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -25- Bank Operations stated that no unusual items or unreasonable increases were noted in its review and analysis of the budget material. In discussing the budgets, Mr. Farrell noted among other things that the President Irons of the Federal Reserve Bank of Dallas had included following comment in his budget letter of November 9, 1962: "In reviewing this budget, our directors raised a question concerning the necessity for and desirability of submitting semiannual budgets. The view was expressed that duplication of effort was involved by reason of the Preparation, review and submission of two budgets a year Without any compensating benefits. Moreover, the directors were of the opinion that a budget covering only six months would be likely to present a distorted rather than a logical segregation of the Bank's operating expenses." The Division of Bank Operations suggested that the Board's letter to ?resident Irons relating to the Dallas Bank's budget include comments °4 the considerations leading to adoption of semiannual budgets for the Reserve Banks. Mr. Farrell also noted that President Deming of the Federal Reae rye Bank of Minneapolis had expressed the view that it would be Preferable, in the budget presentations of the Reserve Banks, if e°111Parisons were made against a current rate of expenses rather than against the like six months of the year preceding the budget period. In further discussion of the proposed budgets, Governor Mills point d e- out that the Reserve Banks had installed electronic check Prote . asing equipment in the hope that this would lead to a reduction 41 the number of employees in the check collection function. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis However, 12/19/62 • -26- this hope apparently was not being borne out, in view of the rising number of employees allocated to that function. Hr. Farrell replied that the hope still existed that there Ilould ultimately be an easing of manpower requirements. However, until the Banks began to receive a more sizable number of encoded checks, it 14a8 necessary to continue the use of the old-style proof machines. As 1°hg as the Banks had to generate the amount of encoding that was necessary at present, they were unable to reduce manpower requirements. °n the other hand, some encouraging signs were seen in current developments, for example, at the Philadelphia Bank, where the pilot installation of electronic equipment had been relatively trouble free and the amount of encoding done by the commercial banks in the area 14 greater than in most other areas. " Governor Mills then inquired concerning the increase in Payments by the New York Reserve Bank toward the expenses of the Bergen County and Nassau County check clearing bureaus, to which 14r. Farrell replied that control was exercised on the basis of cost Per t housand items. As long as the cost to the Reserve Bank on the basis of each thousand items handled remained below the cost of handl ing. an equivalent number of items at the Reserve Bank, the subsidy seemed worth while. 4 Each year the New York Bank furnished the Board c°mPlete report, together with its recommendation as to whether the 'Irrangements with the bureaus should be continued. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -27- Governor Mills also inquired concerning whether further attention was being given to Reserve Bank expenditures in the area of membership dues and contributions. In reply, Mr. Fauver brought out that the new budget procedure did not provide information on expenditures of that type; it would be necessary, if the Board wanted to check, to make a special survey from time to time. There was some staff feeling that after some five years °f looking carefully at such expenditures and sending reports to the Reserve Banks, a fair degree of uniformity had been achieved, and that the matter had been pursued about as far as seemed reasonable. Mt. Farrell supported the view that as a result of the Board's intensive examination over a period of several years the Reserve Bank " Penditures had become quite well stabilized, at a nonobjectionable level. Governor Mitchell suggested that favorable consideration be gill-en to the revision in budget procedure advocated by President Deming. He felt that it had been a mistake to adopt the practice of basin g budget comparisons on the similar six-month period of the Pl'eceding Year. In looking at employee figures, for example, under the hesent procedure it had to be borne in mind that some portion of the iner ease had already taken place prior to the budget period. Governor Balderston expressed agreement, following which the Chat, "uan suggested that the staff consider effecting a revision in http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -28- budget procedure along the lines mentioned, and there was no indication cl disagreement with this suggestion. Mr. Farrell observed, in connection with the proposed budget of the New York Bank, that it included provision for one-half of the eattmated cost of expanding the Bank's gold vault facilities, which Project was still under consideration by the Board. The New York Bank had indicated, however, that it would be agreeable to capitalizing the expenditure, thus eliminating a question that had existed from the acc ounting standpoint. It was understood, in the light of Mr. Farrell's comments, that aPPr°Priate comment concerning the proposed gold vault expenditure would be included in the Board's letter to the New York Bank. Governor Balderston then made certain inquiries regarding increases in personnel and increases in positions in Grade 12 or over at th_ t Reserve Banks, with particular reference to the auditing and eXaminatio n functions. He recognized that the strengthening of staff 444 uPgrading in the auditing function reflected the concern that had been expressed by the Board regarding the appropriate staffing of this fuuotion. In a discussion of the points raised by Governor Balderston, Chai rrnau Martin and Governor Robertson expressed the understanding, fro41 which no dissent was indicated, that the Board's desire in regard to st r engthening of staff resources in the auditing function applied http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -29- likewise to the examining function. Mr. Farrell commented that the budgets pertaining to the examination departments had been reviewed by the Division of Examinations, which had indicated, at least by 114aication, that the budgets appeared to be in order. Thereupon, the Reserve Bank budgets for the first six months cl 1963 were unanimously accepted, with the understanding that letters would be sent to the Federal Reserve Banks reflecting this action and that the letters to the New York and Dallas Banks would contain comments 41"g the lines indicated at this meeting. A copy of the letter sent to the Federal Reserve Bank of Boston is attached as Item No. 8; and c°Pies of the letters sent to the New York and Dallas Reserve Banks are attached as Items 9 and 10, respectively. The letters sent to the ther Banks were similar to the letter sent to the Boston Bank. All of the members of the staff except Messrs. Sherman, Kenyon, j°hrts°n, and Sprecher then withdrew from the meeting. Salaries of Presidents and First Vice Presidents. Following ' - 4ss1on of the salary rates proposed by the Boards of Directors of the respective Federal Reserve Banks for the Presidents and First 'Vice Presidents of those Banks for the year 1963, as summarized in a ndum from the Division of Personnel Administration dated Dece muer 10, 1962, the payment of salaries as follows was approved 44a4imously, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12/19/62 -30First Vice Presidents Presidents Bank Name Bosto n New York Ph iladelphia C leveland Richmond Atlanta Chicago St. Louis Mi nneapolis Kansas City Dallas San Francisco Salary $35,000 George H. Ellis 70,000 Alfred Hayes 40,000 Karl R. Bopp 40,000 W. D. Fulton 40,000 Edward A. Wayne 40,000 Malcolm Bryan 50,000 C. J. Scanlon 35,000 Harry A. Shuford Frederick L. Deming 40,000 37,500 George H. Clay 40,000 Watrous H. Irons 40,000 Eliot J. Swan Name Salary $27,500 E. O. Latham 40,000 William F. Treiber Hilkert 27,500 N. Robert Thompson 25,000 S. Donald Heflin 27,500 N. Aubrey Harold T. Patterson 27,500 27,500 Hugh J. Helmer 27,500 Darryl R. Francis 25,000 A. W. Mills 30,000 Henry 0. Koppang 25,000 Philip E. Coldwell 27,500 H. E. Hemmings Secretary's Note: The action with respect to the proposed salary for Mr. Koppang was taken with the understanding that Governor Mitchell would talk by telephone with President Clay regarding the present and prospective management setup at the Kansas City Bank, and Mr. Koppang's role therein. The Secretary was advised later by Governor Mitchell that he had talked with President Clay and that the points raised had been resolved satisfactorily. Governor Mitchell reported to the Board on his conversation with President Clay at the Board meeting on December 20, 1962. The meeting then adjourned. Secretary's Note: On December 18, 1962, Governor Shepardson approved on behalf of the Board the following items: re Memorandum from the Office of the Controller dated December 18, 1962, ove°Mmending, in addition to the previous approval of certain other ace crexPenditures, approval of expected overexpenditures in 1962 budget nts of certain divisions and offices of the Board. foil Memoranda from appropriate individuals concerned recommending the wing actions relating to the Board's staff: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 4,1 12/19/62 -31- 4P-E2.IatrataA David S. Staiger as Economist, Division of Research and Statistics, With basic annual salary at the rate of $12,845, effective the date of entrance upon duty. . Warren S. Cornett as Chauffeur, Division of Administrative Services, :ith basic annual salary at the rate of $4,295, effective the date of ntrance upon duty. -S&-.`arZ increases, effective December 23 1962 Joseph Dougherty, Assistant Federal Reserve Examiner, Division of aminations, from $5,375 to $5,545 per annum. Ex fr Edwin G. White, Technical Assistant, Division of Bank Operations, c'm $8,045 to $8,310 per annum. Trans.e Patricia L. Gannon, from the z Administrative Services to the EX with an increase to $5aminations, 8 ) 85, effective December 23, position of Secretary in the Division position of Secretary in the Division in basic annual salary from $5,525 1962. Adliance of sick leave be i Norma L. Neitzey, Secretary, Legal Division, for 26 business days nning December 18, 1962 (5 hours) and extending through January 28, 3 (3 hours). http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS Item No. 1 OF THE 12/19/62 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD aEsti,4.4, 0 December 19, 1962 11.101ard of Directors, The Farmers Savings and Trust Company, Mansfield, Ohio. G entlemen: The Board of Governors of the Federal Reserve /stem approves the establishment of a branch by The Farmers Savings and Trust Company at the southwest corner Of Park Avenue West and Brookwood Way, Mansfield, Ohio, Provided the branch is established within one year from the date of this letter. Very truly yours, (signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. Irl'he letter to the Reserve Bank stated that the Board also 4.4d approved a six-month extension of the period allowed o establish the branch; and that if an extension should be e l 'ggested, the procedure prescribed in the Board's letter W November 9, 1962 (S-1846), should be followed.) http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS O Item No. 2 12/19/62 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. • ADDRESS orrictAL CORRESPONDENCE TO THE HOARD st0:. December 19, 1962 Laurence H. Jones, Vice President and Cashier, Pederal chica,„0 Reserve Bank of Chicago, 90, Illinois. Ipesr Mr. Jones: This refers to your letter of November 29, 1962, regarding the TrusPenalty of $1,099.86 incurred by the Central National Bank and rat, t Company, Des Moines, Iowa, on a $1.1 million deficiency in its luired reserves for the computation period ended November 21, 1962. It was noted that through an error at your Bank, the subject bank %ill was informed that its reserve balance on November 19 was $19.6 vell i°n whereas the actual balance was only $12.0 million; the bank is 'known for its rapid and marked fluctuations in demand deposits, fre execeluent borrowings, occasional deficiencies but also occasional large has siies in average reserves; and its record for reserve deficiencies Snown improvement. In the circumstances the Board authorizes your Bank to waive the Nov assessment of the penalty of $1,099.86 for the period ended ember 21, 1962. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 12/19/62 3 WASHINGTON 25. D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD December 19, 1962 Board of Directors, First State Bank of Marlin, Marlin, Texas. Gentlemen: The Federal Reserve Bank of Dallas has forwarded to the Board , of Governors your letter dated November 15, 1962, together 111611 4 the accompanying resolution signifying your intention to draw from membership in the Federal Reserve System and request"g waiver of the six months' notice of such withdrawal. In accordance with your request, the Board of Governors waiv , es the requirement of six months' notice of withdrawal. Upon render to the Federal Reserve Bank of Dallas of the Federal caserve Bank stock issued to your institution, such stock will be prneeled and appropriate refund will be made thereon. Under the ill°visions of Section 208.10(c) of the Board's Regulation H, your tii ! titution may accomplish termination of its membership at any wi':e L within eight months from the date the notice of intention to '4draw from membership was given. Z ret It is requested that the certificate of membership be fled to the Federal Reserve Bank of Dallas. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 4 12/19/62 WASHINGTON 25, D. C. ADDRESS arriciAL CORRESPONDENCE TO THE BOARD December 19, 1962 Honorable Erie Cooke, Sr., Chairman, Federal Deposit Insurance Corporation, Washington 25, D. C. Dear Mr. Cooke: Reference is made to your letter of December 4, 1962) concerning the application of First State Bank of Marlin, Marlin, Texas, for continuance of deposit insurance after vithdrawal from membership in the Federal Reserve System. No corrective programs which the Board of Governors believes should be incorporated as conditions to the continuance of deposit insurance have been urged upon or agreed to by the bank. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 12/19/62 5 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 19, 1962 Board of Directors, Robert Lee State Bank, Robert Lee, Texas. Gentlemen : The Federal Reserve Bank of Dallas has forwarded to the 197 6 , of Governors your letters dated November 13, 1962, November 20, tin4, and November 21, 1962, together with the accompanying resolu1 signifying your intention to withdraw from membership in the noj ral Reserve System and requesting waiver of the six months' lc° of such withdrawal. 4 In accordance with your request, the Board of Governors the requirement of six months' notice of withdrawal. Upon : I ender to the Federal Reserve Bank of Dallas of the Federal '7rve Bank stock issued to your institution, such stock will be p;oeled and appropriate refund will be made thereon. Under the inZisions of Section 208.10(c) of the Board's Regulation H, your t4itution may accomplish termination of its membership at any 1,riZnhill eight months from the date the notice of intention to ' 4.aw from membership was given. waives L It is requested that the certificate of membership be uxned to the Federal Reserve Bank of Dallas. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 12/19/62 6 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD .** December 19, 1962 Board of Directors, Riverside National Bank of Houston, Houston 4, Texas. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Dallas, the Board of Governors, acting under the provisions of Section 19 of the Federal Reserve Act, grants permission to the Riverside National Bank of Houston, Houston, Texas, to maintain the same reserves against deposits as are required to be maintained by nonreserve city banks, effective as of the date it opens for business. Your attention is called to the fact that such pernlission is subject to revocation by the Board of Governors. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 12/19/62 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE HOARD December 19, 1962 Board of Directors, United California Bank, Los Angeles, California. Gentlemen: The Board of Governors of the Federal Reserve 8Y8tem extends to July 1, 1964, the time within which United California Bank, Los Angeles, may establish a branch at the southeast corner of 5th Street and Wilshire Boulevard, 33nta Monica, California, provided that branch operations 44w conducted at 1401 Third Street, Santa Monica, are disContinued simultaneously with the establishment of the above branch. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 t • Item No. 8 BOARD OF GOVERNORS 4 /19/62 12 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 26, 0. C. AOCHICIN orricim. 001414101100NOICHat 70 Mt OCIAND 44" Deoember 19, 1962. George 11, Ellis, President, "deral Reserve Bank of Boston, Boston 6$ Massachusetts. I/ear Mr. Ellis: the The Board of Governors has reviewed and accepts budo. first half 1 of the Federal Reserve Bank of Boston for the .E, of 4, 14 1962. November of *letter your -1.Y03 as submitted with Separate advice will be given with respect to the Bom,A, for the - 4.8 action concerning the 1963 salaries proposed " veal aus officers of your Bank. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 BOARD OF GOVERNORS Item No. 9 OF THE 12/19/62 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE HOARD December 19, 1962 Alfred Hayes, President, Nedtal Reserve Bank of New York, ' cirk 45, New York. tear Ill% Hayes: The Board of Governors has reviewed and accepts the budget clt the Reserve Bank of New York for the first half of 1963 as 841)104 ted with your letter of November 15, 1962. As you know from your discussion with the Board yesterday the ' ;,- °11, the Board has not yet reached a decision with respect to 840Posal to expand the gold vault at the Head Office of your $235. for A which there was included in your budget a provision of it i,"° representing about half the cost of the project. However, that-u 4 nderstood from discussions with representatives of your Bank be ch:he cost of this project, if approved by the Board, will not the Crged to current expenses but capitalized instead. Accordingly, acceptance of your budget for the first half of 1963 is 111.1.1 the understanding that current expenses in the budget period poesgt include any of the cost of expanding the gold vault, except the' 4-Sr such charges as depreciation incident to capitalization of PI cje . 'ct 4fter„ ktio, Separate advice will be given with respect to the Board's concerning the 1963 salaries proposed for the various officers " Bank. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BOARD OF GOVERNORS Item No. 10 12/19/62 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OrricIAL CORRESPONDENCE TO THE 'CARO 1441P1 ' December 19, 1962 Watrous H. Irons, President, i)ederal Reserve Bank of Dallas, allas 2, Texas. 1)ear Mrs Irons: blIca,„4 The Board of Governors has reviewed and accepts the 194 of the Federal Reserve Bank of Dallas for the first half of as submitted with your letter of November 9, 1962. The Board has noted with interest the comments in your elkmit4?oncerning the feeling of the directors of your Bank about adopted hg semiannual budgets. When the new budget procedure was ingn , following recommendations of the Subcommittee on Account,1— concurrence therein by the Conference of l'residents, the lioar' n realized of ou. that a provision for two budgets each year, instead torIllee as before, perhaps would not overcome all objections to the r procedure without raising new ones. letter effect of 811ort„. As You know, the semiannual budgets have the evaluated be 111g the period.over which activities have to N, forecastfor need get purposes, as well as eliminating the period. The comparison toarcriperises. for any part of the budget compensate than tor tl,had hoped that these advantages would more to th"s additional work and overcome any other objections incident e semiannual budgets. 4ctio, SeParate advice will be given with respect to the Beard's - concerning the 1963 salaries proposed for the various officers 4011r Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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