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9163 Minutes for To: Members of the Board From: Office of the Secretary December 20, 1963 Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement with respect to any of the entries in this set of minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If YOU were not present, your initials will indicate only that you have seen the minutes. Chin. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. Mitchell Gov. Dane 44S7 Minutes of a meeting of the available members of the Board of Governors of the Federal Reserve System on Friday, December 20, 1963. The meeting was held in the Board Room at 10:00 a.m. PRESENT: Mr. Robertson, Acting Chairman Mr. Mitchell Mr. Daane Mr. Sherman, Secretary Mr. Kenyon, Assistant Secretary Mr. Young, Adviser to the Board and Director, Division of International Finance Mr. Molony, Assistant to the Board Mr. Cardon, Legislative Counsel Mr. Fauver, Assistant to the Board Mr. Noyes, Director, Division of Research and Statistics Mr. Koch, Associate Director, Division of Research and Statistics Mr. Brill, Adviser, Division of Research and Statistics Mr. Holland, Adviser, Division of Research and Statistics Mr. Hersey, Adviser, Division of International Finance Mr. Eckert, Chief, Banking Section, Division of Research and Statistics Mr. Axilrod, Senior Economist, Division of Research and Statistics Mr. Keir, Senior Economist, Division of Research and Statistics Mr. Goldstein, Economist, Division of International Finance Money market review. Mr. Keir discussed developments in the Gov ernment securities market, Mr. Koch summarized credit developments, 44i Mr. Goldstein reviewed foreign exchange market developments. pis • trauted material, referred to during the course of these comments, 14e1laded data on dealer financing and dealer holdings of Treasury bills 14 selected periods along with a summary of monetary developments in the -week period ended December 18, 1963. ' l'°111 4SS LV20/63 -2- Following discussion based on the staff reports, all of the titmbers of the staff who had been present except Messrs. Sherman, Kenyon, M°10nY, and Noyes withdrew from the meeting. Messrs. Hackley, General Cc/4'1118e1, and Hexter, Assistant General Counsel, joined the meeting. The following actions were taken subject to ratification at the Ile ct meeting of the Board at which a quorum was present: Discount rates. The establishment without change by the Federal IleseTve Banks of New York, Philadelphia, Chicago, and San Francisco on 4cember 19, 1963, of the rates on discounts and advances in their eiSting schedules was approved unanimously, with the understanding that 4PPrtTriate advice would be sent to those Banks. Circulated item. Unanimous approval was given to a letter to Seclulty Savings Bank, Marshalltown, Iowa, approving the establishment or e branch at Green Mountain provided the bank's proposed purchase of 48 t8 and assumption of liability to pay deposits in Producers Savings Green Mountain, was approved and consummated. 18 A copy of the letter a ttached as Item No. 1. Call report. Acting Chairman Robertson reported the receipt of 'Phone calls from staff members of the Federal Deposit Insurance Co 'Poration who expressed some concern that unless the Acting Chairman or Board of Governors went along with the selection of the close of riess December 20, 1963, as the date for the December call for reports "condition from insured banks, the date would be selected by one cs(1 12/20/63 _3_ individual (the Comptroller of the Currency) serving in two capacities, that is, as comptroller and as Acting Chairman of the Board of Directors Ola the Federal Deposit Insurance Corporation. This, it was thought, Illight create a legal situation that would jeopardize the validity of the deposit insurance assessment. Consequently, the representatives °f the Corporation inquired whether the Acting Chairman of the Board of governors would not go along with the selection of the date, although indicating in some manner that he would have preferred another date. Governor Robertson said he had replied that he could not go along with the selection of the date. The callers urged reconsideration of this decision, citing their understanding that Chairman Martin had indicated earlier to Director Wolcott that he would go along with the selection of the date even though he did not like it. This, Governor Robertson said, 1141/ not his understanding of the matter. Governor Robertson went on to say that he did not propose to sign 411. irmatively the document fixing the date of the call. He would, however, j°111 in the signing of the document issuing the call because in that l'eaAect he felt bound by the statute. Governor Robertson then suggested consideration of the possible 14811ance of a press statement following the announcement of the call, teting reasons why he, as Acting Chairman of the Board, had dissented *°14 the selection of the call date. He read a draft of such a statement. Mr. Hackley commented that he and Mr. Hexter concluded that a lite,. -al reading of the statute seemed to require a vote on the selection '1490 12/20/63 -4- °f the call date by three officials, or a majority thereof, irrespective °r the fact that one official might happen, in certain circumstances, to be serving in two capacities. It appeared that the Congress must have c°fltemplated the possibility that at some point the Comptroller of the Currency would also be serving as Acting Chairman of the Federal Deposit inaux'ance Corporation. Nevertheless, it appeared to concern the represen- tatives of the Corporation that the Congress may have contemplated that the vote must be by at least two of three individuals. If that was their concern, and for some legal reason the Comptroller might feel clisqUalified. from voting twice, certainly any question on that point PParently could be precluded by having Director Wolcott sign. there Then if was any legal question about the Comptroller being disqualified *c/Im voting twice, Mr. Wolcott would in effect have signed as Acting Chairman of the Corporation. After discussion, Governor Robertson stated that he proposed to 1143'e the Board's Secretary call the representatives of the Federal Deposit 'Lance Corporation and advise that it continued to be his (Governor 11°bertson's) position as Acting Chairman of the Board that he would not 13111 affirmatively the document setting the date of December 20 for the teal ' No objection to this procedure was expressed by the other members °t the Board. There ensued further discussion of the possible issuance of a 14'e88 statement and of the alternative possibility of having the Federal 4491 12/20/63 -5- Reserve Banks include a statement in their mailings to member banks concerning the call. At the suggestion of Acting Chairman Robertson, hovever, no decision was made at this meeting, and it was understood that the staff would continue work on a draft of possible press statement rc/r consideration at another meeting in the light of developments. The meeting then adjourned. Secretary's Note: Acting in the absence of Governor Shepardson, Governor Robertson today approved on behalf of the Board the following items: a Letter to the Federal Reserve Bank of Chicago (attached Item No. 2) 1513ra‘ring the designation of six employees as special assistant examiners. a Letter to the Federal Reserve Bank of Chicago (attached Item No. 3) 1431.°ving the appointment of John C. Siragusa as assistant examiner. wo. 4Letter to the Federal Reserve Bank of San Francisco (attached Item approving the appointment of Gust H. Zumas as assistant examiner. to Letter to Dr. Frederic D. Chapman confirming arrangements for him c conduct the annual physical examination of all employees in the Board's areteria during 1964, at a fee of $125. roil Memoranda from appropriate individuals concerned recommending the wing actions relating to the Board's staff: ointment ealA 2:1.61-rY C. Schiller as Draftsman Trainee in the Division of Research o with basic annual salary at the rate of $3,820, effective the tatisticsl &ate of entrance upon duty. Ou tside activities Se , Jo'Army Samuel Fox, Jr., Messenger, Division of Administrative to work part time as a stock clerk at a local department store. 449,c, 12/20/63 , James T. Jones, Messenger, Division of Administrative Services 4° 'work part time as a porter and chauffeur for a local drug store. 4149P, Item No. 1 12/20/63 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS arrimm. CORRESPONDENCE TO THE MORRO December 20 1963 Ikliard of Directors, P .eourity Savings Bank, narshalltown, Iowa. Gentlemens The Board of Governors of the Federal Reserve System aPProves the establishment by Security Savings Bank, Marshalltown, Iowa, of a branch (bank office) at Green Mountain, Iowa, providing the proposed purchase of assets of and assumption of liabilV to pay deposits made in Producers Savings Bank, Green Mountain, "as by Security Savings Bank, Marshalltown, Iowa, is approved and consummated* I Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS Item No. 2 12/20/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 201 1963. 1 Leland Ross, Vice President, 1:r. : rederal Reserve Bank of Chicago, Chicago, Illinois. tear Mr. Ross: In accordance with the request contained in your letter yecember 12, 1963, the Board approves the designation of the to110 wing employees as special assistant examiners for the Federal Ile . t4serve Bank of Chicago for the purpose of participating in examina'"s of State member banks: Of r. Cecchini, Angelo R. Cullen, Jerry F. Cullen, Wallace L. Grube, Jerome L. Phillips, John R. Sharer, John A. Appropriate notations have been made on our records of names to be deleted from the list of special assistant examiners. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 4495 BOARD OF GOVERNORS Item No. OF THE 12/20/63 3 FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS arniciAL CORRESPONDENCE TO THE BOARD December 201 1963. Leland Ross, Vice President, ederal Reserve Bank of Chicago, Chicago, Illinois 60690. bear Mr. Ross: In accordance with the request contained in your letter (.31f December 16, 1963, the Board approves the appointment of C. Siragusa as an assistant examiner for the Federal Reserve -411k of Chicago. Please advise the effective date of the appointment. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 4 el 9v, BOARD OF GOVERNORS Item No. 4 12/20/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 20, 1963. 14 E. H. Galvin, Vice President, " Federal Reserve Bank of San Francisco, San Francisco, California. Dear Mr. Galvin: In accordance with the request contained in Mr. Cavan's letter of December 12, 1963, the Board approves the appointment Of Gust H. Zumas as an assistant examiner for the Federal Reserve Bank of San Francisco. Please advise the effective date of the appointment. It is noted that Mr. Zumas' sister is employed in the l'rice, Utah branch of Walker Bank & Trust Company, Salt Lake City, Utah, a State member bank. Accordingly, the Board's approval of Mr. Zumas' appointment is given with the understanding that he not participate in any examination of the office of that pank to which his sister is assigned so long as she is employed by that institution. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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