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Minutes for
To:
Members of the Board
From:
Office of the Secretary
December 22, 1965
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
°e 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
t!elow.
If you were present at the meeting, your
Initials will indicate approval of the minutes. If
You were not present, your initials will indicate
°n1Y that you have seen the minutes.
Chm. Martin
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
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Federal Reserve Bank of St. Louis
5AZ...t.
,
Minutes of the Board of Governors of the Federal Reserve System
On Wednesday, December 22, 1965.
The Board met in the Board Room at
10:00 a.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Daane
Maisel
Mr. Sherman, Secretary
Mr. Kenyon, Assistant Secretary
Mr. Young, Senior Adviser to the Board and
Director, Division of International Finance
Mr. Holland, Adviser to the Board
Mr. Solomon, Adviser to the Board
Mr. Molony, Assistant to the Board
Mr. Fauver, Assistant to the Board
Mr. Hackley, General Counsel
Mr. Brill, Director, Division of Research and
Statistics
Mr. Farrell, Director, Division of Bank Operations
Messrs. O'Connell and Hooff, Assistant General
Counsel
Mr. Leavitt, Assistant Director, Division of
Examinations
Mrs. Semia, Technical Assistant, Office of the
Secretary
Messrs. Heyde, Sanders, Smith, and Via of the
Legal Division
Messrs. Egertson, Lyon, and Maguire of the
Division of Examinations
Circulated items.
The following items, copies of which are
ettached to these minutes under the respective item numbers indicated,
1,/ere _
=P-PLc.117ts1 unanimously:
Item No.
Lett
the er to Bank of Idaho, Boise, Idaho, approving
establishment of a branch in Ketchum.
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Federal Reserve Bank of St. Louis
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12/22/65
-2Item No.
'
,
t,!legram to the Federal Reserve Bank of Kansas
1t3' a uthorizing the Bank to call for bids for
ne.construction of an addition to the head
office building.
Re ort on com etitive factors
A report
involved
2
San Die o-Los An eles
California .
to the Comptroller of the Currency on the competitive factors
in the proposed merger of United States National Bank, San
t)iego, California, and Bank of Los Angeles, Los Angeles, California,
was a
—RRE.211.td unanimously for transmittal to the Comptroller. The conclusion
read as follows:
While effectuation of the proposed merger of United
States National Bank, San Diego, California, with Bank of
LOS Angeles, Los Angeles, California, would eliminate a
small amount of competition existing between them, the
over-all effect of the transaction on competition would
not be significantly adverse.
erye Bank earnings and expenses (Item No. 3).
There had been
-Lributed
two memoranda from the Division of Bank Operations dated
ilecember 20, 1965, regarding estimated Reserve Bank earnings and
expen
ses during 1965. One memorandum, prepared in the customary fashion
set forth such earnings and expense figures in an attached table
and
°Illmented on proposed year-end closing entries.
In the other memo-
"Qum Mr. Daniels suggested that the established procedure of submitting
the
"'ear-end routine memorandum on earnings and expenses to the Board
be disc
ontinued. The Division of Bank Operations would, however, continu_
e to
scrutinize the statements submitted by the Reserve Banks and
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Submit to the Board any unusual year-end adjustments requiring
approval.
Attached was a draft of telegram to the Federal Reserve
Banks stating that the Board had noted without objection their proPosed
year-end closing entries and indicating that this routine
t°tification would be discontinued, although any unusual charge-offs
Or other special adjustments contemplated at end of year would be
4°ught to the Board's attention for action.
After discussion, Mr. Daniels' suggestion and the related
telegram to the Federal Reserve Banks were approved unanimously.
A
CO
PY of the telegram is attached as Item No. 3.
Application of Otto Bremer Company (Item No. 4).
been
There had
Legal
distributed a memorandum dated December 20, 1965, from the
14vision regarding an application of The Otto Bremer Company, St.
Pawl
-4-, Minnesota, for a determination that the activities of certain
P O
Posed nonbanking subsidiaries were of a kind described in section
4(0(6) of the Bank Holding Company Act so as to make inapplicable
the prohibitions of section 4 of the Act respecting acquisition or
l'etenti n
0 of shares in nonbanking companies. Since the Act required
that such
made at
determinations be made on the basis of the record
a hearing, tentative arrangements had been made for a hearing in
Ilinneapolis on January 20, 1966; for the services of Mr. Frederick G.
Graham, Assistant
SIllithson as hearing examiner; and for Mr. Roland
C°11118e1 of the Federal Reserve Bank of Minneapolis, to act as Board
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Federal Reserve Bank of St. Louis
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tit*
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counsel for purposes of the proceeding.
Attached to the memorandum
14asa
draft of notice of request and order for hearing.
The tentative arrangements for the hearing were approved
44a imously and the issuance of the notice and order was authorized.
A copy of the notice and order is attached as Item No. 4.
Application of Virginia Commonwealth Corporation (Items 5 and 6).
There
had been distributed a memorandum dated December 21, 1965, from
the Legal Division submitting drafts of an order and statement reflectthe approval by the Board (on October 11, 1965) of the application
Of Virginia Commonwealth Corporation, Richmond, Virginia, to acquire
143ting shares of The Peoples Bank of Stafford, Falmouth, Virginia.
After a discussion during which there was agreement with a
suggestion for deletion of a passage in the draft statement, the issue of the
order and statement was authorized.
Copies of the docu-
nieut8, in the form in which they were issued, are attached as Items
5
.t.,pplication of Fidelity Bank (Items 7-9).
There had been dis-
trib
Ilted a memorandum dated December 21, 1965, submitting drafts of
all order
and statement reflecting the Board's approval on December 20,
1965,
the application of Fidelity Bank, Beverly Hills, California,
Of
to merge
South Bay Bank, Manhattan Beach, California.
stated in
For reasons
the memorandum, the draft order waived the standard require-
that the merger not be consummated until the expiration of 7 days
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Federal Reserve Bank of St. Louis
op.
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12/22/65
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following the date of the order.
Also attached to the memorandum was
a draft of
letter to the Federal Reserve Bank of San Francisco that
included, pursuant to views expressed at the December 20 meeting,
statements indicating that the Board had placed reliance on the
Reserve Bank's conclusions and that the Board would expect the Reserve
Bank to give Fidelity Bank more than the usual supervisory attention.
During discussion there was agreement with suggestions for
certain changes in the letter to the Federal Reserve Bank of San
4ancisco and in the draft statement.
The letter was then approved unanimously in the form attached as
Item m
and the issuance of the order and statement was authorized.
Co
Pies of the order and statement, as issued, are attached as Items 8
aild 9
Messrs. O'Connell, Heyde, Smith, Via, Egertson, Lyon, and
Guire then withdrew from the meeting and Mr. Morgan, Staff Assistant,
Board
Members
Offices, entered the room.
Unfit $1 Federal Reserve notes.
On November 26, 1965, the
Board •
instructed the Federal Reserve Banks, as an interim procedure,
t° 8114 unfit $1 Federal Reserve notes to Washington for destruction,
the shipments to be limited, with certain exceptions, to each Bank's
lirrent receipts of its own notes.
At the same time a letter was
sent to
the Secretary of the Treasury, at the request of the Treasury
ePar
count
tment, authorizing a procedure whereby the verification
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Federal Reserve Bank of St. Louis
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12/22/65
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Of the lower
halves of unfit $1 Federal Reserve notes received by the
Treasurer of the United States would be on a 5 per cent basis, with a
Package count of the upper halves by the Comptroller of the Currency.
At today's meeting Mr. Farrell pointed out that in a letter
f December 10, 1965, Secretary of the Treasury Fowler had stated
that ,The
procedures outlined are as agreed upon and are satisfactory
to the Treasury.
We have observed that you have expressly authorized
the Treasurer to make only a 5 per cent verification of the lower
halves
of $1 unfit Federal Reserve notes, with a package count by the
eftPtroller of the Currency of the upper halves,
."
However, it
had developed that the Comptroller of the Currency was not satisfied
14ith those arrangements.
He had had a complete count made of some
Packa ges of upper halves, and continuation of such a count would
equire a large staff.
He had asked that the Reserve Banks furnish
statemen s
t certifying that the dollar amounts of shipments of upper
halves to the
Office of the Treasurer were correct.
Mr. Farrell
"essed the view that Reserve Bank officers would be unwilling to
make
such a certification based on the original proof by currency
sort„
-- s, without reverification. If the members of the Board shared
that .
view, Mr. Farrell asked authorization to indicate that the Board
laas
00f disposed to ask that Reserve Bank officers make such a certifica-
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Federal Reserve Bank of St. Louis
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Mr. Farrell commented further that he had offered to ask the
Reserve Banks if they would be willing to certify that the notes had
been completely counted at the time of receipt and had been held in
double custody from then to the time they were shipped to Washington;
that
suggestion, however, had not been acceptable.
Discussion disclosed a consensus that even though the type of
ertification suggested by Mr. Farrell had not been agreeable to the
lp fice of the Comptroller, Mr. Farrell might indicate that the Board
c°11tinued to be willing to ask the Reserve Banks to make such a
certification; otherwise it would stand on the original procedures
tc) 14bich the Secretary of the Treasury had agreed.
Director appointment.
The Board had previously requested that
Chat
rman Bean of the Federal Reserve Bank of Minneapolis explore the
avai
lability of two persons (Messrs. Paul S. Gerot and Donald C. Dayton)
to serve as
a Class C director of the Bank for the three-year term
begi
rining January 1, 1966. At today's meeting Governor Balderston
tnent'
lolled circumstances that had prompted Chairman Bean to inquire
lqbeth
"er the Board would be willing to name a third prospective appointee.
After discussion the Board agreed that Chairman Bean might
exP10
re also the availability of David M. Lilly, President of Toro
Makif,
aCtUring Corporation, Minneapolis, Minnesota.
Mr. Morgan then withdrew from the meeting and Messrs. Dembitz,
Associate
Research
Adviser, and Eckert, Chief, Banking Section, Division of
and Statistics, entered the room.
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Federal Reserve Bank of St. Louis
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luulation Q proposals (Item No. 10).
Pursuant to the Board's
recent discussions regarding possible amendments to Regulation Q,
PaYtnent
of Interest on Deposits, there had been distributed a memorandum dated December 21, 1965, with which Mr. Hackley submitted a
draft of
notice of proposed amendments that might be published in the
Pederal Register.
tO
The draft reflected two proposals, both designed
Sharpen the distinction between time and savings deposits:
(1)
ha d efinition of "time deposits" would be changed (with a similar
ame ndment
to Regulation D, Reserves of Member Banks) to limit such
deposits
to those that had a single specified maturity, with no provision for
time
%ore
automatic renewal; (2) provisions permitting payment of
ueposits in emergency situations would be changed to impose a
restrictive penalty, i.e., forfeiture of all interest, whether
Paid or
unpaid, on the amount withdrawn for a period of 6 months, in
of the
present provision for forfeiture of "accrued and unpaid
illterest"
for a period of not less than 3 months.
Today's discussion dealt principally with procedural matters,
e8pecially the question as to when, and in what terms, the interagency
Coordinating Committee in the bank supervisory area should be informed
°f the
proposals the Board was considering.
trig the
Comments were made regard-
bearing upon the timing of the Board's action, if any, of the
tell,day
Period prescribed by the so-called Dillon procedure for the
l'eeeiPt of comments.
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Federal Reserve Bank of St. Louis
Some opinion was expressed in favor of letting
12/22/6
5
-9-
the committee know the nature of the proposals under consideration so
that if the
Dillon procedure was considered applicable in this instance
the Board would not experience a further delay if it was concluded that
action should be taken.
Another view favored not making any disclosure
to the committee until a greater degree of agreement had been achieved
among the members of the Board.
Several members of the Board pointed
out that
they would be disinclined to arrive at any conclusions until
it wa S
possible to study in full the information that would be received
in r esponse to the Board's request of December 17, 1965, that member
bank _
'6 report any actions taken or in prospect to increase rates of
inter
retur
est paid on time and savings deposits; at present only fragmentary
ris were available.
It was suggested that conclusions on the prob-
lern
would require analysis of interest rate increases according to
'"graphical distribution and size of banks.
It was recalled that when the request was made for information
On
r
a te actions, it had been contemplated that in any instance in which
it a
PPeared that a member bank might be moving imprudently or without
44fficient forethought, the Reserve Bank of the district would get in
touch with the bank concerned. A suggestion was made that the staff
Pr pare
a draft of letter outlining the approach to be taken by the
Re s
erve
'raft
Bank in those circumstances, and it was understood that such
Would be submitted for the Board's consideration.
Another procedural matter discussed was the possibility of
4g
the Board's staff consult with the staff of the Federal Deposit
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Ing
—ura nee
- Corporation on the Regulation Q proposals submitted by Mr.
RackleY in view of the fact that the Corporation had a parallel regula tion applicable to nonmember insured banks.
That question was
res0lved in the direction of deferring such consultation.
At the conclusion of the discussion of procedures, it was understood that further consideration of the Regulation Q proposals should
be scheduled when all members of the Board were present and when suf4
' eient data had been received in response to the Board's recent reque8t for rate information to permit meaningful analysis.
Mr. Molony inquired as to the position to be taken in the
rim in response
to inquiries from the press and the public.
The
resn,
'flse made thus far had been to the general effect that the Board
r
a long time had been studying the question of appropriate distincbetween types of deposits, that the Board was always concerned
eb°4t any moves that tended to blur those distinctions and gave const
d erati _ n
o to developments having a bearing upon the question, and that
the toard was
currently gathering information for purposes of further
st4dY.
General agreement was expressed with the approach Mr. Molony
had
outlined.
It was pointed out that the Federal Reserve Bank Presidents
°t been informed of the proposal, which the Board recently tenelY agreed to publish in the Federal Register for comment at an
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Federal Reserve Bank of St. Louis
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-11early date, to define as deposits promissory notes issued by banks.
It was agreed that the Presidents should be informed of the proposal
On
a confidential basis; a copy of the letter subsequently sent to
thp", .
-- is attached as Item No. 10.
All members of the staff except Mr. Sherman then withdrew from
the
meeting.
Reserve Bank officer salaries (Items 11-13).
the
The Board approved
Payment of salaries to George H. Clay as President and to Henry O.
XOppang
as First Vice President of the Federal Reserve Bank of Kansas
city at
rates of $42,500 and $30,000 per annum, respectively, effective
janu arY 1, 1966, these rates having been fixed by the Board of Directors
48
r,
'Ported in letters dated October 18 and December 16, 1965.
The Board approved payment of salary to Maurice H. Strothman
Vice President of the Federal Reserve Bank of Minneapolis at
hC
ra te of $29,000 per annum, effective January 1, 1966, this action
having been recommended in a letter from Chairman Bean dated December 8,
1963, a
mending the previous request that Mr. Strothman t s salary be
aI)Pr°17ed at the rate of $28,500.
The Board approved the payment of salary to Eugene M. Tangney
sistant Vice President of the Federal Reserve Bank of Boston at
his cur
rentt
rate of $15,500 per annum, effective January 1, 1966, o
date °f t
ermination of his services, this action having reference to
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a letter from President Ellis dated December 20, 1965.
This action
rescinded the previous authorization to raise Mr. Tangney's salary
to the rate of $17,500 effective January 1, 1966, it having been
ascertained that he had decided to accept an offer of a position
out
the Federal Reserve System.
Copies of letters sent to the respective Reserve Banks reflect-
ing the foregoing actions are attached as Items 11, 12, and 13.
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board
the following items:
Washington, D. C., confirm14 _ Letters to Dr. Frederic D. Chapman,
e 0,dr rangements for (1) the annual physical examinations of all
;1°Yees in the Board's cafeteria at a fee of $125; and (2) the
4
drival physical examinations of the Board's chauffeurs and messengeris at a fee of $28 for each examination.
od,Memoranda recommending the following actions relating to the
S Staff:
A
intment
(Tra,Christine Dunlevy de Fontenay as Digital Computer Programmer
the lnee), Division of Data Processing, with basic annual salary at
rate of $5,181, effective the date of entrance upon duty.
wission to en a e in outside activity
a CK4r1 E. Bakke, Assistant Secretary of the Board, to engage in
retur ounseling and preparation of 1965 Federal and State income tax
Secretary
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Federal Reserve Bank of St. Louis
43/p,
BOARD OF GOVERNORS
Item No. 1
12/22/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
IENCC
ADDRESS OfFICIAL DORREOPOND
TO THZ BOARD
December 22, 1965.
Board of Directors,
Bank of Idaho,
Boise, Idaho. '
Gentlemen:
Reserve
The Board of Governors of the Federal
Idaho,
of
Bank
by
.System approves the establishment
district of
Boise, Idaho, of a branch in the business
hed withestablis
is
Ketchum, Idaho, provided the branch
letter.
in six months from the date of this
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
434
Item No. 2
12/22/65
AM
TELEGR
WIRE SERVICE
LEASED
SYSTEM
BOARD OF GOVERNORS OF THE FEDERAL RESERVE
WASHINGTON
December 22, 1965.
C1NY - Kansas. City
uction of the
Board authorizes calling for bids for the constr
e4fiition to the Kansas City head office building on the basis of
detailed plans and specifications referred to in Vice President
130Yeent8 letter of November 24, 1965.
(Signed) Merritt Sherman
SHERMAN
1
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Federal Reserve Bank of St. Louis
Item No. 3
12/22/65
TELEGRAM
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
December 22, 1965
IO THE PRESIDENTS OF
ALL FEDERAL RESERVE BANKS:
Board has considered and notes without objection proposed
Year-end closing entries of your Bank as shown by statement accomPanYing
(a)
.
Hereafter this routine year-end telegram
ill no longer be sent, since continuing authority for closing-books
ia contained in Accounting Manual.
Any unusual charge-offs or other
8Pecial adjustments in accounts contemplated at end of year will be
br°ught to Board's attention for action.
(Signed) Merritt Sherman
SHERMAN
Boston
December 6 letter from Mk. Latham
New York
December 3 letter from Mr. Blanchette
Philadelphia
December 10 letter from Mk. Wilgus
Cleveland
December 9 letter from Mr. Clouse
Richmond
Your December 9 letter
Atlanta
Your December 10 letter
Chicago
December 6 letter from Mk. Jones
St, Louis
December 3 letter from Mr. Kaley
Minneapolis
December 7 letter from Mr. O'Brien
Ransas City
December 14 letter from Mk. Mathews
Dallas
December 9 letter from Mr. Murff
San Francisco
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Federal Reserve Bank of St. Louis
December 9 letter from Mk. Martens
k
FEDERAL RESERVE SYSTEM
THE OTTO BREMER COMPANY
Item No. 4
12/22/65
Notice of Request for Determination
and Order for Hearing
Notice is hereby given that request has been made to the
Board of Governors of the Federal Reserve System, pursuant to
section 4(c)(6) of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(c)(6)) and section 222.5(b) of the Board's Regulation Y
(12 CFR 222.5(b)), by The Otto Bremer Company, St. Paul, Minnesota,
4 bank holding company, for a determination that the activities
Planned to be undertaken by its proposed subsidiaries, The Farmers
Agr
icultural Credit Co., T.nc., The Farmers Insurance Agency, Inc.,
AIII"icen Insurance Agency, Inc., and The International State Agency,
of the kind described in the aforementioned sections of the
Act and the Regulation so as to make it unnecessary for the
kch
ibitions of section 4 of the Act with respect to shares in
n°nbahking organizations to apply in order to carry out the
Purposes
of the Act.
any
Inasmuch as section 4(c)(6) of the Act requires that
dete
tmination pursuant thereto be made by the Board after due notice
hearing and on the basis of the record made at such hearing,
It is hereby ordered, That pursuant to section 4(c)(6) of
the
an
222.5(b)
Holding Company Act and in accordance with sections
and„
-.c.../(a) of the Board's Regulation Y (12 CFR 222.5(b), 222.7(a)),
hearing with respect
k°14ulgated under the Bank Holding Company Act, a
to this matter be held commencing on January 20, 1966, at 10 a.m., at
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Federal Reserve Bank of St. Louis
-2-
the offices of the Federal Reserve Bank of Minneapolie, Minneapolis,
Minnesota, before a hearing examiner selected by the Civil Service
Commission, pursuant to section 11 of the Administrative Procedure Act,
such hearing to be conducted according to the Rules of Practice for
Pormal Hearings of the Board of Governors of the Federal Reserve
System (12 CFR Part 263).
The right is reserved to the Board or such
hearing examiner to designate any other date or place for such hearing
or any part thereof which may be determined to be necessary or approPriate •for the convenience of the parties.
The Board's Rules of
Practice for Formal Hearings provide, in part, that "All such hearings
shall be private and shall be attended only by parties and their
representatives or counsel, representatives of the Board, witnesses,
and other persons having an official interest in the proceedings:
l'rovided, however, That, on written request by a party or representatives of the Board, or on the Board's own motion, the Board, unless
Prohibited by law, may permit other persons to attend or may order
the hearing to be public."
proceeding
Any person desiring to give testimony in this
Should file with the Secretary of the Board, directly or through the
14, 1966,
Pederal Reserve Bank of Minneapolis, on or before January
a Written request containing a statement of the nature of the petiof the matters
ti°ner i s interest in the proceeding, and a summary
concerning which said petitioner wishes to give testimony.
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Federal Reserve Bank of St. Louis
Such
A.•
-3-
request will be presented to the designated hearing examiner for
his determination. Persons submitting timely request will be
notified of the hearing examiner's decision.
Dated at Washington, D. C., this 22nd day of December, 1965.
By order of the Board of Governors.
(SEAL)
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
Item No. 5
12/22/65
UNITED STATES OF AMERICA
WORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D o C.
•
the Matter
of the Application of
VINI,A
COMMONWEALTH CORPORATION,
-ICIP4°ND, VIRGINIA,
for
°ti aPProval of the acquisition of
\70C-z1g shares
of The Peoples Bank
Stafford, Falmouth, Virginia.
Or.DER APPROVING APPLICATION
UNDER BANK HOLDING COMPANY ACT
pursuant to
There has come before the Board of Governors,
4
action 3
(a)(2) of the Bank Holding Company Act of 1956
(12
1842(a)(2)) and section 222.4(a)(2) of Federal Reserve
t
‘
t eN1
P
*,%to
ol
'di
Y
"
t
Virginia
(12 CFR 222,4(a)(2)), an application by
bank
'
21th Corporation, Richmond, Virginia, a registered
company, for the Board's prior approval of the acquisition
-'e ,.,
'uan 80 per cent of the outstanding voting shares of The
A.Q
154
Bank of Stafford, Falmouth, Virginia.
A8
receipt
required by section 3(b) of the Act, notice of
recommendation requested
'4PPlitation was given to, and views and
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Federal Reserve Bank of St. Louis
435(
-2Of
of Virginia.
the Commissioner of Banking of the Commonwealth
The c
ion.
eumissioner expressed no objection to approval of the applicat
ication was published in the
Notice of receipt of the appl
Register 8599), providing
1 41 Register on July 7, 1965 (30 Federal
'
and views with
°I)Portunity for interested persons to submit comments
48Peet to the proposed acquisition.
ents
The time for filing such comm
have been considered by
4141 views has expired, and all those received
N iloard.
set forth in the
IT IS HEREBY ORDERED, for the reasons
hereby
40ard's Statement of this date, that said application be and
be
so approved shall not
provided that the acquisition
r the date of this
e°48441111eted (a) within seven calendar days afte
Order
r said date.
()r (b) later than three months afte
PPr1.80ved
day of December, 1965.
Dated at Washington, D. C., this 22nd
BY order of the Board of Governors.
Voting for this action:
ers present.
Unanimous, with all memb
(Signed)
Merritt Sherman
Merritt Sherman,
Secretary.
(stAt
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Federal Reserve Bank of St. Louis
Item No. 6
12/22/65
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEN
APPLICATION BY VIRGINIA COI.ZIONVEALTH CORPORATION FOR APPROVAL
OF THE ACQUISITION OF SHARES OF THE PEOPLES BANK OF STAFFORD
STATEMENT
Virginia Commonwealth Corporation, Richmond, Virginia
(11APPlicantn), a registered bank holding company, has filed with the
4ard,
pursuant to section 3(a)(2) of the Bank Holding Company Act of
1956 ("the Act"), an application for approval of the acquisition of
than 80 per cent of the voting shares of The Peoples Bank of
'tff`c/zd, Falmouth, Virginia ("Bank").
v.
Jews and recommendation of supervisory authority. QCitlired
by
As
section 3(b) of the Act, notice of receipt of the application
c.
tO, and views and recommendation requested of, the Commissioner
(/f11
4.)anking
of the Commonwealth of Virginia.
etiCti to
4ar.,
The Commissioner voiced no
approval of the application.
the
Statutory factors. - Section 3(c) of the Act requires
to
take into consideration the following five factors in acting
oti this
holdina
QPplication:
condition of the
(1) the financial history and
the
company and the banks concerned; (2) their prospects; (3)
ch4
r etor
of their management; (4) the convenience, needs, and welfare
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Federal Reserve Bank of St. Louis
-2°f the
whether or not the
communities and the area concerned; and (5)
effect of the acquisition would be to expand the size or extent of the
batitp
" holding company system involved beyond limits consistent with
adequ„
"Le and sound banking, the public interest, and the preservation
Of
"mpetition in the field of banking.
Financial history, condition
tark
and prospects of Applicant and
- At December 31, 1964, nearly two years following Applicant's
4)rrnation as a bank holding company, Applicant controlled six banks
(42 banking offices), holding total deposits of approximately $260 million.
considered
inancial history, though relatively brief, is
441ic
atis
subsidant'sf as is its financial condition and that of its six
factory,
i4rY
banks.
satisfactory
Applicant's prospects, based upon the generally
rs:)14t11 and earnings prospects of its subsidiary banks, and particularly
thos
considered
e Of its largest subsidiary, Bank of Virginia, are
Nttiefactory.
Courthouse, Virginia.
Bank commenced operation in 1922 at Stafford
14 the ,A
office location
"v -year period since 1954, Bank has moved its main
to val
th, retaining the Stafford Courthouse site as a branch, and has
about
'tshed a branch in Chatham Heights (1960), a suburban area
1.1/2
Iles east of Falmouth, and in Fredricksburg (1964), about two miles
41t11 f its
main office.
been exceptional.
Bank's growth, while steady, has not
t4te
Of
Its
than
deposit growth in the past five calendar years has been less
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Federal Reserve Bank of St. Louis
-3-
t
that of its nearest competitors in Fredricksburg.
r:
•1/
1964,
31,
December
At
13enk's total deposits were approximately $7 million, or about 50 per
cent greater than at the same date in 1960.
Its deposits of individuals,
141ttnerships, and corporations ("IPC deposits") at December 31, 1964,
Ilere nearly $
6 million, an increase of approximately $1.5 million over
Year-end 1960.
In the same period, its loans and discounts increased
$3 million to $4 million.
During this four-year period, demand
4sedepo
sits increased nearly 53 per cent, while time IPC deposits in4eased Only 33 per cent.
4t
Despite the greater increase in demand deposits,
year-end 1964 Bank s time 'PC deposits represented 73 per cent of its
total IPC
deposits.
Such disproportionate distribution, according to
APPlicant, results frcm a lack of aggressiveness on the part of Bank in
11111.stling commercial business.
In the five years ending December 31, 1964,
134riltIs reported net income aggregated $212,000 and dividends paid amounted
t0 $89)000, or 42 per cent of reported earnings.
On the basis of the record, the Board concludes that Bank's
fitte
ncial history and condition are satisfactory, and that its prospects
for Co
ntinued sound growth and earnings as an independent institution
te also
generally satisfactory.
At the same time it seems likely that
111°te aggressive operating policies will be pursued by Bank under Applit;
s control thus improving somewhat Bank's growth and earnings prospects.
1
S otherwise indicated, all banking data noted are as of this date.
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Federal Reserve Bank of St. Louis
-4-
Management. - The Board finds Applicant's management to be
"able and
senior
experienced, its officers having served also as the
q4cera of Bank of Virginia.
The sound asset condition of each of
APPlicant's banks reflects favorably upon their managements.
Respecting
41-ik's management, the record shows that Bank's president and chief
lye
r
has bez_a associated with the institution for many years,
is 65
Years of cge, and desires to retire at not later than age 70.
he is
While
there is
"nside:7ed caable and well qualified for his position,
nee that he has pursued extreEely conservative policies and has been
tan t to make the chances necessary to meet the . nore complex and grow-
It
4
seds within Bank's service area. It was, in part, the desire on the
Part of
institution which
manageuent to convert Bank into a full-service
could
Promise the maximum of growth, development, and profit, which
Nort
sdlY led to this proposed affiliation of Bank with Applicant's
11(adi
4g CoMpany
system.
apparently
Although Bank has a second officer
4Pabl„
of assuming chief-executive responsibilities upon retirement of
th, p
resident,
operational
it is asserted that, absent the aggressive
Nida),
'
ea that Applicant could provide, the Bank's second line officer
Nad
continue to
' as a result of his previous experience and training,
Ptirsue
ul tra-conservative policies. Bank's affiliation with Applicant,
Qs Pr
somewhat more aggressive
4"ed, offers reasonable assurance that
Polici
needs of the
es Will be pursued to meet the modern and growing
eQ
erld that such policies would be administered competently under
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Federal Reserve Bank of St. Louis
r:
1- t_IP*.
Applicantts s
upervision.
tth
In addition, Applicant could provide Bank
a ready and immediate source of junior officer material to allow
Although this proposed acquisition
future management succession.
is not the only
means of improving Bank's management situation, it is
ti ready
and reasonable solution.
In the Board's judgment, this consid-
offers support, albeit slight, to approval of the application.
el:4tiall
convenience
needs
and welfare of the communities and
are
composite
- Bank's primary service area, reflecting a
Of the
service
e
tY
areas of
its respective offices
generally comprises
of Fredricksburg and areas immediately adjacent thereto in
all
dir
estimated
ections. The combined service area has a population
tm,
rural in character, it
4 s"'°Ut 35)500. While this area is generally
is
Presently experiencing commercial and industrial development that
1441
Play an increasingly important role in the area's economy. The
city
°f Fredricksburg, with an estimated 1965 population of 14,000,
ins some 260 retail trade establishments, reporting annual retail
totaling nearly $40 million.
as
ellerated by some 35 wholesale and 20 manufacturing establishments
Op
ting in the area.
O
An additional $31 million in business
development
A notable example of the industrial
cClarri
rig in Fredricksburg is the location therein of the American
V iaeo
world's largest
-J-vision of FMC Corporation, which operates the
se n4
Q11,
°Phane Plant employing about 2,800 persons.
The economy of the
location therein of Mary
k burg area is further supported by the
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Federal Reserve Bank of St. Louis
Af?
-6-
Ilashington College and by the nearby location of three Federal military
installations.
serve to
Fredricksburg's numerous historical points of interest
encourage the area's substantial tourist trade.
The evidence of record indicates that Bank has not contributed
to
the
extent of its potential to the commercial and industrial develop-
of the
Fredricksburg area. It is to this point that Applicant has
Arine
iPallY addressed its proposal to provide for Bank additional capital
arid e
/Tanded operations, particularly in the field of commercial and
irlduatrial lending activities.
Applicant intends to effect gradually
substantial change in Bank's loan portfolio so that greater emphasis
1411 be given to the service of commercial and industrial credit requireWith less emphasis on residential mortgage loans, which now comprise
484bstantial portion of Bank's total loan portfolio.
Bank's ability to
sceonlmodate a larger number and size of credit demands will be facilitated,
keording to Applicant, through participations in such loans by other
rile4lbers of
488erts
Applicant's system.
In addition to the foregoing, Applicant
that it will further enable Bank to meet an existing demand for
sales financing
provide fiduciary and agency services
programs) and to
tank's customers through referral to other of Applicant's subsidiaries.
Pith respect to Bank's internal operations, Applicant proposes
-111Pc/ve the same by initiating faster check collection facilities
411c1 8
procedures, inenerallY more progressive operational programs and
tiliclin
g the utilization of Applicant's computer facilities.
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Federal Reserve Bank of St. Louis
-7-
Although in major respects the Board finds that the principal
rig needs
of the Fredr'cksburg area are being adequately served,
it a
PPears that the credit requirements of the growing industrial and
"ITIrrtercial enterprises in the area would be better served by Bank under
APPlicant's control than is presently the case.
The assistance that
APPlicant has rendered its existing subsidiary banks in meeting the
baraci g needs of their respective communities makes reasonable the con1il81011
that the convenience and needs of the Fredricksburg area will
better served
by Bank under Applicant's control.
otfer
SQMe weight for approval of the application.
This consideration
Effect of proposed acquisition on adequate and sound banking,
th
Publi
interest, and banking competition, - Applicant's seven subsidi
'ItY barks (including First National Bank of Vienna, the acquisition
4 was approved by the Board on August 27, 1965) operate 47 offices
hold
deposits aggregating $269 million, representing less than 6 percent
Of
The
the total banking offices and deposits of Virginia banks.
4d(litioa
tooffices
Applicant's holding company system of Bank's four
$6.9
arid
million of deposits would not significantly affect those percentages.
b
ata
1r1 this paragraph relating to banking offices and deposits are
itlQiud°ctober 31, 1965, and December 31, 1964, respectively, adjusted to
A bank mergers consummated and bank holding company acquisitions con:
IrTIMat
(3r approved by the Board as of October 31, 1965, and, in respect
Ntipalj
- ed Virginia Bankshares Incorporated, a registered bank holding
°f Richmond, Virginia, approval on December 15, 1965, of its
aClqui
js ti°n. of Williamsburg State Bank, Williamsburg, a proposed new bank,
sl,
'tic 1/
11."ieh will be merged the Peninsula Bank and Trust Company and Jamesboth of Williamsburg.
4S of
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Federal Reserve Bank of St. Louis
Neither Applicant nor any other holding company has an office
°I a subsidiary bank located, or competing to any significant degree,
in the primary service area of Bank.
clApr
The nearest office of a subsidiary
licant is about 12 miles from Bank's Stafford branch and about
20 miles
from its head office, and there is a non-holding company bank
°Perat _
ing in the intervening area.
The Board finds that no significant
flclurit 0f existing competition would be eliminated, nor potential
ellThetition precluded, by Applicant's acquisition and operation of Bank.
The banks which will be most directly affected competitively
by
thi
-s Proposal are those headquartered in Fredricksburg. Two of the
th, v,
million,
rre
dricksburg banks, with deposits of $18 million and $16.5
4sPecti
e4-Y, are substantially larger than Bank.
The remaining Bank
14as
0
Pened in June 1964 and has deposits of $1.3 million. The initiation
la Ba
nk of
more aggressive operating policies, found earlier to be the
'result of Applicant's acquisition of Bank, would, in the Board's
Ridame
tend to stimulate competition between Bank and each of its
latger Pr
edricksburg competitors. As for the smaller institution, it was
hatter
eu and commenced business in the face of direct competition from
eh
Of
the other long-established banks, and, despite its relatively
nrrY in the area, apparently has acquired a reasonable share of
ethC
batiking market. There is no reason to believe that its ability to
Qoillpqte e
result
ffectively will be significantly or adversely altered as a
(1APPlicant's acquisition of Bank.
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Federal Reserve Bank of St. Louis
-9-
Two banks which would be less directly affected by this proposal
are headq
uartered in Spotsylvania// and in Quantico, each of which banks
has
•
an office located ten miles from an office of Bank.
of Bank, its distance from the banks in Spotsylvania and
' 81Ze
quantiCo,
The relatively
and, with respect to the bank in Spotsylvania, the fact that
beh,
"
een it and the nearest office of Bank there is an office of one of
the 4•
ed ricksburg
banks, make it unlikely, in the Board's opinion, that
the t• w° banks mentioned in Spotsylvania and Quantico will experience any
tlurable competitive impact following consummation of Applicant's proposal.
in the light of the foregoing considerations and all the facts
rh
-"e record, the Board concludes that consummation of the subject prowould not increase Applicant's size or extent beyond limits conSi
st
nt with adequate and sound banking, the public interest, and the
Preservation of competition in the field of banking.
On the basis of all relevant facts as contained in the record
bQfo
the
Board, and in light of the factors set forth in section 3(c)
:
I t• he Act, it is the Board's judgment that the proposed acquisition would
.Q`• )nsistent
with the public interest and that the application should,
therefore, be app
roved.
bQz
iliber 22, 1965.
e
Ples Bank of Spotsylvania is a small institution which was
in 1964 by some of Bank's directors with the intent of merging
lank after a five-year waiting period required by Virginia law.
:ic)rty -'
."
t e Per cent of that bank's voting shares are owned by seven
'
irej
-ors of
Bank.
ro
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Federal Reserve Bank of St. Louis
C.113(
BOARD OF GOVERNORS
Item No. 7
12/22/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 22, 1965.
11r. Eliot J. Swan, President,
l'ederal Reserve Bank of San Francisco,
San Francisco, California.
94120
Dear Mr.
Swan:
As Vice President Galvin has been informed in a separate
letter of
this date, the Board has approved the application, under
e1:.ank Merger Act of 1960 (12 U.S.C. 1828(c)), for the Board's
Prior
consent to the merger of South Bay Bank, Manhattan Beach,
California, into Fidelity Bank, Beverly Hills, California.
When the Board considered this application, it gave
icularly careful attention to the bank's general condition and
the
ab quality and capacity of its management in view of comments
these factors in the most recent report of examination. In
reach
a favorable conclusion, the Board placed reliance on the
ching
vi
!
„'w8, conclusions, and recommendation of the Federal Reserve Bank
San Francisco.
While the Board concluded that Fidelity Bank's condition
and ma_
thatmanagement were such as to justify approval of the merger, it believes
un„ closer than usual supervisory attention should be given this bank
a;_',11 such time as it is certain that the improved condition is permanent
b_: not merely
temporary. For this reason the Board requests the Federal
:741!rve Bank of San Francisco to supervise this bank more closely than
Id be necessary were the bank's condition better.
Very truly yours,
(Signed)
Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
4_3(
JA
Item No. 8
12/22/65
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
------------- ;
14 the
Tatter of the Application of
PIDEtrry
BANK
approval of merger with
004th Bay
Bank
1
ORDER APPROVING MERGER OF BANNS
pursuant to the
There has come before the Board of Governors,
4411: Merger
Act of 1960 (12 U.S.C. 1828(c)), an application by Fidelity
hrik) Beverly Hills, California, a State member bank of the Federal
lia System, for the Board's prior approval of the merger of that
11"
"
bank
charter
and South
Bay Bank, Manhattan Beach, California, under the
and
the sole office
title of the
former. As an incident to the merger,
"Nith Bay
Bank would become a branch of the resulting bank.
Notice
been published
°f the Pr°Posed merger, in form approved by the Board, has
141sualltto
said Act.
the light of
UPon consideration of all relevant material in
the
actors
set forth in said Act, including reports furnished by the
e°1111)troll ___
Insurance Corporation,
''r of the Currency, the Federal Deposit
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Federal Reserve Bank of St. Louis
-4362
-2the Attorney General on the competitive factors involved in the
111%1Posed merger,
IT IS HEREBY ORDERED, for the reasons set forth in the
4ardes
IS
Statement of this date, that said application be and hereby
approved.
IT IS FURTHER ORDERED that the said merger may be
cor'wzmated at any time within, but not later than, three months after
the 4te of this Order, the Board having determined, pursuant to its
of Procedure (12 CFR 262.2(f)(5)), that the public interest
'
'
114114 be served by waiver of the requirement that the transaction not
be c
emsummated within seven calendar days after the date of this
Dated at Washington, D. C., this 22nd day of December,1965.
By order of the Board of Governors.
Voting for this action: Vice Chairman Balderston,
and Governors Robertson, Shepardson, Mitchell, Daane,
and Maisel.
Absent and not voting:
Chairman Martin.
signed)
Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
Item No. 9
12/22/65
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION OF FIDELITY BANK
FOR APPROVAL OF MERGER WITH
SOUTH BAY BANK
STATEMENT
with
Fidelity Bank, Beverly Hills, California ("Fidelity"),
to.
2
ueposits of $36.5 million, has applied, pursuant to the Bank Merger
Act est
1960 (12 U.S.C. 1828(c)), for the Board's prior approval of the
Tiler
Of that bank and South Bay Bank, Manhattan Beach, California
(4L
~Y
banks
which has total deposits of $8 million.' The
%tilt"
Illerge under the charter and title of Fidelity, which is a member
th
e Federal Reserve System. As an incident to the merger, the sole
off.
`xceof
increasing the
Bay Bank would become an office of Fidelity,
titrher
the be
Of
its offices to three.
each of
As required by law, the Board has considered, as to
nks involved, (1) its financial history and condition, (2) the
4detitiee
prospects,
/7 of its capital structure, (3) its future earnings
(4'1
- the „.
- 6eneral character of its management, (5) whether its corporate
lt figures are as of June 30, 1965.
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Federal Reserve Bank of St. Louis
-2.15°17ers are consistent with the purposes of 12 U.S.C., Ch. 16 (the
Pea
rtu Deposit Insurance Act), (6) the convenience and needs of the
Co
to
be served, and (7) the effect of the transaction on
c°41Petition (including any tendency toward monopoly).
The Board
not approve the transaction unless, after considering all of
the
factors, it finds the transaction to be in the public interest.
Banking factors. - Fidelity concentrates in lending to real
es
tate
developers, brokers, and investors.
40
Per cent of the bank's total loans.
This business comprises about
While such credits often tend
large and complex, the management of Fidelity has demonstrated
ell'ertise in this specialized banking activity.
With an addition to
al scheduled to be made at an early date, the bank's capital position
"
e
'
'
4 be strengthened.
satisfactory,
Its net operating earnings have been
"0Porating economies now being effected portend favorable earnings
Pro
spects.
Bay Bank's management is in the hands of its president who is
pest
this
normal retirement age.
Furthermore, there is a need at the bank for
ti°nal management caliber personnel.
si
tuation have not been successful.
44der
Thus far, efforts to remedy
As the resulting bank would be
proposal would solve this
FidelitY S management, consummation of the
koblem at
diversification in the
Bay Bank. It would also provide needed
1
portfolio of the resulting bank; and considerations otherwise relevant
to the
of the proposal.
banking factors are not inconsistent with approval
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Federal Reserve Bank of St. Louis
_3_
tfi
Fidelity, located
Convenience and .needs of the communities. in tie
West Los Angeles.
verlY Hills, operates one branch in nearby
The
offices would
e°11Nenience and needs of the areas served by Fidelity's
not be affected by effectuation of the proposal.
Pacific shore approximately
Manhattan Beach, situated on the
"miles southwest of downtown Los Angeles, has a population of about
34,000
trade area is estimated at 62,000.
3 and the population of its
Nae a '-bedroom" community in
attendant
the main, Manhattan Beach has the
and air-space research
business and a mixture of light industry
fitts
neighboring
The area is heavily dependent for employment upon
*
airer
electronic manufacturing
aft manufacturing plants, oil wells,
Plants
for increasing
) and engineering research firms. The prospect is
deve,
including
'cilment and construction in certain areas near Bay Bank,
stion
"I'lng centers and residential building.
banking offices,
Bay Bank's "service area"-a/ contains 12 other
the State.
itleluding nine offices of four of the largest banks in
The
without
11414ng needs of the area, therefore, would not appear to be
"actuate
consummation of the transaction would
sources of supply. However,
taise
$350,000, make available FHA
the lending limit from $54,000 to over
atId
expected to otherwise improve
real estate financing, and would be
the s
This would permit greater
ervice now available at By Bank.
or more of its deposits
from which a bank derives 75 per cent
4.viduals, partnerships, and corporations.
The
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Federal Reserve Bank of St. Louis
el3(
-4-Patticipation by that banking office in the expansion and development taking
Place and contemplated in the Manhattan Beach area, particularly real
eState
benefits
construction, while at the same time providing substantial
tO •pk
-QY Bank's customers.
Competition. - The nearest office of Fidelity to Bay Bank is
/°eated 10
miles to the northwest.
The service areas of the two banks
do n
Airport,
°t overlap and are separated by the Los Angeles International
'esidential
communities, and small industrial areas.
There is virtually
40 c„
w mpetition between the two banks.
Bank, operating
There is one other small bank, Gateway National
-4Y tank's service area.
The national bank has proven its ability to
offices of
°Iete effectively with other banks in the area, including
1414th larger banks, and should not be adversely affected if the proposal is
41
°Ved.
size of Fidelity
The foregoing, together with the relatively minor
ahdi3„
in which
'Y Bank in relation to the highly concentrated banking market
they
CO mpete and the fact that their respective service areas are served by
consummation of
other competitors, warrants the conclusion that
the
Pr°Posal would have no adverse competitive effect.
approval of the proposal
Summary and conclusion. - As just noted,
and would be expected
%11)1141 nest result in any adverse effect on competition
b
community and customers now served
g some increase in benefits to the
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Federal Reserve Bank of St. Louis
4 417 Bank, It would solve the management problem at that bank and
Pl ide needed diversification in the loan portfolio of the resulting
bank.
Acco d ngly, the Board finds that the proposed mergerwould
n the pubijc interest.
betel:abet- 22$
1965*
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No. 10
12/22/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
••11.RE.StW.*.
December 23, 1965.
CONFIDENTIAL (FR)
Dear Sir:
you
You will recall that, by letter of October 20, 1964,
Regulaamending
of
were asked for your views on the advisability
notes within the
tions Q and D to bring member banks' promissory
coverage of those regulations.
by the Board in
The response of your bank was considered
publication in the Federal Register
tentatively approving, for
early in January 1966, a Notice of Proposed Rule Making with respect
to a
adopted, would require
definition of the term "deposit" that, if
ember banks to treat promissory notes of the types some of them
ve been issuing since September 1964 as deposits subject to the
reserves against
governing the payment of interest on and
deposit .
"'posits
T
r
for your confidenA copy of the draft Notice is enclosed
will follow the
Board
tial information. As indicated therein, the
to submit data,
ity
opportun
usual method of affording the public an
ts.
amendmen
voposed
iews, or arguments in connection with the
Very truly yours,
Merritt Sherman,
Secretary.
Enclosure
T° THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS.
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Federal Reserve Bank of St. Louis
IfT"
BOARD OF GOVERNORS
Item No. 11
12/22/65
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
OFFICE OF THE VICE CHAIRMAN
December 22, 1965.
.c.c2EIDENTIAL (FEI
Mr. Homer A. Scott, Chairman,
rederal Reserve Bank of Kansas City,
Kansas City, Missouri. 64106
Dear Homer:
The Board of Governors approves the payment of
salaries to Mr. George H. Clay as President and Mr. Henry O.
KoPpang as First Vice President of the Federal Reserve Bank
of Kansas City at rates of $42,500 and $30,000 per annum,
respectively, effective January 1, 1966. The rates approved
are those fixed by your Board of Directors, as reported in
Your letters of October 18 and December 16, 1965.
Sincerely you
(Signed) C. C. Balderston
C. Canby Balderston,
Vice Chairman.
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Federal Reserve Bank of St. Louis
- ii (14-'4.4
BOARD OF GOVERNORS
OF THE
Item No. 12
12/22/65
FEDERAL RESERVE SYSTEM
WASHINGTON
OFFICE
or THE VICE CHAIRMAN
December 22, 1965.
CONFIDENTIAL ,(FR)
Mr. Atherton Bean, Chairman,
Federal Reserve Bank of Minneapolis,
Minneapolis, Minnesota. 55440
Dear Atherton:
payment
The Board of Governors has approved the
rate of
the
of salary to First Vice President Strothman at
action
This
$29,000 per annum, effective January 1, 1966.
amend1965,
was recommended in your letter of December 8,
of
rate
ing your previous request for approval at the
$28,500.
Sincerely yours,
(Signed) C. C. Balderston
C. Canby Balderston,
Vice Chairman.
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4 "1
ti a _A.
Item No. 13
12/22/65
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
orrsciAL
CORRESPONDENCE
TO THE BOARD
December 22, 1965.
CONFIDENTIAL (FR)
Mr. George H. Ellis, President,
Federal Reserve Bank of Boston,
Boston, Massachusetts. 02106
Dear Mr. Ellis:
December 20, 1965, the
With reference to your letter of
salary to Assistant
Board of Governors approves the payment of
$15,500, effective
Vice President Tangney at his current rate of
This rescinds the preJanuary 1, 1966, to date of termination.
to $17,500, effective
vious authorization to raise his salary
January 1.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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