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Minutes for To: Members of the Board From: Office of the Secretary December 27, 1963 Attached is a copy of the minutes of the e Board of Governors of the Federal Reserv 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. Daane r 4.3 Minutes of a meeting of the available members of the Board of Governors of the Federal Reserve System on Friday, December 27, 1963. The meeting was held in the Board Room at 10:00 a.m. PRESENT: Mr. Robertson, Acting Chairman Mr. Mitchell Mr. Daane Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary MDlony, Assistant to the Board Cardon, Legislative Counsel 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 Hexter, Assistant General Counsel Hooff, Assistant General Counsel Goodman, Assistant Director, Division of Examinations Spencer, General Assistant, Office of the Secretary The following actions were taken subject to ratification at the next meeting of the Board at which a quorum was present: Discount rates. The establishment without change by the Federal St. Louis, Minneapolis, Reserve Banks of Cleveland, Richmond, Atlanta, 26, 1963, of the rates on discounts Kansas City, and Dallas on December and advances in their existing schedules was approved unanimously, with the understanding that appropriate advice would be sent to those Banks. Re ort on competitive factors Pennsylvania . Claysburg-Williamsburg, There had been distributed a draft of report to the regarding the competittve factors involved Comptroller of the Currency 455f; 12/27/63 -2- in the proposed merger of The Farmers and Merchants National Bank of Williamsburg, Williamsburg, Pennsylvania, into The First National Bank of Claysburg, Claysburg, Pennsylvania. The conclusion in the report read as follows: The Farmers and Merchants National Bank of Williamsburg and The First National Bank of Claysburg serve different sections of Blair County, and there is virtually no competition between them. The instant proposal would not have adverse competitive effects on other banks. The report was approved unanimously for transmittal to the Comptroller. Circulated or distributed items. The following items, copies Of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Telegram to the Federal Reserve Agent at Minneapolis authorizing the issuance of a limited permit to Bancorporation of Montana, Great Falls, Montana, to vote its stock of Liberty County Bank, Chester; Citizens Bank of Montana, Havre; and Central Bank of Montana, Great Falls, Montana. 1 Telegram to the Federal Reserve Agent at Richmond authorizing the issuance of a limited permit to Virginia Commonwealth Corporation, Richmond, Virginia, to vote its stock of The Peoples National Bank of Pulaski, Pulaski, Virginia. 2 Letter to County Trust Company, Tenafly, New Jersey, approving an extension of time to establish a branch at 2 West Clinton Avenue. 3 Letter to International Banking Corporation, New York, New York, granting an extension of time to acquire shares of a French holding company. 14. 4557 -3- 12/27/63 Item No. Letter to The Provident Bank, Cincinnati, Ohio, approving the establishment of a branch at Vine and Seventh Streets coincident with the relocation of the bank's main office. 5 Letter to Union Trust Company of Maryland, Baltimore, Maryland, approving the establishment of a branch in the Frankford Plaza Shopping Center. 6 Letter to the Federal Reserve Bank of Richmond authorizing waiver of a deficient reserve penalty incurred by Loudoun National Bank of Leesburg, Leesburg, Virginia. 7 Letter to Bexar County National Bank of San Antonio, San Antonio, Texas, granting its request for permission to maintain reduced reserves. 8 Letters to Wells Fargo Bank, San Francisco, California, approving the establishment of branches in Anderson, Corning, El Cerrito, and Santa Rosa. 9-12 Letter to Wells Fargo Bank, San Francisco, California, granting an extension of time to establish a branch at 20th and Franklin Streets, Oakland. 13 Letter to the Federal Reserve Bank of San Francisco authorizing waiver of deficient reserve penalties incurred by Golden Gate National Bank, San Francisco, California. 14 Letter to the Federal Reserve Agent at Kansas City approving the appointment of Donald L. Alexander and Cecil B. Foley as Alternate Assistant Federal Reserve Agents. 15 Re uest from Chairman Patman re ardin. certain Reserve Bank ex enditures. In a letter dated December 14, 1963, Chairman Patman of the House Committee on Banking and Currency asked that the Federal Reserve Banks furnish certain information regarding expenditures -4- 12/27/63 (1) for tuition and other costs for Bank employees to attend schools, seminars, conferences, and conventions, and (2) for "imparting information." Attached to Chairman Patman's letter was a list of specific topics on which information was requested. On December 19, 1963, a letter was sent by the Board to each Federal Reserve Bank enclosing a copy of the letter from Chairman Patman and asking that it be reviewed and an indication given of the approximate date on which the information requested might be expected to reach the Board. It was reported at this meeting that advice from some of the Reserve Banks indicated that, in the absence of working overtime and deferring other matters, it would be difficult to furnish the information requested until around the end of January or early February. In discussion, it was the consensus that consideration should be given to a reply to Chairman Patman next week that would advise of the prospective dates on which the information would be made available. Capital notes and debentures. There had been distributed a memorandum dated December 27, 1963, from the Legal Division in connection with an interpretation by the Comptroller of the Currency dated December 17, 1963, and published in the Federal Register for December 24, 1963, that the proceeds of capital notes, capital debentures, or other similar obligations issued by a national bank, 455fl -5- 12/27/63 subordinate in right of payment to the prior payment in full of deposit liabilities, may be included as part of such bank's unimpaired capital stock and unimpaired surplus funds for the purpose of computing the limits on loans to individual borrowers prescribed by 12 U.S.C. 84 (Sec. 5200, Revised Statutes). It was understood that a memorandum from the Legal Division would be distributed later in the day on the subject of another published interpretation by the Comptroller, relating to loans to executive officers of national banks. It was suggested, in connection with the interpretation on capital notes and debentures, that a memorandum be prepared for the Board's consideration that would spell out the legal points involved and also policy questions with respect to the use of debentures. 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: Letter to the Federal Reserve Bank of Richmond (attached Item No. 16) regarding its advice to the Board concerning indebtedness of two examiners to a national bank. Memoranda from appropriate individuals concerned recommending the following actions relating to the Board's staff: 4.2.221aLataL Jewell I. Seay as Indexing and Reference Assistant, Office of the Secretary, with basic annual salary at the rate of $4,565, effective the date of entrance upon duty. ($4,690 under salary schedule effective January 5, 1964.) 4560 12 27 63 -6- Salary increase Anne T. Roberson, Secretary, Division of Research and Statistics, from $6,055, to $6,465 per annum, effective January 5, 1964. ($6,770 under salary schedule effective January 5, 1964.) Charlge in headquarters Edward W. Healey, Assistant Federal Reserve Examiner, Division of Examinations, from Washington, D. C., to San Francisco, California, effective January 3, 1964. Secretar 456i TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item No. 1 12/27/63 December 27, 1963. BEAN -- MINNEAPOLIS XECEA A. Bancorporation of Montana, Great Falls, Montana. B. Liberty County Bank, Chester, Montana. Citizens Bank of Montana, Havre, Montana. Central Bank of Montana, Great Falls, Montana. C. None. D. At any time prior to May 1, 1964, at the annual meetings of, shareholders of such barks, or any adjournments thereof, to elect directors, and to act thereat upon such matters of a routine nature as are ordinarily acted upon at the annual meetings of such banks. (Signed) Elizabeth L. Carmichael CARMICHAEL Definition of KECEA: The Board authorizes the issuance of a limited voting permit, under the provisions of section 5144 of the Revised Statutes of the United States, to the holding company affiliate named below after the letter "A% entitling such organization to vote the stock which it owns or controls of the bank(s) named below after the letter "B", subject to the condition(e) stated below after the letter "C". The permit authorized hereunder is limited to the period of time and the purposes stated after the letter "D". Please proceed in accordance with the instructions contained in the Board's letter of March 10, 1947, (S-964). GRAM TELE WIRE SERVICE LEASED RESERVE SYSTEM BOARD OF GOVERNORS OF THE FEDERAL WASHINGTON Item No:IP32 12/27/63 December 27, 1963 HYDE -- RICHMOND XECEA ond, Virginia. A. Virginia Commonwealth Corporation, Richm B. The Peoples National Bank of Pulaski, Pulaski, Virginia. C. None. l meeting of shareD. At any time prior to April 1, 1964, at the annua to elect holders of such bank, or any adjournments thereof, (1) matters directors for the ensuing year and act thereat upon such l of a routine nature. as are ordinarily acted upon at the annua Incorpomeetings of such bank; and (2) to amend the Articles of ase in the board of directors ration to: (a) provide for an incre of shareby not more than two directors between annual meetings from $25 to g holders, (b) Change the par value of outstandin stock end, (d) eliminate $10 per share, (c) declare a 100 per cent stock divid s of shareholders, and pre-emptive or preferential subscription right (2)(a) through (e) take all action necessary in accomplishing items shall be in accordance with -(2)(d), provided that all action taken roller of the Currency. STOP. Please plans satisfactory to the Compt rized herein until such time withhold issuance of the permit autho nia Commonwealth Corporation that as you have been notified by Virgi affiliate of such bank. Meanwhile, it has become a holding company Corporation that a limited voting you may assure Virginia Commonwealth on. permit will be issued upon such notificati (Signed) Elizabeth L. Carmichael CARMICHAEL Definition of KECEAt t, issuance of a limited voting permi The Board authorizes the ed Statutes Revis of the 5144 on secti under the provisions of the holding company affiliate named to of the United States, to "A", entitling such organization below after the letter owns or controls of the bank(s) named vote the stock which it stated "B", subject to the condition(s) below after the letter rized hereunder autho t permi The "C". below after the letter stated after d of time and the purposes is limited to the perio proceed in accordance with the instructhe letter "D". PleaseBoard's letter of March 10, 1947, (S-964). tions contained in the Item No. BOARD OF GOVERNORS 3 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL- CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, County Trust Company, Tenafly, New Jersey. Gentlemen: The Board of Governors of the Federal an extension until Reserve System has approved time within which County the of 1964, 30, December sh a branch at 2 West establi may Company Trust Clinton Avenue, Tenafly, New Jersey. The establishment of this branch was authorized in a letter dated December 29, 1961. Very truly yours, (Signed) Elizabeth L. Elizabeth L. Carmichael, Assistant Secretary. Carmichael Item No. BOARD OF GOVERNORS 12/27/63 . OF THE 4 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963 Corporation, International Banking 399 Park Avenue, New York 22, New York. Gentlemen: dge your letter of December 2, This will acknowle Federal Reserve Bank of New the 1963, transmitted through letter of December 10, 1962, d's Boar York, referring to the ional Banking Corporation rnat Inte for which granted consent of a French holding comk stoc tal capi to purchase and hold ,000, subject to certain ed $800 exce to pany, in an amount not es were shar acquired within one year. the conditions and provided , although the discussions are It is noted that torily, your negotiations could not be proceeding satisfac 10, 1963, and you have requested a year's completed by December permission to consummate the transaction to extension of the December 10, 1964. with your request, the time within In accordance French holding company may be acquired which the shares of the December 10, 1964. is hereby extended to Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. Item No. 5 12/27/63 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, The Provident Bank, Cincinnati, Ohio. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by The Provident Bank, Cincinnati, Ohio, at the southeast corner of Vine and Seventh Streets, Cincinnati, Ohio, coincident with the relocation of The Provident Bank's main office from that location to the southeast corner of Vine and Fourth Streets, Cincinnati, Ohio. The Board has approved this branch provided the branch is established within 30 months from the date of this letter, and provided further that branch operations flow conducted at Main and Fourth Streets, Cincinnati, Ohio, are discontinued simultaneously with the opening of the new main office. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, A. 3i ftant Secret:try. (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.) 41 s643 BOARD OF GOVERNORS Item No. 6 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, Union Trust Company of Maryland, Baltimore, Maryland. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by Union Trust Company of Maryland, Baltimore, Maryland, of a branch in the Frankford Plaza Shopping Center located at the southwest corner of Frankford Avenue and Moravia Road, Baltimore, Maryland, provided the branch is established within six months from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. that the Board (The letter to the Reserve Bank stated of the period also had approved a six-month extension if an extension that allowed to establish the branch; and ibed in the should be requested, the procedure prescr 6), (S-184 be should 1962 9, er Novemb of Board's letter ed.) follow 4[56 e BOARD OF GOVERNORS Item No. 7 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Mr. Aubrey N. Heflin, First Vice President, Federal Reserve Dank of Richmond, Richmond, Virginia. 23213 Dear Mr. Heflin: December 13, 1963, regarding This refers to your letter of National Bank of Leesburg, Loudoun the a penalty of $73.08 incurred by deficiency in its required reserves for the Leesburg, Virginia, on a August 21, 1963. biweekly computation period ended deficiency resulted from the It is noted that (I) the use the immediate credit symbol to failure subject bank's inadvertent ndent banks for credit to its correspo on drafts drawn on two of its ed too late to avoid discover was omission reserve account; (2) the been have sooner had the detected could the deficiency, although it t of its account promptly statemen daily Bank's member bank checked your has a good record in maintaining its Upon receipt; and (3) the bank reqUired reserves. Board authorizes your Bank to waive In the circumstances, the for the period ended August 21, $73.08 of the assessment of the penalty 1963. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. .456T Item No. BOARD OF GOVERNORS 8 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, ' Bexar County National Bank of San Antonio, San Antonio, Texas. Gentlemen: With reference to your request submitted through the Board of Governors, acting Federal Reserve Bank of Dallas, the the Federal Reserve Act, of 19 under the provisions of Section County National Bank of San Antonio grants permission to the Bexar to maintain the same reserves against deposits as are required to be maintained by nonreserve city banks, effective with the first beginning after the date of biweekly reserve computation period this letter. the fact that such perYour attention is called to Board of Governors. the by mission is subject to revocation Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. , BOARD OF GOVERNORS 9 12/27/63 Item No. OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25 D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by Wells Fargo Bank, San Francisco, California, in the downtown business section of Anderson, California, provided the branch is established within six months from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, 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.) 457') Item No. 10 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 12/27/63 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963 Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by Wells Fargo Bank, San Francisco, California, in the downtown business section of Corning, Tehama County, California, 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. stated that the (The letter to the Reserve Bank h extension of the six-mont a approved Board also had and that branch; the h establis period allowed to ed, the request procedure be if an extension should 9, of letter November prescribed in the Board's .) followed 1962 (S-1846), should be 4, BOARD OF GOVERNORS Item No. 11 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963 Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by Wells Fargo Bank, San Francisco, California, in the vicinity of San Pablo Avenue and the Alameda-Contra Costa County line in El Cerrito, Contra Costa County, California, 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. (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.) el-.")7.2 Item No. 12 12/27/63 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 CORRESPONDENCE AODREBS OFFICIAL TO THE BOARD December 27, 1963 Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by Wells Fargo Bank, San Francisco, California, in the vicinity of the intersection of Edwards and Cleveland Avenues, Santa Rosa, California, provided the branch i!; established within six months from the date of this letter. It is the Board's understanding that the new branch will be opened in temporary quarters in the vicinity of the intersection of Steele Lane and Range Avenue, an unincorporated area of Sonoma County, California (adjacent to the city limits of Santa Rosa, California), and that branch operations in the temporary quarters will be discontinued simultaneously with the Opening of the branch in permanent quarters. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, 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-1646), should be followed.) Item No. 13 BOARD OF GOVERNORS 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve n which System extends to December 30, 1.965, the time withi west south the at h a branc lish estab Wells Fargo Bank may that ded provi nd, Oakla ts, Stree lin corner of 20th and Frank ts, Stree er Webst and 22nd at cted branch operations now condu ent lishm estab the with usly taneo Oakland, are discontinued simul of the new branch. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 4574 BOARD OF GOVERNORS Item No. 14 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 271 1963 Mr. A. B. Merritt, Vice President, Federal Reserve Bank of San Francisco, San Francisco, California. 94120 Dear Mr. Merritt: This refers to your letter of December 13, 1963, regarding the penalties of $94.93 and $270.03 incurred by the Golden Gate National Bank, San Francisco, California, on deficiencies in its required reserves for the computation periods ended December 4 and 11, respectively. It is noted that (1) the deficiencies occurred because, through misunderstanding, the subject bank began maintaining reserves at the rate required of non-reserve city banks prior to the authorized effective date; (2) until that time the bank had maintained adequate reserves at the rate required for reserve city banks; and (3) your Bank feels it may have contributed to the misunderstanding by not informing the bank as to the exact date on which its permission to carry reserves at the lower rate became effective. In the circumstances, the Board authorizes your Bank to waive the assessment of the penalties of $94.93 and $270.03 for the periods y. ended December 4 and 11, respectivel Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 457F BOARD OF GOVERNORS Item No. 15 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS OFFICIAL CCIVIvRES0aNCEINICE TO THE 430ARO December 27, 1963. Mr. Homer A. Scott, Federal Reserve Agent, Federal Reserve Bank of Kansas City, Kansas City, Missouri. 64106. Dear Mr. Scott: of December 9, 1963, the As requested in Mr. Mathews' letter of Messrs. Donald L. tment appoin Board of Governors approves the ant Federal Reserve ate Assist Altern Alexander and Cecil B. Foley as and Blair. Agents to replace Messrs. Whitsitt This approval is given with the understanding that Messrs. Reserve Alexander and Foley will be solely responsible to the Federal Agent and the Board of Governors for the proper performance of their l duties, except that, during the absence or disability of the Federa Reserve Agent or a vacancy in that office, their responsibility will be to the Assistant Federal Reserve Agent and the Board of Governors. When not engaged in the performance of their duties as der and Foley Alternate Assistant Federal Reserve Agents, Messrs. Alexan President, the and may, with the approval of the Federal Reserve Agent their with istent incons perform such work for the Bank as will not be Agents. duties as Alternate Assistant Federal Reserve It will be appreciated if ed of the importance of inform fully of the Federal Reserve staff of the from the operations dence indepen of es. ibiliti these respons Messrs. Alexander and Foley are their responsibilities as members Agent and the need for maintenance of the Bank in the discharge of Please have Messrs. Alexander and Foley execute the usual to the Board of Governors Oath of Office which should be forwarded date of their appointment. ve effecti along with notification of the Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 45U BOARD OF GOVERNORS Item No. 16 12/27/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD December 27, 1963. CONFIDENTIAL(FR) Mr. John L. Nosker, Vice President, Federal Reserve Bank of Richmond, Richmond, Virginia. Dear Mr. Nosker: Reference is made to your letter of December 19, 1963, advising the Board that Examiners Douglas T. Hughes and Leonard A. Ross, Jr., have become indebted to First and Merchants National Bank, Richmond, Virginia, through the acquisition by that bank of their' notes to the original nonbank lenders. It is understood, of course, that they will not be permitted to participate in any examination of First and Merchants National Bank until their indebtedness to that bank has been liquidated. Your attention is called to the fact that the renewal of any such loan would be considered as the making of a new loan by the national bank,and apparently would be prohibited by the Criminal Code, as discussed in the Board's letter S-1680 of November 20, 1958. Very truly yours,' (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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