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Minutes for
To:
Members of the Board
From:
Office of the Secretary
December 28) 1961
minutes of the
Attached is a copy of the
erve System on
Res
l
era
Board of Governors of the Fed
the above date.
include a statement
It is not proposed to
ries in this set of
with respect to any of the ent
icy actions required to
minutes in the record of pol
n 10 of the Federal
be maintained pursuant to sectio
Reserve Act.
on with regard to
Should you have any questi
iated if you will advise
the minutes, it will be apprec
ise, please initial
the Secretary's Office. Otherw
at the meeting, your
below. If you were present
roval of the minutes. If
initials will indicate app
tials will indicate
you were not present, your ini
utes.
only that you have seen the min
Chm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
4411
Minutes of the Board of Governors of the Federal Reserve System on
Thursday, December 28, 1961.
PRESENT:
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Noyes, Director, Division of Research and
Statistics
Mr. O'Connell, Assistant General Counsel
Mr. Furth, Adviser, Division of International
Finance
Mr. Goodman, Assistant Director, Division of
Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mr. Spencer, General Assistant, Office of the
Secretary
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Items distributed to the Board,
The following items, which had
been distributed to the members of the Board and copies of which are
attached to these minutes under the respective item numbers indicated,
're approved unanimously:
Item No.
Letter to Bank of America, New York, New York,
extending the time within which a proposed
e'encY of Banca d'America e d'Italia in Trieste
14aY be opened.
1
Letter to Virgin Islands National Bank, Charlotte
44aa1ie, St. Thomas, Virgin Islands, granting content to the purchase of shares of a corporation
b° be organized for the purpose of holding the
641king premises of Virgin Islands National Bank.
2
-2-
12/28/61
As approved, Item No. 2 was in a form more condensed than the
draft of letter originally distributed, reflecting a suggestion by
Mr. Goodman in which the Board concurred.
Prior to approval of the
item, Mr. Goodman recited in some detail, in response to questions
raised by Governor Mills, the nature of the proposed transaction and
reasons why, despite some reservations, he had come to the conclusion
that favorable action on the request could be recommended.
Messrs. Furth and Goodman withdrew from the meeting at this
Point.
Report on competitive factors (Worcester, Massachusetts).
A
draft of report to the Federal Deposit Insurance Corporation on the
eoMpetitive factors involved in the proposed consolidation of Industrial
City Bank and Trust Company, Worcester, Massachusetts, and Industrial
City Bank and Banking Company, Worcester, Massachusetts, had been
distributed with a memorandum from the Division of Examinations dated
December 21, 1961.
The conclusion in the report read as follows:
The proposed consolidation is being effected in order
to convert an industrial bank, with limited powers, to a
trust company with general banking powers. The effect of
such consolidation would probably be beneficial as it would
permit the smallest commercial bank in the area to compete
more effectively with larger banks.
The report was approved unanimously for transmittal to the
Corporation.
Application of Marine Corporation
(Item No. 3).
On October 2,
1961, the Board issued an order approving the application of The Marine
4413
12/28/61
Corporation, Milwaukee, Wisconsin, to acquire 80 per cent or more of
the voting shares of Wisconsin State Bank, Milwaukee, Wisconsin.
There
had now been transmitted to the Board through the Federal Reserve Bank
Of Chicago a request by Marine Corporation for an extension of time to
January 31, 1962, in which to acquire such shares.
Following an explanation by Mr. O'Connell of the reason for
the request, the extension of time was approved unanimously.
A copy of
the letter sent to the Federal Reserve Bank of Chicago in implementation
of this action is attached to these minutes as Item No.
Request for department store sales figures.
3.
Mr. Noyes reported
that he had received a telephone call from the Federal Reserve Bank of
Chicago advising that that Bank had been requested by the Department of
Justice to furnish aggregate departmental sales figures, in dollars, for
clePartment stores in Milwaukee, Wisconsin.
From information available,
it aPpeared that the Justice Department either had a suit pending, or
contemplated one, seeking to block a merger of two large department
stores in Milwaukee on the ground that such merger would be "in restraint
ef trade."
The Department apparently already had dollar departmental
igures for the two merging stores; evidently it wanted the figures for
411 stores in order to show that the two merging stores, combined,
re presented a preponderance of the sales of various types of merchandise.
In further comments, Mr. Noyes pointed out that department store
841es releases issued by the Federal Reserve based on sample stores in
4414
-4-
12/28/61
selected cities, show sales in various departments, whether up or down,
on a percentage basis compared with the preceding year. In this
Particular case, it was felt that reasonably accurate dollar figures
could be provided.
be less reliable.
In many instances, however, the city figures would
If the requested information should be released to
the Department of Justice, this might lead to similar requests in the
future.
In discussion, Governor Mills inquired whether the department
store sales data were not furnished to the Federal Reserve on a confidential basis, to which Mr. Noyes replied that there was an understanding
With the reporting stores that the dollar figures supplied by the individual
stores would be kept confidential.
Governor Mills then referred to a recent Supreme Court decision
involving the St. Regis Paper Company, in which the Court upheld a stand
by the Census Bureau against revealing certain information supplied to
it in confidence.
He felt that the supplying of dollar departmental
beyond
s aes figures to the Justice Department, as requested, would go
the scope of proper cooperation with a department of the Government,
61401 that the furnishing of such figures would come close to contradicting
a Supreme Court decision.
the
Mr. Hackley commented that he was not entirely familiar with
decision cited by Governor Mills.
He was not sure, however, that the
decision would be entirely conclusive in a matter that appeared to
114
12/28/61
-5-
involve a question of policy under the Board's Rules of Procedure.
The question was one of weighing the confidentiality of information
submitted to the Board against the public interest involved in
Cooperating with another Government agency, as permitted under the
Rules of Procedure, by supplying information that would help that
agency to discharge its duties under the law.
Mr. Hackley indicated
that the Legal Division would study the Court decision to which
Governor Mills had referred.
Governor Robertson said that he would favor furnishing the
requested information to the Justice Department.
It seemed to him
that this was information that a Government agency wanted to use in
the conduct of its official business, and that the furnishing of it
could do no harm to any department store or violate any confidential
relationship.
Further discussion related principally to a question raised by
Governors Balderston and Shepardson, and referred to earlier by Governor
141111s, as to whether the furnishing of dollar departmental sales figures
llould in effect reveal the sales of individual stores, aside from those
14vo1ved in the merger, at least in some instances.
Until evidence
could be obtained as to whether or not this would be the result,
Governors Balderston and Shepardson did not feel that they had
8Ufficient information to decide whether they would favor furnishing
the Justice Department the information requested.
441L;
12/28/61
-6-
Accordingly, it was understood that Mr. Noyes would communicate
With the Federal Reserve Bank of Chicago to Obtain additional information,
and that the matter would then be brought back to the Board for further
consideration.
All members of the staff then withdrew and the Board went into
executive session.
Following the meeting, the Secretary was informed by Governor
Shepardson that during the executive session the Board accepted a request
from Jerome W. Shay that his resignation as Legislative Counsel, to be
effective at the close of business December 28, 1961, be withdrawn.
Governor Shepardson also informed the Secretary that the Board had
appointed Mr. Shay Assistant General Counsel in the Legal Division,
effective upon the assumption of his duties in that position, which
action constituted approval of an additional position of Assistant
°eneral Counsel, not provided for in the 1962 budget of the Legal
bivision.
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board the
following items:
Letter to Dr. Frederic D. Chapman confirming arrangements for
annual physical examination of all employees in the Board's
cafeteria, a fee of $125 to be paid upon completion of the examinations.
the
the
Memoranda from appropriate individuals concerned recommending
following actions relating to the Board's staff:
12/28/61
-7-
Appointments
Nancy H. Teeters as Economist, Division of Research and Statistics,
on a half-time basis with basic annual salary at the rate (full-time
basis) of $8,340, effective the date of entrance upon duty. (The
establishment of this additional position of Economist in the Division
Of Research and Statistics was also approved.)
John Albert Treimann as Assistant Federal Reserve Examiner in the
Division of Examinations, with basic annual salary at the rate of
$8,080, effective the date of entrance upon duty.
Salary increasest effective January
7 1962
Division
Name and title
Basic annual salary
To
From
Office of the Secretary
Gertrude E. Booth, Secretary
$ 4,345
$ 4,510
5,655
5,820
6,345
6,675
6,435
6,600
13,250
4,o4o
13,510
4,145
8,955
9,215
3,605
3,815
3,815
3,710
3,920
3,920
Research and Statistics
Anita E. Perrin, Secretary
International Finance
Esther G. Crews, Supervisor, Administrative Staff
Examinations
Richard B. Friedman, Assistant Federal Reserve
Examiner
Jerome T. Kelley, Senior Federal Reserve Examiner
Peggy Jo Powles, Special Assistant Federal Reserve
Examiner
Louis W. Zidek, Federal Reserve Examiner
Administrative Services
Garland R. Gaines, Messenger
Valeria Faina, Charwoman
Catherine Gallagher, Charwoman
441H
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12/28/61
Acceptance of resignation
Virginia C. Westmoreland, Special Assistant Federal Reserve Examiner,
Division of Examinations, effective at the close of business December 31,
1961.
Memoranda from appropriate individuals concerned recommending
merit increases for the following persons on the Board's staff, effective
January 7, 1962:
Name and title
Division
Basic annual salary
To
From
Legal
W. Sutton Potter, Senior Attorney
Judy D. Taylor, Stenographer
Barton Veret, Attorney
$ 7,820
40145
$
81080
11,250
6,435
6,600
12,210
5,850
12,470
6,015
Research and Statistics
Stephen Axilrod, Economist
Ann Clary, Librarian
MaYnard Comiez, Economist
Eleanor Frase, Economist
Raney Harcourt, Secretary
Marjorie Hollingshead, Clerk-Stenographer
Richard Pickering, Economist
Betty Schieman, Statistical Assistant
7,820
8,080
12,730
12,990
4,675
40840
4,145
4,250
9,215
9,475
4,510
4,675
11,155
12,210
110415
12,730
4,675
4,840
4,145
4,250
4,675
6,600
4,840
6,765
International Finance
Prederick R. Dahl, Economist
Yves Maroni, Economist
Examinations
Patricia D'Ambrosio, Secretary
Peggy Jo Powles, Special Assistant Federal
Reserve Examiner
Susan Rowzie, Secretary
James R. Smith, Assistant Review Examiner
4:4
12/28/61
-9-
1962 (continued)
r22_____
L.TLY±EES
.
4elqt'saleuLlETETEa_2S1225
E
Name and title
Division
Basic annual
From
ary
To
e.orominnalimer
Bank Operations
Elizabeth I. Dietrich, Statistical Clerk
James A. McIntosh, Data Processing Analyst
$4,250
7,560
$4,355
7,820
3,605
4,46o
3,290
3,710
4,565
3,395
Administrative Services
Charles P. Brown, Messenger
Willa McC. Davis, Clerk-Stenographer
Edward D. Rogers Messenger
Secre z
BOARD OF GOVERNORS
,otat?,
)4*0
04,3,
OF THE
Item No. 1
12/28/61
FEDERAL RESERVE SYSTEtyl
WASHINGTON 25, D. C.
t1
i4
P:
ADDRESS
OFFICIAL
CORRESPONDENCE
TO THE BOARD
'4404.
December 28,
1961
Mr. Tom B. Coughran,
Executive Vice President,
Bank of America,
41 Broad Street,
New York 15, New York.
Dear Mr. Coughran:
letter of December
This will acknowledge receipt of your
Bank of New York,
ve
Reser
14, 1961, transmitted through the Federal
ing consent
grant
1960
20,
referring to the Board's letter of May
"), Milan,
("BAI
lia
d'Ita
to the establishment by Banca d'America e
Triestein
y
agenc
sed
Italy, of various agencies including a propo
21,
t
Augus
of
r
lette
Via Belpoggio corner Via Grumula and the
the
which
n
withi
time
1961, extending to January 1, 1962, the
Trieste agency may be opened.
you that work on the
It is noted that BAI has informed
slowly and that it.
g
essin
progr
Trieste agency's new premises is
before the early spring
does not appear the agency can be opened
Of 1962.
dance with your' request,
In the circumstances and in accor
1962, the time within
the Board of Governors extends to April 30,
la agency may be
Gramu
r Via
Which the Trieste-Via Belpoggio corne
opened.
Very truly yours, .
(Signed) Kenneth A. Kenyon
Kenneth!. Kenyon,
Assistant Secretary.
4.41.21.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 2
12/28/61
ADDRESS OFFICIAL CORRESPONDENICE
TO THE BOARD
December 28, 1961
1/
„Ygin
Islands National Bank,
wiarlotte Armaie, St. Thomas,
Virgin Islands.
G
entlemen:
Reference is made to a letter dated October 31, 1961, together
ith enclosures, from Mr. William L. Day, Chairman, The First Pennsylvania
ing on
ta*ing and Trust Company, Philadelphia, Pennsylvania, request
of
Board
the
,!half of Virgin Islands National Bank ('VINB") that
ons
provisi
the
to
t
vernors grant consent, under agreement made pursuan
Virgin
by
Section 25 of the Federal Reserve Act, to the exercise
.-slands National Bank of its powers as a national bank under Section 24A
i the Federal Reserve Act to invest in the capital stock of a corpora!
1(3n [VinBank Realty Company ("VBRC")] holding the banking premises of
'
.
V
INB, with the consent of the Comptroller of the Currency.
Il
It is noted that VINB owns two buildings which it occupies,
.1-4 whole or in part, for banking purposes; that the main office of VINB
;t8 carried at $1; and that the Christiansted office is carried at about
40,000, representing construction costs and land acquisition costs.
uirice VINB's capital stock is $335,000, it is noted that VINB's investra
lit the Christiansted office, without the approval of the Comptroller
Currency, is in violation of Section 24A of the Federal Reserve
and that VINB has been given notice of this violation.
V
nt
In a telegram dated November 7, 1961 addressed to Vice Preside
of
Bornn
nt
Preside
lphia,
.u.ziJuell of the Federal Reserve Bank of Philade
advised that the application made by First Pennsylvania Banking and
T
'rust Company regarding VBRC was authorized on behalf of VINB.
The Board of Governors has been furnished with copies of letdated November 24, 1961 and December 7, 1961 which Deputy Comptroller
2: the Currency Wr. M. Taylor has addressed to Mr. Harry E. Sprogell of
'culrInsel for VINB. It is noted that the Office of the Comptroller of the
exerencY feels that an investment in the stock of VBRC in any amount
the present book value of the head office would be tantamount
a
to eeding
0
write up of fixed assets; that the Office would prefer that VINB
the properties outright; but that the Office will not object to the
°Pcsal provided the stock of VBRC is carried at $1.
•
Virgin Islands National Bank
-2-
In view of the position of the Office of the Comptroller of
the Currency and on the basis of information furnished by Chairman
u4Y of First Pennsylvania on behalf of VINB, the Board of Governors
Fants consent to the purchase by Virgin Islands National Bank of all
the shares of a corporation to be organized under the laws of Delaware
for the sole purpose of holding the banking premises of VINB and to be
known as VinBank Realty Company; provided, that the transaction is
e°nsummated within six months from the date of this letter; that the
stock of the VBRC is not carried at a net amount in excess of $1; and
that the banking premises are leased back to VINB at a rental not to
exceed approximately $40,000 per annum.
Please advise the Board of Governors in writing, through the
Pederal Reserve Bank of New York, when the realty company has been
°rganized and furnish copies of the charter or articles of association
and by-laws, together with a list of the directors and officers.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
t
1 4
1.46-:,w 7
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTE, M
Item No.
WASHINGTON 25. O. C.
12/28/61
3
AOORIEBB OFfICIAL CORRIEISPONOCNCC
TO THe BOARD
'Qak Lev,
December 28, 1961
Mr. Hugh J. Helmer, Vice President,
General Counsel and Secretary,
PederallReserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Helmert
This refers to your letter of December 21, 1961,
transmitting for the Board's consideration a request by The
Marine Corporation, Milwaukee, Wisconsin, for an extension of
lme to January 31, 1962, within which the Corporation may acquire
u0 per cent or more of the outstanding voting shares of Wisconsin
State Bank, Milwaukee, approval of which acquisition was given by
the Board on October 2, 1961. It is noted that your Bank recommended favorable consideration of this request.
Confirming oral advice transmitted this date by Mr. Andrew
Thompson of the Board's staff, the Board has granted The Marine
Corporation's request. It will be appreciated if you will advise
,he Marine Corporation of the Board's action and request that your
.
llk be informed of the date upon which the acquisition is
aocomplished.
T
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
@FedFRASER