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Minutes for
To:
Members of the Board
From:
Office of the Secretary
December 29, 1961
Attached is a copy of the minutes of the
Board of Governors of the Federal Reserve System on
the above date.
It is not proposed to include a statement
with respect to any of the entries in this set of
minutes in the record of policy actions required to
be maintained pursuant to section 10 of the Federal
Reserve Act.
Should you have any question with regard to
the minutes, it will be appreciated if you will advise
the Secretary's Office. Otherwise, please initial
below. If you were present at the meeting, your
initials will indicate approval of the minutes. If
you were not present, your initials will indicate
only that you have seen the minutes.
Chin. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
t
11.
.7
64;0'
Minutes of the Board of Governors of the Federal Reserve System
Ott Friday, December 29, 1961.
PRESENT:
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Mr. Sherman, Secretary
Mr. Molony, Assistant to the Board
Mr. Noyes, Director, Division of Research
and Statistics
Mr. Holland, Adviser, Division of Research
and Statistics
Mr. Koch, Adviser, Division of Research and
Statistics
Mr. Landry, Assistant to the Secretary
Mr. Yager, Economist, Division of Research
and Statistics
Money market review.
Mr. Yager reported on money market conditions,
after which Mr. Holland reviewed the situation with respect to bank reserves,
credit, and the money supply.
Following this presentation, Messrs. Holland, Koch, and Yager
withdrew from the meeting and the following entered the room:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Kenyon, Assistant Secretary
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Johnson, Director, Division of Personnel Administration
Hexter, Assistant General Counsel
Furth, Adviser, Division of International Finance
Kiley, Assistant Director, Division of Bank
Operations
Goodman, Assistant Director, Division of Examinations
Leavitt, Assistant Director, Division of Examinations
Discount rates.
The establishment without change by the Federal
Reserve BRnks of New York, Cleveland, Richmond, St. Louis, Minneapolis,
an1 Dallas on December 28, 1961, of the rates on discounts and advances
12/29/61
-2-
in their existing schedules was approved unanimously, with the understanding
that appropriate advice would be sent to those Banks.
Items circulated or distributed to the Board.
The following items,
which had been circulated or distributed to the Board and copies of which
are attached to these minutes under the respective item numbers indicated,
were approved unanimously:
Item No.
Letter to International Banking Corporation, New York,
New York, granting consent to the purchase of
additional capital stock of The First National City
Bank of New York (South Africa) Ltd., Johannesburg,
Union of South Africa.
1
Letter to Federation Bank and Trust Company, New York,
New York, regarding the possibility of applying
'Country bank" reserve status to the first $150,000,000
Of demand deposits held by reserve city banks.
2
Letter to the Federal Reserve Bank of Chicago approving
PaYment of a fee for special legal services.
3
Letter to the Federal Deposit Insurance Corporation
regarding the application of Farmers & Merchants Bank,
Marianna, Arkansas, for continuation of deposit insurance
after withdrawal from membership in the Federal Reserve
System.
Lotter to the Federal Reserve Bank of Atlanta approving
the appointment of C. L. Williams as Federal Reserve
Agent's Representative at the Jacksonville Branch.
5
Letter to the Federal Reserve Bank of Minneapolis
1)Proving the appointment of Richard C. Heiber as
Alternate Assistant Federal Reserve Agent.
6
Letter to the Federal Reserve Bank of Dallas approving
the appointment of Lorenzo E. McCluskey, Jr., as
Federal Reserve Agent's Representative at the El Paso Branch.
7
Telegram to the Federal Reserve Bank of New York approving
the opening of an account in the name of Bank of the
Netherlands Antilles, formerly the Curacao Bank.
8
12/29/61
-3Item No.
Letter to Bankers Trust Company, New York, New York,
approving the establishment of a branch at 1 Whitehall
Street.
9
Letter to Boonton Trust Company, Boonton, New Jersey,
approving the establishment of a branch in Pine Brook.
10
Letter to County Trust Company, Tenafly, New Jersey,
approving the establishment of a branch at 2 West
Clinton Avenue, Borough of Tenafly.
11
Letter to The Ohio Citizens Trust Company, Toledo, Ohio,
approving the establishment of a branch on Secor Road
near the intersection of Central Avenue in Washington
Township.
12
Letter to Pacific State Bank, Hawthorne, California,
approving the establishment of a branch in the vicinity
Of the intersection of Normandie and Carson Streets in
L°s Angeles County.
13
Letter to United California Bank, Los Angeles, California,
aPProving the establishment of a branch at 5th Street
and Wilshire Boulevard, Santa Monica, provided branch
°Perations now conducted at 1401 Third Street, Santa
Monica, are discontinued simultaneously with the
establishment of the new branch.
14
Letter to Wells Fargo Bank American Trust Company, San
Francisco, California, approving the establishment of a
branch at 20th and Franklin Streets, Oakland, provided
banch operations now conducted at 22nd and Webster
S creets, Oakland, are discontinued simultaneously with
the
establishment of the new branch.
15
Telegram to the Federal Reserve Bank of Philadelphia
In terposing no objection to the purchase of the IBM 1401
general data processing system that had been rented under
Purchase option.
16
Telegram to the Federal Reserve Bank of Minneapolis
z...terposing no objection to the rental of a Burroughs
)
,.
270 electronic check processing system, under purchase
oPtion.
17
41_
12/29/61
Messrs. Noyes and Johnson then withdrew from the meeting.
Regulation K (Items 18 and 19).
Copies had been distributed
under date of December 28, 1961, of a memorandum from Mr. Goodman
regarding (1) extension of general consents under Regulation K,
Corporations Doing Foreign Banking or Other Foreign Financing Under
the Federal Reserve Act, and (2) a comprehensive review of the Regulation.
Attached to the memorandum were proposed letters to:
Chase International Investment Corporation
Chemical International Finance, Ltd.
Morgan Guaranty International Finance Corporation,
and
Philadelphia International Investment Corporation
extending from December 31, 1961, to December 31, 1962, the termination
dates of the outstanding general consents to purchase and hold stock in
generally designated types of corporations.
The letters would, in
addition, solicit suggestions from the supervised institutions as to
modifications of Regulation K that they believed would enable them to
carry out their functions more effectively.
There was also attached to
the memorandum a proposed letter that would invite the comments and
suggestions of the 12 other foreign banking and financing corporations
oPerating under sections 25 and 25(a) of the Federal Reserve Act.
The
Pl'°Posed letters would indicate that such comments should be forwarded
by
February 15, 1962.
In commenting on his memorandum, Mr. Goodman referred to previous
discussions indicating that the Board would like to have a general review
K.ek
-5-
12/29/61
of Regulation K undertaken in the near future, particularly inasmuch as
on January 15, 1962, the revised Regulation would have been in effect
for five years.
With respect to the recommendation to extend the
termination date of outstanding general consents for one year instead
of two, Mr. Goodman expressed the view that such a time limit would seem
desirable if a general review of the Regulation was to be made.
Governor Mills said that he favored the extension of the general
consents for one year, within which time an analysis should be made of
the extent and character of the investments made under such authority.
Governor Robertson also expressed a favorable view on the oneYear extension of the general consents.
In connection with the general
review of Regulation K, which he had previously advocated, he suggested
that a committee comparable to the Neal Committee might be established.
In the discussion that followed, there was general agreement that
a review of the Regulation should be made and brought to completion as
expeditiously as possible.
Various suggestions were made regarding the
Most suitable composition of a committee to work on the matter, in which
connection the point was mentioned that a relatively smalJ group might
be able to work more speedily than a large committee.
After further discussion, the letters to four Edge Act corporations
e3ctending for one year from December 31, 1961, the termination date of
the outstanding general consents to purchase and hold stock in generally
d esignated types of corporations and soliciting suggestions for changes
In Regulation K were approved unanimously.
A copy of one of those letters is
-6-
12/29/61
attached as Item No. 18.
The letters to the 12 other Edge and agreement
corporations inviting suggestions with respect to Regulation K also
were approved unanimously.
A copy of one of the letters is attached
Item No. 19.
It was understood that the staff would prepare for consideration
at a forthcoming meeting a memorandum on procedural arrangements that
might be followed in undertaking a general review of Regulation K.
Mr. Dembitz, Associate Adviser, Division of Research and
Statistics, joined the meeting during the foregoing discussion, at the
conclusion of which Messrs. Hexter, Furth, Kiley, and Goodman withdrew.
Letter to Congressman Addonizio (Item No. 20).
Distribution had
been made of a draft of letter to Congressman Addonizio replying to his
letter of December
8, 1961, asking for comments on a report made to him
by Mr. Cardon, Clerk and General Counsel of the House Banking and Currency
Committee, regarding proposed amendments to the Board's Regulation D,
Reserves of Member Banks, which, among other things, would have the effect
Of classifying Newark, New Jersey, as a "reserve city" for purposes of
reserve requirements of member banks.
Following a discussion during which certain changes in the wording
of the draft reply were agreed upon, unanimous approval was given to a
letter in the form attached as Item No. 20.
The meeting then adjourned.
'2
12/29/61
-7Secretary's Notes: Pursuant to the action
taken by the Board on October 30, 1961, in
approving revised Rules of Organization and
Procedure, the revised Rules were published
in the Federal Register on December 28, 1961.
The effective date was December 15, 1961.
Governor Shepardson today approved on behalf
of the Board the following items:
Memorandum from Mr. Landry, Assistant to the Secretary of the
Board recommending that the policy of providing luncheons for various
btate banker and similar banker groups on the occasion of their visits
to the Board be continued in connection with such visits during the
early part of 1962.
Letter to the Federal Reserve Bank of New York (attached
Itemj2.21) approving the reappointment of Edward W. Warde as examiner.
. attached
Letter to the Federal Reserve Bank of St. Louis (
Item No. 22) approving the appointment of Robert H. Timpe as assistant
examiner.
\-/
Secretai'y.
f
4431
BOARD OF GOVERNORS
OF THE
Item No. 1
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONOCNICL
TO THE BOARD
December 29, 1961
International Banking Corporation,
399 Park Avenue,
New York 22, New York.
Gentlemen:
In accordance with the request and on the basis
of information furnished in your letter of December 19, 19612
transmitted through the Federal Reserve Bank of New York,
the Board of Governors grants its consent to the purchase and
holding by your Corporation of additional capital stock of
The First National City Bank of New York (South Africa) Limited
in the amount of 100,000 South African Rands (approximately
US$1402000).
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTp4
WASHINGTON 25. D. C.
Item No. 2
12/29/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 29, 1961
Mr. T. J. Shanahan, President,
Federation Bank and Trust Company,
10 Columbus Circle,
New York 19, New York.
Dear Mr. Shanahan:
This refers to your letter of November 13, 1961, addressed
to Mr. Howard D. Crosse, Vice President, Federal Reserve Bank of
New York, again requesting that consideration be given to the possibility of applying "country bank" reserve status to the first
$1 0,000,000 of demand deposits held by reserve city banks.
Your letter suggests that such action might be taken under
provisions of present law. In this connection, you refer to the 1959
amendment to section 19 of the Federal Reserve Act authorizing the
Board to permit individual banks in reserve and central reserve cities
to maintain the reserve balances required to be maintained by country
banks. You also refer to the authority of the Board under section 19
of the Federal Reserve Act to change by regulation the reserve requirements of member banks of any classification, subject to certain
limitations. Incidentally, the last-mentioned provision was not
amended, as indicated in your letter, in 1959.
Although it is true that the Board, under present law, may
grant permission for an individual member bank in a reserve city to
maintain the lower reserves applicable to country banks without
regard to their geographic location in the city, it would not be
Possible for the Board under this authority to do more than permit
ouch a bank to maintain reserves against demand deposits in the
,Halne percentage as that prescribed by the Board for country banks.
under its authority to change reserve requirements for different
e7;
A.00
ODARD
or
GOVERNORS OF THE FEDERAL RESERVE SYSTEM
T. J. Shanahan
classifications of banks, the Board may fix only a single requirement
for all demand deposits of banks in a particular classification*
Accordingly, the Board would have no authority under present law to
Permit any member bank to maintain reserves against demand deposits
of U500000,000 or less at a level different from the reserves to be
maintained against demand deposits in excess of that amount.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Li:1 .41
BOARD OF GOVERNORS
OF THE
44
:
C0410k
Item No.
FEDERAL RESERVE SYSTEM
3
12/29/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE.
TO THE BOARD
*ti EttIge
4004***
December 29, 1961.
Mr. Carl E. Allen, President,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Allen:
Reference is made to your letter of November 22,
1961, requesting the Board's approval for the payment by the
Federal Reserve Bank of Chicago of a fee of $5,000 to the law
firm of Holt and Kearney, Chicago, for additional services
rendered by that firm in connection with the assessment
valuations of the Bank's Chicago properties for the real
estate taxes for the years 1960, 1961, and 1962. It is understood that the additional services were necessary because of
the Bank's building program during this period.
This is to advise that in the circumstances described in your letter the Board approves payment of the legal
fee in the amount stated.
Very truly yours,
(signed) Merritt Sherman
Merritt Sherman,
Secretary.
1,135
BOARD OF GOVERNORS
citil
OF THE
gOtt,
FEDERAL RESERVE SYSTEM
0'
Item No. 4
12/29/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
tt 41.stat,
,
tioaspa*-
December 29, 1961.
The Honorable Erle Cocke, Sr., Chairman,
Federal Deposit Insurance Corporation,
Washington 25, D. C.
Dear Mr. Cocke:
Reference is made to your letter of December 14,
1961, concerning the application of Farmers & Merchants
Bank, Marianna, Arkansas, for continuance of deposit insurance after withdrawal from membership in the Federal
Reserve System.
No corrective programs which the Board of Governors believes should be incorporated as conditions to the
continuance of deposit insurance have been urged upon or
agreed to by the bank.
Very truly yours,
(signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
WASHINGTON 25, D. C.
12/29/61
5
ADDRESS OFFICIAL CORRESPONDENCE
' TO THE ROARD
December 29, 1961
Mr. Walter M. Mitchell,
Chairman of the Board and
Federal Reserve Agent,
Federal Reserve Bank of Atlanta,
Atlanta 3, Georgia.
Dear Mr. Mitchell:
In accordance with the request contained in your letter of
December 7, 1961, the Board of Governors approves the appointment of
Mr. C. L. Williams as a Federal Reserve Agent's Representative at
the Jacksonville Branch to succeed Mr. William L. Hicks.
This approval is given with the understanding that Mr. Williams
will be solely responsible to the Federal Reserve Agent and the Board
of Governors for the proper performance of his duties, except that,
during the absence or disability of the Federal Reserve Agent or a
vacancy in that office, his responsibility will be to the Assistant
Federal Reserve Agent and the Board of Governors.
When not engaged in the performance of his duties as Federal
Reserve Agent's Representative, Mr. Williams may, with the approval of
the Federal Reserve Agent and the Vice President in.charge of the
'!aeksonville Branch, perform such work for the Branch as will not be
inconsistent with his duties as Federal Reserve Agent's Representative.
It will be appreciated if Nr. Williams is fully
the •
of his responsibilities as a member of the
the Federal Reserve Agent and the need for maintenance of
from the operations of the Bank in the discharge of these
informed of
staff of
independence
responsibilities.
It is assumed that Mr. Williams will execute the usual Oath of
ce, which will be forwarded to the Board of Governors. His appointment will be effective on the date of executLon of the Oath.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No, 6
12/29/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
•t6thktattl,*-ootnoVv
December 29, 1961
,1;11% Atherton Bean,
u hairman
of the Board and
Federal Reserve Agent,
Federal Reserve Bank of Minneapolis,
4111naapolis 2, Minnesota.
Lear Mr. Bean:
In accordance with the request contained in your letter of
ember 14, 1961, the Board of Governors approves the appointment of
Richard c. Heiber as an Alternate Assistant Federal eserve Agent
the Federal Aeserve Bank of Minneapolis.
This approval is given with the understanding that hr. Heiber
b
/1111
e solely. responsible to the Federal Reserve Agent and the Board of
Gov
th ernors for the proper performance of nis duties, except that, during
the absence or disability of the Federal Reserve Agent or a vacancy in
,4k at office, his responsibility will be to the Assistant Federal Reserve
ent and the Board of Governors.
'
loalen not engaged in the performance of his duties as Alternate
%Eclistant Federal Reserve Agent, hr. Heiber may, with the approval of the
as eral Reserve Agent and the President, perform such work for the Bank
Ida
a,
Alternate Assistant Federal
userve not be inconsistent with nis duties as
Agent.
It will
ortance of his
itsee_
tio,::Ye Agent and
-' of the Bank
be appreciated if Mr. Heiber is fully informed of the
responsibilities as a member of the staff of the Federal
the need for maintenance of independence from the operain the discharge of these responsibilities.
It is assumed that, Mr. Heiber will execute the usual Oath of
which will be forwarded to the Board of Governors along with the
'II-cation of the effective date of his appointment.
Off4_
The Board notes that Mr. John A. MacDonald, presently an Alternate
A4Z”ant Federal Reserve Agent, is to receive a new assignment which will
a e4-let with his responsibilities as a member of the staff of the Federal
e3 rre Agent,
ap
Agent, and that at the time he assumes his new responsibilities his
poJas Alternate Assistant Federal Reserve Agent will be terminated.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
[rr
BOARD OF GOVERNORS
OF THE
Item No. 7
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 290 1961
Mr. Robert O. Anderson,
Chairman of the Board and
Federal Reserve Agent,
Federal Reserve Bank of Dallas,
Dallas 2, Texas.
Dear Mr. Anderson:
In accordance with the request contained in your letter of
December 14, 19615 the Board of Governors approves the appointment of
Mr. Lorenzo E. McCluskey„ Jr. as a Federal Reserve Agent's Representative
at the El Paso Branch to succeed Mr. Earl P. Prentiss.
This approval is given with the understanding that Mr. McCluskey
Will be solely responsible to the Federal Reserve Agent and the Board
Of Governors for the proper performance of his duties, except that,
during the absence or disability of the Federal Reserve Agent or a
vacancy in that office, his responsibility will be to the Assistant
Federal Reserve Agent and the Board of Governors.
When not engaged in the performance of his duties as Federal
Reserve Agent's Representative, Mr. McCluskey may, with the approval of
the Federal Reserve Agent and the Vice President in charge of the
1 Paso Branch, perform such work for the Branch as will not be incon81stent with his duties as Federal Reserve Agent's Representative.
It will be appreciated if Mr. McCluskey is fully informed of
he importance of his responsibilities as a member of the staff of the
l'ederal Reserve Agent and the need for maintenance of independence from
the operations of the Bank in the discharge of these responsibilities.
It is noted from your letter that, with the approval of
Mr. McCluskeyis appointment by the Board of Governors, he will execute
the usual Oath of Office which will be forwarded to the Board together
Ilith advice of the effective date of his appointment.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No.
TELEGRAM
12/29/61
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
December 291
COOMBS - NEW YORK
Your wire December 28.
Board approves opening and maintenance
of an account in the name of the Bank of the NetherLmds
Antilles (late the Cura9ao Bank), subject to the usual
terms and conditions.
Understood that participation in
account will be offered to other Federal Reserve Banks.
(Signed) Merritt Sherman
SHERMAN
1961
8
4/4(
BOARD OF GOVERNORS
OF THE
(141 CfgpfL 44t
'Vzt4 0
.0
Item No. 9
FEDERAL RESERVE SYSTEM
12/29/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
Dccxab.er 29, 1961
Board of Directors,
Bankers Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of an in-town branch
at 1 Whitehall Street, Borough of Manhattan, by Bankers
Trust Company, provided the branch is established within
twelve months from the date of this letter.
Very truly yours,
(Signed) Kenneth A4 Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
4: 4
BOARD OF GOVERNORS
OF THE
Item No. 10
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 29; 1961
Board of Directors,
Boonton Trust Company,
Boonton, New Jersey.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment by Boonton
Trust Company, Boonton, New Jersey, of a branch in
Pine Brook (Unincorporated Area), Montville Township,
Morris County, New Jersey, provided the branch is
established within twelve months from the date of this
letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 11
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
Deccmber 29, 1961
Board of Directors,
County Trust Company,
Tenafly, New Jersey.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
approves the establishment of a branch at 2 West Clinton
Avenue, Borough of Tenafly, Bergen County, New Jersey, by
County Trust Company, Tenafly, New Jersey. This approval
is given provided the branch is established within one
year from the date of this letter. It is noted that
approval of the New Jersey Commissioner of Banking and
Insurance was given with the understanding that capital
would be increased by approximately $750,000.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOAED OF GOVERNORS
OF THE
44{112***4_
CP 001/4*00
44
40
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
i4
a
Item No. 12
12/29/61
ADDRESS OFFICIAL CORRESPONDENCE
TO INC BOARD
a:
str*
,
December 29, 1961
Board of Directors,
The Ohio Citizens Trust Company,
Toledo, Ohio.
Gentlemen:
The Board of Governors approves the establishment of a branch on Secor Road near the intersection of
Central Avenue in Washington Township, Ohio, by The Ohio
branch
Citizens Trust Company, Toledo, Ohio, provided the
this
of
letter.
date
the
is established within one year from
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
4444
BOARD OF GOVERNORS
OF THE
,G6s74
eiA
.
Vt1
Item No. 13
12/29/61
FEDERAL RESERVE SYSTEM
A*
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
7,tt%'
Ntti),3•
*oti.0401**
December 29, 1961
Board of Directors,
Pacific State Bank,
Hawthorne, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of a branch by Pacific
State Bank in the vicinity of the intersection of Normandie
and Carson Streets in an unincorporated area of Los Angeles
County, California) provided the branch is established within
one year from the date of this letter.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
445
BOARD OF GOVERNORS
OF THE
,011R*rtrto
‘
,
,t
Cif 601,
)1`1
,
Item No. 14
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
4
4
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 290 1961
Board of Directors,
United California Bank,
Los Angeles, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of a branch by United
California Bank, Los Angeles, California, at the southeast corner of 5th Street and Wilshire Boulevard, Santa
Monica, California, provided the branch is established
within one year from the date of this letter, and provided further that branch operations now conducted at
1401 Third Street, Santa Monica, are discontinued simultaneously with the establishment of the above branch.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
4446
BOARD OF GOVERNORS
OF THE
Item No. 15
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADORUSt.i OFFICIAL CORRESPONDENCE
TO THE BOARD
December 29, 1961
Board of Directors,
Wells Fargo Bank American Trust Company,
San Francisco, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of a branch at the
southwest corner of 20th and Franklin Streets, Oakland,
California, by Wells Fargo Bank American Trust Company,
Provided the branch is established within one year from
the date of this letter, and provided further that branch
Operations now conducted at 22nd and Webster Streets,
Oakland, are discontinued simultaneously with the establishment of the above branch.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
Item NO. 16
12/29/61
TELEGRAM
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
December 29, 1961.
Hilkert - Philadelphia
Board interposes no objection to purchase of general
data processing equipment referred to in your letter December 26
and accompanying memoranda.
(Signed) Merritt Sherman
SHERMAN
AT, c)
q•
.
1
Item No. 17
12/29/61
TELEGRAM
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERyE SYSTEM
WASHINGTON
December 29, 1961.
Deming
Minneapolis
Board interposes no objection to your proposal
for
al of Burroughs B-270 equipment as outlined in
your letter December 13, 1961.
(Signed)
Sherman
Sherman
(1-11.!.4
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 18
12/29/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDEN:7:17
TO THE BOARD
December 291 1961
Mr. Victor E. Rockhill, President,
Chase International Investment Corporation,
1 Chase Manhattan Plaza,
New York 5, New York.
Dear Mr. Rockhill:
Reference is made to your letter of December 4, 1961 regarding
the Board's letter of January 20, 1960 granting general consent to Chase
International Investment Corporation and Arcturus Investment & Development,
Ltd., Montreal, Canada, your wholly owned subsidiary, to purchase and hold
soek in generally designated types of corporations, subject to. the contherein contained.
By the terms of the general consent, this authorization is applicable only to investments made on or before December 31, 1961, and you have
r
.equested that the termination date be extended to December 31, 1963, subJect to the same conditions.
As five years will have elapsed on January 15, 1962 since the
effective date of the general revision of Regulation K, the Board feels
:that it would be appropriate to make a comprehensive review of Regulation
1 .and to solicit suggestions from supervised institutions as to modificaIons and clarifications of the Regulation which they feel would enable
/lem to carry out their functions more effectively. As the outstanding
eneral consents were granted on an experimental basis, they were limited
? an initial period terminating December 31, 1961, and, pending the corn1.?,letion of the forthcoming review, the outstanding consents will be extended
a period of one year. Accordingly, the termination date contained in
fls
1962Beard's letter of January 20, 1960 is hereby extended to December 31,
l
The Board will be pleased to have your Corporation submit any
coma .
ents regarding Regulation K, and interpretations thereunder, which you
believe would be helpful to the Board and its staff in considering the
(
2estion as to how
corporations doing foreign banking or other
nancing under the Federal Reserve Act may be more effective instruments
foreign4"
i3,11 the furtherance of the foreign commerce of the United States. It will
me,
appreciated if you will forward your comments in writing to the Board by
'euruary l.)e, 1962, through the Federal Reserve Bank of New York.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
C)I
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 19
12/29/61
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONOENc
,
:
TO THE BOARD
December 29, 1961
Mr. Jesse W. Tapp,
Chairman of the Board,
Bank of America,
41 Broad Street,
New York 15, New York.
Dear Mr. Tapp:
As five years will have elapsed on January 15, 1962
since the effective date of the general revision of Regulation K,
the Board feels that it would be appropriate to make a comprehensive review of Regulation K and to solicit suggestions from
supervised institutions as to modifications and clarifications of
the Regulation which they feel would enable them to carry out
their functions more effectively.
The Board will be pleased to have your Corporation submit any comments (in addition to those contained in the letter
furnished by Messrs. Pierotti and Coughran on December 12) regarding Regulation K, and interpretations thereunder, which you believe
would be helpful to the Board and its staff in considering the
question as to how corporations doing foreign banking or other
foreign financing under the Federal Reserve Act may be more effective
instruments in the furtherance of the foreign commerce of the United
States. It will be appreciated if you will forward your comments
In writing to the Board by February 15, 1962, through the
Federal
Reserve Bank of New York.
Very truly yours,
.(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
'
BOARD OF QOVERNORS
tottif:e•- r:po
Item No. 20
12/29/61
OF THE
FEDERAL RESERVE SYSTEM
:
.....
WASHINGTON
4, :,
OFFICE OF THE VICE CHAIRMAN
December 29, 1961
The Honorable Hugh J. Addonizio,
House of Representatives,
Washington 25, D. C.
Dear Mr. Addonizio:
This is in response to your letter of December 8, 1961, asking for
comments on a report made to you by Mr. Robert L. Cardon, Clerk and General
Counsel of the House Banking and Currency Committee, regarding proposed amendments to the Board's Regulation D which, among other things, would have the
effect of classifying the city of Newark, New Jersey, as a "reserve city" for
Purposes of reserve requirements of member banks.
Mr. Cardon's report dealt with the question whether the proposed
amendments were designed to carry out any directive of Congress embodied in
the Act of July 28, 1959. He concluded that the 1959 Act may have prompted
the Board to exercise its statutory authority in making changes in the classification of reserve cities but that such action by the Board was not for the
Purpose of carrying out a directive of Congress.
The 1959 Act amended provisions of the Federal Reserve Act regarding
reserve requirements of member banks in four respects: (1) it authorized the
Board to permit member banks to count all or part of their vault cash as reserves; (2) it authorized the Board to permit individual member banks in reserve
member banks
Or central reserve cities to carry the lower reserves applicable to
te in view
appropria
and
e
outside of such cities ("country banks") if reasonabl
it
fixed 22
(3)
bank;
l
of the character of business transacted by the individua
es that
percentag
reserve
Per cent as the maximum and 10 per cent as the minimum
and
central
cities
reserve
Plight be set by the Board for member banks in both
1 eserve cities; and (4) it provided that the central reserve city classification
;
d effective
kPresently including only New York and Chicago) should be terminate
JulY 28, 1962.
These changes in the law did not affect the authority of the Board to
classify cities as "reserve cities" for purposes of reserve requirements. That
authority was provided for in the original Federal Reserve Act. However, by
setting forth a broader basis for the classification of individual banks within
4 Particular city, the 1959 amendments made it appropriate for the Board to reamine the general standard for classification of reserve cities that it had
The Honorable Hugh J. Addonizio
-2-
adopted in 1947 and that for some time had been considered unsatisfactory.
This point was made in a memorandum prepared by the Board's staff in connection with consideration of the 1959 legislation. That memorandum, which was
made a part of the record of the hearing on the legislation, stated:
"Under existing law, individual banks can be permitted to
carry lower requirements only if located in 'outlying districts'
of the cities. This results in inequities for a number of individual banks, and it is proposed that the law be amended to
permit exemption of banks on the basis of the character of business. This would permit the adoption of more logical and equitable standards of classification for cities as well as for
individual banks in central Reserve and Reserve cities. A
rational system of classification should take into consideration
differences in tie character of deposits held by banks as indicated by type of depositors and by the rate of use of the funds
in transactions affecting the flow of goods and services."
When I testified on the legislation, I made the following statement
regarding the Board's authority to reclassify cities in relation to the changes
that would be made by the
proposed amendments to the law:
"Moreover, the Board would retain authority to reclassify
cities, which, together with the other amendment proposed with
respect to the classification of individual banks, would make
Possible adjustments to remove or reduce any inequities between
banks or classes of banks."
For the reasons above indicated, we do not disagree with the general
conclusion reached by Mr. Cardon in his report to you.
Sincerely yours,
(Signed) C. C. Balderston
C.. Canby Balderston,
Vice Chairman.
4453
BOARD OF GOVERNORS
OF THE
000tter*,4.
0.010,4,40
4
4),
Item No., 21
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
- 4ktIO,,,
.1
ti 0.1.4'
December 29, 1961.
Mr. John F. Pierce, Chief Examiner,
Federal Reserve Bank of New York,
New York 451 New York,
Dear Mr. Pierces
In accordance with the request contained in
your letter of December 19, 1961, the Board approves
the reappointment of Edward W. Warde as an examiner for
the Federal Reserve Bank of New York, effective today.
Very truly yours,
(signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
ei',11.9 0,7
(tt,
Item No. 22
12/29/61
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
tl
ADDRESS OFFICIAL CORRESPONDENCE
*4.rip
tk,
TO THE BOARD
**ktd. Mat/t ezs
7
'
N1,A+ATV'
December 29, 1961.
CONFIDENTIAL (FR)
Mr. Geo. E. Kroner, Vice President,
Federal Reserve Bank of St. Louis,
St. Louis 66, Missouri.
Dear Mr. Kroner:
In accordance with the request contained in your
letter of December 21, 1961, the Board approves the appointment of Robert H. Timpe as an assistant examiner for the
Federal Reserve Bank of St. Louis. Please advise the
effective date of the appointment.
It is noted that Mr. Timpe owns three shares
of stock of Bank of Mascoutah, Mascoutah, Illinois, a
nonmember bank, and that his father is Chairman of the
Board and President of South Side Bank of Quincy, Quincy,
Illinois, also a nonmember bank. Accordingly, the Board's
approval of the appointment of Mr. Timpe is given with
the understanding that he will not participate in any
examination of Bank of Mascoutah so long as he owns stock
of that bank, or of South Side Bank of Quincy so long as
his father is an officer or director of that institution.
Very truly yours,
(signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
@FedFRASER