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Minutes for December
To:
Members of the Board
From:
Office of the Secretary
3, 1958
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, if you
were present at the meeting, please initial in column A below to indicate that you approve the minutes.
If you were not present, please initial in column B
below to indicate that you have seen the minutes.
Chin. Martin
Gov. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
34SF
Minutes of the Board of Governors of the Federal Reserve System on
Wednesday, December 3, 1958.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Szymczak
Mills
Robertson
Shepardson
Mr. Sherman, Secretary
Mr. Kenyon, Assistant Secretary
Mr. Johnson, Director, Division of Personnel
Administration
Mr. Hackley, General Counsel
Mr. Masters, Director, Division of Examinations
Mr. Farrell, Associate Director, Division of Bank
Operations
Mr. Daniels, Assistant Director, Division of Bank
Operations
Mr. Hexter, Assistant General Counsel
Mr. Nelson, Assistant Director, Division of
Examinations
Mr. Hooff, Assistant Counsel
Discount rates.
Unanimous approval was given to a telegram to
the Federal Reserve Bank of Boston approving the establishment without
change by that Bank on December 1, 1958, of the rates on discounts and
advances in its existing schedule.
Items circulated or distributed to the Board.
The following
items, which had been circulated or distributed to the members of the
Board and copies of which are attached to these minutes under the
respective item numbers indicated, were approved unanimously:
Item No.
Letter to the City Bank Farmers Trust Company, New York,
approving the application for fiduciary powers submitted
on behalf of First National City Trust Company. (For
transmittal through the Federal Reserve Bank of New York)
1
34Sr:
12/3/58
-2Item No.
Letter to the State Bank and Trust Company, Ann Arbor,
Michigan, approving an investment in bank premises.
(For transmittal through the Federal Reserve Bank of
Chicago)
2
Letter to the First-Peoples State Bank, Traverse City,
Michigan, granting an extension of time within which to
establish a branch at Munson Avenue and Cochlin Street.
(For transmittal through the Federal Reserve Bank of
Chicago)
3
Letter to The Champaign National Bank, Champaign, Illinois,
approving its application for fiduciary powers. (For transmittal through the Federal Reserve Bank of Chicago)
L.
Letter to The Rushville National Bank, Rushville, Indiana,
approving its supplemental application for fiduciary powers.
(For transmittal through the Federal Reserve Bank of Chicago)
Letter to the Detroit Branch of the Federal Reserve Bank of
Chicago regarding the term "officer" as used in Section 4(d)
of Regulation Q.
6
Letter to the California Bank, Los Angeles, California,
granting an extension of time within which to establish a
branch in East El Monte. (For transmittal through the Federal
Reserve Bank of San Francisco)
7
Letter to the Comptroller of the Currency recommending unfavorably with regard to an application to organize a national
bank at Lighthouse Point, Florida. (With a copy to the Federal
Reserve Bank of Atlanta)
8
Letter to the Federal Deposit Insurance Corporation regarding
deposit insurance for a nonmember State bank being organized
to succeed the Exchange State Bank, Lanark, Illinois.
9
Memorandum from the Reports Review Committee recommending the
discontinuance of certain reports and submitting a letter to
the Presidents of all Federal Reserve Banks requesting their
comments regarding the usefulness of certain other reports.
10
34Sq
-3-
12/3/58
Item No.
Letter to the Marine Midland Trust Company of
Central New York, Syracuse, New York, approving
the establishment of branches in Camillus and
Fairmount incident to a proposed merger with the
Camillus Bank. (For transmittal through the
Federal Reserve Bank of New York)
Notice of Tentative Decision and Tentative Statement
relating to the application of First Virginia Corporation to acquire shares of Old Dominion Bank,
Arlington, Virginia.
II
12, 13
Letter to the Presidents of all Federal Reserve Banks
regarding the use by the Federal Housing Administration
of Agreements to Insure as a temporary substitute for
Commitments for Insurance.
Letter to the Federal Reserve Bank of
posing no objection to an expenditure
235,600 for a program to improve the
protection systems at the head office
Cleveland interof approximately
alarm and
building.
15
Telegram to the Federal Reserve Bank of St. Louis
interposing no objection to the purchase of property
adjoining the Little Rock Branch.
16
Letter to the Presidents of all Federal Reserve Banks,
prepared pursuant to the understanding at the meeting
on October 14, 1958, requesting comments on a proposed
capital expenditures budget.
17
Letter to the Federal Reserve Bank of New York approving
adjustment of the salary structures applicable to employees
at that Bank and its Buffalo Branch.
18
Order granting the Request of Hearing Examiner Woodall for
an extension until March 16, 1959, of the time for filing
his Recommended Decision and Certification of the Record
in the matter of The Continental Bank and Trust Company,
Salt Lake City, Utah.
19
Discussion which preceded approval of some of the foregoing
items is summarized in the following paragraphs.
34S!'
12/3/58
On Item No. 11, Governor Robertson commented that the application
of the Marine Midland Trust Company of Central New York was not the
clearest kind of case to come before the Board but that in effect the
Board had made its decision some time ago when it approved the application of the Camillus Bank to establish a branch in Fairmount.
It was
known at that time that the obtaining of approval for the branch was an
integral step in the merger of the Camillus Bank into the Marine Midland
bank.
The tentative statement in the First Virginia Corporation case,
attached under Item No. 13, was approved in a form incorporating a
sentence inadvertently omitted from the draft that had been distributed
to the Board.
The sentence in question referred to the fact that both
First Virginia Corporation and Old Dominion Bank appeared to be under
good management.
At the suggestion of Governor Mills, the letter to the Federal
Reserve Banks attached under Item No. 14 was approved in a form that
included a reference to, instead of enclosing a copy of, a letter from
the Comptroller of the Currency to the Federal Housing Administration
dated November 4, 1958, advising that national bank examiners had been
instructed to treat the Administration's Agreements to Insure for a
temporary period as the equivalent of firm commitments to insure
mortgage loans for the purposes of section 24 of the Federal Reserve
Act.
3490
12/3/58
-5Discussion of Item No. 14 also included questions by Governor
Robertson relating to whether the plan for issuance of Agreements to
Insure appeared to be predicated upon anticipation by the Federal
Housing Administration of securing additional insurance authorization
at the next session of Congress.
While this appeared to be largely the
case, it was pointed out that there would be some ability to convert the
agreements into firm commitments through recapture procedures; that is
through amortization of insured mortgages, prepayment of such mortgages,
and cancellation or expiration of outstanding commitments.
Governor
Mills coullgented that according to articles in the press applications
for a tentative commitment would be placed in the order of their receipt.
The worst that could happen, therefore, would be delay in converting from
a tentative to a firm basis.
The principal question appeared to be
whether commercial banks would be receptive to the tentative commitments
in view of the possibility of long delay before a firm commitment was
available.
Mr. Hexter stated that there might be some question about
the Comptroller of the Currency's interpretation of the law relating
to national banks but that the position taken in the proposed letter
from the Board to the Reserve Banks would not seem to raise any question
about exceeding any authority given by the Congress.
On Item No. 16, Governor Robertson inquired whether it seemed
clear that the fact of a reluctant seller and a necessitous buyer justified
paying a price of
285,000 for the property proposed to be acquired for
the use of the Little Rock Branch when the fair market value of the
3491
-6-
12/3/58
property had been appraised at
244,500.
Comments made on this point
included reference to the reported indications of probable difficulty
in assembling other suitable property as a branch site, the traffic
problem encountered by the Little Rock Branch, the advantageous location
of the branch, and the reported high cost of assembling properties in
downtown Little Rock in a recent transaction.
The intended use of the
additional space, at least for the present, was described and certain
questions pointed up in the memorandum from the Division of Bank
Operations to the Board were reported by Mr. Farrell to have been
resolved in conversation with President Johns.
The branch directors
were said by Mr. Johns to be on record as unanimously favoring the
proposal, and this was to be verified by letter.
As to termination
of present leases in the quarters proposed to be acquired, Mr. Johns
advised that all leases except one were on a monthly basis and that the
remaining lease would expire next June without option of renewal.
In connection with Item No. 18, Governor Shepardson commented
concerning the frequent salary structure adjustments requested by the
Federal Reserve Banks in an effort to keep somewhat ahead of the
community wage market and asked whether the total movement of the
Reserve Bank structures must not be regarded as participation by the
System in the upward push of wage, and salary levels.
he said, to which he did not know the answer.
It was a problem,
After Mr. Johnson remarked
that many of the Banks appeared to have some leeway under the present
structures, that only a couple of requests for structure adjustments
3492
12/3/58
-7-
were in prospect for the immediate future, but that the 1959 Bank
budgets indicated the possibility of some further requests in the
fpll of that year, Governor Shepardson said that he had noticed from
the distributed material on the 1959 budgets what appeared to be an
upward movement within the salary structures themselves.
While he
could understand that such a movement would tend to occur in the
case of a new organization, he was puzzled about its occurrence in
a mature organization where personnel turnover might be expected to
exert an offsetting effect.
He indicated that he expected to raise
questions concerning this development and its implications in
connection with discussion of the 1959 Reserve Bank budgets.
In the course of consideration of the foregoing items,
Messrs. Nelson and Hooff withdrew from the meeting and Mr. Young,
Assistant Counsel, entered the room.
Official System membership emblem.
In view of a question
raised by an advertising firm through the Federal Reserve Bank of
Minneapolis as to whether the Federal Reserve System would have any
objection to a member bank using a membership emblem other than one in
the traditional "diamond-on-rectangle" shape, the Board asked the
Presidents' Conference in May 1958 for its views on the advisability
of adopting an official emblem of membership.
The Presidents thereafter
expressed to the Board the unanimous opinion that it would be desirable
to adopt an official emblem and that the "diamond-on-rectangle" design
would be most appropriate.
be given further study.
The Board indicated that the matter would
3493
12/3/58
-8Under date of November 25, 1958, there had been distributed
to the Board a memorandum from the Legal Division which pointed out
that no provision of the Federal Reserve Act expressly authorizes the
Board to adopt an official emblem of System membership.
It was not
believed that the Board could make the use of a uniform emblem mandatory
or limit its use to member banks.
While the Board might be in a stronger
position if a copyright to the emblem were obtained, the opinion was
expressed that little would be gained by official adoption of an emblem
and that the better course would be to advise the Presidents accordingly.
It might be stated, however, that if member banks used any emblem or
symbol of membership they should be urged to use the "diamond-onrectangle" design.
A draft of letter to the Presidents was submitted
with the memorandum.
During discussion of the matter, question was raised whether
it would seem advisable to seek legislative authority to require use
of a membership symbol.
Governor Robertson commented that he could see some justification,
from the point of view of protection of depositors, in requiring a bank
to disclose through use of an emblem whether its deposits were insured.
He could see no reason, however, from the standpoint of the public interest
for insisting that a bank disclose publicly its membership in the Federal
Reserve System.
Therefore, while he would like to see a uniform emblem
in use, he would not be inclined to seek legislative authority to institute
a requirement.
3494:
12/3/58
-9Chairman Martin expressed the opinion that there were more
important subjects of legislation for the Board to pursue.
Mr. Hackley then presented two points raised by Mr. Leonard,
Director, Division of Bank Operations, which, if they should be
regarded with favor, would suggest modifications in the phraseology of
the draft of letter to the Presidents that had been distributed to the
Board.
It was decided that the letter should be revised in these
respects but that the letter would not actually be mailed until the
subject of the membership emblem had been discussed with the Presidents
at the joint meeting on December 16.
It was felt that this procedure
would be appropriate in view of the history of the matter, including
the response of the Presidents to the question raised with them by the
Board.
Messrs. Hexter and Young then withdrew.
Rebate of unearned interest on prepaid borrowings.
Last
February, the Presidents' Conference raised with the Board the question
of the appropriate rate of rebate on prepaid member bank borrowings in
the event of a discount rate change.
It appeared that, pursuant to a
policy adopted and reaffirmed by the Governors' Conference in 1923 and
1930, respectively, eleven of the Reserve Banks were rebating at the
lower of the original or prevailing discount rate, but that the
Minneapolis Bank was rebating at the original rate and the Kansas City
Bank would like to follow the same practice.
The Board indicated at the
time that it would consider the matter and advise the Presidents of its
views.
r34G ,
a _7
-10-
12/3/58
A memorandum from the Division of Bank Operations dated November 201
1958, which had been distributed to the Board, provided historical background and suggested possible alternative courses of action.
A draft of
letter to the Chairman of the Presidents' Conference, submitted with the
memorandum, would indicate that the Board had no objection to lack of
uniformity in operating practice in this regard.
It would state, however,
that the Board would also be prepared to reaffirm as System policy the
position taken by the Governors' Conference or to adopt as a new and
uniform policy the position that the benefits of a reduction in discount
rate should accrue to all member banks borrowing from a Reserve Bank as
of the date of such reduction.
The views of the Presidents on the various
alternatives would be requested.
Governor Mills made the following statement:
Viewed as a strictly commercial transaction, the rebate
allowed on the prepayment of a member bank's discounted note
at a Federal Reserve Bank should be at the original interest
rate at which the paper was discounted and not at a lower rate
conforming to whatever reduction in the discount rate at the
Federal Reserve Bank had been made during the pendency of the
member bank's discount. On a strictly commercial basis, rebates
of interest on a discounted note would not be allowed in that
the borrower should be presumed to have calculated his financial
needs and thereby to have set the maturity of his borrowing to
coincide with the time at which he would be in funds to repay
the obligation. The fact that the borrower might come into
funds in advance of the maturity of his bank borrowing and
would wish to repay the obligation with a rebate of the
interest discount does not alter the fact that the original
note and the terms on which it was discounted represented a
contractual obligation whose provisions called for a literal
adherence to its terms.
349C,
12/3/58
The fact that the lending commercial bank or Federal
Reserve Bank would consider that it had a discretionary
right to accept prepayment and rebate the interest discount
does not alter the original terms of the contract. Inasmuch,
however, as a lending commercial bank or Federal Reserve Bank
enjoys a discretionary privilege of rebating discount on the
prepayment of a borrowing, it would seem that the rebate should
not be made to comprehend any lower rate of interest prevailing
at the time of prepayment, but should be at the original discount
rate. Theoretically both a bank's borrower and the bank itself
program their operations so as to measure the availability of
funds for use in their various undertakings. Such being the
case, where a bank accepts prepayment of a borrower's note
and rebates the interest discount, it is in effect subjected
to a change in its original operating program, and as a result
compelled to find employment for funds which it had originally not
expected to be at its disposal for the contract period of the
borrower's loan. Accordingly, a lender's rebate of interest
discount is a concession to the borrower who, upon coming into
funds in advance of the maturity of his bank obligation, might
reasonably be expected to find an income-bearing use for such
funds until needed to repay the bank obligation instead of
shifting the problem to the bank by compelling it to find a
useful reemployment of the funds represented by the prepaid
obligation.
In further comments
Governor Mills said it would seem that the
real question was whether the Reserve Banks should offer a concession by
way of interest rebate on a commercial transaction freely entered into
by a member bank.
He would not be inclined to favor a policy under which
all banks borrowing at the date of a discount rate reduction would automatically be granted a rebate based on the difference between the rates
because he regarded that as a greater concession than warranted.
However,
if a decision should be reached in favor of accepting prepayment, he felt
that rebates of unearned interest should be made at the original contract
rate.
-12-
12/3/58
Governor Robertson also indicated that he would go along with
a policy, uniform among the Reserve Banks, whereby rebates would be
given at the original rate if prepayment were accepted.
Governor Shepardson likewise expressed the view that it would
be desirable to have uniformity of practice among the Reserve Banks.
He saw some merit in rebating at the lower rate following a discount
rate reduction because that would put some penalty on the prepayment,
would prevent borrowing banks from taking advantage of a rate decrease
to gain a benefit, and would appear equitable from the standpoint that
a bank would not be inclined to prepay if the discount rate were
increased.
If the suggestion were followed of establishing a policy
of rebating at the original contract rate, he felt that it would be
desirable to include a provision to the effect that renewal of the
prepaid borrowing within a specified period would be at the contract
rate of the original borrowing.
Should such a provision be added, he
would not object to rebating at the original rate to those desiring to
prepay for reasons other than to gain the benefit of renewal at the
lower rate.
After Governor Szymczak commented on the possibility of
administrative difficulties under any such arrangement, agreement was
expressed with Chairman Martin's suggestion that a new draft of letter
to the Chairman of the Presidents' Conference be prepared for the
Board's consideration in the light of this discussion.
34
12/3/58
-13Messrs. Johnson, Farrell, and Daniels then withdrew from the
meeting.
Request of Counsel for Wachovia.
Mr. Hackley reported a request
from local Counsel for Wachovia Bank and Trust Company, Winston-Salem,
North Carolina, for a copy of a transcript he understood had been prepared
of the meeting of representatives of Wachovia and The Wilmington Savings
& Trust Company with members of the Board on November 19, 1958.
While
no complete record of the meeting had in fact been made, a resume was
included in the Board's minutes, and the Secretary suggested that the
applicable part of the minutes could be reproduced in the form of a
summary of the meeting if the Board desired to comply with Wachovia's
request.
Nr. Hackley expressed the opinion that it would be desirable
to comply with the request for practical and also for legal reasons.
The document would tend to substantiate that the Board's decision was
not arbitrary, that it had been reached only after careful consideration
of all facets of the case, and that it had been made after giving Wachovia
an opportunity to appear before the Board.
The members of the Board, to whom the minutes in question had
been circulated in the customary manner, indicated that they saw no
reason why there should not be sent to Wachovia and its Counsel a
summary drawn therefrom covering the portion of the Board meeting at
Which the representatives of Wachovia and Wilmington Savings & Trust
actually were present.
Accordingly, it was understood that the request
would be complied with in that manner.
CS
14(4(1
12/3/58
Program for Chairmen's Conference.
At the Chairman's request,
Mr. Sherman reviewed for the Board the agenda for the meeting of the
Conference of Chairmen of the Federal Reserve Banks to be held at the
Federal Reserve Building this Thursday and Friday, December
4 and 5.
It was noted that there might be brought up at the Conference
the question of the commissioning of portraits of former Reserve Bank
officers and directors.
Earlier this year the Directors of the Chicago
Bank authorized a portrait of former President Young, but a question
was raised with the Board by Chairman Frail from the standpoint of
policy and, after consideration of the matter at the Board meeting
on January 20, 1958, Chairman Martin talked with Mr. Frail and the project
was deferred.
However, at least one other Reserve Bank (New York) had
authorized portraits of former officers without taking the matter up
with the Board.
The Chairman and the Secretary reviewed positions taken in the
past when the question of portraits had been raised with the Board.
The former referred to certain occasions when he had spoken informally
to the Reserve Bank Chairman concerned and had indicated that the Board
would be happier if the project were not undertaken.
to the Board's letter of January
The latter referred
16, 1945, on the subject of discretionary
expenditures and suggested that the Board might want to consider having
a review made of the provisions of that letter.
3500
12/3/58
-15The desirability of a uniform System policy was mentioned.
On the other hand, there were references to the difficulty involved
in setting down a blanket rule, particularly since the issuance of
such a rule would tend to highlight expenditures in the past.
After further discussion, it was understood that if the question
of expenditures for portraits should be raised at the meeting of the
Chairmen's Conference, that matter would be handled in such manner as
seemed most appropriate at the time.
Ratification of actions taken on December 1, 1958 (Item No. 20).
Actions taken by the available members of the Board in the absence of a
quorum at the meeting on December 1, 1958, were ratified by unanimous
vote.
A memorandum of the meeting is attached as Item No. 20.
The members of the staff then withdrew and the Board went into
executive session.
The Secretary was informed later that during the executive
session the Board took the following actions.
Staff appointments.
Pursuant to recommendations contained in
a memorandum from Governor Shepardson dated December 3, 1958, the Board:
(1) Appointed Robert F. Leonard, currently Director of the
Division of Bank Operations, as Special Adviser to the
Board with no change in salary, effective January 1,
1959, with the understanding that his appointment would
continue for the duration of a special assignment to
make an appraisal of the banking situation in the Ryukyu
Islands for the Department of the Army, but not to exceed
a period of four months from January 1, 1959, at which
time Mr. Leonard would exercise his privilege of retirement
under the Retirement System of the Federal Reserve Banks.
3501
-16-
12/3/58
(2) Appointed John R. Farrell, Associate Director,
Division of Bank Operations, as Director of
that Division, effective January 1, 1959, with
4317,000.
annual salary at the rate of'
(3)
Appointed John N. Kiley, Jr., Chief of the Reserve
Bank Operations Section in the Division of Bank
Operations, as Assistant Director of that Division,
effective January 1, 1959, with annual salary at
the rate of U1,500.
Appointment of director at Boston.
It was agreed to request the
Chairman of the Federal Reserve Bank of Boston to ascertain and advise
whether Mr. Erwin Dain Canham, Editor of the Christian Science Monitor,
Boston, Massachusetts, would accept appointment, if tendered, as a
Class C director of the Federal Reserve Bank of Boston for the threeyear term beginning January 1, 1959, with the understanding that if he
would accept, the appointment would be made.
The meeting then adjourned.
Secretary's Note: Pursuant to the recommendation
contained in a memorandum dated December 1, 1958,
from Mr. Hackley, General Counsel, Governor Shepardson
today authorized on behalf of the Board attendance
by Messrs. Solomon and O'Connell, Assistant General
Counsel, at the sessions on December 12, 1958, of
the Institute on Practical Problems before Federal
Administrative Agencies sponsored by the Administrative
Law Section of the American Bankers Association and
to be held at the Mayflower Hotel. It was understood
that the cost of the registration fee (a5 per person)
would be charged to the "All Other" account in the
Legal Division's 1958 budget.
Secretary
350ft
BOARD OF GOVERNORS
OF THE
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12/3/53
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
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ADDRESS OFFICIAL CORRESPONDENCE
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TO THE BOARD
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December 31 1958
Board of Directors,
City Bank Farmers Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal Reserve System
has given consideration to the application for permission to
exercise fiduciary powers made by you on behalf of First National
City Trust Company, New York, 'Jew York, the national bank into
which the City Bank Farmers Trust Company, New York, New York,
is to be converted, and grants such national bank authority,
effective if and when it is authorized by the Comptroller of
the Currency to commence business, to act, when not in contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee,
receiver, committee of estates of lunatics, or in any other
fiduciary capacity in which State banks, trust companies, or
other corporations which come into competition with national
banks are permitted to act under the laws of the State of New
York. The exercise of such rights shall be subject to the
provisions of Section 11(k) of the Federal Reserve Act and
Regulation F of the Board of Governors of the Federal Reserve
System.
Upon receipt of advice from the Comptroller of the
Currency that the First National City Trust Company has been
authorized to commence business, a formal certificate indicating the trust powers which the bank is authorized to exercise
will be issued.
Very truly yours,
(Signed) Nerritt Sherman
Merritt Sherman,
Secretary.
3503
BOARD OF GOVERNORS
OF THE
Item Jo. 2
12/3/58
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
DecelAbor
3, 1.(93
Board of Directors,
State Bank and Trust Company,
Ann Arbor, Michigan.
Gentlemen:
Pursuant to your request submitted through the Federal
Reserve Bank of Chicago, the Board of Governors of the Federal
Reserve System approves under the provisions of Section 24A of
the Federal Reserve Act, an additional investment by State Bank
and Trust Company of not to exceed :,1 850,000 in bank premises,
for the purpose of rebuilding and expansion of its main office
building, and construction of a building for its branch at
Jackson Avenue and Maple Road.
It is understood that financing of the program is to
be accomplished through the organization of a wholly-owned affiliate
which will take title to the main office building. This will be
accomplished through the bankls subscription to the entire stock
of the affiliate in the amount of $500,000,and the affiliate will
borrow ,-:,500,000 from outside sources. The two presently owned
branches and the new branch building will be retained on the books
of the bank at a total figure of approximately :;250,000.
Very truly yours,
Merritt Sherman,
Secretary.
5
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
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WASHINGTON 25. D. C.
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ADDRESS OFFICIAL CORRESPONDENCE
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TO THE BOARD
-60•„,*
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December
3, 1958
Board of Directors,
First-Peoples State Bank,
Traverse City, Michigan.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of Chicago, the Board of Governors
of the Federal Reserve System extends until July 1, 1959,
the time within which First-Peoples State Bank, Traverse
City, Michigan, may establish a branch at the intersection
of Munson Avenue and Cochlin Street, Traverse City,
Michigan, under the authorization contained in the
Board's letter dated June 24, 1958.
3
12/3/58
Very truly yours,
(Si6ned) 1,1(z..rritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
4
12/3/58
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 3, 1958
Board of Directors,
The Champaign National Bank,
Champaign, Illinois.
Gentlemen:
The Board of Governors of the Federal Reserve System
has given consideration to your application for fiduciary
powers and grants you authority to act, when not in contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee,
receiver, committee of estates of lunatics, or in any other
fiduciary capacity in which State banks, trust companies, or
other corporations which come into competition with national
banks are permitted to act under the laws of the State of Illinois,
the exercise of all such rights to be subject to the provisions
of Section 11(k) of the Federal Reserve Act and Regulation F of
the Board of Governors of the Federal Reserve System.
A formal certificate indicating the fiduciary powers
Which The Champaign National Bank is now authorized to exercise
Will be forwarded to you in due course.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
350
BOARD OF GOVERNORS
OF THE
,.cifttita*,
Item Jo. 5
FEDERAL RESERVE SYSTEM
12/3/58
WASHINGTON 25, D. C.
tl
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
441. mtst
00000 -
December 3, 195si.
Board of Directors,
The Rushville National Bank,
Rushville, Indiana.
Gentlemen:
The Board of Governors of the Federal Reserve
System has given consideration to your supplemental
application for fiduciary powers, and, in addition to
the authority heretofore granted to act as trustee,
executor, administrator, and registrar of stocks and
bonds, grants you authority to act, when not in contravention of State or local law, as guardian of estates,
assignee, receiver, committee of estates of lunntics,
or in any other fiduciary capacity in which State banks,
trust companies, or other corporations which come into
competition with national banks are permitted to act
under the laws of the State of Indiana. The exercise
of all such powers shall be subject to the provisions
of Section 11(k) of the Federal Reserve Act and Regulation F of the Board of Governors of the Federal Reserve
System.
A formal certificate indicating the fiduciary
powers which The Rushville National Bank is now authorized
to exercise will be forwarded to you in due course.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
350"
r
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
6
12/3/58
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December
3, 1958
Mr. Gordon W. Lamphere,
Assistant General Counsel, Detroit Branch,
Federal Reserve Bank of Chicago,
Detroit 31, Michigan.
Dear Mr. Lamphere:
This refers to your letter of November 7, 1958, addressed to
Mr. Hackley, enclosing a letter from Mr. Harry S. Rudy, Vice President
of The Detroit Bank & Trust Company, requesting an interpretation of
section 4(d) of the Board's Regulation Q which permits the payment of
a time deposit before maturity in an emergency where it is necessary
to prevent great hardship, provided the depositor signs an application
fully describing the circumstances, and the application is approved by
an "officer" of the bank who certifies that to the best of his knowledge
and belief the statements in the application are true. The question
specifically is who is an "officer" of a member bank within the meaning
of that section.
Mr. Rudy states that at some of the 54 branches of the trust
company neither the manager nor assistant manager is elected by the
board of directors. The trust company does not consider that there is
an officer in these branches and, therefore, approval for prepayment of
a time deposit is made by an officer at the main office. It is stated
that these branch managers and assistant branch managers have the same
duties, responsibilities and authorities as an elected officer managing
a branch. Therefore, the trust company would like permission to authorize such appointed personnel to perform this act of approval and certification.
The term officer as used in section 4(d) of Regulation Q
includes all member bank personnel who participate or have authority to
Participate in the operating management of the bank or any branch thereof.
In other words, the authorities, duties and responsibilities of an individual are the determining factors rather than his title or the manner
in which he is designated. This is consistent with the definition of
an "executive officer" as contained in the Board's Regulation 0.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. Gordon W. Lamphere
It is the Board's opinion that any branch manager or
assistant branch manager duly authorized to approve an application
for prepayment of a time deposit is an "officer" within the meaning
of section 4(d) of Regulation Q.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
3
BOARD OF GOVERNORS
OF THE
Item No. 7
FEDERAL RESERVE SYSTEM
12/3/58
WASHINGTON 25. D. C.
*
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
"
304A44*-
December 3, 1958
Board of Directors,
California Bank,
Los Angeles 54, California.
Gentlemen:
Pursuant to your request submitted through the Federal
Reserve Bank of San Francisco, the Board of Governors extends
until June 30, 1.959, the time within which California Bank may
establish a branch in the vicinity of Peck Road and Exline
Avenue, East El Monte, California, under authority contained
in the Board's letter of August 6, 1957.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
3510
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 8
12/3/58
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 3, 1958
Comptroller of the Currency,
Treasury Department,
Washington 25, D. C.
Attention Mr. W. M. Taylor,
Deputy Comptroller of the Currency.
Dear Mr. Comptroller:
Reference is made to a letter from your office dated
July 2, 1957, enclosing copies of an application to organize a
national bank at Lighthouse Point, Florida, and requesting a
recommendation as to whether or not the application should be
approved.
Information contained in a report of investigation of
the application made by an examiner for the Federal Reserve Bank
of Atlanta indicates that the proposed capital structure of the
bank would be adequate. The future earnings prospects of the bank
are not especially good, and it does not appear that the management
can be regarded favorably inasmuch as an executive officer has not
been selected and the board of directors is lacking in banking experience. One of the proposed directors, who is serving a bank in
Pompano Beach, would be ineligible to serve as director of the proposed bank. While it is indicated that a bank at the proposed
location might serve as a convenience to some individuals and businesses, there does not appear to be a sufficient need for the proposed bank at this time. In view of these unfavorable factors,
the Board of Governors does not feel justified in recommending
approval of the application.
The Board's Division of Examinations will be glad to discuss any aspects of this case with representatives of your office
if you so desire.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
oWt*a*,
OF THE
'
Item No.
FEDERAL RESERVE SYSTEM
9
12/3/58
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
4490
44,101.1',,,**
December 3, 1958
The Honorable Jesse P. Wolcott,
Chairman,
Federal Deposit Insurance Corporation,
Washington 25, D. C.
Dear Mr. Wolcott:
Reference is made to your letter of November 20,
1958, concerning the organization of a nonmember State bank
to succeed the Exchange State Bank, Lanark, Illinois.
No corrective programs have been urged upon the
Exchange State Bank, or agreed to by it, which, in the
opinion of the Board of Governors, it would be considered
desirable to incorporate as conditions of the insuring of
the deposits of the proposed new nonmember State bank.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 10
12/3/58
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS
orrialAL
CORRESPONDENCE
TO THE BOARD
December 3, 1958
Dear Sir:
The Board recently appointed a Reports Review Committee,
consisting of members of its staff, for the purpose of reviewing
the essentiality, scope in present form, and frequency of statistical reports, statements and releases issued by various Divisions
of the Board.
As a result of this study, it has been tentatively decided
to discontinue the following statements, effective December 31, 1958:
K.3 - Changes in State bank membership (weekly)
G.4 - Annual list and monthly supplement of State
member banks and nonmember banks that maintain clearing accounts
E.4 - Principal assets and liabilities--All Banks
in U. S. and Possessions (semiannually):
first 3 pages (a, b, and c), showing all
banks, all commercial banks, and mutual
savings banks by States
The following two statements have been discontinued as of
the dates indicated:
G.12.4 - Employment in Nonagricultural establishments
(monthly)
As a result of a suggestion of the Reports
Review Committee, arrangements were made
by our Research Division with the Bureau
of Labor Statistics to assume publication
of these figures simultaneously with the
regular monthly release of the unadjusted
employment figures, thus eliminating the
necessity of our publishing the G.12.4
4 0-2
0,7_1A7.,2
-2release which was discontinued September
9, 1958.
K.10 -
Chairmen, Federal Reserve Agents, and Officers
of the Federal Reserve Banks and Branches (as
changes occurred - average monthly)
Since this statement duplicated certain
information as to official personnel of
the Federal Reserve Banks and Branches
which was published in another statement,
the Division of Personnel Administration
consolidated the two reports, thus resulting in the elimination of the K.10
statement, effective July 18, 1958.
The Committee has also questioned the utility of various
data contained in the following reports and statements:
L.4.1 - Earnings and Expenses of Federal Reserve Banks
(monthly)
G.15 - Interdistrict Settlement Fund (monthly)
J.1 -
Deposits, Reserves, and Borrowings of member banks
(semimonthly): second and third pages (a and b)
L.4.5 - Changes in status of banks and branches (monthly)
-
C.2 -
Page 4 (d) of Principal assets and liabilitieF-All Banks in U. S. and Possessions (semiannually),
showing all banks, all commercial banks, and
mutual savings banks by Federal Reserve districts
Foreign Branches of American Banks (annually)
L.4.8 - Construction Contracts Awarded, by Federal Reserve
Districts (monthly)
PA-13 - List of Officers, Federal Reserve Agents, Agents'
Representatives of Federal Reserve Banks (also
section showing directors, business affiliations,
System committees, etc.) (As changes occur)
100-6936 - Sales and Redemptions of United States Savings Bonds
(monthly)
•••
- Estimated Value per Acre of Farm Real Estate by Federal Reserve Districts (January, May, September)
3514
-3- List of Professional Research Perspnnel in the
Federal Reserve System (quarterly)
comments
could be
gestions
would be
It will be appreciated if you will let the Board have your
as to which of the foregoing you consider essential and which
discontinued. As to any you feel are essential, your sugas to how they might be revised to improve their presentation
helpful.
The Board would also like to have your comments on any
other Board releases or periodic statements about which you may have
some question as to their usefulness.
Very truly yours,
Merritt
Secre
TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS
BOARD OF GOVERNORS
OF THE
Item No. 11
12/3/58
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 3, 1958
Board of Directors,
Marine Midland Trust Company
of Central New York,
Syracuse, New York.
Gentlemen:
Pursuant to your request submitted through the Federal
Reserve Bank of New York, the Board of Governors approves the
establishment of branches at the northeast corner of North and
Main Streets, Camillus, New York, and at 21401 West Genessee Street
in the unincorporated area of Fairmount, Town of Geddes, Onondaga
County, New York, by Marine Midland. Trust Company of Central
New York. This consent is given provided
a.
the merger with Camillus Bank is effected substantially in accordance with the terms of the Plan of
Merger dated July 18, 1958;
b.
shares of stock acquired from dissenting shareholders are disposed of within six months after
date of acquisition;
c.
the branches are established within sir months
from the date of this letter; and
d.
that formal apnroval of the State authorities is
effective at the time the branches are established..
The Board of Governors also approves the Subsequent removal of the branch from temporary quarters at 2h01 West Genesee
Street to the southeast corner of the intersection of New York
Route 5 and Onondaga Road in the unincorporated area of Fairmount,
Town of Camillus, New York, provided such relocation is effected
'-Ti.thin six months from the date of this letter.
Very truly 7ours,
(Signed) Merritt Sherman
uicr'flA111erman,
Seeretary.
35-16
Item Jo. 12
12/3/53
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
NOTICE OF TENTATIVE DECISION ON APPLICATION FOR PRIOR
APPROVAL OF ACQUISITION BY A BANK HOLDING COMPANY
OF VOTING SHARES OF A BANK
Notice is hereby given that, pursuant to section 3(a) of
the Bank Holding Company Act of 1956 ("the Act"), First Virginia
Corporation, Arlington, Virginia ("Applicant"), has applied for the
Board's prior approval of action whereby Applicant would acquire
from 51 to 92 per cent of the 400500 outstanding voting shares of
Old Dominion Bank, Arlington, Virginia.
Information contained in
the application and other information relied upon by the Board in
making its tentative decision are summarized in the Board's Tentative
Statement of this date, which is attached hereto and made a part
hereof, and is on file with the Federal Register Division and available for inspection at the office of the Board's Secretary and at
the Federal Reserve Banks.
The record in this proceeding to date consists of the
application, the views and recommendations of the Commissioner of
Banking for the State of Virginia, this Notice of Tentative
Decision, and the facts set forth in the Board's Tentative Statement.
O5
-2-
For the reasons set forth in the Tentative Statement, the
Board proposes to grant the application.
Notice is further given that any interested person may,
not later than fifteen (15) days after the publication of this notice
in the Federal Register, file with the Board in writing any comments
on or objections to the Board's proposed action, stating the nature
of his interest, the reasons for such comments or objections, and the
issues of fact or law, if any, presented by said application which
he desires to controvert. Such statement should be addressed:
Secretary, Board of Governors of the Federal Reserve System,
Washington 25, D. C.
Following expiration of the said 15-day period, the Boardls
tentative decision will be made final by order to that effect, unless
for good cause shown other action is deemed appropriate by the Board
and is so ordered.
Dated at Washington, D. C., this 3rd
day of December, 1958.
By the Board of Governors.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(SEA")
3518
BOARD OF GOVERNORS
Item a). 13
12/3/58
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY THE FIRST VIRGINIA CORPORATION, ARLINGTON, VIRGINIA,
FOR PRIOR APPROVAL OF ACQUISITION OF VOTING SHARES OF
OLD DOMINION BANK, ARLINGTDN, VIRGINIA
TENTATIVE STATEMENT
First Virginia Corporation, Arlington, Virginia, a bank
holding company, has applied, pursuant to section 3(a)(2) of the
Bank Holding Company Act of 1956 ("the Act"), for this Board's
prior approval of the acquisition of from 51 to 92 per cent of the
40,500 outstanding voting shares of Old Dominion Bank, Arlington,
Virginia, a bank organized under the laws of Virginia.
As required by section 3(h) of the Act, the Commissioner
of Banking for the State of Virginia was asked for his views and
recommendations with respect to the application.
The Commissioner
interposed no objection to the application.
Statutory factors. - Section 3(c) of the Act requires the
Board to take into consideration the following five factors: (1) the
financial history and condition of the holding company and bank concerned; (2) their prospects; (3) the character of their management;
(4) the convenience, needs, and welfare of the communities and the
area concerned; and (5) whether or not the effect of the acquisition
would be to expand the size or extent of the bank holding company
system involved beyond limits consistent with adequate and sound
3519
-2-
banking, the public interest, and the preservation of competition
in the field of banking.
Discussion. - The applicant, First Virginia Corporation,
is a part of a holding company system that includes three banks in
northeastern Virginia, near the District of Columbia: Old Dominion
Bank, Arlington, Virginia, with deposits of $37 million on June 23,
1958; Bank of Annandale, Annandale, Virginia, with deposits of
$4 million; and The National Bank of Manassas, Manassas, Virginia,
with deposits of $5 million.
At the present time, Old Dominion Bank is a bank holding
company by virtue of its ownership of all of the stock of First
Virginia Corporation, which
OWMB
a majority of the stock of the
Annandale and Manassas banks. The voting shares of Old Dominion
Bank are publicly owned (with the exception of 5 per cent of Old
Dominion stock presently owned by First Virginia).
First Virginia proposes to acquire up to 92 per cent of
Old Dominion's outstanding voting shares by offering to exchange
30 shares of a new issue of First Virginia stock for each outstanding share of Old Dominion stock. If the proposal were fully consummated the stock of First Virginia would become publicly owned,
and First Virginia would become the owner of 97 per cent of the
voting stock of Old Dominion and would continue to hold a majority
Of the stock of the AnnandAle and Manassas banks. Old Dominion
Bank would cease to be a bank holding company, since it would no
longer own or control 25 per cent of the voting shares of First
Virginia.
_3..
3520
The rapid growth of Old Dominion Bank and Bank of Annandale
calls for substantial increases in their capital structures, and
continued growth of all three banks in the group may, in the future,
call for further increases in their capital structures through sale
of additional stock. Since First Virginia owns a majority of the
stock of the Annandale and Lanassas banks, that holding company would
be the natural purchaser of the greater part of any such additional
Issues of stock.
Under the existing intercorporate arrangement of
the system, however, with a commercial bank (Old Dominion Bank) as
the top holding company and an intermediate holding company (First
Virginia) that holds only the stock of two relatively small banks,
First Virginia might find it somewhat awkward and costly to raise
funds with which to purchase additional shares of its subsidiary
banks. Financing of capital increases for all three banks probably
would be facilitated if, as now proposed, First Virginia became the
only holding company in the group and the relatively large Old
Dominion Bank was included among its subsidiaries.
The financial history and condition of First Virginia are
satisfactory, and the proposed transaction would enhance that corporation's financial strength.
The financial history and condition of
Old Dominion also are satisfactory. As stated above, its rapid
growth
calls for a substantial increase in its capital structure, and such
an increase is contemplated by the general plan of
which the pending
application is a part. Both First Virginia and Old Dominion appear to
be under good management.
3521
Inasmuch as the proposed acquisition involves, essentially,
a rearrangement of the corporate units in the holding company system
and involves no change in the number or character of banking facilities, the convenience, needs, and welfare of the communities and the
area concerned will not be materially affected.
Likewise, the proposed
acquisition will not modify the existing competitive situation among
the banks of the area or otherwise significantly affect competition
in the field of banking.
The contemplated strengthening of the capital
structures of two of the banks in the group would contribute to the
soundness of banking in the area and thereby to the public interest.
Conclusion. - It is the judgment of the Board, in the light
of the factors enumerated in section 3(c) of the Act and the general
Purposes of the Act, that the application should be approved.
352
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 14
12/3/58
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE SOARD
December 3, 1958.
Dear Sir:
A copy of a letter is enclosed dated November 19, 1958, from
Mr. Norman P. Mason, Commissioner, Federal Housing Administration, in
respect to new commitment procedures covering mortgage insurance.
The principal facts in the letter and other information submitted by FHA are that new commitment procedures would be necessary to
conserve the authorization to insure mortgages which has been substantially depleted by an unprecedented demand for FHA insured loans. It
is the intention of the FBA to limit future mortgage insurance commitments to owner-occupant mortgagor applications and certain other limited
uses such as extension of outstanding commitments where construction has
started, or funds have been disbursed by a mortgagee, or a contract of
sale has been executed. In the case of builders applying for conditional or firm commitments, however, an "Agreement to Insure" will be
issued which can be converted into a thCommitment for Insurance" when
insurance authorization becomes available through recapture of expired
outstanding commitments, as the insurance fund revolves, or when the
86th Congress enacts legislation to increase the insurance authorization.
The Agreement to Insure states that upon request and subject
to the availability of insurance authorization and the provisions of
the "Administrative Rules and Regulations" of the FHA in effect at such
time, a Commitment for Insurance will be issued. Mr. Mason in his letter states "there is no doubt that FBA will be able to honor Agreements
to Insure, the only question is one of time which, of course, would be
based upon the recapture rate".
The FHA has sought the assistance of the Board of Governors
in facilitating the acceptance of Agreements to Insure by member State
banks through issuance of a ruling that Federal Reserve examiners Are
not required to tal<e exception to such conditional commitments. FHA
recognizes that member State banks are subject to StAte law and regulation and may not be authorized to employ Agreements to Insure in all
C&5. With reference to naticiaal banks, we have been advised that
the Comptroller of the Currency has instructed notional bank examiners to treat Agreements to Insure already made, and to be made
during the next 120 days, as the equivalent of firm commitments to
insure mortgage loans for the purposes of Section 2/I of the Federal
Reserve Act.
It would be the view of the Board that Agreements to Insure
are a temporary acceptable substitute for FHA Commitments for Insurance. Such Agreements may be converted into A firm commitment when
insurance authorization is available either through recapture procedures or increased insurance authorization by Congress, and Federal
Reserve examiners should be requested not to criticize in reports of
examination properly issued FHA Agreements to Insure in respect to
real estate loans in member State banks.
Very truly yours,
,
OP
Merritt She
Secretary.
Enclosure
TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS
3524
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 15
12/3/58
ADDRESS orricsAL CORRESPONDENCE
TO THE BOARD
Atv,ittst•
4304tt***
December 31 1958
Mr. W. D. Fulton, President,
Federal Reserve Bank of Cleveland,
Cleveland 1, Ohio.
Dear Mr. Fulton:
This refers to your letter of November 13, 1958 concerning
the proposed improvements to the alarm and protection systems at the
Cleveland Head Office building, as approved by your Bank's Board of
Directors.
The Board of Governors will interpose no objection to an
expenditure of approximately $2350600 for the program, as described
in your letter.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 16
12/3/58
TELEGRAM
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
December 3, 1958
Johns - St. Louis
Reurlet of November 26, 1958, Board will interpose
no objection to purchase of property adjoining Little Rock
Branch as described in your letter at a price not to exceed
$285,000.
(Signed) Merritt Sherman
SHERMAN
35
BOARD OF GOVERNORS
OF
•4'.01
,
• et
t,
THE
FEDERAL RESERVE SYSTEM
,
Item No. 17
12/3/58
WASHINGTON 25. D. C.
.*
ADDRESS OFFICIAL CORRESPONDENCE
Q:
TO THE SOARD
6L-14,
4t
4041
6*
*
December 3, 1958
Dear Sire
The continuing number of balak premises projects being submitted
for consideration has become a matter of concern to the Board, particularly
because of the lack of information with regard to long-range plans at the
various Banks.
The present budget procedure covers current expenses for repairs
and alterations and for depreciation, but does not include capital expenditures except as they may be reflected in amounts budgeted for depreciation. Under the present arrangement, each new proposed capital expenditure
for bank premises purposes submitted for approval must be considered by the
Board as an isolated matter without having the advantage of information
concerning other plans that may be under consideration by the Bank submitting the proposal or by other Banks.
It is believed that this situation might be improved by revising
the budget procedure so that the annual budgets covering current expenses
would be accompanied by a separate capital expenditures budget showing, as
far as possible, estimates of expenditures that are contemplated or foreseeable during each of the next five years. This budget would cover contemplated expenditures for land acquisitions, new buildings, additions,
and major alterations and improvements, including portions chargeable to
current expenses as repairs and alterations. Each year the estimates
would be revised in the light of current developments and extended for
another year.
While the Board would not formally act upon the capital expenditures budgets, as it does in the case of the annual current expense
budgets, it is felt that the information contained in the proposed
capital expenditures budgets would be helpful in considering subsequent
requests for approval of individual projects.
Your comments concerning this proposal would be appreciated.
TO THE PRESIDENTS
Very truly
urs
an,
Merritt
Secretary.
OF ALL FEDERAL RESERVE BANKS
354'74
BOARD OF GOVERNORS
*111,1,4
‘,
40-Ay
Item No. 18
12/3/58
OF THE
1
'0
0,1 CO COOP
FEDERAL RESERVE SYSTEM
•
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCIL
TO THE BOARD
December 3, 1958
CONFIDENTIAL (FR)
Mr. William F. Treiber,
First Vice President,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Mr. Treiber:
Reference is made to your letter of October 22, 1958, in
which your Bank requests the approval of upward adjustments in the
salary structures applicable to the employees of your Bank and the
Buffalo Branch.
The Board approves the following minimum and maximum salaries
for the respective grades for the various structures effective immediately.
Grade
CLERICAL
Buffalo Branch
Head Office
minim=
maximum
Maximum
Minimum
Salary
Salary
Salary
Salary
$ 2,250
$ 3,038
3,977
4,423
5,067
5,581
6,144
6,754
7,434
8,143
2,477
2,729
3,013
3,325
3,667
4,039
4,442
4,888
5,394
3,344
3,684
4,o68
4,489
4,950
5,453
5,997
6,599
7,282
8,937
5,960
8,046
61600
7,329
8,148
9,086
10,173
8,910
9,894
11,000
12,266
13,734
1
2
$ 2,389
2,652
$ 3,225
3,580
3
4
5
6
7
8
9
lo
2,946
3,276
3,753
4,134
4,551
5,003
5,507
6,032
11
12
6,620
7,284
13
14
15
16
81042
8,892
9,865
10,993
9,833
10,857
121004
13,318
14,840
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
-2-
Mr. William F. Treiber
NON-CLERICAL
Head Office and Buffalo
Minimum Salary
Grade
1
2,392
2
2,540
2,703
2,891
3,115
3,386
3,706
4,089
4,548
5,079
5,649
3
4
5
6
7
8
9
10
11
Maximum Salary
$3,229
3,429
3,649
3,903
4,205
4,571
5,003
5,520
6,140
6,857
7,626
SPECIAL SALARY RANGES FOR PHYSICIANS
Grade
Physicians
Medical Director
Minimum Salary
$5,500
10,700
Maximum Salary
$8,750
13,650
The Board approves the payment of salaries to the employees,
Other than officers, within the limits specified for the grades in
which the positions of the respective employees are classified. It
is understood that all employees whose salaries are below the minimum
Of their grades as a result of the structure increase will be brought
within the appropriate ranges by March 1, 1959.
The Board understands that the expense arising from these
structure changes has been provided for in the 1959 budget.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
352:
UNIThD STATES OF AEIERICA
BEFORL THE E0AhD OF GOVERNORS OF THE FEDERAL RESLRVE SYSTEN
In the Matter of
THE COOTnENTAL BANK
AdD Tam conpANY
Salt Lake City, Utah
Item No. 19
12/3/58
)
)
)
)
)
)
OR FILING OF
ORDER EXTENDIbiG TIi
ON OF RECORD
CL,RTIFICATi
AND
DECISION
REC011iETIDED
Additional time having been requested by the Hearing Examiner
Within which to file with the Secretary of the Board his Recommended
Decision and Certification of Record in the above-entitled proceeding,
and it appearing to the Board that such request should be granted, it
is hereby ORDERED that the time within which the Hearing Examiner may
file such Recommended Decision and Certification of Record be, and the
same hereby is, extended to and including narch 16, 1959.
This 3rd day of December, 1958.
By order of the Board of Governors.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(SEAL)
Washington, D. C.
3530
Item No.
12/3/58
Minutes of a meeting of the available members of the Board of
Governors of the Federal Reserve System on Monday, December 1, 1958.
The meeting was held in the Board Room at 10:15 a.m.
PRESENT:
Mr. Martin, Chairman
Mr. Szymczak
Mr. Robertson
Mt.
Mt.
Mr.
Mr.
Mt.
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant Secretary
Thomas, Economic Adviser to the Board
Molony, Special Assistant to the Board
Messrs. Young, Noyes, and Robinson, Miss Burr,
Messrs. Williams, Dembitz, Gehman, Keir,
Weiner, Hald, Loewy, Manookian, Wernick,
and Wood, and Miss Dingle of the Division
of Research and Statistics
Messrs. Furth, Hersey, Irvine, Katz, Maroni,
Reynolds, and Summers of the Division of
International Finance
Mr. E. B. Richardson, Deputy Governor of the Commonwealth Bank
of Australia, also was present at this meeting.
Economic review.
The review of international developments by
the Division of International Finance indicated that the gold outflow
from the United States was reduced in November to the lowest point since
last January but that it was as yet too early to know whether this marked
a real turning point.
United States imports in October appeared to have
Picked up somewhat, while an analysis of exports showed relative stability
in the February-September period for raw materials and fuel as well as in
total exports to other industrial countries.
During this period, however,
there had been a gradual falling-off of machinery and equipment exports
as well as in total exports to nonindustrial countries.
Members of the
-2-
12/1/58
Division also commented on significant financial developments in selected
foreign areas.
The review of domestic developments by the Division of Research
and Statistics indicated, among other things, the beginning of a wideningout of price rises, a probable two or three point increase in the index
Of industrial production in November, estimated gross national product
at an annual rate of $450 billion or higher for the fourth quarter, a
continued rise in housing starts in October to a three-year peak, and
some further improvement in the demand for labor.
All of the members of the staff except Messrs. Sherman, Kenyon,
and Fauver then withdrew from the meeting.
Mr. Hackley, General Counsel,
entered the meeting at this point.
Discount rates.
Unanimous approval was given to telegrams to the
Federal Reserve Banks of Minneapolis, Kansas City, and Dallas approving
the establishment without change by those Banks on November 28, 1958, of
the rates on discounts and advances in their existing schedules.
Items circulated to the Board.
The following items, which had
been circulated to the members of the Board and copies of which are
attached to these minutes under the respective item numbers indicated,
were approved unanimously:
Item No.
Letter to The Community Bank and Trust Company,
New Haven, Connecticut, approving the establishment
of an in-town branch. (For transmittal through the
Federal Reserve Bank of Boston)
M-1
-3-
12/1/58
Item No.
Letter to the New Jersey Bank and Trust Company,
Clifton, New Jersey, granting an extension of
time within which to establish a branch in
North Haledon, New Jersey. (For transmittal
through the Federal Reserve Bank of New York)
M-2
Letter to the Lorenzo State Bank, Lorenzo, Texas,
waiving the requirement of six months' notice of
Withdrawal from membership in the Federal Reserve
System. (For transmittal through the Federal
Reserve Bank of Dallas)
M-3
Letter to the Federal Deposit Insurance Corporation
regarding the application of Lorenzo State Bank,
Lorenzo, Texas, for continuance of deposit insurance
after withdrawal from membership in the Federal
Reserve System.
m-4
Following informal comments by Mr. Richardson on economic and
banking developments in Australia, the meeting adjourned.
_
_
Secretary
BOARD OF GOVERNORS
tosICIOO*0
44).
:4 / \Inket
00'
4
OF THE
FEDERAL RESERVE SYSTEM
nO
Item No. 11-1
12/1/58
WASHINGTON 25, D. C.
fii:
AODRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
*'4 bttlit4Ct4''41
December 1, 1958
Board of Directors,
The Community Bank and Trust Company,
New Haven, Connecticut.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of Boston, the Board of Governors of
the Federal Reserve System approves the establishment of
a branch at the junction of College Street Extension and
Congress Avenue, New Haven, Connecticut, by The Community
Bank and Trust Company, provided the branch is established
within six months from the dace of this letter and approval
of the State authorities is in effect as of the date of the
establishment of the branch.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
6
BOARD OF GOVERNORS
OF THE
e(A vicetv,*.0
FEDERAL RESERVE SYSTEM
Item No.
12/1/58
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
*
0o0.4.*
December 12 1958
Board of Directors,
New Jersey Bank and Trust Company,
Clifton, New Jersey.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
extends until June 18, 1959, the time within which New
Jersey Bank and Trust Company may establish a branch at
High Mountain Road and Manchester Avenue, North Haledon,
New Jersey, under authority contained in the Board's
letter of June 18, 1958.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
r--
'351
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. M-3
12/1/58
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO TI-4L
BOARD
December 1, 1958
Board of Directors,
Lorenzo State Bank,
Lorenzo, Texas.
Gentlemen:
The Federal Reserve Bank of Dallas has forwarded to the
Board of Governors your letter of October 30, 1958, and the accompanying resolution signifying your intention to withdraw from
membership in the Federal Reserve System and requesting waiver of
the six months' notice of such withdrawal.
In accordance with your request, the Board of Governors
waives the requirement of six months' notice. Upon surrender to
the Federal Reserve Bank of Dallas of the Federal Reserve Bank stock
issued to your institution, such stock will be cancelled and appropriate refund will be made thereon. Under the provisions of
Section 10(c) of the Board's Regulation H, as amended effective
September 1, 19520 your institution may accomplish termination of
its membership any time within eight months from the date the notice
of intention to withdraw from membership was given.
It is requested that the certificate of membership be
sent to the Federal Reserve Bank of Dallas for disposition.
It is noted that formal application has been filed, as
required, with the Federal Deposit Insurance Corporation for
continuance of deposit insurance after withdrawal from membership
ln the Federal Reserve System.
Very truly yours,
(Signed) Merritt Sherman
,lerritt Sherman,
Secretary.
35
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. M-4
12/1A8
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 1, 1958
The Honorable Jesse P. Wolcott, Chairman,
Federal Deposit Insurance Corporation,
Washington 25, D. C.
Dear Mr. Wolcott:
Reference is made to your letter of November 13, 1958,
concerning the application of Lorenzo State Bank, Lorenzo, Texas,
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) Merritt Sherman
Merritt Sherman,
Secretary.
@FedFRASER