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Minutes for
To:
Members of the Board
From:
Office of the Secretary
DQcember
1963
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. Mitchell
Gov. Daane
2t
Minutes of the
Board of Governors of the Federal Reserve
System on Wednesday, December
4,
1963.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mx.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank
Operations
Mr. Johnson, Director, Division of Personnel
Administration
Mr. Kelleher, Director, Division of
Administrative Services
Mr. Harris, Coordinator of Defense Planning
Mr. O'Connell, Assistant General Counsel
Mr. Shay, Assistant General Counsel
Mr. Goodman, Assistant Director, Division of
Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mr. Thompson, Assistant Director, Division of
Examinations
Mr. Mattras, General Assistant, Office of the
Secretary
Mr. Bakke, Senior Attorney, Legal Division
Miss Hart, Senior Attorney, Legal Division
Mr. Hricko, Senior Attorney, Legal Division
Mr. Poundstone, Review Examiner, Division of
Examinations
Mr. Sanford, Review Examiner, Division of
Examinations
Mr. Smith, Review Examiner, Division of
Examinations
Mr. Noory, Assistant Review Examiner, Division
of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Discount rates.
The establishment without change by the Federal
Reserve Bank of Atlanta on December 2, 1963, of the rates on discounts
12/4/63
-2-
and advances in its existing schedule was approved unanimously, with the
understanding that appropriate advice would be sent to that Bank.
Distributed items.
_
The following items, copies of which are
attachedindicated,
to these minutes under the respective item numbers
were .9.22E2y211 unanimously:
Item No.
Letter to National Bank of Detroit, Detroit,
Michigan, (1) granting permission to organize
a corporation under section 25(a) of the
Federal Reserve Act to be known as International
. .
Bankof
Detroit, Michigan, for the
Detroit,*.
purpose of engaging in international or foreign
banking and international or foreign financial
oPerations, and (2) transmitting a preliminary
permit.
1
Letters to the Federal Reserve Banks of Boston,
Philadelphia, Richmond, Atlanta, Chicago, and
Minneapolis approving the payment of salaries
to certain officers at specified rates.
2-7
Report on competitive factors (Albany-Worcester, New York).
There had been distributed a draft of report to the Comptroller of the
Currencyosed
merger of
on the competitive factors involved in the prop
The Bank of Worcester, Worcester, New York, into National Commercial
Bank and Trust Company, Albany, New York.
After discussion, the report was approved for transmission to the
Comptroller with the understanding that the conclusion would be revised
to eliminate a statement that the proposal would subject small banks in
the area to greater competition, to temper the statement concerning the
4203
12/4/63
-3-
increase in concentration of deposits held by the two largest banks in
the District, and to eliminate a statement that the effect on competition
would be adverse.
The conclusion, as transmitted, read as follows:
The proposed merger of National Commercial Bank and Trust
Company, Albany, New York, and Bank of Worcester, Worcester,
New York, would eliminate little competition, as only a nominal
amount now exists between them; however, the proposal would,
to some extent, increase the concentration of deposits held by
the two largest banks in the Fourth Banking District.
Report on competitive factors (Piqua-Tipp City-Troy, Ohio).
A report to the Comptroller of the Currency on the competitive factors
involved in the proposed mergers of The Troy Citizens Bank, Troy, Ohio,
and The Tipp-Citizens National Bank, Tipp City, Ohio, into The Citizens
National Bank & Trust Company, Piqua, Ohio, was approved unanimously
for
transmission to the Comptroller.
The conclusion read as follows:
The competition existing among the three banks involved
in this proposal is believed to be only minor.
The proposed mergers of The Troy Citizens Bank, Troy, Ohio,
and The Tipp-Citizens National Bank, Tipp City, Ohio, into The
Citizens National Bank & Trust Company, Piqua, Ohio, would
increase the latter's deposit size fairly substantially which
might result in intensified competition between it and the
now largest bank serving Miami County. It does not appear
that smaller banks would suffer significant adverse effects.
Report on competitive factors (New York-Bangkok-Singapore-Hong
Kong)•
A report to the Federal Deposit Insurance Corporation on the com-
Petitive factors involved in the proposed acquisition of assets and assumption of liabilities of the Bangkok, Hong Kong, and Singapore branches of
4204
12/4/63
-4-
National Handelsbank, N.V., Amsterdam, The Netherlands, by The Chase
Manhattan Bank, New York, New York, was approved unanimously for
transmission to the Corporation.
The conclusion read as follows:
The acquisition of the assets and the assumption of the
liabilities of the Bangkok, Hong Kong, and Singapore branches
of National Handelsbank, N.V. by The Chase Manhattan Bank, New
York, should provide increased competition in the international
field and to some extent with respect to indigenous business,
Particularly in relation to the operations of other large United
States banks with overseas branches.
Messrs. Goodman and Poundstone then withdrew from the meeting.
Application of Bank of Virginia (Items
8, 9, and 10). Pursuant
to the decision reached at the meeting on November 27, 1963, there had
been distributed a proposed order and statement reflecting the Board's
approval of the application of The Bank of Virginia, Richmond, Virginia,
to merge with The Hallwood National Bank, Hallwood, Virginia.
There
had also been distributed a draft of dissenting statement of Governors
Mills and Robertson.
The issuance of the order, statement, and dissenting statement
l'ras authorized, with the understanding that the majority statement
would be revised to reflect certain suggestions by Governor Mitchell.
Copies of the order, statement, and dissenting statement, as issued,
are attached to these minutes as Items
8, 9, and 10.
Mr. Hricko then withdrew from the meeting.
Applications of Atlantic National Bank and Atlantic Trust Company.
There had been distributed a memorandum from the Division of Examinations
4205
12/4/63
-5-
dated November 22, 1963, along with other pertinent papers, relating to
the applications of The Atlantic National Bank of Jacksonville and Atlantic
Trust Company, both of Jacksonville, Florida, for approval, pursuant to
section 3(a)(2) of the Bank Holding Company Act, to acquire shares of
common stock of Daytona Atlantic Bank, Daytona Beach, Florida, a proposed
new bank.
Mr. Thompson summarized the applications, basing his remarks
essentially on the information contained in the Division memorandum,
and stated reasons why the Division recommended approval.
Governor Robertson said that he would approve the applications,
although he regarded the case as weak from the standpoint of public need.
In this
be served
connection, he referred to the size of the community to
and the number of banks already in existence.
He noted, however, that
Other holding company interests were represented in this area and that
the Florida Commissioner of Banking, who was familiar with the locality,
had recommended approval.
The other members of the Board also indicated that they would
approve the applications.
Thereupon, the applications of The Atlantic National Bank of
Jacksonville and Atlantic Trust Company were approved unanimously, with
the understanding that an order and statement reflecting this decision
Yould be prepared for the Board's consideration.
Messrs. O'Connell, Shay, Leavitt, Thompson, Mattras, Sanford,
Smith, and Noory then withdrew from the meeting, as did Miss Hart.
`..?,f )t3
12/4/63
-6Vice President in charge of Denver Branch (Item No. 11).
At
the meeting on November 20, 1963, the Board had given preliminary
consideration to the proposal of the Board of Directors of the Federal
Reserve Bank of Kansas City, as stated in Deputy Chairman Simons' letter
of November 14, 1963, to promote John W. Snider, Cashier at the head
office, to the position of Vice President assigned in charge of the
Denver Branch, with salary at the rate of $17,000 per annum, effective
January 1, 1964.
Action on the matter was deferred by the Board of
Governors pending discussion with representatives of the Reserve Bank.
At this meeting Governor Mitchell reported on a conversation
with President Clay that clarified certain questions previously raised.
Thereupon, unanimous approval was given to a letter to the Federal
Reserve Bank of Kansas City approving the payment of salary to Mr. Snider
as Vice President at the rate of $17,000 for the period January 1 through
December 31, 1964.
A copy of the letter is attached as Item No. 11.
Mr. Johnson then withdrew from the meeting.
S..1663.
Mr. Bakke referred to the report that had been sent to
Chairman Eastland of the Senate Judiciary Committee, pursuant to Board
action on November 1, 1963, concerning S. 1663, a bill to amend the
Administrative
Procedure Act.
He stated that apparently few other
s.gencies had submitted their reports as yet, that the Budget Bureau was
seeking to have such reports submitted by the end of the year, and that
some agencies, having been apprised of the existence of the Board's
4
2(
.
12/4/63
-7-
report, had inquired whether they might have copies for their use in
analyzing the bill.
After discussion, the sending of copies of the report to such
agencies as requested access to the report was authorized.
Mr. Bakke then withdrew from the meeting.
Emergency relocation arrangements (Item No. 12).
There had been
distributed a memorandum from Messrs. Harris, Farrell, and Kelleher
dated November 4, 1963, attaching a report of a concurrent study by
representatives
of the Board and the Federal Reserve Bank of Richmond
concerning relocation arrangements.
The report recommended, for reasons
stated, that the Board establish a relocation facility for the joint
use of itself and the Richmond Bank at a specified location; that the
Board and the Bank develop plans for such facility with a view to its
construction by the Richmond Bank; that in the development of such plans
Consideration be given to including an emergency currency vault for
servicing
Reserve Banks in the eastern part of the country; and that
the functions of the Board and the Richmond Bank be reviewed for the
Purpose of determining which functions, if any, in addition to those
directly related to the operation of the relocation facility, might be
usefully transferred to the relocation site so as to establish a prelocated staff for use in an emergency.
Rough estimates indicated that
the construction
of a facility of the type envisaged by the report might
eost around $467,000 and that the emergency currency vault might cost
an additional $300,000 to $400,000.
1 2(
12/)4/63
-8At the Board's request Mr. Harris commented, in supplementation
Of the memorandum, concerning the present relocation arrangements, the
difficulties involved in them from the standpoint of vulnerability and
the needs of the Richmond Reserve Bank for space, the nature of Government policy in regard to relocation provisions, the possible alternatives
that had been studied by the staff group, and the reasons underlying the
recommendations.
Governor Robertson endorsed the staff recommendations and said
that the Richmond Reserve Bank was ready to move forward with construction
of the proposed relocation facility as soon as the proposal was cleared
with the Board, thus clearing the way also for the Bank to resolve space
problems that had arisen at the Bank's head office.
He noted that the
proposed site for relocation activities was desirable, in that the facilities were reasonably convenient both to Washington and to Richmond,
Permitting relatively easy utilization.
He urged that favorable considera-
tion be given to including the emergency currency vault in the construction
Plans) pointing out that costs would be held to a minimum if the vault
were built in
conjunction with the development of the site.
4 qUestion,
In reply to
Governor Robertson said he understood President Wayne had
discussed the relocation proposal with the Richmond Bank's Board of
Directors
and that approval by the directors was being deferred only
in the absence of Board concurrence with the plan.
Attention was called to the planning that would be necessary in
considering what Board functions and what Reserve Bank functions, in
I909
12/4/63
-9-
addition to the Federal Reserve leased wire switching center, might be
moved to the relocation facility, and Governor Mitchell stressed the
importance of arranging for regular functions to be carried on continuously at the relocation site so as to afford the wherewithal for continued
Operations in the event of an emergency.
He inquired whether such
step, since
arrangements should not in fact be considered as a first
the results might have a bearing on the layout of the structure to be
two steps
erected, but Governor Robertson indicated that he thought the
might proceed simultaneously, with decisions as to location of personnel
at the site being formulated during the period when the facilities were
under construction.
whether to
The initial question, he suggested, was
go ahead with the construction of the facilities, following which arrangements could be made to have the site activated.
If the Board was prepared
be
to go forward with the proposal, the selection of functions that would
moved to the relocation site deserved full study both by the Board and the
Federal Reserve Bank of Richmond.
to
There followed comments on the conformity of the proposal
cost of the
Government emergency planning policy and discussion of the
Project, with Governor Robertson suggesting that for practical purposes
it would seem well to think in terms of a total expenditure in the area
of $1 million.
the view that the
Governor Shepardson expressed agreement with
quarters should be activated on a continuing basis for the plan to be
4210
12/4/63
-10-
effective.
The separation of certain functions and staff for this
Purpose would of course pose personnel problems and involve some
handicap from the point of view of Board operations.
Competent people
would be needed at the relocation site permanently if operations were
to be carried on effectively in the event of emergency.
In some cases,
it might be necessary to employ personnel subject to the understanding
that they would be assigned to the relocation site.
Thus, there would
be distinct problems involved that the Board must be prepared to face if
it decided to go forward with the plan for construction of the new facility.
Notwithstanding these difficulties, since the Board had decided, as a matter
of Policy, to follow an emergency planning program compatible with the
general Government program, he did not see how the Board could do otherwise
than to move ahead.
However, a detailed study should be initiated promptly
to determine what functions could feasibly be transferred to the relocation
site, and planning for the transfer of those functions should then begin.
Governor Balderston described the present relocation arrangements
as unrealistic, and Chairman Martin also indicated that he had concluded
that it would probably be desirable to move ahead with the current proPosal.
Governor Shepardson agreed, and Governor Mitchell said his only
reservation
was that he would want to be sure that the relocation site
was set up as a center of active operations on a continuing basis.
On the last point, Governor Robertson said he would like to
formulate suggestions for the Board's consideration, and it was understood
that he would proceed to develop such suggestions.
211
12/4/63
-11It was then agreed that the Federal Reserve Bank of Richmond
Should be advised of the Board's concurrence in the relocation proposal
SO that the Bank would be in a position to move ahead with the development of plans for construction of the facilities.
A copy of the letter
sent to the Richmond Reserve Bank in accordance with this action is
attached as Item No. 12.
Messrs. Hackley, Farrell, Kelleher, and Harris then withdrew from
the meeting.
Director appointments.
Against the background of informational
material that had been distributed, including memoranda from Mr. Fauver
dated December
3,
1963, consideration was given to situations where action
by the Board
would be required to replace Federal Reserve Bank and branch
directors whose terms were to expire at the end of this year.
(Certain
reappointments had already been approved by the Boo.rd.)
On the basis of today's discussion, it was understood that the
respective members of the Board would assume responsibility for making
inquiry as to appointment possibilities at designated Reserve Banks,
including consultation with the Chairmen of such Banks to the extent deemed
appropriate, and that the appointments to be made would then be considered
further by the Board.
The meeting then adjourned.
Secretary's Notes: Pursuant to the recommendation contained in a memorandum from
the Division of Research and Statistics,
4212
12/4/63
.
-12Governor Shepardson approved on behalf of
the Board on December 3, l93, the appointment of Patricia Kay Cook as Statistical
Clerk in that Division, with basic annual
salary at the rate of $3,820, effective
the date of entrance upon duty.
Governor Shepardson today approved on behalf
of the Board the following items:
cs dated
Memorandum from the Division of Research and Statisti
for
tion
compensa
of
rate
the
that
November 14, 1963, recommending
from
d
increase
be
,
Division
that
to
nt
Consulta
Gertrude Weiss,
to
subject
1964,
1,
January
e
effectiv
5() to $65 for each day worked,
nt.
Consulta
a
as
reappointment of Mrs. Weiss
dated
Memorandum from the Division of Personnel Administration
December 2, 1963, recommending that the following practices be instituted
effective January 1, 1964:
1.
Payment for travel expenses in accordance with the
Board's travel regulations to newly appointed
stenographers, FR-3 and 4, and to typists, FR-2
and 3, from their homes to the metropolitan area
of Washington, D. C., with the understanding that
where such expense is paid to newly appointed
stenographers and typists there will be no payment
for interview expenses as is done at present.
Careful consideration will, of course, be given
before making any such appointments from areas
which would involve distant travel to Washington,
D. C.
2.
Requirement that applicants have had one year of
post-high-school training, such as in a business
ate
school, junior college, or college, or appropri
experience, to qualify for typist positions, FR-3,
and stenographer positions, FR-4.
ding the
Memoranda from appropriate individuals concerned recommen
following actions relating to the Board's staff:
A pointment
Johnny S. Fox as Messenger, Division of Administrative Services, with
e the date of entrance
basic annual salary at the rate of $3,245, effectiv
Upon duty.
4213
12/4/6
-13-
Leave without pay
Mary C. Wing, Technical Editor, Economics, Division of Research and
Statistics, from November 24, 1963, to January 15, 1964.
1
9
3
Item No. 1
BOARD OF GOVERNORS
.....
Gov:
.
.• ,c)OF
4, •
o.
'0
'
L., •
12/4163
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
•S.RES‘":•
•
•.
December 4, 1963.
Mr. Henry T. Bodman, President,
National Bank of Detroit,
Detroit 32, Michigan.
Dear Mr. Bodman:
The Board of Governors has approved the Articles of Association
and the Organization Certificate, dated October 21, 1963, of International
Bank of Detroit, and there is enclosed a preliminary permit authorizing
that Corporation to exercise such of the powers conferred by Section 25(a)
of the Federal Reserve Act as are incidental and preliminary to its organization.
Except as provided in Section 211.3(a) of Regulation K, the
C°rPoration may not exercise any of the other powers conferred by Section
25(a) until it has received a final permit from the Board authorizing it
generally to commence business. Before the Board will issue its final
permit to commence business, the president, cashier, or secretary, together
ith at least three of the directors, must certify (1) that each director
ls a citizen of the United States; (2) that 'a majority of the shares of
caPital stock is held and owned by citizens of the United States, by corporations the controlling interest in which is owned by citizens of the
United States, chartered under the laws of the United States or of a State
?f the United States, or by firms or companies the controlling interest
111 which is owned by citizens of the United States; and (3) that of the
.._ thorized capital
au
stock specified in the Articles of Association at least
Per cent has been paid in in cash and that each shareholder has individually
paid in in cash at least 25 per cent of his stock subscription.
ereafter the cashier or secretary shall certify to the payment of the
remaining
instalments as and when each is paid in, in accordance with law.
Very truly yours,
(Signed) Kenneth A. Kenyon
Enclosure
Kenneth A. Kenyon,
Assistant Secretary.
4
1-
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
December 4, 1963.
Preliminary Permit
of Governors
IT IS HEREBY CERTIFIED that the Board
authority vested
of the Federal Reserve System, pursuant to
Act, as amended,
in it by Section 25(a) of the Federal Reserve
n and Organizahas this day approved the Articles of Associatio
INTERNATIONAL
tion Certificate, dated October 21, 1963, of
Governors, and
BANK OF DETROIT duly filed with said Board of
to exercise
that INTERNATIONAL BANK OF DETROIT is authorized
Section 25(a) as
such of the powers conferred upon it by said
on pending the
are incidental and preliminary to its organizati
al Reserve
issuance by the Board of Governors of the Feder
business in
System of a final permit generally to commence
25(a) and the
accordance with the provisions of said Section
of the
rules and regulations of the Board of Governors
to.
Federal Reserve System issued pursuant there
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
(SEAL)
BY
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
42113
BOARD OF GOVERNORS
Item No. 2
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDREBB OrrICIAL CORREBPONDENCIC
TO THE BOARD
December
Co
h, 1963.
IDENTIAL (FR)
Mr. George H. Ellis, President,
Federal Reserve Bank of Boston,
Boston, Massachusetts 02106.
Dear Mr. Ellis:
to the
The Board of Governors approves the payment of salaries
•
foOWing
period
the
officers of the Federal Reserve Bank of Boston for
January 1 through December 31, 1964, at the rates indicated:
Name
Laurence
H. Stone
Jarvis M. Thayer
Charles
H. Brady
John E. Lowe
Parker B. Willis
Title
Secretary and Associate General Counsel
Cashier
Assistant Vice President
Special Adviser
Vice President and Economic Adviser
Annual
Salary
$161000
16,500
14,000
18,000
17,500
The salary rates approved are those fixed by your Board of Directors,
as r
eported in your letter of October 16, 1963.
You have been advised previously of Board approval of the payment of
sal •
aries to two new officers. This letter advises of Board action concerning
IserZlaries of officers whose title is to change on January 1. You will be adsed of Board action on the remaining salary proposals at a later date.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No.
BOARD OF GOVERNORS
3
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OPPICIAL. CORRESPONDENCE
TO THE BOARD
December
4, 1963.
CONFIDENTIAL (FR)
Mr. Karl R. Bopp, President,
Federal Reserve Bank of Philadelphia,
Philadelphia, Pennsylvania 19101.
Dear Mr. Bopp:
The Board of Governors approves the payment of salaries for the
foi
lowing officers of the Federal Reserve Bank of Philadelphia, for the
period January 1 through December 31, 1964„at the rates indicated:
Name
T
Kenneth
M. Snader
;',4ck C. Rothwell
t
Ber ram W.
Zumeta
Title
Assistant Vice President
Economist
Economist
Annual
Salary
$141000
12,500
13,500
rates approved are those fixed by your Board of Directors, as
in your letter of November 8, 1963. You will be advised at a later
date
of
t,
Board action regarding salary proposals for the remaining officers of
"e Philadelphia Reserve Bank.
reportedThe
Very truly yours,
(SifTed) Merritt Sherman
Merritt Sherman,
Secretary.
4218
BOARD OF GOVERNORS
Item No. 4
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRICIIIB Offal:11AL OORRERPONOCMDR
TO THZ BOARD
December 4, 1963.
CONFIDENTIkL (FR)
Mr. Edwin Hyde, Chairman,
Federal Reserve Bank of Richmond,
Richmond, Virginia 23213.
Dear Mr, Hyde:
of the
The Board of Governors approves the payment of salaries
period
the
for
Ricilmond,
of
Bank
following officers of the Federal Reserve
indicated:
rates
uanuary 1 through December 31, 1964,at the
Name
Welford S. Farmer
Chester D. Porter, Jr.
Edward L. Bennett
Title
Vice President and General Counsel
Examining Officer
Examining Officer
Annual
Salary
$19,000
12,000
13,500
as
The rates approved are those fixed by your Board of Directors,
d
reported in your letter of November 14, 1963. You will be advised at a later
remaining officers of
t te of Board action regarding salary proposals for the
ue Richmond Reserve Bank.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
4.219
BOARD OF GOVERNORS
Item No. 5
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON. D. C. 20551
CORREPPONCIENCIC
ADDRESS OFFICIAL
TO THIL •OAFIO
December 4, 1963.
CONFIDENTBI (FR)
Mr. Malcolm Bryan, President,
Federal Reserve Bank of Atlanta,
Atlanta, Georgia 30303.
Dear Mr, Bryant
the
The Board of Governors approves the payment of salaries of
period
the
for
Atlanta,
following officers of the Federal Reserve Bank, of
January 1 through December 31, 1964,at the rates indicated:
Name
Title
Annual
Salary
Duane Hoover
W. M. Davis
Arthur Kantner
Assistant Cashier
Assistant Cashier
Assistant Cashier
$12,000
14,500
13,500
as
The rates approved are those fixed by your Board of Directors,
adbe
will
You
rePorted in Mr. Patterson's letter of November 11, 1963.
vised at a later date of Board action regarding salary proposals for the
remaining officers of the Atlanta Reserve Bank.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
220
BOARD OF GOVERNORS
......•
,
Item No.
6
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
.0
WASHINGTON, D. C. 20551
ADDRESS
orrictAL
DORRCSPONOCHDIC
TO THE HOARD
December
4, 1963.
CONFIDENTIAL (FR)
Mr. Charles J. Scanlon, President,
Federal Reserve Bank of Chicago,
Chica60
--,
Illinois 60690.
Dear Mr. Scanlon:
The Board of Governors approves the payment of salaries of the
g officers of the Federal Reserve Bank of Chicago,- for the period
' owinanuary 1 through December 31, l961 at the rates indicated:
foil•
Name
D.
K.
R.
A.
M.
A.
M.
J.
Doyle
Scheid
Scheider
Anschutz
Title
Assistant
Assistant
Assistant
Assistant
Vice President
Vice President
Cashier
Cashier
Annual
Salary
$114,500
151000
12,000
11,000
The rates approved are those fixed by your Board of Directors as
reported
in your letter of November 210 1963. You will be advised at a later
,
da
of Board action regarding salary proposals for the remaining officers of
the Chicago
Reserve Bank.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
9
39
:
Item no. (
BOARD OF GOVERNORS
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADORE/III Orrinint.
commtriroNocNac
TO THE !BOARD
December
4, 1963.
CONFIDENTIAL (FR)
Mr. Frederick L. Deming, President,
Federal Reserve Bank of Minneapolis;
Mi
nneapolis, Minnesota 55440.
Dear Mr.
Deming:
The Board of Governors approves the payment of salaries of the
following officers of the Federal Reserve Bank of Minneapolis, for the
Period January 1 through December 31, l9614 at the rates indicated:
Name
R. J.
Dreitzler
J. A. MacDonald
R. D.
Graham
Title
Annual
Salary
General Auditor
Assistant Vice Predident
Assistant Counsel and Assistant Secretary
$151000
.13,500
13,000
The rates approved are those fixed by your Board of Directors, as
reported in your letter of November 114, 1963. You will be advised at a later
412'te of Board action regarding salary proposals for the remaining officers of
(
'41e
Reserve Bank.
Very truly yours,
(ifT,ned) Merritt Sherman
Merritt Sherman,
Secretary.
4222
Item No. 8
12/4/63
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
In the Matter of the Application of
THE RANK OF VIRGINIA
p!,f)r aPproval of merger with
The
Hallwood National Bank
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to the
Lank
Merger Act of 1960 (12 U.S.C. 1328(c)), an application by The Bank
Federal
f Virginia, Richmond, Virginia, a State member bank of the
Reserve System, for the Board's prior approval of the merger of that
bank and The Hallwood National Bank, Hallwood, Virginia, under the
Charter and title of the former. As an incident to the merger, the
nole
The
office of The Hallwood National Bank would become a branch of
Bank of Virginia.
by the
Notice of the proposed merger, in form approved
Board, has been published pursuant to said Act.
Upon consideration of all relevant material in the light of
he factors set forth in said Act, including reports furnished by the
C°111Ptroller of the Currency, the Federal Deposit Insurance Corporation,
"d the
Department of Justice on the competitive factors involved in
the
Proposed merger,
42
-2-
IT IS HEREBY ORDERED, for the reasons set forth in the
Board ia Statement of this date, that said application be and hereby
is
Pproved, provided that said merger shall not be consummated
(a) within seven calendar days after the date of this Order or
(b) later than three months after said date.
Dated at Washington, D. C., this 4th day of December, 1963.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston and Mitchell.
Voting against this action:
and Robertson.
Absent and not voting:
Governors Mills
Governor Shepardson.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
4224
BOARD OF GOVERNORS
Item No.
9
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY THE BANK OF VIRGINIA
FOR PRIOR APPROVAL OF MERGER WITH
THE HALLWOOD NATIONAL BANK
STATE&Et,IT
The Bank of Virginia, Richmond, Virginia ("Virginia Bank"),
with
deposits of $170 million as of June 29, 1963, has applied, pur-
suant to the
Bank Merger Act of 1960 (12 U.S.C. 1328(c)), for the
-mard s
prior approval of the merger of that bank and The Hallwood
Wati°nal Bank, Hallwood, Virginia ("Hcllwood Bank"), with deposits
Of
84.7 million as of the same date, under the charter and title of
Ilitginia Bank.
The proposal contemplates that the sole office of
Hallwood Bank would be operated as a branch of the resulting bank,
incl'easing the number of offices operated by Virginia Bank to 27.
Under the Act, the Board is required to consider, as to
e4eh of
the banks involved, (1) its financial history and condition,
(2) th e
adequacy of its capital structure, (3) its future earnings
Pros
Pects, (4) the general character of its management, (5) whether
its corporate
powers are consistent with the purposes of 12 U.S.C., Ch. 16
(the
PederaI Deposit
Insurance Act), (6) the convenience and needs of
the "mmunity to be served, and (7) the effect of the transaction on
e°1111)Qtition (including any tendency toward monopoly).
The Board may
422,r;
-2-
not approve the transaction unless, after considering all these
factors, it
finds the transaction to be in the public interest.
Banking factors. - The financial history and condition of
both banks are satisfactory.
The financial condition of the result-
ing bank would be satisfactory, also.
r easonably adequate.
Hallwood Bank's capital is
Virginia Bank has benefited from recent sub-
stantial additions to capital and the bank contemplates further
action in this area.
The earnings record of Hallwood Bank compares favorably
with other banks of its size in the Fifth Federal Reserve District.
Virginia Bank's earnings are scmewhat less than the average for
banks
comparable size in the District.
However, the bank's
earnings have improved recently, and prospects for further improvement are
favorable.
Virginia Bank's senior management is regarded as progressive
and capable as are its junior executives who have benefited from the
bara„,
-r• s extensive training program. While the management of Hallwood
tank is
adequate, it lacks depth.
Approval of the proposed merger
weuld insure continuity of management for the only banking office
at nallwood, since Virginia Bank has a pool of experienced executives
frem which management succession could be provided.
There is no indication of any inconsistency with the
Provisions of 12 U.S.C., Ch. 16.
22C
Convenience and needs of the communities. - Virginia Bank
°Perates its main office and 17 branches in the Richmond metropolitan
area, three branches in Norfolk, and one branch each in the cities
of Newport News, Roanoke, Petersburg, Portsmouth, and one in the
community of Dinwiddie.
The proposed merger would have little
effect upon the convenience and needs of the communities presently
being served by that bank.
Hallwood
Hallwood (population 269), where the sole office of
Bank is located, is situated in the northern part of Accomack County
(Population 30,635).
Accomack County is the northernmost of the
t14° Counties comprising the Virginia portion of the Eastern Shore
Peninsula, which lies between the Atlantic Ocean and Chesapeake Bay.
re and
The county's economy is primarily based on agricultu
he seafood industry. A number of vegetable canneries and seafood
Packing houses utilize Accomack County's raw materials.
Employment
i8 also provided by lumber plants, shirt manufacturers, and producers
of building products.
Highway,
The county is served by the busy Ocean
vacationists to
U. S - 13, which brings numerous tourists and summer
he
area.
are expected
This and other parts of the county's economy
to show decided gains with the completion of the Chesapeake Bay
bridge-tunnel, scheduled for 1964, which will join the Virginia
P°rtion of the peninsula to the Norfolk area.
the National
Additional economic support is derived from
Aeronautics and Space Administration installation at Wallop's Island,
422
-4ten miles northeast of Hallwood, which presently employs approximately
1,000 persons and has an annual pay.roll of about $9 million.
The present stable and moderately diversified economy and
anticipated
growth portend a. favorable economic outlook for the county.
Cc/nanmmation of the proposed merger would provide Hallwood and the
county with improved banking services and make more conveniently
available to the
area's larger businesses the increased lending limit
and credit advisory services of Virginia Bank.
be
There also appears to
some need in the Hallwood area for a wider range of consumer install-
ment
ment
financing.
The proposal, if effectuated, would substantially aug-
consumer credit facilities in the area.
The availability of full-scale banking services at a banking
°'4ica at Halluood would have a favorable influence on the expected
g-4.01/th of the
county and the Hallwood area.
Comnetition. - Virginia Bank, a subsidiary of Virginia
Com
monwealth Corporation, a registered bank holding company, is the
fifth largest bank in the State.
Consummation of the proposed merger
llould change
the bank's standing to fourth.
The total deposits held
bY the Virginia Commonwealth group of banks would be increased by only
(3tle- tanth of one per cent of the total deposits held by commercial
benks in Virginia.
Virginia Bank's three branches in Norfolk are the offices
Of v4 .
4rglnia Commonwealth Corporation subsidiaries nearest to Hallwood.
4228
-5-
These offices are about 80 miles from Hallwood and there is no evidence
of direct competition between them and Hallwood Bank.
Bank
Hallwcod Bank's principal competitor is Metompkin
and Trust Company, Parksley, about eight miles south of Hallwood,
oPerating a branch about five miles south of Hallwood.
The presence
of a bank in Hallwood the size of Virginia Bank would provide greater
competition for Metompkin Bank and Trust Company, but it is not felt
that the disparity in size necessarily implies serious competitive
dis advantages for the smaller bank.
a and about
In Focomoke City, Earyland, also on the peninsul
19 miles
larger
north of Hallwood, two Maryland banks serve the
bu
sigsiness customers of the Virginia Eastern Shore area without
nificant competition from Virginia banks located in the area.
These
Bank,
Maryland banks - Maryland National Bank and Citizens National
Cn a
holding company ffiliate of Financial General Corporation, a bank
14ou1d be provided with increased competition for this business by a
branch of Virginia Bank in Hallwood.
County
It does not appear that other banks in Accomack
11°111d be adversely affected by consummation of the proposal due to
heir distances from Hallwood and the fact that they tend to limit
located.
heir activities to the local communities in which they are
proposed merger
Summary and conclusion. - Consummation of the
14(pu1d provide successor management for Hallwood's only banking office,
arW make available to individuals and industry in Hallwood and the
surrounding Accomack County area the broad range of services provided
bY large banks.
Competition for business and industrial accounts would
be intensified for banks located in the Maryland portion of the
Peninsula. Favorable economic prospects for the entire peninsula
area suggest a climate conducive to continued healthy expansion for
smaller banks in the area.
The competitive effects on smaller
banks of establishment of Virginia Bank as a competitor in the
area should not be significantly adverse.
Accordingly, the Board finds the proposed transaction to
• the
be- in
public interest.
be
cember 4, 1963.
423t
DISSENTING STATEMENT OF GOVERNORS MILLS AND ROBERTSON
Item No. 10
12/4/63
Effectuation of the proposal approved by the Board in this
cue will advance The Bank of Virginia to fourth place in size among
the commercial banks in Virginia by the elimination of a growing
independent bank with satisfactory prospects.
It will also augment
further,
through the merger route (and by use of a healthy premium),
the concentration of banking resources controlled by Virginia
Commonwealth Corporation and add still another area of the State to
thesealready penetrated by the growing aggregation of banking
facilities of that bank holding company.
Furthermore, only a relatively short distance from Hallwood
there are available any banking services not supplied by The Hallwood
National Bank or the other banks in Accomack County.
Maryland National
Bank - with a branch at nearby Pocomoke City, Maryland, and total
dePosits
of over $575 million - can make its resources readily available
for the use and convenience of the Pocomoke City Branch and the customers
served by that Branch in Hallwood and Accomack County.
Also in
Pocomoke City is the Citizens National Bank, a subsidiary of Financial
General Corporation, a bank holding company with total resources of
4PPr
oximately $1 billion and more than a score of controlled banks in
seven States and the District of Columbia.
This pool of resources
Liarly is accessible for the convenience and use, through the
Citizens National Bank, of bank customers in the Virginia portion of
the Eastern Shore Peninsula.
Clearly, these two sources of financial
ervices can supply conveniently present banking needs that may not
be
adequately met by the banks in Hallwood and Accomack County, and
1231
-2cen be expected to continue as nearby means for meeting future needs
for banking services that may not be satisfied through growth of
the local banks in the Hallwood - Accomack area.
of Virginia,
Hallwood Bank, although small compared to Bank
is the largest of five independent banks in Accomack County.
While
the replacement of Hallwood Bank by a branch of Virginia Bank might
organizabe expected to increase competition for the larger banking
tions represented at Pocomoke City, there can be little doubt that
the remaining smaller banks in Accomack County will be exposed to
increasingly strong competitive forces.
of
There would seem clearly to be no pressing problem
management at Hallwood Bank.
As a part of the merger transaction
the chief executive officer of that bank apparently will become a
vice president of The Bank of Virginia.
This seems to refute the
eXistence of any present management difficulty at Hallwood Bank,
and there is no evidence that any lack of depth in management at
that bank might not be corrected within a reasonable time by means
°ther than a merger.
application
In a case such as this, it is our view that the
Should not be approved unless there is a much stronger showing of
record
benefits to the public than is revealed by anything in the
Of this case.
Accordingly, we would disapprove the application.
December 4, 1963.
4232
BOARD OF GOVERNORS
Item No. 11
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 4, 1963.
CONFIDENTIAL (FR)
Mr. George H. Clay, President,
Federal Reserve Bank of Kansas City,
Kansas City, Missouri 64106.
Dear Mr. Clay:
The Board of Governors approves the payment of
salary to Mr. John W. Snider as Vice President of the
Federal Reserve Bank of Kansas City, assigned to the Denver
Branch, at the rate of $17,000 per annum, for the period
January 1 through December 31, 1964.
The salary rate approved is that fixed by your
Board of Directors, as reported in Mr. Simons' letter of
November 14, 1963.
Very truly yours,
(Signed) Merritt
Merritt Sherman,
Secretary.
Sherman
or*
BOARD OF GOVERNORS
Item No. 12
12/4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO
THE BOARD
December 13, 1963.
Mr. Edward A. Wayne, President,
Federal Reserve Bank of Richmond,
Richmond, Virginia 23213.
Dear Mr. Wayne:
On December 4, 1963, the Board approved the
recommendations contained in the report on emergency relocation
arrangements dated October 28, 1963, prepared jointly by the
study committees of the Board and the Federal Reserve Bank of
Richmond. It is understood that you have a copy of this report.
In approving the recommendations, the Board indicated
that a currency vault should be included in plans for the new
facility, and it emphasized the importance of identifying functions which might usefully be transferred to the facility.
Members of the Board's study committee expressed
their appreciation for the cooperation and assistance of Messrs.
Dickerson, Black, and Nowlan in the preparation of the report.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
@FedFRASER