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PR 609
Minutes for
To:
Members of the Board
From:
Office of the Secretary
December 5, 1966
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.
Chm. Martin
Gov. Robertson
Gov. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
Gov. Brimmer
Minutes of the Board of Governors of the Federal Reserve
System on Monday, December 5, 1966.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Shepardson
Mitchell
Daane
Maisel
Brimmer
Sherman, Secretary
Kenyon, Assistant Secretary
Broida, Assistant Secretary
Young, Senior Adviser to the Board
Solomon, Adviser to the Board and Director,
Division of International Finance
Mr. Molony, Assistant to the Board
Mr. Cardon, Legislative Counsel
Mr. Fauver, Assistant to the Board
Mr. Solomon, Director, Division of Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Miss Eaton, General Assistant, Office of the
Secretary
Mr.
Mr.
Mr.
Mr.
Mr.
Messrs. Brill, Koch, Partee, Williams, Axilrod,
Gramley, Eckert, Ettin, Fry, Keir, Kelty,
and Rosenblatt of the Division of Research
and Statistics
Messrs. Sammons, Hersey, Katz, Reynolds, Baker,
Gemmill, and Ruckdeschel of the Division of
International Finance
Money market review.
Mr. Kelty reported on conditions in the
Government securities market, following which Mr. Fry commented on a
distributed table affording perspective on bank reserve utilization.
Mr. Baker then reported on the foreign exchange markets, with particular reference to the influences exerted by year-end window-dressing
-2-
12/5/66
operations.
Copies of the several statistical tables distributed in
connection with today's review have been placed in the Board's files.
After discussion of the reports all members of the staff except
Messrs. Sherman, Kenyon, Young, Solomon (Adviser), Molony, Fauver,
Brill, Solomon (Examinations), Partee, and Leavitt, and Miss Eaton withdrew from the meeting and the following entered:
Mr. Hackley, General Counsel
Mr. Johnson, Director, Division of Personnel
Administration
Mr. Kakalec, Controller
Mr. O'Connell, Assistant General Counsel
Mr. Hart, Assistant Director, Division of
Personnel Administration
Mr. Morgan, Staff Assistant, Board Members'
Offices
Mr. Shuter, Attorney, Legal Division
Mr. Egertson, Supervisory Review Examiner,
Division of Examinations
Discount rates.
The establishment without change by the Federal
Reserve Bank of Atlanta on November 23, by the Federal Reserve Banks of
St. Louis, Kansas City, and Dallas on November 25, and by the Federal
Reserve Banks of New York, Philadelphia, Chicago, and San Francisco on
December 1, 1966, of the rates on discounts and advances in their existing schedules was approved unanimously, with the understanding that
appropriate advice would be sent to those Banks.
Approved items.
The following items, copies of which are
attached to these minutes under the respective numbers indicated, were
approved unanimously after consideration of background material that
12/5/66
-3-
had been made available to the Board and clarification of points of
information about which members of the Board inquired:
Item No.
Letter to Bankers Trust Company, New York,
New York, granting an extension of time to
establish a branch in the Borough of Brooklyn.
1
Letter to Endicott Trust Company, Endicott,
New York, granting an extension of time to
establish an in-town branch.
2
Letter to The Connecticut Bank and Trust Company, Hartford, Connecticut, granting an
extension of time to establish a branch in
West Hartford.
3
Letter to The Farmers and Merchants Bank,
Fairborn, Ohio, approving the establishment
of an in-town branch.
4
Letter to Bank of the Commonwealth, Detroit,
Michigan, approving the establishment of
branches (1) in Redford Township, (2) in
Farmington Township, and (3) in Detroit, and
commenting on the bank's capital position.
5
Letter to Bank of the Commonwealth, Detroit,
Michigan granting an extension of time to
establish a branch in the Detroit Trade Center.
6
Letter to Bank of Silvis, Silvis, Illinois,
waiving the requirement of six months' notice
of withdrawal from membership in the Federal
Reserve System.
7
Letter to Manitowoc Savings Bank, Manitowoc,
Wisconsin, approving an investment in bank
premises.
8
Letter to Washington Trust Bank, Spokane,
Washington, approving an investment in bank
premises.
9
12/5/66
-4Item No.
Letter to the Federal Reserve Bank of Dallas
approving revision of the salary structures
applicable to employees at the head office
and branches.
10
Letter to the Federal Reserve Bank of San
Francisco approving revision of the salary
structures applicable to employees at the
head office and branches.
11
Reports on competitive factors.
A report to the Comptroller
of the Currency on the competitive factors involved in the proposed
merger of The First National Bank of Landisville, Landisville,
Pennsylvania, into The Conestoga National Bank of Lancaster, Lancaster,
Pennsylvania, was approved unanimously for transmittal to the Comptroller in a form in which the conclusion read as follows:
Consummation of the proposed merger of The First
National Bank of Landisville and The Conestoga National
Bank of Lancaster would eliminate a moderate amount of
competition existing between them and the potential for
more competition between them. The transaction would
also increase the concentration of area deposits held
by the three large Lancaster banks. It appears the
overall competitive effect of the proposed merger would
be somewhat adverse.
A report to the Comptroller of the Currency on the competitive
factors involved in the proposed merger of The First National Bank of
Elsinore, Elsinore, California, into First National Bank and Trust Company, Ontario, California, was approved unanimously for transmittal,
the conclusion stating that the proposed merger would have no adverse
effect on competition.
12/5/66
-5San Francisco National Bank matter.
There had been distributed
copies of a letter dated November 11, 1966, from President Swan of the
Federal Reserve Bank of San Francisco relating to the appeals currently
pending in respect to orders of the U.S. District Court dismissing certain suits against the Reserve Bank arising out of the closing of San
Francisco National Bank.
The letter pointed out, by way of background, that the Reserve
Bank, in an effort to maintain the liquidity of San Francisco National
Bank, made advances beginning August 28, 1964, that amounted to more
than $9 million when the bank closed on January 22, 1965.
Various
depositors in the closed bank eventually filed suits putting in question
the propriety of those advances.
On April 26, 1966, the District Court
entered orders granting motions by the Reserve Bank to dismiss the
suits, the Court citing three reasons for dismissal:
(1) the Reserve
Bank was acting primarily as an instrumentality or "agency" of the
United States under the Federal Tort Claims Act and consequently the
Court's jurisdiction was subject to limits imposed therein; (2) the
claims of the plaintiffs were essentially claims for money damages and,
as such, were not maintainable under the Act; and (3) the facts alleged
failed to disclose acts or omissions by the Reserve Bank proximately
resulting in loss to any plaintiff.
President Swan's letter noted that a basic question involved
was whether depositors of member banks could sue to set aside the secured
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12/5/66
and preferred position of Reserve Banks where they had made lawful
advances pursuant to sections 10(b) and 13 of the Federal Reserve Act.
That question, which had never been satisfactorily determined by a court
of law, entailed considerations that appeared to be of paramount importance to the entire Federal Reserve System.
The matter had now progressed
to a point where President Swan believed more direct participation by
the Board would be appropriate and highly desirable.
Accordingly, he
requested that the Board consider and state its position supporting the
Reserve Bank in an amicus curiae brief to be filed with the Court of
Appeals for the Ninth Circuit.
He suggested that such a brief discuss
the extent to which the Federal Reserve System as a whole shared with
the Board immunities from suit with respect to the responsibility of
discounting paper presented by member banks.
That suggested approach
was outlined in more detail in an enclosed memorandum prepared by the
Reserve Bank's General Counsel.
General Counsel's memorandum suggested that the Board limit its
approach to supporting the proposition advanced in the District Court's
first reason for dismissal; that is, that in making section 10(b) or
section 13 advances Reserve Banks act primarily as instrumentalities or
"agencies" of the United States.
In other words, no position would be
taken as to the other reasons for dismissal or to the applicability of
the Federal Tort Claims Act to other activities performed by Reserve
Banks.
-7-
12/5/66
In reviewing the matter, Mr. O'Connell recalled that at the
Conference of Reserve Bank Counsel held October 27-28, 1966, special
counsel for the San Francisco Reserve Bank made a plea that the other
Reserve Banks file either separate briefs or a joint brief.
The request
met with almost unanimous opposition, but it was understood that special
counsel for the San Francisco Bank would pursue the matter in letters
addressed to the individual Reserve Banks.
According to later informa-
tion, however, the other Reserve Banks were subsequently advised that
the request was being withdrawn.
Against that background, the request
from President Swan that the Board file a brief was now presented for
consideration.
Mr. O'Connell also reported that it was understood that the
Conference of Reserve Bank Presidents, at its meeting on December 12,
would consider a suggestion by President Hayes of the New York Bank for
the appointment of an ad hoc committee to study the "agency" status of
the Federal Reserve Banks, that suggestion apparently having been made
primarily in light of issues that had arisen under the Freedom of Information Act.
The Board might consider it desirable to obtain the results
of a study by such an ad hoc committee.
However, the study might not
be available in sufficient time for consideration by the Board in determining whether to file a brief along the lines suggested by President
Swan.
According to available information, it appeared that such a brief
might have to be filed by early January.
-8-
12/5/66
The question presented, therefore, was what response should be
made to the request contained in President Swan's letter.
Several of
the members of the Board expressed the view, in discussion of that question, that a brief should be filed.
At the same time, the importance
of the question involved was recognized, with reference being made to
the possible broad longer-run implications of a court finding as to the
"agency" status of the Federal Reserve Banks.
Reference also was made
to the matter of relationships between the Board and the Reserve Banks.
For such reasons an opinion was expressed that it would be helpful if
the Board could have before it, in reaching a determination on the filing of a brief, a report reflecting the views of the Reserve Banks if
that could be obtained in sufficient time that the Board would not lose
by default its opportunity to file a brief with the Court of Appeals.
At the conclusion of the discussion it was suggested that the
staff deteLwine more precisely when the filing of a brief would be
required and that the staff also inquire whether steps might be taken
to expedite the establishment of the proposed ad hoc committee and the
conduct of its study.
It was understood, however, that the Board was
not committing itself to await the receipt of such study before deciding
the question of filing a brief.
Secretary's Note: Inquiry subsequent
to the meeting indicated that the brief
would not have to be filed until a date
somewhat later than had been anticipated.
At the meeting of the Conference of Presidents on December 12, an ad hoc committee
12/5/66
-9was appointed to study the "agency"
status of the Federal Reserve Banks.
It was understood that the committee
would appoint a subcommittee of counsel to advise it on the matter.
Proposed amendment to Home Loan Bank Board regulations (Item
No. 12).
There had been distributed a revised draft of letter to the
Chairman of the Federal Home Loan Bank Board in response to his request
of November 7, 1966, for the Board's comments on a proposed amendment
to the rate control regulations of the Bank Board that would have the
effect of limiting the rate payable by member savings and loan associations on certificate accounts if at any time such accounts bearing a
rate higher than that prescribed for regular accounts should exceed
50 per cent of an institution's total withdrawable accounts.
Governor Maisel recalled that, pursuant to the understanding
at the meeting on November 14, 1966, he had discussed the matter with
Chairman Horne at some length.
As he had reported previously to other
members of the Board informally, Chairman Horne had cited regulatory
problems that were being encountered with some member institutions.
Governor Maisel had raised with him the question whether the present
interest rate control legislation should be construed as regulatory
legislation in that sense.
He felt that the discussion with Chairman
Horne had contributed to clarifying the issue of principle involved,
and in his opinion the proposed letter, which he had advised Chairman
Horne would be forthcoming, constituted an appropriate confirmation of
12/5/66
-10-
the views that should be presented to the Home Loan Bank Board in
writing.
After further discussion the letter was approved unanimously;
a copy is attached as Item No. 12.
Military leave policy.
The Board's statement of policy relat-
ing to the treatment of employees entering service in the Armed Forces
of the United States had last been revised in 1950.
It was therefore
out of date in several respects, and a proposed revision embodying a
number of changes, principally of a technical character, was submitted
with a memorandum from the Division of Personnel Administration distributed under date of November 23, 1966.
One portion of the proposed statement related to the reinstatement of employees returning from military service, the substance of the
pertinent provisions being that an employee who fulfilled certain conditions would be reinstated in the position he left or one of like seniority, status, and pay.
Question was raised during discussion whether
consideration should not be given to the fact that employees returning
from military service might have acquired additional skills by virtue
of such service.
There was general agreement that any such additional
skills should be taken into account in placement procedures and that
the provisions of the policy statement should be regarded as in the
nature of a minimum guarantee.
The proposed document also contained a statement that as a
matter of policy the Board would not request a deferment for any of its
z‘i‘
12/5/66
-11-
employees subject to the draft.
However, the covering memorandum from
the Personnel Division indicated that upon the request of an employee
being called in the draft the Division would provide him with a certified copy of his job description and also that the draft board would
be supplied any information on the nature of the employee's job that
the draft board might request.
Discussion of this aspect of the matter
brought out that the basic statement that the Board would not request
a deferment of any of its employees subject to the draft reflected a
policy that had been in effect since World War II and was most recently
confirmed by the Board at its meeting on October 24, 1966.
However,
certain questions were raised relating to the type of information with
respect to an employee's duties that it would seem suitable to transmit
to a draft board, and the mechanics of transmission of such information.
One of the questions had to do with whether, in certain circumstances,
it would not be appropriate to furnish information direct to the draft
board, rather than through the employee, and whether such information
should be supplied only upon request.
A suggestion was made that it
might be advisable to ascertain the practices of other agencies.
Additionally, it was noted that in dealing with retirement
credit the proposed statement referred only to employees under the
Board Plan of the Retirement System of the Federal Reserve Banks or
under the Civil Service Retirement System.
It was suggested that the
statement also include reference to any employees who might happen to
be under the Bank Plan of the Retirement System.
12/5/66
-12At the conclusion of the discussion it was suggested by the
Chairman that the aspects of the proposed statement that had been questioned be discussed further by interested members of the Board with the
Division of Personnel Administration to determine whether they could not
be resolved satisfactorily within the general framework of the statement.
This would be with the understanding that if necessary the proposed
statement would be brought back to the Board for further consideration.
There was general agreement on proceeding along the lines suggested by
the Chairman.
Nonclerical salary rates at Chicago (Item No. 13).
A memorandum
from the Division of Personnel Administration dated November 28, 1966,
regarding nonclerical salary rates at the Federal Reserve Bank of Chicago
had been distributed to the Board.
In the memorandum, which referred to a recent exchange of correspondence between the Board and the Bank as the result of discussion at
the Board meeting on August 25, 1966, particularly President Scanlon's
letter of September 6, the Division recommended that the Board grant
the Bank continuing authority to pay salaries above the maximum rates
of their grades to building service and trade personnel on the basis of
wage-rate contracts negotiated between the Building Managers Association
of Chicago, of which the Bank was an associate member, and the various
union organizations in the Chicago metropolitan area that represented
the organized building service and trade employees, provided the Bank
12/5/66
-13-
would keep the Board's Division of Personnel Administration currently
informed of all salaries above the maximum rates of the grade paid to
the Bank's building service and trade personnel and that no revision
of the present salary determination procedure would be made without
prior Board review.
It also recommended that the Board approve requests
contained in President Scanlon's letters of October 6 and 7 and
November 3 and 10, 1966, for the payment of salaries to specific categories of the Bank's building service and trade groups above the maximum
rates of their respective grades.
Governor Brimmer noted that the Reserve Bank apparently was
committed to practices followed by the Building Managers Association
even though it did not have a vote with regard to them.
That led him
to raise the question whether the Reserve Bank in fact restricted its
recruitment to union members.
He expressed the view that a Reserve
Bank should not so restrict itself in recruiting and should not subject
itself in detail to union contracts when it did not participate in the
drawing up of such contracts.
He was concerned about the Board's tak-
ing an action that would signify approval of such a procedure, and he
had doubts about the appropriateness of the basic arrangement followed
by the Chicago Bank.
Mr. Johnson said he had called the Reserve Bank to obtain further
information and had been told that in recruiting the Bank did not inquire
whether a person was or was not a union member.
However, the Reserve
12/5/66
-14-
Bank understood that if a person was employed, his fellow employees made
clear to him that he should join the union.
In other words, while the
Reserve Bank gave the matter of union membership no official recognition, it was aware of employee practices.
Governor Brimmer then indicated that he would dissent from the
recommendation contained in the Personnel Division's memorandum.
Other
Board members also indicated that they had some reservations about the
Chicago arrangements but expressed the view that, all things considered,
the best course was to recognize the situation as it existed and grant
to the management of the Reserve Bank the degree of administrative
discretion now recommended.
At the conclusion of the discussion, approval was given to a
letter to the President of the Federal Reserve Bank of Chicago (copy
attached as Item No. 13) reflecting the recommendation of the Personnel
Division, Governor Brimmer dissenting.
The meeting continued from this point with limited staff
attendance.
Director appointment.
It was agreed to ascertain through the
Chairman of the Federal Reserve Bank of New York whether Gerald F. Britt,
President, L-Brooke Farms, Inc., Byron, New York, would accept appointment, if tendered, as a director of the Buffalo Branch for the threeyear term beginning January 1, 1967, with the understanding that if it
were found that he would accept, the appointment would be made.
12/5/66
-15Secretary's Note: It having been ascertained
that Mr. Britt would accept the appointment if
tendered, an appointment telegram was sent to
him on December 6, 1966.
Foreign travel.
The Board authorized travel by Charles C. Baker
of the Division of International Finance to Europe for a period of about
seven weeks after the turn of the year, as recommended in a memorandum
from that Division dated November 30, 1966, such travel to be mainly for
the purpose of increasing his knowledge of European gold and foreign
exchange markets and the statistics related thereto.
It was understood
that Mr. Baker would spend approximately three weeks at the Bank for
International Settlements, two weeks at other principal continental
centers, and two weeks in London, and that he would receive per diem
in lieu of subsistence in accordance with the Standardized Government
Travel Regulations.
Following consideration of a memorandum from the Division of
Research and Statistics dated November 29, 1966, the Board authorized
the making of application for Stephen H. Axilrod of that Division to
attend, in the spring of 1967, a two-week course on the City of London
sponsored by the British Council, with the understanding that Mr. Axilrod
would spend an additional week in visits with the Bank of England and
key London money market houses.
The meeting then adjourned.
Secretary's Notes: Pursuant to the action
taken at the Board meeting on November 8,
1966, and subsequent approval by Governor
12/5/66
-16Shepardson following the negotiations contemplated by that action, the Secretary of the
Board on December 2, 1966, executed on behalf
of the Board a lease and amendatory agreement
with Architect Building Associates covering
office space and parking spaces in the Architect Building in Rosslyn, Virginia, for a
five-year period from December 16, 1966. The
lease, cancelable upon 90 days' written notice
after 30 months, provided basically for 11,455
square feet of floor space on the first floor
of the Architect Building.
Pursuant to action taken by the Board on
October 25, 1966, there were sent under date
of December 1, 1966, letters to the Securities
and Exchange Commission and to the Presidents
of nine Federal Reserve Banks relating to possible violations of the margin regulations
resulting from extensions of credit to Karl H.
P. Swensson directly or indirectly. A copy of
the letter sent to the Commission is attached
as Item No. 14; a copy of one of the letters
sent to the Reserve Banks is attached as Item
No. 15.
On November 30, 1966, Governor Shepardson
approved on behalf of the Board memoranda
recommending the following actions relating to the Board's staff:
Printing Grade Wage Schedule
Revised Printing Grade Wage Schedule (copy attached as Item No. 16)
and increases in the annual salary rates of the following employees in
the Division of Administrative Services under the schedule, effective
December 4, 1966:
Name and title
Franklin Taylor, Supervisor, Duplicating,
Mail, Messenger, and Supply Section
Thomas V. Kopfman, Assistant Supervisor,
Duplicating, Mail, Messenger, and
Supply Section
Annual salary rate
To
From
$9,506
$9,797
8,902
9,214
12/5/66
-17Annual salary rate
From
To
Name and title
Bruce L. Moffett, Operator (Offset Press)
Edward Cross, Foreman-Operator
Abner Thompson, Pressman-Photographer
John P. Fling, Sr., Operator (Offset Press)
Bishop Hart, Bindery Worker
Wesley B. Collins, Photographer (Offset)
Aaron Dortch, Foreman-Operator
Herbert William Bundy, Bindery Worker
Charles P. Brown, Operator (Multilith)
James R. Jordan, Operator (Offset Press
and Multilith)
Theodore L. Jones, Operator (Duplicating
Devices)
Quincy W. Barnes, Operator (Xerox-Mimeograph)
Abraham Rose, Operator (Mimeograph)
Charles E. Evans, Operator (Duplicating
Devices)
James T. Jones, Operator (Mimeograph)
$8,050
8,341
6,261
7,675
7,488
6,594
6,365
6,074
5,782
5,782
$8,341
8,632
6,490
7,946
7,758
6,822
6,594
6,282
5,990
5,990
5,221
5,429
5,491
5,200
5,221
5,699
5,408
5,429
4,680
4,888
Acceptance of resignations
Charlotte Breckenridge, Editorial Assistant, Division of Research
and Statistics, effective the close of business December 2, 1966.
Mabel Virginia Smith, Research Assistant, Division of Research and
Statistics, effective the close of business December 9, 1966.
On December 1, 1966, Governor Shepardson
approved on behalf of the Board a letter
to the Presidents of all Federal Reserve
Banks (copy attached as Item No. 17) transmitting copies of the form to be used by
State member banks in submitting reports
of income and dividends for the calendar
year 1966.
On December 2, 1966, Governor Shepardson
approved on behalf of the Board the following items:
Letter to the Federal Reserve Bank of San Francisco (copy attached
as Item No. 18) approving the appointment of Richard J. Mackey as assistant examiner.
12/5/66
-18-
Memoranda recommending the following actions relating to the
Board's staff:
Prevailing Rate Wage Schedule
Revised Prevailing Rate Wage Schedule (copy attached as Item No. 19)
and establishment of annual salary rates for the following employees in
the Division of Administrative Services under the schedule, effective
December 4, 1966:
Name and title
Carlton C. Poling, Assistant Supervisor
Motor Transport Unit
Herman C. Bounds, Chauffeur
Willard D. Creasey, Chauffeur
Roger M. Painter, Chauffeur
Bert Harvey, Chauffeur (Station Wagon)
Arthur S. Myers, Mechanical Foreman
William D. Ward, General MechanicOperating Engineer
John C. George, Electrician-Operating
Engineer
Gordon M. Davis, Sr., Carpenter-Operating
Engineer
Glenn B. Hopkins, Painter
Bruce L. Rabbitt, Painter
Paul L. Tedrow, Operating Engineer
P. D. Maddox, General Mechanic-Operating
Engineer
William T. Houser, General MechanicOperating Engineer
Carroll P. Hickman, Supervisory Clerk
Saul Clanton, Gardener
Charlie H. Ward, Lead Laborer
Henry Edmonds, Grounds Maintenance Worker
Hampton L. Logan, Window Washer
Annual salary rate
From
To
$6,011
$6,302
5,470
5,741
5,470
4,909
8,840
5,470
5,762
6,053
5,762
5,158
9,235
5,762
7,426
7,758
7,072
7,384
6,822
6,822
6,490
6,261
6,822
7,114
6,781
6,594
6,157
6,448
5,970
6,011
4,909
4,909
4,368
6,282
6,302
5,158
5,158
4,555
AnaiatmaL
Carol A. Poplin as Stenographer, Legal Division, with basic annual
salary at the rate of $5,416, effective the date of entrance upon duty.
14 l';
12/5/66
-19-
Salary increases, effective December 4
1966
Joyce E. Jamison, Librarian, Division of Research and Statistics,
from $6,664 to $6,877 per annum.
Kathleen Thomas, Secretary, Division of Research and Statistics,
from $5,507 to $5,683 per annum.
Robert F. Emery, Economist, Division of International Finance,
from $13,769 to $14,217 per annum.
Rodney H. Mills, Jr., Economist, Division of International Finance,
from $13,321 to $13,769 per annum.
Transfer
James L. Ellis, from the position of Electronic Accounting Machine
Operator to the position of Computer Operator (Trainee), Division of
Data Processing, with no change in basic annual salary at the rate of
$4,936, effective December 4, 1966.
Acceptance of resignation
Bonnie Jo Brooke, Programmer, Division of Data Processing, effective the close of business December 9, 1966.
On December 2, 1966, Governor Shepardson
noted on behalf of the Board a memorandum
advising that Jean Crosby, Secretary, Legal
Division, had filed application for retirement, effective December 31, 1966.
Governor Shepardson today approved on behalf of the Board the following items:
Memorandum from the Division of Research and Statistics dated
December 2, 1966, requesting that nine specified members of the staff
of that Division be authorized to attend at Board expense the annual
meeting of the Allied Social Science Associations in San Francisco,
California, December 27-29, 1966.
Memorandum from the Division of Research and Statistics dated
December 2, 1966, recommending the reestablishment of an economist
Position in the Business Conditions Section.
12/5/66
-20-
Memorandum from the Office of the Secretary recommending an
increase in the basic annual salary of Betty J. Abbott, Records Clerk,
from $5,576 to $6,035, with a change in title to Senior Records Clerk,
effective December 5, 1966.
BOARD OF GOVERNORS
Item No. 1
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE B OAR D
December 5, 1966
Board of Directors,
Bankers Trust Company,
New York, New York.
Gentlemen:
The Board of Governors of the Federal Reserve
System extends to December 7, 1967, the time within which
Bankers Trust Company, New York, New York, may establish
a branch at 1541-49 Flatbush Avenue, at the intersection
of Flatbush and Nostrand Avenues, Borough of Brooklyn,
New York.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 2
OF THE
12/5/66
FEDERAL RESERVE SYSTEM
WASHINGTON, 0. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE
CARO
December 5, 1966
Board of Directors,
Endicott Trust Company,
Endicott, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System extends to June 9, 1967, the time
within which Endicott Trust Company, Endicott,
New York, may establish an in-town branch in the
Endicott Plaza Shopping Center.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
t
BOARD OF GOVERNORS
Item No. 3
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRIESPONOENCE
TO INC BOARD
December 5, 1966
Board of Directors,
The Connecticut Bank and Trust Company,
Hartford, Connecticut.
Gentlemen:
The Board of Governors of the Federal Reserve
System extends to October 1, 1967, the time within
which The Connecticut Bank and Trust Company, Hartford,
Connecticut, may establish a branch in the Crossroads
Plaza Shopping Center at Bishpo's Corner, North Main
Street, West Hartford, Connecticut.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
4
BOARD OF GOVERNORS
Item No. 4
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 5, 1966
Board of Directors,
The Farmers and Merchants Bank,
Fairborn, Ohio.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by The Farmers and
Merchants Bank, Fairborn, Ohio, of a branch in the
Bonomo Plaza Shopping Center on Dayton-Yellow Springs
Road, Fairborn, Greene County, Ohio, provided the branch
is established within one year from the date of this
letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
BOARD OF GOVERNORS
Item No. 5
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20851
ADDRESS
orriciAL
CORRESPONDENCE
TO THE HOARD
December 5, 1966
Board of Directors,
Bank of the Commonweal
th,
Detroit, Michigan.
Gentlemen:
The Board of Governors of the Federal Reserve Syste
m approves
the establishment
by Bank of the Commonwealth, Detroit, Michigan, of
three branches at the follo
wing locations provided the branches are
established within one year from the date
of this letter:
(1)
In the vicinity of the intersection of Joy Road and
Inkster Road, Redford Township, Wayne County, Michigan,
(2)
At the intersection of Ten Mile Road and Middlebelt
Road, Farmington Township, Oakland County, Michigan, and
(3)
In the vicinity of the intersection of Grand River
Avenue and Fenton Street, Detroit, Michigan.
In approving these branch applications, the Board
has carefully
considered your bank's less than satisfacto
ry capital position. Much of
Your recent subst
antial deposit growth has been invested in loans, and
as a resul
t the bank's capital position has deteriorated consi
derably
since the sale of
$15 million in capital debentures in May of 1966.
As noted in its letter of September 23, 1966, it
is the Board's
u
nderstanding that the directorate will propo
se
progr
a
am
for
increasing
total capital funds
in early 1968. The Board again urges that this
capital increase program be accel
erated if conditions permit. Moreover,
tihe Board
urges that careful consideration be given to other means
of
.mproving your bank's capital posit
ion, such as improvement of liquidity
bY a realignmen
t of your bank's asset structure.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(The letter to the Reserve Bank stated that the Board also had approved a
siLx-month extension of the period allowed to establish the branches; and
that if an extension should be requested, the procedure prescribed in the
,
Board's letter of November 9, 1962 (S-1846), should be followed.)
BOARD OF GOVERNORS
OF THE
Item No. 6
12/5/66
•
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRE11111
orritim. CORRIESPONDIENCIC
TO THE BOARD
December 5, 1966
Board of Directors,
Bank of the Commonwealth,
Detroit, Michigan.
Gentlemen:
The Board of Governors of the Federal
Reserve System extends to May 12, 1967, the time
within which Bank of the Commonwealth, Detroit,
Michigan, may establish a branch in the Detroit
Trade Center in the vicinity of Sixth Street
and Howard Street, Detroit, Michigan.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
:* L.
BOARD OF GOVERNORS
Item No. 7
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
orricmt. CORRIMPONDENCIE
TO THIC BOARD
December 5, 1966
Board of Directors,
Bank of Silvis,
Silvis, Illinois.
Gentlemen:
The Federal Reserve Bank of Chicago has forwarded to the
Board of Governors a letter dated November 15, 1966, signed by
President Ronald C. Vorhies, together with 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.
The Board of Governors waives the requirement of six
months' notice of withdrawal. Under the provisions of Section
208.10(c) of the Board's Regulation
H, your institution may
accomplish termination of its membership at any time within
eight months from the date that notice of intention to withdraw
from membership was given. Upon surrender to the Federal Reserve
Bank of Chicago of the Federal Reserve stock issued to your
institution, such stock will be canceled and appropriate refund
Will be made thereon.
It is requested that the certificate of membership be
returned to the Federal Reserve Bank of Chicago.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
4426
BOARD OF GOVERNORS
Item No. 8
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADDRESS orriciAL CORRESPONDENCE
TO THE BOARD
December 5, 1966
Board of Directors,
Manitowoc Savings Bank,
Manitowoc, Wisconsin.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves, under the provisions
of Section 24A of the Federal Reserve Act, an
investment in bank premises by Manitowoc Savings
Bank of not to exceed $1,357,500, excluding the
cost of land already acquired, $42,500, for the
purpose of constructing new banking quarters.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 9
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, CI. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 5, 1966
Board of Directors,
Washington Trust Bank,
Spokane, Washington.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves, under the provisions of Section 24A of
the Federal Reserve Act, an additional invest
ment in
bank premises by Washington Trust Bank, Spokane, Washington,
of not to exceed $160,000 for the purpos
e of acquiring
Property to be used for bank premises on Lot 5 in Block 7,
Railroad Addition to City of Spokane.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
›c.„4
'X Art
BOARD OF GOVERNORS
Item No. 10
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
orriciAL
CORRESPONDENCE
TO THE BOARD
December 5, 1966
CONFIDENTIAL (FR)
Mr. Watrous H. Irons, President,
Federal Reserve Bank of Dallas,
Dallas, Texas. 75222
Dear Mr. Irons:
As requested in your letter of November 10, 1966, the Board
of Governors approves the following minimum
and maximum salaries for
the respective grades of the employees' salary structures
at the Federal
Reserve Bank of Dallas and branches, effective January 1, 1967.
Grade
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Dallas-El Paso-Houston
Minimum
Maximum
$ 2,912
2,970
3,120
3,330
3,705
4,120
4,590
5,125
5,715
6,380
7,130
7,975
8,825
9,825
10,935
12,205
$ 3,725
3,805
4,045
4,500
5,000
5,565
6,195
6,915
7,715
8,615
9,625
10,765
11,910
13,265
14,765
16,475
San Antonio
Minimum
Maximum
$ 2,912
2,970
3,090
3,385
3,715
4,085
4,500
4,970
5,500
6,085
6,745
7,495
8,280
9,230
10,295
11,415
$ 3,645
3,800
4,170
4,565
5,015
5,515
6,075
6,710
7,415
8,215
9,105
10,120
11,180
12,460
13,900
15,410
Salaries should be paid to employees within the limits specified for the grades in which their respective positions are classified.
All employees whose salaries are below the minimum of their grade as a
result of these structure increases should be brought to appropriate
ranges by April 1, 1967.
Mr. Watrous H. Irons
-2-
4429
It is noted that any additional salary expenses arising out
of the increases in salary structures can be handled within the limits
of your 1967 budget estimates.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
4430
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 11
12/5/66
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 5, 1966
CONFIDENTIAL (FR)
Mr. Eliot J. Swan, President,
Federal Reserve Bank of San Francisco,
San Francisco, California. 94120
Dear Mr. Suan:
As requested in your letter of November 4, 1966, the Board of
Governors has approved the following minimum and maximum salaries for
the respective grades of the employees' salary structures at the Federal
Reserve Bank of San Francisco, effective January 1, 1967.
Grade
1
2
San Francisco Los Angeles
Minimum Maximum
Portland Seattle
Minimum Maximum
Salt Lake City
Minimum Maximum
$ 3,360 $ 4,560
$ 3,240 $ 4,320
$ 30000
3,120
3,240
3,50
3,960
4,320
4,860
5,340
5,94o
3
4
5
6
7
8
9
lo
11
3,540
3,780
4,020
14,320
4,680
5,160
5,700
6,360
7,020
7,860
4,800
5,100
5,400
5,820
6,360
6,960
7,740
8,520
91540
10„620
3,420
3,600
3,900
4,260
4,680
5,040
5,580
6,180
6,840
7,680
4,620
4,920
5,220
5,700
6,240
6,840
7,500
8,340
91240
10020
12
13
14
8,820
9,840
10,920
11,820
13,200
14,760
8,520
9,420
10,320
11,520
15
16
12,180
16,380
11,280
15„240
13,500
18,060
12,300
16,620
12,660
13,920
$ 3,,8110
14,080
4,320
4,740
5,280
5,880
6,540
7,260
8,10o
,32
'
''
f'6
8,880(-i)
8,100
8,940
9,840
10,980
12,060
13,200
10,740
11,760
14,460
15,840
4431
Mr. Eliot J. Swan
- 2-
Salaries should be paid to employees within the limits
specified for the grades in which their respective positions are
classified. It is noted that all employees whose salaries are below
the minimum of their grades as a result of
these structure increases
Will be brought within appropriate ranges by April 1, 1967.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 12
12/5/66
WASHINGTON, 0. C. 20551
OFFICE OF THE CHAIRMAN
December 6, 1966
The Honorable
John E. Horne,
Chairman,
Federal Home Loan Bank Board,
Washington, D. C. 20552
Dear John:
This is in response to your letter of November 7, 1966, requesting comments regarding a proposed amendment to the
rate control
regulations of the Federal Home Loan Bank Board. It is understood that
the amendment
would have the effect of limiting the rate of return
payable by member institutions on certificate accounts
if at any time
certificate accounts bearing a rate higher than that prescribed for
regular accounts should exceed 50 per cent of an institut
ion's
Withdrawal accounts.
The Board assumes that the proportion of certificates outstanding to total share accounts is currently well below 50 per cent in
all metropolitan areas. If this is indeed the case, the regulati
on
would not at this time have any significant quantita
tive impact on
savings flows to and among the major types of financial intermediaries.
Nevertheless, there is an issue of principle involved, since
it is our
belief that a gradation of interest ceilings in accordance
with the maturity
of the deposit or certificate is a sound economic
basis on which returns to savers paid by financial institutions should
be scaled.
The proposed regulation would appear to be moving in the
opposite direction.
Moreover, if there is any prospect that quantitative impacts
of the proposed regulation might develop in the next year
or so, the
Board believes
that such restrictive regulation would not be in accord
with the public policy objective of providing maximum support to the
mortgage area.
As a supervisory matter applied in individual situations where
the soundness of the institution might be involved, the Board would have
no objection to limiting the institution's aggressiveness in seeking
funds. But as a principle of interest rate regulation generally, the
The Honorable
John E. Horne
method proposed by your regu
lation
intention of restoring a structur
e
to maturity.
Therefore, the Board
restriction of this kind to member
would contravene our expressed
of maximum rates scaled according
would not contemplate extending a
commercial banks.
Sincerely yours,
(Signed) Bill M.
Wm. McC. Martin, Jr.
4434
BOARD OF GOVERNORS
Item No. 13
12/5/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 5, 1966.
CONFIDENTIAL
FR
Mr. C. J. Scanlon, President,
Federal Reserve Bank of Chicago,
Chicago, Illinois. 60690
Dear Mr. Scanlon:
As requested in your letter dated September 6, 1966,
the Board of Governors gives the Federal Reserve Bank of Chicago
continuing authority to pay above the maximums of assigned grades
for salaries which the Building Managers Association of Chicago
has advised the Reserve Bank are the rates that have been agreed
upon in the Chicago metropolitan area for organized building
service and trade employees. It is understood that the Bank will
keep the Board currently informed of all salaries paid under this
authority and that no revision of the procedure will be made
Without prior Board review.
The Board also approves requests in your letters dated
October 6 and 7, and November 3 and 10, for the payment of salaries
to specific categories of the Bank's building service and trade
groups above the maximum rates of their respective grades.
Sincerely yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
.143f-1
Item No. 14
12/5/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
AOONESS
orricum
CONINCEPONDENCE
TO THE ECIAND
December 1, 1966
Securities and Exchange Commission,
500 North Capital Street
,
Washington, D. C. 20549
Attention Lawrence Williams, Esq.
Gentlemen:
This is in response to your letter of March 28, 1966,
referring to the Board information respecting certain loans to
Karl. H. P. Swensson, by numerous banks, many
of which involve the
New York brokerage firm of Garvin
, Bantel & Co. ("Garvin").
The Board has concluded that on the basis of the facts set
forth in your letter, absent any extenua
ting circumstances which might
be revealed by
further investigation, Garvin appears to have violated
Federal Reserve Regulation T, "Credit by Brokers, Dealers,
and Members
of National Securities Exchanges", Regula
tion U. "Loans by Banks for
the Purpose of Purchasing
or Carrying Registered Stocks", and section 7(c) of the Securities Exchan
ge Act of 1934 ("the Act"). Since
Primary supervision of brokers, dealers, and member firms is vested
in
the Commiss
ion by sections 17(a) and 21 of the Act, the Board assumes
that the Commission will undertake
whatever action it deems appropriate.
The Board bases its conclusion on the information submitted,
which indicates that Mr. Swensson, directly
and through nominees,
Obtained loans from banks, on collateral consisting of non-exempted
securities that are registered on a national securities exchange, in
greater amounts than permitted under Regulation U. Although Mt. Swensso
n
maintained that the purpose of the loans was not to purchase said
securities,
butoto pay taxes and other current expenses, the Board
concludes that the volume involved--purchases of $4 million worth of
stock in eight years, with contemporaneous borrowings of roughly
$2.5 million--and the accompanying circumstances strongly indicate that
Securities and Exchange Commission
-2-
the purpose of
the loans was to purchase said stock. As a result, the
loans would appear to have
been made by the banks in violation of
Regulation U.
Many of the loans in question were made through Garvin. The
Board has held (1953
Federal Reserve Bulletin 950) that under section 220.7(a) of Regul
ation T (12 CFR 220.7(a)), a broker who arranges
bank credit
. . must act in good faith and, therefore, must question
Om accuracy of any nonpurpose statement (i.e.
, a statement
"ctiat the loan is not for the purpose of purchasing or
carrying registered stocks) given in connection with the
loan where the circumstances are such that the broke
r from
any source knows or has reason to know that
the statement
is incomplete or otherwise inaccurate
as to the purpose of
the credit."
This view is reinforced
by the general rule of law that a person who aids
or abets a
violation of law by another is himself guilty of a violation.
In addition,
the opinion of the Court in Remar v. Clayton Securities
Cor oration,
81 F. Supp. 1014 (D.C. Mass. 1949), supports the conclusion
that a broker who knowi
ngly arranges a bank loan that violates Regulation U
has himself violated 7(c)
of the Securities Exchange Act of 1934.
The Board's interpretation, cited above, states further that
in dischargin
g his obligation to act in good faith, the broker "must
be alert to
the circumstances surrounding the loan . . ." and, in
particular, for example:
". . . if a broker or dealer is to deliver registered
stocks to secure the loan or is to receive the proceeds
of the loan, the broker arranging the loan and the
bank
making it would be put on notice that the loan would probably
be subject to Regulation U."
In view of the number and total amount of the loans arranged
hY
for Mr. Swensson, and the fact that, in the instance investigated by your staff, it
was found that registered stocks were delivered
to the bank by a broke again
r
st payment to the broker of the proceeds
of the bank loan, the
Board is of the opinion that Garvin did not act
in good faith, in arranging the
loans.
Enclosed is a copy of the Legal Division memorandum to the
Board that sets out the basis for the Board
's conclusions.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Enclosure
g
Item No. 15
12/5/66
BOARD OF GOVERNORS
OF THE
•
•
I 4
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 1, 1966.
Mr. Eliot J.
Swan, President,
Federal Reserve Bank
of San Francisco,
San
Francisco, California. 94120
Dear Mr. Swan:
Available information indicates that Regulation U may have
been
Violated by a number of banks through loans to
Karl H. P. Swensson
and related
interests, the proceeds of which appear to have been used
to purchase
stock of W. F. Hall Printing Company, which security is
registered on the New York and Midwest
Stock Exchanges. (The situation
is d escribed
in
some
detail
in
the
enclosed
Board staff memorandum
of
October 14.)
Accordingly, the Board is requesting the Reserve Banks in
Whose
districts the lending banks are located to conduct
special
inspections of
such banks pursuant to section 17(b) of the Securities
Exchange Act of 1934 (U. S.
Code, Title 15, section 78q), which provides
that HJir, in
the judgment of the Board . . . it is . . .
necessary,
,:ts broker,
dealer, or bank/ shall permit such inspections to be made
by the
Board . . . as the—Board may deem
necessary . . .". In the
l'Welfth Federal
Reserve District the banks involved are The Bank of
California
Seattle, Washington; National Bank of Commerce of Seattle,
Seattle,
Washington; Northwest Bank, Seattle, Washington; The Pacific
National Bank, Seattle,
Washington; Seattle - First National Bank,
Seattle, Washington;
Seattle
Trust and Savings Bank, Seattle, Washington;
and Citizens
Commercial Trust & Savings Bank, Pasadena, California.
Since these will be the first such inspections
pursuant to
sectio 17(b),
the examiners necessarily must develop procedures to
obtain the
required information from the banks' records and from officers
t e
tfl mployees of the banks, and to correlate and present such information
their reports. It is
important to bear in mind that the purpose of
the i
nspection is to ascertain whether the bank, in
extending the credit,
Mr. Eliot J. Swan
-2-
made an adequate
effort to comply with section 221.1(a) of Regulation U,
or so conducte
d itself as to be guilty of a violation of that provision.
Particularly involved are the provisions of section 221.3(a) with respect
to the informat
ion contained in so-called "purpose statements" and
Whether, in each case, such statement was accepted by the bank in good
faith, under the terms
of the second sentence of section 221.3(a).
Published rulings of the Board of Governors on this subject appear at
6650 through 6666 of the volume of Interpretations, and additional
interpretations appear in the Federal Reserve Loose-Leaf Service. In
the instant
situation, the circumstances in which the loan application
was presented to
the bank (for example, whether a broker/dealer acted
as intermed
iary), and the manner in which the stock collateral was
delivered to the lending bank, may be particularly important.
In view of the number of banks that extended credit to the
Swenssons, the chronology of various loans (including steps in the
making and subsequent transact
ions relating to particular loans) may
require special attention. These problems will be dealt with by the
examiner in each bank, and by the Board's staff in related transactions
involving different banks.
Enclosed is a list of questions that may be helpful to
examiners conducting the inspections. It is recognized, however, that
each inspection must
be tailored to the circumstances disclosed and
the availabi
lity or unavailability of particular items of information.
The Board requests that the regional office of the Comptroller
0f the Currency
be invited to participate in the inspection of National
Bank of Commerce of
Seattle; The Pacific National Bank; and Seattle - First
National Bank and the regional office of the FDIC in the inspection of
Northwest Bank.
It is hoped that a report of the inspection, including answers
o the
enclosed list of questions, will be received by the Board of
Governors before
January 31. Any comments or inquiries that your Bank
may wish
to submit prior to undertaking the inspections should be presented to the Board within the next 10 days.
It is requested that the report of inspection be accompanied
by the
views of your Bank's counsel as to whether the information
obtained appears to establish a violation of Regulation U.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Enclosures
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Item No. 16
12/5/66
PRINTING GRADE WAGE SCHEDULE *
December 4, 1966
This schedule applies to those positions in the Duplicating and
Supply Unit of the Duplicating, Mail, Messenger, and Supply Section
that perform the following kinds of lithographic work: Offset
Printing, Offset Photography, Photostat and Xerox Operation, Mimeograph Operation, Bindery Operation, and to the Supervisor and
Assistant Supervisor of those positions:
Basic Hourly and Rounded Annual Wage Rates by Step and Grade
Printing
°rade
1.
2
3
Step 1
Annual
Hourly
Step 2
Annual
Hourly
Step 3
Annual
Hourly
1.72
1.84
1.98
3578
3827
4118
1.81
1.94
2.08
3765
4035
4326
1.90
2.04
2.18
3952
4243
4534
6
2.10
2.23
2.36
4368
4638
4909
2.21
2.35
2.48
4597
4888
5158
2.32
2.47
2.60
4826
5138
5408
8
9
2.48
2.61
2.74
5158
5429
5699
2.61
2.75
2.88
5429
5720
5990
2.74
2.89
3.02
5699
6011
6282
2.87
2.99
3.12
5970
6219
6490
3.02
3.15
3.28
6282
6552
6822
3.17
3.31
3.44
6594
6885
7155
3.25
3.37
3.51
6760
7010
7301
3.42
3.55
3.69
7114
7384
7675
3.59
3.73
3.87
7467
7758
8050
3.63
3.75
3.89
7550
7800
8091
3.82
3.95
4.09
7946
8216
8507
4.01
4.15
4.29
8341
8632
8923
4.01
4.14
4.27
8341
8611
8882
4.22
4.36
4.49
8778
9069
9339
4.43
4.58
4.71
9214
9526
9797
4
10
11
12
13
1.4
15
16
17
18
19
20
21
Incumbents of positions subject to this wage schedule are eligible for
step increases within particular grades on the following basis:
For advancement to Step 2, after 26 weeks' (6 months) satisfactory
service in Step 1.
For advancement to Step 3, after 78 weeks' (18 months) satisfactory
service in Step 2.
*(This schedule supersedes the wage scale effective December 5, 1965)
144
Item No. 17
12/5/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
December 7) 1966
Dear Sir:
copies of Form FR 107 are being
Under separate cover
sent to your Bank for use by State member banks in submitting their
reports of income and dividends for the calendar year 1966. The
form is the same as the one used in submitting reports for the
calendar year 1965 except that a minor change has been made in the
Supplementary Information Section. The change reflects a change
in the statistical treatment of partial period reports of banks
involved in mergers, conversions, withdrawals, etc. Essentially,
the intention is to encourage State member banks in business at the
end of the year to submit consolidated full-year reports. Correoponding
changes have been made by the other Federal Bank Supervisory Agencies.
Very truly yours,
Merritt Sherman,
Secretary.
E
nclosure.
TO THE
PRESIDENTS OF ALL FEDERAL RESERVE BANKS.
1441
Item No. 18
12/5/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
orricim. CORRESPONDENCE
TO THE BOARD
December 2, 1966
Mr. Irwin L. Jennings, Vice President,
Federal Reserve Bank of San Francisco,
San Francisco, California.
94120
Dear Mr. Jennings:
In accordance with the request contained
in your letter of November 28, 1966, the Board
approves the appointment of Richard J. Mackey as
an assistant examiner for the Federal Reserve
Bank of San Francisco, effective today.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
Item No. 19
12/5/66
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
METROPOLITAN D.C. RATE WAGE SCHEDULE*
December 4, 1966
This schedule applies to manual labor, semi-skilled and skilled, trade
and craft positions in the Mechanical Force, and the Chauffeurs in the
Motor Transport Unit of the Division of Administrative Services.
Basic Hourly and Rounded Annual Wage Rates by Step and Grade
Grade
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Ste
Ste
Ste
Hourly
Annual
Hourly
Annual
Hourly
Annual
1.53
1.81
2.08
3182
3765
4326
1.61
1.90
2.19
3349
3952
4555
1.69
2.00
2.30
3515
4160
4784
2.36
2.63
2.75
4909
5470
5720
2.48
2.77
2.89
5158
5762
6011
2.60
2.91
3.03
5408
6053
6302
2.87
2.98
3.10
5970
6198
6448
3.02
3.14
3.26
6282
6531
6781
3.17
3.30
3.42
6594
6864
7114
3.21
3.37
3.53
6677
7010
7342
3.38
3.55
3.72
7030
7384
7738
3.55
3.73
3.91
7384
7758
8133
3.70
3.86
4.02
7696
8029
8362
3.89
4.06
4.23
8091
8445
8798
4.08
4.26
4.44
8486
8861
9235
4.17
4.32
4.48
8674
8986
9318
4.39
4.55
4.72
9131
9464
9818
4.61
4.78
4.96
9589
9942
10317
4.66
4.82
4.98
9693
10026
10358
4.90
5.07
5.24
10192
10546
10899
5.15
5.32
5.50
10712
11066
11440
Incumbents of positions subject to this wage schedule are eligible
for step increases within particular grades on the following basis:
For advancement to Step 2, after 26 weeks (6 months) satisfactory
service in Step 1.
For advancement to
Step 3, after 78 weeks (18 months) satisfactory
service in Step 2.
*(This schedule supersedes the wage scale effective December 5, 1965)
@FedFRASER