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Minutes for
To:
Members of the Board
From:
Office Of the Secretary
February 1, 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. King
Gov. Mitchell
(
Minutes of the Board of Governors of the Federal Reserve
System on Friday, February 1, 1963.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Koch, Associate Director, Division of
Research and Statistics
Mr. Holland, Adviser, Division of Research
and Statistics
Mr. Mattras, General Assistant, Office of
the Secretary
Mr. Eckert, Chief, Banking Section, Division
of Research and Statistics
Mr. Yager, Chief, Government Finance Section,
Division of Research and Statistics
Miss Dingle, Senior Economist, Division of
Research and Statistics
Mr. Bernard, Economist, Division of Research
and Statistics
Mr. Reynolds, Chief, Special Studies and
Operations Section, Division of International
Finance
Mr. Gemmill, Economist, Division of International
Finance
Mr.
Mr.
Mr.
Mr.
Money market review.
distributed:
The following tables and charts were
maturing issues in current Treasury refinancing and
securities offered in exchange; daily fluctuations of 3-month bill rates
during January and February since 1954; selected commercial bank ratios
and net public and private debt for the period 1900 through 1962;
summary of monetary developments during the four-week period ended
January 30, 1963.
10
-2-
2/1/63
Mr. Bernard reported on the terms of the current Treasury
refinancing and on other recent developments in the Government
securities market, after which Mr. Eckert discussed banking developments
and reviewed certain of the charts that had been distributed.
Mr.
Holland noted prospective near-run developments in the money market
and commented on the possible effect of such developments in relation
to open market operations.
Mr. Gemmill then discussed foreign exchange
market developments.
All members of the staff then withdrew except Messrs. Sherman,
Kenyon, Fauver, and Mattras and the following entered the room:
Mr.
Johnson, Director, Division of Personnel Administration; Mr. Hexter,
Assistant General Counsel; and Mr. Hooff, Assistant General Counsel.
Discount rates.
The establishment without change by the
Federal Reserve Banks of Chicago, Minneapolis, and San Francisco on
January 31, 1963, 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.
Circulated or distributed items.
The following items, copies
of which are attached to these minutes under the respective item numbers
indicated, were approved unanimously:
Item No.
Letter to the Federal Reserve Bank of Kansas City
approving the payment of salary to Carl F. Griswold
as Assistant Vice President at the rate fixed by
the Bank's Board of Directors.
1
2/1/63
-3Item No.
Letter to the Federal Reserve Bank of San
Francisco noting the Bank's plan to obtain
new and improved check processing equipment.
2
Letter to Mr. John M. Dorer, Strasburg,
Virginia, regarding the maximum rate of
interest a member bank may pay on savings
deposits.
3
Letter to Chase International Investment
Corporation, New York, New York, approving
an extension to February 1, 1964, of the
time within which Chase International may
make further investments in Arcturus Investment & Development, Ltd., Montreal, Canada.
4
The meeting then adjourned.
Secretary's Note: Governor Shepardson
today approved on behalf of the Board
the following items:
Letter to the Federal Reserve Bank of Cleveland (attached Item No. 5)
approving the appointment of George M. Apelian as assistant examiner.
Memoranda from appropriate individuals concerned recommending the
acceptance of resignations of the following persons on the Board's
staff, effective the dates indicated:
Allene H. Freeman, Records Clerk, Office of the Secretary, effective January 29, 1963.
Kay J. Auerbach, Economist, Division of International
Finance, effective close of business February 13, 1963.
Jean S. Glascock, Secretary, Office of the Controller,
effective close of business January 31, 1963.
Governor Shepardson today noted on behalf
of the Board a memorandum advising that
the application for retirement of Mary F.
Murphy, Mailing List Clerk, Division of
Administrative Services, had been approved
2/1/63
by the Retirement System of the Federal
Reserve Banks effective February 1, 1963.
Secreiitry
Item No. 1
2/1/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
(..1+
TO THE BOARD
••
kAtItt.0:*•
February 1, 1963
CONFIDENTIAL (FR)
Mr. Homer A. Scott,
Chairman of the Board,
Federal Reserve Bank of
Kansas City,
Kansas City 6, Missouri.
Dear Mr. Scott:
The Board of Governors approves the payment ,of salary •
to the following officer of the Federal Reserve Bank of Kansas City
for the period January 10 through December 31, 1963, at the rate
indicated, which is the rate fixed by the Board of Directors as
reported in your letter of January 10:
Name
Annual Salary
Title
.M.+••••.0
Carl F. Griswold
Assistant Vice President
$12,000
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
114:
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 2
2/1/63
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 1, 1963
Mr. A. B. Merritt, Vice President,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Merritt:
This refers to your letter of January 15, 1963,
informing the Board of your Bank's intention to accept an
offer by the UNIVAC Division:of Sperry Rand Corporation
to substitute new and improved equipment for the NDP 200
check processing system, which you are now leasing from
that company. The Board notes that the cost of this now
BP 1 System will be considerably less than the NDP 200
equipment, and that the new system will be delivered on
August 1, 1963, under a leasing arrangement which could
be terminated at the same time your existing lease would
expire.
Very truly yours,
(signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
Item No.
OF THE
3
2/1/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 1, 1963.
Mr. John M. Dorer,
Route 2,
Strasburg, Virginia.
Dear Mr. Dorer.:
This refers to your letter of January 10, 1963, with respect
to the maximum rate of interest a member bank may pay on savings deposits. It is understood that you made a deposit with State National
Bank, Bethesda, Maryland? on January 3, 1962, and withdrew the funds
on January 2, 1963.
The Supplement to Regulation Q, copy of which is enclosed,
provides that a member bank may pay interest at the maximum rate of
4 per cent per annum, compounded quarterly, "on that portion of any
savings deposit that has remained on deposit for not less than 12
months." However, in section 217.3(d) of Regulation Q, it is provided
that a member bank may pay interest on a savings deposit received during the first 10 calendar days of any calendar month at the applicable
maximum rate permitted, calculated from the first day of such calendar
month until such deposit is withdrawn, and may pay interest on a savings deposit withdrawn during the last three business days of any
calendar month ending a regular quarterly or semiannual interest period
at the applicable maximum rate permitted by the Regulation.
Accordingly, giving effect to the purpose of allowing these
so-called "grace periods," it is the Board's opinion that the funds
here in question were on deposit for a period of 12 months within the
meaning of the provision of Regulation Q permitting interest at the
maximum rate of 4 per cent per annum.
It should be understood, however, that the Regulation does
not require a member bank to pay any particular rate of interest and
the amount actually paid is subject to contract between the bank and
the depositor.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Enclosure
BOARD OF GOVERNORS
OF THE
Item No. 4
FEDERAL RESERVE SYSTEM
2/1/63
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 1, 1963
Chase International
Investment Corporation,
One Chase Manhattan, Plaza,
New York 51 New York.
Gentlemen:
Reference is made to your letter of &Hillary 14,
1963, transmitted through the Federal Reserve Bank of New
York, regarding the Board's letter of February 21, 1957
(and subsequent letters) which authorized your Corporation,
subject to various conditions, to make further investment
in Arcturus Investment &Development, Ltd., ("Arcturus"),
Montreal, Canada (in form of stock or obligations), up to
an amount not to exceed US$7,5001000. The Board's letter
of April 16, 1962 extended to February 1, 1963 the time
within which such investment might be made.
In accordance with your request and on the basis
of the information furnished, the Board extends to February
1, 1964 the time within which further investment maybe made
in Arcturus (in form of stock or obligations), up to an
amount which, with the existing inIestment, would not exceed
US$7,500,000.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
fissistant Secretary.
BOARD OF,GOVERNORS
Item No.
OF
2/1/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 1, 1963
AIR MAIL
CONFIDENTIAL (FR)
Mr. Paul C. Stetzelberger, Vice President,
Federal Reserve Bank of Cleveland,
Cleveland 1, Ohio.
Dear Mr. Stetzelberger:
In accordance with the request contained in your
letter of January 25, 1963, the Board approves the appointment of George M. Apelian as an assistant examiner for the
Federal Reserve Bank of Cleveland. Please advise the effective date of the appointment.
It is noted that Mr. Apelian owns shares of BancOhio
Corliorabigh,'Columbus, Ohio, a bank holding company registered
under th4q1dilk, Holding Company Act of 1956. Accordingly, the
Board's aiviloVal of Mr. Apelian's appointment is given with
the understanding that he will not participate in any examination of any, bank or other organization in the BancOhio group
so long as he is a stockholder in that organization.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
5
@FedFRASER