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609
9/61
Minutes for
To:
Members of the Board
From:
Office of the Secretary
February 15, 1963
Attached is a copy of the minutes of the
Board of Governors of the Federal Reserve Sy-stem 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. Mill
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
Minutes of the Board of Governors of the Federal Reserve
System on Friday, February 15, 1963.
The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Mr. Sherman, Secretary
Mr. Kenyon, Assistant Secretary
Mr. Young, Adviser to the Board and Director,
Division of International Finance
Mr. Molony, Assistant to the Board
Mr. Fauver, Assistant to the Board
Mr. Noyes, Director, Division of Research and
Statistics
Mr. Solomon, Director, Division of Examinations
Mr. Koch, Associate Director, Division of
Research and Statistics
Mr. Holland, Adviser, Division of Research and
Statistics
Mr. Solomon, Associate Adviser, Division of
Research and Statistics
Mr. Hersey, Adviser, Division of International
Finance
Mr. Landry, Assistant to the Secretary
Mr. Eckert, Chief, Banking Section, Division
of Research and Statistics
Mr. Yager, Chief, Government Finance Section,
Division of Research and Statistics
Mr. Axilrod, Senior Economist, Division of
Research and Statistics
Miss Dingle, Senior 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
Money market review.
Mr. Yager reported on developments in
the GOvernment securities market, including comments on recent and
ospective Treasury debt operations.
'
Pl
Following this report Mr. Axilrod
2/15/63
-2-
Made a statement on monetary developments and referred to a summary
table covering the four weeks ended February 13, 1963, that had been
d
istributed before the meeting.
With the aid of several hypothetical
supply-demand diagrams that had also been distributed, Mr. Axilrod then
Presented an analysis of the possible effects on interest rates and
credit availability of the current Administration proposal for tax
reduction, following which Mr. Gemmill reported on the balance of
Payments and foreign exchange market developments.
At the conclusion of these reports all members of the staff
except Messrs. Sherman, Kenyon, Fauver, Solomon (Examinations), and
LandrY withdrew and the following entered the room:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Shay, Assistant General Counsel
Daniels, Assistant Director, Division of Bank
Operations
Goodman, Assistant Director, Division of Examinations
Benner, Assistant Director, Division of Examinations
Leavitt, Assistant Director, Division of Examinations
McClintock, Supervisory Review Examiner, Division of
Examinations
Miss Hart, Senior Attorney, Legal Division
Discount rates.
The establishment without change by the
Federal Reserve Banks of New York, Cleveland, Richmond, Chicago, St.
Louis, Minneapolis, Kansas City, and Dallas on February 14, 1963,
or the rates on discounts and advances in their existing schedules
1/48 approved unanimously, with the understanding that appropriate
4avice would be sent to those Banks.
'71
2/15/63
Circulated or distributed items.
The following items, copies
Of 'Which are attached under the respective item numbers indicated, were
2211112129_. unanimously:
Item No.
Letter to Bankers International Financing
C°mPany, Inc., New York, New York, granting
consent to the purchase of shares of InterAfrica
(Liberia) Limited, Monrovia, Liberia.
1
Letter to International Banking Corporation,
New York, New York, interposing no objection
to the acquisition by First National City
Tx:ust Company (Bahamas) Limited of stock of
First National Nominees Ltd. and Providence
Associates Ltd., both of Nassau, Bahamas.
2
Letter to Southern Commercial and Savings Bank,
St. Louis, Missouri, waiving the requirement
°I six-months' notice of withdrawal from
Illembership in the Federal Reserve System.
3
Letter to the Federal Reserve Bank of St. Louis
:
1_°ting amendment of its agreement with Schwarz
Van Rofen, architects, so as to pertain to
construction of a new building rather than an
addition at Little Rock and to reduce the fee;
arid also noting the employment of outside counsel.
11.
laetter to the Bureau of the Budget stating that
:
tAls Board had no proposals for State legislation
suggest for consideration by the Committee
State Officials on Suggested State Legislation
(If the Council of State Governments.
5
.111,?tter to Security Bank and Trust Company, Danville,
,!rginia, approving the establishment of a branch
Wooding Avenue and West Main Street.
6
g
7
etter to Trust Company of Georgia, Atlanta,
"
rgia, approving the establishment of a branch
e't North Avenue and West Peachtree Street.
2/15/63
Item No.
Letter to The Detroit Bank and Trust Company,
Detroit, Michigan, approving the establishment
of a branch in Sterling Township.
8
Letter to Security Bank, Lincoln Park, Michigan,
"roving the establishment of a branch in the
vicinity of Dix Road and Old Goddard Road.
9
10
Letter to Citizens Fidelity Bank and Trust
C°111PanY, Louisville, Kentucky, approving the
establishment of a branch in Fern Creek,
Jefferson
County.
Letter to Bank of Dearborn, Dearborn, Michigan,
proving the establishment of a branch at
-2701 West Warren Avenue incident to removal
'
cf its head office from that address to a
l
ocation in the vicinity of Michigan Avenue
and Outer Drive.
11
Letter to Wilmington Trust Company, Wilmington,
12
n
Delaware, approving the establishment of a branch
in Dover.
With respect to Item No. 12, a letter to Wilmington Trust
0°111Parly approving the establishment of a branch in Dover, it was noted
that the delay in action on the matter had resulted in a question being
raised with a member of the Board by the State Bank Commissioner.
In
discussion, it was pointed out that the time required for processing
branch applications in the Division of Examinations normally did not
exceed two weeks from the date of receipt from a Reserve Bank, which
in this case had been February 4, 1963. The record showed that the
Pederal Reserve Bank of Philadelphia had received the application in
411d- November of 1962, and the reason for the delay in processing the
application at the Reserve Bank was not clear.
In general, pursuant to
r?"7:3
2/15/63
-5-
a letter from the Board (S-1822, January 29, 1962), the Reserve Banks
were following the practice of processing and forwarding State member
bank branch applications to the Board rather than holding them pending
action by the appropriate State banking authorities.
It was understood
that the Division of Examinations would continue to urge the expeditious
Processing of such applications by the Reserve Banks.
Messrs. Farrell, Daniels, and Goodman then withdrew from the
meeting.
Application of Peoples Trust Company of Bergen County
(Items 13-15).
Pursuant to the decision reached at the meeting on
February 7, 1963, copies had been distributed of a draft order and
statement
reflecting the Board's approval of the application of Peoples
Trust Company of Bergen County, Hackensack, New Jersey, to merge with
The First National Bank of Wyckoff, Wyckoff, New Jersey.
Copies of a
dissenting statement by Governor Robertson had also been distributed.
After a discussion during which the Legal Division was granted
Permission to make minor editorial changes in the majority statement,
issuance of the order, statement, and dissenting statement was authorized.
C°Pies of the order and statements, as issued, are attached hereto as
Items 13 through 15.
Mr. Shay and Miss Hart then withdrew and Mr. Eckert, Chief,
returned to the
1144king Section, Division of Research and Statistics,
room.
17114
2/15/63
-6Revised form FR 209 (Item No. 16).
There had been distributed
under date of February 14, 1963, copies of a memorandum from the Division
°t Examinations pertaining to a proposed revision of form FR 209,
currently prepared by the Bank Examination Department at each Reserve
Bank as a summary of the reports of examination of State member and
national banks and forwarded to the Examinations Division for review.
Recently consideration had been given by the Examinations Division and the
Division of Research and Statistics to utilizing the form as a means
Of obtaining supplementary banking data, and in consequence a revised
44d expanded form FR 209 had been designed by representatives of the two
Divisions following receipt of the views and comments of the Reserve
1144ks.
Attached to the memorandum was a draft of the revised form and a
Shm
-,vogested transmittal letter to all Reserve Bank Presidents with instruc-
ti°ns for preparation and use of the form by the Reserve Banks.
As stated in the memorandum, the information that would be
Obtained with respect to State member banks on the new FR 209 form
/1041d be complete since it was under the exclusive control of the
Reserve Banks.
However, information taken from national bank examination
l'ePorts would not be as complete.
Furthermore, the Comptroller of the
eIll'rency had recently discontinued certain schedules that were a source
°f information of particular interest to the Division of Examinations and
4t
the same time had announced that the national bank report form would
he revised, thereby creating the possibility that data for the FR 209
f 21 might be further curtailed.
"
Therefore, following release of the
v
2/15/63
-7-
Comptroller's revised examination report form and after evaluation of
national bank data obtained from FR 209, consideration would be given
to (1) continuation of national bank reporting as now provided, (2)
devising a separate form for national banks, or (3) discontinuing the
use of FR 209 for national banks.
Although it had not been thought
tlecessary to discuss the above program with the Comptroller because
the information used would be taken from purchased copies of bank
ex41ination reports and all figures compiled would be in totals
vithin which data from individual banks would not be identifiable, it
Igas the view of the staff that the new information about banks which would
become
available through this project might be of interest and use to the
CoMptroller.
In a discussion of the memorandum, Governor Balderston inquired
hO
much less data were provided in the examination reports of national
ballks than in the examination reports of State member banks.
Mr. Eckert
l'ePlied by citing as examples certain balance sheet ratios, data on
liquid
assets, information on time deposits, and data on maturity
istribution of securities.
Mr. Benner commented that the difference
e°naisted essentisilY of a relative lack of qualitative data in the
bank
44tional bank examination report as compared to the State member
ex4Mination report.
which might
He said that there was some indication,
be explored further, the Comptroller of the Currency was preparing some
gllalitative data on work sheets compiled by national bank examiners.
2/15/63
-8-
Governor Robertson expressed the view that the best course would be to
Proceed on the basis of the data available, which he thought would be
aldficient to justify the project.
In further discussion, reference was made to a statement in
the memorandum that the Federal Deposit Insurance Corporation was
endeavoring to develop a program somewhat similar to the FR 209
13r°gra1 for insured nonmember banks, and it was noted that the FR 209
Program would presumably help the Corporation in establishing such a
Program.
Question was then raised as to communicating with the Comptroller
°I' the Currency with respect to the FR 209 program.
After discussion it
s agreed,pursuant to a suggestion by Governor Robertson, that no
notification need be given at the present time.
When the results of
the revised FR 209 program became available, it was felt that the prospect
Of obtaining the Comptroller's cooperation would be more favorable.
It being indicated that the members of the Board favored the
1)roPosal for use of the revised form FR 209 for analysis of reports of
exelaination of State member and national banks, the program was
till4nianously authorized.
A copy of the letter sent to all Reserve Bank
esidents pursuant to the foregoing action is attached hereto as
'
Pl
item No. 16.
All members of the staff except Messrs. Sherman, Kenyon, Fauver,
alld Landry then withdrew.
414
2/15/63
_9..
Working Party
3 meeting. Governor Shepardson reported that
since the agenda for the meeting of Working Party
3 of the Economic
P°11cy Committee of the Organization for Economic Cooperation and
nevelopmPnt to be held in Paris, France, February 25-29, 1963, related more
Closely than usual to U. S. monetary policy considerations, he had
approved, pursuant to the Board's authorization on May 17, 1962, a
Proposal that Mr. Holland, Adviser, Division of Research and Statistics,
accompany Mr. Young to the meeting.
Governor Shepardson also noted that
there might be occasion for the Federal Reserve to share with the Treasury
the cost of a dinner for delegates to the Working Party
3 meeting; the Board
had authorized him on May 17, 1962, to approve representation expenses
la connection with Mr. Young's attendance at Working Party
3 meetings, so
h° action by the Board was called for on this matter, which was mentioned
/18 an item of information.
The meeting then adjourned.
Secretary's Note: Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor
Shepardson today approved on behalf of the
Board the following actions relating to
the Board's staff:
APPointment
William Lane Porter, Jr., as Law Clerk (Summer) in the Legal
t
11fision, with basic annual salary at the rate of $4,565, effective
,
date of entrance upon duty.
increases, effective February 17, 1963
James S. Nystrom, Economist, Division of Research and Statistics,
rr°m $6 900 to $8,045 per annum.
578
2/15/63
-10-
Salary increases, effective February 17, 1963 (continued)
Ann R. Walks, Statistical Assistant, Division of Research and
Stat
$5,375 per annum.
istics' from $5,045 to
../,..aatptance of resignation
Walter Frumin, Guard, Division of Administrative Services,
effective February 14, 1963.
Secra
BOARD OF GOVERNORS
OF THE
Item No. 1
2/15/63
FEDERAL RESERVE SYSTEM
oi .
‘1
Ei if
v , w•
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 15, 1963
Bankers International Financing Company, Inc.,
16 Wall Street,
New York 15, New York.
Gentlemen:
In accordance with your request and on the basis of the
il:Iformation furnished in your letter of December 11, 1962, trans!itted through the Federal Reserve Bank of New York, the Board of
lovernors grants consent for Bankers International Financing Company,
u
no., ("BIFC"), to purchase and hold 400 shares, par value $100 each,
°f InterAfrica (Liberia) Limited, Monrovia, Liberia, ("IAL"), a
?°mPany in formation, at a cost of US$)40,000, provided such stock
-Ls acquired within one year from the date of this letter.
The Board's consent is granted upon condition that BIFC
dispose of its holdings of stock in IAL, as promptly as praolcable, in the event that IAL should at any time (1) engage in
seuing, underwriting, selling or distributing securities in the
,
united States; (2) engage in the general business of buying or
SeLLing goods, wares, merchandise, or commodities in the United
otates or transact any business in the United States except such
s,is incidental to its international or foreign business; or
,
0) otherwise conduct its operations in a manner which, in the
Judgment of the Board of Governors, causes the continued holding
c) its stock by BIFC to be inappropriate under the provisions of
,,f
')ection 25(a) of the Federal Reserve Act or regulations thereunder.
It is assumed that IAL will not engage in the business
receiving or paying out deposits or accepting drafts or bills
f exchange, and the Board's consent is given subject to this furtier condition.
Of
2
Very truly yours,
(Signed)Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
-441
Item No. 2
2/15/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 151 1963
International Banking Corporation,
399 Park Avenue,
New York 22, New York.
Gentlemen:
Reference is made to your letter of November 15, 1962
transmitted through the Federal Reserve Bank of New York,
requesting approval of the Board of Governors for the acquiescence by your Corporation in the ownership by First
National City Trust Company (Bahamas) Limited of stock of
First National Nominees Ltd., Nassau, Bahamas, and
Providence Associates Ltd., Nassau, Bahamas.
In the circumstances and on the basis of the
information furnished, the Board interposes no objection
to the acquisition by First National City Trust Company
(Bahamas) Limited of stock of First National Nominees Ltd.
and Providence Associates Ltd.
It is understood that the sole activity of the
nominee companies will be to act as nominees for the Trust
Company and its customers.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
Item No.
BOARD OF GOVERNORS
3
2/15/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, ID. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 15, 1963
Board of Directors,
Southern Commercial and Savings Bank,
8t. Louis, Missouri.
Gentlemen:
The Federal Reserve Bank of St. Louis has forwarded to the Board
G overnors President Hawkins' letter dated January 16, 1963, together
nth the accompanying resolution, signifying your intention to withdraw
Qm membership in the Federal Reserve System and requesting waiver of
Ile six-months' notice of such withdrawal.
J
The Board of Governors waives the requirement of six-months'
!)tice of withdrawal. Under the provisions of Section 208.10(c) of the
u'oarrit Regulation H, your institution may accomplish termination of its
lembership at any time within eight months from the date that notice of
piltention to withdraw from membership was given. Upon surrender to the
yederal Rescq-.v,3 Bank of St. Louis of the Federal Reserve stock issued to
1,17 institution, such stock will be cancelled and appropriate refund
be made thereon.
It is requested that the certificate of membership be returned
to the Federal Reserve Bank of St. Louis.
Attention is invited to the fact that if your bank is desirous
continuing deposit insurance after withdrawal from membership in the
e,
eral Reserve System, it will be necessary that application be made to
"e Federal Deposit Insurance Corporation.
V
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
(11•111-.)
it
Item No. l.
BOARD OF GOVERNORS
011W4,,,
/15/63
2
OF THE
4
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
4,4
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
"
44.4,40'
February 15, 1963
Mr. Harry A. Shuford, President,
Federal Reserve Bank of St. Louis,
P. 0. Box 442,
St. Louis '66, Missouri.
Dear Mr. Shuford:
This refers to your letter of January 16, 1963,
concerning the amendment of the agreement entered into by
Your Bank with the architects, Schwarz & Van Hoefen, so as
to pertain to the construction of a new building for the
Little Rock Branch, rather than an addition, and to reduce
the fee from 71'j per cent to 6/
2 per cent of the cost of the
1
work.
It is noted that compensation in the amount of
$6,039.32 has been paid to the architects and their consulting
engineers for their work under the original agreement calling
for the construction of an addition to and alterations of the
existing Little Rock Branch building.
It is also noted that the Directors have approved
the employment of the Little Rock law firm, House, Holmes,
Butler & Jewell, to assist in legal matters involved in the
acquisition of a new building site in Little Rock.
Very truly yours,
(signed.) Merritt Sherman
Merritt Sherman,
Secretary.
Item No.
BOARD OF GOVERNORS
5
15/63
/
2
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
February 151 1963
William D. Carey,
4foutive Assistant Director,
,
.;reau of the Budget,
:
"ashington 25, D. C.
pear Mr. Carey:
'
This refers to your letter of February 4, 1963, inquiring
whether the Board has any proposals for State legislation which it
;'111d desire to present through the Bureau of the Budget for considll'ation by the Committee of State Officials on Suggested State Legisation of the Council of State Governments.
There do not appear to be any proposals for State legislation
/41lich the Board would wish to suggest at this time.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
584
Item No.
BOARD OF GOVERNORS
6
15/63
2/
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
AOORCIIII
orricHAL
OORRCIIPONOIENCIC
TO THIC BOARD
February 15, 1963
Board of Directors,
Security Bank and Trust Company,
Danville, Virginia.
Gentlemenr
,
The Board of Governors of the Federal
Reserve System approves the establishment of a
branch by Security Bank and Trust Company at the
intersection of Wooding Avenue and West Main
Street, Danville, Virginia, 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.
2/15/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
• AOCHIES•
orriaem. COMPICEPONDENCE
TO THE BOARD
February 15, 1963
Board of Directors,
Trust Company of Georgia,
Atlanta, Georgia.
Gentleraent
The Board of Governors of the Federal
Reserve System approves the establishment by Trust
Company of Georgia, Atlanta, Georgia, of a branch in
the Life Insurance Company of Georgia building at the
corner of North Avenue and West Peachtree Street,
Atlanta, Georgia, provided the branch is established
by December 31, 1964.
Very tray 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.)
Item No.
BOARD OF GOVERNORS
8
15/63
/
2
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE •OARD
February 15, 1963
Board of Directors,
The Detroit Bank and Trust Company,
Detroit, Michigan.
Gentlemen:
The Board of Governors of the Federal
The
Reserve System approves the establishment by
,
Michigan
Detroit,
Company,
Trust
Detroit Bank and
of
tion
intersec
the
of
vicinity
the
of a branch in
Van Dyke Road and Sixteen Mile Road, Sterling
Township; Macomb County, Michigan, provided the
branch is established within six months 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-l846), should be followed.)
BOARD OF GOVERNORS
Item No.
9
2/15/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADORE'S OPTIMAL 001RMIESPONOILNOC
TO THIC IMAM)
February 15, 1963
Board of Directors,
Scicurity Bank,
Lincoln Park, Michigan.
Gentlemens
The Board of Governors of the Federal
ty
Reserve System approves the establishment by Securi
branch
in-town
an
of
an,
Michig
Bank, Lincoln Park,
Road and
in the vicinity of the intersection of Dix
shed
establi
is
branch
the
d
provide
Road,
Old Goddard
.
within six months 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.
Item No. 10
BOARD OF GOVERNORS
15/63
2/
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADORICIS OIIIOIAL CORRESPONDENCE
TO THE IBOARD
February 15, 1963
Board of Directors,
Citizens Fidelity Bank and Trust Company,
Louisville, Kentucky.
Gentlement
The Board of Governors of the Federal Reserve
System approves the establishment of a branch by Citizens
Fidelity 'Bank and Trust Company in the community of Fern
Creek, Jefferson County, Kentucky, provided the branch is
established within six months 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
OF THE
Item No. 11
2/15/63
.
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRCBPONOCNCE
TO THC HOARD
February 15, 1963
Board of Directors,
Bank of Dearborn,
Dearborn, Michigan.
Gentlemen:
Reserve
The Board of Governors of the Federal
branch by
wn
in-to
an
of
System approves the establishment
ion
connect
in
Avenue
Warren
Bank of Dearborn at 12701 West
to
address
that
from
office
With the removal of its head
of Michigan
a location in the vicinity of the intersection
approval
This
n.
Michiga
n,
Dearbor
Avenue and Outer Drive,
letter.
this
of
date
the
expires six months from
re of the bank
It is understood that capital structu
the
iS to be increased by not less than $250,000 through
latter
the
sale of additional common stock for cash during
half of 1963.
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
0f November 9, 1962 (S-1846), should be followed.)
r;90
BOARD OF GOVERNORS
Item No. 12
2/15/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OrrIOIAL CORRIESPONDENCIC
TO INC SCARE}
February 15, 1963
Board of Directors,
Wilmington Trust Company,
Wilmington, Delaware.
Gentlement
The Board of Governors of the Federal
Reserve System approves the establishment by
Wilmington Trust Company, Wilmington, Delaware,
of a branch at the intersection of routes 13,
113, and Court and Loockerman Streets in Dover,
Kent County, Delaware, 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-1.846), should be followed.)
591
Item No. 13
2/15/63
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
41.
aft
IlIthe Matter of the Application of
l'IXPIJES TRUST COMPANY OF BERGEN COUNTY
OX
he
aPProval of merger with
First National Bank of Wyckoff
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to
the pank
Merger Act of 1960 (12 U.S.C. 1828(c)), an application by
l'ecicges Trust Company of Bergen County, Hackensack, New Jersey, for
the Board's prior approval of the merger of that bank and The First
liatiotal Bank of Wyckoff, Wyckoff, New Jersey, under the charter and
title of the former. As an incident to the merger, the sole office
Qt
the latter bank would be operated as a branch of the former bank.
of the proposed merger, in form approved by the Board, has
beft—
Published pursuant to said Act.
of
Upon consideration of all relevant material in the light
d by the
factors set forth in said Act, including reports furnishe
Corny-,
e
I'Ldroller of the Currency, the Federal Deposit Insuranc Corporation,
44d the Department of Justice on the competitive factors involved in
the
Proposed merger,
IT IS HERP,BY ORDERED, for the reasons set forth in the
13oa,,A
and hereby
-4 8 Statement of this date, that said application be
'
is approved, provided that said merger shall not be consum:ated
or
seven calendar days after the date of this Order
(b) I
-Later than three months after said date.
Dated at Washington, D. C., this 15th day of February, 1963.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, Shepardson, and Mitchell.
Voting against this action: Governor Robertson.
Absent and not voting:
Governor King.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(stAL)
BOARD OF GOVERNORS
Item No. 14
2/15/63
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY PEOPLES TRUST COMPANY OF BERGEN COUNTY
FOR APPROVAL OF MERGER WITH
THE FIRST NATIONAL BANK OF WYCKOFF
STATEMENT
Peoples Trust Company of Bergen County, Hackensack, New
41'8e3r ("Peoples"), with deposits of $177.9 million,* has applied,
131Thsuant to the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), for
the
First
Board's prior approval of the merger of that bank and The
liati°11a1 Bank of Wyckoff, Wyckoff, New Jersey ("First National"),
1144 deposits of $10.7 nillion.* The banks would merge under the
ter and title of Peoples, which is a State-chartered member bank
of the Federal Reserve System.
aqe
office
As an incident to the merger, the
s,
of First National would become a branch of People
ill'reasing the number of its offices from twelve to thirteen.
to
Under the law, the Board is required to consider, as
each
" of the banks involved, (1) its financial history and condition,
(2)
the adequacy of its capital structure, (3) its future earnings
of its management, (5) whether
Plt°sPects) (4) the general character
its
12 U.S.C.,
c°/Porate powers are consistent with the purposes of
Posit figures are as of June 30, 1962.
r“
-2the Federal Deposit Insurance Act), (6) the convenience and
rieed8 of the community to be served, and (7) the effect of the transaction on competition (including any tendency toward monopoly).
The
Board
may not approve the transaction unless, after considering all
these
t.
factors, it finds the transaction to be in the public interes
Banking factors. - Both Peoples and First National have
8`kefactory financial histories.
The financial condition of First
National
is excellent, its capital structure is adequate, and its
earnings prospects are favorable. First National's management, while
sat. '-aCtOry, has refrained from expanding or diversifying the bank's
-S
8er"vices in response to recent growth in the community.
Although the
-"4 has had some success in recruiting executive personnel, it has as
/ret no
successor for the present president.
Peoples' financial condition is satisfactory, its earnings
e,
Pr'°ePects are favorable, its capital structure is reasonably adequat
all4 its management is competent.
Under the management of Peoples,
those attributes would also characterize the resulting bank.
banks
There is no evidence that the corporate powers of the
are
or would be, inconsistent with 12 U.S.C., Ch. 16.
Hackensack, with
Convenience and needs of the communities. -
populaa 1960 population of 31,000, is the seat of Bergen County (1960
ti0r1 780,000), situated on the west bank of the Hudson River, opposite
ilew York city. Peoples has its main office and two branches in the
c°1111tY seat, with nine other branches in various communities which, like
_3—
Raelcensack, are located generally in the south-central part of the
e°1114Y. Economically, Bergen County is well balanced, with residential,
Corillilercial, and industrial sections. During the past decade, it has
been
one of the most rapidly developing industrial and residential
"i(Yas of New Jersey, and the most intensive commercial and industrial
aetillitY is concentrated in the vicinity of Hackensack.
Wyckoff is primarily an upper middle-class residential
ColTlIrlityvith
the usual retail outlets, located in the northwest
ecticrl of the county.
11
The completion of a new State highway (Route 208)
helped to open this area for residential development.
Unlike some
or the more densely settled sections in the middle and southern parts
thp
-
county, Wyckoff and its surroundings have an abundance of unde-
itelePed land.
Hackensack and Bergen County generally are served by numerous
othe
1" large and small banks with offices in the county, as well as by
lar,_
su banks in neighboring counties, and by New York City banks which
lse in the county and are conveniently accessible to the many
ents who commute to and from the city.
Six offices of four banks
°Ile&
rele Wyckoff, at a distance of from three to five miles from First
and offer convenient alternative sources of banking services,
°l.udition to those proffered by larger New Jersey and New York City
411ka.
If the merger takes place, the legal lending limit to one
borr_
uwer from the Wyckoff office will be increased from $60,000 to
-44,325,000. It appears from the application that Peoples will markedly
"Mid installment and commercial credits, which have formed a relatively
1°1'rProportion of loans by First National, and that it will make available
81101 services as construction loans, revolving check credit, and trust
facilities, which First National has not provided in Wyckoff. The fact
that Peoples has $2.5 million in mortgage loans in the Wyckoff area,
311arently obtained because the bank is active in construction mortgage
need for
r1fl—ricing which is not handled by First National, indicates a
this
service in the area.
Competition. - The effect of the merger on competition will
be felt chiefly in the Wyckoff area. Peoples' closest office to First
National, at Glen Rock, is six miles southeast of Wyckoff.
these
Between
two are located three offices of competing banks. While Peoples
Isegarcis itself as serving the whole of Bergen County, its competitive
l'((nls Would appear to be in the central and southern portions.
Most
t the business Peoples derives from in and near Wyckoff is in
installment loans, revolving check credits, commercial loansI and real
::tent
some
mortgage loans resulting from construction mortgages. In
°r these categories First National does not extend credit and in others
drawn from
activities are unaggressive. First National's business
the areas where Peoples' offices compete in a more concentrated way is
both in amount
?illat National.
and in proportion to the total business of
There are 27 common depositors with total deposits in
11°t4 banks aggregating less than $300 thousand, and one common borrower,
141th loans from both aggregating less than $125,000.
Peoples is the largest bank in Bergen County, with 19 per
eellt
of the county's IPC deposits, which will be increased to 20 per
eerrt bY consummation of the proposed merger.
However, the large banks
11113ergen County are relatively small when compared with the large
banks
in adjacent Naw Jersey counties, This has hampered the
eQ171Petitive efforts o- Pergen County banks in the big bank area of
flIPetition. Additional competition within the county is provided by
.
19
80171ngs and loan associations, by life insurance companies, credit
11111°1183 34 sales finance and personal loan company offices, and direct
Ii404
"ng agencies of the Government. To the extent that Peoples will be
a county-wide area after the proposed merger takes place, it
1/111
be in competition with all of these, as well as with the other
1110°1-Inty and larger out-of-county and New York City banks.
Summary and conclusion. - The Bank Merger Act requires the
ton„
to take into consideration not only the effect on competition
hetvm
-en the banks involved, but also the effect on the general competitiv .
esituation in the areas served by those banks. In this connection,
the
high density of banking and quasi-banking facilities, particularly
14 that portion of New Jersey which is in reasonably close proximity to
1114T
4,ork City, is relevant. While there is some existing competition
°eP°81. s of indrirduals, partnerships,and corporations.
-6i tlieen First National and the Glen Rock branch of Peoples which will
be eliminated when the proposed merger takes place, this fact must be
balanced against the wide variety of alternative sources for bank
"Ices and credit that will remain. The transaction will replace
Pi
ret National with the office of a bank offering a far broader range
in demand, as
qbanking services. Some of these services are already
44li0nstrated by the number of Wyckoff residents who are already banking
elltside the town, and it appears highly probable that the need for
nicire and expanded services will grow as the area itself grows. It does
riot appear probable that the increased competition afforded by placing
on
411office of Peoples directly in Wyckoff will have an adverse effect
the
remaining banks which now have offices in the area.
For these reasons, the Board finds that the proposed merger
14°1114 be in the public interest.
FebruarY l5, 1963.
)
59!
Item No. 15
2/15/63
DISSENTING STATEMENT OF GOVERNOR ROBERTSON
Once again, the majority of the Board permits a large
441"essive bank in Bergen County, New Jersey, to swallow up a sound
41a11 neighborhood bank, which has been adequately serving the needs
t a nearby residential community. Here the large bank has been competing
11441*°usly in the small bankls service area, from an office six miles
4144Y, and would find it more convenient to serve its customers from
tacuity located in the community itself.
Under New Jersey law,
it can operate in Wyckoff only by merging with the one independent
bellc there, and the size of the premium to be paid for stock of the
lon,,
"cu bank measures the anxiety of Applicant to acquire an office there.
The
merger has little more than this to recommend it. I am not
irfq° essed by the weight of the reasons cited by the majority in favor
01'
approval.
1. It is true that the loan limit of the resulting
bank will be many times that of the bank to be absorbed.
But no need has been demonstrated, or even alleged by the
APAlicant, for an increased lending limit in Wyckoff.
Moreover, the Applicant, as well as some of the other banks
'whose offices surround the community, is
evidently already
°ffering the other additional services which, it is urged,
should be offered from the office of the local bank.
CO(I
domq„.41.
2. Management of the local bank is conceded to be
a
satisfactory, and there will be ample time to recruit
successor before the president, a relatively young man,
l.
retires. even if that should be necessary, which is doubtfu
3. The fact that banking concentration is already far
higher in neighboring counties may be regrettable; it does
not seem to me a valid argument for permitting such concentration to grow in Bergen County.
Followed to its logical conclusjon„ as I pointed out in my
cli enting statement in the matter of the application of Liberty Bank
11'1 Ti'llst Company for approval of its merger with The First National
Of Batavia (Federal Reserve Bulletin, January 1963, page 16), the
11111.°sophy exemplified by such decisions tolerates tranquil acquiescence
1111ile smaller banks are being absorbed, one by one, by aggressive,
Iat'ger banks in a race which may well lead to a few banks controlling
411 the banking facilities of an area, or even of a whole State.
The Board operates under a statutory injunction to refrain
lIt
in the
approving a merger unless "it finds the transaction to be
1411311,0 interest".
In approving mergers like this one for the stated
d, the
Ileason that market dominance in the area has not yet been achieve
tn
of
—4. Is sporting with a tidal wave. It is here, in the early stages
tliend toward market dominance, that I believe Congress intended the
lioA„
-'d to protect the public interest by preserving competition.
eorv,
'equently, I would deny the application.
4/31‘1-lary 15, 1963.
Item No. 16
2/15/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
S-1864
WASHINGTON 25, D. C.
ADORES. OFFICIAL CORRKEPONDIENCIC
TO THIC OCIARD
February 19, 1963.
near sir:
e.Form FR 209, currently prepared as a summary of the report of
4 1 ation of member banks, has been revised and expanded to provide certain
;
thePlementary banking data not now available to the System. Two copies of
Qtielrevised form, which the Board has authorized for immediate use, are
for "ed. The white form is to be used for State member banks; the green
national banks. There are also enclosed for illustrative purposes two
irod uctions of the form completed with sample data for a State member and
a'
4 ati0nal bank. A supply of form 209 is being forwarded to you under
parate cover, and additional copies may be obtained upon request.
It is contemplated that each Reserve Bank will assume the responsi1144Y for
This will
completing the form for member banks in its District
forwIlde editing, preparing punch cards, machine verifying the data, and
rding finished punch cards and forms as discussed in greater detail
:
belo
After the data have been tabulated, each Reserve Bank will be furtoae.ed a summary of the information reported for the banks in its District
tter with national summaries for all member banks.
kw,
Tabulating the data from form 209 will be done on a quarterly basis
WhichIllsofar as possible, each quarter should include data for all banks for
Nz. the examination was started in that quarter. If, for some banks, the
erld Illation report is not available within a six-week period following the
th02f the calendar quarter, the data for these banks should be inludf!d with
'e transmitted for the succeeding c,uarter,
Within six weeks after the close of each calendar quarter, punch
4rds
Ntili containing the information on FR 209 for all member banks for which the
ah nation date falls within the quarter, along with a copy of PR 209,
°tad be
forwarded to the Board's offices. The original and one copy of
209
for State member banks should be forwarded with the report of examitlati
ith°11. Only one copy of FR 209 for national banks should be sent (forwarded
Na Punch cards), and comments currently supplied at the bottom of the form
"ing the bank's condition, management, etc. are to be discontinued.
•,
f402
S-1864
-
To •
n insure confidentiality of the data, the copy of FR 209 forwarded with the
81;4°1 Cards should not contain the name and location of the bank,. For
i.:ristical purposes the identification code in the block at the upper right
.'erner
of the form will suffice.
With respect to reports of examination of State member banks
nilet'eePeared by State authorities and furnished the Reserve Banks, it is not
should
be „ssarY to prepare form 209 and punch cards, except that the form
or "4")
"3"
(rated
bank
problem
or t:rePared if the State report is that. of a
since
arising
condition
the'f the report discloses a seriously deteriorating
should
that
information
be erevious Federal Reserve examination or contains
fortits?,ught to the attention of the Board, Only an original and one copy of
E `") as nearly complete as possible, should be forwarded to the Division
por„xaminations and, since these forms will not be used for statistical
Pose
s, punch cards need not be prepared,
There is attached the format for the punch cards and suggested
villear!t..lictions for the preparation of form 209 and for editing and machine
&tication of the data.
Very truly yol
efz'
yr,
Merritt Shedilli°
Secretary.
htflehments.
NE
T0'
PRESIDENTS OF ALL FEDERAL RESERVE BANKS
@FedFRASER