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Minutes for To: February 171 1960. Members of the Board Prom: Office of the Secretary 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 he 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, Y°ur initials will indicate only that you have seen the minutes. Chm. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System °11TArednesday, February 17, 1960. The Board met in the Board Room at 10:00 PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Szymczak Mills Robertson Shepardson King Mr. Sherman, Secretary Mr. Kenyon, Assistant Secretary Mr. Thomas, Adviser to the Board Mr. Fauver, Assistant to the Board Mr. Hackley, General Counsel Mr. Noyes, Director, Division of Research and Statistics Mr. Brill, Associate Adviser, Division of Research and Statistics Mr. Masters, Associate Director, Division of Examinations Mr. Farrell, Assistant Counsel Miss Hart, Assistant Counsel Mrs. Ulrey, Economist, Division of Research and Statistics Letter to Senator Holland on retail statistics (Item No. 1). The s ll000mmittee on Department of Commerce and Related Agencies of the Rolls eAPPropriations Committee had under consideration at this time the nest of the Bureau of the Census for an appropriation of $400,000 "iscal 1961 to enable it to broaden its program for the collection 411(11,,„ "u-Lication of statistical information on retail trade by taking over fl'om the Federal Reserve System the collection of statistics on 'Lrtient store activity. In the course of the hearing, question had ttriten with regard to the position of the Federal Reserve concerning 2/17/60 -2- proposal, and it had been indicated by the Subcommittee staff that, 14 lieu of testimony by a representative of the Board, a letter to the Chairman of the Subcommittee, Senator Holland, probably would be acceptable. 4 draft of such a letter had been distributed to the members of the Board before this meeting. Certain suggestions for changes in the draft letter had been submitted to Mr. Noyes, and others were made in the course of discussion t this meeting. Unanimous approval then was given to a letter to aenator Holland in the form attached as Item No. 1. Mr. Thomas then withdrew from the meeting and Mr. Hexter, Assistant General Counsel, entered the room. Messrs. Young, Adviser to the Board, Molony, Assistant to the Board, and Solomon, Director, of Examinations, entered the room somewhat later. Meetin, with re resentatives of Nor:an Guarant Trust Corn 04p, eurUary $ 10, 1960, the Board gave consideration to the question whether eeztain loans made by Morgan Guaranty Trust Company, New York City, under ' Ic sernents with four members of the New York Stock Exchange for the 1111'1511c of purchasing preferred stock of Studebaker-Packard Corporation, e°11liert1b1e into common stock in January 1961, constituted loans for the 1°11111 e of financing bona fide arbitrage transactions under Regulation U, L°4148 by Banks for the Purpose of Purchasing or Carrying Registered Stocks, 1514 a decision was deferred in order to give the member bank an opportunity t°16We representatives appear before the Board. 2/17/60 _3_ Those representing Morgan Guaranty who met with the Board at this time were: Charles H. Willard and Leighton H. Coleman, of Counsel, atad Edward K. Brass, Vice President. A stenographic record of the discussion was made, and a tran- e ll.Pot has been placed in the Board's files. (For this purpose a rePresentative of Alderson Reporting Company, the Board's contract reP°rting firm, was present.) The discussion concluded with a comment by Chairman Martin that the Board would give further consideration to the question of the loan trnb,_ --uzactlons and that Morgan Guaranty would be advised. Messrs. Willard, Brass, and Coleman then withdrew, as did Miss art:Mrs larey, and Messrs. Hexter, Brill, and Farrell. Items circulated to the Board. The following items, which had been circulated to the members of the Board and copies of which are 4ttached hereto under the respective item numbers indicated, were t2111°Z.94. 1 unanimously: Item No. Lett ,er to Chemical Bank New York Trust Company, brn,,I?rk City, approving the establishment of a ' ea in Bayside, Borough of Queens. 11%41;- uo Bankers International Financing Company, Inc., 814esseCity, transmitting a final permit to begin tett r to the Federal Reserve Bank of New York authorizing as Fiscal Agent in respect of the proposed issue 041e International Bank for Reconstruction and Development /lentY-five Year Bonds of 1960, due February 3_5, 19 5. by,- act 2 3 4 2/17/60 -4Item No. Letter to Elston Bank & Trust Company, Crawfordsville, v;Idianal approving the establishment of a branch in tTaveland incident to its merger with The State Bank of "aveland. a Letter to the Farmers State Bank, Stanberry, Missouri, PPr°ving an investment in bank premises. Letter trm., to the Presidents of all Federal Reserve Banks L0-'8111itting revised portions of the Federal Reserve tia lng ?e-Le Service relating to the Uniform System for s. mBanks. 5 6 7 Letter from the California State Treasurer. In a letter to overnor Balderston dated February 11, 1960, Mr. Bert A. Betts, Treasurer lithe State of Csljfornia, referred to State funds held on time deposit with california banks at 3 per cent and to the possibility of obtaining 4 hi --Cher rate of return through investment of such funds in short-term Owe— "Iment securities. He inquired whether there was any evidence or thira„. ' - 111g on the part of the Board that the maximum permissible rate of 4141 ' est on time deposits might be increased, stating that the present ilestrilent policy of the State must be reconsidered if leaving the money O, 1 time deposit would work to the continuing disadvantage of the State's tajn, After discussion, there was agreement that it would be in order tor Goy ernor Balderston to reply to the effect that the question of 81ng the maximum permissible rate under Regulation Q continued ' to e .-Ire active study and consideration by the Board, that it would be PPropriate to give any intimation in advance of any prospective 2/17/60 -5- action on the interest rate ceiling, but that a decision to change the Illa imum rate, if made, would be announced promptly. Loans by Morgan Guaranty Trust Company. 'lit The meeting with sentatives of Morgan Guaranty Trust Company concerning the aPlaicability of Regulation U to certain loans made by that bank under agreements with four members of the New York Stock Exchange for the 11.11pose of purchasing Studebaker-Packard convertible preferred stock had revealed circumstances which suggested that a prompt decision by the Board would be advisable. Accordingly, further consideration was giVell to the matter at this time. Mr. Hackley said he thought it only fair to point out that the leoni •"4- question involved was seribusly debatable. Assuming that the loans her et°fore made by Morgan Guaranty to the member firms under the existing )r1441.tment were made in good faith, the provisions of Regulation U rela • tIng to errors in good faith would suggest that insofar as those 113Av,, ' - 8 were concerned the bank was not in violation of the Regulation. N4 4 Laleory would not seem to apply to future loans made under the ecrallitment, but on the other hand a court might agree with the position o cglasel for Morgan Guaranty that the whole commitment should be Con 81-clered, that the agreements were entered into in good faith, and that fUture loans under such a commitment therefore would not constitute 1/10:1 ations of the Regulation. Moreover, quite apart from the good faith 44Peet -3 there was the question whether a court would conclude that there 2/17/60 -6had been a violation of Regulation U because, whereas Regulation T contains a or easonable time" limitation (within which a transaction must be consummated) in the exception relating to arbitrage transactions, Regulation U does not contain such language in reference to the same subject. Accordingly, a court might conclude that the Board had made a deliberate distinction. Even if the words "reasonable time" were contained in the pertinent provisions of Regulation U, a court might ' tee that a "reasonable time" in the case of a bona fide arbitrage tleaction should be determined on the basis of testimony of people in the -nsiness, and they might support the contention that in this Particular case a period as long as a year and a half was a reasonable time . 111 the absence of a specific limitation in Regulation U. Also, there vas the fact that the interpretations contained in the question 44(14/lewer Pamphlet issued by the Board in connection with the June 15, 1959 'amendments to Regulations T and U were not published in the Federal Register. -* A court, being advised that the Board customarily followed the to its of Publishing interpretations of general applicability with regard regulations in the Federal Register, might support the contention that p arties subject to Regulations T and U were not bound by the information co ntained in the question and answer pamphlet. Ito tiot Chairman Martin commented to the effect that in his opinion it b e difficult to establish that all loans under the commitment were of a package deal, following which Governor Mills said that from I 2/17/60 a -.7— barker's point of view the commitment in this case would be comparable to a loan agreement covering a term loan, where an understanding is reached that the borrower may borrow or repay at his option over the life of the agreement. Governor Mills expressed the view that in this eaee, as in the other he had mentioned, the past could hardly be seParated from the future. Mr. Hackley then commented on the question of reporting to the 13ePartment of Justice a possible violation of the Board's regulations that would constitute a felony. It was his view that where it was (1°1g/trill whether there had been a violation, the Board would not be allbject to justifiable criticism if, in its discretion, it decided not to report the matter. During Mr. Hackley's comments, Messrs. Thomas, Hexter, and „ -'e-1-1 returned to the room, and Miss Hart entered the room subsequently. Mr. Hexter expressed agreement with the reasoning stated by u L,ackley on the question of reporting a possible violation. In this Parti cular case, he felt there were sufficient elements of doubt to ant the Board exercising discretion. In further discussion, Governor Shepardson suggested that there Vas . dlstinction between the circumstances of this case and one involving the, vcssibility of loans over an indefinite period of time. Here, he taid. 1 certain definite dollar and time limitations were involved because the terms of the commitment. 2/17/60 —8.. Chairman Martin agreed, and added that a special type of trans- aeticril namely, arbitrage, was involved. He had sometimes wondere d, he said, whether it was wise to permit arbitrage transactions at all. At Present, however, arbitrage is an accepted feature of the market where 1881188 such as the Studeba ker-Packard stock are concerned, and that ftst be recognized. Chairman Martin suggested that the broad question for the Board to hn _ 'I—v e in mind, in considering the particular case before it, was the effect from the standpoint of the public interest; that is, whether real (lamage to the public interest was involved. He also suggested that it 11'48 iMportant for the Board to put its Regulations T and U in such form that the problem of uncertainty in respect to arbitrage transactions 1.1°/11c1 not recur. It was difficult for him to see how the Board would gait 4n311 hing by getting into a squabble, even if actual litigation was 4(4 inv 04.ved, which might give an impression that the Board was trying to 'dnge its regulat ions by interpretation. Governor Balderston said that he thought Governor Mills had put rIllger on a vital point in suggesting that the original agreement was the Unit to be dealt with, rather than loans made under that agreement. 114 this connection, Governor Balderston noted that if a businessman 4448 a u . to live mmltment to do certain things at a certain date and then fails uA to the agreeme nt, he may be faced with a suit, and properly so. s0, 48 brought out by Governor Shepardson, in this particular case the 2/17/60 cloftlitment was limited in time and, at least to some extent, in amount. For these reasons, Governor Balderston believed that the Board should " Illmilnicate a decision to the New Reserve Bank along lines favorable to M°rgan Guaranty and request the Reserve Bank to relay that decision to the member bank. Governor Szymczak indicated that his concern was not so much with thts case, or the action taken by the Board on it, as with the broader Pls°blem of dealing equitably with a body of cases of similar nature thro._ uCh a general regulation. He could see the merits of the Morgan ease and how it might be regarded as different from somewhat einalar cases. This particular case had come specifically to the Board's alqention, but there might be others. The question was how to afford eqtlal treatment to all parties affected by a regulation of this kind. Governor Robertson referred to the argument that had been advanced to th e effect that the Board should look to the commitment and that, if a cormti tment was made, it followed that loans pursuant thereto could also be lila, 4e'' In actuality, he said, there is a difference between a commitment 4nd a loan. To illustrate, he presented the following hypothetical case: A, -°11ttnitment is made by a national bank to make loans over the ensuing Years to the X Corporation. Then, after the date of the commitment, eoh_ =Acre es enacts legislation which says that a national bank shall not 1444 lo., • -us ln any amount to a class of corporations that includes the corp °ration. In such circumstances, it would not be legal for the 2/17/60 -10- liatianal bank to make a loan to the X Corporation, despite the previous ectImitment, after the effective date of the legislation. This would be true, Governor Robertson said, even if the commitment was -waited to six months. Loans could not be made under the commitment atter the law prohibiting such a loan was enacted. In the Morgan Guaranty e486, it was contended that the commitment was entered into in good faith 4411 that the loans thereunder also were made in good faith. 184 While there Provision in Regulation U which excuses mistakes when the element of Cel3c1 faith is present, that provision would not in his opinion be applicable to anYthing happening after the intent of the Regulation is clarified. In this case, any loan hereafter made by Morgan Guaranty under the original agreements Qf the would be granted in the face of the fact that the provisions -egulation had now been clarified. Governor Robertson acknowledged that an element of doubt was eu by virtue of the fact that the definition of "reasonable time" in -- arbitrage transaction was not written into Regulation U and was co onlY in the interpretative pamphlet issued following adoption q the June is, 1959, amendments, which was not published in the Federal egiStfh. -r. If it were not for this factor, he noted, there would be no 4-em before the Board. In the present circumstances, it seemed to 1 'hat it would be illegal for Morgan Guaranty to make any additional Ae he saw it, the way to handle the matter would be to advise Qlr'e'all Guaranty that as the Board read Regulation U in the light of the 2/17/60 -11- int erpretation that had been issued, certainly the reasonable time element Ilas vital to a good-faith arbitrage transaction. In view of the existing cl°1thts, however, the Board would not tell Morgan Guaranty that it could 11(4 rnake any additional loans under its commitment. Instead, it would advise the bank that the matter was being turned over to the Justice tePartment, with the doubts concerning it pointed out to the Department. Thi8 would let the Department know that the Board did not think that an and-0ut violation was involved, but the Department would be informed. Mr. Hackley said he thought there would be no question but that 4" rnillitMent is essentially a contract to make loans and therefore is subject to applicable laws and regulations. If in this case the loans that, aad been made were in violation of Regulation U, then the loans niacie in the future under the commitment would also violate the Regulation eVell though the contract was entered into in good faith. As he had 0ated previously, he was concerned about putting the Board's position °I th 1 e Eround of carrying out a commitment entered into in good faith, ther than on the ground that, aside from the question of good faith, there was a serious question whether Regulation U had in fact been d• It was enot clear in Regulation U, he pointed out, that a J -Limitation was applicable in the case of an arbitrage transaction. ?Or reason, his preference would be to take the position that there had b een no willful violation of the Regulation, if in fact there was a 10-at' lon at all; and in the circumstances to raise no objection to 2/17/60 -12- ea-rrYing out the original commitment. This would be preferable, he thought, to proceeding on the basis that the commitment was made in C"'d faith and loans made pursuant to it would likewise be made in g°°(ifaith, because he did not see how future loans could be said to be Illade in good faith. Mr. Hackley then suggested that in the light of this case the 13(Irdmight wish to issue interpretations of Regulations T and U es tablishing a specific time limitation applicable to arbitrage transactiOns, which might be 60 days or some other period. An alternative be to adopt an appropriate amendment. In this connection, Governor Shepardson suggested that it would bedesirable for the Board to have a clear picture as to that it was aeekm* to accomplish in the public interest by any such interpretation oZ a Thendment. During further discussion along these lines, Governor Szymczak llotedthe difficulty involved in preparing regulatory provisions that %1111 tak -e care of exceptional cases, and Governor Mills suggested that it sui-o'" eases should arise the interested parties would be likely to " b lIg them to the Board for consideration. Ggvernor King commented that he thought the natter had arisen beca_ u.se the area involved was a rather nebulous one and the Board had clealt With it in nebulous fashion. He did not feel that interpretations slIch 48 set forth in the question and answer pamphlet were of quite the 2/17/60 8ajlle effect as regulations. While he entertained some doubt as to good raith in this case, the burden of proof in establishing otherwise would 41313ear difficult. In the circumstances, he would be inclined to interPose no objection to what had been done or might be done under the ecItlitment. He would favor any step the Board thought appropriate to rilake the Regulation clear to those subject to it. In this particular 4'se, however, because of the fuzziness of Regulation U and the 'ference of language between the provisions of Regulations T and U regard to arbitrage transactions, he had concluded that it would be hard, L'° Justify a decision to tell Morgan Guaranty not to honor its e°1111111tment. In his opinion, the consequences of directing Morgan Naramty to do otherwise would outweigh whatever good might be a.ce°1t1P1ished. Chairman Martin then suggested that the Board might request the Legl Division to draft a possible statement to Morgan Guaranty r°r4 the Board's consideration tomorrow, but Governor Mills suggested that th --e problem c ould perhaps be settled today if the majority of the Boara Ifaswilling to give approval to Morgan Guaranty to carry out its '441zmnt under the agreements with the four Stock Exchange firms. If that were done, he continued, the Board could ask the Legal Division to ctl'art lor the Board's consideration, as promptly as possible, amendments to a_ egulations T and U that would prescribe a definition of "reasonable consistent with ordinary market practices. 2/17/60 j4 Chairman Martin replied that he thought Governor Mills had stated the position of the majority, but that he (Chairman Martin) would not want to "give approval" to the completion by Morgan Guaranty °f the loan program under its commitment. Governor Shepardson commented that language along the lines Plsevi°11slY mentioned by Mr. Hackley might serve to meet the Chairman's P°1-11t, and Mr. Hackley then restated his suggested approach along the l'°11°Ifing lines: The Board would not say definitely to Morgan Guaranty that that the member bank was doing or had done or might do was in 111131ati°r1 of Regultion U. However, in view of the fact that it was d batable arid whether any such action violated Regulation U, as now drawn, in the light of an assumption of good faith in the matter, the Board WO1f1 44.1 not interpose objection. Governor Balderston then suggested that Mr. Hackley be requested to , in touch by telephone with Vice President Crosse of the Federal .erb. -'e Diank of New 'York, advise Mr. Crosse of the Board's position alore, 4 . such lines, and request that Mr. Crosse advise Morgan Guaranty -°mPany accordingly. The procedure suggested by Governor Balderston was approved, c1111°/* Robertson dissenting for the reasons he had stated in the course th„, '''lsoussion at this meeting. Secretary's Note: Later in the day Mr. Hackley telephoned Mr. Crosse and told him that the Board's views were substantially as set forth in the following paragraph, which Mr. Hackley dictated to Mr. Crosse's secretary: f; 2/17/60 -15The Board has given further consideration to the question whether certain loans made by Morgan Guaranty Trust Company under agreements with four members of the New York Stock Exchange for the purpose of purchasing convertible preferred stock of Studebaker-Packard Corporation constitute loans for the purpose of financing bona fide arbitrage transactions under Regulation U. It appears that such agreements and the loans that have heretofore been made thereunder were entered into in good faith and without intent to violate the Regulation. Apart from this consideration, the Board recognizes that the Regulation as presently drawn does not make it entirely Clear whether loans made under these agreements violate the Regulation. Accordingly, the Board will interpose no objection and intends to take no adverse action with respect to loans that have been or may be made pursuant to the outstanding agreements. Mr. Crosse indicated that he would advise Morgan Guaranty the same afternoon. Mr. Hackley also told Mr. Crosse, for his own information, that the Board had instructed the Legal Division to consider promptly amendments to Regulations T and U that would limit the arbitrage exceptions to cases in which the transaction was consummated Within a specified period of time, such as 60 days. Mr. Crosse expressed the feeling that such amendments would be desirable. The meeting then adjourned. Secretary's Notes: Pursuant to the recommendations contained in a memorandum from Mr. Koch, Adviser, Division of Research and Statistics, Governor Shepardson approved on behalf of the Board on February 16, 1960, the temporary appointment of Kenyon E. Poole as Economist in that Division (from about June 13 to about September 21 1960), with basic annual salary at the rate of a3,970, effective the date he assumes his duties. Governor Shepardson approved today on behalf of ems: the Board the following 2/17/60 -16- fol., Memoranda from appropriate individuals concerned recommending the ' °wing actions affecting the Board's staff: Estalaishment of new position of A New position, with the title of General Assistant, in the Division 4cirainistrative Services. Sal ** arl icrease with change in title tua MarY E. Sanders, from $51880 to $61070 per annum, with a change in from Secretary to General Assistant, Division of Administrative z'vices, effective February 211 1960. memb Catherine L. Schmidt, from the position of Secretary in the Board A ere' Offices to the position of Secretary in the Division of in,flistrative Services, effective February 211 19601 with no change 81:r basic annual salary at the rate of $603701 but with the underrig that her annual salary will be adjusted to $613300 effective J 4/ 1960. Cce tance of resignation liar„Will. lam F. Upshaw, Legal Assistant, Legal Division, effective ‘44 13, 1960. 414l,ftterto the Federal Reserve Bank of Chicago (attached Item No. 8) ""J-ng the appointment of O. Jay Tomson as assistant examiner. " Secretary 1W2 o 6.10011,,7 4 o tio 'PACT BOARD OF GOVERNORS or THE FEDERAL RESERVE SYSTEM WASHINGTON ? ; 4 411.61,00 *000**0 Item No. 1 2/17/60 OFFICE OF THE CHAIRMAN February 17, 1960 The Honorable Spessard L. Holland, u hairman, Subcommittee on Department „ of Commerce and Related Agencies, `-iotamittee on Appropriations, United States Senate, Washington 25, D. C. jlear Hr. Chairman: I am advised that your Subcommittee has expressed an l!terest in the views of the Federal Reserve with respect to the IgroPriation requested for the Bureau of the Census to improve the information 0_ On gram for collection and publication of statistical retail trade. The program, as originally proposed, envisaged, among other thi ngs, the he centralization of responsibility for all data collection Pro in the field of retnil trade in the Bureau of the and the withdrawal of the Federal Reserve System from its limited operation in the collection of statistics on depart— ti.'-eetsent Store activity. The Federal Reserve System made a thorough study of its :28ent Program of department store statistics collection, processing, Publication, which led to the conclusion that much of the data we econn,assembling are not as comprehensive as is desirable for tioZTto analysis, and that certain of the components are of ques— eZ4i:Irtical validity. In order to improve the data r it would be necessary to extend considerably their 4108ent scope and add reporting stores to our sample. To proceed la ng these lines would be excessively costly and create direct over— and duplication at several points with the current program of lanreau of the Census in the retail trade field. After extended discussions with the Bureau of the Budget, the blea.'ureau of the Census, and various organizations interested in the eca'nrement of retail trade, it seemed to us that the only sensible eoll ion to the problem was for the Federal Reserve System to dis— pro 'nue completely the collection of department store data. The P"al made by the Census, in connection with its budget request for The Honorable Spessard L. Holland -.2- 1(196 at1 a )Provides for the integration and substantial improvement of the hati that would be available to the public on retail trade at the and regional level and contemplates that the Federal Reserve 0ernwiu supplement this national program by reimbursing the ,,113 Bureau for the collection and publication of local data more uses to the Board and the Reserve Banks and to economic and business "alysts than data now collected. atoreWe are aware that some representatives of the department the -ndustry are concerned about the withdrawal of the System from Co ooric'Llection of retail trade statistics. From what we know of their eria, it is based largely on a misunderstanding of the program whicl, ant, Censuo -plans to carry out with the appropriated funds requested, The funds we are prepared to add for the local data collection. kxper ta that will be available under this program will be far e °r to those now available to analysts studying current economic raents. We feel sure they also will be superior for retailers geriern, 11,,,a1-2`47, despite the fact that some of the reports that have been pr uY department Stores in the past are not included in this basic °gram. clevf We understand that in the House of Representatives the funds rerth "l'kested b Niue , Y the Bureau of the Census for the national program were the ?u somewhat, and that this reduction would necessitate at least our e timination of the weekly portion of the national program. It is ittatieeling that such a cutback would be most unfortunate because it st;eti Make the national program less current than the department store tor ttties now available and would also probably make it impossible reirobue Bureau of the Census to prepare for the Federal Reserve, on a thes weekly local and regional data. We have found cieveir, ,weeklY reports valuable in our own analysis of current business 13.40 :'411ents in the various Federal Reserve Districts, and we are Wo414-1 , 1are that they are widely used in the business communities. We restor e, therefore, that your Committee would recommend the ation of the amount originally requested for this program. Sincerely yours, (Signed) Wm. McC. Martin, Jr. Wm. McC. Martin, Jr. BOARD OF GOVERNORS 000) 1 OF THE .0 ?. Item No. 2 2/17/60 FEDERAL RESERVE SYSTEM A* WASHINGTON 25. D. C. 4 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. Board of Directors, Chemical Bank New York Trust Company, New York, New York. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank ofTemrYork, the Board of Governors of the Federal Reserve System approves the establishment of a branch at 2398 Bell Boulevard, Bayside, Queens, New York, by Chemical Bank New York Trust Company, New York, New York, provided the branch is established within six months from the date of this letter and formal approval of State authorities is effective as of the date of the establishment of the branch. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 3 2/17/60 WASHINGTON 25. D. C. AODRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. 1kers International Financing Company, Inc., a11 Street, York 151 New York. Gentlemen: The Board of Governors has received a certificate of oecretary and three directors of Bankers International the'alleing Company, Inc., dated February 4, 1960, certifying 13rerinforrnation required by Section 3(c) of Regulation K as 1311 .ecill-leite to the issuance of a final permit to commence the There is enclosed a final permit of the Board of Itic.'"°1's granting to Bankers International Financing Company, authority to commence business as a corporation organized 4: t 1** the provisions of Section 25(a) of the Federal Reserve UPon completion of the organization of the Corporation, 1.4 11;Z.be appreciated if you will advise the Board of Governors, the d-1.4.ng, through the Federal Reserve Bank of New York, as to a-Le the Corporation commences business. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. Z4elosure tff BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON February 17, 1960 Permit to psgin Business Reserve Board of Governors of the Federal. Fifty and ed Hundr °r1 the tenth day of December, Nineteen ion nizat Orc!e Cert:44 .PProved the Articles of Association and aecoeate of Bankers International Financing Company, Inc. in 4103 With the terms of Section 25(a) of the Federal Reserve ' Act.3 and Sreter,, III-MBAS, the the Board , IIREREAS, by satisfactory evidence presented to Govp Bankers that JlItehj2lors of the Federal Reserve System, it appears of the all Provfaiaulorlal Financing Company, Inc. has complied with be to red °1118 of the statutes of the United States requi c(4.41€, , , commence h before a corporation shall be authorized to the of 25(a) bas a corporation arganized under Section LI.eserve Act; T frr 00 ORE, it is hereby certified that Bankers al Financing Conn Inc. is authorized to commence Le pro,q0104:' as a corporation organized and operating under the .knior; of Section 25(a) of the Federal Reserve Act and the reguthe Board of Governors of the Federal Reserve System 1444ed "4 241 a ccordance therewith. 11441,4 ti 17CM and IN WIT . 414 WHEREOF, I have hereunto set my hand S ve th Reser 8v atek t e seal of the Board of Governors of the Federal en. 0 be affixed on the day and year first above writt (Signed) Merritt ShermEn Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No. 4 2/17/60 AODRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. Bilby, Vice President, Lers.1 Reserve Bank of New York, New York 45, New York. Dear Mr, Bilby: This refers to your letter of February 9, 1960, and its ellelosur 411k ,, es, concerning the proposed issue by the International Bollalor Reconstruction and Development of its Twenty-five Year i?! 1960, due February 15, 1985. In that letter you state tjaaj is Proposed to amend Schedule A of the Fiscal Agency Agre Batk-ment dated as of February 6, 1950, between the International and Your Bank to include the bonds in question. The Board of Governors approves of your Bank acting as lawt'Agent in respect of the proposed issue by the International appr °f Twenty-five Year Bonds of 1960, due February 15, 1985, and vith°\res the execution and delivery by your Bank of an Agreement the r0 International Bank in the form or substantially in Of Feb! SuPplement No. 18 to the Fiscal Agency Agreement dated as International Bank, eric jIllarY 6, 19501 between your Bank and the sed with Your letter. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 5 2/17/60 WASHINGTON 25, D. C. ADDRESS orricsAL CORRESPONDENCE TO THE BOARD February 171 1960. Board of Directors, Elston Bank & Trust Company, Crawfordsville, Indiana. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Chicago, the Board of Governors of the Federal Reserve System approves the establishment of a branch at the present location of The State Bank of Waveland, II;aveland, Indiana, by Elston Bank & Trust Company, provided the merger of the banks is effected substantially in accordance 'with the agreement between the parties dated December 8, 1959, and the establishment of the branch ls effected within six months from the date of this letter. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. fif BOARD OF GOVERNORS OF THE Item No. 6 FEDERAL RESERVE SYSTEM 2/17/60 WASHINGTON 25, D. C, ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. Board of Directors, Farmers State Bank Stanberry, Stanberry, Missouri. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Kansas City, the Board of Governors ° of_ the Federal Reserve System approves, under the provisions r Section 24A of the Federal Reserve Act, an additional inBank , 11'It;:f $45,000 in bank premises by Farmers State Setst: 7 a acquiring of purpose the Stanberry, Missouri, for a more suitable building, installing a vault and remodeling the building. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS Item No. 7 2/17/u0 S-1730 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, ID. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. TO ThE PRESIDENTS OF LLL FEDERAL RESERVE BANKS Dear sir: v • The Board's Division of Examinations has completed a review of I'lc)1.18 1 recti in the Federal Reserve Loose-Leaf Service relating, dithe or indirectly, to the Uniform System for Rating Member Banks for clatinurP°se of eliminating obsolete portions of such letters and consolikresghthe remaining material in more useful form. The attached encloserit• ave been prepared with this purpose in mind only and represent no 11;.1 or significant change in the basic subject matter of the origele cia;:ers. The enclosures will appear in the Loose-Leaf Service under "oard , - -- of this letter and will collectively supersede the following -Letters currently appearing in the Loose-Leaf Service: Date of Letter Aug 8, 1934 Apr. 25, 1936 May 24, 1943 Aug 11, 1952 11, 1952 Nov. 4, 1952 APr, 23, 1953 Aug. 12, 1953 Oct. 24, 1955 Aug bee. 5, 1955 July 29, 1959 Letter Number Loose-Leaf Service X-7977 X-9562 S-653 S-1465 #3610 3611 3619 3593 3619 3593 3614 & 3619 3619 3594 3594 3593 3593 361)4 3614 (From Div. of Exam.) S-1479 S-1493 (From Div. of Exam.) S-1580 S-1580-a S-1581 S-1581-a S-1703 S-1703-a to), t' the It will be noted that a definition of "gross capital structure" 4 Pose of rating asset quality has been added by footnote In ' 1/1td. lares 3-1730-a entitled "Uniform System for Rating Commercial -8 of Member Banks." Iclo_ures Very, truly yours, Merritt Shermark, Secretarz.,-% BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 8 2/17/60 WASHINGTON 25, D. C. ADDFIESS OFFICIAL CORRESPONDENCE TO THE BOARD February 17, 1960. CONFIDENTIAL FR Mr. W. R. Diercks, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Diercks: In accordance with the, request contained letter of February 8, 1960, the Board approves the Ilent of 0. Jay Tomson as an assistant examiner for Federal Reserve Bank of Chicago. Please advise as date on which the appointment is made effective. in your appointthe to the It is noted that Mr. Tomson is indebted to ermers Savings Bank, Stratford, Iowa, a nonmember bank, in the amount of 480. Accordingly, the Board's approval of the appointment of Mr. Tomson is given with the understanding that he will not participate in any examination of that tank until his indebtedness has been liquidated. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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