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Minutes for
To:
Members of the Board
From:
Office Of the Secretary
January 14, 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 Monday, January 14, 1963.
The Board met in the Board Room
at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank
Operations
Solomon, Director, Division of Examinations
Shay, Assistant General Counsel
Daniels, Assistant Director, Division of
Bank Operations
Goodman, Assistant Director, Division of
Examinations
Smith, Assistant Director, Division of
Examinations
Leavitt, Assistant Director, Division of
Examinations
Mattras, General Assistant, Office of
the Secretary
Hill, Attorney, Legal Division
Circulated or distributed items.
Of
The following items, copies
Which are attached to these minutes under the respective item numbers
indicated, were approved unanimously:
Item No.
Letter to Morgan Guaranty International Finance
CorPoration, New York, New York, granting
Permission to purchase shares of Banco Espanol
Desarrollo, Madrid, Spain.
1
98
1/14/63
-2Item No.
Letters to Bank of America, New York, New York,
granting permission to purchase additional shares
Of Industrial Finance Corporation of Thailand,
Bangkok, Thailand, and Pakistan Industrial
Credit and Investment Corporation, Karachi,
Pakistan.
2-3
Letter to American Bank of Sarasota, Sarasota,
Florida, interposing no objection to a change
la location of the bank to 3800 South Tamiami
Trail from 6700 South Tamiami Trail.
14.
Letter to the Federal Deposit Insurance Corporation
regarding the application of The First State Bank
Of Tonganoxie, Tonganoxie, Kansas, for continuation
Of deposit insurance after withdrawal from memberShip in the Federal Reserve System.
5
Letter to the Chairman of each Federal Reserve
Bank regarding the biennial Conference of General
Auditors to be held May 1-3, 1963, at the Board's
offices.
6
Letter to Chemical Bank New York Trust Company,
7
New York, New York, approving the establishment
Of a branch in West Hempstead, Nassau County.
Letter to Washington State Bank, Washington, Iowa,
approving the establishment of a branch at South
Avenue B and West Washington Street.
8
Letter to the Federal Reserve Bank of San Francisco
l'egarding a question raised by Union Bank, Los
Angeles, California, as to whether certain services
l'ould constitute "bank services" within the definition
of that term in the Bank Service Corporation Act.
9
In discussion of Item No. 1, Governor Mills raised a question
vith respect to the desirability of including in the proposed letter a
condition that Banco Espanol del Desarrollo would not engage in the
business of receiving or paying out deposits or accepting drafts or
4M-3
1/14/63
-3-
bills of exchange.
Mr. Goodman commented to the effect that the basic
reason was found in the provisions of Regulation lc which defined
"banking" to mean the business of receiving or paying out deposits,
Or accepting drafts or bills of exchange.
Since the matter before the
Board involved a request for consent to a proposed investment by an
Edge Act financing corporation, it was thought consistent to include
the condition to which Governor Mills had referred.
It was not believed
that the condition would present a problem from the standpoint of the
operations of Banco Espanol del Desarrollo; if there should be a problem,
Mr. Goodman felt confident that the Board would hear from Morgan Guaranty.
With reference to Items 2 and
3, Governor Mills raised a question
//all regard to the nature of the prospective operations of Bank of America,
New York, New York, now that the Board had granted permission for the
conversion of its overseas branches to branches of the parent bank, Bank
°I' America National Trust and Savings Association, San Francisco, Calif°rnia.
In reply, Mr. Goodman indicated that Bank of America presumably
Igonld continue to function as an Edge Act banking corporation domiciled
in New York City and conducting an international banking business.
He
noted that the parent organization had recently received permission to
°rganize an Edge Act financing corporation; also that Bank of America
°Ignad stock of an Italian bank and a number of industrial development
banks.
The latter were not deposit banking institutions, but there was
nothing in the law to prevent investments of such type by Edge Act banking
corporations.
Mr. Goodman pointed out, in addition, that in connection
1/14/63
J.
with the proposed revision of Regulation K, consideration was being given
to the question of the desirability of retaining the separation of Edge
Act corporations into banking and financing corporations.
Application of Bank of Jamestown (Items 10 and 11).
Pursuant to
the decision reached at the meeting on January 10, 1963, there had been
distributed a proposed order and statement reflecting the Board's approval
Of the application of Bank of Jamestown, Jamestown, New York, to merge
Clymer State Bank, Clymer, New York.
The issuance of the order and statement, copies of which are
attached to these minutes as Items 10 and 11, was authorized.
Expenses of Issue and Redemption Division (Item No. 12).
There
had been circulated a draft of letter to the Comptroller of the Currency
asking for further information with regard to a request of the Comptroller
r°1* Payment of the estimated expenses of the Federal Reserve Issue and
Redemption Division for the period January through June 1963.
The letter
had been drafted because the estimated expenses included for the first
time an item for "management and administrative services," in the amount
of $16,495.
The documentation received from the Comptroller of the Currency
stated that the new account classification had been established to provide
the Comptroller with the means of recovering the cost of various services
rendered to the Issue and Redemption Division.
It was indicated that the
assessment was applied "against the cost of time and material in the general
54Pervi5i0n of this division as provided by the Comptroller and his
101
1/14/63
-5-
immediate staff and various other services furnished this division in
connection with the disbursement of funds, the internal audit control
of such funds and the various records maintained, the acquisition of
suPPlies and materials, and the management and direction of personnel."
A memorandum from the Division of Bank Operations dated January
7,
1963, which had been circulated with the draft of letter to the Comptroller,
Pointed out that no advance notice had been given of the new charge,
flitch would apparently add over $30,000, or about 12-1/2 per cent, to the
annual expenses of the Issue and Redemption Division.
It was noted, also,
that the vouchers from the Comptroller requesting advances to cover
estimated expenses of the Issue and Redemption Division for succeeding
semiannual periods had customarily been accompanied by a detailed list
Of expenses.
Further, it had been the usual practice of the Chief of the
Division to confer with the Division of Bank Operations before making
an unusual expenditure.
the
In commenting on the matter, Mr. Farrell referred to
functions of the Issue and Redemption Division, which he described as
E relatively self-contained unit, and reviewed the history of the procedure
l
under which it had been agreed a number of years ago that the personne
of the Issue and Redemption Division would be considered employees of
ed by
the Treasury but the expenses of the Division would be reimburs
the Federal Reserve. He noted that the Comptroller had announced his
and redemption
intent of seeking legislation which would transfer the issue
- 02
1
1/14/63
-6-
function to the Federal Reserve, but that such legislation had not yet
received Congressional consideration.
After a general discussion of the Comptroller's current request
for payment of the estimated expenses of the Issue and Redemption
Division, particularly in respect to "management and administrative
services," it was agreed that it would be desirable to seek further
information.
Accordingly, the proposed letter to the Comptroller was
aPProved unanimously.
A copy is attached as Item No. 12.
Cincinnati Branch premises.
Chairman Martin reported that on
Priday, January 11, he received a telephone call from Mr. Charles P. Taft
°f Cincinnati, Ohio, who expressed some concern about an article that had
appeared in the January 10 issue of the Cincinnati Enquirer.
In substance,
the article indicated that the Federal Reserve Bank was considering the
construction of a new building for its Cincinnati Branch and had in mind
a location within the area comprehended by the Cincinnati urban redevelopprogram.
The article suggested that this might present certain
Problems because the Federal Reserve probably would not want to conform
in all respects to the groundrules that had been established for projects
Undertaken within the redevelopment area.
The Chairman stated that upon receipt of the telephone call from
14.1% Taft he had asked Mr. Farrell to look into the matter.
He then called
UPon Mr. Farrell, who reported that he had had telephone conversations
President Fulton and with Vice President Kiel of the Cincinnati
1,03
1/14/63
-7-
Branch, and that an explanatory letter from Mr. Kiel had been received
by Chairman Martin this morning.
According to the telephone conversations
and the letter, Mr. Kiel had suggested exploration of the possibility
Of a new building for the Cincinnati Branch at the meeting of the head
office directors on October 11, 1962.
With the concurrence of Chairman
Hall and President Fulton, he had subsequently entered into a preliminary
discussion with the Cincinnati City Manager, such discussion having been
authorized by the Branch directors on November 8, 1962.
At the suggestion
°f the City Manager, he had also met with a representative of the firm
that had been chosen as sole developer of the core redevelopment area.
The discussions had not gone beyond the exploratory phase, and the newsPaper article was said to have contained several inaccuracies.
There followed a general discussion of the matter, including the
adequacy of the Cincinnati Branch premises, and it was understood that
Farrell would keep the Board informed of any further developments
The meeting then adjourned.
Secretary's Notes: On October 17, 1962,
the Board approved a proposed Agreement
of Federal Reserve Banks Covering Fire
and Other Risks. Duly executed counterpart originals of such Agreement having
been received from the Federal Reserve
Banks of Boston, Cleveland, Richmond,
Atlanta, Chicago, Kansas City, Dallas, and
San Francisco, the Secretary of the Board
today notified those Banks by telegram
that the Agreement would become effective
January 14, 1963.
1/14/63
-8Pursuant 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:
..Allnintment
. Charles R. Scullin as Guard, Division of Administrative Services,
.wath basic annual salary at the rate of $3,560, effective the date
Of entrance upon duty.
...11.19..yy increases
effective January 20, 1963
Name and title
Division
Basic annual salary
To
From
Legal
Gertrude E. Booth, Secretary
$ 5,205
$ 5,375
6,055
6,225
14,565
15,045
7,125
7,350
11,150
11,515
12,845
13,270
8,575
8,84o
3,952
3,350
4,295
4,160
3,455
4,400
4,400
Research and Statistics
ternice T. Mann, Secretary
Examinations
W. D. Dougal, Senior Federal Reserve
Examiner
Alexander J. Harris, Jr., Assistant
Review Examiner
Travis J. Johnson, Senior Federal Reserve
Examiner
John T. McClintock, Supervisory Review
Examiner
J°hn Albert Treimann, Assistant Federal
Reserve Examiner
Administrative Services
gnincy W. Barnes, Operator (Mimeograph)
?rank A. Dean, Sr., Messenger
Plorence A. Norman, Relief Cook
Lloyd F. White, Chauffeur
4,295
Secretary
L
Item No. 1
1/14/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 14, 1963
Morgan Guaranty International
Finance Corporation,
23 Wall Street,
New York 8, New York.
Gentlemen:
In accordance with the request and on the basis of the
information furnished in your letter of December 11, 1962, trans'flitted through the Federal Reserve Bank of New York, the Board of
Governors grants its consent for Morgan Guaranty International
Finance Corporation to purchase and hold 18,000 shares, par value
Pesetas 1,000 each, of the capital stock of Banco Espanol del
Desarrollo ("BED"), Madrid, Spain, at a cost of approximately
US$300,000, provided such stock is acquired within one year from
the date of this letter.
The Board's consent is granted upon condition that MGIFC
shall dispose of its holding of stock of BED as promptly as practicable in the event that BED should at any time (1) engage in
issuing, 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 States or
transact any business in the United States except such as is incidental to its international or foreign business; or (3) otherwise
conduct its operations in a manner which, in the judgment of the
Board of Governors, causes the continued holding of its stock by
MGIFC to be inappropriate under the provisions of Section 25(a) of
the Federal Reserve Act or regulations thereunder.
It has been noted that under Spanish law BED will have
the power to take deposits, but that the nature of its business is
stIch that it does not propose to take deposits from the public,
although it may from time to time hold funds which are incidental
to its investment business. Accordingly, the Board's consent is
P.ven subject to the additional condition that BED will not engage
Ill the business of receiving or paying out deposits or accepting
drafts or bills of exchange.
Very truly yours,
(signed) Elibabeth L. Carmichael,
Elizabeth L. Carmichael,
Assistant Secretary.
406
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 2
1/14/63
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 14, 1963
Bank of America,
41 Broad Street,
New York 15, New York.
Gentlemen:
In accordance with the request contained in
your letter of November 29, 1962, transmitted through
the Federal Reserve Bank of New York, and on the basis
of the information furnished, the Board of Governors
grants consent for Bank of America to purchase and hold
300 additional ordinary shares, par value Baht 1,000 each,
Of the capital stock of Industrial Finance Corporation
of Thailand (uIFCT")„ Bangkok, Thailand, at a cost of
approximately US$14,5281 provided such stock is acquired
within one year from the date of this letter.
The Board's consent is granted subject to the
, same conditions prescribed in the Board's letter of
April 15, 1960 granting consent to the purchase of 300
ordinary shares of IFCT.
Very truly yours,
(Signed) Elizabeth L. Carmichael,
Fnizabeth L. Carmichael,
Assistant Secretary.
'107
Item No.
BOARD OF GOVERNORS
3
1/14/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
January 14, 1963
Bank of America,
41 Broad Street,
New York 15, New York.
Gentlemen:
In accordance with the request contained in
Your letter of December 7, 1962, transmitted through the
Federal Reserve Bank of New York, and on the basis of the
information furnished, the Board of Governors grants consent for Bank of America to purchase and hold 14,385 additional ordinary shares, par value Rupees 10 each, of
Pakistan Industrial Credit and Investment Corporation
("PICICfl), Karachi, Pakistan, at a cost of approximately
$30,208.50, provided such stock is acquired within one
Year from the date of this letter.
The Board's consent is granted subject to the
same conditions prescribed in the Board's letter of
April 20, 1961 granting consent to the purchase of additional shares of PICIC.
Very truly yours,
(Signed) Elizabeth L. Carmichael,
Elizabeth L. Carmichael,
Assistant Secretary.
_08
Item No. 4
BOARD OF GOVERNORS
04/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 14, 1963
°rganization Committee,
American Bank of Sarasota,
Sarasota,
Florida.
Gentlemen:
The Board of Governors of the Federal Reserve System
has
,
been informed that the American Bank of Sarasota is to be
Icated at 3800 South Tamiami Trail instead of 6700 South Tamiami
rail as originally indicated. The Board has no objection to the
'
Proposed change in location of the bank.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
109
BOARD OF GOVERNORS
340tttr*4
44' 1,4004
:
4o
a
*
't1
t
1/14/63
FEDERAL RESERVE SYSTEM
t,
4
Item Uo.
OF THE
WASHINGTON 25. D. C.
*
4
4
4
ADDRESS OrrICIAL CORRE•PONDENCE
TO THE BOARD
RA
t400*
January 14, 1963
The Honorable Erie Cooke, Sr., Chairman,
Federal Deposit Insurance Corporation,
Washington 251 D. C.
Dear Mr. Cooke:
Reference is made to your letter of December 26, 1962,
2oncerning the application of The First State Bank of Tonganoxie,
l onganoxie, Kansas, for continuance of deposit insurance after
Withdrawal from membership in the Federal Reserve System.
No corrective programs that the Board of Governors
believes should be incorporated as conditions to the continuance
of deposit insurance have been urged upon or agreed to by the
bank.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
10
BOARD OF GOVERNORS
Item No. 6
OF THE
4/63
FEDERAL RESERVE SYSTEM
WASHINGTON 25. O. C.
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
January 14, 1963.
Dear Sir:
Please be advised that the regular biennial Conference
Of General Auditors will be held in the Board's offices in
Washington on May 1, 2, and 3, 1963.
The Standing Committee of General Auditors, in consultation with the Board's Division of Examinations, ascertained
that these dates would be convenient and desirable, and the
holding of the Conference in Washington at such time has been
Cleared with the Chairman of the Chairmen's Conference.
Very truly y urs,
Merritt S
Secretary.
TO THE CHAIRMAN OF EACH FEDERAL RESERVE BANK
COPIES TO THE PRESIDENT OF EACH FEDERAL RESERVE BANK
AND TO EACH GENERAL AUDITOR.
Item No.
BOARD OF GOVERNORS
1/14/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 14, 1963
Board of Directors,
Chemical Bank New York Trust Company,
New York, New York.
'Gentlemen:
Re2erve
The Board of Governors of the Federal
the
System approves the establishment of a branch on
ed Area of West
north side of Fulton Avenue, Unincorporat
, New York,
Hempstead, Town of Hempstead, Nassau County
ed the
provid
by Chemical Bank New York Trust Company,
date of
the
from
branch is established within one year
this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
also
(The letter to the Reserve Bank stated that the Board
d
allowe
had approved a six-month extension of the period
be
should
to establish the branch; and that if an extension
of
letter
s
Board'
requested, the procedure prescribed in the
ed.)
November 9, 1962 (S-1846), should be follow
'
0
,1
'4,
A
Vir
Item No. 8
1/14/63
BOARD OF GOVERNORS
..,....,
t ..i
.. cl,Of co,
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
.,
...,,..4vYr)
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
January 14, 1963
Board of Directors,
Washington State Bank,
Washington, ION'S..
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of an in—town branch
(Parking Lot Office) by. Washington State Bank at the
southwest corner of the intersection of South Avenue B
and West Washington Street, 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.)
Item No. 9
BOARD OF GOVERNORS
1.A4/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS orriciAL CORRESPONDENCE
TO THE BOARD
January 14, 1963
11,r° E. H. Galvin, Vice President,
4Q.ederal Reserve Bank of San Francisco,
n Francisco 20, California.
Dear Mr. Galvin:
Your letter of November 14, 1962, presented questions of
the
Union Bank, Los Angeles, California, concerning the Bank Service
C
orPoration Act. The bank has asked whether certain services would
'
'
s°11stitute "bank services" within the definition of that term in
,ection 1(b) of the Bank Service Corporation Act so that it would be
rcessary to supply the assurances regarding regulation and examina610n required by section 5 of the Act.
From the bank's letter to you of November 7, a copy of which
among the enclosures with your letter, it appears that Union Bank
lel°11temp1ate5 obtaining from an outside service bureau services which
uld consist of "tabulating services ... for printing lists of shareTransfer
o°1ders, cash dividends, stock dividends, etc., for our Stock
ePartment. The actual tabulating cards will be stored in our own
arters but would be transported from time to time to the service
41'eau in order to have the servicing program processed."
vra,e
j
V
Whether work of this kind--which apparently involves
Ponsihi1ities undertaken by the bank in its trust or agency capaciles for corporate customers of the bank--would constitute "bank serv;
iees" is a question that should not be answer3d without detailed
,nformation from the bank as to how the work will be carried out.
r view of the fact that section 5 of the Act prohibits a bank from
412ing bank services to be performed unless appropriate assurances
:
'
asl:e furnished, the bank and the service bureau, of course, could avoid
4Y question of possible violation of the law by furnishing such assurahces.
plans
The other matter of interest to Union Bank concerns its
to --.
to
respect
With
banks.
correspondent
th ulLer certain services to its
have
"we
that
states
November
7
of
you
18 matter the bank's letter to
:.mind offering the use of our computer and other tabulating equipment,
"lch will be housed at our service building at Olympic and Hope to our
i
1.4
Mrs E. H. Galvin
-2-
correspondent banks. This service might go as far as to involve the
l eceipt of banking-by-mail deposits from a lock box, the processing of
'
!Ilch checks, and crediting the proceeds to accounts maintained for
6hese correspondent banks at our service building."
On the basis of the foregoing, it would appear that the
. ervices just described would come within the definition of "bank serv'cos" in section 1(b) of the Bank Service Corporation Act. Accordingly,
lap8surances complying with the requirements of section 5 would have to
te supplied by both the correspondent banks for whom such services are
be performed and by Union Bank. Such assurances should be furnished
required by the Comptroller of the Currency and the FedEral Deposit
Insurance Corporation as to correspondent national banks and correspondent
nonmember insured banks, as the case may be. For such correspondents as
PlaY be State member banks, the Board's Statement of October 23, 1962,
concerning the Bank Service Corporation Act states that, until further
more definite procedures are prescribed, it will be satisfactory if
!uch assurances are supplied by a letter from the State member bank to
'he Federal Reserve Bank.
Finally, the receipt of banking-by-mail deposits for correspondent
at Union Bank's new service building might be such as to cause the
8ervice building to be a branch of the correspondent banks. As you will
1. 11, this question was raised in the Board's letter of October 30,
1&
1,7°2, to President Swan involving the use by Union Bank of the service
uuilding for its own bank-by-mail deposits. Of course, if the receipt
(b3r banking-by-mail deposits at the service building for correspondent
anks should constitute the service building a branch of the correspond.4t3, approval of the Comptroller of the Currency, the Federal Deposit
:Tsurance Corporation, or the Board would 13,3 necessary depending on
nether the particular correspondent bank was a national, State nonmember
Insured, or State member bank, respectively. Until the actual facts conthe receipt of banking-by-mail deposits can be clearly ascertained,
'would seem inadvisable to take a definite position on the question
Ilhether the operation of a branch or branchea would be involved, as indicated in the letter of October 30, 1962, referred to above.
b An
7
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 10
1/14/63
UNITED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
•11.
--------------
In the Matter of the Application of
BAITIC OF JAMESTOWN
approval of merger with
vq14er State Bank
•••
ORDER APPROVING MERGER OF BANKS
There has come before the Board of Governors, pursuant to
the Bank Merger Act of 1960 (12 U.S.C. 1828(0), an application by
8ank of Jamestown, Jamestown, New York, a member bank of the Federal
Reserve System, for the Boardts prior approval of the merger of that
bank and the Clymer State Bank, Clymer, New York, under the charter
441 title of the former. As an incident to the merger, the sole
°trice of Clymer State Bank would be operated as a branch of the
Rarlit of Jamestown.
Notice of the proposed merger, in form approved
t'51. the Board, has been published pursuant to said Act.
Upon consideration of all relevant material in the light
t the factors set forth in said Act, including reports furnished
the Comptroller of the Currency, the Federal Deposit Insurance
15
e()I'Poration, and the Department of Justice on the competitive factors
illIrca.ved in the proposed merger,
IT IS HEREBY ORDERED, for the reasons set forth in the
13°41113 Statement of this date, that said application be and hereby
is
PProved, provided that said merger shall not be consummated
within seven calendar days after the date of this Order or
(1) later than three months after said date.
Dated at Washington, D. C., this 14th day of January, 1963.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, Robertson, and Shepardson.
Absent and not voting: Governors King and Mitchell.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 11
1/14/63
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY BANK OF JAMESTOWN
FOR APPROVAL OF MERGER WITH
CLYMER STATE BANK
STATEMENT
Bank of Jamestown, Jamestown, New Ycrk("JamestoNn Bank"),
Iltth deposits of $44.8 million as of June 29, 1962, has applied,
1311rsuant to the Bank Merger Act of 1960 (12 U.S.C. 1828(c)), for the
clI s prior approval of the merger of that bank and Clymer State
'
13°41
13411k,
Clymer, New York ("Clymer Bank"), with deposits of $2.4 million
4S Of the same date.
The banks would merge under the charter and
title of Jamestown Bank, which is a member State bank of the Federal
R"erve System; and, as an incident to the merger, the sole office
°f 01
Ymer Bank would become a branch of the resulting bank, increas111g the number of its offices from
5 to 6.
Under the Act, the Board is required to consider, as to each
°f the banks involved, (1) its financial history and condition, (2) the
0
44111a Y of its capital structure, (3) its future earnings prospects,
(4)
the general character of its management, (5) whether its corporate
Aol„ter
s are consistent with the purposes of 12 U.S.C., Ch. 16 (the
Pede
ra1 Deposit Insurance Act), (6) the convenience and needs of the
1_18
-2-
e°111111unity to be served, and (7) the effect of the transaction on
c°1711Detiti0n (including any tendency toward monopoly). The Board may
riq aPprove the transaction unless, after considering all these factors,
it finds the transaction to be in the public interest.
Banking factors. - Jamestown Bank has a satisfactory financial
history.
The bank also has a satisfactory financial condition, an adequate
eatdtal structure, and its earnings prospects are favorable. This would
be equally true of the resulting bank which would be under the competent
niarlagement of Jamestown Bank.
Clymer Bank has had a reasonably satisfactory financial history
." capital structure, and its earnings have been above average for banks
of comparable size. Recently, however, the bank's financial condition
has
deteriorated, partially because of the strain on its resources that
has
resulted from attempts to meet requests for loans.
Consummation of the proposal would provide strengthened
iliallagement to what has been the operation of Clymer Bank and also would
the serious management succession problem that has followed the
barikt s
quite recent loss of its two active officers through resignation
44d illness.
No inconsistency with the purposes of 12 U.S.C., Ch. 16,
18 indicated.
Convenience and needs of the communities. - Jamestown (1960 city
z-"-Lation )42,000 and trade area population 150,000) is situated in Chautauqua
Co
-41t.Y in southwestern New York about 75 miles from Buffalo. The economy of
the
area, dependent principally on diversified manufacturing and
t9
...3
agricuIture, is stable.
Four offices of Jamestown Bank are in Jamestown
and the bank's remaining office is in the village of Sherman, about
22 mi,_
4.es west of Jamestown and 12 miles north of Clymer. The servi,-,9
area of Jamestown Bank is limited mainly to the communities of
4111estama and Sherman.
The unincorporated village of Caymer (population :04.00) is
tilatad in the extreme southwestern corner of New York about 25 miles
8"west of Jamestown.
Clymer Bank is tho only banking office in the
11-1-1c-ge, and the area served by the bank has a population of about 20000.
This area,
as well as that surrounding Sherman, is chiefly agricultural
allci has experienced little population growth over the past decade.
Consummation of the proposed merger would affect principally
the
convenience and needs of the Clymer area. The resulting bank
to make available to the area through its Clymer branch a
1)1.0nA
"ar range of services, such as FHA and VA loans, and trust and
other
Specialized services. Moreover, the resulting bank would be
able 4
L.0 make more and larger loans for which there appears to be a
depland in the
Clymer area.
Competition. — Little, if any, competition exists between
43111er Bank and the four offices of Jamestown Bank in Jamestown
becau,
of the intervening distance
of 25 miles. There is moderate
%p _
pv'tition for business from the countrysLde between Clymer Bank
and 4.,
e branch of Jamestown Bank in Sherman, 12 miles north of Clymer.
lath
c4gh this competition would be eliminated if the proposal were
effected, services of banks other than Jamestown Bank would remain
Oa
1.80/1ably
accessible to persons in the communities of Clymer and
She
There are two banks in Corry, Pennsylvania, about 8 miles
8°11th of Clymer, and one of the two other banks with main offices in
J
ellies-town has a branch in Mayville, 9 miles northeast of Sherman.
consummation of the proposal would have no significant impact on bankcomPetition in Jamestown.
Summary and conclusion. - Effectuation of the proposal would
ace Clymer Bank with a branch of Jamestown Bank and eliminate a
kod _
erate amount of competition between the former and the latter's
'14*a.aleh at Sherman.
Other sources of banking services, however, would
1*14in reasonably accessible to persons in these two communities. This,
tope,,
'
41er with the management strength and succession, and increased
services and resource.: Oat the transaction would be expected
t°b1.1-ng to the Clymer community, outweigh the adverse considerations
r lati-ng to
the competitive factor.
Accordingly, the Board finds this merger to be in the public
Lit
"erest.
tiarlilary 14,
1963
Item No. 12
BOARD OF GOVERNORS
1/14/63
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS
OFFICIAL
CORRESPONDENCE
TO THE BOARD
January 14, 1963
(1.1r. James J. Saxon,
/144)mptroller of the Currency,
D
epartment of the Treasury,
Washington 25, D.
C.
tear Mr. Saxon:
This refers to the voucher from your office requesting
for the estimated expenses of the Federal Reserve Issue and
"edemPtion Division for the six-month period January - June 1963.
Pa
The list of estimated expenses accompanying the voucher
8 for the first time an item for "Management and Administrative
=vices." This additional expense would seemingly add over $301000
ZalallY, or about 12-1/2 per cent, to the expenses of the Federal
:.serve Issue and Redemption Division for which reimbursement is
"quested of the Board of Governors. The Board would, therefore,
reciate having an explanation of the computation of the charge,
.
ft clwing the particular items of expense reflected and the method
-4. proration.
show
r
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
@FedFRASER