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Minutes for
To:
January 16, 1961
Members of the Board
Priam: 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
!linutes 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.
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. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Minutes of the Board of Governors of the Federal Reserve System on
NI°/1day, January 16, 1961.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Szymczak
Mills
Robertson
Shepardson
King
Sherman, Secretary
Kenyon, Assistant Secretary
Thomas, Adviser to the Board
Shay, Legislative Counsel
Fauver, Assistant to the Board
Hackley, General Counsel
Noyes, Director, Division of Research
and Statistics
Mr. Farrell, Director, Division of Bank
Operations
Mr. Solomon, Director, Division of
Examinations
Mr. Johnson, Director, Division of
Personnel Administration
Mr. Masters, Associate Director, Division
of Examinations
Mr. Hexter, Assistant General Counsel
Mr. Rudy, Special Assistant, Legal Division
Mr. Conkling, Assistant Director, Division
of Bank Operations
Mr. Landry, Assistant to the Secretary
Mr. Young, Assistant Counsel
Miss Hart, Assistant Counsel
Mr. Leavitt, Supervisory Review Examiner,
Division of Examinations
Mr. Poundstone, Review Examiner, Division
of Examinations
Mr. Franzoni, Technical Assistant, Division
of Bank Operations
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Items
circulated or distributed to the Board.
The following items,
14111ch had been circulated or distributed to the Board and copies of which
1/16/61
-2-
are attached to these minutes under the respective item numbers indicated,
vere
approved unanimously:
Item No.
1‘:etter to The Chase Manhattan Bank, New York,
Aelq YOrk,
approving the continued operation
Of a branch at 37 Wall Street until July 1, 1961.
1
Letters
to Chemical Bank New York Trust Company,
47York, New York, approving extensions of time
'o establish
branches at 67 Broad Street and in
Rego Park.
2 and 3
Letter to First National Bank of Owensville,
rollErville, Indiana, approving its application
r fiduciary powers.
Letter to The
Bank of Edwardsville, Edwardsville,
5
'La: approving an investment in bank premises.
tette
al)ri r to Sulphur Springs State Bank, Sulphur
ngs, Texas, approving an investment in bank
Premises.
6
Letter to
Chase International Investment Corpo; 11, New York, New York, granting consent
Moor A
rcturus Investment & Development, Ltd.,
treal,Canada, to purchase stock of Esperance
/n1
:
c-c;'ernational Pty., Limited, an Australian
torPoration, and for Chase International also
acquire shares of that corporation.
7
Letter to
Charles M. Boynton, Esq., South Bend,
Of iana, granting permission for the late filing
se a brief in connection with the hearing under
otction 4(0(6) of the Bank Holding Company Act
ell application by St. Joseph Agency, Inc.
Mr. Molony, Assistant to the Board, joined the meeting at this
and Mr. Leavitt withdrew.
145
1/16/61
-3for economically depressed areas (Item No. 9). At the meeting
°IljantlarY 13,
1961, consideration had been given to a proposed letter to
e41rma11 Robertson of the Senate Banking and Currency Committee reporting
oil SI 1 and
S. 6, bills to alleviate conditions in economically depressed
"11, and the staff was requested to prepare a revised draft.
Distribution
had nov been made, under date of January 13, 1961, of three alternative drafts,
clle a revised
staff draft, the second a draft phrased along lines suggested
G°vernor Balderston, and the third a draft phrased along lines suggested
bY
There had also been distributed copies of the Board's
Governor Robertson.
letter of February 26,
1959, commenting on similar bills introduced in the
Preceding Congress.
After discussion of the alternative drafts, it vas decided to transmit
tech
--airman Robertson a letter along the lines of the draft proposed by
Gove,
'uor Balderston, as amended by changes suggested by Governor Mills and
vith 41,
-4te portion stricken that commented on the method of financing the
Progr._
-R41 envisaged by the bills. In taking this action, it was understood
that
'reference would also be made in the letter to S. 9, a similar bill
laced. by Senator Dirksen, unless further staff study disclosed some
for bringing the matter back to the Board.
A copy of the letter sent pursuant to the Boardsa action is
attaLeb
'Led as Item No.
9.
-4Mr. Young then withdrew from the meeting and Mr. Hooff, Assistant
General Counsel, entered the room.
Weekly Federal Reserve Condition Statement (Item No. 10).
On
ktober 20, 1960, a letter had been sent to all Federal Reserve Banks
requesting comments on a proposal to publish the weekly Federal Reserve
Condi+4
--Lon Statement (H.4.1) on a consolidated (rather than a combined)
basis, and in millions of dollars.
Replies had now been received from
all Banks, ten of which favored both proposals.
The Atlanta and Dallas
Reiv.rve
Banks had raised a question as to the effect of the consolidation
On the ratio of gold certificate reserves to deposit and Federal Reserve
note l
iabilities combined. The former feared misinterpretation of the
reslating increase in the ratio; the latter based its objection, which
vent not
only to the gold reserve ratio but to the consolidation procedure
in general, on
the ground that a consolidated statement would be appropriate
°n1Y "...when
there is a common control through stock ownership...."
The
Atlanta Reserve Bank also referred to possible misinterpretation of the
131.°13°18al to publish the statement in millions of dollars as an attempt to
%nee
al minor changes in the Systemts operations, and the Dallas Reserve
13811k believed the advantages of publication in millions did not outweigh
eertain possible disadvantages.
The objections of the Atlanta and Dallas Reserve Banks were
rized in a distributed memorandum of the Division of Bank Operations
-5dated January
10, 1961, which also referred to other changes in the Federal
Reserve condition statement suggested by Mr. Thomas at the Board meeting on
October 20.
Other
FV/Id.
These related to the definition of U. S. Treasury, foreign, and
A
ueposits,
and to the reporting of gold held by the Exchange Stabilization
In view of a program now under consideration which would involve changes
In 0ther compilations of data published by the Board, and might take some
tirae to work out, it was the opinion of the staff that the changes in the
veeklY Federal Reserve statement covered in the memorandum from the Division
°11 Bank Operations should not be held up.
Attached to the memorandum was a proposed letter to all Reserve
8ank Presidents informing them that the plan to publish a consolidated
veeklY statement, and in millions of dollars, would be put into effect
PebrUsry 2,
1961.
In commenting on the matter, Mr. Conkling pointed out that a
1°c11
fication of the original staff proposal was now recommended by the
bivision of Bank Operations.
Certificate
Instead of publishing the ratio of gold
reserves to deposit and Federal Reserve note liabilities in
the .tore(2kiy
statement on a consolidated basis, which would have had the
"feet of
increasing the ratio by about
(although
sometimes as much as
.3 per cent in most weeks
.6 or .7 per cent in the months of January
Fel'ruary), these ratios would be published only on a combined basis.
.
et the
- second page of the statement, which would show other figures on a
1/16/61
-6-
consolidated basis, a parenthetical explanation regarding the reserve
ratio would be included, as follows: "(computed from figures as shown
Oil the following pages--not consolidated)".
Messrs. Thomas and Hackley pointed out that the gold reserve
reqUiretnent
is applicable to the Federal Reserve Banks individually, and
that there is no requirement applicable to the System as a whole.
There-
tore) to show the gold reserve ratio in the weekly statement on a consolidated
Elsie
'would appear to serve no useful purpose, and in fact might be confusing
and mi
sleading. Accordingly, if any figure at all was to be shown in the
vae
klY statement, a figure computed on a combined basis would seem preferable.
As to the other point that had been raised by the Dallas Bank,
Measrs
u
Liackley and Farrell made reference to the provision of section 11
Of the
Federal Reserve Act which requires a consolidated statement for all
deral Reserve Banks and a detailed statement showing the assets and
110,4
ities of the Federal Reserve Banks, singly and combined. Although
techni
cally the Reserve Banks are not under the same corporate control,
the.,
"
no sound reason why the weekly statement should not be published
on a
c°11so1idated basis, particularly when publication on a combined basis
reBlIltea
-- in overstatement of the assets and liabilities of the System as
a vhole.
Mr. Conkling then commented further on the steps that would be
implement a decision to proceed along the lines recommended by
1/16/61
-7-
the Division of Bank Operations, including the insertion of an explanation
Of the
changes between the first and second pages of the first weekly
statement issu.-d on the new basis.
At the conclusion of the discussion, the recommendation of the
DivisiOn of Bank Operations was approved unanimously, with the understanding
that the changes would become effective with the weekly statement published
On February 2, 1961.
This action contemplated that the letter that had
been submitted with the memorandum from the Division of Bank Operations
14)4141 be sent to the Federal Reserve Banks.
A copy of that letter is
attached as Item No. 10.
Messrs. Molony, Noyes, Farrell, Conkling, and Franzoni then withfrom the meeting.
Interpretation of section 220.3(g) of Regulation T (Item No. 11).
The
had been distributed with a memorandum from the Legal Division dated
Jahua
rY 11, 1961, copies of a letter from the Federal Reserve Bank of New
dated October 18, 1960, submitting to the Board a question that had
41Lrlaeh from conflicting interpretations of section 220.3(g) of Regulation
T
-redit by Brokers, Dealers, and Members of National Securities Exchanges,
that,
"ad been given by that Bank and the Federal Reserve Bank of San
8Co
There was also attached to the memorandum a draft of reply
to
Of
1/441eNew York Reserve Bank agreeing with its view that the last sentence
se
"ion 220.3(g) prohibits the concurrent carrying of long and short
'()
1/16/61
-8-
P°81tIons in the same registered security for the purposes of Regulation
Ty
regardless of which position is taken first.
The last sentence of section 220.3(g) provides that:
"For the purposes of this part (Regulation T), if
a security has maximum loan value in the account
under subparagraph (c)(1) of this section, a sale
of the same security (even though not the same
certificate) in the account shall be deemed to be
a long sale and shell not be deemed to be or treated
as a short sale."
This
sentence was adopted as part of the amendments of June 15, 1959, to
Close
s loophole by means of which the purpose of the retention requirement,
a(1°1Dted as part of the same amendments to improve the quality of underniargined accounts, would have been frustrated.
As noted in the Legal
ipivisi°n ts memorandum, some flexibility in undermargined accounts was
Perltitted by allowing substitutions without deposit of additional margin
here the substitutions are carried out by purchases and sales on the
4111e day, but the Board had refused to lengthen the period under which a
811htitution might be made without deposit of additional margin.
It would
be„
8611,1e to make such substitutions over a longer period without deposit
"
Or ad
ditional margin if customers were permitted to maintain simultaneous
arId short positions in the same account.
Shortly after the amendment to section 220.3(g) of Regulation T
beetize
lav, the New York Reserve Bank informed the New York Stock Exchange,
141.1
teh
so advised its members, that the amendment applied not only to a
1/16/61
-9-
ituation in which a long position was already in a customerts account
lrith a broker and the former set up a matching short sale, but also if
'
the customer first made a short sale and subsequently purchased and
carried the same stock long in his margin account.
On September 12, 1960, the Federal Reserve Bank of San Francisco
gave an individual an interpretation of section 220.3(g) of the Regulation
hich likewise attempted to close the seeming loophole under which a
customer
could trade in and out of a security indefinitely, after
dePosi
ting only a single margin, if he first took a short and then a
Position.
that
In its interpretation, however, the Reserve Bank stated
a second full margin would be required at the time the long purchase
l'Et8 made.
Having been apprised of the differing interpretation of this
ectio„
- of the Regulation that had been given by the San Francisco
,
Rese
ve Bank, the New York Stock Exchange requested clarification in
'
letter to the Federal Reserve Bank of New York dated October 3, 1960.
In the opinion of the Legal Division, the interpretation given
by
the San
Francisco Reserve Bank could not be justified because of the
1)1.°111sion of section 220.3(d)(3) which states that no margin is required
t°r seclarities sold short in an account where the same securities
a-cunties exchangeable or convertible...into such securities sold
11'31't") are held long in the account.
The Legal Division also believed
-10that the interpretation originally given to the New York Stock Exchange by
the
Federal Reserve Bank of New York was correct. Accordingly, it was
l'econimended that the Board adopt the interpretation of that Bank.
After comments by Miss Hart, the proposed letter to the Federal
Reserve Bank of New
York expressing agreement with its interpretation was
aprv,rovea
be
unanimously, with the understanding that the interpretation would
Published in the Federal Register and the Federal Reserve Bulletin.
It
1'43'8 also understood that copies of the letter to the New York Bank would be
sent
to the Federal Reserve Bank of San Francisco, with the request that the
idual who had made inquiry be informed accordingly, and that copies of
the ,
-Letters to the
New York and San Francisco Banks would be sent to Senator
Of California, with whom the individual making the inquiry had been in
Q°11tset.
A copy of the letter to the New York Reserve Bank is attached as
Itelt r
Messrs. Shay and Poundstone then withdrew from the meeting.
LIY
of common trust fund regulations.
At its meeting on November
1960) the Board authorized publication in the Federal Register of a
111-1311c/sed amendment to section 17(a) of Regulation F, Trust Powers of
Nettion
-e-1. Banks.
The proposed amendment, as to which the date for sub-
kissi
011 of comments was subsequently extended, would provide that an
Ititer
-vivos trust revocable by the settlor and calling for payment to the
sett'
°l.'s estate at his death would be ineligible for common trust
-11Participation.
ljas
The decision to publish the proposed amendment for comment
reached with the understanding that the Board would make a study of all
feat
lirea of its common trust fund regulations.
In this connection, it was
ag'reed that the
Board would schedule a panel presentation through which
ic'111.d be
sought the views of individuals and institutions concerned with
the a
ppr9priate use of common trust funds. There had now been distributed,
ulicier date of January 11, 1961, a memorandum from Mt. Masters concerning
the P°aaible scope of the proposed study and the selection of participants
in
proposed panel presentations.
In his memorandum, Mr. Masters noted that the first panel suggested
therej
'would comprise one representative of the trust business to be chosen
by the Tru _.
st Division of the American Bankers Association, a similar repre- to
sentAt1Vt
be chosen by the Board, and one representative of the public
lalterest,
also to be selected by the Board.
Each participant would be
regtlested to prepare and present a paper on a phase of the subject to be
'11re
4c1 upon after consultation with the Board's staff, with a view toward
15r"etting a balanced evaluation of the place of common trust funds in
trtiat b
usiness, their future prospects, and current and prospective
atti-,
strative problems relevant to existing regulatory provisions.
The
u Proposed panel would include one or more representatives each of
the
ecurities and Exchange Commission, the National Association of
'
Seclur
lties Dealers, the Internal Revenue Service, the Comptroller of the
-12C1317rencY, the Federal Deposit Insurance Corporation, and the National
480ciation of Supervisors of State Banks.
After commenting on the matter, Mr. Masters indicated that if the
Boar
d Agreed with the approach to this project as outlined, the staff
It°11.14 proceed with detailed arrangements.
In the discussion that followed, questions were raised and
c°1401ented upon concerning a number of the features of the proposed
Ilgements. As the result of this discussion, it was suggested that
"
tt
Inight be appropriate to think in terms of scheduling the panel presentati°118 for about mid-March, that the American Bankers Association might
be asked to nominate two of the three members of the first panel, with the
11r1(te1"st8nding that divergent points of view would be represented, and that
th
Isganizations to be included in the second panel should be invited to
hoe
representatives present at the first panel as observers. As to
reamit was suggested that most of the participants, by virtue
or
-- Positions, probably would not want to receive honoraria, and
that th
p,
-question could be brought back to the Board if any cases developed
it seemed desirable to make a payment to the participant.
At the conclusion of the discussion, it was understood that plans
tic‘r 41'
41e Panel presentations would proceed on the basis outlined in Mr.
Ilast r t
e-a - memorandum, as amended to take into account the suggestions made
this meeting.
1/16/61
All of the members of the staff except Messrs. Sherman, Kenyon,
and. Johnson then withdrew from the meeting.
APpointments at San Francisco Bank (Item No. 12).
the
Pursuant to
Ne
Lula rstanding at the meeting on December 19, 1960, the Chairman of
the b_,
xtoteral Reserve Bank of San Francisco had been advised by Chairman
Martin that the Board of Governors would be agreeable to the appointment
tRliot J. Swan as President of the Bank, and of H. E. Hemmings as First
Vice President, each for a five-year term beginning March 1, 1961, if
Buell
aPPointments were made by the Board of Directors. In a letter dated
Jenua
rY 5, 1961, Chairman Whitman stated that those appointments had been
tnade and the salaries of Messrs. Sven and Hemmings fixed at the annual
1.1."13Of 830,o00 and $21,500, respectively, for the period March 1 through
-IJer 31, 1961, subject to the approval of the Board of Governors.
There
nad been circulated to the Board a proposed letter to the San
SCo Bank expressing approval of the appointments and the salary
rates.
After discussion the letter, a copy of which is attached as Item
vas approved unanimously.
bpointments of officers in charge of research.
'rston
Governor
commented that through oversight the intention of the Federal
Ike erv_
Bank of Atlanta to appoint Charles Taylor as Vice President in
ellEirge
of
the research function, as reported by the Bank in its correspondence
1/16/61
l'e6arding officer salaries for 1961, had not come to the attention of the
Diviaion of Research and Statistics prior to Board action on Mr. Taylorts
Although in this case the Director of the Division, when the
salarY.
11/4)°i 1tment was subsequently brought to his attention, expressed no
clbjection, Governor Balderston noted that similar appointments would
-ve to be made
in the near future at the Federal Reserve Banks of
13(3st0n and New York, which raised the question whether any steps should
1De taken with a view to assuring that when appointments were made by
thc)" Benks they would be of such a nature that no questions would arise.
During the discussion that ensued, it was pointed out that no
le€,41
—4- requirement existed for Board approval of the appointment of the
Offic
er in charge of the research function at a Reserve Bank, as opposed
to ar,
4r°val of the salary of the officer, although the Board in the past
haci
ndicated to the Banks that, by virtue of its interest in the research
13r°1.8-111
Of
the System, the Board would like to be advised of contemplated
tIlintments at the respective Banks.
With respect to the situation at the Federal Reserve Bank of Boston,
it 11"
noted that President Erickson and the incoming President, Mr. Ellis,
14)111c1 be in Washington next week to attend a meeting of the Federal Open
MArk
et Committee, and it was suggested that Governor Balderston could
l'eviev the matter with them informally at that time.
It was also
iliclicated that Chairman Martin might discuss the situation at the New
1
1/16/61
-15-
York Bank
with President Hayes informally if an appropriate occasion
Should arise.
Mr. Johnson then withdrew from the meeting.
E:E2sedure for handling matters requiring Board approval.
Governor
Bald_
rston referred to the time required for processing and obtaining Board
action. on certain matters in the bank supervisory area of a relatively
tine
nature, in particular requests for additional time for State
nieltiber banks to establish branches and requests for permission to make
otalents in bank premises under section 24A of the Federal Reserve
e Presented for consideration the question whether the Board would
delegate authority to a member of the Board to pass upon those two
Of items, with the understanding that such member would bring any
11111181,-,
s4m-L cases to the Board's attention.
However, following a discussion during which it was noted, among
Other 4.1.
'ings, that State member banks did not appear to have been handi4p,e,
by the timing of actions relating to applications in the two
eet
ec3rie5 to which reference had been made, it was decided to make no
chat
ge in existing procedures at this time.
There was also some discussion as to whether it would be feasible
to
- any reduct4on in the number of staff members through whom various
baxik
suPervisory items requiring Board approval customarily are cleared.
Zt1 t S
h - connection, question was raised as to whether there might not be
r;C-4
1/16/61
a te
ndency to route through the Legal Division more items than necessary,
Partinta
arly items as to which it would appear that no legal question was
invea*ved.
It was brought out, however, that in any organization clearance
m
atters through the legal staff may be regarded as a valuable "insurance
device"
and that in certain cases it might develop that there were legal
Of
11113
t13 that would not be noticed unless the cases were submitted for
legal
review.
The meeting then adjourned.
Secretaryts Note: Governor Shepardson
today approved on behalf of the Board
the following items:
No. ,Letter
to the Federal Reserve Bank of San Francisco (attached Item
approving the appointment of Alan S. Cohen as assistant examiner.
No. Ittter to the Federal Reserve Bank of San Francisco (attached Item
approving the designation of 0. L. Burgess, H. G. Ramirez, F. P.
W Sines as special assistant
J. W.
L. Scott, and J
L. Peterson J.
J L
Secretary
BOARD OF GOVERNORS
ittntrtir
Vi
4.4
e
CQ O@OC,
OF THE
FEDERAL RESERVE SYSTEM
‘
:
1
*
q4
4,
WASHINGTON 25, D. C.
Item No. 1
1/16/61
AODREBEI OrFICIAL CORNESPONOENCE
Ti THE 0.0.4110
tt 431.4
'
January 16, 1961
Board of
The ChaseDirectors,
New York, Manhattan Bank,
New York.
Ge
ntlemen:
Pursuant to your request submitted through the
al Reserve Bank
of New York, the Board of Governors of
.!!e
,
1t Federal Reserve System approves the continued operation
The Chase Manhattan Bank, New York, New York, of its
'
anch at 37 Wall Street, New York, New York, until July 1,
,061
-.
Pede
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 2
1/16/61
AODRESS OrrICIAL CORRESPONDENCE
TO THE SOARD
January 16, 1961
Board of Directors,
. Chemical Bank New
York
Trust Company,
New York, New
York.
G
entlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
°F the Federal Reserve System extends to July 20, 1961,
re time
within which Chemical Bank New York Trust Company,
"
14 York, New York, may establish a branch at 67 Broad
otreet, New York, New York, as approved by the Board in
its letter of July 20, 1960. It is understood that
(perations
at the branch located at 30 Broad Street,
'York, New York, will be discontinued simultaneously
Vith the opening of the branch at 67 Broad Street, New York,
New York.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No, 3
1/16/61
ADDRESS OFFICiAL CORRESPONDENCE
TO THE BOARD
January 16, 1961
Board of Directors,
Chemical Bank New
York
Trust Company,
New York, New
York.
G
entlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
?f the Federal Reserve System extends to July 15, 1961,
the time
within which Chemical Bank New York Trust Company,
New York, New
York, may (1) establish a branch at the
northwest corner of Queens Boulevard and 64th Road, Rego
k, New York, as approved by the Board in its letter of
24, 1959, and (2) discontinue operations at the
zporary quarters at 97-63 Queens Boulevard, Rego Park,
W
York g,ai
lr
5
;
:
ed by the Board in its letter of
Septembe
f
r
Very truly yours,
(signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
,4,ttttto4
*
4
OW 4401.:4,
OF THE
:Li
VI/ 9e0:4
*
41;
*
4 4,
4
Item No. 4
FEDERAL RESERVE SYSTEM
1/16/61
WASHINGTON 25, D. C.
ADORERS
OFFICIAL
CORRESPONOENCE
TO THE BOARD
January 16, 1961
Board of Directors,
First National Bank
of Owensville,
Owensville, Indiana.
G
entlemen:
The Board of Governors of the Federal Reserve
System has given consideration to your application for
,cluciary powers and grants First National Bank of
weneville authority to act, when not in contravention
5 State or local law, as executor and administrator.
✓ile exercise of such rights shall be subject to the
provisions of Section 11(k) of the Federal Reserve Act
!
rid Regulation F of the Board of Governors of the
rederal Reserve System.
A formal certificate indicating the fiduciary
Powers that your bank is now authorized to exercise will
oe forwarded in due course.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
)
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 5
1/16/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 16, 1961
Board of Directors,
The Bank of Edwardsville,
Edwardsville, Illinois.
Gentlemen:
Pursuant to your request submitted through
the Federal Reserve
Bank of St. Louis, the Board of
Governors of the Federal Reserve System approves,
under the provisions of Section 24A of the Federa
l
Reserve Act, an investment of $30,500 in bank premises
by The Bank of Edwardsville, Edwardsville,
Illinois.
The approved investment
includes $20,500 for the purchase of a tract of land to be employed,
at present,
as a parking
lot for customers of the bank and
410,000 for
expenses in conversion of the property
to a
parking lot.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 6
1/16/61
WASHINGTON 25. ID. C.
ADDRESS. orriciAL CORRESPONDENCE
TO THE BOARD
January 16 1961
Board of Directors,
Sulphur Springs State Bank,
Sulphur Springs, Texas.
Gentlemen:
Pursuant to your request submitted through the
Fedeal Reserve Bank of D13as, the Board of Governors of
the Federal
Reserve System approves, under the provisions
5 Section 24 of the Federal Reserve Act, an investment
./_1 bank premises by Sulphur Springs State Bank, Sulphur
'
141-ngs, Texas, of $185,000 for the purpose of constructing
a new bank
building.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
co%
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 7
1/16/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
teeti
444tur***
January 162 1961.
It's V. E. Rockhill, President,
Chase I
18 Pinenternational Investment Corporation,
New YorkStreet,
5, New York.
bear Mr.
Rockhill:
In accordance with the request contained in your letter
°f
ot °et
m °bsr.31, 1960, transmitted through the Federal Reserve Bank
130 ::sw York, and on the basis of the information furnished, the
De;'d of Governors grants its consent for Arcturus Investment &
ellbe °Plilent, Ltd. ("Arcturus"), Montreal.
, Canada, a wholly owned
arY of Chase.International Investment Corporation ("CIIC"),
to
811 purchase, at
an approximate cost of US$236,400, and hold 105,536
zit es, Par value LA 1 each, of the capital stock of Esperance
lawerhational Pty. Limited, a new corporation organized under the
°f the Australian Capital Territory and registered in the State
,,tern Australia, provided such stock is acquired within one
yeares
sent 'roM the date of this letter. The Board also grants its conto acquire and hold, in consideration for its services
30 ,(
0)1111Ulating and effecting the financial plan for the enterprise,
' 0 shares of such stock.
or
CIIC
The Board's consent is granted upon condition that
4et4r
Allstr us and CIIC shall dispose of their holdings of stock of the
the A elish company, as promptly as practicable, in the event that
;
,
118tralian company should at any time (1) engage in issuing,
iitIcie
"
e riting, selling or distributing securities in the United
kat
(2) engage in the general business of buying or selling
Eood
traria
.nres, merchandise, or commodities in the United States or
itician any business in the United States except such as is
its -46a1 to its international or foreign business; or (3) conduct
pede°Perations in a manner inconsistent with Section 25(a) of the
ral Reserve Act or regulations thereunder.
BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
V. E. Rockhill
So long as Arcturus and CIIC are the controlling stock11 '(.ers in the Australian company, the Australian company will make
,-..rt-Lnvestment in the stock of any corporation or partnership except
10, el* the consent of the Board of Governors has been obtained in
a same manner
as provided by Section 211.9(c) of Regulation K for
/„.elleing Corporations. The Board grants its consent for Esperance
te,ziuternational to become a general partner in Esperance Land &
;
°Pment Company through an investment offA 265,000 in the
bevel
e-Lopment Company.
When required by the Board of Governors, Arcturus and CIIC
.t,1:Toause the Australian company to permit examiners appointed by
brallj'ciard of Governors to examine the Australian company and its
ell_ ehes and agencies, and to furnish the Board of Governors with
reports as it may request from time to time.
the Australian
corapalv• • Upon completion of the organization of
furnished
it is reouested that the Board of Governors be
with
.41nal copies of the Articles of Association and By-Laws of the
'
139-11Y.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 8
1/16/61
WASHINGTON 25, D. C.
ADDRESS
orricim. CORRESPONOENCE
TO THE BOARD
January 17, 1961
Charles M. Boynton,Esq.,
laW Offices of Doran, Manion,
Boynton & Kamm,
St's Joseph Bank Building,
South Bend 1, Indiana.
1)ear
Mr. Boynton:
This refers to your letter of January 10, 1961, requesting
that YOU
be allowed to file late a brief in the matter of the appliooration by St. Joseph Agency, Inc., for a determination by the Board
0 Governors of the Federal Reserve System pursuant to section 4(c)(6)
the Bank Holding Company Act of 1956, Docket No. BHC-57.
In accordance with Rule VIII of the Board's Rules of
Practice for Formal Hearings, the Board has granted your request
arid
has
A
received as filed the brief enclosed in your letter of
'January 10.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 9
FEDERAL RESERVE SYSTEM
1/16/61
WASHINGTON
OFFICE OF THE CHAIRMAN
January 16, 1961
The u
“enorable A. Willis Robertson,
Cr,hairman,
ti`JeiTnittee on Banking and Currency,
ited States
Senate,
liashington 25, D. C.
p
°ear Mr. Chairman:
This is in response to your requests of January 9, 10 and 12,
1961
'.ror the Board's comments on S. 1, S. 6, and S. 9 -- bills to
aileit
late conditions in economically depressed areas.
The Board is sympathetic to the purposes of the proposed leg/I. th efl and hopes that an appropriate bill may be enacted promptly.
that e aid proposed is to be effective, it should be focused upon areas
coto.o.are significantly depressed in relation to the remainder of the
To spread such aid over the economy as a whole, or too large
a
abiZtien of it, could lead to economic effects which would be undesirbIlt
The problem is not only to decide what steps might be helpful,
or Cuere and how much. For this reason, we would urge that the test
sts applied in identifying depressed areas be such that they will
citree,
eu the assistance to the areas of greatest need.
Sincerely,
\\,
Wm. McC. Martin, Jr.
Sures
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 10
1/16/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 16, 1961.
Dear sir:
to the
Replies have been received from all Reserve Banks in response
Nais2card's letter of October 20, 1960, concerning the proposal to
4.
11k " a consolidated Statement of Condition of the Federal Reserve
two s (H.4.1(a)), and in millions of dollars. The comments on the
in fr°Posals and the alternative methods of handling are summarized
e attached
memorandum, together with Board decisions thereon.
two 8
Ten Banks favored both proposals. The views of the other
rlote,anks are set forth in some detail in the attachment. It will be
seriQ
that, with respect to the consolidation proposal, one Bank had
it vin misgivings about putting it into effect at this time because
a/l ast d raise the gold reserve ratio, which might be misinterpreted as
The tempt to cover up the gold situation by juggling of statistics.
1,1ere°''her Bank also mentioned the gold reserve ratio, but its objections
flo
011.1y re on the grounds that a consolidated statement is appropriate
NoWhere there
is a common control through stock ownership. On the
liate_s
,a3- of publishing the statement in millions of dollars, one Bank
kllorQ that
this might also be misinterpreted as an attempt to conceal
th changes, and the other considered the advantages to be outweighed
erep e dis
advantages, particularly the possibility of significant dis4rikar2cies existing between the H.4.1 release and the actual Reserve
°a-lance
sheet.
'ati...os . As explained in the attached memorandum, the gold reserve
will continue to be published only on the present combined
basis.
kilt
It is contemplated that the first consolidated statement in
131 cers of dollars will be released on February 2, 1961, as of the
41clic 4-.-11-g day, with the announcement and consolidated page revised as
N:)ri.l ed by the attachments; that an announcement will be made in the
tl- "
1961 Bulletin and the table in the February Bulletin will show
'e
'
41esdaY and end-of-month statement figures on a consolidated
-2-
basiS
and in millions of
dollars; and that the table showing the
of
individua]
Reserve
Banks will continue on a combined
basis 3 „
but in millions of dollars, with
the "Total" column restored.
The Board's staff has responded to those portions of the
Rese
I've Banks' letters
which are not covered in the attached
nI tile'randum.
Very truly yours,
/
Merritt She
Secretary.
11010sure
To T
RESIDENTS OF ALL FEDERAL RESERVE BANKS.
174
BOARD OF GOVERNORS
OF THE
44Y0a)CO04
0S1''
Utilhi
FEDERAL RESERVE SYSTEM
`el *
WASHINGTON 25. D. C.
Item No. 11
1/16/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
January 17, 1961
1 0. Howard D. Crosse, Vice President,
rederal Reserve Bank of New York,
New York
45, New York.
*Nlr Mr. Crosse:
This refers to your letter of October 18, 1960, enclosing
a COPY
of a letter dated October 3, 1960, from the New York Stock
Exch
8
a ange, which presents the question whether the last sentence of
eetion
of Regulation T applies when a customer first sells
22(43(g)
registered
security short in an undermargined account, then sub—
;:quently purchases the same security, instructing the broker to
intain long and short positions in that security.
The Board agrees with your view that the last sentence of
section
220.1(g) prohibits the concurrent carrying of long and short
181t tiola5 in the same registered security for the purposes of Regula—
toZ,? T, regardless of which position is taken first. This result
ti,'4011B because the word "sale" is equivalent, where the sense of
4141 regulation requires it, to."sale position". Accordingly, where
ecurity is purchased "long" in a margin account, and there is an
Z8ting short position in the same security in the account, the
Positions must be "netted out" for purposes of the regulation.
be appreciated if you would inform the Stock Exchange of
Board's decision, which will be published in the Federal Reserve
'
4•Lletin and in the Federal Register.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
.
!
t;:
`Oli
,„
•"
BOARD OF GOVERNORS
OF THE
Item No. 12
1/16/61
FEDERAL RESERVE SYSTEM
WAS
OFFICE OF THE CHAIRMAN
CONFIDENTIkL (FR)
Mr. F. B. Whitman,
C
hairman of the Board,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Whitman:
The Board of Governors has approved the appointment of
,111". Eliot J. Swan as President and Mr. H. E. Hemmings as First
'ice President of the Federal Reserve Bank of San Francisco,
each for a term of five years beginning March 1, 1961, in
accordance with the action taken by the Board of Directors as
reported in your letter of January 5, 1961.
The Board of Governors has also approved the payment
Of salaries to Messrs. Swan and Hemmings at the rates of $30,000
and $21,500 per annum, respectively, for the period March 1, 1961,
through December 31, 1961.
No announcement of the Board's approval will be made
with the thought that you will make such local announcement as
Your Bank may desire.
Sincerely yours,
(Signed) Wm. HoC. MIxtin,
Wm. McC. Martin, Jr.
Jr
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, ID. C.
Item No. 13
1/16/61
ADDRESS OfFICIAL CORRESPONDENCE
TO THE BOARD
January 17, 1961
It% H. N. Mangels, President,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Mangels=
In accordance with the request contained in your
letter of January 5, 1961, the Board approves the appoint2ent of Alan S. Cohen as an assistant examiner for the
rederal Reserve Bank of San Francisco. Please advise us
of the
effective date of the appointment.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 14
1/16/61
ADDRESS OFFICIAL CORRESPONDENCE
TO THE 00ARD
January 17, 1961
Mi. H. N. Mangels, President,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Mangels:
In accordance with the request contained in
Your letter of January 6, 1961, the Board approves the
designation of
the following employees as special
assistant examiners for the Federal Reserve Bank of
San Francisco for the purpose of participating in examinations of State member banks only:
0. L. Burgess
H. G. Ramirez
F. P. Thoennes
K. L. Peterson
The Board also approves the designation of
J. L. Scott and J. W. Sines as special assistant examiners
for the Federal Reserve Bank of San Francisco for the
PrPose of participating in examinations of State member
nks except Wells Fargo Bank American Trust Company,
oan Francisco, California. The authorization - heretofore
given your Bank to designate these employees as special
assistant examiners is hereby canceled.
It has been noted on our records that Mr. H. P.
pianzel has eliminated "Jr." from his name, and appropriate
notations have been made of the names to be deleted from
the list of examining personnel of your Bank.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
"Assistant Secretary.
@FedFRASER