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Minutes for To: January 21 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 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. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King ‘ . 1 Minutes of the Board of Governors of the Federal Reserve System Qa Thursday, January 21 PRESENT: Mr. Mr, Mr. Mr. Mr. Mr. 1960. The Board met in the Board Room at 10:00 a.m. Martin, Chairman Balderston, Vice chairman Szymczak Mills Robertson King Sherman, Secretary Hackley, General Counsel Solomon, Director, Division of Examinations Nelson, Assistant Director, Division of Examinations Mr. Landry, Assistant to the Secretary Mr. Mr. Mr. Mr. Bank merger bill -- S. 1062. At Governor Robertsonts request, 111% Rackley reported that Mr. Cardon, Clerk of the House Banking and krrency Committee, which would start hearings on February 16 on the b all- merger bill, S. 1062, had drafted a proposed amendment to this and had given the amendment to Mr. Coburn, General Counsel of the Pederal Deposit Insurance Corporation, for comment. He recalled that in the form in which the bill was introduced in February 1959 it 15rovided that every bank merger should have the prior approval of the 4deral Deposit Insurance Corporation, the Comptroller of the Currency, cr +L uLie Board of Governors; that the banking agency should consider the lled "banking factors" stated in section 6 of the Federal Deposit kma ranee Act, and also Whether the effect of the merger would be to less. .1:1 competition "unduly" or to tend "unduly" to create a monopoly; 44d %hat the banking agency be required to obtain the views of the other boo 1. yanking agencies on the question of competition and be authorized to -2request the opinion of the Attorney General with respect to this question. However, as the bill passed the Senate on May 14, 1959, it included additional provisions making it mandatory rather than permissive for the banking authorities to obtain a report from the Attorney General and requiring the banking agencies to submit semi-annual reports to Congress regarding bank mergers, including a statement in justification Of their approval of any merger where a report had been submitted by the Attorney General. He noted that the principal effect of the amend- proposed by Mr. Cardon would be to require the appropriate banking eRsncy to consider whether the effect of a merger would be "substantially" to lessen competition or to tend to create a monopoly and thus preclude the banking agency from approving a merger where there would be a enbstantial lessening of competition unless it should find that the blel'ger would nevertheless be "in the public interest" because the benefits to the public would outweigh the adverse effect in competition. 141'' Rsckley said that Mr. Coburn desired to meet with members of the 11°Ell'"s staff and of the Office of the Comptroller of the Currency for the Purpose of discussing the kind of reply that might be given Mr. C4rdon. Consultation with Comptroller of the Currency and the Federal 1psurance Corporation (Item No. 1). The Chairman reported that, . °cOrdance with the understanding reached at the Board meeting on ' Jalma 417Y 15, 1960, he and Governor Robertson consulted with Chairman 1/21AO -3- Wolcott of the Federal Deposit Insurance Corporation with respect to S. 2609, a bill introduced by Senator Robertson to provide for amendment of the Federal Deposit Insurance Act to revise the assessment base. Mr. Gidney was unable to attend this meeting but Chairman Martin had talked with him by telephone. The Chairman said that the PIVposal discussed by the Board on January 15 to vest sole jurisdiction in one agency, i.e., the Federal Deposit Insurance Corporation, instead having tripartite control by the three bank supervisory agencies, seemed to be agreeable to both the Comptroller and Chairman Wolcott. Unanimous approval was then given to a letter to Senator Robertson (with a copy to Chairman Wolcott) recommending approval of 84 2609) a bill to amend the Federal Deposit Insurance Act to revise the assessment base, with the understanding that the Board should rely UDOn Messrs. Wolcott and Gidney to bring to Senator Robertsonts attention the unanimous desire of all three agencies to have the Federal Deposit Illaurance Corporation specified as the sole agency empowered to establish egUlations as required in this bill. Items circulated to the Board. been This letter is attached as Item The following items, which had circulated to the Board and copies of which are attached to these ktraltes under the respective item numbers indicated, were approved 1414/1111101.1sly: 1/21/60 _1_ Item No. Letter to the Security Bank, Lincoln Park, Michigan, IIPProving the establishment of a branch in Taylor To vnship. 2 !aetter to Seattle Trust and Savings Bank, Seattle, 48.shington, approving the establishment of a branch in King County. 3 The meeting then adjourned. Secretary's Note: Pursuant to the recommendations contained in memoranda from appropriate individuals concerned, Governor Balderston, acting in the absence of Governor Shepardson, today approved on behalf of the Board the following actions affecting the Board's staff: Advan sick leave .11.11.0.010.111.0114.0.0. tor M.Callie Wickline, Nurse, Division of Personnel drninistratio rther advance of sick leave through February 29, 1960. of resignation McLaughlin, Library Assistant, Division of Research and 4tics, effective January 22, 1960. p, w6ati_Joan Secretary eir0 eiG.0(77. BOARD OF GOVERNORS OF THE Item No. 1 1/21/60 FEDERAL RESERVE SYSTEM WAS OFFICE OF THE CHAIRMAN January 21, 1960. The Honorable A. Willis Robertson, Chairman, Committee on Banking and Currency, kited States Senate, W ashington 25, D. C. Dear Mr. Chairman: This refers to your August 28, 1959 request for the Board's views on S. 2609. The bill would amend the Federal Deposit Insurance Act to provide a report of condition assessment base. It 01-11d also include in sections 2 to 15 provisions that are cerned principally with refineents and improvements in T, e laws governing the operation of the Federal Deposit ' l3"surance Corporation and its administration of closed insured enka, both of which matters are peculiarly within the experi'et' and competence of the Corporation. Zr The portion of the bill that provides a report of dition assessment base would eliminate the present differbetween the certified statements of deposits for assessPurposes and the reports of condition. The reporting of hersits for various purposes in a uniform manner would be a,Pful to all insured banks as well as to the supervisory sencies. The Board recommends the enactment of S. 2609. Sincerely yours, (Signed) Wm. McC. Martin, Jr. Wm. McC. Martin, Jr. BOARD OF GOVERNORS .01:111A00,., OF THE C#7(10;44 Item No. 2 1/23 /60 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. AOORCEIS orricam. OOPIRCOPONORNCIC TO THE BOARD t,,44ttstr, 6 44404- January 21, 1960. Board of Directors, Security Bank, Lincoln Park, Michigan. 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 in the immediate vicinity of the intersection of Ecorse Road and Pelham Road, Taylor Township, Wayne County, Michigan, by Security Bank, provided the branch is established within six months from the date of this letter. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 3 FEDERAL RESERVE SYSTEM 1/21/60 WASHINGTON 25, D. C. ADDRESS OFfiCIAL CORRESPONDENCE TO THE BOARD January 21, 1960. Board of Directors, Seattle Trust and Savings Bank, Seattle 4, Washington. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors of the Federal Reserve System approves the establishment of a branch in Des Moines, King County, Washington, by Seattle Trust and Savings Bank, provided the branch is established within six months from the date of this letter and approval of the State authorities is in effect as of the date of the establishment of the branch. Very truly yours, (Signed) Kenneth A. Kenyon • Kenneth A. Kenyon, Assistant Secretary.
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