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Minutes for To: Members of the Board From: Office of the Secretary July 1, 1957 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, if you were present at the meeting, please initial in column A below to indicate that you approve the minutes. If you were not present, please initial in column B below to indicate that you have seen the minutes. Chin. Martin Gov. Szymczak Gov. Vardaman Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson c O'Cv6 44 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, July 1, 1957. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Szymczak Vardaman Mills Robertson Shepardson Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Hackley, General Counsel Masters, Director, Division of Examinations Mr. Hexter, Assistant General Counsel Mr. Hostrup, Assistant Director, Division of Examinations Mr. Thompson, Supervisory Review Examiner, Division of Examinations Mr. Mr. Mr. Mr. Mr. Items circulated to the Board. The following items, which had been circulated to the members of the Board and copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Memorandum from Mr. Marget regarding a proposed visit to the Scandinavian central banks by Mr. Katz. 1 Letter to the Federal Reserve Bank of Boston interposing no objection to assumption of the additional expense involved in adoption of an expanded Blue Cross hospitalization plan. 2 1845 -2- 7/1/57 With respect to the preceding item (No. 2), Governor Vardaman suggested that there be compiled for the Board's information data concerning the cost to the Federal Reserve Banks of employee fringe benefits other than those related to the Retirement System of the Federal Reserve Banks. He also suggested that similar data be ob- tained regarding the fringe benefits available to Civil Service employees. Pursuant to Governor Vardaman's suggestion, Governor Shepardson was requested to arrange with the staff for compilation of the pertinent information. Item No. Letter to Federal Reserve Bank of St. Louis approving a revised officers' salary structure, as well as specific salaries for fifteen officers at rates fixed by the Board of Directors. 3 Letter to the Federal Reserve Bank of Chicago approving the payment of salary to the Bank's plumber at a specified rate. 4 Letter to the Federal Reserve Bank of Dallas approving the payment of salaries to five officers of the Bank at rates fixed by the Board of Directors. 5 Letter to The Connecticut Bank and Trust Company, Hartford, Connecticut, approving the relocation of the branches presently operated at 654 and 68 Main Street, Winsted, Connecticut, to a new location near the intersection of Center and Elm Streets in Winsted. (For transmittal through the Federal Reserve Bank of Boston) 6 18'46 7/1/57 -3With respect to the preceding item (No. 6), Governor Shepardson inquired why it appeared preferable to approve the relocation of the two existing branches to a single new location rather than to treat the matter as a mere relocation of existing branches for which the Board's approval would not be required. Governor Robertson responded that in the Office of the Comptroller of the Currency the practice would be followed of cancelling the two outstanding branch authorizations and issuing a permit to establish a branch at the new location, so that the records might be clear. In the case of State banks, the matter of Federal record keeping on branches was not so important, but it would appear to be a more clean-cut procedure to provide for the closing of the two existing branches and to approve the new location, particularly since the new location was some distance removed from the locations of the existing branches. In further discussion of the matter, it was noted that, according to the letter which had been prepared, the two branches would have to be relocated to the new site within one year from the date of the letter or the Board's approval would terminate. Item No. Letter to Long Island Trust Company, Garden City, New York, approving the establishment of a branch in the Village of Garden City Park, New York. (For transmittal through the Federal Reserve Bank of New York) 7 1847 7/1/57 -4Item No. 8 Letter to the Federal Reserve Bank of Chicago regarding the proposed withdrawal from System membership of Saline Savings Bank, Saline, Michigan. Letters to the Federal Reserve Bank of Chicago and the Federal Deposit Insurance Corporation regarding the proposed withdrawal from System membership of The Saratoga State Bank, Saratoga, Indiana. 9, 10 Letter to the Federal Reserve Bank of Chicago regarding securities held by Marshall and Ilsley Bank, Milwaukee, Wisconsin, in violation of section 5136, United States Revised Statutes. 11 Letter to the Comptroller of the Currency regarding a proposed merger of The Bank of Arizona, Prescott, Arizona, and First National Bank of Arizona, Phoenix, Arizona. 12 Call upon foreign banking corporations and foreign financing corporations for reports of condition. There had been circulated to the members of the Board a memorandum dated June 25, 1957, from Mr. Goodman, Assistant Director, Division of Examinations,submitting proposed letters calling for reports of condition as of June 30, 1957, from the following foreign banking corporations and foreign financing corporations in the Second Federal Reserve District operating under the provisions of sections 25 and 25(a) of the Federal Reserve Act: Bankers Company of New York First of Boston International Corporation International Banking Corporation Morgan & Cie. Incorporated New York, New York New York, New York New York, New York New York, New York -5- 7/1/57 American Overseas Finance Company American Overseas Finance Corporation Bank of America The Chase Bank New New New New York, York, York, York, New New New New York York York York The proposed reports would be submitted through the Federal Reserve Bank of New York, and the Reserve Bank would be requested to check the reports for mechanical errors before transmitting them to the Board. It was agreed unanimously that reports of condition should be obtained from the respective corporations as suggested. Application submitted by Brenton Companies pursuant to the Bank Holding Company Act (Item No. 13). There had been distributed to the members of the Board copies of a memorandum from the Division of Examinations dated June 20, 1957, discussing an application submitted by Brenton Companies, Des Moines, Iowa, for the Board's prior approval of the acquisition of 51 per cent to 95 per cent of the capital stock of the proposed South Des Moines National Bank, Des Moines, Iowa. On the basis of analysis of the information contained in the application and the data and favorable comments submitted by the Federal Reserve Bank of Chicago and the Comptroller of the Currency, it was the recommendation of the Division that an order be issued granting the application. A supplemental memorandum from the Division presented a detailed analysis of the application in the -6- 7/1/57 light of the factors required to be considered by the Board in a case of this kind pursuant to section 3(c) of the Bank Holding Company Act. There had also been distributed to the members of the Board a memorandum from the Legal Division dated June 25, 1957, which expressed the view, in the light of the statutory factors required to be considered by the Board, that approval of the application would be warranted under the law. Submitted with the memorandum was a draft of order which might be issued. Following comments by Mr. Masters in support of the recommendation by the Division of Examinations, Mr. Hackley said that in this case it seemed clear to the Legal Division that there was no question about the preservation of competition. After Governor Robertson commented that the Division of Examinations should be complimented for the excellent manner ia which this application had been analyzed and presented, Governor Vardaman agreed that the Division had done a good job. However, he again called attention to what he considered the unfairness of analyzing an application of this kind in terms of the percentage of bank deposits controlled by the applicant in the area concerned unless an analysis was made of the ownership of such deposits. In this case, he said, he would favor granting the application, but 1850 -7- 7/1/57 not simply on the basis that the percentage of bank deposits controlled by the applicant was relatively low. In a discussion of the point raised by Governor Vardaman, Mr. Hackley pointed out the obvious difficulty in devising any rule-ofthumb standards for determining whether a proposed acquisition of stock would be inconsistent with the preservation of competition. Therefore, it seemed necessary to resort to some guides of an arbitrary, or seemingly arbitrary, nature. These guides, of course,would not be nec- essarily conclusive, and the staff did not feel that control by an applicant of any particular percentage of bank deposits would indicate conclusively whether or not the application should be granted. How- ever, in a case of this kind where no close question was involved, the fact that the holding company controlled only a small percentage of the bank deposits in the city of Des Moines and the surrounding area seemed definitely to indicate a lack of undue concentration irrespective of the composition of those deposits. Governor Robertson observed that each member of the Board probably would give different weight to different kinds of information in reaching a judgment with respect to applications under section 3(a) of the Bank Holding Company Act. He felt, therefore, that it would be unfortunate to exclude from the file information on the percentage of bank deposits controlled by the applicant, even though relatively little weight might be given to that information in some cases or by some of the members of the Board. 1851 -8- 7/1/57 Governor Shepardson added the comment that where the percentage of controlled bank deposits was low and there was little or no question about the competitive effect of a proposed acquisition of stock, the composition of the controlled deposits would not seem to be significant. On the other hand, if the percentage was high the composition of deposit ownership would assume greater significance. Further discussion brought out the difficulty of obtaining a breakdown of the ownership of deposits except by means of a special survey in which it would appear necessary to go not only to the banks owned or controlled by the applicant but to other banks in the area. Governor Vardaman then indicated that as long as the staff was alert to the dangers involved in the use of bank deposit figures and simply set forth these figures along with other indicative data, he would have no objection. Thereupon, the issuance of an order approving the application of Brenton Companies to acquire stock of the proposed South Des Moines National Bank was approved unanimously, with the understanding that advice would be sent to the applicant and other interested parties and that a notice would be published in the Federal Register. A copy of the order issued pursuant to this action is attached to these minutes as Item No. 13. 1852 -9- 7/1/57 Extension of time for The Canadian Bank of Commerce to file Schedule A of Form F.R. Y-6 (Item No. 14). In a memorandum dated June 28, 1957, copies of which had been sent to the members of the Board, the Division of Examinations discussed a request by The Canadian Bank of Commerce, Toronto, Canada, for an extension of time beyond July 1, 1957, for filing Schedule A of its annual report pursuant to the Bank Holding Company Act. This schedule covers holdings of voting shares of nonbanking organizations other than subsidiaries, and it appeared that until recently The Canadian Bank of Commerce did not understand that such holdings were required to be listed. Public disclosure of these holdings not being required in Canada, the bank was concerned about possible undesirable consequences if it should have to mention them in its annual report as a bank holding company and it was understood that the bank intended to institute certain requests for relief from the reporting requirement. Following comments by Mr. Hostrup, during which he said it appeared that The Canadian Bank of Commerce had been acting in completely good faith, it was agreed unanimously that the bank should be granted an extension to September 3, 1957, for filing Schedule A of its annual report. A copy of the telegram sent to the Federal Reserve Bank of New York pursuant to this action is attached hereto as Item No. 14. Messrs. Hostrup and Thompson then withdrew from the meeting. Request for report on S.2021 (Items 15 and 16). In 1955 the Board gave extended consideration to proposed legislation which would -10- 7/1/57 in have permitted a limited measure of underwriting and dealing revenue bonds by commercial banks. At that time the Board obtained the views of the Federal Reserve Banks and heard arguments by representatives of commercial banks and investment banking firms. However, the Board did not find it necessary to take a position on the question in 1955 or in 1956. There had been introduced in this session of the Congress a bill sponsored by several Senators which included as its more controversial feature the same proposal that the Board had considered Earlier this year the Board received a routine request from in 1955. the Senate Banking and Currency Committee for comments on the bill (S.2021), but it was ascertained that a report need not be made until further notice. Last week, however, the Board's Legislative Counsel was informed by the Clerk of the Committee that the Board's comments might be wanted at any time. Accordingly, it was felt that the matter should be considered by the Board and a report held in readiness for transmittal whenever the Banking and Currency Committee advised that it was desired. In a memorandum dated June 21, 1957, which had been distributed to the members of the Board, Mr. Hexter discussed the provisions of S.2021 and submitted a draft of report which would oppose enactment of the provisions relating to underwriting and dealing in revenue securities by commercial banks. This position would reflect the views held in 1955 by the Board's staff and by all but one of the Federal 1854 -11- 7/1/57 Reserve Banks. The proposed reply, however, would not object to a feature of the bill which would exempt from section 5136 of the Revised Statutes investments by member banks in short-term obligations of public housing agencies supported in effect by a State's guarantee of payment. At the request of the Board, Mr. Hexter reviewed the principal reasons which had been advanced in 1955 for and against authorizing commercial banks to underwrite and deal in revenue bonds. At that time, he said, it appeared to the Board's staff and to the Federal Reserve Banks that the separation of commercial banking from investment banking was a sound and significant principle which should be maintained. Chairman Martin suggested that it would seem desirable to submit the proposed report to the Bureau of the Budget and to the Secretary of Treasury for their comments now, so that the report could be sent to the Banking and Currency Committee promptly upon receipt of a request from the Committee. There being unanimous agreement with this suggestion, it was understood that appropriate transmittal letters would be prepared. Copies of the letters sent in accordance with this action are attached to these minutes as Items 15 and 16. The meeting then adjourned. 1855 Item No. 1 7/1/57 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Office Correspondence card of Governors FronL 14% Earcet Date Subject: June 242 Proposed Visit to the Scandi- navian Central Banks by Mr. Katz Mr. Samuel I. Katz, Chief of the British Commonand Near East Section, will be on a Scandinavia, wealth, under the Rockefeller Award Program status pay -withoutleave June 30, 1958, during which time until 1957 1, October from of British economic and study intensive an make will he program comes to an study this When problems. financial the necessary granted be Katz that recommend Mt. end, I to spend one expenses travel and diem, per leave, official week each at the central banks of Norway, Sweden, and Denmark. Since Mr. Katz already will be in Great Britain under the Rockefeller Program, these visits could be made at a minimal additional time and expense. Mr. Katz has never visited the Scandinavian countries, which are under his supervision. It would be most helpful for the work of the Division of International Finance to have him become better acquainted with the economies of these countries and also to meet the personnel in each of these central banks. 1957 _6 BOARD OF GOVERNORS OF THE OP 60v4 Item No. 2 7/1/57 FEDERAL RESERVE SYSTEM t,t • * 1-* a WASHINGTON 25, D. C. ADDRESS orricsAL CORRESPONDENCE TO THE HOARD 44, t‘444k**" July 1, 1957 Mr. Joseph A. Erickson, President, Federal Reserve Bank of Boston, Boston 6, Massachusetts. Dear Mr. Erickson: This refers to your letter of June 24, 1957) advising that the Board of Directors has authorized the adoption of an expanded Blue Cross hospitalization plan for officers and employees of the Bank. The Board of Governors interposes no objection to the assumption by the Federal Reserve Bank of Boston of the increased expense involved in the adoption of the additional Blue Cross benefits as described in your letter. Very truly Yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 3 7/1/57 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 CONFIDENTIAL (FR) Mr. Pierre B. McBride, Chairman, Federal Reserve Bank of St. Louis, St. Louis 2, Missouri. Dear Mr. McBride: The Board of Governors has approved effective July 1, 1957, the adjustments proposed in Mr. Johns* letter of June 13, 1957, for the minimums and maximums of the salary structure of the Officers' Salary Administration Plan of the Federal Reserve Bank of St. Louis, as follows: Group Minimum Maximum A $15,000 12,500 10,000 $22,500 18,000 15,000 12,500 8,500 The Board of Governors has also approved the payment of salaries to the following officers at the Federal Reserve Bank of St. Louis and its branches for the period July 1, 1957 through December 31, 1957, at the rates indicated which are the rates fixed by the Board of Directors as reported in Mr. Johns letters Name Donald L. Henry Earl R. Billen Willis L. Johns Orville 0. Wyrick John J. Hofer Sherley C. Davis John W. Menges Wilbur H. Isbell * Louisville Branch Title Vice President and Manager* Assistant Vice President Assistant Vice President Chief Examiner Assistant Vice President Cashier, Little Rock Branch Cashier, Louisville Branch Cashier, Memphis Branch Annual Salary $15,000 12,500 12,500 12,500 10,000 10,000 10,000 10,000 Mr. Pierre B. McBride Name William E. Walker Clifford Wood William J. Bryan L. K. Arthur Clarence J. Woertz H. C. Anderson Benjamin B. Monaghan - 2- Title Annual Salary Assistant Vice President Assistant Cashier, Little Rock Branch Assistant Cashier, Little Rock Branch Assistant Cashier, Louisville Branch Assistant Cashier, Louisville Branch Assistant Cashier, Memphis Branch Assistant Cashier, Memphis Branch $ 8,500 8,500 8,500 8,500 8,500 8,500 8,500 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 1859 BOARD OF GOVERNORS 40.411 *41,1.4. 4,4 CaCq 40. icl aM IF4t: iii : 41. VAL OF THE Item No. FEDERAL RESERVE SYSTEM •.4.* ,* 4 7/1/57 WASHINGTON 25, D. C. ADDRESS orrIciAL CORRESPONDENCE 4 4.. TO THE SWARD sP July 1, 1957 CONFIDENTIAL (FR) Mr. H. J. Newman, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Newman: The Board of Governors approves the payment of salary by the Federal Reserve Bank of Chicago to the plumber at the rate indicated below, effective June 3, 1957, in accordance with the request contained in your letter of June 21, 1957. Title Annual Salary Plumber $6603.16 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. -ISSO BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 5 7/1/57 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 CONFIDENTIAL (FR) Mr. Robert J. Smith, Chairman, Federal Reserve Bank of Dallas, Dallas 13, Texas. Dear Mr. Smith: The Board of Governors approves the payment of salaries to the following officers of the branches of the Federal Reserve Bank of Dallas for the period September 1, 1957 through December 31, 1957, at the rates fixed by the Board of Directors as reported in Mr. Irons' letter of June 13, 1957: Name B. J. Troy Alvin E. Russell Frederic W. Reed W. C. Hartung Frederick J. Schmid Title Annual Salary $ 9,800 9,800 Cashier (Houston) Assistant Cashier (San Antonio) Cashier (El Paso) Assistant Cashier (Houston) Assistant Cashier (San Antonio) 9,800 8,500 8,000 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 61 BOARD OF GOVERNORS OF THE Item No. 6 FEDERAL RESERVE SYSTEM 7/1/5'7 WASHINGTON 25. D. C. ADDRESS of-riciAL CORRESPONDENCE TO THE BOARD July 1, 1957 Board of Directors, The Connecticut Bank and Trust Company, Hartford, Connecticut. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Boston, the Board of Governors approves the relocation of the branches presently operated by The Connecticut Bank and Trust Company at 654 and 68 Main Street, Idnsted„ Connecticut, to a new location near the intersection of Center and Elm Streets in Iiansted, Connecticut, provided the change in location of the branches is effected within one year from the date of this letter. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 1_862 BOARD OF GOVERNORS OF THE Item NO. 7 FEDERAL RESERVE SYSTEM 7/1/57 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE , TO THE BOARD at. July 1, 1957 Board of Directors, Long Island Trust Company, Garden City, New York. Gentlemen: Pursuant to your request submitted through the Bank of New York, the Board of Governors Reserve Federal System approves the establishment Reserve Federal of the Trust Company at the northwest Island Long by branch of a corner of Jericho Turnpike and Villa Place, in the unincorporated Village of Garden City Park, Town of North Hempstead, Nassau County, New York, provided the branch is established within one year from the date of this letter, and that approval of the State authorities is effective as of the date the branch is established. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 1_863 BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 8 7/1/57 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 Mr. W. R. Diercks, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Diercks: of Reference is made to Mr. Van Zante's letter board of the by ed adopt June 17, 1957, enclosing a resolution , signifying higan e,Mic Salin directors of the Saline Savings Bank, al Reserve Feder the in its intention to withdraw from membership of the dent presi the from System. Also enclosed was a letter of opinion copy a and rawal bank, setting forth the reason for withd . of Counsel regarding the resolution Regulation H, as Under the provisions of section 10 (c), accomplish may bank the amended effective September 1, 1952, e of intention notic after s termination of its membership six month additional an for made to withdraw is given. Provision is also s' notice, month six the of ation two months' period, after the expir dingly, after expiration in which withdrawal may be effected. Accor nder of the Federal surre upon of the requisite notice period and authorized to cancel are you bank, Reserve Bank stock issued to the on. Please advise when such stock and make appropriate refund there cancellation is effected and refund is made. .the bank should be The certificate of membership issued to the Board. The State obtained, if possible, and forwarded to the bank's proposed withbanking authorities should be advised of withdrawal becomes effectdrawal from membership and the date such ive. cation to the It is noted that the bank is making appli e of deposit nganc conti Federal Deposit Insurance Corporation for insurance after withdrawal from membership. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 1.S64 BOARD OF GOVERNORS Item No. 9 OF THE FEDERAL RESERVE SYSTEM 7/1/57 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 Mr. W. R. Diercks, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Diercks: Reference is made to Mr. Van Zante's letter of June 17, 1957, enclosing a resolution adopted by the board of directors of The Saratoga State Bank, Saratoga, Indiana, signifying its intention to withdraw from membership in the Federal Reserve System and a letter requesting waiver of the six months' notice of such withdrawal and setting forth reason for withdrawal. A copy of opinion of Counsel regarding the resolution was also received. In accordance with the bank's request, the Board of Governors waives the requirement of six months' notice of withdrawal. Accordingly, upon surrender of the Federal Reserve Bank stock issued to the bank, you are authorized to cancel such stock and make appropriate refund thereon. Under the provisions of section 10 (c) of Regulation H, as amended effective September 1, 1952, the bank may accomplish termination of its membership at any time within eight months after notice of intention to withdraw is Riven. Please advise when cancellation is effected and refund is made. The certificate of membership issued to the bank should be obtained, if possible, and forwarded to the Board. The State banking authorities should be advised of the bank's proposed withdrawal from membership and the date such withdrawal becomes effective. It is noted that the bank has been advised of the necessity for application to the Federal Deposit Insurance Corporation if it desires continuance of deposit insurance after withdrawal from membership. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. i865 BOARD OF GOVERNORS OF THE Item No. 10 FEDERAL RESERVE SYSTEM 7/1/57 •el WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 The Honorable H. E. Cook, Chairman, Federal Deposit Insurance Corporation, Washington 25, D. C. Dear Mr. Cook: Reference is made to your letter of June 14, 1957, concerning the application of the Saratoga State Bank, Saratoga, Indiana, for continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. No corrective programs which 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) Merritt Sherman Merritt Sherman, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 11 7/1/57 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE * *t aciARo .tt,4 0444. tast3 July 1, 1957 Mr. W. R. Diercks, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Diercks: Reference is made to Mr. Van Zantels letter of June 17, 1957, regarding the continued violation of section 5136, United States Revised Statutes, on the part of Marshall and Ilsley Bank, Milwaukee, Wisconsin, as disclosed in the report of examination as of March 11, 1957. It is noted that this violation has existed since 1955, and while the Board appreciates the bank's position, there appears to be no alternative other than insisting that the bank dispose of the nonconforming securities, since there Is no provision in the statute or regulations issued pursuant thereto which would authorize the Board to condone such violations. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. 1867 BOARD OF GOVERNORS Lototr**4,4 44 OW OCillf,t„,'t4 :a .1 a4 v, , 1- * : , OF THE Item No. 12 7/1/57 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO 11-4E BOARD July 1, 1957 Comptroller of the Currency) Treasury Department) Washington 25, D. C. Attention Mr. L. A. Jennings, Deputy Comptroller of the Currency. Dear Sir: The proposal to merge The Bank of Arizona, Prescott, Arizona, with and into First National Bank of Arizona, Phoenix, Arizona, under the charter and title of the latter, to which reference is made in your letter of May 28, 1957, does not appear to come within the purview of the Bank Holding Company Act of 1956. However, Transamerica Corporation, in addition to its status as a bank holding company, has been under regulation by the Board as a holding company affiliate for a number of years, and the enclosed information may be helpful in your consideration of the matter. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Assistant Secretary. Enclosure 4 f BOARD OF GOVERNORS OF TIL FEDERAL RESERVE SYSTEM Item No. 13 7/1/57 In the Matter of the Application of Brenton Companies for Approval of A.cquisition of Voting Shares of South Des Moines National Bank, Des Moines, Iowa ORDER The above matter having come before the Board on the application of Brenton Companies, Des Moines, Iowa, dated January 10, 1957, filed pursuant to the provisions of section 3(a)(2) of the Bank Holding Company Act of 19560 for prior approval of acquisition by Brenton Companies of direct ownership of 51 per cent to 95 per cent of a total of 2,000 voting shares of the proposed South Des Moines National Dank, Des Moines, Iowa, and it appearing after due consideration thereof in the light of the factors enumerated in section 3(c) of the Bank Holding Company Act of 1956 that such application should be granted, IT IS HEREBY ORDERED that the said application be and hereby is granted and the acquisition by Brenton Companies of 51 per cent to 95 per cent of 2,000 voting shares of South Des Moines National Bank, Des Moines, Iowa, is hereby approved, provided that such acquisition is completed within three months from the date hereof. By order of the Board of Governors. (Signed) Merritt Sherman Assistant Secretary (SEAL) Dated: July 1, 1957 1869 TELEGRAM Item No. 14 7/1/57 July 1, 1957 CROSSE - NEW YORK Board has extended to September 3, 1957, the time for filing by The Canadian Bank of Commerce, Toronto, Canada, of Schedule A of its annual :'eport on Form F.R. Y-6. (Signed) S. R. Carpenter CARPENTER •c o BOARD OF GOVERNORS OF THE ,k 40(fflgak:e., ,' -'.- .\ ',.• :•,/ ) ',,--,„'1,.,1 FEDERAL RESERVE SYSTEM Item No. 15 7/1/57 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 The Honorable Percival F. Brundage, Director, Bureau of the Budget, Executive Office Building, Washington, D. C. Dear Mr. Brundage: Enclosed is a draft of a proposed letter to the Chairman of the Senate Committee on Banking and Currency commenting on 5.2021, a bill "To assist cities and States by amending Section 5136 of the Revised Statutes, as amended, with respect to the authority of national banks to underwrite and deal in securities issued by State and local governments, and for other purposes." The Boardwishes to have its report on this proposed legislation cleared with a view to being able to send the report promptly when it appears that the legislation will be considered. It will, therefore, appreciate advice as to the relationship of the proposed legislation to the program of the President. Sincerely yours, (Signed) Wm. McC. Martin, Jr. Wm. McC. Martin, Jr. 4( BOARD OF GOVERNORS OF THE Item No. 16 FEDERAL RESERVE SYSTEM 7/1/57 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 1, 1957 The Honorable George M. Humphrey, Eecretary of the Treasury, Department of the Treasury, Washington, D. C. Dear George: Fnclosed is a copy of a proposed report on 5.2021 , a bill which, among other things, has to do with whether national and membnr State banks may underwrite and deal in so-called "revenue" bonds. This proposed report is being transm itted to the Oirector of the Bureau of the Budget with a reques t for advice as to the relationship of the proposed legislation to the program of the President. The Board wishes to have its report on thio propos ed legislation cleared with a view to being able to send the report promptly vhen it appears that the legislation will be considered. I hope that you will let me have any comments that you or the Comptroller of the Currency may wish to make on the propos ed report. Sincerely yours, (Signed) Bill Wm. McC. Martin, Jr. r
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