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Minutes for July 10, 1959 To: Members of the Board From: 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, 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. Chm. Martin Gov, Szymczak Gov. Mills Gov, Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System on Friday, July 10, 1959. PRESENT: The Board met in the Board Room at 10:00 a.m. Martin, Chairman Balderston, Vice Chairman Szymczak Mills Shepardson Mr. King Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Thomas, Economic Adviser to the Board Young, Director, Division of Research and Statistics Marget, Director, Division of International Finance Hackley, General Counsel Molony, Special Assistant to the Board Shay, Legislative Counsel Furth, Associate Adviser, Division of International Finance Goodman, Assistant Director, Division of Examinations Conkling, Assistant Director, Division of Bank Operations Discount rates. The establishment without change by the Federal Re8erVe Banks of New York, Cleveland, Richmond, Atlanta, Chicago, St. Louis, and Minneapolis, and Dallas on July 9, 1959, of the rates on discounts advances in their existing schedules was approved unanimously, with the und erstanding that appropriate anvice would be sent to those Banks. Establishment of foreign branch (Item No. 1). Pursuant to the recommendation contained in a file that had been circulated to the )30419. , unanimous approval was given to a letter to The First National CitY Bank Of New York authorizing the establishment of a branch in the 7/10/59 -2- City of Lomas de Zamora, Argentina. A copy of the approved letter is attached as Item NO. 1. Pro osed waiver of penalty incurred by Chicago National Bank. There had been circulated to the members of the Board a draft of letter to the Federal Reserve Bank of Chicago ratifying the waiver of a penalty of$499.68 incurred by the Chicago National Bank, Chicago, Illinois, by virtue 0--P a deficiency in its required reserves during the weekly computation period ended February 18, 1959. The Reserve Bank had waived this penalty under one of the provisions of the Board's letter S.11 23) dated October 10, 1949. However, it later discovered that the Per Y was not eligible for waiver under those rules because a smaller PensitY also had been waived several months earlier. member In view of the tuilvs satisfactory reserve record, the Reserve Bank requested rat ification of its action in waiving the second of the two penalties. Governor King raised the question whether the member bank 14°1-11d not be aware that the Reserve Bank had acted in error in waiving the second penalty without Board approval. If that were the case, he felt the Reserve Bank should take the step of advising the member bank es t° what had transpired in order that the record would be clear and the would be no possibility of misunderstanding. In the light of Governor King's comments, there followed discussion regarding the extent to which member banks might be expected 7/10/59 to be conversant with the rules for the waiver of penalties incurred °4 account of deficiencies in required reserves, and it was not clear whether the Chicago National Bank would be familiar with the procedures involved. During the discussion, Mr. Conkling reviewed the circum- stances under which the waiver of penalty had been made by the Bank in this instance ana commented that cases of erroneous independent action on the part of the Reserve Banks were rare. The suggestion then was made that it might be premature to ask the Chicago Reserve Bank to notify the Chicago National Bank of the circumstances involved in the absence of more detailed information. dinglY, Governor King was requested to discuss the matter with Aec°1 ' Reserve Bank President Allen and report back to the Board. Report on enrolled bill S.726 (Item No. 2). The Bureau of the Budget had requested the Board's views on enrolled bill S.726, which 'would amend section 11 of the Clayton Act to provide for the more expeditious enforcement of cease and desist orders issued thereunder. The earolled bill contained substantially the same provisions as bills I. 11.11* and H.R. 2977, which were the subject of the Board's letter to the House Committee on the Judiciary dated April 1, 1959. A draft ot letter, which would advise the Budget Bureau that the Board had no (*Jsetion to approval of the enrolled bill, had been distributed to the members of the Board. 7/10/59 -4Following a brief discussion, unanimous approval was given to the proposed letter to the Budget Bureau in the form in which it had been submitted. A copy is attached as Item No. 2. Mr. Shay then withdrew from the meeting. Service of Board staff members on subcommittees of Presidents' Conference Items 3 and 4 . Unanimous approval was given to a letter to Mr. Allen, Chairman of the Committee on Bank and Public Relations of the Presidents' Conference, indicating that the Board would be glad to have Mr. Molony continue to serve as an associate of the Subcommittee °II Bank and Public Relations. A copy of the letter, which had been distributed in draft to the Board prior to this meeting, is attached "Item wo Governor Balderston then referred to a letter of June 30, 1959, fr°111 Mr. Hayes, Chairman of the Presidents' Conference Special Committee on rnergencY Operations, relating to the continued service of specified zembers of the Board's staff as associates on the three subcommittees Of that Conference Committee. Mr. Sherman stated that the draft of reply that had been 1DrePared would approve the continued service of Messrs. Farrell and }CileY of the Division of Bank Operations as associates on two of the allbeommittees and would suggest that Mr. Hexter, Assistant General C°118e1, serve as associate on the third subcommittee in view of the fact that Mr. Solomon, who had been serving in that capacity, would 811°ItlY cease to be a member of the Board's Legal Division. 7/10/59 -5Thereupon, unanimous approval was given to the proposed letter to Mr. Hayes, a copy of which is attached as Item No. 4. At this point it. Solomon, Assistant General Counsel, entered the room. Suggestion for amendment to Regulation U (Item No. 5). In a letter to Chairman Martin dated June 121 19591 Mr. Milton Knight, President of The National Bank of Toledo, Toledo, Ohio, suggested that Regulation U1 Loans by Banks for the Purpose of Purchasing or Carrying Registered Stocks, be amended to permit 75 per cent of the current market value of stock to be loaned by banks, up to a maximum of $10,0001 for the Purpose of exercising employee stock options. A draft of reply, which had been circulated to the Board, reflected continuation of the Pc)sition previously taken by the Board following consideration of similar suggestions received from other sources. After a brief discussion, the proposed reply, a copy of which is attached as Item No. 51 was approved unanimously. In view of a coMment. by Chairman Martin that he had some reservations about the 13°excl'a position, question was raised as to whether any special study or the matter should be made for the Board by the staff. However, it /gas agreed that no such study need be undertaken at this time. 7/10/59 -6Collection of statistics on Federal funds transactions. meeting on March 12, 1959, At the the Board approved staff recommendations that a Prc3gra1 for the collection of statistics on Federal funds transactions be authorized for a minimum period of 24 months but that inauguration of the program await publication and distribution of the initial study of Federal funds transactions. The initial study had now been published. Acc ordingly, in a memorandum dated July 1, 1959, which had been circulated to the members of the Board, Messrs. Thomas, Young, and Farrell recom- mended approval of attached letters to the Federal Reserve Banks and to the Bureau of the Budget with a view to beginning the authorized Statist.%;4-a-1. program on September 1, 1959. In commenting on the matter, Mr. Young recalled that at the recent -"k, meeting of the Presidents' Conference, Mr. Hayes had raised the question whether consideration should be given to a possible deferment Of the s tatistical project because the current Treasury-Federal Reserve study of the Government securities market might suggest certain changes in the reporting forms, including those proposed for use by Government securities dealers in New York City. Mr. Young indicated that the question raised by Mr. Hayes could not be resolved at this stage. 110WeVer) he deemed it appropriate to send to the Reserve Banks and the Budget Bureau the letters that had been circulated to the Board in order that the project might go forward on at least a tentative basis. 7/10/59 -7In the light of Mr. Young's comments, the letters were approved u nanimously. Secretary's Note: Following the meeting, Mr. Young requested that the actual mailing of the letters be deferred temporarily in order to permit further staff discussion. In the light of that discussion, it was deemed appropriate to make certain minor changes in the form of report to be used in collecting the data. Accordingly, the approved letters were sent on July 241 1959. Copies are attached under Items 6 and 7) respectively. Mr. Conkling then withdrew from the meeting. Gold loan to Brazil (Item No. 8). At previous meetings of the Board) most recently on July 8, 1959, consideration was given to the circumstances surrounding an inquiry by Banco do Brasil relating to the Possibility of obtaining a $50 million Federal Reserve gold loan. Following the discussion on July 8, Mr. Marget was authorized to indicate nt°114allY to the Federal Reserve Bank of New York that, in view of 01 the circ umstances, the Board would be inclined to approve action, if taken by the New York Bank's directors, to make a short-term loan on gold to Brazil in the amount of $50 million, to mature in two months or at such time as a loan or loans made by United States commercial ban%8 became available to Brazil, whichever date might be earlier. A te1e °5-441 was received yesterday afternoon from the New York Reserve 13:axik stating the directors had authorized a loan to Brazil on such tee, subject to the approval of the Board of Governors. There had been distributed to the members of the Board prior to this meeting a 7/10/59 -8- memorandum from Mr. Marget dated July 91 1959, submitting a draft of telegram to the Federal Reserve Bank of New York that would approve the loan on the terms and conditions outlined. In a discussion of the matter, Mr. Marget stated, in response to a the question, that one of the New York City commercial banks had taken leadership in a syndicate that would make a loan to Brazil, out of the proceeds of which the Federal Reserve gold loan would be repaid. Accordingly, there appeared to be a reasonable expectation that the Pederal Reserve loan would not be of long duration. Thereupon, unanimous approval was given to the telegram to the Federal Reserve Bank of New York of which a copy is attached as Item No A The members of the staff then withdrew and the Board went into executive session. Delegations of authority to Governor She ardson. later B'eard The Chairman informed the Secretary that during the executive session the vested in Governor Shepardson for the year beginning August 11 1959, the direction of its internal affairs that are of a managerial 44ture. This meant that the directors of divisions would continue t0 take up with him matters pertaining to Board personnel, budget, 414 h°usekeeping, and that the Board as a whole would continue to keep in touch with the operating problems of the staff and determine questions of policy. Governor Shepardson's designation included 7/10/59 -9- authorization to approve travel requests in accordance with the efficial travel regulations of the Board, as amended August 6, 1956. The action also continued the authorization conferred by the Board on Governor Shepardson at its meeting on June 26, 1957, to approve on behalf of the Board (1) ell proposed personnel actions relating to members of the Board's staff other than the Assistant to the Board) the Assistant to the Chairman, the Economic Adviser to the Board, the Legislative Counsel, the Special Assistant to the Board, and the directors and assistant directors of the various divisions of the staff; and (2) the proposed appointment of examiners, assistant exaraillere) and special or special assistant examiners of the Federal Reserve Banks, with the understanding that ell such approvals would eentinue to be entered in the minutes as of the date of approval. The meeting then adjourned. Secretary's Notes: Governor Shepardson today IP., 1(2_Z_edon behalf of the Board the following items affecting the Board's staff: -111211212/22 oi'viDaviette Clagett Hill, from Statistical Clerk to Research Assistant, arin sion of Research and Statistics, with an increase in her basic salarY from 4;4,190 to eA,980, effective July 26, 1959. poreAtibreY L. Simmons, from the position of Guard to Sergeant, Guard basic sion of Administrative Services, with an increase in his annual salary from $3,825 to $3,9451 effective August 1, 1959. ACee tanee of resi ation Au.g4Ti/T: T;5Hill, Clerk, Division of International Finance, effective 7/10/59 -10- 2111212:21.11112. _o Richard M. Westebbel Economist, Division of International Finance, r a period up to five weeks beginning in mid-September, 1959, to comple te his doctoral dissertation. Governor Shepardson also approved today letters to the Federal Reserve Bank of Cleveland (attached Items 9 and 10) approving the appointment of John Andrew Murray and Francis Anthony Dinda as assistant examiners. BOARD OF GOVERNORS 4, , ) 4614 r4C' 0 1-2 44a0 OF THE It-km No. 1 FEDERAL RESERVE SYSTEM 4 7/10/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE d TO THE BOARD 't. t Mat ,t,41 July 10, 1959 The First National City Bank of New York, 55 Wall Street, New York 15, New York. Gentlemen: The Board of Governors of the Federal Reserve SITR+ ,---em authorizes The First National City Bank of New York, New York, New York, pursuant to the provisions of Section 25 c ut,tho Federal Reserve Act, to establish a branch in the 01-V of Lomas de Zamora, Province of Buenos Aires, Republic ar, Argentina, at No. 30 L.N. Alem Street, Lomas de Zamora, 1u , to operate and maintain such branch subject to the 101 ; 3 °v-Lsions of such Section; upon condition that, unless the oran is actually established and opened for business on jefc ' re JulY 1, 1960, all rights granted hereby shall be de ' ed to have been abandoned and the authority hereby granted onall au tomatically terminate on such date. advise the Board of Governors in writing, ... throu0.11 ., Plear S 'the Feoorz,1 Reserve Bank of New York, when the branch 10 Tablished and opened for business. It is understood that will be made in the location of the branch after esteabTlge shment without the prior approval of the Board of Governors Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS 4kt OW 241V) tp* — tr .4 4 h OF THE Item No. 2 FEDERAL RESERVE SYSTEM gR StiCA 4 04 a 7/10/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD t'040, 1•TV* July 10, 1959 Mr. Phillip S. Hughes, Assistant Director for Legislative Bureau of theReference, Budget, Room 253) Executive Office Building, Washington 25, D. C. Attention: Mrs. Garziglia Dear Mr. Hughes: This is in response to your communication of July 8, 1959, questing the views of the Board of Governors on the enrolled bill, 726 "To mor, amend section 11 of the Clayton Act to provide for the e the exPeditious enforcement of cease and desist orders issued ,-eunder, and for other purposes." L'a The views of the Board with respect to two bills, H.R. 432 and 4 11 2 • 977, the which contain substantially the same provisions as to telnrolled bill, were expressed in a letter dated April 1, 1959, e Committee coPY or which is on the Judiciary of the House of Representatives., a enclosed. elirO The Board of Governors has no objection to approval of the ed bill, s. 726. Very truly yours, (Signed) MerrItt Sherman tnel 0aUre Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE Item No. 3 FEDERAL RESERVE SYSTEM W 4 4 0 4 0 7/10/59 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE , ,41,1mtst TO THE BOARD ' 2,tottae.,* July 10, 1959 Mr. Carl E. Allen, Chairman, Committee on Bank and Public Relations, C onference of Presidents, C/o Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr. Allen: With reference to your letter of July 2, 1959, the Board will be glad to have Mr. Charles Molony continue to :ve as an Associate of the Subcommittee on Bank and Public :?1 u.slations of the Conference of Presidents for the coming year. Responding specifically to the question in the second Para Paragraph desif,- _, of your letter, it is customary for the Board to as,s_6"4Ue the members of its staff who are to serve as a_uoiates of subcommittees of the Conference of Presidents beg n Periodically to consider whether those designations should „ Felltinued or changed. This need not be done annually but " O'tg!I be done whenever there is a change in the chairmanship 1 the Conferenc e or at some other interval when membership °f any given subcommittee is being reviewed. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS 4. OF THE - ' Item No, 4 FEDERAL RESERVE SYSTEM 7/10/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE SOAR() July10, 1959 Mr. Alfred Hayes, Chairman, ..Pacial Committee on Emergency Operations, uo nference of c/0 Federal Presidents, Reserve Bank of New York, New York )45, New York. Dear Mr. Hayes: a,,_ With reference to your letter of June 30, 1959, the Board arlves the continuation of Messrs. Kiley and Farrell, respectively, theIscleiates on the Operations and cont libeemmittee on Subcommittee on Emergency Cash Emergency Treasury Operations of the Presidents erenee Special Committee on Emergency Operations. view of the fact that Mr. Frederic Solomon will shortly cease mr. t to ve a member of the Board's Legal Division, it suggests that on v2vld B. Hexter serve as associate on the Subcommittee of Counsel ,luergency Operations. Very truly yours, Merritt Shl,r__n„ . Secretary. BOARD OF GOVERNORS IZOtop,t.L OF THE Item No. 5 7/10/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 10, 1959 Mr. Milton President, Knight, The National Bank of Toledo, Toledo Dear 111'. Knight: This refers to your letter of June 12, 1959, suggestion U be amended to permit 75 per cent of the value of stock to be loaned by banks, up to a Ma lmum of options. . --, for the c purpose of exercising employee stock ing that R Similar amendments to Regulation U have been suggested Zasejeral occasions in the past from a number of different sources, rise Ile Board has recognized the important considerations which give sectito these auggestions. On the other hand, Regulation U, and recrel 7 of the Securities Exchange Act of 1934 under which the and ' D ti°11 is issued, are directed toward the regulation of credit, 13rive iTPloYees who hold stock options already have the same credit eges under the present regulation as all other persons. the exer . While suggestions for permitting additional credit for a nujalb else of such stock options had been carefUlly considered on questier of earlier occasions, the Board recently reexamined the the 1 °I1 in the light of the various relevant considerations, including Act.lurposes of Regulation U and section 7 of the Securities Exchange to exeit appeared to the Board that these proposals relate primarily again , c,,utive compensation rather than credit regulation, and the Board t eached the conclusion time ' that it would not be desirable at that ° adopt such an amendment to this credit reollation. ill your 1.°11 may be assured that the views and recommendations con• etter have been carefully noted and will be borne in1 mind in 1nect' to th,,1°n with any rurther consideration or development with respect 'matter. Very truly yours, (Signed) Merritt Sherman nerritt Sherman, Secretary. 400****44 BOARD OF GOVERNORS 605-1:2;NN 01* * 4 OF THE Item No, 6 7/10/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE it TO THE BOARD kto,t° July 24, 1959 Dear sir: Tis refers to the proposed collection of certain statistics trA,' - "lons in the Federal funds market that was discussed in the Board7 letter a Zeorones of of October 20, 1958 and at several meetings of the Presidents. The Board has authorized the project for year period from September 1, 1959. submit, A suggested report form (Form F. R. 716), as it is being numb, ' ed to the Bureau of the Budget, is enclosed and the approval the IV will be telegraphed upon receipt. It is being submitted to the Budget with the explanation that each Federal Reserve Bank reau Of make s varations in the content and arrangement of the reportuut that that seem most suitable for use in the particular district; thiS information obtained will cover the data indicated in 4.0rm and its accompanying instructions. fog Each Federal Reserve Bank is requested to collect these data dailY fr all member banks that engage in Federal funds transactions all significant extent. This may be defined, roughly, as includgetL'aks in the new "money market" series described in the Board s $3-4 : IrIi; ),May 20, and others that are believed to have as much as Or ( 1 0n of transactions in this market per month, on the average, markert' i)v ew of seasonal and other fluctuations in the use of this Pederea as much as about $40 million per year. In the survey of were ,funqs transactions that was made in November 1956, reports these°! , L tainsd from about 150 banks throughout the country; presumably o ulliessrks should be asked to report again in the proposed survey Reserv,„ !eY now appear to be nonparticipants in this market. A Bank ;ZY use wire transfer data or other available information in dotsrmin which banks to include. It may also wish to request report P keir. -6-rom all banks in its district of more than a certain size million of deposits) with the idea of dropping later the banksij 11°° at are not participating significantly in this market. _2_ Each Federal Reserve Bank should forward to the Board a rePort f0/ each . day, summarizing the data on transactions on that day b- r eY i slr%211(3(2-It..mbkin its district; a copy of this reporting form is B. 716a) and a supply will be shipped under separate inrr. It is requested that these daily summaries for each week endon Wednesday be mailed to the Board's Division of Bank Operations than the followinc, c.onday; this schedule may be changed ' In s initial experience. In any case, it will probably be desirable for the Reserve Banks to obtain reports from the respondent banks Promptly. .-;ummaries of the district reports will be distributed to the Reserve Banks and within the Board. For purposes of the restricted Illa11in0; list, pleL.se inform the Oivi sion cf hank Operations of the number of copies desired and the Persons or departments to be addressed. bass p_ Inasmuch as a main purpose of these data is to provide a funds 47 studies of the structure and significance of the Federal in, 1144rkot, the detailed data received from the individual report ban1s should be preserved. It is contemplated that these data format%trancferred to punch cards for analysis, and that a proposed al0r. punch-card use this f11 will be distributed to the Reserve Banks In addition to reports from commercial banks, the Federal Rph, or 717 bank of New York is preparing plans for a similar collection Newlcoteral funds transactions from Government securities dealers In the relic CitY. These plans are being considered with reference to /iarketrnt Treasury -Federal Reserve Study of the Government Securities Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Pin closures 2 TO THE PRE2 IDENT:3 OF ALL FEDERAL RESERVE BANKS BOARD OF GOVERNORS ,01044,4. 4141s101©eit, ,:kt OF THE Item No. 7 FEDERAL RESERVE SYSTEM 7/10/59 WASHINGTON 25, D. C. Lav, ADORES OFFICIAL CORRESPONDENCE TO THE BOARD uoki*** July 24, 1959 Mr. P. F. Krueger, Clearance Officer, Office of Standards, Bureau of Statistical the Budget, Washington 25, D. C. Dear Mr. Krueger: Enclosed are two copies of your Form 83 and of a draft F.R. 716 that the Reserve Banks are expected to obtain from T Ppro a . tely 200 of the larger member banks, starting in September 141-19 It is expected that this number will include all the b xtait t.engage in Federal funds transactions to any significartk: Or lb authorizedTte collection of the new statistics, which has been basi, Y the Board for a two-year period, would provide market a 11,::hrirparslItcVies of the functioning of the Federal funds an : use of it. These studies could not be made on ( is of existing data that pertain only to a single month Banks). Noveul° r 1956, when a similar collection was made by the Reserve A Earphlet entitled "The Federal Funds Market was recenhy PILITI od have been covering the November 1956 survey and copies your Office. unitorm . The collection of these data will be substantially Dri,_ .1n eleven of the Federal Reserve districts, with only 1373W dlfferences in such details as whether the data are reCityed bY telephone or on the form, and whether the specific or b„ or c) ,1 --..Y the district is reported for the location of seller it i;Jer. However, in New York City because of the great volume, rathe exPected that each summaries of transactions will be reported Tlthan individual transactions. Because of these differences erve Bank will prepare stant.J, its own forms, which will be subY in accordance with the attachment. form will It 13 expected that a somewhat similar but less detailed Merlt be provided for the collection of these data from Governsecurities dealers in New York City. These plans are being Mr. P. F. Krueger. .2- considered -with reference to the Treasury - Federal Reserve Study oofffitleiee.Government Securities Market, recently auth orized by your Of these Mr. E. T. Crowder of your Office has been kept advised of these developments and has been furnished with copies of drafts forms and instructions. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 1401"ures. Item No. TELEGRAM 7/10/59 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM LEASED WIRE SERVICE WASHINGTON July 10, 1959 SA NFORD - NEW YORK Your Wire July 9. Board approves granting of loan on gold by Your Bank to the United States of Brazil of $50 million on the f°11"ing terms and conditions: (A) Loan to be made up to 98 per cent of the value of gold bars set aside _ -Ln your vaults under pledge to you; (B) To be made on or before July 31, 1959; (C) To mature in two months from date on which it is made or 1113°n such date as sufficient proceeds of any loan or loans hereafter rriads by commercial banks in U.S. first become available, whichever date is earlier; (I)) To bear interest from the date on which loan is made until paid at a rate equal to one per cent in excess of discount rate of your Bank in effect on date on which loan is made; (E) Int el'est on loan to be due and payable at maturity of loan; (P) Upon maturity of loan unless otherwise paid your Bank may sell to the U.S. such amount of gold pledged as may be necessary to Pay such loan with interest and expenses of sale. In connection with any such sale, your Bank rill Act as fiscal agent of the U.S. fld apply the proceeds of the sale to the repayment of such loan. 8 BANFoRD You will also require that the Banco do Brasil give you assurance that it will not request any renewal of the loan. In this connection you Will 01., 0-vs special emphasis to the above provision for the sale of gold ir the loan is not otherwise paid at maturity. It is understood that before making the loan you will receive a note frcqn the Brazilian Ambassador in Washington, D.C., through the Department c`f State in effect certifying the power and authority of Banco do Brasil to ---Acr pniinto the proposed transaction in behalf of the United States of Brazil -- and perform all acts in connection therewith. It i8 further understood that the usual participation will be offered to the other Federal Reserve Banks. (Signed) Merritt Sherman SHEREAN BOARD OF GOVERNORS OF THE Item No. 9 FEDERAL RESERVE SYSTEM 7/10/59 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 10, 1959 Mr. Paul C. Stetzelberger, Vice President, Federal Reserve Bank of Cleveland, Cleveland 1, Ohio. Dear Mr. Stetzelberger: In accordance with the request contained in your letter of July 7, 1959, the Board approves the appointment of John Andrew Murray as an assistant examiner for the Federal Reserve Bank of Cleveland. Please advise as to the date on which the appointment is made effective. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE 4 FEDERAL RESERVE 'SYSTEM Item No. 10 7/10/59 WASHINGTON 25. O. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 10, 1959 Mr. Paul C. Stetzelberger, Vice President, Federal Reserve Bank of Cleveland, Cleveland 1, Ohio, Dear Mr. Stetzelberger: In accordance with the request contained in your letter of July 6, 1959, the Board approves the appointment of Francis Anthony Dinda as an assistant examiner for the Federal Reserve Bank of Cleveland. Please advise as to the date on which the appointment is made effective. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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