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I Minutes for To: Members of the Board From: Office of the Secretary July 15, 1964. 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. Chm. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. Mitchell Gov. Daane -4, Minutes of the Board of Governors of the Federal Reserve System on Wednesday, July 15, 1964. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Robertson Shepardson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Molony, Assistant to the Board Cardon, Legislative Counsel Fauver, Assistant to the Board Hackley, General Counsel Farrell, Director, Division of Bank Operations Johnson, Director, Division of Personnel Administration O'Connell, Assistant General Counsel Furth, Adviser, Division of International Finance Smith, Assistant Director, Division of Examinations Leavitt, Assistant Director, Division of Examinations Sprecher, Assistant Director, Division of Personnel Administration Egertson, Supervisory Review Examiner, Division of Examinations Poundstone, Review Examiner, Division of Examinations Hart, Personnel Assistant, Division of Personnel Administration Circulated or distributed items. vey.. The following items, which aPproved unanimously and copies of which are attached to these /411111tes under the respective item numbers indicated, had been circulated °11 distributed to the Board in draft prior to the meeting except for in which instance it was understood that the letter to be 7/15/64 -2- Sent would be in a form similar to those sent in reply to previous requests for the Board's comments on proposed legislation to establish a separate executive department of Government to deal with consumer affairs: Item No. 1 Letter to Harvard Trust Company, Cambridge, Massachusetts, 7 1 3Proving the establishment of a branch at 615 Concord Avenue, .4hch operations now conducted at 127 Alewife Brook Parkway 2 o be discontinued simultaneously with the establishment of he new branch. Z Letter to First Bank of Brighton, Brighton, Colorado, ap131 ‘c)ving an investment in bank premises. 2 etter to The Commercial Savings Bank, Adrian, Michigan, ' PProving an investment in bank premises. l 3 Letter to the Federal Reserve Bank of San Francisco mIlthorizing disclosure to the President of Farmers & oe rlichants Bank of Long Beach, Long Beach, California, of a memorandum in the files of the Re certain portions serve Bank. 4 Letter to the Federal Reserve Bank of Chicago interposing t( 1 objection to the Bank's proceeding with the installation system for centralized control of heating, ventilating, air conditioning, and authorizing an expenditure not to eeed $125,000 for this purpose. 5 tette 6 the r to the Federal Reserve Bank of New York approving PaYment of salaries to two officers, Edward J. Geng r-Z4 James H. Oltman, at rates fixed by the Bank's Board D irectors. Lette r to Senator Long, Chairman of the Subcommittee on jrlistrative Practice and Procedure of the Senate .,74rY Committee, with further regard to S. 1663, a bill'el co revise the Administrative Procedure Act, on 19'gh the Board had commented by letter dated July 1, 7 t 044 7/15/614 -3Item No. Letter to Senator McClellan, Chairman of the Senate e sommittee on Government Operations, commenting on 2969, a bill to establish a Department of Consumer Affairs. 8 In connection with Item No. 7, the staff was authorized to comply Ifith requests of the other Federal bank supervisory agencies and the American. Bankers Association for copies of the Board's report of July 1 and this supplement pertaining to S. 1663. It was understood that this 454 been checked with the Subcommittee staff, and that no objection was inteTposed. The Board's staff was also authorized to furnish informally t° the Subcommittee staff, as requested, a list of Board releases containing, in summary form, information based on reports to the Board of the kind that would be exempted from public disclosure by the amendment t° S. 1663 currently being proposed by the Board. This would make evident that although the recommended amendment would give the Board the right to continue to refuse disclosure of certain reports, the Board had regular 1Y released various kinds of summary data based thereon. Direct investments in stock of foreign banks (Items 9 and 10). here had been distributed a memorandum from Mr. Hackley dated July 14, 1.964 , noting that the press on that day carried reports of a ruling by theComptroller of the Currency to the effect that national banks could gllire stock of foreign banks directly as a means of conducting overoperations. The ruling was contained in a letter sent by the Comptroller on July 2, 1964, to the presidents of all national banks. A Copy of the letter was attached to the memorandum. The Comptroller's ruling was in the same form in which it was sulmdtted to the Board by the Comptroller as a proposed ruling, in accordance with the so-called "Dillon procedure," on April 16, 1964. In a letter to the Comptroller's Office dated April 28, 1964, the Board had taken the position that in the absence of action by Congress, direct acquisitions of stock by member banks in foreign banks would be contrary t° Federal banking law. The Federal Deposit Insurance Corporation had eqressed similar Views to the Comptroller's Office. On June 1, 1964, the Bureau of the Budget requested the Board's v regarding a draft bill submitted by the Treasury Department to Permit member banks to purchase and hold directly stock interests in 4.1-gn banks. In its reply of June 12 the Board opposed the bill as . Mitted, but indicated that it would favor enactment of an alternative 11411erldment to section 25 of the Federal Reserve Act in order to accomplish 8 10034 -- uantially the same purpose. A similar recommendation had previously been '" made to the Budget Bureau in a letter of May 13, 1963. The memorandum suggested that it would seem desirable, in order Prevent misunderstanding, for the Board to issue a statement that 1.41d,4- Present law member banks had no authority to make direct acquisi- tior,_ 4"1 of stock of foreign banks. kit PA --- with the memorandum. A draft of such a statement was sub- zot 14 7/15/64 In commenting on the matter, Mr. Hackley pointed out that one question involved was whether any statement issued by the Board should include language indicating that the Board would favor an appropriate Ettnendment to the law that would expressly permit member banks to acquire directly controlling stock interests in foreign banks, subject to apli°val and under regulations of the Board. The Board had twice endorsed allch legislation in letters to the Budget Bureau, but it had never recommended such legislation directly to the Congress. There was general agreement that a statement should be issued bY the Board. It was also agreed that the statement should be limited to t he situation that existed under the present law, without reference t0 the Board's position on legislation to amend the existing law. It was concluded that in the prevailing circumstances there was ° reason to follow the Dillon procedure before issuing the Board's stat ement, but it was understood that Mr. Hackley would advise Mr. Belin, Gene , ra-I. Counsel of the Treasury, of the statement that was to be released bY the Board. Accordingly, unanimous approval was given to the issuance of the statement of which a copy is attached as Item No. 9. A copy of the tlotie e sent to the Federal Register for publication is attached as Item u Messrs. O'Connell, Furth, Egertson, and Poundstone then withdrew ' 011 the meeting. it) P•U`js 7/15/64 -6Retirement System matter (Item No. 11). 1)ivision of Personnel Administration dated July A memorandum from the 8, 1964, which had been distributed, noted that revisions in the Rules and Regulations of the Retirement System of the Federal Reserve Banks, as approved by the Board °f Trustees on June 16, 1964, included a provision that "any required contributions made by a member after the date as of which it is deterIllined that the maximum retirement allowance limitation under Section 3 Subdivision (8) became operative shall be treated as additional conmade by the member." The Board's approval of June 29, 1964, Of changes in the Rules and Regulations applicable to the Bank Plan the Retirement System included a request that the procedure to be f°11°14ed in determining these additional contributions be submitted for 13131'°Ira1 prior to use by the Retirement System. In a letter dated June 30, 1964, a copy of which was attached to the memorandum, the Actuary for the Retirement System, Mr. George B. outlined the procedure proposed to be followed in determining the flOUzit of a member's required contribution that would be considered as 8414tional because of the 80 per cent limitation on retirement allowance, 14°1uding primary Social Security, and the Board's consideration thereof 14e.8 requested in a letter dated July 1 from the Secretary of the RetireSystem. The Personnel Division recommended that the Board approve the Procedure outlined in Mr. Buck's letter. 7/15/64 -7After explanatory comments by Mr. Johnson concerning the pro- Posed procedure and the manner in which it would operate, as described in Mr. Buck's letter and the memorandum from the Division of Personnel M inistration, the use of the procedure was approved unanimously. A coPY of the letter sent to the Secretary of the Retirement System pursuant to this action is attached as Item No. 11. Mr. Hart then withdrew from the meeting. Examination of St. Louis Reserve Bank. There had been distributed a memorandum from the Division of Examinations dated July 14, 1964, sumni4rizing the examination of the Federal Reserve Bank of St. Louis made by the Board's examining staff as of April 24, 1964. Additionally, the examination report and usual accompanying memoranda had been circulated to the Board. Following comments by Mr. Smith highlighting the information cilaclosed by the examination, it was concluded that there were no matters NLUring action by the Board. At this point Mr. Hooff, Assistant General Counsel, entered the room. Withdrawal from membership before granting of deposit insurance. Gov.. -rnor Robertson referred to a memorandum from Mr. Hooff dated July 13, 1964) concerning the fact that Farmers' State Bank of Chadwick, Chadwick, 111111°1a, had effected withdrawal from membership in the Federal Reserve SYstern -- on Friday, July 10, 1964, (six-month notice having been waived 40fj p' 7/15/64 -8- the Board at the bank's request) before its application for deposit insurance as a nonmember bank had been granted by the Federal Deposit Insurance Corporation. The Federal Reserve Bank of Chicago had since been informed by the Chicago office of the Corporation that because of certain factors it would be at least three weeks before final action Igas taken on the application for deposit insurance. It was understood that the report of the examination made following the bank's application tor deposit insurance was still in process, and that there were certain tatters the Corporation proposed to discuss with representatives of the bet4k. In the circumstances, the Reserve Bank had raised the question 111formally with Mr. Hooff whether some step could or should be taken to rescind the termination of membership until such time as deposit 14surance was granted. Mr. Hooff had expressed to the Reserve Bank the °1)Illion that the bank's Federal Reserve membership could not be reintated unless the bank reapplied for membership and its application was 411Proved by the Board. Governor Robertson expressed agreement with the opinion stated ill Mr% Hooff's memorandum. Mr. Leavitt said he understood that Farmers' Bank was forwarding m embership application to the Chicago Reserve Bank, and he felt that h - application could be processed expeditiously for presentation to the Board. However, he would be reluctant to recommend favorable action the except after receipt of supporting comments from the Federal 1)ePosi4 Insurance Corporation. 7/15/64 -9Governor Robertson agreed and added that any such application for membership should be cleared with the Washington office of the Corporation as well as the Chicago office. After further discussion, there was general agreement that in the circumstances there was no reason to take any action, other than for the Board to consider on the merits, and in the light of such comInents as were made by the Federal Deposit Insurance Corporation, any aPPlication that might be submitted by Farmers' State Bank of Chadwick for re-admission to membership in the Federal Reserve System. Mr. Hooff raised the question whether the Board might want to setad a letter to all Federal Reserve Banks suggesting that they follow eases of withdrawal from System membership to be sure that a withdrawing bank, s Reserve Bank stock was not canceled until the Federal Deposit Insurance Corporation had acted on the bank's application for deposit 14surance, but it was the view of the Board that the sending of such a letter would not be necessary. The meeting then adjourned. Secretary's Note: Pursuant to the recommendation contained in a memorandum from the Division of Administrative Services, Governor Shepardson today approved on behalf of the Board acceptance of the resignation of Marie Kinder, Charwoman in that Division, effective at the close of business July 10, 1964. V A_ '1 Secretaw 1 \...r1. 1 - tN BOARD OF GOVERNORS / Item No. 1 7/15/64- OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADORES° OFFICIAL CORRESPONDENCE TO THE BOARD July 15, 1964 Board of Directors, Harvard Trust Company, Cambridge, Massachusetts. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by Harvard Trust Company, Cambridge, Massachusetts, at 615 Concord Avenue, Cambridge, Massachusetts, provided the branch is established within six months from the date of this letter, and provided further that branch operations now conducted at 127 Alewife Brook Parkway, Cambridge, Massachusetts, are discontinued simultaneously with the establishment of the above branch. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. (The letter to the Reserve Bank stated that the Board also had approved a six-month extension of the period allowed to establish the branch; and that if an extension should be requested, the procedure prescribed in the Board's letter of November 9, 1962 (S-1846), should be followed.) 2 00 BOARD OF GOVERNORS Item No. 2 y/15/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 AUORLSO OfTIOIAL CORRE•PONOCP4Ce TO THE "WARD July 15, 1964 Board of Directors, First Bank of Brighton, Brighton, Colorado. Gentlemen: Pursuant to the provisions of Section 24A of the Federal Reserve Act, the Board of Governors of the Federal Reserve System approves an investment, direct and indirect, of $260,000 by First Bank of Brighton, Brighton, Colorado, for the purpose of constructing new banking quarters. It is understood that the premises will be owned by the Firstbanc Corporation, a wholly owned affiliate organized solely for that purpose, and that the $260,000 represents an investment of $100,000 by the bank in the capital stock of the affiliate and $160,000 in funds borrowed by the affiliate from a source other than the subject. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS Item No. OF THE 3 7/15/64 FEDERAL RESERVE SYSTEM WASHINGTON, 0. C. 20551 ADOREMS arrociAL CORRIESPONOCNCIE TO THIC •OARO July 15, 161i. Board of Directors, The Commercial Savings Bank, Adrian, Michigan. Gentlemen: The Board of Governors of the Federal Reserve System approves, under the provisions of Section 24A of the Federal Reserve Act, an additional investment in bank Premises by The Commercial Savings Bank, Adrian, Michigan, of $112,000 for the purpose of remodeling the building adjacent to the bank's main office and for elevator installation. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 2,5t12 BOARD OF GOVERNORS Item No. OF THE FEDERAL RESERVE SYSTEM L. 7/15/64 WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 15, 1964. Mr. Eliot J. Swan, President, Federal Reserve Bank of San Francisco, San Francisco, California. 94120 pea Mr. Swan: This acknowledges your letter of May 28, 1964, enclosing letter dated May 22, 1964, from Mr. G. A. Walker, President, %rmers & Merchants Bank of Long Beach, Long Beach, California Farmers"), wherein Mr. Walker requests access to portions of a rIlemorandum in the files of your Bank which you advise was prepared J°1-nt1y by Messrs. Millard and O'Kane on November 25, 1959, and ! e lates to a meeting between Messrs. Millard and O'Kane with armers' Board of Directors on November 24, 1959, called for the 1,;t1rpese of discussing the report of examination of Farmers as of "Tril 27, 1959. e Pursuant to section 261.2 of the Board's Rules Regarding info rmation, Submittals, and Requests (12 CFR 261.2), the Board a outherizes your disclosure to Mr. Walker of the following portions of the November 25, 1959 memorandum: the last incomplete paragraph sn Page numbered 5., the whole of page numbered 6., and the first, ie ze°nd, and fourth paragraphs on page numbered 7. While the authorherein contemplates your choice of the form or manner in Fir, Walker will have access to this material, it is suggested at the restricted access authorized would be best effected by : 1. reParation of a transcript of the paragraphs specified and transmlttal of the same to Mr. Walker. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 2503 BOARD OF GOVERNORS Item No. OF THE 5 7/15/64 FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 15, 1964 Mr. Charles J. Scanlon, President, Federal Reserve Bank of Chicago, Chicago, Illinois. 60690 Dear Mr. Scanlon: This refers to your letter of July 2, 1964, concerning the installation of a system to be used for the centralized control of the heating, ventilating, and air conditioning systems in the Head Office building of the Federal Reserve Bank of Chicago. The Board will interpose no objection to the Bank's proceeding with this project, as described in your letter, and authorizes an expenditure of not to exceed $125,000 for this purpose. It is noted that this work will be scheduled for the first six months of 1965 for budget purposes. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 4.-44 BOARD OF GOVERNORS Item No. " 6 7/15/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 15, 1964 CONFIDENTIAL (FR) Mt. William F. Treiber, Pirst Vice President, Federal Reserve Bank of New York, New York, New York. 10045 pear Mr. Treiber: The Board of Governors approves the payment of salaries to the following officers of the Federal Reserve Bank of New York Or July 2 through December 31, 1964, at the rates l t Of Name Title Edward J. Geng James H. Oltman Manager Manager Annual Salary $14,500 12,000 The salary rates approved are those fixed by your Board mirectors, as reported in your letter of July 3, 1964. TN Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 2505 BOARD OF GOVERNORS Of THE FEDERAL RESERVE SYSTEM Item No. 7 7/15/64 WASHINGTON OFFICE OF THE CHAIRMAN July 15, 1964. The Honorable Edward V. Long, Chairman, Su bcommittee on Administrative Practice and Procedure of the Committee on the Judiciary, States Senate, wa W shington, D. C. 20510 ashington Dear Mr, Chairman: Further reference is made to your letter of May 8, 1964, t• ransmItting copies of a new comparative print of S. 1663, concerning which the Board forwarded views and comments by letter dated July 1, 1964. Subsequent to the submission of the Board's views and 111ments, members of the Board's staff met with Mr. Bernard easterwald, Chief Counsel of your Subcommittee, and his staff ' associate, Mr. Charles Helein, and discussed the principal points alsed in the Board's July 1 letter. Among the matters discussed ;as the Board's opposition, initially set forth in its letter of t°vember 6, 1963, on S. 1663 as introduced, to provisions of secel-On 3(c) relating to the availability to any person of agency records 1(cept those particular records or parts thereof specifically exempt : _ rider the provisions of section 3(c). In general, as Messrs. Fensterwald nd Helein were advised, the Board believes that the seven specific s emptions from the requirements of section 3(c) are susceptible of leh narrow construction and application as to raise the possibility cflat certain data of the Board, the publication of which would be ,ritically detrimental to the Board's functions and to the public (4tcrest, would be subject to the section's requirements. a j Specifically, reports of examination of State member banks Are 1 Pared by the several Federal Reserve Banks for transmittal to the , .lard, portions of reports of condition submitted to the Board by tcl) toese member banks, and various operating reports, either required to be submitted or voluntarily submitted by the Banks, are not believed ti be so clearly covered by any one of the seven exemptions in secth°11 3(c) as to relieve the Board's concern regarding the possibility that their disclosure would be required. While the Board is aware at a liberal interpretation of exemptions "(4) trade secrets, The Honorable Edward V. Long -2- (5) intra-agency or inter-agency memorandums or letters dealing solely with matters of law or policy, . .. [or] (7) investigatory files until they are used in or affect an action or proceeding or a private Party's effective participation therein" might exempt documents of the nature aforementioned, it is the Board's judgment that sufficient uncertainty in this regard exists as to require the Board's opposition to the subsection as presently worded. Upon conveyance of this expression by the Board's representatives to Messrs. Fensterwald and Helein of the Subcommittee's staff, it was requested that the Board submit to the Subcommittee suggested language that would, if enacted, appear to offer to the Board the assurance of exemption from publication consistent with the Board's functions and the public's right to reasonable access to the Board's records. There is set forth below a proposed eighth exemption from the provisions of section 3(c) which the Board believes would serve the legitimate interests of the public and of the several agencies responsible for the regulation and supervision of financial institutions. The proposal urged by the Board would be effected by triking the period following the word "therein" in line 16 of the tibcommittee Revision of section 3(c) and by adding the following: "; and (8) contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of any agency responsible for the regulation or supervision of financial institutions." The Board appreciates the opportunity afforded to implement its earlier expressed position and urges appropriate consideration by the proposal. Subcommittee of this Sincerely yours, (Signed) Wm. McC. Martin, Jr. Wm. McC. Martin, Jr. BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 8 7/15/64 WAS OFFICE OF THE CHAIRMAN July 15, 1964. The Honorable John L. McClellan, Chairman, Committee on Government Operations, United States Senate, Washington, D. C. 20510. Dear Mr. Chairman: This is in response to your letter of July 6, 1964, requesting the views of the Board on the bill, S. 2969, "To establish a Department of Consumer Affairs." While the Board is sympathetic with efforts to protect the economic interests of consumers, it questions whether the proposed separate executive department of Government would be desirable or effective for this purpose. Existing public agencies should be guided in their decisions by due consideration of consumers as well as other interests, all included under the general welfare. To the extent that any serious problems may exist in the consumer field, the Board believes that lt would be preferable to consider legislation addressed directly to these specific problems rather than to the creation of a new Government agency whose statutory responsibilities might be difficult to define. Sincerely yours, (Signed) Wm. McC. Martin, Jr. Wm, McC. Martin, Jr. Item No. 9 7/15/64 July 15; 1964; ror immediate release. INVESTMENTS BY MEMBER BANKS IN STOCK OF FOREIGN BANKS Question has arisen whether member banks may directly acquire and hold stock of foreign banks as a means of conducting their overseas operations. In the opinion of the Board, it is clear that such direct acquisition and holding by member banks of stock of foreign banks is not permissible under present law. State member banks arc made subject by section 9 of the rederal Reserve Act (12 U.S. C. 335) to the same limitations and conditions with respect to the purchasing and holding of stock as are applicable in the C. case of national banks under section 5136 of the Revised Statutes (12 U.S. 24). Under the last-mentioned section, a national bank is prohibited from Purchasing for its own account any shares of stock of any corporation except as provided in that section or "otherwise permitted by law." There is no provision in section 5136 or any other provision of law permitting the Purchase by national banks of stock of foreign banks. It may be noted that, under section 25 of the Federal Reserve Act (14 U.s, C. 601) and the provision of section 9 of the Act previously mentioned, rnernber banks are permitted, subject to approval of the Board of Governors and regulations prescribed by the Board, to acquire stock of corporations Chartered under Federal or State law that are principally engaged in international or foreign banking. Through such intermediate subsidiaries, a nlernber bank may indirectly acquire and hold the stock of foreign banks. 2509 TITLE 12 - BANKS AND BANKING Item No. 10 7/15/64 CHAPTER II - FEDERAL RESERVE SYSTEM SUBCHAPTER A - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM [Reg. H] PART 208 - MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL RESERVE SYSTEM Direct Investments in Stock of Foreign Banks S 208.112 Investments by member banks in stock of foreign banks. (a) Question has arisen whether member banks may directly acquire and hold stock of foreign banks as a means of conducting their o verseas operations. (b) In the opinion of the Board, it is clear that such direct acquisition and holding by member banks of stock of foreign banks is not permissible under present law. State member banks are Illads subject by section 9 of the Federal Reserve Act (12 U.S.C. 335) to the same limitations and conditions with respect to the purchasing and holding of stock as are applicable in the case of national banks under section 5136 of the Revised Statutes (12 U.S.C. 24). Under the last-mentioned section, a national bank is prohibited from purchasing fc)r its own account any shares of stock of any corporation except as Provided in that section or "otherwise permitted by law." There is Provision in section 5136 or any other provision of law permitting he Purchase by national banks of stock of foreign banks. (c) It may be noted that under the Federal Reserve Act 8Pec1fic provision is made for acquisition by member banks of stock °f d omestic corporations engaged in international or foreign banking 2510 °r financing. Through such intermediate subsidiaries, a meqiber bank m4Y indirectly acquire and hold the stock of foreign banks. (12 U.S.C. 248(i). Interprets 12 U.S.C. 24 and 335.) Dated at Washington, D. C., this 15th day of July, 1964. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (Signed) Merritt Sherman rritt Sherman, Secretary. 2511. BOARD OF GOVERNORS Item No. 11 OF THE 7/15/611. FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS arriciAL CORRESPONDENCE TO THE BOARD July 15, 1964 We. Valerie R. Frank, Secretary, * Retirement System of the Federal Reserve Banks, Federal Reserve Bank of New Yorks New York,'New York. 10045. Dear Mrs. Frank: Reference is made to your letter of July 10 1964, and attachment from Mr. Buck, the System Actuary, outlining the procedure to be followed in determining the amount of a *ember's required contribution which would be considered as additional because of the 80 per cent limitation on retireleant allowance, including primary Social Security. The Board of Governors approves the use by the Retirement System of the procedure outlined in Mr. Buck's letter of June 30. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary.
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