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9/61
Minutes for
To:
Members of the Board
From:
Office of the Secretary
July 17, 1962
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
111.-th respect to any of the entries in this set of
!lnutes in the record of policy actions required to
°e 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
4 e1aw. If you were present at the meeting, your
44itials will indicate approval of the minutes. If
You were not present, your initials will indicate
1341Y that you have seen the minutes.
Chm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
Minutes of the Board of Governors of the Federal Reserve
SYstem on Tuesday, July 17, 1962.
at 10:00
The Board met in the Board Room
a.m.
PRESENT: Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Robertson
King
Mitchell
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Farrell, Director, Division of Bank
Operations
Mr. Johnson, Director, Division of
Personnel Administration
Mr. Harris, Coordinator of Defense
Planning
Mr. Hexter, Assistant General Counsel
Mr. Masters, Associate Director, Division
of Examinations
Mr. Goodman, Assistant Director, Division
of Examinations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mrs. Semis, Technical Assistant, Office of
the Secretary
Mr. Hill, Attorney, Legal Division
Mr.
Mr.
Mr.
Mr.
Ratification of actions taken.
The actions taken by the
available members of the Board at a meeting on Friday, July 13, 1962,
Irel'e ratified unanimously. The actions so ratified are set forth in
the minutes of that meeting.
Discount rates.
The establishment without change by the
Feciel'al Reserve Bank of Kansas City on July 13, 1962, of the rates
°4-discounts and advances in its existing schedule was approved
114al1ia1ous1y, with the understanding that appropriate advice would
be sent to that Bank.
ir)Omyilf
7/17/62
-2Circulated or distributed items. The following items, which
had been circulated or distributed to the Board and copies of which are
attached to these minutes limier the respective item numbers indicated,
%lere aPproved unanimously:
Item No.
Letter to the Federal Reserve Bank of New York
laterposing no objection to an extension of
a e of absence with pay to Assistant Vice
- ident Holmes to serve as personal assistant
'
mo the Under Secretary of the Treasury for
onetary Affairs.
1
L
i
I
elegram to the Federal Reserve Bank of Cleveland
Iltiterposing no objection to the rental, under
l l'ellase option, of National Cash Register elec!
il
o-ic check processing equipment at the head
c.'lce and Burroughs B-270 equipment at the
14c1nnati and Pittsburgh Branches.
2
lajetter to the Federal Reserve Bank of Chicago
l13ving the payment of salaries to the Bank's
.
el
ectricians at specified rates.
3
1T,etter to Continental Illinois National Bank and
Company of Chicago, Chicago, Illinois,
13, 116 that the Bank paid a $2 million capital
s(
Ilieription to the stock of Continental Intert3 1°1:101 Banking Corporation on November 26, 1961,
;
D4 that the bulk of these funds were invested in
'
ited States Treasury bills on that date.
Let
8.7.r to Continental Illinois National Bank and
Tr4t
Company of Chicago, Chicago, Illinois, noting
the Bank paid a $2 million capital subscrip0::°11 to the stock of Continental International Finance
byl*Poration on November 26, 1961, and that the
114$: of these funds were invested in short-term
4ed States Treasury securities on that date.
'
4
5
C
40,4
.1 1
iV
)
4:
4
7/17/62
-3Item No.
Letter to the Federal Reserve Bank of St. Louis
regarding the applicability of the Clayton Act
to interlocking directorates of First National
in St. Louis and St. Louis Union Trust
13
0kilk
1°111ParlY, both of St. Louis, Missouri.
6
Messrs. Johnson, Goodman, and Hill then withdrew.
Defense planning.
Governor Robertson reported that the Federal
Reserve Bank of Richmond was facing a need to provide space for its
131'esent and future operations, which raised a question from the standpoint
c't the space provided by the Bank for the Board's emergency operations
e411 in turn, whether the Board should establish a different relocation
Center for such operations, perhaps in conjunction with the Richmond
" If so, that might require a number of full-time employees, for
4111
(1111°11€ other things the regular operation of the switching center of
the Federal Reserve Leased Wire System would be involved.
Following a general discussion of considerations pertinent
to the selection of a Board relocation center, and of the extent to
hieh the Board's and the Richmond Reserve Bank's problems meshed, it
vas
agreed that a committee comprised of Mr. Harris, Mr. Farrell (or
s()1
"ne designated by him), and Mr. Kelleher, Director, Division of
Acilllinistrative Services, (or someone designated by him) would explore
relocation center
°II behalf of the Board the various aspects of the
of
1311(3b1em. It was understood that the committee would keep advised
ttklies being pursued by the Federal Reserve Bank of Richmond, that it
(
4r),fy
e
7/17/62
-4-
/10111d consult with other Federal Reserve Banks to whatever extent
1*4Mted useful, and that the committee would then present recommendations
to the
Board.
The meeting then adjourned.
Secretary's Notes: On July 16, 1962,
Governor Robertson, acting in the
absence of Governor Shepardson,
approved on behalf of the Board the
following items:
alp, Letter to the Federal Reserve Bank of Richmond (attached Item No.
°ving the designation of Harold T. Lipscomb as special assistant
4111iner.
—‘
Letter to the Federal Reserve Bank of Chicago (attached Item No.
Pr°ving the appointment of William E. Ruddy as assistant examiner.
all
Acting in the absence of Governor
Shepardson, Governor Robertson
today approved on behalf of the
Board a letter to the Federal
Reserve Bank of St. Louis (attached
Item No. 9) approving the appointment of Floyd A. Cain as assistant
examiner.
Secre ary
7)
8)
e
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 1
7/17/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL cORRESPONDENCL
TO THE BOARD
: 1962
July 17
9.2112PENTIAL (FR)
Mr. Thomas M. Timlen, Jr.,
S
ecretary,
Federal Reserve Bank of New York,
NeW York 45, New York.
Dear MX. Ttmlen:
Thank you for your letter of July 5, 1962, advising that
the Board of Directors had granted an extension of leave of absence
;
1.
T. Pay to Mr. Alan R. Holmes, Assistant Vice President, to serve
'
ito Personal assistant to Under Secretary of the Treasury Robert V.
°811J for the period beginning July 8 and terminating on or about
Se
ptember 8, 1962.
expenses
It is noted that the Bank will continue to assume
subsistence
urred by Mr. Holmes including travel, hotel, and
ili?enses, to the extent such expenses are not assumed by the
eaaury Department.
The Board of Uovernors interposes no objection to the
exten
sion
of arrangements with respect to 'vire Holmes, as described
ur
Yo letter.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
0040
TELEGRAM
Item No. 2
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
7/17/62
July 17, 1962
Thompson - Cleveland
Board interposes no objection to rental of electronic
Check processing equipment referred to in urlet June 18, 1962.
(Signed) Merritt Sherman
SHERMAN
BOARD OF GOVERNORS
Item No. 3
OF THE
FEDERAL RESERVE SYSTEM
7/17/62
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
July 170 1962
CONFIDENTIAL (FR)
Mr. H. J. Newman, Vice President,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Er. Neitnaan:
The Board of Governors approves the paymait of
salaries by the Federal Reserve 2- ank of Chicago to the
?alcumbents of the positions shown below at the rates
indicated, effective July 1, 1962, in accordance with the
request contained in your letter of July 5:
Title
Head 'Electrician
Electrician
Annual Salary
$91 776.00
8,798.40
Very truly yours,
(Signed) Merritt Sherman
I,.erritt Sherman,
Secretary.
BOARD OF GOVERNORS
Item No. 4
7/17/62
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE SOARD
July 170 1962
Mr. John H.
Perkins, Vice President,
Con
tinental Illinois National Bank
and Trust Company of Chicago,
231
South LaSalle Street,
Chicago 90, Illinois.
Dear Mr.
Perkins:
This will acknowledge your letter of June 29, 1962,
tl:1:tt&di through the Federal Reserve Bank of New York, regarding
br1=2:!1 International Banking Corporation ("CIBC")
CO
mMenoed
In a letter dated January 4, 1962, Vice Chairman Anderson
advised that CIBC commenced business on January 2, 1962,
-"dthe Board's
K.3 announcement for the week ended January 13, 1962
'clJorted that CIBC opened for business effective January 2, 1962.
ot cTin
Ah
"a
The Board has noted that, following the receipt on
trrember 22, 1961 of the Board's Preliminary Permit to CIBC dated
;/
15, 1961, on November 26, 1961 your bank paid in the
$21 &
%ZOO° capital subscription to the stock of CIBC. (The Board's
11,w;:.1A to Begin Business" was issued to CIBC on December 60 1961.)
tIrvIfard has also noted, without objection, that the bulk of these
biars.were invested on November 26, 1961 in United States Treasury
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item NO. 5
OF THE
7/17/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
:1962
July 17
*. John H.
Perkins,
Vrtice President,
‘41Itinental Illinois National Bank
and Trust
Company of Chicago,
31
South LaSalle Street,
'''Icago 90, Illinois.
i)ear
Perkinst
This will acknowledge your letter of June 29, 1962,
tifsmitted through the Federal Reserve Bank of Chicago, advising
"gt Continental International Finance Corporation (CIFC") cornkeno
ed business as of June 28,
1962.
The Board has noted that, following the receipt on
tto
liZber 22, 1961 of the Board's Preliminary Permit to CIFC dated
$2 8nolber 15, 1961, on November 26, 1961 your bank paid in
the
°s000 capital subscription to the stock of CIFC. (The Board's
Ther!tt to Begin Business" was issued to CIFC on
December 6, 1961.)
N.114 ard has also noted, without objection, that the bulk of these
Tree.r, were invested on November 26, 1961 in short-term United States
'
147 securities.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
4I1•..syt
BOARD OF GOVERNORS
Item No. 6
OF THE
7/17/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
Ally 17, 19622
1,1 (4 0. Wyrick, Vice President,
--u.eral Reserve Bank of St. Louis,
St. Louis
66, Missouri.
Dear
Mr. WYrick:
ents,
This refers to your letter of June 12, 1962, with attachm
the
raisin
i g the question as to the applicability of the Clayton Act to
inte
( pir4ecking directorates of the First National Bank in St. Louis
rat NationPl") and the St. Louis Union Trust Company ("Union Trust").
s
The Board understands that Union Trust accepts no deposit
exernow
is
l
Nationa
in a fiduciary relationship but that First
eXeePt -the ng a few functions that are of a fiduciary nature. It seems that
var, Most recent examination of the trust department of the bank, which
Twil laY 7, 1962, disclosed these functions to be that (1) it is serving
"°11t fee as Trustee, Paying Agent, Registrar and Depo.7itary under
h'Ilerlemeat with the Board of Trustees of Westminster College, for certain
issues; (2) it is Trustee under an agreement with two persons for
the
pis Purpose of holding legal title to certain real estate; (3) it is
and Paying Agent, Registrar and Depositary of certain bonds for
the
of x41*: Louis Housing Authority and the Housing Authority of the City
stock of
4411-°ch; and (4) it is Registrar in fifteen instances for
,
othe
J.corporations.
The Board takes note that Union Trust is disqualified by law
or 11_
ao_Y rules of the New York Stock Exchange from taking a number of these
tollalts and that the trust activities performed by First National seem
the Board
fe e s° limited in volume as to be insignificant. Thus,
rs that exception (6) to section 8 of the Clayton Antitrust Act,
h Permits a member bank of the Federal Reserve System to have
dir set
or
ors in common with "a bank, banking association, savings bank,
s in which
4st company not engaged in a class or classes of busines
'
[340111
re, the
therefo
co„, member bank is engaged", is applicable, and that,
to serve
e
continu
may
b0.174,°n directors of First National and Union Trust
'LI financial institutions.
inform the inquiring bank of the Board's
coriclus. You are requested to
that any material change in the
tact,,1°n• It should also be made clear
-°"- situation above described may require a reconsideration of the matter.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
Item No. 7
OF THE
7/17/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL. CORRESPONOENCE
TO THE BOARD
July 170 1962
,1 1r. John L. Nosker, Vice President,
rederal Reserve Bank of Richmond,
4chillond 13, Virginia.
Dear 1.1r.
Nosker:
In accordance with the request contained in
:
51°11r letter of July 11, 1962, the Board approves the
;esiglation of Harold T. Lipscomb as a special assistant
.1.1c:111114.er for the Federal Reserve Bank of Richmond for
;
14e purpose of participating in examinations of State
v. ber banks
except The Bank of Virginia, Richmond,
Irginia.
The authorization heretofore given your Bank
to d .
is esignate Mr. Lipscomb as a special assistant examiner
herebY canceled.
Very truly yours,
(Signed) Elizabeth Lm Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item No.
OF THE
8
7/17/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
July 17, 1962
CO
NFIDENTIAL (FR)
Mr. Leland Ross, Vice President,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Ross:
In accordance with the request contained in
Y°11r letter of July 10, 1962, the Board approves the apP21ntment of William E. Ruddy as an assistant examiner
.f_or the Federal Reserve Bank of Chicago. Please advise
the effective
date of the appointment.
It is noted that Mr. Ruddy is indebted to,
4214ne four shares of stock of, Security Bank, Lincoln
;
En') Michigan, a State member bank. Accordingly, the
74rd's approval of the appointment of Mr. Ruddy is given
wIth the understanding that he will not participate in
Zny
of Security Bank so long as he is indebted
(1, or mins stock of, that institution.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item NO.
OF THE
9
7/17/62
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
July 18, 1962
CONFIDENTIAL
(FR)
Mr. O. 0. Wyrick, Vice President,
Federal Reserve Bank of St. Louis,
St. Louis 66, Missouri.
Dear Mr. Wyrick:
In accordance with the request contained in your
letter of July 11, 1962, the Board approves the app,intment
of Floyd A. Cain as an assistant examiner for the Federal
Reserve Bank of St. Louis. Please advise the effective date
of the
appointment.
It is noted that Mr. Cain is indebted to Old
!lational Bank of Centralia and to City National Bank, both
located in Centralia, Illinois. Accordingly, the Board's
apl
of the appointment of Mr. Cain is given with the
understanding that he will not participate in the examinaof either bank to which indebted until that indebtedness
uae been liquidated.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
@FedFRASER