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' Vs9 Minutes for To: July 25, 1960 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, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If you were not present, Your initials will indicate only that you have seen the minutes. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King 27 Minutes of the Board of Governors of the Federal Reserve System (41 Monday, July 25, 1960. PRESENT: Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman Balderston, Vice Chairman Mills Robertson Shepardson Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Thomas, Adviser to the Board Knipe, Consultant to the Chairman Messrs. Marget, Hersey, Sammons, Gekker, Gemmill, Irvine, Katz, Maroni, Wallace, and Wood, of the Division of International Finance Messrs. Koch, Robinson, Brill, Dembitz, Williams, Altmann, Eckert, Fisher, Gehman, Kalachek, Peret, Wood, and Yager, and Miss Dingle, of the Division of Research and Statistics Economic review. The Division of International Finance commented on Utitea -- States foreign trade and financial developments in selected countries "1"0 ", following which the Division of Research and Statistics summarized (1°Illestie economic developments. Thereafter all of the members of those Divisions except Messrs. Koch, ° and Sammons withdrew, as did Messrs. Thomas and Knipe. Messrs. ilegcllY, Assistant to the Board, Solomon, Director, and Nelson, Assistant ector, Division of Examinations, Hexter, Assistant General Counsel Hooff, 4 . 8818tallt Counsel, and Potter, Legal Assistant, entered the room at this point. Items circulated to the Board. The following items, which had been Qt1seillated to the members of the Board and copies of which are attached to the illinutes under the respective item numbers indicated, were approved 11114111tously: " 7/25/60 -2Item No. Itietter to the Lawrence Savings and Trust Company, "astle, Pennsylvania, approving the establishment a branch in Shenango Township. j 1 Letter to The Farmers State Bank of Englewood, Ohio, Ill pving an investment in bank premises. Proposed merger of Harris Trust and Chicago National. With reference to_ ' 4e proposed merger of the Harris Trust and Savings Bank and the Chicago Nstiehal Bank, both of Chicago, Illinois, it was agreed, at the request of the Chairman, to defer further consideration of the matter until Wednesday, 441427, in order that the Chairman might have an opportunity to complete hi8 study of the pertinent files. Merger of Portland Trust and Valley National (Item No. 3). 441 been There circulated to the Board a file relating to the application of the N'tl nd Trust Bank, Portland, Oregon, for consent to its proposed merger 11..th The Valley National Bank of Milton, Milton-Freewater, under the title °r The Oregon Bank, and for approval of the establishment of a branch at the Are sent location of the national bank in Milton-Freevater. The recommendations or +Is e Federal Reserve Bank of San Francisco and the Boardts Division of %cat& rlations were favorable, and letters reflecting the views of the Comptroller Or the Currency, the Federal Deposit Insurance Corporation, and the Department °t all " lee with respect to the competitive aspects of the proposal were con- tattle d in letters included in the file. In summarizing its analysis of the 7/25/60 _3_ IIPPlication, the Division of Examinations stated: The proposed merger will provide expanded banking services for the Milton-Freewater area by a banking institution in sound condition and strongly managed, all of which would appear to be in the public interest. Governor Mills disqualified himself, for personal reasons, from 13Etliticipation in the decision on this matter. No question was raised with respect to the proposal except as to Ikether it was sufficiently clear in the record that the transaction would t1 c4 involve an "insider's" profit inuring to the management of the applicant balalt by reason of the purchase of shares of the Milton-Freewater bank as a Iltel) Preliminary to the effectuation of the merger. In this connection, Mr. ilelat3n presented information drawn from the application papers and from telera. Phone conversation with an official of the San Francisco Reserve Bank 14110 . LA tended to indicate that no such profit would be derived. The suggestion ' 114 ni,„ --N4e that if it seemed desirable in order to make the record completely Q441. ) further information could be sought from the President of Portland , -anA through the San Francisco Reserve Bank. During the course of this discussion Governor Mills made certain ellt% in response to inquiry by a member of the Board, concerning the oll'ic*e:ble reputation in the community of the applicant bank's President. 1°'!IllOr Mills made it clear, however, that these comments were not intended ellggest that the Board refrain from making any further inquiry it might t114114er desirable to complete the record. 7/25/60 -4At the conclusion of the discussion satisfaction was expressed /r1th the record in its present status, and approval then VIIS given to the leltter to the Portland Trust Bank of which a copy is attached as Item No. 3, GWernor Mills not voting. Study by New York Clearing House Association (Item No. 4). With a letter dated July 21, 1960, Vice President Bilby of the Federal Reserve 4r1k(n New York transmitted to the Board copies of a study of Regulation Q, Payiz ellt of Interest on Deposits, which had been made by a special committee of 41. '"e New York Clearing House Association. The study related particularly to -Le aPplication of Regulation Q to foreign time deposits. Mr. Bilbyls 41;ter stated that the Association had indicated its desire ultimately to 4111. the report public, although the Association would be glad to restrict ' t(Lation of the report for such time as the Board might wish to devote to m. ' 116-Y of the document. There had been distributed to the members of the Board a proposed 1,.tter to President Hayes of the New York Reserve Bank which would indicate l'het the Board appreciated receiving copies of the study, which had been AreDa. red by the Clearing House Association at its own initiative, but that the gilection of when and how the study should be made public was a matter for de claion by the Association. Following a brief discussion, the letter to President Hayes, a copy of 14hieh 1 attached as Item No. 4, was approved unanimously. The meeting then adjourned. 7/25/60 -5Secretary's Notes: Governor Shepardson today approved on behalf of the Board a letter to the International Cooperation Administration (attached Item No. 5) with regard to an extension of the detail of Mr. Ralph E. Holben to the Board, and from the Board to Banco de Guatemala. Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson also approved today on behalf of the Board the following items affecting the Boardts staff: Ann R. Clary as Librarian in the Division of Research and Statistics, ellu basic annual salary at the rate of $5,685, effective the date of Q'ance upon duty. SalltrY increases effective August 7, 1960 48,111e and title Division Basic annual salary To From Research and Statistics R. Grunwell, Chief Draftsman 140 ;"•ret V. Hastings, Research Assistant wi;:lea F. Jones, Statistical Assistant 11red Racz, Statistical Assistant 144j ice H. Schwartz, Chief Analyst Marne C. Strader, Research Assistant Weaver, Statistical Assistant $ 8,340 5,685 6,015 6,015 12,470 5,685 6,180 $ 8,600 5,850 6,18o 6,18o 12,730 5,850 6,345 5,170 12,470 5,335 12,730 6,180 6,345 International Finance hta Joht Brinley, Secretary Reynolds, Economist Bank Operations 4ther W. Conover, Supervisor, Reserve Bank Statement uri it .279 4 7/25/60 -6- increases, ef.ective August 7, 1960 (continued) Division Basic annual salary From To Bank Operations Lou1se Roberts, Statistical Assistant eodore A. Veenstra, Jr., Technical Assistant $5,655 9,215 $5,820 6,180 9,735 6,345 9,995 6,015 6,180 4,355 4,46o 6,180 6,3145 6,435 4,250 6,600 9,475 Examinations : Int W. Edwards, Secretary N, Lyon, Review Examiner atricia McShane, Training Assistant 44118.11 Rowzie, Stenographer Personnel Administration M. eallie Wickline, Nurse Administrative Services 466 111, 4 ert E. Haney, Senior Programmer 4.eY L. Simmons, Sergeant, Guard Force Governor Shepardson noted on behalf of the Board that applications for retirement, effective July 31, 1960, had been filed by Susan S. Burr, Associate Adviser, Division of Research and Statistics, and Edward L. Hargett, Operator-Mimeograph, Division of Administrative Services. Secretary 4,355 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 1 7/25/60 ADDRESS arriciAL CORRESPONDENCE TO THE BOARD July 25, 1960 Board of Directors, Lawrence Savings and Trust Company, New Castle, Pennsylvania. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank or Cleveland, the Board of Governors approves the establishment of a branch on State Thoute #88 in Lawrence Village Shopping Center, Shenango Township, Pennsylvania, by Lawrence Savings and Trust Company, New Castle, Pennsylvania. This approval is given provided the branch is established within one year from the date of this letter. Very truly yours, (Signed) Kenneth A— Kenyon Kenneth A. Kenyon, Assistant Secretary. 2Sf:10 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 2 7/25/60 ADDRESS OFFICIAL CORRESPONDENCE TO THE *CARO July 25) 1960 Board of Directors, The Farmers State Bank of Englewood, Ohio, Englewood, Ohio. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Cleveland, the Board of Governors of the Federal Reserve System approves, under the provisions of Section 24A of the Federal Reserve Act, an additional investment of $130,808 in bank premises by The Farmers State Bank of Englewood, Ohio, Englewood, Ohio, for the purpose of constructing a new bank building. It is understood that this investment will be reduced by the net profit on the sale of the old bank building. Very truly yours (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 2SC tett* ti 44 4 Otit Coli, 9 tJ BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. 444, Item No. 3 7/25/60 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD 40401 July 25, 1960 Board of Directors, Portland Trust Bank, Portland, Oregon* Gentlemen: The Board of Governors of the Federal Reserve System, after consideration of all factors set forth in section 18(c) of the Federal Deposit Insurance Act, as amended by the Act of May 13, 1960, and finding the transaction to be in the public interest, hereby consents to the merger of The Vslley National Bank of Milton , MiltonFreewater, Oregon, into Portland Trust Bank, under the charter of the latter bank and new title of The Oregon Bank. The Board of Governors also approves the establishment of a branch by The Oregon Bank at the locati on of the present Office of The Valley National Bank of Milton, 903 South Main Street, Milton-Freewater, Oregon. This approval is given provided the transactions are consummated within six months from the data of this letter and shares of stock acquired from dissenting shareholders are disposed of within six months from date of acquisition* Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 4 FEDERAL RESERVE SYSTEM 7/25/60 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 25, 1960. Ivir. Alfred Hayes, President, Federal Reserve Bank of New York, 114r York 45, New York. 1)ear Mr, Hayes: With Mr. Bilbyts letter of July 21, 1960, there were t__ flaitted several copies of a study made by a special committee I:II:tithe New York Clearing House Association of the Boardts Regun Q as it applies to foreign time deposits. Mr. Bilbyts 14ter states that in transmitting the report to the Board through lar — the Bank, the Association indicated a desire ultimately to make latirePort public although it would be glad to restrict its circu.such time as the Board might wish to devote to study of the ()*Ile'lpofcg The Board appreciates receiving copies of the study, which reviewed with interest by the members of the Board and its However, since the report was prepared by the New York Clearoh7°11se Association at its own initiative and without solicitation "e Part of the Board of Governors, the question of when and how It should be made public is a matter for decision by the Association. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. ‘24c-i BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No. 5 7/25/60 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 25, 1960. Mr. Harry A. Hinderer, Director of Personnel, International Cooperation Administration, Washington 25, D. C. Attention: Miss Hood Dear Mr. Hinderer: Reference is made to the correspondence of July-October 1959 between the Board of Governors and the International Cooperation Administration concerning the reimbursable detail of Mr. Ralph E. Holben from the I.C.A. to the Board and from the Board to the Banco de Guatemala, eald also to your letter of July 15, 1960 concerning an amendment of the reimbursable charges earlier specified 80 as to include an employer's contribution to health i nsurance. The detail of Mr. Holben was arranged for a Period of one year to October 15, 1960. The Banco de Guatemala, with Mr. Holben's approval, has now requested extension of the detail for two additional months. olnce Mr. Holben's services have been very valuable to the Bank, the Board of Governors wishes to support this equest, and asks the International Cooperation Adminis! T,ration to approve an extension of Mr. Holben's detail to the Board to December 15, 1960. The Board will seek to amend its contract with the B anco de Guatemala so as to include the new charge Of $3.12 per pay period for health insurance. Mr. Reynolds Mr. Harry A. Hinderer -2- of the Board's staff also understands that the I.C.A. may with to propose some modification of the charges earlier specified for salary, retirement, insurance, and leave in Mr. Henry Ardai's letter to the Board of September 1, 1959, Particularly to take account of the general Government pay raise,recently effective. It would be helpful to have a detailed statement of any proposed modifications, together "with the effective dates both for them and for the new health insurance charge. These matters could then be taken uP with the Banco de Guatemala at the same time as the extension of contract. Sincerely yours, (Signed) Merritt Sherman Merritt Sherman, Secretary.
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