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Minutes for To: Members of the Board From: Office of the Secretary July 25, 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 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. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell 1") Minutes of the Board of Governors of the Federal Reserve System on Wednesday, July 25, 1962. The Board met in the Board Room at 1000 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston Vice Chairman Robertson Shepardson King Mitchell Mr. Sherman, Secretary Mr. Kenyon, Assistant Secretary Mr. Young, Adviser to the Board and Director, Division of International Finance Mr. Molony, Assistant to the Board Mr. Cardon, Legislative Counsel Mr. Fauver, Assistant to the Board Mr. Hackley, General Counsel Mr. Noyes, Director, Division of Research and Statistics Mr. Solomon, Director, Division of Examinations Mr. Daniels, Assistant Director, Division of Bank Operations Mr. Goodman, Assistant Director, Division of Examinations Mr. Landry, Assistant to the Secretary Mr. Bakke, Senior Attorney, Legal Division Mr. McClintock, Supervisory Review Examiner, Division of Examinations Mr. Langham, Chief, Call Report Section, Division of Bank Operations Discount rates. The establishment without change by the F ederal Reserve Bank of Atlanta on July 24, 1962, of the rates on discounts 841°1 advances in its existing schedule was approved unanimously, with the llriclerstanding that appropriate advice would be sent to that Bank. Circulated or distributed items. The following items, which had been circulated or distributed to the Board and copies of which are attached to these minutes under the respective item numbers indicated, 14"e approved unanimously: 7/25/62 -2Item No. Letter to The First National Bank of Mondovi, Mondovi, Wisconsin, approving its application for fiduciary powers. 1 Letter to Mr. Joseph Rogers, President, The P'rat National Bank of San Jose, San Jose, California, replying to his letter of July 13, 1962, to the Federal Reserve Bank of San Francisco regarding the use of branch deposit information. 2 The letter to Mr. Rogers (Item No. 2) was approved in a form reflecting certain suggestions made by members of the Board at this Meeting, the principal purpose of which was to emphasize that although in certain circumstances it might be necessary to use branch deposit clata in such manner that figures for offices of individual banks could be identified, the Board would continue, as far as possible, to protect the confidentiality of unpublished information for individual banks. It was understood that edited copies of the letter would be sent to all F ederal Reserve Banks for their information and that copies would also be sent to the Bureau of the Budget, the Comptroller of the Currency, 44a the Federal Deposit Insurance Corporation. Report on competitive factors (Baltimore-Laurel, Maryland). there had been distributed copies of a draft report to the Federal IDePosit Insurance Corporation on the competitive factors involved in the °Posed merger of State Bank of Laurel, Laurel, Maryland, into The ' 151 2qUitable Trust Company, Baltimore, Maryland. The report, which contained the following conclusion, was -%.2.1:2y2s1 unanimously for transmission to the Corporation: 7/25/62 -3_ This proposal would not have an adverse effect on competition. However, the merger would further the trend in Maryland toward concentration of banking resources in a few large banks. Mr. McClintock withdrew from the meeting at this point. Amendment to H. R. 8874 (Items 3 and 4). Copies had been distributed of a draft of letter to Chairman Spence of the House Committee on Banking and Currency responding to his request for the 130ardi8 views on a substitute amendment to H. R. 8874, relating to bank service corporations, that had been adopted by Subcommittee No. 1 of the eoinmittee. The draft letter would note that, as indicated in its report slkmitted under date of March 1, 1962, the Board favored the objective °f the bill. It believed that the substitute amendment adopted by the 84bcommittee would carry out substantially the suggestions made in the e ttrlier report. There had also been distributed copies of a draft of letter to co agressman Moorhead in reply to his request for comments on a letter ci ted July 23, 1962, from Secretary of Banking Myers of Pennsylvania Q°11eerning the substitute amendment to H. R. 8874. The letter to Congress4414 Moorhead would state that the Board believed the substitute amendment 8110111d not be considered as increasing in any way Federal supervisory 13Wers over State banks. In a discussion of the proposed legislation, during which it Iras indicated the full Committee was meeting in executive session today, l'eservations were expressed by some members of the staff with regard to 7/25/62 -4- Section 31 which in essence would require each bank service corporation, subject to certain qualifications, to offer its services to all applicant banks. However, it was not considered advisable by those holding such reservations to suggest deletion of Section 3 at the risk of threatening favorable action on the bill. Following this discussion, unanimous approval was given to the letters to Chairman Spence and Congressman Moorhead, copies of which are attached as Items 3 and 41 respectively. Whitney Holding Corporation (Item No. 5). By order dated May 3, 1962, approval was given, Governor Robertson dissenting, to an application by Whitney Holding Corporation to form a bank holding company. Sub- sequently, certain parties filed suit in the U. S. Circuit Court of APPeals for the New Orleans District to vacate the Board's decision. 14/4 July 23, 1962, Mr. Malcolm L. Monroe, attorney for Whitney Holding CorPoration, in a telephone conversation with Mr. Hexter requested that exhibits M-3, M-4, and N-5 to the Corporation's application to the Board be treated as confidential and omitted from the appeal record. Copies had been distributed of a draft of letter to Mr. Monroe advising that the Board felt obliged to place the complete record in the Ilarlds of the Department of Justice and suggesting that any request for e°4fidential treatment of portions thereof should be addressed to that i)ePartment. After Mr. Bakke had discussed the circumstances surrounding the I'equest by Mr. Monroe, the letter, a copy of which is attached as Item No. 51 aPproved unanimously. 7/25/62 Messrs. Cardon, Noyes, Daniels, Goodman, Bakke, and Laugh= then withdrew from the meeting. Report by Mr. Young. Itt Mr. Young reported on his attendance June meeting in Paris of the Economic Policy Committee of the Nanization for Economic Cooperation and Development and at a July Ifteting of Working Party 3 of the Organization. He also referred to certain conversations in London with officials of the British Treasury 44i the Bank of England. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board a letter to the Federal Reserve Bank of New York (attached Item No. 6) approving the appointment of Barry F. Bosak as assistant examiner. BOARD OF GOVERNORS Item NO. 1 7/25/62 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. AO0FolLtit1 OFFICIAL 1 TIIE tiIIA140 July 25, 1962 L(3urd of Directors, The first National thank of Nondovi, _sconsin. Ge ntlemen: ilie board of Governors of the Federal Reserve System has conrAderation Lo your application for fiduciary powers and lfir4n t l'irst National bank of Mondovi authority to act, when :!t. in contravention of State or local law, as trustee, executor, 7urnlnistrator, reEistrar of stocks and bonds, guardian of estates, nee, receiver, committee of estates of lunatics, or in any ' o rier fiduciary capacity in which state banks, trust companies, or her Corporations which come into competition with national banks : re permitted to act under the laws of the State of Wisconsin. The ,4erc1se of such rights shall be subject to the provisions of ( ! r ction 11(k) of the Federal Reserve Act and Regulation F of the ; of Governors of the Federal Reserve .:ystem. A formal cerLificate indicating the fiduciary powers that Your bank is now authorized to exercise will be forwarded in due course. Very truly yours, (Signed) Elizabeth L. Carmichael Llizabeth L. Uarmichael, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item NO. 2 7/25/62 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDE NCL TO THE BOARD rint -44tkr.40 July 25, 1962. Mr. Joseph Rogers, President, !he First National Bank of San Jose, °an Jose 8, California. Dear mr. Rogers: The Board has considered your letter of July 13, 1962, forwarded by the Federal Reserve Bank of San Francisco, regarding the Use to be made of your bank's report of deposits of its San Jose °ffices and its branches in other communities as of June 30. As stated in the Reserve Bank's letter of June 18 requesting this report, publication of branch data for individual banks is not anticipated, except as that may be necessary with respect to appli?ations for mergers or branches, or under the Bank Holding Company t. The primary purpose of the request is to obtain from member arlks the basic data needed for preparing the pamphlet, Distribution b! Eanly Counties and Standard Metropolitan Areas, which - (1?_m9,1 tsr ?e last published as of June 15, 1960. (The Federal Deposit 'hsurance Corporation collects the data needed for nonmember insured baake.) V The Board goes to great lengths to avoid disclosure of l1,141Published information regarding individual banks, and its statisi iteal tabulations avoid groups containing less than three banks. !aPPreciates the feeling that you express regarding figures for 4. 'clividual offices of your bank, but it is not possible to give "surance that under no circumstances would a figure for an office a group of offices of an individual bank become public. In considering applications for mergers or branches or 11 1 der the Bank Holding Company Act, it is occasionally necessary ,/. i'Ll°,Prepare statistical arrays such as the following, which eventu47 may become public information, in setting forth the degree of b,,,_ 4ut-ing concentration in a city or county: ' t Mr. Josuph Rogers nank A B C D Number of offices 10 7 3 1 -2- Deposits at (date) $800 600 400 200 Percentage distribution of deposits 40 30 20 10 ,11 such an array, the deposits of the single office of bank D are Ilisolosed. This single office may be a bank with no branches, in ich ease there would, of course, be no disclosure of unpublished formation. It may, however, be a single office of a bank with °ranches. n Your letter refers to the statement in a letter you from the Comptroller of the Currency dated June 5, 1962 i341dicating that participation of national banks in the Board's r_anch deposit survey is at their discretion. In order to correct impression that this report is optional on the part of member pariks) there is quoted below the text of a wire sent to the , residents of all Federal Reserve Banks, with a copy to the troller of the Currency, in response to an earlier inquiry on this point, r 0e 4 4 ,e-Lved "Question has been raised as to whether report of member bank deposits by branches referred to in Board letter of June 5, 1962, is a mandatory report. Such report is required by the Board pursuant to Section 11(a) of the Federal Reserve Act, and any member bank inquiring as to the necessity for supplying information Should be informed accordingly." You may be sure that the Board gave careful consideration :_the need for collecting branch deposit data prior to reaching a ision that a report in this form should be required, and careful .flsideration also will be given to the manner in which data for individual bank may be used. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 2Sri(*) BOARD OF GOVERNORS Item NO. 7/25/62 OF THE FEDERAL RESERVE SYSTEM WASHINGTON OFFICE OF THE CHAIRMAN July 25, 1962 The Honorable Brent Spence, Chairman, Committee on Banking and Currency, House of Representatives, Washington 25, D. C. Dear Mr. Chairman: This is in Board's views on the adopted yesterday by Banking and Currency response to your request for the substitute amendment to H. R. 8874, Subcommittee No. 1 of the House Committee. As indicated to you in the Board's report submitted under date of March 1, the Board favors the objective of this bill. The substitute amendment adopted by the Subcommittee in substance would carry out the suggestions made by the Board in its earlier report, and the Board is especially pleased to note that the new bill includes in section 5 provisions that are needed to insure adequate regulation and examination of bank services performed off the bank's premises. The Board, accordingly, recommends enactment of the bill as amended. Sincerely yours, Wm. McC. Martin, Jr. 3 e7.4D,1430,y-c.„ BOARD OF GOVERNORS Item No. OF THE 7,30 rmr., 4 7/25/62 FEDERAL RESERVE SYSTEM WASHINGTON 40 : OFFICE OF THE CHAIRMAN July 25, 1962 The Honorable William S. Moorhead, House of Representatives, Washington 25, D. C. Dear Mr. Moorhead: This is in reply to your request for the Board's comments on a letter dated July 23 to you from Robert L. Myers, Jr., Secretary of Banking, Commonwealth of Pennsylvania. Mr. Myers' comments are addressed, of course, to H. R. 8874 as introduced and the amendments proposed by the Federal Deposit Insurance Corporation at the hearings on the bill. The Board is of the opinion that the substitute amendment adopted by Subcommittee No. 1 of the House Banking and Currency Committee on yesterday should not be considered as increasing in any way Federal supervisory powers over State banks. Unlike the bill as introduced, there is no provision in the substitute requiring approval by a Federal agency of any bank's investment in a bank service corporation. Rather, the bill relaxes existing restrictions in Federal banking laws on such investments. Section 5 of the substitute bill does insure that Federal agencies will continue to have regulatory and examination powers necessary to carry out their existing responsibilities with respect to bank supervision, but it does not in any W4Y increase presently existing Federal authority over banks. Sincerely yours, Wm. McC. Martin, Jr. '-7)4!„•:, BOARD OF GOVERNORS Item NO. 5 OF THE 7/25/62 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 25, 1962 Malcolm L. Monroe, Esq., Whitney Building, New Orleans 12, Louisiana. Re: Your ref. #1562-131-D-3 Dear Mr. Monroe: This will acknowledge, with thanks, receipt of extra 2°Pes of certain exhibits to the application of the Whitney National flank in connection with the Whitney Holding Corporation matter for use in preparing the record on appeal. With respect to your telephone conversation of July 23, 1962 with Mr. Hexter, requesting that exhibits M-31 M-4, and N-5 to the application be treated as confidential and omitted from the appeal record, this is to advise you that the Board feels obliged to place the complete record in the hands of the Department of Justice and 71Y request for confidential treatment of portions thereof should be addressed to that Department. Accordingly, it is suggested that you 31-.14ish to communicate with the Assistant Attorney General, Civil 7, 111 ‘ your request. 4 r1sion, attention Mrs. Pauline B. Heller, regarding the record of filing on view of the time schedule relating to the such that suggested en appeal with the Court, it is further no Justice of be in the hands of the Department later 4-ater than August 11 1962. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS Item No. 6 7/25/62 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD July 25, 1962 Mr. Howard D. Crosse, Vice President, Federal Reserve Bank of New York, New York 451 New York. Dear Mr. Crosse: In accordance with the request contained in Your letter of July 19, 1962, the Board approves the appointmant of Barry F. Bosak as an assistant examiner for the Federal Reserve Bank of New York. Please advise the effective date of the appointrent. Very truly yours, (signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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