Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, June 1, 1959, Volume 46, Part 6

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Minutes for June 1, 1990

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.
A
Chin. 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 Monday, June 1, 1959.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

The Board met in the Board Room at 10:00 a.m.

Martin, Chairman
Szymczak
Mills
Robertson
Shepardson
King
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Sherman, Secretary
Kenyon, Assistant Secretary
Riefler, Assistant to the Chairman
Thomas, Economic Adviser to the Board
Young, Director, Division of Research
and Statistics
Hackley, General Counsel
Molony, Special Assistant to the Board
Shay, Legislative Counsel
Noyes, Adviser, Division of Research
and Statistics
Nelson, Assistant Director, Division
of Examinations
Goodman, Assistant Director, Division
of Examinations
Benner, Assistant Director, Division
of Examinations
Hill, Assistant to the Secretary
Hooff, Assistant Counsel

Items circulated to the Board.

The following items, which

had been circulated to the Board with appropriate supporting information,
and copies of Which are attached to these minutes under the respective
item numbers indicated, were approved unanimously:
Item No.
Letter to The Merchants Trust Company of Red Bank,
N. J., Red Bank, New Jersey, approving the
establishment of a branch in the Township of
Holmdel.

1

Letter to the Industrial National Bank of Miami,
Miami, Florida, approving its application for
fiduciary powers.

2




6/1/59

-2In connection with Item No. 2

Mr. Benner commented that the

Chairman of the Board of the applicant bank, also Chairman of the Board
of a State member bank in Miami Beach, Florida, was under indictment,
along with certain former directors of the two banks, for alleged
Conspiracy growing out of violations of sections 22(g) and 23A of the
Federal Reserve Act.

However, the applicant bank was in good condition

and the situation mentioned was not believed to indicate that the
request for trust powers should be denied.
Grace periods under Regulation Q (Item No. 3).

On October

28, 1958, the Board requested the comments and recommendations of the
Federal Reserve Banks, the Comptroller of the Currency, and the Federal
Deposit Insurance Corporation as to whether it would be desirable to
amend section 3(d) of Regulation Q, Payment of Interest on Deposits,
to permit banks to pay interest from the first day of any month on
savings deposits received during the first 10 calendar days in such
month.

The Regulation currently permits a member bank to compute

interest at the applicable maximum rate from the first day of the month
on a savings deposit received during the first 10 business days of
any calendar month commencing a quarterly or semi-annual interest period,
and during the first

5

days of any other calendar month.

The substi-

tution of calendar for business days was considered desirable since it
was possible, because of holidays, for a bank to pay interest at the
maximum rate from the first of the month on a deposit received as late
as the 15th of the month.




6/1/59

-3There had been distributed to the Board a memorandum from

Mr. Hooff dated May 28, 1959, setting forth reasons in favor of such
an amendment, namely, that (1) it would reduce misunderstandings by
and inquiries from member banks in connection with grace periods, (2)
it would make possible uniform advertising by all member banks and
create better customer relationship, (3) it would facilitate computation
of interest on savings accounts computed on a cycle basis, and (4)
it would enable banks to compete more effectively with other savings
institutions.

The replies from most Federal Reserve Banks had

indicated unqualified approval of the amendment.

Chicago opposed the

suggestion, although it agreed with the proposed change from business
to calendar days, while three other Federal Reserve Banks did not
believe the amendment was necessary but would not object to its adoption.
The Comptroller of the Currency and the Federal Deposit Insurance
Corporation also endorsed the suggestion, as did the Federal Advisory
Council.

It was suggested that this amendment, if approved by the

Board, be published in the Federal Register in advance of its final
adoption so that the public would be notified and could submit any
relevant data, views, or arguments.

This was thought desirable because

tle amendment, although essentially of a liberalizing nature, would
have a restrictive effect in allowing only 10 calendar days instead
of 10 business days for receipt of deposits in a month commencing a
regular quarterly or semi-annual interest period.




6/1/59

.J4....
Since interagency discussion had indicated that the staff of

the Federal Deposit Insurance Corporation favored a similar amendment
to the regulations relating to the payment of interest on deposits by
insured nonmember banks, the Legal Division proposed that, subject to
agreement on the part of the Board, arrangements be made for simultaneous publication in the Federal Register of the proposed amendment
to Regulation Q and the similar proposed amendment to the regulations
of the Corporation.
Following a brief discussion, unanimous approval was given to
Publication of the proposed amendment and to a letter to the Federal
Deposit Insurance Corporation transmitting the amended section as it
mould appear in the Federal Register.

Copies of the letter and

enclosure are attached hereto as Item No. 3.
Mr. Hooff then withdrew from the meeting.
Retail trade statistics.

At the conclusion of the discussion

Of the retail trade statistics program at the joint meeting of the
Board and the Presidents on April 14, 1959, it was understood the Board
would give further consideration to the matter on the basis of the
view expressed by the Presidents.

Copies of correspondence exchanged

between Mr. Young and President Bryan of the Federal Reserve Bank of
Atlanta subsequent to that meeting had now been distributed to the
Board.

The final paragraph of Mr. Young's letter, sent to Mr. Bryan

under date of May 13, 1959, contained the following sentences:




6/1/59

-5-

"Since it appears highly unlikely that we will be
able to reach any clear-cut agreement promptly as to the
constructive steps, if any, that we should take to improve
the quality and usefulness of these statistics, I wonder
if it might not be most fruitful at this juncture to turn
our attention to pruning away some of the things that all
of us agree are of no practical value to the System, and
may have considerable negative utility because their lack
of statistical reliability reflects on the general quality
Of our statistical program. Perhaps some aggressive action
along these lines might have the by-product advantage of
leading us closer to a solution of the central issue."
After comments on the status of the matter by Messrs. Young
and Noyes, there followed a discussion during Which Governor Mills
restated and amplified the views he expressed at the meeting of the
Board on April 2) 1959, and the meeting with the Presidents on April 14
Which led him to the conclusion that it would be inadvisable to transfer
the collection of the retail trade data to the Census Bureau until
such time as appropriated funds were available to the Bureau for that
Purpose.
The discussion revealed general agreement that in all the
circumstances it would be appropriate, as a next step, to proceed
along lines such as mentioned in Mr. Young's letter.

Accordingly, he

and Mr. Noyes
were authorized and requested to initiate steps through
the committee
structure of the Presidents' Conference and the System
Research Advisory Committee looking toward the development of a program
that -would accomplish the results outlined in the letter.




6/1/59

-6Letter to Congressman Johnson (Item No. 4).

There had been

prepared by Mr. Thomas and distributed to the Board a draft of reply
to a letter dated May 26, 1959, from Congressman Byron L. Johnson, a
member of the House Banking and Currency Committee, in which a number
of questions were raised with respect to the pending legislation on
member bank reserve requirements. Among other things the Congressman
asked whether maximum reserve requirements should not be left as high
as at present and suggested that the effect of the pending legislation
would be to weaken substantially the power of the Federal Reserve to
fight inflation.

The proposed reply indicated why the Board believed

that retention of three classes of banks for reserve purposes was
justified, but it went on to state why it seemed unlikely that an
increase in reserve requirements beyond the 20 per cent maximum in
the proposed bill would be necessary.

It concluded with the statement

that the bill vas designed primarily to remove structural inequities
and difficulties of administration from the law and would in no way
weaken the power of the Federal Reserve 'either to fight inflation or
to provide an
adequate monetary and credit basis for sustained economic
growth.
In discussion, several clarifying changes in the draft of reply
were agreed upon. Governor Robertson, who had opposed the provision
in the bill originally introduced at the request of the Board that
would reduce the maximum permissible reserve requirement for central




6/1/59

-7-

reserve city banks from 26 per cent to 20 per cent, expressed the view
that there was substance to some of the comments in Congressman Johnson's
letter.

In his opinion the unlikelihood referred to in the draft of

reply (that an increase in reserve requirements beyond 20 per cent
would ever be necessary) was by no means a certainty.

With the proposed

legislation now having been altered to provide for elimination of the
central reserve city classification, he suggested that the position
be taken that a -wrong principle was involved.

Should legislation be

enacted in the form of the present bill, as he thought likely, he felt
that the Board would find itself handicapped in the administration of
reserve requirements in the future.
The other members of the Board indicated that they would be
satisfied with a reply to Congressman Johnson in the form of the draft,
as modified by the suggestions agreed upon at this meeting, on the
basis that such a reply was consistent with the position taken by the
Board when the reserve requirement legislation was introduced.

While

it was recognized that there might be shades of opinion on legislation
in this area, it seemed advisable to the majority of the Board not
to change position at this stage, even though the original bill had
been modified to abolish the central reserve city classification.
Accordingly, approval was given to a letter to Congressman
Johnson in the form attached as Item No. 4, with the understanding that
copies would be sent to Chairman Spence of the House Banking and




6/1/59

-8-

Currency Committee and Chairman Brown of Subcommittee No. 2 of the
House Banking and Currency Committee.
Letter to Congressman Hosmer (Item No. 5).

There had been

distributed to the Board a draft of reply to a letter from Congressman
Craig Hosmer of California dated
May

25, 1959, in connection with a

communication to him from counsel for the Bank of Belmont Shore, Long
Beach, California, with respect to the efforts of that bank to establish
a branch in Seal
Beach, California.
In response to questions by Governor Shepardson, it was brought
out that at the time
the Board refused to extend further the period
for this bank to
establish the proposed branch, the bank was in an
unsatisfactory condition from the standpoint of management, assets,
and capital.

Not until more recently had progress been made toward

resolving these difficulties.

It was noted that the bank had been

advised that when these problems were resolved the Board would be glad
to consider
another application to establish the proposed branch.

In

the meantime,
however, the Comptroller of the Currency had approved
an applica
tion of a national bank to establish a branch in Seal Beach.
Following further discussion, during which suggestions were
made for the
purpose of clarifying the circumstances involved, unanimous
WERn1 was given to a letter to Congressman Hosmer in the form
attached as Item No. 5.




6/1/59

-9Continued retention of retired employee

(Item No.

6).

Pursuant

to the recommendation contained in a file that had been circulated to
the Board, unanimous approval was given to a letter to the Federal
Reserve Bank of Philadelphia interposing no objection to the continued
employment of a retired examiner, Mr. John C. Hummel, for an additional
year on a part-time basis.
Item No.

A copy of the letter is attached as

6.

The meeting then adjourned.




Secretary's Notes: During the day advice was
received from the Federal Reserve Banks of Boston
and Atlanta that the directors of those Banks had
established, subject to the approval of the Board
of Governors, a rate of 3-1/2 per cent (rather
than 3 per cent) on discounts for and advances to
member banks under sections 13 and 13a of the
Federal Reserve Act, along with a rate of 4 per cent
on advances under section 10(b). Other rates in
the Banks' existing schedules were established
without change, except that the Atlanta directors
fixed a range of 4-1/2 per cent to 6 per cent on
advances to commercial and industrial businesses
under section 13b. These rates being within the
pattern approved by the Board on May 28, 1959, the
Boston and Atlanta Banks were advised of their
approval, effective June 2, 1959. All Reserve
Banks and branches were notified by telegram, a
press statement in the usual form was issued at
4:00 p.m. ZDT, and arrangements were made for
publication of a notice in the Federal Register.
Pursuant to recommendations contained in memoranda
from appropriate individuals concerned, Governor
Shepardson today approved on behalf of the Board
the following items affecting the Board's staff:

6/1/59

-10-

Salary increases
Travis J. Johnson, Federal Reserve Examiner, Division of Examinations, from $7,990 to $8,330 per annum, effective June 28, 1959.
Elmer W. Lyster, Federal Reserve Examiner, Division of Examinations,
from $7,990 to $8,330 per annum, effective June 28, 1959.




On the basis of a memorandum from the Division
of Examinations dated May 22, 1959, Governor
Shepardson also approved today on behalf of the
Board resumption of the publication of the
weekly K.3 announcement entitled "Changes in
State Bank Membership." The Board's letter to
the Federal Reserve Banks dated May 6, 1959, had
indicated that this statement was to be discontinued.
In the absence of Governor Shepardson, Governor
Robertson approved on behalf of the Board on
May 29, 1959, a telegram to the Federal Reserve
Bank of Minneapolis (attached Item No. 7)
approving the appointment of Steven J. Johnson
as assistant examiner.

BOARD OF GOVERNORS
OF THE

Item No. 1
6/1/59

FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 1, 1959.

Board of Directors,
The Merchants Trust Company
of Red Bank, N. J.,
Red Bank, New Jersey.
Gentlemen:
Pursuant to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors
approves the establishment of a branch on Route 35 approximately 1,000 feet west of Laurel Avenue, Township
of Holmdel, New Jersey, by The Merchants Trust Company of
Red Bank, N. J., Red Bank, New Jersey. This approval is
given provided the branch is established within one year
from the date of this letter and formal approval of State
authorities is effective at the time the branch is established.
It is understood that capital funds of approximately
t300,000 are to he added to capital structure prior to
opening of the branch.




Very truly yours,

(Signed) Kenneth

A. Kenyon

Kenneth A. Kenyon,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item NO. 2
6/1/59

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 1, 1959

Board of Directors,
Industrial National Bank
of Miami,
Miami, Florida.
Gentlemen:
The Board of Governors of the Federal Reserve System
has given consideration to your application for fiduciary powers
and grants you authority to act, when not in contravention of
State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies, or other
corporations which come into competition with national banks
are permitted to act under the laws of the State of Florida,
the exercise of all such rights to be subject to the provisions
of Section 11(k) of the Federal Reserve Act and Regulation F
of the Board of Governors of the Federal Reserve System.
A formal certificate indicating the fiduciary powers
that Industrial National Bank of Miami is now authorized to
exercise will be forwarded to you in due course.




Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item No. 3

FEDERAL RESERVE SYSTEM

6/1/59

WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONOENCE
TO THE BOARD

June 1, 1959

Federal Deposit Insurance Corporation,
Washington 25, D. C.
Gentlemen:
This refers further to the subject of the Board's letter
of October 28, 1958, regarding a proposed amendment to section 3(d)
of Regulation Q so as to authorize member banks, in computing
interest on savings deposits at the maximum permissible rate, to
permit a grace period of 10 calendar days in any month in lieu of
the present authority to permit a grace period of 10 business days
in any calendar month commencing a quarterly or semi-a7Fal—Feriod
or during the first 5 business days of any other calendar month.
A conference was held between staff members of the offices
of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation and the Board of Governors on May 22, 199, at which
this proposed amendment was discussed. It was the unanimous
conclusion of all present that such an amendment is desirable.
Accordingly, there is enclosed a draft of a notice of the
publish
proposed amendment to Regulation Q, which the Board plans to
be
will
n
Corporatio
in the Federal Register, assuming that your
agreeable to an amendment of its comparable regulation in a similar
manner.
Corporation,
If this amendment meets with the approval of the
Divisions
Legal
the
of
it is suggested that Mr. Oppegard and Mr. Hooff
arrange
ly,
respective
Of the Corporation and of the Board of Governors,
in
amendments
proposed
for simultaneous publication of notice of the
the Federal Register.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

Enclosure



DRAFT

FEDERAL RESERVE SYSTEM
112 CFR Part 217]
[Reg. 0
PAYMENT OF INTEREST ON DEPOSITS
Notice of Proposed Rule Making
Part 217 (Regulation Q), relating to the payment of
interest on deposits, provides in y 217.3(d) that member
banks may compute interest at the applicable maximum rate
from the first day of the month on a savings deposit
received during the first 10 business days of any calendar
month commencing a quarterly or semi-annual interest
period, and during the first five business days of any
other calendar month,
The Board is considering amending this subsection
so as to permit member banks to pay interest at the
maximum permissible rate from the first day of the month
on savings deposits received during the first 10 calendar
days in any month.
The purpose of this amendment is to reduce misunderstandings in connection with these so-called "grace periods",
make possible uniform advertising, create better customer
relationships, and enable banks that compute interest on
a cycle basis to facilitate computation of interest on
savings accounts and eliminate difficulties presently
being encountered.



-2-

The proposed anendment to

217.3 is as follows:

(d) Grace periods in computing interest on
savings deposits. -- A member bank may pay interest
on a savings deposit received during the first
10 calendar days of any calendar month at the
applicable maximum rate proscribed pursuant to
subsection (a) of this section calculated from
the first day of such calendar month until such
doposit is withdrawn or ceases to constitute a
savings deposit under the provisions of this
regulation, whichever shall first occur; and a
member bank may pay interest on a savings deposit
withdrawn during its last 3 business days of any
calendar month ending a regular quarterly or
semi-annual interest period at the applicable
maximum rate prescribed pursuant to subsection (a)
calculated to the end of such calendar month.
This notice is published pursuant to section 4 of the
Administrative Procedure Act and section 2 of the Rules of
Procedure of the Board of Governors of the Federal Reserve
System (12 CFR 262.2).

The proposed changes are authorized

under the authority cited at 12 CFR 217.
To aid in the consideration of the foregoing matter, the
Board will be glad to receive from interested persons any
relevant data, views, or arguments. Although such material
may be sent directly to the Board, it is preferable that it
be sent to the Federal Reserve Bank of the district which will
forward it to the Board to be consideredc, All such material
Should be submitted in writing to be received not later than

, 1959.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM




Nerritt Sherman,
Secrctary.

BOARD OF GOVERNORS
OF THE

Item No.

FEDERAL RESERVE SYSTEM

6/1/59

WASHINGTON
,

OFFICE OF THE CHAIRMAN

June 1, 1959.

The Honorable Byron L. Johnson,
House of Representatives,
Washington 25, D. C.
Dear Mr. Johnson:
This is in reply to your letter of May 26 raising a number
of questionswith respect to the bill relating to reserves required
to be maintained by Federal Reserve member banks. The following
answers may be given seriatim to your questions:
1) The Board expressed the view in its statements regard—
ing the bill that the central reserve city classification should be
retained, but suggested that permissible requirements against demand
deposits at central reserve city banks be reduced from a range of 13
to 26 per cent to a range of 10 to 20 per cent. As was brought out
in the hearings on April 7 before Subcommittee No. 2 of the House
Committee on Banking and Currency, the Board believes that there are
essential differences between the character of deposits at very large
banks in financial centers and those at banks in smaller cities
Which justify three classes of banks rather than only two.
2) It is to be expected that with the growth in the economy
the reserve needs for banks will expand further and it is highly un—
likely that there will ever be an increase in the available supply of
reserves aufficiently greater than the justifiable reserve needs to
necessitate an increase in reserve requirements beyond the 20 per cent
maximum in the proposed bill.
3) The Board is not in a position to express the views of
the Administration, but would point out that increases in reserve
requirements would not be an alternative to rising interest rates;
they would in fact decrease the banks' ability to lend and have the
effect of causing interest rates to rise. Changes in interest rates
reflect primarily the relationship between total demands for credit
and the available supply of lendable funds as determined primarily by
the volume of savings and to a smaller extent by the lending capacity
of banks.
4) Reductions in reserve requirements over time to provide
for deposit growth would be designed to permit the banking system as




4

The Honorable Byron L. Johnson

-2-

a whole to meet the essential credit needs of the country and should
occasion little or no transfer of U. S. Government securities from
the Federal Reserve Banks to member banks. It is likely that in
order to maintain adequate liquidity some of the additional assets
that banks require would need to be U. S. Government securities but
these would have to be found in the market from sources other than
the Federal Reserve.
It is unlikely that such an expansion of member banks'
assets and liabilities would greatly increase their profits. Along
with deposit growth the costs of rendering bank services also rise.
There would be growth in the number of depositors, in the number of
checks drawn, transfers of funds, and in many other services required
by depositors, necessitating increases in the number of employees
and in wages and salaries paid, as well as in other costs. The banking system renders a vital service to the economy in creating the
bulk of the money supply and in handling billions of individual
transactions that are involved in the utilization of that money supply.
The use of the services of the banking system contributes to the
efficiency of the economy. The record of the past several years shows
that the ratio of member bank net profits to their capital accounts
has remained close to 8 per cent, notwithstanding considerable growth
in the volume of their assets and liabilities.
Finally, it should be pointed out that the bill as originally
proposed by the Board was primarily designed to remove from the
Present law some structural inequities and difficulties of administration and only incidentally, and to a relatively minor extent, affects
the Systemls existing authority to influence the over-all availability of reserves to the banking system. It would not in my judgment
weaken the power of the Federal Reserve either to combat inflation or
to provide an adequate monetary and credit basis for sustained economic
growth.




Sincerely yours,

Wm. McC. Martin, Jr.

BOARD OF GOVERNORS
OF THE

Item No. 5

FEDERAL RESERVE SYSTEM

6/1/59

WAS H NCiTON

OFFICE OF THE CHAIRMAN

June 1, 1959
The Honorable Craig Hosmer,
House of Representatives,
Washington 25, D. C.
Dear Mr. Hosmer:
This will acknowledge your letter of May 25, 1959, enclosing
a communication from Mr. James J. Baker with respect to the attitudes
and activities of the Federal Reserve System in connection with the
proposal of the Bank of Belmont Shore, Long Beach, California, to establish a branch in Seal Beach.
Aa indicated in Mr. Baker's letter, the Board of Governors
approved the establishment of a branch in Seal Beach by the Bank of
Belmont Shore in April 1957 and the time within which to establish the
branch was extended subsequently to April 3, 1958. In the meantime,
serious and extensive irregularities were discovered in the operation
Of the bank resulting in the indictment of the president and executive
vice president. Due to the many problems then confronting the bank with
respect to its management, capital, and asset condition, a further extension within which to establish the branch was not granted; and, as a
result, the Board's authorization expired. However, the bank was advised that when the problems had been resolved satisfactorily the Board
'would be willing to consider a new application in the light of conditions then existing.
The information supplied you by Mr. Baker is indicative of the
Problems which this bank faced and some of the efforts of the supervisory
authorities in effecting corrections. Cur records indicate that the
Reserve Bank has been in close touch with the bank and with the other
suPervisory authorities with respect to these problems and that recent
correspondence and conversations were held with respect to the proposed
branch. In the interim, es Mr. Baker states, the Comptroller of the
Currency approved tho establishment of a branch in Seal Beach by the Bank
of America NT&SA.
However, his statement that this was done on recommention of the Federal Reserve is in error, since the approval of the esablishment of branches by national banks comes under the sole jurisdiction
of the
furnish
Comptroller of the Currency and the Federal Reserve does not
re
existthe
to
as
made
are
cermendations with respect thereto. Inquiries
to
as
made
are
recommendations
c'nflicting applications, but no
ere
sutat of
another
by
branch
action should be taken on an application for a
Per7lsory agency.

r




The Honomble Craig Hosmer

-2-

Following a review of this matter as requested by you, I am
able to assure you that there has been no discriminatory action taken
by the System against
the Bank of Belmont Shore in respect to its establishment of the branch in question. There was a willingness to
approve the establishment of a branch by that bank whea conditions
warranted and, as heretofore stated, the Federal Reserve Bank of San
Francisco has been in close touch with the Bank of Belmont Shore in
that regard. Further, as to the establishment by a national bank of
a branch in the
same locality, the Board had no control over that establishment which was accomplished while the subject bank was correcting its unsatisf
actory conditions.
Ni. Baker's letter is returned herewith.
Sincerely yours,
(Signed) Wm. MCC. Martin, Jr.
NM. McC. Martin, Jr.
Enclosure




BOARD OF GOVERNORS
OF THE

,,o44,)
- Weap,

.,/
o
o,
o

Item No. 6

FEDERAL RESERVE SYSTEM
*

\

6/1/59

WASHINGTON 25, D. C.

M

UU

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

*
*S V20t

June 1, 1959.

Mr. Joseph R. Campbell, Vice President,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pennsylvania.
Dear Mr. Campbell:
In accordance with the request contained in your
letter of May 15, 1959, and on the basis of the information
furnished, the Board of Governors interposes no objection to
the continued employment of John C. Hummel, a retiree of the
bederal Reserve Bank of Philadelphia, on a part-time basis as
a special assistant examiner, to assist in the examination of
State member banks and in the training of assistant examiners,
with the understanding that the period of his employment in
the circumstances described in your letter will be limited to
one year from the date of this letter.
The Board approves the designation of Mr. Hummel as
a special assistant examiner for the Federal Reserve Bank of
Philadelphia for the purpose of participating in the examination of State member banks during such periods as he may be
actually employed by the Reserve Bank. This approval is given
on the assumption that Mr. Hummel is not indebted to any member
bank and that he will not be permitted to participate in the
examination of any bank to which indebted.




Very truly yours,

(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.

TELEGRAM
LEASED WIRE SERVICE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON

May 29, 1959

CONFIDIj (FR)
DEMING - MINNEAPOLIS
Reurlet May 28 Board approves appointment Steven J. Johnson
as assistant examiner for Federal Reserve Dank of Minneapolis.
Please advise effective date. It is noted Johnson is indebted
to Bank of Sun Prairie, Sun Prairie, Wisconsin, a nonmember
bank in District 7, in amount of approximately $10h25.
Appointment given with understanding he will not participate
in arty examination of that bank until indebtedness has been
liquidated,




(Signed) Kenneth A. Kenyon
ICENTON

Item No. 7

6/1/59