The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes for To: Members of the Board From: Office of the Secretary June 10 1965 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. Robertson Gov. Balderston Gov. Shepardson Gov. Mitchell Gov. Daane Gov. Maisel Minutes of the Board of Governors of the Federal Reserve System on Thursday, June 10, 1965. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Shepardson Mitchell Daane Maisel 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 Hackley, General Counsel Brill, Director, Division of Research and Statistics Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations O'Connell, Assistant General Counsel Kiley, Assistant Director, Division of Bank Operations Leavitt, Assistant Director, Division of Examinations Spencer, General Assistant, Office of the Secretary Smith, Senior Economist, Division of Research and Statistics Circulated or distributed items. The following items, copies °f which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Letter to Wells Fargo Bank, San Francisco, California, ! i Prcving an extension of time to establish a branch LI El Cerrito. ° Jder approving an extension of time for First National p?rPoration, Appleton, Wisconsin, to acquire shares of airst National Bank of Appleton and Valley National Bank, f Proposed new bank, (both of Appleton, Wisconsin) and cr Valley National Bank to be opened for business. 1 2 6/10/65 -2Item No. Memorandum from the Legal Division dated June 9, 1965, recommending approval of a request by the Department of Justice for 1962 deposit data for certain offices of The Bank of California, National Association, San Francisco, California; letters transmitting such data. 3-5 Reassignment of territory in Sixth District (Item No. 6). There had been circulated a memorandum dated June 1, 1965, from the Division of Bank Operations discussing and recommending approval of a request by the Federal Reserve Bank of Atlanta that the territory of the Birmingham Branch be extended to include the portion of the State of Alabama presently included in the territory served by the head office. The reassignment would involve nine counties (Barbour, Coffee, Covington, Dale, Geneva, Henry, Houston, Pike, and Russell) and portions of two other counties (Lee and Chambers). The Atlanta Reserve Bank had made the following points in favor of the proposal: (1) with the decline of railroad transportation and the increased use of armored car deliveries, the 29 banks in the area could be serviced more effectively and efficiently from the Branch; (2) the change would give official recognition to the shift in the workload from the Atlanta Bank to the Birmingham Branch that had already occurred; (3) under the present optional routing system, some banks in the area received as many as four cash letters a day; (4) the proposed transfer w°111d not disturb existing correspondent bank relationships; and (5) all member and par remitting banks involved in the proposed shift had been contacted and were agreeable to the change. 6/10/65 -3A draft of letter to the Atlanta Reserve Bank that would approve the requested extension of territory of the Birmingham Branch, effective at the close of business June 23, 1965, was attached to the memorandum. Following comment by Mr. Farrell in supplementation of the inforillatio n presented in the memorandum of June 1, the letter to the Atlanta Reserve Bank was approved unanimously. A copy is attached as Item No. 6. Alleged deposit in Dallas Bank (Item No. 7). In a letter dated IlaY 19, 1965, Congressman Wright of Texas requested that the Board allow a disinterested third party to examine the records of the Federal Reserve Bank of Dallas in order to settle a controversy over whether the Bank was h°1ding funds deposited in behalf of the deceased father of a Mr. Albert Sidney Lackey. A draft of reply and related files had been circulated. The letter would state, among other things, that the Federal Reserve Banks were not and never had been authorized to accept deposits from or on behalf of individuals, and that in the course of regular examinations there had been no evidence that the Dallas Reserve Bank had departed frorn this restriction. Nevertheless, a careful search had been made by the Bank's staff incident to Mr. Lackey's claim, and no evidence had been found of the alleged deposit. The Board was satisfied that the Bank had taken steps to insure that the claim was thoroughly investigated and that the alleged deposit did not exist. Mr. Cardon reported that he had discussed the claim at some length with Mr. Lackey's attorney and an aide to Congressman Wright in 6/10/65 -4- the offices of the Congressman, who also joined the discussion briefly. In connection with the draft letter, Mr. Cardon suggested that since the funds in question reportedly were deposited about 40 years ago, a sentence might be included to note that Mr. Lackey's father had died in 1925 and the investigation of the Bank's records covered all the years °f the Bank's operations through 1927. In the general discussion that followed, agreement was expressed with a suggestion made by Governor Shepardson that at the time of the next examination of the Federal Reserve Bank of Dallas the Board's examiners review the Bank's account books in the light of Mr. Lackey's claim so that it might be on record that this had been done. The letter to Congressman Wright was then approved unanimously in a form reflecting Mr. Cardon's suggestion. A copy of the letter, in the form sent, is attached as Item No. 7. All members of the staff except Mr. Sherman then withdrew from the meeting. Foreign travel for Mrs. Junz. Pursuant to the recommendation c"tained in a memorandum dated June 3, 1965, from Mr. Young, Adviser to the Board and Director, Division of International Finance, the Board QI-V-11.°I.:11 certain foreign travel by Helen B. Junz, Economist in the 47ision of International Finance, for the purpose of consulting various specialists on the labor supply and wage situation in Europe. The authorized travel was from Amsterdam to Geneva, Paris, and Brussels and 6/10/65 -5- return to Amsterdam over a period of two weeks beginning approximately September 13, 1965, with payment of transportation expenses plus per diem in lieu of subsistence at rates prescribed by the Standardized Government Travel Regulations. Youth opportunity program (Item No. 8). Governor Shepardson stated that an inquiry had been received from one of the Federal Reserve Banks regarding the statement by the President dated May 21, 1965, concerning the "Youth Opportunity Program," designed to provide temporary summer employment for persons in the age bracket 16 through 21. In view °f the Board's action yesterday, he had replied that the Board was participating in the program and expected to hire a few persons in the Particular age bracket. It was understood that a letter would be sent to the Presidents Of all Federal Reserve Banks providing similar information, with indication that the question whether the Reserve Banks should cooperate in the Pt°gram was a matter for each Bank to decide in the light of the constructive use that might be made of the workers, but that the Board was sYmPathetic with the effort whenever immediate results were likely to be Productive or the persons temporarily employed might be potential l'egular employees at a later stage. A copy of the letter subsequently sent to the Federal Reserve Banks is attached as Item No. 8. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board the following items: 6/10/65 -6- Letter to the Federal Reserve Bank of Cleveland (attached Item No. 9 approving the appointment of Bruce E. Thauburn as examiner. Memorandum from the Division of Data Processing dated May 4, 1965, recommending that new positions of (1) tabulating machine operator and (2) key punch operator be established in that Division. Memoranda recommending the following actions relating to the Board's staff: A22-21212 1L Penelope Johnson as Statistical Assistant, Division of Research and Statistics, with basic annual salary at the rate of $5,000, effective the date of entrance upon duty. rs . Phyllis A. Carson, from the position of Stenographer in the Legal nvision to the position of Secretary in the Division of Administrative ervices, with an increase in basic annual salary from $4,630 to $5,000, effective June 28, 1965. th Patricia E. Gardosik, from the position of Clerk-Stenographer in t.e.Division of Bank Operations to the position of Secretary in the s vision of Personnel Administration, with an increase in basic annual alarY from $4,630 to $5,000, effective upon assuming her new duties. Item No. 6/10/65 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS. arriccm. CORRESPONDENCE TO THE MORRO June 10, 1965 Board of Directors, Wells Fargo Bank, San Francisco, California. Gentlemen: The Board of Governors of the Federal Reserve System extends to September 27, 1965, the time within Which Wells Fargo Bank may establish a branch in the vicinity of San Pablo Avenue and the Alameda-Contra Costa County line in El Cerrito, Contra Costa County, California. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 344 UNITED STATES OF AMERICA Item No. 2 6/10/65 BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. Ia the matter of the Application of PIRST NATIONAL CORPORATION, APPleton, Wisconsin, , f7cYr Prior approval of acquisition of . ptc)ting shares of First National Bank of PPleton, and Valley National Bank, a Posed new bank, both of Appleton, qaconsin. al• ORDER EXTENDING PERIOD OF TIME PRESCRIBED BY PROVISO IN ORDER OF APPROVAL WHEREAS, by Order dated February 25, 1965, the Board of c°11ern°rs, pursuant to section 3(a)(1) of the Bank Holding Company Act Of 1956 (12 U.S.C. 1842(a)(1)) and section 222.4(a)(1) of Federal Iteserve Regulation Y (12 CFR 222.4(a)(1)), approved an application on behalf of First National Corporation, a proposed Wisconsin corporation, 1143uant to which it would become a bank holding company through the 4441111eition of 80 per cent or more of the voting shares of First Natio nal Bank of Appleton and Valley National Bank, a proposed new bank) both of Appleton, Wisconsin; and said Order was made subject to the Ptoviso "that the acquisition so approved shall not be consummated (b) later than three months after said date [of Order]", and -2- "ttlat Valley National Bank be opened for business within six months lq the date of the Board's Order]"; and WHEREAS, First National Corporation has applied to the Board fc)r an extension of the time within which the approved acquisition may be consummated and within which Valley National Bank is to be opened .(31. business; and it appearing to the Board that reasonable cause has been shown for the extensions of time requested, and that such extensions ' Imuld not be inconsistent with the public interest; IT IS HEREBY ORDERED, that the Board's Order of February 25, 19653 as published in the Federal Register on March 4, 1965 (30 P '-me 2833), be, and it hereby is, amended so that the proviso re- 4ting to the dates by which the acquisition approved shall be Co slImmated, and Valley National Bank opened for business, shall read: "(b) later than October 1, 1965, and provided, further, that Valley 44tiona1 Bank shall be opened for business no later than December 31, 1965,11 Dated at Washington, D. C., this 10th day of June, 1965. By Order of the Board of Governors. (Signed) Merritt Sherman Merritt Sherman, Secretary. Item No. 3 6/10/65 June 9, 19654 Request by Department of Justice Board of Governors SUBJECT: Legal Division (T. J. O'Connell) for 1962 county deposit data. On June 9, the Board received a telegram from a member of the , staff of the Department of Justice, Antitrust Division, in San rancisco, California, requesting that the Board make available to the cuePartment June 30, 1962 deposit data for the offices of The Bank of /lalifornia, N. A., located in Seattle, Uashington (King County), Tacoma, a,shington (Pierce County), and Portland, Oregon (IIultnomah County). T, 'aue request is made in relation to the Government's antitrust suit ainst Crocker-Anglo National Bank and Citizens National Bank, Los tr eles (merged under the title of Crocker-Citizens National Bank), the belal of which commenced last week in San Francisco. Specifically, the isprtment requests IPC demand and time deposits figures at June 30, 1°2) at the aforementioned offices of The Bank of California. 4 Under the Board's Rules, the data sought by the Department coin_ citute unpublished information of the Board. The Department's re% Parallels a request recently made by counsel for the defendant corlks in this suit for 1964 deposit data for individual banks in various d,nties in the State of California. The Board furnished the deposit requested as to all member banks and nonmember insured banks. The teniaember bank data were released following receipt from the Federal °sit Insurance Corporation of appropriate authorization for disclosure. : Th for tabulations given to the banks' counsel were also furnished to counsel the Government. As the Board is aware, in requiring member banks to report ts by individual offices, the banks have been advised since June 19 to°0 that such data would be considered public information with respect ta"Ky plications for mergers or branches, or for Board action under the Holding Company Act. Recommendation. - It is the view of the Legal Division that the beParr of c -ment's request for 1962 deposit data for three offices of The Bank eari lifornia should be accorded the same Board action as was given the is 4 1er-mentioned request for 1964 deposit data. Since a national bank eoltnvolved and the Comptroller did not participate in the June 1962 data or cection, there appears to be no reason for contacting either the FDIC as to t°111Ptroller on this matter. The Bank of California is on notice are data the if Even fur r possibility of the disclosure contemplated. will Department the Shed, it cannot be stated with certainty that se for 'ne data in evidence; it is possible that the data will be used only stud" Y or analytical purposes. Hoard of Governors l Board grants the Department's request, it is suggested thIf the th at e Board's reply take the form of a transmittal letter from the 0, sion of Data Processing, generally similar to the letters previously , 1/lcellared in respect to transmittal of the 1964 deposit data. These 4:stters acknowledged the requests for data, noted enclosure of the same :tul set forth brief explanatory comments on the data. Consistent with ilttlier Board actions in furnishing data to either side in this case, . is recommended that if the information sought by the Department is Z Z:rtlished, the same information be transmitted to counsel for the defendant th4lts. The Department would be advised the opposing counsel has been given Francisco would bee.data in question, and the Federal Reserve Bank of San transmittal.of letter Kurnished a copy of each Item No. 4 6/10/65 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS OrrICIAL. CORRESPONDENCE TO THE ODARD June 10, 1965. Xt.. John D. Gaffey, Antitrust Division, 11. S. Department of Justice, 450 Golden Gate Avenue, Box 36046, Room 16432, San Francisco, California. 94102 bear Mr. Gaffey: In response to your telegraphic request of June 8, 1965, there are shown below demand and time deposits of individuals, P eaItnerships, and corporations held by the offices of The Bank of v41iforn ia, located in Seattle and Tacoma, Washington, and N A t1and, Oregon, as of June 30, 1962. Demand IPC (in thousands) Time IPC (in thousands) Seattle $ 35,879 $ 22,069 Portland $ 46,826 $ 33,839 Tacoma $ 20,854 $ 20,664 It is understood that the above data are to be used in trial of the case of U.S. v. Crocker-Anglo National Bank, et al. ratiant to the Board ts policy, established in respect to this case, w,illaking data that are furnished to one party to the litigation railable to the other party, the above data are being sent to • Richard J. Archer, counsel for defendant banks in this case. the 4 w Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. Item No. 5 6/10/65 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OfFICIAL CORRESPONDENCE TO THE BOARD June 10, 1965. Mr. Richard J. Archer, Morrison, Forester, Holloway, Clinton & Clark, Crocker Building, San Francisco, California. 94104 Dear Mr. Archer: In connection with the trial of the case of U.S. v. Cr0 -__slser-Anglo National Bank, et al., the Department of Justice has equested that the Board make available to staff members of the ! 4 cintitrust Division in San Francisco, California, June 30, 1962 ,ePosit data for the offices of The Bank of California, N. A., ±ocated in Seattle and Tacoma, Washington, and Portland, Oregon, T Board has agreed to furnish the requested data and, in line with e Board's policy, established in respect to this case, of making tie:ta that are furnished to one party to the litigation available to tr other party, there are set forth below the data furnished to "e Department of Justice. r Demand IPC (in thousands) Time IPC (in thousands) Seattle $ 35,879 $ 22,069 Portland $ 46,826 $ 33,839 Tacoma $ 20,854 $ 20,664 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. cz, Item No. 6 6/10/65 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ^CORTI!!! orriciAL CORPICIPONOTINCE TO THC ROAR° June 10, 1965 Mr. Malcolm Bryan, President, Federal Reserve Bank of Atlanta, Atlanta, Georgia. 30303. Dear Mr. Bryan: The Board has approved the proposal in your letter of May 18, 1965, to extend the territory of the Birmingham Branch of the Federal Reserve Bank of Atlanta to include the portion of the State of Alabama that is now in the territory served by your Head Office. It is understood that the area in question involves all of Barbour, and Coffee, Covington, Dale, Geneva, Henry, Houston, Pike, Lee and Chambers of portions as Russell counties, as well be counties. It is also understood that the change will 1965. 23, June business of made effective at the close The Federal Reserve Par List will be amended accordingly. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS 0F THE Item No. 7 6/10/65 FEDERAL RESERVE SYSTEM WASHINGTON OFFICE OF THE CHAIRMAN June 11, 1965 Ihs Honorable Jim Wright, House of Representatives, Washington, D. C. 20515 Dear Mr. Wright: 19, in which This is in response to your letter of May party to third You request that the Board allow a disinterested in order Dallas !_aimine the records of the Federal Reserve Bank of funds holding , cc) settle a controversy over whether the Bank is Albert Sidney Posited in behalf of the deceased father of Mr. Lackey. never have been The Federal Reserve Banks are not and authorized to accept deposits from or on behalf of individuals, and been no evidence iii the course of regular examinations there has restriction. this that the Dallas Reserve Bank has departed from account books the Nevertheless, a careful, item-by-item search of Lackey's Mt. to 8 also been made by the Bank's staff incident claim, and no evidence has been found of the alleged deposit. si the search covered all thilce Mr. Lackey's father died in 1925, ua years of the Bank's operations through 1927. Bank were to accede to If, under these circumstances, the i is difficult to the -nepection of its records as you suggest, it of any Reserve records the ile how we could stop short of opening r particular allegation of a 4:.1k to indiscriminate search upon 4-uterest--the very thing your letter indicates you would not have us do. operate under the general As you know, the Reserve Banks Board is satisfied that Fcrvision of the Board of Governors. The insure that the Federal Reserve Bank of Dallas has taken steps to The Honorable Jim Wright -2- ac14r. Lackey's claim was thoroughly investigated, that he has been are public the of corded the consideration to which all members deposit entitled in matters of this nature, and that the alleged in question does not exist. Accordingly, I am sure you will appreciate both the further reason and the justification for the Board's view that ed. warrant be not administrative pursuit of the matter would Sincerely yours, (Signed) Wm. McC. Martin, Jr. Ma. McC. Martin, Item No. 8 6/10/65 BOARD OF GOVERNORS OF THE • o• FEDERAL RESERVE SYSTEM : . WASHINGTON, D. C. 20551 .„firm ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD June 15, 1965. Dear Sir: In response to an inquiry from one of the Federal Reserve Banks regarding the statement by the President dated May 21, 1965 concerning the "Youth Opportunity Campaign," the Board has stated that it is participating in this program and expects to hire a few persons in the age bracket 16 through 21 for temporary summer jobs. With respect to the question whether the Federal Reserve Banks should cooperate in the program, this, of course, is a matter for each Bank to decide in the light of the constructive use that might be made of workers in the category described. However, the Board is sympathetic with the effort to provide employment to such individuals whenever immediate results are likely to be productive or whenever the Persons temporarily employed may be potential regular employees at a later stage. Enclosed for your convenient reference are copies °f the White House release of May 21, and an "Open Letter to EmPloyers" dated May 23 from the Secretary of Commerce. Very truly yours, Merritt Sherman, Secretary. Enclosures. TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS. Item No. 9 6/10/65 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS orriciAt. CORREISPONOCNCE TO THE BOARD June 10, 1965 Mr. Harry W. Huning, Vice President, Federal Reserve Bank of Cleveland, Cleveland, Ohio. 44101 Dear Mk. Huning: In accordance with the request contained in Your letter of June 3, 1965, the Board approves the appointment of Bruce E. Thauburn as an examiner for the Federal Reserve Bank of Cleveland. Please advise the effective date of the appointment. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
@FedFRASER