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69
Minutes for June 10, 1966
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, 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. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
Gov. Brimmer
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Federal Reserve Bank of St. Louis
1[998
Minutes of the Board of Governors of the Federal Reserve
System on Friday, June 10, 1966.
The Board met in the Board Room at
10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Robertson, Vice Chairman
Shepardson
Mitchell
Daane
Maisel
Mr. Kenyon, Assistant Secretary
Mr. Young, Senior Adviser to the Board and
Director, Division of International Finance
Mr. Holland, Adviser to the Board
Mr. Molony, Assistant to the Board
Mr. Hackley, General Counsel
Mr. Solomon, Director, Division of Examinations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mrs. Semia, Technical Assistant, Office of the
Secretary
Mr. Morgan, Staff Assistant, Board Members' Offices
Messrs. Brill, Koch, Partee, Axilrod, Eckert, Ettin,
Fry, Keir, and Kelty, and Mrs. Peskin of the
Division of Research and Statistics
Messrs. Sammons, Hersey, Katz, Baker, and Gemini11
of the Division of International Finance
Money market review.
Mr. Kelty discussed conditions in the
Government securities market, with special reference to Federal agency
issues, after which Mr. Fry commented on the staff projections of aggregate bank reserve figures.
(Tables and charts had been distributed
r elating to the calendar of agency issues and to money and capital markets and bank reserve utilization.)
Mr. Baker then reported on foreign
exchange markets, with emphasis on recent activity in sterling.
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Federal Reserve Bank of St. Louis
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-2All members of the staff not concerned with the remaining items
on the agenda then withdrew from the meeting and the following entered
the room:
Farrell, Director, Division of Bank Operations
Johnson, Director, Division of Personnel Administration
O'Connell, Assistant General Counsel
Smith, Associate Adviser, Division of Research and
Statistics
Mr. Kiley, Assistant Director, Division of Bank Operations
Mr. Thompson, Assistant Director, Division of Examinations
Mrs. Heller and Mr. Forrestal, Senior Attorneys, Legal
Division
Mr. Lawrence, Economist, Division of Research and Statistics
Mr. White, Technical Assistant, Division of Bank Operations
Messrs. Egertson and McClintock, Supervisory Review Examiners
Messrs. Donovan, Lyon, and Poundstone, Review Examiners,
and Miss Greene, Assistant Review Examiner, Division of
Examinations
Mr. Hart, Assistant to the Director, Division of Personnel
Administration
Mr.
Mr.
Mr.
Mr.
Discount rates.
The establishment without change by the Federal
Reserve Bank of Boston on June 6, 1966, and by the Federal Reserve Banks
of Cleveland, Richmond, Atlanta, St. Louis, Minneapolis, Kansas City,
end Dallas on June 9, 1966, of the rates on discounts and advances in
their existing schedules was approved unanimously, with the understanding
that appropriate advice would be sent to those Banks.
Approved items.
after
The following items were approved unanimously
consideration of background information that had been made avail-
able to the Board.
indicated.
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Federal Reserve Bank of St. Louis
Copies are attached under the respective numbers
6/10/66
-3Item No.
Letter to The First Pennsylvania Banking and
Trust Company, Philadelphia, Pennsylvania,
aPproving the establishment of a branch in
Abington Township.
Letter to Bank of Slidell, Slidell, Louisiana,
a pproving the establishment of an in-town branch
and commenting on the bank's capital position.
2
Letter to Jeff Davis Bank & Trust Company,
Jennings, Louisiana, approving the establishment
Of a branch in Lake Arthur.
3
Letter to The Connecticut Bank and Trust Company,
Hartford, Connecticut, granting an extension of
time to establish a branch in West Hartford.
4
Letter to New Jersey Bank and Trust Company,
Clifton, New Jersey, granting a further extension of time within which to comply with a
condition of membership.
5
Letter to American State Bank, Lubbock, Texas,
aPProving its application for membership in the
Pederal Reserve System.
6
Letter to Boston Overseas Financial Corporation,
-c'oston, Massachusetts, granting an extension of
time to purchase additional shares of International
Pactors A. G., Chur, Switzerland.
7
lle morandum dated June 6, 1966, from the Division
of Examinations suggesting a change in the procedure for handling requests from the Federal
ePosit Insurance Corporation for information
about banks withdrawing from System membership.
8
Letter to the Federal Reserve Bank of San
Francisco regarding an apparent violation of
the Bank Holding Company Act by American
National Bank of Denver, Denver, Colorado, a
subsidiary of Western Bancorporation, Los
A ngeles, California.
9
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6/10/66
-4Item No.
Letter to the Bureau of the Budget regarding
a.draft bill relating to interest rate limitations on obligations and loans of agencies
regulated by the Farm Credit Administration.
Letters to the Federal Reserve Banks of New
York, Philadelphia, and Richmond regarding
b uilding operating costs.
10
11-13
Letter to the Federal Reserve Bank of Richmond
a pproving the payment of salary to William F.
Upshaw as Assistant General Counsel at the rate
fixed by the Bank's Board of Directors.
14
Letter to the Federal Reserve Bank of Atlanta
aPproving the payment of salary to Arthur H.
Kantner as Assistant Vice President at the
rate fixed by the Bank's Board of Directors.
15
Letter to the Federal Reserve Bank of Chicago
aPProving the payment of salaries to Gordon W.
LamPhere as Assistant Vice President and to
Adolph J. Stojetz and Ronald L. Zile as Assistant Cashiers at the rates fixed by the Bank's
8°ard of Directors.
16
Letter to the Bureau of the Budget requesting
aPProval of the collection of information on
the par
value of holdings of U.S. Government
and Federal agency securities by issue from
all national banks at the forthcoming June call
date.
17
Letter to the Federal Reserve Bank of New York
tending the time for Marine Midland Grace
T2rust Company of New York to retain stock of
h50 Park Avenue Corporation, a corporation
,°1ding the leasehold of the building containthe bank's midtown office, pending a deterIlilnation under section 4(c)(1) of the Bank
°1ding Company Act.
18
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-5With respect to Item No. 18, Mr. O'Connell summarized the back-
ground of the matter and brought out that the effect of the letter would
be simply to defer a determination of the question of "substantial occuPancY" pursuant to section 4(c)(1) until Marine Midland Grace Trust
Company had actually achieved the degree of occupancy of the building
that reportedly was intended.
Thus, the letter followed the position
Previously taken by the Board, most recently in a letter to the New York
Reserve Bank dated January 25, 1966.
There followed discussion of the standards that might appropriately be used in determining "substantial occupancy" during which Governor
Ilaisel repeated the suggestion he had made earlier that consideration
Should be given not only to percentage of space occupied in a building
but also to the value of such space in relation to the total rentable
value of the building.
Report on competitive factors.
A report to the Comptroller of
the Currency on the competitive factors involved in the proposed consolidation of the Bank of Trade of San Francisco, San Francisco, California,
and The First National Bank of Vista, Vista, California, was approved
unanimously for transmittal to the Comptroller.
The conclusion stated
was that the proposed consolidation would not have an adverse effect upon
e°mPetition.
Holding company application forms (Item No. 19).
At the meet-
ing on March 30, 1966, following discussion of a proposed letter to the
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Federal Reserve Bank of St. Louis
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Federal Reserve Banks regarding the need for further improvement in the
Processing of bank holding company and bank merger applications, the
sending of such a letter was deferred pending consideration of revised
aPPlication forms, work on which had been in process for some time.
There had now been distributed a memorandum dated June 8, 1966, from
the Division of Examinations submitting proposed revisions of Forms
F.R. Y-1 (Application to Become a Bank Holding Company) and F.R. Y-2
(APPlication for Acquisition of Bank Shares by a Bank Holding Company).
Also submitted was a draft of letter that would transmit the proposed
forms to the Reserve Banks for comments.
After introductory remarks by Mr. Thompson, during which he
Pointed out that some changes in the forms would be necessary if pending
bank holding company legislation should be enacted, Governor Mitchell
commented further on the revisions, a work in which he and Governor
Shepardson had participated with the staff.
One objective, he said, had
been to streamline the requirements for filing, with the thought that
additional data could be supplied through Federal Reserve computer procedures.
The major change, he continued, reflected an effort to deal
better with the definition of the relevant service area.
Procedurally,
the new approach would start with an approximation by the applicant,
this to be reinforced by Reserve Bank review.
It was hoped that this
approach, bringing the Federal Reserve into the measurement process at
°4 early stage, would lead to greater accuracy.
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Federal Reserve Bank of St. Louis
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-7Governor Robertson expressed himself in favor of asking the
views of the Reserve Banks regarding the proposed forms.
He indicated
that he had some reservations as to what might result from the proposed
new measurement of service areas, but noted that these reservations
might be resolved after further study of the matter.
Governor Robertson also observed that it would appear desirable
to achieve as much consistency as possible between bank holding company
and bank merger applications.
In this connection he brought out that
the interagency Coordinating Committee on Bank Regulation was attempting
tO develop uniform standards for merger applications.
Therefore, it
would seem advisable to inform the Committee of the standards decided
uPon for use in holding company applications.
In an ensuing exchange of comments on the problems involved in
achieving interagency uniformity, Governor Shepardson expressed himself
in favor of obtaining the views of the Reserve Banks regarding the proPosed holding company forms, then arriving at a Board position on them,
and on that basis pursuing the interagency negotiations on the merger
aPPlication forms.
There was general agreement that such a procedure would be
aPPropriate.
After further discussion the sending to the Reserve Banks of a
letter in the form attached as Item No. 19 was approved unanimously.
Possible kiting operation.
Mr. Solomon reported information
received from the Federal Reserve Bank of St. Louis regarding what
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appeared to be a kiting operation involving two banks in Missouri, one
a national bank that had been borrowing quite regularly from the Reserve
Bank and the other an insured nonmember bank proposing to convert to
national bank status.
Both banks were under the same control.
Mr. Solomon related that interagency cooperation had resulted
in arrangements whereby simultaneous special investigations were being
made, in the one case by a national bank examiner, accompanied by a
Reserve Bank examiner, and in the other case by an examiner for the
Federal Deposit Insurance Corporation.
Application of United Virginia Bankshares.
There had been
d istributed a memorandum dated June 1, 1966, from the Division of Examinations, with other pertinent papers, regarding the application of
United Virginia Bankshares Incorporated, Richmond, Virginia, to acquire
at least 80 per cent of the voting shares of Spotswood Bank, Harrisonburg, Virginia (a proposed new bank into which the Harrisonburg Loan &
Thrift Corporation, an industrial loan association, was to be converted).
The Division recommended approval.
After summary comments by Mr. Lyon based on the distributed
material, Governor Mitchell called attention to several passages in the
Reserve Bank investigation report that might be interpreted as indicating that the loan and thrift corporation had been providing unusually
vigorous competition in the area and that the present application might
constitute a device to stifle such competition.
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Federal Reserve Bank of St. Louis
The report, he said,
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could be read as saying that the loan and thrift corporation had been
Providing facilities that would not otherwise have been available to
the Harrisonburg community, which facilities would no longer be available if the proposed transaction occurred.
Governor Daane commented that the management of United Virginia
Bankshares was noted for its aggressiveness and hardly would allow any
of its units to be unaggressive.
Governor Shepardson suggested that the portion of the report
mentioned by Governor Mitchell might be read as indicating that the
industrial loan association had pursued questionable competitive tactics.
Further discussion brought out that the industrial loan association was not subject to Federal regulation concerning the amount of
interest that could be paid on accounts held by it.
Nor were such
accounts covered by Federal deposit insurance.
Governor Robertson said it was on this basis that he would approve
the application.
The institution into which the industrial loan associa-
tion was to be converted would be subject to the same restraints and
°bligations as other banks in the area.
The application was then approved unanimously, it being understood
that an order and statement reflecting this decision would be prepared
f'pr the Board's consideration.
It was also understood that issuance of
the order and statement would be withheld pending action by the Federal
1)ePosit Insurance Corporation on the application of Spotswood Bank for
deposit insurance.
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Federal Reserve Bank of St. Louis
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-10Application of United Virginia Bankshares (with other related
11ROAS1Li2EL.
There had been distributed memoranda from the Division
of Examinations dated June 2, 1966, with other pertinent papers, regarding the applications of (1) United Virginia Bankshares Incorporated,
Richmond, Virginia, to acquire at least 90 per cent of the voting shares
of Rockbridge Bank & Trust Company, Lexington, Virginia, a proposed new
bank into which would be merged Rockbridge National Bank of Lexington;
(2) Rockbridge Bank & Trust Company for membership in the Federal Reserve
System; and (3) Rockbridge Bank & Trust Company to merge Rockbridge
National Bank of Lexington.
The Division recommended approval of the
aPplications.
After summary comments by Mr. Lyon, the members of the Board
stated their positions, which resulted in approval of the bank holding
company and bank merger applications, Governors Robertson and Mitchell
dissenting on the ground that Rockbridge National Bank of Lexington, the
°IllY local independent bank, was a viable institution, its management
was reasonably satisfactory, its profits position was good, and there
was an advantage to the community in leaving this option available.
It
was understood that appropriate orders and statements would be drafted
fc'r the Board's consideration.
The application of Rockbridge Bank & Trust Company for membershin in
the Federal Reserve System was then approved, it being understood
that advice of this action would be withheld until the Board's orders and
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statements regarding the related holding company and merger applications
were issued.
Messrs. Young, Holland, O'Connell, Smith, Thompson, Leavitt,
Forrestal, Lawrence, Donovan, Egertson, Lyon, McClintock, and Poundstone,
Mrs. Heller, and Miss Greene then withdrew from the meeting.
In a memorandum
Coin orders from nonmember banks (Item No. 20).
of October 12, 1965, the Legal Division concluded that the Reserve Banks,
as a legal matter, should accept orders for coin directly from nonmember
banks as well as from member banks and, in addition, that member and nonmember banks should be treated alike in respect to charges for coin shipments.
Discussion by the Board on November 26, 1965, resulted in a
consensus (which was consonant with a view expressed in September 1965
by the Conference of Presidents of the Federal Reserve Banks) that in
Principle the Reserve Banks should accept coin orders from nonmember
banks as well as from member banks, but that pending further study and
alleviation of the coin shortage, the Reserve Banks not accepting orders
from nonmember banks should not be required to do so.
The Board also
expressed the view that a broad study of coin distribution procedures
Should be requested through the Presidents' Conference.
A letter of
December 30, 1965, from the Board to the Chairman of the Presidents'
Conference requested such a study.
There had now been distributed a memorandum dated June 2, 1966,
L n which Mr. Farrell noted that the coin shortage had been largely
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resolved, except for half dollars.
As to the latter, principally
because of the propensity of the public to retain the Kennedy halves,
rationing would undoubtedly be necessary for some time to come.
Seven
Federal Reserve Banks did not follow the practice of accepting coin
orders from nonmember banks, which therefore had to rely on their correspondent member banks, and the inability of nonmember banks to obtain
supplies of halves was leading to charges of inequity.
One such complaint
had recently been brought to the Board's attention by the Bureau of the
Mint, which had indicated to the Congressman who transmitted the complaint
that the matter would be under active consideration by the Board.
It
appeared that the Reserve Banks that did not fill coin orders for nonMember banks were not likely to change their practice, and it was understood that there were no plans to submit any recommendation to the June
1966 meeting of the Presidents' Conference.
Mr. Farrell recommended that
a letter be sent to the Chairman of the Conference stating that the Board,
4°twithstanding its previous request that the question of coin orders
from nonmember banks be included in a comprehensive review of all currency
and coin services, now believed circumstances had changed sufficiently to
warrant early action on this one question and that, accordingly, it would
like to be advised of any objections the Conference might have with respect
to implementing as soon as possible the policy previously agreed upon in
Principle.
A draft of such a letter was attached to the memorandum.
During discussion it was noted that the move recommended by Mr.
Farrell was without prejudice to the question of payment of shipping
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charges, that question being reserved pending completion of the over-all
study now in progress.
The letter to the Chairman of the Conference of Presidents was
then approved unanimously.
A copy is attached as Item No. 20.
Messrs. Partee, Associate Director, and Gramley, Associate
Adviser, Division of Research and Statistics, entered the room at this
Point.
Reserve Bank budgets (Item No. 21).
There had been distributed
a memorandum dated June 3, 1966, from the Division of Bank Operations
s ummarizing and analyzing the proposed budgets of the Federal Reserve
Banks for the second half of 1966.
Total operating expenses for the
second half of the year were expected to be $93.6 million, which was
about $.1 million more than estimated for the first half of 1966, with
eight Banks budgeting increases and four budgeting decreases.
The larger
increases, at Minneapolis and Chicago, reflected principally expanded
check volume.
The largest proportional decrease, at San Francisco, was
attributable in part to improved check processing at the Los Angeles
4arich through acquisition of newer high-speed equipment.
It was noted
that by the end of 1966 all Federal Reserve offices except the Little
Rock Branch would be using high-speed processing equipment, and conver81°n to such equipment at Little Rock was in the planning stage.
The
111°st notable change in coin handling expense was an $80,000 decrease at
Chicago, reflecting the discontinuance of coin wrapping.
With that dis-
eo ntinuance, only five Banks continued to offer wrapped coin service.
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Federal Reserve Bank of St. Louis
2(111
6/10/66
-14In response to questions from Governor Mitchell and other members
of the Board as to certain projected expenses at the Federal Reserve Bank
of New York, principally reflecting augmentation of staff in several functions, members of the Board's staff commented in explanation of the factors
involved in each instance.
Governor Mitchell also raised a question about the lack of uniformity of practice among the Reserve Banks in regard to the furnishing of
wrapped coin service.
Mr. Farrell cited some of the discussion and views
expressed on this point in the past, and Governor Mitchell then requested
Preparation of a memorandum on the subject.
Governor Maisel observed that there appeared to be something of
a seasonal factor in the semiannual budgets and asked whether comparisons
With the like period of the previous year might not be more meaningful.
The ensuing discussion included comments by Governor Mitchell
and Mr. Farrell to the effect that an objective of the change to semiannual budgets had been to encourage the Reserve Banks to take a look at
heir current operations and prepare budgets on that basis.
While the
e istence of a minor seasonal pattern was recognized, this shortcoming
was believed to be outweighed by the advantage of having a budget document that served to tell what the Reserve Banks were doing currently and
what they expected to be doing in the future.
Comments by other members
Of the Board who spoke on the subject reflected general agreement.
After further discussion the budgets of the Federal Reserve Banks
for the second half of 1966 were accepted as submitted.
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Federal Reserve Bank of St. Louis
A copy of the
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letter sent to the Federal Reserve Bank of Boston pursuant to this action
is attached as Item No. 21.
The letters to the other Reserve Banks were
similar in form.
St. Louis salary structure (Item No. 22).
There had been dis-
tributed a memorandum dated June 3, 1966, with which the Division of
Personnel Administration submitted, and recommended approval of, a request
by the Federal Reserve Bank of St. Louis for increases in the employees'
salary structures averaging 4.9 per cent at the head office, 5.9 per cent
at the Little Rock Branch, 5.2 per cent at the Louisville Branch, and
4.5 per cent at the Memphis Branch, effective July 1, 1966.
Attached
was a draft of letter that would grant the Board's approval.
Governor Maisel raised a question as to the relationship of the
Proposed salary structure increase to the Presidential guideposts.
Mr. Johnson suggested that a comparison be drawn with the pay
b ill for Federal employees now under consideration by the Congress, which
would include an across-the-board salary increase of about 2.85 per cent
and fringe benefits bringing the total up to the guidepost figure of
3.2 per cent.
However, this did not eliminate within-grade progress
increases, meritorious salary adjustments, or adjustments incident to
Pesition reclassifications.
A change in salary structure at a Reserve
sank resulted in an upward shift of the minimum and maximum for each
gl
'ade.
In practice, however, Reserve Banks did not generally grant
salary increases across the board, but instead only on a selective basis
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related to performance.
In the present case, although the structure
increases ranged from 4.5 per cent to 5.9 per cent, it was understood
that the St. Louis Bank planned to give salary increases to only approximately 72 per cent of its employees, such increases being equal to
4.8 per cent of total pay roll.
Normally there would be a salary review
as of July 1 in any event, and last year the increases amounted to about
2.5 per cent of total pay roll, so it might be assumed that only the
remainder would reflect the structure increase.
Accordingly, it could
be said that the St. Louis Bank's proposal fell within the Presidential
guideposts.
Mr. Johnson said it was his view that it might be well to ask
the Reserve Banks to submit henceforth a statement as to the relation8114 between any proposed change in salary structure and the guideposts.
He felt
that the System might be in a better position to defend any
structure increase called into question if the fact that the guideposts
had been considered was on record.
There followed additional discussion of the relationship between
the magnitude of a structure increase and the magnitude of resulting
actual
the
salary adjustments during which Mr. Johnson commented further on
Practices followed generally by the Reserve Banks.
He indicated,
however, that the New York Bank, in connection with a proposed structure
adjustment now in process for Board consideration, contemplated an acrossthe-board 3 per cent increase, and some of the members of the Board exPressed reservations on that score.
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Federal Reserve Bank of St. Louis
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-17Governor Maisel then expressed the view that the Board should
have a statement on record as to the compliance of any proposed Reserve
Bank salary structure change with the national policy reflected in the
Presidential guideposts, and Governor Robertson suggested that the
Reserve Banks be informed that the Board would expect any structure
Proposals presented in the future to be accompanied by such a statement.
There was general agreement that this procedure should be followed.
The letter to the Federal Reserve Bank of St. Louis indicating
a pproval of the proposed salary structure increases at the head office
and branches was then approved unanimously.
A copy is attached as Item
No. 22.
Governor Robertson raised the question whether Reserve Banks
Inight not be able to perform a useful service by providing relevant
salary data to member banks in their districts.
He suggested that the
idea be referred to the Chairman of the Presidents' Conference for
48signment to a System committee concerned with services to member banks
for study and recommendation, and it was understood that this would be
done
Talcott questions.
There was distributed a draft of possible
Board reply to letters dated June 3, 1966, that Congressman Talcott, a
itlember of the House Banking and Currency Committee, had sent to the
illembers of the Board asking certain questions with respect to interest
rates on time and savings deposits.
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Federal Reserve Bank of St. Louis
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-18Preference was expressed for a composite reply, as opposed to
individual replies by the respective Board members.
Several suggestions
were made concerning the draft reply, however, and it was understood
that further consideration would be given to the matter after the Board
members had had an opportunity to give additional study to the draft.
Foreign travel.
The Board approved travel by Louis Zeller,
Digital Computer Programmer Supervisor, Division of Data Processing, to
Mo ntreal, Canada, during the period May 22-28, 1966, to attend a meeting
of users
of IBM computers for non-scientific data processing.
The meeting then adjourned.
Secretary's Notes: On June 8, 1966,
Governor Shepardson approved on behalf
of the Board the following items:
No
Letter to the Federal Reserve Bank of Boston (copy attached as Item
approving the appointment of Bruce G. Bean as assistant examiner.
. Memorandum from the Division of Research and Statistics recommending
increase in the basic annual salary of Joyce J. Wood, Stenographer in
°et Division, from $4,797 to $5,181, with a change in title to Secretary,
ef
fective June 19, 1966.
On June 9, 1966, Governor Shepardson
approved on behalf of the Board the
following items:
19
Memorandum from Mr. Holland, Adviser to the Board, dated June 9,
„66, recommending that Professor Hyman Minsky continue to be paid at
17 consultant rate of $75 per day plus travel expenses in connection
ttli the preparation of an outline for a proposed paper relating to the
sI
daudY of the discount mechanism. It was understood that about 10-15
a Y'„i s of consulting time might be involved plus travel between Washington
11'
4 New York.
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Memorandum from the Division of Administrative Services dated
June 6, 1966, requesting authority to hire a painter on a contractual
b.asis for the period of absence of Glenn B. Hopkins or until such time as
it is
decided whether Mr. Hopkins will return to painting. This action
included authorization for the resultant overexpenditure in the pertinent
account of the budget of the Division of Administrative Services.
Memoranda recommending the following actions relating to the Board's
staff:
Susan Lynn Weller Burch as Economist, Division of Research and
Statistics, with basic annual salary at the rate of $12,510, effective
the date of
entrance upon duty.
Jared Jacob Enzler as Economist, Division of Research and Statistics,
With basic annual salary at the rate of $11,723, effective the date of
entrance
upon duty.
P1-2ent following maternity leave
Mary Anne Lostaunau, Secretary, Office of the Secretary, with basic
annual salary at the rate of $5,894, effective June 13, 1966.
Acc
--......eTtance of resignations
4..
Ruth M. Blackman, Clerk-Librarian, Division of Personnel AdministraLion
, effective the close of business June 10, 1966.
e.„ D. Lewis McKee, Technical Assistant, Division of Bank Operations,
-Lzective the close of business July 15, 1966.
Governor Shepardson today approved on
behalf of the Board memoranda recommending the following actions relating
to the Board's staff:
intment
Joseph C. Golden as Senior Economist, Division of Research and
Sta tistics,
with basic annual salary at the rate of $17,055, effective
the date of entrance upon duty.
.
rease
James R. Smith, Attorney, Legal Division, from $11,723 to $12,510
Per annum, effective June 19, 1966.
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-20Acting in the absence of Governor Shepardson,
Governor Robertson today approved on behalf
of the Board a memorandum from the Division
of Research and Statistics recommending the
transfer of Christine de Fontenay from the
position of Digital Computer Programmer
(Trainee) in the Division of Data Processing
to the position of Digital Computer Programmer
(Trainee) in the Division of Research and Statistics, with no change in basic annual salary
at the rate of $5,181, effective June 13, 1966.
zrr;jf
Assistant Secretary,
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Federal Reserve Bank of St. Louis
Item No. 1
6/10/66
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
AOORIEIIII
OFFICIAL
CORRESPONDENCC
TO THIC 'CARO
June 10, 1966.
Board of Directors,
The First Pennsylvania Banking
and Trust Company,
Philadelphia, Pennsylvania.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by The First Pennsylvania
Banking and Trust Company, Philadelphia, Pennsylvania, of
a branch at 801 Old York Road, Abington Township, Montgomery
County, Pennsylvania, provided the branch is established
Within six months from the date of this letter.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
201
BOARD OF GOVERNORS
OF THE
Item No. 2
6/10/66
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966.
Board of Directors,
Bank of Slidell,
Slidell, Louisiana.
Gentlemen:
The Board of Governors of the Federal Reserve System
approves the establishment by Bank of Slidell, Slidell, Louisiana,
of a branch in the Northside Plaza Shopping Center, Slidell,
Louisiana, provided the branch is established within six months
from the date of this letter, and further provided the bank's
capital account is increased a minimum of $100,000 from the contemplated sale of other real estate or from other sources.
Approval of this branch does not imply approval of the
bank's capital position, which will continue to be regarded as low
after the proposed increment. Accordingly, the Board urges your
Close review of capital relationships and your adoption of such
measures as may be necessary to provide a strong capital base,
capable of supporting the present burden of risk and a continuation
of the rapid growth being experienced by the bank.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
hoard also had approved a six-month extension
of the period allowed to establish the branch;
ricl that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
2020
BOARD OF GOVERNORS
Item No. 3
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966
Board of Directors,
Jeff Davis Bank & Trust Company,
Jennings, Louisiana.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by Jeff Davis Bank &
Trust Company, Jennings, Louisiana, of a branch near the
intersection of Arthur Street and Third Street, Lake
Arthur, Louisiana, providing the branch is established
within one year from the date of this letter, and
further provided that, prior to establishment of the
branch, the bank's capital stock is increased to the
amount required by paragraph 3 of Section 9 of the Federal
Reserve Act and related Federal statutes. Under present'
conditions a minimum capital of $150,000 would be required to fulfill these statutory provisions.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (S-1846), should be followed.)
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Federal Reserve Bank of St. Louis
2021
BOARD OF GOVERNORS
Item No. 4
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966
Board of Directors,
The Connecticut Bank
and Trust Company,
Hartford, Connecticut.
Gentlemen:
Reserve
The Board of Governors of the Federal
n which
withi
time
the
System extends to January 9, 1967,
ord,
Hartf
ny,
Compa
The Connecticut Bank and Trust
the Crossroads
Connecticut, may establish a branch in
r, North Main
Corne
p's
Bisho
Plaza Shopping Center at
t.
cticu
Street, West Hartford, Conne
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2022
BOARD OF GOVERNORS
Item No. 5
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20531
ADDRESS
°maim_
CIORREOPONOICHOt
TO THIC SOAR°
June 10, 1966
Board of Directors,
New Jersey Bank and Trust Company,
Clifton, New Jersey.
Gentlemen:
3,
Pursuant to condition of membership numbered
period
a
within
d,
agree
New Jersey Bank and Trust Company
all corporate
not to exceed three years, to dispose of
ship in
member
to
stock owned at the time of admission
extended
uently
subseq
June 1958. The Board of Governors
the
with
ance
this period to June 20, 1966. In accord
and
1966,
25,
request contained in your letter of May
t to
after considering the circumstances with respec
Board
the
stock,
further retention of this corporate
which your
extends until June 20, 1967, the time within
ed 3.
number
ion
condit
bank may comply with membership
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2023
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 6
6/10/66
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966
Board of Directors,
American State Bank,
Lubbock, Texas.
Gentlemen:
The Board of Governors of the Federal Reserve System
approves the application of American State Bank, Lubbock, Texas,
for stock in the Federal Reserve Bank of Dallas, subject to the
numbered conditions hereinafter set forth:
1.
Such bank at all times shall conduct its business
and exercise its powers with due regard to the
safety of its depositors, and, except with the
permission of the Board of Governors of the Federal
Reserve System, such bank shall not cause or permit
any change to be made in the general character of
its business or in the scope of the corporate powers
exercised by it at the time of admission to membership.
2.
The net capital and surplus funds of such bank shall
be adequate in relation to the character and condition
of its assets and to its deposit liabilities and other
corporate responsibilities.
In connection with foregoing conditions of membership,
Particular attention is called to the provisions of the Board's
Regulation H, regarding membership of State banking institutions in
the Federal Reserve System, with especial reference to Section 208.7
thereof. A copy of the regulation is enclosed.
charter
If at any time a change in or amendment to the bank's
g
furnishin
is made, the bank should advise the Federal Reserve Bank,
d
determine
be
"Pies of any documents involved, in order that it may
whether such change affects in any way the bank's status as a member
of the Federal Reserve System.
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Federal Reserve Bank of St. Louis
BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
American State Bank
20 4
-2-
Acceptance of the conditions of membership contained in
this letter should be evidenced by a resolution adopted by the board
of directors and spread upon its minutes, and a certified copy of
such resolution should be filed with the Federal Reserve Bank.
Arrangements will thereupon be made to accept payment for an appropriate
amount of Federal Reserve Bank stock, to accept the deposit of the
Federal
required reserve balance, and to issue the appropriate amount of
Reserve Bank stock to the bank.
the Federal
The time within which admission to membership in
limited
is
shed
accompli
be
may
Reserve System in the manner described
to the
applies
bank
the
unless
30 days from the date of this letter,
that
advised
is
Board
the
When
zoard and obtains an extension of time.
ate
appropri
the
that
and
with
all of the requirements have been complied
the
bank,
the
to
issued
been
!mount of Federal Reserve Bank stock has
20ard will forward to the bank a formal certificate of membership in the
Yederal Reserve System.
of the Federal
Since your bank has previously been a member
Reserve System, it is assumed that you are acquainted with the officers
the
sf the Federal Reserve Bank of Dallas and the services offered by
(3
that you will find
Yatem. The Board of Governors sincerely hopes
Tembership in the System beneficial and your relations with the Reserve
bank pleasant.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
Enclosure.
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Federal Reserve Bank of St. Louis
so4
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 7
6/10/66
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966.
Boston Overseas Financial Corporation,
67 Milk Street,
Boston, Massachusetts. 02106
Gentlemen:
Reference is made to your letter of April 25, 1966,
requesting extension of the time within which to purchase the reirclia_ining 145 of 640 additional shares of International Factors A.G.,
irr, Switzerland, authorized by the Board's consent of December 7,
1764, provided such stock was acquired within one year. On November 10,
t965, the time within which such purchase could be made was extended
June 7, 1966, and, as requested in your letter of April 25, 1966,
the Board now extends such period to October 18, 1966.
The foregoing extension is given with the understanding
that the foreign loans and investments of your Corporation, combined
th those of The First National Bank of Boston and Bank of Boston
?ternational, will not cause the total of such loans and investto exceed the guidelines established under the voluntary
a°reign credit restraint effort now in effect and that due consideris being given to the priorities contained therein. The Board
Co
lo
insiders that compliance with the priorities expressed in Guide4 would require that total nonexport credits to developed
,1tries in Continental Western Europe not exceed the amount of
sc
,)
,111
b-e u loans and investments as of the end of 1965, unless this can
re done without inhibiting the bank's ability to meet all reasonable
equests for priority credits within the over-all target.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
‘lf
es:
,
‘
TO:
PROM:
June 6, 1966
Item No. 8
6/10/66
Board of Governors
DATE:
Division of Examinations
SUBJECT: Procedure for processing
requests from Federal Deposit
Insurance Corporation for information
about banks withdrawing from membership
When a bank proposes to withdraw from membership in the Federal
terve System and continues as a nonmember insured bank, the Federal Deposit
ur urance Corporation asks the Board for information about any corrective programs
j
t ed upon the bank, or agreed to by it, or programs which the Board would advise
usirC incorporated as conditions of admitting the bank to insured nonmember status.
recellY the Board's responses are routine stating merely that neither have corbe tive programs been urged upon the bank nor would the Board recommend that any
timine°rPorated as conditions to continuing as a nonmember insured bank. Somete e8 the bank's condition is considerably less than satisfactory and the Federal
ue
tesit Insurance Corporation is informed of this fact and also of our efforts to
e4_41.a improvement. All letters concerning banks proposing to withdraw are
4-ccuiated
to Board members.
It is believed the routine letters could be treated in the same fashion
requests to invest in bank premises or pay dividends when certain guideclues are met. Under this procedure the applications are forwarded to the Office
rola!he Secretary and then docketed without circulation. It is recommended that
rou,':ine letters be handled in this manner in the future. Letters with more than
'ine comment will continue to be brought to the Board's attention.
43 are
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Federal Reserve Bank of St. Louis
2027
BOARD OF GOVERNORS
Item No. 9
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966
I1r. H. B. Jamison,
:
Assistant Vice President,
Federal Reserve Bank of San Francisco,
San Francisco, California. 94120
bear Mr. Jamison:
This refers to the report by your Bank in a letter of
SePtember 2, 1965, from Vice President E. H. Galvin, regarding an
?Parent violation of section 6(a)(4) of the Bank Holding Company
of 1956 by American National Bank of Denver, Denver, Colorado
American"), a subsidiary of Western Bancorporation, Los Angeles,
fornia ("Western"), a registered bank holding company. Your
nitial report was followed by an exchange of correspondence between
,
.1our Bank and Western and your Bank and the Board bearing on clari,
iznication of certain aspects of the reported apparent violation. The
matter was the subject of further inquiry and consideration at a
staff
vrting in May of this year of Mn, O'Connell of the Board's
matter is now
P Mn, Cooper of your Bank's Legal Department. The
b:t
t-J-ore the Board upon your request for a determination with respect
_c) the apparent violation of law and any course of action that may
aPPear appropriate.
The Board's understanding of the pertinent facts in this
matter is as follows. In November 1964, American purchased 43 real
Collins,
etate loans from First National Bank of Fort Collins, Fort
price of
purchase
total
e10rad0, also a subsidiary of Western, for a
4
of Fort
Bank
National
c 68,722.93, under an arrangement whereby First
purchase
The
purchased.
411ins would continue to service the loans
of ce paid by American equaled the then outstanding principal amount
'
the loans purchased.
Bank's
The above transaction, noted in the course of your
1965
July 22,
of
letter
196, examination of Western, was the subject of your
that
judgment
your
Am j, to Western, in which Western was informed of
violation
a
constituted
erio1n's purchase of the loans in question
0,
to
'
section 6(a)(4) of the Act, which makes it unlawful for a bank
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD
H. B. Jamison
OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
-2-
credit to a bank holding
cake anY loan, discount, or extension of
iri
to any other subsidiary of
s°1TanY of which it is a subsidiary or
purchase
,.uen bank holding company. In reply, Western confirmed the
an,
Americ
by
aransaction and the fact that the loans were still held
'
r,
Howeve
wud conceded the validity of the interpretation given.
y of the
ilestern stated that the two banks involved had made inquir
and had
se
hegzonal Comptroller of the Currency regarding the purcha
an
tuted
consti
oeen advised by that official that the transaction
n
Wester
Act.
right purchase of assets which would not violate the
s
Board'
the
ated further that the two banks had been unaware of
to their
1terpretation of the term "discount" until it was called
.
advised
rn
'Weste
Ltention in your Bank's July 22 letter. Finally,
:
aware
fully
now
1;ur Bank that the managements of the two banks are
0
nces
assura
that
and
h the Board's interpretation of section 6(a)(4)
nature.
this
of
ions
alre been given that there will be no further violat
on of the term
On the basis of the Board's interpretati
4di
va scount" as used in section 6(a)(4) of the Act, which interpretation
ned in
summarized in your Bank's letter to Western and is contai
Board
the
the
,
letter
that
co .94neral Contract Corporation case cited in
First
from
se
1 urs in your conclusion that .American's purcha
1/,1.
constituted
a").-onal Bank of Fort Collins of the loans in question
action that
of
shvlolation of section 6(a)(4). Regarding a course
violation, secthis
to
t
ti°uld or might now be undertaken with respec
ul, and
unlawf
"make
fl 8 of the Act - the "penalties section" It is
Act".
the
of
ions
s punishment for, only willful violat
thescribe
transthe Bribes
the
nding
surrou
s
stance
opinion that in the circum
proven to the
in question, it is unlikely that it could be
willful, parwas
law
of
ion
lsfaction of a court that the violat
'
ti
to the
letter
's
Calvin
Mr.
tocularlY in view of the fact noted in
received from the
4.1 c1 that the banks apparently acted upon advice
Accordingly, the Board has conol. °nal Comptroller of the Currency.
in reporting the
vtuued that no useful public purpose would be served
Similarly, it is not believed
th°1ation to the Department of Justice.
be furthered by requiring
kat.anY statutory or public purpose would
a manner different than
ojan to dispose of the purchased loans in
no apparent financiuer loans carried in the bank, particularly since
be gained by American
gain or other benefit has inured to or will
d on the loans. In these
ot1"er
ei
than the receipt of the interest charge
may properly reicumstances, the Board has concluded that the loans
rnar
collection in the usual course of
b.Sin °I1 the books of American for
transmit to Western the
It will be appreciated if you will
Board's
sUbst
ination, advising Western of the
pos. ance of the Board's determ
the
to
ed
report
will not be
ltion that the transaction in question
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr, H. B. Jamison
.3-
Department of Justice, but that this decision is contingent upon
Illfillment of assurances given by Western that violations of this
nature will not again occur between and among Western and its subsidiary banks.
A copy of this letter is enclosed for the information of
Your Bank's Vice President and General Counsel.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
44C108Ure
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Federal Reserve Bank of St. Louis
2030
BOARD OF GOVERNORS
.••••••.
.•,,,,D0f Gov .
kji, •
`t.3.
.•
0.
4
OF THE
FEDERAL RESERVE SYSTEM
Item No. 10
6/10/66
WASHINGTON, O. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
0'6
TO THE BOARD
June 10, 1966
11r. W. F. Rommel, Acting Assistant Director
for Legislative Reference,
Bureau of the Budget,
Washington, D. C. 20503
Dear Mr. Rommel:
Memorandum
This is in reply to your Legislative Referral
Credit
of June 3, 1966, requesting the views of the Board on a Farm
Administration draft bill, "To delete the interest rate limitation
on debentures issued by Federal intermediate credit banks, raise
the interest rate limitation on loans made by Federal land banks
and banks for cooperatives, and for other purposes."
legislation.
The Board has no objection to the proposed
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No. 11
6/10/66
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966.
Mr. Alfred Hayes, President,
Federal Reserve Bank of New York,
New York, New York. 10045
Dear Mr. Hayes:
This refers to your letter of April 4, 1966 in response
to the Board's letter of March 2, 1966, concerning building
operating costs at the New York Reserve Bank.
The Board has noted that you are planning an immediate
review of housekeeping techniques and systems and would appreciate
receiving a copy of this study.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2032
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 12
6/10/66
WASHINGTON, D. C. 20551
ADDRESS. OFFICIAL CORREBPONOCNCIE
TO THE BOARD
June 10, 1966.
Mr. Karl E. Bopp, President,
Federal Reserve Bank of Philadelphia,
Philadelphia, Pennsylvania. 19101
Dear Mr. Bopp:
This refers to your letter of March 7, 1966 in response
to the Board's letter of March 2, 1966, concerning costs of the
The
Provision of Space function at the Philadelphia Reserve Bank.
the
of
receipt
to
forward
Board appreciates your response and looks
report of your staff committee study.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No. 13
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO Ti-IC HOARD
June 10, 1966.
Mr. Edward A. Wayne, President,
Federal Reserve Bank of Richmond,
Richmond, Virginia. 23213
Dear Mr. Wayne:
This refers to your letter of March 9, 1966 in response
to the Board's letter of March 2, 1966, concerning costs of the
Provision of Space function at the Richmond Reserve Bank.
The Board has noted that your Bank considers the age and
complexity of the buildings to be the major factors contributing to
the above-average costs in this operation. While it is agreed that
these factors do adversely affect this operation at the Richmond
Reserve Bank, the Board believes, in light of experience at other
Banks, that improvements might result from a comprehensive review
of present maintenance policies and practices and that it might be
helpful if a representative of the Board's Division of Bank Operations
could participate in such a review. Such an arrangement should at
least provide for a better mutual understanding of the problems
involved in your building maintenance and operation.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
21): 1
Item No. 14
BOARD OF GOVERNORS
.......
,.' of Got.•
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
0'
WASHINGTON, D. C. 20551
ADDRESS
arriciAL
CORRESPONDENCE
TO THE BOARD
June 10, 1966.
CONFIDENTIAL
FR)
Mr. Edward A. Wayne, President,
Federal Reserve Bank of Richmond,
Richmond, Virginia. 23213
Dear Mr. Wayne:
The Board of Governors approves the payment of salary to
Mr. William F. Upshaw as Assistant General Counsel of the Federal
Reserve Bank of Richmond at the rate of $20,000 per annum, for the
period of August 1 through December 31, 1966. This is the rate fixed
by your Board of Directors as reported in your letter of May 13, 1966.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2035
BOARD OF GOVERNORS
Item No. 15
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS
OFFICIAL
CORRESPONDENCE
TO THE SOAR°
June 10, 1966.
CONFIDENTIAL (FR)
Mr. Monroe Kimbrel,
First Vice President,
Federal Reserve Bank of Atlanta,
Atlanta, Georgia. 30303
Dear Mr. Kimbrel:
The Board of Governors approves the payment of
salary to Mr. Arthur H. Kantner as an Assistant Vice President
of the Federal Reserve Bank of Atlanta, assigned to the
New Orleans Branch, at the rate of $15,500 per annum for
the period May 15 through December 31, 1966. This is the
rate fixed by your Board of Directors as reported in your
letter of May 13.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
()1.1‘
4.44 ,oft
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 16
6/10/66
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE SOARD
June 10, 1966.
CONFIDENTIAL al
Mr. Charles J. Scanlon, President,
Federal Reserve Bank of Chicago,
Chicago, Illinois. 60690
Dear Mr. Scanlon:
The Board of Governors approves the payment of
Adolph J. Stojetz as an Assistant Cashier of
Mr.
to
salary
the Federal Reserve Bank of Chicago at the rate of $11,500
per annum for the period August 1 through December 31, 1966.
The Board also approves the payment of salary to
Mr. Gordon W. Lamphere as Assistant Vice President, assigned
to the Detroit Branch, at the rate of $20,000 per annum; and
to Mr. Ronald L. Zile as Assistant Cashier, assigned to the
Detroit Branch, at the rate of $10,500 per annum for the
period September 1 through December 31, 1966.
These are the rates which were fixed by your Board
of Directors as reported in your letter of May 19.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
d'3(
BOARD OF GOVERNORS
S.
Item No. 17
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
DENCE
ADDRESS OFFICIAL CORRESPON
TO THE BOARD
June 10, 1966.
Mr. Edward T. Crowder,
Clearance Officer,
Office of Statistical Standards,
Bureau of the Budget,
Executive Office of the President,
Washington, D. C. 20503
Dear Mr. Crowder:
approval
Attached are three copies of your Form 83 requesting
S.
U.
of
holdings
of
value
c)r collection of information on the par
l
nationa
all
from
issue
by
Government and Federal Agency securities
this
know
you
As
date.
tlellIber banks at the forthcoming June call
Reserve
Chedule B is collected from State member banks of the Federal
Federal
the
by
ed
supervis
and from insured nonmember banks
r
.Eltem
This
'posit Insurance Corporation at June and December call dates.
Reserve
Federal
the
by
members
bank
?rm was collected from national
the last December call date under approval number 55-6508. The
our letter
PPorting statement for the December call submitted with
at that
used
form
the
of
Copies
applies.
December 9, 1965, still
delete
to
y
slightl
revised
be
would
forms
'tme are attached. The June
of
Zatured issues, add new security issues, and add agency issues
es for
134rticipation certificates which are classified as securiti
st
atistical purposes.
n
this
The possibility that the Comptroller would collect
n
edule B from national banks as a regular part of the conditio
enta(repres
l Port has been discussed extensively at the staff level
j
the
s'ves of your Agency were present at these meetings) and was
agencies
ory
2111Ject of discussion among the heads of the bank supervis
Very
e.
Committe
a recent meeting of the Inter-Agency Coordinating
that
ly
.ecently, however, the Board staff has been advised informal
from national
ae Comptroller had decided not to collect this Schedule
report again
will
riks at the June call date. Instead, national banks
of U. S.
value
book
2n the old non-compatible schedule which shows the
wn
breakdo
maturity
and
`4°11ernment securities according to a mixed issue
f
O
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Federal Reserve Bank of St. Louis
BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. Edward T. Crowder
-2-
2ORS
and provides no detail on Federal agency issues. The Board feels that
continued availability of the more useful information provided on the
new Schedule B for pll insured commercial banks is imperative.
Earlier correspondence with your Agency and memoranda
Originating in the Treasury Office of Debt Analysis and in the
Boardts Research Division (copies of which were transmitted to the
Budget Bureau) have pointed out that the new issue--par value Schedule
is a vast improvement over the older book value--maturity schedule
for collecting this information. This improvement stems from reduced
reporting burden as well as from the more comprehensive, flexible and
accurate information received. In addition to the numerous reasons
mentioned in earlier correspondence and memoranda, information is
_needed now on bank holdings of new issues of participation certificates
bY Federal agencies. The sharp recent and prospective increase in use
°f the
instruments by such agencies as the Commodity Credit Corpora1011, Export-Import Bank and Federal National Mortgage Association is
substantially increasing the importance of these certificates in
commercial bank investment portfolios. We understand that the question
°11 incidence and type of bank ownership of these certificates is also
of some interest to your Agency.
We regret the necessity to come to your Office with still
Other emergency request for approval of a special purpose document.
'lDu'ut under the circumstances, and considering the marked changes in
0 4k liquid asset holdings that have been taking place under pressure
:
r- strong credit demand and more restrictive monetary conditions, we
el that this step is necessary. Because of the extensive prepara'°ns necessary for drafting, printing, circulption, distribution,
airld Planning for processing of these forms, it would be appreciated
-f You would once again give this matter your special attention.
j
We are hopeful that the banking agencies will be able to
34°Pt a more cooperative posture on uniform reporting forms and
,
:
°cedures sometime before the December 1966 call date, and we will
Continue to exert all possible efforts toward this end.
Very truly yours,
Kenneth A. Kenyon,
Assistant Secretary.
Attachments.
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Federal Reserve Bank of St. Louis
.41
BOARD OF GOVERNORS
;•.. •
Item No. 18
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARO
June 10, 1966
Mr,
William H. Braun, Jr.,
Assistant Vice President,
Federal Reserve Bank of New York,
1 4 York, New York. 10045
%
Dear Mr, Braun:
This acknowledges your letter of May 27, 1966, relating to
the
, question pending before the Board of whether Marine Midland Grace
nrust
Company of New York should be permitted, under section 4(c)(1)
the Bank Holding Company Act, to retain stock it now owns in
.ark Avenue Corporation which holds the leasehold of the building
which'Marine ls mid-town office is located.
Marine's request for a determination of this question was
co.nally presented to the Board in December 1960 and again in
eember 1965. Your Bank was advised by the Board's letter of
vnuarY 25, 1966, that since Marine's request for a determination
)8 based upon occupancy not yet achieved, but only intended, the
137
thatd considered Marine's request for a determination premature and
tri_t the Board believed that the determination requested should be
'ue at or following the date by which Marine's projected occupancy
650 Park Avenue had been achieved.
r
Your letter of May 27 enclosed copies of two letters from
Mar •
1.7 lne, dated March 7, 1966, and May 20, 1966, the substance of which
that Marine has entered into a lease with 250 Park Avenue Corporafor occupancy of the entire second floor of the building at
ocu Park Avenue, that the leased space is now being renovated for
vilnpancy "in late August or early September", and that such occupancy
ce2: bring Marine's total occupancy of 250 Park Avenue to 10.45 per
tlia; of the building's "rentable space". On the basis of this inforBank
4 °n, You have affirmed the recommendation transmitted by your
1
to .
rule
Board
the
that
1965,
24,
December
th Lhe Board in a letter of
at Marine may retain its stock interest in 250 Park Avenue Corporation.
The Board's action of January 25, 1966, deferring its
dete .
buti rmlnation of the question of Marine's "substantial use" of the
ding in question, was intended to enable Marine to complete its
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
2040
Mr. William H. Braun, Jr.
-2-
proposed plan for occupancy by May 1966, the date given by Marine
for such occupancy, so that the Board, in ruling upon Marine's
request for a determination, would be acting on the basis of actual
occupancy rather than on statements of intention in this respect.
At this date, giving full consideration to the advice contained in
Marine's letters of March 7 and May 20, any action by the Board
would still be premised upon a statement of intended action. While
:
121arine'8 execution of an occupancy lease with its subsidiary build:4ag corporation adds strength to Marine's statement of intention,
:
the Board continues in its belief that the determination requested
should be made at or following the date by which Marine now states
its occupancy of 250 Park Avenue will be an accomplished fact.
Accordingly, the Board extends until October 1, 1966, the
--e given Marine in the Board's letter of January 25, 1966, within
ich Marine may retain the stock awned in 250 Park Avenue Corporai°11. Prior to October 1, Marine should advise the Board of the
extent to which it then has occupied the building, and upon receipt
c)f such information, the Board will determine the question of "substantial
occupancy".
r
It will be appreciated if you will transmit the substance
of t,4
4
—4-1.8 letter to Marine.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A, Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
2041
BOARD OF GOVERNORS
Item No. 19
OF THE
6/10/66
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE FIGARO
June 17, 1966.
beer sir,
the
There are enclosed five copies of (1) a memorandum from
"ision of Examinations dated June 8, 1966, and (2) proposed
stone of Forms P.R. Y-1 and P.R. Y-2.
Attention is drawn to the fact that the revised forms
(Iuire much less information from an Applicant with respect
Nts D and E of both forms, and with respect to data concernsubsidiaries (Exhibit I of Y-2), and (b) financial history
(
N
efV)
the Applicant (Exhibit K of Y-2), (ii) the Subsidiary Banks
t M of Y-1), and (iii) the Bank (Exhibit L of Y-2).
r
APPliThe new forms provide for the Reserve Banks to assist
eyelleents in establishing primary service areas of offices and the
444 4P of the number and amount of demand deposit accounts of
of
uals, partnerships, and corporations, and certain categories
one:
4148 in instances where primary service areas (a) of offices of
ot ti;ubeidiary Bank overlap those of another (Y-1) and (b) of offices
Applie Bank overlap those of an existing subsidiary bank of the
etIparb
ea
i nt(11-2). Such assistance would involve establishment and
44,1i:talon of the use of proper sampling techniques. Both Research
hotexamination personnel of your Bank would be involved in this
tetilb1118 1 in that they would be actively participating in the
efirtlidehment of primary service areas and development of data conof .'ng the overlap of deposits and loans prior to the submission
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Federal Reserve Bank of St. Louis
-2-
2042
If H.R. 7371, an Act to amend the Bank Holding Company
et of 1956, as passed by the House of Representatives or by the
or a compromise bill, is enacted into law, it is recognized
that the
proposed forms would have to be revised in certain respects.
It is desired that the forms be reviewed by those persons
Ptimaril concerned
and that your Bank's suggestions and comments
.Lating
thereto be submitted to the Board no later than July 31,
in66.
Very truly yours,
Merritt Sherman,
Secretary.
flelosures.
1°1311E PRESIDENTS OF
ALL FEDERAL RESERVE BANKS.
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Federal Reserve Bank of St. Louis
204
BOARD OF GOVERNORS
Item No. 20
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966.
Mr. Edward A. Wayne, Chairman,
Conference of Presidents,
Federal Reserve Bank of Richmond,
Richmond,
Virginia. 23213
Dear Mr. Wayne:
At the meeting held September 27, 1965, the Conference
Presidents expressed the views that the Reserve Banks should
Principle accept orders for coin directly from nonmember banks,
but that
because of the coin shortage Reserve Banks not Chen
accepting
such orders should not be required to do so at that
time.
Subsequently, in a letter dated December 30, 1965, the
board requested that the Conference arrange to have a comprehenive review made of the whole range of currency andcoin services,
including
coin orders from nonmember banks.
of
While the Board believes that the comprehensive review
tsquested in its letter of December 30, 1965, is still desirable,
now feels that conditions have changed enough in recent months
to make
also desirable an early settlement of the question of coin
7ders from nonmember banks. On the one hand, supplies of coin
d
enominations other than half dollars have improved to the
_int where acceptance of orders directly from nonmember banks
VcIlonld cause no problems. On the other hand, the peculiar demand
cL or half dollars and the prospect of continued rationing of these
i ins for a long time to come have focused new attention on any
lnceignities that may exist in the distribution procedure and have
e
, the Treasury to request that the matter again be brought to
tl"e attention of the Presidents.
g
In the light of these circumstances, the Board would like
from the forthcoming Conference indicating what,
any, strong reasons there might be why any Reserve Bank that
has not
already done so should not take appropriate steps as soon
Possible to make generally known that it will accept coin orders
ilrectlY from nonmember banks.
t
1,_ v
if "d e
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Federal Reserve Bank of St. Louis
Mr. Edward A. Wayne
- 2-
2044
To avoid possible misunderstanding, it should be mentioned
that the Board does not contemplate that such an announcement would
cover, or make any change in, present practices with respect to
absorption of shipping charges. The Board feels that any action
on this latter question should be deferred pending completion of
the comprehensive review of currency and coin services.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
204
BOARD OF GOVERNORS
Item No. 21
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 13, 1966
Mr. George H. Ellis, President,
Federal Reserve Bank of Boston,
Boston, Massachusetts. 02106.
Dear Mr. Ellis:
The Board of Governors has reviewed and accepts
the budget of the Federal Reserve Bank of Boston for the
Period July 1 - December 31, 1966, as submitted with your
letter of May 11, 1966.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
2( p
BOARD OF GOVERNORS
Item No. 22
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 10, 1966.
CONFIDENTIAL
(FR)
Mr. Darryl R. Francis, President,
Federal Reserve Bank of St. Louis,
8t. Louis, Missouri 63166.
°ear Mr. Francis:
As requested in your letter of May 12, 1966, the Board of
Go
vernors approves the following minimum and maximum salaries for the
Respective grades of the employees' salary structures at the Federal
"eserve Bank of St. Louis, and branches, effective July 1, 1966.
Memphis
St. Louis
Louisville
Little Rock
9.111! Minimum Maximum Minimum Maximum Minimum Maximum Minimum Maximum
1
2
3
14
6
7
8
9
10
ii
12
13
15
16
$ 2,940 $ 31840 $ 2,940 $ 3,180 '2,940 $ 3,540 $ 2,940 $ 3,240
3,060 14,080 31000 31480 3,000 3,720 3,000 3,480
3,240 14,380 3,060 3,780 3,060 4,140 3,060 3,900
31540 4,740 3,180 4,260 3,300 4,500 3,240 4,380
3,8140 5,160 3,480 4,680 3,660 14,980 3,5140 14,800
14,200 5,700 3,840 5,160 4,080 5,460 3,960 5,280
4,620 6,240 4,260 5,700 14,500 6,060 4,380 5,880
5,100 6,900 4,680 6,360 4,980 6,720 14,860 61540
5,640 7,620 5,160 7,020 5,520 7,500 51 340 7,200
6,300 8,460 5,760 7,740 6,120 8,280 5,880 7,980
7,020 9,480 6,300 8,520 6,780 9,180 61540 8,820
71800 10,500 7,020 9,480 7,500 10,140 7,260 9,8140
8,700 11,760 7,740 10,500 8,280 11,220 8,040 10,860
9,66o 13,080 81640 11,700 9,180 12,360 8,880 12,000
10,800 14,580 9,660 13,020 10,10 13,680 9,840 13,320
12,000 16,240 10,740 114,520 11,220 15,180 10,920 14,700
The Board approves the payment of salaries to employees within
theI,
Jamits specified for the grades in which the positions of the
IZPective employees are classified. All employees whose salaries are
sh-L"1 the minimum of their grades as a result of this structure increase
°tad be brought within appropriate ranges by October 1, 1966.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
,4
4
Item No. 23
BOARD OF GOVERNORS
.,•••„.
.4 Of C0i:i4:
6/10/66
OF THE
FEDERAL RESERVE SYSTEM
•
•
•
•
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 8, 1966
Mr. Luther M. Hoyle, Jr., Vice President
Federal Reserve Bank of Boston,
Boston, Massachusetts. 02106
Dear Mr. Hoyle:
In accordance with the request contained in your
letter of June 2, 1966, the Board approves the appointment
of Bruce G. Bean as an assistant examiner for the Federal
Reserve Bank of Boston. Please advise the effective date
of the appointment.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
@FedFRASER