The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6/10/66 -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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20( 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 6/10/66 -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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6/10/66 -6- 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2004 6/10/66 -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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20().f• 6/10/66 -8- 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The report, he said, 6/10/66 -9- 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21 6/10/66 -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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2008 6/10/66 -11- 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 6/10/66 -12- 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2010 -13- 6/10/66 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A copy of the 6/10/66 -15- 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21 6/10/66 -16- 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6/10/66 -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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21)I 6/10/66 -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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 201fl 6/10/66 -19- 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 6/10/66 -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, http://fraser.stlouisfed.org 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.) http://fraser.stlouisfed.org 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.) http://fraser.stlouisfed.org 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.) http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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 http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org 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. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis