The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes for To: Members of the Board From: Office of the Secretary June 11/ 1956 Attached is a copy of the minutes of the Board of Governors of the Federal Reserve System on the above date. It is not proposed to include a statement with respect to any of the entries in this set of minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, if you were present at the meeting, please initial in column A below to indicate that you approve the minutes. If you were not present, please initial in column B below to indicate that you have seen the minutes. Glam. Martin Gov. Szymczak Gov. Vardaman Gov. Mills x- Gov. Robertson Gov. Balderston Gov. Shepardson xf/rA/16 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, June 11, 1956. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Szymczak Vardaman Mills Shepardson Carpenter, Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Vest, General Counsel Young, Director, Division of Research and Statistics Mr. Sloan, Director, Division of Examinations Mr. Hackley, Assistant General Counsel Mr. Cherry, Legislative Counsel Mr. Mr. Mr. Mr. Mr. The following matters, which had been circulated to the members of the Board, were presented for consideration and the action taken in each instance was as stated: 3 Letter to the Board of Directors, The Farmers Savings Bank Coinony Ridge, Ohio, reading as follows: Pursuant to your request submitted through the Federal Reserve Bank of Cleveland, the Board of Governors approves the establishment of a branch by The Farmers 6avings Bank Company in a shopping center on the south side of Woodville Road in Ross Township, Wood County, 1.1110, Provided the branch is established by March 21, ( and approval of the State authorities is effeculve as of the date the branch is established. 1.194 6/11/56 -2- It is understood that the bank proposes to sell p50,000 additional common stock at a premium of $50,000 before the branch is opened for business. Approved unanimously, for transmittal through the Federal Reserve Bank of Cleveland. Letter to Mr. Stetzelberger, Vice President, Federal Reserve Bank of Cleveland, reading as follows: Reference is made to your letter of May 28, 1956, enclosing a resolution adopted by the board of directors of The Holgate State Bank, Holgate, Ohio, signifying its intention to withdraw from membership in the Federal Reserve System and a letter requesting waiver of the six months' notice of such withdrawal. Also enclosed was a letter from the president of the bank setting forth reason for withdrawal, and copy of opinion of Counsel regarding the resolution. In accordance with the bank's request, the Board of Governors waives the requirement of six months' notice of Withdrawal. Accordingly, upon surrender of the Federal Reserve Bank stock issued to the bank, you are authorized to cancel such stock and make appropriate refund thereon. Under the provisions of Section 10(c) of Regulation HI as amended effective September 1, 1952, the bank may accomplish termination of its membership at any time within eight months after notice of intention to withdraw is given. Please advise when cancellation is effected and refund is made. The certificate of membership issued to the bank should be obtained, if possible, and forwarded to the Board. The State banking authorities should be advised of the bank's .Proposed withdrawal from membership and the date such withbecomes effective. It is noted that the bank has made application to the b:ederal Deposit Insurance Corporation for continuance of d.ePosit insurance after withdrawal from membership. Approved unanimously. 1195 6/11/56 -3- Letter to Mr. Pondrom, Vice President, Federal Reserve Bank of Dallas, reading as follows: As recommended in your letter of May 24, 1956, the Board of Governors, under the provisions of Section 24A of the Federal Reserve Act, approves an additional investment in bank premises not to exceed *56,000 by the Robert Lee State Bank, Robert Lee, Texas. It is understood that the building now occupied will be sold, and the proceeds of sale will be applied to reduce the carrying value of the new quarters. Please advise the bank of the above approval. Approved unanimously. There were presented telegrams to the following Federal Reserve Banks approving the establishment without change on the dates indicated Of the rates of discount and purchase in their existing schedules: Boston St. Louis San Francisco New York Philadelphia Cleveland Richmond Atlanta Minneapolis Kansas City Dallas June June June June June June June June June June June 4 If 6 7 7 7 7 7 7 7 7 Approved unanimously. There had been sent to the members of the Board before this meetcopies of a draft of statement prepared for the use of Chairman Martin in testifying tomorrow before the Subcommittee on Economic .14.... 6/11/56 Stabilization of the Joint Committee on the Economic Report. According to the Subcommittee, the hearing was to be concerned with procedural matters surrounding the recent increase in Federal Reserve Bank discount rates, including reports in the press regarding differences of opinion within the Government concerning the wisdom of the action. At the same time, it was understood that the Subcommittee did not intend at this time to go into the merits of the action itself. In view of the indi- cated purpose of the hearing, the draft of testimony was devoted principally to an explanation of the organization of the Federal Reserve SYstem from the standpoint of responsibility for policy actions. y, After discussing the approach taken in the draft of testimon Mr. Thurston distributed to the members of the Board copies of an alternative draft prepared by Mr. Riefler, Assistant to the Chairman, which a matter 14as directed toward the reasons why differences of opinion in such as an increase of the discount rate might develop and also would Point out the System's responsibility for making policy decisions in the monetary and credit area. approach taken in the Governor Vardaman stated that he felt the suggest certain °riginal draft was appropriate but that he would like to changes. prepared. He then read a revised draft which he had in the revised Following expressions of general concurrence from Congressman clraft, Mr. Cherry read the letter dated May 10, 1956, 1:i9 6/11/56 -5- Patman, Chairman of the Subcommittee on Economic Stabilization, in Which Mr. Patman asked certain specific questions with regard to communications or representations regarding the discount rate action which the Board might have received from other parties within the Government either before or after the rate was increased. to the Board's reply dated May 16. Reference also was made The questions raised in Mr. Patman's letter then were discussed from the standpoint of the responses which it would be appropriate for Chairman Martin to make in the course of the hearing if similar questions were directed to him. At the conclusion of the discussion, Chairman Martin suggested that the draft of testimony sent to the members of the Board prior to this meeting be revised in accordance with the changes proposed by Governor Vardaman and also to incorporate portions of the alternative cll'aft submitted by Mr. Riefler. He said that unless a request was made 4t the hearing that the statement be read, he proposed to submit it for inclusion in the record and then to indicate his willingness to answer Such questions as the Subcommittee might wish to ask. Chairman Martin al-so said that Mr. Young had prepared certain material reviewing recent ecorlomic trends and that if there was no objection he would use this in such manner as seemed appropriate in the light of developItients at the hearing. There was unanimous agreement with the procedure suggested by Chairman Martin. I 9S -6- 6/11/56 Mr. Thurston then withdrew from the meeting. Board copies of There had also been sent to the members of the a draft of testimony to be given tomorrow by Governor Balderston before the Subcommittee on Banking of the Senate Committee on Banking and Curon 18(c) of the rency regarding bill S. 3911, which would amend secti consent of the apFederal Deposit Insurance Act to require the prior case of any bank merger Propriate Federal bank supervisory agency in the or consolidation in which the resulting bank would be a national bank, a State member bank, or a nonmember insured bank. This bill was devel- ury oped by the three Federal banking agencies, submitted by the Treas f of himself and Department, and introduced by Senator Fulbright on behal Senator Capehart. respect to legisThe Board's favorable position with problem had been stated lation of this kind to deal with the bank merger Banking and Curin letters to the Bureau of the Budget and the Senate rency Committee, and also in testimony given recently by Chairman Martin Judiciary. before a Subcommittee of the Senate Committee on the that the proposed stateIn response to a question, Mr. Vest said Chairman Martin before the ttlent was in line with the testimony given by es in emphasis in Senate Judiciary Subcommittee, with some minor chang view of the fact that the hearing tomorrow would be directly concerned was concerned primarily /11-th S. 3911 whereas the Judiciary Subcommittee been introduced. Igith certain other bank merger bills which had 6/11/56 -7In a discussion of the matter, minor changes in the draft of testimony were suggested by members of the Board. In addition, con- sideration was given to various questions which might be raised at the hearing and responses which would accurately reflect the Board's position. At the conclusion of the discussion, the draft of testimony was approved unanimously in a form which would take into account the changes agreed upon at this meeting. The meeting then adjourned. Secretary's Note: Governor Balderston today approved, on behalf of the Board, memoranda from appropriate individuals concerned recommending that the basic annual salaries of the following employees be increased as indicated, effective June 17, 1956: lame and title ' Division Basic annual salary To From Office of the Secretary Zoe Gratsias, Secretary Rannah W. Nielsen, Senior Records Clerk 31670 3,840 $3,805 8,645 5,440 5,710 4,755 8,990 5,575 5,845 4,890 3,940 Research and Statistics T. Allen, Economist ,taeodore G. Flechsig, Economist w1J-e11yn Morelle, Economist 14arY F. Weaver, Clerk 1 2no 6/11/56 -8- LEllau increases, effective June 17z 1956 (continued) Name and title Division Basic annual salary To From Bank Operations Rita D. Brinley, Clerk-Stenographer John C. Franzoni, Technical Assistant Barbara Wrenn, Statistical Clerk $3,430 7,465 $3,585 7,680 3,345 3,500 Administrative Services Pletcher E. Brown, Messenger Shirley S. Corbin, Elevator Operator Donald W. Moon, Purchasing Assistant Margaret E. Royce, Clerk 3,285 3,370 2,750 4,930 3,415 2,825 5,065 3,500 Governor Balderston also approved today on behalf of the Board the recommendation contained in a memorandum from the Division of Personnel Administration dated June 6, 1956, that the salary rate for substitute nurses in that Division be increased from 4115 per day to $16 per day, effective June 11, 1956. cretary
@FedFRASER