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Minutes for
To:
Members of the Board
From:
Office of the Secretary
June 18, 1964
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. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Daane
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Federal Reserve Bank of St. Louis
Minutes of the Board of Governors of the Federal Reserve
SYstem on Thursday, June 18, 1964.
The Board met in the Board Room'
at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Mills I/
Robertson
Shepardson
Mitchell
Sherman, Secretary
Bakke, Assistant Secretary
Fauver, Assistant to the Board
Farrell, Director, Division of Bank
Operations
Mr. Solomon, Director, Division of
Examinations
Mr. Johnson, Director, Division of Personnel
Administration
Mr. Connell, Controller
Mr. Hexter, Assistant General Counsel
Mr. O'Connell, Assistant General Counsel
Mr. Holland, Associate Director, Division
of Research and Statistics
Mr. Smith, Assistant Director, Division
of Examinations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mr. Langham, Assistant Director, Division
of Data Processing
Mrs. Semia, Technical Assistant, Office
of the Secretary
Miss Hart, Senior Attorney, Legal Division
Mr. McClintock, Supervisory Review Examiner,
Division of Examinations
Mr. Kakalec, Assistant to the Controller,
Office of the Controller
Mr. Veenstra, Chief, Financial Statistics
Section, Division of Data Processing
Mr.
Mr.
Mr.
Mr.
ithdrew from meeting at point indicated in minutes.
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Federal Reserve Bank of St. Louis
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-2Ratification of action.
The action taken by the available members
Of the Board on June 16, 1964, as recorded in the minutes of that meeting,
in authorizing the issuance of an order and statement reflecting the
Board's approval of the merger of Bank of Graham, Bluefield, Virginia,
into Farmers Bank of Clinch Valley, Tazewell, Virginia, was ratified by
Unanimous vote.
Application of Manufacturers and Traders Trust Company (Item
1.12.1_11.
Unanimous approval was given to the application of Manufacturers
and Traders Trust Company, Buffalo, New York, for permission to establish
a branch in Hamburg Village, Erie County, New York.
A copy of the letter
informing the applicant of this approval is attached as Item No. 1.
Report on competitive factors (Worcester, Massachusetts).
There
Ilad been distributed a draft of report to the Comptroller of the Currency
°n the competitive factors involved in the proposed merger of Industrial
aitY Bank and Trust Company, Worcester, Massachusetts, into The Mechanics
174tional Bank of Worcester, Worcester, Massachusetts.
During a discussion centering on the extent and significance of
e°MPetition from savings banks in the Worcester area, it was agreed to
.elate the second sentence of the conclusion of the draft report, which
14°Uld have indicated that, in view of the unusual competitive capabilities
clt the local savings banks, the merger would not have an appreciable effect
on the
banking structure in the over-all area.
With that change, the
ePort was approved unanimously for transmission to the Comptroller of
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the Currency.
The conclusion of the report, in the form approved, read
as follaws:
The proposed merger of The Mechanics National Bank of
Worcester and Industrial City Bank of Worcester would eliminate
the limited competition between the two banks and the potential
for increased competition.
Savings institutions in Massachusetts.
During discussion of
the preceding matter it was recalled that several years ago, when the
Board considered a proposed merger involving certain banks in Massachusetts, the Federal Reserve Bank of Boston had submitted extensive
information regarding the competitive capacity of savings institutions
14 Massachusetts.
General agreement was expressed with a suggestion that such
information be brought up to date and made available to the Board.
Mr. McClintock then withdrew.
Proposed New Orleans real estate purchase.
On June 10, 1964,
the Board had discussed a proposed purchase of property adjoining the
'
lel? Orleans Branch building site, as described in a circulated memodated June
5 from the Division of Bank Operations, in order to
rmit demolition of certain dilapidated structures now occupied by
Undesirable tenants adjacent to the new Branch building.
The memorandum
44 Pointed out that although the building site acquired for the Branch
14 1958 would accommodate anticipated growth for many years, future
N)ansion of office facilities on the present property could be underten only at the expense of parking space.
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Federal Reserve Bank of St. Louis
Various other information
21
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bearing on the proposed purchase was also contained in the memorandum,
and the discussion relating thereto had ended with agreement that
further information would be sought from President Bryan of the Federal
Reserve Bank of Atlanta, who was to be in Washington the following week.
Governor Mitchell reported that pursuant to this agreement he had
discussed the matter with President Bryan, who hRd not been able to add
much of substance to the information previously furnished in justification of the proposed purchase.
Mr. Farrell then commented on background circumstances related
to the purchase of the present building site and discussed certain
facts concerning the property proposed to be acquired.
He brought out,
a4long other things, that the Board had approved an expenditure of up
to $1 million for the present building site, but the acquisition cost
had only been $750,000.
Thus, if the proposed purchase could be made
l'or the appraised value of the property, $329,0001 the aggregate cost
(3f both properties would be only $79,000 more than the expenditure the
180ard had been willing to allow for the present site alone.
He added,
havever, that the pending request was for approval of a top figure of
$425,000, to allow room for negotiation.
Further comment was made that
41though the Reserve Bank did not have plans for active use of the
e4ditional property, there was a question whether the 50-space parking
'
41ea planned for the new Branch building would be adequate for longtel'M use, since the Branch now had about 225 employees.
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Mr. Farrell
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then displayed and commented upon a map showing the position and certain
features of the present building site, the property proposed to be acquired,and the immediately surrounding area.
He noted that the present
building site contained 65,000 square feet and the property proposed
to be purchased 16,370 square feet, and observed that the total of
81)370 square feet would not be out of line with the size of certain
Federal Reserve Branch properties, topped by the Buffalo Branch with
82)600 square feet and several other Branches with areas of around
60,0400 square feet or more.
Mr. Farrell emphasized that he was not
erguing for the purchase, but merely presenting facts.
Governor Robertson commented that the present building site
in New Orleans was more than two-thirds as large as most of the head
Office or branch areas, to which Governor Mitchell responded that most
°f the Banks and Branches had insufficient space; for example, the
Chicago Reserve Bank, with 54,000 square feet, had to park a number
Of its trucks in the street.
Governor Shepardson commented that an adverse working environment
el)lald create a personnel problem, as demonstrated by the situation that
ha4 been encountered by the Denver Branch.
He had visited the New Orleans
bIlliding site and could readily see that the disreputable nature of some
Of
its surroundings could be an adverse working condition for Branch
rnPloyees.
Also, so far as property values were concerned, it seemed
l'e4sonable to expect an improvement, since the rehabilitation plans of
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the City of New Orleans for the area in question seemed to be beginning
to move.
Governor Robertson observed that improvement of the area would
Probably bring better neighbors, but it also might make the property
in question more expensive than would be appropriate for use by the
Branch.
In his view, if the property was needed, it should have been
PUrchased at the time the building site was acquired.
Chairman Martin remarked that this was true of many property
seqUisitions.
It had been his observation that when a proposal such
as the present one was turned down, subsequent events usually showed
that approval would have been the better choice.
As he saw it, there
seemed to be no question as to the merits of the purchase proposal
es a Purely business proposition, although careful consideration should
he given to the appropriateness of spending public funds in the cireUmstances presented.
After further discussion, Governor Mitchell suggested that
Farrell visit New Orleans, talk with the Chairman of the New Orleans
/3ranch Board, among others, and return to the Board with a recommendation.
General agreement was expressed with Governor Mitchell's prok'saly Governor Robertson suggesting also that, if it looked as if
the Purchase should be approved, the boards of the Atlanta Bank and
the
“ew Orleans Branch submit recommendations with related information
that
would provide a record that would more clearly justify approval.
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Federal Reserve Bank of St. Louis
,
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-7Call report (Items 2, 3, and 4). There had been distributed a
memorandum dated June 16, 1964, from Messrs. Veenstra and Holland
rePorting that, in response to the Board's letter sent pursuant to
the discussion on May 27, 1964, the Comptroller of the Currency in a
letter of June 8 had informed the Board that he would use a form for
the midyear call that would have the same face as was used for the
APril 15 call.
The back of the form would contain the detailed sched-
Illss of loans, Government securities, cash assets, and deposits, and
have the same format as for State banks, although the content of some
items that were related to revised items on the face would vary.
It
Igas recommended, in the light of the Comptroller's letter, that the
Reserve Banks collect eight supplementary items of information directly
from national banks in order to enable adjustment of all major national
bank condition statistics to a basis compatible with State bank condition
statements.
Such a step appeared to be the only practicable means of
°btaining reliable summary statistics for all member and all insured
bltnks for the midyear call.
The procedure would also permit adjustment
Or individual national bank condition information so that comparisons
°r
national and State bank performance on a local basis would be valid.
Attached to the memorandum were (1) a draft of letter to the Federal
Reserve Banks transmitting (a) the State member report forms for the
jilne call, (b) a reconciliation statement to be collected from national
bsIlks at the June call, and (c) the branch deposits report forms to be
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sent to all member banks operating branches outside their head office
City; (2) a draft of a proposed reconciliation statement; (3) a draft
Of letter to the Bureau of the Budget and supporting statement
requesting approval of the reconciliation statement; and
(4) a
draft of
letter to the Bureau of the Budget requesting approval of the branch
deposits survey.
Among other background comments, the memorandum noted that the
June
8 letter
from the Comptroller of the Currency contained language
that might or might not indicate that he would not object to a Federal
Reserve request of national banks for a reconciliation statement.
It
Ilas brought out also that staff-level discussions with the Bureau of
the Budget indicated some uneasiness toward giving approval for the
Reserve Banks to collect supplementary condition information from
44tional banks.
While it seemed probable that the Bureau would even-
tually approve the proposed reconciliation statement, there had been
some talk of
calling a high-level meeting of agency representatives to
cllecuss the statement before approval would be given.
At the Board's invitation, Mr. Holland commented on the situat1042 with special reference to statistical problems that arose from
the use of dissimilar forms for call reports by
the Federal bank
sig)ervisory agencies. One development in this regard related to the
errort
being made by Chairman Barr of the Federal Deposit Insurance
e°1121Oration to initiate a new round of inter-agency meetings looking
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toward agreement on a report form.
His letter of invitation had
suggested that the first meeting be preceded by submission of suggestions as to a form on which there might be hope of agreement.
The
Comptroller was said to have declined participation in such a meeting
°II the ground that the report form he had in use suited his purposes.
Governor Mitchell asked whether the Bureau of the Budget gave
aPProval to the form used by the Comptroller of the Currency.
Responses
indicated that some years ago all agencies had been requested to clear
ftprms for collection of statistics with the Bureau.
It was understood
that the Comptroller of the Currency and the Federal Deposit Insurance
Corporation formerly complied with that request) but no longer did so.
Further discussion turned upon the Board's right to make direct
'
lequests of national banks for information and the legal recourse available
in the event such a request should be refused.
The letter to the Federal Reserve Banks and the two letters
t° the Bureau of the Budget were approved unanimously.
ttached as Items 2) 3) and
Copies are
4.
Messrs. Holland) Langham) and Veenstra then withdrew.
Reporting requirement under Regulation U (Item No. 5. Part
two
v1 a study of the impact of tax-exempt foundations and charitable
tr4,
4,_
on the nation's economy, published in October 1963 by a Sube°111mittee of the House Select Committee on Small Business, discussed
eertain activities of the Baird Foundations in New York City, among
°thers-
Subcommittee Chairman Patman had asked the Board to review
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the Foundations' activities from the standpoint of possible violations
Of section 22 of the Federal Reserve Act or other laws within Federal
Reserve jurisdiction.
Pursuant to discussions at meetings of the
Board on January 15 and
16, 1964, letters were sent to Subcommittee
Chairman Patman and to the Securities and Exchange Commission on
January 17.
The letter to Mr. Patman indicated that the Foundations'
transactions did not appear to conflict with any statutory or regulatory
Prcsvisions administered by the Board, except possibly the Foundations'
railure to report loans made during fiscal year
1959 for the purpose
Purchasing or carrying registered securities, as provided for in
section 221.3(j) of Regulation U, Loans by Banks for the Purpose of
PUrchasing or Carrying Registered Stocks. It was also stated that the
question whether such a violation ha/a in fact occurred was being reto the Securities and Exchange Commission.
There had been distributed a memorandum dated June
16, 1964,
from the Legal Division, stating that informal word had been received
fr
the staff of the Securities and Exchange Commission that the
C°111111ission's Chairman had been asked to testify before the Subcommittee
°4 Or about July 22,
1961
1964, regarding questions arising from the October
Port on foundations and trusts, and that, in the view of the
ecThjalission's staff, it would be difficult to prove willful failure on
the
1)art of the Baird Foundations to file the reports in question unless
t}1
Y. had been notified by the Board that they were subject to the filing
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requirement and had failed to comply.
Attached to the memorandum was
a draft of letter that would ask the Federal Reserve Bank of New York
to notify the Baird Foundations that they were subject to the filing
requirement of section 221.3(j) of Regulation U.
Discussion brought out, among other points, that even though
Primary responsibility to comply with the reporting requirement rested
uPon the respondent, there was reason to lay a formal basis for any
charge of noncompliance that might be made.
Comment was made that
even when reports were requested merely for purposes of obtaining inforMation, such as the one in question, the Board had some obligation to
fcilow up where there were indications that certain organizations had
failed to comply.
There was also discussion of the possible desirability
°f a continuing reporting requirement of transactions covered by section
,
221',t
JO) of
Regulation U, rather than the one-time report now called for.
The letter to the Federal Reserve Bank of New York was approved
Ilrlezlimously.
A copy is attached as Item No.
5.
Messrs. Fauver and Leavitt and Miss Hart then withdrew.
Examination report form.
There had been distributed a memorandum
4ted May 28, 19641 from Mr. Solomon regarding a change in the style of
sort that had been made effective with the report of examination of
the
Federal Reserve Bank of San Francisco as of March 231 1964.
The
131'InciPal effect was to replace the rather full-scale reports formerly
14‘ePared for each branch with a brief letter report.
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Federal Reserve Bank of St. Louis
Pursuant to the
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intenti0n expressed by Mr. Solomon at the meetings on March 5 and
April 1, 1964, a review also had been made of the material in the main
section of the report, resulting in a proposal for substantially curtailing the contents thereof as exemplified by a pro forma report attached
to the memorandum.
The pro forma report, for ease of comparison,
stmulated the report of examination of the San Francisco Bank as it
'would appear if the suggested deletions and changes were given effect.
The proposed modifications were itemized on tables attached to the
Memorandum.
At the Board's invitation, Mr. Solomon commented on the proposed
ision„ which was part of a second round of steps being taken pursuant
to a review of examination procedures by Haskins & Sells.
It was ex-
Pected to put the revised procedures into effect with the next examinaion started after the conclusion of the examination of the New York
Reserve Bank, currently in progress.
Haskins & Sells had already
'
leviewed and commented favorably on some of the second round of revised
Pr°cedures, and there was every reason to expect that other proposed
Ions, including the modified examination report form, would be
'
i milarly satisfactory.
In essence, the objective sought to be achieved
-4 revising the procedures was to move away from the massive sampling
th4t had been undertaken in the past in Reserve Bank examinations.
In this connection, Mr. Solomon described a meeting that had
lleen held with the senior field force, the Board's Washington staff, and
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representatives of Haskins & Sells, looking toward the application of
statistical sampling to the field of accounting, auditing, and examining.
Specialists in statistical sampling from Haskins & Sells and
from the Board's staff had participated in the meeting.
A further
meeting had been held by the Division of Examinations with Mr. Holland
c)f the Division of Research and Statistics to discuss the general
subject of discounts and how the examiner should best approach this
aspect
of Reserve Bank operations.
In Mr. Solomon's view, this was
clie of the most difficult problems that confronted the examiner.
a 'Period
Over
of years a somewhat mechanistic approach seemed to have devel-
cTed that made the discount window of limited usefulness.
Although the
l'°reword to Regulation A, Advances and Discounts by Federal Reserve
4nks, did not call for such a mechanistic approach, it had perhaps
been misconstrued as if it did.
This deterrent to exercise of the full
ecollos of the discount function might constitute an impediment to System
Membership and might hinder the extension of Federal Reserve credit
where
funds were most directly needed.
Although the problem was not
131111181127 related to examinations, except insofar as examiners had to
he on the front line, it was hoped that the current explorations of
the subject would produce some suggestions, still within the Foreword
to Regulation A, that would permit greater flexibility.
Returning to the revised form of report, Mr. Solomon noted that
the reduction of the branch reports of examination to letter form had
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reduced the over-all report from 213 to 100 pages.
The suggestions
in the memorandum for reductions in the text would eliminate another
36 pages.
He suggested that a further reduction be made by eliminating
Forms FR 34 and FR 5, at the end of the report, comprised of balance
Sheets and a Federal Reserve Agent's statement.
Mr. Solomon emphasized that the abbreviated report sought to
condense only routine matters.
Any unusual or significant developments
in the areas affected by the reductions obviously would be brought
before the Board.
He observed that the question whether particular
information now contained in reports of examination of the Reserve Banks
could be dispensed with in the revised report form involved two consideratlens - first, what information the recipients of the report feel they
1/111st have, and second, the cost involved in preparing the reports.
The
'
lacipients were, most immediately, the Board and the Reserve Bank
(Ifficers and directors.
From the Washington view, it was easy to under-
estimate the interest taken in examination reports by Reserve Bank
clirectors, who saw only one report each year, whereas the Board saw
relve.
tl
'
Mr. Solomon added that it should also be borne in mind that
the reports might be reviewed by the House Banking and Currency Committee,
4nd,
_
iu view of that possibility, it would be well to guard against any
harge that the reports had been trimmed down to a point that fell short
c)f* accepted standards of adequacy. As to the cost element, the great
blat,
Of expense was for assembling and analyzing the data, lesser costs
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arising from typing, duplicating, and filing.
The cost of assembling
aid analyzing had in effect already been established by the Board when,
after reviewing the recommendations of Haskins & Sells, it had adopted
the present directive to the examining staff.
Virtually all of the
information needed for the schedules was called for under the directive,
and therefore any reduction in cost of preparation would necessarily
relate only to the expense of typing, duplicating, and filing.
Mr. Solomon went on to say that with the form of report being
niQre concise, the summary memorandum from the Division of Examinations
to the Board that in the past had been circulated with each report
eolad either be greatly condensed or omitted altogether, and only
13articular passages of the report called to the Board's attention.
At Chairman Martin's request for comments from the members of
the Board, Governor Robertson expressed the view that, having done a
good job of boiling down the report, the Division's summary memorandum,
%/hieh duplicated information in the report, could be discontinued.
He
however, that he had difficulty in seeing the virtue of certain
alicif
r the
proposals for moving information from a consolidated schedule
14 the body of the report to a separate memorandum that would not come
bercTe the Board.
Some of the latter data would involve the same amount
()t 14ork for preparation whether they were in the report proper or in a
1)arate memorandum, and, although he had no objection to separate
ItI
randa, he saw no need for separating this material from the report.
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If everything was included in one report, the mere size of the schedules
did not bother him.
In fact, it seemed to him that the data would be
more usable if in one spot than if contained in a number of scattered
memoranda.
Examples of what he had in mind were certain balance sheet
entries such as sundry items payable, under other liabilities; statement
Of accountability to Treasury Department for United States Government
securities; purchases and sales of securities; noncash collections;
and cafeteria; all of which Mx. Solomon's May 28 memorandum indicated
Igc)uld be eliminated from the schedules in the body of the report and
dealt
with separately.
Governor Mills stated that he was favorably impressed with the
/31\rision's work in condensing the report, and, generally speaking, he
'
lic3ul4 adopt the pro forma report that had been given as a sample.
How-
he believed that more time should be taken to consider the matter
Of separate memoranda.
In principle, he agreed with the idea of
eliminating from the schedules in the report certain statistical measIlraments that were not important for evaluating the financial position
audit status of the Reserve Banks.
However, it was his view that
the key function of the examination report was to point up the Banks'
tatIla in these areas, and for this reason he was inclined to feel that
the report schedules might well merit further review with an eye to
allgtne---ng
nf
data in certain areas.
He would be inclined toward more
illelUsions rather than toward more deletions.
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Federal Reserve Bank of St. Louis
Also, he placed reliance
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on the judgment of the examiners to bring to the Board's
attention any
matters that warranted comment but were not included in the condensed
schedules.
Governor Shepardson, recalling Mr. Solomon's remarks as to
costs, referred to the comments in Haskins & Sells' report to the effect
that certain data in the reports of examination of Reserve Banks were not
reallY pertinent for the purpose sought to be served.
to
ti
Without trying
go down the list of items to debate the merits of inclusion or delehe would agree with Governor Robertson that if the material was
needed there would not seem to be any purpose to presenting it in a
8eParate memorandum.
A few extra pages did not bother Governor Shepardson,
bUt -e
1, did
question the function of some of the items.
For example, he
agreed with a suggestion that the certified statement of condition be
eliminated.
If the examiners found the certification by the Bank's
411ditor corlect,it should be sufficient for this to be reported, rather
than to make up a duplicate of the statement.
Governor Mitchell remarked that anyone wanting to use a condition statement would not usually seek the one in the examination report,
would use one of the weekly ones that were easily available.
He
elt that a certification that the statement as of the date of examinati°n had been found correct should be sufficient for purposes of the
l'ePort.
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-18Governor Shepardson continued with the observation that the
earnings and expenses section might also be eliminated, and if the
examiner found points to criticize they should be noted in the text.
Re noted that twice a year the Board received budget information from
the Reserve Banks with a statement of earnings and expenses compared
141th the budget; this seemed to him more useful, in contrast with the
absence of any meaningful basis of comparison for the figures in the
l'ePort of examination.
Governor Mills expressed misgivings that decisions regarding
ehanges in the form and content of the examination report might be
being made too hastily and that snap judgments might reduce the value
clf the report unduly.
As one who had lived with banking reports, he
haa been won over to the need of a rather complete document.
Governor Shepardson said that he could not necessarily agree,
stating that in his opinion the report could be condensed even further.
he
statistical information was presented as of the date of examination,
liel'eas more recent figures were usually available from other sources
rcIr any statistics that were needed for comparison and analysis.
To
him
) a pertinent question was whether some of the information was
l'sallY useful to the Board's staff.
For instance, the report included
4 aaction on property, yet every major property transaction by a Reserve
1344k was submitted for the Board's approval, with extensive memoranda
illatIfYing the proposal.
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Federal Reserve Bank of St. Louis
He was at a loss to see what was gained by
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having the examiners go back over that ground.
Similarly, the pro
forma report included information on buildings and tenants, although
changes in those areas were infrequent and the Board received reports
°11 any major changes.
On the other hand, he was also of the opinion
that more information was needed than had heretofore been included in
several areas, such as discounts, where a bare set of figures was now
811(Ain, with no basis for relating them to other data for purposes of
coMparison.
In his view, the effort to revise the examination procedure
and to make the report meaningful and useful required further review,
with some further eliminations and some expansions.
Governor Mitchell expressed agreement that better coverage
of the discount function was needed.
However, he was not sure that
lt was really necessary to have the section on scope of examination
14 the branch reports.
Other than these points, he took no exception
to Mr. Solomon's proposals as to the text of the report, which might
be used as a basis for discussion.
Mitchell
As for the exhibits, Governor
would omit all except the two forms, balance sheet and Federal
Reserve Agent's statement, which could be certified on the back.
The
III'aetioe of accountants was to certify that books and records were
t.31'rect on a certain date; they did not provide schedules unless there
1148 something wrong, which was then fully explored.
The Federal Reserve
Setem was different from almost any other organization, except possibly
bank, in that it hed a daily statement.
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Federal Reserve Bank of St. Louis
What was wanted from an
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t.no,
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examination, as Governor Mitchell saw it, was nothing more than a
certification that the statement was correct as of
that date.
In response to an inquiry by Chairman Martin whether further
discussion of the proposed new report form was desired, Governor Mills
r
eiterated his strong feeling that the Board should review comprehensively the suggested inclusions and deletions before reaching a decision
on changes.
He commented that although Governors Shepardson and Mitchell
ePParently would be inclined to delete much information and merely rely
°4 certification that the figures had been proved correct, that was not,
In his mind, adequate for the Board's purposes.
What was needed was
1'411 and detailed data from which the Board could evaluate the administration of the Reserve Bank as seen through the eyes of the examiner.
In
Ilia view, since the report had already been condensed to 100 pages, the
8°ard should be in no haste to make further cuts.
During further discussion, Chairman Martin commented that the
Ports had contained far too much detailed material so far as he was
c°neerned.
While no member of the Board ought to be denied any informa-
ti011 he found useful, there was a question as to whether a better
14'esentation might be made.
Governor Shepardson pointed out that, assuming there was need
tc* the tabulations in the pro forma report, there was a separate
t4bulation for each branch of many of the items shown for the head
°rfice, and
he asked if that information could not be presented in
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Federal Reserve Bank of St. Louis
6/18/64
-21-
Multi-columnar form on one page for all offices
of a Reserve Bank.
Staff responses indicated that individual compilatio
ns were made for
each branch to provide a report to the branch management.
report
However, a
including figures for head office and all branches in one tabula-
tion could be circulated.
Governor Robertson suggested that the Division of Examinations
gO back
through the suggested report form in the light of the discussion
at this meeting with a view to seeing what could be consolidat
ed and
'that duplications there were, and then get
the views of other divisions
°4 information they found useful and whether that information should
be
Made available in separate memoranda rather than in the report proper.
After further discussion, Chairman Martin expressed the view
that significant progress in improving the examination report form had
been made and the project was well on the way to an important simplificati°4.
However, especially in view of the absence of two members of the
1/csard from today's meeting, it might be advisable for the Division of
calllinations to follow Governor Robertson's suggestion for consultati
ons
1.71th other divisions and to weigh further the importance of
various
Itern8 and how they might best be presented, the results to be submitted
tc)r further consideration by the Board.
It was understood that this suggestion would be followed.
Governor Mills then withdrew from the meeting.
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Federal Reserve Bank of St. Louis
it'
e
•;r1
.'
6/18/64
C
Ald
-22Examination of San Francisco Reserve Bank.
There had been dis-
tributed to the Board a memorandum from the Division of Examinations
dated June 10, 1964, reviewing the report and supplemental memoranda
relating to the examination of the Federal Reserve Bank of San Francisco
Made by the Board's examining staff as of March 23, 1964.
The examina-
tion report and usual accompanying memoranda had been circulated to the
Board.
At the request of the Board, Mr. Smith commented in supplementation of the examination report and related papers.
It appeared that
the examination had not disclosed any matters that were regarded as
calling for action by the Board.
Securities reported missing by member bank.
that,
Mr. Solomon reported
Pursuant to the discussion at the meeting on May 28, 1964, President
of the Federal Reserve Bank of Boston han been asked to furnish
certain information, requested by Mr. Robert A. Schremp of the House
lIcinking and Currency Committee staff, about an incident involving
certain securities reported missing by State Street Bank and Trust
C°MPanY, Boston, Massachusetts.
Among other things, Mr. Schremp had
48ked if any reports of the incident had been made by the Reserve Bank.
?1'eeident Ellis' reply referred to a report by the Bank's Audit Depart11";/ and Mr. Schremp had now requested that report.
There was unanimous agreement that the report should be furnished
to Mr. Schremp.
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Federal Reserve Bank of St. Louis
6/18/64
-23All members of the staff except Messrs. Sherman and Johnson
then withdrew.
Actions relating to Board's staff.
Governor Shepardson reported
that J. J. Connell, Controller, had elected to retire as of the close
Of business June 30, 1964.
To succeed Mr. Connell, Governor Shepardson
recommended that John Kakalec, at present Assistant to the Controller,
be appointed Controller, effective July 1, 1964, at a salary of $15,250
Per annum.
Mr. Connell's application for retirement was noted, and Governor
ShePardson's recommendation of Mr. Kakalec's appointment as Controller
/4 s aPproved unanimously.
Federal Government pay bill.
Governor Shepardson noted the
Pclesibility that the Federal Government pay bill, H. R. 11049, might
be enacted in the near future, raising the salaries of classified
Igorkers as of a near-term date and raising official salaries as of the
beginning of 1965.
He inquired whether, if such legislation were
etilteted, the Board would contemplate following the procedure that had
been followed in recent years.
This had entailed applying the salaries
131'0v1ded by the pay bill to Board employees in nonofficial positions,
44(1 of adjusting salaries of a few officials who had been recently apklinted and for whom the adjustment under the pay bill, if applied to
the salaries they were receiving before their official appointments,
Ig(311141 have resulted in larger amounts than their present salaries.
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Federal Reserve Bank of St. Louis
He
2154
6/18/64
-24-
noted that there might be a few other instances in which non-officer
eMployees would receive salaries under the revised pay bill in excess
of those of their supervising officers.
Members of the Board indicated that in the event the pay bill
"ere enacted
the same general procedure should be followed that had
been followed in recent years; namely, the rates would be applied to
e°mParable positions on the Board's staff and a review would be made
to determine where adjustments in certain officer salaries might be
called for at the sane time in order to avoid inequities of the type
that had been referred to by Governor Shepardson.
The meeting then adjourned.
Secretary's Note: On June 17, 1964,
Governor Shepardson approved on behalf
of the Board the following items:
Re
Letter to the Secretary of the Retirement System of the Federal
tl,sarve Banks (attached Item No. 6) regarding payment by the Board of
pie cost of increased retirement benefits incorporated into the Board
an for Board annuitants as provided in Public Law 87-793.
13, Memoranda recommending the following actions relating to the
-arais staff:
413
Pointment
14,f Charles F. Phillips, Jr., Assistant Professor of Economics, Washon and Lee University, as Consultant in the Division of Research
Statistics on a temporary contractual basis effective to December 31,
196t'
14 9, with compensation at the rate of $50 per day and necessary travel
accordance with the Board's travel regulations.
E8tablishment
of budget position
)4172°eition of Senior Economist in the Flow of Funds Section of the
on of Research and Statistics.
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Federal Reserve Bank of St. Louis
%3
6/18/64
Acceptance of resignations
Stuart H. Altman, Economist, Division of Research and Statistics,
effective at the close of business June 26, 1964.
Phyllis Featherstone, Statistical Assistant, Division of Research
and Statistics, effective at the close of business June 24, 1964.
Governor Shepardson today approved
on behalf of the Board the following
items:
Letter to the Federal Reserve Bank of San Francisco (attached
approving the appointment of Bruce E. Dean as assistant
'mulner.
Item
,
Memorandum from the Division of Administrative Services dated
illne 16, 1964, requesting authorization to purchase a VariTyper,
e'del 660-F, at a cost of 33,250. Approval of this request constiuted approval of the resultant overexpenditure in the Division's
1964 budget.
Z
staff:
Memoranda recommending the following actions relating to the Board's
Sala
case
James R. Smith, Review Examiner, Division of Examinations, from
'
4 9,250 to $9,980 per annum, effective June 21, 1964.
John B. P.
Baird, from the position of Analyst in the Division
.
°‘414 Operations to the position of General Assistant in the Office
at !he Secretary, with no change in basic annual salary at the rate
Y7,490, effective upon assuming his new duties.
Or
or
A.0
Secreta
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Federal Reserve Bank of St. Louis
Item No. 1
BOARD OF GOVERNORS
6/18/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDREBB OFFICIAL CORRESPONDENCE
TO THE BOARD
June 18, 1964
Board of Directors,
Manufacturers and Traders
Trust Company,
Buffalo, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment by
Manufacturers and Traders Trust Company, Buffalo,
New York, of a branch in the Hamburg Shopping
Center located at 141-161 Buffalo Street, Hamburg
Village, Erie County, New York, 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
Item No. 2
BOARD OF GOVERNORS
6/18/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADORCIE1 eir•FICIIAL OORRIESPONOIENCE
TO THC 110,010
June 19, 1964
near sir:
The indicted number of copies of the following forms are being
forwarded
to your Bank under separate cover for use of State member banks
A
nd their affiliates in submitting reports as of the next call date
:
°PY of each form is attached.
Number of
Form FR 105 (Call No. 172), Report of Condition of State
member banks.
Form FR 105e (Revised February 1961), Publisher's copy of
report of condition of State member banks.
Form FR 105e-1 (Revised February 1961), Publisher's copy
of report of condition of State member banks.
Form FR 220 (Revised March 1952), Report of affiliate or
holding company affiliate.
Form FR 220a (Revised March 1952), Publisher's copy of
report of affiliate or holding company affiliate.
The forms are identical to those used for the December 20, 1963,
Form FR 105 includes the schedules on the reverse, which had been
Cu for the spring call. The same form is being printed by the
Illetib-r41- Deposit Insurance Corporation for distribution to insured noner State banks.
rePort •
el64
the c
The face of the form to be distributed to national banks by
by th°mPtroller of the Currency is expected to be the same as that used
8eve at Agency for the April 15, 1964, call date and thus will differ in
44deral respects from the form being used by State banks. However, it is
be tfstood that the reverse of the form to be used by national banks will
"same as for State member banks.
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Federal Reserve Bank of St. Louis
-2-
In these circumstances, it will be necessary to collect additional
information directly from national banks in order that statistical informsmay be compiled for all member and all insured banks for the midyear
cell date. For this purpose, three copies of a supplementary reconciliation
statement
for each national bank (draft copies attached) will be forwarded
as soon as available. A new memorandum on operating procedures for editing
tabulating national bank reports and the reconciliation statements will
De forwarded to the Reserve Banks by the Division of Data Processing in the
near future. Procedures to be used for editing and tabulating State member
rePorts will be the same as those in effect for the December call.
It is planned to collect June 30, 1964, branch deposits data by
ti
,lies from all member banks operating branches outside the head office
'
,ci tY on the same basis as in 1962, as described in the Board's letter of
4 une 5) 1962. It is understood that the Comptroller of the Currency will
Lhterpose
no objection to such collection by the Reserve Banks.
Forms for all member banks listing their branches outside the
Office city (opened before April 30) will be forwarded as soon as
aliallable. Branches opened after April 30 should be added to the forms
at
re the Reserve Banks. Reporting banks will again be given the option of
branches. Banks
haP°rting deposits by cities rather than individual
th ing large and widespread branch systems should be advised in advance
fl!et these data will be collected as of June 30. Draft copies of this
°rill are also attached.
head
Very truly yours,
Merritt Sh
Secretary.
tnelosures
1° IRE PRESIDENTS OF ALL FEDERAL RESERVE BANKS
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Federal Reserve Bank of St. Louis
$
BOARD OF GOVERNORS
Item No.
3
6/18/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
.•kit RE.0 ••
June 19, 1964.
David E. Cohn, Clearance Officer,
°ffice of Statistical Standards,
Bureau of the Budget,
Executive
Office of the President,
Washington, D. C. 20503
Dear Mr.
Cohn:
This is to request clearance by your Agency of a reconciliation
statement to
collect certain supplementary condition report statistics
from
fo
all national banks to permit derivation of consistent summary inbarTation for all Federal Reserve member banks and all insured commercial
ofn'a and to provide consistent balance sheet data for individual banks
all
tether classes. Three copies of your Form 83 and the proposed form towith the required supporting statement and copies of the related
ltion report forms are enclosed.
Mr. E. T. Crowder of your Office has been kept appraised of
_ti_oPments regarding these statements and the unsuccessful negotiaurirs between the three Federal bank supervisory agencies to obtain a
ren
!
°1.111 or compatible report form for the midyear call. A staff memodated March 20 to Mr. Crowder summarized developments up to that
time
mr.% Since then, discussions on the subject have continued and
and .
ii rYmond T. Bowman, Assistant Director for Statistical Standards,
'Ir. Crowder were furnished copies of interagency correspondence on
'
subject.
(level
use
The Comptroller of the Currency has informed us that he will
f°rm for the midyear call that will be the same on the face of
coll°
j
eP rt as that used for the April 15 call. The back of the form
asse
!
tning the detailed schedules of loans, government securities, cash
alth's, and deposits will have the same format as for State banks,
on j
lugn the content of some items that are related to revised items
will vary. The face of this report differs in several
aocortant respects from that used by State banks, as indicated in the
mPanYing supporting statement.
the
4
11/1p0
e
1148 Mad
the
face
Although tabulation of the national bank call in this format
e for April 15, when information from the face only was collected,
'ask
required substantial time and effort at the Reserve Banks and
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
"
'
0
401
)
HOARD
Mr. Dav id E.
Cohn
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
-2-
unusually large amount of time on the Board's computer. The special
ulation not only required complete revision of established processing
°cedures at the Reserve Banks and the Board, but compatible summary
rhatistics could be achieved only by estimating for each national bank
ra e c'rPorate stock holdings, the amount of repurchase or resale agreebents in effect at the call date at banks in the weekly reporting memart.bank series, and the amount of mortgages or other liens outstanding
actlndividual banks. It was also necessary to adjust Federal Funds transua 1,.°11s and direct lease financing items reported separately in the
ihtl°nal bank report to a basis consistent with that reported by all
resured State banks, and to adjust the fixed asset items in the State
illaPt?rts to a basis consistent with the national bank reports. This esting and adjusting was done by Board staff at substantial additional
c°st.
tab
4
The resulting estimates presumably were fairly accurate for
15
APrii
othe
- since the missing items--corporate stocks and mortgages or
the liens on bank premises and other real estate--were reported at
pur "ecember 20 call. Inconsistencies with respect to reporting rep ehase and resale transactions were adjusted through use of data reha
orted in other series available at the Board. However, the estimating
Apj”ure with respect to repurchase/resale transactions used for the
repl
'15 call depended on a Wednesday call date and use of the weekly
:
rts of condition and would not be reliable when applied to a
Jun
cori,
- 3° call. Use of the December call as a bench mark in estimating
esj°rate stocks and mortgages and other liens would not provide reliable.
lmates in June, especially on an individual bank basis.
As noted in the enclosed supporting statement, reliable and
co/Isis
itifo tent data for individual banks of all classes and consistent summary
:
Pro illation for the banking system is necessary for continuing statistical
Pr4rains in use at the Reserve Banks and at the Board, and for research
441
'
tects conducted by others. In the absence of a reconciliation statenational banks, use of individual bank data for the different
diff
:
es of banks for comparative purposes would be precluded since the
rpo'tences in reporting procedures affect total loans and investments
i!ed for each national bank as well as reported asset and liability
totar
for someof the national banks. Summary statistics compiled from
'rts
of banks reporting on different bases also have limited usefulness.
Since the required data can be collected with a minimum of
be urt and
banks, it is felt that the
a minimum burden on respondent
s far outweigh the problems involved.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
IA:
HOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
David E. Cohn
OW
Because of serious time limitations to prepare for the midYear call, the Board would appreciate favorable consideration of this
l'arm at your earliest convenience. Delay in presenting this request
for clearance resulted from the fact that we were advised only a
few
daYs ago of the format of the national bank condition report form.
Very truly yours
(signed) Merritt Sherman
Merritt Sherman,
Secretary.
Enclosures
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADORLSC OFFICIAL CORRESPONOENCE
,_<4‘," •
RES•,s- ••
TO THE HOARD
June 19, 1964.
MEMORANDUM FOR:
14r. David E. Cohn, Clearance Officer,
Office of Statistical Standards,
Bureau of the Budget,
Executive Office of the President,
Washington, D. C. 20503
Supporting Statement to Request for Approval of
Statistical Reconciliation Statement for
National Bank Condition Report Series
1
" Justification of Form in its Relation to Operating or Research
112EL4ffs
The attached slip-sheet reconciliation statement is required
to collect information from national banks that will permit derivation
and tabulation of consistent June 30 bank condition data for all Federal
Reserve member and all insured commercial banks. The data to be collected
!ill be used to adjust data reported on the national bank condition report
4'Orm which will in turn be combined with similar information derived from
:
411 reports of State banks submitted on form FR 105, the condition report
?I'm for State member banks of the Federal Reserve System, and Federal
*71308it Insurance Corporation form 64 used by insured nonmember State
'
c nks. These summary tabulations are the only source of universe comer4411-1 bank balance sheet data and are widely used by economists, financial
t1114lYsts, and others in Government and elsewhere. They are required by
4 e 330ard in the conduct of its responsibilities for monetary policy and
c8 bench mark data for many related current series. In addition, loss of
:
8 118istent condition information for all classes of individual banks would
1.2
,
:1ously hinder any economic, legal, or business analysis requiring such
'
LLormation.
reaPects The face of the national bank form differs in the following
from the face of the form to be collected from all insured State
uEtrata.
1.
Loan and investment items, although reported net of
valuation reserves as in the State forms, are not
completely comparable in that repurchase and resale
transactions are to be treated as outright sales and
purchases of securities, and are no longer to be
reported as borrowing or lending transactions. These
differences
also apply to the related loan and secuhttp://fraser.stlouisfed.org
rity
Federal Reserve Bank of St.
Louis items in schedules on the back of the form.
BOARD
Mr. David E. Cohn
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
-2-
2.
Corporate stocks (including Federal Reserve Bank
stock) have been deleted and combined with "other
assets" as was done in the national bank form for
the September 30, 1963, call.
3.
The liability item reflecting mortgages or other
liens on bank premises and on other real estate
has been deleted and any such amounts are to be
netted against the new fixed asset item.
4.
Three items reflecting bank premises owned and
furniture and fixtures, real estate owned other
than bank premises, and investments and other
assets indirectly representing bank premises, have
been combined into a single item called "fixed
assets."
5.
In addition, there are the continuing differences
that were instituted beginning in September (separate reporting of Federal Funds transactions under
assets and liabilities and of direct lease financing
under assets) which can be adjusted in the editing
and tabulating process.
Additional information is required to permit adjustment for the first
three of these differences. The last two can be adjusted to a compat!
.ble basis in the editing and tabulating process without additional
-Lnformation from national banks and without loss of any important
summary or individual bank information.
Repurchase or resale transactions in effect on the call date
obably involve few banks, but the amounts involved are large when
2°11sidered in relation to individual banks, if not in national totals.
un April 15, 1964, when such information was collected by the Reserve
1;:4flics directly from a few national banks known to be active in this area,
was found that 10 banks held $137 million in securities purchased with
'
Igreement to resell and 3 banks had sold $57 million of securities under
4greements to repurchase. The number of banks and the amounts involved
rollI.Y vary widely from day to day and there are indications that the number
,. banks engaging in these transactions may be increasing. Since the end
1962 the weekly average of amounts involved in these transactions have
;!ried between $92 and $352 million at 37 banks reporting in the Federal
'
:
litunds series. When the amounts of securities sold under repurchase transIi?tions are included in individual national bank reports on a basis consistent
.fth reporting procedures in previous years, and on the basis on which they
reported by State banks, the effect is to increase both total assets
11, 1 total liabilities in the banks' reports. Inconsistent reporting of
b:eurities purchased under resale agreements results in these transactions
ing shown as loans by State banks and as securities by national banks.
r
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Federal Reserve Bank of St. Louis
A ,1
BOARD
Mr. David E. Cohn
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
-3-
Corporate stock holdings of all national banks must be
determined in order to derive individual national bank figures and
summary national bank data for aggregate loans and investments
(total earning assets) which are consistent with those for other
classes of banks. Current information on mortgages or other liens
.
:Lpremises or other real estate is required to derive indi°11_LaLA
vidual national bank and summary national bank data for total assets
Eind total liabilities which are consistent with those for other
classes of banks.
Any uses of individual bank data, and there. are many, are
seriously affected by such inconsistencies between the various classes
(3f banks. The total of earning assets and consistent figures for
total assets and total liabilities for individual banks are important
t° the computation of operating ratios. These are furnished to each
tlember bank and this has become a widely used and highly popular
service to these banks. It is probable that continuation of this
Ber rice would alone justify to national banks the nominal additional
added reporting burden imposed by the form.
In addition to their use in operating ratio analysis, comP4rative individual bank data are widely used in economic research and
Illarket analysis and other studies made incident to applications to
Terge or establish branches. Obviously, these uses would be seriously
I,Lindered if data for individual national and State banks differed in
chese fundamental and important respects.
Since the required data can be collected with a minimum effort
a minimum burden on respondents, it is felt the benefits far outweigh the problems involved.
!
tid
B. J
ustification of Method Used in Selecting and Contacting Those to
1
.11.Spvered
This form will be collected from all national banks in the
tint+
,.ed States (about 4,600) that report to the Office of the Comptroller
°f
,
b the Currency on Form 2130-A. Direct mail collection from national
1.07:4a is the most feasible method of deriving this information since
t-v7ional banks will be able to submit the form with the usual copy of
'e related Form 2130-A to their Federal Reserve Banks.
-211.1111222Elption of Plans for Collection
Tabulation and Publication
It is planned that this form will be used only for the forthmidyear call date and the data will be used to adjust the Reserve
co:7- 8 copy of the official national bank condition report to a basis
aaflistent with that submitted by State banks. Adjusted national bank
tan will be keypunched at the Reserve Banks and tabulated with infori
n from State banks on the Board's computer. Summary data will be
lol
ished as usual in the Summary report of assets and liabilities of
r banks and in the Federal Reserve Bulletin as well as used
Digitized for-,,ern
FRASER
8.4._Ly by the Board staff and the staffs of other Government agencies.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. David E. Cohn
D. Documentation of Consultation with those Supplying Data, Users
of the Data, and Others
The format was determined by the staff of the Federal
lieserve Board and was drafted to obtain the absolute minimum
amount of information that would permit derivation and tabulation
°I* only the items absolutely required. Since the form of the
national bank condition report and thus the nature of the items
that would be needed was not known until very recently, time did
not permit prior discussion of the format of the proposed form
With anyone outside the staff of the Federal Reserve Board.
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Rnelosures
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
Item No.
4
6/18/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE EIDARD
June 19, 1964.
*. David E. Cohn, Clearance Officer,
°trice of Statistical Standards,
Ilreau of the Budget,
Executive
Office of the President,
Washington, D. C. 20503
tear Mr. Cohn:
Enclosed are three copies of your Form 83 and the proposed
request clearance of a survey of deposits at branches of
EnTks as of June 30, 1964, to be made on the sane basis as in June
Data collected will be used in the publication of the booklet
• istribution of Bank Deposits by Counties and Standard Metropolitan
• ea8" that has been published periodically by the Board since 1947.
data obtained will also be used for important internal regulatory
'4"(1 statistical purposes.
A to
i
Z
The program was expanded in 1962 to require reports of
de
Posits by cities for branches outside the head office city rather
than
Ile
the county totals that had been collected previously. These
ha:data have been widely used for internal purposes by the Federal
'
to 4. supervisory agencies, although outside publication was limited
1n,
c°1111tY totals. It is apparent that the expanded survey did not
and may even have reduced, the reporting burden on the
'
8Pondent branch banking systems.
For the 1962 survey, report forms listing the branches for
each
of
the
1,895 banks with branches outside head office city were
Dre
theDarsd at the Board. Since this resulted in accurate reporting, and
ma tc)rms can now be prepared directly from punch card records, it is
ehorilned to repeat this procedure. Respondents will again be given a
by .&Ce of reporting individual branch data or totals of branches grouped
hrEteities, but it is expected that most banks will report individual
vionch data. The deposit items proposed are also the same as in predemand deposits of individuals, partnerships, and coroth—
'
4-°ns; time deposits of individuals, partnerships, and corporations;
eenetr deposits; and total deposits. Estimates will be permitted where
Of j
alized bookkeeping arrangements cross city lines. Advance notice
"e survey to respondents is also provided.
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Federal Reserve Bank of St. Louis
2167
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. David E. Cohn
-2-
AB in 1962, it will be necessary for the Federal
11111:8 to collect branch deposits data from national member
:
!he Federal Deposit Insurance Corporation has advised that
L: fleet
deposits data from nonmember State banks- on
basis. branch
Very truly yours,
(Signed) Merribt Shermaa
Merritt Sherman,
Secretary.
flelosures
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Federal Reserve Bank of St. Louis
Reserve
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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
5
6/18/64
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 18, 1964.
Mr. Alfred Hayes, President,
Federal Reserve Bank of New York,
New York, New York. 10045
Dear Mr. Hayes:
In a letter of January 17, 1964, the Board advised
Mr- Philip A. Loomis, Esq., General Counsel of the Securities and
Exchange Commission, of its view that the volume of general lending
by three
New York foundations, the Winfield Baird Foundation, the
David, Josephine, and Winfield Baird Foundation, and the Lansing
Foundation ("the Baird Foundations"), was such as to suggest that
the Baird Foundations could be regarded as engaged in the business of
extending credit within the meaning of section 221.3(j) of
Regulation U. The information on which this letter was based was
dryn from Chapter II of the report of a subcommittee of the Select
CQmmittee on Small Business on "Tax-Exempt Foundations and Charitable
'Yrusts: Their Impact on our Economy", of October 16, 1963, which
had been submitted to the Board by Representative Patman for comment.
A number of the lendings by the Baird Foundations detailed
in the report were for the purpose of purchasing or carrying securiies registered on national securities exchanges, and lendings of
'his type were outstanding on or after December 15, 1959, the
effective date and period for determining applicability of the
IseN3rting requirement imposed by the Board pursuant to section 221.3(j)
2f Regulation U. Based on these facts, the Board advised Representative
(in a letter also dated January 17, 1964) and the Commission
r
t_at
rian
it appeared the Baird Foundations should have filed on Form FR 728
"le reports authorized by section 221.3(j) and called for by 12 CFR 221.51.
l
The Commission's staff has informally advised the Board's
that it would facilitate the Commission's task of enforcing the
otgulation and the underlying sections of the Securities Exchange Act
th 1934 if the Board were to advise the Baird Foundations of its view
A"et the component organizations are subject to the filing requirement.
ccordingly, it would be appreciated if your Bank would so advise the
staf.c
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Federal Reserve Bank of St. Louis
2169
Mr. Alfred Hayes
three organizations involved and inform the Board of their response.
The Patman Report does not give local New York City addresses for the
°rganizations comprising the Baird Foundations, but it states that
Mr. David G. Baird, of Baird & Co., a member organization of the
New York Stock Exchange, told the Committee that he alone was
responsible for their operation. Accordingly, it is assumed that
they can be reached through the offices of Baird & Co.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
BOARD OF GOVERNORS
OF THE
Item No.
6
6/18/64
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE SOAR°
June 17) 1964
Mrs, Valerie R. Frank,
Secretary, Retirement System
of the Federal Reserve Banks,
Federal Reserve Bank of New York,
New York, New York.
10045
Dear Mrs. Frank:
This refers to the Board ls letter of May 31, 1963,
interposing no objection to incorporating into the Board Plan
the increased benefits provided by Public Law 87-793 approved
October 11, 1962, and requesting that the Board be billed by
the Retirement System on a pay-as-you-go basis for the cost
of similar benefits for Board Plan annuitants during the
18-month period, January 1, 1963, through June 30, 1964.
Although legislation has not been approved to date
by congress to enable the Civil Service Retirement and Disability Fund to fund these benefits, there is every evidence
to believe that an appropriation will be made to take up the
cost for another fiscal year and a strong probability that
the Civil Service Commission will be authorized to continue
the liberalized payments after June 30, 1964, by means of a
concurrent Resolution of both Houses of Congress, pending
Consideration of the budget for the fiscal year 1965. It
is therefore requested that the Board continue to be billed
"a pay-as-you-go basis for the cost of these benefits for
he period July 1, 1964, through June 30, 1965. In this regard,
lt is understood that this cost will be in the neighborhood
of $26,000 for the period involved.
It is further understood that you will continue to
bill us at the time of retirement for the supplements which
are added to each retirement depending on the year in which
the employee retires.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
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Federal Reserve Bank of St. Louis
o -,7$
BOARD OF GOVERNORS
Item No.
OF THE
FEDERAL RESERVE SYSTEM
7
6/18/64
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 18, 1964.
CONFIDENTIAL (S)
Mr. E. H. Galvin, Vice President,
Federal Reserve Bank of San Francisco,
San Francisco, California. 94120
Dear Mr. Galvin:
In accordance with the request contained in
Mr. Cavan's letter of June 12, 1964, the Board approves
the appointment of Bruce E. Dean as an assistant examiner
for the Federal Reserve Bank of San Francisco, effective
today.
It is noted that Mr. Dean is indebted to Seattle
National Bank, Seattle, Washington. Accordingly the Board's
approval of the appointment of Mr. Dean is given with the
examiunderstanding that he will not participate in any
liquidated.
been
has
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indebtedne
his
until
nation of that bank
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
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Federal Reserve Bank of St. Louis
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