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Minutes for To: June 20, 1960 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. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King 41 Minutes of the Board of Governors of the Federal Reserve System on Monday, June 20, 1960. PRESENT: Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Szymczak, Acting Chairman Mills Robertson King Sherman, Secretary Thomas, Adviser to the Board Young, Adviser to the Board Shay, Legislative Counsel Molony, Assistant to the Board Fauver, Assistant to the Board Noyes, Director, Division of Research and Statistics Mr. Koch, Adviser, Division of Research and Statistics Mr. Landry, Assistant to the Secretary Mr. Keir, Chief, Government Finance Section, Division of Research and Statistics Mr. Mr. Mr. Mr. Mr. Mr. Mr. Report on money market developments. Messrs. Thomas and Keir 1)resented a report on money market developments and changes in the reserve Positions of member banks. At the conclusion of this report, all members of the staff with the exception of Messrs. Sherman and Landry withdrew and Messrs. Hackley, Genera]. Counsel, Masters, Associate Director, and Nelson, Assistant tirector, Division of Examinations, joined the meeting. Items circulated to the Board. been The following items, which had circulated to the Board and copies of which are attached to these rad, nUtes under the respective item numbers indicated, were approved unani- 111011sly: Item No. tter to the Fidelity Union Trust Company, Newark, Jersey, approving an increase in the investment bank premises authorized by the Board in 1957. 1 6/20/60 -2Item No. Letter to The New Bethlehem Bank, New Bethlehem, Pennsylvania, waiving the requirement of six months' notice of withdrawal from membership in the Federal Reserve System. 2 Letter to the Citizens National Bank, St. Petersburg, Florida, reaffirming the position taken in the Board's letter of June 1, 1960, to the Federal Reserve Bank of Atlanta regarding the applicability of Regulation Q toa. plan of the Citizens National Bank for paying iaterest monthly, at specified rates, on one-year time certificates of deposit. 3 Letter to the Federal Reserve Bank of St. Louis approving 4 the payment of salary to an Assistant Cashier assigned to the Memphis Branch at the rate fixed by the Board of D irectors. Letter to the Comptroller of the Currency recommending favorably with respect to an application to organize a national bank at Roswell, New Mexico. Report on proposed consolidation of banks in New Castle, Pennsylyaw There had been circulated under date of June 14, 1960, a memorandum fl'ott the Division of Examinations transmitting a report to the Comptroller °f the Currency pursuant to the Federal Deposit Insurance Act, as amended by the Act of May 13, 1960, on the competitive factors involved in a 13r0Posed consolidation of First National Bank of Lawrence County at New Castle and Union Trust Company of New Castle, New Castle, Pennsylvania. The report concluded as follows: The proposed consolidation would combine two closely affiliated institutions and eliminate one banking office. While the competitive position of the continuing bank would be enhanced to some extent, it seems probable that the effect on the over-all competitive situation in the New Castle area would be negligible. 6/a0/60 _3_ There being no objection, unanimous approval was given to the transmission of the report to the Comptroller of the Currency. The meeting then adjourned. 22 BOAR 40aSt0 *0 pp Gov z) OF GOVERNORS OF THE 0 FEDERAL RESERVE SYSTEM t* WASHINGTON 25. D. C. 4 4 0 0 * Item No. 1 6/20/60 AC/CIRCUS OFFICIAL CORRESPONDENCE TO THE EIOAFIO NA 044*** June 20, 1960 Board of Directors, Fidelity Union Trust Company, Newark 1, New Jersey. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors approves, under the provisions of Section 24A of the Federal Reserve Act, an increase of $1,300,000 in the net additional investment of $7,800,000 in bank premises authorized in its letter of August 12, 1957, addressed to the Federal Reserve Bank of New York. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 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Box 11208, St. Petersburg, Florida. tear 3 6/20/60 Smith: The Board has considered the observations in your letter 0 1 to fine 6, 1960, with respect to the Boardts letter of June 1, 1960, t'ne Federal Reserve Bank of Atlanta regarding the 'Premium XII" Plan of your Bank. , The provisions of section 3(d) of Regulation Q, referred t° Your letter, which expressly allow "grace periods" in comput" ' s j Interest on savinrzs deposits, are designed to reduce misunder: r Idiags, make possible uniform advertising,, create better customer bl-Lationships, and enable banks that compute interest on a cycle e; -is to facilitate colJputation of interest on savings accounts and a4-1-Ininate difficulties being encountered. These reasons would not PPear to apply with equal force to your bankts Premium /II plan. Viile the Board appreciates your observations, it feels that it should adhere to the views expressed in its letter of June 1, 1960. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. otd BOARD OF GOVERNORS OF THE Item No. 4 FEDERAL RESERVE SYSTEM 6/20/60 WASHINGTON 25, D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD o oow" June 20, 1960 CONFIDENTIAL (FR) Mr. Delos C. Johns, President, Federal Reserve Bank of St. Louis, St. Louis 66, Missouri. Dear Mr. Johns: The Board of Governors approves the payment of salary to the following officer of the federal Reserve Bank of St. Louis, assigned to the Memphis Branch, for the period July 1 through December 31, 1960, at the rate indicated, which is the rate fixed by your Board of Directors as reported in your letter of June 101 1960: Name Paul I. Black, Jr. Title Assistant Cashier Annual ,Salary $71500 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 5 6/20/60 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD June 20, 1960 Comptroller of the Currency, Treasury Department, Washington 25, D. C. Attention Mr. G. W. Garwood, Deputy Comptroller of the Currency. near Mr. Comptroller: Reference is made to a letter from your office dated March 1, -9603 enclosing copies of an application to organize a national bank at ! Ioswell, New Mexico, and requesting a recommendation as to whether or ' not the application should be approved. A report of investigation of the application made by an e aminer for the Federal Reserve Bank of Dallas indicates that the troponents expect to provide a minimum capital structure of $1,250,000 P °r.the bank instead of750,000„ as shown in the application. This caPltal structure would appear to be adequate. While the need for cloiltional banking services is not urgent, there appears to be suffi. ! '2-ent potential growth in the community to support future profitable 1,'Perations of the proposed bank. Only one of the proposed directors as had previous banking experience, but the group as a whole represents Iversified business interests and is well regarded in the community. A ILIalified executive officer has been chosen, and proposed management is, erefore, regarded as satisfactory. Accordingly, the Board of Governors ecommends that favorable consideration be given the application. ' q Z The Board's Division of Examinations will be glad to discuss V.aspects of this case with representatives of your office if you so "lre. T Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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