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609 1O/59 Minutes for To: June 22, 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 Minutes of the Board of Governors of the Federal Reserve System On Wednesday, June 22, 1960. PRESENT: Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 11:00 a.m. Martin, Chairman Szymczak Mills Robertson King Sherman, Secretary Shay, Legislative Counsel Molony, Assistant to the Board Fauver, Assistant to the Board Hackley, General Counsel Farrell, Director, Division of Bank Operations Mr. Connell, Controller Mr. Masters, Associate Director, Division of Examinations Mr. Daniels, Assistant Director, Division of Bank Operations Mr. Smith, Assistant Director, Division of Examinations Mr. Bass, Assistant Controller Mr. Landry, Assistant to the Secretary Mr. Mr. Mr. Mr. Mr. Mr. Items circulated or distributed to the Board. The following and copies items, which had been circulated or distributed to the Board °r 'which item numbers are attached to these minutes under the respective ind -icated, were approved unanimously: Item No. Telegram to the Federal Reserve Bank of Kansas City 41!terp081ng no objection to its calling for bids for :e construction of an addition and for alterations to the Oklahoma City Branch building. 1 utter to Chairman Robertson of the Senate Banking S. 3702, 441 Currency Committee, reporting favorably on : Act, Reserve Federal the of bill to amend section 14(b) the of ty authori the years amended, to extend for two ions obligat States United e deral Reserve Banks to purchas directly from the Treasury. 2 6/22/60 -2Assessment on Federal Reserve Banks for Board expenses during the !_122nd half of 1960. Copies had been distributed of a memorandum dated June 21) 1960, from Mr. Bass. It was recommended in the memorandum that an assessment of .00294 of their total paid-in capital and surplus as of June 3, 1960, be levied on the Reserve Banks to meet the estimated expenses of the Board for the second half of 1960. Governor Mills referred to a statement in the memorandum that a general pay increase effective July 10, 1960, in line with the recent Act Of Congress providing for a 7-1/2 per cent increase in the salary scale for classified Civil Service employees if adopted by the Board, would increase salary expenses for the remainder of the year by approximately $150,000. Since the President had not yet acted on this bill and since there was 114eertainty as to whether it would become law, he proposed that the assessment be deferred, preferably until definite information was available "to whether it would be enacted. Following an observation from Mr. Bass to the effect that the Board had adequate funds to operate until the early part of July, it was agreed that action on this item be deferred. Messrs. Connell, Daniels, and Bass then withdrew from the meeting. Request from Mr. Patman. There had been distributed to the Board 1)1.1°r to the meeting copies of a letter dated June 21, 1960, from Chairman ilatslan of Subcommittee No. 3 of the House Committee on Banking and Currency. 6/22/60 -3- This letter requested copies of the supplemental, confidential memoranda containing the examinerts comments regarding management of the Federal Reserve Banks of New York, Chicago, and San Francisco for the years 1957-59, inclusive, and reviewing operations of the auditing departments. Mr. Masters recalled that in response to a similar request from 41*. Patman in October 1957, the Board decided not to make the supplemental examination memoranda available to Mr. Patman on the grounds that such action Itcluld interfere with the freedom of the examiner in expressing his views and thus impair the usefulness of the supplemental memoranda. Governor Robertson said that there was nothing in the confidential memoranda that had been ' l egklested that should not be made available to the Committee on Banking and ellrrency. However, he hoped Mr. Patman would realize the nature of the Ports and withdraw his request. If he had any doubt about their content, a c°PY with the names blanked out could be furnished to him. Governor Mills said that he had a great deal of sympathy with the P°sition indicated by Governor Robertson. He did not know, however, Ithether the General Accounting Office prepared similar memoranda with l'esPect to agencies it audited and, if they did, whether they were held 41 confidence from Congressional committees. If the General Accounting °trice prepared similar reports and made them available to the Congress, it l'ibuld be difficult for the Board to withhold the confidential memoranda Narding the Federal Reserve Banks from a committee of Congress. 6/22/60 perhaps During the ensuing discussion, Chairman Martin said that the confidential memoranda should be discontinued. If they were to be at the same prepared, he was disposed to accede to Mr. Patman's request, time informing him that should he make the details public they might prove snibarrassing to certain individuals, and in consequence the Board would feel obliged to discontinue such reports. On balance, he favored full disclosure and he disliked seeing the Board placed in the position of lrithholding from Congress what were essentially harmless documents. real Governor Szymczak said that in his opinion the Board had no Choice but to accede to Mr. Patman's request. However, he believed that 141% Patman should be told on the telephone or in person the exact nature °f the confidential material in these reports. There then ensued an extended discussion of the contents of the e°11fidential memoranda that are prepared by the Board's examiners to 811PPlement the reports of examination of the Reserve Banks, of the pros 44d cons on having such supplemental memoranda, and of the pros and cons "making them available to a Committee of Congress upon request. At the conclusion of the discussion, it was agreed that this item be Placed on the docket for the meeting on Monday, June 27, 1960, the day berore Chairman Martin was to testify before Mr. Patman's Subcommittee No. 3. The meeting then adjourned. Secretary's Notes: Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Robertson, acting in the absence 6/22/60 of Governor Shepardson, today approved on behalf of the Board increases in the basic annual salaries of the following persons on the Boardts staff, effective June 26, 1960: Division Basic annual salary To From 1110.01... Board Members* Offices George L. Spencer, Jr., Secretary to Mr. Szymczak $7,270 $7,510 4,490 4,640 3,945 4,040 3/755 3,850 10,130 3,850 3,780 3,850 3,850 10,370 3,945 3,495 4,230 4,340 5,090 3/590 4,325 4,490 5,240 4,135 4,230 5,430 5,580 3/945 4,040 Office of the Secretary .',/ ,°an V. Caulfield, Senior Records Clerk Diane Quick, Clerk-Stenographer Legal Jeanne A. Chambers, Stenographer Research and Statistics ilip T. Allen, Economist ( 4-„Une E. Farrell, Clerk-Stenographer olyn B. Hammond, Statistical Clerk „!78. G. Kennedy, Statistical Clerk zGNoberta M. OtRaurke, Clerk-Stenographer Draftsman Trainee 841 J. , Clerk-Stenographer #.11.arlenePayne, Roberts, Gail Y Ann Shuler, Secretary 17 K. Stephanos, Secretary Z 3)875 3/945 3,945 Bank Operations atie L. Phipps, Statistical Typist Examinations ilglas L. Orre, Assistant Federal Reserve Examiner Personnel Administration E. Harcourt, Clerk-Stenographer 231: 6/22/60 -6- SalarY increases, effective June 260 1960 Na d title continued Basic annual salary To From Division Administrative Services $4,490 40490 14,230 3,850 3,445 31340 14,098 William F. Becker, Captain, Guard Force Ruth Jean Myers, Publications Clerk Mary F. Murphy, Mailing List Clerk Willa I. Davis, Clerk-Stenographer P. D. Maddox, Guard James Jackson, Laborer Bishop Hart, Operator, Duplicating Devices Governor Robertson also approved today on behalf of the Board a letter to the Federal Reserve Bank of Richmond (attached Item No. 3) approving the designation of Richard H. Jones as special assistant examiner. Sec 41640 4164o 4,325 31945 31540 3,435 4,306 TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON June 22, 1960. Ieecly Kansas City Board interposes no objection to your Banktg calling for bids for construction of addition and for alterations to Oklahoma City Branch building on the basis of plans and specifications referred to in Mr. Clay's letter of June 15, 1960. In accordance with custdmary procedures, a summary report of the bids should be forwarded to the Board together with recomnendation of the Bank as to acceptance. (Signed) herritt Sherman Sherman Item No. 1 6/22/60 / 1 4 r'r. A) DA .e -------k--.7 7 "-4,":.( ' ( • •J4 . ).•''elSr f, • 1,1 , , BOARD OF GOVERNORS OF THE Item No. 2 6/22/60 FEDERAL RESERVE SYSTEM WASHINGTON ) 4 - ‘‘4) ,i ..) 4. '"f:• - OFFICE OF THE CHAIRMAN •eil'' '' %4 14,,trp)*' ' ' June 22, 1960 The Honorable A. Willis Robertson, Chairman, Committee on Banking and Currency, United States Senate, Washington 25, D. C. Dear Mr. Chairman: This is in response to your request for the Board's views on S. 3702, to amend section 14(b) of the Federal Reserve Act, as amended, to extend for two years the authority of the Federal Reserve Banks to purchase United States obligations directly from the Treasury. Under existing law, the authority will terminate on June 30, 1960. The use of this authority by the Federal Reserve enables the Treasury to avoid creating unnecessary financial trains that would otherwise occur if it had to draw heavily on its accounts especially during periods immediately preceding tax Payment dates. Temporary Treasury borrowing at such times, followed by prompt repayment from the proceeds of tax payments, provides a smooth operating mechanism, without the abrupt money Inarket fluctuations that would otherwise occur. The authority could also be useful in dealing with situations resulting from a national emergency. Since 1942 when the authority was granted it has been sparingly used, and its use is reported, as required bY law, each year in detail in the Board's Annual Report. The l'esults of its use also appear currently in weekly statements sued by the Federal Reserve and in daily statements issued by -Ole Treasury. The Board, therefore, recommends approval of the bill. Sincerely yours, dtA McC. Martin, Jr. BOARD OF GOVERNORS OF THE Item No. 3 FEDERAL RESERVE SYSTEM 6/22/60 WASHINGTON 25, O. C. ADDRESS arrictm. CORRES TO The BOARD June 22, 1960. Mi. N. L. Armistead, Vice President, Pederal Reserve Bank of Richmond, Richmond 13, Virginia. Dear Mr. Armistead: In accordance with the request contained in your 'letter of June 80 1960, the Board approves the designation of Richard H. Jones as a special assistant examiner for the Federal Reserve Bank of Richmond for the purpose of particiPating in the examination of State member banks except Staterlanters Bank of Commerce and Trusts, Richmond, Virginia* The authorization heretofore given your Bank to designate Jones as a special assistant examiner is hereby canceled. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 0 DANCE
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