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Minutes for
To:
June 24, 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
at
Gov. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
la
Minutes of the Board of Governors of the Federal Reserve System
on Friday, June 24, 1960.
PRESENT: Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Szymczak
Mills
Robertson
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Kelleher, Director, Division of Administrative
Services
Mr. Masters, Associate Director, Division of
Examinations
Mr. Hexter, Assistant General Counsel
Mr. Chase, Assistant General Counsel
Mr. Daniels, Assistant Director, Division of Bank
Operations
Mr. Hostrup, Assistant Director, Division of
Examinations
Mr. Nelson, Assistant Director, Division of
Examinations
Mr. Landry, Assistant to the Secretary
Ratification of actions taken in the absence of a quorum (Item No. 1).
The
Board ratified by unanimous vote the actions taken at a meeting of the
"ailable members of the Board on June 23, 1960. Minutes of that meeting
Et1
attached hereto as Item No. 1.
Discount rates.
The establishment without change by the Federal
itaserve Banks of New York, Cleveland, Richmond, Chicago, St. Louis, Minneapolis,
151118118 City, and Dallas on June 23, 1960, of the rates on discounts and
ebatices in their existing schedules was approved unanimously, with the
1"eretanding that appropriate advice would be sent to those Banks.
6/24/60
-2Items circulated to the Board.
The following items, which had been
circulated to the Board and copies of which are attached to these minutes
under the respective item numbers indicated, were approved unanimously:
Item No.
Letter to The Commercial Bank, Blue Hill, Nebraska,
granting its request for permission to exercise
fiduciary powers.
2
Letter to The Farmers National Bank of Grant, Grant,
Nebraska, approving its application for fiduciary powers.
3
Telegram to the Federal Reserve Agent at Chicago
aUthorizing the issuance of a general voting permit to
irst Wisconsin Bankshares Corporation, Milwaukee,
Wisconsin, entitling it to vote the stock which it owns
controls of Mayfair National Bank of Wauwatosa,
suwatosa, Wisconsin.
4
Letter to the Federal Reserve Bank of St. Louis regarding
the bank holding company status of Usher and Gardner, Inc.
5
Letter to the Comptroller of the Currency requesting that
order be placed with the Bureau of Engraving and Print411g for printing Federal Reserve notes during the fiscal
Year 1961.
6
With respect to Item No.
5, upon a request from Governor Robertson,
14r• Hostrup went into the background of the bank holding company status of
Usher and Gardner, Inc., Mayfield, Kentucky.
The question at issue was
14hether that corporation owned or had ever awned as much as 25 per cent of
the stock of any bank other than the Exchange Bank, Mayfield, Kentucky,
ch would qualify it as a bank holding company under the Bank Holding
Ca,
--"Avany Act of 1956.
Mr. Hostrup referred to a letter from the Federal
6/24/60
_3-
Reserve Bank of St. Louis dated April 22, 1960, which noted that the last
examination report of the bank in Mayfield no longer referred to the possible
holding company violation mentioned in the previous report that had been
the subject of a letter from the Division of Examinations to the St. Louis
Reserve Bank on November 19, 1959.
The Reserve Bank's letter of April 22
reported that counsel for Usher and Gardner, Inc., held a lengthy conference
it St. Louis with Vice President Kroner, the Chief Examiner and Counsel of
the Reserve Bank, and the Chief National Bank Examiner. It was brought out
dllritg this conversation that Mr. Usher had bought 650 shares of the Citizens
13611k0 Hickman, Kentucky, from the corporation, thereby reducing the maximum
P°8sible corporate holdings of bank stocks to an amount below the specifi"•tions of the Bank Holding Company Act.
Classification of member banks in the Second District (Item No. 7).
4 draft of letter to the New York Reserve Bank had been circulated with a
tnenlorandum dated June 15, 1960, from the Division of Bank Operations.
The
letter would state that the Board had changed the classification of member
banks in the Second Federal Reserve District for the purpose of electing
Class A and Class B directors.
The draft letter would note that the new
111saification would leave 13 of the 37 banks transferring from Group 2
to
Group 3 at the upper limit of capital and surplus for Group 3, with the
'e8111t that whenever their capital was increased they would revert to Group 2.
Mr. Farrell referred to the fact that the current classification
6/24/60
°f
-4-
member banks in the New York District had been in effect since June 20,
1957, and that an analysis by the Reserve Bank of the present classification
c3f voting groups suggested the desirability of a change in the light of the
Boats formula (S-l521; F.R.L.S. No. 3120):
The number of member banks in Group 2 will be approximately onethird of the total number of member banks in the district, with
the number of member banks in Group 1 as nearly as may be in the
same ratio to the total number of all member banks as the combined
capital and surplus of member banks in Group 3 bears to the combined
capital and surplus of all member banks.
Re said
that the Division of Bank Operations felt that a somewhat different
limit for Group 3 would be preferable to the one proposed by the Reserve
klak but that the difference was one of degree only, and in the past such
differences had not been considered of sufficient importance to justify
illBistence on changes in recommendations formally made.
Mr. Farrell added
that the Reserve Bank was reluctant to amend its proposal because it had
been reviewed with the Bankts directors, who had agreed with the recommendation.
There being no objection, the letter to the New York Reserve Bank
chellging the classification of member banks in the Second Federal Reserve
kstrict for the purpose of electing Class A and Class B directors was
-t12'12d unanimously.
A copy of the letter is attached to these minutes
'at Item No.
7.
Meeting with Committee on Common Trust Funds (Item No. 8).
There
484 been circulated under date of June 24, 1960, a draft of letter to the
6/24/6o
-5-
Federal Reserve Bank of New York that would propose a meeting with the
Committee on Common Trust Funds of the Trust Division of the American
Bankers Association.
The Trust Division had written under date of May 16,
1960, suggesting in substance an amendment to subsection 5(c) of Section
17 of Regulation F that would substitute for the present limitation on
amounts which may be invested by qualified fiduciary accounts in common
trust funds established under the provisions of the section, a limitation
°f 5 per cent of a common trust fund the value of whose assets exceeded
$2 million, while retaining the present limitation on investment in common
tr45
t funds with assets valued at $2 million or less.
The Reserve Bank had
transmitted this proposal to the Board and advised that it was studying the
Icommendation and would prepare a memorandum of its views for submission
to the Board.
The draft reply to New York would state that, in connection
with Board consideration of this proposal, the comments of the Reserve Banks,
°ther interested bank supervisory agencies, and the Internal Revenue Service
Ir°1-11d be requested.
However, it would go on to say that in advance of taking
"
Y of these steps it would be appreciated if a meeting would be arranged
either in New York or Washington for further consideration of the matter
Irith representatives of the Trust Division's Committee on Common Trust Funds.
Governor Mills asked whether it was contemplated that the Board's
l' Ill'esentatives at the proposed meeting would indicate the Board's position
qae
'
wrIlY or another on the proposal, which substantially relaxed the adminis-
tlIttion of common trust funds and struck him as being a move in the wrong
direction.
6/24/6o
-6Mr. Masters replied that the recommendation made by the Committee
Ott Common Trust Funds of the American Bankers Association was indeed a
sveeping one, and in his opinion it required more support than was given
to it in the memorandum from that group.
He indicated that the proposed
meeting was suggested as a means of developing a better understanding of
the objectives and reasons for the recommendation.
Noting that it would
be difficult for the Board's representatives to remain passive during a
m eeting of this type, Mr. Masters said that it was not intended to argue
the merits of the recommendation but merely to explore and develop information
a
lready received from the Association and perhaps to develop alternatives
to the recommendation.
He went on to say that the Executive Committee of the
Association's Common Trust Fund Committee was attempting to promote support
the recommendation among banks in St. Louis, Philadelphia, and New York.
The letter to the New York Reserve Bank regarding arrangements for
411c4 a meeting was then approved unanimously.
"tached to these minutes as Item No.
A copy of this letter is
8.
Messrs. Thomas and Young, Advisers to the Board, and Noyes, Director,
13ivision of Research and Statistics, joined the meeting at this point.
Arizona banking study (Item No.
terea
9). Under date of May 31, 1960, the
Reserve Bank of San Francisco wrote to the Board requesting
itIstructions as to the response that it should make to a request of the
1)ePartment of Justice for access to the confidential or other materials in its
riles relating to the San Francisco Bank's 1956 study, Investigation of Banking
6/24/60
_7_
ta Arizona.
The material was desired by the Antitrust Division of Justice
in connection with a Grand Jury proceeding against General Motors Corporation
involving the Sherman Act; the Antitrust Division specifically was seeking
ench material as the Reserve Bank might have respecting an agreement between
Valley National Bank of Phoenix, Arizona, and General Motors Acceptance
Corporation prohibiting the latter from offering longer maturities than
those required by the policy in effect at Valley National Bank.
In addition,
the Reserve Bank had inquired as to the extent of its authority to cooperate
//ith the Antitrust Division in connection with the performance of its
resPonsibilities.
A draft of letter that would reply to the Reserve Bank had been
ciroUlated expressing the opinion that such material as is relevant should
he Made available to the Antitrust Division, with the understanding that
ellch material would be used for developing information and would not be
Ilaed for any other purpose or introduced in evidence and that no reference
to the source of the information would be made to anyone outside the Justice
1)ePartment.
The letter would also indicate that Justice had already been
ttlformed that the confidential Dembitz memorandum to members of the Commission
°4 Credit Granting by Automobile Dealers, dated May 4, 1956, referred to at
111,ge 102 of Volume I of the Reserve Bank's study, was not relevant and
therefore would not be made available to the Antitrust Division.
The letter
to the Reserve Bank would note in conclusion that permission for Justice to
,411
203
-8-
6/24/60
examine reports of examination of national banks and nonmember insured
banks must be requested from the Comptroller of the Currency and the
Federal Deposit Insurance Corporation.
Mr. Hackley recalled that a copy of the San Francisco Reserve
Berikts study, Investigation of Banking in Arizona, was sent by the Board
to the Department of Justice on April 3, 1957, and that pursuant to the
Boardts action on April 13, 1960, a copy of the memorandum dated March
14) 1960, prepared in the Boardts Legal Division by Mr. Upshaw also was
eent to the Justice Department.
The Chief Trial Attorney of the San
.111)-ncisco office of the Antitrust Division of Justice had asked the Reserve
Bank for access to the information upon which both the Reserve Bankts study
Iltd the Upshaw memorandum were based.
A similar request had been received
bY Mr. Hackley from Mr. Bicks, Acting Assistant Attorney General in charge
Of the Antitrust Division, in a letter dated May 27, 1960.
Mr. Hackley
'rent on to say that, if the Board approved the draft letter authorizing
the San Francisco Reserve Bank to make certain materials available to the
Antitrust Division, he would propose to respond to the letter from Mr. Bicks
that the Upshaw memorandum was based entirely on the study prepared at the
Francisco Bank and that the Board had authorized the Reserve Bank to
S
"
illake its basic information available to representatives of Justice in the
15:1811ner indicated.
On the latter point, Mr. Hackley said that the recommended
l'ePlY to the San Francisco Reserve Bank was consistent with replies made by
the Board to earlier similar requests from other Government agencies that
6/24/60
-9-
they be given access to unpublished information in the Boardts records.
Governor Mills observed that the draft letter to the Reserve Bank
*ftuld state that the memorandum prepared by Mr. Dembitz of the Division of
Research and Statistics containing confidential information Obtained from
General Motors Acceptance Corporation would not be made available to the
justice Department.
He felt it important that the letter make clear that
itiformation of this type, which
should not be released.
Was
given in strict confidence to the Board,
Governor Mills went on to suggest that the Reserve
l arlk be advised to consult the Boardta Legal Division whenever it had
reservations about revealing to the Justice Department any of the information
Used in the preparation of its 1956 report and the report prepared in the
toardts Legal Division.
Chairman Martin suggested that Mr. Hackley make certain that the
aka
Francisco Reserve Bank understood that, if it had doubts as to making
information available under the terms of the proposed letter, such questions
be brought back to the Board.
A letter to the San Francisco Reserve Bank in response to its request
r°r instructions as to making available to the Department of Justice materials
UPC11 'Which the Reserve Bank's 1956 study of banking in Arizona was based
was
the),
- approved unanimously, with the understanding that Mr. Hackley would
int rm Mr. Bicks, Acting Assistant Attorney General, of the substance of the
11°aIlts letter to the Federal Reserve Bank of San Francisco. A copy of the
letter to the San Francisco Bank is attached hereto as Item No. 9.
6/24/60
-10Messrs. Connell, Controller, Bass, Assistant Controller, and Horbett,
Special Consultant, Division of Bank Operations, entered the meeting at this
Point and Mr. Chase withdrew.
Application by Eastern Trust and Banking Company (Item 10 and 11).
There had been distributed a draft of Order approving the application by
eastern Trust and Banking Company, Bangor, Maine, under the Bank Holding
Clftloany Act for prior approval to acquire up to 70 per cent of the 2,000
outstanding voting shares of Guilford Trust Company, Guilford, Maine. A
draft Statement of the Board and a press release regarding this matter had
also been distributed.
Mr. Hackley noted that no objections or comments had been filed
rcalowing publication in the Federal Register on June
8, 1960, of a Notice
Of Tentative Decision referring to a Tentative Statement approving this
aPPlication.
Since the time for filing such objections and comments had
11°1
'
7 expired, the Legal Division had prepared for the Boardla consideration
cll'afts of a final Order and Statement, in this case substantially the same
aa the Tentative Decision and Tentative Statement.
There being no objection, the Order and Statement granting the
clardla approval of the request by Eastern Trust and Banking Company to
"Illire up to 70 per cent of the outstanding voting shares of Guilford
Company were approved unanimously, with the understanding that a press
l'eleaae would be issued in the usual manner.
Copies of the Order and State-
are attached to these minutes as Items 10 and 11.
6/24/60
-11Report on competitive factors--Savannah
Georgia.
A memorandum
dated June 21, 1960, from the Division of Examinations had been distributed
in connection with the proposed consolidation of City Bank and Trust Company,
Macon, Georgia, and The Citizens and Southern National Bank, Savannah,
Georgia, under the charter and title of the latter bank.
Attached to the
memorandum was a proposed report to the Comptroller of the Currency on the
competitive factors involved in the consolidation.
Governor Robertson suggested the deletion of the last sentence of
the proposed conclusion of the report, pointing out that the reference therein
to the organization of a new State bank in Macon, where a branch of the
consolidated bank was to be established, simply indicated the need for a new
bellk in that community and gave an undeserving tone to the statement as a
vhole.
There was agreement with Governor Robertsonta suggestion.
Thereupon
unanimous approval was given to the report to the
-uptroller of the Currency on the competitive factors involved in the
ills°130Bed consolidation of The Citizens and Southern National Bank, Savannah,
Ge°rgia, and City Bank and Trust Company, Macon, Georgia.
the
The conclusion of
report, as approved, was as follows:
The proposed consolidation will result in the elimination
Of a relatively small bank in Macon and a lessening of competition.
It will expand the resources of the largest commercial bank and
itself a bank holding company, which operates in various communities
throughout the State through branches and subsidiary banks. It will
result in a concentration of local commercial banking in Macon in
two large State-wide banking systems.
6/24/6o
-12At this point Messrs. Masters and Hostrup withdrew from the
meeting.
Draft of statement by Chairman Martin on H. R. 8516 and H. R. 8627.
Copies had been distributed of a draft of statement to be made by Chairman
Martin on June 28, 1960, before Subcommittee No. 3 of the House Banking
and Currency Committee on H. R. 8516, relating to retirement of stock in
the Federal Reserve Banks, and H. R. 8627, proposing the substitution of
interest-bearing deposits at the Reserve Banks for Reserve Bank stock now
°lined by member banks.
After a discussion of the proposed statement, it was understood
that it would be revised and considered at another meeting of the Board.
Messrs. Thomas, Hexter, and Young then withdrew and Mr. Sprecher,
A8aistant Director, Division of Personnel Administration, entered the room.
Draft reply to letter from Chairman Hardy. A redraft of proposed
telaY to a letter dated June 10, 1960, from Chairman Hardy of the Foreign
C/etations and Monetary Affairs Subcommittee of the Committee on Government
°Perations of the House of Representatives had been distributed in accordance
1/1th the understanding reached at yesterday's meeting of the available members
t the Board.
Governor Robertson said that it was not now proposed to send to
Cii
iman Hardy the redraft of answer to the question relating to float but
to
AL.,_
'''QA
the Reserve Bank Presidents for comment. Also, the answer to the
'ion regarding a single Federal Reserve note issue would be forthcoming
6/24/60
-13-
at a later date.
Governor Robertson then commented on the answers to the
Other questions and the changes that had been made since the preceding
draft.
Governor Mills said that he hoped the letter to the Reserve Bank
residents transmitting the proposed reply to the question regarding float
l'ould not be taken to indicate that the draft answer was intended to
constitute a declaration of the Boardts position on the question of returning
to a three-day maximum deferment schedule in place of the present two-day
flaximum.
Otherwise, the Presidents might believe the Board had already
clecided to make this move and thus be inhibited from giving their comments.
Governor Robertson said that the letter was not intended to indicate
8.
Board position but was for the purpose of stirring up comments on the entire
Problem.
There followed a discussion of the draft answers, during which Mr.
1411-els withdrew from the meeting.
vas
At the conclusion of the discussion, it
understood that further revisions would be made in the draft replies for
(Abideration by the Board early next week.
The meeting then adjourned.
Secretaryts Notes: On June 23, 1960, Governor
Robertson, acting in the absence of Governor
Shepardson, approved on behalf of the Board the
following items:
Memoranda from appropriate individuals concerned recommending the
04ing actions affecting the Boardss staff:
43*IT
2It
6/24/60
-14-
A
______Ppointraents
Carol Lee Jones as Stenographer in the Division of Examinations, with
basic annual salary at the rate of $3,755, effective the date of entrance
uPon duty.
Gail Mullin as Economist in the Division of Research and Statistics,
l'/ith basic annual salary at the rate of $8,330, effective the date of
entrance upon duty.
Patricia J. Snell as Statistical Clerk in the Division of Research
and Statistics, with basic annual salary at the rate of $3,755, effective
the date of entrance upon duty.
mPloyment following maternity leave
, Rose Cassedy as Research Assistant in the Division of Research and
otatisties, with basic annual salary at the rate of $5,580, effective
ne 27, 1960,
A dvance of sick leave
, Dorothy L. Duvall, Statistical Clerk in the Division of Bank Operations,
• be advanced further sick leave for the period June 24 through July 15, 1960.
Letter to the Federal Reserve Bank of Philadelphia (attached Item No. 12)
y,
8./)vroving
the appointment of Louis A. Pinola as assistant examiner.
Letter to the Federal Reserve Bank of Cleveland (attached Item No. 13)
itterposing
no objection to George Herbert Ferguson, an assistant examiner,
r7ing in a certain trust capacity, with the understanding that he will not
1-rticipate in any examination of The City Bank Company, Lorain, Ohio, as
°I1g as the trusts include stock of that bank.
Telegram to the Federal Reserve Bank of Atlanta (attached Item No. 14)
Mving the appointment of Albert Sidney Maner as assistant examiner.
Acting in the absence of Governor Shepardson,
Governor Robertson today approved on behalf of
the Board the following items:
Memorandum dated June 17, 1960, from Gail Jeanne Payne, Draftsman
flee in the Division of Research and Statistics, requesting permission
"cept a part-time position as salesgirl in a local dress shop.
6/24/60
-15-
Letter to the Federal Reserve Bank of St. Louis (attached Item No. 15)
aPproving the appointment of Delmer D. Weisz as assistant examiner.
- -/
Secretary
23:12
Item No. 1
6/24/6o
Minutes of a meeting of the available members of the Board of
Governors of the Federal Reserve System held in the Board Room at 10:00 a.m.
On Thursday, June 23, 1960.
PRESENT:
Mr. Szymczak, Acting Chairman
Mr. Mills
Mr. Robertson
Sherman, Secretary
Shay, Legislative Counsel
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Johnson, Director, Division of Personnel
Administration
Mr. Kelleher, Director, Division of Administrative
Services
Mr. Connell, Controller
Mr. Masters, Associate Director, Division of
Examinations
Mr. Daniels, Assistant Director, Division of Bank
Operations
Assistant Director, Division of
Sprecher,
Mr.
Personnel Administration
Mr. Bass, Assistant Controller
Mrs. Semia, Technical Assistant, Office of the
Secretary
Special Consultant, Division of Bank
Horbett,
Mr.
Operations
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Report on competitive factors.
from
A memorandum dated June 16, 1960,
the Division of Examinations had been distributed in connection with
the Proposed purchase of assets and assumption of liabilities of The
8sex National Bank, Essex, Connecticut, by Hartford National Bank and
Trust Company, Hartford, Connecticut.
Attached to the memorandum was a
Pl'oposed report to the Comptroller of the Currency on the competitive
ttletors involved in the transaction.
(late.
The report was required by today's
6/23/60
-2Governor Mills suggested revisions in the wording of the con-
clusion of the report.
He pointed out that this case, like two others in
Process, involved an expansion within a holding company, and he thought
that was a sensitive area that the bank merger legislation was aimed at
in particular. Governor Mills considered that the overall expansion of
the holding company should be taken into account by the Board and also
by the Comptroller's Office.
With the changes in the conclusion suggested by Governor Mills,
the report was approved unanimously for transmission to the Comptroller
Of the Currency.
The conclusion of the report as approved read as follows:
While the proposed transaction would eliminate one unit bank
in Essex and would extend the overall service territory and increase
the employable resources of the largest commercial bank in Hartford,
local banking competition in Essex should tend to be intensified.
Replies to questions submitted by Hardy Subcommittee.
Governor
Robertson stated that there had been distributed drafts of replies to
Taestions contained in a letter dated June 10 from Chairman Porter
RardY, Jr., of the Foreign Operations and Monetary Affairs Subcommittee
the House Committee on Government Operations.
It would be helpful to
those who were working on the answers to have the benefit of any comments
the members of the Board might care to make at this time.
In regard to the first question, which concerned the possibility
°t reducing float by increasing the maximum deferment time for check
eltedits, Governor Mills stated that he felt strongly that the reply
-3-
6/23/60
should be delayed and the question of increasing maximum deferment time
should again be brought up with the Federal Reserve Bank Presidents.
After further discussion of changes in wording and approach in
the proposed replies, it was understood that a revised draft would be
PrePared and distributeftto the Board.
The meeting then adjourned.
Bee
tary
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 2
6/24/60
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June
24, 1960
Board of Directors,
The Commercial Bank,
Blue Hill, Nebraska.
Gentlemen:
This refers to your request for permission,
under applicable provisions of your condition of membership numbered 1, to act in certain fiduciary capacities.
Following consideration of the information submitted, the Board of Governors of the Federal Reserve
System grants permission to The Commercial Bank to act as
executor and administrator of the estates of deceased
persons, as prescribed by the laws of the State of Nebraska,
With the understanding that your bank will not accept fiduciary appointments of other kinds without first obtaining
the permission of the Board.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
Item No. 3
FEDERAL RESERVE SYSTEM
6/24/6o
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
JlinP 24, 1960
Board of Directors,
The Farmers National Bank of Grant,
Grant, Nebraska.
Gentlemen:
The Board of Governors of the Federal Reserve
System has given consideration to your application for
fiduciary powers and grants The Farmers National Bank
of Grant authority to act, when not in contravention of
State or local law, as executor and administrator. The
exercise of such rights sW1 be subject to the provisions of Section 11(k) of the Federal Reserve Act and
Regulation F of the Board of Governors of the Federal
Reserve System.
A formal certificate indicating the fiduciary
Powers that your bank is now authorized to exercise will
be forwarded in due course.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
ciwt
TELEGRAM
LEASED WIRE SERVICE
Item No.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
June 24,
6/24/6o
1960
?RAU - CHICAGO
KEBJE
A. First Wisconsin Bankshares Corporation Milwaukee, Wisconsin.
,
B. Mayfair National
Bank of Wauwatosa, Wauwatosa, Wisconsin.
C.
None.
(Signed) Merritt Sherman
SHERMPLN
Nifinition of KEBJE
The Board authorizes the issuance of a general voting permit,
under
the provisions of section 5144 of the Revised Statutes of the
United States, to the holding company affiliate named below
after the letter "A"entitl
ing such organization to vote the
,
stock which it owns or controls of the bank(s) named below
after the letter "B" at all meetings of shareholders of such
bank(s), subject to the condition(s) stated below after the
letter 'IC". The period within which a permit may be issued
pursuant to this authorization is limited to thirty days from
the date of this telegram unless an extension of time is granted
by the Board. Please proceed in accordance with the instructions contained in the Board's letter of March 10, 1947,
(5-964).
4
349
BOARD OF GOVERNORS
OF THE
Item No. 5
FEDERAL RESERVE SYSTEM
6/24/6o
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 24, 1960
Mr. Geo. E. Kroner, Vice President,
Federal Reserve Bank of St. Louis,
St. Louis 66, Missouri.
Dear Mr. Kroner:
This refers to the Board's letter of November 19,
1959, and your reply of April 22, 1960, concerning the bank
holding company status of Usher and Gardner, Inc.
Statements of Counsel for Usher and Gardner, Inc.,
reviewed the status of the Usher and Gardner litigation
generally, with particular reference to the process of
establishing the character (as either personal or corporate
Property) of assets standing in the name of or carried on
the books of the corporation, and were to the effect that no
such determination could at that time be made as to the bank
stocks, but as a result of investigation certain other properties had been established as involiring personal rather than
corporate ownership; and that a determination of ownership of
the bank stocks would require an audit of some 30 years'
transactions, and no such audit of the corporation was then
contemplated. The corporation's Counsel further stated that
la order to put the bank holding company question at rest,
Mr. Usher had purchased 650 shares of Citizens Bank, Hickman,
Kentucky, from the corporation, and also asserted that Usher
and Gardner, Inc. did not then own, if it did at any time, as
zuch as 25 per cent of the stock of any bank other than
Exchange Bank, Mayfield, Kentucky.
On the basis of the information furnished, the Board
agrees with the conclusion reached by you and your Bank's
Counsel, that Usher and Gardner, Inc. is not a bank holding
company. No further action is deemed necessary.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
2339
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
6
6/24/6o
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
June 24, 1960
The Honorable)
The Comptroller of the Currency,
Treasury Department;
Washington 250 D. C.
It is respectfully requested that you place an order with
the Bureau of Engraving and Printing for printing 540,432,000 Federal
Reserve notes (single units) of the 1950 Series during the fiscal
Year ending June 30, 1961, in the amounts and denominations shown
below for the various Federal Reserve Banks:
Denomination
Boston
New York
Philadelphia
Cleveland
Number of
notes
Dollar
Amount
$5
lo
6,84ol000
8,64o,000
$34,200,000
86,400,000
20
50
100
2,520,000
144,000
144,000
50,400,000
7,200,000
14,400,000
5
lo
30,240,000
52,920,000
151,2000000
20
50
100
280000,000
1,584,000
1,152,000
529,200,000
560,0000000
79,200,000
115,200,000
5
lo
17,280,000
28,720,000
86,400,000
2871200l000
20
50
7,9200000
1,152,000
158,400,000
loo
288,000
28,8000000
5
lo
14,400,000
11,800,000
72,000,000
118,000,000
20
50
100
120600,000
' 576,000
144,000
252,0000000
28,800,000
14,400,000
571600l000
The Comptroller
of the Currency
-2Denomination
Richmond
Number of
notes
Dollar
Amount
$5
10
20
50
10)080,000
14,760,000
13,680)000
432,000
$50)400,000
1471600)000
273)600,000
211600)000
Atlanta
5
lo
20
loo
31,600,000
24,760,000
15,040,000
288,000
158,000,000
247)600,000
300)800,000
28,800,000
Chicago
5
lo
20
50
20,520,000
43,920,000
17,640,000
1,008,000
102,600,000
439,200,000
352,800,000
50,400,000
5
lo
20
100
11,520,000
7,560,000
3,960,000
288,000
57,600,000
75,600,000
79,200,000
28,800,000
Minneapolis
5
lo
20
4,68o,000
3,600,000
2,880,000
23,400,000
36,000,000
57,600,000
Kansas City
5
lo
20
50
loo
31 960,000
7,560,000
6,840,000
144,000
144,000
19,800,000
75,600,000
136,800,000
7,200,000
14,400,000
5
lo
20
19,360,000
6,480,000
4,320,000
96,800,000
64,800,000
86,400,000
5
10
20
50
100
ii,o8o,000
12,240,000
11,440,000
720,000
864,000
55,400,000
122,400,000
228,800,000
36,000,000
86,400,00o
St. Louis
Dallas
San Francisco
The Comptroller
of the Currency
-3Denomination
Total8
$5
10
20
50
100
Number of
notes
181,560,000
222,960,000
126,840,000
51760,000
3,312,000
Dollar
Amount
$907,800,000
21229,600,000
20 536,800,000
288,0000000
331,200,000
540,4320000 $6,293,4000000
Respectfully,
(Signed) Merritt Sherman
Merritt S'aerman;
Secretary-
2342
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, 0. C.
Item No. 7
6/24/6o
ADDRESS OFFICIAL CORREOPONDENCE
TO THE BOARD
June 24, 1960
Mr. Alfred Hayes, President,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Mr. Hayes:
As recommended in your letter of June 2, 1960, the
Board has changed the classification of member banks in the
Second Federal Reserve District, for the purpose of electing
Class A and Class B directors, to the following:
Group
1
2
3
Banks with Capital and Surplus of:
$25,000,000 or more
More than $1,000,0000 but less
than $25,000,000
$1,000,000 or less
It is noted that this classification will leave 13 of
the 37 banks transferred from Group 2 to Group 3 at exactly the
uPPer limit of capital and surplus for Group 3. As a result,
With their first increase in capital, they will revert to
Group 2.
It is suggested that in the future consideration might
be given to setting the capital and surplus limits at a point where
there would be a lesser concentration of banks at or near the
liaximum limit for the group. In this instance, for example, the
definition of Group 3 might have been "banks with capital and surplus
of less than $1,200,000" or "less than $1,150,000."
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
499
,4
OF THE
CO GO
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 8
6/24/6o
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
t1.1
'
*".,4tmst
t1444**
June 24, 1960
Mr. Fred W. Piderit, Jr.,
Assistant Vice President,
Federal Reserve Bank of New York,
New York 45, New York.
Dear Mr. Piderit:
This will acknowledge your letter of May 23, with
Which you enclosed a letter and supporting memorandum, both
dated May 16, addressed to the Board by the Committee on
Common Trust Funds of the Trust Division of the American
Bankers Association, and requesting consideration by the
Board to amendment of subsection 5(c), Section 17, Regulation F. The amendment proposed, in substance, would substitute for the present li jtation upon amounts which may
be invested by qualified fiduciary accounts in common trust
funds established under the provisions of Section 17, a
limitation of 5 per cent of a common trust fund the value
Of the assets of which is in excess of $2,000,000, while
retaining the present limitation on investment in common
trust funds with assets valued at $2,000,000 or less. It
is noted that your Bank is studying the recommendation and
will prepare a memorandum of its views for submission to the
Board.
conThe recommendation so made involves important
farwith
ion,
regulat
ceptual changes in the common trust fund
such
of
tration
adminis
reaching significance relative to the
In this
tunds and to the Board's regulatory responsibilities.
letter
ee's
Committ
connection, the memorandum accompanying the
purpose
and
need
raises a variety of questions bearing on the
ishcf the proposed change as well as on the method of accompl
the
to
tives
alterna
ing it, including questions as to possible
method recommended.
of this proposal,
In connection with Board consideration
other interBanks,
Reserve
the comments and views of the Federal
Service
Revenue
l
Interna
ested bank supervisory agencies, and the
these
of
any
taking
Will be requested. However, in advance of
BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
14r. Fred W. Piderit, Jr.
- 2
steps it would be helpful to have the benefit of further
exploration of certain features of this proposal with the
Trust Division's Committee on Common Trust Funds. It will
be appreciated, therefore, if you will so advise the Chairman
of this Committee and arrange a meeting, either in New York
or Washington, at the early convenience of all concerned for
further discussion of the matter with representatives of the
Trust Division's Committee on Common Trust Funds.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 9
6/24/60
WASHINGTON 25, O. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
40j
4& wItt,
t'ttols***
June 24, 1960
Mr. H. N. Mangels, President,
Federal Reserve Bank of San Francisco,
San Francisco 200 California.
Dear Mr. Mangels:
Receipt is acknowledged of your letter of May 31, 1960,
and enclosures, with reference to the requests received from the
offices of the Antitrust Division of the Department of Justice for
permission to examine the materials upon which were based the report dated November 23, 1956, prepared by your Bank and the memorandum dated March 14, 19600 prepared by Mr. Upshaw„ on banking
in Arizona.
Specifically, you request "instructions as to the release
to the Antitrust Division of the confidential or other materials in
2i
r oux7 files relating to the Investigation of Banking In Arizona and
the extent of 2Your7 authority to cooperate with that division in
connection with the performance by them of their responsibilities."
The Board is of the opinion that such material as is relevant should
be made available to the Antitrust Division, with the understanding,
of course, that such material will be used for developing information and will not be used for any other purpose or introduced in
evidence and that no reference to the source of the information will
be made to anyone outside the Department of Justice. However, in
conversation with the Department of Justice here, it was pointed out
that the Dembitz memorandum was not relevant and that therefore it
would not be made available to the Antitrust Division.
It will, of course, be necessary to point out to representatives of the Antitrust Division that permission to examine
reports of examination of national banks and nonmember insured
banks cannot be given by the Board of Governors but must be requested from the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No. 10
UNITED STATES OF AMERICA
6/24/6o
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D. C.
In the Matter of the Application of
EASTERN TRUST AND BANKING COMPANY
for prior approval of the acquisition of
voting shares of Guilford Trust Company,
Guilford, Maine
ORDER APPROVING APPLICATION UNDER
BANK HOLDING COMPANY ACT
There having come before the Board of Governors pursuant
to section 3(a)(2) of the Bank Holding Company Act of 1956 (12 USC 1843)
and section 4(a)(2) of the Board's Regulation Y (12 CFR 222.4(a)(2)),
an application on behalf of Eastern Trust and Banking Company, Bangor,
Maine, for the Board's prior approval of the acquisition of up to
70 per cent of the 2,000 outstanding voting shares of Guilford Trust
Company, Guilford, Maine; a Notice of Tentative Decision referring to
a Tentative Statement on said application having been published in
the Federal Register on June
8, 1960 (25 Federal
Register 5115); the
said Notice having provided interested persons an opportunity, before
issuance of the Board's final order, to file objections or comments
Upon the facts stated and the reasons indicated in the Tentative
-2-
Statement; and the time for filing such objections and comments
having expired and no such objections or comments having been filed;
IT IS HEREBY ORDERED, for the reasons set forth in the
Board's Statement of this date, that the said application be and
hereby is granted, and the acquisition by Eastern Trust and Banking
Company of up to 70 per cent of the 2,000 outstanding voting shares
of Guilford Trust Company, Guilford, Maine, is hereby approved,
Provided that such acquisition is completed within three months
from the date hereof.
Dated at Washington, D.
C.,
this 24th day of June 1960.
By order of the Board of Governors.
Voting for this action: Chairman Martin and Governors
Szymczak, Mills, and Robertson
Absent and not voting: Governors Balderston, Shepardson,
and King
(signed) Merritt Sherman
(SEAL)
Merritt Sherman,
Secretary.
2348
Item No. 11
BOARD OF GOVERNORS
6/24/6o
OF THE
FEDERAL RESERVE SYSTEM
APPLICATION BY EASTERN TRUST AND BANKING COMPANY,
BANGOR, MAINE, FOR PRIOR APPROVAL OF ACQUISITION OF
VOTING SHARES OF GUILFORD TRUST COMPANY, GUILFORD, MAINE
STATEMENT
Eastern Trust and Banking Company, Bangor, Maine
("Applicant"), a bank holding company, has applied, pursuant
to section 3(a)(2) of the Bank Holding Company Act of 1956
("the Act"), for the Board's prior approval of the acquisition
of up to 70 per cent of the 2,000 outstanding voting shares of
Guilford Trust Company, Guilford, Maine ("Bank").
Views and recommendations of the Bank Commissioner for
the State of Maine. - As required by section 3(b) of the Act,
the Board forwarded notice of the application to the Bank Commissioner for the State of Maine.
The Commissioner interposed
no objection to the application.
Statutory factors. - Section 3(c) of the Act requires
the Board to take into consideration the following five factors:
(1) the financial history and condition of the holding company
and bank concerned; (2) their prospects; (3) the character of
their management; (4) the convenience, needs, and welfare of the
communities and area concerned; and (5) whether or not the effect
231
-2-
of the acquisition would be to expand the size or extent of the
bank holding company system involved beyond limits consistent with
adequate and sound banking, the public interest, and the preservation of competition in the field of banking.
Discussion. - Applicant is a State bank which awns a
majority of the shares of each of two other commercial banks in
Maine, the three banks having total deposits of approximately
$30,000,000.
The towns of Guilford and Greenville, where Bank and its
branch, respectively, are situated, are in Piscataquis County.
The
area is described by Applicant as one in which the population derives
its income from activities such as lumber and pulp operations, textiles,
slate quarries, hardwood products, furniture manufacturing, and tourist
trade.
The population of Guilford is about 1,850 and of Greenville,
1)900.
There are no other banking offices in either town.
The financial history and condition, the prospects, and
the management of both Applicant and Bank are satisfactory.
The Applicant states that the principal effect of the
Proposed acquisition upon the convenience, needs, and welfare of
the communities and the area concerned would be the advantages
derived by Bank and its customers from supervision of Bank by a
larger institution.
Applicant also states that the population of
the area concerned is remaining fairly stable.
Nor is there any
indication that the needs of the community will increase for any
other reason in the near future.
Consequently, there appears to be
no strong evidence supporting a community need to be satisfied by,
or benefit to the community welfare to result from, this acquisition.
At the same time, the Board finds no adverse considerations insofar
as the fourth statutory factor is concerned.
An additional judgment required of the Board in its consideration of this application is whether the effects of the acquisition proposed would be to eYpand the size or extent of Applicant's
bank holding company system beyond limits consistent with adequate
and sound banking, the public interest, and the preservation of
banking competition.
Applicant and its two subsidiary banks hold approximately
5
per cent of the total deposits of commercial banks in Maine, and
have about
State.
6
per cent of the total offices of such banks in the
Acquisition of Guilford would increase Applicant's control
Of total commercial bank deposits and of such offices by approximately one percentage point.
The office of Applicant's subsidiary
banks which is nearest to Bank is some 43 miles from Guilford.
Bangor, where the Applicant's head office and several of its
branches are located, is 48 miles from Guilford.
Offices of a
substantial competing commercial bank are located on the highways
between Bangor and Guilford, and between Guilford and the areas
served by Applicant's present subsidiaries.
It was found that an insignificant amount of deposits of
individuals, partnerships, and corporations held by Bank originates
in the areas in which Applicant's banks primarily operate.
Likewise,
the business derived by Applicant's banks from the service area of
Bank appears to be negligible.
The competition between offices of
the present Eastern group and those of Bank that would be reduced
or eliminated, if Bank were acquired by Applicant, would therefore
be insignificant.
Bank has approximately
57 per cent of the total deposits
of all commercial banks, and about
35 per cent of the deposits of
all banks located in Piscataquis County. While there are no other
banking offices in the area designated by Applicant as Bank's
Primary service area, Applicant also states that Bank is in active
competition with the remaining banks which have offices in Piscataquis
County.
On the basis of the evidence adduced it does not appear
that Applicant's acquisition of Bank would result in an undue
concentration of banking resources in the area concerned, or
Produce results inconsistent with adequate and sound banking, the
Public interest, and the preservation of banking competition.
Conclusion. - The above views were incorporated in the
Tentative Statement issued in connection with the Notice of
Tentative Decision published in the Federal Register on June 8,
1960 (25 Federal Register 5115), affording interested persons an
oPportunity to submit comments on, or objections to, the Board's
Proposed action.
No comments or objections were received.
232
Viewing the relevant facts in the light of the general
purposes of the Act and the factors enumerated in section 3(c),
it is the judgment of the Board that the proposed acquisition
would be consistent with the statutory objectives and the public
interest and that the application should be approved.
June as 1960.
4(3,0
:cwt.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 12
6/24160
ADDRESS OFFICIAL CORRESPONDENCE
TO THE EIDARD
June 23, 1960
CONFIDENTIAL (FR)
Mr. Joseph R. Campbell, Vice President,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pennsylvania.
Dear Mr. Campbell;
In accordance with the request contained in your letter
of June 20, 1960, the Board approves the appointment of Louis A.
Pinola as an assistant examiner for the Federal Reserve Bank of
Philadelphia. Please advise as to the effective date of the
appointment.
It is noted that Mr. Pinola owns 10 shares of the stock
of The Liberty National Bank of Pittston, Pittston, Pennsylvania,
and that he plans to dispose of this stock upon receipt of his
appointment as an assistant examiner. It is also noted that
Mr. Pinola is indebted to The Liberty National Bank in the amount
of $1,100 for the purchase of an automobile. Accordingly, the
Board's approval of the appointment of Mr. Pinola is given with
the understanding that he will not participate in any examination
of that bank until his indebtedness has been liquidated.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 13
6/24/6o
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
*4
44.ffl.s1
'''titup;01**
June 23, 1960
CONFIDENTIAL (FR)
Mr. Paul C. Stetzelberger, Vice President,
Federal Reserve Bank of Cleveland,
Cleveland 1, Ohio.
Dear Mt. Stetzelberger:
Reference is made to your letter of June 15,, 1960,
advising that George Herbert Ferguson, whose appointment as
an assistant examiner for the Federal Reserve Bank of Cleveland
was approved on May 21, 1956, has completed his military service and will resume his duties as an assistant examiner effective July 5, 1960.
It is noted that Mr. Ferguson, as a beneficiary of
his grandfather's estate, expects to receive approximately 78
shares of the common stock of The City Bank Company, Lorain,
Ohio, a State member bank, and that he plans to dispose of this
stock immediately upon its distribution to him. It is also
noted that Mr. Ferguson was appointed under his grandfather's
will as trustee for his minor brother and sister, and that the
trust estates of the minors will receive 156 shares of The
City Bank Company. In the circumstances, no objection will be
interposed to Mr. Ferguson serving in this trust capacity with
the understanding that he will not participate in any examination of The City Bank Company as long as the trusts include
stock of that bank.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
Item No.
TELEGRAM
6/24/6o
LEASED WIRE SERVICE
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON
June 231 1960
CONFIDENTIAL (FR)
Denmark - Atlanta
Reurlet June 20 Board approves appointment Albert Sidney Maner as
assistant examiner for Federal Reserve Bank of Atlanta effective
June 27, 1960.
Re indebtedness to The Miami National Bank, Miami, Florida, of $160.
APproval given with understanding he will not participate in any
"einination that bank until indebtedness liquidated.
No additional photograph necessary.
(Signed) Merritt Sherman
Sherman
14
ri
or
fr!* ,:
BOARD OF GOVERNORS
42.4¢{tetp.,4
OF THE
0°440c4( fautV...
t
tlf.
0*
6/24/6o
WASHINGTON 25. O. C.
10,
1,41
Item No. 15
FEDERAL RESERVE SYSTEM
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
ntsl•
soo***
June 24, 1960
Mr. Geo. E. Kroner, Vice President,
Federal Reserve Bank of St. Louis,
St. Louis 66, Missouri.
Dear Mk. Kronen
In accordance with the request contained in
your letter of June 20, 1960, the Board approves the
appointment of Delmer D. Weisz as an assistant examiner
for the Federal Reserve Bank of St. Louis.
Please ad-
vise as to the effective date of the appointment.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
@FedFRASER