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Minutes of actions taken by the Board of Governors of the Federal Reserve System on Tuesday, June 28, 1955. The Board met in the Board Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Vardaman Mills Robertson Shepardson Carpenter, Secretary Sherman, Assistant Secretary Thurston, Assistant to the Board Vest, General Counsel Sloan, Director, Division of Examinations Mr. Johnson, Controller, and Director, Division of Personnel Administration Mr. Mr. Mr. Mr. Mr. The following matters, which had been circulated to the members Of the Board, were presented for consideration and the action taken in each instance was as indicated: C0MT%n te Street Trust Letter to the Board of Directors, Second Bank-Sta Boston, Massachusetts, reading as follows: the Federal Pursuant to your request submitted through the approves s Governor of Board Reserve Bank of Boston, the establishment of a branch by the Second Bank-State Street Trust Company, Boston, Massachusetts, at 711 Boylston Street in Boston, provided the branch is established within six months from the date of this letter. Approved unanimously, for transmittal through the Federal Reserve Bank of Boston. Telegram to Mr. Crane, Federal Reserve Agent, Federal Reserve Banj a limited voting permit, under +211 New York, authorizing him to issue Statutes of the United Revised vue Provisions of section 5144 of the -2- 6/28/55 States, to Marine Midland Corporation, Jersey City, New Jersey„ entitling such organization to vote the stock which it owns or controls of The Jamaica National Bank of New York, New York, New York, at any time Prior to October 12 1955, to authorize the merger of such bank into The Marine Midland Trust Company of New York, and for such other purposes as may be necessary in connection therewith. The telegram also advised Mr. Crane that the permit should not be issued until he was notified by Marine Midland Corporation that it had acquired a controlling interest ln The Jamaica National Bank of New York, and that, meanwhile, he could ssure Marine Midland Corporation that a limited voting permit would be Issued upon receipt of such notification. Approved unanimously. Letter to the Board of Directors, Bankers Trust Company, New York, Ilew York, reading as follows: of The Board of Governors approves the establishment at York, a branch by Bankers Trust Company, New York, New the 138-02 Queens Boulevard, Jamaica, New York, provided of date branch is established within one year from the this letter. Approved unanimously, for transmittal through the Federal Reserve Bank of New York. Ga Men Letter to the Board of Directors, Long Island Trust Company, City, New York, reading as follows: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors approves the establishment of a branch by the Long Island Trust Comside of Covert PanY2 Garden City, New York, on the east Chester Avenue in Avenue, approximately 130 feet north of County, Nassau Manor, the Incorporated Village of Stewart ed within establish one year New York, provided the branch is from the date of this letter. Approved unanimously, for transmittal through the Federal Reserve Bank of New York. Letters to Mr. Diercks, Vice President, Federal Reserve Bank of Chi °ago, reading as follows: Reference is made to your letter of June 16, 1955, submitting the request of The Bank of Albion, Albion, Michigan, J.? A_ _IA-,0. 6/28/55 _3_ for an extension of six months in which to accomplish admission to membership in the Federal Reserve System, due to the fact that the Commissioner of Banking of the State of Michigan will not issue a certificate of authority to commence business until the bank building is completed and ready for occupancy, which it is estimated will take approximately four months. In view of the circumstances set forth in your letter, the Board of Governors further extends to December 27, 1955, the time within which admission of The Bank of Albion, Albion, Michigan, to membership in the Federal Reserve System, in the manner set forth in the Board's letter of January 25, 1955, may be accomplished. Reference is made to your letter of June 14, 1955, n, for submitting the request of City Bank, Detroit, Michiga the in branch an extension of time in which to establish a , Detroit in vicinity of Gratiot Avenue and Eight Mile Road Michigan. letter In view of the circumstances outlined in your rs Governo of Board and your favorable recommendation, the estabwhich within extends until August 1, 1955, the time the Board's lishment of the branch, which was approved in ished. accompl letter of September 24, 1954, may be Approved unanimously. San Telegram to Mr. Millard, Vice President, Federal Reserve Bank of Francisco, reading as follows: Board of Governors extends to July 1, 1955, time within may establish Which First State Bank of Salina, Salina, Utah, branch in Panguitch, Utah. Approved unanimously. San Letter to Mr. Millard, Vice President, Federal Reserve Bank of Francisco, reading as follows: As recommended in your letter of June 17, 1955, the Board of Governors extends to December 30, 1955, the time Within which the Farmers and Merchants Bank of Lodi, Lodi, 1140 6/28/55 -4- California, may establish a branch at the northeast corner of Lodi Avenue and Church Street in Lodi. Please notify the bank of this extension. Approved unanimously. Letter to the Comptroller of the Currency, Treasury Department, Washington, D. C., (Attention: Mr. W. M. Taylor, Deputy Comptroller of the Currency), reading as follows: Reference is made to a letter from your office dated March 170 1955, enclosing photostatic copies of an applica— ation to organize a national bank at Roosevelt Road and Kedzie Avenue in Chicago, Illinois, and requesting a recom— ap— mendation as to whether or not the application should be proved. Information contained in a report of investigation of the application made by an examin3r for the Federal Reserve Bank of Chicago, indicates generally satisfactory findings with respect to the factors usually considered in connection with such proposals. It is indicated that the organizers have agreed to increase the initial capital structure of the bank from $600,000 to $750,000. The Board of Governors rec— ommends approval of the application. The Board's Division of Examinations will be glad to discuss any aspects of this case with representatives of your office, if you so desire. Approved unanimously. There was presented a request from Mr. Vest, General Counsel, for authority to travel to Boston, Massachusetts, July 24-30, 1955, to attend a meeting of the Legal Subcommittee on Emergency Operations. Approved unanimously. There was presented a draft of letter to The Bank of Tokyo of California, San Francisco, California, approving establishment of a branch by that bank at Gardena, California, the letter having been circulated aill°ng the members of the Board before this meeting. 6/28/55 Governor Vardaman inquired whether establishment of this branch by The Bank of Tokyo had been cleared with the Department of State, indicating that in his opinion it would be desirable for such clearance to be obtained in connection with the establishment of a domestic branch by any foreign bank. It was understood that a letter would be sent to the Department of State inquiring whether that Department knew of any reason why a branch should not be established at Gardena, California, by The Bank of Tokyo, and that the matter would be presented to the Board at a later date for further consideration. Before this meeting there had been sent to the members of the Board a memorandum Prepared in the Legal Division under date of June 232 1955, recommending that a permit to commence business be issued to Amen can Overseas Finance Corporation, the Edge Corporation organized by Chase Manhattan Bank, pursuant to the Board's approval on June 3, 1955, of the Articles of Association and Organization Certificate for the Corporation. The memorandum stated that, by letter of June 20, 1955, American Overseas Finance Corporation had made the necessary certification to the Board regarding the requirements as to citizenship of its directors, the owner shilo or control of a majority of its shares by United States citizens, alld the payment for its stock. The memorandum also noted that four banks Other than Chase Manhattan Bank (Chemical Corn Exchange of New York, First National Bank of Boston, Mellon National Bank of Pittsburgh, and National Itank 0f Detroit) are participating in the new Edge Corporation. 1112 6/28/55 -6There was unanimous agreement that a permit authorizing American Overseas Finance Corporation to commence business should be issued in accordance with the recommendation contained in the memorandum from the Legal Division. There had been sent to the members of the Board a memorandum from the Division of Personnel Administration dated June 17, 1955, recommending that merit increases in the basic salaries of members of the Board's staff, as shown below, be approved effective July 32 1955. salary in— Mr. Johnson stated that the recommendations for merit creases were well distributed throughout the staff and, in his opinion, each Division had reviewed the work of employees in the Division carefully for the purpose of considering whether a merit increase should be recom— mended at this particular time. 21112_22E121.jalla Division ;'.1.!1412—alLtlaa From To Board Members' Section Athens J. Messick, Stenographer Virginia J. Ogilvie, Secrotary $3,785 $3,910 4,330 4,580 3,030 3,110 3,255 3,335 4,170 4,295 3,415 3,495 Office_2f the Secretary Sudelle Rice, Pile Clerk Zoe Gratsias, Minutes Clerk Ruth W. Franta, Supervisor, Bank and Miscellaneous Records Hannah W. Nielsen, Records Clerk a ,/ 1- 6/28/55 Merit increases, effective Jilly_11.212i (continued) Division Name and title Basic annual salary From To :Ial . Suse Office of the . Cornelia A. Bates, Supervisor, Noncurrent Records and Records Disposal $4,295 $4,420 42035 14,160 8,360 8,560 8,360 8,560 9,600 9,800 7,240 7,440 720140 7,240 7,640 7,840 61340 62540 4,455 14,580 32495 3,575 3,575 3,655 3,110 3,190 5,185 5,310 1,201_221212k4a Eleanor E. Omohundro, Clerk-Stenographer Research and Arthur L. Broida, Economist Stanley Sigel, Economist Lorman C. Trueblood, Economist Saul B. Klaman, Economist Maurice H. Schwartz, Economist Alvern H. Sutherland, Chief Librarian Peter M. Keir, Economist Edward R. FrY) Economist Dorothy A. Culbertson, Clerk Reba C. Driver, Clerk Louise P. Root, Clerk International Finance Prederick R. Dahl, Economist I -8- 60/28/55 effective July 3_1 1955 (continued) Merit increases, _ Division Name and title Basic annual salary From To International Finance Catherine B. Davian, Clerk-Stenographer Pearl G. Farrington, Clerk Nancy J. Smith, Statistical Assistant $3,255 $3,335 3,785 3,910 4,455 4,580 5,940 6,140 412°5 4,330 61Mo 6,340 6,340 61540 3,495 3,575 6,740 61940 5,185 5,330 6,740 6,940 Examinations Karl P. Wendt, Federal Reserve Examiner E. W. Lowe, Assistant Federal Reserve Examiner Bank Operations Oliver H. Jones, Technical Assistant liarY M. Durkan, Technical Assistant Barbara B. Hart, Clerk Personnel Administration June E. Ayers, Administrative Assistant John B. Bazuin, Personnel Technician Administrative Services Ipavie H. Wilson, Chief, Machine Tabulation and Telegraph Section 1145 —9— 6/28/55 .. (continued) ivreritive July 3 1955 Division Name and title Basic annual salary From To Administrative Services Elizabeth L. Carmichael, Chief, Publications Section John H. Battle, Laborer Ruth M. Flowers, Charwoman $6,340 $6,540 2,952 3,032 2,560 2,630 5,310 5,435 Office of the Controller John Kakalec, Accountant Approved unanimously. Reference was made to a letter addressed to Governor Balderston s of the Federal bY Mr. Decker, Deputy Chairman of the Board of Director 20, 1955, submitting the Reserve Bank of Richmond, under date of June flames of several individuals who might be considered by the Board for ap— of that Bank, to succeed Pointment as director of the Baltimore Branch 1955. Mr. Taylor, for the remainder of the term ending December 31, names suggested was Governor Balderston stated that among the M. Lewis P. Seiler, President, Stewart & Co. (a department store), Baltimore, Maryland, and that he would recommend his appointment. if It was agreed unanimously that, manner usual it were ascertained in the that Mr. Seiler mould accept, he should Balti— be appointed as a director of the Bank Reserve more Branch of the Federal of portion d of Richmond for the unexpire 1955. the term ending December 31, 114.6 —10— 6/28/55 Governor Robertson stated that at the present time Chase Man— outstanding stock of County hattan Bank holds about six per cent of the having been acquired Trust Company, White Plains, New York, such stock by Bank of Manhattan Company many years ago. He reviewed the circum— the bank prior to the stances under which this stock had been held by the Manhattan Company, merger of The Chase National Bank and Bank of the Board could require the stating that there was no legal basis on which County Trust Company. Chase Manhattan Bank to dispose of the shares of were three other instances in Governor Robertson also stated that there small amounts of stock of Which member banks in New York City also held of such stock violate Other banks, and that in no case did the holding the law or a condition of membership. In the case of Chase Manhattan Bank, reviewed the matter and were not New York State Banking authorities had the bank dispose of the stock disposed to take any action to require that held in the County Trust Company. GOVBrilOr Robertson went on to say that, law for requiring the four While recognizing that there was no basis in banks, he would recommend banks to dispose of the stock they held in other four institutions involved, that the Board address a letter to each of the violation of the law and that the stating that these holdings were not in Board had no legal authority for requiring them to dispose of such holdings, but that it would be in the public interest if they disposed of such shares. Re went on to say that while this would be his recommendation, on the 114 —11— 6/28/55 grounds that he felt it was undesirable for one bank to hold stock in another bank, a different view was held by members of the Division of Examinations. In response to Chairman Martinis inquiry, Mr. Sloan said that the four cases to which Governor Robertson referred covered banks only in the New York City area and that there were probably other banks in the United other banks. It was Mr. States that held small quantities of stock in Revised Statutes now pro— Sloan is feeling that, while Section 5136 of the necessary or desirable hibited such purchases of stock by banks, it was not to request the New York banks concerned to dispose of the minor amounts Of shares which they had acquired legally many years ago and which they flow held legally. If, however, the Board should decide to make a request Robertson, Mr. Sloan felt of the New York banks, as proposed by Governor that it should direct the Division of Examinations to review all member banks in the United States with a view to making a similar request of all in other banks. member banks which were found to hold stock the matter only from the Mr. Vest stated that he had reviewed standpoint of the law and that in his opinion the Board had no legal au— the stock referred to. It thus thority to require the banks to dispose of to suggest or request that became a matter of policy whether it wished the banks dispose of such stock. present felt that since the Board The other members of the Board did not have authority to require the divestment, it should not make the —12— 6/28/55 proposed request. Chairman Martin suggested that under the circumstances the Board take no action on the matter at this time. There was agreement with Chairman Martin's suggestion. Governor Robertson stated that in accordance with the discussion at the meeting of the Board on June 27, 1955, he had sent to Senator Robertson today two drafts of holding company bills; draft "A" would carry out the Board's views as to the form of such legislation and draft "B" would amend Bill H. R. 6227, passed by the House of Representatives, in accordance with the suggested amendments which were sent to the House Banking and Currency Committee pursuant to the Board's action of March 10, 1955. Minutes of actions taken by the Board of Governors of the Federal Reserve System on June 27, 1955, were approved unanimously. The meeting then adjourned.
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