Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, June 7, 1962, Volume 49, Part 6

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Minutes for

To:

Members of the Board

From:

Office of the Secretary

June

7, 1962

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 tc 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.

Ohm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov, Shepardson
Coy. King
Gov. Mitchell

Minutes of the Board of Governors of the Federal Reserve System
The Board met in the Board Room at 10:00 a.m.

on Thursday, June 7, 1962.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Martin, Chairman
Mills
Robertson
Shepardson
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Hackley, General Counsel
Solomon, Director, Division of
Examinations
Mr. Goodman, Assistant Director, Division
of Examinations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mrs. Semia, Technical Assistant, Office
of the Secretary
Mr. Poundstone, Review Examiner, Division
of Examinations

Mr.
Mr.
Mr.
Mr.
Mr.

Discount rates. The establishment without change by the
Pederal Reserve Bank of St.

ouson June 5, 1962, of the rates on

discounts and advances in its existing schedule was approved unanimously,
with the understanding that appropriate advice would be sent to that
Bank.
Circulated items.

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 Farmers Bank and Trust Company,
ICII°x, Indiana, approving the declaration
or
dividends payable on June 30 and
Se
ptember 29, 1962.

1

‘IfIr(A.
;

6/7/62

-2Item No.

Letter to The Citizens Bank of Owensville,
rexisville,
Missouri, approving an investment
In bank
premises.

2

Letter to Security Trust Company, St. Louis,
Missouri,
waiving the requirement of six
11.1onth6' notice of withdrawal from membership
in the Federal
Reserve System.

3

Letter to North Hill National Bank of San
Antonio, San Antonio, Texas, granting its
request for permission to maintain reduced
reserves.
Letter to Rhode Island Hospital Trust Company,
Providence, Rhode Island, approving the
est
ablishment of a branch in the Rhode Island
11°sPital.

5

Letter to Bank of America National Trust and
Savings Association, San Francisco, California,
aPproving
the establishment of a branch in
Amsterdam, The Netherlands.

6

Letter to Wells Fargo Bank, San Francisco,
;_;alifornia, approving the establishment of
°ranches in the vicinity of the southern side
Of Lake
Tahoe, El Dorado County, and in the
nelnity of the Northgate Shopping Center, Terra
Llnda.

7

Letter to Mr. Hayes, President of the Federal
Reserve Bank of New York, enclosing a copy of a
letter written by Mr. Cooke, Chairman of the
!ederal Deposit
Insurance Corporation, to the
6ecretary
of the Treasury of Puerto Rico in
otnection
with an article in the May 5, 1962,
Issue of The San Juan Star.
PafEL2fl_c_aapetitive factors (Pittsburgh-Imperial, Pennsylvania
There had been
distributed a draft of report to the Comptroller of the

6/7/62

-3-

Currency on the competitive factors involved in the proposed merger
Of The
Union National Bank of Pittsburgh, Pittsburgh, Pennsylvania,
and The Imperial
Bank, Imperial, Pennsylvania.
report

The conclusion of the

stated that "There is little competition between The Union

National Bank of Pittsburgh and The Imperial Bank.

The merger of

these two banks would
have little effect on banking competition in
the

area."
There being no objection, the report was approved unanimously

for t
ransmittal to the Comptroller.
The meeting then adjourned.
Secretary's Notes: On June 6, 1962,
Governor Shepardson approved on behalf
of the Board the following items:
Memorandum from Mr. Solomon, Director, Division of Examinations,
requesi''
6 permission to deliver a lecture on bank capital during the
&gust 1962 session of
the School of Banking at the University of
Madison, Wisconsin, with the understanding that the lecture
would
a
be delivered while on annual leave and that he would accept
as compensation from the school.
Stat-"lMemorandum
from Mr. Koch, Adviser, Division of Research and
i 4.
es, recommending that official leave for three days (probably
',141 20-22, 1962) be granted to Myron A. Grove, Economist in that
lsic)n, in order to confer on his doctoral dissertation with his
facultY adviser at
Northwestern University, with the understanding
that he
would travel at his own expense.
Letter to the Presidents of all Federal Reserve Banks
(attached Item 0. 9) transmitting copies of the forms to be used by
State
member banks in submitting reports of condition at the next
call date.
Governor Shepardson today approved
on behalf of the Board the following
items:

2071
6/7/62
Memorandum from the Division of International Finance
re.commending the appointment of Max E. Fieser as Economist in
that Division, with basic annual salary at the rate of $10,6351
effective
the date of entrance upon duty.
Memorandum from the Division of Personnel Administration
recommending
that the usual physical requirements be waived in the
C Be
of Karl E. Bakke, a member of the Civil Service Retirement
System whose appointment as Senior Attorney in the Legal Division
was approved on May 8,
1962.

BOARD OF GOVERNORS
44 CO top *4
'

OF THE

FEDERAL RESERVE SYSTEM

tr

WASHINGTON 25. D. C.

Item No. 1
6/7/62

ADDRESS OFFICIAL, CORRESPONDENCE
TO THE BOARD

t 41 last
e
S
t'''404***

June 7, 1962

Board of Directors,
Farmers Bank and Trust Company,
Knox, Indiana.
Gentlemen:
The Board of Goyernors has received from the Federal
Reserve Bank of Chicago a copy of a letter from Mr. Alexander L.
Jonas, President of Farmers Bank and Trust Company, dated
MaY 25, 1962, requesting approval for the declaration of
dividends of 0,250 each payable on June 30 and September 29,
1962. The Board's permission is necessary under the provisions
of paragraph 6, Section 9, of the Federal Reserve Act and Section 5199(0), United States Revised Statutes.
After consideration of the facts, the Board approves
the declaration of these dividends. This approval is restricted
to the payment of these dividends only and does not authorize
any other declaration of dividends during 1962 or later.

Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

11^.4

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 2
6/7/62

WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 71 1962

Board of Directors,
The Citizens Bank of Owensville,
Owensville, Missouri.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves, under the provisions of Section 24A of
the Federal Reserve Act, an investment in bank premises
by The Citizens Bank of Owensville, Owensville, Missouri,
of $134,500 for the purchase of land and construction of
new bank premises.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.

,10

,4NA

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

Item NO. 3
6/7/62

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 71 1962
Board of
Directors,
Security Trust
Company,
St,
Louis, Missouri,
Ge
ntlemen:
the 14_
The Federal Resorve Bank of St. Louis has forwarded to
lut.-uarci. of Governors your letter dated May 17, 1962, and a reso,, 1°n of your board of directors dated May 16, 1962, signifying
ur
intention to withdraw from membership in the Federal Reserve
J6tem and requesting waiver of the six months' notice of such
withdrawal.
In accordance with your request, the Board of Governors
waiv
es the requirement
of six months' notice of withdrawal. Upon
surrender to
the
Reserve Bank of St. Louis of the Federal
Federal
Reserve
Bank stock issued to your institution, such stock will be
prnceled and appropriate refund will be made thereon. Under the
in°Y..
1-sions of section 10(c) of the Board's Regulation H, your
ti!6itution may
accomplish termination of its membership at any
4,,we within eight
months from the date the notice of intention
'u withdraw
from membership was given.
returnedrquested that the certificate of membership be
e Federal Reserve Bank of St. Louis.
Attention is invited to the fact that if your bank is
desire,
memh 'us of continuing deposit insurance after withdrawal from
thatershiP in the Federal Reserve System, it will be necessary
corpoe
gtztion be made to the Federal Deposit Insurance

Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No,

WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPOND(
TO THE SOAR°.

June 7, 1962

Board of Directors,
North Hill National Bank of San Antonio,
San Antonio,
Texas.
G
entlemen:
Pursuant to your request submitted through the Federal
rve Bank of Dallas, the Board of Governors, acting under the
!lovisions of Section 19 of the Federal Reserve Act, grants perto the North Hill National Bank of San Antonio, San Antonio,
,Le as, to maintain the same reserves against deposits as are required
e?
,, be
maintained by banks outside of central reserve and reserve
ies,
lt
effective as of the date it opens for business.

Re

subje

L.

6/7/62

Your attention is called to the fact that such permission
t to revocation by the Board of Governors. .
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

CE

21)
BOARD OF GOVERNORS

otrtnt,**4.0

OF THE

Item No. 5

FEDERAL RESERVE SYSTEM

*'

6/7/62

WASHINGTON 25, D. C.
,o

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 7, 1962

Board of Directors,
Rhode Island Hospital Trust Company
Providence, Rhode Island.
Gentlemen:
The Board of dovernors of the Federal Reserve
System approves the establishment of a branch by the
Rhode Island Hospital Trust Company, Providence, Rhode
Island, in the Rhode Island Hospital located at 593
Ed4Y Street, Providence, Rhode Island, provided the
branch is established 'within six months from the date
of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.

no7,7,
BOARD OF GOVERNORS

„4,titIttr}4.4
o,
,
4 1940001,:
44:

OF THE

FEDERAL RESERVE SYSTEM

it

Item No.

6

6/7/62

WASHINGTON 25, D. C.

1,011,
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

°*;:4t5as

444***

June 7, 1962

Bank of America National Trust
and Savings Association,
San Francisco 20, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System authorizes Bank of America National Trust and
Savings Association, San Francisco, California, pursuant
to the provisions of Section 25 of the Federal Reserve
Act, to establish a branch in the City of Amsterdam, The
Netherlands; and to operate and maintain such branch subject
to the provisions of such Section.
Unless the branch is actually established and opened
for business on or before June 1, 1963, all rights granted
hereby shall be deemed to have been abandoned and the authority
hereby granted will automatically terminate on that date.
Please advise the Board of Governors, in writing,
through the Federal Reserve Bank of San Francisco, when the
branch is opened for business, furnishing information as to
the exact location of the branch.
Very truly yours,
, (Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.

4f)(rsig

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No.

WASHINGTON 25, D. C.
ea,

*.%

7

6/7/62
ADDRESS C1FFICIAL CORRESPONDENCE

t+

TO THE BOARD
-4444,11.°*

June 7) 1962

Board of Directors,
Wells Fargo Bank,
San Francisco, California.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment of the following branches
by Wells Fargo Bank, San Francisco, California, provided
each is established within six months from the date of
this letter:
(1) in the vicinity of the southern side of
Lake Tahoe, El Dorado County, California,
and
(2) in the vicinity of the Northgate Shopping
Center, Terra Linda, Marin County,
California.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.

21

ottof
e401'
t .

BOARD OF GOVERNORS
OF THE

Item No. 8
6/7/62

FEDERAL RESERVE SYSTEM
WAS

OFFICE OF THE CHAIRMAN

June 7, 1962

Mr. Alfred Hayes, President,
Federal Reserve Bank of New York,
New York 450 New York.
Dear Al:
Enclosed is a copy of a letter to Governor Robertson
from Chairman Cocke of the Federal Deposit Insurance Corporation,
together with a copy of an article that appeared in the May 5
188U5 of The San Juan Star and a copy of a letter from Mr. Cocke
ito the
Secretary of the Treasury, San Juan, Puerto Rico. The
Board thought that a copy of Chairman Cockets letter and the
attached materials should be brought to your attention.
Sincerely yours,
(Signed) Bill

Wm. McC. Martin, Jr.

Enclosures

2080
FEDERAL DEPOSIT INSURANCE CORPORATION
Washington

May 24, 1962

COpy

Dear

Governor Robertson:

heldThis will express appreciation for the discussion
with you Tuesday afternoon.
information that I

You will find attached 'certain
felt
incl. You and your associates would like to have before you,
st uding an article in the May 5 issue of The San Juan
and copy of a letter of the undersigned to the Secretary
the Treasury, San Juan, Puerto Rico.

e

With best personal wishes,

Sincerely yours,

(signed) Erie
Erie Cocke, Sr.

Ihe Honorable
J. L. Robertson
Member of
the Board of Governors
„ Of the
Federal Reserve System
weehington D. C.

COpy

May 21, 1962

Mr. Jose
Noguera
ecretary of the
Treasury
Juan, Puerto Rico
Dear Mr. Noguera:
Some few days ago we observed press comments covering
11_ appearance of Mr. Howard Crosse, Vice President, Federal
thees
j erve Bank of New York, before the Chamber of Commerce in San
than, in Which he made comments on our attitude towards the
saarte
-- of
Jriug
new. banks. We now have before us a copy of the
4 uan Star of May 5 1962, in which the reporter sets forth
„lle
the f
two paragraphs.
"Crosse explained that the alleged reluctance
of the Secretary of the Treasury to authorize
another commercial bank may be rooted in the
belief that the Federal Deposit Insurance
Corporation would frown on the proposed bank.
The latter agency, Crosse stressed, takes a
highly conservative view towards the chartering of new banks."
The reporting does not purport to be a quotation, and
rther realize that being taken out of context of the
:
c
of his remarks they are susceptible to construction and
elusions which Mr. Crosse may not have intended.
We

Nevertheless, we assure you that we recognize that you

have
puertthe sole responsibility for the chartering of banks in
exe,° Rico and we have not attempted to interfere in the

res-c-Lse of your prerogative and duty. By the same token, our
baj
onsibility to determine the acceptability of applicant
and e for the benefits of Federal deposit insurance is singular
the rverned by the precise factors set forth in Section 6 of
ederal Deposit Insurance Act. Those requirements, which

2(
t"
S

Mr. Jose Noguera

- 2 -

May 21, 1962

are controlling on our Board, have the general approbation of the
chartering authorities, and the instances are rare in which a
disagreement
as to the findings on these factors arises.
The record of the more than twelve years in which we
have had the most cordial relations with your Department, we
1?elieve, is ample evidence of our cooperative attitude and is
Indicative of our intentions and desire to work through your
office for the benefit of Puerto Rican banking. We have felt
imPeiled to address this communication to you in order that no
mis-construction may arise from Mr. Crosse's remarks and that
"may continue to work with you in the fullest accord.
Sincerely yours,
(Signed) Erle Cocke, Sr.
Erle Cocke, Sr.
Chairman

NGG:ems
cc - SE Lod(2)

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 9
6/7/62

WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 7, 1962

Dear sir:

The
of copies of the following forms are being forwarded t0 yourindicated number
their
Bank under separate cover for use of State member banks and
each,
affiliates in submitting reports as of the next call date. A copy of
.korm is
attached.
111111thft' of
Form FR 105 (Call No. 164), 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.
Form FR 105e-2 has been discontinued. This was a publisher's copy
ilet1P131em
-ecenib;erit that could be used at the option of the State member bank since
1953 to report certain loans and investments which were fully backed
:!d bY agencies of the United States Government. In recent years, it has
by relatively few State member banks. It is understood that a similar
e et
°11
be made in the report of condition form to be used by national banks
10gh the elimination of memoranda item 33 which has been comparable to form
All other forms are the same as those used on March 261 1962.
Very trul,

Ehq.0

Merritt
Secre

?RESIDENTS OF ALL FEDERAL RESERVE BANKS

aurs,