The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes for To: March 13, 1961 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 ReBerVe 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. Ift 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. Chm. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System Ofl Monday, March 13, 1961. PRESENT: Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.mo Martin, Chairman Balderston, Vice Chairman Szymczak Robertson Shepardson Mr. Sherman, Secretary Mr. Kenyon, Assistant Secretary Miss Carmichael, Assistant Secretary Mr. Young, Adviser to the Board Mr. Shay, Legislative Counsel Mr. Hackley, General Counsel Mr. Solomon, Director, Division of Examinations Mr. Hexter, Assistant General Counsel Mr. Rudy, Special Assistant, Legal Division Mr. Conkling, Assistant Director, Division of Bank Operations Mr. Leavitt, Assistant Director, Division of Examinations Items 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 2.T...1.11:a12s1 unanimously: Item No, Letter to The County Trust Company, White t4,!ins, New York, approving an extension of sre to establish a branch in the Rye Ridge °PPing Center, To of Rye, Westchester County. 1 I2, ,'etter to the Federal Reserve Bank of Atlanta 1f.arl : 0 „ting a request that the application of Bank shi uaYne8boro, Waynesboro, Georgia, for member04-13 )fl the Federal Reserve System be held in eYance for a reasonable period of time. Lett er to an of Chicago l •nte „ the Federal Reserve Bank div.r.t- sing no objection to the payment of o4 ldends declared during 1960 by The Farmers d Merchants State Bank, Oldenburg, Indiana. 2 3/13/61 -2Item No. Letter to Citizens State Bank, Houston, Texas, granting permission to maintain reduced reserves. 4 Letter to The First Pennsylvania Banking and Trust Company, Philadelphia, Pennsylvania, aPProving the establishment of a branch at 1518 Walnut Street. 5 Letter to Tracy-Collins Bank and Trust Company Salt Lake City, Utah, approving the establishment of a branch at 888 East 4500 South Street, Salt Lake County. 6 Letter to The Southwest Bank, Inglewood, Ca establishment of a lifornia, approving the branch in Los Angeles. 7 Letter to the Federal Reserve Bank of St. c,ouis authorizing Messrs. Gerald Dunne, George .1 ' °ner, and Harold Kline to make depositions 111 c onnection with a suit now pending in the Circuit Court of the City of St. Louis; letter I:tobert Kratky, Esq., St. Louis, Missouri, 1.-Ildicating that the Board would have no ob3etion to Messrs. Dunne, Kroner, and Kline being deposed in connection with this suit. 8 and 9 yeport on competitive factors (Harrisburg and Middletown, PennsYlvania). There had been distributed to the Board copies of a di'aft of report to the Comptroller of the Currency on the competitive factors involved in the proposed merger of Citizens Bank and Trust Con' PanY of Middletown, Pa., Middletown, Pennsylvania, into and with The n arrisburg National Bank, Harrisburg, Pennsylvania. The report concluded as follows: The proposed transaction would have little effect on competition in Harrisburg. The Citizens Bank and Trust 3/13/61 -3.- Company of Middletown as a branch of the larger resulting bank would provide stronger competition in the Middletown area, but such increased competition should not be so great as to have serious consequences on the remaining bank. No objection being indicated, the report was approved lirlaniztously for transmittal to the Comptroller. Messrs. Rudy, Conkling, and Leavitt withdrew from the meeting at this point and Messrs. Noyes, Director, Division of Research and Statistics, Koch, Adviser in that Division, and Sammons, Adviser, Divisi°n of International Finance, entered the room. Organization for Economic Cooperation and Development While testifying before the Joint Economic Committee 011 March 7, 1961, Chairman Martin was asked by Congressman Curtis hether the Board had made a statement regarding its position on a eellveation before the Senate for ratification that would reconstitute the Organization for European Economic Cooperation as the Organization Egonomic Cooperation and Development. After Chairman Martin replied ill the negative, Congressman Curtis requested that the "Federal Reserve have a statement, a considered statement, for insertion in the record 48 to Your position on OECD as you have expressed it, that you do not feel that this would in any way affect your independent judgment and Powers that you presently have." Pursuant to this request, a draft Of such a statement was distributed with a covering memorandum from Mr. JJAIng dated March 9, 1961. • 3/13/61 In discussion, consideration was given to the final paragraph of the statement, which in draft form read as follows: The Board of Governors understands that nothing in the Treaty embodying the proposed organization confers any power to bind the United States without compliance with applicable procedures imposed by domestic law. On this basis, it is clear that neither the present status of the Federal Reserve System in the structure of the U. S. Government nor its independence of judgment and action in the field of monetary policy would be affected by U. S. membership in the OECD. In response to questions regarding the possible effect of the c°nvention on the status of the Federal Reserve System, it was stated by in of the staff that there appeared to be nothing in the document that would confer authority to bind the United States to any acti°n, except in compliance with the requirements of United States constitutional procedures. In other words, the implementation of acti°ns taken by the organization apparently would be dependent on the ceTistitutional procedures in effect within the individual member nations. In the light of this understanding, Governor Robertson suggested that the final paragraph be changed to read as follows: The Board of Governors understands that nothing in the Convention embodying the proposed organization would affect the present status of the Federal Reserve System in the !tructure of the U. S. Government or its independence of judgment and action in the field of monetary policy. At the conclusion of the discussion, the statement was approved t4 a the p -`orm reflecting the change suggested by Governor Robertson, with understanding that Mr. Shay would arrange for its transmittal for inclusion in the record. A copy of the statement is attached as Item 927 3/13/61 -5All of the members of the staff except Messrs. Sherman, nackleY, and Solomon then withdrew from the meeting. Pan American Bank. Governor Robertson reported on recent developments with respect to the introduction of needed additional capital into the Pan American Bank of Miami, Florida. He outlined the manner in which he intended to proceed with a view to accelerating the introduction of such capital, and no objection was indicated. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board a letter to the Federal Reserve Bank of Cleveland (attached Item No. 11) approving the designation of Charles C. Glass as special assistant examiner. c BOARD OF GOVERNORS OF THE Item No. 1 3/13/61 FEDERAL RESERVE SYS1EM WASHINGTON 25, D. C. 4v, 44 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD mtlot,'' *0,404,0- 'A044 March 13, 1961 Board of Directors, The County Trust Company, White Plains, New York. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors or the Federal Reserve System extends to September 6, the time within Which The County Trust Company, *lite Plains, New York, may establish a branch in the Rye Ridge Shopping Center to be located on the southwest corner of Bowman Avenue and Ridge Street, Town of Rye (Unincorporated Area), Westchester County, New York. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 9' BOARD OF GOVERNORS OF THE Item no. 2 3/13/61 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD March 13) 1961 lir 'J. E. Denmark, Vice President, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Dear Mr. Denmark: Your letter of February 22, 1961 refers to 11r. Tucker's request that the application of Bank of hlaynesboro, Waynesboro, Georgia, for membership in the Federal Reserve System be held in abeyance until he can eje an opportunity to explore the possibility of reconfferences with the Federal Deposit Insurance co4lItlons, theThe Board has considered this request and will hold application in abeyance for a reasonable period °I' time. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE 00, FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 3 3/13/61 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD .ZD oti '''444.vtteropo March 13, 1961 Mr. Hugh J. Helmer, Vice President, Federal Reserve Bank of Chicago, Chicago 90, Illinois. Dear Mr, Helmer: This acknowledges your letter of January 11, 1961, and attached letter from The Farmers and Merchants State Bank, Oldenburg, Indiana, in which the member bank 1_:equests the Board's approval for the declaration of two ,I.vidends totalling $1,375 in 1960 in contravention of 6 ection 9, Federal Reserve Act, and Section 5199(b), 119S.R.S. Under the statute the Board's approval is !quired prior to the declaration of the dividend. 71or approval cannot be given in this case since the -lvidends have already been paid. The Board, however, 14111 raise no objection to the member bank's action in Inaking such payments. 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 CORRESPONOE TO THE BOARD cala: 4t,o40 March 13, 1961 Board of Directors, Citizens State Bank, oust, Texas. Ge ntlemen: Pursuant to your request submitted through the Federal Bank of Dallas, the Board of Governors, acting under the ions of Section 19 of the Federal Reserve Act, grants perto the Citizens State Bank to maintain the same reserves 0:inst deposits as are required to be maintained by banks locate. e of central reserve and reserve cities, effective with the ' (;1. et b iweekly reserve ry computation period beginning after the date this letter. Reseru Your attention is called to the fact that such permission is subject to revocation by the Board of Governors. 4 3/13/61 Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. CE BOARD OF GOVERNORS OF THE Item No. FEDERAL RESERVE SYSTEM 5 3/13/61 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD March 13, 1961 Board of Directors, The First Pennsylvania Banking and Trust Company, Philadelphia, Pennsylvania. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Philadelphia, the Board of Governors of the Federal Reserve System approves the establishment of a branch at 1518 ialnut Street, Philadelphia, Pennsylvania, bY The First Pennsylvania Banking and Trust Company, Philapelphia, Pennsylvania. This approval is given provided the °ranch is established within six months from the date of this letter. It is noted that operations at this °ranch will be ?ontinued until such time as the mortgage servicinL; and du:a1/.Igs with mortgors can be transi'efred Lo othc:r orfices and will not extend beyond October 31, 1962. Very truly joaru, (Signed) Elizabeth L. Carmichael Elizabeth L. evxmichael, A3sioLant Secretary. €141:e e BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYS-I EM Item No. 6 3/13/61 WASHINGTON 25, D. C. ADDRESS orriciAL CORRESPONDE NCE TO THE BOARD March 13, 1961 Board of Directors, 'P'lleY-Collins Bank and Trust Company, oalt Lake City, Utah. G entlemen: Pursuant to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors of the Federal Reserve System approves the establishment of Vranch at 888 East 4500 South Street, Salt Lake County, by Tracy-Collins Bank and Trust Company, provided the branch is established within one year from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS OF THE ,444; rh V; to 3* FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item No. 7 3/13/61 4 V3e., ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD te t kagit : *cl Wt. March 13) 1961 Board of Directors, The Southwest Bank, Inglewood, California. G entlemen: Pursuant to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors °f the Federal Reserve System approves the establishment of a branch in the vicinity of the intersection of Manchester and Western Avenues, Los Angeles, Los Angeles County, California, bY The Southwest Bank, provided the branch is established within one year from the date of this letter. It is understood that capital funds of the bank will be increased by at least $300,000 prior to the establishment of the branch, that branch premises would be constructed on leased ground and that formal execution of the lease would be made °n1Y after approval of the State Banking Department, and that the selection of management of the new branch be submitted for aPProval as required by the Superintendent of Banks of the State of California. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS tkotItt**4 4:44Q Cjv:14 4 flo 0.1 OF THE 111( ;) Item No. FEDERAL RESERVE SYSTEM '014 WASHINGTON 25. D. C. mg 8 3/13/61 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD March 13, 1961. *. Delos C. Johns, President, Federal Reserve Bank of St. Louis, St. Louis 66, Missouri. Dear Mr. Johns: Enclosed is a letter replying to the request of Attar ,-neY" Robert Kratky for unpublished information which you -4e re Your quested to transmit to Mr. Kratky. In accordance with rec ommendation, Mr. Kratkyis request is being approved. You are advised that pursuant to section 9 of its Rules ,e of Organization the Board authorizes Messrs. Gerald V'n, k George Kroner, and Harold Kline to be deposed concerning " Inf ormation requested. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS oitztOtrztrEil. OF THE Item No. FEDERAL RESERVE SYSTEM *. 3 3/13/61 WASHINGTON 25, D. C. ADDRESS OrFICIAL CORRESPONDENCE TO THE BOARD March 13, 1961 Robert Kratky, Esq., Attorney at Law, Suite 1301 International Building, 722 St, Chestnut Street, Louis 1, Missouri. 1)ear Sir: This refers to your further inquiry concerning the subject or two , cases in which you have been retained as counsel representing Wint,„"uise B. Gruenewaelder: Louise B. Gruenewaelder v. Edward L. The ;!:Tann et al, number 5760-E, pending in the Circuit Court of t -"Y of St. Louis; and, E. L. Wintermann v. Louise B. Gruenewaelder, ' el 212,961 pending in the Circuit Court of St. Louis County, Mi%Uri intor„,, Under subpoena duces tecum you have examined unpublished 401;ation consisting of two narrative memoranda, one from Messrs. r and Dunne to Mr. Peterson, dated April 9, 1951, concerning "Interview tini„ with Mrs. Louise B. Gruenewaelder, 6917 Pershing, totrsitY City, Mo., April 4", and the other from Mr. H. B. Kline Files, dated May 25, 1951, on the subject "Transactions between SPe?uise B. Gruenewaelder and Mutual Bank and Trust Company". Part-Loally you now request the Board's permission under Title 12, tki `61.2(o)(1), of the Code of Federal Regulations for Messrs. Gerald ftmite, George Kroner, and Harold Kline to make a deposition on all ot tv,re within their personal knowledge regarding the subject matter Cit:e memoranda or the suit new pending in the Circuit Court of the of St. Louis. 7 ,_ The Board oeing deposed -X.,4 Provided that ---..Lcable statutes Z has no objection to Messrs. Dunne, Kroner, and on the subject identified in the preceding parasuch deposition is made in accordance with the relating to pending litigation. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 9 r STATEMENT OF THE BOARD'S VIEWS ON OECD Item No. 10 3/13/61 In the modern world of interdependent nations, suitable international forums in which economic questions of mutual interest can be sidered and discussed have an important role to play. In the postwar Period the Organization for European Economic Cooperation has provided °Ile such forum for its member countries in Western Europe, and for Canada and the United States, which have been associate members. The proposal to rec onstitute the OEEC as the Organization for European Economic Cooperation and Development (OECD) results from the great change in ee°11°rnic conditions and economic problems in the past decade, and Particule.rly from the re-establishment of world multilateral trade and the convertibility of most leading currencies. In addition to its other ities, the OECD would provide the basis for continuation and intensati°n of international economic consultation and cooperation among the e°11ntries concerned. Member countries would thus be provided with an oppo„ "unity to inform themselves more fully than might otherwise be 1)°81ble regarding the policies of their fellow members, and to express thel-I'views regarding the consonance of such policies with their own ee0 11Qmic interests. It must he remembered, of course, that there are practical 11111ite, °11 the extent to which it is possible to reconcile the economic P°11eies of different countries. These limits result from the variation 1111°I.Ig their economic conditions, among their techniques of economic cont' °1 and: at times, among their views as to what policies are suitable -2114 Particular circumstances. On various occasions, representatives of the United States in Paris negotiations have pointed out the existence °t such limits, and the Board of Governors fully agrees with this view. The Board of Governors understands that nothing in the Convention ellibodying the proposed organization would affect the present status of the Federal Reserve System in the structure of the U. S. Government or its independence of judgment and action in the field of monetary policy. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 11 3/13/61 ADDRESS OfFICIAL CORRESPONDENCE TO THE BOARD March 13, 1961 Mr. Paul C. Stetzelberger, Vice President, Federal Reserve Bank of Cleveland, Cleveland 1, Ohio. Dear Mr. Stetzelberger: In accordance with the request contained in your letter of March 8, 1961, the Board approves the designation Of Charles C. Glass as a special assistant examiner for the Federal Reserve Bank of Cleveland for the purpose of participating in examinations of member banks except The Fifth Third Union Trust Company, Cincinnati, Ohio. The authorization heretofore given your Bank to designate Mr. Glass as a Special assistant examiner is hereby canceled. O. As requested; the names of W. M. Elliott and 0. assistant special of list the from deleted Hanser have been examiners. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
@FedFRASER