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Minutes for To: Maych 20. 1958 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, if you were present at the meeting, please initial in column A below to indicate that you approve the minutes. If you were not present, please initial in column. B below to indicate that you have seen the minutes. Chm. Martin Gov. Szymczak Gov. Vardaman Gov, Mills Gov. Robertson Gov. Balderston Gov. Shepardson Minutes of the Board of Governors of the Federal Reserve System on Thursday, March 20, 1958. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 Martin, Chairman Balderston, Vice Chairman Szymczak Vardaman Mills Robertson Shepardson Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Kenyon, Assistant Secretary Hackley, General Counsel Masters, Director, Division of Examinations Hexter, Assistant General Counsel Advice of Board action on applications. Pursuant to the understanding at the meeting on February 24, 19580 there had been prepared and circulated to the members of the Board a memorandum from the Division of Examinations at February 270 1958, revieving the procedures presently followed in aing applicants of action taken by the Board on various types of 415Plications processed by that Division. The memorandum pointed out that raost instances the advice is transmitted through the Federal Reserve concerned, usually in the form of a letter to the member bank but 14 Some cases in the form of a letter to the Reserve Bank requesting that the tember bank be advised of the Boardts action. With respect to a Permit for a holding company affiliate, the Federal Reserve Agent 18 l 'eqUested by telegram to issue the permit on behalf of the Board. It 1118 recommended that henceforth advice of Board action on all of the types a " pplications show in a schedule attached to the memorandum be in the 92. 32 / 0/58 -2- form of a letter to the applicant transmitted through the Federal Reserve sank concerned, except for certain orders issued under the Bank Holding e°mPany Act. The recommended procedure would extend also to letters Prepared in the Division of Bank Operations in connection with applications tor permission to maintain reduced reserves. Any official permits, including those issued to holding company affiliates, would be prepared in the Board's °ffices and transmitted through the Federal Reserve Bank. Following comments by Mr, Masters, Governor Vardaman, who had liaised the question of procedure at the meeting on February 240 said that It had not been his thought to bypass the Federal Reserve Banks. However, he had questioned the advisability of writing to a Reserve Bank and leottlesting that the Board's decision be relayed to the applicant, since ' he felt that it was better for the Board to express itself directly to the aPplicant. In response to a question as to what was gained by transmitting letters to applicants through the Federal Reserve Banks, Governor Vardaman raentioned the delegation of the examination function by the Board to the Reserve Banks and also the fact that this procedure alloys the Reserve kilk to have advice of the Board's action before such advice is received bl the applicant. Other points mentioned were that the applications are 13110ces8ed and recommended upon by the Federal Reserve Banks, that the 14teedure helps to maintain a close relationship between the Reserve 414k and member banks in its district, and that the procedure affords an 3/20/58 -3- oPportunity for the Reserve Bank to review the Board's letter before it readhes the applicant. Mr. Hackley said that it had concerned the Legal Division that in some cases 'where the law requires approval of a transaction by the Board, the applicant bank would not have a letter from the Board la its files to the extent that the procedure was followed of writing to the Federal Reserve Banks and asking them to advise the applicant bank. Governor Robertson indicated that he favored the recommendation, Particularly because transmittal of the Board's letter through the Federal Reserve Bank provides assurance that the Reserve Bank will have advice of the action taken before the applicant has such advice. Thereupon, the procedure recommended in the memorandum from the iblaion of Examinations was approved unanimously. Visit by Mortgage Bankers Association. Following a statement by G°vernor Shepardson, it vas agreed unanimously to extend an invitation t° the Board of Governors of the Mortgage Bankers Association of America t° visit the Federal Reserve Building on June 3, 1958, in the afternoon, terr a chart show similar to that presented recently to the newly appointed dll'e'etors of the Federal Reserve Banks and branches, The meeting then adjourned. Secretary'a Notes: During the day advice was received from the Federal Reserve Bank of Minneapolis that the directors of that Bank had established, subject to the approval of the Board of Governors, rates of 2-1/4 per cent (rather than 2-3/4 per cent) on discounts and advances under sections 13 and 13a of the Federal Reserve Act; 2-3/4 per cent on section 10(b) advances, and 3-1/2 per cent on advances under the last paragraph of section 13. Other rates in the Bankla existing schedule 'were established without change. 92 32 / 0/58 -4Pursuant to the action taken by the Board on March 60 1958, the Secretary advised the Minneapolis Bank of approval of the rates established by the directors, effective March 21, 1958. All Federal Reserve Banks and branches 'were notified by telegram, a press statement vas issued in the usual form, and arrangements were made for publication of a notice in the Federal Register. Advice also vas received during the day from the Federal Reserve Banks of New York, Philadelphia, and Chicago that the directors of those Banks had established without change, subject to the approval of the Board of Governors, the rates on discounts and advances in the Banks existing schedules. Pursuant to the procedure authorized at the meeting on January 24, 19582 the Secretary advised each of those Banks of approval of the action taken by its direct cretar-y
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