Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, March 21, 1961, Volume 48, Part 3

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Minutes for

To:

March 21, 1961

Members of the Board

From: Office of the Secretary

Attached is a copy of the minutes of the
of Governors of the Federal Reserve System on
the
-Lne above date.
It is not proposed to include a statement
th respect to any of the entries in this set of
Tinutes in the record of policy actions required to
ue 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
it Secretary's Office. Otherwise, please initial below.
Y°11 were present at the meeting, your initials will
'..nliicate approval of the minutes. If you were not present,
:
:
1171 1t!ttiale will indicate only that you have seen the




Chin. Martin
Gov. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King

aelri

Minutes of the Board of Governors of the Federal Reserve System
Oh

Tuesday,
March 21, 1961.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

The Board met in the Board Room at 10:00 a.m.

Balderston, Vice Chairman
Mills
Robertson
Shepardson
King
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Sammons, Adviser, Division of International
Finance
Mr. Leavitt, Assistant Director, Division of
Examinations
Mr. Landry, Assistant to the Secretary

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Discount rates.

The establishment without change by the Federal

ve Banks of Boston and Atlanta on March 20, 1961, of the rates on
'
ci1

se°1111t8 and advances in their existing schedules was approved unanimously,
vith the
understanding that appropriate advice would be sent to those Banks.
Items circulated to the Board.

The following items, which had

bee4
circulated to the Board and copies of which are attached to these
es under
the respective item numbers indicated, were approved
1111ara

y:

mous1

Item No.
tte

f

-0 the Federal Reserve Bank of New York interno objection to having approximately 1,000
lonaia.rs of unfit United States currency strapped
ban4_7114inally in order to complete the tests of a
machine.

P%inr




1

3/21/61

-2Item No.

Letter to the Chairman, Committee on Fiscal Agency
Conference of Presidents of the Federal
,
],:rations,
P
Cerve Banks, approving the continued service of
:
lard H. Hackley and John N. Kiley, Jr., as
o'liate members of the Subcommittee of Counsel
I .seal Agency Operations and the Subcommittee
04 f
'scal Agency Operations, respectively.

2

Letter
Tv.
-- to The Union and New Haven Trust Company,
11.,
yen/ Connecticut, approving the establishment
or'
a branch in the Defeo Industrial Park, Town of
rth Haven.
Proposed visit to Canada by staff economist.
elated

3

There had been

to the Board a memorandum from Mr. Marget, Director, Division

or Inte
rnational Finance, dated March 14, 1961, recommending that
.‘'.4 Anderson, Economist in that Division, be authorized to visit the
tanle _
-- of Canada to familiarize himself with recent financial and economic
clevel
'°Pments in that country and to study at first hand the effectiveness
or h
t-e monetary, fiscal, and debt management policies of the Canadian
1310rietarY authorities.

In addition to his stay at the Bank of Canada,

Arlderson also would visit with Canadian Government officials in
Ottaw
a ana with bankers, businessmen, and university economists in

Toro
rit° and Montreal. The period of time Mr. Anderson would be absent
Ilas 4
Ildicated in the memorandum as being up to three weeks beginning at
'
the e
na of April or early in May 1961.
Following a brief discussion, unanimous approval was given to

the r
eeommendation contained in the memorandum, with the understanding
that
• Anderson would be reimbursed on the basis of the

17 per diem

tOr

anada specified by the Standardized Government Travel Regulations.




1W

3/21/61

-3Mr. Sammons then withdrew from the meeting.
Report on competitive factors (Morganfield and Waverly

Dist
ribution had been made under date of March

Kentucky).

16, 1961, of a draft of

re(prt to the Federal Deposit Insurance Corporation on the competitive
re'et°rs involved in the proposed merger of Bank of Waverly, Waverly,
lelituckY, (a noninsured State bank) with The Morganfield National Bank,
korgat.
vp
'
-- 1eld, Kentucky, under the charter and with the title of the
tlational bank.
Following discussion, the report was approved unanimously for
tl'ansill-ission to the Federal Deposit Insurance Corporation.

The conclusion

rellcl as
follows:
.
While there is a degree of competition between the two
?aistitutions seeking to merge, the merging bank is so small
itt does not appear that the amount of competition that would
te eliminated by the merger would be substantial. Combining
amallest and largest banks in this area would enhance
"
e applicant's position, but would not give the applicant
an undesirable competitive advantage.
Application of Bank of Las Vegas (Item No.

4). Mr. Leavitt

referred to
the action taken at yesterday's meeting, with Governor
liobertson dissenting, approving the application of Bank of Las Vegas,
Las
egas, Nevada, to establish a branch in the vicinity of Maryland
1)a,r,41.1
4Y and East San Francisco Avenue, Clark County. He then read a

tht d
Paragraph that the staff suggested adding to the letter of approval
tc' P1
'
eee on record that, although the branch application had been approved

re

asons stated, there was a need to improve the asset condition and

st),then the capital structure of the bank as rapidly as possible.




i

3/21/61

_L1 _
There being no indication that the suggested paragraph should

riotbe added, it was understood that the letter would be sent in such
r(31in"

A copy of the letter, as sent, is attached as Item No.

The meeti

4.

then adjourned.

Secretary's Notes: On March 17, 20, and 21,
1961, Governor Shepardson approved on behalf
of the Board letters to the chairmen of the
appropriate committees of the Presidents'
Conference approving the continued service
of the following members of the Board's staff
as associates of the subcommittees indicated:
Slzb

colmaittee
ommittee
e°Mmitte
e
°Perat'
lons
Bike
oMmittee
,
u1•Teormnitt
ee
,,'1111)11°c0Intnittee
1
"
se
ommittee
IlbQommittee
Ree°1"ds

on Accounting
on Bank and Public Relations
on Cash, Leased Wire, and Sundry
on
of
of
on
on

Collections
Counsel on Collections
Counsel on Commercial Code
Personnel
Retention and Disposal of

M. B. Daniels
Charles Molony
(Joseph E. Kelleher
(John N. Kiley, Jr.
John R. Farrell
Howard H. Hackley
Howard H. Hackley
Edwin J. Johnson
Kenneth A. Kenyon

Pursuant to the recommendations contained in
memoranda from the Division of Research and
Statistics, Governor Shepardson today approved
on behalf of the Board the appointment of the
following persons to the staff of that Division,
effective the dates of entrance upon duty:
Gene

T

Li. Finn as Economist, with basic annual salary at the rate
or $8,o80.

Mary

C. Wing as Technical Editor, Economics, with basic annual salary
at the rate of $8,080.




'

41.

;

BOARD OF GOVERNORS

oilti***4

I

te1401/4

OF THE
*
tot,
.*

:!4
'11

*

Item No. 1
3/21/61

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

*,6vOik

ADDRESS

orrictm. CORRESPONDENCE

1
a '
-0404o

-* !'t Na

TO THE BOARD

March 211 1961

14.1% Everett B.
Post, Manager,
!:lanning Department,
yederal Reserve Bank of New York,
New York
451 New York.
°ear Mr.
Post:
In reply to your letter of March 91 19611 the Board has
1;(,)4?bjection to your having approximately 1,000 packages of unfit
tired States currency
strapped longitudinally in order that you
comPlete the tests of a banding machine: particularly with
re,
erence to the effect of such longitudinal banding on the cur"cY incineration process.
It is understood that should these tests indicate an
ovement in efficiency and economy through the use of the bandthe :
IIT achine, you will again bring this matter to the attention of
ttra -(3ard. Please include in the information submitted at that
li,„? comments concerning the effect of longitudinal banding on the
'
glfication part of the operation.

Z




Very truly yours,
(Signed) Merritt Sherman.
Merritt Sherman,
Secretary.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

Item No. 2
3/21/61

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

March 21) 1961

Mi. Carl E. Allen, Chairman,
Committee on Fiscal Agency Operations,
Conference of Presidents of the
Federal Reserve Banks,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Allen:
Your letter of March 8, 1961, requests that
Mi. Howard H. Hackley continue serving as an associate
member of the Presidents' Conference Subcommittee of
Counsel on Fiscal Agency Operations and that Mr. John
N. Kiley, Jr. continue as an associate member of the
Subcommittee on Fiscal Agency Operations. The Board
Will be pleased to have Messrs Hackley and Kiley serve
1'1 the capacities indicated*




Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

Item No.

3

3/21/61

ADDRESS OFFICIAL CORRESPONDENCE
TO THE SOAR°

March 21, 1961

Board of Directors,
The Union and New Haven Trust Company,
New Haven, Connecticut.
Gentlemen:
Pursuant to your request submitted through
the Federal Reserve Bank of Boston, the Board of
Governors of the Federal Reserve System approves the
establishment of a branch in the Defco Industrial Park,
!'°wn of North Haven, Connecticut, by The Union and New
established
"aven Trust Company, provided the branch is
within one year from the date of this letter.




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

10
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No.

L.

3/21/61

WASHINGTON 25, O. C.
ADDRESS OFFICIAL

CORRESPONDENCE
TO THE BOARD

March 21, 1961

Board of
Directors,
baak of Las
Vegas,
Las
Vegas, Nevada.
Ge
ntlemen:
Pursuant to your request submitted through the Federal
Reser
ped,"e Bank of San Francisco, the Board of Governors of the
in fal Reserve System approves the establishment of a branch
sn,,i'ne vicinity of the intersection of Maryland Parkway and East
;
p:
c Nncisco Avenue, Clark
County, Nevada, by Bank of Las Vegas,
nded the branch is established within one year from the date
wlie letter.
11444_
It is understood that dividend payments will be
d
to
that
$1.25 per share for July 1961 and Jaauary 1962, and
the
zofits realized from the sale of securities, sold during
or 13-L
411:13t six weeks of 1961, will be added to capital, surplus,
as required by the Superintendent of Banks for the
State
ve "3
of Nevada.
tztetor
1011,111e the capital structure of this bank is notsati
'saddit.Y, this branch is being approved in view of the small
ijwcalonal investment in bank premises, the minimum of expansion
laizth ved, and the convenience provided for customers. The Board
1.at—
3:
0 ues to stress the need for improving the asset condition and
gthening the capital structure of the bank as rapidly as
e.




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

(1