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Minutes for To: March 3, 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 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 not present, indicate approval of the minutes. If you were seen the have you that your initials will indicate only minutes. Chin. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Minutes of the Board of Governors of the Federal Reserve System on Friday, March PRESENT: 3, 1961. Mr. Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Balderston, Vice Chairman Szymczak Mills Robertson Shepardson King Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Thomas, Adviser to the Board Molony, Assistant to the Board Fauver, Assistant to the Board Noyes, Director, Division of Research and Statistics Holland, Adviser, Division of Research and Statistics Koch, Adviser, Division of Research and Statistics Landry, Assistant to the Secretary Eckert, Chief, Banking Section, Division of Research and Statistics Yager, Economist, Division of Research and Statistics 19gport on money market. ments Mr. Yager reported on recent develop- in the money market, following which Mr. Eckert presented a report On member bank reserves, bank loans and investments, and the money supply. At the conclusion of these reports, Messrs. Thomas, Noyes, Holland, 1°c11, Eckert, and Yager withdrew from the meeting and the following entered the room: Mr. Hackley, General Counsel Mr. Masters, Associate Director, of Examinations Mr. O'Connell, Assistant General Mr. Hostrup, Assistant Director, of Examinations Mr. Thompson, Supervisory Review Division of Examinations Mr. Smith, Legal Assistant Division Counsel Division Examiner, 3/3/61 -2Discount rates.. The establishment without change by the Federal Reserve Banks of New York, Philadelphia, Chicago, and San Francisco on March 2, 1961, of the rates on discounts and advances in their existing schedules was approved unanimously, with the understanding that appropriate advice would be sent to those Banks. Item circulated to the Board. The following item, which had been circulated to the Board and a copy of which is attached to these minutes as Item No. 1, was approved unanimously: Letter to Manufacturers Trust Company, New York City, approving the establishment of a branch at 515 Madison Avenue, Borough of Manhattan. itIELlication to organize a national bank at Dania Item Nc. 2). Florida At the meeting on Tuesday, February 28, following an indication that a favorable view on the proposed organization of a national bank at Dania, Florida, might be transmitted to the Comptroller °f the Currency rather than an adverse recommendation, as suggested by the Federal Reserve Bank of Atlanta and the Division of Examinations, It Was understood that the Reserve Bank would be invited to make any rurther comments that it desired regarding the application. A memorandum Mr. Masters had been distributed to the Board under date of March 1, 1961) reporting on a telephone conversation with the Reserve Bank pursuant t0 the foregoing understanding. 3/3/61 -3Mr. Masters commented on his memorandum, noting in his remarks that the Reserve Bank had nothing to add which would change in any material way the adverse recommendation it had made. The Reserve Bank however, emphasize the relatively minor financial stake that the supporters would have in the new bank, the fact that the proposed board Of directors did not seem too strong, and the rather poor earnings Prospects. It was the view of the Reserve Bank, Mr. Masters said, that the Dania community could probably support another commercial bank. Rowever, the management and prospects of the proposed institution did n°t measure up to the standards the Reserve Bank would like to see maintained for newly organized banks in the area. Governor Mills stated that he was willing to accept the unfavorable recommendation of the Federal Reserve Bank of Atlanta in consideration of the fact that the Bank had reiterated its views on the application, which were based on analysis of a field investigation of the circumstances involved. Following a brief discussion, during which it was agreed that the Proposed letter to the Comptroller of the Currency recommending unfavorably Ilith respect to the application should be changed to avoid indicating doubt e°fleerning the ability of the community to support a new bank organized under strong auspices, unanimous approval was given to a letter in the form attached as Item No. 2. Cit)Cj 3/3/61 -4Application to organize a national bank at Greeley, Colorado (Item IT At the meeting on March 2, 1961, question had been raised r egarding the adverse recommAndations of the Federal Reserve Bank of Kansas City and the Division of Examinations with respect to an application to organize a national bank at Greeley, Colorado. Pursuant to the under- standing reached at that meeting, the Reserve Bank had been asked whether it had any further comment or additional information relevant to the a pplication. Under date of March 2, 1961, a memorandum from Mr. Masters had been distributed informing the Board of the Reserve Bank's views. Mr. Masters said the Reserve Bank had reiterated its belief that there was no need for an additional bank in the proposed location at the Present time or in the foreseeable future. It was the consensus of those t the Reserve Bank acquainted with the area that a bank so located could not develop enough business to justify its existence; the shopping center 11°4 under construction in the area where the bank would be located was l'ePorted to contain only a relatively few retail units. The city was currently served by three banks, and the needs of the residential area Where the proposed bank would be located were being serviced without inconvenience to the banking public. Governor Mills said that on the basis of the same reasoning he had expressed with respect to the Dania, Florida, application, he would be lung to accept the adverse recommendation of the Federal Reserve Bank of Kansas City in this case. 831) 3/3/61 There being concurrence with this view, the letter to the Comptroller of the Currency recommending unfavorably with respect to the aPPlieation was approved unanimously. as Item No. A copy of the letter is attached 3. kpplication of New York Holding Corporation. been Distribution had made under date of February 24, 1961, of a memorandum from the Legal Division concerning the question of conducting a hearing on an application by New York Holding Corporation, White Plains, New York, pursuant to sectic'n 3(a) of the Bank Holding Company Act, for the Board's prior apProval of action whereby the corporation would become a bank holding c°111PanY through acquisition of the capital stock of Wall Street Trust C°mPanY, New York, New York, and Main Street Trust Company, White Plains, , New "1 Vr, -4, 4shell" corporations which were in process of organization under the banking laws of the State of New York. (In conjunction with this a43Plication, Bankers Trust Company of New York City and The County Trust C°mPanY of White Plains had applied for consent to merge with Wall Street Trust c -ompany and Main Street Trust Company, respectively.) Notification "receiPt of the application had been transmitted to the Federal Register Publication, to the Department of Justice, and to the Superintendent of 13.ank for the State of New York, together with a request for the latter's viewS on the application, and requests for views on the competitive factors 41-7°1ved in the two related merger applications had been made of the 3/3/61 -6- Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the United States Attorney General. It was the suggestion of the Legal Division that a public hearing might be appropriate, this view being based on the prospect of widespread public interest in the proposed transaction and the fact that two somewhat similar transactions in the State of New York also were Pending. One of these involved the formation of a holding company to acquire six banks, including Morgan Guaranty Trust Company of New York and live banks in upper New York State, and the other involved a merger between First National City Bank of New York and the National Bank of Westchester, White Plains, New York. It was pointed out in the memorandum that if the Board should cler a public hearing on the application of New York Holding Corporation ' °I the following questions would be presented: (1) whether the applicant sh°111d be permitted to submit certain data in confidence; (2) whether the hearing would be limited to those factors usually considered in a section 3(a) hearing or be extended to include issues pertaining to the related Illerger applications; and (3) the choice of a hearing examiner. On the gllestion of the issues concerning which evidence would be received, it was the judgment of the Legal Division that the two sets of statutory factors required to be considered under section 3(a) of the Bank Holding Company 841 3/3/61 -7- Act and section 18(c) of the Federal Deposit Insurance Act, as amended, were sufficiently similar to preclude the need for a separate designation of the latter even if the Board wished to receive evidence related to the mergers. So far as the problem of maintaining the confidentiality of designated portions of the application was concerned, the memorandum Pointed out that if a public hearing were ordered the application would be introduced into the hearing record as an exhibit, and unless otherWise arranged the entire content of the application would be available to Public scrutiny. It was proposed in the memorandum that the portion Which applicant would like kept in confidence could, with the concurrence of the hearing examiner, be received in a confidential portion of the hearing record and entered in a "blinded" form in the public record. .11r18.13-Y, with regard to the question of designating a hearing officer, the memorandum noted that from informal discussion with Hearing Examiner Charles W. Schneider of the National Labor Relations Board, it had been ascertained that Mr. Schneider's present workload apparently would Permit his undertaking an assignment of this kind. Assuming Mr. Schneider,s availability, it was the judgment of the Legal Division Holding that his experience in conducting other hearings under the Bank Co n3PanY Act would prove beneficial. At the Board's request, Mr. O'Connell summarized the considerations 14hich suggested that a public hearing on the application would be appropriate, S 3/3/61 -8- f°110wing which he and Mr. Hackley replied to a number of questions raised by members of the Board with regard to various aspects of the application and related matters. At the conclusion of the discussion, the unanimous view was exPressed that a public hearing should be held, and it was indicated that the related procedures suggested in the Legal Division's memorandum were agreeable to the Board. Accordingly, it was understood that Preliminary arrangements for the hearing would be made, that the Board Would be advised thereof, and that a notice of hearing would be submitted ror the Board's consideration. The meeting then adjourned. Secretary's Notes: It having been ascertained, pursuant to the action taken by the Board on February 8, 1961, that Mr. Judson Bemis, President of Bemis Bro. Bag Company, Minneapolis, Minnesota, would accept appointment, if tendered, as Class C director of the Federal Reserve Bank of Minneapolis for the unexpired portion of the three-year term ending December 31, 1963, an appointment telegram was sent to Mr. Bemis today. The Board's letter of December 9, 1960, transmitted to the Federal Reserve Banks copies of reports of earnings and dividends (Form F.R. 107) for use by State member banks in submitting reports for the calendar year 1960. Governor Shepardson approved today on behalf of the Board a letter to the Reserve Banks advising that there were being transmitted under separate cover copies of a memorandum and attachments announcing and explaining the nature of changes in the earnings and dividends form and instructions to be used by State member banks in making reports for the first half of 1961. The letter suggested that copies of the memorandum and attachments be distributed to all State member banks to assist them in making any changes in accounting procedures 064 813 3/3/61 -9that might be necessary to report the information requested on the new form, such distribution to be coincident with the mailing of similar information to national banks by the Office of the Comptroller of the Currency. Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson today approved on behalf of the Board the following items relating to the Boardts staff: Salar increases Office of the Secretary: ,_ Ruth D. Stone, Secretary, from $5,820 to $6,150 per annum, effective °Larch 19, 1961. Division of Administrative Services, effective March from 'om luth 5, 1961: Vera Dulin, from $4,130 to $4,285 per annum, with change in title Cashier to Supervisor, Cafeteria. S. Elting, Cafeteria Helper, from $1,803 to $3,290 per annum, Change in status from part-time to full-time. Winnie Tull, from S4,445 to $4,600 per annum, with change in title wuunior Supervisor to Supervisor, Cafeteria. in .Geraldine M. Venable, from $3,815 to $3,920 per annum, with change title from Cafeteria Helper to Clerk-Cashier. ACee tance of resignation effectiDorothy Mosher, Charwoman, Division of Administrative Services, -ve at the close of business March 3, 1961. , Secretary ' 814 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM gq) WASHINGTON 25, D. C. Item No. 1 3/3/61 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD '44444,0 March 3, 1961 Board of Directors, Manufacturers Trust Company, New York, New York. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of New York, the Board of Governors of the Federal Reserve System approves the establishment of a branch by Manufacturers Trust Company, New York, New York, at 515 Madison Avenue, Borough of Manhattan, New York, New York, 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. BOARD OF GOVERNORS OF THE Item No. 2 3/3/61 FEDERAL RESERVE SYS1EM WASHINGTON 25. D. C. ADDRESS eirricIAL CORRESPONDENCE TO TI-4E BOARD March 31 1961 Comptroller of the Currency, Treasury Department, W ashington 250 D. C. Attention Mr. W. M. Taylor, Deputy Comptroller of the Currency Dear Mr. Comptroller: Reference is made to a letter of your office dated September 8, 1960, enclosing copies of an application to organize !national bank at Dania, Florida, and requesting a recommendation as to whether or not the application should be approved. Information contained in a report of investigation of the application made by an examiner for the Federal Reserve Bank °f Atlanta indicates that the proposed capital structure of the ! 3. llk would be adequate. However, it is noted that the sponsors rould have, in the aggregate, only a small financial interest in 1.11_1? proposed bank. Moreover, the proposed Board of Directors is out' impressively strong and satisfactory arrangements for erating management of the institution have not been made. In View of the unfavorable factors, the Board of Governors does not feel justified in recommending approval of the application. The Board's Division of Examinations will be glad to cliscuse any aspects of this case with representatives of your ffice if you so desire. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 3 3/3/61 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO TNE BOARD March 3, 1961 Comptroller of the Currency, Treasury Department, Washington 25, D. C. Attention Mr. W. M. Taylor, Deputy Comptroller of the Currency. Dear Mr, Comptroller: Reference is made to a letter from your office dated October 18, 1960, enclosing copies of an application to organize 4 national bank at Greeley, Colorado, and requesting a recomme ndation as to whether or not the application should be approved. Information contained in a report of investigation of the application made by a representative of the Federal Reserve xlIc of Kansas City indicates favorable findings with respect to trne proposed capital structure and management of the bank. nowever, the information indicates that ample banking facilities are available in Greeley at the present time and the prospects for satisfactory operations and nee,' for the proposed bank are not very favorable. In the circumstances, the Board of Governors does not feel justified in recommending approval of the application. The Board's Division of Examinations will be glad to dis ells -3 any aspects of the application with representatives of Your office if you so desire. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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