Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, March 7, 1963, Volume 50, Part 3

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Minutes for

To:

Members of the Board

From:

Office of the Secretary

March 71 1963

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 indicate approval of the minutes. If
you were not present, your initials will indicate
only that you have seen the minutes.

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

Minutes of the Board of Governors of the Federal Reserve
System on Thursday, March 7, 1963.

The Board met in the Board

Room at 10:00 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.

Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Sherman, Secretary
Kenyon, Assistant Secretary
Hackley, General Counsel
Farrell, Director, Division
of Bank Operations
Solomon, Director, Division
of Examinations
Daniels, Assistant Director,
Division of Bank Operations
Leavitt, Assistant Director,
Division of Examinations
Mattras, General Assistant,
Office of the Secretary

Items circulated to the Board.

The following items, copies of

which are attached to these minutes under the respective item numbers
indicated, were approved unanimously:
Item No.
Letter to the Federal Reserve Bank of New York
noting without objection increases in the scope
and cost of proposed alterations to the electrical
system in the main Reserve Bank building.

1

Letter to the Federal Reserve Bank of New York
interposing no objection to the Bank's proposed
Program to modernize 16 passenger elevators and
rePlace 6 service elevators in its main building.

2

Letter to Winnetka Trust and Savings Bank, Winnetka,
Illinois, approving an investment in bank premises.

3

3/7/63

-2Item No.

4

Letter to Liberty State Bank, Hamtramck, Michigan,
granting permission to exercise fiduciary powers.
Report on competitive factors (Sidney-Botkins, Ohio).

There

had been distributed a draft of report to the Comptroller of the
Currency on the competitive factors involved in the proposed merger
Of The Shelby County Bank, Botkins, Ohio, into The Citizens Baughman
National Bank of Sidney, Sidney, Ohio.
After a short discussion, the report was approved unanimously

tor transmission to the Comptroller of the Currency with the understanding that the conclusion of the report would be revised slightly
to read as follows:
The proposed merger of The Shelby County Bank, Botkins,
Ohio, into The Citizens BalighmAn National Bank of Sidney,
Sidney, Ohio, would eliminate the slight amount of competition
existing between these two institutions. While this merger
would increase the size of the area's largest bank, there is
no evidence to indicate that it would have significant adverse
effects on swAller banks situated in the general area to be
served.
All members of the staff then withdrew except Mr. Sherman.
Annual meeting of Bank for International Settlements.

Governor

Robertson referred to earlier discussions regarding his plans for
attendance at this year's annual meeting of the Bank for International
aattlements to be held in Basle, Switzerland, in June.

He would like

to have the Board's approval for Mr. Holland, Adviser in the Division
or Research and Statistics, to accompany him on the trip, including
visits to several of the European central banks as might seem desirable.

3/7/63

-3Governor Robertson stated that he had had some discussion with

President Ellis of the Boston Bank, who also was planning to attend
the meeting, and it was also noted that President Swan of the San
Francisco Bank was planning to go to the sane meeting.

Both Mr. Ellis

and Mr. Swan planned to visit several European central banks on the
trip.
The necessary foreign travel that would be involved in Mr.
for
Holland's attendance at this year's annual meeting of the Bank
International Settlements and a program of visits to such European
,
central banks as might be worked out with Governor Robertson was approved
it being understood that the authorization of specific travel expenses
would be subject to Governor Shepardson's approval.
Foreign travel for Mr. Hersey.

Governor Shepardson stated that

Mr. Young, Adviser to the Board and Director, Division of International
Finance, had recommended in a memorandum dated March

5, 1963, that Mr.

Hersey, Adviser in the Division of International Finance, be authorized
to attend a meeting of balance of payments experts to be held in Paris
on March 19-21, 1963, under the auspices of the International Monetary
Ilund.

The meeting would include central bank and other government balance

well
°f payments experts from several European countries and Japan, as
as from the United States.

Mr. Young also recommended that, in conjunction

With this meeting, Mr. Hersey spend a few days at the Bank of France, so
that his trip would cover the period March 16-23, 1963.

'Sir)

3/7/63
The recommendations contained in Mr. Young's memorandum were

Pad.
Regulation K.

Governor Mitchell reported that he had reviewed

with members of the staff yesterday afternoon a new draft of Regulation K,
Corporations Doing Foreign Banking and Other Foreign Financing under the
Federal Reserve Act, prepared pursuant to the understanding at the meeting
Of the Board on February 18, 1963.

Some of the proposed shortening of the

Regulation involved more in the way of substantive changes than he felt
had been contemplated by the Board, and he had requested the Legal Division
to modify the shortened draft with a view to having copies distributed to
the members of the Board by the end of this week.

He suggested, therefore,

that the matter be placed on the agenda for consideration by the Board
on Monday, March 11.
There followed a discussion of some of the changes that had been
made in the draft of Regulation, particularly with respect to whether it
accomplished the simplification of the Regulation that had been indicated
aa desirable by some members of the Board in other recent discussions.
At the conclusion of the discussion it was understood that the
Matter would be placed on the agenda for a report by Governor Mitchell
Ott Monday, March 11, with the hope that a revised draft of Regulation
Could shortly thereafter be transmitted to the Federal Register for the
l'eceipt of comments.

3/7/63

_5..
Report of condition of member banks.

Governor Mitchell stated

that Mr. Noyes, Director, Division of Research and Statistics, had
informed him that at a recent meeting of the System Research Advisory
Committee considerable opposition was expressed by the Reserve Bank
economists to the idea of obtaining data now collected from all member
banks on the reverse of the call report by means of a sampling process.
The general attitude of the Reserve Banks was that sampling procedures
would not be satisfactory for this purpose.

If this view prevailed, the

suggestion made earlier for changes in the form of call report along lines
indicated at the meeting of the Board on February 13, 1963, would not be
feasible.

Governor Mitchell went on to say that Comptroller of the Currency

Saxon was entirely agreeable, according to the informal joint staff committee
of the Board, the Comptroller's Office, and the Federal Deposit Insurance
Corporation that had been discussing this subject, to collection of complete
information for one call date each year, but that the Comptroller felt
strongly that the statistical information gathered on the reverse of the
call report for other call dates should be substantially reduced along
lines he previously had indicated.

An alternative for the Board would,

of course, be to obtain directly a complete call report from all member
banks for each call date.

Governor Mitchell indicated that at this time

he was merely reporting the results of the latest meeting of the System
Research Advisory Committee for the Board's information.
The meeting then adjourned.

S2F
3/7/63

-6Secretary's Note: Governor Shepardson
today approved on behalf of the Board
the following items:

Letter to the Federal Reserve Bank of St. Louis (attached Item
approving the designation of Charles Ray Halbrook as special
assistant examiner
Letter to the Federal Reserve Bank of San Francisco (attached
Item No 6) approving the appointment of Clete F. Eberhardt as
assistant examiner.
Memoranda from appropriate individuals concerned recommending
the following actions relating to the Board's staff:
ointment
Clarence G. Higgins as Guard, Division of Administrative Services,
with basic annual salary at the rate of $3,560 effective the date of
entrance upon duty.
ts
James R. Turner, Offset Press Operato (Multilith), Division of
Administrative Services, to work part-time as an offset press operator
for a local printing firm.

BOARD OF GOVERNORS

Item No. 1
3/7/63

OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD

March

7, 1963

Mr. Alfred Hayes, President,
Federal Reserve Bank of New York,
New York J4., New York.
Dear Mx. Hayes:
This refers to Vice President Biiby's letter of
February 14, 1963, requesting the Board's consideration of
.
increases in the scope and cost of the alterations to the
building.
Bank
Reserve
York
New
main
the
in
system
electrical
The Board notes without objection the expansion of
the scope of the program as outlined in Mr. Bilby's letter and
the increase in total estimated costs to $561,000, or $211,000
in excess of the estimated cost of $350,000 authorized in
November 1961.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

821.;•
,

Item No. 2
3/7/63
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS orrscsAL CORRESPONDENCE
TO THE BOARD

March

7, 1963

Mr. Alfred Hayes) President,
Federal Reserve Bank of New York)
New York 45, New York.
Dear Mr. Hayes:
This refers to Vice President Biiby's letter
of February 14) 1963, containing, for the Board's
consideration) your Bank's proposal for modernization of
the 16 passenger elevators and replacement of the 6
service elevators in the main New York Reserve Bank
building.
The Board will interpose no Objection to your
Bank's proceeding with the program) and authorizes an
expenditure of not to exceed $3)176)000.
It is noted' that three of the major elevator
manufacturers will be asked to submit bids.
Very truly yours)
(Signed) Merritt Sherman
Merritt Sherman)
Secretary.

A,0

Item No.
3/7/63
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
AOOFIESS OFFICIAL COFINICIIPONOENCE
TO THE BOAR°

March 7, 1963

Board of Directors,
Winnetka Trust and Savings Bank,
Winnetka, Illinois.
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, both direct and indirect,
of not to exceed 065,000 by Winnetka Trust and
Savings Bank for the purpose of constructing a
new bank building.
Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

Item No. 4
3/7/63

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS arrocim. CORACEPONOENCE
TO THE BOARD

March 7, 1963

Board of Directors,
Liberty State Bank,
Hamtramck, Michigan.
Gentlemen:
•

This refers to your request for permission, under
.?..PPlicable provisions of your condition of membership numbered
1, to exercise fiduciary powers.
Following consideration of the information submitted,
the Board of Governors of the Federal Reserve System grants
Permission to Liberty State Bank to exercise the fiduciary powers
now or hereafter authorized by its charter and the laws of the
State of Michigan.
Very tray yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

Item No. 5 '

)

3/7/63
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

March 7, 1963

AIR MAIL
Mr, 0. 0. Wyrick, Vice President,
Federal Reserve Bank of St. Louis,
St. Louis 66, nissouri.
Dear Mr. WYrick:
ined in your letter
In accordance with the request conta
nation of Charles
desig
the
of February 261 1963, the Board approves
Federal
the
for
er
examin
Ray Halbrook as a special assistant
Reserve Bank of St. Louis.
Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

Item No.
OF THE

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3/7/63

BOARD OF GOVERNORS

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

I.

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44 ti

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

I

March 71 1963

AIR MAIL
Mr. P. W. Cavan, Vice President,
Federal Reserve Bank of San Francisco,
San Francisco 20, California.
Dear Mr. Cavan:
In accordance with the request contained in your letter
Of February 27, 1963, the Board approves the appointment of
Clete F. Eberhardt as an assistant examiner for the Federal Reserve
Bank of San Francisco. Please advise the effective date of the
appointment.
Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.