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Minutes for To: March 8, 1960. 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 indicate approval of the minutes. If you were not present, Yclur initials will indicate only that you have seen the 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 orl Tuesday, March PRESENT: 8, 1960. The Board met in the Board Room at 10:00 a.m. Mr. Mr. Mr. Mr. Mr. Balderston, Vice Chairman Szymczak Mills Robertson King Sherman, Secretary Hackley, General Counsel Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Daniels, Assistant Director, Division of Bank Operations Mr. Nelson, Assistant Director, Division of Examinations Mr. Landry, Assistant to the Secretary Mr. Mr. Mr. Mr. Mr. Discount rates. The establishment without change by the Federal Reserve Bank of Boston on March 7, 1960, of the rates on discounts and advances in its existing schedules was approved unanimously, with the unde rstanding that appropriate advice would be sent to that Bank. Items circulated to the Board. The following items, which had bee ll circulated to the members of the Board and copies of which are attached to these minutes under the respective item numbers indicated, were .2Qproved unanimously: Item No. £ett to the Federal Reserve Bank of Boston IcTIIE the assessment of a penalty incurred Rutland County National Bank of Rutland, l'Ill°11t, because of a deficiency in its required eserves. tetteas, tleb, the McDonald al State Bank, North Platte, exe;, k•a, granting its request for permission to ' cise certain fiduciary powers. 1 2 3/8/60 -2Item No. Letter to the Presidents and Federal Reserve Agents of all Federal Reserve Banks regarding the construction of extra vault facilities in the new Salt Lake City Branch building to provide storage for emergency supplies of currency. 3 Application to organize a national btuA in IkNibier, Colorado In conformance with the understanding reached at Yesterday's meeting, Mr. Solomon reported that he had telephoned the Kallsas City Reserve Bank regarding the application to organize a national bank in Boulder, Colorado, and that in the absence of President Leedy he had spoken to First Vice President Koppang, who was familiar with the case. Mr. Koppang said that the Reserve Bank had no strong feelings egal'aing this case and that its recommendation that the application be cleaied had rested upon the view that another bank in Boulder at this time seemed slightly premature. However, the Reserve Bank would be delighted if the Board wished to recommend favorably on this application to the Comptroller of the Currency. Mr. Solomon said that Mr. Koppang 44cled that it was his understanding the National Bank Examiner had Prob.1,1 recommended approval of the application. Following a discussion, unanimous approval was given to a letter to the Comptroller of the Currency recommending that he give favorable ec/risideration to the application to organize a national bank in Boulder, 001°r414-0. This letter is attached Item No. 4. Mr. Fauver, Assistant to the Board, then entered the room. 3/8/6o -3Proposed American Trust Company--Wells Fargo merger and branches. Governor Mills referred to the Board's discussion on February 25, 1960, a letter dated February 18, 1960, from Acting Assistant Attorney General Bicks of the Anti-Trust Division of the Department of Justice, regarding the proposed acquisition by the American Trust Company (San Francisco) of the Wells Fargo Bank, so far as section 1 of the Sherman liet of 1890 was concerned, and he asked what the status of this question as at the moment. Mr. Solomon replied that a letter was delivered late yesterday afternoon by the Department of Justice, with which the Department transmitted a memorandum presentirlg reasons why the Board should deny authority to operate the present offices of Wells Fargo Bank as branches of the e°11tinuing bank. The reasons pertained more to the proposed merger between American Trust Company and Wells Fargo Bank than to the applie4tion for permission to operate branches. Mr. Sherman said that copies t the memorandum from the Department of Justice were being distributed thi8 morning, and that the file in this case was still in circulation a41°4g. the members of the Board. Application by First Bank Stock Corporation in re Eastern Bank of St. Paul, Minnesota. Governor Mills inquired as to the current status of the staff's consideration of the application Or Pirst Bank Stock Corporation to acquire stock of Eastern Heights 943 3/8/6o State B, Bank, St. Paul, Minnesota, with reference to which oral argument had been held on January 6, 1960. In reply it was indicated by Messrs. Hackley and Solomon that the Legal Division and the Division of Examiaations had prepared memoranda on this subject that would be distributed to the Board today or tomorrow. Mr. Hackley added that this was an imPortant application since an adverse decision by the Board would almost certainly be appealed. Letter to the Federal Reserve Bank of Atlanta (Item No. 5). There had been circulated to the Board a draft letter to the Federal Reserve Bank of Atlanta interposing no objection to proceeding with the preparation of preliminary plans and specifications for the proposed New Orleans Branch building. In connection with this item, Governor Balderston said that t°11cIdag the discussion at yesterday's meeting, when the Board authorized the Federal Reserve Bank of Kansas City to proceed with plans for the addition to the Oklahoma City branch building, he checked into the 841°Iu1t of uncommitted funds under Congressional authorization for branch bIlliclinge and discovered that only about $1-1/2 million was left o mitted as of current date, which would be insufficient to finance r1e'4 construction planned at either the Denver or New Orleans branches. dingly, while he had no objection to authorizing the preparation ' 4ec°1 (It Plane for such construction and the paying of architects' costs, he thought that all concerned should keep in mind that there was 3/8/60 -5- insufficient money for either of these projects and that the Board must go to the Congress for an additional authorization before actual co nstruction could be undertaken. During the discussion that followed, Mr. Farrell observed that the letter from First Vice President Patterson of the Atlanta Reserve 1/ank, dated January 4, 1960, suggested that the Atlanta Bank was assuming the Board would request funds for new branch building construction from the Congress early in January 1960. Governor King replied that possibly Mr' Patterson had included this reference in his letter as a result of tile conversation that he (Governor King) had had with President Bryan that Bank last fall. In that conversation he had told President IlrYan that it would be advisable for the Atlanta Bank to proceed with it 1"-ana since, if the Board were to make a request of Congress this it would be desirable to do so early in the session. Unanimous approval was then given to the letter to the Atlanta Reserve Bank (attached Item No. 5) with the understanding that the Atl4nta Reserve Bank would be advised informally of the Board's decision not t° request additional funds for new branch building construction tl'°M th p -Congress at this session. The meeting then adjourned. Secretary's Note: Pursuant to the recommendation contained in a memorandum from Mr. Sherman, Secretary of the Board, Governor Robertson, acting Mfi 3/8/60 -6in the absence of Governor Shepardson, today approved on behalf of the Board the appointment of Vivienne O. Goebel as Minutes Clerk in the Office of the Secretary, for a temporary period ending about July 1, 1960, with basic annual salary at the rate of $4,040, effective the date she assumes her duties. (71)A retary 911, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 1 3/8/60 WASHINGTON 25. O. C. ADDRESS OFFICIAL CORRESPONDENCE TO TI-4E BOARD March 8, 1960. Eark0. Latham, First Vice President, xederal Reserve Bank of Boston, 130sto11 6, Massachusetts. ipee•r Mr. Latham: This refers to your letter of February 19, regarding a penalt vefrra o y $244.11 incurred by the Rutland County National Bank of Rutland, bil.r °11t, for a deficiency of $106,0 70 in its required reserves for the eeklY computation period ended February 10, 1960. It is noted that the deficiency resulted from the fact that, Ei.--1 1.1gh the bank's management knew of the change from a semimonthly to this: eklY computation period for computing reserves, it failed to take tilati,:tactor into consideration in estimating its daily reserve position; perj.;Pating a deficiency in its reserves for the reserve computation talikT 6IIIIich it thought would end on February 15, it borrowed from your wel,r,00 00 0 on February 10 for five days; and, if it were not for the 12,01,ro'l-ght regard ing the close of the computation period, it would have deri Ifecl a larger amount for a single day in order to overcome the ciency. In view of the short period since the change from to a 1— a semimonthly the rull'eekly reserve comput ation period for countr member y banks, and the ,?commenda tion of your Bank, the Board authorizes your Bank to waive .-usessment of the penalty of $244.11. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. *of BOARD OF GOVERNORS OF THE Item NO. 2 3/8/60 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD March 8, 1960. Board of Directors, McDonald State Bank, North Platte, Nebraska. G entlemen: This refers to your request for permission, under. . at provisions of your condition of membership numbered 1-1 to act in certain fiduciary capacities. Following consideration of the information submitted, the Board of Governors of the Federal Reserve System grants P a,!rIllission to McDonald State Bank to act as executor and ' L Irdllistrator, with the understanding that your bank will not ;173cer.)t fiduciary appointments of other kinds without first talning the permission of the Board. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 941 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 3 3/8/60 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD March 8, 1960. sear Sir: You may recall that, as part of the System's defense planning, theB_ tet, rivard authorized the construction of extra vault facilities in the ; 81 .alt Lake City Branch building to provide storage for emergency : Lies of currency. Partitions and other fixtures have now been elitialled in this area, and it is ready for use. It consists of an vault level capable of holding about 180 million notes. 4 In view of the uncertain status of the proposal to construct be rts facilities at Fort Riley, Kansas, the Board believes that it would ei4."eirable to put an emergency supply of currency in the new Salt Lake "Y vault as soon as possible. Under the plan contemplated-- (1) Some of the Federal Reserve notes held in Washington for the various Reserve Banks, now aggregating about 240 million notes, would be shipped to Salt Lake City. They would be held in dead storage until it seemed desirable to roll them over, possibly in five or six years. (2) The Federal Reserve Bank of San Francisco would receive from the other Reserve Banks, and the Agent at the San Francisco Reserve Bank would receive from the other Agents, Powers of attorney to act on behalf of the other Banks and Agents, respectively, in holding joint custody of the unissued notes. In order that this proposal may be carried out to the best tritert, Nrh:'t of all concerned, it would be helpful to have an expression of eter'eference or objection your Bank might have with regard to the 11 encY storage of your Bank's notes at Salt Lake City, and an -cati "of the amount and denominations that might be stored. One -2- hot thaz to be kept in mind in this connection is the additional shipping hatilts that would be involved if and when the emergency supply in t 'Jake City is rolled over and shipped to the Banks of issue for use °Mal operations. a This letter is being sent to all Presidents of Federal Reserve d to all Federal Reserve Agents. Very truly yours, Merritt She Secretary* SIDENIS OF ALL FEDERAL SERVE BANKS Y1) BOARD OF GOVERNORS 40*****4 44 OW 410p;'41 tit § OF THE FEDERAL RESERVE SYSTEM ti * Item No. 4 3/8/60 WASHINGTON 25. D. C. 3 ADDRE•B OFFICIAL CORRESPONDENCE TO THE BOARD Akkat 4t 4 1000* ' March 8, 1960. Comptroller of the Currency, Treasury Department, Washington 25, D. C. Attention Mr. C. C. Fleming, Deputy Comptroller of the Currency. °ear Mr. Comptroller: Reference is made to a letter from your office dated Nov ember 2 1959, enclosing copies of an application to organize a tational ' bank at Boulder, Colorado, and requesting a recommendation 48 to whether or not the application should be approved. A report of investigation of the application made by an exn,m4...e 444. r for the Federal Reserve Bank of Kansas City indicates that organizers have agreed to provide a capital structure of $400,000 ,Stead of $300,000 shown in the aoplication. This revised capital ruture appears to be adequate. This report also discloses generally yrnrable findings with respect to the proposed management of the bank. there is some question as to need for the bank at this time and that tut,flIture earnings prospects are only fair, it is indicated provide will mor:-ve growth will occur in the area and the institution the ngly, Accordi 13, convenient facilities for local residents. 44rd of Governors recommends favorable consideration of the applica- th;"' The Boards Division of Examinations will be glad to discuss r , all. Z :pects of this case with representatives of your office if you so Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 5 3/8/60 WASHINGTON 25. D. C. ADDRESS OFTICIAL CORRESPONDENCE TO THE BOARD March 8, 1960. Mr. Harold T. Patterson, First Vice President and General Counsel, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Dear Mr. Patterson: This refers to your letter of January 4, 1960, together with attachments and schematic drawings for the proposed New Orleans branch building. In accordance with the Board's letter of May 6, 1959, and the National Shelter Policy, the Board would wish to have provision 2 t r a fallout shelter in the new building at New Orleans. During "-!Arther planning, it is assumed that consideration will be given to the inclusion of the fallout shelter in space that would be part of ! A area used in normal operations, in line with provisions of the vDM directive. Referring to the last sentence of the first paragraph of Your letter, the Board expects at an appropriate time to request _ elation providing authorization for further branch bank building etruction, or possibly the repeal of the present limitation. In the meantime, there would be no objection to your Bankt 8 proceeding with the preparation of preliminary plans and sPec ifications. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary.
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