The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Minutes of actions taken by the Board of Governors of the Federal Reserve System on Monday, May 2, 1955. The Board met in the Board ROOM at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Balderston, Vice Chairman Szymczak Mills Robertson Shepardson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Carpenter, Secretary Sherman, Assistant Secretary Kenyon, Assistant Secretary Thurston, Assistant to the Board Riefler, Assistant to the Chairman Thomas, Economic Adviser to the Board Vest, General Counsel Hackley, Assistant General Counsel The following matters, which had been circulated to the members of the Board, were presented for consideration and the. action taken in each instance was as indicated: Memorandum dated April 19, 1955, from Mr. sion of Administrative Services, recommending the Szillat as Operator, Key Punch, in that Division, the rate of $3,190 per annum, effective as of the upon the performance of her duties. Bethea, Director, Diviappointment of Lyla E. with basic salary at date on which she enters Approved unanimously. Letter to Mr. Earhart, President, Federal Reserve Bank of San Francisco, reading as follows: Thank you very much for again inviting us to send a representative to your Business Outlook Conference, to be held May 6. The Board/3 representative at last yearlsconference was very much impressed with the organization of the conference and the quality of the discussion. He felt that the insights into, and "feeling" for, current developments that he obtained at the meeting were of great value. 5/2/55 -2- Present plans call for Mr. Louis Weiner, Chief of the National Income, Labor, and Moneyflows Section of the Research Division, to represent the Board at the conference again this year. Approved unanimously. Letter to Mr. Armistead, Vice President, Federal Reserve Bank of Richmond, reading as follows: In accordance with the request contained in your letter of April 20, 1955, the Board approves the designation of William A. Horsley as a special assistant examiner for the Federal Reserve Bank of Richmond to participate in the examination of all State member banks except. The Bank of Virginia, Richmond, Virginia. Approved unanimously. Telegram to Mr. Crane, Federal Reserve Agent, Federal Reserve Bank of New York, authorizing, subject to the following condition, the issuance of a general voting permit, under the provisions of section 5144 of the Revised Statutes of the United States, to Marine Midland Corporation, Jersey City, New Jersey, entitling such organization to vote the stock which it owns or controls of The Farmers National Bank and Trust Company of Rome, Rome, New York, at all meetings of shareholders of such bank: Prior to the issuance of general voting permit authorized herein, applicant shall execute and deliver to you in duplicate an agreement in form accompanying Board's letter S-964(F.R.L.3. #7190). Permit authorized herein shall not be issued until you have been notified by Marine Midland Corporation that it has acquired a controlling interest in bank named herein. Meanwhile, you may assure Marine Midland Corporation that voting permit will be issued upon receipt of such notification. Approved unanimously. Letter to the Board of Directors, Cambria Bank, Incorporated, Cambria, Virginia, approving, subject to conditions of membership numbered 1 and 2 contained in the Board's Regulation HI the bankt3 application for membership in the Federal Reserve System and for the appropriate amount of stock in the Federal Reserve Bank of Richmond. Approved unanimously, for transmittal through the Federal Reserve Bank of Richmond. 5/2/55 -3- Letter to Mr. P. Booker Robinson, Vice President, Citizens Fidelity Bank and Trust Company, Louisville, Kentucky, reading as follows: In your letter of April 18, 1955, you advise us that Mr. Miller requests that the Citizens Fidelity Bank and Trust Company be granted an established priority for banking facilities in 1. The new Shopping Center on Preston Highway adjacent to the commercial airport. 2. Priority for Branch Banking Facilities that might be hereafter considered for this or any other Shopping Center erected, or to be erected on the Shelbyville Road. It is understood that the new Shopping Center on Preston Highway to which you refer is the location of the proposed branch for which application was made and with reference to which the Board of Governors said, in its letter dated February 25, 1955, it would be glad to reconsider at such time as permanent financing arrangements had been made for construction of the center and construction had reached the stage when it would be possible to estimate with some accuracy when the branch, if granted, could be opened for business. It is understood, also, that the proposed bi.anch on Shelbyville Road to which specific reference is made is that which was proposed for the Shelbyville Road about one and four-tenths miles east of the downtown section of St. Matthews. Priority is requested for this or any other Shopping Center erected, or to be erected on the Shelbyville Road. The Board regrets that your request for priority cannot be granted. It must consider applications for branches as they are received and in the light of existing facts, conditions and circumstances. For reasons which you will readily appreciate, it does not honor requests for priority or expressions of intention to file applications for branches at some future time and for an unspecified location within a general area. Approved unanimously, with a copy to the Federal Reserve Bank of St. Louis. 5/2/55 -4- Letter to Dir. Conrad E. Snow, Assistant Legal Adviser, Department of State, Washington, D. C., reading as follows: Reference is made to your letter of April 7, 1955, enclosing a questionnaire dealing with the frequency with which questions involving international legal problems arise in the work of the United States Government. You ask that each topic of the questionnaire be marked to indicate the frequency with which the particular subject arises in the work of the Board of Governors of the Federal Reserve System. From a review of the questionnaire it appears that none of the listed topics involves a matter with which the Board has to deal. However, in response to the general question at the end of the questionnaire, the Board occasionally does deal with problems which involve international legal questions. The Board has authority to charter corporations to engage in foreign banking or foreign financial operations. The Board also grants approval for member banks of the Federal Reserve System to establish branches in foreign countries; and in that connection it sometimes deals with questions in treaties and otherwise concerning the rights of such branches abroad, and related questions of reciprocal rights of branches of foreign banks in this country. From time to time the Board has occasion to consider legal questions such as those that may be involved in loans on gold made by Federal Reserve Banks to foreign banks or governments. Officials of the Federal Reserve System do a considerable amount of work in the study or formulation of such documents as the Bretton Woods Agreements, the Bretton Woods Agreements Act which established the National Advisory Council, and similar agreements or legislation. Approved unanimously. There were presented telegrams to the Federal Reserve Banks of Boston, New York, Cleveland, Richmond, Minneapolis, Kansas City, and Dallas approving the establishment without change by the Federal Reserve Bank of Boston on April 25, by the Federal Reserve Bank of Kansas City on April 27, and by the Federal Reserve Banks of New York, Cleveland, Richmond, Minneapolis, and Dallas on April 28, 1955, of the rates of discount and purchase in their existing schedules. Approved unanimously. Governor Robertson reported having received a telephone call several days ago from Mr. Irons, President of the Federal Reserve Bank of Dallas, who stated that the Bank wished to employ Mr. Robert Judy, now with the Federal Deposit Insurance Corporation, as Chief Examiner. Governor Robertson said he responded that the matter would first have to be cleared with the Federal Deposit Insurance Corporation and that, accordingly, he had gotten in touch with Mr. H. E. Cook, Chairman of the Corporation, and Mr. Vance L. Sailor, Chief of the Division of Examination, both of whom indicated that there mould be no objection to the employment of Mr. Judy by the Dallas Reserve Bank. He said that he reported this to President Irons, who then requested approval by the Board of Governors of the employment of Mr. Judy and payment of salary to him at the rate of $10,600 per annum. The appointment of Mr. Robert Judy as Chief Examiner for the Federal Reserve Bank of Dallas and the payment of salary to him at the rate of $10,600 per annum were approved unanimously, and it was understood that Governor Robertson mould so advise President Irons. There were presented requests from Mr. Leonard, Director, Division of Bank Operations, for authority to travel to Chicago, Illinois, during the period May 8-11, 1955, to attend a meeting of the Insurance Committee 5/2/55 -6- of the Federal Reserve Banks and to travel to New York, New York, during the period May 24-27, 1955, to attend a meeting of the Presidents' Conference Subcommittee on Collections. Approved unanimously. At this point Mr. Hexter, Assistant General Counsel, entered the room. Governor Balderston stated that pursuant to invitations extended by the Board last meek as the result of informal discussions, Mr. Woodward, Vice Chairman of the Chairmen's Conference, and Mr. Young, Chairman of the Presidents' Conference, would be in Washington tomorrow to meet with the Board for a discussion of the request made by Mr. Dawson, Chairman of the House Committee on Government Operations, for an audit of the Federal Reserve System, Mr. Woodward coming in place of Mr. Virden, Chairman of the Chairments Conference, who had advised that he could not be present. He went on to say that Presidents Erickson, Sproul, Williams, and Fulton, of the Federal Reserve Banks of Boston, New York, Philadelphia, and Cleveland, respectively, also mould be in Washington tomorrow for a meeting of the Special Committee on Emergency Operations, and that they would meet with the Board and Messrs. Woodward and Young at luncheon and afterward for a discussion of the matter. Governor Balderston then referred to the statement prepared by the staff entitled "The Federal Reserve System and the Comptroller General" and to the understanding at the meeting of the Board on April 28 that Governor -7- S/2/55 Robertson would prepare an alternative version of the paper. Governor Robertson then read three alternative drafts, two of which were in the form of letters to Chairman Dawson and the third of which was in the form of a memorandum. There followed a discussion of the papers read by Governor Robertson and other matters related to the audit request. Chairman Martin said that he had requested an appointment with Chairman Dawson today (later in the meeting he received word that an appointment had been arranged for this morning). He suggested, therefore, that no action be taken with respect to the papers presented by Governor Robertson or other aspects of the audit request until after his conversation with Chairman Dawson. The other members of the Board expressed agreement with Chairman Martin's suggestion. Messrs. Vest and Hexter then withdrew from tha meeting. Pursuant to the understanding at the meeting on April 21, 1955, there had been prepared, under the supervision of Governor Balderston, a draft of testimony to be given before the Subcommittee on Small Business of the Senate Banking and Currency Committee regarding Bill S. 381, providing for the formation of national investment companies, and Bill S. 383, which would authorize the Board of Governors to prescribe terms and conditions for the insurance of loans to small business enterprises. Copies of the draft had been sent to the members of the Board prior to this meeting. Governor Balderston stated that although definite advice had not yet been received, it appeared that the schedule of hearings might not call _8_ 5/2/55 for testimony by the Board until Thursday, May 5. It was his view that the formal statement should be relatively brief and that the remaining part of the time allotted to the Board should be given over to answering such questions as might be asked by the Subcommittee. He then mentioned a number of changes in the testimony which had been suggested since the draft was prepared. Inasmuch as several members of the Board had not yet had an oppor— tunity to study the draft of testimony, it was understood that the draft would be revised to take into account the changes which Governor Balderston had mentioned and that copies of the revised draft would be sent to the members of the Board prior to consideration at the meeting tomorrow. Governor Robertson stated that on Sunday, May 12 he -went to Richmond, the Board's relocation center, where he reviewed arrangements made for housing the operations of the Board. He said that among other things he had approved assignments of offices to members of the Board which mould be pre— sented shortly in line drawing form. He suggested that when the members of the Board had reviewed and approved the assignments of offices, it be with the understanding that thereafter the assignments would not be changed. Minutes of actions taken by the Board of Governors of the Federal Reserve System on April 28 and 29, 1955, were approved unanimously. The meeting then adjourned.
@FedFRASER