Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, May 27, 1957, Volume 44, Part 4

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Minutes for

To:

Members of the Board

From:

Office of the Secretary

May 27, 1957

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, if you
were present at the meeting, please initial in column A below to indicate that you approve the minutes.
If you were not present, please initial in column B
below to indicate that you have seen the minutes.
A
Chm. Martin
Gov. Szymczak
1/ Gov. Vardaman

X

Gov. Mills
Gov. Robertson
Gov. Balderston

X

Gov. Shepardson

X

1/

In accordance with Governor Shepardsonts memorandum of
March 8, 1957, these minutes are not being sent to
Governor Vardaman for initial.




1464.
Minutes of actions taken by the Board of Governors of the
Federal Reserve System on Monday, May 27, 1957.

The Board met in the

Board Room at 10:00 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Balderston, Vice Chairman
Szymczak
Mills
Robertson
Shepardson
Mr. Carpenter, Secretary
Mr. Sherman, Assistant Secretary
Mr. Kenyon, Assistant Secretary
Mr. Riefler, Assistant to the Chairman
Mr. Thomas, Economic Adviser to the Board
Messrs. Young, Garfield, Noyes, Williams,
Koch, Dembitz, Brill, Eckert, Gehman,
Jones, Weiner, Culbertson, Trueblood,
Wernick, and Wood of the Division of
Research and Statistics
Messrs. Furth, Bangs, Katz, Sammons, Wood,
and Reynolds of the Division of International Finance

Review of economic developments.

The staff of the Division of

International Finance presented a review of selected international financial developments, following which the staff of the Division of Research
and Statistics summarized developments in the domestic economy.

The

l'ePort of the Division of International Finance revealed no significant
ehange in the international economic situation during the current month.
It

general, inflationary pressures remained prevalent abroad and appeared

likelY to continue to exert an expansionary influence on the United States
ee°n°mY, although perhaps less strongly than in the last six months.

The

d°112estic review indicated as a whole a continuation of the previously
IsePorted sideways movement at a high level of economic activity.
All of the members of the staff who were present except Messrs.
earPenter, Sherman, and Kenyon then withdrew from the meeting and Messrs.




-2-

5/27/57

Sloan, Director, Division of Examinations, and Hackley, General Counsel,
entered the room.
Appointment of Alternate Assistant Federal Reserve Agents at
There had been circulated

Federal Reserve Bank of Boston (Item No. 1).

to the members of the Board a proposed favorable response to a request
from the Federal Reserve Agent at the Boston Reserve Bank for approval of
the appointment of three members of the Bank's staff as Alternate Assistant Federal Reserve Agents.
Comments by Governor Balderston regarding the relatively low
salaries of two of the persons proposed for appointment led to a discussion of the regular duties performed by these employees, their apparent
qualifications for the position of Alternate Assistant Federal Reserve
Agent, the nature and extent of their duties in that capacity, and the
difficulties evidently experienced by the Reserve Banks in selecting appro1311-ate personnel for appointment to the Agent's function, particularly at
the branches.

With regard to the proposed appointments, Governor Balderston

said he had been informed by Mr. Johnson, Director of the Division of
?.el'sonnel Administration, that the Boston Reserve Bank's salary scale ap"
11 tred to be in conformity with the principles governing salary administrati°n at the Federal Reserve Banks generally.

Nevertheless, he continued

t° feel that there was some element of inconsistency in the situation, as
l'eflected by the salaries of the proposed appointees, which might be
difficult to explain if the occasion demanded.
After Governor Shepardson had expressed the view that the problems




5/27/57

_3..

encountered in connection with the staffing of the Agent's function
might warrant review of the whole operation on a broad basis, Governor
Robertson suggested that the appointments at Boston be approved and that
the Divisions of Personnel Administration and Bank Operations be requested
to check into the salary administration pattern at the Boston Bank to
determine whether there were any problems to which consideration should
be given.
Agreement having been expressed with Governor Robertson's suggestion, the Board approved unanimously the letter to the Federal Reserve
Agent at the Federal Reserve Bank of Boston of which a copy is attached
to these minutes as Item No. 1.
Items circulated to the Board.

The following items, which had

been Circulated to the Board and copies of which are attached to these
rilinutes under the respective item numbers indicated, were approved
Unanimously:
Item No.
1.Letter to the Federal Reserve Agent at Cleveland approv:
3-ng the appointment of G. Donald Laughlin as Federal Re-.
ellre Agent's Representative at the Pittsburgh Branch.

2

.1t!tter to the Federal Reserve Agent at Cleveland approv;
4/3 the appointment of Lester C. Dieringer as Federal ReYe Agent's Representative at the Cincinnati Branch.

3

Lett-er to the Federal Reserve Agent at San Francisco apng the appointment of Richard G. Retallick as Alter'ce Assistant Federal Reserve Agent.

4

let
h
ter to the Federal Reserve Agent at San Francisco aping the appointment of Elvin L. Baldwin as Federal Re--- Ye Agent's Representative at the Los Angeles Branch.

2




5

j4_

5/27/57

Item No.
Letter to Security Trust Company, Lexington, Kentucky,
approving the establishment of a branch on Loudon Avenue.
(For transmittal through the Federal Reserve Bank of
Cleveland)

6

Letter to Progressive Bank and Trust Company, New Orleans,
Louisiana, approving its application for permission to
exercise limited fiduciary powers. (For transmittal through
the Federal Reserve Bank of Atlanta.)

7

Letter to the Federal Reserve Bank of Kansas City waiving the 8
requirement of six months' notice of withdrawal from memberShip in the Federal Reserve System for The Pleasant Hill Bank,
Pleasant Hill, Missouri.
9
Letter to The Riverview State Bank, Kansas City, Kansas, apProving its application for permission to exercise fiduciary
Povers. (For transmittal through the Federal Reserve Bank of
Xansas City.)
Letter to the Presidents of all Federal Reserve Banks forward- 10
ing copies of forms for the use of State member banks and
(
their affiliates in submitting reports as of the next call date.
their
the understanding that the letters would be sent when the
forns were printed.)
Letter to the Chairman of the Senate Committee on Banking and 11
?urrency reporting on S. 1992, a bill to amend section 24 of
r he Federal Reserve Act to exempt "disaster loans" covered by
( 11 Business Administration deferred participation agreements.
a copy to the Bureau of the Budget.)
Application of Wisconsin Bankshares Corporation (Item No. 12).

At

the meeting on Friday, May 24, the Board gave consideration to an applicati011 submitted by Wisconsin Bankshares Corporation, Milwaukee, Wisconsin,
/Alrauant to the Bank Holding Company Act and decided to request additional
t4f
ormation through the Federal Reserve Bank of Chicago before taking action
'41th respect to the application.

Copies of a draft of letter to the Reserve

1144k had been distributed to the members of the Board before this meeting.




1468
5/27/57

-5Agreement having been expressed with changes in the draft of

letter suggested by Governor Robertson, unanimous approval was given to
the letter to the Federal Reserve Bank of Chicago of which a copy is
attached hereto as Item No. 12.
The meeting then adjourned.

Secretary's Note: Pursuant to recommendations contained in memoranda from
appropriate individuals concerned, Governor
Shepardson today approved on behalf of the
Board the following actions regarding the
Board's staff:

..._APpointments
Patricia A. Latona as Key Punch Operator in the Division of
Administrative Services, with basic salary at the rate of $2,960 per
annum, effective the date she assumes her duties.
Mary Susan Kirby as Clerk-Stenographer in the Division of
Personnel Administration, with basic salary at the rate of $3,415 per
61111111m, effective the date she assumes her duties.
Mary Catherine Tippett as Clerk-Stenographer in the Division of
Personnel Administration, with basic salary at the rate of $3,415 per
a•rinum, effective the date she assumes her duties.
Acceptance of resignation
Doris S. Shanks, Secretary, Division of Examinations, effective
148tY 31, 1957.
Governor Shepardson also approved today
on behalf of the Board the following
letters, copies of which are attached
hereto under the respective item numbers
indicated:
Item No.

Letter to the operator of the barber shop located in
the

Reserve Building concerning operations of
shop.
the Federal




13

1469
5/27/57

-6Item No.

Letter to the Federal Reserve Bank of Philadelphia approving the appointment of Anthony F. DeCesare as
assistant examiner.

114

Letter to the Federal Reserve Bank of Chicago approving
the designation of Roy P. Anderson, Walter C. Bloy,
Albert Morris, Carl C. Welke, Harold L. Cheadle, Theodore
R. Schneider, and Abner D. Goldstine as special assistant
examiners.

15




BOARD OF GOVERNORS
OF THE

Item No. 1

FEDERAL RESERVE SYSTEM

5/27/57

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

May 27,

1957

,1 1s. Robert C. Sprague,
Federal Reserve Agent,
,.:Federal Reserve Bank of Boston,
c'oston 6, Massachusetts.
har Mr. Sprague:
In accordance with the ,request contained in your letter of
22, 1957, the Board of Governors approves the appointments of
Bernard J. Hussey, (Forrest) Meldon Hatch, and Arthur Stetson as
L,ernate Assistant Federal Reserve Agents at the Federal Reserve Bank of
starl, effective May 1, 1957.
This approval is given with the understanding that Messrs. Hussey,
and Stetson will be solely responsible to the Federal Reserve Agent
the Board of Governors for the proper performance of their duties, except
Iree 6)cluring the absence or disability of the Federal Reserve Agent or a
T a4rIcY in that office, their responsibility will be to the Assistant Federal
erve Agent and the Board of Governors.

4tcl,

t

When not engaged in the performance of their duties as Alternate
4
Ae34
a stant Federal Reserve Agents they may, with the approval of the Federal
be il've Agent and the President, perform such work for the Bank as will not
neonsistent with their duties as Alternate Assistant Federal Reserve
rite.
It will be appreciated if Messrs. Hussey, Hatch, and Stetson are
rto
qag informed of the importance of their responsibilities as members of the
fro„.1 ef the Federal Reserve Agent and the need for maintenance of independence
4i the
operations of the Bank in the discharge of these responsibilities.
)
c to
Messrs. Hussey, Hatch, and Stetson should execute the usual Oaths
ffi
--ee which are to be forwarded to the Board of Governors.
4n-one
It is noted from your letter that the appointments of Messrs. John F.
were r and George E. Wells, as Alternate Assistant Federal Reserve Agents,
"cinded on April 22 because of the demands of their regular duties.




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

BOARD OF GOVERNORS
4.0tutv0.*4

OF THE

Item No. 2
5/27/57

FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO. THE BOARD

/,:ay 27, 1957

Arthur B. Van Buskirk, Federal Reserve Agent,
'ederal Reserve Bank of Cleveland,
Cleveland 1, Ohio.
pear Mr. Van Buskirk:
In accordance with the request contained in your letter of May 8,
19s,
12 the Board of Governors approves the appointment of Mr. G. Donald
gulin as a Federal Reserve Agent's Representative at the Pittsburgh
anch, to succeed Mr. W. J. Cosgrove.
This approval is given with the understanding that Mr. Laughlin
Go„ be solely responsible to the Federal Reserve Agent and the Board of
:
al ernors for the proper performance of his duties, except that, during the
014,7,nce or disability of the Federal Reserve Agent or a vacancy in that
ce, his responsibility will be to the Assistant Federal Reserve Agent
—u the Board of
Governors.
When not engaged in the performance of his duties as Federal
Reae _
Rea_ 4.-ve Agent's Representative he may, with the approval of the Federal
er.re Agent and the Vice President in charge of the Pittsburgh Branch,
a Th°1111 such work for the Branch as will not be inconsistent with his duties
rederal Reserve Agent's Representative.
It will
!1Vortance of his
Ileserve Agent and
tions of
the Bank

be appreciated if Mr. Laughlin is fully informed of the
responsibilities as a member of the staff of the Federal
the need for maintenance of independence from the opera—
in the discharge of these responsibilities.

Mr. Laughlin should execute the usual Oath of Office which is to
Nye'rwarded to the Board of Governors. Your advice with respect to the
etive date of Mr. Laughlin's appointment also will be appreciated.

be p_




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

f

BOARD OF GOVERNORS
OF THE

Item No.

FEDERAL RESERVE SYSTEM

3

5/27/57

WASHINGTON 25, O. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

May 27, 1957

Arthur B. Van Buskirk, Federal Reserve Agent,
Federal Reserve Bank of Cleveland,
Cleveland 1,
Ohio.
Dear Mr. Van Buskirk:

1957, the In accordance with the request contained in your letter of May 8,
Board of Governors approves the appointment of Mr. Lester C.
'
lleringer as a Federal Reserve Agent's Representative at the Cincinnati
'
ranch, to succeed Mr. Harry H. Ostendorf.
This approval is given with the understanding that Mr. Dieringer
,111 be solely responsible to the Federal Reserve Agent and the Board of
'
arernors for the proper performance of his duties,
except that, during the
orsence or disability of the Federal Reserve Agent or a vacancy in that
a fice, his responsibility will be to the Assistant Federal Reserve Agent
the Board of Governors.
When not engaged in the performance of his duties as Federal
!i.e..'rve Agent's Representative he may, with the approval of the Federal
n erve Agent and the Vice President in charge of
the Cincinnati Branch,
such work for the Branch as will not be inconsistent with his duties
Federal Reserve Agent's Representative.
It will
tiP1Portance of his
geserve Agent and
tions of
the Bank

be appreciated if Mr. Dieringer is fully informed of the
responsibilities as a member of the staff of the Federal
the need for maintenance of independence from the operain the discharge of these responsibilities.

Mr. Dieringer should execute the usual Oath of Office which is to
P
„
"
. )rwarded to the Board of Governors. Your advice with respect to the
keetive date of Mr. Dieringer's appointment also will be appreciated.

be




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item No. 4
5/27/57

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD

May 27, 1957

11r. A. H. Brawner,
Federal Reserve Agent,
Federal Reserve Bank of
San Francisco,
San Francisco 20, California.
pear Mr. Brawner:
In accordance with the request contained in your letter of April 25,
the Board of Governors approves the appointment of Mr. Richard G.
as Alternate Assistant Federal Reserve Agent at the Federal Reserve
'Ink of San Francisco to succeed Mr. Dorris B. Atkins.

19

This approval is given with the understanding that Mr. Retallick
be solely responsible to the Federal Reserve Agent and the Board of
uovf,
ah c:rnors for the proper performance of his duties, except that, during the
0?ence or disability of the Federal Reserve Agent or a vacancy in that
a„fice, his responsibility will be to the Assistant Federal Reserve Agent
"d the Board of Governors.

, 4.

When not engaged in the performance of his duties as Alternate
stant Federal Reserve Agent he may, with the approval of the Federal
be erve Agent and the President, perform such work for the Bank as will not
inconsistent with his duties as Alternate Assistant Federal Reserve Agent.
It will be appreciated if Mr. Retallick is fully informed of the
pLeae't,ance of his responsibilities as a member of the staff of the Federal
or ,rve Agent and the need for maintenance of independence from the operations
'he Bank in the discharge of these responsibilities.
It is noted from your letter that with the approval of Mr. Retallick's
apt—
4;Vaatnent
4
by the Board of Governors, he will execute the usual Oath of
atce which will be forwarded to the Board of Governors together with advice
'
0 the effective date of his appointment.




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

Item No. 5

FEDERAL RESERVE SYSTEM

5/27/57

WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONOENCE
TO THE SOARS

**'

May 27, 1957

4. A. H. Brawner, Federal Reserve Agent,
/'ederal Reserve Bank of San Francisco,
San Francisco 20, California.
JJear Mr. Brawner:
19s,

In accordance with the request contained in your letter of May 2,

f, the Board of Governors approves the appointment of Mr. Elvin L.

ldwin as a Federal Reserve Agent's Representative at the Los Angeles Branch.
This approval is given with the understanding that Mr. Baldwin
, 1 be solely responsible to the Federal Reserve Agent and the Board of
ernors for the proper performance of his duties, except that, during the
:nee or disability of the Federal Reserve Agent or a vacancy in that
et„ ice, his responsibility will he to the Assistant Federal Reserve Agent
the Board of Governors.

Z

When not engaged in the performance of his duties as Federal
Res.
Agent's
Representative he may, with the approval of the Federal
e Te
ne rve Agent and the Vice President in charge of the Los Angeles Branch,
aar,
f
,0rm such work for the Branch as will not be inconsistent with his duties
rederal Reserve Agent's Representative.
It will
of his
tio:ve Agent and
"s of the Bank

ix4PoItance

be appreciated if Mr. Baldwin is fully informed of the
responsibilities as a member of the staff of the Federal
the need for maintenance of independence from the operain the discharge of these responsibilities.

It is noted from your letter that with the approval of Mr. Baldwin's
Plirntment by the Board of Governors, he will execute the usual Oath of
Eta ," which will be forwarded to the Board of Governors together with advice
the effective date of his appointment.




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

L475
BOARD OF GOVERNORS
OF THE

Item No. 6

FEDERAL RESERVE SYSTEM

5/27/57

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

May 27, 1957

Board of Directors,
Security Trust Company,
Lexington, Kentucky.
Gentlemen:
Pursuant to your request submitted through
the Federal Reserve Bank of Cleveland, the Board of
Governors of the Federal Reserve System approves the
establishment of a branch on Loudon Avenue at the in,tersection of Russell Cave Pike and North Broadway
,
Pike, outside the city limits of Lexington, Kentucky)
provided the branch is established by April 29, 1958,
and the approval of the State authorities is in effect
as of the date of the establishment of the branch.




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

4.76
BOARD OF GOVERNORS
OF THE

Item No. 7

FEDERAL RESERVE SYSTEM

5/27/57

WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE

TO THE BOARD

May 27, 1957

Board of Directors,
Progressive Bank and Trust Company,
New Orleans, Louisiana.
Gentlemen:
This refers to your request for pernissions
under applicable provisions of your condition of membership numbered 1, to exercise fiduciary powers,
limited, however, to a specific appointment.
Following consideration of the information
submitted, the Board of Governors of the Federal Reserve
System grants permission to Progressive Bank and Trust
Company, New Orleans, Louisiana, to act as trustee,
registrar, and transfer agent under a $1,500,000 bond
issue of Schwegmann Brothers Giant Supermarkets, dated
June 1, 1957, due in 10 years, with the understanding
that it will not accept any other fiduciary appointments
without first obtaining the permission of the Board.




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

1477
BOARD OF GOVERNORS
OF THE

Item No.

FEDERAL RESERVE SYSTEM

8

5/27/57

WASHINGTON 25, D. C
ADDF•IESS OFFICIAL CORRESPONDENCE
TO THE BOARD

May 27, 1957

Ni", D. W. Woolley, Vice President,
Federal Reserve Bank of Kansas City,
Xansas City 6, Missouri.
Dear Mr. Woolley:
Reference is made to your letter of May 13, 19570 enclosing a resolution adopted by the board of directors of The
Pleasant Hill Bank, Pleasant
Hill, Missouri, signifying its
ntention to withdraw from membership in the Federal Reserve
oYstem and a letter requesting waiver of the six months' notice
cf such withdrawal and setting forth the reasons for wlthdrawal.

I

In accordance with the bank's request, the Board of
d
Clovernors waives the requirement of six months'
notice of with.
Therefore, upon surrender of the Federal Reserve Bank
814)ek issued to the bank, you are authorized to cancel such
and make appropriate refund thereon. Under the provisions
Section 10(c) of Regulation HI as amended effective
Se
Ptember 1, 1952, the bank may accomplish termination of its
T.e.nibership at any time
within eight months after notice of
tention to withdraw is given. Please advise when cancellation
8 effected and refund
is made.

r

The certificate of membership issued to the bank should
be 00
tained, if possible, and forwarded to the Board. The State
vri„ ng authorities should be advised of the, bank's proposed
etwldrawal
from membership and the date such withdrawal becomes
f
ective.
It is noted the Federal Deposit Insurance Corporation
iriL4PProved the bank's application for continuance of deposit
'trance following withdrawal from membership.




Very truly yours,
(Signed)

Merritt Sherman

Merritt Sherman,
Assistant Secretary.

,4
BOARD OF GOVERNORS
AO 79
Ail

OF THE

• 411""61'
y

FEDERAL RESERVE SYSTEM

Item No. 9

5/27/57

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

0.41 mstct,t,'''
004***

May 27, 1957

Board of Directors,
The Riverview State Bank,
Kansas City, Kansas.
Gentlemen:
This refers to your request for permissions
under applicable 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 The Riverview State Bank to
exercise the fiduciary powers now or hereafter authorized
under the terms of its charter and the laws of the State
of Kansas.




Very truly yours,
(Signed) Merritt Sherman

Merritt Sherman,
Assistant Secretary.

1479
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 10
5/27/57

WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

noar Sir:
The indicated number of copies of the following forms are
being forwarded to your Bank under separate cover for use of State
Inember banks and their affiliates in submitting reports as of the
nOxt call date. A copy of each form is attached.
Nuriber of
e9pis
--Form F.R. 105 (Call No. 144), Report of condition of
State member banks.
Form F.R. 105e (Revised November 1955), Publisher's
copy of report of condition of State member banks.
Form F.R. 105e-1 (Revised November 1955), Publisher's
copy of report of condition of State member banks.
Form F.R. 105e-2 (Revised November 1955), Publisher's
copy supplement.
Form F.R. 105fa (May 1957), Schedule FA, Supplementary
data on time deposits of individuals, partnerships,
and corporations and on reserve for bad debts.
Form F.R. 220 (Revised March 1952), Report of affiliate
or holding company affiliate.
Form F.R. 220a (Revised March 1952), Publisher's copy
of report of affiliate or holding company affiliate.
With the exception of form F.R. 105fa, all of the forms
4'e th
-e same as those used on March 14, 1957.




1480
-2 Supplement8ry Schedule FA: This schedule has been added
in order to obtain a breakdown of" Item 1 of Schedule F, time deposits
er individuals, partnerships, and corporations, and obtain additional
information on reserve for bad debts. Similar reports are being colcy and
lected from national banks by the Comptroller of the Curren
t
Deposi
l
from insured nonmember oommercial banks by the Federa
ation
inform
this
Insurance Corporation. It is not planned to collect
regularly.
of deposit
The breakdown of item 1 of Schedule F by type
1945 and
30,
June
12as last obtained in call reports of condition on
purpose
The
1942; prior to 1942, it had been collected regularly.
estimated
onal
additi
,e_f this breakdown by type of deposit, and of the
obtain
to
is
s,
holder
ureakdown of two of the sub-items according to
of
and
ts
deposi
anew bench mark for making estimates of savings
partnerduals,
indivi
:1ership of time deposits other than savings by
!!41
'fllPs, and corporations.
ng to
e of the portion of the schedule relati

The purpos
reserve for
ation for
bad debt losses is to provide current inform
earnings
the
on
ti-mating the potential effect on tax revenues and
ble
allowa
ining
'banks of any changes in the formula for determ
aft.tions to and the maximum ceiling on these reserves.
Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.
,
ctosures

l'°7/1E PRESIDENTS OF ALL FEDERAL RESERVE BANKS




1481
BOARD OF GOVERNORS
ft.'7
)3

Item No. 13

OF THE

FEDERAL RESERVE SYSTEM
^1 -7

5/27/57

WASHINOTON

OFFICE OF THE CHAIRMAN

May 27, 1957

The Honorable J. W. FUlbright„
Chairman, Committee on
Banking and Currency,
United States Senate,
Washington 251 D. C.
Dear Senator Fulbright:
This is in response to your letter of May 9, 1957,
requesting a report by the Board of Governors with respect to
S. 1992, a bill to amend section 24 of the Federal Reserve
Act, which relates to loans by national banks an real estate
security. It is proposed that "disaster loans" covered by
Small Business Administration deferred participation agreements "shall not be subject to the restrictions or limitations
of this section [i.e., section 24] imposed upon loans secured
by real estate."
Section 24 establishes minimum standards for real
estate loans by national banks and limits the aggregate amount
of such loans. These provisions are designed to safeguard
solvency and liquidity. If S. 1992 were enacted, a national
bank would be subject to no aggregate limit on the amount of
"disaster loans" secured by real estate that it could have outstanding; and such loans could be made (1) on the security of
second or third mortgages, (2) without any provisions with
respect to amortization, and (3) in amounts that might equal
Or exceed the value of the real estate security.
When a bank makes disaster loans in compliance with
the requirements of its Disaster Participation Agreement with
Business Administration, the bank is protected against
-Loss on such loans by a commitment an the part of Small Business
Administration to take over upon demand whatever percentage has
been designated by the bank. That percentage can not exceed
90 per cent of loans of less than $20,000 or 75 per cent of
}°ahs in excess of $20,000, and it may be a smaller percentage
ff the bank so elects. However, the Board has been informed
Lhat in most cases Small Business Administration's deferred
Participation in residential disaster loans is 90 per cent.




Honorable J. W. Fulbright
When occasion for making disaster loans arises, the
demand for such loans in a particular community or area may be
very substantial, and a national bank might be under considerable
pressure to make such loans with less than the usual attention to
safeguards of the kinds prescribed by section 24. If such a bank
elected to have only a relatively small percentage of such loans
covered by Small Business Administration deferred participation,
the risk exposure might be sufficient to endanger the bank's
capital structure or liquidity. However, if most loans affected
by the proposed amendment -would be protected to the extent of
90 per cent by Small Business Administration deferred participa—
tions, the aggregate risk may not be excessive as a practical
matter. The Comptroller of the Currency, who is the primary super—
visor of the national banking system, has detailed information
regarding its condition and operations, and accordingly the views
of the Treasury Department presumablydould be accorded particular
weight in passing on the advisability of the proposal embodied in
S. 1992.
In the
provision on this
end of the fourth
Paragraph of that




interest of clarity, it is suggested that, if a
subject is enacted, it should be inserted at the
paragraph of section 24 rather than in the first
section.
Sincerelyyours,

Wm. McC. Martin, Jr,

BOARD OF GOVERNORS
,oitliftv}
•,,?" .‘

OF THE

Item No. 12
5/27/57

FEDERAL RESERVE SYSTEM

41:4

0
,
44
4*

WASHINGTON 25, D. C.

4
•11/
tt ,
.4

ADDRESS orriciAL

CORRESPONDENCE
TO THE HOARD

•-•

May 27, 1957.

Mr. W. R. Diercks, Vice President,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Diercks:
In connection with the consideration of the application
of Wisconsin Bankshares Corporation, Milwaukee, Wisconsin, for
prior approval of the acquisition of shares of the proposed
Southgate National Bank of Milwaukee, the Board of Governors
requests that you ask the Corporation to furnish any additional
and pertinent information it may have or be able to obtain
relative to whether the need for this banking facility is such
as to offset the question of further expansion in the light of
the relative control of deposits by the holding company. This
information should be transmitted to the Board with any findings
or comments you may have to offer.
If they so desire arrangements will be made for representatives of the Corporation to present additional oral information to the Board. Your efforts to expedite this matter will be
appreciated.




Very truly yours,
(Signed) S. R. Carpenter

S. R. Carpenter,
Secretary.

1484
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 13
5/27/57

WASHINGTON 25. D. C.
ADDRESS OFFICIAL
CORRESPONDENCE
TO THE BOARD

May 27, 1957

Mr. Willis M. Boling,
1020 - 19th StreeL, N. W.,
Washington 6, D. C.
Dear Mr. Boling:

In view of the fact that you have employed an
additional barber the Board is hereby suspending the notice
contained in the Board's letter of May 3. Although you have
not as yet provided the services of a bootblack, the Board
still feels that this is a service which should be provided
as soon as possible and is, therefore, holding in abeyance
any action with regard to this matter.
enough
during
May 27
for in

In consideration of the time required to build
business to sustain a two-man shop and to assist you
this period, the Board has suspended payment from
through August 31 of the 10% concession fee called
your contract.




Very truly yours,
(Signed) S. R. Carpenter
S. R. Carpenter,
Secretary.

1485
BOARD OF GOVERNORS
OF THE

Item No. 14
5/27/57

FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO TO-1E BOARD

May 27, 1957

Mr. E. C. Hill, Vice President,
Federal Reserve Bank of Philadelphia,
Philadelphia 1, Pennsylvania.
Dear Mr. Hill:
In accordance with the request contained in
your letter of May 21, 1957, the Board approves the
appointment of Anthony F. DeCesare as an assistant
examiner for the Federal Reserve Bank of Philadelphia.
Please advise as to the date upon which the appointment
is made effective.




Very truly yours,
(Signed) Merritt Sherman

Merritt Sherman,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No. 15
5/27/57

WASHINGTON 25. D. C.
ADDRESS OFFICIAL CrIRRESPONDENCE
TO THE BOARD

May 27, 1957

Mr. C. J. Scanlon, Chief Examiner,
Federal Reserve Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Scanlon:
In accordance with the request contained in
your letter of May 22, 1957, the Board approves the
designation of the following named individuals as
special assistant examiners for the Federal Reserve Bank
of Chicago:




Roy P. Anderson
Walter C. Bloy
Albert Morris
Carl C. Welke

Harold L. Cheadle
Theodore H. Schneider
Abner D. Goldstine

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