Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, May 4, 1962, Volume 49, Part 5

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Minutes for

To:

Members of the Board

From:

Office of the Secretary

May 4, 1962.

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
1D111.4401w. 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.

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

Minutes of the Board of Governors of the Federal Reserve System
cla Friday, May 4, 1962.
PRESENT:

Mr.
Mr.
Mr.
Mr.

The Board met in the Board Room at 10:00 a.m.

Balderston, Vice Chairman
Mills
Robertson
Shepardson
Sherman, Secretary
Kenyon, Assistant Secretary
Thomas, Adviser to the Board
Young, Adviser to the Board and Director,
Division of International Finance
Mr. Molony, Assistant to the Board
Mr. Fauver, Assistant to the Board
Mr. Noyes, Director, Division of Research
and Statistics
Mr. Koch, Adviser, Division of Research
and Statistics
Mr. Brill, Associate Adviser, Division of
Research and Statistics
Mr. Knipe, Consultant to the Chairman
Mr. Spencer, General Assistant, Office of
the Secretary
Mx. Eckert, Chief, Banking Section, Division
of Research and Statistics
Mr. Yager, Chief, Government Finance Section,
Division of Research and Statistics
Mx. Keir, Senior Economist, Division of
Research and Statistics

Mr.
Mr.
Mr.
Mr.

Money market review.

Mr. Keir commented on recent developments

ill the money market, particularly the current Treasury refunding, after
/44ich Mr. Eckert described developments with respect to bank reserves,
the money supply, and related matters.
All members of the staff except Messrs. Sherman, Kenyon, Fauver,
L111. Spencer then withdrew from the meeting and the following entered

the room:

5/4/62

-2Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Solomon, Director, Division of Examinations
Kiley, Assistant Director, Division of Bank
Operations
Mr. Leavitt, Assistant Director, Division of
Examinations
Mr. Poundstone, Review Examiner, Division of
Examinations

Mr.
Mr.
Mr.
Mr.

Discount rates.

The establishment without change by the Federal

Reserve Banks of New York, Philadelphia, and San Francisco on May

1962,

3,

of the rates on discounts and advances in their existing schedules

that appropriate advice
Ifas approved unanimously, with the understanding
Ifould be sent to those Banks.
Circulated or distributed items.

The following items, which had

Board and copies
been circulated or distributed to the members of the
item numbers
Of which are attached to these minutes under the respective
14dicated, were approved unanimously:
Item No.
Letter to Morgan Guaranty International
Banking Corporation, New York, New York,
granting permission to purchase shares of
Gabonaise de Banque, Libreville, Republic
Of
Gabon.

1

Letter to First Pennsylvania Overseas Finance
Corporation, Philadelphia, Pennsylvania,
1,1°ting without objection certain investments
111 United States Government obligations.

2

Letter to Indiana Lawrence Bank & Trust Company,
11orth Manchester, Indiana, approving an
.
Investment in bank premises.

3

_3_

5/4/62

Item No.
Letter to Planters Bank and Trust Company,
Hopkinsville, Kentucky, approving the
establishment of a branch in the Skyline
ShooRping Center on Fort Campbell Boulevard.

4

Telegram to the Federal Reserve Bank of Richmond
noting without objection a decision to purchase
rather than rent an IBM 1401 computer.

5

Report on competitive factors (Altoona-Bellwood, Pennsylvania).
There had been distributed, with a memorandum from the Division of
4aminations dated May 1, 1962, a draft of report to the Federal Deposit
Insurance Corporation regarding the competitive factors involved in the
Proposed merger of Altoona Central Rank and Trust Company, Altoona,
l'ennsylvania, and The First National Bank of Bellwood, Bellwood,
?ennsylvania.

The conclusion in the report read as follows:

Investigation discloses only a moderate amount of
competition between Altoona Central Bank and Trust Company
and The First National Bank of Bellwood. However, the
proposal would enhance, slightly, the dominant position
of the largest bank in Blair County.
The report was approved unanimously for transmittal to the
Corporation.
The meeting then adjourned.
Secretary's Vote: Pursuant to recommendations
contained in memoranda from appropriate
individuals concerned, Governor Shepardson
today approved on behalf of the Board the
following actions relating to the Board's
staff:

AP.P9.21q
Loree D. Bernard as Statistical Clerk in the Division of Research

aoi Statistics, with basic annual salary at the rate of $4,040, effective
upon the date of entrance upon duty.

AS.a2ptance of resignation
Charlotte Louise Hanovega, Statistical Assistant, Division of
esearch and Statistics, effective at the close of business May 11,
1962

BOARD OF GOVERNORS
OF THE

Item No. 1

FEDERAL RESERVE SYSTEM

5/4/62

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

May

4, 1962

llorgan Guaranty International
Banking Corporation,
23 Wall
Street,
New York 8,
New York.
Ge
ntlemen:
In accordance with the request and on the basis of the informati%1
furnished in your letters of March 22, April 13 and 18, 1962, trans10Itted,
through the Federal Reserve Bank of New York, the Board of Governors
'
puants consent for Morgan Guaranty International Banking Corporation to
r hase and hold not more than 3,000 shares, par value 10,000 CFA Francs,
esch of
Union Gabonaise de Panque, a Republic of Gabon banking corporation
:
1 ormation, at a cost of 30,00,000 CFA Francs, or approximately US
$2
the date of
Gove lett Provided such stock, is acquired within one year from
er. Upon making the investment, please advise the Board of
flors the exact number of shares acquired.
The Board's consent is granted upon the condition that Morgan
Guar
ot antY International Banking Corporation shall dispose of its holdings
ev st"k in the Cabon corporation, as promptly as practicable, in the
unrt that
the Gabon corporation should at any time (1) engage in issuing,
(2)rwriting, selling or distributing securities in the United States;
1114 engage in the general business of buying or selling goods, wares,
allclise, or commodities in the United States or transact any business
in
for Ile United States except such as is incidental to its international or
Vrgn business; or (3) otherwise conduct its operations in a manner which,
In
its"judgment of the Board of Governors, causes the continued holding of
pri stock by Morgan Guaranty International Banking Corporation to be inapprors ate under the provisions of Section 25(a) of the Federal Reserve Act or
1.9 tions thereunder.
Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

f

BOARD OF GOVERNORS
OF THE

Item No. 2
5/4/62

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

May 4, 1962.

Mr. William L. Day, President,
First Pennsylvania Overseas Finance Corporation,
Packard Building,
15th and Chestnut Streets,
Philadelphia 20 Pennsylvania.
Dear Mr. Day:
This will acknowledge yOur letter of April 1.1,
1962, advising that First Pennsylvania Overseas Finance
Corporation oommenced business on April 9, 1962.
The Board has noted, without objection, that
Your Corporation made investments in United States
Government obligations immediately upon receipt of the
$2,000,000 of paid-in capital.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretn.y.

BOARD OF GOVERNORS

441dIfIttr,„

,J01410;
4'??'

OF THE

Item No.'3
5/4/62

FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.

4

ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

May 4., 1962.

Board of Directors,
Indiana Lawrence Bank & Trust Company,
North Manchester, Indiana.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves, under the provisions of Section 24A
Of the Federal i0L;erve Act, an investment ill bunk premises
by Indiana Lawrence Bank & Trust Company of $300,000
through its wholly owned affiliate, Indiana Lawrence
Realty Inc., for the purpose of acquiring property and
the construction of new bank premises.
This approval includes the present investment
of $40,000 in stock of the affiliate.
Very truly yours,
(Signed) Elizabeth L. Carmichael

Elizabeth L. Carmichael,
Assistant Secretary.

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Item No.

4

5/4/62

WASHINGTON 25, D. C.

ADDRESS OFFICIAL CORRESPOND
ENCE
TO TNE BOARD

May 11-1 1962.

Board of Directors,
Planters Bank and Trust Company,
Hopkinsville, Kentucky.
Gentlemen:
The Board of Governors of the Federal heserve
System approves the establishment by Planters
Bank and
Trust Company, Hopkinsville, Kentucky, of
a
bran
ch in
the Skyline Shopping Center
on Fort Campbell Boulevard,
Hopkinsville, Kentucky, 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.

;128
Item No. 5

TELEGRAM

5/4/62

LEASED WIRE SERVICE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON

May 40 1962.

Wayne - Richmond

Rs acquisition of IBM 1401 computer at Head Office, which was
noted without objection in Board's letter December 21, 19610
With understanding that Board would be advised later of decision
Whether to acquire such equipment on a rental basis with purchase
option or by outright purchase. Board has noted without objection
Your decision to purchase this equipment at time of installation,
as set forth in your March 21, 1962 letter*

(Signed) Merritt Sherman
SHEItl;AN