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Minutes for May 8, 1958 To: 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 minLtes 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. Chm. Martin Gov. Szymczak Gov. Vardaman 1/ Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson 1/ In accordance with Governor Shepardson's memorandum of March 8, 1957, these minutes are not being sent to Governor Vardaman for initial. Minutes of the Board of Governors of the Federal Reserve System on Thursday, May PRESENT: 8, 1958. Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman3j Balderston, Vice Chairman Szymczak Robertson Shepardson Mr. Carpenter, Secretary Mr. Kenyon, Assistant Secretary Mr. Young, Director, Division of Research and Statistics Mr. Johnson, Director, Division of Personnel Administration Mr. Hackley, General Counsel Mr. Masters, Director, Division of Examinations Mr. Farrell, Assistant Director, Division of Bank Operations Mr. Noyes, Adviser, Division of Research and Statistics Mr. Sprecher, Assistant Director, Division of Personnel Administration Mr. Solomon, Assistant General Counsel Mr. Hexter, Assistant General Counsel Mr. Hostrup, Assistant Director, Division of ExaminAtions Mr. Davis, Assistant Counsel Matter relating to the Retirement System (Item No. 1). There had been circulated to the meMbers of the Board a memorandum from the Division of Personnel Administration dated April 25, adoption, effective June 1, 4 1958, 1958, recommending of a resolution which would amend in minor respect the 1943 resolution establishing the Board Plan of the Retirement System of the Federal Reserve Banks. In addition to the Proposed resolution, the file contained a suggested letter to the Chairman of the Retirement Committee and a proposed amendment to the *)1'king rules for the Board Plan which would be in harmony with the re solution. 1/ Withdrew from meeting at point indicated in minutes. 1419 5/8/58 -2Pursuant to the recommendation of the Division of Personnel Administration, the proposed resolution was adopted by unanimous vote and the suggested amendment to the working rules was approved unanimously. A copy of the letter sent to the Chairman of the Retirement Committee Pursuant to the Board's decision is attached hereto as Item No. 1, under which item number are attached also copies of the resolution and the amendment to the working rules. Messrs. Johnson and Sprecher then withdrew from the meeting. Requests for extension of time under Bank Holding Company Act Items 2 through 14 . There had been distributed to the members of the Board memoranda from the Division of Examinations recommending favorably With respect to requests from the following bank holding companies for extensions of time within which to comply with the divestment provisions of the Bank Holding Company Act in respect to shares of specified nonbanking subsidiaries: Financial Institutions, Inc., Warsaw, New York Consolidated Naval Stores Cowpony, Sebring, Florida Northwest Bancorporation, Minneapolis, Minnesota Otto Bremer Company, St. Paul, Minnesota Montana Shares, Inc., Havre, Montana The Farmers & Mechanics Trust Company, Childress, Texas Union Bond & Mortgage Company, Port Angeles, Washington The First Virginia Corporation, Arlington, Virginia Wisconsin Bankshares Corporation, Milwaukee, Wisconsin Following comments by Mr. Masters on the reasons given in support of the requests and the reasons why, in the opinion of the Division of Examinations, the extensions of time would be reasonable and not detrimental 1 4 1-,11 oto 14, 5/8/58 to the public interest, unanimous approval was given to letters to the applicant bank holding companies for transmittal through the appropriate Federal Reserve Banks. Copies of the letters are attached hereto as Itelth_ro10, inclusive. In addition, similar requests had been received from the following bank holding companies and the files relating to the respective requests were now in circulation to the members of the Board: Chase Investment Company, Des Moines, Iowa The Kemper Investment Company, Kansas City, Missouri Keystone Corporation, Kansas City, Missouri St. Joseph Agency, Inc., South Bend, Indiana Since the recommendation of the Division of Examinations was favorable in each case and the circumstances surrounding the requests for extension of time were similar in nature to those involved in the requests just approved d to by the Board, the suggestion was made that the Secretary be authorize send letters granting the requested extensions of time to the applicant bank holding companies, through the appropriate Federal Reserve Banks, after the files had completed circulation to the members of the Board, unless some question should be raised by a member of the Board in the course of circulation. There was unanimous agreement with this suggestion. Copies of the letters sent to the respective bank holding companies PUrsuant to this action are attached to these minutes as Items 11 through 111') inclusive. 142i 5/8/58 J. Request by Northwest Bancorporation (Items 15 and 16). Northwest BancorPoration, Minneapolis, Minnesota, had requested determinations by the Board pursuant to section 4(c)(6) of the Bank Holding Company Act Which would allow it to retain shares of the three following nonbanking subsidiaries: Northwestern Mortgage Company, Minneapolis, Minnesota South Side Insurance Agency, Inc., Minneapolis, Minnesota Union Investment Company, Minneapolis, Minnesota Under the law this made a hearing mandatory and in a memorandum from the Legal Division and the Division of Examinations dated May 6, 1958, 'which had been distributed to the members of the Board, it was recommended that the Board (1) issue an order setting down the hearing for July 14, 1958/ in Minneapolis, Minnesota; (2) assign Mr. Arthur Leff to conduct the hearing; and (3) confirm tentative arrangements for Mr. Strothman of the Federal Reserve Bank of Minneapolis to act as Counsel for the Board in this matter, with the Reserve Bank to receive reimbursement for any travel Or expenses but not for the salary for Mr. Strothman. The memorandum also sUggested that the Board might wish to have arrangements made for Counsel rriam another Reserve Bank to participate as an observer in order to broaden hearing experience in the System. Since the hearing could not be completed by May 9, 1958, Northwest 44corporation had requested an extension of time under section 4(a) of the Act With regard to its stock of the above three companies, and the memorecommended that this request be granted. 1422 _5_ 5/8/58 In a discussion of the matter, Governor Balderston noted that the hearing was being deferred until the date indicated at the request Of Northwest Bancorporation so that its President, Mr. J. Cameron Thomson, could participate in the hearing upon his return from a trip abroad. He inquired whether it seemed advisable to defer the hearing on this account. In response, Mr. Solomon said that Northwest Bancorporation seemed to want very much to have Mr. Thomson's counsel and assistance at the hearing. He expressed the view that the requested delay would not be out Of order, although a request for a longer delay might raise more of a question about the circumstances in which such a deferment would be justified. Thereupon, unanimous approval was given to the arrangements for the hearing suggested in the memorandum, with the understanding that the necessary procedural steps would be taken. A copy of the order issued Pursuant to this action is attached as Item No. 15. Unanimous approval also was given to the request of Northwest Bancorporation for an extension °f* time for compliance with the provisions of section 4(a)(2) of the Bank ii°14ing Company Act with respect to the three organizations involved in the request for section 4(c)(6) determinations. A copy of the letter which sent to the brink holding company through the Federal Reserve Bank of Minneapolis pursuant to this action is attached as Item No. 16. Mr. Davis then withdrew from the meeting and Messrs. Riefler, Assistant to the Chairman, and Wood, Economist, Division of Research and Sta tistics, entered the room. 1423 5/8/58 -6Proposed housing legislation (Item No. 17). A memorandum from Mr. Young dated May 7, 1958, which had been distributed to the members Of the Board, discussed a request from the Bureau of the Budget for the Board's views on (1) a joint resolution proposed by the Housing and Home Finance Agency to provide an immediate increase in the general insurance authorization of the Federal Housing Administration and (2) amendments Proposed to be offered to S. 3399, the Housing Act of 1958. A draft of letter to the Bureau was submitted with the memorandum. In discussion, several minor changes in the proposed letter were agreed upon, the principal change being with a view to expressing the Board's position in terms of the purpose of Amendment No. 2 to the National Housing Act rather than in terms of the importance attached to that proposal by the Housing and Home Finance Agency. During the discussion Governor Balderston expressed concern about the extent of outstanding commitments on the part of the Federal Government resulting fran guarantee, insurance, and similar features of housing legislation. He pointed out that under certain circumstances these commitments, being large in volume, might lead to an unsound l'inancial situation from the stsnapoint of the Federal Government and 4180 that the commitments were being built up under successive pieces °T legislation in such a way as to tend to obscure the over-all amount. Ile inquired, therefore, whether the Board should not take whatever °PPortunity seemed appropriate to express its apprehension. 1424 5/8/58 Comments concerning the point raised by Governor Balderston included the comment by Mr. Riefler that it was fundamental that the insurance, guarantee, and similar programs involving commitments be sound administratively. This was to him a more important factor than the total amount of outstanding commitments. Governor Robertson then suggested that it would be helpful to the Board, in deciding what kind of action, if any, it should take, if the staff were to give further thought to the subject and submit a memorandum for the Board's consideration. It was his feeling that such a Paper would be desirable even if the Board did not have occasion to use it. At the conclusion of the discussion, unanimous approval was given to a letter to the Bureau of the Budget in the form attached as Item No. 17. Currency collections at Federal Reserve Banks. At the joint meeting of the Board and the Reserve Bank Presidents on February 11, 1958, reference was made to a question which had been raised by the Federal Reserve sank of Chicago concerning the appropriate disposition of certain cUrrency items which, although possibly not in suitable condition for inclusion in Reserve Bank currency exhibits, were believed to be worth More than face value. Pursuant to a suggestion of the Presidents at that time/ Messrs. Farrell and Hexter subsequently discussed the question with the Treasury Department and under date of May 5, 1958, they submitted a Inemorandum on the subject which had been distributed to the members of 1425 5/8/58 -8- the Board before this meeting. In summary, the memorandum stated that a representative of the Treasury had taken the position that currency items of the kind in question should be forwarded to the Treasury for would redemption, the indication being that if this were done the items be added to the miscellaneous collection of other similar items which the Treasury carries in its cash account. Therefore, if the Board concurred in the opinion that unusual currency items should be forwarded to the Treasury, it seemed desirable to request the Treasury to furnish instructions to the Reserve Banks regarding the manner of shipment and the shipment costs, and also to suggest amendment of the Treasury's regulations covering the currency destruction operation to provide for shipment to the Treasury of items of historical value. At the request of the Board, Messrs. Farrell and Hexter commented °11 various phases of the matter, particularly the views expressed to them during their discussion at the Treasury Department, following which Governor Shepardson suggested a procedure under which the respective Reserve Banks would notify the Chicago Bank of any gaps in their currency collections with a view to filling those gaps. After this had been accomplished, the remaining currency items in question would be sent to the Treasury Department for redemption. This would involve working out and certain instructions from the Treasury to the Federal Reserve Banks alnendments to Treasury regulations such as referred to in the memorandum rrom Messrs. Farrell and Hexter. 5/8/58 -9There was unanimous agreement with the procedure suggested by Governor Shepardson, the view being stated that the Federal Reserve Banks should not engage in selling unusual currency items for a profit. It was pointed out that if the existence of unusual currency items became known to collectors, there might be requests for these items and also an increasing number of requests for specific issues of currency. In this connection, it was recalled that the Federal Reserve Banks had taken the position in the past that the function of the Banks was to supply currency for the ordinary needs of business rather than to meet the needs of collectors. Accordingly, it was agreed unanimously that a letter reflecting the consensus of the Board would be prepared and sent to the Conference Of Presidents of the Federal Reserve Banks. Messrs. Farrell and Hexter then withdrew from the meeting. Testimony before Senate Housing Subcommittee. There had been distributed to the members of the Board a draft of testimony to be given by Chairman Martin on Tuesday, May 13, before the Housing Subcommittee of the Senate Banking and Currency Committee. The occasion for the request ror testimony was consideration by the Subcommittee of a group of housing bills dealing with activities of the Federal Government relating to real estate, mortgage finance, and urban renewal programs. The effort made in arting the testimony was to recognize and classify the various bills and to state why the Board took no position on any of them except S. 2791, 1427 5/8/58 -10- to establish a Home Loan Guarantee Corporation, on which the Board had already taken an adverse position. Preliminary consideration of the proposed testimony indicated that the members of the Board were sympathetic to the approach of refraining from detailed expressions concerning the several bills, which were for the most part technical in the sense that they were designed to facilitate carrying out established policies and programs. Accordingly, it was understood that the general approach embodied U1 the draft of testimony would be maintained and that on Monday, May 12, the Board would give further consideration to the testimony on the basis of a draft incorporating changes of a technical nature only. Designation of security officer (Item No. 18). In a memorandum dated May 1, 1958, which had been circulated to the members of the Board and a copy of which is attached as Item No. 18, Governor Robertson recommended that the designations of Security Officer and Personnel Security Officer be combined, that Mr. Johnson, Director of the Division of Personnel Administration, be designated as Security Officer, and that 11r. Chase, Assistant General Counsel, be designated to assist in matters Pertaining to the safeguarding of defense information. Following a brief discussion, the recommendations contained in Governor Robertson's memorandum were approved unanimously. Chairman Martin withdrew from the meeting at this point in order tO keep an appointment outside the building. 1428 5/8/58 Small business legislation. Following the discussion at the Board meeting yesterday concerning the possibility of the Federal Reserve System being assigned responsibilities in connection with a program of financial assistance to small business, Governor Balderston distributed to the members of the Board a memorandum dated May 8, 1958, under the title of the Federal Reserve System's relationship to equity and longterm financing of small businesses. In commenting on his memorandum Governor Balderston said that he had been aided greatly in its preparation by Messrs. Hackley and Young but that he was not sure whether the line of thinking followed therein was agreeable to them. He said that he was searching for a way in which the Board could reaffirm its opposition to any participation in a small business financing program, since affirmation of that position seemed important for the sake of unity throughout the System, while on the Other hand he had tried to indicate certain characteristics that he hoped legislation might embrace in the event that the Congress should override the Board's objection and force the conduct of such a program upon the System. The danger of trying to marry the two things--of trYing to say "no, but" instead of a straight "no"--was that the program was more likely to be assigned to the System if the Board indicated in any way what it would like to see done in the event the System was forced to Undertake certain responsibilities. Nevertheless, his memorandum repre- sented an effort to see what could be done in the way of a statement that 5/8/58 -12- would represent a "no, but" position. Since Mr. Hackley was to be out of town next week, Governor Balderston then called upon him for a statement of his views. Mr. Hackley said he felt very strongly that it would be linfortunate if the System had to participate in any such program since this would be going far afield from central banking functions and, in addition, would impose upon the Board administrative burdens far greater than those under the Bank Holding Company Act, for example. Furthermore, partici- pation in a small business financing program would carry political overtones which are not present in connection with administration of the bank holding company legislation. Therefore, if there was any feasible way of doing so, he would favor adhering to the position of endeavoring to avoid participation in any way except perhaps in a fiscal agent capacity. If, however, the Congress should insist on giving the Board certain functions in this field--which seemed possible in the light of the past record--he wondered whether there was not much to be said for taking on the function completely instead of performing only functions sUch as chartering and examining, and letting some other agency set l egulations and standards. ' To put it another way, if the System had to exercise any functions, perhaps it should exercise not only the chartering and examining functions but also undertake regulation and supervision, although to as limited an extent as possible. One possibility would be 1430 5/8/58 -13- to have standards set up in the statute, thus leaving the Board as restricted an area of discretion as possible. an extremely difficult task. However, that would be Another alternative would be to vest in the Board general power to regulate and supervise the operations of such a program through broad and general provisions in the statute. That would, of course, place on the Board a considerable burden of supervisory detail and the Board would be vulnerable to all kinds of pressures, as distinguished from a situation where limitations on authority are stated in the law. In substance, he would favor attempting to avoid any participation. However, if the System had to do the job, perhaps it would be better for the System to do it alone than to share the responsibility with others. Mr. Young then made a statement in which he expressed the view that participation in such a program was clearly not a business for the central bank. He went on to say, however, that the pressure for System Participation apparently was not going to diminish and, in fact, might He was inclined to agree with Mr. Hackley that if the job had increase. to be done it would be better for the System to take the full responsibility and try to get the program working well. This would, of course, be a slibstantial addition to the Board's workload, certainly for a considerable Period. He would hope that if the responsibility had to be performed, it Ig°111d not have to be performed with meticulous language in the statute, hIlt rather under a general delegation of power to the Board with the 8Pecifics worked out by a series of regulations. 4 41i) -14- 5/8/58 Governor Balderston then commented further on his memorandum, stating that it attempted to bring out that, if the function had to be Performed at all by the System, the legislation should be designed so as to enable certain pitfalls to be avoided. There should be no ap- Propriation of funds by the Congress because of the implications which would be involved from the standpoint of other System operations, and there should be no provision for outside auditing. An effort should be made to keep the statute free from specific regulations so that the System would have latitude to supplement the statute with its own regulations. He would hope that the legislation, if passed by the Congress in its wisdom, might be about as simple in its form as the Provisions of section 13b of the Federal Reserve Act. That would permit the System to establish perhaps three Federal investment banks, and then let those bpnks proceed to finance such State development corporations and Federally chartered investment companies as might eQme into being. In a sense, that would put the Board in somewhat the same relationship to the program as the Bank of England occupies Iiith respect to the British experiment in small business financing. However, Governor Balderston said, if any document along these liaes were to emanate from the Board, that might be an invitation to exert further pressure to those who desired to place the operation Within the Federal Reserve System. In other words, it might be so interpreted by those elements and by the banking fraternity, and might 5/8/58 serve as a divisive force within the System. Nevertheless, if the Board should lose in its effort to avoid any participation, he was somewhat at a loss to know how to work toward legislation framed in the most acceptable manner. Discussion which followed Governor Balderston's comments indicated that the other members of the Board continued to favor taking a strong position at this time against participation of the Federal Reserve System, because they felt that any different position might make it more likely that the program would be thrust upon the System. In this connection, Governor Shepardson said that if there was even a remote possibility of such an outcome, he felt that the Board 'ould be well advised to be thinking about various alternatives in order that it might be as prepared as possible. Governors Szymczak and Robertson expressed agreement with Governor Shepardson. Governor Robertson then read notes that might form the basis for a letter arguing strongly that a small business financing program should not be assigned to the central banking system. It was understood that a draft of letter along those lines would be prepared for consideration at the meeting on Monday, May 12, along with the draft which the staff was requested to prepare at the meeting of the Board yesterday. It was suggested, also, that the staff be thinking about what proposal Inight be made, if necessary, concerning the ultimate withdrawal from the Program of any capital that the Federal Reserve Banks might be l equired to contribute. ' 5/8/58 -16- The meeting then adjourned. Secretary's Notes: Governor Shepardson today approved on behalf of the Board letters to the Federal Reserve Banks of Boston and Philadelphia approving the appointments of Howard B. Everett and Joseph J. Ponczka as assistant examiners for the respective Banks. Copies of the letters are attached as Items 19 and 20, respectively. A telegram was received today from the Federal Reserve Bank of Dallas advising that the directors of that Bank had established, subject to approval by the Board of Governors, rates of 1-3/4 per cent on discounts and advances under sections13 and 13a of the Federal Reserve Act and 2-1/4 per cent on advances under section 10b. Pursuant to the action taken by the Board on April 17, 1958, the Secretary advised the Dallas Bank by telegram of approval of these rates, effective May 9, 1958. All Federal Reserve Banks and branches were notified of this action by telegram, a press statement was issued In the usual form, and arrangements were made for publication of a notice in the Federal Register. During the day advice also was received from the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, St. Louis, Minneapolis, and Kansas City that the directors of those Banks had established without change, subject to approval by the Board of Governors, the rates on discounts and advances in their existing schedules. Pursuant to the procedure authorized by the Board on January 24, 1958, the Secretary advised the seven Federal eserve oe existing Banks of approval of the reestablisbmejj rates. retary 3 BOARD OF GOVERNORS 40ittitt**4 OF THE ,0 A9011 GOV 44 tr 4t, • * Item no 1 5/8/58 FEDERAL RESERVE SYSTEM 0 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD **4t.44* Mat 404*** May 8, 1958 Mr. Marcus Harris, Chairman of the Retirement Committee, Re tirement System of the Federal Reserve Banks, Federal Reserve Bank of New York, New York 45, New York. Dear Mr. Harris: In accordance with Section 10 of the Rules and Regulations of the Retirement System of the Federal Reserve Banks, the Board has approved the attached resolution to amend "The Resolution of the Board of G overnors of the Federal Reserve System Establishing a New Retire: ent Plan for Its Employees" adopted November 2, 1943. This modifiation of the Plan is to be effective as of June 1, 1958. The Board of Governors has also approved the attached amendment Q'dection IV (B) of the Working Rules for the Board of Governors Plan O b-• 4, .tlng these Rules into conformance with the changes in the Plan. It understood that the Retirement Committee is in agreement with the oposed amendment and it is further understood that this change in hee Working Rules will be approved by the Retirement Committee before IN put into use. to 4 t This change in the Working Rules is simply for purposes of clar. lfication and does not amend or modify the provisions of the board of Governors Plan". Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. Attachments (2) RESOLUTION OF THE BOARD OF GOVERNORS AMENDING THE RESOLUTION OF ThE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ESTABLISHING A NEW RETIREMENT PLAN FOR TI'S EMPLOYEES ADO!LED NOVEMBER 2, 1943. RESOLVED: That the last sentence of paragraph (9) of the Resolution of the Board of Governors of the Federal Reserve System, establishing a new retirement plan for its employees, adopted November 2, 1943, be amended to read as follows: "Upon request of such employee or of his designated beneficiary or legal representative, the Retirement Committee may in its discretion make payment of the benefit provided in this paragraph, either in whole or in part, in instalment payments, such deferred payments to include interest at a rate fixed by the Board of Trustees of the Retirement System not in excess of the regular rate of interest as provided in section 8, subdivision (5), of the Rules and Regulations of the Retirement System." 1436 (Deletions are shown by canceled tyr! and additions by capital letters) Section IV (B), Working Rules for Board of Governors Plan. B. Upon request of any person who has this insurance coverage or of his designated beneficiary or legal representative, the benefit may be paid either in whole or in part In instalment payments, such deferred payments to include interest at a rate 1-1-34y-cent-per-annum-lese-thF3A-the regular-rate-of-In4;erest-as fixed by the Board of Trustees NOT IN EXCESS OF THE REGULAR RATE OF INTEREST for the regular plan of the Retirement System. (Instalment payments may also include the refund of accumulated contributions payable upon death of any such person.) 1437 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 2 5/8/58 WASHINGTON 25, D. C. PONDENCE ADDRESS OFFICIAL CORRES TO THE BOARD May 8, 1958 Mr, W. J. Humphrey, President, Financial Institutions, Inc., Warsaw, New York. Dear Mr. Humphrey: cial Institutions, This refers to the application of Finan must comply Inc it , for an extension of the period within which ng Company Holdi 141th the provisions of section 4(a)(2) of the Bank Act of 1956. section 4(a) of In accordance with the provisions of ber 9, 1958. Novem the Act, the Board has granted an extension to Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. i43 4. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 3 5/8/58 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD „4,Lvatst' -004**6 : 1956 May 8 Mr. F. Elgin Bayless, President, Consolidated Naval Stores Company, P. 0. Box 153, Sebring, Florida. Dear Mr. Bayless: This refers to Consolidated Naval Stores Companyls application for an extension, for one year from May 9, 1958, of the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956. In accordance with the provisions of section 4(a) of the Act, the Board has granted the requested extension. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS OF THE Item No. 4 FEDERAL RESERVE SYSTEM 5/8/58 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 8, 1958 Mr. H. Raymond Horn, Senior Vice President, Northwest Bancorporation, . 1215 Northwestern Bank Building, Iliuneapolis, Minnesota, Dear Mr. Horn: This refers to Northwest Bancorporation's application, pursuant to section 4(a) of the Bank Holding Company Act of 1956, for an extension, for one year from May 9, 1958, of the period within which it may retain indirect ownership or control of "tint; shares of the following listed nonbanking organizations: Downtown Auto Park, Minneapolis, Minnesota. The Shamut Company, Duluth, Minnesota. Ddlitt-Seitz Company, Duluth, Minnesota. Friendship Oil Co., New York, New York. accordance with the provisions of section 4(a) In of the Act, the Board has granted the requested extension. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS OF THE 0 4 FEDERAL RESERVE SYSTEM Item No. 5 5/8/58 WASHINGTON 25, D. C. 4 4 4 0 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 80 1958 Mr. R. O. Bishop, Vice President, Otto Bremer Company, 419 Robert Street, St. Paul 1, Minnesota. Dear Mr. Bishop: This refers to Otto Bremer Company's application, pursuant to section 4(a) of the Bank Holding Company Act of 1956, for an extension, for one year from May 9, 1958, of the period within which ng it may retain ownership of voting shares of the following nonbanki or ganizations: Citizens Agency, Inc., Brainerd, Minnesota. Western State Agency, Inc., Marshall, Minnesota. New England Insurance Agency, New England, North Dakota. Drovers Exchange Agency &Realty, Inc., South St. Paul, Minnesota. Willmar Investment Co., Willmnr, Minnesota. In view of the status of the hearing pursuant to section 4(c)(6) of the Act with respect to the above-named companies, the Board has granted, in accordance with the provisions of section 4(a) of the Act, an extension to November 9, 1958. The question of a of your Possible further extension can be considered, at the request Company, prior to November 9, 1958, in the light of the then existing circumstances. ion, which Referring now to your Company's second applicat of voting holdings Ilae for a six-month extension with respect to its n Willisto and ispares of Saulpaugh Corporation, Mankato, Minnesota, the granted Realty Company, Williston, North Dakota, the Board has requested extension to November 9, 1956, in accordance with the Provisions of section 4(a) of the Act. Very truly yours, (signed) S. R. Carpenter S. R. Carpenter, Secretary. 144' BOARD OF GOVERNORS Item No. 6 OF THE FEDERAL RESERVE SYSTEM 5/8/58 WASHINGTON 25. D. C. NCE ADDRESS OFFICIAL CORRESPONDE TO THE BOARD tkt May 8, 1958 gotpe Charles W. Ruble, President, Montana Shares, Inc., Citizens Bank Building, Havre, Mbntana. °ear Mr. Ruble: Reference is made to Mr. Fred J. Weber's letter dated APril n c3, 1958, with 'which there was enclosed an application for extension of not less than six months from May 9, 1958, of I : Period within which Montana Shares, Inc., Havre, Montana gjt comply with the provisions of section 4(a)(2) of the Bank -v4.ding Company Act of 1956. the Act, tit accordance with the provisions of section 4(a) of Board has granted an extension to November 9, 1958. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1442 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ItemN 5/8/58o. 7 WASHINGTON 25. O. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 80 1958 Mr. J. M. Crews, President, The Farmers & Mechanics Trust Company, P. 0. Box 669, Childress, Texas. Dear Mr. Crews: This refers to The Farmers &Mechanics Trust °mPally's application for an extension, for one year from 14?;Y 9, 199, of the pericd within which it must comply ulth the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956. F In view of the Companyis stated reasons for deferMerit of a decision regarding its divestment plans, the Board, aceordrince -with the provisions of section 4(a) of the Act, nas granted the requested extension. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1443 BOARD OF GOVERNORS 440****4 a' tit 401, OF THE it FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 5/8/58 AODRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 80 1958 W. Benj. N. Phillips, President, Union Bond & Mortgage Company, First National Bank Building, Port Angeles, Washington. Dear Mr. Phillips: This refers to Union Bond & Mortgage Company's application for an extension, for one year from May 9$ 1958, of the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956. It is noted that the Company has not reached a final decision on a plan for divestment of that portion of its interests in nonbanking organizations the retention of which may be prohibited by section it of the Act. However, in view of the Company's statement that the plan selected will be submitted promptly, the Board has granted the requested extension in accordance With the provisions of section 4(a) of the Act. Very truly yours, (Signed) So 110 Carpenter S. R. Carpenter, Secretary. 1441 BOARD OF GOVERNORS OF THE Item No. 9 FEDERAL RESERVE SYSTEM 5/8/58 WASHINGTON 25. D. C. ADDRESS OFFICIAL. CORRESPONDENCE TO THE BOARD May 80 1958 Mr. Edwin T. Holland, President, The First Virginia Corporation, 2926 Columbia Pike, Arlington, Virginia. Dear Mr. Holland: This refers to The First Virginia Corporation's application dated March 28, 1958, as supplemented in its letter of April 15, 1958, for an extension, for one year from May 9, 1958, of the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956. It is apparent from the Corporation's application that it feels that the applicability of section 4(a)(2) to it and its activities is dependent to some extent upon action on the Corporation's application filed pursuant to section 3(a)(2) of the Act. First Vlrginia Corporation is now, and would be if it is permitted to acquire the majority of the outstanding voting shares of Old Dominion Bank, Arlington, Virginia, a bank holding company. It, therefore, appears that section 4(a)(2) of the Act is applicable to the Corporation under both the present and contemplated corporate structures, and that possible procedures mentioned in the Corporation's application of March 28, 1958, would not be affected by either the approval or disapproval of the application filed Pursuant to section 3(a)(2) of the Act. In the circumstances, in accordance with the provisions of section 4(a) of the Act, the Board has granted an extension, to November 9, 1958, of the period within which the Corporation /lust comply with the provisions of section 4(a)(2) of the Act. The question of a possible further extension, if that proves to oe.necessary, can be considered at the request of your Corporation prior to November 9, 1958, in the light of the then existing circumstances. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1445 BOARD OF GOVERNORS 4titott 4._ 44 fg 601, OF THE FEDERAL RESERVE SYSTEM Item NO. 10 5/8/58 WASHINGTON 25. D. C. ADOREss orriciAL CORRESPONDENCE TO THE BOARD May 8, 1958 Orth I. Damns, Vice President and Secretary Treasurer Illsoonsin Bankshares Corporation, P5 N. Water Street, 41114aukee 2, Wisconsin. Dear Mr. Dains: applica— This refeL.s to Wisconsin Bankshares Corporation's tion of , Pursuant to section 4(a) of the Bank Holding Company Act i„, period 1 0, for an extension for one year from May 9, 1958, of the 0 Gu6hin which it may retain ownership of voting shares of Title d the requested arantY Company of Wisconsin. The Board has grante extension. for confirma— Referring now to the Corporation's requests ) of (1) as to the applicability of section 4(c)(1) or 4(0(4sin ns: the Act to First Wiscon 110 four companies (First Wisconsin Company, Central Company), First and Inc., anNage Company, Wisconsin Equities, (2)that neither First Wisconsin Foundation, Inc., nor any of its the B:!ets are subject to the controls or prohibitions of the Act, the of 4(a) n sectio of A7d has granted, pursuant to the provisions within which the co6) an extension to November 9, 1958, of the period or control of ZPoration may retain direct or indirect ownership Guaranty Company Title ,!ares of nonbanking organizations (other than O outstanding voting Wisconsin) which exceed five per cent of the six months has been for ;Iares of such organizations. The extension requested by the Corpora— ti!nted, rather than the period of one year allow sufficient With the thought that the shorter period should requests for 04"e for consideration of the questions raised by the c" proves to be Act the of atnfirmation. If the Board's interpretation respect to a variance with that expressed by the Corporation with for an additional eZY,t, of the various matters presented, an application should prove to be ne,,ension of the period for divestment, if that of the then essary mould, of course, be considered in the light ' . eX-Lat*ing ) stances. circum tic) Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS OF THE Item No. 11 5/8/58 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 8, 3.958 Gibson, Stewart & Garrett, Des Moines 9, Iowa. Attention Mr. Harry T. Watts Gentlemen: Reference is made to your letter dated April 100 1958, which you request an extension of time until December 31, 1958, 01 the period -within which Chase Investment Company, Des Moines, low , a: must comply with the provisions of section 4(a)(2) of the Aoank Holding Company Act of 1956. In accordance with the provisions of section 4(a) of the Act, the Board has granted the requested extension. It is understood, of course, that, although the Board 12ae granted the extension of time until December 31, 1958, Chase vestment Company will proceed with its plan to cease to be a Dank holding company at the earliest practicable time. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS 1401.111* OF THE ct, FEDERAL RESERVE SYSTEM Item No. 12 5/8/58 WASHINGTON 25. D. C. Ii ADDRESS OFFSCIAL CORRESPONDENCE TO THE 1110ARD !Ii ti,A.V4ktOW -°Otn1,4.1 May 8, 1958 Iliss Elizabeth Daniel, Assistant Secretary, The Kemper Investment Company, 1510 Commerce Building, Kansas City 6, Missouri. Dear Miss Daniel: This refers to The Kemper Investment Company's aPPlication for an extension, for one year from May 9, 19580 Of the period within which it must comply with the provisions Of section 4(a)(2) of the Bank Holding Company Act of 1956. In accordance with the provisions of section 4(a) Of the Act, the Board has granted the requested extension. It is understood, of course, that, although the oard has granted the extension for one year, the Company will Proceed with diligence to carry out its plan to cease to be 4 bank holding company. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1448 BOARD OF GOVERNORS OF THE Item No. 13 5/8/58 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 80 3.958 Mr. Hugh M. Hiller, Secretary, Keystone Corporation, Commerce Building, Kansas City, Missouri. Dear Mr. Hiller: This refers to Keystone Corporation's appli1958, cation for an extension, for one year from May 9, prothe with of: the period within which it must comply Company Holding visions of section 4(a)(2) of the Bank Act of 1956. section In accordance with the provisions of d requeste 4(a) of the Act, the Board has granted the extension. although It is understood, of course, that, the year, one the Board has granted the extension for to plan its Corporation will proceed to consummate cease to be a bank holding company at the earliest practicable time. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS OF THE Item No. 14 5/8/58 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 8, 1958 Mr. Paul M. LaMar, President, St. Joseph Agency, Inc., St. Joseph Bank Building, South Bend, Indiana. Dear Mr. LaMar: This refers to the application of St. Joseph Agency, Inc. for an extension of one hundred and twenty days from l'IhY 9, 1958, of the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act Of 1956. In accordance with the provisions of section 4(a) of the Act, the Board has granted the requested extension. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1450 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 15 5/8/58 NOTICE OF REQUEST FOR DETERMINATION PURSUANT TO SECTION 4(c)(6) OF BANK HOLDING COMPANY ACT OF 1956 AND ORDER FOR HEARING THEREON Notice is hereby given that request has been made to the Board of Governors of the Federal Reserve System, pursuant to Sect' °11 4(c)(6) of the Bank Holding Company Act of 1956 [12 U.S.C. 18433 4411 section 5(b) of the Board's Regulation Y [12 CFR 222.5(b)], by 11°11.41(west Bancorporation, Minneapolis, Minnesota, a bank holding Conn-, for a determination by said Board that each of the companies listed belaw and the activities thereof are of the kind described in thos ' Provisions of the Act and the Regulation so as to make it unneceSsa,_ for the prohibitions of section 4 of the Act with respect to 84re8 in nonbanking organizations to apply in order to carry out the POses of the Act: 1. Northwestern Mortgage Company, Minneapolis, Minnesota 2. South Side Insurance Agency, Inc., Minneapolis, Minnesota 3. Union Investment Company, Minneapolis, Minnesota Inasmuch as section 4(c)(6) of the Bank Holding Company Act Ot 19 4-56 requires that any determination pursuant thereto be made by the clard after due notice and hearing and on the basis of the record NIde at such hearing, IT IS HEREBY ORDERED That pursuant to section 4(c)(6) of the 8 allk Holding Company Act of 1956 and in accordance with sections 5(b) 4" 7(4) of the Board's Regulation Y [12 CFR 222.5(b), 222.7(a)], 145 2131.°1111.11gated under the Bank Holding Company Act of 1956, a hearing with IseETect to this matter be held commencing on July 141 19581 at 10 o'clock at the office of the Federal Reserve Bank of Minneapolis, 73 South Fifth Street, in the City of Minneapolis, State of Minnesota, before a hearing examiner selected by the Civil Service Commission pursuant to See. 11 of the Administrative Procedure Act, such hearing to be conducted in accordance with the Rules of Practice for Formal Hearings of the 8oard of Governors of the Federal Reserve System [12 CFR Part 263). Oa The Rules of Practice for Formal Hearings provide, in part, that such hearings shall be private and shall be attended only by respond- ents and their representatives or counsel, representatives of the Board, Illtnesses, and other persons having an official interest in the proceedProvided, however, That on the written request of one or more l'esPondents or counsel for the Board, or on its own motion) the Board) not prohibited by law, may permit other persons to attend or may (*der the hearing to be public." Any person desiring to give testimony in this proceeding l'i°1.1141 file with the Secretary of the Board, directly or through the Pederal Reserve Bank of Minneapolis, on or before June 5) 1958, a ttltten request relative thereto, said request to contain a statement () the reasons for wishing to appear, the nature of the petitioner's "in the proceeding, and a summary of the matters concerning 17hich said Petitioner wishes to give testimony. Such request will be 1452 Presented to the designated hearing examiner for his determination in the matter at the appropriate time. Persons submitting timely requests viz be notified of the hearing examiner's decision in due course. This 8th day of May 1958. By order of the Board of Governors. (Signed) S. R. Carpenter S. R. Carpenter, Secretary. ngton, D. C. 1453 Item No. 16 BOARD OF GOVERNORS 5/8/58 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO T$-4E SOARO May 8, 1958 Mr. H. Raymond Horn, Senior Vice President, Northwest Bancorporation, Northwestern Bank Building, Minneapolis, Minnesota. Dear Mr. Horn: This refers to Northwest Bancorporation's application for an extension, for one year from May 9, 1958, of the period within which it must comply with the provisions of section 4(a)(2) of the Bank Holding Company Act of 1956 with respect to the three organizations covered by its request for determinations by the Board pursuant to section 4(c)(6) of the Act; namely, Northwestern Mortgage Company, South Side Insurance Agency, Inc., and Union Investment Company, all of Minneapolis, Minnesota. In accordance with the provisions of section 4(a) of the Act, the Board has granted the requested extension. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. BOARD OF GOVERNORS OF THE Item No. 17 5/8/58 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD May 8, 1958. Mr. Phillip S. Hughes, Assistant Director for Legislative Reference, Bureau of the Budget, W ashington 25, D. C. r ear Mr. Hughes : This is in reply to your request of May 2 for the Board's view A 8 on a Joint Resolution proposed by the Housing and Home Financ e :C?noY to provide an immediate increase in the general insurance 7! 1,, 1 horization of the Federa l Housing Administration, and on amendproposed to be offered to S. 3399, the Housing Act of 1958, before the Senate. With the exception of the proposed change in Section 2 (1-t the Nation al Housing Act (Amendment No. 2), the amendments and the Th.r, Proposed Joint Resolution appear to be technical in nature. Board would have no objection to their enactment. Amendment No. 2, by increasing the maximum amount and Routv um mattlrity of loans insurable under Section 2 of the National pos 4ng Act would clearly liberalize this progra m. In view of the 1_,sible usefulness of this progra m encouraging reas a means of oillitation of structures as part of the urban renewal program 1.14 42.3 a means of stimul ating some kinds of construction activity liCuie period, the Board would have no object ion to this eralization. Z Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1455 BOARD OF GOVERNORS Of FEDERAL RESERVE SYSTEM nuice Correspondence of Governorzi_______ Item NO. 18 5/8158 Date______Flay_l, 1958 r Subject: Ilasignation_of 3acurity office nor Robertson tvo ation, has At the present time the Board, by formal design Security Officers: Mr. Thurston - Security Officer for purpose of Board's regulations relating to the safeguarding of defense information Mr. Johnson - Personnel Security Officer nd that In order to centralize this responsibility, I recomme both „ r of Directo n, Johnso Mr. per t'asignments be given to one person; that that and r; Office ty Securi 11 ,.salral2;kliministration, be designated as in matters Assistant neneral Counsel, be designated to assist ation. inform e Pertaining to the safeguarding of defens within the It is my understanding that the general practice nel and person :21Gir' enment is to have one Security Officer deal with both "40rmation aspects of security matters. on, he For many years, when Mr. Shay was in the Legal Divisi to the ng relati i i :ed in the drafting of the Board's regulations ej rt Zf time to tine r Ing of defense information and was consulted from a execuent pertin t42'0 questions arising under the regulations and as to 4-ve orders and laws. must keep In his capacity as Communications Officer, Mr. Chase ation, inform to e defens to arr., juch with the security procedures relating with work to ment assign the is with this background in mind that nded. recomme is ation inform ty Jc)hnson on matters pertaining to securi to 1A-. are agreeable These proposed changes have been discussed with and Thurston, Johnson, Chase, and Haokley. 1456 Item No. 19 5/8/58 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD May 8, 1958 Mr. B. F. Groot, Vice President, Federal Reserve Bank of Boston, Boston 6, Massachusetts. Dear Mr. Groot: In accordance with the request contained in Your letter of May 5, 1.958, the Board approves the appointment of Howard B. Everett as an assistant examiner for the Federal Reserve Bank of Boston. ?lease advise as to the date on which the appointment is made effective. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary. 1457 BOARD OF GOVERNORS (2# faCtp,, M) i/ OF THE .* 1. FEDERAL RESERVE SYSTEM 5/8/58 WASHINGTON 25. D. C. %:14 Item No. 20 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD 4440 ' 4 MAY 8, 1958 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 5, 1956, the Board approves the aPpointment of Joseoh J. Ponczka as an assistant examiner for the Federal Reserve Bank of Philadelphia. Please advise as to the date on which the appointment is made effective. Very truly yours, (Signed) S. R. Carpenter S. R. Carpenter, Secretary.
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