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Minutes for November 14, 1960 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 minutes in the record of policy actions required to be maintained pursuant to section 10 of the Federal Reserve Act. Should you have any question with regard to the minutes, it will be appreciated if you will advise the Secretary's Office. Otherwise, please initial below. If you were present at the meeting, your initials will indicate approval of the minutes. If you were not present, your initials will indicate only that you have seen the minutes. Chm. Martin Gov. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King i;t30.11 Minutes of the Board of Governors of the Federal Reserve System on Monday, November 14, 1960. PRESENT: Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Martin, Chairman Balderston, Vice Chairman Mills Robertson Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Discount rates. Sherman, Secretary Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Johnson, Director, Division of Personnel Administration Hexter, Assistant General Counsel Dembitz, Associate Adviser, Division of Research and Statistics Nelson, Assistant Director, Division of Examinations Landry, Assistant to the Secretary Collier, Chief, Current Series Section, Division of Bank Operations The establishment without change by the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Millneapolis, and Dallas on November 10, 1960, of the rates on discounts and advances in their existing schedules was approved unanimously, with the Understanding that appropriate advice would be sent to those Banks. Items circulated to the Board. The following items, which had been circulated to the Board and copies of which are attached to these 111141Ates under the respective item numbers indicated, were approved unaniMOlasly: Item No. IvJetter to The Farmers and Merchants Bank of Vandalia, andalia, Illinois, approving an investment in bank , vremises. 1 11/14/6o -2Item No. Letter to the Federal Deposit Insurance Corporation regarding the application of The Newberry State Bank, tlevberry, Michigan, for continuation of deposit . Insurance after withdrawal from membership in the Federal Reserve System. 2 Letter to the Federal Reserve Bank of Philadelphia aPProving the appointment of David P. Noonan as Alternate Assistant Federal Reserve Agent. 3 Mr. Johnson then withdrew from the meeting. Request of Security National Bank (Item No. 4). Under date of November 10, 1960, distribution had been made of a draft letter to the Federal Reserve Bank of Chicago in reply to a letter of October 26, 1960, transmitting a letter from Security National Bank of Sioux City, Iowa, illqUiring whether the Board would consider an application by the bank to revert to its status as a reserve city bank. This designation had been terminated in 1957 when Sioux City ceased to be a reserve city upon the failure of all member banks in that community to request continuation °f that classification under the provisions of the Rule adopted by the 8°4ra in 1947 relating to the standard for classification of reserve cities. During a discussion of the draft reply, reference was made to the Board's 1947 Rule and to the action taken on February 10, 1960, 811sPending until further notice the portion of the Rule which contemplates a triennial review of existing reserve city classifications. It was Pointed out that under the existing Rule, there was no basis on which the iif)flor* 40 1! 11/14/60 -3- Board could classify Sioux City as a reserve or central reserve city. The comment was also made that there was little likelihood that Sioux eltY would be classed as either a reserve or central reserve city under anY of the standards being discussed in connection with the possible adoption of a new procedure for classifying reserve cities pursuant to Public Law 86-114 approved July 28, 1959. Governor Robertson suggested that the draft letter to Mr. Allen should be revised to delete a reference to the status that Sioux City was likely to have under new standards for classifying reserve cities that Might be adopted by the Board in the future. Agreement having been expressed with Governor Robertson's 84gge5ti0n, unanimous approval was given to a letter to Mr. Allen, President, Federal Reserve Bank of Chicago, in the form of attached Item No. 4. Messrs. Farrell, Dembitz, and Collier then left the meeting, and 141% Fauver, Assistant to the Board, entered the room. Oral presentation by Deposit Guaranty Bank and Trust Company. There had been placed on the agenda for today's meeting a review of the Procedures to be followed in connection with oral presentation to be made °11 November 16 by Deposit Guaranty Bank and Trust Company, Jackson, ilssissippi, and others regarding that bank's request that the Board Consider its denial on October 12, 1960, of Deposit Guaranty's application to merge with Bank of Hazlehurst, Hazlehurst, Mississippi. A letter had been sent under date of November 4, 1960, to representatives 11/14/60 -4- of the banks proposing to merge and to representatives of Merchants & Planters Bank of Hazlehurst, which had submitted a request to appear in oPPosition to the merger, stating that all such representatives would have the opportunity to make oral presentation before the Board at 10:00 a.m. on Wednesday, November 16, 1960, in the Board's offices. There followed a discussion of the procedure for the conduct of the oral presentation, during which it was agreed that the Board would hear the presentation in Room 1202 of the Board's building at the time Previously announced. The meeting then adjourned. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. Item :No. 1 11/14/60 AOOMICS• orricom. CORREOPONOCNCC TO THIC BOARD November 14, 1960 Board of Directors, The Farmers and Merchants Bank of Vandalia, Vandalia, Illinois, Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of St. Louis, the Board of Governors Of the Federal Reserve System approves, under the provisions of Section 24A of the Federal Reserve Act, an investment by The Farmers and Merchants Bank of Vandalia, Vandalia, Illinois, of $180,000 in bank premises for the purposes of constructing a new building on property adjacent to the bank's present quarters and for remodeling present banking quarters. Very truly yours, (Signed) Elizabeth L. Carmichael Fnizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 2 11/14/60 ADORERS OfFICIAS. OORRILIPONOENOC TO THE 110A100 November 14 1960 The Honorable Jesse P. Wolcott, Chairman, Federal Deposit Insurance Corporation, Washington 25, D. C. Dear Mr. Wolcott: Reference is made to your letter of October 31, 1960, concerning the application of The Newberry State Bank, Newberry, Michigan, for continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. No corrective programs which the Board believes should be incorporated as conditions to the continuance of deposit insurance have been urged upon or agreed to by the bank. Very truly yours: igned) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. 4WI() BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 3 11/1h/60 WASHINGTON 25. D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD *4mst * 't4404* November it, 1960 Mr. Henderson Supplee, Jr., Chairman of the Board and Federal Reserve Agent, Federal Reserve Bank of Philadelphia, Philadelphia 1, Pennsylvania. Dear Mr. Supplee: In accordance with the request contained in your letter of November 3, 1960, the Board of Governors approves the appointment of Mr. David P. Noonan as Alternate Assistant Federal Reserve Agent at the Federal Reserve Bank of Philadelphia, effective December 1, 1960, to succeed Mr. Elwood J. Braker. This approval is given with the understanding that Mr. Noonan will be solely responsible to the Federal Reserve Agent and the Board 5 Governors for the proper performance of his duties, except that, Ouring the absence or disability of the Federal Reserve Agent or a aeanoy in that office, his responsibility will be to the Assistant ! xederal Reserve Agent and the Board of Governors. When not engaged in the performance of his duties as Alternate Assistant Federal Reserve Agent, Mr. Noonan may, with the 4PProval of the Federal Reserve Agent and the President, perform such work for the Bank as will not be inconsistent with his duties as 41ternate Assistant Federal Reserve Agent. It will be appreciated if Mr. Noonan is fully informed of the 4.e -1-importance of his responsibilities as a member of the staff of Federal Reserve Agent and the need for maintenance of independ— ence from the operations of the Bank in the discharge of these Nm ponsibilities. 4, h It is assumed that Mr. Noonan will execute the usual Oath of n %trice which will be forwarded to the Board of Governors. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 4231 BOARD OF GOVERNORS OF THE Item No. 4 11/14/60 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS orriciAL CORRESPONDENCE TO THE BOARD Novaliber lh, 1960. Carl E. Allen, President, :;ecloral Reserve Bank of Chicago, g. 0. Bo x 834, Chicago 90 : Illinois. Cr Mr. Allen: This refers to your letter of October 26, 1960, transAping a letter from_Nr. C. R. Goscott, Chairr:lan of the Board ifaO Security National Ban%, Sioux City, 10-7a, inquiring 1:40.k• valar the Board =ad consider an application from his bank to ij c.ze a reserve city b-,n1: again. Since the provisions in the law with respect to bank were changed in *Tilly 1959, the Board has been reconsiderthe standards to be used in classifying reserve cities, but deterodnation of this matter has yet been made. Pending i/141;az deto3nination the Board, on February 10, 1960, suspended until "tion of the Rule for Classification of lithcr notice the po, , c 12.&'cll Reserve and Reserve Cities which contemplates a triennial "4•013 notice to that effect was published in the F;:deral Register. eordinsly, the individual standards for classification of central erve and reserve cities, as established in 1947, remain in • °tract til such time as new standards are established. g In 1957, Sioux City did not meet the individual standards be,.abli eat shed in 1947 and, therefore, its designation was teminated ti"ause not all of the member banks in the city requested continuaits reserve city status. Under these cirmactances„ and 8...iteast until some determination has been reached as to general 'dards for classifying reserve cities, it would appear that th ore Imuld be no basis on which the Board could grant an applicatie ci21_ from Security National Bank for its designation as a reserve V bank. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary.
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