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Minutes for
To:
Members of the Board
From:
Office of the Secretary
November 26, 1965
Attached is a copy of the minutes of the
ve System on
Board of Governors of the Federal Reser
the above date.
statement
It is not proposed to include a
set of
this
in
es
entri
the
With respect to any of
red to
requi
ns
actio
y
polic
of
minutes in the record
al
be maintained pursuant to section 10 of the Feder
Reserve Act.
d to
Should you have any question with regar
will advise
the minutes, it will be appreciated if you
initial
the Secretary's Office. Otherwise, please
meeting, your
below. If you were present at the
minutes. If
initials will indicate approval of the
indicate
You were not present, your initials will
only that you have seen the minutes.
Chm. Martin
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Daane
Gov. Maisel
3
al Reserve
Minutes of the Board of Governors of the Feder
System on Friday, November 26, 1965.
The Board met in the Board Room
at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Robertson
Shepardson
Mitchell
Daane
Mr. Sherman, Secretary
Mr. Kenyon, Assistant Secretary
Mr. Broida, Assistant Secretary
Mr. Holland, Adviser to the Board
Mr. Solomon, Adviser to the Board
Mr. Cardon, Legislative Counsel
Mr. Fauver, Assistant to the Board
Mr. Hackley, General Counsel
Examinations
Mr. Solomon, Director, Division of
Directors,
tant
Assis
tt,
Messrs. Goodman and Leavi
ns
natio
Division of Exami
e of the
Mrs. Semia, Technical Assistant, Offic
Secretary
Mr. Furth, Consultant
Members'
Mr. Morgan, Staff Assistant, Board
Offices
rd, Eckert,
Messrs. Koch, Partee, Axilrod, Berna
rch and
Resea
of
and Keir of the Division
Statistics
of the
Messrs. Sammons, Reynolds, and Baker
ce
Finan
nal
natio
Division of Inter
Money market review.
ts in
Mr. Bernard commented on developmen
Mr. Baker reported on
the Government securities market, after which
conditions in foreign exchange markets.
Mr. Sammons collunented briefly
toward arrangements
On discussions with Canadian authorities looking
funds to Canada in the coming
that would contain the net outflow of U.S.
Year.
38
-2-
11/26/65
. Sherman,
All members of the staff then withdrew except Messrs
t,
Kenyon, Cardon, Fauver, Hackley, Solomon (Examinations), and Leavit
and Mrs. Semia and the following entered the room:
ions
Mr. Farrell, Director, Division of Bank Operat
l
Counse
l
Mr. Hexter, Associate Genera
Mr. O'Connell, Assistant General Counsel
ors,
Messrs. Daniels and Kiley, Assistant Direct
ions
Division of Bank Operat
of the
Messrs. Heyde, Robinson, Sanders, and Smith
Legal Division
er, Division
Mr. Egertson, Supervisory Review Examin
of Examinations
Discount rates.
l
The establishment without change by the Federa
November 24, 1965, of the
Reserve Banks of Cleveland and Richmond on
was approved
rates on discounts and advances in their existing schedules
unanimously, with the understanding that appropriate advice would be
sent to those Banks.
Distributed items.
are
The following items, copies of which
a ttached to these minutes under the respective item numbers indicated,
were approved unanimously:
Item No.
Beach,
Letter to Bank of Fort Walton, Fort Walton
ion
admiss
for
ation
applic
its
Plorida, approving
.
System
t° membership in the Federal Reserve
1
of San Francisco
Letter to the Federal Reserve Bank
z'egarding the question whether the activities of
ed
t mortgage loan company proposed to be acquir
,
a
City,
Lake
First Security Corporation, Salt
qualify for
to
as
nature
a
such
of
tah, would be
Bank Holding
e emption under section 4(c)(1) of the
Company Act.
2
k
-3-
11/26/65
Applications of Brenton Companies (Items 3-5).
There had been
d istributed drafts of orders and a statement reflecting the Board's
of Brenton Companies,
approval on November 3, 1965, of the applications
shares of Dallas County State
Inc., Des Moines, Iowa, to acquire voting
burg, Iowa.
Bank, Adel, Iowa, and Palo Alto County State Bank, Emmets
was authorized.
The issuance of the orders and statement
Copies
Of the documents, as issued, are attached as Items 3-5.
al obligations."
Unpublished information regarding "gener
There
had been distributed a memorandum dated November 19, 1965, from the
Legal Division regarding a request from Covington & Burling, counsel
for the Committee for Study of Revenue Bond Financing (an association
riting), for
of investment banking firms engaged in revenue bond underw
s, rulings, and
access to "all unpublished material contained in letter
institutions
°Pinions issued to commercial banks and other financial
obligations
relating to the Board's interpretation of the term 'general
of any State or of any political subdivision thereof' contained in
R. S. 5136, .
opinions and rulings
. including such interpretations,
has considered with
Of other bank regulatory agencies which the Board
and in particular a
regard to its interpretation of this provision,
Currency in 1932 with respect to bonds
ruling of the Comptroller of the
the Comptroller of
Of the Port of New York Authority and a ruling of
t to the meaning of the
the Currency dated October 23, 1934, with respec
term 'general obligations'."
Subsequent to its request to the Board,
-4-
11/26/65
ller of the Currency
Covington & Burling had sent a letter to the Comptro
ee objecting to the
(with a copy to the Board) on behalf of the Committ
Regulation "insofar as they
Provisions of his Investment Securities
ite and deal in obligaPurport to authorize national banks to underwr
thereof, the payment
tions issued by a State or political subdivision
of which is not secured by the general taxing power."
That letter also
the Comptroller for an
indicated that Covington & Burling had asked
with respect to the definioPportunity to examine unpublished rulings
in 12 U.S.C. Sec. 24 and
tion of the term general obligations as used
been denied such opportunity."
The law firm's request to the Board
lity to examine
aPParently represented an effort to exhaust every possibi
information that might be useful to the client.
Division believed the unpubThe memorandum noted that the Legal
the request called for would
lished information in the Board's files that
its
not be significantly beneficial to Covington & Burling in promoting
client's interests.
t did not
The 1932 letter referred to in the reques
items of information
appear to be in the Board's records; certain other
or dealt with facts as
were either available in Congressional testimony
to which there was no dispute.
The mere belief that the person request-
would not find such information
ing access to unpublished information
to deny the
s ubstantially useful was not always a sufficient reason
equest.
this instance, however,
It was considered significant in
because a similar request had been denied by another Governmental agency
-5-
11/26/65
and the information sought related in part to the affairs of that agency.
n
For these and other reasons cited in the memorandum, the Legal Divisio
recommended that the request be denied.
A draft letter attached to the
s, the Board considers
memorandum would say that "In the circumstance
that disclosure of its unpublished information on that subject might
and advice and
impede the Board's necessary collection of information
pollead to misinterpretations and misunderstanding as to the Board's
icies and purposes.
ed
The Board also believes that access to the request
information probably would not be of significant value for the purpose
You have in mind."
The draft letter would end with the statement that
in the
"the Board concludes that the requested disclosure would not be
."
Public interest and, therefore, your request is denied
should not grant
During discussion it was agreed that the Board
the Comptroller.
access to material that the law firm had been denied by
compliance with
As to other items, staff comments indicated that literal
and categorizing
the request would involve a laborious task of assembling
material.
not be desirable to
Governor Robertson then asked if it would
ing the magnitude of the
discuss the matter with the law firm, explain
d would be substantask and the unlikelihood that the material produce
tially useful.
an effort already had been made,
Mr. Hexter responded that such
had been forthcoming, presumably
but that the formal request nevertheless
‘..0
-6-
11/26/65
on the theory that the law firm had nothing to lose and that some result
though the outlook for
helpful for its purposes might be realized even
benefits seemed doubtful.
It seemed to the Legal Division that the
as to whether the effort
situation justified the exercise of judgment
involved should be undertaken.
nonetheless it seemed
Governor Robertson expressed the view that
the matter informally rather
Preferable to make another effort to handle
refused to disclose
than to set down in writing a position that in effect
sure would involve a large task
information on the grounds that disclo
perand that the information probably would not be of much use to the
sons requesting it.
ch suggested by Governor
There was agreement with the approa
Covington & Burling remained
Robertson, it being understood that if
request the matter
unwilling to accept an informal response to their
consideration.
would be brought back to the Board for further
Coin services for nonmember banks.
There had been distributed
y, with an accoms memorandum dated October 12, 1965, from Mr. Hackle
the practices of Federal
PanYing memorandum from Mr. Heyde, regarding
and making shipments of, coin.
Reserve Banks in accepting orders for,
ents' Conference approved by the
Under resolutions of the Presid
Banks followed the practice
Board in 1936, most of the Federal Reserve
only if the shipment had
ef furnishing coin directly to nonmember banks
nonmember bank reimbursed the
been ordered by a member bank and if the
-7-
11/26/65
Reserve Bank for the shipping charges.
The Presidents' Conference,
pursuant
after discussion of this matter at its September 1965 meeting
to the request contained in the Board's letter of August 16, 1965,
t orders
voted 6 to 5 that the Reserve Banks should "in principle" accep
4 that, in
for coin directly from nonmember banks, but also voted 7 to
that did not at preslight of the current coin shortage, Reserve Banks
red to
ent accept direct orders from nonmembers should not now be requi
do
so.
that such a move would
A majority of the Conference "thought
ibution of coin among commercial
aggravate the problem of equitable distr
banks.0
as agents for the Treasury
Since the Reserve Banks acted only
tions, question had arisen whether
bepartment in coin distribution opera
nons
a Reserve Bank could properly refuse to accept direct order from
expense of such shipments
member banks or require nonmembers to bear the
coin shipments to member
while at the same time it absorbed charges on
banks.
points of the history of
Mr. Heyde's memorandum cited certain
had taken over
coin distribution operations, which the Reserve Banks
upon the intent of the instrucfrom the former sub-treasuries, bearing
(Treasury Circular No. 55,
tions in the Treasury's pertinent circular
should "make an equitable and
issued in 1920) that the Reserve Banks
currency and coin in
impartial distribution of available supplies of
all cases."
Heyde's opinion that the
Mr. Hackley concurred in Mr.
should accept orders for coin directly
Reserve Banks, as a legal matter,
-8-
11/26/65
in addition
from nonmember banks, as they did from member banks, and
ed alike in respect to
that member and nonmember banks should be treat
Charges for coin shipments.
There was thus presented the question
its 1936 letter.
Whether the Board would wish to rescind
That ques-
policy as well as interpretation, of course, involved considerations of
Reserve Banks.
tion of the Treasury's instruction to the
distributed memoranda, Mr.
During comments supplementing the
ury Department was aware of the
Hackley observed that unless the Treas
no objection, it was his
variation in Reserve Bank practices and had
s for the Department,
view that the Reserve Banks, in acting as agent
and nonmember banks differently,
were not authorized to treat member
to shipping charges.
either as to acceptance of orders or as
However,
nd its 1936 letter without
he would not suggest that the Board resci
Treasury.
first discussing the matter with the
rning why the question was being
In response to an inquiry conce
indicated that he had no ready
raised after so many years, Mr. Hackley
raised heretofore.
explanation as to why it had not been
Mr. Farrell
Reserve Banks accepted coin
s uggested that the situation whereby some
through members had not created any
orders from nonmember banks only
coin were ample.
s ubstantial problems as long as supplies of
The coin
d the Reserve Banks to
S hortage of recent years, however, had force
ration available coin.
banks to obtain as much
The inability of member
use had diminished their ability or
coin as they needed for their own
-9-
11/26/65
.
willingness to place orders on behalf of nonmembers
Increasing pressure
representahad been brought by nonmember banks on the Bureau of the Mint,
in coin distribution
tives of which raised the point of discrimination
at meetings of the Treasury-Federal Reserve Ad Hoc Coin Committee.
He
be held next week.
noted that another meeting of the Committee would
there ensued a discussion
At the instance of Governor Robertson
d to shipping
Of the practices of the respective Reserve Banks in regar
Charges and coin delivery services.
In those cases where Reserve Banks
s from nonmember banks, shipping
followed the practice of accepting order
Charges were not paid.
h
And for all banks in Reserve Bank or branc
Reserve Bank's counter, where
cities, coin was merely placed on the
banks could call for it.
For member banks in other cities, however,
the service ranged up to delivery by armored car to the door of the
by the Reserve Bank.
requesting bank, with cost absorbed
The latter
from banks in Reserve Bank or
development had given rise to complaints
ded equal service, since they had
branch cities that they were not accor
branch.
to pick up coin at the Reserve Bank or
that before taking any
Governor Mitchell expressed the view
detailed study made of the over-all
action the Board should have a
Problem.
was one to which the Board should
He believed that the problem
the System probably should be pergive attention, because he thought
ces than at present and because the
forming more extensive coin servi
Banks were not uniform.
services rendered by the respective Reserve
-10-
11/26/65
be desirable to have
Governor Robertson agreed that it would
as to currency and coin
uniform practices throughout the System, (both
worked out best by the people
services),and in his view this could be
who were closest to the problem.
Therefore, he suggested that the Board
and to include
ask the Reserve Bank Presidents to develop such a plan
dealing with member and
in it arrangements (as to coin services) for
equitable basis, in accordance with
nonmember banks alike on a fair and
ved that the problem
the instruction in the Treasury circular. He belie
ge at such time as the Board
should be dealt with as a complete packa
had the full facts before it.
that there were a number of areas
Governor Shepardson observed
ve Banks, such as
in which practices differed among the Federal Reser
safekeeping services.
d take into
Conceivably, the suggested study shoul
differences.
account the whole range of these
d, that the Legal Division's
Mr. Hackley noted, in this regar
ibution of coin by the Reserve Banks
memoranda related only to the distr
that while the Reserve
as agents of the Treasury, to which he added
Treasury currency as agents
Banks had undertaken the distribution of
case of Federal Reserve notes.
of the Treasury, this was not true in the
that the matter of coin distribuChairman Martin then suggested
problem, and there was general agreement.
tion be studied as a separate
assuming there was no legal basis to
Governor Daane asked if,
member and nonmember banks in regard to
warrant different treatment of
a c:
kit. a 4,
11/26/65
-11-
principle that coin
coin services, it would be defensible to agree in
direct order but require
Should be furnished to either class of bank on
nonmember banks to pay shipping charges.
Mr. Farrell responded that
he thought it could be argued either that there would still be disavailable on the counter
crimination or, conversely, that making coin
ance with the Treasury
of the Federal Reserve Bank would represent compli
circular.
rationalization that free coin
Governor Daane suggested the
as a Federal Reserve service
delivery to member banks could be regarded
to such banks.
the distribution
Mr. Hackley commented, however, that
the last analysis by the
Of coin was a matter for determination in
might be inappropriate for the
Treasury Department, and therefore it
such as delivery service withSystem to make a determination on a matter
out consulting the Treasury.
would be feasible to move in the
Governor Robertson asked if it
the extent of agreeing
d irection of the Legal Division's memoranda to
directly from nonmember
that Reserve Banks should accept coin orders
shipping costs in an over-all
banks, but to include the question of
study.
believed it would not be easy
Governor Mitchell remarked that he
Reserve Banks, and Mr.
to accomplish uniformity of practices among the
expressed by the Conference of
Hackley referred to the majority view
Banks to accept orders directly
?residents that to require all Reserve
coin shortage,
On nonmember banks at the present time, in light of the
Q
-12-
11/26/65
would aggravate the problem of equitable distribution of coin among
commercial banks.
Governor Mitchell then observed that in any event
it would be impracticable to disturb existing practices when the yearend pressures of coin demand were imminent.
of a study, Mr.
In further discussion as to the advisability
of direct orders from
Rackley reiterated the view that both acceptance
essentially questions
nonmember banks and charges for shipments were
for determination by the Treasury Department.
as far as shipping
Governor Daane expressed the opposite view
charges were concerned.
If the Treasury wanted to stand the cost of
he did not
shipments to nonmember banks it could do so, of course, but
see a basis on which the Reserve Banks could be required to absorb the
cost of shipments to nonmembers.
not entirely clear why
Governor Shepardson remarked that it was
e Banks not cura cceptance of direct orders from nonmembers by Reserv
the coin shortage.
l'ahtly following such a practice would aggravate
l
There followed some discussion of this point during which Mr. Farrel
summarized more or less conflicting analyses that had been advanced to
him by certain Reserve Bank Presidents.
consensus that in principle
Further discussion resulted in a
ly from nonmember as
the Reserve Banks should accept coin orders direct
r study the Reserve Banks
well as member banks, but that pending furthe
should not be
11.°t now accepting direct orders from nonmember banks
3,,
-13-
11/26/65
required to do so.
There was general agreement that uniformity of coin
desirable objective and that a
services among the Reserve Banks was a
requested through the
study of coin distribution procedures should be
consideration.
Presidents' Conference for the Board's
s 6 and 7).
Unfit $1 Federal Reserve notes (Item
Pursuant to
had been disthe discussion at the meeting on November 1, 1965, there
1965, from Mr. Farrell, attachtributed a memorandum dated November 23,
to the Federal Reserve Banks
ing and commenting on (1) a draft of letter
uctions the Board's decision that,
implementing with appropriate instr
$1 Federal Reserve notes
as an interim procedure, shipments of unfit
destruction, limited, however, to curShould be made to Washington for
in those cases where vault
rent receipts of each Bank's own notes except
reduce the accumulated backlog or
space problems made it desirable to
of other Banks could be made withWhere some additional sort of notes
of letter to the Secreout a significant increase in cost; (2) a draft
5 per cent verification count of the
tary of the Treasury authorizing a
Washington (such a letter had been
$1 Federal Reserve notes sent to
tment); and (3) a rider to the present
requested by the Treasury Depar
ed, for handling new currency that
contract with Brink's, Incorporat
ce to return unfit Federal Reserve
would permit the use of Brink's servi
in those cases where a Bank
notes of any denomination to Washington
mical or otherwise desirable to use
might decide that it was more econo
this means of transportation.
38e
11/26/65
-14-
e was agreement on a minor
After a discussion during which ther
Banks, the two letters and
change in the letter to the Federal Reserve
the rider to the Brink's contract were approved unanimously.
Copies
of the letters are attached as Items 6 and 7.
The meeting then adjourned.
contemSecretary's Notes: The requirements
14,
ber
Octo
on
on
acti
d's
plated by the Boar
prea
of
ance
issu
the
g
1965, in approvin
ional
liminary permit to Wachovia Internat
m, North
Investment Corporation, Winston-Sale
there was sent
Carolina, having been completed,
er transmitting
today to that corporation a lett
.
a final permit to commence business
on behalf
Governor Shepardson today approved
the Division
of the Board a memorandum from
ding
of Research and Statistics recommen
G.
Mary
of
ion
gnat
resi
the
of
ce
acceptan
in that DiviMessersmith, Statistical Clerk
business
sion, effective at the close of
December 3, 1965.
Item No. 1
11/26/65
BOARD OF GOVERNORS
OF THE
47
.
;;t9OF G0ire
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20351
ADORCIIII
ornamt. conwestromocmcm
TO MC 1110ARD
•
•1.4cast...'
November 26, 1965
Board of Directors,
Bank of Fort Walton,
Fort Walton Beach, Florida.
Gentlemen:
Reserve System
The Board of Governors of the Federal
on, Fort Walton
Walt
of Fort
approves the application of the Bank
of Atlanta,
Bank
rve
Rese
Federal
Beach, Florida, for stock in the
h.
fort
set
ter
inaf
here
subject to the numbered conditions
1.
uct its
Such bank at all times shall cond
due
rs
with
powe
business and exercise its
rs,
sito
its
depo
regard to the safety of
on of the
and, except with the permissi
ral Reserve
Fede
Board of Governors of the
•
e or
caus
not
System, such bank shall
ral
gene
the,
in
made
permit any change to be
e
scop
the
in
or
character of its business
at
it
by
d
cise
exer
of the corporate powers
ip.
ersh
memb
the time of admission to
lus funds of such
2. The net capital and surp
relation to the
in
uate
bank shall be adeq
its assets and
of
n
itio
cond
character and
and other corpoies
ilit
liab
to its deposit
rate responsibilities.
going conditions of membership,
In connection with the fore
to the provisions of the Board's
particular attention is called
in
ership of State banking institutions
Regulation H, regarding memb
7
208.
ion
to
Sect
e
renc
refe
especial
the Federal Reserve System, with
.
osed
encl
regulation is
thereof. A copy of the
Bank of Fort Walton
to the bank's
If at any time a change in or amendment
l
the Federa Reserve Bank,
charter is made, the bank should advise
in order that it may
furnishing copies of any documents involved,
be determined whether such change affects in any way the bank's
.
status as a member of the Federal Reserve System
ned in
Acceptance of the conditions of membership contai
the board
by
d
adopte
tion
this letter should be evidenced by a resolu
be
should
tion
resolu
of directors, and a certified copy of such
ements
a.
Arrang
Atlant
transmitted to the Federal Reserve Bank of
an appropriate amount
will thereupon be made to accept payment for
deposit of the required
the
of Federal Reserve Bank stock, to accept
amount of Federal
riate
reserve balance, and to issue the approp
Reserve Bank stock to the bank.
membership in the
The time within which admission to
may be accomplished
bed
descri
Federal Reserve System in the manner
, unless the
letter
this
of
date
is limited to 30 days from the
of time. When
ion
extens
an
s
obtain
bank applies to the Board and
been complied
have
ements
requir
the
of
the Board is advised that all
e
Bank stock
l
Reserv
Federa
of
amount
With and that the appropriate
the
to
bank a
d
forwar
will
Board
the
has been issued to the bank,
e
.
l
Reserv
System
Federa
the
in
ship
formal certificate of member
hopes that you will
The Board of Governors sincerely
your relations with
and
cial
benefi
System
find membership in the
Federal Reserve
the
of
rs
office
The
the Reserve Bank pleasant.
your relationships
ishing
establ
in
you
Bank will be glad to assist
to discuss with
time
any
at
and
System
with the Federal Reserve
for making the services of
representatives of your bank means
the System most useful to you.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
......
Item No. 2
11/26/65
OF THE
FEDERAL RESERVE SYSTEM
ioe,4)
WASHINGTON, D. C. 20551
111100P::
ktsv:••
ADDRESS
orricom. CORRESPONDENCE
TO THE BOARD
November 26, 1965.
-•••••
Mr. H. E. Hemmings,
First Vice President,
Federal Reserve Bank of San Francisco,
94120
San Francisco, California.
Dear Mr. Hemmings:
r 15, 1965, transmitting
This refers to your letter of Octobe
ation ("First
a letter of October 14, 1965, from First Security Corpor
registered bank holding company,
Security"), Salt Lake City, Utah, a
as to whether proposed business
which requests a ruling by the Board
Corporation ("UMLC")are of such a
activities of Utah Mortgage Loan
ion under section 4(c)(1) of the
exempt
nature as to qualify for the
Act"). That section exempts
("the
1956
Bank Holding Company Act of
acquisition by a holding
the
t
agains
from the general prohibition
acquisition of stock of any
the
ies
compan
company of stock of nonbank
ss of furnishing services to
busine
the
in
company "engaged . .. solely
y and banks with respect
compan
g
holdin
such
or performing services for
y."
compan
g
to which it is a bank holdin
ing its acquisition by First
It is understood that, follow
of certain of First Security's
Security, UMLC would solicit, on behalf
comply with applicable banking
subsidiary banks, mortgage loans which
investigations and assemble data
laws, and would make all necessary
sals and the terms and conditions
related to credit and real estate apprai
ted to the subsidiary banks,
of proposed loans. Such data would be submit
the loans. If a loan was
which would solely decide whether to make
of the closing, would obtain
approved, UMLC would handle all details
opinion or title insurance, and
necessary FHA or VA approval and title
ds. UMLC would also solicit
would handle disbursements of the loan procee
banks. Upon purchase of
the
investors to purchase mortgage loans from
loans as agent of the
the
e
such loans by investors, UMLC would servic
any loans nor would it
make
t,
Banks. UMLC would not for its own accoun
for the subsidiary
agent
as
except
Purchase mortgage servicing contracts
s"will be
office
UMIC's
that
banks. First Security's letter states
to'
there
nt
adjace
ately
located in the Banks' buildings or immedi
SYSTEM
BOARD OF GOVERNORS OF THE FEDERAL RESERVE
Mr. H. E. Hemmings
3851
-2-
Concurrently, with First Security's acquisition of UMW
e servicing
stock, the Banks would acquire UMLC's outstanding mortgag
presently
ies
Activit
UMLC.
by
owned
contracts and the mortgage loans
ce
sales
insuran
and
estate
real
conducted by UMLC with respect to
y's
would be eliminated prior to or simultaneously with First Securit
acquisition of UMLC's stock.
The Board has stated that:
"[The] legislative history and the content in which
the term 'services' is used in section 4(c)(1) seem to
suggest that the term was in general intended to refer to
servicing operations which a bank could carry on itself,
to have
but which the bank or its holding company chooses
ation."
organiz
done through another
The activities in which UMLC would engage, as above
y,
described, following acquisition of its stock by First Securit
of
ies
ng
activit
servici
ute
constit
,
opinion
would, in the Board's
the kind contemplated by section 4(c)(1), and activities which the
1958 Federal Reserve
subsidiary banks may themselves perform. (See
be performed by
would
s
service
such
that
g
Assumin
Bulletin 431.)
MSC only for such subsidiary banks and that UMLC would not be
tion
engaged in any other business, the Board concludes that acquisi
by First Security of UMLC's stock would fall within the exemption
provided by section 4(c)(1).
mortgage
Any substantial changes in the nature of the
ies to be
activit
ng
loan solicitation, investigation, and servici
nation is
determi
Board's
conducted by UMIC from that upon which the
for
a
basis
as
on
attenti
premised should be brought to the Board's
Possible redetermination.
of this
It will be appreciated if you will transmit a copy
letter to First Security Corporation.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
- 3852
Item No. 3
11/26/65
UNITED STATES OF AMERICA
FEDERAL RESERVE SYSTEM
BEFORE THE BOARD OF GOVERNORS OF THE
WASHINGTON, D. C.
14 the Matter of the Application of
11RENTON COMPANIES, INC.,
Moines, Iowa,
!or approval of the acquisition of voting shares
q Dallas County State Bank, Adel, Iowa.
ORDER APPROVING APPLICATION UNDER
BANK HOLDING COMPANY ACT
Governors, pursuant to
There has come before the Board of
Act of 1956 (12 U.S.C. 1842(a)(2))
seetion 3(a)(2) of the Bank Holding Company
CFR 222.4(a)(2)),
444 section 222.4(a)(2) of Federal Reserve Regulation Y (12
Des Moines, Iowa, a registered
application by Brenton Companies, Inc.,
prior approval of the acquisition of
bat*
holding company, for the Board's
441
at
g shares of Dallas County State
least 80 per cent of the outstanding votin
1144k, Adel, Iowa.
the Act, notice of receipt of the
As required by section 3(b) of
intendent of Banking with a request
44lication was given to the Iowa Super
for
his views and recommendation.
The Deputy Superintendent of Banking
had no objection to the appliItth'ised that the Iowa Department of Banking
eati a.
was published in the Federal
Notice of receipt of the application
3:73
-2-
12309), which provided
Register on September 25, 1965 (30 Federal Register
and views regarding the proposed
411 °PPortunity for submission of comments
views has expired, and
atquisition. The time for filing such comments and
411 those received have been considered by the Board.
s set forth in the Board's
IT IS HEREBY ORDERED, for the reason
St
be and hereby is approved,
atement of this date, that said application
not be consummated
Provided that the acquisition so approved shall
(b) later
(a) within seven calendar days after the date of this Order or
than three months after said date.
day of November, 1965.
Dated at Washington, D. C., this 26th
By order of the Board of Governors.
Voting for this action:
Unanimous, with all members present.
(signed)
Merritt Sherman
Merritt Sherman,
Secretary.
7
.111
- :3(4 1.7 -A
Item No. 4
11/26/65
UNITED STATES OF AMERICA
EM
S OF THE FEDERAL RESERVE SYST
BEFORE THE BOARD OF GOVERNOR
WASHINGTON, D. C.
••
14 the Matter of the Application of
BRENTON COMPANIES, INC.,
Das Moines, Iowa,
ng
crr* approval of the acquisition of voti
k,
Ban
shares of Palo Alto County State
Etxtetsburg, Iowa,
ION UNDER
ORDER APPROVING APPLICAT
ACT
ANY
COMP
BANK HOLDING
to
Board of Governors, pursuant
There has come before the
(12 U.S.C. 1842(a)(2))
ing Company Act of 1956
section 3(a)(2) of the Bank Hold
222.4(a)(2)),
Reserve Regulation Y (12 CFR
ral
Fede
of
(2)
4(a)
4 section 222.
"
Iowa, a registered
s, Inc., Des Moines,
anie
Comp
ton
Bren
by
ion
44 applicat
ion of
prior approval of the acquisit
ballk holding company, for the Board's
of Palo Alto County
at
outstanding voting shares
least 80 per cent of the
State Bank, Emmetsburg, Iowa.
of receipt of the
3(b) of the Act, notice
As required by section
endent of Banking with a request
4PPlication was given to the Iowa Superint
Superintendent of Banking
dation. The Deputy
mmen
reco
and
s
view
his
fc)
the appliBanking had no objection to
441/ised that the Iowa Department of
published in the Federal
the application was
of
ipt
rece
of
ce
Noti
e4ticn.
fLipc.
fl,""
r
„
-2), which provided
aagister on September 25, 1965 (30 Federal Register 12309
art °PPortunity for submission of comments and views regarding the proposed
and
acquisition. The time for filing such comments and views has expired,
411 those received have been considered by the Board.
set forth in the Board's
IT IS HEREBY ORDERED, for the reasons
Statement of this date, that said application be and hereby is approved,
Provided that the acquisition so approved shall not be consummated
later
(4) within seven calendar days after the date of this Order or (b)
than three months after said date.
day of November, 1965.
Dated at Washington, D. C., this 26th
By order of the Board of Governors.
Voting for this action:
Unanimous, with all members present.
(signed)
Merritt Sherman
Merritt Sherman,
Secretary.
- :385(i
Item No. 5
11/26/65
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
INC.,
APPLICATIONS BY BRENTON COMPANIES,
S OF
SHARE
OF
N
SITIO
ACQUI
THE
OF
FOR APPROVAL
BANK
STATE
COUNTY
DALLAS COUNTY STATE BANK AND PALO ALTO
STATEMENT
Iowa ("Applicant"), a
Brenton Companies, Inc., Des Moines,
ns, pursuant to
egistered bank holding company, has filed applicatio
section 3(a)(2) of the Bank Holding Company Act of 1956 ("the Act"), rethe acquisition of at least 80 per
questing the Board's prior approval of
s County State Bank, Adel,
cellt of the outstanding voting shares of Dalla
sburg, Iowa ("Banks").
and Palo Alto County State Bank, Emmet
y authority. - As required
Views and recommendations of supervisor
ied the Iowa Superintendent of
by section 3(b) of the Act, the Board notif
requested his views and recom1344king of receipt of the applications and
meadations thereon.
Banking advised that the
The Deputy Superintendent of
val of either application.
1°44 Department of Banking had no objection to appro
to each application, section 3(c)
Statutory factors. - With respect
consideration the following five
the Act requires the Board to take into
condition of the holding company
factors: (1) the financial history and
Of
(3) the character of their
and the banks concerned; (2) their prospects;
re of the communities and
111444gement; (4) the convenience, needs, and welfa
-2effect of the proposed acquisition
the areas concerned; and (5) whether the
holding company system
would be to expand the size or extent of the bank
ng, the
involved beyond limits consistent with adequate and sound banki
Public interest, and th
of banking.
preservation of competition in the field
applications have been acted upon
Discussion. - Although the
unnecessary repetition of facts
seParately, the Board has determined that
oing statutory
arid conclusions resulting from application of the foreg
of a combined Statement.
factors may be avoided through the use
Accordingly,
Board's determinations accompany this
while separate Orders effecting the
conclusions, and reasoning in respect to
St
atement, the Board's findings,
in this Statement.
each application are combined
majority interest in 12 banks and owns,
Applicant presently has a
cent of the outstanding shares of
tasPectively, 31 per cent and 34 per
County State Bank, the two banks
411as County State Bank and Palo Alto
ns. Consummation of these proposals
that are the subjects of these applicatio
owned shares, the shares in both banks
11°41d add to Applicant's presently
y interests and associates. The
that are now owned by the Brenton famil
the outstanding stock of Applicant. Thus,
4e4ton family owns a majority of
the
the Banks now held by Applicant and the
Present majority ownership of
would vest in the Applicant alone
4enton family interests and associates
ns.
uP°11 consummation of the proposed acquisitio
condition, prospects, and management
The financial history and
involved in these
() APPlicant and each of its banks, including the Banks
4PPlications, are considered satisfactory.
-3-
38
s of Applicant's
In view of the successful operations record
to conclude that approval of these
subsidiary banks, there is no reason
ant in the present nature
applications will result in any change by Applic
of Banks' operations.
since
Banks have been subsidiaries of Applicant
Prior to enactment of the Act.
They have been provided by Applicant with
t will occur upon approval
management services and no change in this respec
of these applications.
that conSimilarly, there is no reason to believe
have any significant effect
summation of the proposed transactions would
by the Banks.
On the convenience, needs, and welfare of the areas now served
l of the Banks, does it
Nor, in view of the existing ownership and contro
have the effect of expanding
appear that the acquisitions proposed will
consistent
the size or extent of Applicant's present system beyond limits
st, and the preservation
With adequate and sound banking, public intere
of banking competition.
ned in the record
On the basis of all relevant facts as contai
factors set forth in section 3(c)
before the Board and in the light of the
the proposed acquisitions would
of the Act, it is the Board's judgment that
that the applications should,
be consistent with the public interest and
therefore, be approved.
November 26, 1965.
QQ
Item No.
6
11/26/65
BOARD OF GOVERNORS
S-1977
OF THE
FEDERAL RESERVE SYSTEM
••
WASHINGTON, O. C. 20551
woomrs• orriciAL 00111111[111PONOIENCIE
TO INC ISOANO
•......
November 26, 1965.
Dear Sir:
Possible solutions to the problems created by the adjournment of Congress without enacting legislation to permit local destruction of unfit Federal Reserve notes, coupled with the increasing
Banks,
quantities of such notes being accumulated at the Federal Reserve
Treasury
the
and
have been discussed by representatives of the Board
that
Department. As a result of these discussions, it has been agreed
$1
unfit
of
receipts
the following procedures with respect to current
1965,
1,
December
e
Federal Reserve notes should be adopted effectiv
and continued until further notice.
Sorting
"Own" notes should be sorted separately from notes of other
Banks. If it is felt that during this sort a further sort
of notes of other Banks by Bank of issue can be made without
a significant increase in cost, there is no objection to
making such additional sorts.
Canceling and Cutting
"Own" notes and other notes sorted by Bank of issue should
be canceled and cut lengthwise.
Shipping
"Own" notes and other notes sorted by Bank of issue should
be shipped to Washington under the same procedures followed
denomwith respect to unfit Federal Reserve notes of higher
a
approved
has
inations. In this connection, the Board
of
use
the
permit
rider to the Brink's contract which will
of
notes
Reserve
the Brink's service to return unfit Federal
Bank
a
where
cases
those
in
any denomination to Washington
S-1977
-2-
k 44
7'
(
- 3
may decide that it is more economical or otherwise desirable
to use this means of transportation. In such cases, arrangements should be made direct with Brink's.
The Treasury has requested that shipments of $1 notes be
distinguished from notes of higher denominations by an "X" in
a red circle on the face of the shipping tag. For those
offices that are already showing an "X" on the tags to distinguish Federal Reserve currency, this will mean merely
encircling the "X" in red. Other offices should add both an
"X" and the circle for shipments of $1 bills.
While the above procedures are intended to apply basically
to current receipts of own notes, they may be extended either to the
accumulated backlog of unfit $1 Federal Reserve notes to the extent
' the backlog is causing vault space problems or to notes of other Banks
where the sort by Bank of issue can be more economically accomplished
'at this time rather than at a later date when overtime might be necessary. In order to minimize costly rehandling in and out of vaults,
it is suggested that any notes sorted by Bank of issue be canceled and
cut and shipped to Washington.
Very truly yours,
Secretary.
TO THE PRESIDENTS OF ALL
FEDERAL RESERVE BANKS.
..,••••••
• Of GOtet4)••
- 3861.
Item No. 7
BOARD OF GOVERNORS
11/26/65
OF THE
FEDERAL RESERVE SYSTEM
.IF
0
.m
WASHINGTON
OFFICE OF THE CHAIRMAN
„
t-9- •
Res.••
••...•
November
26, 1965
The Honorable Henry A. Fowler,
Secretary of the Treasury,
Washington, D. C. 20220.
Dear Joe:
The fact that Congress adjourned without enacting legl Reserve
islation to permit local destruction of unfit Federa
ingly
increas
an
with
notes has left the Federal Reserve System
hope
the
With
bills.
$1
serious problem with respect to unfit
Board
the
s,
charge
g
of avoiding costly sorting and shippin
, pending
directed the Reserve Banks to hold in their vaults
unfit $1
the
of
all
ction,
legislation permitting local destru
since
them
to
in
turned
Federal Reserve notes that have been
million
400
About
1963.
r
Novembe
in
such notes were first issued
is
ation
accumul
of
rate
the
and
such notes are already on hand
there
ions,
limitat
space
vault
of
constantly increasing. Because
of
some
least
at
return
to
but
now appears to be no alternative
tion.
and
destruc
credit
ion
them to the Treasury for redempt
As you know, there has been considerable discussion of
y and the Board
this matter between representatives of the Treasur
that will have
notes
the
handle
to
and plans are being developed
that in these
ands
underst
Board
The
to be shipped to Washington.
to the extent
respect
with
raised
been
has
discussions a question
tion.
destruc
before
notes
these
of
count
of the verification
Such precedents as exist for guidance in this regard
are:
a 100
(1) The Treasurer of the United States is making
in
notes
Reserve
per cent verification count of unfit Federal
denominations of $5 and above but,
(2) Under regulations and procedures prescribed by the
are making only
Secretary of the Treasury, Federal Reserve Banks
$1
silver certificates.
a 5 per cent verification count of unfit
In the light of these circumstances, the Board would
a procedure
have no objection to, and would expressly authorize,
unfit $1
of
halves
lower
the
whereby the verification count of
THE FEDERAL RESERVE SYSTEM
BOARD OF GOVERNORS OF
The Honorable Henry A. Fowler
- 2
Treasurer of the United
Federal Reserve notes received by the
a package count of
with
s
States would be on a 5 per cent basi
Currency, as in the
the
of
the upper halves by the Comptroller
It would be unders.
tion
case of the $5, $10, and $20 denomina
edure with respect
proc
the
stood that no change will be made in
s of $5 and above.
tion
mina
deno
to unfit Federal Reserve notes in
Sincerely yours,
(Signed) Wm. McC. Martin, Jr.
Wm. MCC. Martin, Jr.
@FedFRASER