Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, November 30, 1964, Volume 51, Part 11

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Minutes for

To:

Members of the Board

From:

Office of the Secretary

November 30, 1964.

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, Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Daane

AAJk.,J,

Minutes of the Board of Governors of the Federal Reserve
System on Monday, November 30, 1964.

The Board met in the Board

Room at 10:00 a.m.
PRESENT:

Mr.
Mr.
Mr.
Mr.
Mr.

Martin, Chairman
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell 1/
Mr. Sherman, Secretary
Mr. Broida, Assistant Secretary
Mt. Molony, Assistant to the Board
Mt. Fauver, Assistant to the Board
Mts. Semia, Technical Assistant, Office of
the Secretary
Mr. Furth, Consultant
Messrs. Brill, Holland, Garfield, Partee,
Williams, Eckert, Fisher, Gehman, Gramley,
Keit, Osborne, Weiner, and Wernick of the
Division of Research and Statistics
Messrs. Hersey, Sammons, Irvine, Katz, Reynolds,
Dahl, Gekker, Gemmill, Hayes, Maroni, and
Nettles of the Division of International
Finance

Economic review.

The staff of the Division of International

Finance reported on developments relating to foreign exchange markets,
the balance of payments, and international trade, with special reference
to recent pressure on the pound sterling and the increase in the
British bank rate.

The Division of Research and Statistics then

summarized domestic trends in production and prices, the labor market,

the construction industry and mortgage finance, markets for corporate
and municipal obligations, bank loans and investments, and the effect
Of recent
Treasury financing.

An illustrative table on bank reserve

Utilization in the past year was distributed.

—

Withdrew from meeting at point indicated in minutes.

.
OSty

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11/30/64

Governor Mitchell then withdraw, as did all members of the
staff except Messrs. Sherman and Fauver and Mrs. Semia, and the
following entered the room:
Hackley, General Counsel
Solomon, Director, Division of Examinations
Johnson, Director, Division of Personnel Administration
Hooff, Assistant General Counsel
Conkling, Assistant Director, Division of Bank Operations
Leavitt, Assistant Director, Division of Examinations
Sprecher, Assistant Director, Division of Personnel
Administration
Mr. Egertson, Supervisory Review Examiner, Division of
Examinations

Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.

Discount rates.

The establishment without change by the

Federal Reserve Bank of Dallas on November 27, 1964, of the rates on
discounts and advances in its existing schedule was approved unanimously, with the understanding that appropriate advice would be sent
to that Bank.
Circulated or distributed items.

The following items, copies

of which are to attached to these minutes under the respective item
numbers indicated, were approved unanimously:
Item No.
Letter to Republic National Bank of New York,
New York, New York, granting its request for
Permission to maintain reduced reserves.

1

Letter to Lincoln Rochester Trust Company,
Rochester, New York, approving the establishment of a branch in Greece, New York.

2

Report on competitive factors (Greenville-Fountain Inn, South
Carolina).

A report to the Federal Deposit Insurance Corporation on

11/30/64

-3-

the competitive factors involved in the proposed merger of Citizens Bank,
Fountain Inn, South Carolina, into Southern Bank and Trust Company, Greenville, South Carolina, was approved unanimously for transmittal to the
Corporation, its conclusion reading as follows:
There is little competition between Southern Bank and
Trust Company, Greenville, and Citizens Bank, Fountain Inn.
The overall effect of the proposed merger on competition would not be adverse.
Messrs. Hackley, Solomon, Hooff, Leavitt, and Egertson then
Withdrew from the meeting, as did Mr. Conkling.
New York salary structure (Items

3 and 4).

There had been dis-

tributed a memorandum dated November 25, 1964, from the Division of
Personnel Administration regarding the request of the Federal Reserve
Bank of New York, in a letter of November 10, 1964, for the Board's
approval of (1) increases averaging 5.1 per cent in the salary structure
applicable to clerical employees at the head office; (2) an increase in
the special maximum for professional level positions (Grade 16 only) from
$17,500 to $19,500; (3) increases averaging

4.6

per cent in the salary

structure applicable to clerical employees at the Buffalo Branch; and
an increase of

6.o

(4)

per cent in the single salary structure applicable to

nonelerical employees at both the head office and the Buffalo Branch.

On

the basis of an extensive analysis set out in the memorandum, the Division
recommended
that the proposed adjustments be approved.

A draft of letter

reflecting that recommendation was attached to the memorandum.
At the Board's request, Mr. Johnson made summary comments,
after which Governor Shepardson observed that the Board had agreed to

k

i.

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11/30/64

the present maximum of $171500 for Grade 16 on the ground that the
professional employees for whom that grade was used were not expected
to become officers, and that it was justifiable that the salary range
for that grade overlap somewhat the ranges of the grades for junior
Officers because junior officers had access to greater eventual
advancement in the higher officer grades.

The New York Reserve Bank

had indicated that, because of the overlap, advancement of professionals
in the top grade created inequities in comparison with salaries of
junior officers.
Governor Shepardson inquired whether the Bank's request for an
increase in the Grade 16 maximum to $19,500 might reflect acceptance
of a substantial overlap, or whether it might foreshadow a further request
for raising the salary structure for officers.

In response, Mr. Johnson

stated that, while it was not possible to foretell whether or not the
Bank might seek a higher salary structure for officers, the Bank had
evidently been sincere in expressing the need for a little more headroom in the nonofficer grades.

In response to a further inquiry by

Governor Shepardson as to the present minimum for officer salaries at
the Bank, Mr. Johnson
indicated that it was $14,500 to $21,000 for
Group E, which would represent an overlap of $5,000 with top professional salaries.
After further discussion the letter granting the Board's consent
to the New
York Bank's proposal was approved unanimously.
attached as Item No.

3.

A copy is

11/30/64
Mr. Johnson drew attention to the suggestion in the memorandum
that, if the Board approved the New York Bank's request for a special
maximum of $19,500 for Grade 16, it consider allowing the same maximum
at the other Federal Reserve Banks, upon request, since all of them
had some professional-level positions involving national market
competition.
The Board agreed that the same maximum rate should be allowed
to the other Reserve Banks.

Accordingly, a letter was subsequently sent

to the Federal Reserve Banks other than New York in the form attached
as Item No.

4,

with the understanding that upon receipt of requests

for the new special maximum of $19,500 from any of the Banks, the
Secretary was authorized to advise them that the Board approved such
a rate.
Messrs. Johnson and Sprecher then withdrew from the meeting.
Director appointments.

It was agreed to request the Chairmen

Of the appropriate Federal Reserve Banks to ascertain and advise
Whether the following persons would accept appointments, if tendered,
as Federal Reserve branch
directors for the terms indicated, with the
understanding that if it were ascertained that they would accept, the
appointments would be made:
Robert S. Bennett, General Manager, Lackawanna Plant,
Bethlehem Steel Corporation, Buffalo, New York, as a
director of the Buffalo Branch of the Federal Reserve
Bank of New York for the three-year term beginning
January 1, 1965.

40

11/3o/64

-6-

Robert M. Williams, President ARO, Inc., Arnold Engineering
Development Center, Tullahoma, Tennessee, as a director of
the Nashville Branch of the Federal Reserve Bank of Atlanta
for the three-year term beginning January 1, 1965.
Eugene C. Gwaltney, Jr., Vice President and General Manager,
Russell Mills, Inc., Alexander City, Alabama, as a director
of the Birmingham Branch of the Federal Reserve Bank of
Atlanta for the unexpired portion of the term ending December 31, 1965, to fill the vacancy resulting from the resignation of Jack Warner earlier this year. (Mr. Gwaltney's
appointment was made effective December 4, 1964.)
Secretary's Note: It having been ascertained
that Messrs. Bennett, Williams, and Gwaltney
would accept, appointment telegrams were sent
to them on December 2, 1, and 3, 1964, respectively.
The meeting then adjourned.
Secretary's Note: Governor Shepardson today
approved on behalf of the Board the following
items:
Letter to the Federal Reserve Bank of Richmond (attached Item No. 5)
approving the designation of Robert L. Powell, Jr., as special assistant
examiner.
Memoranda recommending the following actions relating to the Board's
staff:

George J. Konomos as Research Assistant, Division of Research and
Statistics, with basic annual salary at the rate of $6,6301 effective
the date of entrance upon
duty.
Permission to engage in outside activity
Robert M. Steinberg, Economist, Division of Data Processing, to
serve as consultant on statistical and computer applications for Brookings
Institution,
Washington, D. C.

Secret

BOARD OF GOVERNORS

Item No. 1
11/30/64

OF THE

FEDERAL RESERVE SYSTEM

0`.
•

WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

November 30, 1964.

Board of Directors,
Republic National Bank of New York,
New York, New York.
Gentlemen:
With reference to your request submitted through the
Federal Reserve Bank of New York, the Board of Governors, acting
under the provisions of Section 19 of the Federal Reserve Act,
grants permission to the Republic National Bank of New York to
maintain the same reserves against deposits as are required to be
maintained by nonreserve city banks, effective as of the date it
Opens for business.
Your attention is called to the fact that such permission
subject to revocation by the Board of Governors.
Very truly yours,

(Signed) Merritt Sherman
Merritt Sherman,
Secretary.

61..U2:2
BOARD OF GOVERNORS
.....
Gov •.
k-4. •

•
0•

Item No. 2
11/30/64

OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

44'•
.SLREst*•••
......•

November 30, 1964.

Board of Directors,
Lincoln Rochester Trust Company,
Rochester, New York.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment by
Lincoln Rochester Trust Company, Rochester, New
York, of a branch at 1345 Latta Road, Town of
Greece, Monroe County, New York, provided the
branch is established within one year from the
date of this letter.
Very truly yours,

(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
(The letter to the Reserve Bank stated that the
Board also had approved a six-month extension
of the period allowed to establish the branch;
and that if an extension should be requested,
the procedure prescribed in the Board's letter
of November 9, 1962 (s-1846), should be followed.)

(1093
BOARD OF GOVERNORS

Item No.

OF THE

11/30/64

ov col;
4
:•

3

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551

•

AODRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

RESV.•
•,..

November 301 1964.

CONFIDENTIAL

FR

Mr, William F. Treiber,
Pirst Vice President,
Federal Reserve Bank of New York,
New York, New York 10045.
Dear Mr. Treiber:
As requested in your letter of November 10, the Board of Governors
approves the following minimum and maximum salaries for clerical and none
clerical salary grades at the Head Office and Buffalo Branch, effective
December
24, 1964.
CLERICAL

Grade
k1

1
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Head Office
Maximum
Minimum

Buffalo Branch
Maximum
Minimum

$ 2,950
3,236
3,556
3,913
4,308
4,741
5,211
5,719
6,284
6,923
7,638
8,448
9,369
10,404
11,590
12,963

$ 2,600
2,832
3,151
3,506
3,900
4,330
4,798
5,304
5,866
6,502
7,170
7,923
8,781
9,744
10,741
11,852

$ 3,983
4,369
4,801
5,283
5,816
6,400
7,035
7,721
8,483
9,346
10,311
11,405
12,648
14,045
15,647
17,500

$ 3,440
3,823
4,254
4,733
5,265
5,846
6,477
7,160
7,919
8,778
9,680
10,696
11,854
13,154
14,500
16,000

Mr. William F. Treiber

- 2-

NON-CLERICAL
Head. Office and Buffalo
Grade
1
2
3
4
5
6
7
8
9
10
11

Minimum Salary
$2,985
3,163
3,359
3,586
3,856
4,184
4,571
5,033
5,587
6,228
6,917

Maximum Salary
$4,030
4,270
4,535
4,841
5,206
5,648
6,171
6,795
7,542
8,408
9,338

The Board approves the payment of salaries to the employees within
limits specified in which the positions of the respective employees are
classified. All employees whose salaries are below the minimums of their
grade s as a result of these structure increases should be brought to approPriate 'ranges within three months of the effective date of the new structure.
the

The Board also considered and approved your request for a "penthouse"
addition to
the normal grade 16 maximum of $17,500, permitting the payment of
salaries up to a
special maximum of $19,500 where required to recruit and retain employees of the desired quality
in professional level positions.
t•
Very truly yours,
(Signed) Merritt Sherman

Merritt Sherman,
Secretary.

"5
BOARD OF GOVERNORS

Item No. 4
11/30/64

OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
•R,

ADDRESS orricIAL CORRESPONDENCE
TO THE BOARD

•
ast.

* ••• *

December 3, 1964.

Dear Sir:
In November 1963 you were advised that the Board of Governors
vould give consideration to requests from Reserve Banks for approval of
a special maximum of $17,500 for Grade 16 of the employees salary
structure to assist in recruiting and retaining employees of desired
quality in professional level positions.
In order to continue to provide adequate flexibility, without
affecting the normal non-official salary structure, the Board will now
give consideration to reauests
for a special maximum up to $19,500.
Very truly yours,

A
Merritt She an,
Secretary.

TO THE
PRESIDENTS OF ALL FEDERAL RESERVE BANKS EXCEPT NEW YORK

<9

BOARD OF GOVERNORS

Item No.

OF THE

11/30/64.

......
goeif GOv,•
•
*
0.

5

FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

•&AL RIO.•
•...••

December 1, 1964.

Mr. John L. Nosker, Vice President,
Federal Reserve Bank of Richmond,
Richmond, Virginia. 23213
Dear Mr. Nodker:
In accordance with the request contained
in your letter of November 251 1964, the Board
approves the designation of Robert L. Powell, Jr.
as a special assistant examiner for the Federal
Reserve Bank of Richmond for the purpose of
participating in examinations of State member banks.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.