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1R609
Minutes for November
To:
Members of the Board
From:
Office of the Secretary
6, 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
1 1"-414-1
3
5
41..
Minutes of the Board of Governors of the Federal Reserve
SYstem on Friday, November
6,
1964.
The Board met in the Board
Room at 10:00 a.m.
it
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mills, Acting Chairman
Robertson
Shepardson
Mitchell
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Sherman, Secretary
Broida, Assistant Secretary
Fauver, Assistant to the Board
Brill, Director, Division of Research
and Statistics
Holland, Associate Director, Division
of Research and Statistics
Koch, Associate Director, Division of
Research and Statistics
Solomon, Associate Adviser, Division
of Research and Statistics
Katz, Associate Adviser, Division of
International Finance
Reynolds, Associate Adviser, Division
of International Finance
Spencer, General Assistant, Office of
the Secretary
Eckert, Chief, Banking Section, Division
of Research and Statistics
Bernard, Economist, Division of Research
and Statistics
Baker, Economist, Division of International
Finance
Furth, Consultant
Money market review.
There were distributed tables affording
13ex'spective on the money market and on bank reserve utilization,
to
Mr,
with data on negotiable certificates of deposit outstanding.
Bernard commented on recent developments in the Government securities
ket; Mr. Eckert discussed bank reserves, bank credit, and the money
'
Illi
s1113131Y; and Mr. Baker reported on foreign exchange market developments.
4 11 ••••
1,3
11/6/64
All of the members of the staff except Messrs. Sherman and
Spencer then withdrew from the meeting, as did Mr. Furth, and the
following entered the room:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Hackley, General Counsel
Farrell, Director, Division of Bank Operations
Shay, Assistant General Counsel
Hooff, Assistant General Counsel
Goodman, Assistant Director, Division of Examinations
Leavitt, Assistant Director, Division of Examinations
Forrestal, Attorney, Legal Division
McClintock, Supervisory Review Examiner, Division of
Examinations
Discount rates.
The establishment without change by the
Federal Reserve Bank of Atlanta on November
Reserve Bank of Kansas City on November
4,
3,
1964, by the Federal
1964, and by the Federal
Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Chicago,
St. Louis, Dallas, and San Francisco on November 5, 1964, 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.
Circulated or distributed items.
The following items, copies
which are attached to these minutes under the respective item
nUmbers indicated, were approved unanimously:
Item No.
to Riverside Trust Company, Hartford, Connecticut,
utter,
1-Troving the establishment of a branch at 520 Windsor Avenue,
Windsor.
1
0-.41!
I
g
146/64
-3Item No.
Letter to Commerce Union Bank, Nashville, Tennessee,
aPProving the establishment of a branch at 4011
Hillsboro Road.
2
Letter to Irwin Union Bank and Trust Company, Columbus,
Indiana, approving the establishment of a branch at
U. S. Highway 31 and Tannehill Street, Taylorsville.
3
Letter to Bank of Idaho, Boise, Idaho, approving the
establishment of branches in Jerome and Gooding and
emPhasizing the need for strengthening the bank's
capital structure.
4
Letter to Wells Fargo Bank, San Francisco, California,
Tr°ving the relocation of a branch in Stockton from
` N. San Joaquin Street to Miner and El Dorado Streets.
5
etter to Marine Midland International Corporation,
New.York, New York, approving an amendment to its
Articles of Association.
6
Letter to
,
Chase International Investment Corporation,
Irw York, New York, amending the Board's consent of
duly -3,
1964, for that corporation to acquire, either
dire4-1
r,
-,-LY or indirectly, shares of Transamerican Trailer
D
'
errY, Inc.
11eter to Bank of Menomonie, Menomonie, Wisconsin,
dalving the requirement of six months' notice of withrs
'
wal from membership in the Federal Reserve System.
8
ter to State Bank of Fox Lake, Fox Lake, Wisconsin,
lliing the requirement of six months' notice of withal from membership in the Federal Reserve System.
9
Z
tter to the Federal Deposit Insurance Corporation regarding
coe aPplication of State Bank of Fox Lake, Fox Lake,Wis1,rnsin, for continuation of deposit insurance after withdrawal
°111 membership in the Federal Reserve System.
Letter 4_
- -0 the Federal Reserve Bank of Philadelphia
•
Inter„
buil]v°sing no objection to the Bank proceeding with
le
za.c1Tit
rtterations
designed to improve cash department
10
11
11/6/64
-4Item No.
Letter to the Chief of Staff of the Senate Committee on
Banking and Currency regarding "United Security Accounts"
Of Citizens Bank (Park Ridge), Chicago, Illinois. (Copies
or the letter were transmitted to the Federal Deposit
Insurance Corporation, the Comptroller of the Currency,
and the Presidents of all Federal Reserve Banks.)
With respect to Item No.
12
4, Mr. Leavitt noted that establish-
ment of branches in Jerome and Gooding by Bank of Idaho had been
Protested by First Security Bank of Idaho, N.A., Boise, Fidelity
National Bank of Twin Falls, and Twin Falls Bank & Trust Company.
The
Protesting banks had indicated that they felt there was no
for another banking office in Jerome.
need
First Security now operated
the only branch there. Fidelity National and Twin Falls Bank
received business from that area.
Idaho First National Bank, Boise,
had recently received approval to establish a branch in Jerome.
While it appeared that the need for three banking offices was
questionable, the three largest banks in the State would be represented
411
and they could withstand the competition; the addition of
°trice of Bank of Idaho in Jerome would probably not significantly
affect the banks in Twin Falls.
Turning to a question concerning the deteriorating capital position
°r Bank of Idaho, Mr. Leavitt commented on a discussion with Mr. Clifford
T'rleter,
President of United California Bank, Los Angeles, and Vice
Chail.man of the Board of Western Bancorporation, the bank holding company
'
11/6/64
-5-
of which Bank of Idaho was a subsidiary.
Mr. Tweter had indicated
that Western Bancorporation was aware that certain of its subsidiaries
were in need of new capital funds and was prepared to formulate plans
for the strengthening of such banks' capital positions.
In this con-
the letter to Bank of Idaho approving the establishment of
branches in Jerome and Gooding emphasized that a substantially greater
increase in the bank's capital structure than now contemplated was
needed if the bank's capital position was to be regarded as satisfactory.
In response to a question by Governor Mills regarding Item
No. r7
Mr. Goodman explained that there appeared to be substantial
Puerto Rican and Federal tax reasons for not using a Puerto Rican
e°rPoration as the entity to awn and operate cargo vessels and to
issue
stock and warrants.
A Puerto Rican corporation, tentatively
as Transamerican Trailer Ferry, Inc., had been contemplated
1411en the Board granted consent to the purchase of preferred stock by
Chase International Investment Corporation, either directly or through
its subsidiary, Arcturus Investment & Development Ltd., Montreal,
Canada.
Because of certain tax advantages, the corporation that
IroUld acquire and awn the vessels would now be organized under the
lalls of one of the States of the United States, probably New York or
telaware.
Chase International would probably acquire the preferred
*
11/6/64
-6-
stock in Transamerican Trailer Ferry, Inc., because the Maritime
C°Mmission required that
75 per cent of the holders of each class of
st°ok must be citizens of the United States.
by
Mr. Goodman concluded
emphasizing that the proposal to have such a stateside corporation
l'Tas clearly within the provisions of section 25(a) of the Federal
Reserve Act.
With respect to Item No. 11, Governor Mitchell stated that
the Board's Committee on Organization, Compensation, and Building
Plans had reviewed the proposed alterations to the Philadelphia
ReServe Bank's cash department facilities and the Committee had no
ob
jections.
22port on competitive factors (Page-Hope, North Dakota).
There
had- been distributed a draft of report to the Federal Deposit Insurance
C°rPoration on the competitive factors involved in the proposed purchase
f certain assets and assumption of certain liabilities of First State
I/ank of Hope, Hope, North Dakota, by Page State Bank, Page, North
Dakota s
The conclusion in the report read as follows:
The proposed purchase of certain assets and
assumption of certain liabilities of First State
Bank of Hope by Page State Bank would not have
adverse effects on competition.
The report was approved unanimously for transmittal to the
Cor
poration.
riaczt on competitive factors (Seattle-Arlington, Washington).
Ther.
ned been distributed a draft of report to the Cowptroller of the
11/6/64
Currency on the competitive factors involved in the proposed purchase
Of assets and assumption of liabilities of The Citizens State Bank
of Arlington, Arlington, Washington, by Seattle-First National Bank,
Seattle,
Washington.
During a brief discussion, agreement was expressed with a
slight change in the conclusion of the draft report.
The report
was then approved unanimously for transmittal to the Comptroller
With the
conclusion reading as follows:
Consummation of the proposed purchase would
eliminate present and potential competition between
The Citizens State Bank of Arlington, and offices
Of Seattle-First National Bank located in the area
surrounding the community of Arlington.
Seattle-First National Bank, the largest bank
In the State, is also the dominant bank operating
in the trade area of The Citizens State Bank of
Arlington in terms of number of offices and volume
Of deposits. The proposed transaction would further
the consolidation of the bank's position in the
Seattle area.
The meeting then adjourned.
Secretary's Notes: Governor Shepardson
approved on behalf of the Board on November 5,
1961i-, the following items:
No
Letter to the Federal Reserve Bank of Richmond (attached Item
•
Z--s-z--2) approving the reappointment of Charles Phillips Kraemer as
.Lstant examiner.
„ Memoranda
recommending increases in the basic annual salaries
1uz
964:e
th f
ollowing persons on the Board's staff, effective November 8,
Name and title
Basic annual salary
From
To
Division
Board Members' Offices
C
atherine B. Davian, Secretary
$ 7,290
$ 7)510
7,220
5,330
7,465
5,495
6,430
6,615
4,63o
5,000
10,250
10,605
7,218
4,005
7,571
4,140
Research and Statistics
Robert Solodow, Economist
Carolyn C. White, Secretary
International Finance
Rita D. Brinley, Secretary
Personnel Administration
Christine Mason, Secretary
m (change in title from Clerk-Stenographer)
`418xles W. Wood, Personnel Assistant
Administrative Services
!
elacm S. Dyson, Photographer (Offset)
Aaymond R. Sine, Guard
Governor Shepardson today approved on
behalf of the Board memoranda recommending
the following actions relating to the
Board's staff:
intments
bas. Grace T.
Colwell as Records Clerk, Office of the Secretary, with
annual salary at the rate of $4,480, effective November 16, 1964.
Priscilla E.
Wurtzel as Records Clerk, Office of the Secretary,
v.,16h
196k.bastc annual salary at the rate of $4,480, effective November 9,
increases
Name and
title
effective November
Division
8 1964
Basic annual salary
To
From
Legal
'11Yllis Ann Carson, Stenographer
$4,480
$4,630
11/6/64
SalarY
increases, effective November
die
8, 1964 (continued)
Division
Basic annual salary
From
To
Legal
CarTerl H. Feliciano, Secretary
(Change in title from Stenographer)
$4,630
$5,000
5,680
5,990
5,080
5,495
5,680
5,990
Research and Statistics
Sidney Washington, Library Assistant
Examinations
Carol An Slocombe, Secretary
(Change in title from Stenographer)
Data Processing
LYla E. Szillat, Digital Computer Systems
Operator (change in title from Digital
ComPuter Systems Operator-Trainee)
Advance of sick leave
for John H. Hunley, Messenger, Division of Administrative Services,
a period not to exceed 26 days, beginning November 3, 1964.
Ree
loyment following maternity leave
D. Courtright as Statistical Assistant, Division of
Rese
Ajearoh and Statistics, with basic annual salary at the rate of
Y'''165, effective November 9, 1964.
Prin
ting Grade Wage Schedule
inc New Printing Grade Wage Schedule (attached Item No. 14) and
thereases in the annual salary rates of the following employees in
r.st
,n1
Novelti
(4.Administrative Services under the schedule, effective
11/6/64
-10Annual salary rates
From
To
Franklin Taylor, Supervisor
Thomas V.
Kopfman, Assistant Supervisor
-uunald R. Poole, Operator (Offset Press)
,
1/ruce L. Moffett, Operator (Offset Press)
441ward Cross, Photographer (Offset)
elson S. Dyson, Photographer (Offset)
?sleY B. Collins, Photographer (Offset)
s1.1(4
) Hart, Bindery Worker
T'ner Thompson, Operator (Multilith)
aro
Dortch, Foreman-Operator
j4nle5 R.
Jordan, Operator (Offset Press and
Herbert W. Bundy, Bindery Helper and Mimeograph
Operator
Charles P. Brown, Operator (Duplicating Devices)
Quincy W.
Barnes, Xerox-Mimeograph Operator
Theodore L. Jones, Operator (Duplicating Devices)
Abraha_
m Rose, Operator (Mimeograph)
$8,923
8,382
6,864
7,571
7,218
7,218
5,408
6,698
5,678
5,678
5,138
$9,214
8,674
7,093
7,842
7,467
7,467
5,616
6,926
5,907
5,886
5,346
5,408
5,616
4,888
4,888
4,389
4,618
5,096
5,096
4,555
4,784
BOARD OF GOVERNORS
Item No. 1
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 6, 1964
Board of Directors,
Riverside Trust Company,
Hartford, Connecticut.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by Riverside Trust
Company, Hartford, Connecticut, of a branch at 520
Windsor Avenue, Windsor, Connecticut, provided the
branch is established within six months 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.)
BOARD OF GOVERNORS
Item No. 2
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, O. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 6, 1.964
Board of Directors,
Commerce Union Bank,
Nashville, Tennessee.
Gentlemen:
The Board of Governors of the Federal Reserve
System approves the establishment by Commerce Union Bank,
Nashville, Tennessee, of a branch at 4011 Hillsboro Road,
Nashville,Tennessee, 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 ia the Board's letter
Of November 9, 1962 (S-1846), should be followed.)
o0V 00v,••
3778
BOARD OF GOVERNORS
.....
OF THE
•.
••0?..
Item No.
FEDERAL RESERVE SYSTEM
*o
3
11/6/64
WASHINGTON, D. C. 20551
NEE
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
RES,̀'SL• •
s • • • ••*
November
6, 1964
Board of Directors,
Irwin Union Bank and Trust Company,
Columbus, Indiana.
Gentlemen:
The Board of Governors of the Federal
Reserve System approves the establishment by
Irwin Union Bank and Trust Company, Columbus,
Indiana, of a branch at the intersection of
U.S. Highway 31 and Tannehill Street in the
unincorporated village of Taylorsville in German
Township, Bartholomew County, Indiana, 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.)
I
BOARD OF GOVERNORS
k't
OF THE
Item No.
FEDERAL RESERVE SYSTEM
4
n/6/64
WASHINGTON, O. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO TI-4E UOARD
November
61 1964
Board of Directors,
Bank of
Idaho,
Boise, Idaho.
Ge ntlemen
:
The Board of Governors of the Federal Reserve System
approves the establishment of a branch by Bank of Idaho in the
d,owntown business district of Jerome, Idaho, and a branch in the
:014ntown business district of Gooding, Idaho, provided the branches
re
established within one year from the date of this letter.
During the past year, there has been considerable
dete rioration in the bank's capital position, and the Board of
Governors
feels that the capital structure of Bank of Idaho is
n°14 considerably lower than desirable.
The Board understands that President Bianco has info—
Lmed the Federal Reserve Bank of San Francisco that plans to
:
trengthen the bank's capital position are to be discussed at a
0,eting of the bank's directorate in the near future and, fur;
11 er: that Western Bancorporation, which holds a majority of the
nk s stock, recognizes the need for additional capital.
While President Bianco indicated to the Reserve Bank
that an increase of from $750,000 to $1,000,000 in capital stock
was c
ontemplated, it appears that a substantially greater amount
needed if the bank's capital position is to be satisfactory.
lahe
t
Board Urges that plans be formulated as quickly as possible
8° Provide much needed improvement in the bank's capital position
80
042aLs
f7
s.
ther growth and expansion of your bank will be on a
Ne
etter to the Reserve Bank
Very truly yours,
41
4
011 that the Board also had
Of th/rea a six-month extension
tabl, -0eriod allowed to es- (Signed) Karl E. Bakke
ir :AA the branches; and that
(14 extension should be reKarl E. Bakke,
seribed) the procedure preAssistant Secretary.
in the Board's letter
atio rember 91 1962
14-14 be followed.)(s-1846),
‘,I
BOARD OF GOVERNORS
Item No.
OF THE
5
11/6/64
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November
6, 196i.
The Board of
Directors,
Wells Fargo Bank,
San Francisco,
California.
G
entlemen:
The Board of Governors of the Federal Reserve System
approves the relocation by Wells Fargo Bank of a branch in
Stockton,
California, from 26 N. San Joaquin Street to the
northwest
corner of the intersection of Miner and El Dorado
Streets, provided the branch in the latter location is established within two years from the date of this letter and
?perations at the bank's existing office located at 26 N.
San Joaquin Street are discontinued simultaneously with the
°Pening of the office at the northwest corner of the intersection of Miner and El Dorado Streets.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
letter to the Reserve Bank stated that the Board
'
1s0 had approved a six-month extension of the period
allowed for relocation of the branch; and that if an
?xtension should be requested, the procedure prescribed
14 the Board's letter of November 9, 1962 (S-1846),
Should be followed.)
BOARD OF GOVERNORS
Item No.
OF THE
6
11/6/64
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
•
TO THE BOARD
t
•
November
6, 1964
Marine Midland International Corporation,
120 Broadway,
New York 5, New York.
Gentlemen:
Reference is made to your letter of October 19, 1964,
transmitted through the Federal Reserve Bank of New York, requesting approval of an amendment, pursuant to the consent of
the sole stockholder of your Corporation dated October 13, 1964,
to Article
SECOND of your Articles of Association to insert the
words "international or foreign banking and" and to delete the
words "(other than banking)". It is noted that the purpose of
a mendment is to eliminate any doubt that your Corporation may
purchase stock of foreign banks within the limitations of Section
25(a) of the Federal Reserve Act.
In accordance with your request, and pursuant to the
Provisions of Section 211.3(a) of Regulation K, as revised effective September 1, 1963, the Board of Governors approves the amendment to Article SECOND of your Articles of Association so as to
read:
"SECOND. This corporation is being organized for the
purpose of engaging in international or foreign banking
and international or foreign financial operations within
the limitations prescribed in section 25(a) of the
Federal Reserve Act and regulations thereunder, either
directly or through the agency, ownership or control of
local institutions in foreign countries or in dependencies or insular possessions of the United States."
Very truly yours,
(Signed) Karl E. Bakk.f.
Karl E. Bakke,
Assistant Secretary.
101
.....
Got,i
BOARD OF GOVERNORS
Item No.
7
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 6, 1964.
Chase
International Investment Corporation,
One
Chase Manhattan Plaza,
New York,
New York 10005.
Ge
ntlemen:
Reference is made to the Board's letter of July 13, 1964,
grantin
NT, 4g consent for Chase International Investment Corporation
it "C ) to purchase, at par, and hold, either directl
y or through
mos subsidiary, Arcturus Investment & Development Ltd. ("Arcturus"),
ountreal, Canada,
up to $1,000,000 par value 7 per cent redeemable
knmulative preferred stock
of a Puerto Rican corporation tentatively
Riown as Transamerican Trailer Ferry, Inc. ("TTFI"), San Juan, Puerto
The°, provided
such stock was acquired within one year from that date.
ri,LBoard also
granted
consent for CIIC, or Arcturus, to exercise all
ofTs to
acquire shares to which it may become entitled as the holder
not arrants to
purchase, at par, common stock of TTFI in an amount
to exceed
$500,000.
Your letter of September 7, 1964, transmitted through the
Fede,
to 'al Reserve Bank of
New York, requested that the consent be amended
thellrmit the investment to be made in a corporation organized under
than laws of one of the States of the United States of America rather
/0.6'
1' under the laws
of the Commonwealth of Puerto Rico. In accordance
Boarpur request and on the basis of information furnished, the
holf
A, o Governors grants consent for CIIC
to purchase, at par, and
$6;0 either
directl
y
or
through
subsidi
its
ary, Arcturus, up to
a
0,000 par value 7
Of
per cent redeemable cumulative preferred stock
cor
Of
the poration, to be organized under the laws of one of the States
United States of America, provided such stock is acquired
-Ln
year from the date of this letter.
Very truly yours,
Karl E. Bakke,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 8
OF THE
FEDERAL RESERVE SYSTEM
11/6/64
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 6, 1964
Board of Directors,
Bank of Menomonie,
Menomonie, Wisconsin.
Gentlemen:
The Federal Reserve Bank of Minneapolis has
forwarded to the Board of Governors a letter dated August 6,
1964, signed by. President Gene J. Heymans, Sr., and
resolutions dated April 7, 1964, and October 13, 1964,
signifying your intention to withdraw from membership in
the Federal Reserve System, and requesting waiver of the
six months' notice of such withdrawal.
The Board of Governors waives the requirement of
six months' notice of withdrawal. Under the provisions of
Sec-,,ion 208.10(c) of the Board's Regulation H, your institution
maY accomplish termination of its membership at any time
within eight months from the date that notice of intention
to withdraw from membership was given. Upon surrender to
the Federal Reserve Bank of Minneapolis of the Federal Reserve
stock issued to your institution, such stock will be canceled
and appropriate refund will be made thereon.
be
It is requested that the certificate of membership
to the Federal Reserve Bank of Minneapolis.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
.......
id.
.6
•6.,•
.,,
,
t 14
BOARD OF GOVERNORS
.
Item No. 9
OF THE
FEDERAL RESERVE SYSTEM
11/6/64
WASHINGTON, D. C. 20551
• .§. ." •
ADDRESS OFFICIAL CORRESPONOENCE
TO THE BOARD
*
RES-‘*--••
•....••
November 6, 1964
Board of Directors,
State Bank of Fox Lake,
Fox Lake, Wisconsin.
Gentlemen:
The Federal Reserve Bank of Chicago has forwarded
to the Board of Governors your letter dated October 12, 1964,
together with the accompanying resolution signifying your
intention to withdraw from membership in the Federal Reserve
System and requesting waiver of the six months' notice of
such withdrawal.
In accordance with your request, the Board of
Governors waives the requirement of six months' notice of
withdrawal. Upon surrender to the Federal Reserve Bank of
Chicago of the Federal Reserve Bank stock issued to your
Institution, such stock will be canceled and appropriate
refund will be made thereon. Under the provisions of Section
208.10(c) of the Board's Regulation H, your institution may
accomplish termination of its membership at any time within
eight months from the date the notice of intention to withdraw from membership was given.
It is requested that the certificate of membership
be returned to the Federal Reserve Bank of Chicago.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 10
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November
6, 1964
The Honorable Joseph W. Barr, Chairman,
Federal Deposit Insurance Corporation,
20429
Washington, D. C.
Dear Mr. Barr:
Reference is made to your letter of October 15,
1964, concerning the application of State Bank of Fox Lake,
Fox Lake, Wisconsin, for continuance of deposit insurance
after withdrawal from membership in the Federal Reserve
System.
There have been no corrective programs urged upon
the bank or agreed to by it which have not been fully consummated and in the Board's opinion there are no such programs that it would be advisable to incorporate as conditions
of admitting the bank to membership in the Corporation as a
nonmember of the Federal Reserve System.
Very truly yours,
(Signed) Karl E. Bakke
Karl E. Bakke,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 11
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November
6, 1964
Mr. Karl R. Bopp, President,
Federal Reserve Bank of Philadelphia,
Philadelphia, Pennsylvania. 19101
Dear Mr. Bopp:
This refers to your letter of October 23) 1964,
concerning building alterations designed to improve cash
department facilities in the basement of the Philadelphia
Reserve Bank building.
The Board will interpose no objection to your
Proceeding with the alterations as described in your letter
and authorizes expenditures of about $125,000, including
architects' fees, for this purpose.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
t
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 12
11/6/64
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL. CORRESPONDENCE
TO THE BOARD
November
6, 1964
Mr. Matthew Hale,
Chief of Staff,
Committee on Banking and Currency,
United States Senate,
Washington, D. C.
Dear Mr. Hale:
This refers to your letter of October 8, 1964, addressed to
the Federal Deposit Insurance Corporation, requesting comments on the
advertisement appearing in the October 6, 1964 issue of the Wall
Street Journal on "United Security Accounts" of Citizens Bank (Park
Ridge), Chicago, Illinois. As you were informed, this bank is a
State bank member of the Federal Reserve System and therefore your
request was referred to the Board.
The newspaper advertisement requests the public to send for
complete information on the plan and does not include the complicated
details and working arrangements. This bank originated the idea
several years ago but the plan contained several features to which
the Board objected and which have been corrected or eliminated. The
Present plan operates as follows:
An individual opens a savings account with the bank on which
4
he -s
paid the maximum interest permitted by the Board's Regulation Q,
and an out-of-town customer may only obtain funds from the savings
count by the usual method of requesting the bank to send him a check
,or the amount he wishes to withdraw. (It is understood that the bank
!goes not accept such accounts from local customers.) At the same time
°le bank opens in his name a separate check-credit account up to the
amount of his savings deposit. When a check is drawn on this account
i ncl Paid by the bank, an indebtedness is created; in effect, the bank
nas authorized a line of credit equal to the savings account balance
and has made a loan of a part or all of that credit to the customer.
is has some of the aspects of over-draft banking practiced in Great
b ritain. At the end of
the month, the customer is notified as to the
amount of his indebtedness to the bank and is allowed 15 days in which
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Mr. Matthew Hale
-2-
to make settlement. No interest is charged on this loan, but the
customer is billed ten cents per check as a service charge. If the
customer does not pay this obligation by the 15th day of the month
tollowing the month in which the credit was advanced, interest at
a rate of one-half per cent per month is added to his indebtedness
and interest at that rate is added each month until the loan is paid.
The savings account is not disturbed and, in fact, earns interest at
the maximum rate at the same time. The indebtedness to the bank must
be paid by funds coming directly from the customer and not from funds
in his savings account. Of course, the bank has the right of offset
in case the loan proves to be uncollectable, but it is not believed
that this right is analogous to the drawing of checks on the savings
account.
It might be argued that the bank has actually extended no
credit to the customer as there is always a deposit in the bank equal
to the so-called "credit". On the other hand, the bank contends that
this is no more than a demand for collateral on an unsecured loan or
line of credit, and conservative banking would require this or similar
security as the credit is granted to persons unknown to the bank and
Whose credit rating is unavailable.
It is recognized that the newspaper advertisement might cause
the public to believe that checks are drawn on a savings account and
interest is paid on a demand deposit. However, the customer receives
full information on the plan, and should realize that this is not so.
The System has not encouraged this plan and it may prove to
be an uneconomic operation on the. bank's part, as a customer has up
to 45 days' free use of the bank's money and only pays ten cents per
Check as a service charge, while receiving interest at the maximum
rate on a savings account of like amount with the bank. While it does
not seem likely that the operation of this plan would adversely affect
the bank's soundness, if it appeared to the Board that depositors'
funds were in any respect jeopardized by such check-credit account
Plan, the Board would take whatever supervisory action it considered
necessary and appropriate.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS
OVA411.
,
Item No. 1
11/6/64
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
November 51 1964
Mr. John L. Nosker, Vice President,
Federal Reserve Bank of Richmond,
Richmond, Virginia. 23212
Dear Mr. Nosker:
In accordance with the request contained
in your letter of October 30, 1964, the Board
approves the reappointment of Charles Phillips
Kraemer as an assistant examiner for the Federal
Reserve Bank of Richmond, effective today.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS OF TEE FEDERAL RESERVE SYSTEM
PRINTING GRADE WAGE SCHEDULE
November
Item No. 14
11/6/64
8, 1964
This schedule applies to those positions in the Duplicating, Mail and
Supply Section that perform the following kinds of lithographic work:
Offset Printing, Offset Photography, Photostat and Xerox Operation,
Mimeograph Operation, Bindery Operation, and to the Supervisor and
Assistant Supervisor of those positions.
Basic Hourly and Rounded Annual Wage Rates by Step and Grade
Printing
Step 2
Step 1
Hourly
Annual
Hourly
1
2
3
1.60
1.72
3328
3578
1.66
1.81
1.84
3827
1.94
5
1.97
4098
2.07
6
2.08
2.20
4326
2.19
4576
4846
5075
5346
Rg
6o94
2.83
2.95
3.08
7
6
9
2.33
2.44
2.57
Annual
Step 3
Hourly
Annual
3494
1.76
3661
3765
4035
1.90
2.04
3952
4243
2.17
4514
2.30
4784
2.32
4306
4555
4826
2.44
5075
2.45
5096
2.57
2.57
2.70
5346
5616
2.70
2.84
5907
5666
6406
2.97
3.10
3.23
6176
6448
6716
6677
6926
7197
3.37
3.50
3.63
7010
7260
7550
7)467
7736
7967
3.77
3.91
h.03
gt
6362
Ug
16
11
12
2.69
2.80
2.93
13
14
15
16
17
18
3.056344
3.16
3.29
5
2813
3.41
7093
7342
7592
3.72
3.53
3.65
19
20
21
3.21
3.33
3.46
3.59
3.84
3.77
8258
7842
4.17
8674
3.97
8965
8528
3.90
4.10
6112
14.31
6778
4.01
4.22
92114
83h1
4.43
Incumbents of positions subject to this wage schedule are eligible for
step increases within pnrticular grades on the following basis:
For advancement to Ste, after 26 weeks (6 months) satisfactory
service in Step 1.
,
For
advancement
to
Step
3 after 78 weeks (18 months) satisfactory
service in Step 2. .
* (This schedule supersedes the wage scale effective November 10, 1963)
@FedFRASER