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Minutes for
To:
Members of the Board
From:
Office Of the Secretary
October 24, 1962
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.
Ohm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Gov. Mitchell
Minutes of the Board of Governors of the Federal Reserve
SYstem on Wednesday, October 24, 1962.
The Board met in the Board
11001m at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Martin, Chairman
Mills
Shepardson
King
Mitchell
Sherman, Secretary
Kenyon, Assistant Secretary
Fauver, Assistant to the Board
Hackley, General Counsel
Farrell, Director, Division of Bank
Operations
Mr. Johnson, Director, Division of
Personnel Administration
Mr. Hexter, Assistant General Counsel
Mr. Shay, Assistant General Counsel
Mr. Hooff, Assistant General Counsel
Mr. Kiley, Assistant Director, Division
of Bank Operations
Mr. Masters, Associate Director, Division
of Examinations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mr. Thompson, Assistant Director, Division
of Examinations
Mr. Schwartz, Assistant to the Director,
Division of Research and Statistics
Mr. Poundstone, Review Examiner, Division
of Examinations
Mr.
Mr.
Mr.
Mr.
Mr.
Circulated or distributed items.
The following items, copies
clt/P/111-ch are attached to these minutes under the respective item numbers
ated, were approved unanimously:
Item No.
tett
m er to Security Trust Company, Lynn,
assn
approving an investment
111 --chusets,t
vaak premises.
1
(
10/24/62
-2Item No.
Letter to Chemical International Finance, Ltd.,
'York, New York, noting without objection
,,he transfer of certain of its assets to Chemical
uverseas Finance Corporation, Paget, Bermuda,
nd the transfer of some assets of Chemical
uverseas Finance Corporation to Chemical Inter44tiona1 Finance, Ltd., New York, New York; and
i4
,180 granting consent to the purchase and holding
uY the latter of shares in certain foreign
comPanies.
2
litter to the Federal Reserve Bank of Atlanta
Proving the payment of salaries to two newlygPPointed officers of the Birmingham Branch at
rEttee fixed by the Bank's Board of Directors.
14nter
4
to The Colonial Bank and Trust Company,
e,..6erbury, Connecticut, approving (1) the
(nablishment of a branch in Cheshire, and
/ an investment in bank premises.
4
ae
4.ttter to Raritan State Bank, Raritan, New Jersey,
e°ving (1) the establishment of a branch in
4--L
4 sborough Township, Somerset County, and (2)
4 investment in bank premises.
5
tett
to Citizens Commercial & Savings Bank,
1114t) Michigan, approving the establishment of
l'anch at G-3055 West Pierson Road.
pl. er
Lett„,
tLu-r to J. Emil Anderson & Son, Inc., Chicago,
cort1 r1016, regarding its status as a holding
6
7
44111Y affiliate.
tette
yttrae, r to The Fitzgerald Insurance Agency, Inc:,
,) Colorado, regarding its status as a holding
Q0
-PanY affiliate.
8
tette
littrr.r to Counsel for Dauphin Deposit Trust ompany,
regt, 81?Ilrg, Pennsylvania, regarding the bank's
b•
arii'aL that the Board reconsider its denial of the
i application for permission to merge with The
Pirst8,,
Roliz rational Bank of Mount Holly Springs, Mount
4 Springs, Pennsylvania.
9
11
'
10/24/62
-3In connection with Items 7 and 8, although the action taken in
each instance was by unanimous vote, certain reservations were expressed
regarding the circumstances surrounding the requested section 301 deterIn the Anderson case (Item No. 7), Governor Shepardson noted
that J. Emil Anderson & Son, Inc., in addition to owning directly or
indirectly
over 80 per cent of the stock of the Evanston Trust and Savings
Bilak) Evanston, Illinois, owned about 15 per cent of the shares of two
Other Illinois banks.
the
Substantial quantities of the shares of one of
banks also were owned by two officers of the applicant corporation.
14 addition, one of these officers owned 20 per cent of the shares of
4
third bank.
It was Governor Shepardson's view that an element of
Centralized control of these several banks probably existed through the
Shareholdings of the applicant corporation and its officers.
In the
l'It4erald case (Item No. 8), Governor Mills noted that the principal
"set of The Fitzgerald Insurance Agency, Inc., consisted of shares of the
4uters State Bank of Yuma, Yuma, Colorado, and that such shares were
131edged as collateral for an indebtedness of the insurance agency to the
?irat National Bank of Denver, Denver, Colorado.
The letter sent to Counsel for Dauphin Deposit Trust Company
(Item y
included a final paragraph that was added to the original
virart as the
result of a suggestion made at this meeting.
Counsel for
I)414Phin Deposit had suggested that the fact that the Board's decision to
saerrtr
4 the merger application was made by a bare majority of the Board
°ohstituted
a reason for reconsideration of the case. (When the Board's
)
10/24/62
J.
decision was made, Chairman Martin and Governor King were not present;
Of the remaining members, Governor Mills dissented from the decision
to deny.) The purpose of including the additional paragraph in the
11°ard's reply was to make it clear that the non-participation of two
Members in a decision of this kind was not regarded by the Board as a
valid reason for reconsideration.
Messrs. Thompson, Hooff, and Poundstone then withdrew from the
Meeting and Mr. Molony, Assistant to the Board, entered the room.
Electronic processing equipment at Philadelphia.
As described
14 a memorandum from the Division of Bank Operations dated October 22,
1962) which had been distributed, the Federal Reserve Bank of Philadelphia
I cl4Posed a cash expenditure of about $558,000 for the purchase of certain
'
'
ailditional IBM electronic check and general data processing equipment, for
del.
verY in April 1963.
In a discussion of this matter, question was raised as to whether
the Reserve Bank had made a convincing case of need for the availability
ot two
data,
computers for processing research and general operating
ilkilticularly since the proposal seemed to be based to a considerable extent
(14 a desire to limit the use of the equipment to daytime hours only.
Mr.
SIIII/lartz pointed out that it was customary in private industry and in
,
Gove
,nment to make use of computer equipment on an extra-shift basis.
King and Mitchell would
Accordingly, it was agreed that Governors
11./‘1‘ellge to discuss the Philadelphia proposal with President Bopp on the
10/24/62
-5-
Occasion of a forthcoming trip by the latter to the Board's offices, after
144101 the proposal would be considered further by the Board.
All of the members of the staff except Messrs. Sherman, Kenyon,
441 Fsuver then withdrew from the meeting.
Director appointment.
After discussion of information developed
127 Governor Mitchell in accordance with a previous understanding, it was
to ascertain through the Chairman of the Federal Reserve Bank of
Chicago whether Mr. Louis A. Weil, Jr., Publisher and Editor of the
LE14181ng State Journal, Lansing, Michigan, would accept appointment, if
tendered, as a director of the Detroit Branch for the unexpired portion
r the term ending December 31, 1963, to replace Mr. Carl A. Gerstacker,
/440 resigned effective October 1, 1962. It was further agreed that if
tIlere ascertained that Mr. Weil would accept, the appointment would be
te.ae.
Mr. Fauver then withdrew from the meeting.
Reserve Bank officers' salaries.
BOR. r..4
Reporting as Chairman of the
8 Committee on Organization, Compensation, and Building Plans,
4.s. Mitchell, Balderston, and King), Governor Mitchell said the
'
Ceftlittee had met with six Reserve Bank Presidents.
From the discussion
(nficersi salaries, it appeared that two principal questions were
First, at certain Banks an adjustment of officer group ranges
Reserve Bank Presidents
Etl°111 lines suggested by the Board's letter to the
tillted October
5, 1962, would result in the salaries of a number of officers
mg below the minimum of the group to which their positions were allocated.
10/24/62
-6-
On this point, the Committee had expressed the view that it would be
reasonable for the Reserve Banks to have a degree of latitude in bringing
the salaries of the officers in question up to the applicable minimum.
14 other words, the Committee had not pushed the Presidents to bring
the affected officers to the minimum at this time unless it was felt that
the officers were presently underpaid.
With this understanding, there
aPPeared to be no significant problem in respect to the revision of the
c4ficer group ranges.
Second, all of the six Presidents with whom the
0°11anittee had met had originally planned to recommend salary increases
beginning the first of next year for more than 40 per cent of the officer
ff.
'
te
Adjustments were being made in the original plans, but the question
484 been raised whether some leeway could not be provided on this occasion
ell the theory that a period of transition was involved.
It was suggested
to the Committee that the 40 per cent maximum could more easily be observed
14 future years.
All of the Presidents with whom the Committee had con-
rerl'ed thus far seemed to envisage getting within the general range of
145
Per cent, although a desire was evident for assurance that the same
steziclard would be applied throughout the System generally.
Governor
Itttchell expressed to the Board on behalf of the Committee the view that
it Illight be reasonable to allow some leeway this year, with the expectation
tha
t in future years the 40 per cent maximum would be observed.
Comments by Governor King were in support of those expressed by
Q°1rernor Mitchell, and there was no indication of disagreement by other
(1.11'":'
10/24/62
-7-
Members of the Board with the position taken by the Committee in discussion
pith the Reserve Bank Presidents.
The meeting then adjourned.
Secretary's Notes: On October 23, 1962,
the President signed into law H. R. 8874
(Public Law 87-856), the Bank Service
Corporation Act. Pursuant to the action
taken by the Board on October 3, 1962,
a press release on this matter was issued
under date of October 24, 1962. A copy
is attached as Item No. 10.
Pursuant to recommendations contained in
memoranda from appropriate individuals
concerned, Governor Shepardson approved
on behalf of the Board on October 23,
1962, the following actions relating to
the Board's staff:
APPoinits
Cleo J. Kray as Records Clerk, Office of the Secretary, with
annual salary at the rate of $4,110, effective the date of entrance
-von duty.
be.Q4
Narita Ann Vermeulen as Clerk, Division of International Finance,
Ilith basic annual salary at the rate of $4,110, effective the date of
elltrn„
—uce upon duty.
v,
William E. Rumbarger, from the position of Federal Reserve
ifiner to the position of Review Examiner, Division of Examinations,
-ul
vit
th no change in basic annual salary at the rate of $8,310, effective
e date of assuming his new duties.
rile"hing activity
Paul Gekker, Economist, Division of International Finance, to
'Luuct a seminar in Soviet economics and to serve as an academic consultant
4t
George Washington University.
404,
10/24/62
Pursuant to the recommendation contained in
a memorandum from the Division of Examinations, Governor Shepardson today approved
on behalf of the Board the appointment of
Robert B. Thornton as Assistant Federal
Reserve Examiner in that Division, with
basic annual salary at the rate of $6,900,
effective the date of entrance upon duty.
;
10
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 1
10/24/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 24, 1962
Board of Directors,
Security Trust Company,
LYnn, Massachusetts.
Gentlemen:
The Board of Governors of the Federal Reserve
SYstem approves, under the provisions of Section 24A of
the Federal Reserve Act, an investment by Security Trust
Company of $82,000 to complete renovating and remodeling
main office quarters and installing drive-in facilities.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
Item No. 2
10/24/62
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.'
ADDRESS OFFICIAL CORRESPONDENCE
TO TI-4E BOARD
October 24, 1962
Mr. William B. Beam,
Vice President,
Chemical International Finance, Ltd.,
20 Pine Street,
New York 8, New York.
Dear Mr. Beam:
This refers to your letter of September 14, 1962, and
enclosures, transmitted through the Federal Reserve Bank of New
°rk, advising of a recent policy change in your operations and
!
he transfer of certain assets from Chemical International Finance,
("CIFn) to Chemical Overseas Finance Corporation ("COFC"),
raget, Bermuda, your wholly-owned subsidiary, and the transfer of
8°me assets from COFC to CIF as of September 1, 1962.
With the exception of two investment-type transactions
COFC for the reasons outlined, it is noted that the policy
11°11 is for CIF to handle all investment-type transactions; that in
,
Ile future export paper involving Export-Import Bank guarantees
'
wiU be negotiated and held in CIF because Export-Import Bank has
14 c)t made available such guarantees to the foreign subsidiary; and
at all other straight loan transactions will be referred to COFC.
.tccordingly, you have advised the Board of Governors of this general
:
ansfer of assets and have asked specific approval regarding the
.I ares of Investment Company of Nigeria and Development Underwriting
,
'cl.) as well as for such other approvals as the Board may deem
aPP1'°Priate.
lef+
-. in
Z
On the basis of the information furnished in your letter,
TIC" without ruling on the question whether specific Board consent
L'8 required with respect to each of the items transferred, the
"I3
ard notes, without objection, that such transfers were effected
118 of September 1, 1962 and grants consent to CIF to purchase and
°Id) subject to the various conditions contained in specific and
eneral consents heretofore granted to CIF and COFC, as the case may
e) the following shares:
t
SYSTEM
BOARD OF GOVERNORS OF THE FEDERAL RESERVE
Mr. William B. Beam
Carrying
Value
Total
Par Value
25,000 shares Investment Company of
Nigeria Limited, Lagos,
Nig.£25,000
Nigeria
S.A.
a,
Mexican
3,000 shares Impresora
73,000
de C.V., Mexico, .D.F.
S.A.
a,
Mexican
ra
300 shares Impreso
2.375,000
de C.V. (Preferred)
ting
Underwri
40,000 shares Development
Aus.£101000
Ltd., Sydney, Australia
135,000 shares Gas Natural Colombiana, S.A.,
71,350,000
Barranquilla, Colombia
US$70,072.65
240.17
30,021.01
19,129.35
183,005.76
US$302,468.94
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
9
BOARD OF GOVERNORS
.......
Item No. 3
OF THE
.
:0
.4
.1
.
0.
FEDERAL RESERVE SYSTEM
::
i..
ti.
10/24/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 24, 1962
CONFTWMTAL
Mr. Palcolm Bryan, President,
Federal leserve Bank of Atlanta,
Atlanta 3, Georgia.
Dear Mr. Bryan:
payment of
The Board of Governors approves the
0,600 per
of
rate
the
salaries to Mr. Marvin W. Stewart at
$8,900 1/
of
rate
annum and to Mr. William E. Thomas at the
Branch,
ham
Per an
as Assistant Cashiers of the Birming
r 1
Novembe
Federal Reserve Bank of Atlanta, effective
by
fixed
rates
through December 31, 1962. These are the
of
letter
Your Board of Directors as reported in your
October 12, 1962.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
•
1/ Should be Mr. William H. Thomas.
r-;
BOARD OF GOVERNORS
OF THE
Item No.
FEDERAL RESERVE SYSTEM
L.
10/24/62
WASHINGTON 25. D. C.
ADDRESS OFFICIAL C:ORRESPONDENCL
TO THE BOARD
October 24, 1962
Board of Directors,
The Colonial Bank and Trust Company,
Waterbury, Connecticut.
Gentlemen:
The Board of Governors approves the
establishment by The Colonial Bank and Tru.:It
Company, Waterbury, Connecticut, of a branch
near the junction of Main Street and Highland
Avenue, Cheshire, Connecticut, provided the
branch is established within 12 months from the
date of this letter.
The Board of Governors also approve8 an
additional investment of 450,000 in bank premines
for leasehold improvements on premises to be occupiedby the above branch.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
T
BOARD OF GOVERNORS
Item NO. 5
10/24/62
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 24, 1962
Board of Directors,
Raritan State Bank,
Raritan, New Jersey.
Gentlemen:
The Board of Governors of the Federal Reserve System
approves (1) the establishment of a branch on Route 206 between
Hamilton Road and Amwell Road, Hillsborough Township, Somerset
County, New Jersey, and (2) an additional investment of $70,000
in bank premises incident to the establishment of the branch,
under the provisions of Section 24A of the Federal Reserve Act,
by Raritan State Bank, Raritan, New Jersey. This approval is
granted provided (1) the branch is established within one year
from the date of this letter, and (2) the bank's plan to increase
its capital by the sale of 3,000 shares, par value $251 at $100
Per share, is consummated prior to the establishment of the branch.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
..,41••••.
•c,$)OFC01,..
Item No. 6
OF THE
FEDERAL RESERVE SYSTEM
o
10/24/62
WASHINGTON 25. D. C.
h•
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 241 1962
Board of Directors,
Citizens Commercial
& Savings Bank,
Flint, Michigan.
Gentlemen:
The Board of Governors of the Federal Reserve
SYstem approves the establishment of an in-town branch
at G-3055 West Pierson Road, by Citizens Commercial &
Savings Bank, provided the branch is established within
alx months from the date of this letter.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
Item No. 7
OF THE
FEDERAL RESERVE SYSTEM
10/24/62
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 24, 1962
Mr
Paul W. Brandel, Vice President,
Emil Anderson & Son, Inc.,
jr,449-11 Balmoral Avenue,
"lcago 40, Illinois.
Dear Mr.
Brandel:
This refers to your request, submitted through the Federal
Ree
of 7r7e Bank of Chicago, for determination by the Board of Governors
s'ne Federal Reserve System as to the status of Jo Emil Anderson
011, Inc. as a holding company affiliate.
The Board understands that the present activities of J. Emil
& Son, Inc. are the design, construction, and financing of
or lstrial and commercial buildings; that the Company awns, directly
st rldirectly, for investment purposes, over 80 per cent of the outEvanston,
1117:ling shares of stock of Evanston Trust and Savings Bank,
of stock
shares
outstanding
the
of
of ln°1-si slightly under 15 per cent
Ravenswood,
of
Bank
the
of
and
Illinois,
Cbi uhe Gary...Wheaton Bank, Wheaton,
banks;
other
three
of
stock
of
amounts
biate!g°, Illinois, and insignificant
any
control
or
own
indirectly,
at
or
directly
not,
the Company does
8to
institutions.
banking
other
any
control,
of, or manage or
Ander,,
facts, the Board has determined that J. Emil
Ander,01 In view of these
busii
& Son, Inc. is not engaged, directly or indirectly, as a
nes,.7
14 holding the stock of, or managing or controlling, banks, banking
'
a.se
sece
jiations, savings banks, or trust companies within the meaning of
amended; and, accordingly,
1
,°11 2(c) of the Banking Act of 1933, as
the (
company
affiliate except for
holding
be
a
to
°mPa4Y is not deemed
the:
Reserve
Act, and does not
Federal
the
of
heeeurPoses of section 23A
order to vote the
in
Governors
of
Board
bank 4 voting permit from the
stack which it awns.
If, however, the facts should at any time differ from those
above to an extent which would indicate that J. Emil Anderson
again
might be deemed to be so engaged, this matter should
Ilbmitted to the Board. The Board reserves the right to rescind this
cited
be
Mr. Paul W. Brandel
-2-
determination and make further determination of this matter at any time
or
the basis of the then existing facts. Should future activities of,
acquisitions by the Company, or its subsidiaries and affiliates,
:
rvarticularly in bank stocks, even though not constituting control,
d Ult in the Company attaining a position whereby the Board may deem
orirable a determination that the Company is engaged in the business
d„.11°1ding bank stocks, or the managing or controlling of banks, the
'"ermination herein granted may be rescinded.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
05M
BOARD OF GOVERNORS
•'-'pOF GPI;•.
ei? •.
,' $
44t0,, 0.
4
7
.0
\ t:•
.
h,i41'
•
.-i
W .•
.7.
i,
I,•
I....' 4,
)•
.,, :1
t
`t,..
1...
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
Item No. 8
10/24/62
25, D. C.
E
ADDRESS OFFICIAL COF7RESPONDENC
TO THE BOARD
'
1 RE.Srce`'•
.41'
•.
'
'
.•'
October 24, 1962
Mr. L. E. Fitzgerald, President,
The Fitzgerald Insurance Agency, Inc.,
Yurnai Colorado.
Dear
Mr. Fitzgerald:
in your letter of
This refers to the request contained
e Bank of Kansas
Reserv
l
Federa
the
cl, 1962, submitted through
the Federal
of
ors
Govern
of
for determination by the Board
nce Agency,
Insura
rald
Fitzge
I serve System as to the status of The
:
e° as a holding company affiliate.
Ji11-0-
Insurance Agency,
The Board understands that The Fitzgerald
various types
ing
broker
of
-LS primarily engaged in the business
ate by reason
affili
y
0i insurance; that the Company is a holding compan
(3
of stock
shares
nding
outsta
op the fact that it owns 73 per cent of the
y
Compan
the
that
and
do;
Farmers State Bank of Yuma, Yuma, Colora
or
manage
of,
stock
any
l
contro
0,,e3 not, directly or indirectly, own or
1,' control, any banking institution other than Farmers State Bank of
4ma.
Inc. 4
4
ined that The
In view of these facts, the Board has determ
ly or indirectly,
direct
d,
Fitz
engage
not
is
as gerald Insurance Agency, Inc.
lling, banks,
or
contro
ng
managi
or
of,
i_j business in holding the stock
a
ba,
the meanwithin
ies
compan
trust
or
Llig associations, savings banks,
accordand,
d;
amende
as
1933,
of
ing of section 2(c) of the Banking Act
g company affiliate except
t,AY, the Company is not deemed to be a holdin
e Act, and does not
Reserv
l
Federa
4: the purposes of section 23A of the
to vote the
order
in
ors
Govern
of
h. a voting permit from the Board
c1
ba,
--L‘ stock which it owns.
indicate that
If, however, the facts should at any time
The,,
to be so engaged,
be
deemed
might
th,fltzgerald Insurance Agency, Inc.
Board reserves
The
Board.
the
to
ted
tai;;3 matter should again be submit
'
r
determination
furthe
make
and
n
inatio
determ
or right to rescind this
existing facts.
this matter at any time on the basis of the then
4059
Mr. L. E. Fitzgerald
-2-
Particularly, should future acquisitions by or activities of the Company
result in its attaining a position whereby the Board may deem desirable
4 determination that the Company is engaged as a business in the holding
?f bank stock, or the managing or controlling of banks, the determination
ilerein granted may be rescinded.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
411
BOARD OF GOVERNORS
Item No.
OF THE
FEDERAL RESERVE SYSTEM
9
10/24/62
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE SOAR°
October 24, 1962
Martin P. Snyder, Esq.,
Morgan, Lewis & Bockius,
Fidelity-Philadelphia Trust Building,
Philadelphia 9, Pennsylvania.
11/ear Mr. Snyder:
This is in reply to your letter of September 28, 1962,
1
1 e18.t ng to the Board's denial, on July 131 1962, of the application
;
1 its
consent to the merger of The First National Bank of
411nt Holly Springs into Dauphin Deposit Trust Company. On behalf
ti the applicant bank, you request reconsideration of the Applica11 and an opportunity to present the matter orally before the Board
Governors.
As you know, section 262.2(f)(6) of the Board's Rules of
ure provides that, in such matters, the Board will not
!Onside its action "unless the request presents relevant facts
for good cause shown, were not previously presented to the Board,
w_ Unless it otherwise appears to the Board that reconsideration
'
111d be appropriate."
Your letter of September 28 enumerates a number of "principal
rea,
r l'°ns for requesting the Board to reconsider its decision", which
i lte to such matters as the extent of the service areas of First
co i°flal and of Dauphin Deposit's Carlisle branch, whether substantial
thrnpetition between these offices would be eliminated by the merger,
toe degree of existing banking concentration in the area, and the need
r trust services in Mount Holly Springs.
The letter of September 28 apparently was not intended to
Q04,'"L in full the facts and reasoning on the basis of which you
end that the Board's denial of the application should be rescinded.
'
gonver, under section 262.2(f)(6) a request for reconsideration of
action under the Bank Merger Act should be accompanied by a
tEtTete statement of the facts and reasoning relied upon. When the
111,e,.'s and arguments mentioned in the letter of September 28 as supportthe enumerated reasons are submitted, the request will be conered by the Board. If the Board should then conclude that there is
I
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Martin. P. Snyder, Esq.
sufficient basis for reconsideration and if it should appear that
°IV- presentation is necessary or advisable, you will be so informed.
Your letter refers to the fact that the Application in this
T!tter was acted upon by five members of the Board, one of whom
ssented, as "another reason why the Board should reconsider the
on the basis of new evidence to be submitted." In order to avoid
BElible misunderstanding, you are informed that the Board does not
.e ti- rd this circumstance as providing any valid support to a petition
r reconsideration.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
, REStO,'•
Por
aluiediate release
Item No. 10
10/24/62
October 24, 1962.
The Board of Governors of the Federal Reserve System today
iss11-3
proi?Ll a statement to all State chartered member banks explaining
byjsionc of the newly enacted Bank Service Corporation law signed
iez "e President on October 23, 1962, A like statement is being
q lled to all State nonmember insured banks by the Board of Directors
Federal Deposit Insurance Corporation.
The Act applies to all banks subject to Federal supervision
, the first Federal legislation in a relatively new area of bank'p'lle use of nonbanking organizations having modern automated equiprrierAj
q t,-or various types of clerical, bookkeeping, accounting, and
lstical operations.
411c1
The provisions of the Act were effective upon its signing by
th
resident. Some banks already have made, or are contemplating
Nti
'
bytg, arrangements for utilizing outside services of the kind covered
be of; Act and the explanation of how to comply with its provisions will
special interest to them.
ttiel ,1
The statement summarizes the salient features of the new Act
'`ilig
xten,e.
the definition of bank service corporations; how and to what
'
eove
banks may invest in such corporations; and the kinds of services
by the Act. It also explains in some detail provisions regardNet Lie nature of assurances regarding regulation and examination that
the ue given both by the supplier of the services and the user bank to
P131*()Priate Federal supervisory agency* For State member banks, such
4szu14,
-44ees will be given to the Board through their respective Federal
Banks
A copy of the statement issued by the Board is attached.
ktt'hinent
@FedFRASER