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Minutes for October 25, 1960
To:
Members of the Board
From: Office of the Secretary
Attached is a copy of the minutes of the
of the Federal Reserve System on
Governors
of
Board
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.
Chin. Martin
Gov. Szymczak
Gov. Mills 1/
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
1/ See memoranda of December 27, 1960, from Governor Mills
and Mr. Sherman.
Minutes of the Board of Governors of the Federal Reserve System on
Tuesday, October 25, 1960.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 9:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
King
Mr. Sherman, Secretary
Mr. Thomas, Adviser to the Board
Mr. Molony, Assistant to the Board
Vault cash and reserve requirements.
Chairman Martin said that he
had asked the Board to meet at this time for a preliminary exploration of
the timing of possible action, and announcement thereof, to implement the
1959 Act of Congress relating to vault cash and reserve requirements of
alenlber banks so as to provide a substantial part of reserves that would
be needed
by the banking system to meet seasonal and other needs during
November and December of this year. Specifically, he had reached the
conclusion that it would be desirable to authorize all member banks to
all vault cash in computing their reserve requirements at an early
date and to equalize the reserve requirements against net demand deposits
"central reserve city banks and reserve city banks, even though Public
liar 86-114 did not require the elimination of central reserve cities
July 28, 1962.
these
He did not have in mind any action or decision on
questions this morning but felt that some discussion of the possi-
bIlitY of such action would be helpful before this morning's meeting of
the Pederal Open Market Committee with the thought that the Board could
(74
10/25/60
-2-
Meet tomorrow to discuss whether or not action should be taken and, if so,
at what time.
He then asked that Mr. Thomas comment on the projected needs
for reserve funds during November and December of this year, both in terms
Of the amounts of reserves that would be needed and the timing of such
demands.
In his response to this request, Mr. Thomas referred to a memorankm that he had distributed under date of October 24, 1960, that presented
itIrormation and commented on some of the considerations related to further
action to release vault cash holdings of member banks for use as reserves.
There followed an informal discussion of the question presented by
Chairman Martin, at the conclusion of which it was understood that the
Matter would be taken up by the Board on the following day.
The meeting then recessed and reconvened at 12:50 p.m. with the
811ma members of the Board present as at the 9:00 a.m. session, along with
Messrs. Sherman and Kenyon.
The following also were present:
Messrs. Erickson, Hayes, Bopp, Fulton, Leach, Allen, Johns,
Deming, Leedy, Irons, and Mangels, Presidents of the
Federal Reserve Banks of Boston, New York, Philadelphia,
Cleveland, Richmond, Chicago, St. Louis, Minneapolis,
Kansas City, Dallas, and San Francisco, respectively,
and Mr. Patterson, First Vice President, Federal
Reserve Bank of Atlanta.
Absorption of exchange charges.
At Chairman Martin's request,
4°vernor Robertson reported on developments during the past few weeks in
e°4nection with the Board's ruling of August
4, 1960,
regarding absorption
(')f)2
ij
10/25/60
-3-
of exchange
charges, including receipt by the Board of a letter dated
BePtember 1, 1960, from the Bank Management Commission of the American
Bankers Association recommending a modification and liberalization of
that ruling and receipt of a letter from the Association of Reserve
City Bankers dated October 13, 1960, recommending a change in the
n.
I/11111g similar to that proposed by the Bank Management Commissio
After a brief discussion of Governor Robertson's report, the
nieeting recessed and reconvened in the Board Room at 2:20 p.m. with the
afte attendance as at the close of the 12:50 p.m. session except that
Chairman Martin and Governors Robertson and Shepardson were not in
attendance and Mr. Hackley, General Counsel, was present.
There was a further discussion of the Board's August 4 ruling
l egarding the absorption of exchange charges and of possible changes
'
that might be made in that ruling. A memorandum of this discussion
has been placed in the Board's files.
The meeting then adjourned.
Secretary's Notes: Pursuant to the recommendations contained in memoranda from appropriate
individuals concerned, Governor Shepardson today
approved on behalf of the Board increases in the
basic annual salaries of the following persons
on the Board's staff, effective October 30, 1960:
400S
-4-
10/25/60
and title
Division
Basic annual salary
To
From
Research and Statistics
MurraY Altmann, Economist
Prank deLeeuv, Economist
Priscilla S. Goodby, Economist
(Change in title from Research Assistant)
111;a17 C. Jackson, Statistical Clerk
irginia Lambert, Secretary
tlsie T. Nelson, Economist
nA t M. VanEckhardt, Statistical Assistant
$10,895
9,215
5,685
$11,155
9,475
6,435
4,040
5,170
7,095
4,675
4,145
5,335
7,260
4,840
8,6o0
8,860
6,930
7,095
3,605
4,075
3,710
4,180
Bank Operations
JOhn D. Smith, Technical Assistant
Examinations
Iriftn W. Robinson, Assistant Federal Reserve Examiner
Administrative Services
John ^
,
Simmons, Laborer
"ilhelmina K. Steele, Operator, Tabulating Equipment
Governor Shepardson also approved today on
behalf of the Board a letter to the Federal
Reserve Bank of Minneapolis (attached Item
No. 1) approving the designation of Hord
L. Knous as special assistant examiner.
•
BOARD OF GOVERNORS
OF THE
Item No. 1
10/25/60
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS
orriciAL
CORRESPONDENCE
TO THE BOARD
October 252 1960
CONFIDENTIAL (FR)
Mr. Frederick L. Deming, President,
Federal Reserve Bank of Minneapolis,
Minneapolis 2, Minnesota.
Dear Mr. Deming:
In accordance with the request contained in
Your letter of October 14, 1960, the Board approves the
designation of Howard L. Knous as a special assistant
examiner for the Federal Reserve Bank of Minneapolis.
It is noted that Mr. Knous is indebted to First
National Bank of Minneapolis, Minneapolis, Minnesota, in
the amount of $7,577.79 for a mortgage on his home.
Accordingly, the Board's approval of the designation of
Mr. Khans is given with the understanding that he will
not participate in any examination of First National
Bank of Minneapolis until his indebtedness has been
liquidated.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
@FedFRASER