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Minutes for October 28 1959 To: Members of the Board From: Office of the Secretary 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. Szymczak Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King ezro_.-7 I Minutes of the Board of Governors of the Federal Reserve System on Wednesday, October PRESENT: Mr. Mr. Mr. Mr. 28, 1959. The Board met in the Board Room at 10:00 a.m. Balderston, Vice Chairman Mills Shepardson King Mr. Sherman, Secretary Mr. Fauver, Assistant to the Board Mr. Young, Director, Division of Research and Statistics Mr. Hackley, General Counsel Mr. Solomon, Director, Division of Examinations Mr. Hexter, Assistant General Counsel Mr. Nelson, Assistant Director, Division of Examinations Mr. Landry, Assistant to the Secretary Discount rates. The establishment without change by the Federal Reserve Bank of Atlanta on October 26, 1959, 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. Items circulated to the Board. The following items, which had been circulated to the Board and copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Letter to the American Commercial Bank, Charlotte, North Carolina, approving the establishment of three branches in Raleigh, North Carolina, incident to its proposed merger with the First National Bank of Raleigh. 1 Letter to The Ashville Bank, Ashville, Ohio, approving an investment in bank premises. 2 -2- 10/28/59 Item No. Letter to the Federal Reserve Bank of Atlanta regarding the proposed relocation by the Progressive Bank and Trust Company, New Orleans, Louisiana, of its LakeviewCanal Branch from 5055 Canal Street to a new site at 120 City Park Avenue. 3 Letter to The National Bank of Canton, Canton, Illinois, approving its application for fiduciary powers. 4 Telegram to the Federal Reserve Agent at Chicago authorizing the issuance of a limited voting permit to Brenton Companies, Des Moines, Iowa, covering their stock in Northwest Des Moines National Bank, Des Moines, Iowa. 5 Letter to The National Lumberman's Bank of Muskegon, Muskegon, Michigan, approving its application for fiduciary powers. 6 Letter to The gynthiana State Bank, Cynthiana, Indiana, waiving the requirement of six months' notice of withdrawal from membership in the Federal Reserve System. 7 Prior tax certification with respect to Borgerding Investment Company, Belgrade, Minnesota. 8 Report on grants of trust powers. In connection with the , approval of the letter to The National Lumberman's Bank of Muskegon (Item No. 6), Vice Chairman Balderston commented that he presumed the the number the Board's Annual Report would include information as to of requests for fiduciary powers approved by the Board during to which Mr. Solomon replied in the affirmative. 1959,. Governor Shepardson a report on stated that the Board sometime previously had requested ion as to the criteria for granting trust powers, including informat the the number of such requests granted, the number not granted, and reasons in the latter instances. 10/28/59 -3- Mr. Solomon replied that this study was in process and that he hoped the resulting report would soon be available. Deposit insurance for First State Bank and Trust Company of Lufkin, Texas (Item No. 9). There had been circulated to the Board a draft letter to the Federal Deposit Insurance Corporation concerning the application of the First State Bank and Trust Company of Lufkin, Texas, Lufkin, Texas, for continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. The letter stated that the bank had been considered to be moderately deficient in capital funds in view of the volume of assets at risk and that the Federal Reserve had suggested curtailment of cash dividends to effect correction of this deficiency. In response to a question from Governor Shepardson as to what the Federal Deposit Insurance Corporation might do in this case as a result of the bank's failure to follow the corrective suggestion made by the Federal Reserve Bank of Dallas, Mr. Nelson replied that the Federal Deposit Insurance Corporation would probably be more insistent than the Federal Reserve. For example, it might stipulate that the bank increase its capital before permission would be granted for the continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. Vice Chairman Balderston then asked whether the corrective program that had been urged upon the bank had prompted the First State Bank and Trust Company's decision to withdraw from Federal Reserve _1_ 10/28/59 membership, and Mr. Nelson replied that there was no indication that this was so. Following reference to a number of recent withdrawals from Federal Reserve membership of banks in the States of Texas and Indiana, Governor Shepardson commented that when a bank withdrew from membership in the System on the grounds that it wished to place the reserves thus released in the form of earning assets, it would find it necessary to keep some of the funds elsewhere as a reserve or to place them on deposit with a correspondent bank. Thus, the net amount available for investment would be something less than the reserves formerly required to be kept at the Federal Reserve Bank. Unanimous approval was then given to a letter to the Federal Deposit Insurance Corporation in the form attached hereto as Item No. 9. Application to organize a national bank in Tulsa, Oklahoma (Item No. 10). A memorandum dated October 14, 1959, had been circulated to the Board from the Division of Examinations concurring in a recommendation of the Federal Reserve Bank of Kansas City that an application to organize a national bank at Tulsa, Oklahoma, be disapproved. A draft of letter that would so recommend to the Comptroller of the Currency accompanied the memorandum. The memorandum pointed out that, although future earnings prospects of the proposed bank were favorable, the general character of the proposed management was not entirely satisfactory and 10/28/59 -5- the convenience and needs of the community to be served were not sufficiently established at the present time. In elaborating upon the memorandum, Mr. Nelson explained that the southeast section of Tulsa in which the proposed bank would be located was considered to be a logical spot for a new bank eventually but that there was little commercial or industrial development in the immediate area at present and the application appeared to be premature. Governor Mills commented that, on balance, he would agree with the recommendation of the Division of Examinations. However, he thought the decision a close one since the individual proponents enjoyed good reputations and had evidenced capacity to raise and invest the necessary risk capital. Vice Chairman Balderston also indicated that he would agree with the recommendation of the Division of Examinations, although he did so with some reluctance. He was concerned as to whether the Board was consistent in its recommendations to the Comptroller of the Currency for different parts of the country. He felt that in some districts the Reserve Bank officers sending in recommendations seemed more ready to discourage the opening of new banks than in others. He had no suggestion at this time as to how to assure consistency in the Board's recommendations to the Office of the Comptroller. Unanimous approval was then given to a letter to the Comptroller of the Currency in the form attached as Item No. 10. 10/28/59 -6- Deposit pickups in New Jersey (Item No. 11). Mr. Hackley reported that letters dated October 14 and October 26, 1959, had been received from the Hudson County National Bank, Jersey City, New Jersey, inquiring as to whether any Federal statute or regulation would be violated in the event that bank should inaugurate a pickup service of deposits for present and prospective customers, to be made either by vehicles owned by the bank or by vehicles owned by an independent company. He indicated that there was involved possible violation of Regulation Q, Payment of Interest on Deposits, as well as of section 5155 of the Revised Statutes relating to the establishment of a branch or branches. With reference to the possible relevance of Regulation Q to this question, the principle indicated by the Board in its decision of January 1957 in the Lubbock, Texas, case was that a service rendered to a customer did not constitute a payment of interest, directly or indirectly, and it would appear that in the present case this ruling would apply. There- fore, it was not necessary to raise the question of Regulation Q in responding to Hudson County National Bank and, since any question as to the establishment of a branch of a national bank was a matter for the Comptroller of the Currency, it was planned to refer the letter to that office for reply, with advice of the referral to be sent to Hudson County National Bank. Mr. Hackley went on to say that this was brought to the Boardts attention because of the position that had been taken in 10/28/59 March -7- 1953 in connection with an inauiry regarding Commercial Trust Company of New Jersey, a member State bank also located in Jersey City, that armored car pickup of deposits would be construed as operation of a branch without the approval of the Board in violation of section 9 of the Federal Reserve Act. The State banking authorities of New Jersey held a different opinion at that time, however, and it was Mr. Hackley's understanding that Commercial Trust Company was still providing deposit pickup service. Governor Mills commented that this was a tender subject that had been up before the New Jersey State banking authorities, and he requested that the proposed letter to Hudson County National Bank be read. Following a reading of the proposed reply, Governor Mills questioned the advisability of language which might indicate doubt on the part of the Board as to whether the pickup service would constitute a branch operation. He recalled that legislation had been introduced in New Jersey in this connection but had not been enacted. Governor Mills also commented that smaller banks in New Jersey had objected to the practice of large banks picking up deposits in areas served by smaller banks. Mr. Solomon and Mr. Hackley observed that in the Commercial Trust case, the Board had taken a firm position that the practice of picking up deposits constituted a branch operation. 010 -8- 10/28/59 Mr. Hexter added the comment that Hudson County National Bank, a competitor of Commercial Trust Company, no doubt anticipated a reply similar to that given Commercial Trust, and he expressed the view that, in line with Governor Mills' suggestion, it would be preferable to make no reference to the branch question in referring the letter to the Comptroller and informing the national bank of this disposition. In response to a question from Governor Shepardson as to what steps could be taken by the Board in instances of this type where the Board's views were ignored, Mr. Hexter replied that the Board could initiate a proceeding to remove the directors of the offending bank or, if it felt the circumstances warranted, take action to terminate the offending bank's membership in the System. After further discussion, during Which it was noted that in California the State authorities had been unwilling to take firm action against the practice of picking up deposits, it was unanimously agreed that the inquiry from Hudson County National Bank should be referred to the Comptroller of the Currency and the bank so advised by letter in the form attached as Item No. 11. Mr. Young withdrew from the meeting at this point. In connection with the foregoing discussion, Governor King stated that he recently learned of a service being offered by certain banks whereby they provided a postal box address to which remittances -9- 10/28/59 due the depositor could be sent. The bank credited the depositor's account on its books, after which it returned a check list to the depositor showing the names of those making the payments and the amounts paid by each. He wondered whether the Board had had occasion to consider this practice, which he felt was efficient. e After comments were made on several variations of the practic to which Governor King referred, Mr. Hackley said that, rightly or wrongly, this issue as far as Regulation Q was concerned had been settled in the Lubbock, Texas, ruling of the Board on January 22, 1957, s by a bank in which the Board held that the rendering of such service in did not constitute indirect payment of interest on a demand deposit violation of Regulation Q. Messrs. Hexter and Nelson then withdrew from the meeting. Topics for Federal Advisory Council meeting (Item No. 12). of Reference was made to a draft of letter to Mr. Prochnow, Secretary the the Federal Advisory Council, suggesting topics for inclusion on r 16, 1959, agenda for the meeting of the Council to be held on Novembe the Board on and for discussion at the joint meeting of the Council and November 17, 1959. During discussion, several changes in wording of the letter were suggested and agreed upon. It was also agreed that the Board on maximum rates would not include in this letter a request for views of interest payable under Regulation Q, and that it would ask for the 10/28/59 -10- led Council's views regarding the expansion and implications of so-cal "revolving" check and charge bank credit plans. Thereupon, unanimous approval was given to a letter to Mr. Prochnow in the form of attached Item No. 12. The meeting then adjourned. Secretary's Notes: On October 27, 1959, Governor Shepardson approved on behalf of the Board a letter to the Executive Vice President of the National Association of Bank Auditors and Comptrollers extending an invitation to the national officers of that Association to visit the Federal Reserve Building on February 17) 1960, for a program which would include a luncheon. Governor Shepardson today approved on behalf of the Board a letter to the Federal Reserve Bank of Richmond (attached Item No. 13) approving the designation of James R. T. Hodgson as special assistant examiner. On the basis of information contained in a memorandum from Mr. Johnson, Director, Division of Personnel Administration, dated October 27, 1959, Governor Shepardson today approved on behalf of the Board a program of visits to commercial banks in various cities by James B. Eckert, Chief of the Banking Section, Division of Research and Statistics, as a part of the Board's training program, it being understood that the total period of time covered by these visits would be approximately eight to nine weeks. BOARD OF GOVERNORS OF THE Item No. 1 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE 130ARD October 281 1959. Board of Directors, American Commercial Bank, Charlotte, North Carolina. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Richmond and subject to the circumstances described therein, the Board of Governors of the Federal Reserve System approves the establishment of branches by American Commercial Bank at the locations listed below, following consummation of the proposed merger of your bank and First National Bank of Raleigh, Raleigh, North Carolina: 200 South Salisbury Street, Raleigh, North Carolina; 2518 Fairview Road, Raleigh, North Carolina; and 518 West South Street, Raleigh, North Carolina. This approval is given provided: (a) Shares of stock acquired from dissenting shareholders are disposed of within six months from the date of acquisition, and (b) The branches are established within six months from the date of this letter. Very truly yours (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. 3'-f15( BOARD OF GOVERNORS OF THE Item No. 2 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 28, 1959. Board of Directors, The Ashville Bank) Ashville, Ohio. Gentlemen: Pursuant to your request submitted through the Federal Reserve Bank of Cleveland, the Board of Governors of the Federal Reserve System approves, under the provisions of Section 24A of the Federal Reserve Act, an investment in bank premises not to exceed $124,000, by The Ashville Bank, Ashville) Ohio, for the purpose of constructing a new bank building and providing temporary quarters during the construction period. This approval is granted with the understanding that the real estate occupied as temporary quarters will be sold subsequent to completion of the new bank building and that the carrying value of bank premises will be reduced to $1101000. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 3 FEDERAL RESERVE SYSTEM 10/28/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 28, 1959. Mr. J. E. Denmark, Vice President, Federal Reserve Bank of Atlanta, Atlanta 3, Georgia. Dear Mr. Denmark: Reference is made to your letter of October 15, 1959, with respect to the proposed relocation by the Progressive Bank and Trust Company, New Orleans, Louisiana, of its Lakeview-Canal Branch from 5055 Canal Street to a new site at 120 City Park Avenue. According to the information available, the proposed site is about 500 feet from the existing branch and competing banking facilities are more than one mile distant. It would appear that the proposed change would constitute a mere relocation of an existing branch in the immediate neighborhood without affecting the nature of its business or the customers served. Under the circumstances formal approval of the Board of Governors is unnecessary. Very truly yours, (signed) Kenneth A0 Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No, 4 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE HOARD October 28 1959 Board of Directors, The National Bank of Canton, Canton, Illinois. Gentlemen: The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary powers and grants The National Bank of Canton authority to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State of Illinois. The exercise of such rights shall be subject to the provisions of Section 11(k) of the Federal Reserve Act and Regulation F of the Board of Governors of the Federal Reserve System. A formal certificate indicating the fiduciary powers that your bank is now authorized to exercise will be forwarded in due course. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. Item No. 5 TELEGRAM 10/28/59 LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON October 28, 1959. PRALL — CHICAGO KECEA A. Brenton Companies, Des Moines, Iowa, B. Northwest Des Moines National Bank, Des Moines, Iowa. C. None. D. At any time prior to April 1, 19601 at the annual meeting of such bank or any adjournment thereof, to act upon proposals (1) to increase the capital stock of such bank, and (2) to amend the articles of association of such bank to conform to articles recommended by the Comptroller of the Currency, provided that all actions taken shall be in accordance with plans satisfactory to the Comptroller of the Currency. (Signed) Kenneth A. Kenyon 11NYON Definition of KECEA: The Board authorizes the issuance of a limited voting permit, under the provisions of section 5144 of the Revised Statutes of the United States, to the holding company affiliate named below after the letter "A", entitling such organization to vote the stock which it owns or controls of the bank(s) named below after the letter "B", subject to the condition(s) stated below after the letter "C". The permit authorized hereunder is limited to the period of time and the purposes stated after the letter "D". Please proceed in accordance with the instructions contained in the Board's letter of March 10, 1947, (s-964) BOARD OF GOVERNORS 4440z1*Gtrotri,, OF THE FEDERAL RESERVE SYSTEM 419 - WASHINGTON 25, D. C. Item No. 6 1C/28/59 ADDRESS OFFICIAL CORRESPONDENCE 4 4 4, TO THE BOARD October 28, 1959. Board of Directors, The National Lumberman's Bank of Muskegon, Muskegon, Michigan. Gentlemen: The Board of Governors of the Federal Reserve System has given consideration to your application for fiduciary powers and grants The National Lumberman's Bank of Muskegon authority to act, when not in contravention of State or local law, as trustee, executor, administrator, registrar of stocks and bonds, guardian of estates, assignee, receiver, committee of estates of lunatics, or in any other fiduciary capacity in which State banks, trust companies, or l other corporations which come into competition with nationa of State the of banks are permitted to act under the laws to Michigan. The exercise of such rights shall be subject Act Reserve Federal the the provisions of Section 11(k) of and Regulation F of the Board of Governors of the Federal Reserve System. A formal certificate indicating the fiduciary be powers that your bank is now authorized to exercise will forwarded in due course. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE 400t14414.*, 44 of Gov Item No. 7 FEDERAL RESERVE SYSTEM 4 t t 10/28/59 WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD 44 October 28, 1959. Board of Directors, The Cynthiana State Bank, Cynthiana, Indiana. Gentlemen: The Federal Reserve Bank of St. Louis has forwarded 1959, and to the Board of Governors your letter of October 7, to withion intent your ying signif the accompanying resolution requesting and System e Reserv l Federa draw from membership in the awal. withdr such of waiver of the six months' notice In accordance with your request, the Board of Governors waives the requirement of six months' notice of such withdrawal. of the Upon surrender to the Federal Reserve Bank of St. Louis stock such ution, instit your to issued Federal Reserve Bank stock n. thereo made be will refund riate will be canceled and approp tion HI Under the provisions of Section 10(c) of the Board's Regula may ution instit your 1952, 1, ber Septem as amended effective eight accomplish termination of its membership at any time within from aw withdr to ion intent of notice the months from the date membership was given. It is requested that the certificate of membership be sent to the Federal Reserve Bank of St. Louis for disposition. Attention is invited to the fact that if your bank is from desirous of continuing deposit insurance after withdrawal ary be necess will it System e Reserv l Federa membership in the nce t Insura l Deposi Federa the to made be that application Corporation. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 8 10/28/59 WASHINGTON CERTIFICATION 1. The Board of Governors of the Federal Reserve System has been informed by Borgerding Investment Company, Belgrade, Minnesota, that it proposes to distribute to its shareholders 766 shares of stock of North American State Bank, Belgrade, Minnesota, and 145 shares of stock of Elrosa State Bank, Elrosa, Minnesota. 2. Pursuant to the provisions of section 1101(b) and section 1103(b) of the Internal Revenue Code of 1954, the Board of Governors of the Federal Reserve System hereby certifies that: (a) Borgerding Investment Company satisfies the requirements of subsection (b) of section 1103 of the Internal Revenue Code of 1954 and therefore is a ."qualified bank holding corporation" as defined in that subsection. (b) The 766 shares of stock of North American State Bank and the 145 shart:s of stock of Elrosa State Bank referred to in "1" above are all or part of the property by reason of which Borgerding Investment Company controls (within the meaning of section 2(a) of the Bank Holding Company Act of 1956) said banks. proposed distribution of the shares of bank stock enumerated hereinabove is appropriate to effectuate the policies of the Bank Holding Company Act of 1956. (c) The Executed in Washington, D. C., pursuant to direction of of the Foder31 Reserve System. Governors of Board the (Signed) Merritt Sherman Merritt Sherman, Secretary. Date: October 28, 19590 BOARD OF GOVERNORS OF THE 001,07,44, L___•• 4;;V41/ 4z.4 45 'tt, -. (ip -3.( FEDERAL RESERVE SYSTEM * WASHINGTON 25. D. C. ,cfp Item No. 9 10/28/59 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD 4.;trtfii : 44. N0%* October 28, 1959. The Honorable Jesse P. Wolcott, Chairman, Federal Deposit Insurance Corporation, Washington 25, D. C. Dear Mr. Wolcott: Reference is made to your letter of October 6, 1959, concerning the application of the First State Bank and Trust Company of Lufkin, Texas, Lufkin, Texas, for continuance of deposit insurance after withdrawal from membership in the Federal Reserve System. The bank has been considered to be moderately deficient in capital funds in view of the volume of assets at risk, and in order to effect correction of this deficiency, curtailment of cash dividends has been suggested. NO other corrective programs that the Board of Governors feels should be incorporated as conditions to the continuance of deposit insurance have been urged upon or agreed to by the bank. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. )4. BOARD OF GOVERNORS OF THE Item No. 10 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 28, 1959. Comptroller of the Currency, Treasury Department, Washington 25, D. C. Attention Mr. W. M. Taylor, Deputy Comptroller of the Currency. Dear Mr. Comptroller: Reference is made to a letter from your office dated June 29, 1959, enclosing copies of an application to organize a national bank at Tulsa, Oklahoma, and requesting a recommendation as to whether or not the application should be approved. A report of investigation of the application made by an examiner for the Federal Reserve Bank of Kansas City discloses generally favorable findings with respect to capital structure and earnings prospects of the proposed bank. However, it appears that the character of the proposed management is not entirely satisfactory and the area to be served has not developed sufficiently to warrant the organization of a bank at this time. Accordingly, the Board of Governors does not feel justified in recommending approval of the application to organize a national bank at Tulsa, Oklahoma. The Board's Division of Examinations will be glad to discuss any aspects of this case with representatives of your office if you so desire. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. BOARD OF GOVERNORS OF THE Item No. 11 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 28, 1959 Mr. F. C. Ferguson, President, Hudson County National Bank, Montgomery & Washington Streets, Jersey City, New Jersey. Dear Mr. Ferguson: Your letters of October lb and October 26, 1959, regarding ers the question whether a practice of picking up deposits from custom tion, regula or l statute by truck or otherwise would violate any Federa cy have been referred to the Office of the Comptroller of the Curren for reply. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. , BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. Item No. 12 10/28/59 ADDRESS OFFICIAL CORRESPONOENCE TO THE BOARD October 28, 1959 AIR MAIL Mr. Herbert V. Prochnow, Secretary, Federal Advisory Councils c/o The First National Bank of Chicago, P. O. Box A, Chicago 900 Illinois. Dear Mr. .Prochnow: The Board suggests the following topics for inclusion on the l to be held on agenda for the meeting of the Federal Advisory Counci g of the meetin joint the at sion November 16, 1959 and for discus 17, 1959: Council and the Board on November the 1. The Board would appreciate receiving the views of cts prospe the and ion ss situat Council regarding the current busine and the first for business activity during the remainder of this year members of dual indivi the s from report with six months of 1960, along in their pments develo ctive prospe t or curren the Council regarding the for e pictur total the to icance signif districts having especial the in strike the of impact the on ts country as a whole. Commen of production and steel industry, as it may have affected levels activity or psychology on effect future a have trade and also as it may , will be of particular of the business community and the general public interest to the Board. on the 2. The Board would appreciate the Council's views for bank loans and strength of the current and prospective demand and the first half of year this of der remain other credit during the 1960. 3, The Board would be glad to have the views of the Council and the next meeting regarding appropriate credit policy between now of the Council. The Board has been considering the desirability of amending n 1(e) of Regulathe definition of savings deposits contained in Sectio e deposits of exclud tion Q, Payment of Interest on Deposits, so as to ional educat or public agencies even though operated for charitable tion defini the purposes. Consideration is also being given to whether L. Prochnow -2- to limit savings deposits should be even further restricted so as all corporations including g natin elimi thus solely to individuals, rations and associations now the special types of nonprofit corpo The Board would be interested its. permitted to have savings depos to express. care might il in any views that the Counc memThe Board wolld be interested in the views of the opment and operation bers of the Council with respect to the devel , particularly as such plans t credi e of "revolving" check and charg ng and on the lendi bank sound on t developments may have an impac y. t polic credi exercise of monetary and S. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. BOARD OF GOVERNORS OF THE Item No. 13 10/28/59 FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ENCE ADDRESS OFFICiAL CORRESPOND TO THE BOARD October 28, 1959. Mr. John C. Horigan, Chief Examiner, Federal Reserve Bank of Richmond, Richmond 13, Virginia. Dear Mr. Horigan: ined in your In accordance with the request conta the designaves appro d Boar the , letter of October 26, 1959 ial assistant examiner tion of James R. T. Hodgson as a spec , for the purpose for the Federal Reserve Dank of Richmond s, except The bank all of ns natio of participating in exami e-Planters Stat and nia, Virgi , mond Bank of Virginia, Rich nia. Virgi mond Rich ts, Trus Bank of Commerce and Bank to The authorization heretofore given your is iner t exam stan designate Mr. Hodgson as a special assi hereby canceled. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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