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Minutes for
To:
October 28, 1960
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.
Chin. Martin
Gov. Szymczak
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. King
Minutes of the Board of Governors of the Federal Reserve System on
Friday, October 28, 1960.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Szymczak
Mills
Robertson
Shepardson
Sherman, Secretary
Thomas, Adviser to the Board
Shay, Legislative Counsel
Fauver, Assistant to the Board
Noyes, Director, Division of Research
and Statistics
Mr. Koch, Adviser, Division of Research and
Statistics
Mr. Landry, Assistant to the Secretary
Mr. Keir, Chief, Government Finance Section,
Division of Research and Statistics
Mr.
Mr.
Mr.
Mr.
Mr.
Report on money market conditions.
Messrs. Thomas and Keir presented
a report on money market, conditions including in their remarks reference to
the Treasury's forthcoming November 15 refunding concerning which terms
were released to the press yesterday after the close of the market.
Follow-
this report there was some discussion of a suggestion by Mr. Thomas that
during the refunding period nonbank Government securities dealers be provided
repurchase assistance by the System at a rate under the current discount rate
°f three per cent.
A memorandum relating to this suggestion has been placed
in the files of the Federal Open Market Committee.
Mr. Noyes brought to the Board's attention that three business
indicators had recently shown some improvement:
namely, department store
41..les on a seasonally adjusted basis would be up about six percentage points
osc
10/28/60
-2-
in October from their September level; new orders received by manufacturers
had exceeded sales in September for the first time this year; and automobile
sales had gone well during the first ten days of this month.
At the conclusion of these reports Messrs. Thomas, Noyes, Koch, and
Keir withdrew and the following entered the room:
Mr. Hackley, General Counsel
Mr. Solomon, Director, Division of Examinations
Mr. Goodman, Assistant Director, Division of
Examinations
Mr. Sprecher, Assistant Director, Division of
Personnel Administration
Mr. Leavitt, Supervisory Review Examiner,
Division of Examinations
Discount rates.
The establishment without change by the Federal
MinneReserve Banks of New York, Cleveland, Richmond, Chicago, St. Louis,
s and
aPolis, and Dallas, on October 27, 1960, of the rates on discount
with the
advances in their existing schedules was approved unanimously,
understanding that appropriate advice would be sent to those Banks.
Items circulated or distributed to the Board.
The following items,
Which
vhich had been circulated or distributed to the Board and copies of
d,
are attached to these minutes under the respective item numbers indicate
were approved unanimously:
Item No.
Letter to The First National City Bank of New
York, New York City, approving a change in the
location of its Nassau, Bahamas, branch.
1
Letter to First-Peoples State Bank, Traverse
Clty, Michigan, granting its request for
Permission to exercise fiduciary powers.
2
10/23/60
-3Item No.
Letter to the Federal Reserve Bank of St.
Louis approving the appointment of Marvin
L. Bennett as Assistant Federal Reserve
Agent, and of Leroy W. Siddall, Ralph C.
Hancock, and Laudie Ptacnik as Alternate
Assistant Federal Reserve Agents.
3
Letter to the Comptroller of the Currency
recommending favorably with respect to an
application to establish a bank in Evanston,
Illinois.
4
Messrs. Goodman and Sprecher withdrew from the meeting at this
Point.
Report on competitive factors (Ashland and Presque Isle, Maine).
Under date of October 20, 1960, copies had been distributed of a proposed
report to the Comptroller of the Currency on the competitive factors involved
in a planned purchase of assets and assumption of liabilities of Ashland
TrUst Company, Ashland, Maine, by Northern National Bank of Presque Isle,
?1'ssque Isle, Maine.
Governor Mills said that, technically considered as a report on
e°10Pet1tive factors, the conclusion of the proposed report was correct that
the acquisition in question would eliminate the only alternative banking
service in the primary Ashland service area and would strengthen further
the dominant position of Northern National Bank in the northern part of
Maine. Recognizing the statutory provision that these reports were to
Cover the competitive factors involved in proposed mergers, he felt it
7°Ki1d be desirable in an instance such as this to include in the body of
_11
10/28/60
the report (as distinguished from the conclusion) some additional background information that would bring out the fact that Ashland Trust
Company is located in a sparsely settled area, that this small bank
complements the services provided by Northern National Bank, but that
because of its small size it may not be self-sufficient in caring for
the credit needs of the community.
Mr. Solomon stated that in preparing these reports the Division
Of Examinations had been careful to address the content, particularly
the conclusion, only to the competitive factors involved.
It was
recognized that the final decision by the agency concerned might
Properly be based on factors other than competition , but it had not
been believed appropriate to direct the reports to factors outside the
competitive area.
Mr. Solomon said, however, that he believed some
as to
modification in the body of the present report could be made so
bring out more fully the position of Ashland Trust Company along the
lines suggested by Governor Mills without departing from the general
approach of addressing the report to competitive factors.
Governor Shepardson pointed out that one sentence in the conclUeion of this report as now written might be construed as departing
from the approach Mr. Solomon had indicated, that is of limiting the
conclusion strictly to the competitive factors, and perhaps there
should also be some change made in that portion of the report.
10/28/60
Mr. Hackley stated that the latter point had also occurred to
him. It was his view that the Board might be going beyond its responsibilities under the statute if it included, particularly in the conclusion
Of a report, comment on factors other than the competitive situation.
He
noted that the title of these reports was addressed to the competitive
factors involved in a proposed merger or purchase of assets and assumption
Of liabilities, and for this reason it was his view that the sentence to
vhich Governor Shepardson referred should be deleted from the conclusion
Qf the report.
There being agreement that the report should be revised in accordance
'with the discussion at this meeting, unanimous Approval was given to its
transmission, when so revised, to the Comptroller of the Currency.
The
reloort was transmitted later in the day in a form containing a conclusion
as follows:
Northern National Bank of Presque Isle is now a strong
competitor in the Ashland area. The proposed acquisition would
eliminate the only alternative banking source in the primary
Ashland service area and would strengthen further the dominant
position of Northern National Bank in northern Maine.
Letter to Secretary of Federal Advisory Council (Item No. 5).
Copies had been distributed of a draft of letter to the Secretary of the
Paderal Advisory Council suggesting topics for inclusion on the agenda
Or the meeting of the Council to be held on November 14 and for discussion
at the joint meeting of the Council and the Board on November 15, 1960.
In
addition to the three topics listed in the draft letter, question was raised
4060
-6-
10/28/6o
as to the desirability of including two additional topics; onaof these
would relate to the problem of absorption of exchange charges and the
Other would ask for any comments the Council might care to make regarding
the questions raised in the June 10, 1960 letter from Chairman Porter
Hardy, Jr., of the Foreign Operations and Monetary Affairs Subcommittee,
a copy of which was handed to each member of the Council at its meeting
with the Board on September 15.
The Board agreed, following discussion, to include the topic
relating to questions contained in Chairman Hardyes letter, but not to
list at this time the question of absorption of exchange.
The letter to
the Secretary of the Federal Advisory Council was then approved unanimously
in the form of attached Item No.
5.
Meeting of Board with new directors.
Governor Shepardson referred
to the usual practice of scheduling a meeting of the Board with new directors
Of the Reserve Banks and branches early in the new year.
Such a meeting was
held this year on February 18 with a dinner on the preceding evening, he
noted, and he suggested that it would be advantageous to set a date for
next year's meeting well in advance.
Following discussion of this matter, it was agreed that the joint
fleeting of the Board with new directors of the Reserve Banks and branches be
held on Thursday, March 16, 1961, the dinner to be on the evening preceding,
with the understanding that this action constituted authorization of the
Noenditure for the dinner.
10/28/60
-7-
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 the following items relating
to the Board's staff:
APpointments
Helen Heacock as Statistical Clerk in the Division of Bank Operations,
with basic annual salary at the rate of $4,460, effective the date of
entrance upon duty.
Shepfield A. Whitley as Cafeteria Laborer in the Division of Administrative Services, with basic annual salary at the rate of $3,185, effective
the date of entrance upon duty.
Salary increase
Samuel E. Entriken, Legal Assistant in the Legal Division, from
to 4ok,7,u20 per annum, effective October 30, 1960.
7,4-25
Transfers, effective October 30, 1960
Edward Cross, from the position of Bindery Worker to that of PhotograPher, Division of Administrative Services, with an increase in his basic
annual salary from $5,262 to $5,491.
Bishop Hart, from the position of Operator, Offset Press, Multilith,to
that of Bindery Worker, Division of Administrative Services, with no change
in his basic annual salary of S1 ,3O6.
Abner Thompson, from the position of Xerox Operator to that of Operator
(Multilith), Division of Administrative Services, with an increase in his
basic annual salary from $4,306 to $4,555.
Governor Shepardson also approved today on
behalf of the Board a memorandum dated October
28, 1960, from Messrs. Kelleher, Director,
Division of Administrative Services, and Johnson, Director, Division of Personnel Administration,
recommending approval of a new Printing Grade Pay
40 2
-8-
10/28/6o
Schedule and changes in annual salary rates
of the present incumbents of certain positions
covered by that schedule, effective October 30)
1960. Copies of the new schedule and a list of
the approved salary changes are attached as Items
6 and 7, respectively.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25. D. C.
Item No. 1
10/28/60
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
October 28, 1960
The First National City Bank
of New York,
55 Wall Street,
New York 15, New York.
Gentlemen:
The Board of Governors approves a change in location of
Your Nassau, Bahamas, Branch from 343 Bay Street to a new building
to be erected at the corner of Bay Street and Rawson Square, Nassau,
and which is expected to be completed within two years.
It is understood that the new building will also contain
the offices of First National City Trust Company (Bahamas) Limited.
Board's approval of the change in location of your Nassau Branch
le subject to the condition that the quarters of the two institutions
Shall be separate and distinct.
Please advise the Board of Governors in writing, through
the Federal Reserve Bank of New York, when the branch is moved to the
new location and opened for business. The location of the branch may
not thereafter be changed without the prior approval of the Board of
Governors.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
e,tootr**
OF THE
V*
*
tr
Item No. 2
10/28/60
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
#,:
0
h211
October 28, 1960
,c)ard of Directors,
i'irst-Peoples State Bank,
Iraverse City, Michigan.
Gentlemen:
The Board of Governors of the Federal Reserve System has
°4'en consideration to the application for permission to exercise
44e-Lary powers made by First-Peoples State Bank on behalf of
1,;610nal Bank & Trust Company of Traverse City, Traverse City, Hichigan,
114a national bank into which it is to be converted, and grants such
t:1;tional bank authority, effective if and when the proposed conversion
1, cons1.1mmated, to act, when not in contravention of State or local
as trustee, executor, administrator, registrar of stocks and bonds,
itiardian of estates, assignee, receiver, committee of estates of
tonatios, or in any other fiduciary capacity in which State banks, trust
rlar?anies, or other corporations which come into competition with
lei°nal banks are permitted to act under the laws of the State of
ote1
,
1 igan. The exercise of such rights shall be subject to the provisions
,
)
'ectien 11(k) of the Federal Reserve Act and Regulation F of the
d of Governors of the Federal Reserve System.
After the conversion becomes effective and the Comptroller
Currency authorizes the national bank to commence business,
T1
,are requested to have the board of directors of National Bank &
ai 8t Company of Traverse City adopt a resolution ratifying your
coPiloation for permission to exercise fiduciary powers, and a certified
r of the resolution so adopted should be forwarded to the Federal
111:,erve Bank of Chicago for transmittal to the Board for its records.
1 a copy of such resolution has been received by the Board, a formal
kttificate indicating the fiduciary powers that the national bank is
horized to exercise will be forwarded.
he
O
4
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
41)1):-,
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON 25, D. C.
Item No. 3
10/28/60
ADDRESS OFFICIAL CORRESPONDENCE
TO THE !BOARD
October 28, 1960
Mr. Pierre B. McBride,
Chairman of the Board and
Federal Reserve Agent,
Federal Reserve Bank of St. Louis,
St. Louis 66, Missouri.
Dear Mr. McBride:
In accordance with the request contained in your letter of
October 13, 1960, the Board of Governors approves the appointments of
Mr. Marvin L. Bennett as Assistant Federal Reserve Agent, and of
Messrs. Leroy W. Siddall, Ralph C. Hancock, and Laudie Ptacnik as
Alternate Assistant Federal Reserve Agents, effective November 1,
1960.
This approval is given with the understanding that these
appointees will be solely responsible to the Federal Reserve Agent
and the Board of Governors for the proper performance of their
duties, except that, during the absence or disability of the Federal
Reserve Agent, or a vacancy in that office, the Assistant Federal
Reserve Agent will be responsible solely to the Board of Governors
and the Alternate Assistant Federal Reserve Agents will be responsible to the Assistant Federal Reserve Agent and the Board of
Governors.
When not engaged in the performance of their duties as
Assistant and Alternate Assistant Federal Reserve Agents, respectively,
the appointees may, with the approval of the Federal Reserve Agent and
the President, perform such work for the Bank as will not be inconsistent with their duties as Assistant and Alternate Assistant Federal
Reserve Agents.
It will be appreciated if these new appointees are fully
informed of the importance of their responsibilities as members of
the staff of the Federal Reserve Agent and the need for maintenance
Of independence from the operations of the Bank in the discharge
of
these responsibilities,
BOARD OF DOVERNORS OF THE FEDERAL RESERVE
SYSTEM
Mr. Pierre B. McBride
— 2 —
It is noted from your letter that, upon the approval of
the appointments of Messrs. Bennett, Siddall, Hancock, and Ptacnik
by the Board of Governors, they will execute the usual Oaths of
Office, which will be forwarded to the Board of Governors.
The Board notes that these appointments will, for the
time being, be in addition to those presently serving, and that
following a period of training for the newly assigned personnel,
the appointments of Messrs. Ewell M. Coleman, Jr., and William E.
Lichius as Alternate Assistant Federal Reserve Agents will be
rescinded and since it is not your intention to have two Assistant
Federal Reserve Agents indefinitely, the appointment of Mr. Walter F.
Davisson as Assistant Federal Reserve Agent will also be rescinded as
soon as practicable.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
of;
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
WASHINGTON 25. D. C.
10/26/60
4
ADDRESS orriciAt. CORRESPONDENCE
TO THE BOARD
October 28, 1960
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
September 1, 1960, enclosing copies of an application to organize
a national bank at Evanston, Illinois, and requesting a recommendation as to whether or not the application should be approved.
A report of investigation of the application prepared by
the Federal Reserve Bank of Chicago indicates that the proponents
expect to provide a minimum capital structure of $600,000 instead
of :;,510,000, as shown in the application. This proposed capital
structure would appear to be adequate. Future earnings prospects
appear favorable, proposed management is regarded as satisfactory,
and although there is no urgent need for banking facilities in the
northwestern section of Evanston, there seems to be sufficient
potential growth to support the proposed institution. Accordingly,
the Board of Governors recommends favorable consideration of the
application.
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) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No.
WASHINGTON 25, D. C.
ADORE'S
arriciAL
CORRESPONDENCE
TO THE BOARD
October 28, 1960.
Mr. Herbert V. Prochnow, Secretary,
Federal Advisory Council,
c/o The First National Bank of Chicago,
Chicago 90, Illinois.
Dear Mr. Prochnow:
The Board suggests the following topics for inclusion on
the agenda for the meeting of the Federal Advisory Council to be
held on November 14, 1960, and for discussion at the joint meeting
of the Council and the Board on November 15:
1. What are the views of the Council regarding the
current economic situation and prospects for business
activity during the next six months? The impressions of
members of the Council as to expectations of the business
community and as to the outlook for capital expenditures,
inventories, and consumer expenditures would be appreciated.
2. How does the current demand for credit compare
with the demand at this season of other recent years? Are
there indications that the demand for bank loans and other
credit will strengthen.
3. The Board would be glad to have the views of the
Council regarding recent monetary and credit policy.
4. Viould the Council care to express any views on the
questions contained in the letter from Chairman Hardy that
was distributed at the meting of the Board and the Council
in September?
5
10/28/60
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
069
Item No.
10/28/60
PRINTING GRADE BASIC PAY SCHEDULE*
Basic Annual Pay Rates by Grade - Effective October 30, 1960
Hote:
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, Offset Composition, Photostat
and Xerox Operation, Miteograph Operation Bindery Operation, and to
the supervisor and assistant supervisor of those positions.
4inting
3
Step 1
Step 2
Step
32,746
2,974
3,203
$2891
3,120
3,370
$3,037
3,286
3,536
6
39411
30640
3,869
3,598
3,827
14,077
3,786
4,014
4,285
9
4/098
4,326
4,555
4,306
4.'555
4,784
4,514
4,784
5,034
4,763
4,992
5,221
5,013
5,262
5491
5,262
S,S33
5,762
5,450
5,678
5,886
5,741
5.,970
6,198
6,032
6,261
6,510
6,136
6,344
6,552
6,448
6;677
6,906
6,781
6,802
7,010
7,259
7,155
7;384
7,509
79758
1
3
5
15
16
17
18
19
20
21
7,010
7,259
8,008
(This schedule supersedes the pay scale effe,Aive October )41 2959)
*
Incumbents of positions subject to this pay schedule are eligible
for progress step increases within particular salary grades on
the following basis:
For :::::::::::
sSttpe.:
to
after 26 weeks (6 months) satisfactory
service in Step 1.
after 78 week (18 months) satisfactory
service in Step 2.
1107 0
- B-
Budget
Position
Number
1
2
Item No . 7
io/'1£/oo
Annual
Empl oyee
Taylor, Franklin
Kopfman, Thomas V.
Position
Printing
Salary tt.ates
Grade/Step Present Proposed
Amount
%
of
Increase
Inc.
Supv., Dup. , Mail
Mess., & Supply
21/3
$7717
$8008
$291
3. 77%
Asst. Supv., Dup.,
Mail, Mess.,& Sup.
19/3
7238
7509
271
3. 74
3
Constable, Frank W.
For eman-Operator
17/3
6718
7010
292
4.34
4
Johnson, Claiborne
Opr. (Offset Press)
16/3
6490
6781
291
4.48
5
Moffett, Bruce L.
Opr. (Offset Press)
16/J
6490
6781
291
4.48
6
Surguy, J . Robert
Clerk (Composition )
16/3
6490
6781
291
4.48
1
Dyson, Nelson
Photogr apher (Offset)
14/3
6011
6261
250
4.15
8
Cross, Eaward
Photographer (Offset) 13/2
5h91
5741
250
4.55
9
Hart, Bishop
Bi ndery Worker
7/3
4306
4514
208
4. 83
12
Barnes , Bricen
Opr.
8/3
4534
4784
250
5. 51
13
Berry, Benjamin D.
Foreman-Operator
9/3
4784
50JL
250
5. 22
7/3
4306
4514
208
4. BJ
4784
229
5. 02
_22...._9
5. 64
s.
(Mimeograph)
15
Bundy, Herbert W.
Opr.
:!.6
Thompson, ,\bner
Opr. (Multilith)
9/2
4555
17
Jordan,
Opr.
7/ 1
L13J/
19
Faber, Philip D.
Xerox-Mimeo. Operator 7/ 1
4Lh5y
20
Lane, Daniel F.
Opr.
Jarncs
R.
(Dup. r.ievices)
(Dup. Devices)
{:1~.:'leograph)
6/3
4056
li285
Total Annual Cost .
Average per cent increa3e.
y
_
. ~3601
• L. 6:~
Thia salary represent s a "saved r ate" which is now $240 above Step l of the grade.
This proposed r ate will decrease t ni s "saved r Rte" to $32.
Y This
salary represents a "saved r ate" which is now $555 above Step 1 of the grade.
This proposed rate will decrease t his ·•saved r ate" to $347.
@FedFRASER