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Minutes for To: Members of the Board From: Office of the Secretary October 8, 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 Minutes of the Board of Governors of the Federal Reserve System on Thursday, October PRESENT: 8, 1964. The Board met in the Board Room at 10:00 a.m. Mr. Mr. Mr. Mr. Mr. Mr. Balderston, Vice Chairman Mills Robertson Shepardson Mitchell Daane Mr. Sherman, Secretary Miss Carmichael, Assistant Secretary Mr. Fauver, Assistant to the Board Mr. Hackley, General Counsel Mr. Solomon, Director, Division of Examinations Mr. Kakalec, Controller Mr. Davis, Acting Director, Division of Data Processing Mr. Leavitt, Assistant Director, Division of Examinations Mr. Langham, Assistant Director, Division of Data Processing Mr. Sundberg, Review Examiner, Division of Examinations Report on competitive factors (Seattle-Spokane, Washington). There had been distributed a draft of report to the Federal Deposit Insurance Corpor4tion on the competitive factors involved in the proposed consolidation of Washington Mutual Savings Bank, Seattle, Washington, with Citizens Savings and Loan Society of Spokane, Washington, upon the latter institutions's c°11version into Citizens Mutual Savings Bank, Spokane, Washington. Following a suggestion by Governor Mills for the deletion of a 13°rtion of the conclusion, the report was approved unanimously for transMittal to the Corporation in a form in which the conclusion read as follows: There is presently no competition between Washington Mutual Savings Bank, Seattle, and Citizens Savings and Loan Society, Spokane, and the consolidation would not have adverse competitive effects. Mr. Sundberg then withdrew from the meeting. ;,44,10 -2- 10/8/64 Request of Etex Banco (Item No. 1). There had been distributed a memorandum from the Division of Examinations dated October 6, 1964, regarding the request of Etex Banco, Inc., Tyler, Texas, for a determination exempting it from all holding company affiliate requirements except those contained in section 23A of the Federal Reserve Act. The memorandum pointed out that Etex was a Texas corporation formed for the purpose of investing and holding stocks in various businesses, that it presently owned a majority of the outstanding shares °f The First National Bank of Winnsboro, Winnsboro, Texas, that it was not now engaged in any business except holding the stock of the Winnsboro bank/ and that it did not plan to purchase the stock of other banks or corporations in the future. It was noted that two of the principals of the holding company affiliate were directors of the Winnsboro bank. On the basis of the Board's general policy in one-bank cases, the Division recommended approval. Attached to the memorandum was a draft of letter that would grant the requested determination. The letter to Etex Banco, Inc., was approved, Governor Robertson ab staining. A copy of the letter is attached as Item No. 1. Acquisition of stock by affiliate of Mercantile Trust (Item No. 2). There had been distributed a memorandum from the Legal Division dated October 6, 1964, with reference to a question raised by the Federal Reserve 186141k of St. Louis as to whether the acquisition of stock of Digitronics C°rPoration by Mercantile-Commerce Company, an affiliate of Mercantile Trust 10/8/64 -3- company, St. Louis, Missouri, constituted a violation of section 5136 Of the Revised Statutes and section 9 of the Federal Reserve Act, which Prohibit member banks from purchasing corporate stocks for their awn account. The stock was purchased with the proceeds of a loan obtained by officers of the affiliate from an unaffiliated bank, Security Trust Company of St. Louis. Apparently the member bank did not itself own any stock of Mercantile-Commerce Company. The stock of that company was held by trustees for the benefit of the shareholders of the member bank; and the power to appoint trustees and successor trustees was vested in the member bank. Consequently, the member bank undoubtedly controlled Itircantile-Commerce Company. As pointed out in the memorandum, section 5136 of the Revised Statutes was not directed at "control" by a member bank of another corporation; it merely prohibited the "purchase" of corporate stocks by a member bank "for its own account." As a strictly legal matter it could be argued that the stock was not purchased "for the account" of the Member bank, since literally it was purchased by officers of the affiliate and the stock of the affiliate was held for the benefit of the shareh olders of the member bank. Even if regarded as a purchase for the member bank's account, it might be even more strongly argued that the stock was ric)t Purchased by the member bank, since no funds of the bank were provided, tlirectly or indirectly, for such purchase. t lo/8/64 For these reasons, it was the view of the Legal Division that, in the event of litigation, it would be difficult to convince a court that the stock was "purchased" by the member bank "for its own account." The question being raised at this time differed from the situation considered by the Board on September 21, 1964, in which a wholly-owned subsidiary of Mercantile Trust Company had purchased the stock of several corporations. In both instances the trustees were subject to control by the member bank. The chief difference, however, was that in the earlier case the stock was acquired by a wholly-owned subsidiary of the member bank and therefore with funds indirectly coming from the member bank itself, whereas in the present case the stock was not purchased with fluids emanating even indirectly from the member bank. In the circumstances, the Legal Division recommended that the Board raise no question with respect to Mercantile-Commerce Company's Purchase of the stock of Digitronics Corporation. A draft of letter to the Federal Reserve Bank of St. Louis reflecting this conclusion was attached to the memorandum. At the Board's invitation Mr. Hackley summarized the facts of the case and the reasons for the conclusions reached by the Legal Division. During discussion, Governor Robertson raised a question as to the position that the Legal Division might take if the affiliate had 15(31Towed from the member bank to purchase the stock. Mr. Hackley responded that such a procedure would be more questionable, but even so it could be 3153 10/8/64 -5- argued that the purchase was not for the account of the member bank but for the account of the affiliate. Governor Robertson then asked whether the Legal Division would recommend permitting an affiliate to engage in any type of business, and Mr. Hackley replied that the answer would depend on the source of the funds used. As had been pointed out in the Legal Division memorandum, section 5136 of the Revised Statutes was not directed at control by a member bank of another corporation but at the purchase of stock for a member bank's account. Even though the member bank had the power to ePPoint trustees of the affiliate and thus control the affiliate, it *would be difficult to conclude that the purchase of stock of any kind by 4n affiliate, where the funds did not come from the member bank, would be a purchase of the member bank. In the course of the discussion, Mr. Solomon noted that the Present case was an example of the type of situation that the Board had in mind in its recommendation to the Congress that references in section 2(a) the Bank Holding Act to "two or more banks" be replaced by "any bank" so that a corporation would become a bank holding company by acquiring 25 per cent or more of the stock of any bank. After further discussion, Governor Robertson expressed the view that the Board should keep this case in mind as an example in connection with any recommendation for legislation to amend the Bank Holding Company Act) such as Mr. Solomon had referred to. 10/8/64 -6The letter to the Federal Reserve Bank of St. Louis was then aPProved unanimously. A copy is attached as Item No. 2. During the foregoing discussion Mr. Brill, Director, Division of Research and Statistics, entered the room. Individual member bank reports of deposits for reserve purposes Items 3 and 14. . There had been distributed a memorandum from the Division of Data Processing dated October 6, 1964, with reference to a Proposed letter to the Federal Reserve Banks regarding the conversion of individual bank reports of deposits from punched cards to magnetic tape for storage and machine access. In a letter dated November 24, 1959, the Board requested the Reserve Banks to begin tabulating daily data from reports of net demand and time deposits submitted by member banks for reserve purposes. Reserve 8anks using punched cards in preparing the tabulations were asked to retain them for possible future use by the Board. The cards that had been punched were not in a common sort pattern and that factor, together .11.th the heavy volume, precluded their use by high-speed processing te chniques. Approximately 15 million punched cards covering individual bank l'ePorts of deposits had accumulated at the Reserve Banks. The cards had not Yet been put to use in research or analytical studies and, in order to make the data accessible for studies, and also to solve the storage Problem, the Division proposed that the Reserve Banks be advised: (1) to t_ozi_30 10/8/64 —7— destroy punched cards for the period prior to January 1960; (2) to convert to tape the data on cards from January 1960 through the last reserve period in September 1964; and (3) to sort cards in a prescribed manner beginning with data for October 1, 1964, in preparation for periodic taping. Reserve Banks without tape facilities would have the option of shipping their cards to Washington or of arranging for a local computer service center to perterm the work. Reserve Banks with tape equipment would also be given the Choice of taping the cards or of sending their cards to Washington for taping. Preliminary arrangements had been made with the Treasury Depart- ment to write the cards on tape at a favorable rate. It was estimated that, if all of the Reserve Banks (except the three that had already taped the data) shipped their cards to the Treasury, the total cost of taping them (including the necessary tape) would be about $11,000. The shiPPing cost was estimated to be about $2,200. The Division of Data Processing recommended, and the Division of Research and Statistics concurred, that the plan outlined in the memorandum be approved and the cost of accomplishing this work, not to exceed $11,000, be absorbed by the Board, the shipping costs to be paid by the Reserve Banks- It was further recommended that approval of the plan also consti- tute approval of an overexpenditure of like amount in the appropriate accounts of the Division of Data Processing. Attached to the memorandum was a draft of letter to the Federal Reserve Banks advising them of the approval of the plan and outlining detailed procedures for carrying it out. Also attached to the memorandum , 10/8/64 -8- was a draft of letter to the Treasury Department regarding financial arrangements for taping the cards. After Mr. Langham had commented on the procedures recommended by the Division, Governor Mitchell inquired whether it was contemplated that the tapes would merely be stored for possible future use or whether there were actual plans for using them. Mr. Davis responded that it was intended that the taped data Would be used. For example, during the last three months, in order to suPport sampling experiments designed to improve current estimates of required reserves figures, it had been necessary to ask the Reserve Banks to send tapes containing daily deposits data. The subsequent processing Of these data had turned out to be a fairly sizable job. Also, there /fas a present need for the back figures to determine how this sample vould perform over the critical period of December-January. In a broader sense, it was considered desirable to have the data in a readily accessible r°rm so that they could be meshed in with other data for microanalytical re search. Mr. Brill stated that if individual bank reports of deposits were °la tape, they could be meshed in with the weekly series and thereby make it Possible to show daily and weekly changes in volatility. Mr. Solomon commented on another possible use of the data, observing that from time to time it was important to know more about seasonal and intramonthly fluctuations on an individual institution basis. 10/8/64 -9Governor Mitchell noted that the data had been held for a number Of years and had not been used up to this time. He expressed doubt that they would be used in the future and requested that, if the staff recommendation was approved, a report be submitted a year from now describing any studies undertaken. He added that he would be sympathetic with having such studies undertaken. Mr. Brill noted that some of the data on the punched cards had not been in a form that could be used easily. New statistical techniques had been developed, and trained persons now had an interest in using these data. He went on to say that in his judgment the System would be making a serious mistake if an effort were not made to preserve and use these data. Governor Shepardson raised a question as to the reason for recommending that cards containing data for the period November 1958 to January 1960 be destroyed. Mr. Davis responded that generally the cards punched for that period were not in as good condition, and figures not as refined, as those for later dates. Also, the January 1960 date was close to the effective date (December 1, 1959) of the Board's amendment to Regulation D that permitted member banks to count part of their vault cash in meeting reserve requirements. The discussion then turned to the matter of systematizing the collection and processing of data on a current basis (after October 1, 1964). Mr. Davis mentioned that it was planned to tape daily data from , 10/8/64 -10- reports of net demand and time deposits on a current basis so that they could be utilized along with other data. He believed that standard Procedures for accomplishing this could probably be adopted by the Reserve Banks without much difficulty. In this connection, Governor Robertson suggested that the procedures proposed by the Division at this time might be considered as a device for bringing about uniformity of the statistics in this area. Governor Shepardson said that he had gathered from discussion that some of the cards punched at the Reserve Banks were not compatible with those of other Reserve Banks. If the data that were being collected were of value from a national standpoint, he saw no reason why they should not be accumulated and processed by a standardized procedure throughout the System. Governor Daane suggested that the general question of uniformity in such cases was a matter that could appropriately be taken up with the Presidents of the Reserve Banks at some convenient time. The letter to the Reserve Banks setting forth the procedures ' lecommended by the Division of Data Processing was then approved, along /lith the letter to the Treasury Department. Items Copies are attached as respectively. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board the following items: l0/8/64 -11- Letters to Mrs. Renee Mikus and Mr. Jean Jacques Lesceux of Washington, D. C., confirming arrangements for them to give instruction in Conversational French to members of the Board and the Board's staff as an activity of the Board's Training and Development Program. The letters stated that the course would be approximately ten weeks in length, with meetings daily from 8:15 to 9:15 a.m. beginning on October 13, 1964, that textbooks and other materials required for Participants would be provided by the Board, and that the Board would pay $10 for each session conducted, this fee to include any materials or references needed by each instructor in conducting the Program. It was further understood that Mrs. Mikus would be primarily responsible for planning the program and that Mr. Lesceux would conduct the sessions on days when Mrs. Mikus was not available. Memoranda recommending the following actions relating to the Board's Staff: Salary increases, effective October 11 1964 Name and title Division Basic annual salary To From Board Members' Offices LeRoy T. Morgan, Staff Assistant $12,915 $13,335 4,780 4,930 10,960 19,310 18,170 5,230 4,005 8,650 7,220 19,310 11,315 19,880 18,740 5,380 4,140 8,945 7,465 19,880 12,915 18,740 .U5 1.5,9900) Office of the Secretary J°an L. Scott, Records Clerk Research and Statistics Jacquelin Bauman, Economist James B. Eckert, Chief, Banking Section peter M. Keir, Chief, Capital Markets Section Yllis H. Lockhart, Statistical Clerk ?nise O'Brien, Statistical Clerk watkins Leigh Ribble, Jr., Economist Roberta M. Weil, Economist L°1118 Weiner, Chief, National Income, Labor Force, and Trade Section 4e1Mut F. Wendel, Economist S. Wernick, Senior Economist -°an R. Winter, Statistical Assistant !;.4rray 5,825 6 -12- 10/8/64 §alary increases, effective October 11, 1964 (continued) Division Name and title Basic annual salary To From International Finance Paul Gekker, Senior Economist (change in title from Economist) Peggy H. Reaves, Senior Clerk Carol Sullivan, Secretary $15,640 $17,030 5,495 5,165 5,660 5,330 5,690 5,875 9,535 9,535 9,830 9,830 Bank Operations Carol Lee Jones, Secretary Examinations Adrien P. Francoeur, Federal Reserve Examiner Charles Hadley Fraser, Federal Reserve Examiner Personnel Administration John J. Hart, Assistant to the Director (change in title from Personnel Assistant) 13,755 14,660 Administrative Services Isaac White, Messenger 3,385 3,500 5,330 5,165 5,495 5,330 Data Processing Susan R. Clark, Statistical Clerk Sandra Lee Wolfe, Secretary Transfer Division of Davita C. Hays, from the position of Secretary in the Personnel Administration to the position of Secretary in the Division salary from International Finance, with an increase in basic annual 5,660 to $6,060, effective October 11, 1964. .ension of maternity leave Research Suzanne D. Courtright, Statistical Assistant, Division of and Statistics, from October 12, 1964, through November 6, 1964. 3461 Item No. BOARD OF GOVERNORS 1 108/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 8, 1964. Mr. Gordon Wilkinson, Secretary, Etex Banco, Inc., Tyler, Texas. Dear Mr. Wilkinson: This refers to the request contained in your letter of September 10, 1964, submitted through the Federal Reserve Bank of Dallas, for a determination by the Board of Governors of the Federal Reserve System as to the status of Etex Banco, Inc., as a holding company affiliate. From the information presented, the Board understands that Etex Banco, Inc., is a holding company affiliate by reason of the fact that it owns 8,552 (57%) of the 15,000 outstanding shares of stock of The First National Bank of Winnsboro, Winnsboro, Texas; and that it does not, directly or indirectly, own or control any stock of, or manage or control, any other banking institution. In view of these facts, the Board has determined that Etex Banco, Inc., is not engaged, directly or indirectly, as a business in holding the stock of, or managing or controlling banks, banking associations, savings banks, or trust companies Within the meaning of section 2(c) of the Banking Act of 1933 (12 U.S.C. 221a); and, accordingly, it is not deemed to be a holding company affiliate except for the purposes of section 23A of the Federal Reserve Act and does not need a voting permit from the Board of Governors in order to vote the bank stock Which it owns. SYSTEM BOARD OF GOVERNORS OF THE FEDERAL RESERVE Mr. Gordon Wilkinson -2- If, however, the facts should at any time indicate that Etex Banco, Inc., might be deemed to be so engaged, this matter should again be submitted to the Board. The Board reserves the right to rescind this determination and make further determination of this matter at any time on the basis of the then existing facts, including additional acquisitions of bank stocks even though not constituting control. Very truly yours, (Signed) Karl E. Bakke Karl E. Bakke, Assistant Secretary. BOARD OF GOVERNORS Item No. 2 OF THE 108/64 FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 8, 1964. : 1, 1r. 0. 0. Wyrick, Vice President, rederal Reserve Bank of St. Louis, St. Louis, Missouri. 63166 1/ear Mr. Wyrick: This refers to your letter of July 1, 1964, and its enclosure, regarding the acquisition of stock of Digitionics ,,cr poration by Mercantile-Commerce Company, an affiliate of 41ercantile Trust Company, St. Louis, Missouri, a member bank. It is understood that the stock of Mercantile-Commerce Cora PanY is held by trustees for the benefit of shareholders of rtcantile Trust Company, and that the member bank indirectly ratrols the election of directors of Mercantile-Commerce Company 1 reason of its power to appoint the trustees and successor trustees. ! cè is also understood that the stock in question was purchased by f_ttain officers of Mercantile-Commerce Company with funds borrowed " )111 an unaffiliated bank. While it appears that the member bank effectively controls cantile-Commerce Company, it may be argued that the stock in question Was "c, purchased for "the account" of the member bank. Even if re togarded as a purchase for the bank's account, it would be difficult bajcnsider the transaction as involving a "purchase" by the member thet`s since no funds of the bank were used directly or indirectly in acquison of the stock. On the basis of the above understanding of the facts, it is the , the r'ard Is opinion that the acquisition of such stock did not constitute 'Purchase" of the stock by Mercantile Trust Company "for its awn in violation of section 5136 of the Revised Statutes and se414int" 3-0n 9 of the Federal Reserve Act. ate Very truly yours, —1/ Merritt Sherman, Secretary. 3464 Item No. 3 108/64 BOARD OF GOVERNORS S-1932 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD October 8, 1964. Dear Sir: November 24, 1959 (S-1716) The Board's letter dated data from to begin tabulating daily requested the Reserve Banks er banks memb by d Deposits submitte Reports of Net Demand and Time in pres card using punched for reserve Purposes. Reserve Banks possible for requested to retain them paring the tabulations were future use by the Board. studying means of making The Board's staff has been uses and of minimizing the these data accessible for research It cards at the Reserve Banks. storage problem of the punched g these evin achi of ible method has been concluded that the most feas data ng aini cont s to tape those card Purposes would be to convert r embe Sept in od reserve peri from January 1960 through the last hed punc in data ude any use of 1964. Present plans do not incl s conto January 1960 and card r prio cards for reserve periods royed. taining these data may be dest s task of writing these card It is recognized that the rable financial arrangeOtt tape is a sizable one. However, favo to Department of the Treasury ments have been made with the equiptape out with s Bank for Reserve Perform taping in Washington those would also be available to ment. In addition, this service ng the some difficulty in scheduli Reserve Banks which would have encounter computers or which might necessary time on their own (Costs s punched some time ago. some difficulty in processing card by the Washington would be assumed of processing cards sent to wire if by ng essi Proc Division of Data Board.) Please advise the taping here. Your cards will be shipped for 346:) -2- S-1932 that will be The multiple card readers in Washington designed to used in the conversion operation are specially In order to take process cards that might be in poor coadition. this work, it advantage of the Treasury's facilities for doing e the cards receiv to ment Depart will be necessary for the Tveasury to perform desire Bank e by the end of October. Should any Reserv should sion conver the ent, the taping operation on its own equipm of end the by Board be completed and the tapes mailed to the this year if feasible. planned to In addition to taping back data, it is also Deposits Time and Demand write the daily data from Reports of Net r 1, Octobe for cards Ott tape on a current basis beginning with minor to major in placed 1964. For this purpose, cards should be be should Tape . sort as follows: date, State, and bank number Data of on Divisi s written periodically and shipped to the Board' ly, whichever Processing as a 2,400 foot reel is filled or annual cards conng handli occurs first. Additional instructions for of taping The taining current data will be forwarded later. by cards y summar current data will not affect the need for daily class of bank. to be Attached is a statement of detailed procedures as well as data followed in the card-to-tape conversion of back tapes. and/or instructions for labeling and shipping cards Questions about these procedures should be directed to the Division of Data Processing. Very truly yours, C1-A7\ Merritt She/man, Secretary. Attachment. TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS. 3466 S -1932-a Procedure to be Used in Taping or Shipping Cards of Daily Deposits for the Period January 1960-September 1964 The following are procedures to be used by Banks making arrangements to tape their own cards, and for Banks who ship their cards to be taped I centrally in Washington. LAEIALIL212.g_2.12pe Their Own Cards (ignore if cards are to be shipped) Cards may be written on magnetic tape without prior sorting. If cardS are already in a systematic sort pattern, however, care should be taken to maintain the order in preparing the tape. It will not be necessary to re move total cards representing seven- or fourteen-day aggregates prior to taping. We are assuming that the cards are filed in at least general data order and that terminal dates can be specified for each reel. should be prepared as follows: I. Tapes should be written 14 81-character records (including record mark) per tape block without labels. Use either 556 or 200 character per inch density (556 is preferable) move mode and even parity. Padding for the last record in the file should be all nines. 2. It is essential that the reels be identified by external label showing terminal dates for each reel. We are assuming that the cards were filed in general date order prior to taping. 3. After taping, a sample portion of each reel should be read and the resulting print-out inspected to make sure the tape was written properly. The tape Tape 346';' S-1932-a -2 should, however, be read back completely to take a record or block count. WO objectives: This procedure will accomplish (1) the entire tape will be checked for valid coding and (2) the count will insure that roughly the expected number of cards for the period covered have been recorded on the tape, 4. Tapes for all back data should be received by the Division of Data Processing by the end of this year if feasible, 5. At the same time the tapes are sent, please send card formats, file order, etc. needed to completely identify the tape-recorded data. Tapes of back data should begin with January 1960 and end with Sept ember 30, 1964. Completed tapes should be forwarded to the Division oftsata Processing along with descriptive information requested above. Existing tapes of these data will be satisfactory regardless C)f 4 'le order or blocking factor as long as they contain the identifying Oati of the standard card format, Reserve Banks without tape facilities may arrange for processing . till'0 u81.1 a computer service facility or the cards may be shipped to 1448hington for processing centrally. If the cards are taped in Washington, illessing costs will be absorbed by the Board. ted Use We have arranged for of a local computer at reasonable cost which can accommodate 41) to eight card readers simultaneously. .1 11;8 / S-1932-a 3 Z1j2211.2.LiaLt..ructions for Cards to be Taped Centrally Cards should be shipped by express to the following address: Treasurer of the United States, Electronic Data Processing Division, Receiving Branch, General Accounting Office Building, Washington, D. C. 20226 it Check s be noted that the above address is the same one to which Treasury from your Bank are presently shipped. Before packaging, the individual boxes of punched cards should be arranged in general chronological order to the degree known. Labeling 134 the outside of each box of cards should show the Federal Reserve District number and boxes should be numbered serially beginning at one and continuing through the last box. This information, necessary in order for the Treasury t° be able to label properly the tape reels, should be as follows, e.g.: F. R. District 6 September 4 - 9, 1963 Box 375 of 490 After packaging, the shipping carton should show the words I be. Demand Deposit Cards," origin, and sequence of cartons, e.g.: Daily Demand Deposit Cards F. R. District 6 67 of 100 BOARD OF GOVERNORS ...• * •. ()OF 001;• Item No. OF ,HE FEDERAL RESERVE SYSTEM rr1rfr w' 4 io/8/64 WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD ' 11ESs- • October 8, 1964. Mr. William T. Howell, Deputy Treasurer, Department of the Treasury, Washington, D. C. Dear Mr. Howell: On September 24 representatives of the Board's Division of Data Processing met with Mx. Roy Conner, Chief, Electronic Data 40cessing Division, Department of the Treasury, and his associates, to explore the feasibility of having a large volume of punched cards written on tape utilizing equipment operated by the Treasury Department. It is understood that this work could be done on a reimbursable basis during regularly scheduled working hours using the special purpose equipment designed for processing Treasury checks. The cost to the Board for processing approximately 10 million punched cards was estimated at $8,000, with provisions for an appropriate downward adjustment in the tentative cost if the card volume is appreciably less than anticipated. The Board would suPPly the tape required for this purpose. Cards to be processed are currently distributed among the Reserve Banks and since the conversion process has been antic!,,Pated for some time, some of the Reserve Banks having tape equipment rY have already started an in-house taping operation. However, an ! _curate estimate of the volume of cards to be converted in Washington ; 111 be determined and furnished to you in the near future if this °rk is agreeable to your Office. The financial arrangements described herein are satisfactory Lue Board. Your early advice as to whether these arrangements are 8 134tisfactory to your office will be appreciated. If they are, the ,c)ard i s Division of Data Processing will be happy to work out the 'echnical details with Mr. Conner. tO Very truly yours, 1 1 1 \ Merritt Sherman, Secretary. (
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