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609 Minutes for To: Members of the Board From: Office of the Secretary September 17, 1965 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 to any of the entries in this set of respect with record of policy actions required to the in minutes 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. Robertson Gov. Balderston Gov. Shepardson Gov. Mitchell Gov. Daane Gov. Maisel 3()i.)1 Minutes of a meeting of the available members of the Board of Governors of the Federal Reserve System on Friday, September 17, 1965. The meeting was held in the Board Room at 10:00 a.m. PRESENT: Mr. Robertson, Acting Chairman Mr. Shepardson Mr. Maisel Sherman, Secretary Kenyon, Assistant Secretary Broida, Assistant Secretary Young, Adviser to the Board and Director, Division of International Finance Mr. Molony, Assistant to the Board Mr. Solomon, Director, Division of Examinations Mr. Goodman, Assistant Director, Division of Examinations Miss Eaton, General Assistant, Office of the Secretary Mr. Morgan, Staff Assistant, Board Members' Offices Mr. Mr. Mr. Mr. Massrs. Brill, Koch, Solomon, Axilrod, Bernard, Eckert, and Keir of the Division of Research and Statistics Messrs. Hersey, Katz, Irvine, Baker, and Gemmill of the Division of International Finance Money market review Mr. Bernard presented a review of develop- ments in the Government securities market, Mr. Keir reviewed the capital market, and Mr. Baker summarized foreign exchange market developments. Tables were distributed affording perspective on the money market, the capital market, and bank reserve utilization, along with a table showing selected indicators of monetary policy and a chart showing official account purchases of longer -term Governments. -2- 9/17/65 indicators Mr. Koch commented on implications of the selected of of monetary policy, and there was a general discussion in the light his observations. All members of the staff except Messrs. Sherman, Kenyon, and Solomon (Examinations), and Irvine, and Miss Eaton then withdrew t Director, Messrs. Hackley, General Counsel, and Leavitt, Assistan Division of Examinations, entered the room. ratification at the The following actions were taken subject to next meeting of the Board at which a quorum was present: Discount rates. The establishment without change by the Federal and San Francisco Reserve Banks of New York, Philadelphia, Minneapolis, their on September 16, 1965, of the rates on discounts and advances in understanding that existing schedules was approved unanimously, with the aPpropriate advice would be sent to those Banks. Circulated items. The following items, copies of which are indicated, attached to these minutes under the respective item numbers 'ere approved unanimously: Item No. Letter to Bank of Smithtown, Smithtown, New York, aPproving the establishment of a branch in Kings Park, Town of Smithtown. 1 Letter to Peoples Union Bank and Trust Company, McKeesport, Pennsylvania, approving the establishment of a branch in Elizabeth Township. 2 -3- 9/17/65 Item No. 3 Letter to United California Bank, Los Angeles, California, approving the establishment of a branch in Orange. Gold loan (Item No. 4). There had been distributed a memorandum from Mr. Young dated September 16, 1965, relating to a proposed gold collateral loan to the Bank of the Republic (Colombia). This loan had been authorized by the Board of Directors of the Federal Reserve Bank of New York subject to approval by the Board of Governors. Bank of the Republic had requested a loan against gold collateral of up to $22 million. However, the New York Bank authorized a loan or loans up to a total of $21 million, which was the maximum that could be granted on the basis of current gold holdings of Bank of the Republic with the New York Bank. Such loan or loans: (1) would be made up to 98 per cent of the value of gold bars set aside in the vaults of the New York Bank under pledge to it; (2) would mature in three months with °Ption to repay at any time before maturity, advances to be made in multiples of $1 million and repayments in multiples of $1 million; (3) llould bear interest at the discount rate of the New York Bank in effect On the date on which such loan or loans were made; and (4) could be tequested and made at any time during a period of 30 days beginning with the date of acceptance by Bank of the Republic of the New York Bank's terms and conditions. Other Reserve Banks. The usual participation would be offered to the 30I.)f) 9/17/65 -4After discussion of the circumstances giving rise to the loan request, unanimous approval was given to a telegram to the Federal Reserve Bank of New York stating that the Board approved the making of the loan or loans on the terms and conditions indicated. of the telegram is attached as Item No. 4. The meeting then adjourned. Secretary's Notes: At the meeting of the Board on September 3, 1965, it was agreed to order a hearing on the application of Associated Bancorporation, Milwaukee, Wisconsin, to become a bank holding company through the acquisition of shares of Milwaukee Western Bank, Milwaukee, and Menomonee Falls Bank, Menomonee Falls. Pursuant to the authorization given at that meeting, arrangements for the hearing had now been completed and there was issued today the order of which a copy is attached as Item No. 5. Governor Shepardson today approved on behalf of the Board a letter to the Federal Reserve Bank of Richmond (attached Item No. 6) approving the designation of G. Dwight Hearn as special assistant examiner. A copy 305"; BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 1 9/17/65 WASHINGTON, D. C. 20551 ADORES! orriciAL CORPIC•PONDENCIC TO THE BOARD September 17, 1965. Board of Directors, Bank of Smithtown, Smithtown, New York. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by Bank of Smithtown, Smithtown, New York, of a branch at 82-84 Main Street, Kings Park, Town of Smithtown (unincorporated area), Suffolk County, New York, provided the branch is established Within six months from the date of this letter. Very truly yours, . (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. (The letter to the Reserve Bank stated that the Board also had approved a six-month extension of the period allowed to establish the branch; and that if an extension should be requested, the procedure prescribed in the Board's letter of November 9, 1962 (S-1846), should be followed.) BOARD OF '30VERNORS Item No. 2 9/17/65 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 20551 ADDRESS orriciAL CORRESPONDENCE TO .THIE BOARD September 17, 1965, Board of Directors, Peoples Union Bank and Trust Company, McKeesport, Pennsylvania. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by Peoples Union Bank and Trust Company, McKeesport, Pennsylvania, of a branch on the southwest corner of the intersection of Route #48 and Simpson Howell Road in Elizabeth Township, Allegheny County, Pennsylvania, provided the branch is established Within twelve months from the date of this letter. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. (The letter to the Reserve Bank stated that the Board also had approved a six-month extension of the period allowed to establish the branch, and that if an extension should be requested, the procedure prescribed in the Board's letter of November 9, 1962 (S-1846), should be followed.) (1)(11; 14:1011, f* BOARD OF GOVERNORS Item No. 3 9/17/65 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, 13. C. 20551 ADDRESS orriciAL CORRESPONDENCE TO .THE BOARD September 17, 1965. Board of Directors, United California Bank, Los Angeles, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by United California Bank, Los Angeles, California, of a branch in the vicinity of the intersection of Tustin and Meats Avenues, Orange, California, provided the branch is established within one year from the date of this letter. Very truly yours, (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary. (The letter to the Reserve Bank stated that the Board also had approved a six-month extension of the period allowed to establish the branch; and that if an extension should be requested, the procedure prescribed in the Board's letter of November 9, 1962 (5-1846), should be followed.) 3060 EGRAM TEL LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item No. 4 9/17/65 September 17, 1965. SANFORD - NEW YORK ON GOLD UP TO BOARD APPROVES GRANTING LOAN OR LOANS BANK OF NEW YORK A TOTAL OF $21 MILLION BY THE FEDERAL RESERVE ON THE TERMS TO THE BANCO DE LA REPUBLICA (COLOMBIA) DESCRIBED IN YOUR WIRE OF SEPTEMBER 16. (Signed) Merritt Sherman SHERMAN 30G1 Item No. 5 9/17/65 UNITED STATES OF AMERICA BEFORE TUE BOARD OF GOVEPNOPS OF THE FEDERAL RESERV% SYSTEM WASHINGTON, D. C. 14 the Matter of the Application of DOCKET NO. BHC-74 . SSOCIATED BANCORPORATION, 4i1uaukeo, Wisconsin, Pursuant to Section 3 of the Wt. Holding Company Act of 1956. onun FOR HEARING On July 1, 1965, there was published in the Federal Register (3o P. R. 8423) a notice of receipt by the Board of Governors of an app 14 pursuant to section 3(a)(1) of the Bank Holding Company Act Qf 1956 (12 U.S.C. 1C42(a)(1)), by Associated Bancorporation, Milwaukee, hsconsiu, for the Board's prior approval of action whereby Applicant 1/ Uld become a bank holding company through the acquisition of a minimum ao per cent of the voting shares of Milwaukee Western Bank, Milwaukee, " 4 lienomonee Falls Bank, Menomonee Falls, both of Wisconsin. It appears to the Board that it is appropriate in the public illterest that a hearing be held with respect to this application. Aecc)rdingly, IT IS HEREBY ORDERED, That, pursuant to section 222.7(a) of the di s Regulation Y (12 CFR Part 222.7(a)), promulgated under the Bank ng Company Act of 1956, a public hearing with respect to this -2- 3062 1965, at 10 a.m, at the application be held, commencing November 9, South LaSalle Street, rederal Reserve Bank of Chicago, Fifth Floor, 230 g examiner, said Chicago, Illinois, before a duly designated hearin Rules of Practice hearing to be conducted in accordance with the Board's for Formal Hearings (12 CFR Part 263). s will be the IT IS FURTHER ORDERED, That the following matter prejudice to the desigsubject of consideration at said hearing, without r examination: nation of additional, related matters and questions upon furthe the (1) the financial history and condition of company and the banks concerned; (2) their prospects; (3) the character of their management; of the (4) the convenience, needs, and welfare communities and area concerned; and ed acquisition (5) whether or not the effect of the propos system the size or would be to create a bank holding company tent with adequate extent of which would exceed limits consis preservation and sound banking, the public interest, and the of competition in the field of banking. desiring to give testimony, IT IS FURTHER ORDERED, That any person these proceedings should file Present evidence, or otherwise participate in System, pith the Secretary, Board of Governors of the Federal Reserve t Ilashington, D. C. 20551, on or before October 15, 1965, a written reques containing a statement of the nature of the petitioner's interest in 3063 the proceedings, the e;:tent of the participation desired, a summary of the matters concerning which petitioner wishes to give testimony submit evidence, and the names and identity of the witnesses who Propose to appear. Requests will be presented to the designated hearing examiner for his determination, and persons submitting them will be notified of his decision. Dated at Uashington, D. C., this 17th day of September, 1965. By order of the Board of Governors. (Signed) Merritt Sherman Merritt Sherman, Secretary. (8P.AL) 3064. BOARD OF GOVERNORS OF THE Item No. 6 9/17/65 FEDERAL RESERVE SYSTEM WASHINGTON, O. C. 2051 Al:MRCSS orricum. OOSISCOP0NDEP4OIC TO THE IllOAIRO September 17, 1965. Mr. John L. Nosker, Vice President, Federal Reserve Bank of Richmond, 23213 Richmond, Virginia. Dear Mr. Nosker* In accordance with the request contained in your letter of September 14, 1965, the Board approves the designation of G. Dwight Hearn as a special assistant examiner for the Federal Reserve Bank of Richmond. Very truly yours (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Assistant Secretary.
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