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1_283 Minutes of actions taken by the Board of Governors of the Federal Reserve System on Thursday, September PRESENT: 2, 1954. Mr. Vardaman, Acting Chairman Mr. Mills Mr. Robertson Mr. Carpenter, Secretary Mr. Kenyon, Assistant Secretary Memoranda from Mr. Sloan, Director, Division of Examinations, recommending that the resignations of the following employees be accepted effective the dates indicated: Name and title Effective date Charles P. Sturges, Assistant Federal Reserve Examiner R. N. Manatt, Assistant Federal Reserve Examiner 10/23/54 11/4/54 Approved unanimously. Letter to Mr. Treiber, First Vice President, Federal Reserve Bank of New York, reading as follows: Reference is made to your letter of August 13, 1954, advising that Mr. Kenneth E. Small, formerly Manager of the Personnel Department, has been temporarily assigned as Manager, Government Bond Department, and Manager, Safekeeping Department, effective August 12, 1954, to succeed Mr. Ralph W. Scheffer who died on August 9. In this connection, the Board of Governors approves the payment of salary to Mr. Small as Manager, Government Bond Department, and Manager, Safekeeping Department, at his present rate of $11,000 per annum, for the period August 12, 19541 through December 31, 1954. It is noted from your letter that there is no substantive change in the duties of the Manager of the three departments affected and that, for purposes of salary 1284 9/2/54 -2- administration, Mr. Small will continue to be in Salary Grade E. Approved unanimously. Letter to Mr. Patterson, Secretary, Board of Directors, Federal Reserve Bank of Atlanta, reading as follows: Reference is made to your letter of July 20, 1954, advising that, under the Executive Training Program of the Bank, Mr. Robert M. Stephenson was relieved of his duties as Assistant Vice President at the Head Office and transferred to the New Orleans Branch where, effective July 1, 1954, he assumed the duties of Assistant Vice President at that Branch. In this connection, the Board of Governors approves the payment of salary to Mr. Stephenson as Assistant Vice President, New Orleans Branch, at his present rate of $10,000 per annum, for the period July 1, 1954, through December 31, 1954. Approved unanimously. Letter to Mr. Armistead, Vice President, Federal Reserve Bank of Richmond, reading as follows: Reference is made to your letters of July 16 and August 26, 1954, and enclosures with respect to the application of the Farmers and Bank of Amherst, Amherst, Virginialto establish a branch in the Elon Sanitary District of Amherst County, Virginia, at the intersection of U. S. Route No. 29 and Main Street in Madison Heights. According to the information submitted, the State Banking Department of Virginia has denied the application of the bank to operate the branch and you have recommended disapproval. The Board, therefore, will take no action on the proposal, and it is suggested that you advise the bank to that effect. Approved unanimously. Letter to the Board of Directors, St. Bernard Bank & Trust Co., Arabi, Louisiana, reading as follows: Pursuant to your request submitted through the Federal Reserve Bank of Atlanta, the Board of Governors approves the 1285 9/2/54 establishment of a branch by the St. Bernard Bank & Trust Co., Arabi, Louisiana, at the corner of Trio Street and St. Bernard Highway in the unincorporated town of Chalmette, Louisiana, provided the bank's capital is increased from $150,000 to $200,000 by the sale of $50,000 par value of new common stock at a premium of not less than $30,000 prior to the establishment cf the branch which shall be effected on or before June 30, 1955. Analyses of reports of examination of your bank have reflected an undercapitalized position for the past ten years, and it is noted the primary reason for this situation has been the relatively moderate additions made to capital accounts from earnings during the period. Since the proposed sale of new stock will improve but not entirely correct the unsatisfactory relationship between capital accounts and assets subject to normal banking risks, it is suggested consideration be given to a curtailment of operating expenses, particularly the substantial salaries, bonuses and fees paid to directors who are nonoperating officers of the bank. Unless future retentions of earnings provide a sufficient capital cushion to cover adequately any subsequent increase in volume, the matter of augmenting capital by a further sale of new stock should have attention. Approved unanimously, for transmittal through the Federal Reserve Bank of Atlanta. Letter to the Presidents of all Federal Reserve Banks reading as follows: The General Accounting Office is making an audit of the accounts and records of the Guaranteed Loan Programs of the Departments of the Army, Navy and Air Force for the period July 1, 1953, to June 30, 1954. In connection with this audit it will be appreciated if you will furnish the Board, in duplicate, the following information with respect to loans purchased for account of each of the above Guarantors. If no loans have been purchased, negative reports should be submitted. 1. 2. 3. Name and address of borrower. Name and address of the financing institution. Number of Guarantee Agreement. 1286 9/2/54 -44. 5. 6. 7. 8. 9. 10. 11. 12. 13. Maximum amount of loan specified in Guarantee Agreement. Per cent guaranteed. Percentage of guarantee fee. Date of purchase by Federal Reserve Bank. Amount of principal and accrued interest purchased. Additional amount advanced since purchase. Balance of purchased principal and interest as of June 30, 1954. Principal outstanding, including unguaranteed por— tion as of June 30, 1954. Schedule of collateral as of June 30, 1954. An opinion, if one can be rendered at this time, as to the collectibility of the loan. The following information is requested in addition to the above. 1. Listing of Certificates of Deposit issued by the Reserve Bank during Fiscal Year 1954 showing Cer— tificate of Deposit number, date and amount of certificate. 2. Listing of expense vouchers covering Fiscal year 1954 for which the Reserve Bank received payment. Separate statements, officially signed, should be submitted for each of the three guaranteeing agencies. Approved unanimously.
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