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Minutes for september 24, 1962 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. Chin. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. King Gov. Mitchell Minutes of the Board of Governors of the Federal Reserve The Board met in the Board System on Monday, September 24, 1962. Room at 10:00 a.m. PRESENT: Mr. Mr. Mr. Mr. Mr. Mr. Martin, Chairman Mills Robertson Shepardson King Mitchell Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Mr. Sherman, Secretary Kenyon, Assistant Secretary Cardon, Legislative Counsel Fauver, Assistant to the Board Hackley, General Counsel Noyes, Director, Division of Research and Statistics Farrell, Director, Division of Bank Operations Solomon, Director, Division of Examinations Hooff, Assistant General Counsel Masters, Associate Director, Division of Examinations Goodman, Assistant Director, Division of Examinations Leavitt, Assistant Director, Division of Examinations Inquiry from Forest Service. Governor Mills reported a telephone call that he had received from a representative of the thlited States Forest Service who asked for suggestions regarding Person who might be nampd to a committee being appointed to Uladertake an impartial study of the valuations of privately-owned timber resources, particularly in the Pacific Coast area. Governor Mills stated reasons why it would not seem desirable to suggest any person actively connected with the Federal Reserve -2- 9/24/62 System for service in such capacity. However, it had occurred to him that the name of former President Earhart of the Federal Reserve Bank of San Francisco might be mentioned. No objection was seen to mentioning Mr. Earhartis name. It Vas understood if members of the Board had any additional suggestions, they would get in touch with Governor Mills. Bank of Georgia. Mr. Hooff reported that a subpoena had been served on the Federal Reserve Bank of Atlanta, in connection with the prosecution of a robbery case, for the production in court of certain documents to prove that The Bank of Georgia, Atlanta, and that its Georgia, was a member of the Federal Reserve System deposits therefore were insured. After discussion, it was agreed that Assistant Counsel for the Federal Reserve Bank should be authorized to produce the requested documents. Mr. Hooff then withdrew from the meeting. A . 4_11. 1.12 lication of De osit Guarant • Bank & Trust C 11114111ZI Item There had been circulated to the Board an application of i, for IDePosit Guaranty Bank & Trust Company, Jackson, Mississipp Permission to establish a branch at 11.229 North State Street, Jackson. When the file was in circulation, Governor Mills attached a note Inquiring as to the competitive effect on the nearby branch of a lollaller Jackson bank (the Jackson-Hinds Bank). -3- 9/24/62 Mr. Leavitt stated that he had discussed with Vice President Denmark of the Federal Reserve Bank of Atlanta the question raised by Governor Mills. Mr. Denmark felt that the establishment of the proposed branch would not have a substantial adverse effect on the principally existing branch of the smaller bank, which attracted types of customers who were not likely to transfer their banking connections to Deposit Guaranty. Mr. Denmark also felt that if the smaller bank had felt strongly about the proposed branch it 'Would have filed a formal protest, but no such protest was filed. Be believed that Deposit Guaranty was justified in moving into this its existing exPanding area of the city of Jackson to protect ellstomers in that area. Governor King commented that, according to the memorandum on the application submitted by the Reserve Bank, the Jackson-Hinds Bank had expressed the view that it would be difficult to compete for new business effectively with the much larger bank. However, he did not feel that this protest was too well founded; the two larger banks in Jackson already had personnel soliciting new bUsiness throughout the entire city. It was his feeling that 1Deposit Guaranty was applying for the new branch mostly as a the area. gesture of convenience to customers located in His the bank for the PrIncipal question would be as to the need of aaditional facility, but he had noted that no substantial investMent in banking quarters was involved. _1. 9/24/62 The application of Deposit Guaranty Bank & Trust Company was then approved unanimously. A copy of the letter sent to the bank pursuant to this action is attached as Item No. 1. Applications of United California Bank (Items 2 and 3). There had been circulated to the Board applications of United California Bank, Los Angeles, California, to establish branches in Seal Beach and San Leandro. When the file was in circulation, certain questions were raised with respect to the capital position of the bank. Accordingly, there had been distributed a memorandum from the Division of Examinations dated September 19, 1962, outlining the position of the bank and describing a discussion by Francisco regarding telephone with the Federal Reserve Bank of San the matter. The memorandum pointed out that upon further analysis it had been ascertained that United California had 82 per cent of the capital required under the Form for Analyzing Bank Capital rather than the 72 per cent stated in the branch memoranda that had been circulated. It continued to be the Division's recommendation that the two branch applications be approved. In discussion, no objection was indicated to the approval of the two branch applications. However, the view was expressed that United California's capital position should be made the subject of d a great deal further a comprehensive review before the bank proceede -5- 9/24/62 with the establishment of additional branches. It was pointed out that the bank had hoped to improve its capital position through funds obtained from the anticipated sale by Western Bancorporation of First Western Bank and Trust Company, Los Angeles, but that the prospective sale of the latter bank had fallen through. While the San Francisco Reserve Bank had suggested of United Undertaking a thorough capital study following receipt California's year-end condition and earnings reports, it was the tely, with a Board's feeling that the study should proceed immedia view to determining what, if any, supervisory steps should be taken. the bank's capital It being understood that the study of tions were approved adequacy would proceed, the two branch applica Unanimously. Copies of the letters sent to United California Bank 2 and PUrsuant to this action are attached as Items Availability of examination reports. 3, respectively. There had been distributed a memorandum from Mr. Masters dated September 20, 1962, relating recent occurrences from which it appeared that reports of examination of national banks were no longer going to be made available to the Board in Washington on a borrowed basis. tances involved Following a general discussion of the circums l 414 the need to borrow examination reports of nationa banks from ry for the Board time to time in order to obtain information necessa 9/24/62 -6- to perform its statutory responsibilities, it was understood that the matter would be given such further consideration as seemed necessary in the light of developments. Secretary's Note: At the Board meeting on September 25, it was reported that the difficulty had been corrected and that examination reports of national banks were again being made available by the Office of the Comptroller of the Currency upon request. Mr. Leavitt then withdrew and Mr. Young, Adviser to the 80ard and Director of the Division of International Finance, entered the room. Federal Reserve motion picture. In further regard to the Pcieral Reserve motion picture project, which had been the subject (32 discussion at recent meetings, there had now been distributed a memorandum from Governor Mitchell dated September 24, 1962, in which he reported that the script had been re-viewed by Miss Burr, C°nsultant to the Board, and suggested how he felt that the script eckild be modified to correct certain defects that had caused him e°ncern. in which he indicated Following comments by Governor Mitchell the type of suggestions he would propose to make with regard to the agreed that this crilolt, as outlined in his memorandum, it was 4PProach afforded a satisfactory basis for Governor Mitchell to 11-scuss the subject on September 26 with President Wayne, a member 9/24/62 of the Presidents' Conference Committee on Bank and Public Relations, and Mr. Bunting, Chairman of the Subcommittee on Bank and Public Relations. Review of Regulation K. Governor Mitchell made a brief report on the progress of the current study of Regulation K, Corporations Doing Foreign Banking or Other Foreign Financing under the Federal Reserve Act, and pointed out that three memoranda had now dealing with the principal problems covered by the study been distributed to the members of the Board. In discussion, question was raised whether the time was area. ProPitious for reaching final decisions in this However, there was general agreement that it would be desirable for the 'Board to discuss the problems covered in the study with a view to familiarizing itself therewith and perhaps reaching tentative conclusions. It was further agreed that the most feasible approach might be to take up the three memoranda in sequence. Accordingly, it was understood that the Secretary would 4rrange to have the first of the memoranda entered on the agenda 11°r discussion on an appropriate date, with advance notification t° the members of the Board. from the meeting. Messrs. Young and Goodman then withdrew to the underCommittee on Financial Institutions. Pursuant atanding at the meeting on Friday, September 21, Mr. Noyes, who had 3f3A 9/24/62 -8- been representing Chairman Martin in the work of the three interagency committees appointed by the President to make studies in areas suggested by the recommendations of the Commission on Money and Credit, reported on the work of the Committee on Financial Institutions. In his report, Mr. Noyes described the membership Of the Committee, the principal subjects that had been discussed, said the tentative positions taken with respect to them, along with certain other subjects that had not as yet been discussed. He toted that within the near future it should be possible to make had available to the members of the Board position papers that evolved from the Committee's deliberations on each of the respective subjects. l At the request of any Board member, additiona background PaPers also could be made available. It was understood that the Board would give consideration tO these matters after the papers described by Mr. Noyes had been distributed. The meeting then adjourned. Secretary's Note: Pursuant to recommendations contained in memoranda from appropriate individuals concerned, Governor Shepardson today approved on behalf of the Board the following actions relating to the Board's staff: ktollqaTIL Helen M. Dunn as Statistical Assistant, Division of Research Statistics, with basic alums] salary at the rate of errective the date of entrance upon duty. and 9/24/62 .§ttla..17 increases effective SeEtember 30, 1962 _Name and title Division Basic annual s arY To From Research and Statistics James S. Nystrom, Economist Wilallyn Morella, Economist Natalie Strader, Survey Statistician (Economics $ 6,435 8,080 6,765 $ 6,600 8,31i0 6,930 12,210 12,210 12,210 12,470 12,470 12,4/0 3,500 3,605 Bank gperations !eynond J. Collier, Chief, Current Series Section '&11e W. Langham, Chief, Call Report Section 'E* Ralph Massey, Chief Reserve Bank Operations Section Administrative Services Alfred J. Holston, Clerk AS...tptance of resionation , Judith S. Scully, Secretary, Division of °e13tember 19, 1962. Operat ons, effective r"- ; BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 1 9/24/62 WASHINGTON 25, D. C. ADDRESS arrociAL CORRESPONDENCE TO THE UOARD September 24, 1962 Board of Directors, Deposit Guaranty Bank & Trust Company, Jackson, Mississippi. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by Deposit Guaranty Bank & Trust Company, Jackson, Mississippi, of a branch at 4229 north State Street, Jackson, Mississippi, provided the branch is established Within six months from the date of this letter. The Board of Governors also approves an additional investment of $6,200 in bank premises for leasehold improvements, night depository installation and drive-in window installation. Very truly yours, (Sigmed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. (Z1; • BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 2 9/24/62 WASHINGTON 25, D. C. ADDRESS OFFACIAL CORRESPONDENCE TO THE BOARD September 24, 1962 Board of Directors, United California Bank, Los Angeles, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by United California Bank in the vicinity of Westminster Avenue and Los Alamitos Boulevard, Seal Beach, California, provided the branch is established within si months from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary. BOARD OF GOVERNORS ..... , OF Got OF THE FEDERAL RESERVE SYSTEM Item No. 3 9/24/62 WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 24, 1962 Board of Directors, United California Bank, Los Angeles, California. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch by United California Bank at the intersection of Doolittle Drive and Marina Boulevard, San Leandro, California, provided the branch is established within one year from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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