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'49 9163 Minutes for To: Members of the Board From: Office of the Secretary September 24, 1963 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, yourinitials will indicate only that you have seen the minutes. Chm. Martin Gov. Mills Gov. Robertson Gov. Balderston Gov. Shepardson Gov. Mitchell ef9.e 329'7 Minutes of the Board of Governors of the Federal Reserve 8:Mem on Tuesday, September 24, 1963. Room at 10:00 The Board met in the Board a.m. PRESENT: Mr. Mr. Mr. Mr. Balderston, Vice Chairman Mills Robertson Shepardson Sherman, Secretary Kenyon, Assistant Secretary Fauver, Assistant to the Board Hackley, General Counsel Solomon, Director, Division of Examinations Mr. O'Connell, Assistant General Counsel Mr. Hooff, Assistant General Counsel Mr. Benner, Assistant Director, Division of Examinations Mr. Leavitt, Assistant Director, Division of Examinations Mr. Spencer, General Assistant, Office of the Secretary Mr. Bakke, Senior Attorney, Legal Division Mr. Donovan, Review Examiner, Division of Examinations Mr. Guth, Review Examiner, Division of Examinations Mr. Lyon, Review Examiner, Division of Examinations Mr. Rumbarger, Review Examiner, Division of Examinations Mr. Smith, Review Examiner, Division of Examinations Mr. Noory, Assistant Review Examiner, Division of Examinations Mr. Mr. Mr. Mr. Mr. Discount rates. The establishment without change by the Pecle 141 Reserve Bank of Atlanta on September 23, 1963, of the rates ' c4 011 l 4'ecounts and advances in its existing schedule was approved 141144-6, —4°118. with the understanding that appropriate advice would be 8e4 t0 that Bank. 1911c'; % _71 9/24/63 -2Circulated or distributed items. The following items, eqies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. Iutter to The Marine Midland Trust Company of New York, New York, approving the icaulishment of a branch at 777 Third Avenue, 4g.11 of Manhattan. 1 ' .egrams to the Federal Reserve Agent at Richmond tV;Lorizing the issuance of general voting permits kl) Financial General Corporation, Washington, (2) The Morris Plan Corporation, New York, tie" lork; (3) Distributors Discount Corporation, 00,2 17 °.rk) New York; (4) National Insurors & Credit Ili'veration, Des Moines, Iowa; and (5) American %v stallitent Credit Corporation, Washington, D. C., : bear ring stock owned or controlled in specified in Maryland and Virginia. 2-6 Report on competitive factors (Lansing-Grand Ledge, Michigan). There had been distributed a draft of report to the Comptroller of thee urrency on the competitive factors involved in the proposed 13111'ehase of assets and assumption of liabilities of The Grand Ledge Stets, - Bank, Grand Ledge, Michigan, and Loan and Deposit State Bank, qrar,„1 --A-k Ledge, Michigan, by Michigan National Bank, Lansing, Michigan. e also had been distributed a memorandum from the Division of txeltti. Ilations and Legal Division dated September 20, 1963, citing x'ta• ln background factors for the information of the Board in conOn with its consideration of the competitive factor report. 9/24/63 _3.. The last sentence in the conclusion of the draft report read as follows: Furthermore, alternative sources of banking services would be reduced significantly and the over-all effect on competition would be significantly adverse. In discussion, Governor Mills noted that the Grand Ledge ecqualunity was only about 10 miles from Lansing and seemed to be a suburban part of that city. In his view, if the same reasoning were al/Plied in this instance as in certain previous cases, the proposal • 8 more in the nature of an establishment of a branch by Michigan /lational Bank within a metropolitan area already served by it. It stretched the point a little to say that the two Grand Ledge banks l'ePresented important alternate sources of banking services, and he • a have some doubt about stressing that point. He would revise the last sentence in the draft of conclusion, which put more emphasis 04 adverse factors than he thought could be found. During further discussion, Governor Robertson indicated that he 17ould not try to qualify the word "adverse." • He would delete the "significantly" in each place where it appeared in the draft conc lusion. Governor Shepardson referred to the recent occasion on which the Board had transmitted to the House Banking and Currency Committee, 1111011 request, a listing in which the Board's staff had undertaken to 3300 W2V63 -4- elassifY, by degrees of adverse effect, the tone of competitive factor liell°rts that the Board had submitted to the Comptroller of the Currency. It Ifts his impression, from Board discussions at that time, that the 1134rd was going to endeavor to be more specific in its reports in the kture. Governor Robertson repeated that he would consider it a mistake to trY to go further than to express the view that the over-all effect °fa Proposed merger on competition would be adverse or not adverse. 1501nted out that in any given report the conclusion must be read e°Nunction with the entire report. Governor Mills indicated that he, -t5reed strongly with Governor Robertson. After further discussion, the report was approved unanimously 'transmittal to the Comptroller, its conclusion being modified 11°1 to „. ad as follows: The purchase of assets and assumption of liabilities °f The Grand Ledge State Bank and Loan and Deposit State 11131ank, both of Grand Ledge, Michigan, by Michigan National ank) Lansing, would further concentrate banking resources , ueld by the largest bank in the Lansing area and would eliminate direct competition between the Grand Ledge banks as well as competition between these banks and Michigan !ational Bank. Furthermore, alternative sources of bank'lig services would be reduced and the over-all effect 04 competition would be adverse. Request of Mark One Corporation. There had been distributed kek, 4111.zia dated August 16 and September 19, 1963, from the Division or tx anlinations and Legal Division, respectively, with regard to a 3301 9/24/63 -5- request by Mark One Corporation, Mineola, Texas, for a determination exempting it from all holding company affiliate requirements except for the Purposes of section 23A of the Federal Reserve Act. After brief discussion during which it was pointed out that the nature of this case raised a question that could involve a reversal °I' Policy in the handling of so-called "one bank" cases, it was agreed thet the subject would be held over for consideration at a time when more members of the Board were available. Messrs. Hooff, Bakke, Donovan, Guth, Rumbarger, and Noory then vithdrew from the meeting. Pan American Bank of Miami (Items 7 and 8). There had been listributed a memorandum from the Legal Division dated September 19, 19631 'with regard to a request received from the Criminal Division, Department f Justice, for access by its staff to certain materials relating to Pan Ainerican Bank of Miami, Miami, Florida; namely, reports of examination, itieluding both open and confidential sections, for the years 1961 and 1962; all examiners' loan line slips, cards, or sheets dealing with the Pall American Bank for the years 1961 and 1962; and all correspondence riles dealing with the bank for the same years. The memorandum pointed out that this request was incident to 4 derai grand jury investigation being conducted in the Southern elal District of Florida concerning what was believed by the Coye rnment to be an insurance program fraud. The insurance fraud 3302 9/24/63 8cheme -6- was alleged to have involved one or more loans made by Pan klerican Bank, and in this connection the Department was seeking "ain information from examination records. The memorandum went on to note that any documents made availble Would be retained by a Federal Deposit Insurance Corporation Xelliiner, Thomas E. Lindsey, who was on loan from the Corporation in the 1°int capacity of advisor to the United States Attorney and special 13411t to the Federal grand jury. Under the Department of Justice Ilr°13cisal, any documents that the Board might authorize the Federal Reeerve Bank of Atlanta to make available would be placed in the 1(Iesession of Examiner Lindsey, and by him made available to the United State Attorney and other representatives of the Justice Department. The uz the documents would be restricted to obtaining background infor11; the contents would not be used in evidence. It was pointed out that the Justice Department's request had been , ulscussed with First Vice President Patterson and Vice President Derima Of the Federal Reserve Bank of Atlanta and with Messrs. Solomon alaa . B -liner of the Board's Division of Examination. Some concern had be expressed about the release of some of the information requested, Da.rti eularlY the confidential sections of the reports of examination. Stibse qUently, the matter had been discussed with the Justice Department, ' 4a the Department advised that in view of the questions raised, per- for access to information along the following lines would be 4‘tistactory: 3303 9/24/63 -7- (1) The Department of Justice considered study of both the open and confidential sections of the reports of examination as an essential part of its investigation and requested Board authorization for access to the open and confidential sections. (2) The Department would be satisfied if the Board would authorize Examiner Lindsey to review the line cards in the Reserve Bank for the purpose of specifically designating those which appeared to relate to the scope of the grand jury's investigation. Thereafter, copies of such cards could be made by the Reserve Bank and given to Mr. Lindsey under such conditions as the Board might impose. (3) The Department of Justice would be satisfied if the Board authorized access to correspondence exchanged between the Reserve Bank and Pan American Bank for the years 1961 and 1962. The Legal Division memorandum stated that it was the view of the Division, concurred in by the Division of Examinations, that access to the examiners' loan line data and correspondence files should be "31Lorized by the Board. It was proposed that the examiners' loan line cells be reviewed at the Atlanta Reserve Bank by Examiner Lindsey and that Photostatic or other copies be made only of those cards considered Peltinent to the grand jury investigation. Also, copies of correspond- between the Reserve Bank and Pan American Bank would be prepared and 1.1ten to Mr. Lindsey to be retained by him in the same manner, for the same Purposes, and for the same length of time as authorized for the eoPie - of the loan line cards. With respect to open sections of the rePor4 - -s of examination for the years 1961 and 1962, the Examinations 444a T. 'gal Divisions concurred in recommending that photostatic copies be Prepa red and made available to the Justice Department through Examiner tirlds eY. The Legal Division further recommended that the confidential 3 04 9/24/63 -8- sections of the reports of examination be made available on the same tell". This position was reflected in draft letters to the Department °I JUstice and the Federal Reserve Bank of Atlanta. At the Board's request, Mr. O'Connell made a statement regarding the facts of the matter, his comments being based substantially on the Illt°Mation presented in the memorandum of September 19. During the e°111 ' se or his comments, Mr. O'Connell noted that if the Board were to the Justice Department's request, the grand jury might issue a stibpoena for production of the documents. In that event, if the Board liere unsuccessful in resisting the subpoena, the material would then Ile to be furnished to the grand jury. Governor Robertson said he would suggest that the confidential "14)ns not be made available, but that the other information requested be r ulllished. If, however, after reviewing the open sections and other tater. 141, the Justice Department was of the opinion that there might be 1111 "ation in the confidential sections that would bear directly on the Rrarld durY investigation, specific subjects could be identified to officers °Ir the Atlanta Reserve Bank, who could then review the confidential sections to r the Purpose of ascertaining the presence of relevant information. Governor Mills stated that his attitude toward the request was i cal to the approach he took in the case involving the North Shore 1144k Beach, Florida, on which he had dissented on a similar request the Justice Department. He had hoped that the experience with that 33J') 9/24/63 -9- case would have deterred any repetition of what he considered a breach °I' confidentiality. A bank that was under Federal Reserve supervision exPosed itself and its operations through the examination process. To l'elease this information to another agency, and particularly to a Federal " :LeY that was developing a case for prosecution was, in his thinking, 4comPlete breach of the confidentiality that had been recognized in thebanking fraternity over a great many years. He would not release the Information except under subpoena, and then under protest. Governor Mills went on to say that he thought the Board was 0 Peting the law rather than following it. Within the Federal -.tve Act authorization was given for the release of certain documents end. information, but that authorization allowed a certain latitude to the B °ard. In this case it was his opinion that it would be improper to A, ''ease the information requested. With respect to the Board's Rules Of Or ganization and Procedure, he had contested the insertion of a pro- 181°11 Permitting release of confidential information to any agency, Pt' and unless such a request was fully within the context of general 43111t°rY authority. In further discussion, Governor Robertson said that he would %Irov-e the recommendation of the Legal Division and the draft letters, xce Pt that he would suggest that the confidential sections of the nation reports be handled in the manner that he had described 'liel". Governor Shepardson stated that he found merit in the 3306 9/24/63 -10- suggestion by Governor Robertson, if the matter could be handled effectively in that manner. Governor Balderston indicated that he els° agreed with Governor Robertson's view. He was in favor of narrow- the availability of the information to as few persons as possible. At the conclusion of the discussion, the request of the Justice Department was approved, subject to the understanding that the conficl tial sections of the reports of examination of the Pan American Bank " 'the years 1961 and 1962 would be handled in the manner suggested by t(4 G°vernor Robertson. Governor Mills dissented from this action for the Is°tIs he had indicated during the discussion. ' l'" Copies of the letters sent to the Department of Justice and the PdA-_, e--'du. Reserve Bank of Atlanta pursuant to this action are attached to these minutes as Items 7 and 8. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board the recommendation contained in a memorandum from the Division of Research and Statistics that the appointment of Peter Berman as Research Assistant (Summer) in that Division be continued until about February 151 1964, at the same annual salary rate of $5,540. Secretary 3307 Item No. 1 9/24/63 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 24, 1963 Board of Directors, The Marine Midland Trust Company of New York, New York, New York. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment of a branch at 777 Third Avenue, Borough of Manhattan, New York, New York, by The Marine Midland Trust Company of New York, provided the branch is established within six months from the date of this letter. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, 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, 1963 (S-1846), should be followed.) 3308 Item No. 2 9/24/63 TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON September 24, 1963. RICHMOND (1.E Financial General Corporation, Washington, D. C. Citizens National Bank in Pocomoke City, Pocomoke City, Maryland. The Peoples National Bank of Leesburg, Leesburg, Virginia. (1) Prior to issuance of permit authorized herein, Applicant shall execute and deltver to you in duplicate an agreement in form accompanying Board's letter S-964 (F.R.L.S. #7190), (2) simultaneously with issuance of general 11."'illg permit authorized herein, there shall be issued to The Morris Plan Corporation, Distributors Discount Corporation, National Insurors & Credit e°11°0ration, and American Installment Credit Corporation, the general voting Pel'rilits authorized in Board's telegrams of this date. STOP. The Board has noted the change in Applicant's reporting procedure, from carrying Illr etments in subsidiary companies on a valuation basis to a cost basis. "der that there be no future misunderstanding regarding this matter, Please advise Applicant of the Board's view (see, e.g., Trans-Nebraska Co., 49F* R. Bulletin 633, 637 Way 6, 1963)) that, in reports to the Board, Mar eflolders, and thP public, holding company affiliates and bank holding COIrrn '"arlies should reflect in their assets their aggregate investment in etoet. 4 of subsidiaries at not more than their proportionate interest in the aggregate net assets of such subsidiaries stated in accordance with gerier„,, a-LIY accepted accounting principles. STOP. Please forward to Nev York Reserve Bank copies of permits issued by your Bank to The Morris 330.9 4LE .... RICHMOND Plaz Corporation and Distributors Discount Corporation, and forward to Chicago Reserve Bank a copy of the permit issued to National Insurors & Credit Corporation. (Signed) Elizabeth L. Carmichael CARMICHAEL n of KEBJE r it, unde The Board authorizes the issuance of a general voting perm sed Statutes of the the provisione'of section 5144 of the Revi named below any affiliate United States, to the holding comp organization to vote the after the letter "An, entitling such w the bank(s) named belo • etock which it owns or controls of such of ders ehol shar of after the letter "Bn at all meetings stated below after the n(s) ed bank(s), subject to the conditio h a permit may be issu whic in with letter ACH. The period from days ty thir to ted n is limi Pureuant to this authorizatio time is granted ss an extension of unle gram the date of this tele rdance with the instrucby the Board. Please proceed in acco letter of March 108 1947, (5-964). tions contained in the Board's AM TELEGR WIRE SERVICE LEASED BOARD 9/24/63 OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON September 24, 1963. IIYDE -RICHMOND XEBJE A, 13. Cl The Morris Plan Corporation, New York, New York. Citizens National Bank in Pocomoke City, Pocomoke City, Maryland. (1)Prior to issuance of permit authorized herein, Applicant shall execute and deliver to you in duplicate an agreement in form accompanying Board's letter S-964 (F.R.L.S. #7190), (2) simultaneously with issuance of general voting permit authorized herein, there shall be issued to Financial General Corporation, Distributors Discount Corporation, National Insurors & Credit Corporation, and American Installment Credit Corporation, the general voting permits authorized in Board's telegrams of this date. (Signed) Elizabeth L. Carmichael CARMICHAEL 45f1.114., ---zatA9n of KEBJE ' voting permit, under authorizes the issuance of a general Statutes of the u e provisions of section 5144 of the Revised named below anited States, to the holding company affiliate to vote the zation organi gfter the letter "A", entitling such below named ) bank(s itf°ck which it owns or controls of the shareholders of such ' of b 6er the letter "B" at all meetings ion(o) stated below after the lank(8), subject to the condit may be issued 4.etter "C". The period within which a permit days from l'i;Irsuant to this authorization is limited to thirty is granted time of 1,ne date of this telegram unless an extension cinetru the by the with ance accord Board. Pleas() proceed in ). (5-964 1947, 10, March of -"Dna contained in the Board's letter AM TELEGR SERVICE LEASED WIRE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON Item No. 4 9/24/63 September 24, 1963. HYDE -- RICHMOND KEBJE A. Distributors Discount Corporation, New York, New York. B. C, Citizens National Bank in Pocomoke City, Pocomoke City, Maryland. (1) Prior to issuance of permit authorized herein, Applicant shall execute and deliver to you in duplicate an agreement in form accomPanying Board's letter S-964 (F.R.L.S. #7190), (2) simultaneously With issuance of general voting permit authorized herein, there shall be issued to Financial General Corporation, The Morris Plan Corporation, National Insurors & Credit Corporation, and American Installment Credit Corporation, the general voting permits authorized in Board's telegrams of this date. (Signed) Elizabeth L. Carmichael CARMICHAEL Definition of KEBJE The Board authorizes the issuance of a general voting permit, under the provisions of section 5144 of the Revised Statutes of the United States, to the holding company affiliate named below after the letter "A", entitling such organization to vote the stock which it owns or controls of the bank(s) named below after the letter "B" at all meetings of shareholders of such bank(s), subject to the condition(s) stated below after the letter "C". The period within which a permit may be issued Pursuant to this authorization is limited to thirty days from the date of this telegram unless an extension of time is granted by the Board. Please proceed in accordance with the instructions contained in the Board's letter of March 10, 1947, (3-964). •1')4 4 Item d: 5 TELEGRAM LEASED WIRE SERVICE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON 9/24/63 September 24, 1963. RIDE RICHMOND .154: JE A. National Insurors & Credit Corporation, Des Moines, Iowa. B. The Peoples National Bank of Leesburg, Leesburg, Virginia. C. (ix %A.) Prior to issuance of permit authorized herein, Applicant Shall execute and deliver to you in duplicate an agreement in form accompanying Board's letter S-964 (F.R.L.S. #7190), (2) simultaneously with issuance of general voting permit authorized herein, there shall, be issued to Financial General Corporation, The Morris Plan Corporation, Distributors Discount Corporation, and American Installment Credit Corporation, the general voting Permits authorized in Board's telegrams of this date. (Signed) Elizabeth L. Carmichael CARMICHAEL ttiti The of KEBJE permit, under authorizes the issuance of a general voting of the Statutes the provisions of section 5144 of the Revised below named affiliate United States, to the holding company to vote the after the letter HAfis entitling such organization below named bank(s) the etock which it owns or controls of of such shareholders of meetings after the letter HIP at all the after below stated condition(s) bank(s), subject to the issued be may permit a which within letter DC". The period days from Pursuant to this authorization is limited to thirty is granted time of the date of this telegram unless an extension instructhe with accordance bY the Board. Please proceed in (5-964). tions contained in the Board's letter of March 10, 1947, 1500ard :3aV Item No. RAM TELEG WIRE SERVICE 9/24/63 LEASED BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON September 24, 1963. HYDE RICHMOND KEBJE A. American Installment Credit Corporation, Washington, D. C. B. The Peoples National Bank of Leesburg, Leesburg, Virginia. C. (1) Prior to issuance of permit authorized herein, Applioant shall execute and deliver to you in duplioate an agreement in form accompanying Board's letter 5-964 (F.R.L.S. #7190), (2) simultaneously with issuance of general voting permit authorized herein, there shall be issued to Financial General Corporation, The Morris Plan Corporation, Distributors Discount Corporation, and National Insurors & Credit Corporation, the general voting permits authorized in Board's telegrams of this date. (Signed) Elizabeth L. Carmichael CARMICHAM, 1/2S1pition of KEBJE The Board authorizes the issuance of a general voting permit, under the provisions of section 5144 of the Revised Statutes of the named below United States, to the holding company affiliate to vote the on organizati such entitling "A", after the letter below named bank(s) the etook which it owns or controls of of such rs shareholde of meetings all after the letter "B" at the after below stated bank(s), subject to the condition(e) be issued may permit a which within letter fiC". The period Pursuant to this authorization is limited to thirty days from the date of this telegram unless an extension of time is granted instrucby the Board. Please proceed in accordance with the (5-964). March 10, of 1947, letter Board's tions contained in the 6 3314 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Item No. 7 9/24/63 WASHINGTON OFFICE OF THE CHAIRMAN September 24, 1963. The Honorable Herbert J. Miller, Jr., Assistant Attorney General, Criminal Division, Department of Justice, Washington, D. C. 20530 Dear Mr, Miller: This is in reply to your letter of September 4, 1963, aadvising that, in connection with a Federal grand jury investig Florida, txon being conducted in the Southern Judicial District of You wish to have made available to your staff certain reports and records of the Board relating to the Pan American Bank of Miami, Bank Florida, which documents are located in the Federal Reserve e availabl of Atlanta. You request that these documents be made E. through Federal Deposit Insurance Corporation Examiner Thomas docuLindsey in whose custody, as an agent of the grand jury, the are: d requeste ments would be placed and retained. The documents ion examinat of (a) the open and confidential sections of reports all (b) 1962; and of the Pan American Bank for the years 1961 Pan examiners' loan line slips, cards, or sheets dealing with the ndence correspo all (3) and 1962; American Bank for the years 1961 and and 1961 years the for Bank files dealing with the Pan American 1962, of your It is understood that subsequent to the receipt Peloquin Robert Mr. between place taken letter, conversations have of the Department's Criminal Division and Mr. Thomas J. O'Connell of the Board's legal staff in which certain questions were raised and discussed relating to the scope and nature of the Department's request. As a result of these conversations, it is further understood that Mr. Peloquin, on behalf of the Department, has agreed that certain modifications in respect to the original request would .be satisfactory to the Department. The Board's approval hereinafter modifications. given is premised upon and reflects these the open The Board agrees to make available copies of for the Bank American Pan sections of the reports of examination of of the staff the by prepared Years 1961 and 1962, such copies to be declines Board the being, time the Federal Reserve Bank of Atlanta. For 3315 The Honorable Herbert J. Miller, Jr. -2- to make available to the Department copies of the confidential sections of the above reports of examination. Following study of the open sections of those reports, however, if the Department ls of the opinion that there might be information in the confidential sections of any of the reports for the years 1961 and 1962 that bears directly on the grand jury investigation and will identify the specific subjects, Vice President Denmark of the Federal Reserve Bank of Atlanta will review those confidential sections for the purPose of ascertaining the presence of such information. Any such inrepresentative. formation will then be made available to the Department's under The Board authorizes FDIC Examiner Lindsey to study, of Bank Reserve Federal the of s official arrangements agreeable to and 1961 the to relating cards line Atlanta, all examiners' loan 1962 examinations of the Pan American Bank, it being understood that the originals of such line cards are not to be removed from the Federal Reserve Bank and that the Bank is to make copies only of such loan line cards as may be determined to be reasonably related to the scope of the grand jury's investigation. The Board further authorizes the furnishing by the Federal Reserve Bank of Atlanta of COpies of correspondence exchanged between that Bank and Pan American Bankfor the years 1961 and 1962. understanding The foregoing authorizations are given with the access is nt's Departme the which to s that the contents of the document the grand before either evidence as used be lerein authorized will not nd inforbackgrou as only rather, but ngs, proceedi J ury or in any court the with and ation, investig jury grand pending mation incident to the s Lindsey' further understanding that the documents placed in Examiner by custody will remain at all times in his custody, to be returned date him to the Federal Reserve Bank of Atlanta within 30 days of the Upon which he takes possession of them. taken in The Board's action in this matter has been accordance with section 261.2(c) of the Board's Rules Regarding Inforpart, that mation, Submittals, and Requests which provides, in . "The Board . . . may make available to . examinaof reports . . . agencies of the United States y in necessar where use for ion, tion and other informat .". . . duties official the performance of their 3316 -3- The Honorable Herbert J. Miller, Jr. A copy of this letter is being sent to President Malcolm Bryan, Federal Reserve Bank of Atlanta. A copy of the Board's letter to President Bryan is enclosed for your information. It is suggested that your representatives contact President Bryan in regard to arrangements for access to the documents as herein authorized. Sincerely yours, (Signed) Wt. McC. Martin, Jr. Wm. McC. Martin, Jr. Enclosure Item No. 8 BOARD OF GOVERNORS •....... •. 9/24/63 OF THE FEDERAL RESERVE SYSTEM WASHINGTON 25, D. C. ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 24, 1963. Mr. Malcolm Bryan, President, Federal Reserve Bank of Atlanta, Atlanta, Georgia. 30303 Dear Mr. Bryan: There is enclosed a copy of a letter to Chairman Martin, dated September 4, 1963, from Mr. Herbert J. Miller, Jr., Assistant Attorney General, Criminal Division, Department of Justice, requesting certain documents in the possession of the Federal Reserve B'nk of Atlanta, to be used by the Department's staff in connection with a Federal grand jury investigation being conducted in Miami, Florida. As set forth in Mr. Miller's letter, the request is for documents relating to the Pan American Bank of Miami, Florida, for !ha years 1961 and 1962. It is understood that this request has t , e°11. discussed briefly between members of the Board's staff and ilessrs. Harold T. Patterson and J. E. Denmark of your Bank. As reflected in the Chairman's reply of this date to Mr. Miller, a copy of which is also enclosed, the Board authorizes ?u to make available to Federal Deposit Insurance Corporation .4xaminer Thomas E. Lindsey, as an agent of the grand jury, photostatic copies of the open section of the reports of examination of the Pan American Bank of Miami for the years 1961 and 1962. You will cte that, for the time being, the Board has declined to make available c'o the Department copies of the confidential sections of the 1961 and 1962 reports of examination; but that, following study of the open !!ctions of the reports, if the Department' is of the opinion that 'ne confidential sections contain information bearing directly on the grand jury investigation and identify to Vice President Denmark the :Pecific subjects concerned, Mr. Denmark may review the confidential _actions of the reports for the purpose of ascertaining the presence ul such information. If found, the Board authorizes the same to be made available to the Department's representative. Authorization is also given to placing in Examiner Lindsey's cssession prepared copies of correspondence exchanged between your ank and the Pan American Bank for the years 1961 and 1962. As to t 331S BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM lir. Malcolm Bryan, President -2- of the 1961 the examiners' loan line cards prepared in the course study and 1962 examinations of Pan American Bank, following the Of these cards at your Bank by Examiner Lindsey and a person or you are authorPersons of the Bank's staff whom you may designate, copies of ized to place in Examiner Lindsey's possession prepared oned as are determined !uch of the line cards for the two years menti ey Lo bear upon the grand jury investigation of which Examiner Linds has knowledge. the understanding The foregoing authorization is given with that custody of the documents mentioned is to be retained at all tirries by Examiner Lindsey; that neither the documents nor their cone the grand jury or in any tents will be used as evidence either befor mation incident to the c°urt proceedings, but only as background infor documents received by lding grand jury investigation; and that all be returned by miner Lindsey pursuant to this authorization will days of the date 30 "14 to the Federal Reserve Bank of Atlanta within uPon which he takes possession of them. t 's representatives It will be noted that the Department details have been advised to contact you in regard to arranging the copy of A oned. ri.," Examiner Lindsey's access to the materials menti to Mr. Miller. 'lie letter has been enclosed with the Chairman's reply Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. .-Inclosures
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