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Minutes for September 24,_1964
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.
Chm. Martin
Gov. Mills
Gov. Robertson
Gov. Balderston
Gov. Shepardson
Gov. Mitchell
Gov. Daane
41.4)44,.?
I4
C
Minutes of the Board of Governors of the Federal Reserve
SYstem on Thursday, September 24, 1964. The Board met in the Board
Room at 10:00 a.m.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Balderston, Vice Chairman
Robertson
Shepardson
Mitchell
Daane
Mr. Sherman, Secretary
Miss Carmichael, Assistant Secretary
Mr. Fauver, Assistant to the Board
Mr. Hackley, General Counsel
Mr. Davis, Acting Director, Division of
Data Processing
Mr. Hexter, Assistant General Counsel
Mr. Shay, Assistant General Counsel
Mr. Holland, Associate Director, Division
of Research and Statistics
Mr. Conkling, Assistant Director, Division
of Bank Operations
Mr. Leavitt, Assistant Director, Division
of Examinations
Mr. Longhorn, Assistant Director, Division
of Data Processing
Mr. McClintock, Supervisory Review Examiner,
Division of Examinations
Mr. Sundberg, Review Examiner, Division of
Examinations
Discount rates.
The establishment without change by the Federal
lesezive Bank of Minneapolis on September 23, 1964, of the rates on diseowat
s and advances in its existing schedule was approved unanimously,
Vith the
understanding that appropriate advice would be sent to that
Report on competitive factors (Pottsville-New Philadelphia,
Penja
"•-,...i.N61
:
22.521i
.±1. There had been distributed a draft of report to the
P de al
Deposit Insurance Corporation on the competitive factors
9/24/64
-2-
Involved in the proposed merger of Silver Creek State Bank, New Philadelphia, Pennsylvania, into Union Bank and Trust Company, Pottsville,
Pe nnsylvania.
The conclusion in the report read as follows:
Consummation of the proposed merger of Union Bank and
Trust Company, Pottsville, and Silver Creek State Bank, New
Philadelphia, would eliminate only nominal competition existing
between the two banks and would not have adverse competitive
effects on other banks operating in the area.
The report was approved unanimously for transmittal to the
Corporation.
Report on competitive factors (Boise-Twin Falls, Idaho).
There
44 been distributed a draft of report to the Comptroller of the Currency
°4 the competitive factors involved in the proposed merger of First
Security Bank of Twin Falls, Twin Falls, Idaho, into First Security Bank
°I
'Idaho, National Association, Boise, Idaho.
During discussion relating
to the facts surrounding the proposed merger a change in the wording of
the conclusion was agreed upon.
The report was then approved unanimously for transmittal to the
C0111Ptrol1er in a form in which the conclusion read as follows:
First Security Bank of Idaho, National Association, Boise,
a subsidiary of First Security Corporation, Salt Lake City, Utah,
a registered bank holding company, and First Security Bank of
Twin Falls have been very closely associated in ownership, management, and operations since the organization of First Security
Bank of Twin Falls in 1959 by the principal officers of First
Security Bank of Idaho, National Association, following denial
Of an application by the latter bank to establish a branch in
Twin Falls. The bank proposed to be acquired was created de
novo, albeit indirectly, by the applicant bank and so the merger
would not result in the permanent elimination from the market of
a previously independent bank; therefore, while consummation of
the proposal would make permanent the existing alliance between
the two banks, it would not, under the circumstances, have adverse
competitive effects.
9/24/64
-3Messrs. Shay, McClintock, and Sundberg then withdrew from the
meeting.
Request for call report data.
There had been distributed a
Memorandum
from Messrs. Longhorn and Holland dated September 18, 1964,
Narding a request from a group of academicians at the University of
Illinois (Professors Donald R. Hodgman, Robert W. Gillespie, and Thomas A.
Uncey) for cooperation in a study of commercial bank behavior that had
been undertaken with support from the National Science Foundation and
the Graduate College of the University of Illinois.
The project would
14volve qualified access to call report data reported by member banks in
Illinois for the period December 1959-June 1963.
Attached to the memo-
'
l e-rlaum was a statement from the Hodgman group describing the proposed
study.
The Divisions of Research and Statistics and Data Processing
'
lecommended that the proposal as outlined be approved for the following
reasons: (1) It was believed that the successful completion of the
1)°,Ject would be of particular interest to the Board and its staff, the
BtudY being one that the staff would have liked to undertake if resources
Pel'Mitted; (2) the study was under the direction of men of recognized
c°111Petence who had already devoted many months to planning and programming
4ctivities necessary to insure the completion of the project, which was
Y supported by well-known institutions; (3) the data processing
413ecifications had been designed to assure no disclosure of individual
1144k data; (4) participation by members of the Board's staff had been
441. 'would continue to be limited to planning, advice, and criticism; and
9/24/64
-4-
(5) the computer time required at the Board to complete the study would
be moderate (estimated at 15 hours).
During discussion reference was made to the steps that had been
taken to insure confidentiality of individual bank data.
In this connec-
tion, Governor Daane suggested that it might be appropriate at some time
to look into the whole question of nondisclosure of such data.
He some-
tiles wondered if the Board might not be going too far in its insistence
11Pon confidentiality of individual bank figures in studies such as this.
Governor Mitchell expressed a similar view, noting, however,
that it was often possible to generalize data in such a way as to prevent
sclosure of individual bank data and still produce significant results.
Mr. Holland observed that procedures used to protect individual
b4nk data sometimes resulted in users reaching misleading conclusions.
licIfever, there was some evidence of reluctance on the part of banks to
1\1111ish certain types of data, which, if disclosed, might have harmful
erfects on their own operations.
At the conclusion of the discussion the request of the University
°t Illinois professors for the assistance outlined in the September 18
Illerflorandum was approved unanimously.
Messrs. Davis, Holland, and Langham then withdrew from the
nieeting.
Change in control of banks (Item No. 1).
Mr. Leavitt stated
t444.
" subsequent to Mr. Solomon's report to the Board on September 15,
9/24/64
-5-
'
964, members of the staff of the Board and the Federal Deposit Insurance
Corporation had been conferring further with respect to the procedure
for reporting changes in control of bank management pursuant to provisions of H. R. 12267 (Public Law 88-593), which had been approved by
the President on September 12, 1964. On the basis of the conferences,
tIls conclusion had been reached that information regarding such changes
should be exchanged at the regional level by Federal bank supervisory
agencies.
This would mean that, upon receipt of a report on bank stock
14volving either changes in outstanding voting stock or loans, a Reserve
Bank
would notify the appropriate Supervising Examiner of the Federal
ttePosit Insurance Corporation, the Regional Comptroller of the Currency,
and the State Banking Commissioner of the change.
It was contemplated
that a similar procedure would be followed by representatives of the
?sclera). Deposit Insurance Corporation and the Comptroller of the Currency.
It
'was likely that the procedure to be followed at the regional level
11'411.14 be outlined in a letter from Chairman Barr of the Corporation to
the Board and the Comptroller, and upon receipt of such a letter ap14'°Driate advice could be sent to the Reserve Bank Presidents.
Governor Robertson indicated that he would favor the proposed
etellange of information in the field, but he thought that the Reserve
444 should be notified by the Board of this procedure without delay.
lie saw no need for waiting until a letter was received from Chairman
1141*r•
9/24/64
-6After discussion it was understood that a letter would be sent
at this time to the Reserve Bank Presidents outlining the procedure to
be followed
at the regional level and requesting that the Reserve Banks
send to the Board a copy of each report relating to management control
received directly by them and of all reports submitted to them by the
local representatives of either the Federal Deposit Insurance Corporation
Or the Comptroller of the Currency.
A copy of the letter sent pursuant
to this action is attached as Item No. 1. In accordance with the understanding, a copy of the letter was transmitted to the Chairman of the
Federal Deposit Insurance Corporation and to the Comptroller of the
ellrrency.
The meeting then adjourned.
Secretary's Notes: Pursuant to the authorization at the Board meeting on August 19, 1964,
a letter was sent today to the Presidents of
all Federal Reserve Banks regarding a quarterly
survey of bank lending practices to be conducted
on an experimental basis. A copy of the letter
is attached as Item No. 2.
Governor Shepardson today approved on behalf
of the Board memoranda recommending the following actions relating to the Board's staff:
SalarY increases, effective September 27, 1964
Division
Basic annual salary
To
From
Office of the Secretary
Prat,
74°es R. Williams, Senior Records Clerk
kehange in title from Records Clerk)
$5,080
$5,495
0 1. i 1•41, lc
9/24/64
.§.:411_
!
8ry increases
Name and title
-7effective September 27, 1964 (continued)
Division
Basic annual salary
To
From
Legal
Janet Hart, Senior Attorney
$12,495
$12,915
4,630
5,000
5,330
4,630
5,495
4,780
9,830
4,780
8,200
4,005
10,125
4,930
4,480
4,630
15,150
15,150
15,640
15,640
14,66o
15,150
4,630
4,480
4,780
4,630
4,638
4,888
5,230
5,380
4,005
6,250
4,140
Research and Statistics
JO;kan C. Corrado, Secretary
(change in title from Clerk-Stenographer)
Jeaanette R. DeLawter, Secretary
Elizabeth Mehall, Statistical Clerk
Wilellyn Morelle, Economist
!tephana Prager, Statistical Clerk
riatalie C. Strader, Survey Statistician (Economics)
G
retchen Walrath, Clerk-Stenographer
Catherine Zadbri, Clerk-Stenographer
8,445
4,140
Bank Operations
IlaYraond J. Collier, Assistant to the Director
Ralph Massey, Assistant to the Director
Examinations
Jakk
M. Egertson, Supervisory Review Examiner
Personnel Administration
A. Chandler, Personnel Clerk
44.cietine Mason, Clerk-Stenographer
s_8
g
I i
Administrative Services
q11.14,
W. Barnes, Operator (Xerox-Mimeograph)
''-Ex V. Dunn, Supervisor, Cafeteria
Data Processing
Cha
rla Jo Hall Key Punch Operator
444 R
R. Walka, )
Digital Computer Programmer
7,220
3
it
9/24/64
-8-
Tt!.211!IIIL2
Peggy Jo powles, from the position of Stenographer in the Division
c/f Examinations to the position of Secretary in the Office of the
ecretary, with an increase in basic annual salary from $4,930 to
q6,330) effective upon assuming her new duties.
2
Maureen E. Giordano, from the position of Clerk-Stenographer in
he Division of Personnel Administration to the position of Stenographer
3-4 the Division of Research and Statistics, with no change in basic
aanual salary at the rate of $4,005, effective September 27, 1964.
, Sally L. Hayes, from the position of Clerk-Stenographer in the
Iiivision of Personnel Administration to the position of Secretary in
6he Division of Research and Statistics, with an increase in basic
EtIllitlal salary from $4,630 to $5,000, effective September 27, 1964.
Lois A. Chandler, from the position of Personnel Clerk in the
li nsl.on of Personnel Administration to the position of Clerk in the
s4v1sion of Administrative Services, with no change in basic annual
41ary at the rate of $4,780, effective September 27, 1964.
!!!aaalaance
of resignations
.
e
Harriet D. Berger, Secretary, Division of International Finance)
4tective at the close of business September 30, 1964.
Thomas H. Hickman, Guard, Division of Administrative Services,
.c4rective September 14, 1964.
Secretary
3291
Item No. 1
BOARD OF GOVERNORS
9/24/64
OF THE
FEDERAL RESERVE SYSTEM
S-1931
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September 25, 1964.
Dear sir:
The recently enacted Public Law 88-593 requires that Federal
Su
Pervisory authorities be informed of changes in the control of manageof insured banks. The Board's statement of September 18, 1964,
stgarding reports to be made under this law states that reports by
,,Ite member banks involving changes in control of management shall be
1
7e
;
to its Federal Reserve Bank and that reports concerning loans by
toy insured bank on the stock of a State member bank shall be submitted
vhithe Federal Reserve Bank of the State member bank on the stock of
ch the loan was made.
When reports on bank stock involving either changes in
.
%tot
anding voting stock or loans are received by the Federal Reserve
one copy of each such report shall be forwarded promptly to the
ofPt°Priate Supervising Examiner of the FDIC, the Regional Comptroller
sh the Currency, and the State Banking Commissioner. The Reserve Banks
1 forward promptly to the Director of the Board's Division of
eminations a copy of all reports received directly by them and also
eiet!PY of any report submitted to them by the local representative of
"er the FDIC or the Comptroller of the Currency.
0
Very truly yours,
,..A
Merritt Sherman,
Secretary.
1° IRE
PRESIDENTS OF ALL FEDERAL RESERVE BANKS
34,(',92
S-1930
HOARD OF GOVERNORS
OF THE
Item No. 2
9/24/64
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September 24, 1964.
Dear Sir:
The Board has authorized a survey of bank lending practices
to be conducted on an experimental basis for a period of about one year.
the
This survey is to be made quarterly at banks now reporting in
this
if
;
Quarterly Survey of Interest Rates on Loans to Businesses
to smaller
Ft°vos successful, an experimental extension of coverage
nanks is contemplated.
a relatively
The purpose of this survey is to obtain, through
or other
officer
loan
senior
a
by
simPle questionnaire to be filled out
policies,
lending
bank's
the
senior official thoroughly familiar with
Information on changes over the preceding three months in the terms
a_nd conditions for lending to commercial and industrial businesses and
Bureau
finance companies. A small supply of the reporting form (Budget
might
that
letter
a
of
draft
a
with
14_°. 55-R213) is enclosed, together
,
is being
ue used in approaching the banks concerned. A larger supply
mailed under separate cover.
should be
The completed reporting form for each respondent
forwarded to the Board's Data Processing Division for keypunching and
t_a bulation. Prior to transmittal, each report should be checked care4111y for completeness, consistency, and reasonableness, and any
. Summary
ambiguities clarified through discussion with the respondent
use
their
for
Bank
Reserve
the
s tatistics will be made available to
and for distribution to respondents.
conducted as of
The initial survey in this series is to be
the Board's
reach
should
forms
Se ptember 30, 1964, and the completed
the
surveys,
subsequent
bata Processing Division by October 9. In
quarterly
the
of
day
last
the
Tiestionnaire should be completed as of
15, March 15, and
laterest rate survey reporting period (December
to reach the Board
mailed
be
',J uno 15) and the completed forms should
°Y the 25th of the month.
Very truly yours,
2
J„,
Enclosures.
TO THE PRESIDENTS OF ALL
Merritt Sherman,
Secretary.
S- 1930-a
Suggested Draft of Letter from Reserve Bank
to banks to be, asked to participate
in New Survey of Bank Lending Practices
The Federal Reserve System is undertaking an experimental
survey to obtain information on changes in bank practices regarding
the terms and conditions of lending to commercial and industrial businesses and finance companies.
This survey is to be conducted
quarterly for a period of about one year at banks that are presently
rePresented in the Quarterly Survey of Interest Rates on Loans to
Nsinesses.
As a respondent in this survey, we are asking your
cooperation in supplying this supplemental information.
As you will note, the reporting form (copies enclosed) is
re
latively simple and should require only a few minutes to complete.
Information regarding the practices of individual banks will be treated
In a confidential manner; reeults will, however, be made available to
respondents and others in the form of broad aggregates of banks.
It
18 believed that the information to be collected will not only be of
1/Slue to the System in carrying out its monetary policy responsibilities
but that it also will be of considerable interest to the respondent
ba nka
The questionnaire should be completed by the senior' loan
°fficer of your bank or by another senior official thoroughly familiar
Ilith the bank's current lending policies.
To insure consistency of
tePorting, it would be desirable that the same individual be designated
to
fill out each successive report.
32144
-1930-a
S
Two copies of the form are enclosed, one to be returned to
the Reserve Bank and one for your file.
We are asking that the first
'report in this series reflect conditions as of the end of September
ahd that it be completed and returned to us by October 5.
Subsequent
tePorts should be completed as of the end of the quarterly interest
ate survey reporting period (December 15, March 15, and June 15) and
*tied to us by the 18th of the month.
ta
claauras.
(kftd of Governors of the
Federal Reserve System,
September 24, 1964)
@FedFRASER