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Minutes for September 25, 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 Minutes of the Board of Governors of the Federal Reserve System on Friday, September 25, 1964. PRESENT: Mr. Mr. Mr. Mr. Mr. The Board met in the Board Room at 10:00 a.m. Balderston, Vice Chairman Robertson Shepardson Mitchell Daane Mr. Sherman, Secretary Mr. Broida, Assistant Secretary Mr. Young, Adviser to the Board and Director, Division of International Finance Mr. Noyes, Adviser to the Board Mr. Fauver, Assistant to the Board Mr. Brill, Director, Division of Research and Statistics Mr. Solomon, Director, Division of Examinations Mr. Holland, Associate Director, Division of Research and Statistics Mr. Koch, Associate Director, Division Research and Statistics Mr. Partee, Adviser, Division of Research and Statistics Mr. Hersey, Adviser, Division of International Finance Mr. Katz, Associate Adviser, Division of International Finance Mr. Spencer, General Assistant, Office of the Secretary Mr. Morgan, Staff Assistant, Board Members' Offices Mr. Axilrod, Chief, Government Finance Section, Division of Research and Statistics Mr. Eckert, Chief, Banking Section, Division of Research and Statistics Mr. Baker, Economist, Division of International Finance Money market review. There were distributed tables affording 1)el'%oective on the money market and on bank reserve utilization. Government Mr. Axilrod reported on recent developments in the ecurities market, after which Mr. Eckert discussed bank reserves, bank 1,4 j,1 9/25/6k -2- credit, and the money supply. Mr. Baker then commented on foreign exchange Market developments. Following discussion based on the review, all of the members of the staff except Messrs. Sherman, Noyes, Fauver, Brill, Solomon, and 4encer withdrew from the meeting and the following entered the room: Hexter, Assistant General Counsel Daniels, Assistant Director, Division of Bank Operations Goodman, Assistant Director, Division of Examinations Leavitt, Assistant Director, Division of Examinations Egertson, Supervisory Review Examiner, Division of Examinations Mr. McClintock, Supervisory Review Examiner, Division of Examinations Mr. Mr. Mr. Mr. Mr. Discount rates. The establishment without change by the Federal Reserve Banks of New York, Cleveland, Richmond, Chicago, St. Louis, 1(4nsas city, and Dallas on September 24, 1964, of the rates on discounts and advances in their existing schedules was approved unanimously, with the understanding that appropriate advice would be sent those Banks. Circulated items. The following items, copies of which are attached to these minutes under the respective item numbers indicated, were approved unanimously: Item No. cetter to Manufacturers and Traders Trust Company, antral°, New York, approving the establishment of branch at 5691 Transit Road, Town of Lockport. 1 ttter to coast Bank, Long Beach, California, granting eXtension of time to establish a bramh at Garden crve Boulevard and Huntington Beach Boulevard, Garden e`ve, branch operations now conducted at 9836 Garden th e Boulevard to be discontinued simultaneously with e establishment of this branch. 2 e j j 9/25/64 _3_ Item No. Letter to Tracy-Collins Bank and Trust Company, Salt 3 Lake City, Utah, granting its request for permission to maintain reduced reserves. Letter to Surety National Bank, Los Angeles (Encino) California, granting its request for permission to Malntain reduced reserves. 11- Letter to the Federal Deposit Insurance Corporation f .egarding the application of Marion State Bank, rlarion, Texas, for continuation of deposit insurance after withdrawal from membership in the Federal Reserve °Ystem, 5 Letter to Irving International Financing Corporation, !!w York, New York, granting permission to purchase wlares of Uganda Crane Industries Limited, Kampala, Uganda. 6 Report on competitive factors (Franklin, Indiana). There had been distributed a draft of report to the Federal Deposit Insurance C°rporation on the competitive factors involved in the proposed merger The Johnson County National Bank of Franklin, Franklin, Indiana, with krmers Trust Company, Franklin, Indiana. After discussion of a question raised by Governor Shepardson he certain comments in the body of the report were consistent with the conclusion, the report was approved unanimously for transmittal to the Corporation. The conclusion read as follows: The Farmers Trust Company, Franklin, and The Johnson County National Bank of Franklin are direct competitors serving the same community and area. Consummation of the proposed merger would have adverse effects on competition. meeting. Messrs. Egert on and McClintock then withdrew from the • 9/25/64 -4Inter-Agency Committee on Automation (Item No. 7). There had been distributed a memorandum from Governor Robertson dated September 21, 1964, with regard to the Inter-Agency Committee on Automation. The Committee was set up following a top-level inter-agency conference of examination officers in February 1961 for the purpose of ascertaining the most effective means of training examiners in electronic (14ta processing applications in banks. The conference was arranged at Governor Robertson l s suggestion in cooperation with the Chairman of the Pederal Deposit Insurance Corporation and the Comptroller of the Currency. Governor Robertson stated that efforts of the Committee had been helPful in developing knowledge of data processing in banks and that he believed the continuation and improvement of the training program warranted t4vorab1e consideration by the Board. Although the final report of the Inter-Agency a permanent committee Committee on Automation suggested that raight be established by the participating agencies for carrying forward it 411tomation training programs for examiners, he had concluded that 11°11-ld be preferable to handle the program without a formal committee e rl'angement. ' from the The Comptroller of the Currency had withdrawn 131'°gram and, after consultation with Chairman Barr of the Federal Deposit IllsUrance Corporation, Governor Robertson had reached the conclusion that It 1/ould be preferable for the Board to direct Mr. Goodman, Assistant 1/irector of the Division of Examinations, to serve as the Board's repreefforts of the Board entative in planning and coordinating the joint 9/25/64 -5- and the Federal Deposit Insurance Corporation, while Chairman Barr contemplated designating Mr. Edward J. Roddy of the Corporation's staff to represent that agency in such efforts. Technical assistance from the staffs of interested agencies in carrying out the program would, of course, be available. Attached to Governor Robertson's September 21 memorandum was a clraft of letter to the Federal Reserve Banks with regard to a proposed training program, which contemplated that during the next two years or Reserve District ientation programs would be held in each Federal in cooperation with the Federal Deposit Insurance Corporation, with rePresentatives of the State Banking Departments invited to participate to the extent facilities were available. There being no objection, it was understood that the proposed processing applications 13r°gram for training examiners in electronic data ill banks would be handled in the manner suggested in the memorandum of Selotember 21 from Governor Robertson. A copy of the letter sent to all is attached as Item No. deral Reserve Banks with regard to the program Pe' 7. The meeting then adjourned. Secretary's Note: Governor Shepardson today approved on behalf of the Board the following items: (attached Item No. Letter to the Federal Reserve Bank of New York 4roving the appointment of C. Frank Kaker as assistant examiner. 8) relating to the Board's Memoranda recommending the following actions ttarr: 3300 9/25/64 -6- ointments Petronella van der Vossen as Stenographer, Division of Personnel Administration, with basic annual salary at the rate of $4,005, effective the date of entrance upon duty. Lee R. Thompson as Guard, Division of Administrative Services, with basic annual salary at the rate of $4,005, effective the date of entrance IlDon duty. Salary increases, effective September 27, 1964 Nancy H. Teeters, Economist (half-time basis) Division of Research and Statistics, from $4,915 to $5,303 per annum. A Aaron Dortch, Operator (Offset Press and Multilith), Division of 4 .dzinistrative Services, from $5,408 to $5,678 per annum, with a change in title to Foreman-Operator. "31 3 item No. 1 9/25/64 BOARD OF GOVERNORS OF THE FEDERAL,RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS orricIAL CORRESPONDENCE TO THE BOARD September 25, 1964. Board of Directors, Manufacturers and Traders Trust Company, Buffalo, New York. Gentlemen: The Board of Governors of the Federal Reserve System approves the establishment by Manufacturers and Traders Trust Company, Buffalo, New York, of a branch at 5691 Transit Road, Town of Lockport, Niagara County, New York, provided the branch is established within one year from the date of this letter. Very truly yours, (signed) Karl E. Bakke Karl E. Bakke, Assistant Secretary. stated that the (The letter to the Reserve Bank six-month extension Board also had approved a ish the branch; of the period allowed to establ should be requested, and that if an extension the Board's letter the procedure prescribed in Should be followed.) of November 9, 1962 (S-1846), BOARD OF GOVERNORS Item No. 2 9/25/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 251 1964 Board of Directors, Coast Bank, Long Beach, California. Gentlemen: The Board of Governors of the Federal Reserve System extends to March 11, 1965, the time within which Coast Bank may establish a branch at the southwest corner of Garden Grove Boulevard and Huntington Beach Boulevard, Garden Grove, California, provided that branch operations now conducted at 9836 Garden Grove Boulevard, Garden Grove, are discontinued simultaneously with the establishment of the new branch. Very truly yours, (Signed) Karl E. Bakke Karl E. Bakke, Assistant Secretary. 3303 Item No. BOARD OF GOVERNORS 3 9/25/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 AOOACINI °maw. OORRIEMPONDENOE TO THE SWARD September 251 1964. Board of Directors, Tracy-Collins Bank and Trust Company, Salt Lake City, Utah. Gentlemen: With reference to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors, acting under the provisions of Section 19 of the Federal Reserve Act, grants permission to the TracyCollins Bank and Trust Company to maintain the same reserves against deposits as are required to be maintained by nonthe first with reserve city banks, effective biweekly reserve computation period beginning after the date of this letter. Your attention is called to the fact that such Governors. permission is subject to revocation by the Board of Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 3314 BOARD OF GOVERNORS Item No. OF THE FEDERAL RESERVE SYSTEM k 9/25/61+ WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 251 19640 Board of Directors, Surety National Bank, Los Angeles (Encino), California. Gentlemen: With reference to your request submitted through the Federal Reserve Bank of San Francisco, the Board of Governors, acting under the provisions of Section 19 of the Federal Reserve Act, grants permission to the Surety National Bank to maintain the same reserves against deposits as are required to be maintained by nonreserve city banks, effective as of the date it opened for business. Your attention is called to the fact that such Permission is subject to revocation by the Board of Governors. Very truly yours, (Signed) Merritt Sherman Merritt Sherman, Secretary. 3305 BOARD OF GOVERNORS Item No. 5 OF THE 9/25/64 FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 25, 1964. Mr. Timothy J. Reardon, Jr., Assistant to the Chairman, Federal Deposit Insurance Corporation, 20429 Washington, D. C. Dear Mr. Reardon: Reference is made to your letter of September 9, 1964, concerning the application of Marion State Bank, Marion, Texas, for continuance of deposit insurance after Withdrawal from membership in the Federal Reserve System. There have been no corrective programs urged Upon the bank, or agreed to by it, which have not been fully consummated, and, in the Board's opinion, there are no such programs that it would be advisable to incorporate as conditions of admitting the bank to membership in the Corporation as a nonmember of the Federal Reserve System. Very truly yours, (Signed) Karl E. Bakke Karl E. Bakke, Assistant Secretary. 330; BOARD OF GOVERNORS Item No. 6 9/25/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 25, 19611.. Irving International Financing Corporation, One Wall Street, New York 15, New York. Gentlemen: In accordance with the request contained in your letter of August 25, 1964, transmitted through the Federal Reserve Bank of New York, and on the basis of information furnished, the Board of Governors grants consent for your Corporation to purchase and hold 100,000 shares, par value El (East African) each, of Uganda Crane Industries Limited, 4ampala, Uganda, at a cost of £100,000 (approximately US$280,000), provided such stock is acquired within one year from the date of this letter. The Board also approves the purchase and holding °f shares of Uganda Crane Industries Limited within the terms of the above consent in excess of 10 per cent of your Corporation's capital and surplus. Very truly yours, (signed) Karl E. Bakke Karl E. Bakke, Assistant Secretary. BOARD OF GOVERNORS Item Do. 7 9/25/64 OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 25, 1964. Dear sir: Following an Inter-Agency Conference of Examination Officers InterAutomation held in Philadelphia in February 1961, an Age,„ of ascerta,'LeY Committee on Automation was established for the purpose c d:ning the most effective means of training examiners in electroni 'ta processing applications in banks. Batik Under the direction of the Committee, four regional training grams have been conducted in cooperation with the Federal Reserve ;anks in Chicago, Philadelphia, San Francisco, and Dallas. The Chicago 4 gram was attended by representatives of the three Federal banking by representatives encies. The other three programs were attended : the Reserve Banks, the Federal Deposit Insurance Corporation, and 114 Qrious State Banking Departments. sro t j The Board feels that the preliminary efforts of the Committee hay ot!been successful and measures for the continuation and improvement ,e euch a training program warrant the support of the Board and the ;d8erve Banks. Mr. Glenn M. Goodman, of the Board's staff, and Mr. c ard J. Roddy, of the Federal Deposit Insurance Corporation, will continue to maintain liaison for their respective agencies in planning, ucting, and coordinating the programs for training bank examiners electronic data processing and developing suitable examination and 488Pecti0n procedures and reports. This contemplates that technical 488i8 tance from the staffs of the interested agencies will be provided needed to carry out the program. regional It is contemplated that, during the next two years, in District °Ilent co_ ation programs will be held in each Federal Reserve reprewith aeuPeration with the Federal Deposit Insurance Corporation, thntatives of the State Banking Departments invited to participate to e extent facilities are available. This arrangement has been discussed 3 -2vith Chairman Barr of the FDIC and it has his full support. He hopes °let all organized training programs in electronic data processing for eXaminers will be conducted jointly with, the FDIC. It is assumed that your Bank will wish to cooperate in making Your facilities and staff available where needed to carry out the program and your assurances in this regard will be appreciated. With the cooperation of the Federal Reserve Banks of Boston and Atlanta, tentative arrangements have been made to conduct Regional xrat 4 fling Programs in the Boston area during the period November 9-20 014 in the Atlanta area during the period November 30-December 11. ;nould you wish to have representatives of your Bank Examination Departattend either or both of these programs, it will be helpful if Goodman could be informed at least 30 days prior to the opening of re training program so that arrangements may be made to accommodate them ‘ 0 the extent practicable. Very truly yours, r r I) sKt % Merritt Shermad, Secretary. 1° THE PRESIDENTS OF ALL FEDERAL RESERVE BMW. 3ajO Item No. 8 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 9/25/64 WASHINGTON, D. C. 20551 ADDRESS OFFICIAL CORRESPONDENCE TO THE BOARD September 251 1964. Mr. Howard D. Crosse, Vice President, Federal Reserve Bank of New York, New York, New York. 10045 Dear Mr. Crosse: In accordance with the request contained in your letter of September 22, 1964, the Board approves the appointment of C. Frank Kaker as an assistant examiner for the Federal Reserve Bank of New York. Please advise the effective date of the appointment. Very truly yours, (Signed) Elizabeth L. Carmichael Elizabeth L. Carmichael, Assistant Secretary.
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