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509
. 6/61
Minutes for
To:
Members of the Board
From:
Office of the Secretary
September
5, 1961
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
30f)3
Minutes of the Board of Governors of the Federal Reserve System on
Tuesday, September 5, 1961.
PRESENT:
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
The Board met in the Board Room at 10:00 a.m.
Martin, Chairman
Balderston, Vice Chairman
Mills
Robertson
Shepardson
King
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Discount rates.
Sherman, Secretary
Kenyon, Assistant Secretary
Molony, Assistant to the Board
Fauver, Assistant to the Board
Hexter, Assistant General Counsel
O'Connell, Assistant General Counsel
Hostrup, Assistant Director, Division
of Examinations
Benner, Assistant Director, Division of
Examinations
Leavitt, Assistant Director, Division of
Examinations
Sprecher, Assistant Director, Division
of Personnel Administration
Landry, Assistant to the Secretary
Potter, Assistant Counsel
Thompson, Review Examiner, Division of
Examinations
The establishment without change by the Federal
Reserve Banks of Chicago, St. Louis, Minneapolis, and San Francisco on
August 31, 1961, of the rates on discounts and advances in their existing
schedules was approved unanimously, with the understanding that appropriate
advice would be sent to those Banks.
Items circulated to the Board.
The following items, which had been
circulated to the Board and copies of which are attached to these minutes
under the respective item numbers indicated, were approved unanimously:
9/5/61
-2Item No.
Letter to Worthen Bank & Trust Company, Little
Rock, Arkansas, approving the establishment of
a branch in the vicinity of East Roosevelt Road
and Confederate Boulevard.
1
Letter to Main Bank and Trust, San Antonio, Texas,
approving an investment in bank premises.
2
Mr. Benner withdrew from the meeting at this point.
Report on competitive factors (Jamestown-Olean, New York).
There
had been distributed with a memorandum from the Division of Examinations
dated August 30, 1961, a draft of report to the Comptroller of the Currency
on the competitive factors involved in a proposed merger of The First National
Bank of Olean, Olean, New York, into Chautauqua National Bank of Jamestown,
Jamestown, New York.
During a discussion of the report, Governor Mills read a memorandum
suggesting amplification of the conclusion to take into account certain
additional factors relating to the competitive situation.
It being
Indicated that the other members of the Board were in agreement with
Governor Mills' suggestion, it was understood that the staff would prepare
a revised conclusion for the Board's consideration.
Mr. Molony then withdrew from the meeting.
Report on competitive factors (Bradford-Smethport, Pennsylvania).
Distribution had been made, with a memorandum from the Division of Examinations dated August 29, 1961, of a draft of report to the Federal Deposit
Insurance Corporation on the competitive factors involved in a proposed
9/5/61
-3-
purchase of assets and assumption of liabilities of Smethport National
Bank, Smethport, Pennsylvania, by Producers Bank and Trust Company,
Bradford, Pennsylvania.
The conclusion of the proposed report read as
follows:
The proposed purchase of assets and assumption of liabilities of Smethport National Bank by Producers National 1/
Bank and Trust Company would eliminate the small amount of—
competition which presently exists between the constituents
and would enhance Producers' area of competition. It seems
probable that an intensification of competition would occur
in the Smethport and Bradford trade areas without appreciable
adverse effects on smaller banks.
The report was approved unanimously for transmission to the Federal
Deposit Insurance Corporation.
Report on competitive factors (Eddyville-Kuttawa, Kentucky).
There
had been distributed, with a memorandum from the Division of Examinations
dated August 29, 1961, a draft of report to the Federal Deposit Insurance
Corporation on the competitive factors involved in the proposed consolidation
of First State Bank of Eddyville, Eddyville, Kentucky, and Citizens Bank of
Kuttawa, Kuttawa, Kentucky.
The conclusion of the report was as follows:
Both of applicant banks are to have their present
locations inundated as part of the Barkley Dam construction
project. The two banks contemplate consolidation and continuation of banking services in the same trade area as a
single entity.
The two banks are closely related through common
ownership and, to a lesser degree, common management.
There is no evidence of important competition between
the two banks.
The proposed consolidation should have no adverse
competitive effects.
lj Should be Producers Bank and Trust Company.
9/5/61
-4The report was approved unanimously for transmission to the Federal
Deposit Insurance Corporation.
Report on competitive factors (Charlotte-Slier City, North Carolina).
There had been distributed, with a memorandum from the Division of Examinations
dated August 25, 1961, copies of a proposed report to the Comptroller of the
Currency on the competitive factors involved in a planned merger of The
Chatham Bank, Siler City, North Carolina, into First Union National Bank of
North Carolina, Charlotte, North Carolina.
In discussion of the report, Governors Balderston and Robertson
suggested minor changes in the wording of the conclusion with which agreement was expressed.
The report was then apyroved unanimously for transmission
to the Comptroller of the Currency in a form containing the following
conclusion:
Applicant banks do not appear to be competitors. No
adverse competitive effects seem probable as a result of
the proposed merger; however, the proposed merger would
increase the trend in North Carolina toward concentration
of banking resources in a few large banks.
At this point Mr. Leavitt withdrew from the meeting.
Application of First Virginia Corporation
(Items
3, 4,
and 5).
August 14, 1961, the Board considered and approved an application by The
First Virginia Corporation, Arlington, Virginia, to acquire stock of the
Richmond Bank and Trust Company, Richmond, Virginia.
In connection with
its consideration of the matter, the Board's attention was directed by
memorandum from Mr. Hackley dated August
4, 1961,
to information that
On
:31.141)7
9/5/61
-5-
had been received to the effect that (1) First Virginia Corporation had
made a written offer to Southern Bank of Norfolk, Norfolk, Virginia, to
acquire stock of that bank, to which the bank apparently had not responded,
and (2) individuals said to be closely connected with First Virginia were
actively acquiring shares of the Norfolk bank.
This information was first
provided orally by Mx. Robert R. MacMillan, an attorney of Norfolk, Virginia,
representing Southern Bank.
The information was considered pertinent to
First Virginia's application since, in connection with the application,
First Virginia had stated in a letter dated July
3, 1961, to the Federal
Reserve Bank of Richmond that "the Corporation (First Virginia) does not
now have any plans, written or oral, to acquire shares of another bank at
this time....".
During the discussion at the meeting on August 14 it was noted, as
to the apparent inconsistency between the Corporation's July
3 letter and
Mx. MacMillan's statements, that there could be a plausible explanation.
In the absence of a written statement from Mr. MacMillan, it seemed
inappropriate to pursue the matter with representatives of First Virginia,
especially since Mr. MacMillan had indicated that his remarks were being
made in confidence.
Copies had now been distributed of a memorandum dated August 29,
1961, from the Legal Division pertaining to the aforementioned matter.
The memorandum noted that the Board had now received a letter from Mr.
MacMillan dated August 15, 1961, containing the essentials of the latter's
9/5/61
-6-
oral conversation with the Legal Division.
Subsequently, at the request
of the Legal Division, Mr. MacMillan in a letter dated August 23, 1961,
forwarded additional documentation on the matter of the proposed exchange
Of shares between First Virginia Corporation and Southern Bank of Norfolk;
and further material was received from Mr. MacMillan under date of August
24.
Mr. MacMillan had stated that his submission of the additional material
was with the understanding that the Board might make whatever disclosure or
use thereof it considered appropriate.
It was pointed out in the memorandum of the Legal Division that the
statements and related information contained in First Virginia's letter of
July
3,
1961, and Mr. MacMillan's letters of August 15, 23, and 24, 1961,
raised for the Board's consideration the following questions:
(a) Whether, in connection with First's application for
permission to acquire stock of the Richmond bank, there was
sufficient evidence that First had misinformed the Board as
to its present intention in respect to further bank stock
acquisitions so as to warrant pursuit of the matter with
appropriate officials of First either (1) prior to completion of Board action on the pending application, or
(2) following issuance of the Board's statement and order;
and in the event action was deemed warranted, what form
that action should take.
(b) Whether, in respect to Mr. MacMillan's belief as to
First's indirect acquisition of shares of Southern, the
facts asserted sufficiently bore out that belief to warrant
action by the Board; and, if so, what form the Board's action
should take.
The opinion of the Legal Division regarding the first question was
that the statement made by First Virginia Corporation to the Federal Reserve
00!
9/5/61
-7-
Bank of Richmond on July 3, 1961, which was in response to a request from
the latter for information as to the contemplated use of the proceeds from
sale by First Virginia of twelve-year notes in the sum of $4 million, did
not constitute, when considered in context, an "inconsistent" or "conflicting"
statement sufficient to justify withholding final action on the Corporation's
application to acquire stock of the Richmond Bank and Trust Company.
With
respect to the second question, it was the recommendation of the Legal
Division that no action be taken by the Board at this time in view of the
lack of any firm evidence of a tie-in between First Virginia and the
Purchasers of Southern Bank stock and in view of the likelihood that
First Virginia would reaffirm a statement already made in a letter dated
July 14, 1961, to Southern Bank of Norfolk that First Virginia "does not
OWn directly, indirectly, or otherwise any shares of Southern Bank
stock....".
It was the further opinion of the Legal Division that
reference of this matter to the Department of Justice for either
investigation or prosecution would not result in such action by that
Department.
Attached to the memorandum of the Legal Division was a draft
Of letter to Mr. MacMillan that would acknowledge receipt of the information submitted by him.
At the request of the Board, Mr. O'Connell commented on the memorandum of the Legal Division and explained the views expressed therein.
In the discussion that followed, Governor Robertson stated that
although he would not object to approval of the application of First
Company,
Virginia Corporation to acquire stock of Richmond Bank and Trust
g)t.t.1
-8-
9/5/61
he thought it advisable to ask representatives of First Virginia to come to
the Board's offices in order to acquaint them with the information that the
Board had received and place them on notice that the Board would expect
complete disclosure in connection with any future applications by the
holding company.
He believed this procedure would be preferable to
waiting until the holding company made another application.
During consideration of this suggestion, it was brought out that
in more than one instance the holding company concerned had engaged in
practices that raised questions in connection with the consideration of
its applications to the Board.
As to the relationship of the information
supplied by Mr. MacMillan to the application currently before the Board,
It appeared that the comments that might be made by representatives of
First Virginia Corporation could be fairly well anticipated, and there
Was general agreement with the view that the situation was not at a
Point where any specific demands upon the Corporation would seem justified.
However, a meeting with representatives of the Corporation would
clarify the general attitude of the Board toward any repetition of
Practices such as those that had raised questions and would serve
thereby to put the holding company on notice.
The view was expressed,
also, that the effectiveness of the proposed conference would be enhanced
indicated
if at least one member of the Board was present, and the Chairman
that he would be willing to represent the Board at such a meeting if his
schedule permitted.
1,
9/5/61
Accordingly, the purpose of the suggested meeting having been
Clarified., it was understood that the necessary arrangements would be
made. It was understood, also, that a letter of acknowledgment would
be sent to Mr. MadMillan in the form submitted with the Legal Division's
memorandum.
A copy of the letter, as sent, is attached as Item No.
3.
Consideration then was given to the order and statement that had
been drafted pursuant to the Board's approval on August 14, 1961, of the
application of First Virginia Corporation to acquire stock of the Richmond
Bank and Trust Company.
The drafts had been distributed to the Board with
a memorandum from the Legal Division dated August 17, 1961.
After discussion, the issuance of the proposed order and statement
was authorized by the Board.
Copies of the docvments, as issued, are
attached as Items 4 and 5, respectively.
Messrs. O'Connell, Potter, and Thompson then withdrew from the
meeting.
Limitation on group life insurance coverage
(Item No.
6).
The
Conference of Chairmen of the Federal Reserve Banks, at its meeting in
December 1960, had recommended to the Board that the present limitation
Of $20,000 on the maximum amount of insurance for any one individual
covered under the System's group life insurance policy with the
Connecticut General Life Insurance Company be removed or, in the
alternative, that the limitation be increased to $40,000.
In a
n
9/5/61
-10-
memorandum dated August 16, 1961, which had been circulated to the Board,
the Division of Personnel Administration recommended approval of the
alternative recommPndation, with the understanding that such action
would be subject to subsequent approval by the boards of directors of
the individual Reserve Banks and that negotiations to effectuate such a
change in the coverage of the policy would be the responsibility of the
Conference of Presidents.
The reasons for the Division recommendation
included the following:
1.
The effective limitation on coverage under group life
insurance policies, as set forth in State laws, had
been raised generally since the Connecticut General
policy was issued in 1951, but approximately half of
the States still had a limitation of $40,000.
2.
The suggested limitation of $40,000, taken together
with the $25,000 active service death benefit payable
under the Retirement System (Bank Plan), would in effect
give all System personnel a coverage of at least one
year's salary.
3.
The S40,000 figure would tend to take into account the
increase in Federal Reserve salary levels since 1951.
4.
The $40,000 level would not be out of line with the
prevalent practices of industry.
5.
The increase in premium cost would be nominal (about
$3,000 or $4,000).
Following comments by Mr. Sprecher on the memorandum of the Division
Of Personnel Administration, Governor Mills inquired as to the consistency of
the proposal with the insurance advantages under the Federal Employees Group
Life Insurance program.
Mr. Sprecher replied that the ceiling on benefits
9/5/61
-11-
under the Federal program was still set at $20,000.
However, as indicated
in the memorandum, the limit probably would be raised, perhaps at the next
session of the Congress. The Personnel Division had delayed somewhat in
Presenting a recommendation on the proposal of the Chairmen's Conference
in the hope that it might be considered in conjunction with a change under
the Federal program, but in any event it was noted that the Reserve Banks,
in both salaries and fringe benefits, are attuned more to labor market
conditions in their local areas.
After further discussion, unanimous approval was given to the
recommendation of the Division of Personnel Administration.
these minutes as Item No.
6 is
Attached to
a copy of the letter sent to Chairman Van
Buskirk of the Conference of Chairmen of the Federal Reserve Banks informing
him of this action.
The meeting then adjourned.
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 1
9/5/61
WASHINGTON 25. ID. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
ta
4.1?*6
September
5, 1961
Board of Directors,
Worthen Bank & Trust Company,
Little Rock, Arkansas.
Gentlemen:
Purusant to your request submitted
through the Federal Reserve Bank of St. Louis,
the Board of Governors of the Federal Reserve
System approves the establishment by Worthen
Bank & Trust Company, Little Rock, Arkansas,
of a branch in the vicinity of the intersection
of East Roosevelt Road and Confederate Boulevard,
Little Rock, Arkansas, 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.
AI4
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Item No. 2
9/5/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
September
5, 1961
Board of Directors,
Main Bank and Trust,
San Antonio, Texas.
Gentlemen:
The Board of Governors of the Federal Reserve Syste
m has
given consideration to the letter of Mr. Roy H. Schultz,
Presi
dent
of
Main Bank and Trust, dated July 5, 1961, to Mr. L. G. Pondr
om,
Vice President, Federal Reserve Bank
of Dallas, requesting the
Board's approval of the investment in bank premises under
the
Provisions of Section 24A, Federal Reserve Act. The total
amount
of the investment comprises $465,190
on the books of the bank,
167,500 indebtedness of 900 North Main Company, an affiliate, and
48,200 in loans secured in whole or in part by the
stock of the
affiliate. There is available in a depreciation reserve 14,58
0
Which has not been applied to the above total of
bank premises.
After reviewing all of the facts, the Board will interpose no objection to such investment. The Board
understands from
the letter of Mr. Schultz that the
$8,200 in loans secured in whole
er in part by the stock of the affil
iate will be paid or secured by
Other acceptable collateral or financial statements
within 60 days,
and that the indebtedness of $67,5
00 of 900 North Main Company will
be paid off on or before
September 15, 1962. It is also the Board's
understanding that the present rate and method for the depre
ciation
Of bank premises would
be continued.
Very truly yours,
(Signed) Elizabeth L. Carmichael
Elizabeth L. Carmichael,
Assistant Secretary.
BOARD OF GOVERNORS
OF THE
*
o
•
_
;(f..
*
rr
FEDERAL RESERVE SYSTEM
Item No.
**
1.1
3
9/5/61
WASHINGTON 25, D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
***‘44Ete•
0 0**
September 18, 1961.
Robert la. MacMillan, Esq.,
Breeden, Howard and MacMillan,
National Bank of Commerce Building,
Norfolk, Virginia.
Dear Mr. MacMillan:
This will acknowledge your letters of August l5,
August 23, and August 24, 1961, with their enclosures,
relative to recent acquisitions that have come to your
attention relating to the Southern Bank of Norfolk, Norfolk,
Virginia, and to your belief that The First Virginia
Corporation, Arlington, Virginia, has been active in the
indirect acquisition of shares in the Southern Bank of
Norfolk without the prior approval of the Board.
The material submitted by you has been brought
to the attention of the Board and will be borne in mind.
Very truly yours,
(Signed) Kenneth A. Kenyon
Kenneth A. Kenyon,
Assistant Secretary.
Item No. 4
9/5/61
UND2ED STATES OF AMERICA
BEFORE THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.
In the Matter of the Application of
THE FIRST VIRGINIA CORPORATION
for prior approval of acquisition of
voting shares of Richmond Bank and
Trust Company, Richmond, Virginia
ORDER APPROVING APPLICATION UNDER
BANK HOLDING COMPANY ACT
WHEREAS, there has come before the Board of Governors,
Pursuant to section 3(a)(2) of the Bank Holding Company Act of
1956 (12 usc 1842) and section 4(a)(2) of the Board's Regulation Y
(12 CFR 222.4(a)(2)), an application on behalf of The First
Virginia Corporation, Arlington, Virginia, for the Board's prior
aPProval of the acquisition of 80 per cent or more of the voting
shares of Richmond Bank and Trust Company, Richmond, Virginia; and
a Notice of Application has been published in the Federal Register
on May 18, 1961 (26 Federal Register 4342), which provided interested persons an opportunity to submit comments and views regarding
the proposed acquisition; and the time for filing such comments
and views has expired and no such comments or views have been filed;
Pt
aoCupp
IT IS HEREBY ORDLRED, for the reasons set forth in the
Boardls Statement of this date, that said application be and
hereby is granted, and the acquisition by The First Virginia
Corporation of 80 per cent or more of the voting shares of
Richmond Bank and Trust Company, Richmond, Virginia, is hereby
approved, provided that such acquisition is completed within
three months from the date hereof.
Dated at Washington, D. C. this 5th day of
September, 1961.
By order of the Board of Governors.
Voting for this action: Chairman Martin, and
Governors Balderston, Mills, and King.
Absent and not voting:
Shepardson.
Governors Robertson and
(Signed) Merritt Sherman
Merritt Sherman,
Secretary.
(SEAL)
Item No.
BWRD OF GO7ERNORS
9/5/61
OF THE
FEDERLL RESERVE SYSTEM
APPLICATION BY THE FIRST VIRGINIA CORPORATION, ARLINGTON,
VIRGINIA, FOR PRIOR APPROVAL OF ACQUISITION OF SHARES OF
RICHMOND BANK AND TRUST COMPANY, RICHMOND, VIRGINIA
STATEMENT
The First Virginia Corporation, Arlington, Virginia
("First"), a registered bank holding company, has applied pursuant
to section 3(a)(2) of the Bank Holding Company Act of 1956 ("the
Act"), for the Board's prior approval of the acquisition of 80 per
cent or more of the capital stock of Richmond Bank and Trust Company,
Richmond, Virginia ("Bank").
Views and reconmendations of supervisory authority. - As
required by section 3(h) of the Act, the Board forwarded notice of
the applicatim to the Commissioner of Banking for the State of
Virginia, who expressed no objection to approval.
Statutory factors.
Section 3(c) of the Pot requires
the Board to take into consideration the following five factors:
(1) the financial history and condition of the holding company and
bank concerned; (2) their prospects; (3) the character of their
1"nagement; (4) the convenience, needs, and welfare of the communities and the area concerned; and
(5)
whether or not the effect of
5
3020
the acquisition would be to expand the size or extent of the bank
holding company system involved beyond limits consistent with adequate and sound banking, the public interest, and the preservation
of competition in the field of banking.
Discussion. - First presently controls five banks in
northern Virginia with a total of 13 offices and aggregate deposits
of about $84,966,000 at April 12, 1961. Dank, which had total
deposits of about $3,201,000 as of /pril 12, 1961, and no branches,
is located in that part of Richmond known as South Richmond and is
approximately 100 miles from the nearest banking office of the
First system.
The financial history and condition, the prospects, and
the management of First are satisfactory, in the opinion of the
Board.
The Board also finds that the condition of Bank is sound
and its management competent.
However, Bank is located in an area
which has been becoming predominantely industrial and in which there
is strong competition from larger banks, PS discussed more fully below.
BPI-108 growth has been moderate as compared with that of other banks
that have been better able to serve the increasing credit needs of
businesses in the area.
Bank has established no branches, while the
four largest Richmond banks have branches in or near Bank's primary
service area, some of which have been established in recent years.
It appears that through assistance in these respects and others,
-3First could significantly improve Bank's prospects, in addition
to providing better assurance of management continuity for the
future.
Thus, there are some considerations under the first three
factors that weigh in favor of approval of this application.
A brief summary of the situation with respect to existing
banks in the area will have relevance to the Board's considerations
under both the fourth and fifth statutory factors. The Richmond
Metropolitan Area is served by 10 banks operating 50 offices, 40 of
Which are in the City of Richmond.
Only two of these banks, both
recently established, and none of those in Richmond itself, are
smaller than Bank in total deposits.
Bank's primary service area
aPPears to be served to some extent by at least nine banking offices
Other than Bank, each of which is an office of one of Richmond's
four largest banks and eight of which are less than two miles from
Bank.
For the present, at least, there appear to be sufficient banking facilities and services available to residents and
businesses in Bank's service area to serve the convenience and fill
the needs of the area adequately.
On the other hand, it is
believed that the proposed acquisition of Bank by First would in
various ways enable Bank to serve its customers somewhat better
than it has been able to do in the context of changing circumstances.
The acquisition would not Ilnday expand the size of the
holding company system involved. As noted, First's subsidiary
banking office nearest to Bank is 100 miles away. The a0.dition
of Bank to the system would
not have any noticeable effect on
First's competitive position in the areas where its other banks
are located.
Nor would it significantly affect First's position
in the State, since after acquisition, First' banks
s
would hold
less than three per cent of the total deposits of
all Virginia
banks. Apparently no competition would be eliminated. To the
contrary, the holding company affiliation would be likely to
strengthen Bank as a competitor in the Richmond area without
reducing the number of alternative sources of banking service
for that market.
In summary, we find no adverse considerations that
would outweigh those noted as favorable to approval of this application. It is the judgment of the Board, based on the relevant
facts considered in the light of the general purposes of the Act
and the factors enumerated in sectio
n 3(c) thereof, that the
proposed acquisition would be consistent with the statutory
objectives and the public interest, and that the application
should be approved.
-ePt-mhr-r
BOARD OF GOVERNORS
„otitItro,*
OF THE
44)
1 C0001,
Item No.
FEDERAL RESERVE SYSTEM
1T,Q
9/5/61
WASHINGTON 25. D. C.
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD
4tic.4***
September
"
C FIDEN
5, 1961
-
Mr. Arthur B. Van Buskirk,
Chairman, Conference of Chairmen
of the Federal Reserve Banks,
Federal Reserve Bank of Cleveland,
Cleveland 1, Ohio,
Dear Mr. Van Buskirk:
The Board of Governors has reviewed the proposal of the
Conference
of Chairmen recommending to the Board of Governors that
the present
limitation of $20,000 on the maximum amount of insurance
for.any one individual covered under the System's group life insurance
Policy with the Connecticut General Life Insurance Company be removed
or in the alternative that the limitation be increased to $40,000.
The Board believes that as a matter of policy any increase in
this group life insurance limitation should not exceed the legal maximum
limitation of $40,000 which is in effect in approximately one half of
the States. Consequently, the Board approves the alternative proposal
Of the Conference that the limitation be increased to $40,000, subject
to the
approval by the Boards of Directors of the individual Federal
Reserve Banks.
Inasmuch as the Conference of Presidents has the committee
?rganization to deal with such fringe benefit matters, Mr. Malcolm Bryan,
Chairman of that Conference, is being furnished with a copy of this
letter in order that the appropriate committee may institute the necessary
,
8,1
:rangements to effect the increased coverage with the Connecticut General
Life Insurance Company.
Very truly yours,
(Signed) Merritt Sherman
Merritt Sherman,
Secretary
coPy to Chairmen all Federal Reserve Banks
6
@FedFRASER