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American Bankers Association (5)
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Arthur F. Burns Papers
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The original documents are located in Box B1, folder "American Bankers Association (5)" of the Arthur F. Burns Papers at the Gerald R. Ford Presidential Library. Copyright Notice The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections. Works prepared by U.S. Government employees as part of their official duties are in the public domain. The copyrights to materials written by other individuals or organizations are presumed to remain with them. If you think any of the information displayed in the PDF is subject to a valid copyright claim, please contact the Gerald R. Ford Presidential Library. Some items in this folder were not digitized because it contains copyrighted materials. Please contact the Gerald R. Ford Presidential Library for access to these materials. FEDERAL AGENCY RELATIONS THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 FEDERAL ADMINISTRATIVE ADVISER HAMPTON A. RABON 202/467-4200 March 9, 1973 Mrs. Catherine Mallardi Secretary to Chairman Burns Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Mrs. Mallardi: There is enclosed for your information a copy of the agenda for the next meeting of the Government Borrowing Committee. Please call to Chairman Burns' attention that the Committee will be meeting in our offices at 1120 Connecticut Avenue, N.W. The building (Bender) has another entrance on L Street, near 18th. Our board room is on the 7th floor. The Committee will look forward, as usual, to meeting with Chairman Burns at 4:00 p.m. on Tuesday, April 24, 1973. I am also enclosing for Chairman Burns' information a list of the members of the Government Borrowing Committee. Sincerely, Hampton A. Rabon HAR:fmm Enclosures Attended GERALD R. FORD VIBRABA AGENDA GOVERNMENT BORROWING COMMITTEE The American Bankers Association April 24-25, 1973 Tuesday, April 24, 1973 LISEARY GERALD GERALD R. FORD 9:00 a.m. Committee meets in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th floor) 1/ 10:00 a.m. Committee to review slides in Room 2334 of the Treasury building 2/ 11:00 a.m. Committee to meet with Under Secretary for Monetary Affairs, Mr. Paul Volcker in Room 4426 of the Treasury building for backgrounding. 3/ 12:30 p.m. Refreshments. Virginia Room, Mayflower Hotel (2nd floor) 1:00 p.m. Luncheon. Maryland Room, Mayflower Hotel (2nd floor) 2:30 p.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th floor) 1/ Chairman Burns (Federal Reserve Board) will meet with the Committee at 4:00 p.m. 6:30 p.m. Cocktails 7:00 p.m. Dinner New York Room, Mayflower Hotel (2nd floor) Wednesday, April 25, 1973 9:00 a.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th floor) 1/ 9:45 a.m. Committee to report its recommendations to Secretary Shultz and the Treasury Financing Group in Room 4426 of the Treasury building 3/ 1/ This location is on Connecticut Avenue across from the Mayflower Hotel. 2/ Treasury will use the regular projection room on the second floor in southwest corner of building (corner facing the Mall and the White House) 3/ Conference with Under Secretary for Monetary Affairs and report to the Secretary of the Treasury will be held in the 4th floor Conference Room on west side of building near the center elevators opposite the White House. GOVERNMENT BORROWING COMMITTEE Chairman: Robert M. Surdam Chairman and Chief Executive Officer National Bank of Detroit RPA Box 116 Detroit, Michigan 48232 Alfred Brittain III Donald M. Graham President Chairman and Chief Executive Officer Bankers Trust Company Continental Illinois National Bank P. O. Box 318, Church Street Station and Trust Company New York, New York 10015 Lock Box H Chicago, Illinois 60693 Robert E. Bryans William M. Jenkins President Chairman First National Bank of Casper Seattle-First National Bank P. O. Box 40 P. O. Box 3586 Casper, Wyoming 82601 Seattle, Washington 98124 Willard C. Butcher Ben F. Love President Chairman and Chief Executive Officer The Chase Manhattan Bank, N.A. Texas Commerce Bank, N.A. One Chase Manhattan Plaza P. O. Box 2558 New York, New York 10015 Houston, Texas 77001 A.W. Clausen John A. Moorhead President and Chief Executive Officer Chairman and Chief Executive Officer Bank of America, N. T. & S. A. Northwestern National Bank P. O. Box 37000 Seventh and Marquette San Francisco, California 94137 Minneapolis, Minnesota 55440 Richard P. Cooley John A. Oulliber President and Chief Executive Officer Chairman of the Board Wells Fargo Bank, N.A. First National Bank of Commerce 464 California Street P. O. Box 60279 San Francisco, California 94120 New Orleans, Louisiana 70160 Gaylord Freeman Howard C. Petersen Chairman of the Board Chairman of the Board The First National Bank The Fidelity Bank P. O. Box A Broad and Walnut Streets Chicago, Illinois 60670 Philadelphia, Pennsylvania 19109 Robert J. Gaddy Robert V. Roosa Chairman and President Partner Tower Grove Bank and Trust Company Brown Brothers Harriman & Company 3134 S. Grand Boulevard 59 Wall Street St. Louis, Missouri 63118 GERALD LIBRARY New York, New York 10005 Government Borrowing Committee - page two Thomas I. Storrs EX OFFICIO President and Chief Executive Officer North Carolina National Bank Eugene H. Adams P.O. Box 120 President Charlotte, North Carolina 28201 The First National Bank P.O. Box 5808, Terminal Annex D. Thomas Trigg Denver, Colorado 80217 Chairman and Chief Executive Officer (President, ABA) National Shawmut Bank of Boston P.O. Box 2176 Willis W. Alexander Boston, Massachusetts 02106 Executive Vice President The American Bankers Association Walter B. Wriston 1120 Connecticut Avenue, N.W. Chairman Washington, D.C. 20036 First National City Bank 399 Park Avenue Rex J. Morthland New York, New York 10022 Chairman of the Board The Peoples Bank and Trust Company of Selma ADVISORY MEMBERS P.O. Box 799 Selma, Alabama 36701 John J. Larkin (President-Elect, ABA) Senior Vice President First National City Bank Douglas R. Smith P.O. Box 850, Wall Street Station President and Chairman of the Board New York, New York 10015 National Savings & Trust Company Washington, D.C. 20005 Donald C. Miller (Chairman, ABA Savings Bond Committee) Executive Vice President Continental Illinois National Bank Allen P. Stults and Trust Company Chairman and Chief Executive Officer Lock Box H American National Bank & Trust Company Chicago, Illinois 60693 P.O. Box DD Chicago, Illinois 60690 Leland S. Prussia, Jr. (Past President, ABA) Senior Vice President Bank of America, N.T. & S.A. P.O. Box 37000 San Francisco, California 94137 Hampton A. Rabon A.B.A. Director (202/467-4200) James R. Sheridan Senior Vice President North Carolina National Bank P.O. Box 120 Charlotte, North Carolina 28201 April 1973 FORD & LIBRARY 076870 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM THE AMERICAN BANKERS ASSOCIATION MAR NE TAVENUE, N. W., WASHINGTON, D.C. 20036 PRESIDENT OFFICE RECEIVE CHAIRMAN EUGENE H. ADAMS March 15, 1973 PRESIDENT THE FIRST NATIONAL BANK DENVER, COLORADO 80217 The Honorable Wright Patman Chairman, Joint Economic Committee Room G 133 - New Senate Office Building Washington, D. C. 20510 Dear Mr. Patman: This letter is being submitted in response to your recent request for comments from The American Bankers Association on the 1973 Economic Report of the President. We were pleased to note that the Report suggests that a range of goals rather than a single value is desirable at the present time as a guide to governmental economic policies. To adopt a "range of values" recognizes both the practical difficulties of "fine tuning" and the fact that in the economic environment of the 1970's it may at times be necessary to accept a lower level of achievement in one area while striving for a higher level in another. We believe the Administration will continue its efforts to curb inflation. The danger is still very great that unacceptable inflationary pressures will reappear as the result of budgetary deficits, excessive wage settlements, the rising prices of imported goods (especially raw materials not available in the U.S.) and, finally, the belated effect of past expansionary monetary policies. Any relaxation in the government's anti-inflationary posture is certain to rekindle an inflationary psychology that will be much more difficult to deal with as the economy approaches full employment. We wish also to emphasize the special importance of implementing a sound fiscal policy. We strongly urge the Congress and the Administration to work together to control Federal spending within the limits suggested in the Report. Monetary policy of course can make a contribution toward curbing inflation, but it cannot shoulder the burden alone. In summary, we believe inflation still remains the most important problem con- fronting our nation, and we wish to emphasize again the importance of adopting and adhering to anti-inflationary policies. The spending policies outlined in the Economic Report, in our judgment, provide an appropriate guide for governmental expenditures for the present and for the 1973-1974 fiscal year. Sincerely, Puper GERALD FORD Dry THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W. WASHINGTON, D.C. 20038 PRESIDENT EUGENE H. ADAMS PRESIDENT THE FIRST NATIONAL BANK DENVER, COLORADO 80217 April 18, 1973 Dear Fellow Banker: By this time you probably are familiar with the "dual prime rate" and profit margin guidelines issued April 16 by the Committee on Interest and Dividends. I am enclosing a copy of the complete CID guidelines for your further information. After a careful study of the guidelines, I would like to share with you my views on what they mean to the banking industry. I believe they contain, for us, both an opportunity and an obligation. Quite simply, the new program places banking on a footing similar to that of other businesses in the Administration's efforts to combat persistent inflationary forces in the nation's economy. The guidelines can go a long way toward easing what had become an increasingly difficult situation for banks. Had the intense pres- sures of recent months been continued, we might well have seen the return of critical conditions similar to those of 1969-70 -- a situation ultimately injurious to all banks. We are strongly urged by the guidelines to continue supplying adequate funds to small businesses, consumers, homebuyers, and far- mers, at reasonably statle rates of interest. We are also asked to keep a tight rein on our over-all profit margins. We should recognize the dual-prime system for what it is. It is an effort to minimize the distortions in the money market caused by regulatory action. And it might help to show more accurately the role of the widely misunderstood prime rate, whose fluctuations al- ways have had far less impact on small business and consumer loans than has been generally believed. There will likely be some annoyances -- perhaps another reporting requirement, for example. However, I am convinced our industry can operate within the framework of the new CID guidelines. And just as banking gave its support to Phases I and II of the Administration's economic program, I am confident the industry will accept its share of the burden under this temporary program aimed at restoring stability to the economy. GERAUGA FORD LIBRARY Sincerely, Gene adams Eugene H. Adams COMMITTEE ON INTEREST AND DIVIDENDS WASHINGTON, D. C. 20551 Criteria Established by the Committee on Interest and Dividends for Interest Rates Charged by Commercial Banks 1. A major purpose of the criteria described below is to protect small business and farm borrowers against burdensome increases in interest rates, and yet make it possible for rates on loans to large national firms to respond flexibly to changes in money market conditions. It is not intended, however, either in the case of loans to large firms or to small firms, to interfere with normal business practices relating to differentials in interest rates that reflect credit risk and similar factors. 2. Major corporations ordinarily have extensive banking relation- ships across the country. The "large-business prime rate" is to be under- stood as the rate charged by a commercial bank on short-term loans to large businesses with the highest credit standing. This rate, which corresponds to what is now usually termed the prime rate, generally will apply to borrowers who have access to national money and capital markets. 3. Small businesses and farms normally are restricted to local banking sources and do not have access to national money markets. The "small-business prime rate," which will apply to such borrowers, is to be understood as the best rate charged by a bank to its most credit-worthy local customers. This rate may vary from bank to bank. 4. The interest rate charged by a commercial bank on a business loan, whether to a large or small firm, is part of its structure of rates reflecting degree of risk, size of loan, and other factors. This structure is to be based on the "large-business prime rate" in the case of large borrowers, and on the "small-business prime rate" in the case of small businesses and farms. 5. For present purposes, a small business is any domestic -- commercial, industrial, or agricultural --- borrower whose total borrowings outstanding at any one time over the preceding 12 months (exclusive of long- term real estate mortgage debt) did not exceed $350,000 and whose assets do not exceed $1 million. This definition covers the great majority of business establishments and farms. 6. Banks may extend application of the small business rate structure to any firm regardless of size. GERALD FORD LIBRARY 7. Rates charged by a commercial bank on loans to large firms may respond flexibly to changes in open market interest rates. By keeping the "large-business prime rate" consistent with the cost of borrowing from alternative market sources, the recent large diversion of financing from the commerical paper market to banks would be halted and tendencies toward excessive and unhealthy expansion of bank credit would be moderated. -2- 8. If an increase in the "large-business prime rate" occurs, it should be made in moderate steps in order to avoid disruptive market effects. y Rates charged by a commercial bank to small business and farm borrowers should remain at levels no higher than those prevailing on the date these criteria are issued unless an increase can be fully justified by increases in costs. If increases in these rates occur, they are to be decidedly smaller, and are also to be made less frequently, than changes in rates on loans to large firms. 10. Interest rates charged by banks on home mortgage loans and consumer loans should remain under special restraint. They are to continue relatively stable even if the "large-business prime rate" and associated rates move up significantly. 11. Any increase in rates to small business and farm borrowers, to home mortgage borrowers, and to consumer borrowers must be justified by increases in the cost of lendable funds and other operating costs related to the commercial banking function, to the extent that such increased costs are not offset by higher earnings on large business loans and other loans and investments. Any increase in rates justified by costs should not be unduly concentrated in any single category of loans. 12. Since under the current economic stabilization program, all segments of our society -- business firms and wage earners alike -- are called upon to forego for the sake of the general welfare some of the earnings that they might otherwise have realized, banks should accept similar restraints. While present criteria provide for flexibility in the "large-business prime rate, increases in a bank's entire structure of lend- ing rates must in no instance lead to undue increases in the bank's profit margin. 13. If increases in interest rates on loans occur, they shall not raise the bank's over-all profit margins on domestic operations (exclud- ing revenues from service functions such as trust departments and data processing) above the average of the best two years in the four preceding calendar years. For purposes of this test, the profit margin is defined as the ratio of net operating income, on a fully taxable equivalent basis before income taxes and securities gains or losses, to gross operating income on a fully taxable equivalent basis. 14. Commercial banks are to continue to meet legitimate credit needs of home buyers, consumers, small business, and farmers. Periodic reports will be required to assure that these needs are being met. April 16, 1973 LIBRAR LIBERTY GERALD FORD THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W. WASHINGTON, D.C. 20036 PRESIDENT EUGENE H. ADAMS PRESIDENT THE FIRST NATIONAL BANK DENVER, COLORADO 80217 April 18, 1973 Dear Fellow Banker: By this time you probably are familiar with the "dual prime rate" and profit margin guidelines issued April 16 by the Committee on Interest and Dividends. I am enclosing a copy of the complete CID guidelines for your further information. After a careful study of the guidelines, I would like to share with you my views on what they mean to the banking industry. I believe they contain, for us, both an opportunity and an obligation. Quite simply, the new program places banking on a footing similar to that of other businesses in the Administration's efforts to combat persistent inflationary forces in the nation's economy. The guidelines can go a long way toward easing what had become an increasingly difficult situation for banks. Had the intense pres- sures of recent months been continued, we might well have seen the return of critical conditions similar to those of 1969-70 -- a situation ultimately injurious to all banks. We are strongly urged by the guidelines to continue supplying adequate funds to small businesses, consumers, homebuyers, and far- mers, at reasonably stable rates of interest. We are also asked to keep a tight rein on our over-all profit margins. We should recognize the dual-prime system for what it is. It is an effort to minimize the distortions in the money market caused by regulatory action. And it might help to show more accurately the role of the widely misunderstood prime rate, whose fluctuations al- ways have had far less impact on small business and consumer loans than has been generally believed. There will likely be some annoyances -- perhaps another reporting requirement, for example. However, I am convinced our industry can operate within the framework of the new CID guidelines. And just as banking gave its support to Phases I and II of the Administration's economic program, I am confident the industry will accept its share of the burden under this temporary program aimed at restoring stability to the economy. Sincerely, FORD LIBRART Gene adams Eugene H. Adams COMMITTEE ON INTEREST AND DIVIDENDS WASHINGTON, D. C. 20551 Criteria Established by the Committee on Interest and Dividends for Interest Rates Charged by Commercial Banks 1. A major purpose of the criteria described below is to protect small business and farm borrowers against burdensome increases in interest rates, and yet make it possible for rates on loans to large national firms to respond flexibly to changes in money market conditions. It is not intended, however, either in the case of loans to large firms or to small firms, to interfere with normal business practices relating to differentials in interest rates that reflect credit risk and similar factors. 2. Major corporations ordinarily have extensive banking relation- ships across the country. The "large-business prime rate" is to be under- stood as the rate charged by a commercial bank on short-term loans to large businesses with the highest credit standing. This rate, which corresponds to what is now usually termed the prime rate, generally will apply to borrowers who have access to national money and capital markets. 3. Small businesses and farms normally are restricted to local banking sources and do not have access to national money markets. The "small-business prime rate," which will apply to such borrowers, is to be understood as the best rate charged by a bank to its most credit-worthy local customers. This rate may vary from bank to bank. 4. The interest rate charged by a commercial bank on a business loan, whether to a large or small firm, is part of its structure of rates reflecting degree of risk, size of loan, and other factors. This structure is to be based on the "large-business prime rate" in the case of large borrowers, and on the "small-business prime rate" in the case of small businesses and farms. 5. For present purposes, a small business is any domestic -- commercial, industrial, or agricultural -- borrower whose total borrowings outstanding at any one time over the preceding 12 months (exclusive of long- term real estate mortgage debt) did not exceed $350,000 and whose assets do not exceed $1 million. This definition covers the great majority of business establishments and farms. 6. Banks may extend application of the small business rate structure to any firm regardless of size. GERALD LIBRARY 7. Rates charged by a commercial bank on loans to large firms may respond flexibly to changes in open market interest rates. By keeping the "large-business prime rate" consistent with the cost of borrowing from alternative market sources, the recent large diversion of financing from the commerical paper market to banks would be halted and tendencies toward excessive and unhealthy expansion of bank credit would be moderated. -2- 8. If an increase in the "large-business prime rate" occurs, it should be made in moderate steps in order to avoid disruptive market effects. 9. Rates charged by a commercial bank to small business and farm borrowers should remain at levels no higher than those prevailing on the date these criteria are issued unless an increase can be fully justified by increases in costs. If increases in these rates occur, they are to be decidedly smaller, and are also to be made less frequently, than changes in rates on loans to large firms. 10. Interest rates charged by banks on home mortgage loans and consumer loans should remain under special restraint. They are to continue relatively stable even if the "large-business prime rate" and associated rates move up significantly. 11. Any increase in rates to small business and farm borrowers, to home mortgage borrowers, and to consumer borrowers must be justified by increases in the cost of lendable funds and other operating costs related to the commercial banking function, to the extent that such increased costs are not offset by higher earnings on large business loans and other loans and investments. Any increase in rates justified by costs should not be unduly concentrated in any single category of loans. 12. Since under the current economic stabilization program, all segments of our society -- business firms and wage earners alike -- are called upon to forego for the sake of the general welfare some of the earnings that they might otherwise have realized, banks should accept similar restraints. While present criteria provide for flexibility in the "large-business prime rate, increases in a bank's entire structure of lend- ing rates must in no instance lead to undue increases in the bank's profit margin. 13. If increases in interest rates on loans occur, they shall not raise the bank's over-all profit margins on domestic operations (exclud- ing revenues from service functions such as trust departments and data processing) above the average of the best two years in the four preceding calendar years. For purposes of this test, the profit margin is defined as the ratio of net operating income, on a fully taxable equivalent basis before income taxes and securities gains or losses, to gross operating income on a fully taxable equivalent basis. 14. Commercial banks are to continue to meet legitimate credit needs of home buyers, consumers, small business, and farmers. Periodic reports will be required to assure that these needs are being met. April 16, 1973 Executive Report April 23, 1973 Good Morning! Inflation is rubbing raw the public's sensitive "pocketbook nerve"--and inflation has become as much a political as an economic issue. Congress is acting to extend the President's power to impose controls on much of the national economy. With final action still to come, it looks as though the new law to be adopted will stick close to the measure consistently advocated by your ABA in telegrams and other communications to Congress: a one-year extension that gives the President broad discretion. Political concern about inflation is having a direct impact on banks. Creation of the dual prime rate by the Committee on Interest and Dividends is a political response to an economic problem. The CID, confronted by the thankless and probably hopeless task of explaining to the public where the customary prime rate fits into the economic spectrum, chose instead to restrict the impact of the free prime rate to our large corporate customers. In addition, it created a second base lending rate for loans to small business, farmers, and consumers. Needless to say, representative bankers were consulted in the deliber- ations that led to this temporary solution. Quick federal action in finding and approving the two-tier prime rate underscores the fact that government acts faster when prodded by a crisis. Solutions devised in a crisis atmosphere are often expedient, but they do not necessarily take into account all the long-range considerations. Both the House and Senate Banking Committees have approved legis- lation that would not prohibit mutual savings banks in Massachusetts and New Hampshire from offering NOW accounts, subject to potential rate regulation by FDIC. Chairman Thomas J. McIntyre (D-N.H.) of the Senate Financial Institutions Subcommittee says candidly: "I haven't encountered such intense interest in such a localized issue for several years." I question whether NOW accounts are truly a local issue. If, or when, NOW accounts spread to other states their impact will increase --and it will touch many aspects of the nation's financial system. Availability of these interest-bearing checking accounts from MSBs and cooperative banks could prompt a shift of funds out of checking accounts as people find they can enjoy the fruits of their savings and the convenience of checking in a NOW account. Widespread NOW accounts could also make it more difficult for the Federal Reserve to adjust the money supply. If thrift institutions offer the more liquid NOW accounts, would reserve requirements be imposed on a fair basis? Even if they were, thrifts would continue to have a significant competitive FORD Route to: LIBRARY THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 advantage over commercial banks. Their taxes are lower, under today's rules they can pay higher interest rates on savings, and their regulatory burdens are lighter. Piecemeal legislation tends to create as many problems as it solves. Over the years, bankers have consistently asked Congress to pass laws that foster fair and equal competition--the heart of the Hunt Com- mission's recommendations, which strongly urged that they be considered as a package. Congress is already considering some-but not all--of the Commis- sion's recommendations. Sen. McIntyre points out that it will be difficult for the lawmakers to consider a single legislative package: the tax recommendations will go before different committees from those that deal with financial structure. We hope Congress can be convinced that even though insurmountable jurisdictional problems preclude con- sideration of the Hunt report as a "package," it is essential to co- ordinate legislative handling of the tax and structural recommendations. It is possible that the tax aspects of the legislation based on the Hunt report could be considered along with the tax reform proposals now before the House Ways and Means Committee. Both the Senate and House are expected to vote on the NOW account issue (and extending Reg. Q ceilings) early in May. Sen. McIntyre anticipates that his subcommittee will "get more and more involved with the Hunt Commission study." Later this year or early next year, he expects the subcommittee to "be holding compre- hensive hearings and moving toward the implementation of a number of the Commission's recommendations." Sen. McIntyre believes that "there are clear indications that the movement within the financial community is toward more competition between commercial banks and thrift institutions." He says he is "sure" a central issue to be dealt with "in the near future is the question of third party payments systems, whether they are in the form of demand deposits, electronic transfer systems, or an expansion of the NOW account concept." I believe it is of utmost importance to all the nation's finan- cial institutions to persuade the Administration and the federal banking regulatory agencies that Congressional consideration of the full range of Hunt Commission recommendations must be fully coordi- nated, and that this merits priority. grasing Waln WL/SHE feilethmer, Sincerely, if Willis Alexanden 1450 3) Adminis- Willis W. Alexander C.I.D. Executive Vice President FR, 4) educations spps- GOVERNMENT BORROWING COMMITTEE The American Bankers Association Report to the Secretary of the Treasury The Honorable George P. Shultz Washington, D.C. April 25, 1973 In response to your request, the Committee was pleased to consider the refinancing of the $3.8 billion, 4 3/4% and $5.8 billion, 7 3/4% Treasury notes maturing May 15, 1973, of which $4.3 billion are privately held. We recommend a three part program as follows: 1. The offering through a cash auction of $750 million of 24 year, 7% bonds due May 15, 1997; 2. The offering on a rights basis of a new 6 year, 6 7/8% note due May 15, 1979 to the holders of the: 7 3/4% notes due May 15, 1973, 4 3/4% notes due May 15, 1973, and as a prerefunding, to the holders of the: 4% bonds due August 15, 1973, 4 1/8% bonds due November 15, 1973, 4 1/8% bonds due February 15, 1974, and 4 1/4% bonds due May 15, 1974. 3. The reactivation at an early date of the 2 year note cycle for such further cash as may be needed for any May 15 attrition or additional cash needs. This recommendation reflects a concensus of all members present except for a reservation on the part of a minority of our members as to the wisdom of the inclusion of the two issues maturing in 1974. FORD & LIBRARY GERALD -2- In recommending this program, the Committee was mindful of: a) the Treasury's presentation suggesting a comfortable cash position, b) the unlikelihood of any immediate major cash requirements, c) the flatness of the present interest rate curve, d) the reasonably healthy technical state of the market, e) the need for further progress in reactivating a viable long-term market, and £) the anti-inflationary effect of such an extension. All this suggests that some reasonable debt extension may be achieved with this package without causing a major market disruption. The background briefing by the Treasury staff was most helpful to the Committee. We hope that our recommendations will be useful to you and your associates in reaching your decision. GERALD R.FORD LIBRARY FEDERAL AGENCY RELATIONS THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 FEDERAL ADMINISTRATIVE ADVISER HAMPTON A. RABON 202/467-4200 June 18, 1973 Mrs. Catherine Mallardi Secretary to Chairman Burns Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Mrs. Mallardi: There is enclosed for your information a copy of the agenda for the next meeting of the Government Borrowing Committee. Please call to Chairman Burns' attention that the Committee will be meeting in our offices at 1120 Connecticut Avenue, N.W. The building (Bender) has another entrance on L Street, near 18th. Our Board Room is on the 7th floor. The Committee will look forward, as usual, to meeting with Chairman Burns at 4:00 p.m. on Tuesday, July 24, 1973. I am also enclosing for Chairman Burns' information a list of the members of the Government Borrowing Committee. Sincerely, Hampton Ci. Jahon Hampton A. Rabon HAR:fmm Enclosures Afterded GERALD FORD CLORABY GOVERNMENT BORROWING COMMITTEE Chairman: Robert M. Surdam Chairman and Chief Executive Officer National Bank of Detroit RPA Box 116 Detroit, Michigan 48232 Alfred Brittain III Donald M. Graham President Chairman and Chief Executive Officer Bankers Trust Company Continental Illinois National Bank and P.O. Box 318, Church Street Station Trust Company New York, New York 10015 Lock Box H Chicago, Illinois 60693 Robert E. Bryans President William M. Jenkins First National Bank of Casper Chairman P.O. Box 40 Seattle-First National Bank Casper, Wyoming 82601 P.O. Box 3586 .. Seattle, Washington 98124 Willard C. Butcher President Ben F. Love The Chase Manhattan Bank, N.A. Chairman and Chief Executive Officer One Chase Manhattan Plaza Texas Commerce Bank, N.A. New York, New York 10015 P.O. Box 2558 Houston, Texas 77001 A.W. Clausen President and Chief Executive Officer C. Coleman McGehee Bank of America, N.T. & S.A. President and Chief Executive Officer P.O. Box 37000 First and Merchants National Bank San Francisco, California 94137 P.O. Box 27025 Richmond, Virginia 23261 Richard P. Cooley President and Chief Executive Officer John A. Moorhead Wells Fargo Bank, N.A. Chairman and Chief Executive Officer 464 California Street Northwestern National Bank San Francisco, California 94120 Seventh and Marquette Minneapolis, Minnesota 55440 Gaylord Freeman Chairman of the Board John A. Oulliber The First National Bank Chairman of the Board P.O. Box A First National Bank of Commerce Chicago, Illinois 60670 P.O. Box 60279 New Orleans, Louisiana 70160 Robert J. Gaddy Chairman and President Ellmore C. Patterson Tower Grove Bank and Trust Company Chairman of the Board 3134 South Grand Boulevard Morgan Guaranty Trust Company FORD & St. Louis, Missouri 63118 23 Wall Street New York, New York 10015 GERALD LIBRARY Government Borrowing Committee -2- Howard C. Petersen EX OFFICIO Chairman of the Board The Fidelity Bank Eugene H. Adams Broad and Walnut Streets President Philadelphia, Pennsylvania 19109 The First National Bank P.O. Box 5808, Terminal Annex Robert V. Roosa Denver, Colorado 80217 Partner (President, ABA) Brown Brothers Harriman & Company 59 Wall Street Willis W. Alexander New York, New York 10005 Executive Vice President The American Bankers Association D. Thomas Trigg 1120 Connecticut Avenue, N.W. Chairman and Chief Executive Officer Washington, D.C. 20036 National Shawmut Bank of Boston P.O. Box 2176 Rex J. Morthland Boston, Massachusetts 02106 Chairman of the Board The Peoples Bank and Trust Company ADVISORY MEMBERS of Selma P.O. Box 799 John J. Larkin Selma, Alabama 36701 Senior Vice President (President-Elect, ABA) First National City Bank P.O. Box 850, Wall Street Station Douglas R. Smith New York, New York 10015 President and Chairman of the Board National Savings & Trust Company Donald C. Miller Washington, D.C. 20005 Executive Vice President (Chairman, ABA Savings Bonds Committee Continental Illinois National Bank and Trust Company Allen P. Stults Lock Box H Chairman and Chief Executive Officer Chicago, Illinois 60693 American National Bank & Trust Company P.O. Box DD Leland S. Prussia, Jr. Chicago, Illinois 60690 Senior Vice President (Past President, ABA) Bank of America, N.T. & S.A. P.O. Box 37000 San Francisco, California 94137 Hampton A. Rabon James R. Sheridan A.B.A. Director (202/467-4200) Senior Vice President North Carolina National Bank P.O. Box 120 Charlotte, North Carolina 28201 June 1973 GERALD FORD LIBRARY AGENDA GOVERNMENT BORROWING COMMITTEE The American Bankers Association July 24-25, 1973 Tuesday, July 24, 1973 9:00 a.m. Committee meets in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 10:00 a.m. Committee to review slides in Room 2334 of the Treasury building 2/ 11:00 a.m. Committee to meet with Under Secretary for Monetary Affairs, Mr. Paul Volcker in Room 4426 of the Treasury building for backgrounding 3/ 12:30 p.m. Refreshments 1:00 p.m. Luncheon Cabinet & Pan American Rooms, Mayflower Hotel 2:30 p.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ Chairman Burns (Federal Reserve Board) will meet with the Committee at 4:00 p.m. 6:30 p.m. Cocktails 7:00 p.m. Dinner Cabinet & Pan American Rooms, Mayflower Hotel Wednesday, July 25, 1973 9:00 a.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 9:45 a.m. Committee to report its recommendations to Secretary Shultz and the Treasury Financing Group in Room 4426 of the Treasury building 3/ 1/ This location is on Connecticut Avenue across from the Mayflower Hotel. 2/ Treasury will use the regular projection room on the second floor in southwest corner of building (corner facing the Mall and the White House). 3/ Conference with Under Secretary for Monetary Affairs and report to the Secretary of the Treasury will be held in the 4th floor Conference Room on west side of building near the center elevators opposite the White House. GERALD LIBRARY BOARD OF GOVERNORS #1837 OF THE FEDERAL RESERVE SYSTEM NB THE AMERICAN BANKERS ASSOCIATION 1126973 AUG AMENO! N.W., WASHINGTON, D.C. 20036 07 PRESIDENT OFFICE OF RECEIVED THE CHAIRMAN EUGENE H. ADAMS PRESIDENT THE FIRST NATIONAL BANK July 31, 1973 DENVER, COLORADO 80217 Mr. Donald Macdonald Senior Vice President Dow Jones & Company, Inc Wall Street Journal 22 Cortlandt Street New York, New York 10007 Dear Mr. Macdonald: As a long time reader and admirer of your great newspaper, Iam writing this letter to you to call your attention to an error in fact which appeared in your July 25th edition. I am enclosing a copy of an article by one of your staff reporters in regard to the changes in the loan interest rates published each month by the Federal Reserve Board, which instituted in January of 1972 a monthly survey of some 400 banks (I believe this is approximately the right number) asking them to report the average interest rate charged by them in the first five business days of the previous month on a total of eight types of bank loans. The staff reporter who wrote the article of July 25 must be familiar with the publication to which I am referring and his article had to be based on the July 23 release by the Fed. I take particular exception to the statement in the third paragraph of the news item which states as follows: "It was the fourth consecutive month during which the rates on small business loans had risen substantially. In January the rate was 7.31%." I am enclosing herewith for your perusal a copy of the July 23, 1973 Federal Reserve release, and I call your attention to the fact that the 7.31% rate quoted in your paper as applying to January of this year actually was the average January, 1972 rate; the rate in January, 1973 was 7.70%. The rate in June this year was 8.19%, so the change in the last six months amounts to 49 basis points, which is less than one-half of one percent, and the change in the 18-month period, from January, 1972 through June, 1973 was 88 basis points, which, while representing a 12% increase over the January, 1972 rate, was nevertheless not even a base rate increase of one percent. In the last four reported months, March, April, May and June, this small business loan rate changed from 7.83% in March, to 7.95% in April, to 8.10% in May, and 8.19% in June. I realize I am editorializing, but I do not consider those increases "substantial. " GERALD FORD STBRART Mr. Donald Macdonald July 31, 1973 Page 2 In the 18-month period covered by the Fed's ongoing survey, it is my personal opinion that the American commercial banking industry has shown very considerable restraint in loan rate increases. Particularly do I think this is true in the consumer loan area. The final paragraph of your news article contains this sentence: "The average rate on loans to buy new automobiles climbed to 10.08% last month from 10.05% in May. Some climb .03%. It would be much fairer to point out that, in two of the five consumerate categories used by the Fed, there has been in the last 18 months either a decline in the average rate or no change at all, and the only reason there has been an increase in the bank credit card rate (and here only 13 basis points) is the fact that, in the intervening period during which the Fed has been making these surveys, several states of our nation have amended their usury laws to allow a higher interest rate on bank credit cards. I don't know what you will conclude to do, if anything, about this letter, and I am well aware of the fact that it is difficult to argue with a newspaper unless you have one of your own. Nevertheless, in the interest of accuracy and in fairness to the American commercial banking industry, I would hope very much indeed that you would ask your staff reporter to cover the whole area embraced in the Federal Reserve's survey and to point out, as I have tried to do herein, if you agree with me, that banks of our nation have been pretty good citizens in trying to provide most American consumers with the loan funds they want at reasonable and virtually unchanged rates throughout this period. Very truly yours, Eugene H. Adams EHA:p Enclosures bc: The Honorable Arthur F. Burns GERALD FORD LIBRARY Loan Interest Rates For Small Concerns Rose Again in June Average Bank Fee on Short-Term, Noninstallment Borrowing Hit 8.19%, Up From May's 8.10% By a WALL STREET JOURNAL Staff Reporter WASHINGTON - Interest rates on bank loans for small businesses continued to rise in BOARD : OF COMMONWEALTH COVER FEDERAL RESERVE OF THE statistical release THE For immediate release G.10 July 23, 1973 INTEREST RATES CHARGED ON SELECTED TYPES OF BANK LOANS Type of Loan Interest rate (per cent per annum) January May June Charge in 1972 1973 1973 18 mos. 1) Small short-term noninstalment loans to businesses 7.31 8.10 8.19 +12% 2) Farm production loans (one year or less maturity) a) Feeder cattle operations 7.55 8.13 8.20 +8% b) Other farm production operating expenses 7.63 8.06 8.13 + 6% 3) Consumer instalment credit for: a.) New automobiles (36 months) 10.26 10.05 10.08 - 2% b) Mobile homes (84 months) 10.94 10.84 10.57 - 3% a.) Other consumer goods (24 months) 12.57 12.48 12.57 SAme d) Other personal expenditures (12 months) 12.74 12.78 12.78 Virtually Sucharged Credit card plans 17.11 17.22 17.24 + .007 NY Prime RATe 5.00 7.00 850 + 70% Note: The interestrates shown on this release are based on a survey conducted jointly by the Federal Reserve System and the Federal Deposit Insurance Corporat ion of loans made during the first full calendar week of each month by a sample of 370 insured commercial banks. They represent simple unweichted iverages of the "most common" effective annual rate re- ported by respondents in each loan category. The "most common" rate is defined as the rate charged on the largest dollar volume of loans in the particular cateegory during the week covered in the survey. Consumer instalment Loan rates are reported on a Truth-in-Lending basis as specified in the Federal Reserve Board's Regulation= %. 1/ Loans of $10.000 to $25,000 maturing in one year or less. 1 GERALD PORD BOARD OF GOVERNORS FEDERAL NB THE AMERICAN BANKERS ASSOCIATION 1972 112000 AVENUE WASHINGTON, DC 20036 07 PRESIDENT OFFICE OF RECEIVED THE CHAIRMAN EUGENE H ADAMS PRESIDENT THE FIRST NATIONAL BANK July 31, 1973 DENVER, COLORADO 80217 Mr. Donald Macdonald Senior Vice President Dow Jones & Company, Inc Wall Street Journal 22 Cortlandt Street New York, New York 10007 Dear Mr. Macdonald: As a long time reader and admirer of your great newspaper, I am writing this letter to you to call your attention to an error in fact which appeared in your July 25th edition. I am enclosing a copy of an article by one of your staff reporters in regard to the changes in the loan interest rates published each month by the Federal Reserve Board, which instituted in January of 1972 a monthly survey of some 400 banks (I believe this is approximately the right number) asking them to report the average interest rate charged by them in the first five business days of the previous month on a total of eight types of bank loans. The staff reporter who wrote the article of July 25 must be familiar with the publication to which I am referring and his article had to be based on the July 23 release by the Fed. I take particular exception to the statement in the third paragraph of the news item which states as follows: "It was the fourth consecutive month during which the rates on small business loans had risen substantially. In January the rate was 7.31%." I am enclosing herewith for your perusal a copy of the July 23, 1973 Federal Reserve release, and I call your attention to the fact that the 7.31% rate quoted in your paper as applying to January of this year actually was the average January, 1972 rate; the rate in January, 1973 was 7.70%. The rate in June this year was 8.19%, so the change in the last six months amounts to 49 basis points, which is less than one-half of one percent, and the change in the 18-month period, from January, 1972 through June, 1973 was 88 basis points, which, while representing a 12% increase over the January, 1972 rate, was nevertheless not even a base rate increase of one percent. In the last four reported months, March, April, May and June, this small business loan rate changed from 7.83% in March, to 7.95% in April, to 8.10% in May, and 8.19% in June. I realize I am editorializing, but I do not consider those increases "substantial." FORD LIBRARY Mr. Donald Macdonald July 31, 1973 Page 2 In the 18-month period covered by the Fed's ongoing survey, it is my personal opinion that the American commercial banking industry has shown very considerable restraint in loan rate increases. Particularly do I think this is true in the consumer loan area. The final paragraph of your news article contains this sentence: "The average rate on loans to buy new automobiles climbed to 10.08% last month from 10.05% in May.' Some climb!-- .03%. It would be much fairer to point out that, in two of the five consumer rate categories used by the Fed, there has been in the last 18 months either a decline in the average rate or no change at all, and the only reason there has been an increase in the bank credit card rate (and here only 13 basis points) is the fact that, in the intervening period during which the Fed has been making these surveys, several states of our nation have amended their usury laws to allow a higher interest rate on bank credit cards. I don't know what you will conclude to do, if anything, about this letter, and I am well aware of the fact that it is difficult to argue with a newspaper unless you have one of your own. Nevertheless, in the interest of accuracy and in fairness to the American commercial banking industry, I would hope very much indeed that you would ask your staff reporter to cover the whole area embraced in the Federal Reserve's survey and to point out, as I have tried to do herein, if you agree with me, that banks of our nation have been pretty good citizens in trying to provide most American consumers with the loan funds they want at reasonable and virtually unchanged rates throughout this period. Very truly yours, Eugene H. Adams EHA:p Enclosures bc: The Honorable Arthur F. Burns GERALD FORD LIBRARY 7/25/73 Loan Interest Rates For Small Concerns Rose Again in June Average Bank Fee on Short-Term, Noninstallment Borrowing Hit 8.19%, Up From May's 8.10% By a WALL STREET JOURNAL Staff Reporter WASHINGTON - Interest rates on bank loans for small businesses continued to rise in June, the Federal Reserve Board said. OF OF COMMONWEALTH COVER FEDERAL RESERVE OF THE statistical release For immediate release G.10 July 23, 1973 INTEREST RATES CHARGED ON SELECTED TYPES OF BANK LOANS Type of Loan Interest rate (per cent per annum) January May June Charge 1972 1973 1973 18 mos. 1) Small short-term noninstalment loans to businesses 1/ 7.31 8.10 8.19 + 12% 2) Farm production loans (one year or less maturity) a) Feeder cattle operations 7.55 8.13 8.20 +8% b) Other. farm production operating expenses 7.63 8.06 8.13 + 6% 3) Consumer instalment credit for: a.) New automobiles (36 months) 10.26 10.05 10.08 - 2% b) Mobile homes (84 months) 10.94 10.84 10.57 - 3% a.) Other consumer goods (24 months) 12.57 12.48 12.57 d) SAme Other personal expenditures (12 months) 12.74 12.78 12.78 (d) Credit card plans Virtually Sucharged 17.11 17.22 17.24 + .007 NY Prime RATe 5.00 7.00 850 + 70% Note: The interest rates shown on this release are based on a survey conducted jointly by the Federal Reserve System and the Federal Deposit Insurance Corporat ien of loans made during the first full calendar week of each month by a sample of 370 insured commercial banks. They represent simple unweighted iverages of the "most common" effective annual rate re- ported by respondents in each bean category. The "most common" rate is defined as the rate charged on the largest dollar volume of loans in the particular cateegors during the week covered in the survey. Consumer instalment Lean rates are reported on a Truth-in-Lending basis as specified in the Federal Reserve Board's Regulation :. 1/ Loans of $10.000 to $25,000 maturing in one year or less. GERALD FORD LIBRARIA FEDERAL AGENCY RELATIONS THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 FEDERAL ADMINISTRATIVE ADVISER HAMPTON A. RABON 202/467-4200 October 1, 1973 Mrs. Catherine Mallardi Secretary to Chairman Burns Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Mrs. Mallardi: There is enclosed for your information a copy of the agenda for the next meeting of the Government Borrowing Committee. Please call to Chairman Burns' attention that the Committee will be meeting in our offices at 1120 Connecticut Avenue, N.W. The building (Bender) has another entrance on L Street, near 18th. Our Board Room is on the 7th floor. The Committee will look forward, as usual, to meeting with Chairman Burns at 4:00 p.m. on Tuesday, October 23, 1973. I am also enclosing for Chairman Burns' information a list of the members of the Government Borrowing Committee as it is expected to be constituted at the time of the meeting. Sincerely, Hampton a Hampton A. Rabon HAR:fmm Enclosures GERALD FORD FIBRARY AGENDA GOVERNMENT BORROWING COMMITTEE The American Bankers Association October 23-24, 1973 BERALD FORD LIBRARY Tuesday, October 23, 1973 9:00 a.m. Committee meets in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 10:00 a.m. Committee to review slides in Room 2334 of the Treasury building 2/ 11:00 a.m. Committee to meet with Under Secretary for Monetary Affairs, Mr. Paul Volcker in Room 4426 of the Treasury building for backgrounding 12:30 p.m. Refreshments. Maryland Room, Mayflower Hotel 1:00 p.m. Luncheon. New York Room, Mayflower Hotel 2:30 p.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ Chairman Burns (Federal Reserve Board) will meet with the Committee at 4:00 p.m. 6:30 p.m. Cocktails 7:00 p.m. Dinner New York Room, Mayflower Hotel NOTE: The Honorable James E. Smith, Comptroller of the Currency, will attend the dinner. Wednesday, October 24, 1973 9:00 a.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 9:45 a.m. Committee to report its recommendations to Secretary Shultz and the Treasury Financing Group in Room 4426 of the Treasury building This location is on Connecticut Avenue across from the Mayflower Hotel. Treasury will use the regular projection room on the second floor in southwest corner of building (corner facing the Mall and the White House). Conference with Under Secretary for Monetary Affairs and report to the Secretary of the Treasury will be held in the 4th floor Conference Room on west side of building near the center elevators opposite the White House. GOVERNMENT BORROWING COMMITTEE Chairman: Robert M. Surdam Chairman and Chief Executive Officer National Bank of Detroit RPA Box 116 Detroit, Michigan 48232 Andrew Benedict Robert J. Gaddy Chairman of the Board Chairman and President First American National Bank Tower Grove Bank and Trust Company P.O. Box 1351 3134 South Grand Boulevard Nashville, Tennessee 37202 St. Louis, Missouri 63118 Alfred Brittain III William M. Jenkins President Chairman Bankers Trust Company Seattle-First National Bank P.O. Box 318, Church Street Station P.O. Box 3586 New York, New York 10015 Seattle, Washington 98124 Robert E. Bryans Ben F. Love President Chairman and Chief Executive Officer First National Bank of Casper Texas Commerce Bank, N.A. P.O. Box 40 P.O. Box 2558 Casper, Wyoming 82601 Houston, Texas 77001 Willard C. Butcher C. Coleman McGehee President President and Chief Executive Officer The Chase Manhattan Bank, N.A. First and Merchants National Bank One Chase Manhattan Plaza P.O. Box 27025 New York, New York 10015 Richmond, Virginia 23261 A.W. Clausen John A. Moorhead President and Chief Executive Officer Chairman and Chief Executive Officer Bank of America, N.T. & S.A. Northwestern National Bank P.O. Box 37000 Seventh and Marquette San Francisco, California 94137 Minneapolis, Minnesota 55440 Richard P. Cooley Ellmore C. Patterson President and Chief Executive Officer Chairman of the Board Wells Fargo Bank, N.A. Morgan Guaranty Trust Company 464 California Street 23 Wall Street San Francisco, California 94120 New York, New York 10015 Gaylord Freeman John H. Perkins Chairman of the Board President The First National Bank Continental Illinois National Bank and Trust Co. P.O.BoxA Lock Box H Chicago, Illinois 60670 Chicago, Illinois 60693 GERALD FORO LIBRARY -2- Government Borrowing Committee EX OFFICIO Howard C. Petersen Chairman of the Board Eugene H. Adams The Fidelity Bank President Broad and Walnut Streets The First National Bank Philadelphia, Pennsylvania 19109 P.O. Box 5808, Terminal Annex Denver, Colorado 80217 Robert V. Roosa (Past President, ABA) Partner Brown Brothers Harriman & Company Willis W. Alexander 59 Wall Street Executive Vice President New York, New York 10005 The American Bankers Association 1120 Connecticut Avenue, N.W. D. Thomas Trigg Washington, D.C. 20036 Chairman and Chief Executive Officer National Shawmut Bank of Boston W. Jarvis Moody P.O. Box 2176 President Boston, Massachusetts 02106 American Security and Trust Company 15th and Pennsylvania Avenue, N.W. ADVISORY MEMBERS Washington, D.C. 20013 (Chairman, ABA Savings Bonds Committee) John J. Larkin Rex J. Morthland Senior Vice President Chairman of the Board First National City Bank The Peoples Bank and Trust Company of Selma P.O. Box 850, Wall Street Station P.O. Box 799 New York, New York 10015 Selma, Alabama 36701 (President, ABA) Donald C. Miller Executive Vice President George L. Whyel Continental Illinois National-Bank & Trust Co. Vice Chairman of the Board Lock Box H Genessee Merchants Bank and Trust Company Chicago, Illinois 60693 Flint, Michigan 48502 (President-Elect, ABA) Leland S. Prussia, Jr. Senior Vice President Bank of America, N.T. & S.A. P.O. Box 37000 Hampton A. Rabon San Francisco, California 94137 ABA Director (202-467-4200) James R. Sheridan Senior Vice President North Carolina National Bank P.O. Box 120 Charlotte, North Carolina 28201 FORD & LIBRARY GERALD October 10, 1973 GERALD An Invitation The First National Bank of Miami, a Southeast Bank, invites you, your associates and ladies to our traditional Florida Cracker Breakfast 8 to 10:00 a.m., Sunday, October 7, 1973 at the ABA Convention, The Ninety- Fifth, John Hancock Building Chicago, Illinois Harry Hood Bassett Charles J. Zwick J. B. Shumate David W. Brillhart Bernard F. Bischoff III Robert E. White RSVP BOARD OF FEDERAL RESERVE SYSTEM 19730CT PM12: 15 OFFICE THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N. W., D.C. 20036 PRESIDENT REX J. MORTHLAND CHAIRMAN OF THE BOARD THE PEOPLES BANK S TRUST COMPANY SELMA, ALABAMA 36701 # 2290 October 25, 1973 M/R asa Dr. Arthur F. Burns, Chairman Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Dr. Burns: Thank you very much for your October 16 letter of congratulations on my recent election as President of the American Bankers Association. Having you take the time out of your busy schedule to write means much to me because of my strong admiration for your scholarship and for your great contributions to our nation in a most responsible and difficult position. I hope we shall be able to continue discussions with you in a manner that will be helpful to you and to the Board of Governors. The leadership of the American Bankers Association is anxious to do whatever it can to promote an effective banking system in a sound economy for our nation. We shall welcome any opportunity to work with you, any of the Governors, or the staff of the Federal Reserve System whenever you believe that we may be of assistance. Sincerely yours, Rex J. Morthland RJM:k1 CC: Mr. Eugene H. Adams Mr. Willis W. Alexander BERALD R. FORD #. October 16, 1973 Dear Mr. Morthland: I want to congratulate you on your recent election as president of the American Bankers Association and to wish you well as you undertake important new responsibilities on behalf of the banking community. I look forward to continuing with you the constructive dialogue which I have enjoyed with your immediate predecessors. Sincerely yours, (signed) Arthur F. Burns Arthur F. Burns Mr. Rex J. Morthland Chairman Peoples Bank & Trust Company Selma, Alabama 36701 CC: Mrs. Mallardi (2) NB:slc N.B. GERALD FORD BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM #2510 1973DEC 13 PM 48 TRUST DIVISION RECEIVED THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 PRESIDENT CHALKLEY J. HAMBLETON PRESIDENT HARRIS TRUST AND SAVINGS BANK P. O. BOX 755 CHICAGO, ILLINOIS 60690 VICE PRESIDENT December 10, 1973 WILLIAM W. GRAULTY EXECUTIVE VICE PRESIDENT THE CONNECTICUT BANK AND TRUST COMPANY ONE CONSTITUTION PLAZA HARTFORD, CONNECTICUT 06115 M DIRECTOR The Honorable Arthur F. Burns L.A. CAPALDINI Chairman 202/467-4020 Board of Governors of the Federal Reserve System ASSOCIATE DIRECTORS Federal Reserve Building/Constitution Avenue JAMES D. McLAUGHLIN Washington, D.C. 20551 202/467-4027 MARY C. SMITH 202/467-4025 Dear Mr. Burns: Complimentary Registration -- 55th National Trust Conference On behalf of the officers of the ABA Trust Division, I cordially invite you to attend our 55th National Trust Conference to be held at the San Francisco Hilton on February 3-6, 1974. Preliminary information about the conference is enclosed, including a hotel reservation form for your use. Please complete the complimentary conference registration form and return it directly to me to ensure proper registration for the conference. You should make your own reservation directly with the hotel as soon as possible to be sure that you get the accommodations of your choice. If you need assistance in any way, please let us know. I hope very much that you can be with us in San Francisco in February. Cordially yours, L.A. Capaldini Enclosure LAC/hk Called 12/1/19 GERALD FORD LIBRARY regam February President 3-6, 1974 ABA Trust Division BOARD OF GOVERNORS OF THE San Francisco Hilton FEDERAL RESERVE SYSTEM Chalkley J. Hambleton and Tower 1973DEC 13 PM 47 President Harris Trust and San Francisco RECEIVED Savings Bank OFFICE OF THE CHAIRMAN Chicago TRUST Today/Tomorrow November 1973 Your interest in the trust business prompts me to write to you about the ABA 55th National Trust Conference. As Division President, I particularly want you to have preliminary information about a conference that is being designed especially for you. Last year the Executive Committee of the ABA Trust Division decided to begin moving the conference to various sites around the country. I know you are pleased to see our upcoming conference located in the beautiful and interest- ing city of San Francisco. We will be in session February 3-6, 1974, at the San Francisco Hilton. The theme for this year's conference is "Trust: Today/Tomorrow." It is intended to provide you with a means of focusing upon the opportunities and issues facing the trust business now and the trends and events that will profoundly affect all of us in the future. As you look over the enclosed preliminary program, you will see that we are providing a conference that includes outstanding and interesting speakers with something to say. You will hear Chet Huntley, ABA President Morthland and other thought leaders. In addition, the concurrent workshop sessions will allow you to choose from more than 25 different speakers and topics according to your professional interests and needs. Also, you'll note there will be a special program for spouses. After looking over the enclosed program, we hope you will decide to make the National Trust Conference a part of your schedule for next year. We have included conference and spouse registration forms and hotel reservation information so that you can conveniently plan and schedule now for what I believe will be a highly informative and interesting conference. Looking forward to seeing you in San Francisco. Cordially, e.J.Hambletin Chalkley J. Hambleton GERALD FORD LIBRARY THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 So that this registration will receive priority processing, return it directly to: L. A. Capaldini Director/Trust Division The American Bankers Association 1120 Connecticut Avenue, N. W. Washington, D. C. 20036 Please! TYPE this form to ensure that all copies are clearly legible. This will enable us to serve you more efficiently. Detach the last copy (blue) for your files. VIII CONFERENCE REGISTRATION COMPLIMENTARY FULL NAME First Middle initial Last First Name or Nickname for BADGE TRUST Arthur F. Burns Today/Tomorrow BANK or ORGANIZATION MAILING ADDRESS CITY, STATE, ZIP TRUST TITLE $ ASSETS size , 000, per last 000.00 call report AREA CODE TELEPHONE SPOUSE REGISTRATION COMPLIMENTARY FULL NAME First Middle Initial Last First Name or Nickname for BADGE ABA Mrs. Arthur F. Burns HOME MAILING ADDRESS Note: HOME Mailing Address 55th National CITY, STATE, ZIP Trust Conference Additional registrants may be submitted on a separate sheet. Fees are same as stated on this form. REGISTRATION FEES Detach the last copy (blue) for your files. Mail top 5 copies CONFERENCE $125 to: Miss Bonnie Kennedy Trust Conference Registration Coordinator SPOUSE $45 The American Bankers Association 1120 Connecticut Avenue, N.W. Total enclosed $ Washington, D.C. 20036 February 3-6, 1974 Please make check payable to: San Francisco The American Bankers Association Any questions? Phone Miss Kennedy at 202/467-4882. Hilton and Tower CANCELLATION: Full registration will be refunded if written notice is postmarked no later than San Francisco January 15, 1974. After January 15, $25.00 per person processing fee. No refunds after March 6, 1974. Your name will appear on advance registration list if received by January 15, 1974. TRUST Today/Tomorrow Preliminary Program This "preliminary program" contains only basic information relating to this conference. It is subject to GERALD LIBRARY modifications. Registrants will receive a final and complete program in San Francisco. TRUST Today/Tomorrow ABA 55th National Trust Conference February 3-6, 1974 "Trust: Today/Tomorrow," the theme San Francisco Hilton and Tower of the ABA 55th National Trust Conference, reflects the concerns of trust officers today. This dynamic and pragmatic conference will provide you with a means of focusing upon the opportunities and issues facing the trust business now and the trends and events that will profoundly affect us in the future. The general sessions feature such thought leaders as Chet Huntley, ABA President Morthland, and economists Solomon and Sprinkel who will talk about investment strategies in a changing economy. These and other leaders will help trust officers prepare profitably for the days ahead in an increasingly dynamic and responsive manner. THE AMERICAN BANKERS ASSOCIATION Spouses Program The Spouses Program will feature happenings created especially for spouses by knowledge- able convention planners and San Franciscans in the know. The headquarters for these activities will be a special host suite at the San Francisco Hilton. Spouses of San Francisco bankers will serve as hostesses and be on hand to offer advice on where to shop, where to eat, and what to see. A special representative will provide you and your spouse with complete details shortly after your spouse's registration is received. Registered spouses will be admitted to all sessions and open receptions. Sign up your spouse now. TRUST Today/Tomorrow General Sessions These will take place on Monday, Tuesday and Wednesday mornings. The talks will feature discussions on those opportunities and issues all trust officers, whether from large or small banks, need to address. Chalkley J. Hambleton William W. Graulty Speakers Chalkley J. President William W. Executive Vice President Harris Trust and Savings The Connecticut Bank Hambleton Bank Graulty and Trust Company Chicago, Illinois Hartford, Connecticut and and President Vice President ABA Trust Division ABA Trust Division Rex J. Morthland Chet Huntley Dr. Ezra Solomon Dr. Beryl W. Sprinkel Rex J. Chairman of the Board Chet Huntley Private Citizen Morthland Peoples Bank & Trust Bozeman, Montana Company and Selma, Alabama Former NBC Newscaster and President The American Bankers Association Dr. Ezra Dean Witter Professor Dr. Beryl W. Senior Vice President of Finance and Economist Solomon Stanford University Sprinkel Harris Trust and Stanford, California Savings Bank Chicago, Illinois Chalkley J. Hambleton William W. Graulty Presiding Chalkley J. President William W. Executive Vice President Harris Trust and The Connecticut Bank Hambleton Savings Bank Graulty and Trust Company Chicago, Illinois Hartford, Connecticut and and President Vice President ABA Trust Division ABA Trust Division John M. Cookenbach Stetson B. Harman Joseph Schmedding John M. Executive Vice President Stetson B. Senior Vice President and Secretary and Executive Trust Cookenbach Harman The First Pennsylvania Officer Banking and Trust First National Bank Company of Oregon Philadelphia, Pennsylvania Portland, Oregon and and Past President Past President ABA Trust Division ABA Trust Division Joseph Senior Vice President and Senior Trust Officer Schmedding Bank of America NT&SA San Francisco. California and Chairman of Trust Group California Bankers Association TRUST Today/Tomorrow Concurrent Workshops There will be a total of 16 workshop The workshops will be on a "track" sessions during the conference-four basis. The four "track" subject areas are: during each of these periods: Community Banks Monday afternoon, February 4 Investments Tuesday morning, February 5 Marketing Tuesday afternoon, February 5 Strategies Wednesday morning, February 6 You will be able to move from session to session, depending on your interest or you can stay on one track during the four periods given above. Varying levels of sophistication-from basic "how to" to newest theory-will be utilized in order to address your level of interests and needs. John R. Bermingham Richard P. Brown Moderators John R. Senior Vice President Richard P. Senior Vice President Irving Trust Company and Executive Trust Bermingham Brown New York, New York Officer The First National Bank of Denver Denver, Colorado William G. Brown Paul F. Butler Donald S. Buzard William J. Copeland William G. Executive Vice President Paul F. Vice President American National Bank State Street Bank & Brown Butler & Trust Company Trust Company Chattanooga, Tennessee Boston, Massachusetts Donald S. First Vice President and William J. Vice Chairman of the General Counsel Board Buzard First Wisconsin Trust Copeland Pittsburgh National Bank Company Pittsburgh, Pa. Milwaukee, Wisconsin Van R. Gathany Robert L. Landau Ray F. Myers Moderators (continued) Van R. Senior Vice President Robert L. Vice President The Northern Trust Bankers Trust Company Gathany Landau Company New York, New York Chicago, Illinois Ray F. Myers Executive Vice President Continental Illinois National Bank and Trust Company Chicago, Illinois Fred E. Seibert Arthur V. Toupin Gerald V. Weigle James Wood Fred E. Vice President Arthur V. Executive Vice President Bank of America NT&SA Bank of America NT&SA Seibert San Francisco, California Toupin San Francisco, California Gerald V. Senior Vice President James Wood Vice President The First National Bank The Bank of New York Weigle of Cincinnati New York, New York Cincinnati, Ohio L.A. Capaldini James D. McLaughlin Miss Mary C. Smith Staff L. A. Director/Trust Division James D. Associate Director/ Trust Division Capaldini McLaughlin Miss Mary C. Associate Director/ Trust Division Smith Suggested Concerning Sunday 3rd: Arrival/Departure Times Opening Reception starts at 6:00 p.m., closes at 8:00 p.m. You'll find it a good Rule of thumb: gatherin' place. The Conference Registra- tion and Spouse Registration desks open Arrive afternoon on Sunday, February 3. 10:00 a.m., close 8:00 p.m. Depart afternoon on Wednesday, February 6. Of course, you may wish to arrive earlier Concerning Wednesday 6th: and/or stay later to enjoy the city of San Francisco, also for your own special side You can't afford to miss the morning's trips. four workshop sessions and the general session (some of the best was saved for the last). It all closes before noon, enabling you to catch early afternoon flights where necessary. Fill out and send this addressed and postage paid form directly to hotel. If you wish to call in your reservation, phone Hilton Reservation Service Office in your city. Or phone San Francisco 415/771-1400. San Francisco Hilton and Tower Date mailed HOTEL RESERVATION All reservations cancelled after 6 p.m. unless a deposit has For ABA February been received or payment 55th National 3-6, 1974 guaranteed for late check-in. If guest guarantees reservation Trust Conference San Francisco and does not arrive, room will Hilton and Tower be billed for one night and the reservation cancelled. If a room at the rate requested is unavailable, one at the nearest Mr. Salazar, please confirm the following in writing: available rate will be reserved. TRUST The above are current rates. In Today/Tomorrow the event of any change, the rates Main ACCOMMODATIONS Tower prevailing at the time of the con- Building vention will apply. All requests must be received 30 days prior Single Bedded $24-40 $33-49 to the starting date of the con- vention. Roomsheld for this meet- Double Bedded $33-49 $43-58 ing that are not reserved by that Twin Bedded $33-49 $43-58 Arrival Date Time time automatically revert to the Suite with 1 bedroom and parlor $80-up $80-up hotel. Suite with 2 bedrooms and parlor $120-up $155-up All rooms subject to current city room tax. Departure Date Time Children in same room with parents: no charge, Name Company Address City-State-Zip Additional Occupants (Names) To make your hotel reservation, use the card To effect your conference and spouse registra- below or write on your letterhead to: tions, use the enclosed forms and mail them in the postage paid envelope to: Mr. Tony Salazar Front Office Manager Miss Bonnie Kennedy San Francisco Hilton and Tower Trust Conference Registration Mason and O'Farrell Coordinator San Francisco, California 94102 The American Bankers Association 1120 Connecticut Avenue, N.W. Washington, D.C. 20036 If you wish to call in your reservations, phone Hilton Reser- Any questions? Telephone Miss Kennedy in vation Service Office in your city. Or phone San Francisco 415/771-1400. Washington at 202/467-4882. FIRST CLASS Permit No. 15042 San Francisco California BUSINESS REPLY CARD No postage necessary if mailed in the United States Postage will be paid by Mr. Tony Salazar Front Office Manager SAN FRANCISCO HILTON and TOWER MASON and O'FARRELL SAN FRANCISCO, CALIFORNIA 94102 TRUST Today/Tomorrow DA THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 FEDERAL AGENCY RELATIONS THE AMERICAN BANKERS ASSOCIATION 1120 CONNECTICUT AVENUE, N.W., WASHINGTON, D.C. 20036 FEDERAL ADMINISTRATIVE ADVISER HAMPTON A. RABON 202/467-4200 December 18, 1973 Mrs. Catherine Mallardi Secretary to Chairman Burns Board of Governors of the Federal Reserve System Washington, D.C. 20551 Dear Mrs. Mallardi: There is enclosed for your information a copy of the agenda for the next meeting of the Government Borrowing Committee. Please call to Chairman Burns' attention that the Committee will be meeting in our offices at 1120 Connecticut Avenue, N.W. The building (Bender) has another entrance on L Street, near 18th. Our Board Room is on the 7th floor. The Committee will look forward, as usual, to meeting with Chairman Burns at 4:00 p m. on Tuesday, January 29, 1974. 300 I am also enclosing for Chairman Burns' information a list of the members of the Government Borrowing Committee. Sincerely, Hampton a. John Hampton A. Rabon HAR:fmm Enclosures BERALD R. FORD LIBRARY AGENDA GOVERNMENT BORROWING COMMITTEE The American Bankers Association January 29-30, 1974 Tuesday, January 29, 1974 9:15 a.m. Committee meets in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 10:00 a.m. Committee to review slides in Room 2334 of the Treasury building 2/ 11:00 a.m. Committee to meet with Under Secretary for Monetary Affairs, Mr. Paul Volcker, in Room 4426 of the Treasury building for backgrounding 3/ 12:30 p.m. Refreshments 1:00 p.m. Luncheon. Presidential Room, Mayflower Hotel 2:30 p.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1. Chairman Burns (Federal Reserve Board) will meet with the Committee at 4:00 p.m. 6:00 p.m. Reception 7:00 p.m. Dinner. Monroe Room, Washington Hilton Hotel NOTE: Members of the Government Relations Council will attend the reception and dinner. Wednesday, January 30, 1974 9:00 a.m. Committee to assemble in Board Room of The American Bankers Association 1120 Connecticut Avenue, N.W. (7th Floor) 1/ 9:45 a.m. Committee to report its recommendations to Secretary Shultz and the Treasury Financing Group in Room 4426 of the Treasury building 3, 1/ This location is on Connecticut Avenue across from the Mayflower Hotel. 2/ Treasury will use the regular projection room on the second floor in the southwest corner of the building (corner facing the Mall and the White House) Conference with Under Secretary for Monetary Affairs and report to the Secretary of the Treasury will be held in the 4th floor Conference Room on west side of the building near the center elevators opposite the White House. QERALD FORD LIBRARY GOVERNMENT BORROWING COMMITTEE Chairman: Robert M. Surdam Chairman and Chief Executive Officer National Bank of Detroit RPA Box 116 Detroit, Michigan 48232 Andrew Benedict Robert J. Gaddy Chairman of the Board Chairman and President First American National Bank Tower Grove Bank and Trust Company P.O. Box 1351 3134 South Grand Boulevard Nashville, Tennessee 37237 St. Louis, Missouri 63118 Alfred Brittain III William M. Jenkins President Chairman Bankers Trust Company Seattle-First National Bank P.O. Box 318, Church Street Station P.O. Box 3586 New York, New York 10015 Seattle, Washington 98124 Robert E. Bryans Ben F. Love President Chairman and Chief Executive Officer First National Bank of Casper Texas Commerce Bank, N.A. P.O. Box 40 P.O. Box 2558 Casper, Wyoming 82601 Houston, Texas 77001 Willard C. Butcher C. Coleman McGehee President President and Chief Executive Officer The Chase Manhattan Bank, N.A. First and Merchants National Bank One Chase Manhattan Plaza P.O. Box 27025 New York, New York 10015 Richmond, Virginia 23261 A.W. Clausen John A. Moorhead President and Chief Executive Officer Chairman and Chief Executive Officer Bank of America, N.T. & S.A. Northwestern National Bank P.O. Box 37000 Seventh and Marquette San Francisco, California 94137 Minneapolis, Minnesota 55480 Richard P. Cooley Ellmore C. Patterson President and Chief Executive Officer Chairman of the Board Wells Fargo Bank, N.A. Morgan Guaranty Trust Company P.O. Box 44000 23 Wall Street GERALD FORD LIBRARY San Francisco, California 94144 New York, New York 10015 Gaylord Freeman John H. Perkins Chairman of the Board President The First National Bank Continental Illinois National Bank and Trust Co. P.O. Box A 231 South LaSalle Street Chicago, Illinois 60670 Chicago, Illinois 60693 -2- Government Borrowing Committee EX OFFICIO Howard C. Petersen Chairman of the Board Eugene H. Adams The Fidelity Bank President Broad and Walnut Streets The First National Bank Philadelphia, Pennsylvania 19109 P.O. Box 5808, Terminal Annex Denver, Colorado 80217 Robert V. Roosa (Past President, ABA) Partner Brown Brothers Harriman & Company Willis W. Alexander 59 Wall Street Executive Vice President New York, New York 10005 The American Bankers Association 1120 Connecticut Avenue, N.W. D. Thomas Trigg Washington, D.C. 20036 Chairman and Chief Executive Officer National Shawmut Bank of Boston W. Jarvis Moody P.O. Box 2176 President Boston, Massachusetts 02106 American Security and Trust Company 15th and Pennsylvania Avenue, N.W. ADVISORY MEMBERS Washington, D.C. 20013 (Chairman, ABA Savings Bonds Committee) John J. Larkin Rex J. Morthland Senior Vice President Chairman of the Board First National City Bank The Peoples Bank and Trust Company of Selma 95 Wall Street--23rd Floor P.O. Box 799 New York, New York 10015 Selma, Alabama 36701 (President, ABA) Donald C. Miller Executive Vice President George L. Whyel Continental Illinois National Bank & Trust Co. Vice Chairman of the Board 231 South LaSalle Street Genessee Merchants Bank and Trust Company Chicago, Illinois 60693 Flint, Michigan 48502 (President-Elect, ABA) Leland S. Prussia, Jr. Senior Vice President ABA Staff: Bank of America, N.T. & S.A. Hampton A. Rabon P.O. Box 37003 Director (202-467-4200) San Francisco, California 94137 Lawrence Banyas James R. Sheridan Economic Consultant (202-467-4382) Senior Vice President North Carolina National Bank P.O. Box 120 Charlotte, North Carolina 28201 FORD is LIBRARY 038470 December 1973