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CIRCULAR N O . 102. m FEDERAL RESERVE BANK OF N E W YORK N E W YORK, May 24, 1918. TEMPORARY RETIREMENT OF SILVER CERTIFICATES. T o THE CASHIER, SIR: For the purpose of conserving the Nation's gold supply, permitting the settlement in silver, where practicable, of adverse trade balances, providing silver for subsidiary coinage and commercial use, and assisting Allied Governments in the war against Germany, Congress has recently authorized $350,000,000 of the silver dollars held in the United States Treasury to be broken up and sold as bullion. As most of the silver thus held is represented by silver certificates in circulation, it c a n o n l y be o b t a i n e d by t h e r e t u r n of silver certificates t o t h e Treasury for c a n c e l l a t i o n . T h e withdrawal of silver certificates from circulation is not intended to be permanent, as the Act provides t h a t the Director of t h e Mint, as soon as practicable after a sale of silver bullion has been made, shall purchase a like q u a n t i t y of silver to take the place of the bullion sold. T o provide temporarily the necessary circulating medium during the interim between the withdrawal of the silver certificates and their subsequent reissue when the silver supply has been replenished by purchases of silver, Federal reserve banks will issue Federal reserve b a n k n o t e s in denominations of $1.00, $2.00, $5.00 and upward. These notes will be obligations of the Federal reserve banks secured by United States certificates of indebtedness or bonds and similar otherwise to national bank notes. We ask the banks of this district to cooperate with the Government by furnishing us with their present supply of $5.00 silver certificates, which can be replaced in circulation a t once by Federal reserve notes, Federal reserve bank notes, or United States notes. In a few weeks, when Federal reserve b a n k notes of the $1.00 and $2.00 denominations are ready, a request will also be made t h a t silver certificates in these denominations be sent in. Will y o u n o t , therefore, please sort o u t of y o u r c a s h a n d forward t o u s , at our e x p e n s e , all silver certificates of $5.00 a n d u p w a r d w h i c h y o u m a y have o n h a n d or receive f r o m t i m e t o t i m e , i n r e t u r n for w h i c h w e will either, (a) (b) Furnish you, free of expense, other currency of the same or larger denominations, as you m a y prefer, or Place the amount to your credit in this bank or in any designated bank in this city. W e feel confident that you will be willing to cooperate with the Government in furnishing it the silver it needs for its own requirements and those of its Allies. Awaiting your response to this, we are Very truly yours, B E N J . STRONG, Governor.
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