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CIRCULAR No. 23. FEDERAL RESERVE BANK O F NEW YORK 62 CEDAR STREET NEW YORK, May 15, 1915. To THE CASHIER: SIR: CURRENCY SHIPMENTS The amount of Federal reserve notes of this bank now outstanding is $29,440,000, against which the bank has deposited with the Federal reserve agent $181,300 commercial paper and $29,258,700 gold. A supply of these notes in denominations of $5, $10, $20, $50 and $100 is kept on hand by this bank, and they have been issued, whenever desired, to member banks in this district. They will be shipped to member banks, on request, in such,denominations as may be required, and the face amount, plus the cost of shipment, charged to the member bank's account. No rediscount is necessary in order to obtain a supply of notes, as they may be charged against balances in excess of the amount required for the reserve of the member bank. In each instance, when ordering notes shipped, instructions should be given as to the method of shipment, t. e., whether by express or registered mail. The cost of shipment by express to each member bank of this district will be advised on request, the cost of shipping notes of $5 denomination being usually less by express than by registered mail. T h e cost of shipment by registered mail, fully insured, at present is approximately as follows: No. of B i l l s Denominations Postage Registry Insurance $ T o t a l Cost 1000 5's $1.04 $.10 .25 $1.39 1000 10's 1.04 .10 .50 1.64 1000 20's 1.04 .10 1.00 2.10 1000 50's 1.04 .10 2.50 3.64 1000 100's 1.04 .10 .-).00 6.14 Shipments of gold certificates, silver certificates and legal tender notes may be made to this bank either by express or registered mail for credit of the member bank's account or for exchange for Federal reserve notes. Shipments of gold coin should be made by express, prepaid, and will be credited, less the allowance for any coin on which the abrasion exceeds the legal limit of tolerance, as ascertained by the New York Sub-Treasury. Respectfully, B E N J . STRONG, J R . , Governor. •*£ So the Cashier, Dear Sir: The enclosed circular l e t t e r , rules and requirements, and draft of resolution, explain In detail the plan for the Intra-d 1strlct oolleotion of cheeks and drafts to be established by the Federal Reserve tank of Sew York for the benefit of the member banks of this d i s t r i c t . X an sending a special l e t t e r to ench member bank who i s a member of the Ssw York Clearing House Association, in order to explain tiu* position of this bank with respect to the present functions of the Clearing Kouce and our relations therewith. It i s not our Intention at the present time to charge to your account any checks drawn on you that we may receive; from other member breaks Joining the proposed system, but ws - i l l collect then as at present through the Clearing Bouse* However, in order that we may accept any checks you may have for deposit *lth us, drawn on other member banks Joining the collection system, ana In order that there may be no exceptions or apparent discrimination between member banks, v«e hope that you w i l l adopt the necessary resolution to become a member of the collection system and give us the authority to charge such iters tc your account. Iff -oursc, shrulcl i t B*6tt rv-r.crr advis- able to adopt the practice of charging such Items direct to the accounts of member banks *ho are members of the Clearing Houre system, such a change rtmld only be made after conference with the banks involved -nd consultation of the wishes of the Clearing House Association. LH!r/ Fne. Yours very txuly, Governor. FEDERAL RESERVE BANK OF NEW YORK May 17, 1915. To t h e Cashier, S i r : In discussing the intra-district collection system v/ith member banks, it is evident that some of them are under the impression that their acceptance of the plan v/ill require them to keep large excess balances on deposit v/ith this bank. Such is not the case, hov/ever. It v/ill only be necessary for a member bank to forward each day's items drawn on other member banks which have joined the collection system to an amount sufficient to offset the checks presented against such member bank by other banks which have joined the system. Consequently, no considerable excess balances, figuring from the books of this bank, need bo maintained. To provide against the possible depletion of reserve balances by charges in excess of the items remitted, it is suggested that member banks joining the system may arrange v/ith their reserve agents to make such regular transfers of funds as experience indicates are necessary to maintain their reserve balances. On the other hand, upon request, or by standing order filed v/ith thi3 bank, such excess balances as may be built up by a surplus of credits over debits, may be transferred to your Nev/ York City reserve agent, thereby preventing unnecessary loss of interest on excess reserves. Depositors of member banks joining the collection system, have the privilege of stamping their checks "Collectible at Par through the Federal Reserve Bank of Nev/ York," and may thus enable their customers to avoid the inconvenience or disadvantage of collection charges, as v e are advised that checks drav/n upon such member / banks v/ill be added to the "discretionary list" of the Nev/ York Clearing House Association. It is believed that the proposed plan for collecting checks, developed along proper lines, and v/ith the cooperation of our member banks, v/ill ultimately afford a desired facility of which experience v/ill demonstrate the advantages. If you have reached a decision to join the collection system, prompt advice v/ill be appreciated, in order that no unnecessary delay may be made in publishing the initial list of its members. Respectfully yours, Benjamin Strong, Jr., Covernor.
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