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TREASURY DEPARTMENT' Fiscal Assistant Secretary May 23, 1^51 To Secretary SnyS There is att a telegram which of ;o the Presidents of all Federal Re serve Banks. In view of the potential magnitude of these cases (one case in Hew York involving $715 million has already been reported to us), I see no alternative but to take this special action* I!* F* Bartelt Attachment* Mr. Bartelt From boom 3 S T A N D A R D F O R M N o . 14 APPRCfcfliD BY TH E PRESID ENT M a r c h 10 , 1 9 2 6 Bu r e a Tr ea su r y D epartm ent TELEGRAM Amos a? nm s, xsm sassatm Ch g . A pp r o pr ia t io n Hiscmdjmwx E & m m O FFIC IA L B U SIN E SS—GOVERNM ENT RATES U. S. GOVERNMENT PRINTING OFFICE 2--- 17902 May 23, 1951 m s c m To"Presidents, Federal Reserve Banks; Boston, Mass New York, N. v Philadelphia, pa. Cleveland, Ohio Richmond., Va. Atlanta» G a . Chicago, 111. S t . Louis, No. Minn eapoli s , Minn. Kansas City, Mo. Dalias, T g xa s San Franr: .1s c o , Cali It has c o m to treasury*s attention that some large holders of treasury Saving* notes will redoes their old notes for cash on J m e 1st and subscribe o n that date to the new notes throu^i their commercial bank depositaries which will undoubtedly make payment through treasury f&x and Loan Accounts• this practice will require treasury to stake substantial withdrawals £To© depositaries to asst redemptions while n ew deposits from sales of notes will he concentrated In relatively few depositaries* This m y operate to cans® strain on money market w hich should h e avoided from standpoint of treasury and Federal Reserve System* especially as refunding operation may he in process early in June* Accordingly, if any individual operation of this character involving $5 #000,000 or more semes to your attention, please contact hanks involved and ask them to have owners of the notes conduct transaction direst with yenr Bankas dash redemption offset %y ca^h sale in treasury accounts* If hank is uncooperative please contact owner as fiscal agent of ’ Treasury and a«fe for oooperation in interest of overall effect on mommy market* In eases where substantial eash redactions are made and funds go to depositaries which take credit in treasury fax and Loan Accounts for corresponding sales treasury will immediately call funds from sueh individual depositaries at earliest possible date after June 1st* In your contacts with depositaries involved in these transactions they may he notified of this proposed action in their Cases* Please advise me fcy telegram ef any oases coming to your attention* the amounts involved and results of your action in each case* ( u t u M ) ». f. a WfEaffalfingertnlb 5-22-51
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