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E x -O f f ic io W . P . G . HARDING, GOVERNOR PAU L M. W A R B U R G , VICE GOVERNOR m em bers FREDERIC A, D E jj$ * lo L g 9 , ADOLPH C. M ILLER CHARLES S. HAMLIN W ILLIAM G. McADOO SECRETARY OF THE TREASURY CHAIRMAN JOHN SKELTON W ILLIAM S Co m p t r o l l e r o f t h e C u r r e n c y FEDERAL RESERVE BOARD WASHINGTON H . PARKER W IL L IS , SECRETARY SHERMAN P. ALLE N , ASST. SECRETARY AND FISCAL AGENT ADDRESS REPLY TO FEDERAL RESERVE BOARD June 1, 1917. Dear Sir: The activities of the Federal reserve banks as fiscal agents for the Government, and especially in con nection with the sale of Liberty Bonds, seem, to require some additional accounting. With the exception of Receipts deposited with the Federal Reserve Bank to the credit of the Treasurer of the United States, general account, or to the credit of such other deposit accounts that may be opened at the request of the Treasury Department, no record of the trans actions handled by the Fiscal Agent Department should be entered upon the general books of a Federal reserve bank, or upon Daily Statement Form 34. Forms suggested for use in handling subscriptions were approved at the meeting of representatives of Federal reserve banks held in Washington on May 17. Copies have since been sent to each Federal reserve bank by the Treasury Department. In the opinion of the Board, it is desirable and neces sary that each Federal reserve bank should keep a full and com plete record of all transactions handled by the Fiscal Agent Department, and that such general ledger and other accounts be kept as will permit of a proper system of audit and control. For that purpose, your bank is requested to open in a special ledger the accounts shown on the daily statement enclosed here with, and to make entries in the manner indicated in the memo randum attached thereto. In order that the Board may be ad vised as to the Fiscal Agent Department accounts, your bank is requested to forward a copy of the daily statement beginning Monday, June 18, and each day thereafter until further notice. A supply of the necessary forms will be sent in the course of a few days. Very truly yours, Governor. Enclosure. Fiscal Agent Accounts LIBERTY LOAN BONDS, PRIOR'TO ALLOTMENT •: Subscriptions Received Debit Credit (a) Receipts deposited with Federal Reserve Bank, .General Account. Liberty Loan Account* Full Payment Account* (b) Certificates of Indebtedness* (c) Unpaid Balances^ Liberty Loan Bond Subscriptions Subscriptions Received* WHEN ALLOTMENTS HAVE BEEN ANNOUNCED: (a) Ad justrsufescription account Debit Credit Subscriptions Received Subscriptions Allot;tM, (This entry will close Unpaid balances on Liberty Bond account) Subs crip tions Received (b) Adjust Receipts Transfer balances, Liberty Loan Account Full Payment Account Certificates of Indebtedness to account, Receipts deposited to credit of General Account, Treasurer of United States, After adjusting entries are made all receipts will there after be deposited to credit General Account, Treasurer of United States, unless other instructions are issued. PAYMENTS AFTER ALLOTMENTS HAVE BEEN ANNOUNCED: Debit (a) Receipts deposited for credit General Account, Treasurer of United States, (b) Depositary Banks, Liberty Loan Deposit, balances due to Treasurer of United States # Credit (a) Unpaid balances on Liberty Bond Subscriptions* X-VB Sa. - 2 Individual ledger accounts should be kept for each of the several depositary banks, showing all deposits and withdrawals. Boston Ledger is suggested: 4, CASH AND OTHER ITEMS CARRIED OVER FOR FOLLOWING DAY’S BUSINESS AND ITEMS CARRIED PENDING COLLECTION. Debit Credit Cash and other items Suspense account When items are collected, make necessary adjustments in above accounts, also, give credit to subscribers and charge "Recepits Deposited". 5. INTEREST RECEIVED: Credit to this account, interest received from depositary banks, also, interest received in adjustment at time of full, or final, payment of bond subscriptions. Charge corresponding amount to ac count "Receipts Deposited". Payment of interest on certificates of indebtedness should not be entered in this account. INTERIM CERTIFICATES. (a) When received Credit Debit Interim Certificates on hand Separate accounts 20 Interim Certificates, Received from Secretary of Treasury. per cent paid 40 i! o ii 7 0 ii ii ii Full amt. " (b) When deliveries are made Credit Debit Interim Certificates Delivered to subscribers Interim Certificates on hand 20 per cent paid 40 ii ii ii 70 " " " Full amt. " (c) When Certificates are surrendered Debit Interim Certificates on hand Credit Interim Certificates delivered to subscribers. LIBERTY LOAN BONDS. 7. (a) When received Debit Liberty Bonds on hand Credit Liberty Bonds received . from Secretary of Treasury (b) When deliveries are made Debit Liberty Bonds delivered to subscribers. 8. Credit Liberty Bonds on hand. TREASURY CERTIFICATES OF INDEBTEDNESS: (a) When allotted. Debit 1. Receipts deposited with Federal Reserve Bank, credit General Account, Treas. of United States. 2. Credit Treasury Certificates of Indebtedness allotments. Depositary Banks, Treasury Certificate proceeds, deposited; balances due to Treas. of United States. Individual ledger accounts should be kept for each of the separate depositary banks, showing all deposits and withdrawals. (b) Interest account. Credit to this account, interest received from depositary banks. Charge a corresponding account to "Receipts deposited". 9. INTEREST PAID ON CERTIFICATES OF INDEBTEDNESS SHOULD NOT BE ENTERED IN THIS ACCOUNT BUT TREATED IN MANNER INDICATED BELOW: 1. Certificate deposited prior to June 15, 1917. After allotments have been announced the certificate, will be deposited by the Fiscal. Agent’s department, with Reserve Bank as a cash receipt at face value. The Reserve Bank will issue its cashier’s check to the subscriber, for interest to June 15. The Reserve Bank will then add the interest to the face amount of certi ficate and charge the combined amount to the General Ac count,, Treasurer of the United States, returning the certificate-^with other warrants paid, 2- Certificate deposited after June 15,1917. Fiscal Agent*s department will add interest to date of payment to the face amount of certificate, accept the combined amount in the same manner as a cash receipt and deposit it with the Reserve Bank for credit of General Account, Treasurer of United States, The Reserve Bank will,in turn, collect the certificate and interest by charging the amount to the General Account, Treasurer of the United States, and forward the certificate to the Treasurer in the same man ner as a Treasury warrant for credit at face value, plus accrued in terest. 3 - Maturing Certificate of Indebtedness, not presented in payment or part payment for Liberty Bonds — Should be handled by the Banking Department and not the Fiscal Agent1s Department. When presented on or after date of maturity th© certificate should be treated in the same manner as a Treasury warrant; paid with interest to maturity and charged to the General Account of Treasurer of the United States. CUSTODY OF COLLATERAL. 1- Security for Liberty Loan Deposits-with depositary banks to the credit of Treasurer cf United States, (a) (b) Held by Reserve Bank, Held by other custodians. 2- Security for deposit of proceeds of Treasury Certificate, with depositary banks to the credit of Treasurer of United States. (a) Held by Reserve Banks. Adequate records should be maintained shewing the securities held, deliveries, substitutions and withdrawals.
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