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Ex -O f f ic io m e m b e r s W. P. G. HARDING. G O V E R N O R PAUL M. WARBURG. V I C E G O V E R N O R DERIC A. DELANO toLPH C. MILLER CHARLES S. HAMLIN WILLIAM G. McADOO X-3&& SECRETAR Y OF TH E TREASURY C H A IR M A N JOHN SKELTON WILLIAMS C O M P TR O LLER O F T H E C U R R E N C Y FEDERAL RESERVE BOARD H. PARKER WILLIS. S E C R E T A R Y SHERMAN P. ALLEN. A S S T . S E C R E T A R Y A N D F IS C A L A G E N T WASHINGTON A DDRESS REPLY TO FEDERAL RESERVE BOARD September 11, 1917. Dear Sir: The Board wishes to call your attention to the importance of enforcing rigidly the regulations regarding penalties for impairment of reserve accounts. Last June there was some demand for accommodation at some of the banks, and it is anticipated that this pressure will be much greater within the next two or three months than it was then. If the policy of penalizing impaired reserve balances is not vigorously enforced by all Federal Re serve B a n k a w e may have to deal with a troublesome situa tion because of the reluctance of member banks to discount paper or to borrow money. In order that it may be informed as to the situa tion, the Board requests that you advise this office of the practice of your bank in regard to impaired Reserve accounts, both as to the penalties imposed, and as to the statements you receive from your member banks with respect to their deposits and reserves. Please forward copies of these statements. Very truly yours, Governor.
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