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4 COPY X-6976 TELEGRAM FEDERAL RESERVE SYSTEM (LEASED WIRE SERVICE) RECEIVED AT WASHINGTON, D. C. 67 f y Atlanta 1110a Sept. 24, Wyatt Washington Referring your suggestion as to interpleader in central national tank and t r u s t co matter do not think we could f i l e b i l l with Reservation of r i g h t to appear f o r any purpose which might influence decision of court. Do not think either side w i l l make any attempt to give regu? l a t i o n J an i n t e r p r e t a t i o n a t variance with i t s clear intendment, as s t a t e d in former correspondence think case will turn e n t i r e l y upon proposition of whether remittance d r a f t should he regarded as having been paid as of the time when i t reached the Jacksonville branch Parker 1250 p C O P Y X-6976-a September 24, 1931. Mr. Robert S. Parker, Suite 1607, William-Oliver Building, Atlanta, Georgia. Dear Bob? Please accept my thanks f o r your l e t t e r of September 18, 1931, with f u r t h e r reference to your proposed b i l l of interpleader in the case of Federal Reserve Bank of Atlanta v. .Anderson, Receiver of the Central National Bank and Trust Company of St. Petersburg, Florida. I note with i n t e r e s t that you have discussed t h i s subject with counsel who w i l l represent respectively the receiver and a l a r g e percentage of the other claimants to the fund and that they seem to be agreed t h a t the Early Case will in no way be involved in t h i s case, because of the changes which have been made in Regulation J . I note, however, that you a n t i c i p a t e that counsel f o r some of your endorsers may contend t h a t the remittance d r a f t operated as an assignment pro tanto of the reserve balance. Even though the decision of the Supreme Court in the Early Case i s not r e l i e d upon by counsel f o r the owners of the checks, I hardly see how i t w i l l be possible f o r the court to avoid the necess i t y of construing Regulation J as amended; and, even if the court should avoid a l l reference to Regulation J , I believe the question whether a d r a f t on the reserve balance operates as an assignment pro tanto of that balance i s a question of almost equal importance to the Federal reserve banks. If the court should hold that such a d r a f t operates as an equitable assignment pro tanto of the reserve balance, the p r a c t i c a l r e s u l t would be s u b s t a n t i a l l y the same as if the Federal reserve bank were required to charge checks to the reserve b a l ance a f t e r the insolvency of the remitting bank. I cannot help f e e l ing, t h e r e f o r e , that t h i s case w i l l involve questions of great int e r e s t to the Federal Reserve System and that every p o s s i b l e p r e c a u t i o n should be taken to see that the views of the Federal reserve banks as to the proper i n t e r p r e t a t i o n and application of Regulation J are properly presented to the court. In t h i s connection, one of my associates here suggested yesterday that i t might be possible f o r you to amend your b i l l of X-6976-a interpleader so as to say t h a t , while the Federal reserve bank has no i n t e r e s t in the fund involved, i t i s v i t a l l y i n t e r e s t e d in the questions of law involved, and especially in the i n t e r p r e t a t i o n of i t s check coll e c t i o n c i r c u l a r and of the applicable provisions of Regulation J , and that the Federal reserve bank, t h e r e f o r e , requests the p r i v i l e g e of presenting i t s views on these questions to the court, either as amicus curiae or in some other capacity. This seems to mo to be a good idea and to be a more accurate statement of the Federal reserve bank's true p o s i t i o n than the statement that the Federal reserve bank has no i n t e r est in the controversy. I , t h e r e f o r e , sent you a telegram yesterday submitting t h i s suggestion f o r your consideration. At the Conference of Counsel of a l l Federal reserve banks held in Washington, June 9 and 10, 1930, at which the r e v i s i o n of Regul a t i o n J was prepared, we reached an informal understanding that Counsel for a l l Federal reserve banks should confer as to the best method of p r o t e c t i n g the i n t e r e s t s of a l l Federal reserve banks in the f i r s t case a r i s i n g under the amended regulation. The case of Skinner and Company v. Federal Reserve Bank of Richmond having been disposed of as a r e s u l t of the reorganization of the bank on which the check involved in that case was drawn, t h i s appears to be the f i r s t case in which the courts w i l l have an opportunity to pass upon the amended regulation. After obt a i n i n g your permission, t h e r e f o r e , I am sending counsel f o r a l l of the Federal reserve banks copies of our correspondence and of your proposed b i l l of interpleader and i n v i t i n g t h e i r suggestions as to how the int e r e s t s of the Federal reserve banks may best be protected in t h i s matt e r . In view of your f i n e s p i r i t of cooperation, I am sure that you w i l l bo glad to have any suggestions which they may care to submit. Assuring you of my deep appreciation of your courtesy in conferring with me about t h i s case, and with warmest personal r e gards , I am Cordially yours, Walter # y a t t , General Counsel. WW-sad X-6975-b C O P Y COLQUITT, PARKE&, TROUfMAiT & ARKfRIGHT ATTOB1TEYS AT LAW SUITE 1607 WILLIAM-OLIVER BLDG-. AT'LMTA, GA. September 18, 1931. Mr. Walter Wyatt, General Counsel, Federal Reserve Board, Washington, D. C. Dear Walter; He: Central N a t ' l Bank & Trust Co., St. Petersburg, Fla. I thank you very much f o r your l e t t e r of September 16th, w r i t t e n with reference to the proposed b i l l of interpleader to be f i l e d in the above matter. I was in St. Petersburg and Tampa t h i s week and, while there, submitted the proposed b i l l to counsel who w i l l represent, r e s p e c t i v e l y , the Receiver and a large percentage of the other claimants to the fund. Counsel seem to be agreed that the Early case w i l l in no way be involved in t h i s case, because of the changes which have been made in Regulation J . I think that counsel will concede that the c o n t r o l l i n g question in the case i s whether or not the remittance d r a f t should be regarded as having been paid as of the time when i t was received through the mails by the Jacksonville Branch of the Reserve Bank, although counsel f o r some of our endorsers may make the contention that the d r a f t operated as an assignment pro tan to of the fund on which i t was drawn. Ho contention will be made that the Federal Reserve Bank had the r i g h t or r e s t e d under any duty to "pay" the d r a f t a f t e r receiving notice of the insolvency of the Central National Bank. If the respective contentions of the p a r t i e s are made as I now a n t i c i p a t e , there would seem to be no danger of the development in the case of any question which might embarrass the Federal Reserve Banks. I s h a l l , however, keep a close watch on the s i t u a t i o n . So f a r as j u r i s d i c t i o n is concerned, I think there i s no doubt about the f a c t t h a t the court at Tampa would have X-6976-b COLQUITT, PARKER, TROUTMAN & A2KWRIG-HT COUTDTUAIIOH SHEET Mr. Walter Wyatt, - #2. 9-18-31. j u r i s d i c t i o n inasmuch as the Central national Bank and. Trust Company of St. Petersburg had i t s o f f i c e in the Southern D i s t r i c t of Florida, Tampa Division, and the Receiver i s one of the p a r t i e s defendant. I do not think that any defendants, c i t i z e n s or r e s i d e n t s of States other than Florida, could be made defendants without t h e i r consent. Within the next few days, however, the Federal Reserve Bank of Atlanta w i l l write a l l of i t s endorsers, s t a t i n g i t s intention to f i l e the b i l l of interpleader and suggesting the a d v i s a b i l i t y of making voluntary appearances. As I wrote you a day or so since, I a n t i c i p a t e that a l l , or subs t a n t i a l l y a l l , of the claimants to the fund will be b e f o r e the Court when the case i s heard. With personal regards, I am Sincerely yours, (Signed) Robt. S. Parker. Robt.S. Parker. RSP/w.
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