Full text of Mimeograph Letters and Statements of the Board : Copy of Letter From Walter Wyatt, General Counsel, to Thomas Paton, Asst. General Counsel, American Bankers' Association, re Proposed Uniform Bank Collection Code, Number X-6137, Volume 29, Page 226

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COPY

X-6137

September 13, 1 9 2 8 .

Mr. Thomas B. P a t o n , J r . ,
A s s i s t a n t General Counsel,
American B a n k e r s ' A s s o c i a t i o n ,
110 E . 42nd. S t r e e t ,
New York C i t y .
Dear Mr. P a t o n :
Some t i m e ago Mr. H. F . S t r a t e r , C a s h i e r of t h e F e d e r a l
R e s e r v e Bank of C l e v e l a n d a n d Chairman of t h e S t a n d i n g Committee
on C o l l e c t i o n s of t h e C o n f e r e n c e of Governors of F e d e r a l R e s e r v e
Banks, f o r w a r d e d t o me a copy of a l e t t e r which y o u h a d a d d r e s s e d
t o him u n d e r d a t e of May 1 8 t h , r e q u e s t i n g t h e views of h i s c o m m i t t e e
on t h e p r o p o s e d U n i f o r m Bank C o l l e c t i o n Code which y o u r o f f i c e i s
p r e p a r i n g f o r t h e American B a n k e r s ' A s s o c i a t i o n . Mr. S t r a t e r c a l l e d
my a t t e n t i o n t o y o u r s t a t e m e n t t h a t i t h a s "been t h e p o l i c y to e n c o u r a g e a s much c o n s t r u c t i v e c r i t i c i s m a s p o s s i b l e a n d s u g g e s t e d t h a t
I m i g h t t r a n s m i t c o p i e s o f t h e r e v i s e d d r a f t of t h e Code t o C o u n s e l
f o r t h e v a r i o u s F e d e r a l r e s e r v e "banks and o b t a i n t h e i r comments on
t h e same. I h a v e done so a n d am t a k i n g t h e l i b e r t y of e n c l o s i n g
f o r y o u r i n f o r m a t i o n s u c h comments a s r h a v e r e c e i v e d .
Mr. P a r k e r , Counsel t o t h e F e d e r a l R e s e r v e Bank of A t l a n t a ,
a s k e d me t o a d v i s e you t h a t s i n c e w r i t i n g t h e e n c l o s e d l e t t e r h e
has reached the conclusion t h a t the c o n s t i t u t i o n a l q u e s t i o n r a i s e d i n
d i s c u s s i n g S e c t i o n 11 i s p r o b a b l y n o t w e l l f o u n d e d .
Due t o t h e f a c t t h a t you h a d i n v i t e d Counsel of some of t h e
F e d e r a l r e s e r v e b a n k s t o submit t h e i r v i e w s w i t h r e f e r e n c e t o t h e
f i r s t t e n t a t i v e d r a f t of y o u r Code, t h i s m a t t e r was b r o u g h t up f o r
d i s c u s s i o n a t a c o n f e r e n c e of Counsel f o r a l l F e d e r a l r e s e r v e b a n k s
which was h e l d i n W a s h i n g t o n l a s t w i n t e r t o c o n s i d e r o t h e r l e g a l q u e s t i o n s of i n t e r e s t t o t h e e n t i r e F e d e r a l r e s e r v e s y s t e m , a n d a t t h a t
t i m e i t was a g r e e d t h a t Counsel f o r a l l F e d e r a l r e s e r v e b a n k s s h o u l d
f u r n i s h t h i s o f f i c e w i t h c o p i e s of t h e i r comments r e s p e c t i n g t h i s
Code i n o r d e r t h a t I m i g h t t r a n s m i t them t o you i n a b o d y . B e f o r e I
r e c e i v e d a l l of t h e i r comments I l e a r n e d t h a t you h a d a l r e a d y p r e p a r e d
a r e v i s e d d r a f t of t h e Code f o r s u b m i s s i o n t o t h e E x e c u t i v e C o u n c i l of
t h e American B a n k e r s ' A s s o c i a t i o n a t a m e e t i n g h e l d i n A u g u s t a , G e o r g i a ,
sometime i n A p r i l , a n d h e n c e I d i d n o t t r a n s m i t t h o s e comments t o y o u .




X-613? *

I n o r d e r t h a t you may h a v e a c o m p l e t e s t a t e m e n t of t h e views of
Counsel f o r t h e v a r i o u s F e d e r a l r e s e r v e "banks I am now e n c l o s i n g
c o p i e s of t h e i r comments on t h e f i r s t t e n t a t i v e d r a f t . You u n d o u b t e d l y a l r e a d y h a v e some of t h e s e , h u t I do n o t t h i n k you have
a l l of them.
I n a u t h o r i z i n g me t o f u r n i s h you w i t h c o p i e s of t h e i r
l e t t e r s , C o u n s e l f o r t h e F e d e r a l r e s e r v e "banks h a v e a s k e d me t o
make i t c l e a r t h a t t h e s t a t e m e n t s c o n t a i n e d t h e r e i n a r e m e r e l y
e x p r e s s i o n s of t h e i r own p e r s o n a l o p i n i o n s a n d do n o t r e p r e s e n t t h e
v i e w s of t h e F e d e r a l r e s e r v e "banks o r t h e F e d e r a l r e s e r v e s y s t e m ,
Moreover, t h e y do n o t d e s i r e t o have t h e i r v i e w s q u o t e d i n t h i s c o n n e c t i o n "but would p r e f e r t o h a v e you t r e a t t h e i r l e t t e r s a s "being
intended only f o r your c o n f i d e n t i a l i n f o r m a t i o n .
I t r u s t t h a t you w i l l r e c e i v e t h i s i n f o r m a t i o n i n t h e
s p i r i t i n which i t i s o f f e r e d - t h a t of h e l p f u l a n d c o n s t r u c t i v e
criticism
a n d t h a t i f t h e r e i s a n y t h i n g e l s e t h a t I c a n do t o be
of a s s i s t a n c e t o you, you w i l l n o t h e s i t a t e t o c a l l upon me.
Very t r u l y y o u r s ,

Walter Wyatt,
General Counsel.
Enclosures.

W:vdb




COPY
FEDERAL RESERVE BAH
OF
KANSAS C m

H. C-. LEEDY, Counsel
1503 F e d e r a l R e s e r v e Bank B l d g . ,
Kansas C i t y , M i s s o u r i .

X-6137-a,
September 11, 1928.

Hon. W a l t e r W y a t t , G e n e r a l Counsel,
F e d e r a l Reserve Board,
W a s h i n g t o n , D. C. .
My d e a r Mr. W y a t t :
Upon my r e t u r n t o t h e o f f i c e a f t e r a n a b s e n c e of
two weeks I f i n d y o u r t e l e g r a m i n which you r e q u e s t my comments
on t h e p r o p o s e d u n i f o r m bank c o l l e c t i o n code p r e p a r e d by J u d g e
P a t on of t h e American B a n k e r s ' A s s o c i a t i o n .
A f t e r r e a d i n g t h e comments of t h e c o u n s e l t o t h e
s e v e r a l F e d e r a l R e s e r v e Banks on t h e f i r s t d r a f t of t h e p r o p o s e d
code, I f e e l t h a t a l l q u e s t i o n s h a v e b e e n r a i s e d which m i g h t b e
r a i s e d c o n c e r n i n g t h e new d r a f t . A c c o r d i n g l y , I h a v e n o t h i n g
new t o a d d .
I n my l e t t e r c o n c e r n i n g t h e f i r s t d r a f t of t h e code
I q u e s t i o n e d t h e p r o v i s i o n s i n t h e l a t t e r p a r t of t h e s e c t i o n which
appears i n the r e v i s e d d r a f t as Section 10. This s e c t i o n r e l a t e s
t o t h e c o n t i n u e d l i a b i l i t y of t h e p a r t i e s t o a n i n s t r u m e n t f o r
w h i c h payment h a s n o t b e e n made i n f i n a l l y c o l l e c t e d p a p e r . I am
s t i l l u n a b l e t o s e e t h a t t h i s s e c t i o n a s d r a f t e d would be w o r k a b l e
in a l l cases.
The t e r m s t o w h i c h I h a v e r e f e r e n c e a r e t h o s e which
p r o v i d e t h a t when i t e m s a r e exchanged t h r o u g h t h e c l e a r i n g s a n d
a d r a f t i s g i v e n f o r t h e d i f f e r e n c e between t h e i t e m s e x c h a n g e d ,
which d r a f t i s n o t p a i d on a c c o u n t of t h e i s s u i n g bank f a i l i n g ,
t h e makers, d r a w e r s a n d e n d o r s e r s of t h e i t e m s drawn on o r p a y a b l e
a t the f a i l e d b a n k , s h a l l r e m a i n l i a b l e on t h e i t e m s f o r t h e
p r o p o r t i o n a t e p a r t t h e r e o f which t h e t o t a l amount of t h e d r a f t
so i s s u e d b e a r s t o t h e t o t a l amount of such i t e m s . I s e e no
o b j e c t i o n to t h i s where a n exchange of i t e m s i s made b e t w e e n o n l y
two b a n k s , o r where e a c h bank c l e a r i n g i t e m s makes a n exchange
w i t h e a c h o t h e r b a n k , a n d a s e t t l e m e n t i s made b e t w e e n e a c h , w h i c h
i s t h e same, of c o u r s e , a s i f o n l y two b a n k s were i n v o l v e d . I am
u n a b l e t o s e e how i t w o u l d work, however, where t h e r e a r e a number
of banks i n v o l v e d w h i c h make t h e i r c l e a r i n g s t h r o u g h t h e o r d i n a r y
c l e a r i n g h o u s e a r r a n g e m e n t , where a n e t d e b i t o r c r e d i t i s c a s t
up a g a i n s t e a c h c l e a r i n g b a n k , a n d t h e d e b t o r banks s e t t l e w i t h

t h e c r e d i t o r banks w i t h o u t r e g a r d to whether the p a y i n g banks,


~2Page 2 , H o n , - W a l t e r Wyatt*

X-6137-a
S e p t . 11, 1 9 2 8 .

o r arty of them,, owe b a l a n c e s t o t h e banks t o which payments a r e
made, on a c c o u n t of i t e m s which t h o s e "banks, a s "between t h e m s e l v e s ,
h e l d a g a i n s t e a c h o t h e r . To i l l u s t r a t e : Assume t h a t t h e r e a r e
e i g h t "banks which c l e a r t h e i r i t e m s t h r o u g h t h e c l e a r i n g house#
The e i g h t h "bank i s i n s o l v e n t . ' The amount of i t e m s which each of
t h e "banks h o l d s a g a i n s t t h e i n s o l v e n t bank v a r i e s g r e a t l y , a s do
t h e i t e m s which t h e i n s o l v e n t "bank h o l d s a g a i n s t t h e o t h e r seveft
banks + As t o some of t h e s e v e n "banks, t h e i t e m s which t h e i n s o l v e n t "bank h o l d s a g a i n s t them, e x c e e d s t h e amount of t h e i t e m s
which t h e y h o l d a g a i n s t t h e i n s o l v e n t b a n k . No b a l a n c e i s s t r u c k
a s b e t w e e n t h e i n s o l v e n t bank a n d t h e o t h e r b a n k s , b u t t h e t o t a l
of a l l of t h e i t e m s h e l d a g a i n s t t h e i n s o l v e n t bank i s t a k e n ,
w h i c h , of c o u r s e , r e p r e s e n t s t h e g r o s s d e b t of t h a t bank on
a c c o u n t of t h e c l e a r i n g s . There i s t h e n t o t a l l e d t h e amount o f
a l l i t e m s which t h e i n s o l v e n t bank: h o l d s a g a i n s t a l l of t h e o t h e r
b a n k s , which i s i t s g r o s s c r e d i t i n t h e c l e a r i n g s * The same t h i n g
i s done a s t o e a c h of t h e o t h e r b a n k s , and i n e a c h i n s t a n c e t h e
d i f f e r e n c e b e t w e e n t h e g r o s s i n d e b t e d n e s s of t h e bank a n d i t s
g r o s s c r e d i t i s t h e amount which i t i s r e q u i r e d t o p a y , or i s
e n t i t l e d t o r e c e i v e , a c c o r d i n g t o w h e t h e r i t s d e b i t s or i t s c r e d i t s
a r e the l a r g e r . The amount a d e b t o r bank i s r e q u i r e d t o p a y , ( a n d
a bank a b o u t t o s u s p e n d i s a l m o s t i n v a r i a b l y a d e b t o r b a n k , ) b e a r s
no r e l a t i o n w h a t e v e r t o any i n d e b t e d n e s s owing t o t h e bank o r b a n k s
t o which payment i s made on a c c o u n t of exchange of i t e m s b e t w e e n
them, b u t on t h e c o n t r a r y , t h e c r e d i t o r bank or b a n k s so p a i d , may
h a v e a c t u a l l y b e e n i n d e b t e d t o t h e d e b t o r bank, a s b e t w e e n thems e l v e s , on a c c o u n t of t h e i r exchange of i t e m s .
I r e a l i z e , of c o u r s e , t h a t f o r t h e p u r p o s e of d e t e r m i n i n g
t h e e x t e n t of t h e r e l e a s e of e a c h maker, drawer or e n d o r s e r of a n
i t e m so h a n d l e d , i t would be p o s s i b l e f o r t h e p r o p o r t i o n t h a t s u c h
p a r t i e s s h o u l d be h e l d l i a b l e f o r c o u l d be a r r i v e d a t by r e f e r e n c e
t o t h e t o t a l amount of t h e n e t d e b i t b a l a n c e owing by t h e i n s o l v e n t
bank, a f t e r t h e e x c h a n g e of a l l i t e m s , a n d t h e a g g r e g a t e amount of
a l l i t e m s c l e a r e d a g a i n s t i t , b u t t h e dilemma i s i n a d j u s t i n g t h e
r i g h t s a s b e t w e e n t h e c l e a r i n g b a n k s , and a s between t h e i r c u s t o m e r s ,
so a s t o p a s s b a c k t o t h e u l t i m a t e owners of t h e i t e m s t h e r i g h t
t o e n f o r c e t h e i t e m s f o r t h e p r o p o r t i o n a t e amounts t h e p a r t i e s
r e m a i n l i a b l e f o r t h e r e o n , a n d so t h a t no c l e a r i n g bank may r e t a i n
a g r e a t e r p r o p o r t i o n of any s e t t l e m e n t h a d f r o m t h e c l e a r i n g s t h a n
i t i s e n t i t l e d t o , a f t e r t h e p r o p o r t i o n a t e l i a b i l i t y of d r a w e r s ,
makers a n d e n d o r s e r s h a s b e e n d e t e r m i n e d , a n d p a s s e d on to t h e
p a r t i e s e n t i t l e d t o e n f o r c e t h e same* For i n s t a n c e , assume t h a t
f o u r o f t h e b a n k s i& t h e above t h e o r e t i c a l c a s e a r e c r e d i t o r b a n k s
i n the c l e a r i n g s , and t h a t the remaining f o u r , including the
i n s o l v e n t b a n k , a r e debtor©*, Three of t h e c r e d i t o r b a n k s r e c e i v e
s e t t l e m e n t f r o m t h e d e b t o r banks o t h e r t h a n t h e i n s o l v e n t bank*
The f o u r t h c r e d i t o r b a n k r e c e i v e s s e t t l e m e n t f r o m t h e i n s o l v e n t bank
i n t h e f o r m of i t s d r a f t * On t h e s u s p e n s i o n of t h e i n s o l v e n t barik s



X-6137-a

Page 3, Hon. T; a l t e r W y a t t .

S e p t . 11, 1 9 2 8 .

b e f o r e payment of t h e d r a f t , o n l y t h e "bank w i t h which i t made
s e t t l e m e n t h a s any "balance owing on a c c o u n t of t h e i t e m s h e l d a g a i n s t
t h e i n s o l v e n t b a n k , a n d a l l of t h e o t h e r "banks, e a c h of w h i c h may
h a v e h e l d a l a r g e r number of s u c h i t e m s , h a v e b e e n p a i d i n f u l l .
I f t h e i r i t e m s a r e t o be t r e a t e d a s o n l y p a r t i a l l y p a i d , n o t w i t h s t a n d i n g t h e s e t t l e m e n t , t h e r e o b v i o u s l y mast be some a d j u s t m e n t
b e t w e e n them a n d t h e bank h o l d i n g t h e u n p a i d d r a f t , a n d a s a l r e a d y
i n d i c a t e d , t h e r e a p p e a r s t o be no p r o v i s i o n i n t h e p r o p o s e d code
by which t h i s may be a c c o m p l i s h e d .
What I h a v e s a i d I assume may a l r e a d y h a v e r e c e i v e d t h e
c o n s i d e r a t i o n of J u d g e P a t o n , b u t I a g a i n r e f e r t o i t f o r w h a t e v e r
a d d i t i o n a l c o n s i d e r a t i o n he may t h i n k i t w a r r a n t s .
W i t h b e s t p e r s o n a l r e g a r d s , I am
Yours v e r y t r u l y ,
(S)

HGL:CR




H. G. L e e d y .

COPY
WILL I M S M D SXHLER
ATTORNEYS' AT LA"
601 Commercial T r u s t B u i l d i n g
PHILADELPHIA
X-6137-b
September 10, 1928
Walter l y a t t , E s q . , General Counsel,
F e d e r a l Heserve Board,
W a s h i n g t o n , B. C.
Dear Mr. W y a t t :
The m a t t e r of t h e p r o p o s e d Uniform Check C o l l e c t i o n Code
i s o n l y a n o t h e r i n s t a n c e i n which I h a v e n o t "been a b l e t o a f f o r d
any p r a c t i c a l a s s i s t a n c e .
When I h a d a n o p p o r t u n i t y t o c o n s i d e r t h e d r a f t s u b m i t t e d
I f o u n d t h a t o t h e r c o u n s e l of F e d e r a l R e s e r v e b a n k s h a d b e t w e e n
them a p p a r e n t l y made e v e r y comment a n d s u g g e s t i o n t h a t seemed t o
me t o be p e r t i n e n t #

I should a l s o say t h a t the m a t t e r being i n

t h e h a n d s of J u d g e P a t on i n t h e f i r s t i n s t a n c e a s c o u n s e l f o r t h e
American B a n k e r s ' A s s o c i a t i o n , and h a v i n g v e r y p r o m p t l y r e c e i v e d
t h e c o n s i d e r a t i o n a n d s t u d y w h i c h Mr. Agnew was a b l e t o g i v e i t ,

I

should not have been i n c l i n e d t o expect t h a t f u r t h e r s u g g e s t i o n s
of " a l t e r a t i o n s o r r e p a i r s " would be c a p a b l e of s t r e n g t h e n i n g
or improving i t .

I h a v e t a k e n o c c a s i o n t o make s u r e t h a t t h e

o f f i c e r s of t h e F e d e r a l R e s e r v e Bank of P h i l a d e l p h i a h a d c o n s i d e r e d
t h e p r o p o s e d Code a n d h a v e h a d a n o p p o r t u n i t y t o comment on i t
from a p r a c t i c a l s t a n d p o i n t .

They h a v e b e e n i n communication

w i t h c e r t a i n of o u r member, banks, b u t have a d v i s e d me t h a t t h e y
h a v e no comments t o make

My own


a t thip time,

e x p e r i e n c e w i t h r e s p e c t t o t h e e n a c t m e n t of

* X*a613'?-"b

-2r.
W i l l i a m s aqd. S i n k i e r ^
{

S h e e t Btiribey: 2

W a l t e r Wyatt* E s q .
September 1 0 , 1928
l e g i s l a t i o n i n Pennsylvania during the p a s t f i f t e e n or twenty
y e a r s h a s made me r a t h e r s k e p t i c a l a s t o t h e c h a n c e s of e n a c t m e n t
f o r any such c o m p r e h e n s i v e code a s compared w i t h t h e c h a n c e of
g e t t i n g t h r o u g h one o r more s t a t u t e s t o e f f e c t t h o s e s p e c i f i c
changes w h i c h "bankers w o u l d r e c o g n i z e a s c o n f o r m i n g t o good
"banking custom a n d which u n d e r t h e d e c i s i o n s have n o t "been
d e f i n i t e l y e s t a b l i s h e d , a s , e . g . , t h e d i r e c t t r a n s m i t t a l of c h e c k s
t o "banks on w h i c h t h e y a r e drawn, t h e r i g h t t o a c c e p t "bank d r a f t s
i n l i e u of c a s h , t h e l i m i t a t i o n of t h e r e s p o n s i b i l i t y of t h e bank
of d e p o s i t t o due c a r e i n t h e s e l e c t i o n of s u b - a g e n t s , a n d t h e
c l a r i f i c a t i o n of t h e law a s t o p r e f e r e n c e s i n t h e l i q u i d a t i o n of
insolvent banks.

T h i s I n o t e i s a l s o t h e view of o t h e r c o u n s e l .

The whole m a t t e r , however, i s p r i m a r i l y f o r t h e American B a n k e r s '
A s s o c i a t i o n to c o n s i d e r and to p r e s s .

Certainly in this d i s t r i c t

w h i l e t h e members of t h a t A s s o c i a t i o n know of our r e a d i n e s s t o c o o p e r a t e , t h e b e s t r e s u l t s c o u l d n o t i n my judgment b e e x p e c t e d f r o m
any a c t i o n on t h e p a r t of r e p r e s e n t a t i v e s of t h e F e d e r a l R e s e r v e
Bank i n a p p e a r i n g t o t a k e t h e i n i t i a t i v e i n an e f f o r t t o s e c u r e t h e
e n a c t m e n t of s u c h l e g i s l a t i o n .
I s h a l l , of c o u r s e , w i s h t o k e e p i n t o u c h w i t h t h e m a t t e r
a n d hope i t may be p o s s i b l e a t some s t a g e t o r e n d e r some a i d .
would be p r e f e r a b l e f r o m my s t a n d p o i n t t o w r i t i n g i n t h e way of
a p o l o g y f o r n o t h a v i n g any p r a c t i c a l a s s i s t a n c e t o o f f e r , a s up
to this date.


E MS.


Very trialy. yours",
iS)" P a r k e r S . W i l l i a m s .

This

COPY
HERRICK, SMITH, DONALD & FAB.L3Y
F i r s t Nationti.1 B u i l d i n g
1 Federal S t r e e t
BOSTCH

X-6137-c
September 6, 1928.

Mr. W a l t e r W y a t t , G e n e r a l Counsel
F e d e r a l Reserve Board
Washington, D. C.
Dear Mr. W y a t t :
You h a v e s u b m i t t e d t o me t h e s e c o n d t e n t a t i v e d r a f t
of a U n i f o r m Bank C o l l e c t i o n Code p r e p a r e d "by Mr. Thomas B.
P a t o n a n d h a v e a s k e d f o r my comments.
S e v e r a l months ago you s u b m i t t e d a copy of Mr. P a t o n ' s
f i r s t d r a f t of t h e code w i t h a s i m i l a r r e q u e s t .

Under d a t e o f .

March 22 I w r o t e you a l e t t e r g i v i n g c e r t a i n l i m i t e d comments
r e l a t i v e t o Mr. P a t o n ' s f i r s t d r a f t .

I have r e v i e w e d my own

comments made a t t h a t t i m e a n d I h a v e a l s o r e a d o v e r t h e v a r i o u s
l e t t e r s w r i t t e n by c o u n s e l of o t h e r F e d e r a l R e s e r v e Banks r e l a tive to t h a t f i r s t d r a f t .
Here a r e my comments c o n c e r n i n g t h e s e c o n d d r a f t :
I s h o u l d l i k e t o make r e f e r e n c e t o my l e t t e r of March
22 i n which I made t h e . f o l l o w i n g s t a t e m e n t }
"We h a v e n e v e r h a d a s i n g l e c a s e i n c o u r t g r o w i n g
o u t of t h e c o l l e c t i o n of c h e c k s o r o t h e r i t e m s .
Mr. C a r r i c k t e l l s me t h a t t h e r e h a s n e v e r b e e n any
c o l l e c t i o n c a s e i n v o l v i n g any l o s s t o t h e R e s e r v e Bank
of B o s t o n e x c e p t i n c o n n e c t i o n w i t h one s m a l l i t e m where
we m i s r o u t e d a check a n d p a i d up t h e l o s s a s soon a s
our n e g l i g e n c e became a p p a r e n t .
"Thus, a t l e a s t so f a r a s our p r a c t i c a l e x p e r i e n c e
i s c o n c e r n e d , t h e r e i s n o t h i n g i n e x i s t i n g c o n d i t i o n s to



X-6137

KEKRICK, SMIHE, DOHALD & FARLEY
To

W.W.

Folio

3

September 6, 1928

i n d i c a t e t h e n e c e s s i t y of f o r m u l a t i n g any c o d e . P e r h a p s
y o u r committee w i l l t a k e u n d e r a d v i s e m e n t a s t o w h e t h e r
a new code i s n e c e s s a r y . I t h i n k i t m i g h t be "borne i n
mind t h a t a l l new l e g i s l a t i o n , however c a r e f u l l y p r e p a r e d ,
t u r n s o u t a l m o s t i n e v i t a b l y t o "be d e f e c t i v e o r ambiguous
i n some r e s p e c t . "
When I made t h e above s t a t e m e n t I f e l t more s t r o n g l y
t h a n I e x p r e s s e d a g r a v e doubt a s t o t h e wisdom of f o r m u l a t i n g
any c o m p r e h e n s i v e code r e l a t i v e t o c o l l e c t i o n s .
I n o t e w i t h i n t e r e s t t h e l e t t e r of Mr. P a r k e r , c o u n s e l
f o r t h e R e s e r v e Bank of A t l a n t a ,

i n which h e makes t h e f o l l o w i n g

statement:
"We m i g h t remark a t the o u t s e t t h a t we r a t h e r doubt
b o t h t h e f e a s i b i l i t y a n d a d v i s a b i l i t y of s e c u r i n g t h e
e n a c t m e n t of a n y t h i n g which m i g h t p r o p e r l y "be t e r m e d a
U n i f o r m C o l l e c t i o n Code. We b e l i e v e t h a t i t would he vegy
h e l p f u l were t h e s e v e r a l S t a t e s t o e n a c t l e g i s l a t i o n d e s i g n e d to accomplish c e r t a i n s p e c i f i c t h i n g s , namely:
( a ) t h e r i g h t t o s e n d c h e c k s d i r e c t to drawee o r p a y o r
"banks; ( b ) t h e r i g h t t o a c c e p t / S ^ S r t s i n l i e u of
c a s h ; ( c ) e x e m p t i o n f r o m l i a b i l i t y on a c c o u n t of t h e d e f a u l t o r o m i s s i o n s of s u b a g e n t s ; a n d ( d ) t h e c l a r i f i c a t i o n
of t h e law on t h e s u b j e c t of p r e f e r e n c e s i n i n s o l v e n t
"bank l i q u i d a t i o n . We b e l i e v e , however, t h a t i t would "be
b e t t e r t o l i m i t t h e a c t i v i t i e s of t h e A s s o c i a t i o n t o t h e
a c c o m p l i s h m e n t of t h e s e p a r t i c u l a r ends r a t h e r t h a n t o
a t t e m p t t o h a v e e n a c t e d a somewhat a m b i t i o u s code w h i c h
r u n s c o u n t e r t o t h e common law i n a number of r e s p e c t s ,
a n d which e x p e r i e n c e m i g h t d e m o n s t r a t e t o be d e f e c t i v e if
not dangerous."
I t seems t o me t h a t Mr. P a r k e r 1 s p o i n t s a r e w e l l t a k e n .
I am n o t p r e p a r e d t o s t a t e w h e t h e r I s h o u l d recommend l e g i s l a t i o n
c o v e r i n g t h e same s p e c i f i c t h i n g s a s h e d o e s , b u t I do t h i n k t h e
g e n e r a l i d e a he e n u n c i a t e s i s sound.
ITow w i t h r e s p e c t t o t h e second d r a f t of t h e code I can
o n l y say t h a t I h a v e r e a d i t over c a r e f u l l y t o g e t h e r w i t h t h e

explanatory


r e m a r k s which accompany t h e d r a f t .

I t c e r t a i n l y seems

HER3ICK, SUITH, D02TALD & FAELET
To
Folio

X-6137

W.f.
3

September 6, 1928

t o "be a n improvement o v e r t h e f i r s t d r a f t a n d on t h e whole would
seem t o "be a f a i r l y c l e a r e n u n c i a t i o n of t h e p r i n c i p l e s which
s h o u l d g o v e r n "bank c o l l e c t i o n s .

Based on such e x p e r i e n c e a s I

h a v e h a d i n t h i s d i s t r i c t I o b s e r v e no p a r t i c u l a r p r o v i s i o n i n
t h e code w h i c h I would c o n s i d e r t o "be o b j e c t i o n a b l e .

However, a s

I h a v e h e r e t o f o r e s t a t e d t o you s e v e r a l t i m e s , we hatie h a d no e x p e r i e n c e i n t h i s d i s t r i c t i n t h e m a t t e r of l i t i g a t i o n .
These a r e my p e r s o n a l views a n d do n o t n e c e s s a r i l y r e f l e c t t h e views of t h e o f f i c e r s of t h e B o s t o n Bank.
Very t r u l y y o u r s ,
( S ) A r t h u r H. Weed.
AHW:M
CC-Mr. C a r r i c k
Mr. P a r k e r




Law O f f i c e Of
LOCKE, LOCKE, STROUD & RANDOLPH,
American Exchange B u i l d i n g ,
D a l l a s , Texas.

X-5137-d
September 6, 1 9 2 8 .

F e d e r a l R e s e r v e B o ar d ,
W a s h i n g t o n , D. C.
Q-entlemen:

A t t e n t i o n W a l t e r Wyatt, G e n e r a l C o u n s e l .

P u r s u a n t t o t h e t e l e g r a p h i c communications t h a t
h a v e p a s s e d "between o u r Mr. B r e i b e l b i s a n d Mr. W y a t t , we h a v e
t o a d v i s e t h a t we h a v e r e v i e w e d t h e s e c o n d d r a f t of t h e p r o p o s e d U n i f o r m Bank C o l l e c t i o n Code p r e p a r e d "by Mr. Thomas B.
P a t o n , G e n e r a l Counsel of American B a n k e r s ' A s s o c i a t i o n .
We do n o t f i n d t h i s d r a f t s u b s t a n t i a l l y d i f f e r e n t
f r o m t h e f i r s t d r a f t , u p o n which we made d e t a i l e d comments
some t i m e a g o . We e n c l o s e a copy of our n o t e s of c o m p a r i s o n
of t h e s e c o n d d r a f t w i t h t h e f i r s t d r a f t *
As a c o n c r e t e w h o l e , we doubt t h e a d v i s a b i l i t y of t h e
a d o p t i o n of t h i s c o d e .
We i n c l i n e t o t h e o p i n i o n t h a t i t w i l l c a u s e more
t r o u b l e s t h a n i t w i l l s o l v e a n d w i l l p r o d u c e more l i t i g a t i o n
than i t will avoid.
Yours v e r y t r u l y ,
( S ) Locke, Locke, S t r o u d & R a n d o l p h .
gPD-h.




COPY

X-6137-d
R o t e s made i n c o n n e c t i o n w i t h
s e c o n d t e n t a t i v e d r a f t of
P r o p o s e d Uniform C o l l e c t i o n Code.
<

-o-

*

SECTION 1 - i s s u b j e c t t o t h e same c r i t i c i s m made i n
o u r c r i t i c i s m of f i r s t t e n t a t i v e d r a f t .
SECTION 2 - i s s u b j e c t t o same c r i t i c i s m made i n o u r
c r i t i c i s m of S e c t i o n 2 of f i r s t t e n t a t i v e d r a f t , e x c e p t , however,
t h a t i t a p p e a r s t o g i v e t h e d e p o s i t o r y "bank "broader r i g h t s t h a n
were g i v e n u n d e r s e c t i o n 2 of f i r s t t e n t a t i v e d r a f t , which w o u l d
seem t o make i t e v e n more s u b j e c t t o o u r c r i t i c i s m *
SECTION 3 - a p p e a r s t o have b e e n m a t e r i a l l y changed
from s e c t i o n 3 of t h e f i r s t t e n t a t i v e d r a f t , by- m r e . l y g i v i n g
the d e p o s i t a r y r i g h t to revoke the c r e d i t without r e q u i r i n g t h a t
c h e c k s be p a i d i n t h e o r d e r of t h e i r r e c e i p t ,
SECTION 4 - does n o t a p p e a r t o
s e c t i o n 4 of t h e f i r s t t e n t a t i v e d r a f t ,
o m i s s i o n of t h e word " m i s s i n g " f r o m t h e
and i s s u b j e c t t o t h e same c r i t i c i s m a s

h a v e b e e n c h a n g e d from
w i t h t h e e x c e p t i o n of t h e
l a s t s e n t e i i c e o f t h e same,
was o r i g i n a l l y made.

SECTION 5 - does n o t a p p e a r t o have b e e n c h a n g e d .
SECTION 6 - a p p e a r s to h a v e been changed, o m i t t i n g t h e
o b j e c t e d p r o v i s o s w h i c h were made t h e s u b j e c t of c r i t i c i s m a n d ,
a l s o , by t h e o m i s s i o n of s u b - s e c t i o n ( c ) , which we c r i t i c i z e d *
SECTION 7 - m e r e l y s t a t e s t h e r a l e of law now f o l l o w e d
i n t h i s s t a t e , w i t h t h e e x c e p t i o n of t h e u s e of t h e words " s o l v e n t
drawee o r p a y o r b a n k " . T h i s might l e a d t o a q u e s t i o n of f a c t a s to
when a check i s p a i d , t h e answer t o such q u e s t i o n b e i n g d e p e n d e n t
upon t h e s o l v e n c y of t h e drawee o r p a y o r b a n k .
SECTION 8 - h a s been s t r i c k e n o u t .
SECTION 9 - The r e d r a f t of s e c t i o n 9 a p p e a r s t o meet our
c r i t i c i s m o f t h e same. S u b s e c t i o n ( b ) a p p e a r s t o h a v e b e e n b r o a d e n e d t o g i v e t h e r i g h t t o t h e drawee bank t o p a y t h e check w i t h a
c a s h i e r ' s c h e c k . There i s some doubt i n our mind of t h e wisdom of
s p o n s o r i n g l e g i s l a t i o n which would p e r m i t a bank t o p a y a check
upon i t s e l f w i t h i t s own c a s h i e r ' s c h o c k .
omitted.)

(SECTION 10 - of t h e o r i g i n a l d r a f t a p p e a r s t o have boon

SECTION 10 - of t h e s e c o n d d r a f t does n o t a p p e a r t o h a v e
b e e n m a t e r i a l l y c h a n g e d f r o m s e c t i o n 11 of t h e f i r s t t e n t a t i v e
d r a f t w i t h t h e e x c e p t i o n of t h e i n c l u s i o n of t h e words " i n d o r s e r s "
a l o n g w i t h d r a w e r s a n d m a k e r s of i t e m s .
T h e r e a p p e a r s t o u s t o b e some q u e s t i o n a s t o w h e t h e r o r
n o t s e c t i o n 7 does n o t c o n f l i c t w i t h t h i s s e c t i o n i n view of t h e
f a c t t h a t s e c t i o n 7 provides t h a t under c e r t a i n conditions the
i t e m s s h a l l be deemed t o be p a i d , whereas t h i s s e c t i o n p r o v i d e s


-2~

X-6137-d

f o r a c o n t i n u e d l i a b i l i t y even a f t e r payment a s o u t l i n e d i n s e c tion 7.
SECTION 11 - T h i s a p p e a r s t o o n l y "broaden s e c t i o n 12
of t h e f i r s t t e n t a t i v e d r a f t , and i t l i k e w i s e a p p e a r s t o u s t o he
i n c o n f l i c t w i t h s e c t i o n 7.
SECTION 12 - T h i s s e c t i o n i s s u b j e c t t o t h e o r i g i n a l
c r i t i c i s m of s e c t i o n 12 of t h e f i r s t t e n t a t i v e d r a f t >
SECTION 13 - T h i s s e c t i o n does n o t a p p e a r t o h a v e "been
changed f r o m s e c t i o n 14 of t h e f i r s t t e n t a t i v e d r a f t a n d i s s u b j e c t t o t h e same c r i t i c i s m a s made of t h a t s e c t i o n *




-o-

COPY
FEDERAL RESERVE BAH OF CHICAGO
CHAS. L. POWELL, Counsel
C o n t i n e n t a l a n d Commercial Bank 31 cig.
X-6137-e
CHICAGO

September 4 , 1928

Mr. W a l t e r W y a t t ,
General Counsel,
F e d e r a l R e s e r v e Board,
W a s h i n g t o n , D. C.
Dear Mr. W y a t t :
Re Uniform Bank C o l l e c t i o n Code
Your w i r e of t h e 2 9 t h u l t . , c a l l e d my a t t e n t i o n
t o Mr. V e s t ' s l e t t e r of J u l y 1 0 t h w i t h r e f e r e n c e t o t h e above
m a t t e r . I was o u t of town when y o u r w i r e r e a c h e d my o f f i c e , a s
you were a d v i s e d "by Mr. McKay. I h a v e n o t o v e r l o o k e d Mr. V e s t ' s
l e t t e r , b u t I h a d l e t o t h e r more i m p o r t a n t m a t t e r s p u s h i t t o
one s i d e .
I n t h e f i r s t p l a c e , I do n o t b e l i e v e t h a t t h e r e i s any
g e n e r a l c a l l f o r t h e e n a c t m e n t of t h i s p r o p o s e d c o l l e c t i o n c o d e .
We a l r e a d y h a v e , i n most of t h e S t a t e s , t h e u n i f o r m n e g o t i a b l e
i n s t r u m e n t a c t , a n d I doubt t h e p r o p r i e t y of e n a c t i n g t h i s p r o p o s e d
c o d e , w h i c h i n some r e s p e c t s w i l l i n t e r f e r e w i t h t h a t a c t .
I am n o t a v e r s e , however, t o e x p r e s s i n g my views on
s e v e r a l of t h e s e c t i o n s of t h e p r o p o s e d c o d e :
S e c . 2 . The word " i t e m s " i n n e x t t o t h e l a s t l i n e
s h o u l d be changed t o 11 i t e m " .
S e c . 3 . I n s e r t a comma a f t e r t h e word " h o u r s " i n t h e
f i f t h l i n e , a n d a comma a f t e r t h e word "day" i n t h e s i x t h l i n e ;
a n d omit t h e l a s t s e n t e n c e i n s a i d s e c t i o n ; and i f t h e l a s t s e n t e n c e
i s n o t o m i t t e d i n s e r t t h e word " n e x t " b e f o r e t h e word " f o l l o w i n g "
in the l a s t l i n e .
I can s e e no r e a s o n w h a t e v e r f o r t h e l a s t s e n t e n c e b e c a u s e i t i s a r e p e t i t i o n of what i s a b o v e .
S e c . 5 . Change t h e word " c o l l e c t i o n " t o t h e w o r d
" c o l l e c t i n g " i n t h e s e c o n d l i n e of t h i s s e c t i o n .
Sec. 9. Sub-paragraph (b) i s not c l e a r .
I t m i g h t mean
t h a t an a g e n t f o r c o l l e c t i o n c o u l d a c c e p t i n payment of an i t e m




X-6137-e
Mr* W a l t e r " J y a t t ,
General Counsel,
F e d e r a l R e s e r v e Board,
W a s h i n g t o n , D. C.
#2
a c a s h i e r ' s check on t h e c o l l e c t i o n "bank. T h i s s h o u l d n e v e r
he p e r m i t t e d .
I f t h e words "upon i t s e l f " c o u l d he c l a r i f i e d
so a s t o make i t c l e a r t h a t t h e y meant a check upon t h e bank
which s e n t t h e i t e m f o r c o l l e c t i o n i t would he s a t i s f a c t o r y .
S e c . 1 0 . The word " o r " , "being t h e f i r s t word i n t h e
s i x t h l i n e of t h i s s e c t i o n , s h o u l d he changed t o " a n d " . The
l a s t sentence i n t h i s s e c t i o n needs c l a r i f y i n g ; and i n f a c t ,
t h e whole s e c t i o n i s of d o u b t f u l p r o p r i e t y i n t h a t i t a t t e m p t s
t o d e a l w i t h t h e r i g h t s of t h e d r a w e r s o r makers of t h e i t e m s
a n d n o t w i t h t h e r i g h t s of t h e e n d o r s e r s a l o n e . From a b a n k e r ' s
s t a n d p o i n t , i t would be h i g h l y d e s i r a b l e t o d e a l w i t h t h e s e
r i g h t s , "but I do n o t b e l i e v e i t i s p r a c t i c a l , a n d I do n o t b e l i e v e
i t can e v e r be e n a c t e d i n t o l a w .
S e c . 1 1 . The l a s t s e n t e n c e i s e n t i r e l y i m p r a c t i c a l .
How c o u l d a r e c e i v e r o r o t h e r o f f i c i a l r e t u r n e v i d e n c e which
would e n a b l e t h e owners t o h o l d t h e d r a w e r s , makers o r e n d o r s e r s ?
He c e r t a i n l y c o u l d n o t d e t e r m i n e what t h e c o u r t would a c c e p t a s
e v i d e n c e . He m i g h t w e l l f u r n i s h i n f o r m a t i o n a s t o t h e e x a c t
situation.
S e c . 1 2 . T h i s s e c t i o n does n o t go f a r enough. I t h i n k
i t s h o u l d i n c l u d e , a n d be so r e - d r a f t e d a s t o i n c l u d e , i t e m s h e l d
f o r c o l l e c t i o n , e v e n though such i t e m s a r e drawn on t h e a g e n t
b a n k , a s t h e whole t h e o r y of t h e c o l l e c t i o n code r e c o g n i z e s a
drawee bank a s a p r o p e r a g e n t f o r c o l l e c t i o n , a s a p p e a r s i n S e c t i o n
6; and I c a n s e e no r e a s o n t o make t h e d i s t i n c t i o n h e r e made
i n r e g a r d t o e s t a b l i s h m e n t of a p r e f e r e n c e u n d e r t h e t r u s t f u n d
theory.
I am v e r y s o r r y t h a t I have so l o n g d e l a y e d r e p l y i n g
t o Mr. V e s t s l e t t e r ; t h e f a c t s a r e t h a t I deemed t h e m a t t e r of
so l i t t l e i m p o r t a n c e t h a t I d i d n o t g i v e i t my u s u a l prompt a t t e n tion.
With k i n d r e g a r d s , I am
Yours t r u l y ,
( S ) CHAS. L . POWELL,
COUNSEL.
CLP




COPY

X-613?~f
FEDERAL RESERVE BAH

or

ST. LOUIS

August 30, 1928.
Mr. W a l t e r W y a t t ,
General Counsel,
F e d e r a l R e s e r v e Board,
W a s h i n g t o n , D. C.
Dear Mr. W y a t t :
R e f e r r i n g t o y o u r t e l e g r a m of 8 / 2 9 / 2 8 r e l a t i v e t o t h e
Second T e n t a t i v e d r a f t of t h e Uniform C o l l e c t i o n Code p r e p a r e d
"by Mr. P a t o n .
P r i o r t o t h e r e c e i p t of Mr. V e s t ' s l e t t e r of 7 / 1 0 / 2 8 ,
f o r w a r d i n g Mr. P a t o n ' s Second T e n t a t i v e D r a f t of t h e U n i f o r m
Bank C o l l e c t i o n Codo t o - g e t h e r w i t h s u g g e s t i o n s made by C o u n s e l ,
of t h e s e v e r a l F e d e r a l R e s e r v e Banks, on t h e F i r s t T e n t a t i v e
d r a f t , Mr. A t t e b e r y , o u r Deputy Governor a n d a member of t h e
S t a n d i n g Committee on C o l l e c t i o n s , h a d r e c e i v e d f r o m Mr. S t r a t e r ,
Chairman o f t h e Committee, a copy of t h e Second T e n t a t i v e d r a f t
which h a d b e e n f o r w a r d e d d i r e c t by Mr. P a t o n t o Mr. S t r a t e r .
Upon e x a m i n a t i o n of t h e Second T e n t a t i v e d r a f t s u b m i t t e d by
Mr. S t r a t e r , I f o u n d t h a t t h e c h a n g e s s u g g e s t e d i n my l e t t e r t o
you u n d e r d a t e of 2 / 2 9 / 2 8 h a d b e e n s a t i s f a c t o r i l y t a k e n c a r e of
a n d so a d v i s e d Mr. A t t e b e r y .
When Mr. V e s t ' s l e t t e r of 7 / 1 0 / 2 8 was r e c e i v e d , I r o u t e d
i t t o g e t h e r w i t h t h e s u g g e s t i o n s of C o u n s e l , of t h e F e d e r a l R e s e r v e
Banks, on t o Mr. A t t e b e r y f o r h i s u s e i n a n s w e r i n g Mr. S t r a t e r ' s
l e t t e r , i n t e n d i n g t o answer Mr. V e s t ' s l e t t e r a s soon a s Mr. A t t e r b e r y h a d h a d s u f f i c i e n t t i m e t o go o v e r t h e comments of C o u n s e l ,
answer Mr. S t r a t e r ' s l e t t e r , a n d , r e t u r n Mr. V e s t ' s l e t t e r t o
oy f i l e s . A f t e r Mr. A t t e b e r y h a d f i n i s h e d w i t h t h e l e t t e r a n d
s u g g e s t i o n s of Counsel a n d a n s w e r e d Mr. S t r a t e r ' s l e t t e r ( c o p y
of which I e n c l o s e ) t h r o u g h some e r r o r t h e l e t t e r a n d s u g g e s t i o n s
wer6 r o u t e d o n / t f i e G e n e r a l F i l e s of t h e bank i n s t e a d of b e i n g
r e t u r n e d f o r t h e l e g a l f i l e s . T h e r e f o r e , i t was o v e r l o o k e d
u n t i l y o u r t e l e g r a m came i n .
Having i n mind t h e o b j e c t i o n s r a i s e d by Counsel t o t h e
F i r s t T e n t a t i v e d r a f t , I have compared t h e f i r s t t e n t a t i v e d r a f t
w i t h t h e s e c o n d t e n t a t i v e d r a f t , and, w h i l s t n o t a l l t h e s u g g e s t i o n s
of Counsel h a v e b e e n f o l l o w e d , I b e l i e v e t h a t t h e d r a f t , a s amended,
i s not o b j e c t i o n a b l e from a Federal Reserve Bank's s t a n d p o i n t .
S e c t i o n 5 , which a d o p t s t h e M a s s a c h u s e t t s r u l e , i s w e l l
a d a p t e d t o t h e E i g h t h F e d e r a l R e s e r v e D i s t r i c t where we h a v e , i n
s e v e r a l S t a t e s , t h e d i r e c t s e n d i n g S t a t u t e , a n d , w h e r e i n some
q u e s t i o n s have been r a i s e d , under t h i s d i r e c t sending S t a t u t e , whether
u n d e r t h e M a s s a c h u s e t t s r u l e t h e drawee o r p a y e r bank i s t h e a g e n t
of t h e owner of t h e i t e m , o r , w h e t h e r t h e F e d e r a l R e s e r v e Bank




2

W. W y a t t .

X-613V-

f o r w a r d i n g t h e i t e m t o t h e drawee o r p a y o r "bank i s t h e l a s t a g e n t
of t h e owner of t h e i t e m .
I have always taken the p o s i t i o n t h a t under the d i r e c t
s e n d i n g a c t t h e drawee o r p a y o r t a n k i s the a g e n t of t h e ownerh u t , have never had to t e s t i t out i n Court.
The l a s t t h r e e l i n e s of S e c t i o n 5 s e t t l e s t h i s q u e s t i o n
a n d w i l l be v e r y a d v a n t a g e o u s t o t h e F e d e r a l R e s e r v e Bank of
S t . L o u i s s i n c e we h a v e h a d so many non-member bank f a i l u r e s i n n e a r l y e v e r y one of which we were c a u g h t w i t h o u t s t a n d i n g
unpaid cash l e t t e r s .
A f t e r g o i n g over t h e Second T e n t a t i v e D r a f t w i t h t h e
o p e r a t i n g S f f i c e r s of our Bank, we c a n n o t f i n d any s e r i o u s
o b j e c t i o n s to i t s form.
I t a k e i t t h a t a s Counsel f o r t h e American B a n k e r s
A s s o c i a t i o n , Mr. P a t o n i s p r e p a r i n g t h i s Code n o t f r o m a
F e d e r a l . ^Reserve Bank s t a n d p o i n t b u t r a t h e r f r o m a commercial
bank s t a n d p o i n t , a n d , t h a t some of t h e c h a n g e s s u g g e s t e d
would n o t meet w i t h t h e commercial b a n k s ' d e s i r e s i n t h e
matter.




Very t r u l y y o u r s ,
(S)
J a s . G-. McCorikey
Counsel.

COPY

COPT

S t . L o u i s , Ho.

x-615'r

J u l y 14, 1928.

Dear Mr. S t r a t e r ;
I r e f e r t o your l e t t e r s of May 2 4 t h a n d June 1 0 t h ,
r e l a t i v e t o u n i f o r m b a n k _ c o l l e c t i o n code^ r e c e i v e d f r o m t h e G e n e r a l
Counsel of t h e American B a n k e r s A s s ' n .
I have c a r e f u l l y gone over t h e code and t h e comments
made by F e d e r a l R e s e r v e c o u n s e l . The p r o p o s e d code c o n t e m p l a t e s
^ m e e t i n g p r e s e n t day p r a c t i c e s on t h e p a r t of many h a n k s , "but i t seems
t o me t h a t i n q u i t e a few i n s t a n c e s , i t r e l i e v e s b a n k s - t h a t i s ,
c o l l e c t i n g b a n k s - of r e s p o n s i b i l i t i e s which, p r o b a b l y due t o t h e
manner i n which I h a v e b e e n a c c u s t o m e d t o h a n d l i n g i t e m s , I do n o t
f e e l i s d e s i r a b l e . On t h e o t h e r h a n d , f r o m a F e d e r a l R e s e r v e
s t a n d p o i n t , t h e r e does n o t a p p e a r to be a n y t h i n g p a r t i c u l a r l y
o b j e c t i o n a b l e i n t h e code, a s now p r e s e n t e d . I t does c l a r i f y
q u i t e a few t h i n g s , b u t , i f a d o p t e d , w i l l u n d o u b t e d l y r e q u i r e
many l e g a l d e c i s i o n s b e f o r e i t s meaning i s w e l l e s t a b l i s h e d .
I am n o t a t t e m p t i n g t o make any s p e c i f i c s u g g e s t i o n s or
c r i t i c i s m s , p r i m a r i l y f o r the r e a s o n t h a t t h i s i s c l e a r l y a l e g a l
s u b j e c t , a n d e x p e r i e n c e of r e c e n t y e a r s h a s c o n v i n c e d me t h a t t h e
i n t r i c a c i e s of p r e s e n t day law a r e t o o much f o r me. I am
o b l i g e d t o a g r e e w i t h Mr. W a l d e n ' s s u g g e s t i o n s a s c o n t a i n e d
i n h i s l e t t e r of J u n e 1 5 t h , copy of which you f o r w a r d e d to me.
Yours v e r y t r u l y ,
O.M.Attebery,
Deputy G o v e r n o r .
Mr. H. F . S t r a t e r , Chairman,
S t a n d i n g Committee on C o l l e c t i o n s ,
F e d e r a l R e s e r v e Bank of C l e v e l a n d ,
Cleveland, Ohio.




X-613?-

COPY
Law O f f i c e s
UELAND & UELAHD
401 New York L i f e B u i l d i n g
'MHEBAPOLIS

August 30, 1928
Mr. W a l t e r W y a t t , C o u n s e l ,
F e d e r a l R e s e r v e Board,
W a s h i n g t o n , D. C.
Dear Mr. W y a t t :
Upon r e c e i p t o f y o u r w i r e of y e s t e r d a y , we h a v e
gone o v e r t h e s e c o n d t e n t a t i v e d r a f t of t h e UNIFORM BAHK
COLLECTION CODE p r e p a r e d "by Thomas B. P a t o n , G e n e r a l Counsel
of t h e American B a n k e r s A s s o c i a t i o n .
We make the f o l l o w i n g c r i t i c i s m s of t h e s e c o n d
tentative draft:
S e c t i o n 4 . We q u e s t i o n t h e u s e of t h e words " i n
"blank o r i n f u l l " i n t h i s s e c t i o n . The words "by u n r e s t r i c t e d
e n d o r s e m e n t " s h o u l d "be s u b s t i t u t e d .
S e c t i o n 5 . I t i s not e x p r e s s l y s t a t e d i n t h i s s e c t i o n , o r e l s e w h e r e i n t h e s e c o n d t e n t a t i v e d r a f t , t h a t any
i n t e r m e d i a t e bank i n t h e c h a i n of c o l l e c t i o n i s t h e a g e n t o f
t h e owner of t h e i t e m . This s h o u l d be made e x p r e s s so a s t o
s e t t l e t h e q u e s t i o n w h e t h e r t h e owner of t h e p a p e r can m a i n t a i n a s u i t a g a i n s t the intermediate c o l l e c t i n g bank.
S e c t i o n 7 . We b e l i e v e t h a t t h e o m i s s i o n of t h i s
s e c t i o n w o u l d c o n s t i t u t e a n improvement.
S e c t i o n 1 2 . We b e l i e v e t h i s s e c t i o n s h o u l d be
o m i t t e d a l t o g e t h e r . The q u e s t i o n of p r e f e r r e d c l a i m s i s so
i n t r i c a t e t h a t we b e l i e v e t h a t s e c t i o n 12 would a d d t o t h e
confusion r a t h e r than simplify matters.
S e c t i o n 1 3 . The l a s t c l a u s e r e a d i n g " b u t such l i e n
may be a c q u i r e d upon any such i t e m or p r o c e e d s f o r a n i n d e b t e d n e s s of t h e r e a l owner t h e r e o f . " ought t o be o m i t t e d . On
p r i n c i p l e a c o l l e c t i n g bank s h o u l d n o t h a v e a l i e n on i t e m s
coming i n t o i t s p o s s e s s i o n w i t h o u t t h e c o n s e n t of i t s d e b t o r .


http://fraser.stlouisfed.org/ SUiME
Federal Reserve Bank of St. Louis

Yours v e r y t r u l y ,
(S)

A, U e l a n d ,
Sigurd Ueland.

COPY

X-6137-h
FEDERAL RESERVE BAM
OF S M FRAHCISCO
August 3 0 , 1928.

Walter Wyatt, E s q . ,
General Counsel,
F e d e r a l R e s e r v e B o ar d ,
W a s h i n g t o n , D. C.
Dear Mr. W y a t t i
R e s p o n d i n g t o your s u g g e s t i o n f o r f u r t h e r comments on t h e
U n i f o r m Bank C o l l e c t i o n Code p r e p a r e d "by J u d g e P a t o n , G e n e r a l Counsel t o
t h e American B a n k e r s A s s o c i a t i o n , a n d r e f e r r i n g t o t h e r e d r a f t of t h e code,
I h a v e t o d a y w i r e d you p e r e n c l o s e d c o p y .
S u p p l e m e n t i n g my w i r e , I "beg

l e a v e t o submit t h e f o l l o w i n g ;

You w i l l r e c a l l t h a t on December 2 3 , 1927, I w r o t e t o Judge
P a t o n , commenting i n d e t a i l on t h e o r i g i n a l d r a f t of t h e c o d e . T h i s
l e t t e r i s embodied i n t h e c o m p i l a t i o n of c o r r e s p o n d e n c e b e t w e e n y o u r o f f i c e a n d Counsel f o r t h e v a r i o u s F e d e r a l r e s e r v e "banks a n d i s d e s i g n a t e d
X-6085-h.
W i t h o u t i n t e n d i n g t o "be e g o t i s t i c a l , I must s a y t h a t t h e comp a r i s o n o f t h e o r i g i n a l code w i t h t h e r e v i s e d one i n d i c a t e s t h a t J u d g e
P a t o n h a s a d o p t e d a l m o s t i n e n t i r e t y t h e s u g g e s t i o n s c o n t a i n e d i n my
l e t t e r of December 2 3 , 1927. The o n l y s u g g e s t i o n made which was n o t
a d o p t e d i s i n r e g a r d t o t h e u s e of 11 s o l v e n t " i n s e c t i o n 1 ( h ) , d e f i n i n g
s o l v e n t c r e d i t . I n view of t h e s u b s e q u e n t p r o v i s i o n s c o n t a i n e d i n p a r a g r a p h s 9 a n d 1 1 , I am i n c l i n e d t o "believe t h a t t h e u s e of t h e word " s o l vent" i s necessary.
I s u g g e s t t h a t i n S e c t i o n 4 , a f t e r t h e word ""banker" i n l i n e
7, p a g e 2 , t h e words " o r o t h e r s i m i l a r p h r a s e " he a d d e d so t h a t t h e l i n e a s
amended w i l l r e a d : "An i n d o r s e m e n t ' p a y any "bank o r h a n k e r ' o r o t h e r
s i m i l a r p h r a s e s h a l l he deemed a r e s t r i c t i v e i n d o r s e m e n t e t c . "
I make
t h i s s u g g e s t i o n f o r t h e r e a s o n t h a t many hanks u s e t h i s t y p e of i n d o r s e ment w i t h a s l i g h t l y d i f f e r e n t w o r d i n g , some of them "being, " p a y t o any
h a n k , h a n k e r o r t r u s t company." To c o n f i n e t h e i n d o r s e m e n t t o t h e e x a c t
words s e t f o r t h i n t h e p r o p o s e d s t a t u t e t o one p a r t i c u l a r w o r d i n g m i g h t ,
u n d e r a s t r i c t c o n s t r u c t i o n , e x c l u d e any o t h e r w o r d i n g h a v i n g s i m i l a r
i m p o r t "but s l i g h t l y d i f f e r e n t p h r a s e o l o g y .
I s u g g e s t t h a t i n s e c t i o n 6 ( a ) a f t e r t h e word " r e c e i p t " i n
l i n e 4 , t h e word " e i t h e r " "be a d d e d , a n d t h a t i n l i n e 5 of t h e same s e c t i o n
a f t e r t h e word "hank" t h e r e he a d d e d t h e w o r d s , " o r a t t h e d i s c r e t i o n of
t h e c o l l e c t i n g h a n k ; " t h e s e a d d i t i o n s b e i n g f o r t h e p u r p o s e of making i t
e n t i r e l y c l e a r t h a t t h e c o l l e c t i n g hank h a s t h e a b s o l u t e o p t i o n of s e n d i n g
t h e i t e m d i r e c t t o t h e drawee o r p a y o r o r t o a n o t h e r b a n k .




•jfcV
-2-

Walter Wyatt, Esq.,

X-6137-h
A u g u s t 30, 1928

I a l s o s u g g e s t t h a t i n s e c t i o n 6, p a r a g r a p h ( b ) , a f t e r t h e
word " o r " , "being t h e f i r s t word i n t h e e i g h t h l i n e of t h a t p a r a g r a p h ,
t h e r e "be a d d e d t h e words " i n any o t h e r m a n n e r . "
I n S e a t t l e , Los A n g e l e s a n d P o r t l a n d t h e r e a r e a number of
s m a l l o u t l y i n g "banks w i t h i n t h e c o r p o r a t e l i m i t s of t h e c i t i e s m e n t i o n e d ,
w h i c h a r e n o t members of t h e c l e a r i n g h o u s e a n d i n r e l a t i o n t o which p r e s e n t a t i o n b y m e s s e n g e r w o u l d consume t h e m a j o r p o r t i o n of t h e b u s i n e s s
day i n
t h e r o u n d t r i p . I h a v o no doubt t h a t t h i s s i t u a t i o n e x i s t s i n many o t h e r l a r g e c i t i e s * I n t h e s e c a s e s we h a v e f o l l o w e d t h e
p r a c t i c e of s e n d i n g t h e i t e m s d i r e c t t o t h e drawee by m a i l a n d a c c e p t i n g
t h e d r a w e e ' s d r a f t i n s e t t l e m e n t t h r o u g h t h e m a i l . I b e l i e v e t h e code
s h o u l d make i t c l e a r t h a t such method of c o l l e c t i o n , i f n e c e s s a r y , a n d
i n a c c o r d a n c e w i t h l o c a l custom, c o n s t i t u t e s o r d i n a r y c a r e . We h a v e
p e n d i n g now a s u i t a g a i n s t u s a r i s i n g f r o m p u r s u i n g t h i s method of c o l l e c t i o n i n P o r t l a n d , t h e drawee bank b e i n g l o c a t e d w i t h i n t h e c i t y l i m i t s
of P o r t l a n d b u t a t a g r e a t d i s t a n c e f r o m t h e c e n t e r of p o p u l a t i o n . The
a d d i t i o n s u g g e s t e d w o u l d c l a r i f y our r i g h t t o p u r s u e t h e c o u r s e i n d i c a t e d ,
I cannot see t h a t s e c t i o n 7 i s necessary or t h a t i t adds anything
t o t h e s t r e n g t h of t h e c o d e . I b e l i e v e i t s h o u l d be l e f t o u t .
I n r e g a r d t o s e c t i o n 9 , I h a v e s u g g e s t e d t h a t t h e words " i t s e l f
o r " a t t h e e n d o f l i n e 3 be e l i m i n a t e d . I do n o t b e l i e v e t h a t a c o l l e c t i n g
bank s h o u l d b e g r a n t e d t h e r i g h t of a c c e p t i n g i n s e t t l e m e n t of c a s h i t e m s
t h e c h e c k of t h e drawee bank drawn u p o n i t s e l f .
To p e r m i t t h i s , l e g a l i z e s
t h e a c c e p t a n c e of one o b l i g a t i o n t>£ t h e drawee i n s u b s t i t u t i o n f o r a n o t h e r .
I t c r e a t e s t h o r e l a t i o n of d e b t o r and c r e d i t o r a s b e t w e e n t h e drawee bank
or payor bank a n d the c o l l e c t i n g agent a n d i f p u r s u e d to t h e p o i n t p e r m i t t e d
by t h e c o d e , w o u l d e n a b l e t h e drawee t o s u b s t i t u t e one c a s h i e r ' s check a f t e r
a n o t h e r i n p u r p o r t e d s e t t l e m e n t of c a s h i t e m s . While i t i s t r u e t h a t i n
t h e c o l l e c t i o n of l o c a l i t e m s a c o l l e c t i n g bank sometimes a c c e p t s a c a s h i e r N
check f r o m t h e drawee i n p u r p o r t e d s e t t l e m e n t , I b e l i e v e t h a t when t h i s
i s done, t h e c o l l e c t i n g bank s h o u l d r e c o g n i z e a n d a c c e p t t h e r i s k e n t a i l e d
i n such p r o c e d u r e .
I
I n my o p i n i o n s e c t i o n 13 of t h e p r o p o s e d code c o n s t i t u t e s , m e r e l y
a n a t t e m p t t o s t a t e t h e g e n e r a l law of b a n k e r s ' l i e n s .
The w o r d i n g of t h e
s e c t i o n a s d r a f t e d i s somewhat i n v o l v e d a n d I b e l i e v e t h a t t h e code would
be s t r o n g e r a n d more r e a d i l y a d o p t e d i f t h i s s e c t i o n were o m i t t e d . I o b s e r v e t h a t J u d g e P a t o n e v i d e n t l y e n t e r t a i n s some s u c h views inasmuch a s
h e s u g g e s t s t h a t t h e s e c t i o n c o u l d be o m i t t e d w i t h o u t much l o s s .
,
I h a v e r e c e n t l y b e e n p r e p a r i n g a b r i e f on o u r P o r t l a n d c a s e and
a t t e m p t i n g t o g e t s o m e t h i n g h e l p f u l f o r Mr. Logan i n c o n n e c t i o n w i t h t h e
R a i c h l e s u i t , which a c c o u n t s f o r my d e l a y i n t a k i n g up t h e code m a t t e r .




X-6137-h
Walter Wyatt, E s q . ,

August 3 0 , 1928

I t r u s t t h a t my t e l e g r a m a n d t h i s l e t t e r w i l l r e a c h you i n t i m e t o be
of some s e r v i c e .




Yours v e r y t r u l y ,
( S ) A l b e r t C. Agnew
Counsel.

X-6137-h.

COPY
FZDERAL RESERVE BAM OF SA1T ZRAHCISCO
TELEGRAM
TO WYATT
FEDERAL RESERVE BOARD

August SO, 1928

PRONTO
R e f e r r i n g r e d r a f t U n i f o r m Bank C o l l e c t i o n Code P a t o n h a s a d o p t e d
p r a c t i c a l l y a l l of o u r s u g g e s t i o n s c o n t a i n e d i n ' X - 6 9 8 5 h , our
l e t t e r December 2 3 , 1927, a n d we c o n s i d e r r e d r a f t of code g e n e r a l l y
s a t i s f a c t o r y . S u g g e s t however, f o l l o w i n g minor c h a n g e s .
Add a f t e r word ""banker11 s e v e n t h l i n e p a f e 2 " o r o t h e r s i m i l a r p h r a s e . "
I n S e c t i o n 6 p a r a g r a p h A a d d a f t e r word " r e c e i p t " i n l i n e 4 word " e i t h e r " .
A f t e r word "bank" s e c t i o n 6 - a l i n e 5 add " o r a t t h e d i s c r e t i o n of t h e
c o l l e c t i n g hank."
i n s e c t i o n 6~b l i n e 8 a f t e r word " o r " f i r s t word of t h a t l i n e , a d d
" i n any o t h e r m a n n e r . "
A d v i s e e l i m i n a t i o n of s e c t i o n 7 .
S e c t i o n 9 p a g e 3 l i n e 3 a d v i s e e l i m i n a t i o n o f " i t s e l f o r " a t t h e end
of t h a t l i n e .
Also a d v i s e e l i m i n a t i o n S e c t i o n 13.
R e f e r r i n g t o s u g g e s t i o n f o r e l i m i n a t i o n df words " i t s e l f o r " b e i n g l a s t
words l i n e 3 s e c t i o n 9 p a g e 3 we do n o t b e l i e v e t h a t c o l l e c t i n g bank
i s j u s t i f i e d i n a c c e p t i n g i n s e t t l e m e n t check of drawee bank o r p a y o r
bank upon i t s e l f . T h i s of c o u r s e i n c l u d e s c a s h i e r ' s c h e c k s t h e a c c e p t a n c e of w h i c h i n e v i t a b l y c r e a t e s r e l a t i o n of d e b t o r a n d c r e d i t o r
b e t w e e n c o l l e c t i n g b a n k a n d p a y o r b a n k , Such method of s e t t l e m e n t cannot
be c o n s t r u e d a s f i n a l payment a n d i f a d o p t e d by law m i g h t r e s u l t
i n g r a v e a b u s e s . While a c c e p t a n c e of c a s h i e r s c h e c k s i n s e t t l e m e n t of
c o l l e c t i o n i t e m s i s common p r a c t i c e on l o c a l i t e m s we c o n s i d e r t h a t
c o l l e c t i n g bank s h o u l d r e c o g n i z e and a c c e p t r i s k i n v o l v e d * L e t t e r f o l l o w s .
'
AC




AGHEW

X-6137-

COPY

FEDEM! RESERVE BAH
OF RICHMOND

August 29, 1928

F e d e r a l R e s e r v e B o ar d ,
W a s h i n g t o n , D. C.
Attention:

Mr, W a l t e r

ffyatt,

General Counsel.

Dear S i r :
I h a v e y o u r t e l e g r a m of August 2 9 t h .

I have

n o t h a d a n o p p o r t u n i t y t o g i v e t h e r e v i s e d f o r m of the
U n i f o r m Bank C o l l e c t i o n Code t h o r o u g h s t u d y , b u t I have
r e a d i t o v e r a n d have no s u g g e s t i o n s t o o f f e r which a r e
n o t c o n t a i n e d i n t h e l e t t e r s f r o m t h e Counsel of o t h e r
Federal Reserve hanks.
Very t r u l y y o u r s ,

(S)

MGW L




M. G-. W a l l a c e ,
Counsel.

X-6137-j

OCBPt

c

SQUIRE, SM3EHS & DEMPSEY
COUNSELLORS AT LAW
THETOTIOITTRUST BUILDINGCLEVELAND

August 22, 1 9 2 8 .
Mr. W a l t e r W y a t t ,
General Counsel,
EDBEBAL RESERVE BOARD,
W a s h i n g t o n , D. C.
Dear S i r :

I n r e : Uniform Bank C o l l e c t i o n Code
We d u l y r e c e i v e d y o u r l e t t e r of J u l y 10 e n c l o s i n g copy of

s e c o n d t e n t a t i v e d r a f t of t h e Uniform Bank C o l l e c t i o n Code and have
made a c a r e f u l r e v i e w of t h e p r o p o s e d code i n i t s p r e s e n t form a s r e q u e s t e d by y o u .
The f o l l o w i n g s u g g e s t i o n s a s t o form h a v e o c c u r r e d t o u s
i n r e v i e w i n g t h e p r o p o s e d d r a f t of t h e c o d e :
Section 3.

I t e m on same h a n k .

The l a s t s e n t e n c e i n

s e c t i o n t h r e e a p p e a r s t o he a r e p e t i t i o n of t h e p r o v i s i o n e x p r e s s e d i n
t h e l a t t e r p a r t of t h e f i r s t s e n t e n c e of t h i s s e c t i o n a n d i s a p p a r e n t l y
s u p e r f l u o u s a n d s h o u l d he o m i t t e d .

We a l s o t h i n k t h e r e i s a chance of

c o n f u s i o n i n i n t e r p r e t i n g t h e l a n g u a g e of t h i s s e c t i o n .

We t a k e i t

t h a t t h e i n t e n t i o n i s t o r e s t r i c t t h e r i g h t of r e v o c a t i o n t o such
r e a s o n s o n l y a s may e x i s t a t t h e t i m e t h e i n i t i a l c r e d i t i s made a n d
n o t t o e x t e n d t h e r i g h t t o r e a s o n s d e v e l o p i n g b e f o r e t h e end of t h e day
on which t h e i t e m i s d e p o s i t e d o r t h e f o l l o w i n g b u s i n e s s day i n t h e
c a s e of d e p o s i t s a f t e r b a n k i n g h o u r s .

As e x p r e s s e d , we t h i n k t h e r e

i s danger of a c o u r t i n t e r p r e t i n g t h e r i g h t of r e v o c a t i o n t o e x t e n d
t o any r e a s o n a r i s i n g w i t h i n t h e time l i m i t s f o r r e v o c a t i o n (which would



make t h e i t e m n o t p a y a b l e ) .

For i n s t a n c e ,

if a stop order i s r e c e i v e d

"by t h e "bank on t h e same day t h a t t h e i t e m i s d e p o s i t e d "but s u b s e q u e n t
t o t h e d e p o s i t of t h e i t e m a n d the c r e d i t of t h e i t e m t o t h e a c c o u n t of
t h e d e p o s i t o r , t h e l a n g u a g e a s a t p r e s e n t e x p r e s s e d m i g h t "be c o n s t r u e d
%

to p e r m i t t h e "bank t o r e v o k e t h e c r e d i t p r e v i o u s l y g i v e n *
was n o t t h e i n t e n t i o n .

T h i s we assume

To c l a r i f y t h e s e c t i o n i n t h i s r e s p e c t , we would

s u g g e s t t h a t i t be changed t o r e a d a s f o l l o w s !
"Any c r e d i t a l l o w e d by any bank f o r any i t e m drawn on
o r p a y a b l e a t ths same bank i n which i t i s d e p o s i t e d ,
s h a l l be p r o v i s i o n a l s u b j e c t t o r e v o c a t i o n a t o r b e f o r e
t h e e n d of t h e day on which t h e i t e m was d e p o s i t e d whenever
s u c h d e p o s i t h a s b e e n made d u r i n g b a n k i n g h o u r s o r a t o r
b e f o r e t h e e n d of t h e n e x t f o l l o w i n g b u s i n e s s day when
s u c h d e p o s i t h a s b e e n made a f t e r b a n k i n g h o u r s i n a n y
c a s e i n which t h e item i s found not to have been p a y a b l e
f o r a n y r e a s o n e x i s t i n g a t t h e time c r e d i t was made t o t h e
d e p o s i t o r ' s a c c o u n t . The bank s h a l l be r e q u i r e d t o g i v e
due n o t i c e of such r e v o c a t i o n t o i t s d e p o s i t o r . "
A s i d e f r o m t h e m a t t e r s of f o r m commented on above we f e e l
t h a t t h e code s h o u l d b e so d e s i g n e d a s n o t t o make t h e drawer o f a check
a g u a r a n t o r o f t h e s o l v e n c y of t h e bank upon which h i s c h e c k i s drawn
a s i s t h e e f f e c t of s e c t i o n t e n .

I t seems t o u s t h a t i t would be more

e q u i t a b l e a n d a t t h e same t i m e be a p r o v i s i o n more e a s i l y a d m i n i s t e r e d
i f t h i s s e c t i o n of t h e code were d r a f t e d a l o n g t h e l i n e s of t h e Ohio
code which c r e a t e s a t r u s t f u n d i n t h e i n s o l v e n t b a n k ' s a s s e t s where a n
i t e m drawn on i t by i t s d e p o s i t o r h a s b e e n p r e s e n t e d f o r payment a n d c h a r g e d
a g a i n s t t h e d e p o s i t o r ' s a c c o u n t p r i o r t o i n s o l v e n c y of t h e b a n k .
We b e l i e v e t h a t t h e p r o v i s i o n s o f t h e p r o p o s e d code s h o u l d
go a s f a r a s p o s s i b l e i n p r o v i d i n g a s t a b l e b a s i s f o r commercial p a p e r
i n c o u r s e of c o l l e c t i o n a n d t h a t t h e t r u s t f u n d t h e o r y w i t h i t s a t t e n d a n t
p r e f e r e n c e a s f o u n d i n t h e Ohio code a t t a i n s t h a t o b j e c t i v e more n e a r l y
t h a n t h e p r o v i s i o n s of t h e p r o p o s e d c o d e .

PJ5H:HIB


Yours v e r y t r u l y ,
(S)

S q u i r e , S a n d e r s & Dempsey.

X-6137-k

COPY
FSDSEiil EESEEVS BAM
Of ATLAZEA
J u l y 21, 1928.

Mr. W a l t e r Wyatt, G e n e r a l Counsel,
F e d e r a l E e s e r v e Board,
Washington, D. C.
Dear Mr. W y a t t :
S i n c e t h e r e c e i p t of your l e t t e r of J u l y 10, a d d r e s s e d
to my f i r m , I h a v e made such s t u d y a s I c o u l d of t h e second
t e n t a t i v e d r a f t of t h e "Uniform B a n k , C o l l e c t i o n Code" a s p r e p a r e d
"by Mr. P a t on, a n d , p u r s u a n t t o your r e q u e s t , I am s u b m i t t i n g
h e r e i n my views w i t h r e s p e c t t h e r e t o .
5$ie second t e n t a t i v e d r a f t e l i m i n a t e s many of t h e
o b j e c t i o n a b l e f e a t u r e s which were i n t h e o r i g i n a l d r a f t ; however,
i n my o p i n i o n , the p r o p o s e d code s t i l l c o n t a i n s p r o v i s i o n s which
I b e l i e v e would p r o v e dangerous and, i n f a c t , s i n c e my f u r t h e r
s t u d y o f t h e q u e s t i o n , I am more f i r m l y c o n v i n c e d t h a n I was when
I w r o t e you i n March, w i t h r e f e r e n c e t o t h e f i r s t d r a f t , t h a t t h e
e f f o r t t o s e c u r e t h i s l e g i s l a t i o n would be of d o u b t f u l a d v i s a b i l i t y .
L e g i s l a t i o n designed to accomplish ( a ) the r i g h t to send items
d i r e c t t o drawee o r p a y o r bank; ( b ) t h e r i g h t t o a c c e p t bank
d r a f t s i n l i e u of c a s h ; and ( c ) exemption from l i a b i l i t y on a c count o f t h e d e f a u l t s o r o m i s s i o n s of s u b a g e n t s , would be h e l p f u l ,
but I b e l i e v e t h a t t h e p r o p o s e d code " c o v e r s too much t e r r i t o r y . "
My comments w i t h r e f e r e n c e t o t h e code, c o n s i d e r e d
s e c t i o n by s e c t i o n , a r e a s f o l l o w s :
S e c . l:*n The d e f i n i t i o n s c o n t a i n e d i n t h i s s e c t i o n seem
t o be a c c u r a t e , r e g a r d e d i n t h e a b s t r a c t . I f , however, t h e t e r m
" s o l v e n t c r e d i t " i s t o be u s e d i n t h e code, i t s h o u l d be g i v e n a
d i f f e r e n t d e f i n i t i o n f o r r e a s o n s which I s h a l l t r y t o make p l a i n
i n s u b s e q u e n t comments.
S e c . 2 : - I doubt t h e a d v i s a b i l i t y of a s t a t u t o r y p r o v i s i o n t o t h e e f f e c t t h a t a bank r e c e i v i n g a n i t e m p a y a b l e a t
a n o t h e r bank s h a l l , i n t h e a b s e n c e of a n e x p r e s s a g r e e m e n t t o t h e
c o n t r a r y , become a n a g e n t of t h e d e p o s i t o r f o r t h e c o l l e c t i o n of
such i t e m a n d n o t d e b t o r t o i t s d e p o s i t o r t h e r e f o r , u n t i l i t h a s
r e c e i v e d t h e p r o c e e d s i n a c t u a l money o r a s o l v e n t c r e d i t . I
know, of c o u r s e , t h a t most banks p r o v i d e by c o n t r a c t w i t h t h e i r
customers f o r a s t a t u s h a v i n g v i r t u a l l y t h e same l e g a l concomit a n t s a s would a p p e r t a i n t o t h e agency r e l a t i o n s h i p s e t up i n
this section; but i t i s quite a d i f f e r e n t thing, p a r t i c u l a r l y
when t h e i n t e r e s t s of t h i r d p e r s o n s a r e i n v o l v e d , f o r a "bank



X-6137-k
Mr. W a l t e r W y a t t ,

and i t s d e p o s i t o r
s h i p of p r i n c i p a l
the bank, and f o r
c a s e s where t h e r e

—2—

7/21/28.

t o e n t e r by p r i v a t e a g r e e m e n t i n t o t h e r e l a t i o n a n d a g e n t , quoad i t e m s p l a c e d on d e p o s i t w i t h
a s t a t u t e to c r e a t e t h i s r e l a t i o n s h i p i n a l l
i s no agreement t o t h e c o n t r a r y .

I t seems t o me, f u r t h e r m o r e , t h a t t h e e f f e c t of t h i s
s e c t i o n w o u l d be t o make any endorsement of a n e g o t i a b l e i n s t r u ment, a l t h o u g h i n b l a n k o r w i t h o u t any r e s t r i c t i o n s o r q u a l i f i c a t i o n s , to a l l i n t e n t s and purposes a r e s t r i c t i v e endorsement,
s i n c e t h e e f f e c t of t h e same would be t o " c o n s t i t u t e t h e e n d o r s e e
t h e a g e n t of t h e e n d o r s e r . " The f i d u c i a r y c h a r a c t e r of t h e
e n d o r s e e would be e s t a b l i s h e d by s t a t u t e , and I doubt w h e t h e r t h e
o b j e c t i o n s which would be i n h e r e n t i n t h i s s i t u a t i o n would be r e moved by t h a t p a r t of S e c t i o n 4 which p u r p o r t s t o g i v e t o
"subsequent h o l d e r s
t h e r i g h t t o r e l y on t h e p r e s u m p t i o n
t h a t ' t h e bank of d e p o s i t i s t h e owner of t h e i t e m . " I n o t h e r
words, the "presumption" a s to the r e l a t i o n s h i p between the
d e p o s i t o r a n d t h e bank i s d i r e c t l y c o n t r a r y t o t h e a c t u a l s t a t u s
a s f i x e d by s t a t u t e .
The e f f e c t o f S e c t i o n 2 of t h e Code, c o n s i d e r e d i n t h e
l i g h t of S e c t i o n s 36 a n d 37 of t h e N e g o t i a b l e I n s t r u m e n t s Law,
involves the frubther s e r i o u s q u e s t i o n as to whether the i n i t i a l
b a n k , o r o t h e r b a n k s h a n d l i n g such i t e m s , would t a k e t h e same
s u b j e c t t o a l l e q u i t i e s e x i s t i n g between p r i o r p a r t i e s .
I have
n o t e d , of c o u r s e , t h a t S e c t i o n 2 u n d e r t a k e s t o c o n f e r upon a
c o l l e c t i n g bank t h e r i g h t t o e n j o y " a l l t h e r i g h t s of a h o l d e r
i n due c o u r s e a g a i n s t p r i o r p a r t i e s . "
I s i t p o s s i b l e , however,
by l e g i s l a t i v e e n a c t m e n t t o c r e a t e t h e anomalous s i t u a t i o n of a
mpre c o l l e c t i o n a g e n t , h a v i n g a l l t h e r i g h t s of a h o l d e r i n due
c o u r s e , w i t h o u t a t l e a s t r e p e a l i n g by i m p l i c a t i o n one o r more
s e c t i o n s of N. I . L . ? A g a i n , m i g h t n o t t h e p r o v i s i o n t h a t t h e
bank s h o u l d be r e g a r d e d a s a h o l d e r i n due c o u r s e be c o n s t r u e d
by t h e c o u r t s a s p e r m i t t i n g a t most a r e c o v e r y by t h e bank o n l y
t o t h e e x t e n t o f w i t h d r a w a l s t h a t m i g h t h a v e b e e n made by t h e
d e p o s i t o r a g a i n s t h i s u n c o l l e c t e d b a l a n c e ? I n such l a t t e r
e v e n t t h e b a n k would b e p u t t o t h e n e c e s s i t y , i n s u i n g u p o n any
i n s t r u m e n t w h i c h i t h a d r e c e i v e d on d e p o s i t , of p r o v i n g i t s a c t u a l
l o s s i n the p r e m i s e s .
A f u r t h e r complication might a r i s e from the f a c t t h a t
the p r i n c i p a l a n d a g e n t r e l a t i o n s h i p , t o u c h i n g any i t e m r e c e i v e d
on d e p o s i t , would e x i s t u n t i l the bank h a d r e c e i v e d t h e p r o c e e d s
i n " a c t u a l money o r a s o l v e n t c r e d i t . " A s o l v e n t c r e d i t i s
d e f i n e d i n t h e Act t o mean a n u n c o n d i t i o n a l c r e d i t of money on
t h e books of a s o l v e n t b a n k t o t h e a c c o u n t of a n o t h e r bank, e t c .
I f t h i s d e f i n i t i o n be t a k e n l i t e r a l l y , t h e q u e s t i o n o f w h e t h e r o r
not a bank h a d , i n f a c t , r e c e i v e d a " s o l v e n t c r e d i t " w o u l d b e




l.

-3Mr. W a l t e r W y a t t ,

X-6137~k
7/21/28.

d e t e r m i n a b l e "by t h e s o l v e n c y of t h e b a n k , upon t h e "books of
which t h e c r e d i t a p p e a r s , a s of t h e time t h e c r e d i t was e n t e r e d . .
I t f o l l o w s t h a t t h e c o l l e c t i n g a g e n t might d i s c o v e r , sometime
a f t e r i t was g i v e n c r e d i t on t h e books of a s u p p o s e d l y s o l v e n t
bank, t h a t t h e l a t t e r was i n f a c t i n s o l v e n t a t t h e t i m e of t h e
c r e d i t * I n s u c h e v e n t i t m i g h t , i f t h e Code i s t o be t a k e n
l i t e r a l l y , c h a r g e b a c k a n i t e m t o a d e p o s i t o r Who h a d s u p p o s e d
t h e same t o h a v e b e e n f i n a l l y p a i d , s i n c e t h e bank of i n i t i a l
deposit had, i n f a c t , r e c e i v e d an i n s o l v e n t c r e d i t , although
a l l p a r t i e s s u p p o s e d t h e same t o h a v e b e e n a s o l v e n t c r e d i t .
While i t i s d o u b t l e s s t r u e t h a t t h e c o u r t s would n o t p e r m i t
a w s u c h h a p p e n i n g , t h e d e f i n i t i o n of " s o l v e r i t c r e d i t " s h o u l d be
c h a n g e d . Mr. Agnew h a s t h o r o u g h l y d i s c u s s e d t h i s p a r t i c u l a r
q u e s t i o n i n h i s f o r m e r l e t t e r a n d I s h a l l n o t e n l a r g e on t h e
same*
S 6 c . 3 : - I h a v e no comments t o make w i t h r e f e r e n c e
t o S e c t i o n 3 , e x c e p t t h a t t h e f i r s t s e n t e n c e of t h e same i s
i n v o l v e d a n d a r e d r a f t would d o u b t l e s s make f o r c l a r i t y *
Sec* 4 : ^ <6hat potftiftii of t h i s s e c t i o n c r e a t i n g a
p r e s u m p t i o n of o w n e r s h i p i n a n e n d o r s e e , d e s p i t e t h e s t a t u t o r y
p r e a t i o n , b y t h e p r o v i s i o n s of S e c t i o n 2 , o f a r e l a t i o n s h i p which
i s incompatible w i t h such presumption, has a l r e a d y been d i s c u s s e d . I h a v e a l s o d i s c u s s e d what I r e g a r d a s t h e i n a d v i s t a b i l i t y of u n d e r t a k i n g t o change t h e p r e s e n t law r e g a r d i n g t h e
l e g a l e f f e c t of a n e n d o r s e m e n t i n b l a n k o r i n f u l l a s a p p l i e d
to t h e d e p o s i t of a. check o r o t h e r i t e m i n a b a n k . There a r e
always a d v a n t a g e s a c c r u i n g f r o m t h e removal by s t a t u t e of a
c o n f l i c t i n j u d i c i a l h o l d i n g s . T h e r e f o r e , a s e t t l e m e n t of t h e
much mooted q u e s t i o n a s t o w h e t h e r a n e n d o r s e m e n t " t o any b a r k "
or b a n k e r " i s r e s t r i c t i v e o r u n r e s t r i c t i v e m i g h t b e of something
more t h a n a c a d e m i c i n t e r e s t .
I t would seem, however, t h a t them a t t e r i s of l i t t l e p r a c t i c a l i m p o r t a n c e .
Sec. 5;~

I h a v e no c r i t i c i s m t o make o f t h i s s e c t i o n .

Sec. 6 : -

I h a v e no c r i t i c i s m t o make of t h i s s e c t i o n .

Sec. 7 : s h o u l d be o m i t t e d .

I am i n c l i n e d t o b e l i e v e t h a t t h i s s e c t i o n

S e c . 9 : - I s e e no o b j e c t i o n t o t h e f i r s t s e n t e n c e i n
S e c t i o n 9 . I t h i n k t h a t t h e word " s o l v e n t " s h o u l d b e s t r i c k e n
f r o m t h e s e c o n d s e n t e n c e of t h i s s e c t i o n . I n any c a s e where a
bank a c c e p t s i n payment of a n i t e m a c r e d i t on t h e books of
a n o t h e r b a n k , i t s h o u l d be e s t o p p e d to a s s e r t t h a t i t h a s not
r e c e i v e d r e t u r n s s h o u l d t h e b a n k , t h e c r e d i t of which i t h a d so
a c c e p t e d , p r o v e t o be i n s o l v e n t .



r

-4Mr. W a l t e r W y a t t ,

X-6137-k
7/21/28.

S e c . 1 0 : - I do n o t "believe t h a t t h i s s e c t i o n c o u l d "be
e n a c t e d w i t h o u t e n t a i l i n g d a n g e r o u s p o s s i b i l i t i e s . Even were
t h e q u e s t i o n s w h i c h a r i s e " o u t of t h e u s e of t h e p h r a s e "'a s o l v e n t
credit" eliminated, other puzzling questions present themselves.
O r d i n a r i l y , payment u p o n p r e s e n t a t i o n "by t h e drawee or p a y o r
"bank d i s c h a r g e s m a k e r s , d r a w e r s a n d e n d o r s e r s . By S e c t i o n 1 0
i t i s p r o v i d e d t h a t t h e r e s h a l l "be no d i s c h a r g e u n t i l t h e drawee
o r p a y o r h a s made a c t u a l payment i n money o r a s o l v e n t c r e d i t .
I assume t h a t a f a i l u r e on t h e p a r t of t h e drawee o r p a y o r t o
make payment a s p r e s c r i b e d i h t h i s s e c t i o n w o u l d / % ° M r & i s honor of t h e i t e m , w h i c h , u n d e r t h e Code, would r e m a i n u n p a i d
a l t h o u g h t h e same h a d b e e n a c t u a l l y c h a r g e d t o t h e a c c o u n t of
some p a r t y l i a b l e t h e r e o n * i t had b e e n h e l d t h a t t h e drawer of
a check i s d i s c h a r g e d by a f a i l u r e t o g i v e n o t i c e of d i s h o n o r ,
t h e bank h a v i n g refused t o p a y b e c a u s e i t was s h o r t of f u n d s a n d
S u b s e q u e n t l y bec&k&e i n s o l v e n t . What w o u l d be t h e s i t u a t i o n ,
t o u c h i n g p r d t b s t a n d n o t i c e of d i s h o n o r , i n a c a s e where a bank
c h a r g e d i t e m s t o t h e a c c o u n t s of d r a w e r s o r m a k e r s , r e m i t t i n g
t h e r e f o r b y b a n k d r a f t w h i c h was n e v e r p a i d b e c a u s e of t h e i n s o l v e n c y of t h e r e m i t t i n g bank? Would i t n o t be v e r y d i f f i c u l t ,
i f r.at i m p o s s i b l e , f o r t h e " h o l d e r s " of t h e i t e m s w h i c h h a d b e e n
c h a r g e d t o c u s t o m e r s ' a c c o u n t s , or p e r h a p s d e l i v e r e d t o s u c h
c u s t o m e r s , t o p r o c u r e , u n d e r t h e s e c o n d i t i o n s , a p r o t e s t of s u c h
^terns a n d t o e f f e c t n o t i c e of d i s h o n o r t o p a r t i e s e n t i t l e d
t h e r e t o ? I n many c a s e s p a r t i e s e n t i t l e d t o n o t i c e of p r o t e s t
w i g h t be r e l e a s e d a n d t h e owners of t h e i t e m s would n o t e v e n h a v e
» c l a i m a g a i n s t t h e c l o s e d bank b e c a u s e of t h e p r o v i s i o n s of
S e c t i o n 11 o f t h e Code.
I am n o t e n t i r e l y c e r t a i n of my g r o u n d i n r a i s i n g t h i s
o b j e c t i o n t o S e c t i o n 1 0 , b u t I believe* t h a t t h e q u e s t i o n s a r e
worthy of c l o s e s t u d y .
I do n o t b e l i e v e t h a t t h e s e c o n d s e n t e n c e of S e c t i o n 10
would be a p p r o p r i a t e f o r e n a c t m e n t i n a n y e v e n t . The p r a c t i c a l
e f f e c t of i t s p r o v i s i o n s would be t o l e a v e t h e owner o f a n i t e m ,
which h a d b e e n " p a i d " t h r o u g h a c l e a r i n g h o u s e , w i t h a n u n s a t i s f i e d c l a i m a g a i n s t t h e m a k e r , d r a w e r , o r e n d o r s e r of t h e i t e m f o r
a p o r t i o n of t h e same a n d a g a i n s t t h e f a i l e d bank f o r t h e b a l a n c e .
The d i f f i c u l t i e s a n d c o n f u s i o n w h i c h would r e s u l t a r e o b v i o u s .
S e c . 1 1 : - Assuming f o r t h e moment t h e c o n s t i t u t i o n a l i t y
of S e c t i o n 11 of t h e Code, t h e r e a r e q u e s t i o n s of p o l i c y i n v o l v e d
which s h o u l d be g i v e n c o n s i d e r a t i o n . O r d i n a r i l y a n i n s o l v e n t
bank r e c e i v e s f r o m o t h e r b a n k s , up t o t h e t i m e of c l o s i n g , i t e m s
drawn on i t a n d e n c l o s e d w i t h " c a s h l e t t e r s I t p a y s s u c h i t e m s
a n d r e m i t s t h e r e f o r i n e x c h a n g e , by a t r a n s f e r of c r e d i t s , o r i n
dome o t h e r w a y . Each owner of such i t e m s h a s a n e q u i t a b l e , a n d



-5Mr. W a l t e r W y a t t ,

X-6137-k
7/21/28*

sometimes a l e g a l , i n t e r e s t i n t h e " r e m i t t a n c e " which h a s b e e n
o b t a i n e d f o r h i s b e n e f i t by a n a g e n t a c t i n g i n h i s b e h a l f . I t
i a c o n t e m p l a t e d i n S e c t i o n 11 t h a t upon t h e a p p o i n t m e n t of a
r e c e i v e r a l l i t e m s drawn u p o n o r p a y a b l e by o r a t s u c h i n s o l v e n t
bank w h i c h h a v e n o t b e e n p a i d i n money o r s o l v e n t c r e d i t , w h e t h e r
or n o t t h e d r a f t of t h e i n s o l v e n t bank h a s b e e n i s s u e d t h e r e f o r ,
s h a l l bo r e t u r n e d t o t h e p r e s e n t e r of s u c h i t e m s . I s i t n o t
c o n c e i v a b l e t h a t t h e owners of t h e i t e m s would p r e f e r t o h a v e , i n
many c a s e s , a c l a i m a g a i n s t t h e i n s o l v e n t bank r a t h e r t h a n one
a g a i n s t a s t i l l more i n s o l v e n t maker o r drawer? I a G e o r g i a , a n d
p e r h a p s i n o t h e r S t a t e s , a n u n p a i d r e m i t t a n c e d r a f t i s made a
l i e n u p o n t h e a s s e t s of a n i n s o l v e n t bank a n d t h e amount t h e r e o f
i s e n t i t l e d t o p r e f e r e n t i a l p a y m e n t . By j u d i c i a l i n t e r p r e t a t i o n
of t h e common law i n o t h e r S t a t e s , t h e same r u l e h a s b e e n
e s t a b l i s h e d . I n any j u r i s d i c t i o n h e would have some k i n d o f
a c l a i m . Where p a r t i e s l i a b l e on a n i n s t r u m e n t r e m a i n s o l v e n t
d e s p i t e t h e c l o s i n g o f . a b a n k , i t would d o u b t l e s s b e t o t h e a d v a n t a g e o f t h e owner of such i t e m to be a b l e t o e n f o r c e t h e same
against p a r t i e s l i a b l e thereon; but there are probably j u s t as
many c a s e s where t h e r e i s more change o f a r e c o v e r y a g a i n s t t h e
bank t h a n a g a i n s t t h e p a r t i e s l i a b l e on t h e i n s t r u m e n t . I
doubt w h e t h e r i t would b e f e a s i b l e t o g i v e t h e h o l d e r of a n i t e m
t h e o p t i o n o f r e c l a i m i n g t h e same o r of p r o v i n g a g a i n s t t h e bank
f o r t h e amount t h e r e o f , b u t , u n l e s s t h e Code c o n f e r r e d such
o p t i o n , i t s c o n s t i t u t i o n a l i t y would be s u b j e c t t o s e r i o u s q u e s t i o n #
I f t h e a g e n t of t h e owner of a n i t e m h a s o b t a i n e d f o r him a
r e m i t t a n c e d r a f t , o r an i n t e r e s t t h e r e i n , u p o n w h i c h a c l a i m
a g a i n s t t h e b a n k may be made by him o r f o r h i s a c c o u n t , i t would
seem t o be c o n t r a r y t o t h e C o n s t i t u t i o n t o d e p r i v e him of t h e
p r o p e r t y , i n w h i c h h e h a s a l e g a l o r e q u i t a b l e i n t e r e s t , by t h e
r e q u i r e m e n t t h a t t h e r e c e i v e r of t h e c l o s e d bank " c a n c e l " such
p r o p e r t y , r e t u r n i n g t o him a check o r o t h e r i n s t r u m e n t which h e
may n o t w i s h t o a c c e p t .
S e c . 1 2 : - ' I h a v e no c r i t i c i s m of S e c t i o n 1 2 .
S e c . 1 3 : - I t h i n k t h a t t h i s s e c t i o n s h o u l d be o m i t t e d
f r o # the Code. I f t h e r e wore any n e e d f o r t h e e n a c t m e n t of a
u n i f o r m s t a t u t e c o n c e r n i n g b a n k e r s ' l i e n s , such n e e d would be
o c c a s i o n e d l a r g e l y by t h e p r o v i s i o n s of S e c t i o n 2 of t h e Code,
t o u c h i n g t h e r e l a t i o n s h i p of a bank t o p a p e r w h i c h i t h a s r e c e i v e d
from a n o t h e r bank a n d w i t h r e s p e c t to which i t i s m e r e l y t h e a g e n t
of t h e o r i g i a a l d e p o s i t o r . T h i s c o n s i d e r a t i o n , t o my mind,
emphasizes t h e dangers which, as I see i t , a r e i n h e r e n t i n
Section 2.




I a p o l o g i z e f o r t h e l e n g t h of t h i s l e t t e r , b u t t h e im~

X-6137-k
7/21/28.

Mr. W a l t e r W y a t t ,

p o r t a n c e of t h e s u b j e c t h a s seemed t o j u s t i f y a c o m p l e t e d i s cussion.
I do n o t w i s h t o "be u n d e r s t o o d a s "being u n d u l y c r i t i c a l
of a p a p e r which i s t h e c a r e f u l , s c h o l a r l y work of a v e r y a b l e
l a w y e r . I t may be t h a t some of t h e o b j e c t i o n s s t a t e d a r e w i t h o u t
m e r i t a n d , i f s o , I am open t o x c o n v i c t i o n . E v e r y l a w y e r f e e l s
a d i s t r u s t of e n a c t m e n t s which r u n c o u n t e r t o t h e common law a n d
which w i l l u p s e t d e c i s i o n s a n d p r e c e d e n t s w i t h which h e i s
famiitiar a n d i t i s p o s s i b l e t h a t I have c o n j u r e d up e v e n t u a l i t i e s
which would n o t i n f a c t f o l l o w a n e n a c t m e n t i n t o law of t h e Code.
I have not u n d e r t a k e n to suggest s u b s t i t u t e s f o r those
p o r t i o n s of t h e Code which I have c r i t i c i z e d . I f I were t o
u n d e r t a k e t o f o r m u l a t e a code I c o u l d n o t do n e a r l y so w e l l a s
h a s Mr. P a t o n . My f e e l i n g i s t h a t any c o l l e c t i o n c o d e , p r e p a r e d
t o c o v e r a n y t h i n g e x c e p t t h e few i m p o r t a n t s u b j e c t s m e n t i o n e d a t
t h e o u t s e t o f t h i s l e t t e r , would be s u b j e c t t o c r i t i c i s m a n d t o
objections.
With k i n d p e r s o n a l r e g a r d s , I am,
Cordially yours,
(S)
BSP/w.




Bobt. S. Parker,