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X-832 COPY OF LETTER \iRIT'J:ElJ BY GOVERNOR &RDUIG TO ASSISTaNT SECRETARY LEFiiNG\iELL ON MARCH 16, 1918. (In re branches of Federal Reserve banks) "After discussing with counsel the matter referred to in your letter of the 14th instant, I feel warranted in advising you that you~ understanding of the status of the branch of the Federal Reserve Bank at Baltimore is entirely correct. A branch of a Federal Reserve bank has no separate corporate entity and its operations are in effect the operations of the Federal Reserve bank. R eserve deposits carried by "'1ember banks upon the books of a branch are actuaJ. reserve carried with the Federal Reserve bank, ani where deposits are rmde in a branch by an agent of the governll'ent and are charged to that bran~h on the books of the ~r8asurer of the United States, the Board underst3.llds that this is ione 1nercly as a matter of bookkeeping convenience~ 'J:he deposit liability rests 1vith the Federal.ResRrve bank. There is no difference 5.r.o. this respect in the status of any branch of any Federal Reserve bank. 1.11ile so,ne J:<'eu.eral Reserve bcinks have Given the directors of a branch bank a broader discretion as to internal m<:m.a.geir.ent of the branch and i:tx to discount ope rat ions th2-n other .l!,ederal Ressrve banks have done wtth their branches, this c .Lrcums tance does not interfere with the theory and the f<:LCt that the assets, liabilities and operations of a branch are actually the a.ssets, liabilities and operations of the hedd office. - the iederal Reserve bank.''
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